As used in this chapter: (1) "Board" means the Workers Compensation Board. (2) "Department" means the Department of Consumer and Business Services. (3) "Director" means the Director of the Department of Consumer and Business Services. [1987 c.373 1; 1993 c.744 9; 1999 c.59 213]
(1) The Department of Consumer and Business Services is created. (2) The department shall be under the supervision and control of a director who shall be responsible for the functions of the department. (3) Subject to confirmation by the Senate in the manner provided in ORS 171.562 and 171.565, the Governor shall appoint the director, who shall hold office at the pleasure of the Governor. The person appointed as director shall be well qualified by training and experience to perform the functions of the office. (4) The director shall receive such salary as is provided by law or, if not so provided, as is fixed by the Governor. (5) With respect to the duties, functions and powers imposed upon the director under the insurance laws, the director may be designated by the title of Insurance Commissioner or may appoint a person under ORS 705.115 to serve under the supervision and control of the director as Insurance Commissioner. (6) Before entering upon the functions of office, the director shall give to the state a fidelity bond with one or more corporate sureties authorized to do business in this state, or an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, in either case in the penal sum fixed by the Governor. (7) The department shall have an official seal. Any certificate or other document or paper executed by the department pursuant to its authority and sealed with its seal, and all copies of papers certified by it and authenticated by the seal, shall in all cases be evidence equally and in like manner as the original and shall have the same force and effect as would the original in any suit or proceeding in any court in this state. [1987 c.373 2; 1991 c.331 108; 1993 c.744 10; 1997 c.631 526; 2003 c.802 179]
(1) The Director of the Department of Consumer and Business Services, with the approval of the Governor, shall organize and reorganize the Department of Consumer and Business Services in the manner the director considers necessary to conduct the work of the department properly. (2) The functions of the department may be divided into administrative divisions or staff offices. Each division or office shall be under the supervision of a person appointed by the director, with the approval of the Governor. The appointee shall serve at the pleasure of the director, not be subject to the State Personnel Relations Law and be well qualified by technical training and experience in the functions the appointee is to perform. [1987 c.373 4]
The Director of the Department of Consumer and Business Services shall establish within the department a Consumer Advocacy Section not later than January 1, 1988. [1987 c.774 152(1)] Note: 705.117 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 705 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) With the approval of the Governor, the Director of the Department of Consumer and Business Services may appoint a deputy director who shall serve at the pleasure of the director, not be subject to the State Personnel Relations Law and have full authority to act for the director, subject to the control of the director. The appointment of the deputy director shall be by written order filed with the Secretary of State. (2) Except as provided in ORS 705.115 and subsection (1) of this section, the director, subject to applicable provisions of the State Personnel Relations Law, shall appoint all subordinate officers and employees of the Department of Consumer and Business Services, prescribe their functions and fix their compensation. [1987 c.373 5]
(1) The Director of the Department of Consumer and Business Services may delegate any duties, powers and functions of the director or of the Department of Consumer and Business Services, under such conditions as the director deems appropriate. (2) In accordance with ORS chapter 183, and in addition to other rulemaking authority prescribed by law, the director may adopt rules for the purpose of carrying out the functions of the department. (3) The director shall adopt rules governing circumstances under which employees or any category of employees of the department may or may not be or become indebted to or hold any interest in any entity subject to regulation by the department. The rules shall provide for reporting any such indebtedness or interest and for preventing or resolving possible conflicts of interest arising therefrom. [1987 c.373 6; 2003 c.802 180]
(1) Except as provided in subsection (3) of this section, a document, material or other information that the Department of Consumer and Business Services possesses or controls for the purpose of administering ORS 86A.095 to 86A.198, 86A.990, 86A.992, 697.005 to 697.095, 697.602 to 697.842, 717.200 to 717.320, 717.900, 717.905 and 735.533 and ORS chapters 59, 723, 725 and 726, the Bank Act and the Insurance Code and that is described in statute as confidential or as not subject to disclosure is not subject to disclosure under ORS 192.311 to 192.478, is not subject to subpoena and is not subject to discovery or admissible in evidence in a private civil action. The Director of the Department of Consumer and Business Services may use a confidential document, material or other information in administering ORS 86A.095 to 86A.198, 86A.990, 86A.992, 697.005 to 697.095, 697.602 to 697.842, 717.200 to 717.320, 717.900, 717.905 and 735.533 and ORS chapters 59, 723, 725 and 726, the Bank Act and the Insurance Code and in furthering a regulatory or legal action the director brings as a part of the directors duties. (2) A document, material or other information to which subsection (1) of this section applies is subject to the public officer privilege described in ORS 40.270. (3) In order to assist in the performance of the directors duties, the director may: (a) Authorize sharing a confidential document, material or other information that is subject to subsection (1) of this section as appropriate among the administrative divisions and staff offices of the department created under ORS 705.115 for the purpose of administering and enforcing the statutes identified in subsection (1) of this section, in order to enable the administrative divisions and staff offices to carry out the functions and responsibilities of the administrative divisions and staff offices. (b) Share a document, material or other information, including a confidential document, material or other information that is subject to subsection (1) of this section or that is otherwise confidential under ORS 192.345 or 192.355, with other state, federal, foreign and international regulatory and law enforcement agencies, with the Federal Reserve Board and with the National Association of Insurance Commissioners and affiliates or subsidiaries of the National Association of Insurance Commissioners, if the recipient agrees to maintain the confidentiality of the document, material or other information. (c) Receive a document, material or other information, including an otherwise confidential document, material or other information, from state, federal, foreign and international regulatory and law enforcement agencies, from the Federal Reserve Board and from the National Association of Insurance Commissioners and affiliates or subsidiaries of the National Association of Insurance Commissioners. As provided in this section, the director shall maintain the confidentiality of documents, materials or other information the director receives if the director receives notice or has an understanding that the document, material or other information is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information. (4) Disclosing a document, material or other information to the director under this section or sharing a document, material or other information as authorized in subsection (3) of this section does not waive an applicable privilege or claim of confidentiality in the document, material or other information. (5) This section does not prohibit the director from disclosing to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners or affiliates or subsidiaries of the National Association of Insurance Commissioners information about a final, adjudicated action, including a suspension or revocation of a certificate of authority or a license, if the information is otherwise open to public inspection. [2001 c.377 2; 2009 c.541 24; 2009 c.604 25; 2015 c.244 1; 2017 c.73 4]
(1) The Director of the Department of Consumer and Business Services may share confidential and privileged documents, material or information the director receives under ORS 732.517 to 732.596 with a chief insurance regulatory official in accordance with ORS 705.137: (a) Only if the regulatory officials jurisdiction has a statute or rules that are substantially similar in effect to ORS 732.586; and (b) Only if the regulatory official agrees in writing not to disclose the documents, material or information. (2) The director shall enter into a written agreement with the National Association of Insurance Commissioners that governs how the director and the association may use or share documents, material or information the director receives under ORS 732.517 to 732.596, including documents, material or information the director receives as a consequence of the directors participation in a supervisory college under ORS 732.571. The agreement must: (a) Specify procedures and protocols for maintaining the confidentiality and security of documents, material and information the director shares with the association and the associations affiliates or subsidiaries; (b) Specify conditions under which the association may share the documents, material or information with other state, federal or international regulatory agencies; (c) State that the director retains ownership of the documents, material and information the director shares with the association and the associations affiliates and subsidiaries and that the associations use of the documents, material or information is subject to the directors control; (d) Require the director or the association to notify an insurer if a subpoena or other request compels the association or the associations affiliates or subsidiaries to disclose or produce documents, material or information the director has shared with the association; (e) Require the association to consent to an insurers intervention in an administrative or judicial proceeding that may result in the association or the associations affiliates or subsidiaries having to disclose or produce documents, material or information the director shared with the association; and (f) State that the association must maintain, in accordance with ORS 705.137, the confidentiality of the documents, material or information the association receives from the director. [2013 c.370 2; 2015 c.27 59]
(1) The Director of the Department of Consumer and Business Services, consistent with ORS 705.137, may enter into agreements with other state, federal, foreign and international regulatory and law enforcement agencies, with the Federal Reserve Board and with the National Association of Insurance Commissioners and affiliates or subsidiaries of the National Association of Insurance Commissioners to govern the sharing and use of information. (2) An agreement under this section must specify the duration of the agreement, the purpose of the agreement, the methods for terminating the agreement and any other necessary and proper matters. (3) An agreement under this section does not relieve the director of any obligation or responsibility imposed by law. (4) The director may expend funds of the Department of Consumer and Business Services and may supply services for carrying out an agreement under this section. (5) Agreements under this section are exempt from ORS 190.410 to 190.440 and 190.480 to 190.490. [2001 c.377 3; 2015 c.244 2]
For the purpose of requesting a state or nationwide criminal records check under ORS 181A.195, the Department of Consumer and Business Services may require the fingerprints of a person who is applying for a license, or applying to renew a license, under ORS 744.059, 744.326, 744.518 or 744.611 or a person who: (1)(a) Is employed or applying for employment by the department; or (b) Provides services or seeks to provide services to the department as a contractor, vendor or volunteer; and (2) Is, or will be, working or providing services in a position: (a) In which the person is providing information technology services and has control over, or access to, information technology systems that would allow the person to harm the information technology systems or the information contained in the systems; (b) In which the person has access to information that state or federal laws, rules or regulations prohibit disclosing or define as confidential; (c) That has payroll functions or in which the person has responsibility for receiving, receipting or depositing money or negotiable instruments, for billing, collections or other financial transactions or for purchasing or selling property or has access to property held in trust or to private property in the temporary custody of the state; (d) That has mailroom duties as a primary duty or job function; (e) In which the person has responsibility for auditing the department; (f) That has personnel or human resources functions as a primary responsibility; (g) In which the person has access to Social Security numbers, dates of birth or criminal background information of employees or members of the public; or (h) In which the person has access to tax or financial information about individuals or business entities. [2007 c.619 1; 2010 c.87 10; 2011 c.447 21; 2019 c.151 19] Note: 705.141 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 705 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) The Department of Consumer and Business Services may establish one or more combined license processing programs. Participation in a combined license processing program by a state agency is voluntary. Notwithstanding any other provision of law, agencies participating in a combined license processing program may: (a) Use combined license applications; (b) Adopt standardized license terms under subsection (2) of this section; (c) Charge adjusted license fees established under subsection (2) of this section; (d) Issue combined license documents; and (e) Take any other action authorized under rules adopted pursuant to subsection (3) of this section that provides a simplified procedure for processing licenses issued pursuant to the program. (2) Notwithstanding any other provision of law, the Department of Consumer and Business Services may establish a standardized term for licenses of state agencies participating in a combined license processing program. If the department establishes a standardized term under the provisions of this subsection, the agencies participating in the program shall adjust the fees established by statute for each license in an appropriate manner to ensure that there is no revenue loss by reason of the change in the term of the license. (3) The Department of Consumer and Business Services may adopt rules necessary for implementation of combined license processing programs. Any agency participating in a combined license processing program may: (a) Agree to be bound by the rules adopted by the Department of Consumer and Business Services; and (b) Adopt any other rules necessary for participation in a combined license processing program. [2005 c.73 1; 2007 c.768 59] Note: 705.143 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 705 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) There is created in the State Treasury a fund to be known as the Consumer and Business Services Fund, separate and distinct from the General Fund. All moneys collected or received by the Department of Consumer and Business Services, except moneys required to be paid into the Workers Benefit Fund, shall be paid into the State Treasury and credited to the Consumer and Business Services Fund. Moneys in the fund may be invested in the same manner as other state moneys and any interest earned shall be credited to the fund. (2) The department shall keep a record of all moneys deposited in the Consumer and Business Services Fund that shall indicate, by separate account, the source from which the moneys are derived, the interest earned and the activity or program against which any withdrawal is charged. (3) If moneys credited to any one account are withdrawn, transferred or otherwise used for purposes other than the program or activity for which the account is established, interest shall accrue on the amount withdrawn from the date of withdrawal and until such funds are restored. (4) Moneys in the fund are continuously appropriated to the department for its administrative expenses and for its expenses in carrying out its functions and duties under any provision of law. (5) Except as provided in ORS 705.165, it is the intention of the Legislative Assembly that the performance of the various duties and functions of the department in connection with each of its programs shall be financed by the fees, assessments and charges established and collected in connection with those programs. (6) There is created by transfer from the Consumer and Business Services Fund a revolving administrative account in the amount of $100,000. The revolving account shall be disbursed by checks or orders issued by the director or the Workers Compensation Board and drawn upon the State Treasury, to carry on the duties and functions of the department and the board. All checks or orders paid from the revolving account shall be reimbursed by a warrant drawn in favor of the department charged against the Consumer and Business Services Fund and recorded in the appropriate subsidiary record. (7) For the purposes of ORS chapter 656, the revolving account created pursuant to subsection (6) of this section may also be used to: (a) Pay compensation benefits; and (b) Refund to employers amounts paid to the Consumer and Business Services Fund in excess of the amounts required by ORS chapter 656. (8) Notwithstanding subsections (2), (3) and (5) of this section and except as provided in ORS 455.220 (1), the moneys derived pursuant to ORS 446.003 to 446.200, 446.225 to 446.285, 446.395 to 446.420, 446.566 to 446.646, 446.661 to 446.756 and 455.220 (1) and deposited to the fund, interest earned on those moneys and withdrawals of moneys for activities or programs under ORS 446.003 to 446.200, 446.225 to 446.285, 446.395 to 446.420, 446.566 to 446.646 and 446.661 to 446.756, or education and training programs pertaining thereto, must be assigned to a single account within the fund. (9) Notwithstanding subsections (2), (3) and (5) of this section, the moneys derived pursuant to ORS 455.240 or 460.370 or from state building code or specialty code program fees for which the amount is established by department rule pursuant to ORS 455.020 (2) and deposited to the fund, interest earned on those moneys and withdrawals of moneys for activities or programs described under ORS 455.240 or 446.566 to 446.646, 446.661 to 446.756 and 460.310 to 460.370, structural or mechanical specialty code programs or activities for which a fee is collected under ORS 455.020 (2), or programs described under subsection (10) of this section that provide training and education for persons employed in producing, selling, installing, delivering or inspecting manufactured structures or manufactured dwelling parks or recreation parks, must be assigned to a single account within the fund. (10) Notwithstanding ORS 279.835 to 279.855 and ORS chapters 279A and 279B, the department may, after consultation with the appropriate specialty code advisory boards established under ORS 455.132, 455.135, 455.138, 480.535 and 693.115, contract for public or private parties to develop or provide training and education programs relating to the state building code and associated licensing or certification programs. [1987 c.373 17; 1989 c.711 6; 1993 c.744 11; 1995 c.641 16; 1999 c.518 1; 2001 c.319 1; 2001 c.710 13; 2003 c.655 84a; 2003 c.675 47; 2003 c.794 322; 2005 c.755 53; 2009 c.567 35; 2013 c.698 11; 2017 c.364 7]
The Prescription Drug Affordability Account is established as a subaccount in the Consumer and Business Services Fund created in ORS 705.145, consisting of moneys collected under ORS 646A.695 and moneys that may be appropriated for deposit into the Prescription Drug Affordability Account by the Legislative Assembly. Interest earned on the account shall be credited to the account. Moneys in the account are continuously appropriated to the Prescription Drug Affordability Board to carry out ORS 646A.693 to 646A.695. [2021 c.598 4] Note: 705.146 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 705 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) The Director of the Department of Consumer and Business Services shall transfer workers compensation premium assessment revenue from the Consumer and Business Services Fund to the Workers Benefit Fund to finance the cost of carrying out the provisions of ORS 656.054 and 656.735 and section 15, chapter 600, Oregon Laws 1985. (2) The amount of total transfers during any one year shall be limited to an amount that will produce an ending cash balance approximating six months of projected expenditures in the Workers Benefit Fund in regard to its functions under ORS 656.054 and 656.735 and section 15, chapter 600, Oregon Laws 1985. (3) The transfers may be conducted annually, quarterly or monthly. Total annual transfers shall comply with subsection (2) of this section. (4) The departments funded liability for claims costs pursuant to ORS 656.054 and 656.735 and section 15, chapter 600, Oregon Laws 1985, shall be limited to the amount of moneys included in the transfers determined by the director to be available for these purposes. [1995 c.641 27]
The Director of the Department of Consumer and Business Services and the Workers Compensation Board may in their discretion establish and maintain petty cash funds for the purpose of making change and paying other petty incidental expenses in the administration of the functions of the Department of Consumer and Business Services and the board. [1987 c.373 19]
(1) Except as provided in ORS 59.255, 59.995, 86A.130, 86A.992 and 645.950, the net amount accruing to the Department of Consumer and Business Services from all fees, charges, interest, penalties and miscellaneous revenues from all sources under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 86A.095 to 86A.198, 650.005 to 650.100 and 705.350 shall, after deduction of refunds, be paid over to the State Treasurer and deposited in a separate subaccount in the Consumer and Business Services Fund created under ORS 705.145 at least monthly and may be used only for the expenses of the department in carrying out its functions and duties under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995, 86A.095 to 86A.198, 650.005 to 650.100 and 705.350. (2) Any amount deposited in the separate subaccount in the Consumer and Business Services Fund as provided in subsection (1) of this section that at the end of each quarter is determined by the Director of the Department of Consumer and Business Services to be in excess of the amount needed to administer ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995, 86A.095 to 86A.198 and 650.005 to 650.100 shall be transferred to the General Fund and shall become available for general governmental expenses. [1987 c.414 143; 1989 c.473 1; 1993 c.508 43; 1993 c.744 12; 1995 c.79 353; 2001 c.319 2,3; 2005 c.755 54,55; 2011 c.597 286]
(1) If any amount due the Department of Consumer and Business Services is not paid within 30 days of the date payment becomes due, and no provision has been made to secure the payment, the department may issue a warrant. The warrant may be filed with the county clerk of any county in this state and recorded in the County Clerk Lien Record of the county in which it is filed. The amount of a warrant issued under this section shall include the principal amount of the debt, any added interest accumulated pursuant to ORS 82.010 or other applicable law and any costs associated with the recording, indexing and serving of the warrant and any satisfaction or release thereof. A copy of the warrant shall be mailed to the debtor by the department at the last known address of the debtor. (2) After receiving the warrant, the county clerk shall enter the warrant in the County Clerk Lien Record in the manner described in ORS 205.125. The warrant shall have the effect described in this section and ORS 205.125 and 205.126 and may be enforced as provided in this section and ORS 18.854, 205.125 and 205.126. [2003 c.578 2]
[2011 c.272 20; renumbered 455.146 in 2017]
The Director of the Department of Consumer and Business Services shall keep books, as records of office, showing all acts, matters and things done by the director under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 and 650.005 to 650.100. [1987 c.414 71; 1989 c.179 5]
(1) Copies of all records and papers of the Department of Consumer and Business Services relating to duties, functions and powers of the Director of the Department of Consumer and Business Services and the department under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 and 650.005 to 650.100, certified by the director, shall be received in evidence in all cases equally and with like effect as the original. (2) The department shall collect a fee as set by rule for making copies of any document filed in the department and relating to the duties, functions and powers of the director under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 and 650.005 to 650.100. For certifying the document it shall collect, in addition, a fee of $2. [1987 c.414 72; 1989 c.179 6]
When certified by the Director of the Department of Consumer and Business Services, all certificates issued by the director and all copies of documents filed in the Department of Consumer and Business Services that relate to the duties, functions and powers of the director under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 and 650.005 to 650.100 shall be taken and received in all courts, public offices and official bodies of this state as prima facie evidence of the facts stated in the certificates or documents. A certificate by the director as to the compliance or noncompliance of the document with provisions of ORS chapter 645 or ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 or 650.005 to 650.100, or as to the existence or nonexistence of the facts relating to the matters contained in the documents that would appear from the presence or absence of documents filed in the department, shall be taken and received in all courts, public offices and official bodies of this state as prima facie evidence of the existence or nonexistence of the facts stated in the certificates or documents. [1987 c.414 75; 1989 c.179 7]
(1) Within one year after a filing under ORS chapter 645 or ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 or 650.005 to 650.100, the Director of the Department of Consumer and Business Services may withdraw from filing any document filed by the director when the person who submitted the document advises the Department of Consumer and Business Services that the document was submitted prematurely or by inadvertence or mistake. The person requesting the withdrawal shall accompany the request with a written statement reflecting the basis of the persons authority to initiate the withdrawal. (2) The director may withdraw without notice or hearing a certificate that the director has issued or a document that the director has filed under ORS chapter 645 or ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 or 650.005 to 650.100 when the fee was paid with a check that was returned to the department for lack of sufficient funds. Such withdrawal shall be retroactive to the date of filing. (3) Any decision under this section may be reviewed in accordance with the provisions of ORS chapter 183. (4) A withdrawal from filing of a document under this section is retroactive to the date of the filing but shall not relieve a person of any liability the person may have incurred while the document was filed with the department. The director is not required to refund any fees paid in conjunction with the document withdrawn. [1987 c.414 73; 1989 c.179 8]
(1) The Director of the Department of Consumer and Business Services by rule shall adopt a schedule establishing priority of access among members of the general public, governmental agencies and other persons to records of the director and the Department of Consumer and Business Services relating to the duties, functions and powers under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 and 650.005 to 650.100 for use at times that the director finds that demands for access to the records and to the time and resources of the director and the department cannot be satisfied readily. (2) The director shall not be responsible for the accuracy of information contained in the records and provided under this section or ORS 192.311 to 192.478. [1987 c.414 74; 1989 c.179 9]
Notwithstanding ORS 192.311 to 192.478, the Director of the Department of Consumer and Business Services shall establish by rule reasonable fees for the following that relate to the duties, functions and powers of the director under ORS chapter 645 and ORS 59.005 to 59.505, 59.710 to 59.830, 59.991, 59.995 and 650.005 to 650.100: (1) Computer generated lists on paper and electronic data processing media; (2) Terminal access to the files of the Department of Consumer and Business Services; (3) Microfilm records of the files of the department; and (4) Copies of the programs and files on paper or electronic data processing media. [1987 c.414 76; 1989 c.179 10]
The Director of the Department of Consumer and Business Services shall appoint examiners to conduct, as required by law, all examinations of entities subject to ORS chapters 706 to 725. [1987 c.373 20]
(1) When the Department of Consumer and Business Services incurs extra expenses in performing its functions and the Director of the Department of Consumer and Business Services determines that the expenses are incurred for the primary benefit of another person, the director may charge and collect from the person an amount equal to the reasonable actual extra expenses incurred. The director shall notify the person of the amounts to be charged either before the expenses are incurred or as soon as practicable after the director determines that amounts incurred should be charged under this section. (2) A person who is charged an amount under this section may request a contested case hearing before the director for review of the charge. [1987 c.309 2]
(1) A person may submit a written request for a certificate from the Director of the Department of Consumer and Business Services for purposes of complying with the provisions of ORS 56.023. The request shall provide such information as the director may require by rule or order. (2) Upon receiving a request for a certificate under subsection (1) of this section, the director shall within 10 business days determine whether the requested name and intended activity are in compliance with the provisions of the Bank Act and ORS 86A.095 to 86A.198, 86A.990 and 86A.992 and ORS chapters 59, 645, 705, 717, 725 and 726. (3)(a) If the director determines that use of the requested name or intended activity is in compliance with the Bank Act and ORS 86A.095 to 86A.198, 86A.990 and 86A.992 and ORS chapters 59, 645, 705, 717, 725 and 726, the director shall issue a written certificate. (b) If the director determines that use of the requested name or intended activity is not in compliance with the Bank Act and ORS 86A.095 to 86A.198, 86A.990 and 86A.992 and ORS chapters 59, 645, 705, 717, 725 and 726, the director shall promptly notify the requester in writing, who may: (A) Amend the name or activity and submit a written request to the director for reconsideration; or (B) Request that the director conduct an administrative hearing. The hearing shall be conducted as a contested case hearing pursuant to ORS chapter 183. [2001 c.315 45; 2009 c.541 25]
(1) For purposes of this section, "company" means a corporation, nonprofit corporation, cooperative, limited liability company, partnership, limited liability partnership, limited partnership, business trust, association or other business entity. (2) A company organized under the laws of this state for the purposes of conducting a banking business as defined in ORS 706.005 (6) either within or outside this state shall be organized under ORS chapter 707. [2001 c.315 44; 2009 c.541 26]
(1) Whenever the Director of the Department of Consumer and Business Services has reason to believe that a person is violating a provision of ORS 705.638, 707.005 or 707.010, the director: (a) Shall have access to the premises where the person is suspected of transacting banking business in violation of ORS 705.638, 707.005 or 707.010 or where the person may have books, accounts and records; and (b) Shall have the power to examine, copy or take possession of the books, accounts and records of the person in order to ascertain whether or not the person has violated or is violating any provision of ORS 705.638, 707.005 or 707.010. (2) If a person refuses to grant access to the premises or refuses to comply with the provisions of subsection (1) of this section, the director may apply for an order to require compliance with the provisions of subsection (1) of this section from a court that has jurisdiction over the matter. (3) When the director believes, from evidence satisfactory to the director, that a person is violating the provisions of ORS 705.638, 707.005 or 707.010, the director may: (a) Issue an order finding the person in violation, directing the person to cease and desist from the violation and assessing a penalty equal to the costs of investigation plus $1,000, but not exceeding $5,000; and (b) Publish notice of an order issued by the director pursuant to paragraph (a) of this subsection. (4) An order under this section remains in effect until the director or a court withdraws the order. [2001 c.315 46; 2009 c.541 27]
(1) Whenever the Director of the Department of Consumer and Business Services determines that a person has engaged, is engaging or is about to engage in an act or practice constituting a violation of a provision of ORS 705.638, 707.005 or 707.010 or any rule or order of the director, the director may bring suit in the name of or on behalf of the State of Oregon in the circuit court of any county of this state to enjoin the acts or practices and to enforce compliance with the provisions of ORS 705.638, 707.005 or 707.010 or the rule or order. Upon a proper showing, the court shall grant a permanent or temporary injunction, restraining order or writ of mandamus. The court may impose a penalty against the person of not more than $20,000 for each violation, which shall be entered as a judgment and paid to the General Fund of the State Treasury. Each violation is a separate offense. In the case of a continuing violation, each days continuance is a separate violation, but the maximum penalty for a continuing violation may not exceed $100,000. If the court finds that the defendant has violated a provision of ORS 705.638, 707.005 or 707.010 or a rule or order, the court may appoint a receiver, who may be the director, for the defendant or the defendants assets. The court may not require the director to post a bond. The court may award reasonable attorney fees to the director if the director prevails in an action under this section. The court may award reasonable attorney fees to a defendant who prevails in an action under this section if the court determines that the director had no objectively reasonable basis for asserting the claim or no reasonable basis for appealing an adverse decision of the trial court. (2) The director may include either of the following in any action authorized by subsection (1) of this section: (a) A claim for restitution or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award appropriate relief to such persons, if the court finds that enforcement of the rights of such persons by private civil action, whether by class action or otherwise, would be so burdensome or expensive as to be impractical. (b) A claim for disgorgement of illegal gains or profits derived. Any recovery under this paragraph must be turned over to the General Fund of the State Treasury unless the court requires another disposition. [2001 c.315 47; 2009 c.541 28; 2011 c.597 287]
[1999 c.1082 1; renumbered 455.840 in 2001]
[1999 c.1082 3; renumbered 455.842 in 2001]
[1999 c.1082 4; renumbered 455.844 in 2001]
[1999 c.1082 5; renumbered 455.846 in 2001]
[1999 c.1082 7; renumbered 455.848 in 2001]
As used in the Bank Act: (1)(a) "Access area" means any paved walkway or sidewalk within 50 feet of an automated teller machine or night deposit facility. (b) "Access area" does not include publicly maintained sidewalks or roads. (2) "Access device" means: (a) An access device as defined in Federal Reserve Board Regulation E (12 C.F.R. Part 205) adopted under the Electronic Fund Transfer Act (15 U.S.C. 1693, et seq.); or (b) A key or other mechanism that a financial institution issues to a customer to give the customer access to the financial institutions or banks night deposit facility. (3) "Acquisition transaction" means: (a) A sale and purchase of all or substantially all of a banks assets that does not occur in the banks ordinary course of business; or (b) The transfer and assumption of all or substantially all of a banks liabilities. (4)(a) "Automated teller machine" or "ATM" means any electronic information processing device located in this state that: (A) Accepts or dispenses cash in connection with a credit, deposit or convenience account, provides information and initiates transactions in accordance with the request or instruction of a customer or the customers agent; and (B) Is unstaffed except for persons that install the device, provide security or provide periodic servicing, maintenance or repair. (b) "Automated teller machine" or "ATM" does not include a device that is used solely to facilitate check guarantees or check authorizations, or that is used in connection with accepting or dispensing cash on a person to person basis, such as by a store cashier. (5) "Bank Act" means ORS chapters 706 to 716. (6)(a) "Banking business" or "business of banking" means a regular business of receiving or accepting money or the equivalent of money on deposit, whether the deposit is made subject to check or is evidenced by a certificate of deposit, a pass book or other writing or evidence. (b) "Banking business" or "business of banking" does not include: (A) Depositing money or the equivalent of money in escrow or with an agent, pending an investment in real estate or securities for or on account of a principal; (B) The business of a credit union; (C) Accepting deposits in connection with purchasing or leasing property or services; or (D) Accepting deposits through an ATM or night deposit facility. (7) "Banking day" has the meaning given that term in ORS 708A.650. (8) "Branch" means an office or other place, except a principal place of business or an ATM, at which: (a) A bank engages in banking business; or (b) A trust company transacts trust business. (9) "Candlefoot power" means a light intensity of candles on a horizontal plane at 36 inches above ground level and 5 feet in front of the area to be measured. (10) "Capital debentures" means capital notes, capital debentures and any other form of unsecured obligations that an institution or stock savings bank issues to evidence borrowings in which the rights of the lender are subordinate to the rights of the depositors. (11)(a) "Defined parking area" means a portion of any parking area or a single level in a multiple-story parking area that is open for customer parking and is: (A) Contiguous to the access area of an ATM or night deposit facility; (B) Regularly, principally and lawfully used for parking by users of the ATM or night deposit facility while the users conduct transactions during hours of darkness; (C) Owned or leased by the operator of the ATM or night deposit facility or owned or controlled by the party that leases the ATM or night deposit facility site to the operator; and (D) The parking area that the operator of the ATM or night deposit facility designates as the most directly accessible to the ATM or night deposit facility, if the parking area is a single level in a multiple-story parking area. (b) "Defined parking area" does not include any parking area that: (A) Users of an ATM or night deposit facility do not regularly use for parking while conducting transactions during the hours of darkness; or (B) Is physically closed to access or has conspicuous signs that indicate that the parking area is closed. (12) "Department" means the Department of Consumer and Business Services. (13) "Director" means the Director of the Department of Consumer and Business Services. (14) "Document of title" means document of title as defined in ORS 71.2010. (15) "Federal Reserve Act" means the Act of Congress approved December 23, 1913 (38 Stat. 251), as amended. (16) "Federal Reserve Bank" means a Federal Reserve Bank that is created and organized under the authority of the Federal Reserve Act. (17) "Federal Reserve Board" means the Federal Reserve Board created and described in the Federal Reserve Act. (18) "Home state" means: (a) With respect to a state bank, the state under the laws of which the state bank is incorporated or otherwise organized; (b) With respect to a federal bank, the state in which the main office of the federal bank is located; (c) With respect to an extranational institution, the state that the extranational institution or the Board of Governors of the Federal Reserve System elects as the extranational institutions home state; or (d) With respect to a financial holding company or a bank holding company, the state in which the total deposits of all banking subsidiaries of the financial holding company or bank holding company are the largest on the date on which the company becomes a financial holding company or a bank holding company. (19) "Hours of darkness" means the period that commences 30 minutes after sunset and ends 30 minutes before sunrise. (20) "Loan production office" means a physical location in this state at which representatives of an insured institution or extranational institution hold themselves out to the public as providing loan origination services, leasing services or services of a similar nature, but at which representatives of the insured institution or extranational institution do not conduct banking business. (21) "Night deposit facility" means a receptacle that a financial institution provides for the financial institutions customers to use to deliver cash, checks and other items to the financial institution. (22) "Obligations" includes: (a) The direct liability of a maker or acceptor of paper discounted with or sold to an institution; (b) The liability of a drawer, indorser or assignor; (c) Obligations of the several members of a copartnership or association; (d) Obligations of all subsidiaries of a corporation in which the corporation owns or controls 50 percent or more of the capital stock; and (e) The liability of a lessee under a lease. (23) "Officer" of a banking institution means a chief executive officer, president, any vice president, secretary, treasurer, cashier or any individual who the board of a banking institution designates as an officer under ORS 707.700. (24) "Operator" means any financial institution or other business entity, or any person that operates an ATM or night deposit facility. (25) "Outside director" means a member of the board of directors of a banking institution who is not employed by the banking institution or by any holding company or subsidiary of the banking institution. (26) "Paid-in capital" means the aggregate amount that an institution or stock savings bank receives from issuing the institutions or stock savings banks stock or that the institution or stock savings bank transfers from retained earnings. (27) "Person" means an individual, corporation, limited liability company, partnership, association, joint stock company, business trust or unincorporated organization. (28) "Stockholders equity" means the aggregate of paid-in capital and retained earnings of an institution or Oregon stock savings bank. (29) "Trust business" means acting as a trustee of a trust. [1973 c.797 2; 1975 c.193 1; 1975 c.725 1; 1983 c.37 1; 1985 c.12 1; 1985 c.451 1; 1985 c.627 3; 1985 c.762 16; 1987 c.373 47; 1987 c.371 1; 1987 c.445 7; 1991 c.331 109; 1993 c.229 1; 1993 c.318 6; 1993 c.744 22; 1995 c.313 1; 1997 c.631 1; 1999 c.107 1; 2001 c.377 45; 2005 c.348 123; 2015 c.244 5; 2021 c.97 80]
As used in the Bank Act: (1) "Bank" means a company, other than an extranational institution, that accepts deposits that the Bank Insurance Fund insures to any extent under the provisions of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1811, et seq. (2) "Bank holding company" means a company that is a bank holding company under the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. 1841, et seq. (3) "Bank service corporation" means a corporation or a limited liability company that is organized to perform services authorized by ORS 708A.145, all of the capital stock or membership interests of which one or more banking institutions or national banks own. (4) "Banking institution" means an Oregon commercial bank, an Oregon trust company or an Oregon savings bank. (5) "Company" means an entity that is a company under the federal Bank Holding Company Act of 1956, as amended, 12 U.S.C. 1841, et seq. (6) "Extranational institution" means a corporation, unincorporated company, partnership or association of two or more persons organized under the laws of a nation other than the United States, or other than a territory of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands, that engages directly in banking business. (7) "Federal bank" means a national bank or another bank organized under the laws of the United States. (8) "Financial holding company" means a company that engages in activities described for a financial holding company in section 103 of the federal Gramm-Leach-Bliley Act (P.L. 106-102). (9) "Financial institution" means an insured institution, an extranational institution, a credit union as defined in ORS 723.006, an out-of-state credit union under ORS 723.042 or a federal credit union. (10) "Institution" means an Oregon commercial bank or an Oregon trust company. (11) "Insured institution" means a company, the deposits of which are insured under the provisions of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1811, et seq. (12) "National bank" means a bank that was organized under the provisions of the National Bank Act, as amended, 12 U.S.C. 21, et seq. (13) "Non-Oregon institution" means: (a) An out-of-state state bank that engages in banking business in Oregon; (b) An out-of-state trust company that transacts trust business in Oregon; or (c) An extranational institution that engages in banking business in Oregon. (14) "Nonstock bank" means a bank that does not issue capital stock. (15) "Oregon bank" means an Oregon stock bank or Oregon nonstock bank. (16) "Oregon commercial bank" means an Oregon stock bank that was chartered under ORS chapter 707 as a bank other than a stock savings bank. (17) "Oregon nonstock bank" means a nonstock bank or savings bank, the home state of which is Oregon. (18) "Oregon operating institution" means: (a) A bank that engages in banking business in this state; (b) An extranational institution that engages in banking business in this state; or (c) A trust company that transacts trust business in this state. (19) "Oregon savings bank" or "savings bank" means an Oregon stock savings bank or an Oregon nonstock savings bank. (20) "Oregon stock bank" means a stock bank, the home state of which is Oregon. (21) "Oregon stock savings bank" means an Oregon stock bank that was initially chartered as or was converted to a stock savings bank under the Bank Act. (22) "Oregon trust company" means a trust company that was organized under the provisions of ORS chapter 707. (23) "Out-of-state bank" means an out-of-state state bank or an out-of-state federal bank. (24) "Out-of-state bank holding company" means a bank holding company, the home state of which is not Oregon, and that is not the bank holding company of an Oregon stock bank or an in-state federal stock bank. (25) "Out-of-state federal bank" means a federal bank, the home state of which is not Oregon. (26) "Out-of-state financial holding company" means a financial holding company, the home state of which is not Oregon, and that is not the financial holding company of an Oregon stock bank or an in-state federal stock bank. (27) "Out-of-state state bank" means a state bank, the home state of which is not Oregon. (28) "Out-of-state trust company" means a trust company that was organized under the laws of another state. (29) "State bank" means a bank that was organized under the laws of a state. (30) "Stock bank" means a bank that issues capital stock. (31)(a) "Trust company" means a company that is authorized under the provisions of ORS chapter 709 to transact trust business, including the trust department of a bank. (b) "Trust company" does not include a corporation that a United States Bankruptcy Court appoints to serve as a bankruptcy trustee under Title 11, United States Code, during a time in which the corporation is acting as a bankruptcy trustee. [1997 c.631 3; 2001 c.377 29; 2011 c.263 1; 2015 c.244 6]
References in the Bank Act to federal statutes and regulations, except as otherwise provided in the Bank Act, are to the statutes or regulations as the statutes or regulations are in effect on January 1, 2015. The Director of the Department of Consumer and Business Services may by rule construe one or more of the references to federal statutes and regulations in the Bank Act as references to the statutes and regulations as the statutes or regulations are in effect on a later date. [1997 c.631 28; 1999 c.107 1a; 2001 c.377 56; 2015 c.244 7]
[1963 c.580 73; 1969 c.314 101; 1973 c.797 10; 1985 c.786 5; renumbered 706.900]
[1963 c.580 75; 1973 c.797 11; renumbered 706.905]
[Renumbered 706.285]
[1963 c.580 76; 1973 c.797 12; 1974 c.27 2; 1985 c.762 21a; 1985 c.786 6; renumbered 706.910]
[Amended by 1973 c.797 15; 1985 c.762 23; renumbered 706.775]
[Amended by 1973 c.797 16; 1975 c.544 2; 1979 c.88 2; renumbered 706.780]
[Amended by 1973 c.797 17; renumbered 706.785]
[Amended by 1963 c.580 78; 1971 c.734 169; 1973 c.797 20; 1985 c.762 25; renumbered 706.790]
(1) Each banking institution is subject to the inspection of the Director of the Department of Consumer and Business Services. The director shall conduct an examination of the condition and resources of each banking institution and determine whether the banking institution is complying with the laws of this state and such other matters as the director may prescribe. Except as provided in subsections (3) and (5) of this section, the director shall conduct examinations not more than 24 months apart. (2) Subject to ORS 706.515, the director may at any time examine any branch of a non-Oregon institution located in this state, for the same purposes and to the same extent as provided in the case of banking institutions. (3) The director may participate in any program that the Federal Deposit Insurance Corporation or the Federal Reserve Board provides for joint or alternate examinations of banking institutions and non-Oregon institutions. (4) In addition to an examination under subsection (1), (2) or (3) of this section, the director may conduct an examination of a banking institution at any other time. (5) Instead of conducting an examination of a banking institution or non-Oregon institution under subsection (1), (2) or (3) of this section, the director may accept an examination or report made under the Federal Reserve Act or under other statutes of the United States. [Amended by 1973 c.797 22; 1981 c.192 4; 1985 c.786 7; 1997 c.631 3a; 2015 c.244 8]
(1) The Director of the Department of Consumer and Business Services may enter into cooperative, coordinating and information sharing agreements with other bank supervisory agencies, with the Financial Crimes Enforcement Network established by order of the United States Secretary of the Treasury or with an organization affiliated with or representing one or more bank supervisory agencies. The director may enter into the agreements in order to examine or supervise a non-Oregon institution branch or other office or place of business located in this state or to examine or supervise a branch of a banking institution located in another state. The director may accept an agency report made pursuant to an agreement entered into under this section in lieu of the directors own examination or investigation. The agreement may resolve conflicts of laws and specify the manner in which examination, supervision and application processes will be coordinated between this state and the home state of the non-Oregon institution. (2) The director may enter into a contract with a bank supervisory agency that has concurrent jurisdiction over a banking institution or non-Oregon institution operating a branch or other office or place of business in this state to engage the services of the agencys examiners at a reasonable rate of compensation or to provide the services of the directors examiners to the agency at a reasonable rate of compensation. The contract is exempt from competitive bidding requirements under the provisions of ORS chapters 279A and 279B. The contract may resolve conflicts of laws and specify the manner in which examination, supervision and application processes will be coordinated between this state and the home state of the non-Oregon institution. (3) The director may enter into joint examinations or joint enforcement actions with other bank supervisory agencies that have concurrent jurisdiction over a non-Oregon institution branch or other office or place of business located in this state or a branch of a banking institution located in another state. Conducting a joint examination or enforcement action under this section does not prevent the director from conducting an independent examination or enforcement action at any time if the director determines that carrying out the directors responsibilities or ensuring compliance with the laws of this state requires the independent action. With respect to examinations or enforcement actions that involve non-Oregon institutions, the director shall recognize: (a) The exclusive authority of the banking supervisory agency of the home state or country of the non-Oregon institution over corporate governance matters; and (b) The primary responsibility of the banking supervisory agency of the home state or country of the non-Oregon institution over safety and soundness matters. (4) The director may share fees collected from non-Oregon institutions under the provisions of the Bank Act with another bank supervisory agency or an organization affiliated with or representing one or more bank supervisory agencies in accordance with agreements between the agency or organization and the director. [1997 c.631 27; 2003 c.794 323; 2009 c.541 29]
When requested in writing by the board of directors of a banking institution or stockholders owning a majority of the capital stock of an institution or an Oregon stock savings bank, the Director of the Department of Consumer and Business Services may make or cause to be made an examination into the affairs and conditions of the banking institution or Oregon stock savings bank. The banking institution or Oregon stock savings bank shall pay the actual costs of the examination as provided in ORS 706.544. [Amended by 1973 c.797 23; 1985 c.762 26; 1985 c.786 8; 1997 c.631 4; 1999 c.59 214]
(1) Each banking institution and each non-Oregon institution shall pay each year to the Director of the Department of Consumer and Business Services the fee set in a schedule the director adopts by rule. The fee shall be paid by the date set by the director in the rule establishing the schedule. (2) The director shall set or change the fee schedule described in subsection (1) of this section after considering: (a) The amount of other moneys available for the director to use in performing the directors duties; (b) The costs the director will incur in performing the directors duties in the year in which the director will collect the fee; and (c) The amount the director needs to establish and maintain a reasonable emergency fund. [Amended by 1969 c.94 1; 1971 c.68 1; 1973 c.797 24; 1977 c.135 8; 1985 c.762 27a; 1985 c.786 9; 1987 c.171 3; 1987 c.373 48; 1993 c.229 3; 1993 c.264 4; 1997 c.631 5; 2009 c.541 30]
A banking institution or a non-Oregon institution shall pay to the Director of the Department of Consumer and Business Services the actual costs of the Department of Consumer and Business Services, as determined by the director, for conducting any special examination or taking any action under ORS 706.600. [1973 c.797 25a; 1977 c.135 10; 1985 c.762 30a; 1985 c.786 11; 1997 c.631 6]
[1973 c.797 28; 1985 c.796 2; renumbered 706.795]
(1) When a banking institution or a non-Oregon institution has been examined by an examiner and the examiner finds securities that are of doubtful value, the examiner shall report the same to the Director of the Department of Consumer and Business Services, who may, at the expense of the banking institution or non-Oregon institution, investigate and appraise the securities. (2) The director may, in the discretion of the director or whenever requested to do so by a banking institution or non-Oregon institution, make an audit of the affairs of the banking institution or non-Oregon institution. The Department of Consumer and Business Services shall be reimbursed by the banking institution or non-Oregon institution for all costs incurred by the department in conducting the audit. [Amended by 1973 c.797 29; 1997 c.631 7]
(1) A banking institution that is engaged in the business of banking in this state shall keep books and accounts of the banking institutions activities, in such a manner as to enable the Director of the Department of Consumer and Business Services to readily ascertain the true condition of the banking institution. (2) If the director determines in an examination of a banking institution that the banking institution does not keep books and accounts in such a manner as to enable the director to readily ascertain the true condition of the banking institution, the director may require any officer of the banking institution to open and keep books or accounts as the director prescribes. (3) If a banking institution fails to open and keep the books and accounts that the director prescribes, the director shall send written notice to the banking institution of intent to assess and collect the penalty under this subsection. For each day the banking institution fails to open and keep the books and accounts after receiving notice from the director, the banking institution is subject to a penalty of $1,000. The banking institution shall pay the penalty when the banking institution receives a notice and demand for the amount of the penalty from the director. If the banking institution delays or refuses to pay the penalty upon the directors demand, the Attorney General shall bring an action in the directors name to recover the penalty. All sums collected for penalties imposed by this section must be paid into the Consumer and Business Services Fund created by ORS 705.145. [Amended by 1973 c.797 30; 1985 c.762 31; 1987 c.373 50; 1997 c.631 8; 2015 c.244 9]
(1) A certificate attached to a copy of a document filed by the Director of the Department of Consumer and Business Services, bearing the directors signature, which may be in facsimile, is conclusive evidence that the original document or a facsimile thereof is on file with the office. (2) All certificates issued by the director in accordance with the provisions of this chapter and all copies of documents filed in the office of the director in accordance with the provisions of this chapter, when certified by the director, shall be taken and received in all courts, public offices and official bodies as prima facie evidence of the facts stated in the certificates or documents. A certificate by the director, as to the existence or nonexistence of the facts relating to financial institutions that would appear from the presence or absence of documents filed in the office of the director or the compliance or noncompliance with provisions of this chapter, shall be taken and received in all courts, public offices and official bodies as prima facie evidence of the existence or nonexistence of the facts stated in the certificates or documents. [1989 c.324 2; 1997 c.631 9]
(1) An insured institution or extranational institution shall file a notice with the Director of the Department of Consumer and Business Services and pay a nonrefundable fee of $100 within 30 days after establishing a loan production office in this state. The notice must include: (a) The name of the insured institution or extranational institution and the address of the main office; (b) The name and address of the loan production office; and (c) The name and address of the officer of the insured institution or extranational institution who is responsible for loan production office activities. (2) An insured institution or extranational institution shall file a notice under subsection (1) of this section for each loan production office the insured institution or extranational institution establishes in this state. (3) An insured institution or extranational institution shall amend a notice the insured institution or extranational institution filed under subsection (1) of this section if a material change occurs in the information in the original notice. An amendment to a notice is not subject to a fee. (4) An insured institution or extranational institution shall notify the director if the insured institution or extranational institution closes a loan production office in this state, specifying the date of closure and describing how the insured institution or extranational institution will dispose of any records the insured institution or extranational institution maintained at the loan production office. A notice under this subsection is not subject to a fee. [2015 c.244 4]
(1) The Director of the Department of Consumer and Business Services may take an action described in subsection (2) of this section if a banking institution or non-Oregon institution: (a) Conducts business in an unsafe or unauthorized manner; (b) Refuses to submit records for inspection by an examiner or by the Department of Consumer and Business Services; or (c) Violates a law of this state or the United States or a duly issued order of the director. (2) If the director believes a condition described in subsection (1) of this section exists, the director may: (a) Notify the appropriate bank supervisory agency, with respect to the banking institution or non-Oregon institution, of the directors determination and the facts and circumstances on which the determination is based; (b) Provide the banking institution or non-Oregon institution with a statement of the charges on the basis of which the director determined that the banking institution or non-Oregon institution is violating the law or conducting business in an unsafe or unauthorized manner; (c) Notify the banking institution or non-Oregon institution of the date and place of a hearing before the director, or a person designated by the director, with respect to the charges against the banking institution or non-Oregon institution; and (d) Conduct a hearing pursuant to the notice given to the banking institution or non-Oregon institution under subsection (1)(c) of this section and make findings with respect to each of the charges specified in the notice to the banking institution or non-Oregon institution. (3) After a hearing conducted under subsection (2) of this section, the director may: (a) By an order in writing: (A) Direct the discontinuance of the illegal, unsafe or unauthorized practices; and (B) Direct the banking institution or non-Oregon institution to take affirmative action to correct or remedy a condition that resulted from the illegal, unsafe or unauthorized practice; (b) Apply for and obtain an injunction or other appropriate order from a court that has jurisdiction over the matter to enforce the directors order issued under paragraph (a) of this subsection; (c) Publish notice of an order the director issued pursuant to paragraph (a) of this subsection; and (d) Suspend or revoke the authority of a non-Oregon institution to open, occupy or maintain a branch or branches in this state. [Amended by 1973 c.797 31; 1997 c.631 10; 2009 c.541 30a]
(1) The Director of the Department of Consumer and Business Services may take one or more of the actions described in this section to protect the interest of the creditors and depositors of a banking institution or non-Oregon institution if any of the following occurs: (a) It is unsafe or inexpedient for the banking institution or non-Oregon institution to continue to transact business. (b) Extraordinary withdrawals of money are jeopardizing the interests of remaining depositors. (c) A director or officer has abused that persons trust or has been guilty of misconduct in an official position injurious to the banking institution or non-Oregon institution. (d) The banking institution or non-Oregon institution has suffered a serious loss by fire, floods, burglary, disaster or otherwise. (e) The banking institution or non-Oregon institution neglects or refuses to observe an order of the director under ORS 706.580 or refuses to submit to the inspection of an examiner. (f) A director or officer refuses to be examined under oath regarding the affairs of the banking institution or non-Oregon institution. (2) For purposes of subsection (1) of this section and subject to subsection (5) of this section, the director may take any of the following actions in regard to a banking institution: (a) Take immediate possession and control of the property and affairs of the banking institution. (b) If the director has issued an order under ORS 706.580, enter the banking institution to monitor and enforce implementation of the order. (c) Direct the sale of all or part of the banking institutions assets, or portions thereof, and the assumption of all or part of its liabilities. (d) Direct the conversion, reorganization or consolidation of the banking institution, either with or without a merger. (e) Direct the merger of the banking institution. (f) Direct the sale of a banking institution. (g) Direct the banking institution to develop and endeavor to implement an acquisition plan, under which the banking institution will acquire or be acquired by a national bank or banking institution, or a state or federal savings association. (h) Take any other action that the director determines is necessary and expedient to facilitate the sale of the stock or assets of the banking institution, or the sale, conversion, reorganization, consolidation or merger of the banking institution. (3) For purposes of subsection (1) of this section, and subject to ORS 706.515, the director may take any one of the following actions in regard to a non-Oregon institution: (a) Take immediate possession and control of the property in this state of the non-Oregon institution. (b) If the director has issued an order under ORS 706.580, enter the branches, offices or other places of business in this state of the non-Oregon institution to monitor and enforce implementation of the order. (c) Acting alone or in concert with another appropriate bank supervisory agency, take any action authorized or permitted to be taken under or pursuant to any agreement or contract between the director and one or more bank supervisory agencies. (4) Notwithstanding any other provision of law and pursuant to ORS 706.544, any actual costs incurred by the Department of Consumer and Business Services under this section shall be paid by the banking institution or non-Oregon institution to the director for deposit in the Consumer and Business Services Fund. The moneys deposited in the Consumer and Business Services Fund under this subsection shall not be considered as a budget item on which a limitation is otherwise fixed by law, but shall be in addition to any specific biennial appropriations or amounts authorized to be expended from the Consumer and Business Services Fund for any biennial period. (5) Subsection (2)(c) to (h) of this section are available to the director only when a banking institution is in immediate danger of insolvency. [Amended by 1973 c.797 32; 1985 c.786 12; 1993 c.318 7; 1997 c.631 11]
An examiner of the Department of Consumer and Business Services, having knowledge of the insolvency or unsafe condition of an Oregon operating institution shall report the fact in writing, over the examiners signature, to the Director of the Department of Consumer and Business Services. [Amended by 1973 c.797 33; 1985 c.762 32; 1997 c.631 12]
The Director of the Department of Consumer and Business Services shall keep proper books showing the acts, matters and things by the director done under the provisions of the Bank Act. [Amended by 1973 c.797 34]
(1) The Director of the Department of Consumer and Business Services shall require each Oregon operating institution to submit a report of condition at the close of business on the same day on which the federal regulatory agencies require a report from national banks. (2)(a) In the report of condition required under subsection (1) of this section, an Oregon operating institution shall: (A) Show the Oregon operating institutions assets and liabilities combined for all departments at the close of business on the day specified. (B) Include a sworn statement as to the accuracy and truth of the report from an officer of the Oregon operating institution that makes the report and an attestation from not less than two directors of the Oregon operating institution. (b) The Oregon operating institution shall transmit the report to the director within the time allowed by federal regulations for submitting reports of national bank associations to the federal regulatory agencies. (3) The director may require additional reports of condition at any time. The additional reports must meet the requirements of subsection (2) of this section. (4) Trust companies that do not conduct banking business need not submit the reports required in subsection (1) of this section, but shall submit reports that the director requires. [Amended by 1973 c.797 35; 1975 c.544 3; 1975 c.725 6a; 1977 c.135 11; 1983 c.37 2; 1989 c.269 1; 1991 c.67 188; 1997 c.631 13; 2015 c.244 10]
If an Oregon operating institution delays or fails to furnish reports in the manner required under ORS 706.630, the Oregon operating institution is subject to a penalty of $250 a day for each day while in default. The Oregon operating institution shall pay the penalty after receiving notice or demand for the amount of the penalty from the Director of the Department of Consumer and Business Services. If the Oregon operating institution does not pay the penalty upon demand by the director, the director shall proceed to collect the penalty in the manner prescribed by ORS 706.570 (3). If the director determines that the default was unavoidable, the director may waive the penalty. [Amended by 1973 c.797 36; 1997 c.631 14; 2015 c.244 11]
(1) Each banking institution shall submit to the Director of the Department of Consumer and Business Services each calendar quarter a copy of such records concerning extensions of credit by the banking institution to its executive officers, directors and principal shareholders, and the related interests of those persons, as are required by rule of the director. (2) The director may require a banking institution to file records under subsection (1) of this section more often than quarterly, as the director determines is necessary. (3) The director shall adopt rules governing the submission of records concerning extensions of credit, as required under subsections (1) and (2) of this section, and the identification of the persons to whom the extensions are made. The rules shall be consistent with provisions of the Financial Institutions Regulatory and Interest Rate Control Act of 1978 and regulations adopted by the Federal Reserve Board and the Federal Deposit Insurance Corporation thereunder: (a) In order that banking institutions may satisfy the requirements of subsections (1) and (2) of this section by submitting copies of records required to be maintained under such federal laws and regulations; and (b) In order to otherwise minimize the inconvenience to banking institutions of having to maintain separate records for the federal regulators and the director. [1985 c.786 2]
(1) If the Director of the Department of Consumer and Business Services determines that the condition of an institution or Oregon stock savings bank is such that any transfer of the capital stock of the institution or Oregon stock savings bank would jeopardize the interest of its depositors, the director shall notify the institution or Oregon stock savings bank in writing that when any shares of the capital stock of the institution or Oregon stock savings bank are to be transferred on the books or records of the institution or Oregon stock savings bank, the officer proposing to make the transfer shall report in writing to the director the proposed transfer of stock. A transfer of stock shall not be made, after the date such a notice is issued, unless the transfer agent first obtains the written consent of the director. The director shall notify the institution or Oregon stock savings bank of the directors decision within 30 days after receiving the report. (2) If a director or officer of an institution or Oregon stock savings bank, a transfer agent, vendee or vendor has reason to believe that a transfer of stock creates or changes a controlling interest in an institution or Oregon stock savings bank, that person shall immediately notify the director of the transfer. A transfer that creates a controlling interest in, or changes the control of, an institution or Oregon stock savings bank shall not be entered upon the books of the institution or Oregon stock savings bank or become effective until: (a) Notice has been received at the office of the director; and (b) The sale, exchange or other disposition has been approved in writing by the director. (3) For purposes of this section, a controlling interest of an institution or Oregon stock savings bank exists if a person, directly or indirectly, acting through one or more other persons, owns or has power to vote 25 percent or more of any class of voting stock of an institution or Oregon stock savings bank or of a corporation that is or becomes a financial holding company or a bank holding company as defined in ORS 706.008 unless: (a) The stock of the institution or Oregon stock savings bank is held in a fiduciary capacity and not for the benefit of the person or of the stockholders, employees or members of the person; or (b) The stock is acquired, not as a means of circumventing ORS chapter 715, but by the person in the ordinary course of business to secure or collect a debt previously contracted in good faith and the person disposes of the stock within two years after the acquisition of the stock. The director may extend the period if an extension will not be detrimental to the public interest or in contravention of any other law. (4) The director shall approve or disapprove the transfer in accordance with the standards provided by ORS 707.080 (1). The director also may disapprove a transfer under subsection (2) of this section if any of the reasons stated by ORS 707.145 apply to the proposed new owner of the shares. (5) Notwithstanding subsections (2) to (4) of this section, if the person acquiring a controlling interest in an institution or Oregon stock savings bank is or will through such acquisition become a financial holding company or a bank holding company, the provisions of ORS chapter 715 apply to the change in controlling interest in lieu of the provisions of subsections (2) to (4) of this section. [Amended by 1973 c.797 40; 1975 c.544 4; 1977 c.135 12; 1979 c.88 5; 1985 c.12 15; 1985 c.786 13; 1997 c.631 17; 2001 c.377 46]
A director, president or chief executive officer of a banking institution who retires or resigns from the position of director, president or chief executive officer shall give 30 days prior written notice to the Director of the Department of Consumer and Business Services. [Amended by 1963 c.195 1; 1973 c.797 41; 1987 c.158 150; 1995 c.316 1]
The Director of the Department of Consumer and Business Services may, by writing, waive the notices provided for in ORS 706.690 and 706.700, or shorten the period after the notice when the resignation or retirement becomes effective. [Amended by 1973 c.797 42; 1975 c.544 5; 1995 c.316 2]
(1) The Director of the Department of Consumer and Business Services shall receive and file in the Department of Consumer and Business Services all reports required by the Bank Act. (2) Except as provided in subsection (3) of this section and ORS 706.730, the records of the Department of Consumer and Business Services that pertain to the administration of the Bank Act are available for public inspection unless the director determines in a particular instance that an Oregon operating institution or the directors, stockholders, officers, employees and customers of the Oregon operating institution have an interest in keeping the records confidential that outweighs the public interest in disclosing the records, or that the records are exempt from disclosure under ORS 192.338, 192.345 and 192.355. A determination by the director under this subsection is subject to review under ORS 192.311 to 192.478. (3) Except as provided in subsections (4) and (5) of this section, the following records of the department are exempt from disclosure or production and must be treated as confidential as provided in ORS 705.137: (a) Examination reports and work papers, directives, orders and correspondence that relate to examination reports. (b) Financial statements of and investigatory information concerning persons subject to investigation by the director under ORS 707.070, 707.080, 707.110, 707.140, 707.145, 707.155 or 707.705. (c) Proprietary information. (d) Reviews of financial statements submitted to the director. (e) Reports filed under ORS 706.655. (f) Stockholder lists. (g) Correspondence, reports or other information obtained from or provided to the Financial Crimes Enforcement Network established by order of the United States Secretary of the Treasury. (4) Notwithstanding subsection (3) of this section, the director may disclose a record that is specified in this subsection and that pertains to an Oregon operating institution that has been liquidated under ORS 711.400 to 711.615 if the director determines in a particular instance that the public interest in disclosure of the record outweighs the interests of the Oregon operating institution or of the directors, stockholders, officers, employees or customers of the Oregon operating institution in keeping the record confidential. The director may not in any circumstances, however, disclose a record or a portion of a record that contains proprietary information or information that relates to a persons financial activities or affairs unless the director concludes that the activities or affairs were a direct and substantial contributing factor in the failure of the Oregon operating institution. This subsection applies to the following records of the department: (a) Examination reports and work papers, directives, orders and correspondence relating to examination reports; (b) Investigatory information concerning persons subject to investigation by the director under ORS 707.070, 707.080, 707.110, 707.140, 707.145, 707.155 or 707.705; (c) Reviews of financial statements; and (d) Reports filed under ORS 706.655. (5) Notwithstanding ORS 40.270, an officer of the department may be examined concerning records that are exempt from disclosure under subsection (2) or (3) of this section and ORS 706.730. The records are subject to production if the court before which a civil or criminal action is pending finds that the examination and production is essential for establishing a claim or defense. In making a finding under this subsection, if the court views the records, the court shall do so in camera. (6) A civil penalty the director imposes under the Bank Act is subject to public inspection after the 20th day after the director imposes the civil penalty. (7) All records of the department that pertain to the condition of Oregon operating institutions may be furnished to: (a) The Federal Reserve Bank and examiners from the Federal Reserve Bank. (b) The Comptroller of the Currency of the United States and national bank examiners. (c) The Federal Deposit Insurance Corporation and examiners from the Federal Deposit Insurance Corporation. (d) The Federal Home Loan Bank of which the operating institution is a member or to which the operating institution has applied for membership. (e) The State Treasurer, if the Oregon operating institution is or has applied to become a depository of public fund deposits. (f) A supervisory authority that regulates financial institutions, financial holding companies or bank holding companies. (g) The respective Oregon operating institution, or the financial holding company or bank holding company that controls an Oregon operating institution. (8) The director shall prescribe and furnish to interested persons the forms for all reports required by the Bank Act. (9) If the director is requested to disclose any record subject to this section and the record contains both material that is exempt from disclosure under this section or any other provision of law and material that is not exempt from disclosure, the director shall separate the exempt and nonexempt material and shall disclose only the nonexempt material. [Amended by 1973 c.797 43; 1975 c.515 6; 1983 c.37 3; 1983 c.367 2; 1985 c.762 33a; 1985 c.786 14; 1987 c.373 50a; 1993 c.318 8; 1995 c.314 2; 1997 c.631 18; 1999 c.107 2; 2001 c.377 21; 2007 c.871 30; 2009 c.541 31; 2015 c.244 12]
(1) Notwithstanding any other provision of law: (a) Reports and records described in ORS 706.720 (3) and compliance review documents are confidential as provided in ORS 705.137 and are not discoverable or admissible as evidence in any civil action or administrative proceeding. (b) Reports and records described in ORS 706.720 (3) and compliance review documents delivered to a state, federal or foreign governmental or regulatory agency remain confidential as provided in ORS 705.137 and are not discoverable or admissible in any civil action or administrative proceeding. (c) A person that serves on a compliance review committee or acts at the request of a compliance review committee may not testify in any civil action as to: (A) The contents or conclusions of a compliance review document; or (B) The actions that a compliance review committee takes. (2) This section does not limit the discovery or admissibility in any civil action or administrative proceeding of any documents that are not reports or records described in ORS 706.720 (3) or compliance review documents. (3) Upon motion by any party, a court shall determine a claim of confidentiality under this section after an in camera review of the materials or information claimed to be confidential. If the court determines that part, but not all, of the materials or information is confidential under this section, the court shall ensure that only the materials or information that is not confidential is disclosed. (4) The provisions of this section do not affect the ability of a person to claim any privilege that may be provided by law, including but not limited to a claim of privilege under ORS 40.225. (5) For the purposes of this section: (a) "Compliance review committee" means a person or persons that a board of directors or the managers of a financial institution assign to test, review or evaluate the conduct of the financial institution, the transactions of the financial institution or the potential transactions of the financial institution for the purpose of monitoring, improving and enforcing compliance with: (A) Safe, sound and fair lending practices; (B) Financial reporting to state or federal regulatory agencies; (C) The financial institutions own policies and procedures; or (D) Federal or state statutory or regulatory requirements relating to financial institutions. (b) "Compliance review document" means any document prepared for or created by a compliance review committee. [1997 c.81 2; 2001 c.377 22; 2015 c.244 13]
An officer, director, stockholder or employee of any Oregon operating institution shall not: (1) Knowingly subscribe to or make or cause to be made any false statement or report to the Director of the Department of Consumer and Business Services or any false entry in the books or accounts of the Oregon operating institution. (2) Knowingly subscribe to or exhibit false papers with the intent to deceive any person authorized to examine into the affairs of the Oregon operating institution. (3) Knowingly state or publish any false report or statement of the Oregon operating institution or prepare any false minutes, with intent to deceive the directors of the Oregon operating institution or any person authorized to examine the affairs of the Oregon operating institution. (4) Make improper or fail to make proper entry upon the books or records or in any statement or report of the Oregon operating institution with intent to deceive or conceal the true condition of the Oregon operating institution. [1973 c.797 44; 1997 c.631 19]
(1) The name of a person who is a depositor or debtor of a bank and the amount of the persons deposit or debt are confidential as provided in ORS 705.137. The Director of the Department of Consumer and Business Services or any other person employed by the Department of Consumer and Business Services shall not knowingly disclose the name of a person who is a depositor or debtor of a bank, or the amount of the persons deposit or debt, except that the director or the employee may disclose such information as may be required under ORS 706.720 (5) or as may be necessary in the performance of the directors or employees official duty including any duty under ORS 295.018. (2) Subsection (1) of this section does not prohibit disclosure of the name of any debtor or the amount of the persons debt included in reports that are filed under ORS 706.655, if the reports were filed by a banking institution that has been liquidated or is in the process of being liquidated under ORS 711.400 to 711.615 and if disclosure is otherwise allowed under ORS 706.720. [Amended by 1973 c.797 45; 1975 c.515 7; 1985 c.762 34,34a; 1985 c.786 15; 1993 c.318 9; 1997 c.631 20; 2001 c.377 23]
(1) For the purpose of an investigation or proceeding under the Bank Act, the Director of the Department of Consumer and Business Services may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of books, papers, correspondence, memoranda, agreements or other documents or records that the director considers relevant or material to the inquiry. (2) If a person fails to comply with a subpoena so issued or a party or witness refuses to testify on any matter, the judge of the circuit court for any county, on the application of the director, shall compel obedience by proceedings for contempt as in the case of disobedience of the requirements of subpoena issued from the court or a refusal to testify therein. (3) Each witness who appears before the director under a subpoena shall receive the fees and mileage provided for witnesses in ORS 44.415 (2), except that a witness subpoenaed at the instance of parties other than the director or an examiner shall not be compensated for attendance or travel unless the director certifies that the testimony of the witness was material to the matter investigated. (4) The director in any investigation may cause the depositions of witnesses to be taken in the manner prescribed by law for like depositions in civil suits in the circuit court. [Formerly 706.410; 1989 c.980 19]
If the Director of the Department of Consumer and Business Services has reason to believe that a person has violated any provision of the Bank Act for which criminal prosecution is provided, the director shall give the information relative to the violation to the appropriate federal, state or local law enforcement officer having jurisdiction of the violation. However, this section does not apply when a director or officer of an Oregon operating institution has reported the information to the appropriate law enforcement agency under ORS 707.735. [Formerly 706.430; 1997 c.631 21]
The Attorney General shall conduct all actions begun by the Director of the Department of Consumer and Business Services under authority of the Bank Act, and may require the assistance of the district attorney of the district in which the action is conducted. [Formerly 706.440]
(1) In accordance with ORS chapter 183, the Director of the Department of Consumer and Business Services may adopt rules for the purpose of carrying out the Bank Act. (2) In addition to the notice requirements of ORS chapter 183, before the director adopts a rule, the director shall submit a copy of the rule to each Oregon operating institution. [Formerly 706.460; 1997 c.631 22]
Notwithstanding any other provision of law, the Director of the Department of Consumer and Business Services may, in accordance with ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to 183.410, make rules that authorize banking institutions to exercise any of the powers conferred upon any financial institution that is conducting banking business or trust business in this state, if the director finds that the exercise of the power: (1) Serves the public convenience and advantage; and (2) Promotes or maintains fair competition between banking institutions and other financial institutions. [Formerly 706.555; 1997 c.631 23; 2015 c.244 14]
Notwithstanding ORS 705.145 (2), moneys received or expended by the Director of the Department of Consumer and Business Services under this chapter relating to the supervision of Oregon operating institutions may be deposited in or withdrawn from a single account. The director need not establish a separate account in the Consumer and Business Services Fund relating to the supervision of banks and a separate account relating to the supervision of trust companies. [1993 c.264 2; 1997 c.631 24]
(1) Any person who violates any provision of the Bank Act, or any lawful rule or final order of the Director of the Department of Consumer and Business Services for which a civil penalty is not expressly provided, shall forfeit a civil penalty in an amount determined by the director of not more than $2,000 for each offense, or $10,000 in the aggregate for all such offenses within any three-month period. In the case of individuals, the civil penalty shall be not more than $1,000 for each offense or $5,000 in the aggregate for all such offenses within any three-month period. Each violation is a separate offense. (2) Any person who violates ORS 706.610 and 706.725 shall forfeit a civil penalty in an amount determined by the director of not more than $5,000. In addition, a person violating ORS 706.610 shall forfeit the persons office. (3) Any person who violates ORS 706.730 shall forfeit a civil penalty, in an amount determined by the director, of not more than $1,000. In addition, the violator shall forfeit the violators office. (4) All money forfeited under subsections (1), (2) and (3) of this section shall be paid to the State Treasurer to be deposited in the Consumer and Business Services Fund. (5) In addition to any other civil penalty, any person who violates any provision of the Bank Act or any lawful rule or final order of the director may be required to forfeit and pay to the State Treasurer to be deposited in the Consumer and Business Services Fund a civil penalty in an amount determined by the director but not to exceed the amount by which the person profited in any transaction which violates any such provision, rule or order. (6) The civil penalty may be recovered in an action brought thereon in the name of the State of Oregon in any court of appropriate jurisdiction or may be imposed as provided in ORS 183.745. (7) In any court action with respect to a civil penalty, including judicial review under ORS 183.745, the court may review the penalty as to both liability and reasonableness of amount. (8) If a civil penalty is assessed against a director, officer or employee of a banking institution or non-Oregon institution, unless the director provides otherwise, the director, officer or employee shall forfeit the penalty and the penalty shall not be paid either directly or indirectly by the banking institution or non-Oregon institution. (9) The provisions of this section are in addition to and not in lieu of any other enforcement provisions contained in the Bank Act. (10) If a civil penalty is assessed against a director, officer or employee of a non-Oregon institution, the director shall give notice of the assessment to the bank supervisory agency having primary responsibility for the supervision of the non-Oregon institution in the state or country in which it is chartered or otherwise organized. [1975 c.544 8; 1985 c.786 18; 1991 c.734 94; 1993 c.318 10; 1997 c.631 25]
Violation of ORS 706.725 is a Class C felony. [Amended by 1973 c.797 48; 1975 c.544 6]
It is unlawful for any person to engage in or transact a banking or trust business within this state except by means of an entity duly organized for the purpose. [1973 c.797 50; 1997 c.631 29]
(1) As an alternative to being organized as a corporation under this chapter, an Oregon bank may be organized as a limited liability company. (2) With respect to any Oregon bank that is organized as a limited liability company, as used in the Bank Act: (a) "Articles of incorporation" means the Oregon banks articles of organization, as defined in ORS 63.001. (b) "Bylaws" means the Oregon banks operating agreement, as defined in ORS 63.001. (c) "Certificate of incorporation" means a certificate of organization issued to the Oregon bank. (d) "Corporation," means a limited liability company, as defined in ORS 63.001. (e) "Director," "directors" or "board of directors" means the Oregon banks manager or managers, as defined in ORS 63.001. (f) "Dividends" means distributions, as defined in ORS 63.001, declared or paid by the Oregon bank. (g) "Incorporator" means the Oregon banks organizer, as defined in ORS 63.001. (h) "Share" or "stock" means a membership interest in the Oregon bank, as defined in ORS 63.001. (i) "Stockholder," "stockholders," "shareholder" or "shareholders" means the Oregon banks member or members, as defined in ORS 63.001. (3) An Oregon bank organized as a limited liability company shall be organized under the authority of the Director of the Department of Consumer and Business Services under this chapter. Except as set forth in subsection (4) of this section, with respect to all other aspects of its operation and existence, an Oregon bank that is organized as a limited liability company is subject to the provisions of ORS chapter 63, to the extent that ORS chapter 63 does not conflict with the Bank Act. In the event of any conflict between the Bank Act and ORS chapter 63, the Bank Act controls. (4)(a) Notwithstanding any provision of ORS chapter 63, the articles of organization of an Oregon bank that is organized as a limited liability company shall: (A) State that the existence of the Oregon bank is perpetual; and (B) Provide that the Oregon bank is to be managed by a board of not fewer than five managers. (b) Notwithstanding any provision of ORS chapter 63, an Oregon bank that is organized as a limited liability company shall be managed exclusively by its board of managers in substantially the same manner as an Oregon bank that is organized as a corporation is managed by its board of directors. The board of managers of an Oregon bank that is organized as a limited liability company has substantially the same rights, powers, privileges, duties and responsibilities as the board of directors of an Oregon bank that is organized as a corporation and is subject to the provisions of this chapter pertaining to directors. (c) Notwithstanding any provision of ORS chapter 63, membership interests in an Oregon bank that is organized as a limited liability company are freely transferable, and consent of the Oregon bank or its members or managers is not required for a person to acquire or transfer a membership interest in the Oregon bank. Immediately upon the completion of the transfer of the membership interest to a person, the person becomes a member and has all the rights of a member. (d) ORS 63.621 (2) to (4) do not apply to an Oregon bank organized as a limited liability company. (5) The articles of organization of an Oregon bank that is organized as a limited liability company shall require that liquidation of the Oregon bank conform with the requirements of the Bank Act. (6) An Oregon bank that is organized as a limited liability company shall have the officers described in ORS 707.700. The officers shall be elected by the board of managers of the Oregon bank and are subject to the provisions of this chapter. (7) Each Oregon bank that is organized as a limited liability company shall have a written operating agreement containing any provisions for the affairs of the Oregon bank as may be agreed upon by its members and that are consistent with the Bank Act. (8) Any number of persons, not fewer than five, may act as organizers of an Oregon bank that is organized as a limited liability company. [2005 c.134 2]
A person that has not received from the Director of the Department of Consumer and Business Services a charter or a certificate of authority to conduct banking business may not: (1) Advertise that the person is receiving or accepting money on deposit. (2) Use a sign at the persons place of business that indicates that the person: (a) Is a banking institution or that the place of business is a place of business for a banking institution; (b) Receives deposits or payments made on check; or (c) Transacts any other form of banking business. (3) Make use of or circulate any letterheads, blank notes, blank receipts, certificates, circulars or any written or printed paper that indicates that the business is the business of a banking institution. (4) Transact business under any name that the director determines leads the public to believe that the person is transacting business as a banking institution or that the person is affiliated with a banking institution. (5) Solicit or receive deposits or transact business in the manner of a banking institution or in such a manner as to lead the public to believe that the person is transacting business as a banking institution. (6) This section does not apply to a national bank that was lawfully transacting banking business in this state on June 30, 2011, and has continuously transacted banking business in this state after June 30, 2011. [Amended by 1973 c.797 51; 1997 c.631 30; 2015 c.244 15]
(1) The Director of the Department of Consumer and Business Services may examine the accounts, books and papers of every person the director has reasonable cause to believe is violating any provision of ORS 707.005 or 707.010. (2) When the director believes, from evidence satisfactory to the director, that any person is violating the provisions of ORS 707.005 or 707.010, the director may cause a complaint to be filed in the circuit court of the county in which the person conducts business to enjoin and restrain the person from continuing the violation. The court shall have jurisdiction of the proceeding and may make and enter an order or judgment awarding such preliminary or final injunctive relief as in its judgment is proper. [Amended by 1973 c.797 52; 1997 c.631 31]
(1) One or more persons or a corporation may organize a banking institution under this section solely for the purpose of merging with, acquiring the assets of or assuming the liabilities of one or more existing financial institutions under ORS chapter 711 and, except as otherwise provided in this section, without authority to engage in or transact banking or trust business. (2) Notwithstanding ORS 707.050, 707.070, 707.080 to 707.120, 707.140, 707.170 or 707.200 or other statutes that are specifically inconsistent with this section, a banking institution described in subsection (1) of this section must be organized as follows: (a) A prospective incorporator or incorporators shall submit to the Director of the Department of Consumer and Business Services for filing articles of incorporation that the prospective incorporator or incorporators execute in duplicate, and such other information as the director may require, which may include the additional information required in an application under ORS 707.070 or 716.028 if the banking institution organized under this section is to survive the merger, will purchase assets or will assume liabilities, together with an organizational fee of $2,500. (b) The articles of incorporation for the banking institution must specify: (A) The name and address of each incorporator. (B) The information required under ORS 707.110 (2)(a), (b) and (h) and (3). (C) The term of the banking institutions existence, which may be perpetual. (D) The purpose of the banking institution, which must be limited to the purposes set forth in subsection (1) of this section. However, if the banking institution is to be the resulting bank in a merger, or the acquiring bank in an acquisition or assumption, the articles of incorporation may also contain all purposes allowed a banking institution under the Bank Act, provided the implementation of such purposes is conditioned upon consummation of the merger or the acquisition or assumption. (E) The name and address of each director of the board of directors, which must be composed of not less than three directors. (3) Unless the director finds that approving the articles would violate ORS 707.145 or other applicable law, the director shall file the articles and issue a certificate of incorporation in accordance with ORS 707.120, if: (a) The director finds that the articles of incorporation conform to subsection (3) of this section; and (b) The director finds that the banking institution, following any merger or assumption of liabilities, will meet the requirements of ORS 707.080 (1) and (2). (4) After the director issues a certificate of incorporation, the corporate existence of the banking institution begins and the banking institution may issue stock. (5)(a) After the director issues a certificate of incorporation, the new banking institution shall file a certified copy of the banking institutions bylaws with the director within 90 days. If the director finds that the bylaws are consistent with the requirements of the Bank Act, the director shall issue a provisional charter to the banking institution. (b) A provisional charter expires one year after the director issues the provisional charter, but the director may extend the expiration period. If a merger or assumption of liabilities is not consummated before the provisional charter expires, the interim bank ceases to exist and the banking institutions articles of incorporation and provisional charter are void. (c) For purposes of ORS chapter 711, a provisional charter that the director issues under this section is a charter, where appropriate. (d) If the merger or assumption of liabilities is consummated and the banking institution organized under this section survives the transaction, the director shall issue to the banking institution a charter to engage in banking business either as an Oregon commercial bank or as an Oregon stock savings bank. (6) A banking institution organized solely for the purposes set forth in subsection (1) of this section for which the director has issued a charter may, with the directors approval, have initial paid-in capital in an amount less than that required by ORS 707.050 before consummation of a proposed merger. [1979 c.88 8; 1997 c.631 32; 2005 c.192 13; 2015 c.244 16]
A trust company that desires to also conduct a banking business may convert to an Oregon bank in accordance with the provisions of ORS 711.070 and 711.080. [1997 c.631 39]
(1) Every institution or Oregon stock savings bank shall have at the time of issuance of its charter, initial paid-in capital of not less than $1,500,000. The Director of the Department of Consumer and Business Services may require a lesser or greater amount of initial paid-in capital for a particular institution or Oregon stock savings bank if the director determines that the lesser or greater amount is sufficient or is necessary for safe and sound operation of the institution or Oregon stock savings bank. (2) The initial paid-in capital of an institution or Oregon stock savings bank must be paid either in cash or by exchange of real property and improvements thereon. The real property and improvements must be approved by the director as meeting all applicable requirements of law and all other conditions and standards that the director adopts by rule, including but not limited to a proper appraisal by a qualified appraiser. [Amended by 1963 c.195 3; 1973 c.797 53; 1985 c.786 24; 1997 c.631 33]
Any number of persons, not less than five, desiring to organize a banking institution shall, as prospective incorporators, first submit an application to the Director of the Department of Consumer and Business Services for a permit to organize a banking institution. The applicants shall pay to the director at the time of their application a fee of $2,500, no part of which shall be refunded. The application shall be signed by one of the applicants and shall include the following information: (1) The proposed location of the initial principal place of business. (2) The class or classes of stock proposed to be issued, the proposed offering price per share and the aggregate dollar amount of the proposed initial paid-in capital. (3) The corporate name. (4) The names of the proposed senior officers and the initial directors, at least three of whom shall also be among the incorporators. (5) The residence addresses and occupations of the proposed incorporators and directors. (6) The proposed articles of incorporation meeting the requirements of ORS 707.110. (7) The number of shares of voting stock proposed to be subscribed for by the incorporators and each of the proposed directors and senior officers, and the names of any other persons who are expected to subscribe for, to own or to control more than 10 percent of the voting stock and the amount of stock for which each proposes to subscribe. (8) Evidence satisfactory to the director of the character, financial responsibility and ability of the incorporators, directors and senior officers. (9) Evidence satisfactory to the director, in the form of a business plan and such additional information as the director may require, demonstrating that the proposed banking institution is likely to be financially successful. (10) The proposed operating policies of the banking institution. (11) A statement as to whether the banking institution is to be a trust company, an Oregon commercial bank or an Oregon stock savings bank, and, if the proposed Oregon commercial bank or Oregon stock savings bank is applying for trust powers, a statement to that effect. (12) Any other information that the director may require. [Amended by 1971 c.68 3; 1973 c.797 54; 1977 c.135 13; 1979 c.88 9; 1997 c.631 36]
(1) The corporate name of a banking institution: (a) May not contain any word or phrase that indicates or implies that the banking institution is organized for any purpose other than one or more of the purposes contained in the banking institutions articles of incorporation. (b) Must be distinguishable from: (A) The name of any banking institution, insured institution, extranational institution that has complied with the provisions of ORS 713.020 or 713.300 or credit union, as defined in ORS 723.008; or (B) The name of: (i) Any corporation, professional corporation, nonprofit corporation, cooperative, limited liability company, limited partnership or business trust currently on file with the Secretary of State; or (ii) Any reserved, registered or assumed business name currently on file with the Secretary of State. (2) The director may refuse to permit a banking institution to use any name the director determines is not distinguishable from the name of a financial institution that is already lawfully engaging in banking business or making loans in this state. (3) A banking institution may transact business under one or more assumed business names if the assumed business names meet the requirements of subsection (1) of this section, unless the director determines that the assumed business names are not distinguishable from: (a) The name of any banking institution, insured institution, extranational institution that has complied with the provisions of ORS 713.020 or 713.300 or credit union, as defined in ORS 723.008; (b) The name of any corporation, professional corporation, nonprofit corporation, cooperative, limited liability company, limited partnership or business trust currently on file with the Secretary of State; or (c) Any reserved, registered or assumed business name currently on file with the Secretary of State. [1985 c.762 36; 1997 c.631 37; 2015 c.244 17]
(1) When an application to organize has been submitted, the Director of the Department of Consumer and Business Services shall determine whether: (a) The purposes of the proposed banking institution as stated in the proposed banking institutions articles of incorporation and the application are consistent with the Bank Act; (b) The character, financial responsibility and general fitness of the persons named in the application are such as to command the confidence of the community in which the proposed banking institution is to be located and to warrant the belief that the business of the proposed corporation will be honestly and efficiently conducted; (c) The proposed directors and officers are competent to manage successfully a banking institution; (d) The suggested capitalization is adequate for the proposed banking institutions anticipated development and growth within a reasonable period of time; and (e) There is reasonable assurance of sufficient volume of business for the proposed banking institution to be economically viable. (2) If the director is satisfied that the applicant meets the standards prescribed in subsection (1) of this section the director shall note the approval and the date on each copy of the application. If the director is not satisfied or believes that the public interest will be endangered the director shall note the disapproval of the director and the date on each copy of the application. (3) The director shall acknowledge receipt of an application and shall notify the applicants of approval or disapproval of the application. The director shall file the original of an approved application in the office of the director. (4) The director shall act to approve or disapprove an application within 60 days from receipt of the application, unless a majority of the applicants and the director agree to extend the time an additional 30 days. (5) The director may grant conditional approval of any application and require the applicants to make additional showing or changes in the proposed banking institution as the director considers advisable. (6) The applicants may appeal the decision of the director to any court of appropriate jurisdiction. [Amended by 1973 c.797 55; 1975 c.544 8a; 1997 c.631 40]
If, after approving the application for authority to organize, it appears to the Director of the Department of Consumer and Business Services that the articles of incorporation, the organization or proposed manner of conducting business do not comply with the terms of the application, the requirements of approval or the requirements of law, the director may refuse to file the articles of incorporation or to grant a charter. [Amended by 1973 c.797 56; 1997 c.631 41]
Within 30 days after authority to organize has been finally granted, the prospective incorporators shall submit to the Director of the Department of Consumer and Business Services articles of incorporation. If articles of incorporation are not received by the director within the specified time, the authority to organize is void. [Amended by 1973 c.797 57; 1997 c.631 42]
(1) Any number of individuals, not less than five, may by articles of incorporation establish an institution or Oregon stock savings bank. The individuals shall execute the articles of incorporation in duplicate, and shall submit the articles of incorporation to the Director of the Department of Consumer and Business Services. (2) The articles of incorporation must: (a) Specify the name of the institution or Oregon stock savings bank. (b) Specify the initial principal place where the institution or Oregon stock savings bank will transact business, designated by legal description or street and number in the city or town. (c) Specify the address, including street and number, and mailing address, if different, of the institutions or Oregon stock savings banks initial registered office and the name of the initial registered agent at the registered office. (d) List the names of the prospective incorporators. (e) Specify the term of the institutions or Oregon stock savings banks existence, which may be perpetual. (f) Specify the purpose for which the institution or Oregon stock savings bank is formed. (g) State that a board of directors of not less than five individuals will govern the business of the institution or Oregon stock savings bank. (h) State the preemptive rights that stockholders will have, if the stockholders will have preemptive rights. (3) In addition to the requirements set forth in subsection (2) of this section, the articles of incorporation: (a) Must prescribe the classes of shares and the number of shares of each class that the institution or Oregon stock savings bank may issue. If the institution or Oregon stock savings bank may issue more than one class of shares, the articles of incorporation must prescribe a distinguishing designation for each class, and before the institution or Oregon stock savings bank issues shares of a class, the articles of incorporation must describe the preferences, limitations and relative rights of the class. All shares of a class must have preferences, limitations and relative rights identical to those of other shares of the same class except to the extent otherwise permitted by ORS 707.262. (b) Must authorize one or more classes of shares that together have unlimited voting rights, and one or more classes of shares, which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the institution or Oregon stock savings bank upon dissolution. (c) May authorize one or more classes of shares that: (A) Have special, conditional or limited voting rights, or no voting rights, except to the extent prohibited by this chapter; (B) Are redeemable or convertible as specified in the articles of incorporation: (i) At the option of the institution or Oregon stock savings bank, the shareholder or another person or upon the occurrence of a designated event; (ii) For cash, indebtedness, securities or other property; or (iii) In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events; (C) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative; or (D) Have preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the institution or Oregon stock savings bank. (4) The description of the designations, preferences, limitations and relative rights of share classes in subsection (3)(c) of this section is not exhaustive. (5) The articles of incorporation also may contain any lawful provisions that: (a) Regulate the business or conduct of affairs of the institution or Oregon stock savings bank; (b) Define, limit and regulate the powers of the directors; or (c) Eliminate or limit the personal liability of a director to the institution or Oregon stock savings bank or the shareholders of the institution or Oregon stock savings bank for monetary damages for conduct as a director, except that the provisions may not eliminate or limit the liability of a director for any act or omission that occurs before the date on which the provision becomes effective, and except that the provision may not eliminate or limit the liability of a director for: (A) Any breach of the directors duty of loyalty to the institution or Oregon stock savings bank or the shareholders of the institution or Oregon stock savings bank; (B) Acts or omissions that are not in good faith or that involve intentional misconduct or a knowing violation of law; (C) Any unlawful distribution under the Bank Act; or (D) Any transaction from which the director derived an improper personal benefit. [Amended by 1973 c.797 58; 1987 c.197 1a; 1989 c.324 3; 1997 c.631 43; 2005 c.192 6; 2015 c.244 18]
(1) If the Director of the Department of Consumer and Business Services finds that the articles of incorporation conform to law, the director shall within 60 days after receiving the articles of incorporation and when all fees have been paid: (a) Indorse on each of the duplicate originals the word "Filed," and the month, day and year of the filing. (b) File one of the duplicate originals in the office of the director. (c) Issue a certificate of incorporation to which the director shall affix the other duplicate original. (2) The certificate of incorporation, with one of the duplicate originals affixed thereto shall be returned to the incorporators or their representative. (3) Upon issuance of the certificate of incorporation the corporate existence of a banking institution begins. [Amended by 1973 c.797 59; 1997 c.631 44]
(1) When subscriptions totaling not less than the amount of the initial paid-in capital have been received, the incorporators shall submit for filing with the Director of the Department of Consumer and Business Services: (a) A list of stockholders, showing name, address, number of shares and amount paid, certified by the president or cashier. (b) A certificate of any escrow agent holding moneys in escrow as payment for subscriptions to stock of the institution or Oregon stock savings bank showing the amount held. (c) A list of the directors and senior officers elected. (d) A copy of its bylaws certified to by its president or cashier. (e) Evidence of approval by the Federal Deposit Insurance Corporation of the Oregon commercial banks or Oregon stock savings banks application for deposit insurance. (2) Upon receiving the items referred to in subsection (1) of this section, the director shall examine the condition of the institution or Oregon stock savings bank. If, upon examination, the director determines that the institution or Oregon stock savings bank has complied with the requirements of the Bank Act and that the amount of the institutions or Oregon stock savings banks initial paid-in capital has been paid or is held in escrow for release upon issuance of a charter, the director shall issue to the institution or Oregon stock savings bank a charter, which, depending on the form of the application and the approval of the director, shall be to do a banking business either as an Oregon commercial bank or as an Oregon stock savings bank, or to do a trust business, or to do both a banking and trust business. [Amended by 1973 c.797 61; 1987 c.216 2; 1997 c.631 47]
The Director of the Department of Consumer and Business Services may disapprove an application for a permit to organize or refuse to approve the articles of incorporation or to grant a charter upon a finding that any person named in the application to organize or in other documents submitted for filing: (1) Is insolvent, either in the sense that the persons liabilities exceed the persons assets or that the person cannot meet the persons obligations as they mature, or is in such financial condition that the person cannot continue in business with safety to the persons customers; (2) Has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession; (3) Has willfully or repeatedly violated or failed to comply with any provisions of the Bank Act or any rule or order of the director; (4) Has been convicted of a crime, an essential element of which is fraud; (5) Is not qualified to conduct a banking business on the basis of such factors as training, experience and knowledge of the business; (6) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the banking business or other business that may lawfully be conducted by an insured institution; (7) Is the subject of an order of the director subjecting the person to a civil penalty, or removing the person from an office in any entity regulated by the director; or (8) Is the subject of an order entered within the past five years, directing the person to cease and desist from any fraudulent or unlawful business or banking practice, subjecting the person to a civil penalty, or removing the person from an office in a financial institution or a consumer finance company issued by the banking supervisor of another state or by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System or by any other agency of the federal government or another state with regulatory authority over such financial institutions or consumer finance companies. [1977 c.135 19; 1985 c.762 37,37a; 1985 c.786 25; 1987 c.373 52; 1997 c.631 48; 2011 c.597 288]
Notwithstanding the provisions of ORS chapter 183, the Director of the Department of Consumer and Business Services may, without prior hearing or opportunity therefor, refuse to grant authority to organize a banking institution. In case authority to organize is refused by the director, the applicants may within 30 days after the refusal appeal the decision to any court of appropriate jurisdiction. [Amended by 1971 c.734 172; 1973 c.797 62; 1975 c.544 8b; 1997 c.631 49]
(1) In the course of investigating any person named in the application to organize or in other documents submitted for filing, the Director of the Department of Consumer and Business Services may require the person to provide additional information for the directors further inquiry. For the purpose of such further inquiry, the director may require any of the following persons to submit to fingerprinting: (a) Any person required to be named in the application to organize. (b) Any person named in the proposed articles of incorporation of the banking institution or documents submitted for filing as a prospective incorporator or as a director, president or chief executive officer of the banking institution. (2) Fingerprints acquired under subsection (1) of this section may be submitted to appropriate law enforcement agencies, including the Federal Bureau of Investigation, for the purpose of discovering any unlawful activities of the person. [1985 c.786 23; 1997 c.631 50]
(1) A banking institution shall not transact any business, except as is incidental or necessary to its organization, until it has received its charter from the Director of the Department of Consumer and Business Services. (2) An institution or Oregon stock savings bank that fails to obtain paid subscriptions in at least the amount of its approved initial paid-in capital and complete its organization and receive from the director a charter, within one year after the date of approval of its articles of incorporation, ceases to exist and the articles of incorporation are void. (3) All persons purporting to act as or on behalf of a banking institution, knowing there was no incorporation, are jointly and severally liable for all liabilities created while so acting. [Amended by 1969 c.44 1; 1973 c.797 63; 1989 c.324 5; 1997 c.631 51]
(1) A charter shall specify the date on which it becomes effective, which shall not be more than 90 days after the date of issuance of the charter, unless an extension of time is granted by the Director of the Department of Consumer and Business Services. (2) A banking institution shall commence business on the effective date specified in its charter. If a banking institution fails to commence business on the effective date specified in the charter or according to any extension of time granted by the director it ceases to exist and its articles of incorporation and charter are void. [Amended by 1973 c.797 64; 1997 c.631 52]
The initial principal place of business of a banking institution shall be specified in its articles of incorporation. The principal place of business may be changed upon application of the banking institution to the Director of the Department of Consumer and Business Services. The director shall determine whether the change in location is advisable or justified and whether the public convenience and advantage will be promoted and shall approve or disapprove the change of location. An appeal from the decision of the director may be taken to any court of appropriate jurisdiction. [Amended by 1973 c.797 65; 1975 c.544 8c; 1997 c.631 53]
(1) Each institution and each Oregon stock savings bank shall continuously maintain in this state a registered agent and registered office that may be, but need not be, the same as any of its places of business. (2) A registered agent shall be: (a) An individual who resides in this state and whose business office is identical to the registered office; (b) A domestic corporation, domestic limited liability company, domestic professional corporation or domestic nonprofit corporation whose business office is identical to the registered office; or (c) A foreign corporation, foreign limited liability company, foreign professional corporation or foreign nonprofit corporation authorized to transact business in this state whose business office is identical to the registered office. [2005 c.192 2]
(1) An institution or Oregon stock savings bank may change the institutions or Oregon stock savings banks registered office or registered agent by delivering to the Director of the Department of Consumer and Business Services for filing a statement of change that sets forth: (a) The name of the institution or Oregon stock savings bank; (b) The address, including street and number, of a new registered office, if the institution or Oregon stock savings bank changes the registered office; (c) The name of a new registered agent and a statement that attests that the new registered agent has consented to the appointment, if the institution or Oregon stock savings bank changes the registered agent; and (d) A statement that attests that after the change or changes are made, the street addresses of the institutions or Oregon stock savings banks registered office and the business office of the institutions or Oregon stock savings banks registered agent will be identical. (2) If a registered agent changes the street address of the registered agents business office, the registered agent shall change the street address of the registered office of the institution or Oregon stock savings bank for which the agent is the registered agent by notifying the chief executive officer of the institution or Oregon stock savings bank of the change in writing, either electronically or by certified mail, and electronically delivering to the director a signed statement that complies with the requirements of subsection (1) of this section and recites that the registered agent has notified the institution or Oregon stock savings bank of the change. (3) The directors filing the statement terminates the existing registered office or registered agent, or both, on the effective date of the filing and establishes the newly appointed registered office or registered agent, or both, as the registered office or registered agent of the institution or Oregon stock savings bank. [2005 c.192 3; 2015 c.244 19]
(1) A registered agent may resign as agent upon delivering a signed statement to the Director of the Department of Consumer and Business Services and giving notice in the form of a copy of the statement to the institution or Oregon stock savings bank. The statement may include a statement that the registered office is also discontinued. (2) Upon delivery of the signed statement, the director shall file the resignation statement. The copy of the statement given to the institution or Oregon stock savings bank under subsection (1) of this section shall be addressed to the institution or Oregon stock savings bank at its mailing address or principal office as shown by the records of the director. (3) The agency appointment is terminated and the registered office discontinued, if so provided, on the 31st day after the date on which the statement was filed by the director unless, prior to that date, the institution or Oregon stock savings bank appoints a successor registered agent as provided in ORS 707.184, thereby terminating the capacity of such agent. [2005 c.192 4]
(1) The registered agent appointed by an institution or Oregon stock savings bank shall be an agent of the institution or Oregon stock savings bank upon whom any process, notice or demand required or permitted by law to be served upon the institution or Oregon stock savings bank may be served. (2) The Director of the Department of Consumer and Business Services shall be an agent of an institution or Oregon stock savings bank, including a dissolved institution or Oregon stock savings bank, upon whom any such process, notice or demand may be served whenever the institution or Oregon stock savings bank fails to appoint or maintain a registered agent in this state or whenever the institutions or Oregon stock savings banks registered agent cannot with reasonable diligence be found at the registered office. (3) Service shall be made on the director by: (a) Serving the director or a clerk on duty at the office of the director a copy of the process, notice or demand, with any papers required by law to be delivered in connection with the service, and the required fee for each party being served or by mailing to the office of the director a copy of the process, notice or demand and the required fee for each party being served by certified or registered mail; (b) Transmittal by the person instituting the proceedings of notice of the service on the director and a copy of the process, notice or demand and accompanying papers to the institution or Oregon stock savings bank being served by certified or registered mail: (A) At the last registered office of the institution or Oregon stock savings bank as shown by the records of the director; and (B) At such address the use of which the person initiating the proceedings knows or, on the basis of reasonable inquiry, has reason to believe is most likely to result in actual notice; and (c) Filing with the appropriate court or other body, as part of the return of service, the return receipt of mailing and an affidavit of the person initiating the proceedings stating that this section has been complied with. (4) The director shall keep a record of all processes, notices and demands served upon the director under this section. (5) After completion of initial service upon the director, no additional documents need be served upon the director to maintain jurisdiction in the same proceeding or to give notice of any motion or provisional process. (6) Nothing contained in this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon an institution or Oregon stock savings bank in any other manner now or hereafter permitted by law, or enlarge the purposes for which service on the director is permitted where such purposes are limited by other provisions of law. [2005 c.192 5]
An institutions or Oregon stock savings banks incorporators shall submit to the Director of the Department of Consumer and Business Services proposed offering documents for selling the institutions or Oregon stock savings banks stock for the directors review. Subscriptions for stock in the institution or Oregon stock savings bank may not be accepted before the date on which the director approves the offering documents. [1997 c.631 46; 2015 c.244 20]
Before a charter for a newly organized institution or Oregon stock savings bank is issued, the subscribers to the stock of the institution or Oregon stock savings bank shall pay in the full amount of the subscribers stock subscriptions, which must total an aggregate amount that is not less than the initial paid-in capital that the Director of the Department of Consumer and Business Services approved. The subscribers shall pay the amount by deposit with an escrow agent that is acceptable to the director for release upon the issuance of a charter. The subscribers shall pay in cash or by exchange of real property and improvements on real property. The director must approve the real property and improvements as provided in ORS 707.050, but in the absence of fraud in the transaction, the judgment of the board of directors as to the adequacy of the real property and improvements as consideration for the stock being purchased is conclusive. An institution or Oregon stock savings bank may not issue any share of stock until the charter for the institution or Oregon stock savings bank has been issued. [Amended by 1973 c.797 66; 1983 c.296 2; 1985 c.786 26; 1987 c.216 3; 1997 c.631 54; 2015 c.244 21]
(1) Except as provided in subsection (2) of this section, a certificate that represents shares of the stock of an institution or Oregon stock savings bank must: (a) Be signed by two officers of the institution or Oregon stock savings bank designated in the bylaws, and may be sealed with the seal of the institution or Oregon stock savings bank or a facsimile of the seal. The signatures of the officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent or registrar other than the institution or Oregon stock savings bank or an employee of the institution or Oregon stock savings bank. If an officer that has signed or whose facsimile signature has been placed upon the certificate is no longer an officer before the certificate is issued, the institution or Oregon stock savings bank may issue the certificate with the same effect as if the former officer were an officer at the date on which the institution or Oregon stock savings bank issued the certificate. (b) State upon the face or back of the certificate the designations, preferences, limitations and relative rights of the shares of each class authorized to be issued, if the institution or Oregon stock savings bank may issue shares of more than one class, or state that the institution or Oregon stock savings bank will provide any shareholder upon request and without charge a full statement of the designations, preferences, limitations and relative rights of each class of shares. (c) State the variations in the relative rights and preferences between the shares of each series so far as the board of directors has fixed and determined the rights and preferences in a series, if the institution or Oregon stock savings bank may issue a class in series, and state the authority of the board of directors to fix and determine the relative rights and preferences of subsequent series. (d) State that the institution or Oregon stock savings bank is organized under the laws of this state. (e) State the name of the person to whom the institution or Oregon stock savings bank issued the certificate. (f) State the number and class of shares, and the designation of the series, if any, that the certificate represents. (2) In lieu of issuing certificates that represent shares in accordance with subsection (1) of this section, the board of directors of an institution or Oregon stock savings bank may authorize the institution or Oregon stock savings bank to issue some or all of the shares of any or all classes or series without certificates. The authorization does not affect shares already represented by certificates until the shares are surrendered to the institution or Oregon stock savings bank. Within a reasonable time after the issuance or transfer of shares without certificates, the institution or Oregon stock savings bank shall send the shareholder a written statement of the information required on certificates under subsection (1) of this section. (3) A share may not be issued until the share is fully paid. (4) At the request of any holder of two or more certificates of the stock of any institution or Oregon stock savings bank organized under the laws of this state, the institution or Oregon stock savings bank shall, upon the surrender of the certificates, issue to the holder of the stock one certificate, or a statement pursuant to subsection (2) of this section, for all shares of stock of any one class in the institution or Oregon stock savings bank that the stockholder owns if the number of shares that the stockholder owns in the particular class equals or exceeds 100. [Amended by 1959 c.108 1; 1965 c.189 1; 1973 c.797 67; 1987 c.197 2; 1989 c.324 6; 1995 c.131 1; 1997 c.631 55; 2015 c.244 22]
(1) An institution or Oregon stock savings bank shall keep a stock ledger or register that shall show the name and mailing address of and the number of shares held by each stockholder of record. The institution or Oregon stock savings bank shall also maintain a record of transfers of stock, stating the time when made, the number of shares transferred and to whom transferred. (2) The stock ledger or register shall be available for inspection and copying, during regular business hours at a reasonable location specified by the institution or Oregon stock savings bank, by a stockholder of the institution or Oregon stock savings bank upon at least five days prior written notice if: (a) The stockholders demand for inspection is made in good faith and for a proper purpose; (b) The stockholder described with reasonable particularity the stockholders purpose; and (c) The stock ledger or register requested is directly connected to the stockholders purpose. [Amended by 1973 c.797 69; 1997 c.631 56]
The shares of stock of an institution or Oregon stock savings bank shall be transferred on the books of the institution or Oregon stock savings bank in such manner as the bylaws may provide and as required in ORS 707.220. A transfer of stock is not valid while an institution or Oregon stock savings bank is under notice from the Director of the Department of Consumer and Business Services to make good any impairment of its stockholders equity, until the impairment has been made good. [Amended by 1973 c.797 70; 1997 c.631 57]
The initial bylaws of an institution shall be adopted by its board of directors. The power to alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless reserved to the shareholders by the articles of incorporation or by bylaws. The bylaws may contain any provisions for the regulation and management of the affairs of the institution not inconsistent with law or the articles of incorporation. [1989 c.324 9; 1997 c.631 58]
(1) An institution or Oregon stock savings bank may amend its articles of incorporation, from time to time, in any and as many respects as may be desired, so long as its articles of incorporation, as amended, contain only such provisions as might be lawfully contained in the original articles of incorporation at the time of making such amendment. (2) In particular, and without limitation upon such general power of amendment, an institution or Oregon stock savings bank may amend its articles of incorporation, from time to time, so as: (a) To change its corporate name. (b) To change its period of duration. (c) To change, enlarge or diminish its corporate purposes. (d) To increase or decrease the aggregate number of shares, or shares of any class, which the institution or Oregon stock savings bank has authority to issue. (e) To exchange, classify, reclassify or cancel all or any part of its shares, whether issued or unissued. (f) To change the designation of all or any part of its shares, whether issued or unissued, and to change the preferences, limitations and relative rights in respect to all or any part of its shares, whether issued or unissued. (g) To change the shares of any class, whether issued or unissued, into a different number of shares of the same class or into the same or a different number of shares of other classes. (h) To create new classes of shares with rights and preferences either prior and superior or subordinate and inferior to the shares of any class then authorized, whether issued or unissued. (i) To cancel or otherwise affect the right of the holders of the shares of any class to receive dividends which have accrued but have not been declared. (j) To divide any class of shares, whether issued or unissued, into series and fix and determine the designations of such series and the variations in the relative rights and preferences as between the shares of such series. (k) To authorize the board of directors to establish, out of authorized but unissued shares, series of any class of shares and fix and determine the relative rights and preferences of the shares of any series so established. (L) To authorize the board of directors to fix and determine the relative rights and preferences of the authorized but unissued shares of series theretofore established in respect to which either the relative rights and preferences have not been fixed and determined or the relative rights and preferences theretofore fixed and determined are to be changed. (m) To revoke, diminish or enlarge the authority of the board of directors to establish series out of authorized but unissued shares of any class and fix and determine the relative rights and preferences of the shares of any series so established. (n) To limit, deny or grant to shareholders of any class the preemptive right to acquire additional or treasury shares of the institution or Oregon stock savings bank, whether then or thereafter authorized. [1989 c.324 10; 1997 c.631 59]
Amendments to the articles of incorporation shall be made in the following manner: (1) If an institution or Oregon stock savings bank has issued shares of stock: (a) The board of directors shall adopt a resolution setting forth the proposed amendment and directing that it be submitted to a vote at a meeting of shareholders, which may be either an annual or a special meeting. (b) Written or printed notice setting forth the proposed amendment or a summary of the changes to be effected shall be given to each shareholder of record entitled to vote within the time and in the manner provided in this chapter for giving notice of meetings of shareholders. If the meeting is an annual meeting, the proposed amendment or such summary may be included in the notice of such annual meeting. (c) At such meeting, a vote of the shareholders entitled to vote thereon shall be taken on the proposed amendment. The proposed amendment shall be adopted upon receiving the affirmative vote of the holders of at least a majority of the shares entitled to vote thereon, unless any class of shares is entitled to vote thereon as a class, in which event the proposed amendment shall be adopted upon receiving the affirmative vote of the holders of at least a majority of the shares of each class of shares entitled to vote thereon as a class and of the total shares entitled to vote thereon. (2)(a) If an institution or Oregon stock savings bank has not issued any shares of stock, the articles of incorporation may be amended by resolution adopted by a majority of the directors. (b) If the provisions of the articles of incorporation relating to the duration, purposes, authorized shares, rights or preferences of shares, or internal affairs of the institution or Oregon stock savings bank are amended by the directors prior to the issuance of stock, the directors shall immediately notify in writing each person who is a party to any agreement for the subscription of stock of the institution or Oregon stock savings bank. Such notice shall set forth the text of the amendment and state that the subscriber may, within 30 days after delivery or mailing of the notice of amendment, rescind the subscribers subscription by notice in writing delivered or mailed to the directors at an address specified. If a notice of rescission is not delivered or mailed within 30 days, the subscriber may not thereafter assert the fact of the amendment as the basis for avoiding the subscription agreement or asserting any claim against any person. (3) Any number of amendments may be submitted to the shareholders or directors and voted upon by them at one meeting. [1989 c.324 11; 1997 c.631 60]
(1) The holders of the outstanding shares of a class shall be entitled to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the provisions of the articles of incorporation, if the amendment would: (a) Increase or decrease the aggregate number of authorized shares of such class. (b) Effect an exchange, reclassification or cancellation of all or part of the shares of such class. (c) Effect an exchange, or create a right of exchange, of all or any part of the shares of another class into the shares of such class. (d) Change the designations, preferences, limitations or relative rights of the shares of such class. (e) Change the shares of such class into the same or a different number of shares of the same class or another class or classes. (f) Create a new class of shares with rights and preferences prior and superior to the shares of such class, or increase the rights and preferences of any class with rights and preferences prior or superior to the shares of such class. (g) Divide the shares of such class into series and fix and determine the designation of such series and the variations in the relative rights and preferences between the shares of such series or authorize the board of directors to do so. (h) Limit or deny the existing preemptive rights of the shares of such class. (i) Cancel or otherwise affect dividends on the shares of such class which had accrued but had not been declared. (2) Different series of the same class of shares shall not constitute different classes of shares for the purpose of voting by classes upon a proposed amendment, except when a series will be adversely affected by an amendment in a manner different from other shares of the same class. [1989 c.324 12; 1997 c.631 61]
The articles of amendment shall be executed in duplicate by the institution or Oregon stock savings bank by its president or a vice president and by its cashier, its secretary or an assistant secretary and shall set forth: (1) The name of the institution or Oregon stock savings bank. (2) If the amendment alters or changes any provision of the original or amended articles of incorporation, an identification by reference or description of the affected provision and a statement of its text as it is amended to read. If the amendment strikes or deletes any provision of the original or amended articles of incorporation, an identification by reference or description of the provision so stricken or deleted and a statement that it is stricken or deleted. If the amendment is an addition to the original or amended articles of incorporation, a statement of that fact and the full text of each provision added. (3) The date of the adoption of the amendment by the shareholders. (4) The number of shares outstanding and the number of shares entitled to vote thereon, and if the shares of any class are entitled to vote thereon as a class, the designation and number of outstanding shares entitled to vote thereon of each such class. (5) The number of shares voted for and against such amendment, respectively, and, if the shares of any class are entitled to vote thereon as a class, the number of shares of each such class voted for and against such amendment, respectively. (6) If such amendment provides for an exchange, reclassification or cancellation of issued shares, and, if the manner in which the same shall be effected is not set forth in the amendment, a statement of the manner in which the same shall be effected. (7) If such amendment was adopted by a majority of the directors pursuant to ORS 707.246 (2)(a), then, in lieu of the information required by subsections (3), (4) and (5) of this section, a statement that no shares have yet been issued and that the amendment was authorized as provided in ORS 707.246 (2)(a). The date of the adoption of the amendment by a majority of the directors shall be included. Articles of amendment under this subsection may be executed as provided in this section or by a majority of the directors. [1989 c.324 13; 1997 c.631 62]
Duplicate originals of the articles of amendment shall be delivered to the Director of the Department of Consumer and Business Services. If the director finds that the articles of amendment conform to law, the director shall, when all fees and charges have been paid as in this chapter prescribed: (1) Indorse on each such duplicate originals the word "Filed" and the month, day and year of the filing thereof. (2) File one of such duplicate originals in the office of the director. (3) Return one duplicate original of the articles of amendment to the banking institution or its representative. [1989 c.324 14; 1997 c.631 63]
(1) Except as provided in subsection (2) of this section, after the Director of the Department of Consumer and Business Services approves and files an amendment to the articles of incorporation, the amendment is effective and the articles of incorporation are amended accordingly. (2) If an amendment to the articles of incorporation specifies a delayed effective date, the amendment is effective on the date specified. A delayed effective date for an amendment may not be later than the 90th day after the date on which the director approves and files the amendment. (3) An amendment does not affect any existing cause of action in favor of or against a banking institution, any pending suit to which such banking institution is a party or the existing rights of persons other than shareholders. An amendment that changes the corporate name does not abate an action brought by or against the banking institution under the former name. [1989 c.324 15; 1997 c.631 64; 2015 c.244 23]
(1) An institution or Oregon stock savings bank may adopt restated articles of incorporation that become effective after approval and filing by the Director of the Department of Consumer and Business Services. The restated articles of incorporation may make any changes in the articles of incorporation that the institution or Oregon stock savings bank could make by regularly adopting an amendment. Adopting restated articles of incorporation amends the existing articles of incorporation to conform to the restated articles of incorporation, without further action of the board of directors or shareholders. Restated articles of incorporation must state that the restated articles of incorporation supersede the previously existing articles of incorporation and amendments to the previously existing articles of incorporation. Restated articles of incorporation must have all the statements that, under ORS 707.110, must be in the original articles of incorporation, except a statement that lists the initial principal place of business, the number or names of directors that constitute the initial board of directors or the names of the incorporators. (2) Except as provided in subsection (3) of this section, restated articles of incorporation that the director has approved and filed supersede the previously existing articles of incorporation and amendments to the previously existing articles of incorporation. The director shall, upon request, certify a copy of the articles of incorporation, the articles of incorporation as restated or any amendments to either the articles of incorporation or the restated articles of incorporation. (3) If the restated articles of incorporation specify a delayed effective date, the restated articles of incorporation are effective on the date specified. A delayed effective date for restated articles of incorporation may not be later than the 90th day after the date on which the institution or Oregon stock savings bank executes and submits the restated articles of incorporation for filing. (4) An institution or Oregon stock savings bank that submits restated articles of incorporation for filing shall include a statement that the president or a vice president and a cashier, secretary or assistant secretary execute in duplicate and that sets forth: (a) The name of the institution or Oregon stock savings bank; (b) The date on which the shareholders adopted the restated articles of incorporation; (c) The number of shares outstanding and the number of shares entitled to vote for or against the restated articles of incorporation, and, if the shares of any class are entitled to vote as a class, the designation and number of outstanding shares of each class that are entitled to vote for or against the restated articles of incorporation. (d) The number of shares voted for and against the restated articles of incorporation, respectively, and, if the shares of any class are entitled to vote as a class, the number of shares of each such class voted for and against the restated articles of incorporation, respectively. (e) The manner in which the institution or Oregon stock savings bank will exchange, reclassify or cancel issued shares, if the restated articles of incorporation provide for an exchange, reclassification or cancellation of issued shares but do not set forth the manner for exchanging, reclassifying or canceling the issued shares. [1989 c.324 16; 1997 c.631 65; 2015 c.244 24]
(1) If the articles of incorporation so provide, the board of directors may determine, in whole or part, the preferences, limitations and relative rights, within the limits set forth in ORS 707.110, of any class of shares before the issuance of any shares of that class or of one or more series within a class before the issuance of any shares of that series. (2) Each series of a class must be given a distinguishing designation. (3) All shares of a series must have preferences, limitations and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, of those of other series of the same class. (4) Before issuing any shares of a class or series created under this section, the institution or Oregon stock savings bank must deliver to the Director of the Department of Consumer and Business Services for filing, articles of amendment which are effective without shareholder action that set forth: (a) The name of the institution or Oregon stock savings bank; (b) The text of the amendment determining the terms of the class or series of shares; (c) The date it was adopted; and (d) A statement that the amendment was duly adopted by the board of directors. [1989 c.324 28; 1997 c.631 66]
(1) An institution or Oregon stock savings bank may: (a) Issue fractions of a share or pay in money the value of fractions of a share; (b) Arrange for disposition of fractional shares by the shareholders; or (c) Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share. (2) Each certificate representing scrip must be conspicuously labeled "scrip" and must contain the following information: (a) The name of the issuing institution or Oregon stock savings bank and a statement that it is organized under the law of this state; (b) The name of the person to whom the scrip is issued; and (c) The number and class of shares and the designation of the series, if any, for which the certificate may be exchanged. (3) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, receive dividends and participate in the assets of the institution or Oregon stock savings bank upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them. (4) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including: (a) That the scrip will become void if not exchanged for full shares before a specified date; or (b) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. [1989 c.324 32; 1997 c.631 67]
(1) Subject to any provisions set forth in its articles of incorporation and subject to preemptive rights, if any, of existing shareholders, an institution or Oregon stock savings bank may create and issue, whether or not in connection with the issuance and sale of any of its shares or other securities, rights or options entitling the holders thereof to purchase from the institution or Oregon stock savings bank shares of any class or classes. Such rights or options shall be evidenced in such manner as the board of directors shall approve and, subject to the provisions of the articles of incorporation, shall set forth the terms upon which, the time or times within which and the price or prices at which such shares may be purchased from the institution or Oregon stock savings bank on the exercise of any such right or option. (2) The rights or options described in subsection (1) of this section may not be issued to a director, officer or employee of the institution or Oregon stock savings bank or of any subsidiary thereof unless the issuance: (a) Is to all shareholders of the institution, Oregon stock savings bank or subsidiary thereof; (b) Is approved at the annual meeting or a special meeting by the holders of at least two-thirds of the outstanding shares entitled to vote thereon; or (c) Is pursuant to a plan previously so approved. (3) In the absence of fraud in the transaction, the judgment of the board of directors as to the adequacy of the consideration received for the rights or options described in subsection (1) of this section shall be conclusive. [1989 c.324 29; 1997 c.631 68; 2001 c.377 58]
The reasonable charges and expenses of organization or reorganization of an institution or Oregon stock savings bank, and the reasonable expenses of and compensation for the sale or underwriting of its shares, may be paid or allowed by such institution or Oregon stock savings bank out of the consideration received by it in payment for its shares without rendering such shares not fully paid and nonassessable. [1989 c.324 31; 1997 c.631 69]
No redemption or purchase of shares shall be made by an institution or Oregon stock savings bank when it is insolvent or when such redemption or purchase would render it insolvent, or which would reduce the net assets below the aggregate amount payable to the shareholders with prior or equal rights to the assets of the institution or Oregon stock savings bank upon involuntary dissolution. [1989 c.324 33; 1997 c.631 70]
(1) When shares of an institution or Oregon stock savings bank are redeemed, the shares shall be restored to the status of authorized but unissued shares, unless the articles of incorporation provide that shares when redeemed shall not be reissued, in which case a statement of cancellation shall be submitted for filing as provided in this section, shall constitute an amendment to the articles of incorporation and shall reduce the number of shares of the class so canceled, which the institution or Oregon stock savings bank is authorized to issue by the number of shares so canceled. (2) The statement of cancellation shall be executed in duplicate by the institution or Oregon stock savings bank by an authorized officer and shall set forth: (a) The name of the institution or Oregon stock savings bank. (b) The number of shares canceled through redemption, itemized by classes and series. (c) The number of shares that the institution or Oregon stock savings bank has authority to issue, itemized by classes and series, after giving effect to such cancellation. (3) Duplicate originals of such statement shall be submitted to the Director of the Department of Consumer and Business Services for filing. If the director finds that such statement conforms to law, the director shall, when all fees and charges have been paid as prescribed by this chapter: (a) Indorse on each duplicate original the word "Filed" and the month, day and year of the filing thereof. (b) File one duplicate original in the office of the director. (c) Return the other duplicate original to the institution or Oregon stock savings bank or its representative. (4) Nothing contained in this section shall be construed to forbid a cancellation of shares or a reduction in the number of authorized shares of any class in any other manner permitted by the Bank Act. [1989 c.324 34; 1997 c.631 71]
(1) The paid-in capital of an institution or Oregon stock savings bank may be increased from time to time by resolution of the board of directors directing that all or a part of the retained earnings of the institution or Oregon stock savings bank be transferred to paid-in capital. (2) An institution or Oregon stock savings bank may, by resolution of its board of directors and with the approval of the Director of the Department of Consumer and Business Services, apply part of its paid-in capital to the reduction or elimination of any deficit in retained earnings arising from losses. (3) An institution or Oregon stock savings bank may, by resolution of its board of directors, create a reserve or reserves out of its retained earnings for any proper purpose or purposes and may abolish any such reserve in the same manner. Retained earnings of the institution or Oregon stock savings bank to the extent so reserved shall not be available for the payment of dividends or other distributions by the institution or Oregon stock savings bank except as expressly permitted by the Bank Act. (4) An institution or Oregon stock savings bank may redeem shares of its stock only with the prior approval of the director. A class or series of shares may be designated redeemable upon certain terms and conditions in advance of its issuance with the prior approval of the director, in which event no further approval shall be required to redeem the shares in accordance with the terms and conditions approved. (5) The director may refuse to approve a reduction in paid-in capital under subsection (2) of this section or redemption of shares under subsection (4) of this section if the director determines that the remaining paid-in capital of the institution or Oregon stock savings bank would be inadequate for the safe and sound operation of the institution or Oregon stock savings bank. (6) The director may by rule or order waive the requirement for prior approval of redemptions of shares. [1989 c.324 35; 1997 c.631 72]
(1) An institution or Oregon stock savings bank may not issue any certificate of stock until the institution or Oregon stock savings bank receives full payment for the stock. A person other than a director, officer or employee of the institution or Oregon stock savings bank that purchases stock after the initial organization of the institution or Oregon stock savings bank must pay for the purchase in cash or by exchanging real property or improvements on real property. The Director of the Department of Consumer and Business Services must approve the real property and improvements the person uses for payment as meeting all applicable requirements of law and all other conditions and standards that the director adopts by rule, including but not limited to a proper appraisal by a qualified appraiser. Stock that the institution or Oregon stock savings bank issues after initial organization to a director, officer or employee of the institution or Oregon stock savings bank may be issued for consideration that consists of cash, real property and improvements to real property, tangible personal property, other securities of the institution or Oregon stock savings bank or, subject to subsection (2) of this section, services the director, officer or employee performed or will perform under contract. In the absence of fraud, the judgment of the board of directors of the institution or Oregon stock savings bank as to the adequacy of the consideration received for the stock issued under this section is conclusive and upon issuance in payment of such consideration shall be fully paid. (2) An institution or Oregon stock savings bank may not issue stock to a director, officer or employee of the institution or Oregon stock savings bank in consideration of services the director, officer or employee performed or will perform under contract unless the plan to issue the stock is approved as follows: (a) The institution or Oregon stock savings bank shall submit the plan to the Director of the Department of Consumer and Business Services for approval. For purposes of this subsection, the director approves the plan if the director either approves the plan in writing or does not disapprove the plan in a writing the director delivers to the institution or Oregon stock savings bank within 30 days after the director receives a copy of the plan. (b) The holders of at least two-thirds of the outstanding shares of the institution or Oregon stock savings bank entitled to vote on the plan approve the plan in a vote at the annual shareholders meeting or a special shareholders meeting. Written or printed notice of the plan must be delivered personally or by mail to each shareholder entitled to vote at the meeting. The notice must be delivered or mailed not less than 10 days and not more than 60 days before the date of the meeting during which the vote will be taken. The notice must describe the plan in reasonable detail, state that the Director of the Department of Consumer and Business Services must approve or not disapprove the plan, that the holders of at least two-thirds of the outstanding shares of the institution or Oregon stock savings bank that are entitled to vote on the plan must approve the plan in accordance with this paragraph and that issuing shares under the plan will dilute the interests of existing shareholders in the institution or the Oregon stock savings bank. (3) Notwithstanding subsections (1) and (2) of this section, an institution or Oregon stock savings bank may create and issue the number of shares of stock stated in the articles of incorporation or amendments to the articles of incorporation. [Amended by 1969 c.635 2; 1973 c.797 76; 1977 c.135 16; 1983 c.37 4; 1997 c.631 73; 2007 c.348 1; 2015 c.244 25]
(1) The board of directors of an institution or Oregon stock savings bank may, at any regular meeting, declare a dividend, but, except as provided in subsection (2) of this section, the amount of the dividend shall not be greater than its unreserved retained earnings, deducting therefrom, to the extent not already charged against earnings or reflected in a reserve, the following: (a) All bad debts, which are debts on which interest is past due and unpaid for at least six months, unless the debt is fully secured and in the process of collection. (b) All other assets charged off as required by the Director of the Department of Consumer and Business Services or a state or federal examiner. (c) All accrued expenses, interest and taxes of the institution or Oregon stock savings bank. (2) Notwithstanding subsection (1) of this section, an institution or Oregon stock savings bank may, by resolution of its board of directors and with the prior approval of the director, pay a dividend in an amount greater than the amount provided in subsection (1) of this section. The director may approve payment of such a dividend only if the director determines that the payment of the dividend would not result in the remaining stockholders equity of the institution or Oregon stock savings bank being inadequate for the safe and sound operation of the institution or Oregon stock savings bank. [Amended by 1973 c.797 79; 1997 c.631 74; 2021 c.197 1]
The Director of the Department of Consumer and Business Services may require any institution or Oregon stock savings bank to suspend the payment of any dividends if the director determines that the payment of dividends would result in the remaining stockholders equity of the institution or Oregon stock savings bank being inadequate for the safe and sound operation of the institution or Oregon stock savings bank. [Amended by 1963 c.580 82; 1973 c.797 80; 1997 c.631 75]
At meetings of the board of directors where dividends are declared, a complete record of the proceedings and business transacted by the board of directors shall be entered in the minutes in the manner required by the Director of the Department of Consumer and Business Services. The minutes shall show that a detailed financial statement as of the last day of the month previous to the month during which the meeting is held was the basis of the decision of the board. [Amended by 1963 c.195 4; 1973 c.797 81]
Within 10 days after declaring a dividend, an institution or Oregon stock savings bank shall forward to the Director of the Department of Consumer and Business Services a report of the dividend declared. [1997 c.631 77; 2015 c.244 26]
(1) A stockholders meeting to elect a board of directors and transact other business must be held in this state within 120 days after the close of the fiscal year of the institution or Oregon stock savings bank. If the Director of the Department of Consumer and Business Services issued an order to the institution or Oregon stock savings bank under ORS 706.580 within the fiscal year immediately preceding the date of the stockholders meeting, the institution or Oregon stock savings bank shall include in every notice required for the stockholders meeting under ORS 707.611: (a) A copy of ORS 706.580; (b) A statement that the institution or Oregon stock savings bank received an order or orders from the director; and (c) A reasonably detailed description of the order or orders. (2) The chief executive officer, a majority of the board of directors, any other person or group authorized by the articles of incorporation or bylaws of the institution or Oregon stock savings bank to call meetings, or not fewer than three stockholders holding in the aggregate not less than one-third of the outstanding voting stock of the institution or Oregon stock savings bank may call a special meeting of stockholders. The articles of incorporation or bylaws of the institution or Oregon stock savings bank may reserve to an officer or the board of directors the authority to designate the time and place of the meeting, except that the institution or Oregon stock savings bank must hold the meeting in this state. Unless the Director of the Department of Consumer and Business Services consents to a later meeting date, the institution or Oregon stock savings bank shall hold a meeting not later than 60 days after issuing the call for the meeting. [Amended by 1957 c.59 1; 1967 c.170 1; 1973 c.797 84; 1983 c.296 3; 1985 c.786 27; 1987 c.177 1; 1989 c.324 39; 1997 c.631 78; 2015 c.244 27]
Written or printed notice stating the place, date and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than 10 days nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the president, the cashier, the secretary or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at the shareholders address as it appears on the stock transfer books of the institution or Oregon stock savings bank, with postage prepaid. [1989 c.324 43; 1997 c.631 79]
Any action required by this chapter to be taken at a meeting of the shareholders or directors of an institution or Oregon stock savings bank or any other action that may be taken at a meeting of the shareholders or directors or of a committee may be taken without a meeting if all of the shareholders or directors or all of the members of the committee entitled to vote with respect to the action sign a consent in writing that sets forth the action to be taken. The consent must be delivered to the institution or Oregon stock savings bank for inclusion in the minutes or for filing with the corporate records. The action is effective on the date on which the last signature is placed on the consent or consents or at such earlier or later time as is set forth in the consent. A consent has the same force and effect as a unanimous vote of the shareholders, directors or committee members and any articles or document filed under this chapter may state that the consent has the force and effect of a unanimous vote. If not otherwise determined in accordance with ORS 707.615, the record date for determining shareholders entitled to take action by consent without a meeting is the date the first shareholder signs the consent. [1989 c.324 52; 1997 c.631 80; 2015 c.244 28]
(1) A shareholder may, at any time, waive any notice required by this chapter, the articles of incorporation or bylaws. The waiver must be in writing, be signed by the shareholder entitled to the notice and be delivered to the institution or Oregon stock savings bank for inclusion in the corporate records. (2) Attendance at a meeting by a shareholder waives objection to: (a) Lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to the holding of the meeting or the transacting of business at the meeting; and (b) Consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. [1989 c.324 51; 1997 c.631 81]
(1) For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors of an institution or Oregon stock savings bank may provide that the stock transfer books shall be closed for a stated period, not to exceed in any case 70 days. If the stock transfer books shall be closed for the purpose of determining the shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least 10 days immediately preceding such meeting. (2) In lieu of closing the stock transfer books, the bylaws or, in the absence of an applicable bylaw, the board of directors may fix in advance a date as the record date for any such determination of shareholders. The record date, in any case, shall be not more than 70 days and, in the case of a meeting of shareholders, not less than 10 days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the close of business on the business day before the date on which notice of the meeting is mailed or the date on which the resolution of the board of directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. (3) When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, unless the meeting is adjourned to a date more than 120 days from the original meeting date. [1989 c.324 44; 1997 c.631 82]
(1) The officer or agent having charge of the stock transfer books for shares of an institution or Oregon stock savings bank shall make, at least 10 days prior to each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof. The list shall be arranged in alphabetical order, with the address of and the number of shares held by each shareholder and, for a period of 10 days prior to such meeting, shall be kept on file at the registered office of the institution or Oregon stock savings bank and shall be subject to inspection by any shareholder at any time during usual business hours. Such list also shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock transfer books shall be prima facie evidence as to which shareholders are entitled to examine such list or transfer books or to vote at any meeting of shareholders. (2) Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting. [1989 c.324 45; 1997 c.631 83]
(1) Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by the articles of incorporation as permitted by the Bank Act. (2) Neither shares of its own stock held by the institution or Oregon stock savings bank in a fiduciary capacity, nor shares held by another corporation if a majority of the shares entitled to vote for the election of directors of such other corporation is held by the institution or Oregon stock savings bank shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time. The prohibition of this subsection does not apply if, under the terms of a trust in which such shares are held, the manner in which such shares shall be voted may be determined by the trustee, by a donor or beneficiary of the trust or by some other person named in the trust, and such shares are actually voted in the manner determined or directed by the trustee, donor, beneficiary or other person so authorized. (3) A shareholder may vote either in person or by proxy executed in writing by the shareholder or by the shareholders duly authorized attorney in fact. No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy. (4) In electing each director for whose election the shareholder has a right to vote, every shareholder entitled to vote at such election shall have the right to vote, either in person or by proxy, the number of shares owned by the shareholder. If the articles of incorporation specifically permit cumulative voting, every shareholder shall have the right to cumulate the shareholders votes either by giving one candidate as many votes as the number of such directors multiplied by the number of the shareholders shares shall equal or by distributing such votes on the same principle among any number of such candidates. (5) Shares standing in the name of another domestic or foreign corporation, a limited liability company, a partnership or another entity may be voted by such officer, agent or proxy as the governing documents of the entity may prescribe or, in absence of such provision, as the board of directors or other governing body of the entity holding the shares may determine. (6) Shares held by a personal representative, administrator, executor, guardian or conservator may be voted by such person, either in person or by proxy, without a transfer of such shares into such persons name. Shares standing in the name of a trustee may be voted by the trustee, either in person or by proxy, but no trustee shall be entitled to vote shares held by the trustee without a transfer of the shares to the name of the trustee. (7) Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under control of a receiver may be voted by such receiver without a transfer into the receivers name if authority to do so is contained in an appropriate order of the court by which such receiver was appointed. (8) Shares may be voted by a pledgee or attorney-in-fact of the shareholder if authorized by the pledge agreement or power of attorney and evidence of such authority is presented to the institution or Oregon stock savings bank upon request. (9) On and after the date on which written notice of redemption of shares has been mailed to the holders thereof and a sum sufficient to redeem such shares has been deposited with another institution or Oregon stock savings bank with irrevocable instruction and authority to pay the redemption price to the holders thereof upon surrender of certificates therefor, such shares shall not be entitled to vote on any matter and shall not be deemed to be outstanding shares. [1989 c.324 47; 1997 c.631 84]
The Director of the Department of Consumer and Business Services may call a meeting of the stockholders of any institution or Oregon stock savings bank by giving, or directing the institution or Oregon stock savings bank to give, not less than 15 days notice of the meeting to the stockholders in the manner prescribed in ORS 707.611. The institution or Oregon stock savings bank shall pay all necessary expenses incurred in serving the notice. [Amended by 1973 c.797 85; 1997 c.631 85; 2015 c.244 29]
(1) Unless otherwise provided in the articles of incorporation, a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting at the time the vote is taken and entitled to vote on the subject matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the Bank Act or the articles of incorporation. (2) Once a share is represented at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting. [1989 c.324 46; 1997 c.631 86]
(1) The articles of incorporation may provide for a lesser or greater quorum requirement for shareholders, or voting groups of shareholders, than is provided for by this chapter, but in no event shall a quorum for shareholders, or any voting group of shareholders, consist of less than one-third of the votes entitled to be cast on any matter by the shareholders or voting group of shareholders. The articles of incorporation may provide for a greater voting requirement for shareholders, or voting groups of shareholders, than is provided for by this chapter. (2) An amendment to the articles of incorporation that adds a greater quorum or voting requirement must meet the quorum requirement and be adopted by the vote and voting groups required to take action under the quorum and voting requirements then in effect. An amendment to the articles of incorporation that changes or deletes a greater quorum or voting requirement must meet the quorum requirement and be adopted by the vote and voting groups required to take action immediately prior to the change or deletion. [1989 c.324 48; 1997 c.631 87]
A person may not be held personally liable for an act done or omitted by the person in good faith and in compliance with a statute, rule or order of the Director of the Department of Consumer and Business Services under this chapter regardless of whether the statute, rule or order is later amended, rescinded or determined to be invalid by judicial or other authority. [1987 c.445 4; 1997 c.631 88]
After the issuance of the certificate of incorporation, an organizational meeting of the board of directors named in the articles of incorporation shall be held, either within or without this state, at the call of a majority of the incorporators, for the purpose of adopting bylaws, electing officers and transacting such other business as may come before the meeting. The incorporators who called the meeting shall give at least three days notice thereof by mail to each director so named, which notice shall state the time, place and purpose of the meeting. [1989 c.324 27; 1997 c.631 89]
(1) If provided by the articles of incorporation or the bylaws, the board of directors, by resolution adopted by a majority of all the directors in office when the action is taken, may designate from among its members one or more committees. To the extent provided in the resolution or in the articles of incorporation or the bylaws of the banking institution, the committees shall have and may exercise all the authority of the board of directors in the management of the banking institution. (2) No committee shall have the authority of the board of directors in reference to: (a) Amending the articles of incorporation; (b) Approving dividends or other distributions to shareholders of an institution or Oregon stock savings bank; (c) Filling vacancies on the board of directors or on any of its committees; (d) Approving the reacquisition of shares of the institution or Oregon stock savings bank; (e) Adopting a plan of merger or consolidation; (f) Recommending to the shareholders the sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all the property and assets of the institution or Oregon stock savings bank other than in the usual and regular course of its business; (g) Recommending to the shareholders a voluntary dissolution of the institution or Oregon stock savings bank or a revocation thereof; (h) Amending the bylaws of the banking institution; or (i) Approving the issuance or sale or contract for sale of shares or determining the designation and relative rights, preferences and limitations of a class or series of shares of the institution or Oregon stock savings bank. (3) Notwithstanding subsection (2) of this section, the board of directors may authorize a committee to take action described in subsection (2)(i) of this section pursuant to a stock option or other stock compensation plan, or by approving the maximum number of shares to be issued and delegating to the committee the authority to determine all or any part of the terms of the issuance or sale or contract of sale and the determination of the designation and relative rights, preferences and limitations of the class or series of shares. (4) The designation of committees and the delegation thereto of authority shall not operate to relieve the board of directors, or any member thereof, of any responsibility imposed upon the board of directors or such member by law. [1989 c.324 50; 1997 c.631 90]
(1) If there are six or more directors, the articles of incorporation or the bylaws may provide for staggering their terms by dividing the total number of directors into two or three groups, with each group to be as nearly equal in number as possible. In that event, the terms of directors in the first group expire at the first annual meeting after their election; the terms of the second group expire at the second annual meeting after their election; and the terms of the third group, if any, expire at the third annual meeting after their election. Thereafter, directors shall be chosen for a term of two years or three years, as the case may be, to succeed those whose terms expire. (2) If the institution or Oregon stock savings bank has cumulative voting, terms of directors may be staggered only if authorized by the articles of incorporation, and no class shall have fewer than three members. [1989 c.324 26; 1997 c.631 91]
(1) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. (2) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove the director. (3) If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the directors removal. If cumulative voting is not authorized, a director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director. (4) A director may be removed by the shareholders only at a meeting called for the purpose of removing the director, and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director. [1989 c.324 49]
(1) A director shall discharge the duties of a director, including the duties as a member of a committee, in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances and in a manner the director reasonably believes is in the best interests of the institution or Oregon stock savings bank. (2) In discharging the duties of a director, a director may rely on information, opinions, reports or statements, including financial statements and other financial data, that are prepared or presented by: (a) One or more officers or employees of the institution or Oregon stock savings bank whom the director reasonably believes are reliable and competent in the matters presented; (b) Legal counsel, public accountants or other persons as to matters the director reasonably believes are within the persons professional or expert competence; or (c) A committee of the board of directors of which the director is not a member, if the director reasonably believes the committee merits confidence. (3) A director is not acting in good faith if the director has knowledge concerning a matter in question that makes reliance otherwise permitted by subsection (2) of this section unwarranted. (4) When evaluating any offer of another party to make a tender or exchange offer for any equity security of the institution or Oregon stock savings bank, or any proposal to merge the institution or Oregon stock savings bank with another institution or Oregon stock savings bank or to purchase or otherwise acquire all or substantially all the properties and assets of the institution or Oregon stock savings bank, the directors of an institution or Oregon stock savings bank may, in determining what the directors believe is in the best interests of the institution or Oregon stock savings bank, give due consideration to the social, legal and economic effects on employees, customers and suppliers of the institution or Oregon stock savings bank and on the communities and geographical areas in which the institution or Oregon stock savings bank and the subsidiaries of the institution or Oregon stock savings bank operate, the economy of the state and nation, the long term as well as short term interests of the institution or Oregon stock savings bank and the stockholders of the institution or Oregon stock savings bank, including the possibility that these interests may be best served by the continued independence of the institution or Oregon stock savings bank, and other relevant factors. [Amended by 1973 c.797 88; 1975 c.725 7; 1997 c.631 92; 2015 c.244 30]
(1) An officer with discretionary authority shall discharge the duties of an officer under that authority: (a) In good faith; (b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (c) In a manner the officer reasonably believes is in the best interests of the institution or Oregon stock savings bank. (2) In discharging the duties of an officer, an officer may rely on information, opinions, reports or statements, including financial statements and other financial data, that are prepared or presented by: (a) One or more officers or employees of the institution or Oregon stock savings bank whom the officer reasonably believes are reliable and competent in the matters presented; or (b) Legal counsel, public accountants or other persons as to matters the officer reasonably believes are within the persons professional or expert competence. (3) An officer is not acting in good faith if the officer has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) of this section unwarranted. [1997 c.631 94; 2015 c.244 31]
(1) The board of directors of a banking institution shall hold regular meetings. The Director of the Department of Consumer and Business Services may specify by rule, in accordance with ORS 183.315, 183.330, 183.335 and 183.341 to 183.410, the minimum frequency with which a board of directors of a banking institution must meet. (2) A quorum at any meeting of the board of directors consists of: (a) If the banking institution has a fixed board size, a majority of the members of the whole board. (b) If the banking institution has a variable-range board size, a majority of the number of directors prescribed or, if no number is prescribed, a majority of the number in office immediately before the meeting begins. (3) If less than a quorum of directors is present at a meeting, the directors may adjourn until the next meeting. (4) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the articles of incorporation or bylaws require the vote of a greater number of directors. (5) Meetings of the board of directors, regular or special, may be held either within or outside this state. (6) Meetings of the board of directors must be held upon such notice as is prescribed in the bylaws. A directors attendance at a meeting constitutes a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. The notice or waiver of notice of a meeting of the board of directors does not need to specify either the business to be transacted at or the purpose of the meeting unless required by the bylaws or by law. (7) Unless the articles of incorporation or bylaws provide otherwise, members of the board of directors of a banking institution or any committee designated by the board may hold a meeting of the board or committee by means of conference telephone or similar communications equipment that allows all persons participating in the meeting to hear each other. Participation in a meeting under this subsection constitutes presence in person at the meeting. [Amended by 1963 c.166 1; 1973 c.797 89; 1983 c.296 4; 1989 c.324 40; 1993 c.255 1; 1997 c.631 95; 2013 c.104 1]
The board of directors shall designate an officer of the banking institution to prepare and submit to the board at every meeting or to a committee of not less than three members of the board of directors a report, in such detail as the board may direct, of the loans and investments made during the preceding month or since the last report, and information concerning loans to officers, directors and employees. The board of directors shall examine the report and make it a part of the record of the meeting by recording the report in full in the minutes. [1973 c.797 90; 1995 c.316 3; 1997 c.631 96]
(1) The Director of the Department of Consumer and Business Services may call a meeting of the board of directors of any banking institution by mailing a notice of the meeting to each director. The notice shall state the purpose of the meeting and designate the time and place where the meeting shall be held. (2) A director who fails to appear at the meeting without proper cause is subject to a penalty of up to $1,000 for each meeting the director fails to attend. The penalty shall be collected in the manner prescribed by ORS 706.570. [Amended by 1973 c.797 91; 1997 c.631 97]
Subject to ORS 707.705, any vacancy in the board of directors may be filled by the remaining directors for the unexpired term at a regular meeting after the vacancy occurs or as otherwise provided in the bylaws of the institution or Oregon stock savings bank. [Amended by 1985 c.786 29; 1997 c.631 98; 2015 c.244 32]
(1) After a charter has been issued to a banking institution, the board of directors shall elect a chief executive officer who shall also be a director, a president who also may be the chief executive officer, at least one vice president, and a cashier or secretary, and may appoint such other officers and employees as the board of directors considers necessary or appropriate. (2) The board of directors may define the duties, fix the compensation, dismiss, fill vacancies and require bonds or irrevocable letters of credit for the faithful performance of the duties of the employees and officers of the banking institution. (3) In the event the board dismisses an officer, the officer shall no longer serve as a director. (4) Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever, in its judgment, the best interests of the banking institution will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. [Amended by 1973 c.797 92; 1983 c.37 6; 1985 c.786 32; 1989 c.324 41; 1991 c.331 110; 1997 c.631 99]
(1) Before a person first takes office as director, president or chief executive officer of a banking institution, the name of the person shall be submitted to the Director of the Department of Consumer and Business Services, with any information about the person that the director may require. (2) The director shall investigate each person whose name is submitted under this section to determine the character, honesty, financial responsibility and competence of the person. In the course of investigating any person under this section, the director may require the person to provide additional information for the directors further inquiry. For the purpose of such further inquiry, the director may require the person to submit to fingerprinting. Fingerprints acquired under this subsection may be submitted to appropriate law enforcement agencies, including the Federal Bureau of Investigation, for the purpose of discovering any unlawful activities of the person. (3) The director may disapprove the election or appointment of the person for any reason stated in ORS 707.145. The director shall issue the disapproval in writing to the board of directors that submitted the persons name. A copy of the disapproval shall be served personally or by certified mail upon the disapproved person. The disapproval may be issued without a prior administrative hearing. (4) A person whom the director disapproves under this section may appeal the disapproval as a contested case pursuant to ORS 183.415 to 183.500. [1985 c.786 31; 1997 c.631 100]
(1) For any reason specified in subsection (2) of this section, the Director of the Department of Consumer and Business Services by order may direct the board of directors of a banking institution to remove a director or officer of the banking institution. (2) The director may issue an order of removal under subsection (1) of this section: (a) For any reason stated in ORS 707.145; or (b) If the person who is the subject of the order has refused otherwise to comply with any written requirements or instructions of the director. (3) An order of removal under this section shall be in writing and may be issued without a prior administrative hearing. A copy of the order shall be served personally or by certified mail upon the person to be removed. (4) Upon receipt of an order of removal the director or officer shall be suspended from office. (5) The person suspended from office may appeal the order of the director as a contested case under ORS 183.415 to 183.500. (6) Upon expiration of the period in which to file an appeal under ORS 183.415 to 183.500 or when the order of the director is affirmed on appeal, the board of directors by resolution shall remove the person from office and declare the office vacant. (7) Any officer or director of a banking institution who is suspended or removed under this section shall not act in any official capacity, conduct any of the business of the banking institution or have access to the books, records or assets of the banking institution as an officer, director or stockholder, without receiving permission from the director. [Amended by 1973 c.797 93; 1983 c.296 5; 1985 c.762 38,38a; 1985 c.786 33; 1997 c.631 101]
An officer or director of a banking institution shall not, as an officer or director, willfully do any act which is expressly forbidden by the Bank Act or omit to perform any duty imposed upon the officer or director by the Bank Act. [Amended by 1973 c.797 94; 1997 c.631 102]
Every official communication directed by the Director of the Department of Consumer and Business Services or any examiner to a banking institution or to any officer of a banking institution, relating to an investigation or examination conducted by the Department of Consumer and Business Services or containing suggestions or recommendations as to the conduct of the business of the banking institution, shall be submitted by the officer receiving it to the board of directors at the next meeting of the board and noted in the minutes of the meeting of the board in the manner prescribed by the director. [Amended by 1973 c.797 95; 1985 c.762 39; 1997 c.631 103]
(1) If an officer or director of a banking institution has reason to believe that a person has violated any provision of law that has resulted or could result in loss to the banking institution and for which criminal prosecution is provided, the officer or director shall give the information relative to the violation to the appropriate federal, state or local law enforcement officer having jurisdiction of the violation, and to the Director of the Department of Consumer and Business Services. (2) If the matter is referred to a district attorney or to the Attorney General, such officer promptly shall investigate the violation and institute such action against the person as the information and investigation requires or justifies. The cost of the investigation and action shall be paid by the county or state in the manner in which other criminal actions are paid. [1979 c.88 7; 1997 c.631 104]
The board of directors of a banking institution shall annually appoint an examining or audit committee composed solely of not fewer than three outside directors of the banking institution or not fewer than three other individuals who the Director of the Department of Consumer and Business Services approves. The examining or audit committee shall examine and study the report of each examination that bank supervising authorities make and report to the board of directors within 60 days after receiving the report concerning the criticisms and suggestions contained in the report. The examining or audit committee shall also comment on any matter relative to the affairs of the banking institution that in the committees judgment the directors should know. The report must be recorded in the minute book of the banking institution, and a copy must be transmitted to the Director of the Department of Consumer and Business Services upon the directors request. [Amended by 1973 c.797 96; 1981 c.192 5; 1985 c.786 34; 1997 c.631 105; 2013 c.104 2; 2015 c.244 33]
As used in ORS 707.744 to 707.764: (1) "Director" means an individual who is or was a director of a banking institution or an individual who, while a director of a banking institution, is or was serving at the banking institutions request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. A director is considered to be serving an employee benefit plan at the banking institutions request if the directors duties to the banking institution also impose duties on or otherwise involve services by the director to the plan or to participants in or beneficiaries of the plan. "Director" includes, unless the context requires otherwise, the estate or personal representative of a director. (2) "Expenses" includes counsel fees. (3) "Banking institution" includes any domestic or foreign predecessor entity of a banking institution in a merger or other transaction in which the predecessors existence ceased upon the consummation of the transaction. (4) "Liability" means the obligation to pay a judgment, settlement, penalty or fine, including an excise tax assessed with respect to an employee benefit plan or reasonable expenses incurred with respect to a proceeding. (5) "Officer" means an individual who is or was an officer of a banking institution or an individual who, while an officer of a banking institution, is or was serving at the banking institutions request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. An officer is considered to be serving an employee benefit plan at the banking institutions request if the officers duties to the banking institution also impose duties on or include services by the officer to the employee benefit plan or to participants in or beneficiaries of the plan. "Officer" includes, unless the context requires otherwise, the estate or personal representative of an officer. (6) "Party" includes an individual who was, is or is threatened to be made a named defendant or respondent in a proceeding. (7) "Proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal. [1989 c.324 17; 1997 c.631 106]
(1) Except as provided in subsection (4) of this section, a banking institution may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if: (a) The conduct of the individual was in good faith; (b) The individual reasonably believed that the individuals conduct was in the best interests of the banking institution, or at least not opposed to its best interests; and (c) In the case of any criminal proceeding, the individual had no reasonable cause to believe the individuals conduct was unlawful. (2) A directors conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the best interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (1)(b) of this section. (3) The termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section. (4) A banking institution may not indemnify a director under this section: (a) In connection with a proceeding by or in the right of the banking institution in which the director was adjudged liable to the banking institution; or (b) In connection with any other proceeding charging improper personal benefit to the director in which the director was adjudged liable on the basis that personal benefit was improperly received by the director. (5) Indemnification permitted under this section in connection with a proceeding by or in the right of the banking institution is limited to reasonable expenses incurred in connection with the proceeding. [1989 c.324 18; 1997 c.631 107]
Unless limited by its articles of incorporation, a banking institution shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because of being a director of the banking institution against reasonable expenses incurred by the director in connection with the proceeding. [1989 c.324 19; 1997 c.631 108]
[1985 c.786 20; 1987 c.216 4; renumbered 707.849 in 1989]
(1) A banking institution may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (a) The director furnishes the banking institution a written affirmation of the directors good faith belief that the director has met the standard of conduct described in ORS 707.746; and (b) The director furnishes the banking institution a written undertaking, executed personally or on the directors behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct. (2) The undertaking required by subsection (1)(b) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment. (3) Any authorization of payments under this section may be made by provision in the articles of incorporation, or bylaws, by a resolution of the shareholders or board of directors or by contract. [1989 c.324 20; 1997 c.631 109]
Unless the banking institutions articles of incorporation provide otherwise, a director of the banking institution who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification if it determines: (1) The director is entitled to mandatory indemnification under ORS 707.748, in which case the court shall also order the banking institution to pay the directors reasonable expenses incurred to obtain court-ordered indemnification; or (2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in ORS 707.746 or was adjudged liable as described in ORS 707.746 (4), whether the liability is based on a judgment, settlement or proposed settlement or otherwise. [1989 c.324 21; 1997 c.631 110]
[1985 c.786 21; renumbered 707.855 in 1989]
(1) A banking institution may not indemnify a director under ORS 707.746 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in ORS 707.746. (2) A determination that indemnification of a director is permissible shall be made: (a) By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding; (b) If a quorum cannot be obtained under paragraph (a) of this subsection, by a majority vote of a committee duly designated by the board of directors consisting solely of two or more directors not at the time parties to the proceeding. However, directors who are parties to the proceeding may participate in designation of the committee; (c) By special legal counsel selected by the board of directors or its committee in the manner prescribed in paragraph (a) or (b) of this subsection, or if a quorum of the board of directors cannot be obtained under paragraph (a) of this subsection and a committee cannot be designated under paragraph (b) of this subsection, the special legal counsel shall be selected by majority vote of the full board of directors, including directors who are parties to the proceeding; or (d) In the case of an institution or Oregon stock savings bank, by the shareholders. (3) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (2)(c) of this section to select counsel. [1989 c.324 22; 1997 c.631 111]
Unless a banking institutions articles of incorporation provide otherwise: (1) An officer of the banking institution is entitled to mandatory indemnification under ORS 707.748 and is entitled to apply for court-ordered indemnification under ORS 707.754, in each case to the same extent as a director under ORS 707.748 and 707.754. (2) The banking institution may indemnify and advance expenses under ORS 707.744 to 707.762 to an officer, employee or agent of the banking institution to the same extent as to a director. [1989 c.324 23; 1997 c.631 112]
[1985 c.786 22; renumbered 707.860 in 1989]
A banking institution may purchase and maintain insurance on behalf of an individual against liability asserted against or incurred by the individual who is or was a director, officer, employee or agent of the banking institution or who, while a director, officer, employee or agent of the banking institution, is or was serving at the request of the banking institution as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The banking institution may purchase and maintain the insurance even if the banking institution has no power to indemnify the individual against the same liability under ORS 707.746 or 707.748. [1989 c.324 24; 1997 c.631 113]
(1) The indemnification and provisions for advancement of expenses provided by ORS 707.744 to 707.762 shall not be deemed exclusive of any other rights to which directors, officers, employees or agents may be entitled under the banking institutions articles of incorporation or bylaws, any agreement, general or specific action of its board of directors, vote of shareholders or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Specifically and not by way of limitation, a banking institution shall have the power to make or agree to make any further indemnification, including advancement of expenses, of: (a) Any director as authorized by the articles of incorporation, any bylaws approved, adopted or ratified by the shareholders or any resolution or agreement approved, adopted or ratified, before or after such indemnification or agreement is made, by the shareholders, provided that no such indemnification shall indemnify any director from or on account of acts or omissions for which liability could not be eliminated under ORS 707.110 (5)(c); and (b) Any officer, employee or agent who is not a director as authorized by its articles of incorporation or bylaws, general or specific action of its board of directors or agreement. Unless the articles of incorporation, or any such bylaws, agreement or resolution provide otherwise, any determination as to any further indemnity under this paragraph shall be made in accordance with ORS 707.756. (2) If articles of incorporation limit indemnification or advance of expenses, any indemnification and advance of expenses are valid only to the extent consistent with the articles of incorporation. (3) ORS 707.744 to 707.762 do not limit a banking institutions power to pay or reimburse expenses incurred by a director in connection with the directors appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent to a proceeding. [1989 c.324 25; 1997 c.631 114]
[Amended by 1955 c.315 1; 1957 c.255 1; 1961 c.220 1; 1965 c.168 1; 1971 c.209 1; 1973 c.797 101; 1979 c.199 1; 1985 c.554 1; renumbered 708.484]
[1959 c.383 1; 1973 c.797 109; renumbered 708.068]
[Amended by 1973 c.797 112; renumbered 708.078]
[Amended by 1973 c.797 113; renumbered 708.082]
[Amended by 1973 c.797 114; renumbered 708.088]
[1973 c.797 106; 1985 c.554 2; renumbered 708.486]
[1973 c.797 107; renumbered 708.488]
[Formerly 708.032; 1977 c.135 22; 1985 c.554 3; renumbered 708.491]
[Amended by 1973 c.797 118; renumbered 708.126]
[Amended by 1973 c.797 119; renumbered 708.136]
[Amended by 1963 c.195 6; 1973 c.797 120; renumbered 708.146]
[Amended by 1973 c.797 157; renumbered 708.489]
[Amended by 1973 c.797 167; renumbered 708.451]
(1) Except as otherwise limited in the Bank Act or the articles of incorporation of an institution, an institution shall have: (a) Perpetual duration and succession in its corporate name, unless a limited period of duration is stated in its articles of incorporation; (b) The power to do all things necessary or convenient to carry out its business and affairs including, without limitation, the power to: (A) Sue and be sued and complain and defend in its corporate name; (B) Have a corporate seal, which may be altered at will, and use it or a facsimile thereof by impressing, affixing or reproducing it in any other manner; (C) Make contracts, incur liabilities, borrow money, issue its notes, bonds and other obligations that may be convertible into other securities of the institution or include the option to purchase other securities of the institution; (D) Conduct its business, locate offices and exercise the powers granted by the Bank Act within or without this state; (E) Elect or appoint directors, officers, employees and agents of the institution; (F) Make and amend bylaws not inconsistent with its articles of incorporation or with the laws of this state for managing the business and regulating the affairs of the institution; (G) Make donations for the public welfare or for charitable, scientific or educational purposes; (H) Transact any business permitted by the Bank Act; and (I) Pay pensions and establish pension plans, and share option plans and benefit or incentive plans for any or all of its current or former directors, officers, employees and agents; (c) The powers granted to institutions by the Bank Act; (d) The power to be licensed as an insurance producer as required by ORS 744.053 to transact one or more of the classes of insurance described in ORS 744.062 except for title insurance; and (e) All powers necessary or convenient to effect any or all of the purposes for which the institution is organized or to perform any or all of the acts expressly or impliedly authorized or required under the Bank Act. (2) With respect to any exercise of the power granted under subsection (1)(d) of this section, other than the licensing of the institution to transact types of limited class insurance, as that term is defined in ORS 744.052, designated by the Director of the Department of Consumer and Business Services: (a) The conduct by the institution of insurance producer activities shall be subject to the approval of the director. The director shall base consideration for approval on the condition of the institution, the adequacy of a formal business plan for the insurance activities and the existence of satisfactory management for the insurance activity. (b) The director may revoke or restrict the ongoing authority of the institution to engage in the insurance producer activity if the condition of the institution substantially deteriorates or if the insurance activities are adversely affecting the institution. (c) The institution shall file a written report with the director no later than March 31 of each year disclosing the insurance activities of the institution. The required contents of the report shall be established by the director by rule. Reports filed with the director under this paragraph shall be available for public inspection in the office of the director. (3) An institution licensed as an insurance producer, as that term is defined in ORS 731.104, shall not in any manner use customer information obtained from another insurance producer to promote, develop or solicit insurance business for the institution unless the other insurance producer consents to such use of the customer information. [1997 c.631 116; 1997 c.831 1a; 2001 c.191 51; 2003 c.363 6; 2003 c.364 58a]
(1) Notwithstanding any provision of the Bank Act to the contrary, Oregon commercial banks may: (a) Engage as principal or agent in activities in which national banks may engage as principal or agent and acquire and retain investments that national banks may acquire and retain, subject to conditions and restrictions that apply to national banks; and (b) Engage as principal or agent in activities and acquire and retain investments that are permissible for state chartered banks under 12 C.F.R. 362.3(b) and 12 C.F.R. 362.4(c), subject to conditions and restrictions provided in 12 U.S.C. 1831a, 12 C.F.R. 362, and other applicable federal law. (2) Notwithstanding any provision of the Bank Act to the contrary, subsidiaries of Oregon commercial banks may: (a) Engage as principal or agent in activities in which subsidiaries of national banks may engage as principal or agent and acquire and retain investments that subsidiaries of national banks may acquire and retain, subject to conditions and restrictions that apply to subsidiaries of national banks; and (b) Engage as principal or agent in activities and acquire and retain investments that are permissible for subsidiaries of state chartered bank subsidiaries under 12 C.F.R. 362.3(b) and 12 C.F.R. 362.4(c), subject to conditions and restrictions provided in 12 U.S.C. 1831a, 12 C.F.R. 362, and other applicable federal law. (3) Activities and investments described in subsections (1) and (2) of this section that require notice to or approval of the Comptroller of the Currency do not require Oregon commercial banks or subsidiaries of Oregon commercial banks to give notice to or obtain approval from the Comptroller of the Currency, but Oregon commercial banks or subsidiaries of Oregon commercial banks shall give notice to or obtain approval from the Director of the Department of Consumer and Business Services. For purposes of this section, references in federal statutes, regulations and other authorities that prescribe the permissible activities and investments of national banks and subsidiaries of national banks refer whenever practicable to comparable provisions of Oregon law. The director may approve an activity or investment that requires the directors approval, subject to such conditions as the director deems appropriate. (4) The purpose of this section is to grant Oregon commercial banks and subsidiaries of Oregon commercial banks all investment and activity power and authority, as principal or agent, permitted state chartered banks under federal law. [1997 c.631 117; 2015 c.244 34]
(1) Institutions may invest, without regard to any limitation based on stockholders equity, in: (a) Obligations of the United States, including those of its agencies and instrumentalities; (b) Obligations of public housing agencies issued pursuant to the United States Housing Act of 1937, as amended; and (c) Obligations of the State of Oregon or any county, city, school district, port district or other public body with the power to levy taxes issued pursuant to the Constitution or statutes of the State of Oregon or the charter or ordinances of any county or city within the State of Oregon, if the issuing body has not been in default with respect to the payment of principal or interest on any of its obligations within five years preceding the date of the investment. (2) Subject to a limitation of 20 percent of stockholders equity, institutions may invest in obligations of any other state of the United States or obligations of any out-of-state county, city, school district, port district or other public body in the United States payable from ad valorem taxes, if the obligations are rated in one of the four highest grades by a recognized investment service organization that has been engaged regularly and continuously for a period of not less than 10 years in rating state and municipal obligations. (3) Obligations received in satisfaction of debts previously contracted in good faith are not subject to the limitations of this section, if the book value of such obligations in excess of the limitations of this section is reduced to the amount allowed under this section within six months after the date the obligations are acquired. [1997 c.631 118; 1999 c.59 215]
(1) An institution may not invest any of the institutions assets in the capital stock of any other corporation or in a membership interest in any limited liability company, except: (a) In the capital stock of the Federal Reserve Bank. (b) In stock or a membership interest the institution acquired or purchased to save a loss on a preexisting debt. The institution shall sell the stock or membership interest within two years of the date the institution acquired or purchased the stock or membership interest. The Director of the Department of Consumer and Business Services may extend the time if the director finds that an extension will not be detrimental to the public interest and will not contravene any other law. (c) In the capital stock or a membership interest of any safe deposit company that does an exclusive safe deposit business on premises the institution owns or leases upon 30 days advance notice to the director subject to the same limitations applicable to a national bank. (d) In the capital stock or a membership interest of an agricultural and livestock finance company, subject to the same limitations applicable to national banks and to the approval of the director. (e) In the capital stock or a membership interest, eligible for purchase by national banks, of a small business investment company, but the aggregate investment in the stock or membership interest may not exceed two percent of the institutions capital. (f) In the common stock of any federally chartered corporation that is chartered for the purpose of providing secondary markets for the sale of mortgages by institutions. (g) In the stock of the Federal Home Loan Bank. (h) In the capital stock of a corporation exclusively engaged in a trust business or a bankers bank, subject to the same limitations applicable to national banks. (i) In the capital stock of a bank service corporation, as provided in ORS 708A.130 to 708A.145. (j) In the capital stock of a community development corporation, as provided in ORS 708A.150. (k) If a trust company is not engaged in a banking business and if the director first approves the investment, the trust company may invest an amount that does not exceed 20 percent of the capital of the trust company: (A) In the capital stock or a membership interest of a subsidiary investment company of a type defined in the Investment Company Act of 1940, as amended; or (B) In a company one of the purposes of which is to act as a federal covered investment adviser or a state investment adviser, as defined in ORS 59.015, with all the powers a federal covered investment adviser or a state investment adviser customarily exercises. (L) In adjustable rate preferred stock of the Student Loan Marketing Association established in 20 U.S.C. 1087-2, except that the aggregate investment in the stock may not exceed 15 percent of the institutions capital. (m) In the capital stock or a membership interest of a company acquired for the purpose of strengthening the institutions capital structure or eliminating undesirable assets, as provided in ORS 708A.125. (n) In the capital stock or a membership interest of a bank, limited liability company or corporation that is engaged in international or foreign banking or foreign banking in a dependency or insular possession of the United States, as provided in ORS 708A.155. (o) In the capital stock of a corporation, or a membership interest in a limited liability company, that was created to establish ATMs, as provided in ORS 708A.160. (2) An institution may invest the institutions assets in shares of any mutual fund, the assets of which are invested solely in obligations of the type described in and limited under ORS 708A.115. (3) An institution may, subject to the directors approval, acquire or continue to hold the fully paid stock of a corporation or a membership interest in a limited liability company, one of the purposes of which is to assist the institution in handling real estate, claims, judgments or other assets or in holding title to the assets. (4) An institution may acquire or continue to hold the fully paid stock of a corporation or a membership interest in a limited liability company, the purpose of which is to permit the institution to engage in any business in which a financial holding company, a bank holding company or a nonbank subsidiary of a financial holding company or a bank holding company is authorized to engage. This subsection does not apply unless the institution is the owner of at least 80 percent of the common stock of the subsidiary corporation or the membership interests of the limited liability company, except qualifying shares of directors or qualifying membership interests of members. (5) An institution may, subject to the directors approval and to rules the director adopts, acquire and continue to hold at least 80 percent of the fully paid stock of a corporation, or at least 80 percent of the membership interests of a limited liability company, that is engaged in any business in which an institution is authorized to engage. Except as otherwise permitted by statute or rule, the investment limitations applicable to the institution apply to the subsidiary. (6) An institution may, subject to the directors approval and under rules the director adopts, acquire and continue to hold all the fully paid stock of a subsidiary corporation, or all of the membership interests of a limited liability company, that is engaged in the business of purchasing the stock of the institution for purposes of holding that stock and making a market for that stock, if not more than 20 percent of the net profit of the banking institution is disbursed to the subsidiary or the limited liability company in any one fiscal year. Except as otherwise permitted by statute or rule, the investment limitations applicable to the institution apply to the subsidiary or the limited liability company. Acquisitions under this subsection may not exceed 15 percent of the institutions capital. (7) An institution may acquire and hold all or part of the stock of a corporation, or the membership interests of a limited liability company, that is or may be licensed after the acquisition as an insurance producer as required by ORS 744.053 to transact one or more of the classes of insurance described in ORS 744.062, subject to the following requirements: (a) Acquiring and holding the stock or the membership interests are subject to the directors approval. The director shall base consideration for approval on the condition of the institution, the adequacy of a formal business plan for the insurance activities, and the existence of satisfactory management for the corporation or the limited liability company. (b) The director may revoke or restrict the ongoing authority of the institution to hold stock in the corporation or membership interests in the limited liability company if the condition of the institution substantially deteriorates or if the insurance activities are adversely affecting the institution. (c) For each calendar year during which an institution owns all or part of a corporation, or a limited liability company, that is licensed as an insurance producer as required by ORS 744.053, the institution shall file a written report with the director. The report must be filed not later than March 31 of the following year and shall disclose the insurance activities of the corporation or the limited liability company. The director shall establish the required contents of the report by rule. The reports filed with the director under this paragraph must be available for public inspection in the directors office. (d) The corporation or limited liability company may not in any manner use customer information that the institution obtained from another insurance producer to promote, develop or solicit insurance business for the corporation or the limited liability company unless the other insurance producer consents to such use of the customer information. (e) The corporation or the limited liability company is subject to the limitations that apply to depository institutions under ORS 746.213 to 746.219. For the purpose of this paragraph, "depository institution" has the meaning given that term in ORS 746.213. [1997 c.631 119; 1997 c.772 31b; 1997 c.831 2a; 2001 c.191 52; 2001 c.377 47; 2003 c.363 7; 2003 c.364 59a; 2005 c.80 4; 2005 c.194 1; 2013 c.104 3]
(1) An institution may carry fully paid and nonassessable capital stock of or membership interest in any other corporation or limited liability company as an asset, if: (a) The institutions board of directors applies in writing to the Director of the Department of Consumer and Business Services; (b) The director approves the application in writing; (c) The institution obeys any limitations the director specifies in the directors approval; and (d) The institution acquires the stock or membership interest for the purpose of strengthening the institutions capital structure or eliminating undesirable assets. (2) The institution may hold the stock or membership interest as long as the director may determine, but in no event longer than 15 years. (3) This section does not apply to any stock or membership interest that an institution may acquire in connection with insuring deposits, under ORS 708A.120, or in a purchase as a part of any transaction in which an institution borrows from the United States or an agency of the United States. This section does not repeal or in any way limit or modify ORS 711.470. [1997 c.631 120; 2015 c.244 35]
As used in ORS 708A.135 to 708A.145, unless the context requires otherwise, "invest" includes any advance of funds to a bank service corporation, whether by the purchase of stock, the making of a loan or otherwise, but does not include a payment for rent earned, goods sold and delivered or services rendered prior to the making of the payment. [1997 c.631 121]
An Oregon commercial bank may invest not more than 10 percent of its capital in a bank service corporation. An Oregon commercial bank shall not invest more than five percent of its total assets in a bank service corporation. [1997 c.631 122]
A bank service corporation shall not unreasonably discriminate in the provision of any services authorized under ORS 708A.130 to 708A.145 against any financial institution that does not own stock in the bank service corporation on the basis of the fact that the nonstockholding financial institution is in competition with a financial institution that owns stock in the bank service corporation, except that: (1) It shall not be considered unreasonable discrimination for a bank service corporation, at its option, to either: (a) Provide services to nonstockholding financial institutions only at a price that fully reflects all of the costs of offering those services, including the cost of capital and a reasonable return thereon; or (b) If an Oregon commercial bank is authorized under ORS 708A.135 to invest in a bank service corporation, the bank service corporation may require that the Oregon commercial bank invest in the stock of the bank service corporation, in which case the bank service corporation shall provide services to the Oregon commercial bank on the same basis as for other stockholder financial institutions of the bank service corporation. (2) A bank service corporation may refuse to provide services to a nonstockholding financial institution if comparable services are available from another source at competitive overall costs, or if the providing of services would be beyond the practical capacity of the bank service corporation. [1997 c.631 123]
(1) A bank service corporation may perform any of the following services for financial institutions: (a) Check and deposit sorting and posting; (b) Computing and posting interest and other credits and charges; (c) Preparing and mailing checks, statements, notices and similar items; or (d) Any other clerical, bookkeeping, accounting, statistical or similar functions. (2) In addition to the services that a bank service corporation may perform for financial institutions under subsection (1) of this section, a bank service corporation: (a) May perform for any person any service that any shareholders of the bank service corporation or any holding company or subsidiary of the shareholder may lawfully perform, except that a bank service corporation may not engage in the business of banking. (b) Is subject to the limitations with respect to selling insurance that apply to depository institutions under ORS 746.213 to 746.219. For the purpose of this paragraph, "depository institution" has the meaning given that term in ORS 746.213. (3) A banking institution may not cause to be performed, by contract or otherwise, any of the services described in subsection (1) of this section for the banking institution, whether on or off the banking institutions premises, unless both the banking institution and the person that performs the services give a satisfactory assurance to the Director of the Department of Consumer and Business Services that the director may regulate and examine the performance of the services to the same extent as if the banking institution performed the services on the banking institutions own premises. (4) The director may regulate and examine the performance of the services described in subsection (1) of this section for financial institutions, and may regulate and examine a bank service corporations performance of the services described in subsection (2) of this section. [1997 c.631 124; 2003 c.363 8; 2015 c.244 36]
(1) As provided in this section: (a) A banking institution may invest its capital in a community development corporation. (b) A banking institution may organize a community development corporation as a wholly owned subsidiary of the banking institution and invest its capital in the corporation. (2) A banking institution may invest in or organize and invest in a community development corporation under subsection (1) of this section, if the following conditions are satisfied: (a) The projects undertaken by the community development corporation must be predominantly of a civic, community or public nature, and not merely of a private or entrepreneurial nature. (b) The banking institutions aggregate investment in community development corporations and their projects must not exceed two percent of its capital for any project and five percent of its capital for all projects, or 10 percent of its capital for all projects with the approval of the Director of the Department of Consumer and Business Services. (c) The banking institution must submit to the director its proposal for investing in or organizing and investing in a community development corporation and the proposal must receive the directors approval. (d) The membership of the board of directors of the community development corporation must be representative of the community in which the corporation is to operate. (3) A community development corporation may be organized as a for-profit corporation under ORS chapter 60 or as a nonprofit corporation under the Oregon Nonprofit Corporation Law. A community development corporation must be authorized under its articles of incorporation or applicable law to: (a) Acquire real estate. This paragraph does not authorize real estate investment that is primarily speculative in nature. (b) Make equity investments in small businesses and in development projects that primarily benefit small businesses. (c) Participate in joint ventures with outside partners. (4) A banking institution wishing to invest in or organize and invest in a community development corporation shall submit to the director, on an application form designed by the director, a proposal that describes in detail the nature and scope of development activities the community development corporation intends to undertake. (5) The director may submit an application to any appropriate state agency or city, county or other local government for its advice and assistance on determining the need and practicability of the projects proposed in the application. [1997 c.631 125]
(1) If the Director of the Department of Consumer and Business Services approves, and subject to rules the director adopts in accordance with ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to 183.410, an institution may invest not more than 10 percent, in the aggregate, of the stockholders equity in the institution in the stock of banks or corporations that are chartered or incorporated under the laws of the United States or another state. The banks or corporations in which the institution may invest under this section must be principally engaged in international or foreign banking, or banking in a dependency or insular possession of the United States, either directly or through the agency, ownership or control of local institutions in foreign countries, or in such dependencies or insular possessions, including the stock of one or more banks or corporations chartered or incorporated under section 25(a) of the Federal Reserve Act, as approved December 24, 1919. (2) An institution shall apply to the director for permission to exercise the powers established in subsection (1) of this section. The application shall specify the name, the stockholders equity in the institution filing the application, the powers for which the institution is applying and the place or places where the banking operations are to be carried on. (3) The director may approve the application, in whole or in part, or may disapprove the application if the director believes that granting approval is inexpedient. The director may increase or decrease the number of places where the banking operations may be carried on. (4) Before an institution may purchase stock in any bank or corporation described in subsection (1) of this section, the bank or corporation shall agree to restrict the banks or corporations operations or conduct the banks or corporations business in the manner and under the limitations prescribed by the director for the places in which the business is to be conducted. (5) If the director determines that a bank or corporation is not complying with the limitations the director prescribed, the director may investigate the matter. If the investigation shows that the bank or corporation, or the institution holding stock in the bank or corporation, has not complied with the limitations, the director may require the institution to dispose of stock holdings in the bank or corporation. (6) An institution that invests in the capital stock of banks or corporations as provided in subsection (1) of this section shall furnish information concerning the condition of the banks or corporations to the director upon demand. The director may order special examinations of the banks or corporations. [1997 c.631 126; 1999 c.59 216; 2015 c.244 37]
A banking institution may, subject to the approval of the Director of the Department of Consumer and Business Services, acquire and continue to hold a membership in or the fully paid stock of a limited liability company or corporation that is created to establish and operate ATM facilities. [1997 c.631 127; 2015 c.244 38]
(1) An Oregon commercial bank may subscribe to the capital stock and become a member of a Federal Reserve Bank. (2) An Oregon commercial bank that is a member of a Federal Reserve Bank is subject to supervision and examination under the laws of this state. The Federal Reserve Board may also examine the Oregon commercial bank. The authorities of this state that have supervisory authority over an Oregon commercial bank may disclose to the Federal Reserve Board, or to examiners that the Federal Reserve Board appoints, all information the authorities of this state have about the affairs of any Oregon commercial bank that has become, or desires to become, a member of a Federal Reserve Bank. (3) An Oregon commercial bank that is a member bank and the directors, principal officers and stockholders of the Oregon commercial bank are subject to all liabilities and duties that the laws of this state impose upon directors, officers and stockholders of Oregon commercial banks. [1997 c.631 128; 2015 c.244 39]
An institution may, with the approval of the Director of the Department of Consumer and Business Services, purchase, sell, issue, underwrite and deal in securities to the same extent national banks may do so. [1997 c.631 129]
An institution may purchase, hold, convey, sell or lease: (1) The real estate and improvements thereto in which the business of the institution is carried on, including, with its offices, other space in the same building to rent as a source of income. (2) Furniture, fixtures, vaults, safe deposit boxes and other personal property necessary or convenient to carrying on the business of the institution. (3) Real or personal property purchased by or conveyed to the institution in satisfaction of or on account of debts previously contracted in the course of its business, or otherwise acquired in the course of collecting debts. (4) Real estate purchased at execution sale or under a judgment. (5) Real estate conveyed to the institution in connection with its purchase of a bona fide contract of sale covering the real estate conveyed. (6) Real estate purchased with the approval of the Director of the Department of Consumer and Business Services for the purpose of future location or expansion of the business of the institution. (7) Real estate held in trust and real estate purchased with assets other than those of the institution. [1997 c.631 131; 2003 c.576 545]
An Oregon commercial bank may acquire and lease personal property at the request of a lessee that wishes to lease the personal property upon terms that require paying rents. Rents may include residual values, the payment of which a responsible third party guarantees. [1997 c.631 132; 2015 c.244 40]
Institutions may purchase the vendors interest in bona fide contracts covering the sale of real estate that comply with the requirements of ORS 708A.270. [1997 c.631 133]
(1) An Oregon commercial bank may accept drafts or bills of exchange drawn upon it having not more than six months sight to run, exclusive of days of grace, that grow out of transactions involving the importation or exportation of goods, or that grow out of the domestic shipment of goods, or that are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. (2) An Oregon commercial bank shall not accept drafts or bills of exchange or issue letters of credit, whether in a foreign or domestic transaction, for any one person to an amount equal at any one time in the aggregate to more than 20 percent of its capital, unless the Oregon commercial bank is fully secured either by attached documents or by some other actual security growing out of the same transaction as the acceptance or letter of credit. (3) Except as provided in subsection (5) of this section, an Oregon commercial bank shall not accept bills or issue letters of credit, or be obligated for a participation share in bills, to an amount equal at any time in the aggregate to more than 150 percent of its capital. The aggregate of acceptances or bills, including obligations for a participation share in such acceptances, growing out of domestic transactions shall not exceed 50 percent of the aggregate of all acceptances, including obligations for a participation share in such acceptances, authorized for the Oregon commercial bank under this section. (4) An Oregon commercial bank may accept drafts or bills of exchange drawn upon it having not more than six months sight to run, exclusive of days of grace, drawn under rules prescribed by the Director of the Department of Consumer and Business Services or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnishing dollar exchange, as required by the usages of trade in the respective countries, dependencies or insular possessions. An Oregon commercial bank shall not accept the drafts or bills of exchange for any one bank to any amount exceeding in the aggregate 20 percent of the capital of the accepting Oregon commercial bank, unless the draft or bill of exchange is accompanied by documents conveying or securing the title or by some other adequate security. An Oregon commercial bank shall not accept the drafts or bills of exchange in an amount exceeding at any time the aggregate of its capital. (5) The director, under such conditions as the director may prescribe, may authorize, by rule or order, any Oregon commercial bank to accept bills and issue letters of credit, or be obligated for a participation share in bills, in an amount not exceeding at any time in the aggregate 200 percent of its capital. [1997 c.631 134]
(1) An institution shall promptly dispose of real and personal property that the institution may not own or hold under the Bank Act. (2) An institution shall sell or exchange real estate that the institution acquires in accordance with ORS 708A.175 (3) and (4) for other real estate within 10 years after title has vested in the real estate, unless the Director of the Department of Consumer and Business Services extends the time. Title vests for purposes of this section on the date the institution receives a deed to the real estate. An institution may not exchange real estate for other real estate without the directors prior written consent. An institution may hold real estate the institution takes in exchange for other real estate for a period of time that the director fixes, not to exceed 10 years from the date of the exchange. (3) An institution shall promptly dispose of personal property the institution acquires under ORS 708A.175 (3). [1997 c.631 135; 2011 c.478 2; 2015 c.244 41]
(1) Except as provided in subsection (2) of this section, the validity of an institutions action may not be challenged on the grounds that the institution lacks or lacked power to act. (2) An institutions power to act may be challenged: (a) In a proceeding by a stockholder against the institution to enjoin the act; (b) In a proceeding by the institution, directly, derivatively or through a receiver, trustee or other legal representative, against an incumbent or former director, officer, employee or agent of the institution; or (c) By the Director of the Department of Consumer and Business Services. (3) In a stockholders proceeding under subsection (2)(a) of this section to enjoin an unauthorized act, the court may enjoin or set aside the act if equitable and if all affected persons are parties to the proceeding, and may award damages for loss other than anticipated profits suffered by the institution or another party because of enjoining the unauthorized act. [1997 c.631 137]
Except as specifically limited by the Bank Act and other applicable law, Oregon commercial banks have the general power to loan money upon terms and conditions that are consistent with safe and sound banking practices. [1997 c.631 138; 2015 c.244 42]
(1) Except as otherwise provided in this section, the rate of interest or the amount of other charges that a financial institution may contract for and receive for a loan or use of money is not subject to limitation. (2) If a borrower repays before maturity a loan that an Oregon commercial bank made, the Oregon commercial bank shall refund or credit to the borrower as provided in this subsection the unearned portion of the charges, if any. The amount of the refund may not be less than the total interest contracted for to maturity, less the greater of: (a) Ten percent of the amount financed, or $75, whichever is less; or (b) The interest earned to the installment due date nearest the date of prepayment, computed by applying the simple interest rate of the loan to the actual principal balances outstanding, for the periods of time the balances were actually outstanding. For purposes of computations under this paragraph, the installment due date that precedes the date of prepayment is nearest if prepayment occurs 15 days or less after that installment date. If prepayment occurs more than 15 days after the preceding installment due date, the next succeeding installment due date is nearest the date of prepayment. In determining the simple interest rate, an Oregon commercial bank may apply to the scheduled payments the actuarial method, by which each scheduled payment is applied first to accrued and unpaid interest and any amount remaining is applied to reduce the principal balance. (3) Any installment of an installment loan or payment under an open-end credit arrangement that the borrower does not pay when due continues to bear interest until paid. In addition, if the borrower does not pay the installment or payment when due, the installment or payment may bear a late charge in an amount to which the Oregon commercial bank and the borrower agree. Except for loans secured by real property, an Oregon commercial bank may impose a late charge only if: (a) The Oregon commercial bank does not receive the installment or payment within 10 days after the due date or, if the open-end credit arrangement is a credit card account, the Oregon commercial bank does not receive the payment on or before the due date; (b) The loan agreement or open-end credit arrangement provides for a late charge upon delinquent installments or payments; and (c) The Oregon commercial bank provides a monthly billing, coupon or notice that discloses the date on which installments or payments are due and states that the Oregon commercial bank may impose a late charge if: (A) The Oregon commercial bank does not receive payment within 10 days after the date on which the installment or payment is due; or (B) In the case of an open-end credit arrangement that is a credit card account, the Oregon commercial bank does not receive payment on or before the date on which the payment is due. If the Oregon commercial bank and the borrower have provided in the note or other written loan agreement that the borrower will make payments on the loan by means of automatic deductions from a deposit account that the borrower maintains, this paragraph does not require the Oregon commercial bank to provide the borrower with a monthly billing, coupon or notice on any occasion in which insufficient funds are in the borrowers account to cover the amount of a loan payment on the date the loan payment becomes due and within the periods described in paragraph (a) of this subsection. [1997 c.631 139; 1997 c.631 139a; 2001 c.440 1; 2015 c.244 43]
An Oregon commercial bank may not accept the Oregon commercial banks own capital stock as collateral unless taking the Oregon commercial banks own stock as collateral is necessary to prevent loss upon an indebtedness previously contracted in good faith. If the indebtedness is not paid in full within six months after the date on which the Oregon commercial bank took the stock as collateral, the Oregon commercial bank shall sell the stock promptly. [1997 c.631 140; 2015 c.244 44]
An Oregon commercial bank may not accept or hold as loan collateral in the aggregate more than 25 percent of the capital stock of any other insured stock institution. [1997 c.631 141; 2015 c.244 45]
(1) With respect to any loans secured primarily by real estate, an Oregon commercial bank shall maintain a file containing such appraisal, evidence of merchantable title and insurance as may be required by the Director of the Department of Consumer and Business Services. (2) All loans made by an Oregon commercial bank to finance the construction of buildings and the improvements appurtenant thereto shall be subject to such requirements as the director may determine. [1997 c.631 142]
(1) An Oregon bank shall file a notice with the Director of the Department of Consumer and Business Services within 30 days after establishing a loan production office in this state or in another state. The notice must include: (a) The name of the Oregon bank and the address of the main office; (b) The name and address of the loan production office; and (c) The name and address of the officer of the Oregon bank who is responsible for loan production office activities. (2) An Oregon bank shall file a notice under subsection (1) of this section for each loan production office. (3) Each notice that an Oregon bank files under subsection (1) of this section must be: (a) Accompanied by a nonrefundable fee of $100. (b) Amended if a material change occurs in the information the Oregon bank provided under subsection (1) of this section. A fee is not required for amendments. (4) An Oregon bank shall notify the director of the closure of a loan production office, the date of closure and the disposition of any records previously maintained at the loan production office. A fee is not required for a notice of closure. [1999 c.107 5; 2015 c.244 45a]
As used in ORS 708A.290 to 708A.375, the term "capital," when referring to an Oregon commercial bank, means tier 1 and tier 2 capital, as applicable and as reported in the banks Consolidated Report of Condition and Income (Call Report) filed under 12 U.S.C. 1817(a)(3), as of the quarter-end preceding the quarter in which a loan or other obligation is approved, plus the balance of the Allowance for Loan and Lease Losses or Adjusted Allowance for Credit Losses as of the same quarter-end not included in tier 2 capital. [1997 c.631 143; 2021 c.197 2]
Except as provided in ORS 708A.300 to 708A.375, the loans and other obligations of a person to an Oregon commercial bank outstanding at any time shall not exceed 15 percent of the Oregon commercial banks capital. Any loan made or other obligation acquired in accordance with ORS 708A.300 to 708A.375 shall be in addition to and shall not be applied against the 15 percent limitation. Any loan made or obligation acquired that complies with ORS 708A.290 to 708A.375 when made or acquired shall not be considered out of compliance on account of a subsequent decline in the capital of the Oregon commercial bank. Obligations in the name of one person for the benefit of another person shall be considered obligations of both the named person and the benefited person. [1997 c.631 144]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to or acquire other obligations of a person, not to exceed 10 percent of its capital, if: (1) The loans or obligations are fully secured by readily marketable collateral having a market value that may be determined by reliable and continuously available price quotations; (2) The market value is at least 15 percent greater than the amount of the obligation at the time it is incurred; and (3) The market value is at all times while the obligation is outstanding at least 100 percent of the balance of principal, interest and other charges applicable to the obligation. [1997 c.631 145]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of other financial institutions without regard to amount in the form of time or demand deposits that it places with such other financial institutions. [1997 c.631 146]
(1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person without regard to amount as an indorser, arising out of the discount of commercial or business paper owned by the person negotiating the paper. (2) As used in this section, "commercial or business paper" means negotiable notes, drafts, acceptances or bills of exchange having a maturity of not more than six months, that have been given by one person to another in settlement of a commercial or business transaction involving the purchase of goods, and upon which both parties to the transaction are liable either as maker, drawer, acceptor or indorser. [1997 c.631 147]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person, not to exceed 15 percent of the banks capital, as an indorser or guarantor of notes, other than commercial or business paper excepted under ORS 708A.310, having a maturity of not more than six months, and owned by the person indorsing and negotiating the same. [1997 c.631 148]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to or acquire other obligations of a person without regard to amount, provided the obligations are fully secured by shipping documents conveying or securing title to goods or commodities in process of shipment. [1997 c.631 149]
(1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person, not to exceed 25 percent of the Oregon commercial banks capital, as an indorser or guarantor of negotiable or nonnegotiable installment consumer paper that carries a full or partial recourse indorsement or unconditional guarantee by the person transferring the obligation and conforms to rules prescribed by the Director of the Department of Consumer and Business Services. (2) The 25 percent limitation of subsection (1) of this section does not apply to the extent the Oregon commercial bank relies primarily on the obligors on the consumer paper for the payment of the consumer paper, the Oregon commercial bank has reasonably adequate knowledge of the financial condition of the obligors on the consumer paper and an officer of the Oregon commercial bank certifies in writing that the creditworthiness of the obligors on the consumer paper has been evaluated. The certificate shall be retained as part of the records of the Oregon commercial bank. [1997 c.631 150]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person without regard to amount in the form of bankers acceptances of other financial institutions of the kind described in section 13 of the Federal Reserve Act. [1997 c.631 151]
(1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans and acquire other obligations of a person secured by documents of title covering readily marketable staples, provided the obligation does not exceed: (a) 15 percent of the Oregon commercial banks capital, where the principal amount of the obligation does not exceed 85 percent of the market value of the staples. (b) 20 percent of the Oregon commercial banks capital, where the principal amount of the obligation does not exceed 80 percent of the market value of the staples. (c) 25 percent of the Oregon commercial banks capital, where the principal amount of the obligation does not exceed 75 percent of the market value of the staples. (d) 35 percent of the Oregon commercial banks capital, where the principal amount of the obligation does not exceed 70 percent of the market value of the staples. (e) 40 percent of the Oregon commercial banks capital, where the principal amount of the obligation does not exceed 65 percent of the market value of the staples. (2) If it is customary to insure the staples mentioned in subsection (1) of this section, the staples shall be fully covered by insurance. (3) This section does not apply to obligations of a person secured by the same staples for more than 10 months. (4) Staples, for purposes of this section, in addition to being readily marketable, must be either: (a) Nonperishable; or (b) Perishable, but frozen, freeze-dried, irradiated or refrigerated for the purpose of protecting the staple against deterioration. [1997 c.631 152]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person, not to exceed 15 percent of the Oregon commercial banks capital, secured by documents of title covering livestock if the principal amount of the obligation is not more than 80 percent of the market value of the livestock. Turkeys are considered livestock within the meaning of this section. [1997 c.631 153]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of any person if the obligation is secured by one or more of the following types of security and the principal amount of the obligation is not more than 90 percent of the market value of the security: (1) Obligations of the United States, including those of its agencies and instrumentalities; (2) Obligations of public housing agencies issued pursuant to the United States Housing Act of 1937, as amended; (3) Obligations of the State of Oregon or any county, city, school district, port district or other public body with the power to levy taxes issued pursuant to the Constitution or statutes of the State of Oregon or the charter or ordinances of any county or city within the State of Oregon, if the issuing body has not been in default with respect to the payment of principal or interest on any of its obligations within five years preceding the date of the investment; or (4) Shares in any mutual fund or unit trust, the assets of which are invested solely in obligations of the type described in subsections (1) to (3) of this section. [1997 c.631 154]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and accept other obligations of a person, not to exceed 20 percent of the Oregon commercial banks capital, if: (1) The obligation is secured by bonds of any state of the United States or bonds of any county, city, school district, port district or other public body in the United States; (2) The principal amount of the obligation is not more than 90 percent of the market value of the bonds that secure the obligation; (3) The bonds are payable from ad valorem taxes; and (4) The bonds are rated in one of the four highest grades by a recognized investment service organization that has been engaged regularly and continuously for a period of not less than 10 years in rating state and municipal bonds. [1997 c.631 155]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person without regard to amount to the extent the obligations are insured, guaranteed or covered by commitments or agreements to take over or purchase made by a private mortgage insurance company, the State of Oregon, any Federal Reserve Bank, the United States or any department, bureau, board, commission or agency of the United States, including any corporation wholly owned, directly or indirectly, by the United States. [1997 c.631 156]
(1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person without regard to amount to the extent the obligations are fully secured by any kind of deposit held by the Oregon commercial bank, including but not limited to deposits held in an automatic savings to checking transfer account or a negotiable order of withdrawal account. (2) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person without regard to amount to the extent the obligations are fully secured at all times by any kind of deposit, including but not limited to deposits held in an automatic savings to checking transfer account or a negotiable order of withdrawal account that are fully insured, guaranteed or underwritten by the United States Government or any agency or instrumentality of the United States by virtue of any Act of Congress or amendments thereto. [1997 c.631 157]
In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire obligations of a person not to exceed 10 percent of the Oregon commercial banks capital that are secured by a life insurance policy having a cash surrender value of not less than 100 percent of the amount of the obligations, plus an amount equal to one annual premium on the insurance policy. [1997 c.631 158]
In addition to obligations permitted by ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person not to exceed 10 percent of the Oregon commercial banks capital that are secured by a first lien on real estate if the obligation does not exceed 80 percent of the fair market value of the real estate as determined by an independent appraisal. Obligations secured by a first lien on real estate that are subject to ORS 708A.295 may become exempt from ORS 708A.295 if: (1) Title to the real estate has, in good faith, passed to another and the original maker of the note is no longer either directly or through some other person the owner of the real estate; (2) The new owner has assumed the obligation and the Oregon commercial bank looks to the owner of the real estate rather than the maker of the obligation for payment; (3) The obligation is not in default at the time the obligation becomes no longer subject to ORS 708A.295; and (4) The obligation does not exceed 80 percent of the fair market value of the real estate at the time the obligation becomes no longer subject to ORS 708A.295. [1997 c.631 159]
In addition to obligations permitted by ORS 708A.295, an Oregon commercial bank may acquire obligations of a person, in the form of a guaranty or otherwise, without regard to amount, on account of obligations previously contracted in good faith or to reduce the risk of loss. Any such obligations shall, however, be subject to ORS 708A.295 in determining whether the Oregon commercial bank may make additional loans to or acquire other obligations of the person. [1997 c.631 160]
Oregon commercial banks may, consistent with applicable law and safe and sound banking practices, offer deposit accounts upon such terms and conditions as they consider appropriate. [1997 c.631 161]
Oregon commercial banks shall secure insurance for their deposits from the Federal Deposit Insurance Corporation or a similar organization organized under the laws of the United States. [1997 c.631 162]
(1) Within the limits established under applicable federal statutes and regulations, an Oregon commercial bank that receives savings accounts shall prescribe by the Oregon commercial banks bylaws or by contract with the Oregon commercial banks depositors, the time and conditions on which the Oregon commercial bank repays depositors or makes a repayment to the depositors order. (2) An Oregon commercial bank may require 30 days notice to withdraw any sum up to $5,000, 90 days notice to withdraw any sum over $5,000 and not over $50,000, and 180 days notice to withdraw any sum over $50,000. The bank may limit, in the aggregate, withdrawals during a specified time period to the amount designated for the time period. (3)(a) Except for negotiable orders of withdrawal and similar deposit accounts, withdrawal from which is subject to check, negotiable order of withdrawal or similar instrument, and except for inadvertent overdrafts, an Oregon commercial bank may not knowingly permit a depositor to overdraw the depositors savings account. (b) As used in paragraph (a) of this subsection, "inadvertent overdraft" means an overdraft that: (A) The Oregon commercial bank does not expressly permit or provide for in bylaws or a deposit contract; (B) Results from events or circumstances beyond the Oregon commercial banks reasonable control; and (C) Is eliminated within 14 days after the Oregon commercial bank becomes aware of the overdraft. [1997 c.631 163; 2013 c.104 4; 2015 c.244 46]
(1) An Oregon commercial bank may secure any of the funds deposited with the Oregon commercial bank by giving a surety bond, an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, or a policy of insurance under which some person other than the Oregon commercial bank becomes liable for deposits, provided that the aggregate face amount of the bonds, letters of credit and policies of insurance does not exceed 20 percent of the capital of the Oregon commercial bank. (2) A depositor may insure any deposit if the Oregon commercial bank is not a party to the insurance and does not pay any premium or other charges. [1997 c.631 164]
(1) If an Oregon commercial bank changes the terms, service charges or conditions for withdrawal of any deposit account, the Oregon commercial bank shall notify the depositor in writing before the change is effective. If an Oregon commercial bank decreases the interest rate on any deposit account, other than an account that by its terms provides for a floating, variable or indexed rate of interest, the Oregon commercial bank shall notify the depositor in writing before the change is effective. With respect to deposit accounts for which the terms provide for a floating, variable or indexed rate of interest, the Oregon commercial bank need not give notice to the depositor concerning changes in the interest rate other than by means of account statements the Oregon commercial bank provides to the depositor in the ordinary course, not less than once each calendar quarter. For accounts that two or more depositors hold, the Oregon commercial bank may give or send the notice to any of the depositors. An Oregon commercial bank may notify a depositor under this section: (a) In person; (b) By sending the notice by regular mail to the last address shown in the Oregon commercial banks deposit account records; or (c) By sending the notice electronically in accordance with an agreement the depositor has with the Oregon commercial bank, provided that the Oregon commercial bank complies with all laws and regulations that apply to electronic consumer notices. (2) The provisions of subsection (1) of this section do not apply to any change in the interest rate payable upon an account as described in ORS 86.245. [1997 c.631 165; 2015 c.244 47]
Any deposit in an Oregon commercial bank made to an account in the name of a minor must be held for the exclusive right and benefit of the minor free from the control or lien of all other persons, except other parties to the account and creditors, and must be paid, in accordance with the terms of the account, together with any interest on the deposit, to or upon the order of the minor. [1997 c.631 166; 2015 c.244 48]
(1) On the death of a depositor of an insured institution, if the deposit is $25,000 or less, the insured institution, after receiving an affidavit as provided in subsection (3) of this section from a person that claims the deposit, or a declaration from the Department of Human Services or the Oregon Health Authority as provided in subsection (4) of this section, may pay the moneys on deposit to the credit of the deceased depositor, in the following order of priority, to: (a) The surviving spouse at the surviving spouses demand at any time after the depositors death; (b) The Oregon Health Authority or the Department of Human Services, if the authority or the department demands the payment not less than 46 days and no more than 75 days after the death of the depositor if the depositor does not have a surviving spouse and if the authority or department has a preferred claim under ORS 411.708, 411.795 or 416.350; (c) The depositors surviving children 18 years of age or older, if the depositor does not have a surviving spouse and the authority and department do not have a claim; (d) The depositors surviving parent, if the depositor does not have a surviving spouse or surviving child 18 years of age or older and if the authority and department do not have a claim; (e) The depositors surviving brothers and sisters 18 years of age or older, if the depositor does not have a surviving spouse, surviving child 18 years of age or older or surviving parent and the authority and department do not have a claim; or (f) Any other surviving heir of the depositor, if there is no surviving spouse, authority claim, department claim, surviving child 18 years of age or older, surviving parent or surviving brothers or sisters 18 years of age or older. (2)(a) An insured institution may not pay moneys on deposit under subsection (1)(c) to (f) of this section earlier than 46 days after the death of the depositor. (b) An insured institution may not pay moneys on deposit under subsection (1)(c) to (f) of this section earlier than 76 days after the death of the depositor unless the financial institution obtains prior verbal or written authorization from the Oregon Health Authority or its designated representative and the Department of Human Services or its designated representative. (3) An affidavit or declaration submitted under this section must: (a) State where and when the depositor died; (b) State that the total deposits of the deceased depositor in all financial institutions in Oregon do not exceed $25,000; (c) Show the relationship of the affiant or declarant to the deceased depositor; and (d) Embody a promise to pay the expenses of last sickness, funeral expenses and just debts of the deceased depositor out of the deposit to the full extent of the deposit if necessary, in the order of priority prescribed by ORS 115.125, and to distribute any remaining moneys to the persons that are entitled to the moneys by law. (4) An insured institution shall accept from the Department of Human Services or the Oregon Health Authority, without additional requirements, a declaration under penalty of perjury meeting the requirements of subsection (3) of this section. A declaration submitted under this section must be signed by the declarant and must include the following sentence immediately above the signature line of the declarant: "I hereby declare under penalty of perjury that I am authorized by the Department of Human Services or the Oregon Health Authority to make this declaration, that the above statement is true to the best of my knowledge and belief, and that I understand that it is subject to penalty for perjury." (5) In the event the depositor died intestate without known heirs, an estate administrator of the State Treasurer appointed under ORS 113.235 is the affiant and shall receive the moneys for deposit into the Unclaimed Property and Estates Fund as escheated property and subject to claims under ORS 116.253. (6) The insured institution shall determine the relationship of the affiant or declarant to the deceased depositor, but paying the moneys in good faith to the affiant or declarant discharges and releases the insured institution from any liability or responsibility for the transfer in the same manner and with the same effect as if the insured institution transferred, delivered or paid the moneys to a personal representative of the estate of the deceased depositor. (7) A probate proceeding is not necessary to establish the right of the surviving spouse, Oregon Health Authority, Department of Human Services, surviving child, surviving parent, surviving brothers and sisters or an estate administrator of the State Treasurer to withdraw the deposits after filing the affidavit or declaration. If a personal representative is appointed in an estate where a withdrawal of deposits was made under this section, the person that withdraws the deposits shall account for the deposits to the personal representative. (8) If an insured institution transfers moneys under subsection (1) of this section, the insured institution may require the transferee to furnish the insured institution with a written indemnity agreement that indemnifies the insured institution against loss for moneys the insured institution transferred to the extent of the amount of the deposit. (9)(a) Moneys disbursed to the Department of Human Services under subsection (1) of this section may be made payable only to the department. (b) Moneys disbursed to the Oregon Health Authority under subsection (1) of this section may be made payable only to the authority. (10) This section is subject to the rights of other parties in the account under ORS 708A.455 to 708A.515. [1997 c.631 167; 2003 c.395 20; 2005 c.381 26; 2007 c.369 1; 2009 c.595 1113; 2011 c.720 217; 2015 c.244 49; 2017 c.51 1; 2019 c.678 69; 2021 c.424 24]
(1) An insured institution shall recognize an adverse claim to a deposit the insured institution holds only if the adverse claimant gives notice to the insured institution of the adverse claim and: (a) Procures a restraining order, injunction or other appropriate process against the insured institution in an action wherein the person to whose credit the deposit stands is made a party and served with summons; or (b) Delivers to the insured institution in a form, and with sureties acceptable to the insured institution, a bond or an irrevocable letter of credit that another insured institution has issued to indemnify the insured institution from any liability, damage and expenses that may arise from paying the adverse claim or dishonoring the check or other order of the person to whose credit the deposit stands. (2) This section does not apply if the person in whose name the account is carried is a fiduciary for the adverse claimant, and the affidavit of the adverse claimant states the facts constituting the fiduciary relationship and the facts showing reasonable cause for the claimants belief that the fiduciary is about to misappropriate the deposit. (3) An insured institution may, at the insured institutions option, interplead a deposit that is subject to an adverse claim. [1997 c.631 168; 2015 c.244 50]
If a person who owns a deposit account subject to check authorizes another person as agent to draw checks against the account, the insured institution, in the absence of written notice to the contrary, may presume that any check the agent draws in the manner that the terms and conditions of the account authorize, including a check the agent draws to the agents personal order, is for a purpose that the principal authorizes and is within the scope of the authority conferred upon the agent. [1997 c.631 169; 2015 c.244 51]
An insured institution may refuse to pay any check, draft or order drawn upon the insured institution if the officers or employees of the insured institution have reason to believe that the person signing or indorsing the instrument was the victim of financial exploitation, as defined in ORS 124.050, or was so under the influence of liquor, drugs or controlled substances or otherwise so incapacitated as to make it reasonably doubtful whether the person was capable of transacting business at the time of signing or indorsing the check, draft or order. [1997 c.631 170; 2015 c.244 52]
(1) An Oregon commercial bank shall certify a check only if the amount of the check actually stands to the credit of the drawer in collected funds on the books of the Oregon commercial bank. (2) The amount of any certified check shall be immediately charged to the drawers account. [1997 c.631 171]
As used in ORS 708A.455 to 708A.515, unless the context requires otherwise: (1)(a) "Account" means a contract of deposit of funds between a depositor and an insured institution. (b) "Account" includes a checking account, savings account or certificate of deposit. (2) "Beneficiary" means a person named in a trust account as one for whom a party to the account is named as trustee. (3) "Joint account" means an account payable on request to one or more of two or more parties, with or without a right of survivorship. (4)(a) "Multiple-party account" means a joint account, a P.O.D. account or a trust account. (b) "Multiple-party account" does not include: (A) Accounts established to deposit funds of a partnership, joint venture or other association for business purposes; (B) Accounts that a person controls as the duly authorized agent or trustee for a corporation, limited liability company, unincorporated association, charitable or civic organization; or (C) A regular fiduciary or trust account in which the relationship is established other than by deposit agreement. (5) "Net contribution" of a party to a joint account as of any given time means: (a) The sum of all deposits to the joint account made by or for the party, less all withdrawals made by or for the party that have not been paid to or applied to the use of any other party, plus a pro rata share of any interest or dividends included in the current balance; and (b) Any proceeds of deposit life insurance added to the account by reason of the death of the party whose net contribution is in question. (6) "Party" means: (a) A person that, by the terms of a multiple-party account, has a present right, subject to request, to payment from the account; (b) A P.O.D. payee or beneficiary of a trust account if the account becomes payable to the payee or beneficiary by reason of the payees or beneficiarys surviving the original party or trustee; (c) A guardian, conservator, personal representative or assignee, including an attaching creditor, of a party; or (d) A person identified as a trustee of an account for another whether or not a beneficiary is named, other than a named beneficiary, unless the named beneficiary has a present right of withdrawal. (7) "Payment" means withdrawing, paying on check or otherwise paying sums on deposit at a partys directive, a partys pledging sums on deposit and any setoff, reduction or other disposition of all or part of an account in accordance with a pledge. (8) "P.O.D. account" means an account payable on request to one person during the persons lifetime and, on the persons death, to one or more P.O.D. payees, or to one or more persons during the persons lifetimes and on the death of all of the persons to one or more P.O.D. payees. (9) "P.O.D. payee" means a person designated on a P.O.D. account as a person to whom the account is payable on request after the death of another person. (10) "Request" means a proper request for withdrawal, or a check or order for payment, that complies with all conditions of an account, including special requirements concerning necessary signatures and regulations of the insured institution. (11) "Sums on deposit" means the balance payable on a multiple-party account, including interest, dividends and any deposit life insurance proceeds added to the account by reason of a partys death. (12)(a) "Trust account" means an account in the name of one or more parties as trustee for one or more beneficiaries in which the relationship is established by the form of the account and the deposit agreement with the insured institution, and the trust has no subject other than the sums on deposit in the account whether or not the deposit agreement provides for payment to the beneficiary. (b) "Trust account" does not include a regular trust account under a testamentary trust or a trust agreement that has significance apart from the account, or a fiduciary account arising from a fiduciary relationship such as attorney-client. (13) "Withdrawal" means payment to a party or to a third person by check or otherwise at a partys directive. [1997 c.631 172; 2015 c.244 53]
The provisions of ORS 708A.465 to 708A.475 concerning beneficial ownership as between parties, or as between parties and P.O.D. payees or beneficiaries of multiple-party accounts, apply only to controversies between the parties, the P.O.D. payees or the beneficiaries and the creditors and other successors of the parties, P.O.D. payees or beneficiaries, and do not apply to the power of withdrawal that a party, P.O.D. payee or beneficiary has under the terms of account contracts. The provisions of ORS 708A.485 to 708A.510 govern the liability of insured institutions that make payments under ORS 708A.485 to 708A.510, and an insured institutions setoff rights. [1997 c.631 173; 2015 c.244 56]
(1) A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit, unless there is clear and convincing evidence of a different intent. (2) A P.O.D. account belongs to the original party during the lifetime of the party and not to the P.O.D. payee or payees. If two or more persons are named as original parties, during their lifetimes, rights as between them are governed by subsection (1) of this section. (3) Unless a contrary intent is manifested by the terms of the account or the deposit agreement or there is other clear and convincing evidence of an irrevocable trust, a trust account belongs beneficially to the trustee during the lifetime of the trustee. If two or more parties are named as trustees on the account, during their lifetimes beneficial rights as between them are governed by subsection (1) of this section. If there is an irrevocable trust, the account belongs beneficially to the beneficiary. [1997 c.631 174]
(1) Sums that remain on deposit in an insured institution at the death of a party to a joint account are rebuttably presumed to belong to the surviving party or parties as against the estate of the decedent. If two or more parties survive, each partys respective ownership during the partys lifetime must be in proportion to the partys previous ownership interest under ORS 708A.465, augmented by an equal share for each surviving party of any interest the decedent may have owned in the account immediately before death. The right of survivorship continues between the surviving parties. (2) If the account is a P.O.D. account: (a) On the death of one of two or more original parties, subsection (1) of this section governs the rights to any sums that remain on deposit. (b) On the death of the sole original party or the survivor of two or more original parties, any sums that remain on deposit belong to the P.O.D. payee or payees, if a P.O.D. payee or payees survive, or to the remaining P.O.D. payee or payees if one or more P.O.D. payees die before the original party. If two or more P.O.D. payees survive, a remaining P.O.D. payee does not have a right of survivorship after one of the P.O.D. payees dies unless the terms of the account or deposit agreement expressly provide for survivorship among remaining P.O.D. payees. (3) If an account is a trust account: (a) On the death of one of two or more trustees, subsection (1) of this section governs the rights to any sums that remain on deposit. (b) On the death of the sole trustee or the survivor of two or more trustees, any sums that remain on deposit belong to the person or persons named as beneficiaries, if a beneficiary or beneficiaries survive, or to the remaining beneficiary if one or more beneficiaries die before the trustee, unless clear and convincing evidence exists of a contrary intent. If two or more beneficiaries survive, a remaining beneficiary does not have a right of survivorship after one of the beneficiaries dies unless the terms of the account or deposit agreement expressly provide for survivorship among remaining beneficiaries. (4) Except as otherwise provided in this section, the death of any party to a multiple-party account does not affect the beneficial ownership of the account, other than to transfer the rights of the decedent as part of the decedents estate. (5) A will may not change a right of survivorship that arises from the express terms of the account or under this section, a beneficiary designation in a trust account, or a P.O.D. payee designation. (6) The rebuttable presumption under subsection (1) of this section may be overcome by evidence establishing that: (a) The deceased party intended a different result; or (b) The deceased party lacked capacity when the joint account was established. (7) An insured institution is not liable, with respect to sums that remain on deposit at the death of a party to a joint account, for distributing the sums to a surviving party or parties in accordance with the account agreement unless, before distributing the sums to a surviving party or parties: (a) The insured institution has received notice in writing of an adverse claim under ORS 708A.435; and (b) The adverse claimant proceeds as required under ORS 708A.435. [1997 c.631 175; 2003 c.256 1; 2015 c.244 57]
The provisions of ORS 708A.470 as to rights of survivorship are determined by the form of the account at the death of a party. Subject to satisfaction of the requirements of the insured institution, the form of an account may be altered by written order given by a party to the insured institution if the party signs the order and the insured institution receives the order during the partys lifetime, and if the party does not countermand the order with another written order during the partys lifetime. [1997 c.631 176; 2015 c.244 58]
Any transfers resulting from the application of ORS 708A.470 are effective by reason of the account contracts involved and ORS 708A.470, and are not to be considered as testamentary or subject to administration in the estate of a deceased party. [1997 c.631 177]
An insured institution may enter into a multiple-party account to the same extent that the insured institution may enter into a single-party account. The insured institution may pay any multiple-party account, on request, to any one or more of the parties. An insured institution need not inquire as to the source of funds the insured institution receives for deposit to a multiple-party account, or as to the proposed application of any sum withdrawn from an account, for purposes of establishing net contributions. [1997 c.631 178; 2015 c.244 59]
If an insured institution conditions withdrawal or payment on advance notice, for purposes of ORS 708A.455 to 708A.515, a request for withdrawal or payment is immediately effective and a notice of intent to withdraw is a request for withdrawal. [2015 c.244 55] Note: 708A.488 was added to and made a part of 708A.455 to 708A.515 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
An insured institution may pay any sums in a joint account, on request, to any party without regard to whether any other party is incapacitated or deceased at the time the party demands payment. An insured institution may not pay the personal representative or heirs of a deceased party unless proofs of death are presented to the insured institution showing that the decedent was the last surviving party or unless no right of survivorship exists under ORS 708A.470. [1997 c.631 179; 2015 c.244 60]
An insured institution may pay any P.O.D. account, on request, to any original party to the account. The insured institution may pay, on request, the P.O.D. payee or the personal representative or heirs of a deceased P.O.D. payee upon presentation to the insured institution of proof of death showing that the P.O.D. payee survived all persons named as original parties. The insured institution may pay the personal representative or heirs of a deceased original party if proof of death is presented to the insured institution showing that the decedent survived all other persons named on the account either as an original party or as P.O.D. payee. [1997 c.631 180; 2015 c.244 61]
An insured institution may pay any trust account, on request, to any trustee. Unless the insured institution has received written notice that the beneficiary has a vested interest that does not depend upon the beneficiarys surviving the trustee, the insured institution may pay the personal representative or heirs of a deceased trustee if proof of death is presented to the insured institution showing that the decedent survived all other persons named on the account either as trustee or beneficiary. The insured institution may pay, on request, the beneficiary upon presentation to the insured institution of proof of death showing that the beneficiary or beneficiaries survived all persons named as trustees. [1997 c.631 181; 2015 c.244 62]
A payment that an insured institution makes under ORS 708A.485, 708A.490, 708A.495 or 708A.500 discharges the insured institution from all claims for amounts the insured institution paid whether or not the payment is consistent with the beneficial ownership of the account as between parties, P.O.D. payees or beneficiaries, or successors of the parties, P.O.D. payees or beneficiaries. The protection given by this section does not extend to payments an insured institution makes after receiving a written notice from any party able to request present payment to the effect that withdrawals in accordance with the terms of the account should not be permitted. Unless the person that gives the notice withdraws the notice, the successor of any deceased party must concur in any demand for withdrawal in order for the protections that this section provides to extend to the insured institution. Any other notice or information shown to have been available to an insured institution does not affect the insured institutions right to protection under this section. The protection that this section provides does not affect the rights of parties in disputes between the parties or the parties successors concerning the beneficial ownership of funds in, or withdrawn from, multiple-party accounts. [1997 c.631 182; 2015 c.244 63]
Without qualifying any other statutory or common law right to setoff or lien and subject to any contractual provision, if a party to a multiple-party account is indebted to an insured institution, the insured institution has a right to setoff against the account in which the party has or had a present right of withdrawal immediately before the partys death. The amount of the account that is subject to setoff is the proportion to which the debtor is, or was immediately before the death of the debtor, beneficially entitled and, in the absence of proof of net contributions, to an equal share with all parties that have present rights of withdrawal. [1997 c.631 183; 2015 c.244 64]
ORS 708A.455 to 708A.465 do not preclude a party to an account from adding the name of another person to the account with the designation "agent." The agent does not have a present or future interest in the sums on deposit in such account, but the insured institution may honor requests from the agent for payment from the account, unless the principal is deceased at the time the agent requests the payment and the insured institution has actual knowledge of the principals death. An insured institutions payment from the account at the agents request discharges the insured institution from all claims for amounts the insured institution paid. [1997 c.631 184; 2015 c.244 65]
(1) An institution may only grant security interests in its assets: (a) To secure its indebtedness to a Federal Reserve Bank or Federal Home Loan Bank. (b) To secure its borrowings from others with a maturity of 90 days or less, provided the value of the assets pledged shall not be more than 50 percent greater than the amount borrowed. If the value of the assets pledged is more than 25 percent greater than the amount borrowed or if the amount borrowed is greater than the stockholders equity of the bank, the transaction shall first be approved in writing by the Director of the Department of Consumer and Business Services. (c) To secure its deposits that are not insured by the Federal Deposit Insurance Corporation provided: (A) The value of aggregate assets pledged does not exceed 20 percent of its stockholders equity; and (B) The prior written approval of the director is obtained. (d) To secure public funds pursuant to ORS 295.001 to 295.108, trust funds awaiting investment or distribution, or trust funds deposited with it by an institution. (2) Notwithstanding any other provision of state law, when an institution grants a security interest in assets to secure public funds, the depositor of the public funds and any bailee of pledged securities or other assets shall be entitled to the status of a lien creditor as defined in ORS 79.0102. (3) An institution shall grant a security interest in its assets only when authorized by a general or specific prior resolution of its board of directors. (4) As used in this section, "public funds" means deposits belonging to: (a) The State of Oregon that may be deposited to the official credit of the State Treasurer, and funds that may be deposited in an official capacity by any state officer, board or commission. (b) Any county within this state deposited to the official credit of the county treasurer, including the funds of any irrigation or drainage district organized under the laws of this state, or any school district within this state where funds of the school district are deposited with the county treasurer, and funds that may be deposited in an official capacity by any county officer. (c) Any port, port commission, dock or dock commission within this state that may be deposited to the credit of the port, port commission, dock or dock commission, or the treasurer thereof. (d) Any city within this state deposited to the official credit of the city treasurer, and funds that may be deposited in an official capacity by any officer of any municipal corporation. (e) Any school district within this state. (f) Any district organized under the laws of this state with the power to levy taxes. (g) Any housing authority organized and operating pursuant to ORS 456.055 to 456.235. (h) The United States and any of its agencies and instrumentalities to be deposited in the manner and under the rules prescribed by the United States Government. [1997 c.631 185; 2001 c.445 180; 2007 c.871 31]
Except as otherwise provided in the Bank Act or other applicable law, institutions shall keep books and records in accordance with accounting principles generally accepted in the United States (GAAP), consistently applied. [1997 c.631 186; 2015 c.244 66]
(1) Real estate, furniture, fixtures, vaults and safe deposit boxes necessary or convenient for the operation of an institutions business shall be carried on the books of the institution in an amount not to exceed 50 percent of its capital, as defined in ORS 708A.290. (2) Within guidelines established by rules promulgated under ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to 183.410 the Director of the Department of Consumer and Business Services may authorize an institution to exceed the limitations prescribed in this section. (3) Personal property acquired for lease to others in accordance with ORS 708A.180 is not subject to the limitations of this section. [1997 c.631 187]
An institution shall carry on the institutions books, at a value that does not exceed 15 percent of the stockholders equity in the institution, any investments in stock of or membership interests in a company that engages in activities in which a financial holding company, a bank holding company or a nonbanking subsidiary of a financial holding company or bank holding company could engage under ORS 708A.120 (4). [1997 c.631 188; 1999 c.59 217; 2001 c.377 49; 2015 c.244 67]
Investments in community development corporations under ORS 708A.150 must be accounted for on an institutions books as "other assets." If the community development corporation is organized under the Oregon Nonprofit Corporation Law, the stock of the corporation purchased by the institution, or the institutions membership in the corporation if it does not issue stock, shall be carried on the books of the institution at a value not exceeding $1. [1997 c.631 189]
An institution shall carry on the institutions books, at a value that does not exceed $1, any investments in a corporation or limited liability company that is engaged in the business of purchasing the institutions stock for purposes of holding and making a market for the stock. [1997 c.631 190; 2015 c.244 68]
(1) An institution may not carry on the institutions books, at a value in excess of 20 percent of the institutions capital, the aggregate amount of stock of or membership interests in a corporation or limited liability company the institution acquired under ORS 708A.125 for the purpose of strengthening the institutions capital or eliminating undesirable assets. (2) The institution each year shall amortize the book value of the stock or membership interests by not less than five percent of the original book value of the stock or membership interests. [1997 c.631 191; 2015 c.244 69]
An institution may not carry claims against the estates of insolvent persons or deceased or incompetent persons and judgments against any person as an asset on the institutions books for more than two years, unless the Director of the Department of Consumer and Business Services grants a written extension of time. This section does not apply to loans an institution makes to the personal representative, guardian, conservator or trustee of any estate. [1997 c.631 192; 2015 c.244 70]
(1) An institution that owns or holds any real estate other than as permitted in the Bank Act shall immediately charge the book value of the real estate to profit and loss or otherwise remove the real estate from the institutions books. (2) An institution shall at all times value and record on the institutions books and records, in accordance with generally accepted accounting principles, real estate that the institution owns or holds in accordance with ORS 708A.175 (3) or (4). [1997 c.631 193; 2011 c.478 1]
An institution may not carry goods, as defined in ORS 79.0102, and chattels, as defined in ORS 87.142, that the institution owns on account of collecting the institutions debts on the institutions books for more than two years after acquiring the goods or chattels, unless the Director of the Department of Consumer and Business Services extends the two-year period. [1997 c.631 194; 2015 c.244 71]
An institution shall charge off all debts: (1) On which interest is past due and unpaid for 12 months, unless the debt is fully secured and in process of collection; (2) That an examiner has classified as a loss; or (3) Upon the instruction of the Director of the Department of Consumer and Business Services. [1997 c.631 195; 2015 c.244 72]
An institution shall maintain the accounts of each foreign branch independently of the accounts of other foreign branches established by it and of its home office. At the end of each year, the profit or loss accrued at each branch shall be transferred to the general ledger as a separate item. [1997 c.631 196]
Any officer, director or employee of an institution who knowingly or negligently loans the funds of the institution in a dishonest or unlawful manner or permits the funds of the institution to be so loaned, is liable for the full amount of the loan and for all damages that the institution, its stockholders or any other person has sustained in consequence thereof. The liability for the loan continues until the loan, with interest, is paid in full without loss to the institution. The amount of the liability may be collected by suit or action without first attempting to collect from the debtor. [1997 c.631 197a]
Institutions shall develop written policies regarding the types of matters that shall be reported to and approved by the institutions board of directors. An officer, director or employee of an institution shall not conceal from or fail to report to the board of directors of the institution any such matter. [1997 c.631 198]
(1) An officer, director, agent or employee of an institution shall not ask for, receive or agree to receive any money, property or thing of value or of personal advantage, for: (a) Procuring or endeavoring to procure for any person any loan from, or the purchase or discount of any paper, note, draft, check or bill of exchange by, the institution. (b) Permitting any person to overdraw any account with the institution. (2) An officer, director, stockholder, employee or agent of an institution shall not abstract or willfully misapply any of the property of the institution, or willfully misapply its credit. [1997 c.631 199]
An officer, director or employee of an institution shall not make or deliver any guaranty or indorsement on behalf of the institution whereby the institution becomes liable upon any of its discounted notes, bills or obligations, in any sum beyond the amount of loans and discounts that the institution may legally make. [1997 c.631 200]
(1) As used in this section: (a) "Bank" means any banking institution, out-of-state state bank, out-of-state federal bank, national bank or extranational institution that engages in banking business in this state. (b) "Banking day" means any day that is not an optional bank holiday. (c) "Emergency" means any condition or occurrence that may interfere with conducting normal business operations at one or more of a banks offices, or that poses an imminent or existing threat to the safety or security of persons or property. (d) "Open for conducting banking business" means the office or offices of a bank are open to the public for carrying on substantially all business functions of the bank. (e) "Optional bank holiday" means: (A) Each Saturday and Sunday. (B) New Years Day on January 1. (C) Martin Luther King, Jr.s birthday on the third Monday in January. (D) Presidents Day on the third Monday in February. (E) Memorial Day on the last Monday in May. (F) Independence Day on July 4. (G) Labor Day on the first Monday in September. (H) Columbus Day on the second Monday in October. (I) Veterans Day on November 11. (J) Thanksgiving Day on the fourth Thursday in November. (K) Christmas Day on December 25. (2) A bank may observe an optional bank holiday, other than a Saturday, that falls on a Saturday on the Saturday or on the preceding Friday. A bank may observe an optional bank holiday, other than a Sunday, that falls on a Sunday on the Sunday or on the succeeding Monday. (3) Except as otherwise provided in this section, a bank shall be open for conducting banking business on each banking day. (4) Any bank may remain closed on any optional bank holiday with respect to all or any of the banks banking and other functions. (5) Subject to any applicable federal law or regulation, a bank may close an office for any part or all of a banking day if the times or days which the office is open are posted on the premises of the office. (6) If the Director of the Department of Consumer and Business Services determines that an emergency exists, the director may authorize a bank to close the banks principal office or branch that the emergency affects. The office or branch may remain closed until the director determines that the emergency has ended and for such further time thereafter as the bank may reasonably require to prepare the office or branch to reopen. (7) If the officers of a bank determine that an emergency exists that affects the principal office or a branch of the bank, the officers may close the office or branch without the directors approval for a period not to exceed 48 hours, excluding holidays, during the continuation of the emergency. A bank that closes an office or branch under this subsection shall give prompt notice of the banks action to the director, or in the case of a national bank, to the Comptroller of the Currency. (8) The principal officers of a bank may close the principal office or any branch of the bank on any day designated, by proclamation of the President of the United States or the Governor of this state, as a day of mourning, rejoicing, or other special observance. (9) If an obligation that is payable at, by or through a bank falls due on a day on which the bank remains closed under this section, the obligation is due and payable on the next banking day on which the bank is open. Any act authorized, required or permitted to be performed at, by or with respect to any bank on a day on which the bank remains closed may be performed on the next banking day on which the bank is open, without liability or a loss of rights of any kind as a result of the closing. [1997 c.631 1c; 1999 c.59 218; 2015 c.244 73]
(1) This section applies to the safe deposit box of any person who is the sole lessee or last surviving lessee of the box and who has died. (2) Subject to ORS 114.537, upon being furnished with a certified copy of the decedents death record or other evidence of death satisfactory to the Oregon operating institution, the Oregon operating institution within which the box is located shall cause or permit the box to be opened, and the contents of the box examined, at the request of an individual who furnishes an affidavit stating: (a) That the individual believes the box may contain the will of the decedent, a trust instrument creating a trust of which the decedent was a trustor or a trustee at the time of the decedents death, documents pertaining to the disposition of the remains of the decedent, documents pertaining to property of the estate of the decedent or property of the estate of the decedent; and (b) That the individual is an interested person and wishes to open the box to conduct a will search or trust instrument search, obtain documents relating to the disposition of the decedents remains, inventory the contents of the box or remove property of the estate of the decedent pursuant to a small estate affidavit filed under ORS 114.515. (3) For the purpose of this section, "interested person" means any of the following: (a) A person named as personal representative of the decedent in a purported will of the decedent; (b) The surviving spouse or any heir of the decedent; (c) A person who was serving as the court-appointed guardian or conservator of the decedent or as trustee for the decedent immediately prior to the decedents death; (d) A person named as successor trustee in a purported trust instrument creating a trust of which the decedent was a trustor or a trustee at the time of the decedents death; (e) A person designated by the decedent in a writing that is acceptable to the Oregon operating institution and is filed with it prior to the decedents death; (f) A person who immediately prior to the death of the decedent had the right of access to the box as an agent of the decedent under a durable power of attorney; (g) If there are no heirs of the decedent, an estate administrator of the State Treasurer appointed under ORS 113.235; or (h) A person who is authorized to file a small estate affidavit under ORS 114.515. (4) If the box is opened for the purpose of conducting a will search, the Oregon operating institution shall remove any document that appears to be a will, make a true and correct copy of it and deliver the original will to a person designated in the will to serve as the decedents personal representative, or if no such person is designated or the Oregon operating institution cannot, despite reasonable efforts, determine the whereabouts of such person, the Oregon operating institution shall retain the will or deliver it to a court having jurisdiction of the estate of the decedent. A copy of the will shall be retained in the box. At the request of the interested person, a copy of the will, together with copies of any documents pertaining to the disposition of the remains of the decedent, may be given to the interested person. (5) If the box is opened for the purpose of conducting a trust instrument search, the Oregon operating institution shall remove any document that appears to be a trust instrument creating a trust of which the decedent was a trustor or trustee at the time of the decedents death, make a true and correct copy of it and deliver the original trust instrument to a person designated in the trust instrument to serve as the successor trustee on the death of the decedent. If no such person is designated or the Oregon operating institution cannot, despite reasonable efforts, determine the whereabouts of such person, the Oregon operating institution shall retain the trust instrument. A copy of the trust instrument shall be retained in the box. At the request of any interested person, a copy of the trust instrument may be given to the interested person. (6) If the box is opened for the purpose of obtaining documents pertaining to the disposition of the decedents remains, the Oregon operating institution shall comply with subsection (4) or (5) of this section with respect to any will or trust instrument of the decedent found in the box, and may in its discretion either: (a) Make and retain in the box a copy of any documents pertaining to the disposition of the remains of the decedent and tender the original documents to the interested person; or (b) Provide a copy of any documents pertaining to the disposition of the remains of the decedent to the interested person and retain the original documents in the box. (7) If the box is opened for the purpose of making an inventory of its contents, the Oregon operating institution shall comply with subsection (4) or (5) of this section with respect to any will or trust instrument of the decedent that is found in the box, and shall cause the inventory to be made. The inventory must be attested to by a representative of the Oregon operating institution and may be attested to by the interested person, if the interested person is present when the inventory is made. The Oregon operating institution shall retain the original inventory in the box, and shall furnish a copy of the inventory to the interested person upon request. (8) If the interested person is an affiant of a small estate affidavit filed under ORS 114.515 and delivers a certified copy of the affidavit in the manner provided by ORS 114.535, the Oregon operating institution shall provide to the affiant access to the decedents property. The Oregon operating institution shall comply with subsection (4) or (5) of this section if a will or trust instrument of the decedent is found in the box. Subject to ORS 114.537, the Oregon operating institution shall allow the affiant to take possession of the personal property in the box. (9) The Oregon operating institution may presume the truth of any statement contained in the affidavit required to be furnished under this section or ORS 114.535, and when acting in reliance upon such an affidavit, the Oregon operating institution is discharged as if it had dealt with the personal representative of the decedent. The Oregon operating institution is not responsible for the adequacy of the description of any property included in an inventory of the contents of a box, or for the conversion of the property in connection with actions performed under this section, except for conversion by intentional acts of the Oregon operating institution or its employees, directors, officers or agents. If the Oregon operating institution is not satisfied that the requirements of this section have been satisfied, the Oregon operating institution may decline to open the box. (10) If the interested person or affiant does not furnish the key needed to open the box, and the Oregon operating institution must incur expense in gaining entry to the box, the Oregon operating institution may require that the interested person or affiant pay the expense of opening the box. (11) Any examination of the contents of a box under this section shall be conducted in the presence of at least one employee of the Oregon operating institution. [1999 c.506 2; 2001 c.10 1; 2003 c.395 21; 2011 c.422 4; 2013 c.366 82; 2019 c.165 26; 2019 c.678 70]
(1) As used in this section: (a) "Financial institution" has the definition given that term in ORS 706.008. (b) "Savings promotion raffle" means a contest in which a financial institution, or an agent of the financial institution, offers a chance for an individual member or depositor to win a designated prize by depositing in the individual members or depositors share account, deposit certificate account or other savings account a specific amount of money during a specific period of time. (2) Subject to subsection (3) of this section, a financial institution may conduct a savings promotion raffle within this state. (3) A financial institution may not, in conducting a savings promotion raffle: (a) Design, engage in, promote or conduct the savings promotion raffle in connection with selling or promoting a consumer product or service other than a share account, deposit certificate account or other savings account that the financial institution offers. (b) Predetermine a winner, or other outcome, in the savings promotion raffle. (c) Permit a director, officer, employee or agent of the financial institution to participate in the savings promotion raffle. (d) Arbitrarily remove, disqualify, disallow or reject an application to enter into or attempt to participate in the savings promotion raffle. (e) Fail to award the prize the financial institution offers in the savings promotion raffle. (f) Print, publish, circulate or display by means of any medium an advertising or other statement concerning the savings promotion raffle that is false, deceptive or misleading. (g) Require an entry fee, a payment or a promise to pay any valuable consideration as a condition of participating in or winning a prize from a savings promotion raffle, except that a financial institution may require an individual member or depositor to deposit a minimum amount to open a share account, deposit certificate account or other savings account and deposit a specific amount or maintain a specific balance for a specific time to participate in the savings promotion raffle and may charge any fee or amount to administer or maintain the individual members or depositors share account, deposit certificate account or other savings account that the financial institution ordinarily and customarily charges an individual member or depositor who does not participate in the savings promotion raffle. (4) A financial institution, in conducting and administering a savings promotion raffle, shall ensure that every individual member or depositor who participates in the savings promotion raffle has an equal opportunity to submit or receive entries for the savings promotion raffle. (5) A financial institutions violation of subsection (3) or (4) of this section is subject to a civil penalty as provided in ORS 706.980. (6) This section applies uniformly throughout this state and within all political subdivisions and municipalities of this state. A political subdivision of this state or a municipality within this state may not enact or adopt an ordinance, resolution, regulation, rule or other law to limit or restrict a financial institutions operation of a savings promotion raffle within this state. (7) This section does not repeal or modify existing state laws with respect to gambling, except that a savings promotion raffle is not subject to existing state laws with respect to gambling. (8) The Director of the Department of Consumer and Business Services may adopt rules to implement the provisions of this section. [2015 c.137 2]
As used in this section and ORS 708A.675: (1) "Financial exploitation" has the meaning given that term in ORS 124.050. (2) "Financial institution" means a financial institution or a trust company as those terms are defined in ORS 706.008. (3) "Law enforcement agency" has the meaning given that term in ORS 124.050. (4) "Vulnerable person" has the meaning given that term in ORS 124.100. (5) "Vulnerable persons account" means a contract of deposit of funds between a depositor and a financial institution where: (a) The account is owned by a vulnerable person, whether individually or with one or more other persons; or (b) A vulnerable person is a beneficiary of the account, including of a formal or informal trust account, a payable on death account, a conservatorship account or a guardianship account. [2017 c.290 1] Note: 708A.670 to 708A.680 were enacted into law by the Legislative Assembly but were not added to or made a part of the Bank Act or any chapter or series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) When a financial institution reasonably believes, or has received information from the Department of Human Services, a law enforcement agency, or a district attorneys office demonstrating that it is reasonable to believe, that financial exploitation of a vulnerable person may have occurred, may have been attempted or is being attempted, and pending an investigation by the financial institution, the department, the law enforcement agency or the district attorneys office, the financial institution may but is not required to: (a) Refuse a transaction with or involving the vulnerable person; (b) Refuse to permit the withdrawal or disbursement of funds contained in a vulnerable persons account; (c) Prevent a change in ownership of a vulnerable persons account; (d) Prevent a transfer of funds from a vulnerable persons account to an account owned wholly or partially by another person; or (e) Refuse to comply with instructions given to the financial institution by an agent or attorney-in-fact under a power of attorney signed or purported to have been signed by the vulnerable person. (2) A financial institution is not required to act under subsection (1) of this section when provided with information alleging that financial exploitation may have occurred, may have been attempted or is being attempted, but may use the financial institutions discretion to determine whether or not to act under subsection (1) of this section based on the information available to the financial institution at the time. (3)(a) Except as provided in paragraph (b) of this subsection, a financial institution that acts under subsection (1) of this section shall make a reasonable effort to notify, orally or in writing, all parties currently authorized to transact business on the account concerning the financial institutions action. (b) A financial institution is not required to provide the notice described in paragraph (a) of this subsection when the financial institution, in the financial institutions discretion, determines that providing notice could compromise an investigation of or response to the suspected financial exploitation. (4) The authority granted to a financial institution under subsection (1) of this section will expire upon the sooner of: (a) Fifteen business days after the date on which the financial institution first acted under subsection (1) of this section; (b) When the financial institution is satisfied that the transaction or act will not result in financial exploitation of a vulnerable person; or (c) Upon termination by an order of a court of competent jurisdiction. (5) Unless otherwise directed by order of a court of competent jurisdiction, a financial institution may extend the duration under subsection (4) of this section based on a reasonable belief that the financial exploitation of a vulnerable person may have occurred, may have been attempted, or may continue to occur or be attempted. (6) A financial institution and all employees of a financial institution are immune from criminal, civil and administrative liability for actions taken under subsections (1) and (5) of this section if the actions were taken in good faith. [2017 c.290 2] Note: See note under 708A.670.
The authority granted to financial institutions under ORS 708A.675 is in addition to and not in lieu of any right a financial institution may have under the financial institutions deposit or other contract with the financial institutions customer. Nothing in ORS 708A.675: (1) Restricts the rights of a financial institution to take or refuse to take any action pursuant to the financial institutions deposit or other contract with the financial institutions customer; or (2) Requires a financial institution to comply with any provision of ORS 708A.675 when acting pursuant to the provisions of the financial institutions deposit or other contract with the financial institutions customer. [2017 c.290 3] Note: See note under 708A.670.
(1) An institution that violates ORS 708A.560 shall forfeit a civil penalty in an amount the Director of the Department of Consumer and Business Services determines that is not more than $50,000. (2) An Oregon commercial bank that violates ORS 708A.420 shall forfeit a civil penalty in an amount the director determines that is not more than $10,000. In addition, the director may revoke the Oregon commercial banks charter. (3) All money forfeited under subsections (1) and (2) of this section shall be paid to the State Treasurer for deposit in the Consumer and Business Services Fund. (4) The director may recover a civil penalty as provided in ORS 706.980. [1997 c.631 201; 2015 c.244 74]
Violation knowingly of any of the provisions of ORS 708A.635 is a Class C felony. [1997 c.631 202]
(1) Except as provided in ORS 709.030 (4) or in subsection (4) of this section, no company shall transact any trust business in this state until the company has obtained a certificate of authority from the Director of the Department of Consumer and Business Services under this section, authorizing the company to transact trust business in this state. (2) To procure a certificate of authority to transact trust business in this state, a company to whom this section applies shall file a written application with the director, which shall contain or be accompanied by: (a) The name of the company. (b) The state or country under the laws of which the company is organized. (c) The date of incorporation or other organization of the company. (d) The period of duration of the company, if the duration is not perpetual. (e) A mailing address to which the director may send notices. (f) The address of the principal office of the company in the state or country under the laws of which it is organized. (g) The street address of the proposed registered office of the company in this state and the name of its proposed registered agent, who shall be amenable to service of process at that address. (h) A brief statement setting forth any background and experience of the company in conducting a trust business in the state or country in which it is organized, and its qualifications to transact trust business in this state. (i) The names and addresses of the chief executive officer and the secretary of the company. (j) Any additional information that the director may by rule require. (k) The verified signature of the chief executive officer of the company, certifying that all information contained in the application is true, accurate and complete. (L) A certificate of existence, a certificate of good standing, a status certificate or a document of similar import, current within 60 days of making application under this section and duly authenticated by the official with custody of the corporate or other records in the state, province or country under the laws of which the company is organized. (m) A certificate of authorization for a foreign corporation, or a copy of the application for authority to transact business in this state as a foreign corporation as filed with the Secretary of State, current within 60 days of making application under this section and duly authenticated by the Secretary of State evidencing the authorization of the company, or application for authorization, to transact business as a foreign corporation under ORS chapter 60. (n) An application fee of $2,500, provided that no application fee shall be charged under this paragraph: (A) If the applicant is concurrently applying for a charter under ORS chapter 707; or (B) If the director reduces or waives the application fee. (3) If the director finds that the application conforms to the requirements of subsection (2) of this section and that the applicant is qualified by experience to transact trust business in this state, the director shall direct the applicant to make the security deposit required under ORS 709.030, and when the deposit is made, the director shall issue and send to the company a certificate of authority to transact business. (4) The requirement to procure a certificate of authority under this section shall not apply to the extent preempted by federal law, or to any bank lawfully transacting trust business in this state on October 4, 1997. [1997 c.631 229; 1999 c.107 3]
(1) As an alternative to being organized as a corporation pursuant to the provisions of ORS chapter 707 and this chapter, an Oregon trust company may be organized as a limited liability company. (2) With respect to any Oregon trust company that is organized as a limited liability company, as used in the Bank Act: (a) "Articles of incorporation" means the Oregon trust companys articles of organization, as defined in ORS 63.001. (b) "Bylaws" means the Oregon trust companys operating agreement, as defined in ORS 63.001. (c) "Certificate of incorporation" means a certificate of organization issued to the Oregon trust company. (d) "Corporation" means a limited liability company, as defined in ORS 63.001. (e) "Director," "directors" or "board of directors" means the Oregon trust companys manager or managers, as defined in ORS 63.001. (f) "Dividends" means distributions, as defined in ORS 63.001, declared or paid by the Oregon trust company. (g) "Incorporator" means the Oregon trust companys organizer, as defined in ORS 63.001. (h) "Share" or "stock" means a membership interest in the Oregon trust company, as defined in ORS 63.001. (i) "Stockholder," "stockholders," "shareholder" or "shareholders" means the Oregon trust companys member or members, as defined in ORS 63.001. (3) An Oregon trust company organized as a limited liability company shall be organized under the authority of the Director of the Department of Consumer and Business Services under this chapter and ORS chapter 707. Except as set forth in subsection (4) of this section, with respect to all other aspects of its operation and existence, an Oregon trust company that is organized as a limited liability company is subject to the provisions of ORS chapter 63, to the extent that ORS chapter 63 does not conflict with the Bank Act. In the event of any conflict between the Bank Act and ORS chapter 63, the Bank Act controls. (4)(a) Notwithstanding any provision of ORS chapter 63, the articles of organization of an Oregon trust company that is organized as a limited liability company shall: (A) State that the existence of the Oregon trust company is perpetual; and (B) Provide that the Oregon trust company is to be managed by a board of not fewer than five managers. (b) Notwithstanding any provision of ORS chapter 63, an Oregon trust company that is organized as a limited liability company shall be managed exclusively by its board of managers in substantially the same manner as an Oregon trust company that is organized as a corporation is managed by its board of directors. The board of managers of an Oregon trust company that is organized as a limited liability company has substantially the same rights, powers, privileges, duties and responsibilities as the board of directors of an Oregon trust company that is organized as a corporation and is subject to the provisions of ORS chapter 707 and this chapter pertaining to directors. (c) Notwithstanding any provision of ORS chapter 63, membership interests in an Oregon trust company that is organized as a limited liability company are freely transferable, and consent of the Oregon trust company or its members or managers is not required for a person to acquire or transfer a membership interest in the Oregon trust company. Immediately upon the completion of the transfer of the membership interest to a person, the person becomes a member, and has all the rights of a member. (d) ORS 63.621 (2) to (4) do not apply to an Oregon trust company organized as a limited liability company. (5) The articles of organization of an Oregon trust company that is organized as a limited liability company shall require that liquidation of the Oregon trust company conform with the requirements of the Bank Act. (6) An Oregon trust company that is organized as a limited liability company shall have the officers described in ORS 707.700. The officers shall be elected by the board of managers of the Oregon trust company and shall be subject to the provisions of this chapter and ORS chapter 707. (7) Each Oregon trust company that is organized as a limited liability company shall have a written operating agreement containing any provisions for the affairs of the Oregon trust company as may be agreed upon by its members and that are consistent with the Bank Act. (8) Any number of persons, not fewer than five, may act as organizers of an Oregon trust company that is organized as a limited liability company. [2005 c.134 4]
(1) Except as provided in subsection (4) of this section, no person other than a trust company shall transact a trust business in this state. Except as provided in subsection (4) of this section, before a person transacts any trust business in this state, the person shall obtain the approval of the Director of the Department of Consumer and Business Services if required under ORS 709.005 and shall deposit with the director, as security and as a pledge for the faithful conduct of its trust business: (a) Cash or interest-bearing securities that have a ready market value; (b) A surety bond issued by a surety company authorized to transact business in this state and in a form approved by the director, under which the principal and surety indemnify the several owners of the fund held in trust against loss due to the failure of the trust company; (c) An irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008; or (d) Any combination of cash, letters of credit, interest-bearing securities and surety bond. (2) If the cash and securities held in trust amount to less than $1 million, the deposit, bond, letters of credit or combination thereof shall be $50,000. If the cash and securities held in trust amount to at least $1 million but do not exceed $1.5 million, the deposit, bond, letters of credit or combination thereof shall be $100,000. For each $500,000 or fraction thereof in excess of $1.5 million held in trust, the deposit, bond, or letters of credit or combination thereof shall be increased an additional $25,000, except a trust company shall not be required to increase the deposit, bond, letters of credit or combination thereof to an amount in excess of $1 million. (3) The securities shall be deposited with the director and held by the director as trustee for the beneficiaries of the trust funds held by the trust company. (4) A person shall not be required to be a trust company if the person: (a) Does not and will not regularly transact trust business in the ordinary course of the persons business; (b) Acts in a manner authorized by law and in the scope of authority as an agent of a trust company; (c) Is an attorney rendering a service customarily performed by an attorney; (d) Is acting as trustee under a deed of trust; (e) Is a licensed real estate broker or principal real estate broker rendering a service customarily performed by a broker; (f) Is a licensed escrow agent rendering a service customarily performed by an escrow agent; or (g) Is exempt from the provisions of subsection (1) of this section by rule of the director. [Amended by 1957 c.82 1; 1967 c.139 1; 1973 c.797 183a; 1979 c.88 12; 1981 c.192 14; 1985 c.800 1; 1991 c.331 114; 1997 c.631 203; 2001 c.300 81; 2007 c.71 228]
The securities mentioned in ORS 709.030 may only be of the following classes: (1) Interest-bearing bonds, notes or obligations of the United States including those of its agencies and instrumentalities, or bonds, notes or obligations for which the faith of the United States is pledged for the payment of the principal and interest. (2) Bonds or other obligations of the State of Oregon, any county of this state or any incorporated city, town or school or port district of this state having a population of not less than 2,000 as shown by the last federal census, or bonds of any other state, any county, incorporated city, town or school or port district therein having a population of not less than 25,000, as shown by the last federal census, if: (a) The bonds or obligations are issued in compliance with the constitution and laws of the applicable state; (b) The bonds or obligations are a general obligation of the state, city, town or school or port district issuing the bonds; and (c) There has been no default in payment of either principal or interest on any of the general obligations of the state, county, incorporated city, town or school or port district for a period of five years preceding the date of the deposit. (3) Notes or bonds secured by first liens upon improved real estate in this state or any other state if the obligation, plus taxes not due and bonded indebtedness for public improvements not due, do not exceed 50 percent of the reasonable market value of the real estate. The trust company shall file in support of a real estate obligation, such appraisal, evidence of merchantable title and insurance as may be required by the Director of the Department of Consumer and Business Services. [Amended by 1973 c.797 184; 1997 c.631 204]
A trust company authorized to do a trust business in this state which is required to make any deposit of securities with any public official in order to do business in this state may deposit: (1) Notes or bonds secured by mortgages or deeds of trust, payment of which are guaranteed by policies of mortgage insurance; and (2) Mortgage participation certificates issued by a mortgage insurance company authorized to do business in this state in accordance with ORS 742.282 and 742.284. [Amended by 1967 c.359 703; 1973 c.797 185; 1997 c.631 205]
The deposit mentioned in ORS 709.030 is primarily liable for the malfeasance of a trust company as a fiduciary and is not liable for any debt or other obligation of the company until such malfeasance liability has been discharged. [Amended by 1973 c.797 186; 1997 c.631 206]
A person who suffers loss or damage because of the breach of any trust committed to a trust company may recover the amount of the loss or damage out of the moneys or securities deposited under ORS 709.030 with the director by the trust company. [Amended by 1973 c.797 187; 1997 c.631 207]
(1) The Director of the Department of Consumer and Business Services may charge a reasonable amount for any expenses incurred and services rendered in connection with deposits of securities. (2) If a trust company does not, after due notice, pay to the director any charge assessed against it under this section, the director may: (a) Apply in payment of the charges, with interest at the legal rate, as much as necessary of the interest or other earnings accruing on any securities deposited with the director; or (b) Report the facts to the Attorney General, who shall, in the name of the director, institute appropriate action against the trust company. [Amended by 1973 c.797 188; 1997 c.631 208]
All mortgages or deeds of trust and all insurance policies, abstracts of title, certificates of title or title insurance policies and appraisements required by the Director of the Department of Consumer and Business Services under ORS 709.040 (3) shall be deposited with the notes or bonds. When less than the whole of a bond issue is deposited, the director shall not require the deposit of the abstract of title, certificates of title or title insurance policies and appraisements, but may require a certificate from the trustee of the mortgage or bond issue that the documents have been deposited with the trustee. [Amended by 1973 c.797 189]
(1) The Director of the Department of Consumer and Business Services may require the immediate substitution of other securities when the director has reason to believe that the market value of securities which have been deposited under ORS 709.030 have depreciated below the amount required under ORS 709.030. Substitution of securities with the director at the request of the depositing trust company may be permitted if approved by the director. (2) All interest, income or dividends from all securities deposited with the director belong to the depositing trust company, and if the trust company is solvent, it may receive and retain the interest, income or dividends. [Amended by 1973 c.797 190; 1997 c.631 209]
If the cash and securities that belong to any single fiduciary account exceed the amount of a trust companys stockholders equity or members equity, the court that appoints the trust company to the position of trust may require an indemnity bond from the trust company for the amount of cash and securities that exceeds the stockholders equity or members equity. [Amended by 1973 c.797 191; 1999 c.59 219; 2015 c.244 75]
The State of Oregon is liable for the return of any funds or securities deposited in accordance with ORS 709.030. [Amended by 1973 c.797 192]
The capital of a trust company may be invested in the securities specified in ORS 709.040. [1973 c.797 193]
A trust company may: (1) Act as a fiscal or transfer agent of the United States or of any state, county, municipality, political subdivision or corporation, and in that capacity: (a) Receive and disburse money; (b) Transfer, register and countersign certificates of stock, bonds or other evidence of indebtedness; (c) Authenticate and certify bonds and certificates of indebtedness; and (d) Act as attorney-in-fact or agent of a person for any lawful purpose. (2) Lease, hold, purchase and convey any real property necessary or convenient in transacting trust business. (3) Receive deposits of moneys, securities and other personal property in trust from any person and loan trust funds that are secured by real or personal property. (4) Act as trustee under any mortgage or bonds and accept and execute any lawful municipal or corporate trusts. (5) Be appointed by a court and act as a fiduciary. (6) Accept and execute any lawful trust. (7) Rent receptacles for safe deposits of personal property and receive personal property upon deposit for safekeeping. (8) Purchase, invest in and sell bills of exchange, bonds and mortgages, and other evidences of indebtedness. (9) Discount and negotiate promissory notes, drafts, bills of exchange and other evidences of debt in managing trust properties, accept for payment at a future date drafts drawn upon the trust company and issue letters of credit authorizing holders to draw drafts upon the trust company or the trust companys correspondents at sight or on time, not exceeding one year. (10) Exercise all other powers given to trust companies under the Bank Act. [Amended by 1961 c.344 106; 1973 c.797 194; 1973 c.823 141; 1974 c.36 24; 1997 c.631 210; 2015 c.244 76]
(1) A trust company shall not advertise to furnish or furnish to the public legal advice or hold itself out as practicing law. (2) A trust company that violates subsection (1) of this section is ineligible for one year thereafter to be judicially appointed as a fiduciary in this state. [Amended by 1973 c.797 195; 1975 c.544 28; 1997 c.631 211]
(1) "Common trust fund" as used in this section, means any fund maintained by a trust company exclusively for the collective investment and reinvestment of moneys contributed thereto by the trust company or an affiliated trust company as a fiduciary. For the purposes of this section, two or more trust companies are affiliated if they are members of the same affiliated group, within the meaning of section 1504 of the Internal Revenue Code. (2) A trust company may establish common trust funds for the purpose of furnishing investments to itself as fiduciary, to an affiliated trust company as fiduciary, or to itself or an affiliated trust company and others as cofiduciaries. A trust company may, as a fiduciary or cofiduciary, invest funds that it lawfully holds for investment, in interests in the common trust fund or a common trust fund of an affiliated trust company, if the investment is not prohibited by the instrument, judgment or order creating the fiduciary relationship, and if, in the case of cofiduciaries, the trust company procures the consent of its cofiduciary or cofiduciaries to the investment. (3) The Director of the Department of Consumer and Business Services, in accordance with ORS chapter 183, may adopt rules necessary to control the establishment and operation of common trust funds and to protect the investors. A trust company except a national bank that is qualified to conduct a trust business pursuant to the laws of the United States shall, in the operation of the common trust fund, comply with the rules. (4) Unless ordered by a court a trust company operating common trust funds is not required to render a court accounting with respect to the funds, but it may, upon application to the circuit court of the county in which it has its principal office in this state, obtain a settlement of its common trust fund accounts on conditions specified by the court. When application for the settlement is presented to a circuit court for approval, the circuit court shall assign a time and place for hearing and order notice thereof by: (a) Publication once a week for three successive publications, the first publication to be not less than 20 days prior to the date of hearing, of a notice in a newspaper having a general circulation in the county in which the trust company operating the common trust fund has its principal office; (b) Mailing, not less than 14 days prior to the date of the hearing, a copy of the notice to all beneficiaries of the trusts participating in the common trust fund whose names are known to the trust company from the records kept by it in the regular course of business in the administration of the trust, directed to them at the addresses shown by the records; and (c) Such further notice, if any, as the court may order. [Amended by 1953 c.258 2; 1959 c.91 1; 1963 c.56 1; 1973 c.797 196; 1973 c.823 142; 1974 c.36 25; 1983 c.367 3; 1985 c.762 41; 1997 c.631 212; 2003 c.576 546]
(1) Except as provided in ORS 709.220, subsection (2) of this section, or as the instrument that creates the trust relationship or a court order authorizes, a trust company may not invest funds that the trust company holds as fiduciary in stock or obligations of, or property the trust company acquired from: (a) The trust company or the trust companys directors, officers or employees; (b) Individuals affiliated with the trust company or the trust companys directors, officers or employees; (c) Organizations in which the trust company or the trust companys directors, officers or employees hold an interest; (d) Affiliates of the trust company or the affiliates directors, officers or employees; (e) Individuals with whom the trust company has an interest that might affect the trust companys exercising the trust companys best judgment in making the investment or acquiring the property; or (f) Organizations in which the trust company has an interest that might affect the trust companys exercising the trust companys best judgment in making the investment or acquiring the property. (2) Subsection (1) of this section does not apply if the trust company invests funds the trust company holds as fiduciary in any open-end or closed-end management type investment company or investment trust for which the trust company, or an affiliate of the trust company, acts as investment advisor or custodian or provides other services, for which services the trust company and the trust companys affiliates may receive reasonable fees. (3) For the purposes of this section, companies are affiliated if the companies are members of the same affiliated group under Section 1504 of the Internal Revenue Code. [1989 c.604 3; 1991 c.353 1; 1997 c.631 213; 2015 c.244 77]
(1) Each banking institution and each non-Oregon institution authorized to transact a trust business in this state shall establish and maintain in its office a trust department, in which separate books and accounts shall be maintained. All property of the trust department shall be segregated from and unmingled with other property. (2) The books and accounts of the trust department shall show the ownership of all moneys, funds, investments and property held by the trust department. Securities may be kept by the trust department in either of the following ways: (a) All certificates representing the securities of an account may be held separate from those of all other accounts; or (b) Certificates representing securities of the same class of the same issuer held for particular accounts may be held in bulk without certification as to ownership attached and, to the extent feasible, certificates of small denomination may be merged into one or more certificates of larger denomination. Upon demand by any person to whom it has a duty to account, a trust department shall certify in writing the securities held by it for an account. A trust department, if operating under the method of safekeeping security certificates described in this paragraph, is subject to such rules as may be issued by: (A) In the case of a banking institution, the Director of the Department of Consumer and Business Services; (B) In the case of an out-of-state bank, the appropriate state supervisor; (C) In the case of an extranational institution, the official charged with supervising the extranational institution in the country under the laws of which it was organized; or (D) In the case of a national bank, the Comptroller of the Currency. (3) All records shall be kept and retained for such time as to enable the banking institution or non-Oregon institution to furnish information or reports with respect to the records that may be required by the director or other regulator specified in subsection (2)(b) of this section. The records shall contain full information relative to each account and nothing contained in this subsection shall require a banking institution or non-Oregon institution to maintain the records required by this section in any given manner, provided that the information required is clearly and accurately reflected and provides an adequate basis for the audit of the information. (4) A banking institution transacting trust business in this state shall retain the records required by this section for a period of three years from the termination of the relationship to which the records relate. A non-Oregon institution or federal bank transacting trust business in this state shall retain such records pertaining to the trust business transacted by it for such periods of time as may be required by applicable laws of the jurisdiction under which the non-Oregon institution or federal bank is organized, or if the applicable laws of the jurisdiction do not specify a period for retaining the records, the non-Oregon institution or federal bank shall retain the records required by this section for a period of three years. The records shall be available for examination by the director or, in the case of: (a) Federal banks, the Comptroller of the Currency or other federal supervisor; (b) Out-of-state banks and out-of-state trust companies, the appropriate state supervisor; or (c) Extranational institutions, the official charged with supervising the extranational institution in the country under the laws of which it was organized. [Amended by 1971 c.263 1; 1973 c.797 197; 1975 c.544 29; 1985 c.762 42; 1991 c.336 1; 1997 c.631 214]
(1) In the acquisition or investment of trust property, a trust company may take in its own name, or in the name of its nominee, any assets in which it may be authorized to invest or hold trust property. (2) Upon the satisfaction, conveyance or investment of trust property, whether the trust property is held in the name of the trust company, individually, or in its name as trustee or in a specified fiduciary capacity or otherwise, the instrument of satisfaction or transfer may be executed by the trust company in its own name. [Amended by 1973 c.797 198; 1997 c.631 215]
In acquiring, holding, satisfying and conveying trust property, a trust company is not required to disclose that it is acting in a fiduciary capacity, the terms or conditions of the instrument under which it acts, the nature or extent of its authority or the application of the proceeds of the transaction. A person dealing with a trust company may not inquire into the matters, except to the extent specified in ORS 709.270. [Amended by 1973 c.797 199]
(1) Funds placed or held in trust by a trust company awaiting investment or distribution shall not be held uninvested or undistributed for a longer period than is reasonable for the proper management of the account, shall be carried in a separate account and shall not be used by the trust company, bank or extranational institution in the conduct of its business or in the conduct of the business of any of its affiliates, except that such funds may be deposited in the commercial or savings or other department of the trust company, bank or extranational institution if the trust company, bank or extranational institution first obtains and sets aside in its trust department: (a) Bonds or other securities eligible for the investment of trust funds; (b) A surety bond; (c) An irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008; or (d) A combination of the securities, letters of credit and surety bond. (2) The surety bond shall be issued by a surety company authorized to transact business in this state and approved by the Director of the Department of Consumer and Business Services. The bond or letter of credit shall provide that the principal and surety or letter of credit issuer shall indemnify the several owners of the funds held in trust against loss due to the failure of the trust company, bank or extranational institution. (3) Notwithstanding the provisions of ORS 708A.415, the securities, the surety bond, the letter of credit or the securities, the surety bond and the letters of credit together shall be in an amount equal to the portion of the trust funds not insured by the United States Government or any agency or instrumentality of the United States. (4) If the trust company, bank or extranational institution fails, the owners of the funds held in trust for investment or distribution have a lien on the bonds or other securities set apart, or a right of action on the surety bond and upon the letter of credit, in addition to their claim against the estate of the trust company, bank or extranational institution. [Amended by 1957 c.82 2; 1973 c.797 200; 1975 c.544 29d; 1983 c.296 5a; 1987 c.216 5; 1991 c.331 115; 1997 c.631 216]
An official oath or indemnity bond or other security shall not be required when a trust company is appointed as fiduciary or during the administration of the trust except as required by ORS 709.030 and 709.130. [Amended by 1973 c.797 201; 1973 c.823 144; 1974 c.36 26]
A trust company shall, except as otherwise provided in this section, keep inviolate all communications and writings made to or by the trustees touching the existence, condition, management and administration of any private trust confided to it. A creditor or stockholder is not entitled to disclosure or knowledge of the communication or writing. However, the officers, manager, trust officer, secretary or attorney of the trust company may know of the communication or writing. In any suit or proceeding touching the existence, condition, management or administration of the trust, the court in which the matter is pending may require disclosure of the communication or writing. [Amended by 1973 c.797 202; 1997 c.631 217]
(1) A trust company shall not make any loan to any director, officer or employee of the trust company or to any affiliate or any director, officer or employee of an affiliate from its trust funds, and shall not permit any director, officer, employee or affiliate to become indebted to it in any way out of its trust funds, unless specifically authorized to do so by the terms of the trust. (2) An officer, director or employee of a trust company shall not knowingly violate any provision of this section, or aid or abet any other person in a violation. (3) This section shall not prevent the maintenance by a trust company of time or demand deposits of its trust funds in an affiliate that is a bank or extranational institution, provided that the bank or extranational institution complies with the requirements of ORS 709.220 pertaining to obtaining and setting aside bonds, surety bonds and other securities in an amount equal to the portion of the trust funds not insured by the Federal Deposit Insurance Corporation. [Amended by 1973 c.797 203; 1975 c.544 29e; 1983 c.296 5b; 1997 c.631 218]
If, as a result of an examination, the Director of the Department of Consumer and Business Services finds that the closing of any trust by a trust company has been unreasonably delayed, the director may initiate proceedings in a court of competent jurisdiction to require the trust company to perform its duties in closing the trust. [Amended by 1973 c.797 204]
(1) A national bank authorized to conduct a trust business that has complied with the applicable provisions of this chapter may transact trust business in all respects, as provided by applicable laws of the United States and rules and regulations promulgated pursuant thereto. All acts provided in the Bank Act to be performed by the State Treasurer, the Director of the Department of Consumer and Business Services or other public officials for or in respect to trust companies, shall be performed for national banks equally with trust companies. (2) Every national bank that is authorized to transact trust business and that has qualified by making the deposit of securities required under ORS 709.030, may: (a) Act or be appointed by any court to act in any fiduciary capacity to the same extent as any trust company; (b) Use the word "trust" in its corporate name; and (c) Advertise its authority to act in fiduciary capacities. [Amended by 1963 c.55 1; 1965 c.170 1; 1973 c.797 205; 1997 c.631 219]
(1) When a sale or transfer of assets or liabilities becomes effective, the purchasing corporation succeeds to all the rights, obligations and relations of the selling corporation to or in respect to any person, estate, creditor, depositor, trustee or beneficiary of any trust and in respect to any fiduciary relation, and the rights, obligations and relations remain unencumbered. (2) The sale or transfer of assets or liabilities does not effect a renunciation or revocation of any letters of administration, letters testamentary, letters of guardianship or any other fiduciary relationship. (3) If any trust, estate, conservatorship or other fiduciary relationship of the selling corporation requires a court to approve a change of the fiduciary, within 90 days after the change becomes effective the successor fiduciary shall file notice of the change with the court that has jurisdiction and serve notice of the change upon each beneficiary. The successor fiduciary may serve the notice in the manner provided in ORCP 9 or, if the residence of a beneficiary is not known, the successor fiduciary may publish the notice in the manner provided for the publication of summons. (4) A beneficiary or other person that is interested in the trust, estate, conservatorship or other fiduciary relationship may, within 90 days after the service of the notice described in subsection (3) of this section, apply to the appropriate court for a change of fiduciary or such other relief as may be proper. [Amended by 1973 c.797 206; 1979 c.284 195; 1997 c.631 219a; 2015 c.244 78]
A trust company may conduct transactions using digital signatures and issue certificates for the purpose of verifying digital signatures. [1997 c.631 234a; 1999 c.718 3; 2001 c.535 35; 2005 c.118 5]
A trust company quitting business shall furnish to the Director of the Department of Consumer and Business Services satisfactory evidence of its release and discharge from all obligations and trusts provided for in the Bank Act. The director shall examine the trust company, and, if the director is satisfied after the examination that the trust company has discharged all its obligations and trusts, the director shall revoke its certificate of authority and deliver up all securities on deposit with the director under ORS 709.030. [Amended by 1973 c.797 207]
(1) If a trust company goes into voluntary or involuntary liquidation or receivership, the appointment of a successor trustee for the trust shall be handled by the court hearing the liquidation proceedings upon petition by the Director of the Department of Consumer and Business Services, the trust company, any interested person or, in the case of a federal bank or extranational institution, by its receiver or liquidating agent. (2) Upon the filing of the petition, the court shall order all persons interested in any trust to designate and take all necessary steps to appoint a successor trustee within a time fixed in the order, or to show cause why a successor trustee should not be appointed by the court. The order may be general in its terms and need not designate the trusts involved or the nature, purpose or extent of the trusts, or give the name of any of the beneficiaries or interested persons. (3) In a trust where those interested in the trust fail to cause a successor trustee to be appointed prior to the time fixed in the order, the court shall appoint a successor trustee. (4) The successor trustee shall succeed to all the rights, powers, and obligations of the trust company in liquidation, except claims or liabilities arising out of the management of trusts prior to the date of transfer. (5) A copy of the order provided for in subsection (2) of this section shall be published once a week for four successive weeks in a newspaper of general circulation to be designated by the court and published in the county in which the liquidation proceedings of the trust company are carried on. If there is no newspaper published in the county, or if the court conducting the liquidation proceedings is located outside this state, publication shall be made in a newspaper of general circulation in the State of Oregon designated by the court. Proof of publication shall be made in the same manner as proof of publication of summons is made. (6) The filing of the petition and the making and entering of the order and the publishing of a copy of the order, gives the court full jurisdiction of the trusts and all parties interested in the trusts. A court having jurisdiction shall require the director to mail, by registered mail or by certified mail with return receipt, postage prepaid, a copy of the order to each living trustor of all private trusts in which the trust company is trustee or to the then directly participating beneficiaries of all private trusts in which there is no living trustor. The notice shall be mailed to the last-known address of each trustor or participating beneficiary as shown by the records of the trust company. Proof of mailing shall be in such form as the court may require. Failure to mail the notice or the nonreceipt of the notice by any trustor or participating beneficiary shall not affect the jurisdiction of the court or invalidate any order or judgment made in the proceedings. (7) It is unnecessary to require the appearance of minors or other incompetents by guardians ad litem or otherwise. (8) The provisions of subsections (2) to (6) of this section shall apply only to trust companies that are organized under the laws of this state and to trust companies that are the trust departments of banks having their principal places of business in this state. If any other trust company goes into voluntary or involuntary liquidation or receivership, the proceedings shall be governed by the laws of the state or country in which the proceedings are initiated. The director and any other interested person may participate in the proceedings. Any successor trustee appointed pursuant to the proceedings shall succeed to all the rights, powers and obligations of the trust company, except claims or liabilities arising out of the management of trusts prior to the date of transfer. [Amended by 1973 c.797 208; 1991 c.249 64; 1997 c.631 220; 2003 c.576 547]
(1) If a trust company discontinues its trust business, the Director of the Department of Consumer and Business Services shall file in the circuit court for the county in which the principal place of business of the trust company is located a verified petition: (a) Stating that the trust company is closing, dissolving or transferring its trust business or is in process of voluntary or involuntary liquidation. (b) Requesting that claims, if any, against the deposit made under ORS 709.030 by the trust company with the director be determined. (2) Notwithstanding the provisions of subsection (1) of this section, if proceedings for the liquidation of the trust company have been commenced in a court located in a county or state other than the county in this state in which the trust company has its principal place of business, the director shall file the verified petition described in subsection (1) of this section in the court where the proceedings have been commenced. [Amended by 1957 c.115 1; 1973 c.797 209; 1997 c.631 221]
(1) Upon the filing of the petition under ORS 709.390, the court shall make an order requiring all persons having claims against the deposits to start action in the circuit court hearing the petition of the Director of the Department of Consumer and Business Services within six months after the date of the order. Any claim not filed within the six-month period is barred. The petition or the order need not give the names of any beneficiary or the nature of the trusts protected by the deposit. (2) A copy of the order shall be published in a newspaper designated by the court, having a general circulation in the county of the principal place of business of the trust company at least once a week for as many consecutive weeks as the court orders, but not less than four weeks nor more than 12 weeks. If a newspaper is not published in the county, the copy of the order shall be published in a newspaper of general circulation in the State of Oregon designated by the court. Proof of publication shall be made in the same manner as proof of publication of summons is made and the proof shall be filed with the clerk of the court. (3) The filing of the petition, under ORS 709.390, and the making and entering of the order and the publishing of a copy of the order under this section gives the court exclusive jurisdiction of deposited securities and of all parties having an interest in or claim upon the securities. (4) A court shall require the director to mail, by certified mail with return receipt, postage prepaid, a copy of the order to each living trustor of all private trusts in which the trust company is trustee and which have not been closed or to the directly participating beneficiaries of all private trusts in which there is no living trustor. The notice shall be mailed to the last-known address of each trustor or participating beneficiary as shown by the records of the trust company. Proof of mailing shall be in the form required by the court. Failure to mail the notice or the nonreceipt of the notice by any trustor or participating beneficiary shall not affect the jurisdiction of the court or invalidate any order or judgment made in the proceedings. (5) The appearance of minors or other incompetents by guardians ad litem or otherwise is not necessary. (6) The provisions of subsections (1) to (4) of this section shall apply only to trust companies that are organized under the laws of this state and to trust companies that are the trust departments of banks having their principal places of business in this state. If a petition is filed under ORS 709.390 (2), the proceedings shall be governed by the laws of the state or country in which the petition is filed. A copy of any court order requiring persons having claims against the deposits made by the trust company under ORS 709.030 to bring their claims within a specified period of time shall be published in a newspaper of general circulation in the State of Oregon. The director shall mail, by certified mail with return receipt, postage prepaid, a copy of the order to each trustor living in this state of a private trust in which the trust company is trustee and which has not been closed, and to the directly participating beneficiaries who reside in this state of any private trust in which there is no trustor living in Oregon. The notice shall be mailed to the last known address of each such trustor or participating beneficiary as shown by the records of the trust company. Proof of mailing shall be in the form required by the court. Failure to mail the notice or the nonreceipt of notice by any trustor or participating beneficiary shall not affect the jurisdiction of the court or invalidate any order or judgment made in the proceedings. [Amended by 1973 c.797 210; 1979 c.284 196; 1991 c.249 65; 1997 c.631 222]
The filing by the Director of the Department of Consumer and Business Services of the petition provided for in ORS 709.390 terminates the right of the trust company affected thereby to do a trust business in this state, except as may be necessary to wind up then existing trusts. [Amended by 1973 c.797 211; 1997 c.631 223]
(1) In all actions to determine claims to the deposits, the Director of the Department of Consumer and Business Services shall be a necessary party defendant. (2) An action shall not be considered to have begun within the time required by the order unless, in the case of defendants within the state, summons is actually served within 60 days after the time limited in the order. (3) Actions filed to determine claims to the deposits shall have preference upon the calendar of any Oregon trial or appellate court and shall be tried by such courts without unnecessary delay. [Amended by 1973 c.797 212; 1997 c.631 224]
(1) If any actions on claims against the deposit mentioned in ORS 709.390 are begun within the six-month period, the Director of the Department of Consumer and Business Services shall not release and the court shall not order the payment of any part of the deposit until all actions are determined by final judgment. (2) When all actions on claims against the deposit are finally determined, so much of the deposit as is necessary shall be paid to the claimants who have established their claims in the sums allowed by the court or, if not sufficient, the deposit shall be distributed pro rata among the claimants establishing their claims. (3) The court, in the proceeding initiated by the director, shall enter a judgment providing that the balance of the deposit be paid to the trust company or if the trust company is in the process of liquidation, to the official in charge of the liquidation. [Amended by 1973 c.797 213; 1997 c.631 225; 2003 c.576 548]
All unpaid charges owing to the Director of the Department of Consumer and Business Services for expenses and services rendered under ORS 709.080 in connection with the deposit mentioned in ORS 709.030, and all expenses incurred by the director, including services rendered by the director, attorney fees and necessary court expenses in connection with the determination of claims against the deposit, are a first and prior lien on the deposit, and shall be paid before any part of the deposit is released or paid to any claimant or trust company. [Amended by 1973 c.797 214; 1997 c.631 226]
The court hearing the proceedings instituted by the Director of the Department of Consumer and Business Services under ORS 709.390 may, upon terms fixed by the court, order the director to sell and reduce to cash the deposited securities as necessary to pay: (1) The unpaid charges and expenses described in ORS 709.440; and (2) Claims established against the deposit. [Amended by 1973 c.797 215]
(1) ORS 709.390 to 709.450 do not apply to a merger or consolidation of a trust company with another trust company authorized to conduct a trust business whereby the security deposits and the trust business of the retiring trust company are acquired by the resulting trust company. (2) Immediately following the completion of a merger or consolidation described in subsection (1) of this section, the Director of the Department of Consumer and Business Services, upon written application of the resulting trust company, shall return to the resulting trust company that portion of the combined security deposits of the trust companies involved in the merger or consolidation which exceeds the deposit required by ORS 709.030 for the combined cash and securities held in trust by the resulting trust company following the merger or consolidation. [Amended by 1957 c.115 2; 1973 c.797 216; 1997 c.631 227]
[Formerly 57.830; renumbered 709.600 in 1997]
(1) An Oregon trust company may convert into an out-of-state trust company subject to the prior approval of the supervisory authority having jurisdiction over the proposed resulting trust company. Upon completion of such a conversion, the Oregon charter shall terminate, except for the purposes specified in ORS 711.190. (2) An out-of-state trust company that follows the procedures prescribed by the supervisory authority having jurisdiction over the converting out-of-state trust company shall be granted a charter as an Oregon trust company by the Director of the Department of Consumer and Business Services if the director finds that the converting trust company meets the standards of the Bank Act for organization as an Oregon trust company. An out-of-state trust company may apply to convert to an Oregon trust company and obtain a charter as an Oregon trust company by filing with the director: (a) A certificate signed by the chief executive officer of the converting out-of-state trust company certifying that the board of directors has taken all necessary corporate action in compliance with the provisions of the laws of the supervisory authority having jurisdiction over the converting out-of-state trust company. (b) The articles of incorporation, approved by a majority of the stockholders of the converting out-of-state trust company, for the operation of the out-of-state trust company as an Oregon trust company. [1997 c.631 230]
An Oregon trust company may merge with or have its outstanding shares acquired by any other trust company if the merger or acquisition of shares is permitted by the laws of the jurisdiction having supervisory authority over the resulting trust company. An Oregon trust company that merges with or engages in a share exchange with another trust company shall follow the procedures set forth in ORS 711.130 to 711.145. [1997 c.631 231]
ORS 711.190, 711.197 and 711.199 shall be applicable to a merging or converting Oregon trust company. [1997 c.631 232]
(1) Subject to the provisions of this section, and subject to the approval of the Director of the Department of Consumer and Business Services, an Oregon trust company may sell all or any portion of the Oregon trust companys assets or transfer all or any portion of the Oregon trust companys liabilities to another trust company outside the ordinary course of business. The parties to the sale or transfer shall document the sale or transfer with an acquisition transaction agreement. The board of directors of each party to the transaction must approve the agreement. (2) If an Oregon trust company proposes to transfer all or substantially all of the Oregon trust companys assets, liabilities or both outside the ordinary course of business, the Oregon trust company shall send notice of the acquisition transaction to each of the Oregon trust companys stockholders within 30 days after the board of directors approves the acquisition transaction. The notice shall set forth the substantive provisions of ORS 711.175, 711.180 and 711.185. To be effective, each selling Oregon trust company that is a party to the acquisition transaction shall have the acquisition transaction approved by a two-thirds vote of the outstanding stock of each class of voting shares at a meeting called to consider the acquisition transaction. (3) The Director of the Department of Consumer and Business Services shall approve an acquisition transaction that is subject to this section if the director finds that the acquisition transaction: (a) Conforms with the provisions of the Bank Act; (b) Will not be detrimental to the safety and soundness of an Oregon trust company that is a party to the acquisition transaction; (c) Is not contrary to the public interest; and (d) Is permitted by the supervisory authority, if any, that has jurisdiction over the acquiring trust company, if the acquiring trust company is not an Oregon trust company. (4) If the director disapproves an acquisition transaction that is subject to this section, the director shall state any objections in writing and give the parties to the acquisition transaction an opportunity to take action to obviate the objections. (5) Any party to an acquisition transaction agreement may appeal the directors decision as provided in ORS 183.415 to 183.500. [1997 c.631 233; 2007 c.71 229; 2015 c.244 80]
A stockholder of an Oregon trust company that is a party to a merger, share exchange or acquisition transaction shall have the rights granted stockholders of Oregon stock banks under ORS 711.175, 711.180 and 711.185. [1997 c.631 234]
(1) Trust business done by corporations created prior to the adoption of the Bank Act (General Laws 1925, chapter 207) shall be subject to regulation by the Director of the Department of Consumer and Business Services and such corporations engaged in trust business are subject to the provisions, including the filing and fee requirements, of ORS chapters 706 to 716. (2) If a corporation subject to subsection (1) of this section also carries on business other than a trust business, the Corporation Commissioner may retain a copy of the articles of incorporation and other filings. As provided in ORS 60.957, such corporations also shall continue to be subject to the provisions, including the filing and fee requirements, of ORS chapter 60. [Formerly 709.500]
(1) Any person who violates ORS 709.270 or 709.280 or any rule adopted under ORS 709.170 (3) shall forfeit a civil penalty in an amount determined by the director of not more than $2,500 for each offense. (2) All money forfeited under this section shall be paid to the State Treasurer to be deposited in the Consumer and Business Services Fund. (3) The civil penalty may be recovered as provided in ORS 706.980. [1975 c.544 29c]
[Amended by 1973 c.797 227; 1981 c.192 18; 1997 c.631 235; renumbered 711.190 in 1997]
[Amended by 1973 c.797 229; 1975 c.544 30; 1977 c.135 25; 1981 c.192 19; 1983 c.296 7; 1997 c.631 236; renumbered 711.180 in 1997]
[Amended by 1973 c.797 231; 1997 c.631 237; renumbered 711.197 in 1997]
[Amended by 1973 c.797 232; 1997 c.631 238; renumbered 711.199 in 1997]
(1) An Oregon stock bank may convert into an insured stock institution subject to the prior approval of the supervisory authority having jurisdiction over the proposed resulting insured stock institution. (2) Upon completion of the conversion of an Oregon stock bank, its charter shall terminate, except for the purposes specified in ORS 711.190. [1997 c.631 265]
(1) A financial institution with its head office or any branches located in this state that follows the procedures prescribed by the supervisory authority having jurisdiction over the converting financial institution shall be granted a charter of an Oregon stock bank by the Director of the Department of Consumer and Business Services if the director finds that the converting financial institution meets the standards of the Bank Act for the organization of such an Oregon stock bank. (2) A financial institution may apply to convert to an Oregon stock bank and obtain a charter by filing with the director: (a) A certificate signed by the chief executive officer of the converting financial institution certifying that all necessary corporate actions in compliance with the provisions of the laws of the supervisory authority having jurisdiction over the converting financial institution have been taken; and (b) The articles of incorporation for the operation of the financial institution as an Oregon stock bank, in accordance with the requirements of ORS 707.120. [1997 c.631 266]
(1) An Oregon nonstock bank may convert into a financial institution subject to the prior approval of the supervisory authority having jurisdiction over the proposed resulting financial institution. (2) Upon completion of the conversion of an Oregon nonstock bank, its charter shall terminate, except for the purposes specified in ORS 711.190. [1997 c.631 267]
(1) A financial institution with its head office or any branches located in this state that follows the procedures prescribed by the supervisory authority having jurisdiction over the converting financial institution shall be granted a charter of an Oregon nonstock bank by the Director of the Department of Consumer and Business Services if the director finds that the converting financial institution meets the standards of the Bank Act for the organization of such an Oregon nonstock bank. (2) An insured nonstock institution may apply to convert to an Oregon nonstock bank and obtain a charter by filing with the director: (a) A certificate signed by the chief executive officer of the converting financial institution certifying that all necessary corporate actions in compliance with the provisions of the laws of the supervisory authority having jurisdiction over the converting financial institution have been taken; and (b) The articles of incorporation for the operation of the insured nonstock institution as an Oregon nonstock bank, in accordance with the requirements of ORS 707.120. [1997 c.631 268]
If an Oregon bank converts pursuant to ORS 711.065 to 711.080, the conversion must be approved by: (1) A simple majority of the full board of directors of the converting Oregon bank, unless the articles or bylaws of the converting Oregon bank required a greater percentage; and (2) If the converting bank is an Oregon stock bank, a vote of a simple majority of the outstanding stock of each class of voting shares at a meeting called to consider the conversion, unless the articles or bylaws of the converting Oregon bank required a greater percentage. [1997 c.631 269; 2015 c.244 81]
(1) An Oregon bank or Oregon trust company organized as a corporation under ORS chapter 707 or 709 may be converted to a limited liability company. An Oregon bank or Oregon trust company organized as a limited liability company may be converted to a corporation. The conversion shall be accomplished by the approval of a plan of conversion under ORS 711.095 and the filing of articles of conversion under ORS 711.100. (2) The plan of conversion shall set forth: (a) The name of the Oregon bank or Oregon trust company prior to the conversion; (b) The name of the Oregon bank or Oregon trust company after the conversion; (c) A summary of the material terms and conditions of the conversion; (d) The manner and basis of converting the ownership interests of each owner into the ownership interests or obligations of the converted Oregon bank or Oregon trust company, or into cash or other property, in whole or in part; and (e) Any additional information required by the Director of the Department of Consumer and Business Services. (3) The plan of conversion may set forth other provisions relating to the conversion. [2005 c.134 6]
(1) A plan of conversion for an Oregon bank or Oregon trust company shall be approved as follows: (a) In the case of the conversion of an Oregon bank or Oregon trust company that was organized as a corporation under ORS chapter 707 or 709 to a limited liability company, the conversion shall be approved by: (A) A simple majority of the full board of directors of the converting Oregon bank or Oregon trust company, unless the articles of incorporation or bylaws of the converting Oregon bank or Oregon trust company require a greater percentage; and (B) A vote of a simple majority of the outstanding stock of each class of voting shares at a meeting called to consider the conversion, unless the articles of incorporation or bylaws of the converting Oregon bank or Oregon trust company require a greater percentage. (b) In the case of the conversion of an Oregon bank or Oregon trust company that was organized as a limited liability company under ORS 707.007 or 709.015 to a corporation, the conversion shall be approved by: (A) A simple majority of the full board of managers of the converting Oregon bank or Oregon trust company, unless the articles of organization or operating agreement of the converting Oregon bank or Oregon trust company require a greater percentage; and (B) A vote of the holders of a simple majority of outstanding membership interests in the converting Oregon bank or Oregon trust company, at a meeting called to consider the conversion, unless the articles of organization or operating agreement of the converting Oregon bank or Oregon trust company require a greater percentage. (2) Following approval of the plan of conversion by the board and the owners under subsection (1) of this section, the converting Oregon bank or Oregon trust company shall submit the plan of conversion to the Director of the Department of Consumer and Business Services for approval. The converting Oregon bank or Oregon trust company shall also submit a nonrefundable application fee of $3,000 and certified copies of the resolutions adopted by the board and by the owners of the Oregon bank or Oregon trust company showing approval of the plan of conversion. The director shall approve the plan of conversion if the director finds that the plan of conversion has been approved by the board and the owners of the converting institution in accordance with subsection (1) of this section and that: (a) In the case of the conversion of an Oregon bank or Oregon trust company from a corporation to a limited liability company, the converting institution meets the requirements of ORS 707.007 or 709.015 for the organization of an Oregon bank or Oregon trust company as a limited liability company; or (b) In the case of the conversion of an Oregon bank or Oregon trust company from a limited liability company to a corporation, the converting institution meets the requirements of the Bank Act for the organization of an Oregon bank or Oregon trust company as a corporation. [2005 c.134 7]
(1) After a plan of conversion is approved under ORS 711.095, the converting Oregon bank or Oregon trust company shall file articles of conversion with the Director of the Department of Consumer and Business Services. The articles shall: (a) State the name and type of the business entity prior to conversion; (b) State the name and type of the business entity after conversion; and (c) Include the plan of conversion. (2) The conversion takes effect on the date the articles of conversion are filed with the director, unless the articles of conversion state another effective date. [2005 c.134 8]
(1) A member of an Oregon bank or Oregon trust company that is organized as a limited liability company may dissent to a plan of conversion under which the Oregon bank or Oregon trust company is to be converted from a limited liability company to a corporation. (2) To perfect a members right to dissent to a plan of conversion described in subsection (1) of this section, the member must send or deliver a notice of dissent to the Oregon bank or Oregon trust company prior to or at the meeting of the members at which the conversion is submitted to a vote, or the member must vote against the conversion. (3) A member may not dissent as to less than all the membership interests held in the name of the member, except a member holding, as a fiduciary or nominee, membership interests held in the members name for the benefit of more than one beneficiary, may dissent as to less than all of the membership interests held in the fiduciary or nominees name if any dissent as to the membership interests held for a beneficiary is made as to all the membership interests held by the fiduciary for that beneficiary or nominee. The fiduciarys rights shall be determined as if the membership interests to which the fiduciary has dissented and the other membership interests are held in the names of different members. (4) Any member who dissented to a plan of conversion under this section and who desires to receive the value in cash of the members membership interests, shall make written demand upon the Oregon bank or Oregon trust company and accompany the demand with the surrender of the members certificates of membership interest, properly indorsed within 30 days after the meeting of the members at which the vote to approve the plan of conversion was taken. Any member failing to make written demand within the 30-day period shall be bound by the terms of the proposed plan of conversion. (5) Within 30 days after the plan of conversion becomes effective, the Oregon bank or Oregon trust company shall give written notice thereof to each dissenting member who has made demand under this section at the address of the member on the membership books of the Oregon bank or Oregon trust company, and shall make a written offer to each such member to pay for the members membership interests at a specified price in cash, determined by the Oregon bank or Oregon trust company to be the fair value of the membership interests as of the effective date of the conversion. The notice and offer shall be accompanied by a statement of condition of the Oregon bank or Oregon trust company as of the latest available date and not more than four months prior to the effective date of the plan of conversion, and a statement of income of the Oregon bank or Oregon trust company for the period ending on the date of the statement of condition. (6) Any member who accepts the offer of the Oregon bank or Oregon trust company within 30 days following the date on which notice of the offer was mailed or delivered to dissenting members shall be paid the price per share offered in cash, within 30 days following the date on which the member communicates acceptance in writing to the Oregon bank or Oregon trust company. Upon payment, the dissenting member shall cease to have any interest in the membership interests previously held by the member. (7) If within 30 days after notice of the offer, one or more dissenting members do not accept the offer of the Oregon bank or Oregon trust company or if no offer is made, then the value of the membership interests of the dissenting members who have not accepted the offer shall be ascertained, as of the effective date of the conversion, by an independent, qualified appraiser chosen by the Director of the Department of Consumer and Business Services. The valuation determined by the appraiser shall govern and the appraisers valuation of the membership interests is not appealable except for one or more of the reasons set forth in ORS 36.705 (1)(a) to (d) for vacation of an arbitrators award, and for one of the grounds for modification or correction of an arbitrators award under ORS 36.710. Any appeal must be made within 30 days after the date of the appraisers valuation and is subject to ORS 183.415 to 183.500. The Oregon bank or Oregon trust company shall pay the dissenting members the appraised value of the membership interests within 30 days after the date the appraiser sends the Oregon bank or Oregon trust company written notice of the appraisers valuation. (8) The director shall assess the reasonable costs and expenses of the appraisal proceeding equally to the Oregon bank or Oregon trust company and to the dissenting members, as a group, if the amount offered by the Oregon bank or Oregon trust company is between 85 percent and 115 percent of the appraised value of the membership interests. The director shall assess the reasonable costs and expenses of the appraisal proceeding and the reasonable costs and expenses, including attorney fees and costs, of the Oregon bank or Oregon trust company to the dissenting members, as a group, if the amount offered by the Oregon bank or Oregon trust company is 115 percent or more of the appraised value of the membership interests. The director shall assess the reasonable costs and expenses of the appraisal proceeding and the reasonable costs and expenses, including attorney fees and costs, of the dissenting members, as a group, to the Oregon bank or Oregon trust company if the amount offered by the Oregon bank or Oregon trust company is 85 percent or less of the appraised value of the membership interests. The directors decision regarding assessment of fees and costs may be appealed as provided in ORS 183.415 to 183.500. (9) Amounts required to be paid by the Oregon bank or Oregon trust company, or by the dissenting members under this section shall be paid within 30 days after the directors assessment of any fees or costs becomes final, or, if the directors decision is appealed, within 30 days after a final determination of the fees and costs is made. (10) The director may require, as a condition of approving a plan of conversion, the replacement of all or a portion of the members equity of an Oregon bank or Oregon trust company. (11) A dissenting member making a demand under subsection (4) of this section may withdraw the demand if: (a) The Oregon bank or Oregon trust company consents to the withdrawal; or (b) The dissenting member pays the members pro rata share of the appraisal costs and the Oregon banks or Oregon trust companys reasonable costs and expenses, including attorney fees and costs. (12) When a dissenting member withdraws the demand under subsection (11) of this section, the members status as a member shall be restored, without prejudice to any proceedings taking place in the interim. [2005 c.134 13]
(1) Subject to the provisions and requirements of ORS 711.130 to 711.145 and 713.270, any Oregon stock bank may merge with any insured stock institution if the merger is permitted by the supervisory authority having jurisdiction over the resulting insured stock institution. (2) Subject to the provisions and requirements of ORS 711.130 to 711.145 and 713.270, ORS chapter 715 and applicable federal law, a company may acquire all of the outstanding shares of one or more classes or series of stock of an Oregon stock bank through a share exchange. [1997 c.631 270]
(1) For each Oregon stock bank that is a party to a merger or that proposes to have its stock acquired through a share exchange, the plan of merger or plan of share exchange shall be approved by a majority of the entire board of directors of each such Oregon stock bank. If an insured stock institution, other than an Oregon stock bank, is a party to a merger with an Oregon stock bank, the plan of merger shall be approved by such merging insured stock institutions board of directors to the extent required under the laws applicable to such insured stock institution. (2) A plan of merger shall contain at least: (a) The name of each party to the merger and the name of the resulting insured stock institution; (b) The terms and conditions of the proposed merger; (c) The manner and basis of converting the shares of each merging insured stock institution into shares, obligations or other securities of the resulting insured stock institution or a holding company of the resulting insured stock institution or, in whole or part, into cash or other property; (d) A statement of any changes in the articles of incorporation of the resulting insured stock institution to be put into effect by the plan of merger; and (e) Any other provisions with respect to the proposed merger that the Director of the Department of Consumer and Business Services determines to be necessary. (3) A plan of share exchange shall contain at least: (a) The name of the Oregon stock bank whose shares will be acquired and the name of the acquiring company; (b) The terms and conditions of the proposed share exchange; (c) The manner and basis of the exchange of shares of the Oregon stock bank for shares, obligations or other securities of the acquiring company or of any other company or for cash or for other property in full or in part; (d) A statement of any changes in the articles of incorporation of the acquired Oregon stock bank to be put into effect by the plan of share exchange; and (e) Any other provision with respect to the proposed share exchange that the director determines to be necessary. (4) After approval by the board of directors, the plan of merger or plan of share exchange shall be submitted to the director for approval, with a nonrefundable application fee of $3,000. Certified copies of the authorizing resolutions of each board of directors, if any such resolutions are required under applicable law, showing approval of the plan of merger or plan of share exchange in accordance with subsection (1) of this section shall also be submitted. For each Oregon stock bank that is a party to a merger or is to be acquired through a share exchange, the certified copies of the board resolutions shall also show that the resolutions were approved by a majority of the entire board. [1997 c.631 271]
(1) Within 90 days after the Director of the Department of Consumer and Business Services receives the materials and fee specified in ORS 711.130, unless the director extends the time in concurrence with the applicants, the director shall approve or disapprove a plan of merger or plan of share exchange. The director shall approve the plan of merger or plan of share exchange if the director finds that: (a) The transaction conforms with the provisions of the Bank Act; (b) The transaction will not be detrimental to the safety and soundness of the resulting insured stock institution or the Oregon stock bank to be acquired through a share exchange; (c) The transaction is not contrary to the public interest; and (d) The director is satisfied that the state or federal supervisory authority that has jurisdiction over the resulting insured stock institution or acquiring company permits the transaction. (2) If the director disapproves a plan of merger or plan of share exchange, the director shall state any objections in writing and give the boards of the parties to the transaction an opportunity to amend the plan of merger or plan of share exchange to obviate the objections. The amended plan of merger or plan of share exchange must be submitted to the director for approval as if the amended plan were the original plan of merger or plan of share exchange. (3) Any of the parties to the transaction may appeal the decision of the director as provided in ORS 183.415 to 183.500. [1997 c.631 272; 2015 c.244 82]
(1) To be effective, a merger or share exchange involving an Oregon stock bank shall be approved by the stockholders of each Oregon stock bank that is a party to a merger or Oregon stock bank to be acquired through a share exchange by a vote of two-thirds of the outstanding stock of each class of voting shares at a meeting called to consider the merger or share exchange. (2) Approval of the merger or share exchange by the stockholders constitutes the adoption of any amendments to the articles set forth in the plan of merger or plan of share exchange. (3) If the plan of merger or plan of share exchange adopts any provision enumerated in ORS 707.248 affecting the rights of nonvoting stockholders of an Oregon stock bank, such nonvoting stockholders may vote as a class on the merger or share exchange. (4) Each Oregon stock bank that is a party to a merger or is to be acquired through a share exchange shall give notice of the meeting to vote on the proposed merger or share exchange to each stockholder of record entitled to vote on the plan of merger or plan of share exchange at the address of the stockholder in the books of the Oregon stock bank at least 15 days before the date of the meeting unless the notice is waived in writing by all the holders of shares entitled to vote on the plan of merger or plan of share exchange. Unless, pursuant to ORS 711.170 (8) or other applicable law, the shareholders of the Oregon stock bank are not entitled to receive fair value of their shares, the notice shall be accompanied by a copy of ORS 711.175, 711.180 and 711.185, and shall explain that the sections establish the rights of dissenting stockholders. The notice shall also include any other information that the Director of the Department of Consumer and Business Services may require. [1997 c.631 273]
(1) In a merger involving an Oregon stock bank: (a) If the resulting insured stock institution is an Oregon stock bank, the merger shall, unless a later date is specified in the plan of merger, become effective upon the filing with the Director of the Department of Consumer and Business Services of the approved plan of merger, copies of the resolutions of the stockholders of each party to the merger, if shareholder approval is required under law applicable to such merging insured stock institution, and evidence satisfactory to the director that all federal regulatory requirements, if any, have been satisfied. The charters of each Oregon stock bank that is a party to a merger, unless it is the resulting insured stock institution, shall terminate when the merger becomes effective. (b) If the insured stock institution from a merger is an insured stock institution other than an Oregon stock bank, the effective date and time of the merger shall be determined under the laws governing the resulting insured stock institution. The merger will be effective as to each Oregon stock bank that is a party to the merger if copies of the resolutions of the directors and shareholders of the Oregon stock bank approving the plan of merger and evidence of the effective date and time of the merger are filed with the director. (c) If the resulting insured stock institution is an Oregon stock bank, the director shall promptly issue to the Oregon stock bank a certificate of merger specifying the names of the parties to the merger, the name of the resulting Oregon stock bank and the date on which the merger became effective as prescribed in this section. The certificate shall be prima facie evidence of the merger and of the correctness of all proceedings and may be recorded in any office for the recording of deeds to evidence the new name in which the property of the merging insured stock institutions is held. (2) In a share exchange involving an Oregon stock bank: (a) If the stock of an Oregon stock bank is to be acquired by a company organized under the laws of this state, the share exchange shall, unless a later date is specified in the plan of share exchange, become effective upon the filing with the director of the approved plan of share exchange, copies of the resolutions of the stockholders of the acquired Oregon stock bank, and evidence satisfactory to the director that all federal regulatory requirements, if any, have been satisfied. (b) If the stock of the Oregon stock bank is to be acquired by a company organized under the laws of a state other than Oregon, the effective date and time of the share exchange shall be determined under the laws governing such company. The share exchange will be effective as to the acquired Oregon stock bank if copies of the resolutions of the directors and shareholders of the Oregon stock bank approving the share exchange and evidence of the effective date and time of the share exchange are filed with the director. [1997 c.631 274; 2005 c.22 484]
Subject to the provisions and requirements of ORS 711.155 to 711.165 and 713.270, an Oregon nonstock bank may merge with any insured nonstock institution if the merger is permitted by the laws of the supervisory authority having jurisdiction over the resulting insured nonstock institution. [1997 c.631 275]
(1) For each Oregon nonstock bank that is a party to a merger, the plan of merger shall be approved by a majority of the entire board of directors of each such Oregon nonstock bank. If an insured nonstock institution, other than an Oregon nonstock bank, is a party to a merger with an Oregon nonstock bank, the plan of merger shall be approved by such insured nonstock institutions board of directors to the extent required under the laws applicable to such insured nonstock institution. (2) The plan of merger shall contain: (a) The name of each party to the merger and the name of the resulting insured nonstock institution; (b) The terms and conditions of the proposed merger; (c) The manner and basis of converting the obligations or securities of each merging insured nonstock institution into obligations or other securities of the resulting insured nonstock institution or, in whole or part, into cash or other property; (d) A statement of any changes in the articles of incorporation of the resulting insured nonstock institution to be put into effect by the plan of merger; and (e) Any other provisions with respect to the proposed merger that the Director of the Department of Consumer and Business Services determines to be necessary. (3) After approval by the board of directors, the plan of merger shall be submitted to the director for approval with a nonrefundable application fee of $3,000. Certified copies of the authorizing resolutions of each board of directors, if any such resolutions are required under applicable law, showing approval of the plan of merger in accordance with subsection (1) of this section shall also be submitted. For each Oregon nonstock bank that is a party to a merger, the certified copies of the board resolutions shall also show that the resolutions were approved by a majority of the entire board. (4) After approval by each board of directors of the plan of merger, notice of the merger shall be delivered to the household of each depositor of each Oregon nonstock bank unless the Oregon nonstock bank is the resulting insured nonstock institution. Such notice shall include at least the name of the resulting insured nonstock institution and the location of its head office and may be included in any account statement regularly delivered to such depositors. [1997 c.631 276]
(1) Within 90 days after receiving the materials and fee specified in ORS 711.155, unless the time is extended by the Director of the Department of Consumer and Business Services in concurrence with the applicants, the director shall approve or disapprove the plan of merger. The director shall approve the plan of merger if the director finds that: (a) The resulting insured nonstock institution meets the requirements of the Bank Act; (b) The merger will not be detrimental to the safety and soundness of the resulting insured nonstock institution; (c) The merger is not contrary to the public interest; and (d) The director is satisfied that the merger is permitted by the state or federal supervisory authority having jurisdiction over the resulting insured nonstock institution. (2) If the director disapproves a plan of merger, the director shall state any objections in writing and give the boards of the parties to the merger an opportunity to amend the plan of merger to obviate the objections. The amended plan of merger shall be submitted to the director for approval as if it were the original plan of merger. (3) Any of the parties to the merger may appeal the decision of the director as provided in ORS 183.415 to 183.500. [1997 c.631 277]
(1) If the resulting insured nonstock institution is an Oregon nonstock bank, the merger shall, unless a later date is specified in the plan of merger, become effective upon the filing with the Director of the Department of Consumer and Business Services the approved plan of merger and evidence satisfactory to the director that all federal regulatory requirements, if any, have been satisfied. The charters of each Oregon nonstock bank that is a party to the merger, other than the resulting insured nonstock institution, shall terminate when the merger becomes effective. (2) If the resulting insured nonstock institution is an insured nonstock institution, the effective date and time of the merger shall be determined under the laws governing the resulting insured nonstock institution. The merger will be effective as to each Oregon nonstock bank that is a party to the merger when copies of the resolutions of the directors of the Oregon nonstock bank approving the plan of merger and evidence of the effective date and time of the merger are filed with the director. (3) If the resulting insured nonstock institution is an Oregon nonstock bank, the director shall promptly issue to the resulting insured nonstock institution a certificate of merger specifying the names of the parties to the merger, the name of the resulting insured nonstock institution, and the date on which the merger became effective as prescribed in subsection (1) of this section. The certificate shall be prima facie evidence of the merger and of the correctness of all proceedings and may be recorded in any office for the recording of deeds to evidence the new name in which the property of the merging insured nonstock institutions is held. [1997 c.631 278]
(1) Subject to the provisions set forth in this section and ORS 713.270, an Oregon bank may sell all or any portion of its assets or transfer all or any portion of its liabilities, other than deposit liabilities, to any person and may transfer all or any portion of its deposit liabilities to any insured institution. (2) An Oregon bank may sell all or substantially all of its assets outside the ordinary course of business, transfer all or substantially all the deposit liabilities of any of its branches or principal place of business, or both, only with the prior written approval of the Director of the Department of Consumer and Business Services. (3) An acquisition transaction agreement shall be approved by a majority of the entire board of directors of each Oregon bank that: (a) Is selling assets or transferring deposit liabilities, or both, requiring approval of the director under subsection (2) of this section; or (b) Is acquiring all or substantially all of the assets outside the ordinary course of business, all or substantially all of the deposit liabilities, or both, of another insured institution. (4) After approval of the acquisition transaction agreement by the board of directors of each Oregon bank that is subject to subsection (3) of this section, the following shall be submitted to the director, if required under subsection (2) of this section, for approval: (a) A copy of the acquisition transaction agreement, which shall contain the terms of conditions of the acquisition transaction; (b) A nonrefundable application fee of $3,000; (c) Certified copies of the authorizing resolutions of the board of directors of each such Oregon bank showing approval of the acquisition transaction agreement in accordance with subsection (3) of this section; and (d) Such other information as the director may require. (5) If an Oregon stock bank proposes to transfer all or substantially all of its assets outside the ordinary course of business, all or substantially all of its deposit liabilities, or both, such Oregon stock bank shall send to each of its stockholders, within 30 days after approval by its board of directors, notice of the acquisition transaction and a copy of ORS 711.175, 711.180 and 711.185. To be effective, each Oregon stock bank that proposes to transfer all or substantially all of its assets outside the ordinary course of business, all or substantially all of its deposit liabilities, or both, shall have such acquisition transaction approved by a vote of two-thirds of the outstanding stock of each class of voting shares at a meeting called to consider the acquisition transaction. (6) Within 90 days after approval of the board of directors of each Oregon nonstock bank that proposes to transfer all or substantially all of its assets outside the ordinary course of business, all or substantially all of its deposit liabilities, or both, each such Oregon nonstock bank shall send notice of the acquisition transaction to the household of each depositor of each such Oregon nonstock bank. Such notice shall include at least the name of the acquiring person or insured institution, the address of the head office of such person or insured institution, and a statement that all or substantially all of the assets, deposit liabilities, or both, will be acquired. Such notice may be included in any account statement sent to such depositors. (7) The director shall approve an acquisition transaction that is subject to subsection (2) of this section if the director finds that the acquisition transaction: (a) Conforms with the provisions of the Bank Act; (b) Will not be detrimental to the safety and soundness of an Oregon bank that is a party to such an acquisition transaction; (c) Is not contrary to the public interest; and (d) If the acquiring person or insured institution is not an Oregon bank, the director is satisfied that the acquisition transaction is permitted by the supervisory authority, if any, having jurisdiction over the acquiring person or insured institution. (8) If the director disapproves an acquisition transaction that is subject to subsection (2) of this section, the director shall state any objections in writing and give the parties to the acquisition transaction an opportunity to take actions to obviate the objections. (9) Any party to an acquisition transaction agreement may appeal the decision of the director as provided in ORS 183.415 to 183.500. [1997 c.631 279]
(1) A stockholder of an Oregon stock bank or Oregon trust company may dissent from the following: (a) A plan of merger pursuant to which the Oregon stock bank or Oregon trust company is not the resulting insured institution; (b) A plan of merger pursuant to which the Oregon stock bank or Oregon trust company is the resulting insured stock institution and the number of its voting shares outstanding immediately after the merger, plus the number of shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will exceed by more than 20 percent the total number of voting shares of the resulting insured stock institution outstanding immediately before the merger; (c) A plan of share exchange pursuant to which the Oregon stock bank or Oregon trust company in which the stockholder owns shares is acquired; (d) An acquisition transaction requiring the stockholders approval pursuant to ORS 711.170 (5); and (e) A plan of conversion pursuant to which the Oregon stock bank or Oregon trust company is to be converted to a limited liability company. (2) To perfect a stockholders right to dissent to a transaction described in subsection (1) of this section, the stockholder must send or deliver a notice of dissent to the Oregon stock bank or Oregon trust company prior to or at the meeting of the stockholders at which the transaction is submitted to a vote, or the stockholder must vote against the transaction. (3) A stockholder may not dissent as to less than all the shares registered in the name of the stockholder, except a stockholder holding, as a fiduciary or nominee, shares registered in the stockholders name for the benefit of more than one beneficiary, may dissent as to less than all of the shares registered in the fiduciary or nominees name if any dissent as to the shares held for a beneficiary is made as to all the shares held by the fiduciary for that beneficiary or nominee. The fiduciarys rights shall be determined as if the shares to which the fiduciary has dissented and the other shares are registered in the names of different stockholders. [1997 c.631 280; 2005 c.134 9]
(1) Any stockholder of an Oregon stock bank or Oregon trust company who dissented to a transaction listed under ORS 711.175 (1) and who desires to receive the value in cash of those shares, shall make written demand upon the Oregon stock bank, Oregon trust company or its successor and accompany the demand with the surrender of the share certificates, properly indorsed within 30 days after the stockholders meeting at which a vote to approve the transaction involving an Oregon stock bank or Oregon trust company was taken. Any stockholder failing to make written demand within the 30-day period shall be bound by the terms of the proposed plan of merger, plan of share exchange, plan of conversion or acquisition transaction agreement. (2) Within 30 days after a transaction listed under ORS 711.175 (1) is effected, the Oregon stock bank, Oregon trust company or its successor shall give written notice thereof to each dissenting stockholder who has made demand under this section at the address of the stockholder on the stock record books of the Oregon stock bank or Oregon trust company, and shall make a written offer to each such stockholder to pay for the shares at a specified price in cash determined by the Oregon stock bank, Oregon trust company or its successor to be the fair value of the shares as of the effective date of the transaction. The notice and offer shall be accompanied by a statement of condition of the Oregon stock bank or Oregon trust company, the shares of which the dissenting stockholder held, as of the latest available date and not more than four months prior to the consummation of the transaction, and a statement of income of the Oregon stock bank or Oregon trust company for the period ending on the date of the statement of condition. (3) Any stockholder who accepts the offer of the Oregon stock bank, Oregon trust company or its successor within 30 days following the date on which notice of the offer was mailed or delivered to dissenting stockholders shall be paid the price per share offered, in cash, within 30 days following the date on which the stockholder communicates acceptance in writing to the Oregon stock bank, Oregon trust company or its successor. Upon payment, the dissenting stockholder shall cease to have any interest in the shares previously held by the stockholder. (4) If, within 30 days after notice of the offer, one or more dissenting stockholders do not accept the offer of the Oregon stock bank, Oregon trust company or its successor or if no offer is made, then the value of the shares of the dissenting stockholders who have not accepted the offer shall be ascertained, as of the effective date of the transaction, by an independent, qualified appraiser chosen by the Director of the Department of Consumer and Business Services. The valuation determined by the appraiser shall govern and the appraisers valuation of the shares shall not be appealable except for one or more of the reasons set forth in ORS 36.705 (1)(a) to (d) for vacation of an arbitrators award, and for one of the grounds for modification or correction of an arbitrators award under ORS 36.710. Any appeal must be made within 30 days after the date of the appraisers valuation and is subject to ORS 183.415 to 183.500. The Oregon stock bank, Oregon trust company or its successor shall pay the dissenting shareholders the appraised value of the shares within 30 days after the date the appraiser sends the Oregon stock bank, Oregon trust company or its successor written notice of the appraisers valuation. (5) The director shall assess the reasonable costs and expenses of the appraisal proceeding equally to the Oregon stock bank, Oregon trust company or its successor and to the dissenting shareholders, as a group, if the amount offered by the Oregon stock bank, Oregon trust company or its successor is between 85 percent and 115 percent of the appraised value of the shares. The director shall assess the reasonable costs and expenses of the appraisal proceeding and the reasonable costs and expenses, including attorney fees and costs, of the Oregon stock bank, Oregon trust company or its successor to the dissenting stockholders, as a group, if the amount offered by the Oregon stock bank, Oregon trust company or its successor is 115 percent or more of the appraised value of the shares. The director shall assess the reasonable costs and expenses of the appraisal proceeding and the reasonable costs and expenses, including attorney fees and costs, of the dissenting shareholders, as a group, to the Oregon stock bank, Oregon trust company or its successor if the amount offered by the Oregon stock bank, Oregon trust company or its successor is 85 percent or less of the appraised value of the shares. The directors decision regarding assessment of fees and costs may be appealed as provided in ORS 183.415 to 183.500. (6) Amounts required to be paid by the Oregon stock bank, Oregon trust company or its successors, or the dissenting shareholders under this section shall be paid within 30 days after the directors assessment of any fees or costs becomes final or, if the directors decision is appealed, within 30 days after a final determination of the fees and costs is made. (7) The director may require, as a condition of approving a transaction listed in ORS 711.175 (1), the replacement of all or a portion of the stockholders equity of an Oregon stock bank or Oregon trust company expended in payment to dissenting stockholders under this section. (8) A stockholder may not receive the fair value of the stockholders shares under this section: (a) If the plan of merger provides that all stockholders of the Oregon stock bank receive common stock of a holding company pursuant to a merger with an interim banking institution chartered under ORS 707.025, the stockholders Oregon stock bank or Oregon trust company and the interim banking institution are the only parties to the merger and the stockholders relative interests in the holding company are in substantially the same proportions as the stockholders relative interests in the Oregon stock bank or Oregon trust company, except for nominal changes in the stockholders interests resulting from elimination of fractional shares; (b) If the shares held by the dissenting stockholder immediately before the effective date of a transaction listed in ORS 711.175 (1) are listed on any national securities exchange or are listed for trading on the National Association of Securities Dealers Automated Quotation stock market on either the national market or smallcap market; or (c) If the plan of stock exchange provides that all stockholders of the Oregon stock bank or Oregon trust company receive stock of a holding company pursuant to the plan of stock exchange with the result that the stockholders relative interests in the holding company are in substantially the same proportions as the stockholders relative interests in the Oregon stock bank or Oregon trust company, except for nominal changes in stockholders interests resulting from elimination of fractional interests. [Formerly 711.045; 2003 c.598 53; 2005 c.134 10]
(1) A dissenting stockholder making a demand under ORS 711.180 may withdraw the demand if: (a) The Oregon stock bank, Oregon trust company or its successor consents to the withdrawal; or (b) The dissenting stockholder pays the stockholders pro rata share of the appraisal costs and the Oregon stock banks or Oregon trust companys reasonable costs and expenses, including attorney fees and costs. (2) When a dissenting stockholder withdraws the demand under subsection (1) of this section, the stockholders status as a stockholder shall be restored, without prejudice to any corporate proceedings taking place in the interim. [1997 c.631 281; 2005 c.134 11]
(1) When a merger or conversion of an Oregon bank becomes effective: (a) The separate existence of each Oregon bank participating in the plan of merger or conversion, except the existence of the resulting financial institution, ends; and (b) The resulting financial institution is an entity with all the property, rights, powers and duties of all parties to the merger or the converting financial institution, except as affected by the laws applicable to the resulting financial institution and by the charter, articles of incorporation and bylaws of the resulting financial institution. (2) All property, debts, choses in action and every other interest of each merging or converting financial institution are transferred to and vested in the resulting financial institution without any further act or deed of any party to the merger or conversion. The title to or any interest in any real estate vested in any merging or converting financial institution may not revert or be impaired because of the merger or conversion. (3) When a merger or conversion becomes effective, the resulting financial institution shall be liable for all liabilities and obligations of each of the merging or converting financial institutions. Any existing or pending claim, action or proceeding by or against any merging or converting financial institution may be prosecuted as if the merger or conversion had not taken place, or the resulting financial institution may be substituted in its place. A merger or conversion may not impair the rights of creditors or depositors of a merging or converting financial institution or any liens upon the property of a merging or converting financial institution. (4) Unless prohibited under applicable law, a resulting financial institution may use the name of the merging financial institution or the converting financial institution whenever it can do any act under the name more conveniently. (5) Any reference to a merging or converting financial institution in any writing, whether executed or taking effect before or after the merger or conversion, is a reference to the resulting financial institution if consistent with the other provisions of the writing, and if the resulting financial institution is authorized to exercise the powers conferred or required by the writing. [Formerly 711.040]
If a merger, conversion or acquisition of an Oregon bank involves a trust company, the Director of the Department of Consumer and Business Services shall not approve the merger, conversion, or acquisition until satisfied that adequate provision has been made for successor fiduciaries. [1997 c.631 282]
If, pursuant to a merger or conversion of a financial institution, the resulting or converting financial institution is an Oregon bank and has assets or liabilities in this state that do not conform to the requirements of applicable law or carries on business activities that are not permitted for the resulting or converting financial institution, the Director of the Department of Consumer and Business Services may: (1) Permit the resulting or converting financial institution to retain the nonconforming assets or liabilities or to continue the otherwise unpermitted activities for such periods and subject to such conditions and limitations as the director determines, by rule or order, will not be injurious to the safety and soundness of the resulting or converting financial institution; or (2) Grant the resulting or converting financial institution a reasonable time to conform with applicable law. [Formerly 711.055]
Without approval by the Director of the Department of Consumer and Business Services, an asset shall not be carried on the books of a resulting or converting financial institution that is an Oregon bank at a valuation higher than that on the books of the resulting or converting financial institution at the time of its last examination prior to the effective date of the merger or conversion. [Formerly 711.060]
An institution may go into voluntary liquidation by vote of its stockholders owning at least two-thirds of its capital stock. The institution shall first obtain the written consent of the Director of the Department of Consumer and Business Services. Before consenting to the liquidation, the director may require a special examination of the condition and affairs of the institution. The institution shall pay the actual costs of the examination as provided in ORS 706.544. [Amended by 1973 c.797 238; 1985 c.762 43; 1985 c.786 40; 1999 c.59 220]
In a transaction where a purchasing insured institution assumes or agrees to pay all the liabilities of a liquidating institution, ORS 711.220 to 711.235 do not apply. [1973 c.797 239; 1997 c.631 239]
(1) If a vote is taken authorizing the voluntary liquidation of an institution, the board of directors shall cause to be published in a newspaper of general circulation in the city, town or county in which the principal office of the institution is located, at least once a week for four consecutive weeks, notice of the liquidation notifying depositors, other creditors or claimants to present their claims for payment. (2) Claims of depositors shall be paid upon the presentation of a check, passbook, certificate of deposit or other instrument required for payment before the institution went into voluntary liquidation. Disputed claims shall be presented in writing for allowance or rejection in the manner provided in ORS 711.230 for claims of other creditors. (3) Within 60 days after the last publication of the notice provided for in this section, an institution in voluntary liquidation shall mail a written notice of its intention to liquidate to the last-known address of all depositors and other creditors who have not yet claimed the full amount shown to be due them according to the records of the institution. [Amended by 1973 c.797 240]
Six months after the mailing of the written notice described in ORS 711.220 (3), the Oregon stock bank shall deliver a report and all deposits that remain unclaimed to the State Treasurer as unclaimed property under ORS 98.352 and deliver a copy of the report filed with the State Treasurer to the Director of the Department of Consumer and Business Services. [Amended by 1957 c.670 33; 1959 c.138 1; 1973 c.797 241; 1993 c.694 36; 1997 c.631 240; 2019 c.678 71; 2021 c.424 21]
(1) Claims of all persons, other than depositors, against the institution shall be presented in writing to the institution within one year after the date of first publication provided for in ORS 711.220, unless barred by an earlier period of limitation. Claims arising out of the expense of liquidation may be filed at any time prior to the closing of the liquidation. (2) The board of directors shall, within 30 days after the presentment of a claim, allow or reject the claim, in whole or in part, noting the same in their minutes. The board shall notify the claimants in writing of its action, either by personal service or by mail. Any claim rejected or disallowed is barred unless action to adjudicate the claim is commenced within 60 days after the date of service or mailing of notice of disallowance or rejection. (3) The board of directors may extend the time within which to receive claims and continue the liquidation after the expiration of the time allowed in this section for the filing of claims. Any new claims filed after the time shall be allowed and paid or rejected in the same manner as provided for other claims. If the liquidation is continued, the transfer of unclaimed deposits to the State Treasurer may be delayed to such time as designated by the Director of the Department of Consumer and Business Services. [Amended by 1959 c.138 2; 1973 c.797 242; 2019 c.678 72]
(1) After the expiration of the time provided in ORS 711.230 for the filing of claims or if the board of directors has extended the time of liquidation then after the time set by them and after payment of unclaimed deposits to the State Treasurer, the board of directors shall make a complete report of the liquidation to the Director of the Department of Consumer and Business Services and shall certify to the director that all claims have been paid or finally determined. (2) Any claims received and approved after the report has been filed with the director shall be paid if the remaining assets are sufficient. (3) When the report has been approved by the director the board of directors may proceed to liquidate the remaining assets and distribute them to the stockholders or other persons entitled to receive them according to their respective rights and interests without further report to the director. [Amended by 1959 c.138 3; 1973 c.797 243; 2019 c.678 73]
The Director of the Department of Consumer and Business Services shall supervise and control an institution in voluntary liquidation until the final report is filed to the same extent the director supervises and controls any other institution. [Amended by 1973 c.797 244]
(1) An institution may not engage in banking business or transact trust business if the institution: (a) Goes into voluntary liquidation; (b) Is closed because of insolvency; (c) Sells all or substantially all of its assets to another institution that takes over and assumes all or substantially all of its deposit liabilities; or (d) Does not engage in banking business or transact trust business for a period of one year. (2) An institution shall, within one year after it ceases to do a banking business or trust business, amend its articles of incorporation by eliminating the power to engage in a banking business or trust business or it is dissolved and shall not be reinstated and shall surrender its charter. For the purpose of winding up its affairs, the institution may continue as a body corporate for a period of five years from the date it stops doing a banking business or trust business, and as such: (a) The dissolution of the institution shall not take away or impair any remedy available to or against such institution, its directors, officers or shareholders for any right or claim existing or any liability incurred prior to such dissolution if an action or other proceeding thereon is commenced within five years after the date of issuance of a certificate of dissolution or filing of a judgment of dissolution. Any other action or proceeding by or against the institution may be prosecuted or defended by the institution in its corporate name. The shareholders, directors and officers shall have power to take such corporate or other action as shall be appropriate to protect such remedy, right or claim. If such institution was dissolved by the expiration of its period of duration, such institution may amend its articles of incorporation at any time during such period of five years so as to extend its period of duration. (b) Whenever any such institution is the owner of real or personal property, or claims any interest or lien whatsoever in any real or personal property, such institution shall continue to exist during such five-year period for the purpose of conveying, transferring and releasing such real or personal property or interest or lien therein. Such institution shall continue, after the expiration of such five-year period, to exist as a body corporate for the purpose of being made a party to and being sued in any action, suit or proceeding against it involving the title to any such real or personal property or any interest therein, and not otherwise. Any such action, suit or proceeding may be instituted and maintained against any such institution as might have been had prior to the expiration of said five-year period. This section shall not be construed as affecting or suspending any statute of limitations applicable to any suit, action or proceeding instituted under this section. (c) For the purpose of service of any process, notice or demand within the prescribed time following such dissolution, the Director of the Department of Consumer and Business Services shall be an agent of the dissolved institution upon whom service may be made. [Amended by 1959 c.54 1; 1973 c.797 245; 1987 c.197 7; 1989 c.324 54; 1997 c.631 241; 2003 c.576 549]
The circuit court of the county in which the principal office of an institution is located: (1) Shall, as directed in ORS 711.400 to 711.615, supervise the liquidation of an institution; and (2) Is referred to in ORS 711.400 to 711.615 as the supervising court. [1973 c.797 250]
An institution is insolvent if any of the following occurs: (1) The fair market value of the institutions assets is insufficient to pay the institutions liabilities, excluding any liability on account of capital debentures. (2) An Oregon stock bank fails to make good the Oregon stock banks reserve requirements under applicable law for a period of 30 days. (3) The institution cannot meet the institutions obligations or demands upon the institution as the obligations or demands become due. [Amended by 1973 c.797 251; 1975 c.544 35; 1997 c.631 242; 2015 c.244 83]
Except for transfers of public funds or collateral that a qualified depository, as defined in ORS 295.001, or the State Treasurer must make under ORS 295.001 to 295.108, transfers of assets made after the commission of an act of insolvency or in contemplation of insolvency to prevent the application of the assets in the manner prescribed by the Bank Act or to the preference of one creditor to another are void. [Amended by 1973 c.797 252; 2007 c.871 32; 2010 c.101 28; 2019 c.587 49]
A director, officer or employee of an Oregon stock bank shall not receive or permit to be received any deposit in excess of the insurance that the Oregon stock bank holds for its deposits under ORS 708A.405, if the director, officer or employee knows that the Oregon stock bank is insolvent. [Amended by 1973 c.797 253; 1985 c.786 41; 1997 c.631 243]
After an Oregon stock bank commits an act of insolvency or the insurance required for its deposits under ORS 708A.405 is canceled by the insurer, the Director of the Department of Consumer and Business Services may take possession of the property and affairs of the Oregon stock bank and proceed to liquidate it as provided for an insolvent Oregon stock bank under ORS 711.400 to 711.615. [1975 c.544 34; 1985 c.786 42; 1997 c.631 244]
(1) An institution may place its property and affairs under the control of the Director of the Department of Consumer and Business Services to be liquidated by notifying the director of its proposed action and by posting a notice on its doors as follows: "This Bank (or Trust Company) Is Under the Control of the Department of Consumer and Business Services." (2) The posting of the notice or the taking possession of an institution by the director is sufficient to place all its property and affairs of whatever nature in the possession of the director and operates as a bar and dissolution to any attachment proceedings. [Amended by 1973 c.797 254; 1975 c.544 36; 1987 c.373 54]
(1) If the Director of the Department of Consumer and Business Services determines upon taking charge of an institution that it is only temporarily short of available funds and that its assets are sufficient to pay its liabilities, leaving its stockholders equity unimpaired, or the stockholders will arrange to make good its stockholders equity, if impaired, the director may permit the officers and directors of the institution to arrange with its depositors and creditors for an extension of time for payment of the depositors and creditors. (2) When the director is satisfied that the stockholders equity of the institution has been brought into conformance with the Bank Act, the institution is solvent and has funds on hand with which to meet the demands made on it in the ordinary course of business, and the institution has arranged with its depositors and creditors for an extension of time to enable the institution to realize on its assets to meet the obligations, the director may within 60 days after taking charge of the institution permit it to resume business. (3) The institution shall pay, at the actual per diem cost, for the service of the director and the employees of the director in taking charge of and looking after the affairs of the institution during the time it was under control of the director. The money so received shall be deposited with the State Treasurer to be credited to the Consumer and Business Services Fund. [Amended by 1973 c.797 255; 1997 c.631 245]
(1) Notice shall be given to the Director of the Department of Consumer and Business Services before a receiver is appointed by any court or a deed of assignment for the benefit of creditors is filed in any court for an institution unless it is necessary so to do in order to preserve the assets of the institution. (2) The director may, within five days after the service of the notice upon the director, take possession of the institution, in which case no further proceedings shall be had upon the application for the appointment of receiver or under the deed of assignment. If a receiver has been appointed or the assignee has entered upon the administration of the trust of the assignee, the appointment shall be vacated or the assignee shall be removed upon application of the director to the court. (3) The director shall proceed to administer the assets of the institution as provided in ORS 711.475 to 711.510. [Amended by 1973 c.797 256]
(1) Upon taking possession of the property and business of an institution, the Director of the Department of Consumer and Business Services shall give written notice of the fact to all persons holding or in possession of any assets of the institution. (2) A person knowing that the director has taken possession of an institution shall not have a lien or charge for any payment advanced or any clearance thereafter made, or liability thereafter incurred, against any of the assets of the institution. [Amended by 1973 c.797 257]
An institution may not apply to the supervising court for an order requiring the Director of the Department of Consumer and Business Services to show cause why the director should not be enjoined from continuing possession pursuant to ORS 711.419. [Amended by 1973 c.797 258; 1975 c.544 37; 1985 c.786 43]
(1) Upon taking possession of the business and property of an insolvent Oregon stock bank, the deposits of which are to any extent insured by the Federal Deposit Insurance Corporation, if the Federal Deposit Insurance Corporation will accept the duty of liquidating the Oregon stock bank, the Director of the Department of Consumer and Business Services may appoint without bond the Federal Deposit Insurance Corporation to act as receiver for the Oregon stock bank. When so appointed the Federal Deposit Insurance Corporation shall exercise all the powers and perform all the duties of the director in connection with the liquidation of Oregon stock banks. (2) Upon being notified in writing of the acceptance of the appointment, the director shall file a certificate evidencing the appointment of the Federal Deposit Insurance Corporation in the office of the director. Upon the filing of the certificate the possession of all the assets, business and property of the Oregon stock bank except those securities pledged under ORS 295.015 shall be transferred from the Oregon stock bank and the director to the Federal Deposit Insurance Corporation, and without the execution of any instruments of conveyance, assignment, transfer or indorsement the title to all such assets and property shall vest in the Federal Deposit Insurance Corporation. The director shall be relieved from all responsibility and liability in respect to the liquidation of the Oregon stock bank. [Amended by 1973 c.797 259; 1983 c.296 11; 1993 c.98 25; 1997 c.631 246]
If any Oregon stock bank in which the deposits are to any extent insured by the Federal Deposit Insurance Corporation is closed for the purpose of liquidation without adequate provision being made for the payment of its depositors and if the Federal Deposit Insurance Corporation pays or makes available for payment the insured deposit liabilities of the closed insured Oregon stock bank, the Federal Deposit Insurance Corporation is subrogated to all rights against the closed insured Oregon stock bank of the owners of deposits to the extent of any payments made by the corporation to the depositors. [Amended by 1973 c.797 260; 1997 c.631 247]
Upon taking possession of the property of an institution to liquidate its affairs, the Director of the Department of Consumer and Business Services shall: (1) Inventory the assets of the institution. The inventory shall be prepared in duplicate with one copy filed in the office of the director and one in the office of the clerk of the county in which the principal office of the institution is located. (2) Within a reasonable time, file with the clerk of the supervising court a notice that the director has taken possession and the time of taking possession. (3) Proceed to liquidate the affairs of the institution, collect debts due the institution and do what is necessary to preserve the assets and business of the institution. [Amended by 1973 c.797 261]
(1) Upon order of the supervising court, the Director of the Department of Consumer and Business Services may: (a) Sell or compromise any bad or doubtful debts, including the individual liability of any stockholder of the institution. (b) Sell all or any of the real estate and personal property of the institution on terms directed by the supervising court. (2) The director, upon compliance with the terms of the sale of property, shall execute and deliver to the purchaser of the property the necessary deeds or instruments to evidence the passing of the title. If the real estate is situated outside the county in which the principal office of the institution is located, a certified copy of the order authorizing and ratifying the sale shall be filed in the office of the clerk of the county in which the property is situated. [Amended by 1973 c.797 262]
The Director of the Department of Consumer and Business Services may, after the director has obtained the consent of the supervising court, borrow funds from any source available to be used for distribution among depositors or other creditors of the institution in the process of liquidation, or for expense of liquidation or preservation of the assets of the institution. To secure the loan, the director may pledge, on terms fixed by the lender and agreed to by the director, all or any portion of the assets of the institution. The director is not personally obligated to pay the loans. [Amended by 1973 c.797 263]
If the assets of an insolvent institution are sold to a new institution and the new institution assumes any or all of the deposit liabilities of the insolvent institution with the approval of the Director of the Department of Consumer and Business Services and the supervising court, the new institution may be organized with a capital stock equal to the capital stock of the insolvent institution without regard to the capital requirements of ORS 707.050. [Amended by 1973 c.797 264]
If an institution becomes insolvent and is taken in charge by the Director of the Department of Consumer and Business Services for liquidation, the director may maintain an action against any stockholder, whose stock or assessment on the stock has not been fully paid, for the collection of the unpaid balance. The action may be prosecuted against one or more stockholders, singly or collectively. [Amended by 1973 c.797 265]
(1) Stockholders in an institution who have transferred their stock or registered the transfer of their stock within 60 days before the date of the closing of the institution or with the knowledge of the impending closing or failure, are liable, as if the transfer had not been made, to the extent that the subsequent transferee fails to pay the unpaid balance on the stock. This subsection does not affect any recourse which a former stockholder might otherwise have against those in whose name the stock is registered at the time the institution closes. (2) An action may not be brought by the holder of any stock standing in the name of the stockholder on the books of an institution at the time it closes which will relieve the stockholder of liability as a stockholder. [Amended by 1973 c.797 266]
A person holding stock of an institution as a fiduciary, as collateral security or in pledge, is not personally subject to any liability as a stockholder. The person pledging the stock is liable as a stockholder. The estate and funds in the hands of the fiduciary are liable to the same extent as the testator, intestate, protected person or person interested in the trust fund would be liable if able to act and hold the stock in the name of that person. [Amended by 1973 c.797 267; 1973 c.823 146; 1974 c.36 27]
(1) The moneys collected by the Director of the Department of Consumer and Business Services under ORS 711.495 shall be, from time to time, deposited in one or more insured institutions, subject to the order of the director. (2) The director may require any bank in which the director deposits money under this section to furnish security therefor satisfactory to the director for the safekeeping and prompt payment of the money deposited. [Amended by 1973 c.797 268; 1997 c.631 248]
(1) As used in ORS 711.515 to 711.525, "depositor" includes purchasers or holders in due course of certificates of deposit, cashiers checks, certified checks, outstanding unpaid drafts drawn or issued by an Oregon stock bank, unsecured letters of credit and unsecured drafts accepted by the Oregon stock bank if the instruments enumerated are issued pursuant to cash or credit actually received or realized by the Oregon stock bank. (2) A depositor or deposit, including deposits of the State of Oregon or any county, city or political subdivision thereof, shall not have a preference or prior lien on any assets of an insolvent Oregon stock bank over the claims of other depositors or deposits, unless the assets have been pledged as security in compliance with the provisions of law. This subsection does not apply to any claims or demands involving funds held by an Oregon stock bank under an express oral or written trust agreement, where a preference to the trust funds may be established by evidence satisfactory to the Director of the Department of Consumer and Business Services and the supervising court. [Amended by 1973 c.797 269; 1997 c.631 249]
If an Oregon stock bank becomes insolvent or goes into voluntary or involuntary liquidation, the assets of the Oregon stock bank must be applied in the following order of priority: (1) First, if collateral has been pledged under ORS 295.015 and assets have been pledged under ORS 709.030, to the benefit of those for whom the collateral and assets have been pledged; (2) Second, to pay the expenses of liquidation; (3) Third, to satisfy the amount due the depositors; and (4) Fourth, to satisfy the amount due sellers of federal funds. [Amended by 1973 c.797 270; 1993 c.373 1; 1997 c.631 250; 1999 c.311 5; 2015 c.244 84]
Interest on unsecured interest-bearing deposits and on secured interest-bearing deposits other than public funds shall stop on the date any Oregon stock bank is placed in the hands of the Director of the Department of Consumer and Business Services for liquidation. Interest on public funds that are secured as provided in ORS chapter 295, shall continue at the rate being paid by the Oregon stock bank prior to the time it closed. [Amended by 1973 c.797 271; 1997 c.631 251]
The Director of the Department of Consumer and Business Services shall cause notice to be given by advertisement, in a newspaper of the choice of the director, weekly for four consecutive weeks, notifying persons with claims against an institution which the director has taken possession of for the purpose of liquidating its affairs, to present the claim to the director, with legal proof of the claim, at a designated place on or before the expiration of 60 days after the date of the first publication of the notice. The notice shall state the date of the first publication. The director shall mail a similar notice to all persons whose names appear as creditors upon the books of the institution. Failure to mail the notice to any creditor does not give the creditor any right or impose any liability on the director. [Amended by 1973 c.797 272]
(1) All claims shall be verified and filed with the Director of the Department of Consumer and Business Services. If a claimant asserts a preference other than the preference given in ORS 711.520 to depositors, the claim shall include a demand for preference and a statement of the grounds upon which preference is claimed. (2) Any claim for preference shall be filed with the director and the supervising court, before the expiration of the time fixed under ORS 711.530 in the notice to creditors. If a claim for preference is not filed within the designated time, it is barred. [Amended by 1973 c.797 273]
(1) Within a reasonable time after the expiration of the time fixed in the notice to creditors, the Director of the Department of Consumer and Business Services shall approve or reject, in whole or in part, every claim filed. (2) Depositors claims that assert no priority or preference other than the preference given under ORS 711.520 to depositors and that are filed after the expiration of the time fixed in the notice to creditors for the filing of all claims shall be approved or rejected, in whole or in part, within a reasonable time after the claims are filed with the director. (3) The approval or rejection of any claim by the director shall be indorsed in writing upon the claim and the director need not state the reasons for the approval or rejection. The director may at any time alter or amend the previous approval or rejection of any claim. [Amended by 1973 c.797 274; 2003 c.14 443]
(1) If a creditor of the closed institution or any interested party objects to the action of the Director of the Department of Consumer and Business Services in allowing in whole or in part any claim filed with the director, the creditor shall, within 10 days after the list of allowed claims has been filed with the clerk of the supervising court, make and file with the clerk of the supervising court a verified statement of the objections of the creditor. The statement shall state the facts and reasons upon which the objections are based and include a notice that the objecting party appeals to the supervising court. Objections to the approval of any claim may be made at any time but, if not filed within the 10-day period, the objections shall apply only to that portion of the claim which has not yet been paid. (2) A copy of the objections and notice shall be served upon the director and upon the creditor whose claim is challenged. Proof of the service shall be filed in the supervising court with the statement of objections. (3) The statement of objection filed in the supervising court shall also have attached to it a copy, certified as correct by the director, of the claim so approved and the approval of the claim indorsed thereon by the director. [Amended by 1973 c.797 275]
(1) If the Director of the Department of Consumer and Business Services rejects any claim in whole or in part, written notice of the rejection shall be given to the claimant, either in person or by mail. If notice by mail is given, it is sufficient that the notice be sent to the address indicated by the claimant on the proof of claim filed with the director. If no address is given, then it is sufficient if the notice is mailed to the last address of the claimant as shown by the books and records of the closed institution. If notice of rejection is given by mail, the notice is considered to have been given by the director on the day when the notice of rejection is properly addressed and deposited in the mail, postage prepaid. Proof of giving of notice of rejection by the director shall be made by affidavit, and the affidavit shall be prima facie evidence of the giving of notice. The affidavit shall be filed in the office of the director. (2) Within 30 days after the giving of the notice of rejection, the claimant may appeal the rejection by serving the director with notice of appeal and by filing the notice with the clerk of the supervising court with proof of service of the notice upon the director and a copy, certified as correct by the director, of the rejected claim and the indorsement made thereon by the director. [Amended by 1973 c.797 276; 2007 c.71 230]
(1) After the filing of objections under ORS 711.545 or the filing of the notice and other papers under ORS 711.550 and upon the motion of any of the parties in interest, the supervising court, upon notice to all the parties, shall set the matter for trial. (2) The trial shall be held in a summary manner upon the documents filed with the court. The person filing the statement of objection or the claimant whose claim was rejected has the burden of proof. (3) An appeal from the decision of the supervising court to the appellate court may be taken by either party as from any other judgment of the supervising court. [1973 c.797 277; 2003 c.576 550]
A party to the proceedings upon any hearing provided for in ORS 711.554 shall not recover costs or disbursements from any other party. [Amended by 1973 c.797 278]
Depositors claims presented and allowed after the expiration of the time fixed in the notice to creditors may be paid the amount of all prior dividends therein, if there are sufficient funds, and share in the distribution of the remaining assets in the hands of the Director of the Department of Consumer and Business Services equitably applicable thereto. [Amended by 1973 c.797 279]
To facilitate the final closing of the liquidation of the institution, the supervising court may, by order, bar all claims at any time after one year from the date of the first publication of notice to creditors under ORS 711.530. [1973 c.797 280]
(1) Upon the expiration of the time fixed under ORS 711.530 for the presentation of claims, the Director of the Department of Consumer and Business Services shall make in duplicate a list of the claims presented specifying whether the claims have been approved, rejected or neither approved nor rejected pending further investigation. The list shall also note which claims have been presented to the supervising court for appeal. One copy of the list shall be filed in the office of the director and one in the office of the clerk of the supervising court. (2) The director shall, in like manner, make and file supplemental lists showing all claims presented subsequent to the filing of the first list. (3) The lists shall be filed in the supervising court at least 15 days before the payment of any dividend on the claims or the payment of any preferred claims. [Amended by 1973 c.797 281]
The directors of an institution who vote for or assent to any distribution of assets of the institution to its stockholders during the liquidation of the institution without the payment and discharge of, or making adequate provision for, all known liabilities of the institution shall be jointly and severally liable to the institution for the value of the assets which are distributed, to the extent that the liabilities of the institution are not thereafter paid and discharged. [1973 c.797 282]
At any time after the expiration of the date fixed for the presentation of claims under ORS 711.530 the Director of the Department of Consumer and Business Services may, out of the funds remaining in the hands of the director after the payment of expenses, declare one or more dividends. After the expiration of one year from the first publication of notice to creditors the director may declare a final dividend. The dividends shall be paid to the persons, in the amounts and upon the notice as may be directed by the supervising court. [Amended by 1973 c.797 283]
(1) Any person who would be entitled to withdraw a deposit under ORS 708A.430 may claim the deposit and receive dividends thereon, or if claim has been made it may be amended after the death of the claimant so that future dividends are paid to the person entitled thereto under ORS 708A.430. (2) If any claim is more than $500, dividends may be paid to the person entitled thereto, as provided in ORS 708A.430, if the Director of the Department of Consumer and Business Services is satisfied that the total dividends to be paid after the death of the claimant are less than $100. (3) The director is under no obligation to determine the relationship of the affiants or declarants to the deceased depositor and the payment of dividends made in good faith to parties making the affidavit or declaration shall be a release of the director for the amount of the dividends so paid. [1973 c.797 284; 1997 c.631 251a; 2017 c.51 4]
(1) If an institution, at the time the Director of the Department of Consumer and Business Services takes possession of its property and business, has in its possession, as bailee, for safekeeping and storage, any valuable personal property, or has rented any vaults, safes or safe deposit boxes or any portion thereof for the storage of property of any kind, the director may mail a notice to the person claiming to be or appearing upon the institutions books to be the owner of the property, or the person in whose name the safe, vault or box stands notifying them to remove the property within a period fixed by the notice but not less than 90 days after the date the notice is mailed. The notice shall be in writing and sent by registered mail or by certified mail with return receipt directed to the person at the persons post-office address as recorded upon the books of the institution. The director shall allow a person access to the institution so that the person may remove the persons property stored or kept with the institution as described in this subsection. The director may require that the person show identification reasonably identifying the person as the person whose name appears as owner of the property on the institutions books or as the person in whose name the safe, vault or box stands. The director may limit access to normal business hours. (2) Upon the date fixed by the notice, the contract, if any, between a person and the institution for the storage of the property or for the use of the safe, vault or box is terminated, and the amount of the unearned rent or charges, if any, paid by the person becomes a debt of the institution to the person. (3) After the date fixed in the notice the safe, vault or box may be opened in the presence of the director, and a witness who is not an officer or employee of the institution. A list and description of the property shall be made by the person opening the safe, vault or box and shall be attached to the property. The director shall keep the property in one of the general safes or boxes of the institution until it is delivered to the person entitled to receive it or is disposed of as provided in ORS 711.582. [Amended by 1973 c.797 285; 1981 c.397 1; 1991 c.249 67]
(1) If property is not removed within six months after the time fixed by the notice of the Director of the Department of Consumer and Business Services under ORS 711.580, the director may sell the property under the direction of the supervising court. The proceeds of the sale shall be held for the benefit of the person entitled to the property. Any funds which have not been claimed within two years after the final order closing the liquidation of the institution may be disposed of in the manner prescribed in ORS 711.590 for unclaimed dividends and deposits. (2) If papers or other articles which have no value and cannot be sold are not removed within six months after the time fixed in the notice of the director, the director shall store the papers and articles with the records of the insolvent institution. One year after the final order closing the liquidation of the institution the papers and articles may be destroyed in the manner prescribed in ORS 711.595 for the records of an insolvent institution. [1973 c.797 286]
(1) When the Director of the Department of Consumer and Business Services has paid to each depositor and creditor of the institution whose claim as a depositor or creditor has been proved and allowed, the full amount of the claim and has made proper provision for unclaimed or unpaid deposits or dividends and has paid all the expenses of the liquidation, the director shall call a meeting of the stockholders of the institution by giving notice of the meeting for 30 days in one or more newspapers circulated in the county in which the principal office of the institution is located. At the meeting the stockholders shall select, by ballot, one or more agents to administer the assets and wind up the affairs of the institution. A majority of the stock present and voting in person or by proxy is necessary to select an agent. (2) The agent shall file with the director a bond or an irrevocable letter of credit to the State of Oregon in an amount not less than 20 percent of the book value of the assets to be surrendered to the agent, but in no case shall the bond or letter of credit be less than $1,000. The bond or letter of credit shall be executed by the agent as principal. The bond shall be executed by a surety company authorized to do business in this state as surety, and any letter of credit shall be issued by an insured institution. The bond or letter of credit shall be conditioned for the faithful performance of all the duties of the agents trust. (3) When the agent files the required bond or letter of credit, the director shall transfer to the agent all the assets of the institution remaining in the hands of the director. Upon the transfer and delivery the director is discharged from all further liability to the institution and its creditors. The agent shall complete the liquidation of the affairs of the institution, and, after paying the expenses of the liquidation, shall distribute the proceeds among the stockholders in proportion to the several holdings of stock. (4) If the stockholders fail to meet on the date advertised for the stockholders meeting or within 15 days after the advertised date or fail to appoint an agent, or if the agent fails to qualify as required in this section within 30 days after the date of their selection, the director may appoint an agent. This agent shall file a bond or letter of credit and liquidate the affairs of the institution as though the agent had been selected by the stockholders. Upon the transfer and delivery to the agent appointed by the director of all the remaining assets in the hands of the director, the director is discharged from all further liability to the institution and its creditors. [Amended by 1973 c.797 287; 1991 c.331 116; 1997 c.631 252]
(1) Two years after the date of the final order closing the liquidation of an institution, the Director of the Department of Consumer and Business Services may withdraw any unclaimed deposits or balances remaining to the credit of dividend accounts, representing the aggregate of undelivered checks or unpaid dividend funds in the possession of the Department of Consumer and Business Services, and report and pay the funds to the State Treasurer as unclaimed property under ORS 98.352. (2) The interest earned on the dividend accounts while they remain in the possession of the director shall be paid to the State Treasurer to be credited to the Consumer and Business Services Fund and no person entitled to the accounts has any claim to the interest. [Amended by 1959 c.138 4; 1973 c.797 288; 1993 c.694 37; 2019 c.678 74; 2021 c.424 22]
If any files, records, documents, books of account or other papers have been taken over and are in the possession of the Director of the Department of Consumer and Business Services in connection with the liquidation of an insolvent institution, the director may, after one year from the declaration of the final dividend or from the date the liquidation has been closed by order of the supervising court, destroy any of the files, records, documents, books of account or other papers which appear to the director to be unnecessary for future reference as part of the liquidation and files of the office of the director. [Amended by 1973 c.797 289]
The expenses incurred by the Director of the Department of Consumer and Business Services in the liquidation of an institution include the expenses of all employees of the Department of Consumer and Business Services employed in the liquidation, reasonable attorney fees for counsel employed by the director in the course of the liquidation, and stationery, rent, postage, telephone, telegraph and other office and traveling expense. The compensation of the employees and the expense of supervision and liquidation shall be fixed by the director, subject to the approval of the supervising court. The supervising court shall not increase the compensation or expenses over the amount fixed by the director. [Amended by 1973 c.797 290; 1985 c.762 44]
Any petition relating to an insolvent institution, except a petition by the Director of the Department of Consumer and Business Services, shall be filed with the supervising court and the director. The director shall, within a reasonable time after the petition is filed, grant or refuse the petition and notify the petitioner in writing of the decision. If a petitioner is dissatisfied with the decision of the director the petitioner may, within 30 days after the decision of the director, present the petition, with the decision of the director, to the supervising court. The supervising court shall fix a date for the hearing of the petition, giving reasonable notice of the date to the petitioner and to the director. The supervising court shall determine the matter upon the evidence produced by all the parties, and the burden of proof is upon the petitioner. [Amended by 1973 c.797 291]
Fees shall not be charged for the filing in the supervising court by the Director of the Department of Consumer and Business Services, the deputies of the director or attorneys of any papers relating to the liquidation of an institution or which are necessary or convenient in connection with the collection of assets of an institution. [Amended by 1973 c.797 292; 1999 c.803 7]
(1) The Director of the Department of Consumer and Business Services may order an Oregon stock bank to suspend or restrict the payment of its liabilities to depositors and other creditors except as provided in ORS 711.620 to 711.670, if the action is necessary for the protection of the depositors and other creditors of the Oregon stock bank and is in the public interest. (2) The order of the director is effective upon receipt by the Oregon stock bank of written notice thereof signed by the director and shall continue in effect until released or modified by the written order of the director. The suspension and restriction shall not exceed a period of 90 days, but may be extended for further periods not to exceed 90 days each upon the written order of the director. [1973 c.797 293; 1997 c.631 253]
(1) When the order mentioned in ORS 711.620 takes effect, the Director of the Department of Consumer and Business Services shall immediately take possession of the property and affairs of the Oregon stock bank, and take whatever action is necessary to conserve the assets of the Oregon stock bank pending further disposition of its business. (2) While the director is in possession of an Oregon stock bank, the director shall have all the powers given to the director in connection with insolvent Oregon stock banks, and the rights of interested parties shall, subject to ORS 711.620 to 711.670, be the same as if the director had taken possession of the Oregon stock bank because of insolvency. (3) All expenses of the director while in possession of the Oregon stock bank shall be paid out of the assets of the Oregon stock bank and shall be a lien on the assets prior to any other lien. [1973 c.797 294; 1975 c.544 38; 1997 c.631 254]
While the Oregon stock bank is in the possession of the Director of the Department of Consumer and Business Services under ORS 711.625, the director may set aside and make available for withdrawal by depositors on a ratable basis such amounts as in the opinion of the director may safely be used for the purpose. [1973 c.797 295; 1997 c.631 255]
(1) While the Oregon stock bank is in the possession of the Director of the Department of Consumer and Business Services under ORS 711.625, the Oregon stock bank may accept deposits but the deposits shall not be subject to any limitation as to payment or withdrawal. (2) Deposits received after the director takes possession and the amounts released for payment to depositors under ORS 711.630, shall be segregated and held and used solely to meet the deposit liability and the pro rata amount so released. They shall not be used to liquidate any indebtedness of the Oregon stock bank existing at the time the director took possession, or any subsequent indebtedness incurred in liquidating any indebtedness of the Oregon stock bank existing at the time the director took possession. (3) Deposits received while the Oregon stock bank is in the possession of the director shall be kept on hand in cash, invested in direct obligations of the United States or deposited with an approved reserve depository. [1973 c.797 296; 1997 c.631 256]
(1) The Director of the Department of Consumer and Business Services may, by order, on a date fixed by the order and at least 10 days after the date of the order, terminate the suspension or restriction on payment of liabilities of the Oregon stock bank designated in the order. (2) Immediately upon the termination of the suspension or restriction on payment of liabilities of the Oregon stock bank designated in the order, the director shall surrender possession of the assets and properties of the Oregon stock bank to the proper officers of the Oregon stock bank. The receipt of the officers operates as a full release of the director. [1973 c.797 297; 1997 c.631 257]
(1) At least 10 days before the date on which the suspension or restriction on the payment of liabilities is terminated, the Director of the Department of Consumer and Business Services shall cause a notice to be published in a newspaper circulated in the city, town or county in which the principal office of the Oregon stock bank is located. Only one publication of the notice is required. (2) The notice shall specify: (a) The date on which the suspension or restriction on the payment of liabilities will be removed; (b) That the provisions of ORS 711.635 pertaining to the segregation of deposits will not be effective after that date; and (c) That the segregated deposits after the removal of the restriction or suspension will be general deposits. (3) On or before the date of the publication of the notice, the director shall mail, postage prepaid, to each depositor in the Oregon stock bank whose deposit has been segregated as provided by ORS 711.635 a copy of the notice addressed to the last-known address of each depositor as shown by the records of the Oregon stock bank. (4) The director shall hand a copy of the notice to every depositor making a deposit in the Oregon stock bank after the date of the newspaper publication and up to the time the suspension or restriction on the payment of liabilities of the Oregon stock bank is removed. [1973 c.797 298; 1997 c.631 258]
If the Director of the Department of Consumer and Business Services removes the restrictions or suspensions on the payment of liabilities of any Oregon stock bank and surrenders possession of the assets and properties of the Oregon stock bank to the proper officers of the Oregon stock bank, before the 10 days notice provided for by ORS 711.645 has been given, the Oregon stock bank shall keep deposits segregated under ORS 711.635 separate and apart from its other assets until the notice has been given by the Oregon stock bank in the manner provided in ORS 711.645. After the notice has been given, the segregated deposits shall become general deposits and may be mingled with the other assets of the Oregon stock bank and the provisions of ORS 711.635 with respect to segregation of deposits shall no longer apply. [1973 c.797 299; 1997 c.631 259]
Nothing in ORS 711.620 to 711.670 prevents the assignment of a suspended deposit liability or the application of all or a part of a suspended deposit to payment at maturity of any indebtedness of the depositor to the Oregon stock bank that existed at the time the suspension became effective, but a deposit liability subsequently assigned may not be so applied. [1973 c.797 300; 1997 c.631 260]
While the payment of the liabilities of any Oregon stock bank is suspended or restricted under ORS 711.620, an assignment or transfer of the capital stock of the Oregon stock bank is invalid. [1973 c.797 301; 1997 c.631 261]
An order of the Director of the Department of Consumer and Business Services under ORS 711.620 to 711.670 or the taking possession of the assets and properties of an Oregon stock bank by the director under ORS 711.620 to 711.670 is not an act of insolvency of the Oregon stock bank and does not raise any presumption of insolvency. [1973 c.797 302; 1997 c.631 262]
Compliance with the terms and conditions of ORS 711.620 to 711.670 and orders and rules promulgated as a result of ORS 711.620 to 711.670 is a complete defense to any suit or action brought by any depositor or creditor against an Oregon stock bank with respect to any deposit or contract liability. [1973 c.797 303; 1997 c.631 263]
Any person who violates ORS 711.415 shall forfeit and pay to the State Treasurer to be deposited in the Consumer and Business Services Fund a civil penalty in an amount determined by the Director of the Department of Consumer and Business Services of not more than $2,500 for each offense. The civil penalty may be recovered as provided in ORS 706.980. [1975 c.544 40]
(1) Every activity that an out-of-state bank or extranational institution engages in while conducting a banking business in this state is subject to the applicable provisions of the Bank Act. (2) Unless the laws of the out-of-state banks home state limit the powers and authorities of the out-of-state bank, an out-of-state bank that opens, occupies or maintains a branch in this state pursuant to and in accordance with the requirements of ORS 713.270 and that has a certificate of authority from the Director of the Department of Consumer and Business Services to conduct banking business in this state under ORS 713.020 and 713.140 to 713.160 has the same powers and authorities to engage in an activity in this state that an Oregon bank has under the laws of this state, except that an out-of-state bank may not transact trust business in this state unless the out-of-state bank complies with ORS chapter 709. [Amended by 1965 c.170 2; 1967 c.333 1; 1973 c.797 307; 1975 c.725 8; 1979 c.88 13; 1997 c.631 283; 2011 c.263 2; 2015 c.244 85]
(1) An out-of-state bank may not conduct banking business in this state unless the Federal Deposit Insurance Corporation insures the out-of-state banks insurable deposits and the out-of-state bank has received a certificate of authority to conduct banking business pursuant to ORS 713.020 and 713.140 to 713.160. (2) An extranational institution may not conduct banking business in this state unless the extranational institution complies with the requirements of ORS 713.025. This subsection and ORS 713.025 do not apply to an extranational institution that has a branch office in this state and was lawfully conducting banking business on December 31, 1966. [1973 c.797 309; 1975 c.725 10; 1997 c.631 286; 2011 c.263 3]
The Director of the Department of Consumer and Business Services shall issue a certificate of authority to conduct banking business in this state to an out-of-state bank or extranational institution that applies for the certificate under ORS 713.140 and that otherwise complies with the requirements of this chapter. [Amended by 1965 c.170 3; 1973 c.797 310; 1975 c.725 11; 1983 c.37 23; 1987 c.197 8; 1989 c.324 55; 1991 c.67 190; 1997 c.631 287; 2011 c.263 4]
(1) Except as provided in subsection (4) of this section and ORS 713.300, every extranational institution with one or more offices in this state shall deposit with the Director of the Department of Consumer and Business Services in an office located in this state of another bank approved by the director under an agreement satisfactory to the director for the protection of depositors of the extranational institution, free and clear of all other liens and encumbrances, assets in an amount set forth in subsection (2) of this section of the following types: (a) Cash; (b) Interest-bearing bonds, notes or obligations of the United States, including those of its agencies and instrumentalities, or bonds, notes or obligations for which the faith of the United States is pledged for the payment of the principal and interest; (c) Bonds or other obligations of the State of Oregon, any county of this state or any incorporated city, town or school or port district of this state having a population of not less than 2,000 as shown by the last federal census, or bonds of any other state, any county, incorporated city, town or school or port district therein having a population of not less than 25,000, as shown by the last federal census, if: (A) The bonds or obligations are issued in compliance with the constitution and laws of the applicable state; (B) The bonds or obligations are general obligations of the state, city, town or school or port district issuing the bonds; and (C) There has been no default in payment of either principal or interest on any of the general obligations of the state, county, incorporated city, town or school or port district for a period of five years preceding the date of the deposit; (d) A surety bond issued by a surety company authorized to transact business in this state and in a form approved by the director, under which the principal and surety indemnify the depositors and creditors of the extranational institution against loss due to nonpayment by the extranational institution, including by reason of the failure of the extranational institution; (e) An irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, satisfactory to the director; or (f) Any combination of cash, securities complying with subsection (1)(b) and (c) of this section, surety bonds complying with subsection (1)(d) of this section, and letters of credit complying with subsection (1)(e) of this section. (2) The market value of the assets deposited pursuant to subsection (1) of this section shall be not less than: (a) Five percent of the total liabilities of the office including acceptances, but excluding accrued expenses and amounts due to and other liabilities of offices, branches, agencies and subsidiaries of the extranational institution; or (b) Such other amount as the director may determine to be necessary for the protection of depositors and the public interest. (3) The director shall determine the value of the assets maintained for the purposes of this section and shall value marketable securities according to accepted principles of accounting. (4) The deposit requirements of subsection (1) of this section shall not apply to an office of an extranational institution that is an insured branch as defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)). [1975 c.725 3; 1997 c.631 290; 1999 c.30 5]
If at the close of any banking day an extranational institution does not have on deposit the assets required to be maintained under ORS 713.025, the managing officer in charge of the office of the extranational institution shall immediately notify the Director of the Department of Consumer and Business Services and the main office of the extranational institution of the deficit. The extranational institution shall have three banking days to eliminate the deficiency. If the deficiency is not eliminated within the three-day period, the extranational institution is prohibited from conducting banking business, making loans, issuing letters of credit or accepting drafts or bills of exchange and the director may revoke its certificate of authority. [1975 c.725 4; 1997 c.631 291]
(1) If an extranational institution becomes insolvent or goes into voluntary or involuntary liquidation or cannot otherwise pay its deposit or other liabilities, the Director of the Department of Consumer and Business Services may take possession of the assets required to be deposited under ORS 713.025 directly or through the appointment of a receiver, free of any liens and other claims. The assets shall be held by the director or receiver in trust. (2) Unless the deposited assets are delivered to the Federal Deposit Insurance Corporation as receiver, the amount available for distribution to the depositors under subsection (1) of this section shall be allocated to the depositors of the office pro rata to the extent of their deposits. (3) Any additional deposited assets remaining after the distributions to depositors provided for in subsection (2) of this section shall be available for distribution to the other creditors of the extranational institution in accordance with ORS 711.530 to 711.570. (4) As used in this section, the term "depositor" has the meaning given that term in ORS 711.515. [1975 c.725 5; 1997 c.631 292; 2007 c.71 231]
(1) An out-of-state bank or extranational institution that conducts banking business in this state shall file reports under oath with the Director of the Department of Consumer and Business Services in the form and giving the information the director requires. (2) An out-of-state bank or extranational institution that conducts banking business in this state is subject to the fee provided in ORS 706.530 and to examination and regulation in the manner provided in ORS 706.500. (3) This section does not apply to a federal bank. [Amended by 1973 c.797 317; 1975 c.725 15; 1997 c.631 293; 1999 c.59 222; 2011 c.263 5]
(1) Except as provided in subsection (2) of this section, the Director of the Department of Consumer and Business Services may not issue a certificate of authority to an out-of-state bank or extranational institution if the name of the out-of-state bank or extranational institution is not distinguishable from: (a) The name of any banking institution, insured institution, extranational institution that has complied with the provisions of ORS 713.020 or 713.300 or credit union, as defined in ORS 723.008; or (b)(A) The name of any corporation, professional corporation, nonprofit corporation, cooperative, limited liability company, limited partnership or business trust currently on file with the Secretary of State; or (B) Any reserved, registered or assumed business name currently on file with the Secretary of State. (2) The director may refuse to permit an out-of-state bank or extranational institution to use a name if the director determines that the name is not distinguishable from the name of a financial institution that is already lawfully transacting business or making loans in this state. (3)(a) Except as provided in paragraph (b) of this subsection, this section does not preclude an out-of-state bank or extranational institution from transacting business under one or more assumed business names if the names conform to the provisions of ORS 707.075. (b) An out-of-state bank or extranational institution may not transact business under a name that the director determines is not distinguishable from: (A) The name of any banking institution, insured institution, extranational institution that has complied with the provisions of ORS 713.020 or 713.300 or credit union, as defined in ORS 723.008; or (B) The name of a corporation, professional corporation, nonprofit corporation, cooperative, limited liability company, limited partnership or business trust or any reserved, registered or assumed business name on file with the Secretary of State. (c) The name designated under this section has the same legal effect under ORS 707.075 and ORS chapters 647 and 648 as the name of an Oregon bank. (d) Issuing the certificate of authority does not abrogate or limit the law as to unfair competition or unfair trade practices or derogate from the common law, the principles of equity or the statutes of this state or of the United States with respect to the right to acquire and protect trade names, trademarks and service marks. [1989 c.324 58; 1997 c.631 294; 2011 c.263 6; 2015 c.244 86]
(1) To procure a certificate of authority to conduct banking business in this state, an out-of-state bank or extranational institution shall apply to the Director of the Department of Consumer and Business Services. The application must state: (a) The name, in accordance with the provisions of ORS 713.130. (b) The state or country under the laws of which the out-of-state bank or extranational institution is organized. (c) The date of organization. (d) The period of duration of the out-of-state bank or extranational institution, if the duration is not perpetual. (e) A mailing address to which the director may send notices. (f) The address of the main office of the out-of-state bank or extranational institution in the state or country under the laws of which the out-of-state bank or extranational institution is organized. (g) The name of the proposed registered agent and the street address in this state of the proposed registered office that will receive service of process for the out-of-state bank or extranational institution. (h) The names and addresses of the president and secretary of the out-of-state bank or extranational institution. (i) Additional information that the director by rule requires. (2) The director may prescribe and furnish forms for the application. The president or a vice president and secretary or an assistant secretary of the out-of-state bank or extranational institution shall sign the application. (3) The out-of-state bank or extranational institution shall also take the steps necessary to become authorized to transact business: (a) If a corporation, as a foreign corporation under ORS chapter 60; (b) If a limited partnership, as a foreign limited partnership under ORS chapter 70; (c) If a limited liability company, as a foreign limited liability company under ORS chapter 63; or (d) If a business trust, as a business trust under ORS 128.560 to 128.600. (4) If the out-of-state bank is an unincorporated company, partnership or association, the out-of-state bank shall register the out-of-state banks name as an assumed business name as provided in ORS chapter 648. [1989 c.324 59; 1997 c.631 295; 2011 c.263 7]
(1) An out-of-state bank or extranational institution shall submit an application for a certificate of authority, together with an application fee of $2,500, to the Director of the Department of Consumer and Business Services for filing. The out-of-state bank or extranational institution shall also deliver with the completed application a certificate of existence or a document of similar import, duly authenticated by the official with custody of records in the state or country under whose law the out-of-state bank or extranational institution is organized and a copy of the documents filed with the Secretary of State to comply with ORS 713.140 (3). (2) If the director finds that the application conforms to this chapter, the director, when all fees and charges have been paid, shall issue and return to the sender a certificate of authority to conduct banking business in this state with the copy of the filed application. [1989 c.324 60; 1997 c.631 296; 2011 c.263 8]
After the Director of the Department of Consumer and Business Services issues a certificate of authority, the out-of-state bank or extranational institution is authorized to conduct banking business in this state, subject, however, to the right of this state to suspend or revoke the authority as provided in ORS 713.230. [1989 c.324 61; 1997 c.631 297; 2011 c.263 9]
An out-of-state state bank or extranational institution authorized to conduct banking business in this state shall have and continuously maintain in this state: (1) A registered office that may be, but need not be, the same as the out-of-state state banks or extranational institutions place of business in this state. (2) A registered agent in compliance with the requirements imposed by ORS 713.140 (3). [1989 c.324 62; 1997 c.631 298; 2011 c.263 10]
(1) A registered agent appointed by an out-of-state bank or extranational institution authorized to transact business in this state must be an agent of the out-of-state bank or extranational institution upon which may be served process, notice or demand required or permitted by law to be served upon the out-of-state bank or extranational institution. (2) The Director of the Department of Consumer and Business Services is an agent of an out-of-state bank or extranational institution upon which process, notice or demand may be served, if: (a) The out-of-state bank or extranational institution is authorized to conduct banking business in this state, and: (A) The out-of-state bank or extranational institution fails to appoint or maintain a registered agent in this state; (B) The registered agent that the out-of-state bank or extranational institution appointed cannot with reasonable diligence be found at the registered office; (C) The certificate of authority for the out-of-state bank or extranational institution has been suspended or revoked; or (D) The out-of-state bank or extranational institution is an unincorporated company, partnership or association; (b) The out-of-state bank or extranational institution is conducting banking business in this state without the authorization required under this chapter; (c) The out-of-state bank or extranational institution has been authorized to conduct banking business in this state and has withdrawn and consented to service on the director as prescribed in this chapter; or (d) The out-of-state bank or extranational institution has conducted banking business in this state without the authorization to do so, has ceased to conduct banking business and has become subject to service on the director as prescribed in this chapter. (3)(a) Except as provided in subsection (4) of this section, service of process, notice or demand must be made on the director by: (A) Serving the director or a clerk on duty in an office of the director with a copy of the process, notice or demand and papers required by law to be delivered in connection with the service, or by mailing to the director a copy of the process, notice or demand by certified or registered mail, and paying a $25 fee for each document being served; or (B) Transmitting notice of the service from the person that initiates the proceedings to the director and transmitting, by certified or registered mail, a copy of the process, notice or demand and accompanying papers to the out-of-state bank or extranational institution being served: (i) At the last-registered office of the out-of-state bank or extranational institution as shown by the records of the director; or (ii) At an address that the person that initiates the proceedings knows or, on the basis of reasonable inquiry, has reason to believe is most likely to result in actual notice. (b) The person that initiates the proceedings shall file with the appropriate court or other body, as part of the return of service, the return receipt of mailing and an affidavit that states that the person complied with this section. (4) If the out-of-state bank or extranational institution that is being served with the process, notice or demand is not authorized to conduct banking business in this state and was not authorized to conduct banking business in this state at the time the transaction, event or occurrence upon which the suit or proceeding is based occurred, service must be made in accordance with subsection (3) of this section, except that the plaintiff or the plaintiffs attorney shall immediately send a copy of the process, notice or demand by registered or certified mail to the principal office or place of business of the out-of-state bank or extranational institution, instead of the last-registered office of the out-of-state bank or extranational institution. (5) The director shall keep a record of all processes, notices and demands served upon the director under this section. (6) This section does not limit or affect the right to serve process, notice or demand required or permitted by law to be served upon an out-of-state bank or extranational institution in a manner permitted by law, or enlarge the purposes for which service on the director is permitted where other provisions of law limit such purposes. [1989 c.324 64; 1997 c.631 299; 2011 c.263 11]
(1) An out-of-state bank or extranational institution that has a certificate of authority to conduct banking business in this state shall deliver copies of documents that the out-of-state bank or extranational institution filed with the Secretary of State pursuant to ORS chapters 60, 63, 70 and 648 and ORS 128.560 to 128.600 to the Director of the Department of Consumer and Business Services promptly after filing the documents with the Secretary of State. (2) If an out-of-state bank or an extranational institution that has a certificate of authority to conduct banking business in this state changes the out-of-state banks or extranational institutions name or duration, the out-of-state bank or extranational institution shall apply to the director to amend the certificate of authority. (3) The requirements for signing and submitting the application described in subsection (2) of this section to the director and that prescribe the form and contents of the application are the same as in the case of an original application for a certificate of authority under ORS 713.140. Filing the application for the amended certificate of authority by the director has the same legal effect as filing the original certificate of authority. [1989 c.324 65; 1997 c.631 300; 2011 c.263 12]
(1) An out-of-state bank or extranational institution that has a certificate of authority to conduct banking business in this state may withdraw from this state by applying to the Director of the Department of Consumer and Business Services to withdraw. An application to withdraw must set forth: (a) The name of the out-of-state bank or extranational institution and the state or country under the laws of which the out-of-state bank or extranational institution is organized. (b) A statement that the out-of-state bank or extranational institution no longer conducts banking business in this state. (c) A statement that the out-of-state bank or extranational institution surrenders authority to conduct banking business in this state. (d) A statement that the out-of-state bank or extranational institution revokes the authority of the out-of-state banks or extranational institutions registered agent in this state to accept service of process, notice or demand and authorizes the director to accept on the out-of-state banks or extranational institutions behalf service of process, notice or demand in any action, suit or proceeding based upon a transaction, event or occurrence that took place in this state before the filing of the application to withdraw. (e) A mailing address to which a person that initiates proceedings may mail a copy of process, notice or demand that has been served on the director, to the out-of-state bank or extranational institution. (f) Additional information that is necessary or appropriate to enable the director to determine and assess unpaid fees or charges payable by the out-of-state bank or extranational institution as prescribed in the Bank Act. (2) The out-of-state bank or extranational institution may apply for withdrawal on forms the director prescribes or furnishes. The president or vice-president and secretary or assistant secretary of the out-of-state bank or extranational institution shall sign the application and one of the officers signing the application shall verify the application or, if the out-of-state bank or extranational institution is in the hands of a receiver or trustee, the receiver or trustee shall sign and verify the application on behalf of the out-of-state bank or extranational institution. (3) An out-of-state bank or extranational institution that conducted banking business in this state without the authorization provided by this chapter is subject to service after ceasing to conduct banking business in this state in the same manner as though the out-of-state bank or extranational institution was authorized to conduct banking business, later withdrew and, in connection with the withdrawal, filed an authorization for service in the manner required by subsection (1)(d) of this section. [1989 c.324 66; 1997 c.631 301; 2011 c.263 13]
(1) An out-of-state bank or extranational institution that applies to withdraw from this state under ORS 713.210 must deliver the application to the Director of the Department of Consumer and Business Services. If the director finds that the application conforms to the provisions of this chapter, the director, when all fees and charges have been paid, shall file the application to withdraw and return the copy marked "Filed" to the sender. (2) The authority of the out-of-state bank or extranational institution to conduct banking business in this state ceases when the application to withdraw is filed. [1989 c.324 67; 1997 c.631 302; 2011 c.263 14]
A certificate of authority for an out-of-state bank or extranational institution to conduct banking business in this state may be revoked if the out-of-state bank or extranational institution: (1) Failed to file a report or pay a fee required under the Bank Act; (2) Failed to appoint or maintain a registered agent or office in this state as required by ORS 713.170 or failed to maintain authority to transact business as required by ORS 713.140 (3); (3) Changed the out-of-state banks or extranational institutions registered office or registered agent and failed to submit a statement of the change to the Director of the Department of Consumer and Business Services as required by ORS 713.200 (1); (4) Misrepresented or allowed a misrepresentation of a material matter in an application, report, affidavit or other document that the out-of-state bank or extranational institution submitted pursuant to the Bank Act; (5) Failed to submit for filing an application to amend the out-of-state banks or extranational institutions certificate of authority as required by ORS 713.200 (2); or (6) Failed to submit for filing a certificate of merger or consolidation as required by ORS 713.260. [1989 c.324 68; 1997 c.631 303; 2011 c.263 15]
(1) If an out-of-state bank or extranational institution has given cause for revocation of a certificate of authority as provided in ORS 713.230 and has failed to correct the neglect, omission, misrepresentation or delinquency, the Director of the Department of Consumer and Business Services may revoke the right of the out-of-state bank or extranational institution to conduct banking business in this state. The director shall mail a notice of the revocation to the mailing address shown for the out-of-state bank or extranational institution in the current records of the director and to the out-of-state bank or extranational institution at the registered office for the out-of-state bank or extranational institution in this state or the principal office in the out-of-state banks or extranational institutions home state or country. (2) After the director revokes the certificate of authority, all powers that this state conferred upon the out-of-state bank or extranational institution cease, and thereafter a person may not exercise or attempt to exercise power under the revoked certificate of authority in this state. (3) If the director is satisfied that an out-of-state bank or extranational institution that has had a certificate of authority revoked under subsection (1) of this section has corrected the cause for revocation, the director shall restore the out-of-state banks or extranational institutions former rights and privileges in the same manner as the director revoked the authority of the out-of-state bank or extranational institution. (4) An out-of-state bank or extranational institution previously authorized to conduct banking business in this state that has had a certificate of authority revoked and that has corrected the cause for revocation under subsection (1) of this section may apply to reinstate the certificate of authority within two years after the date of revocation. The out-of-state bank or extranational institution shall pay all fees that accrued before the director revoked the certificate of authority and a reinstatement filing fee of $100. The payment must accompany the application for reinstatement. If the director is satisfied that the out-of-state bank or extranational institution has corrected the cause for revocation, the director shall file the application for reinstatement, which entitles the out-of-state bank or extranational institution to resume business in this state. The director may not file the application for reinstatement unless the name of the out-of-state bank or extranational institution conforms to ORS 713.130 and the application is filed within two years after the date of revocation. (5) Reinstatement under this section relates back to and takes effect as of the effective date of the revocation of the certificate of authority, so that the existence of the out-of-state bank or extranational institution is deemed to have continued without interruption from that date. [1989 c.324 69; 1997 c.631 304; 2011 c.263 16]
(1) An out-of-state bank or extranational institution that conducts banking business in this state without a certificate of authority may not maintain an action, suit or proceeding in a court of this state until the out-of-state bank or extranational institution obtains a certificate of authority. (2) An out-of-state banks or extranational institutions failure to obtain a certificate of authority to conduct banking business in this state does not impair the validity of a contract or an act of the out-of-state bank or extranational institution, and does not prevent the out-of-state bank or extranational institution from defending an action, suit or proceeding in a court of this state. (3) An out-of-state bank or extranational institution that conducts banking business in this state without a certificate of authority is liable to this state for the years or partial years during which the out-of-state bank or extranational institution conducted banking business in this state without a certificate of authority. The amount of the liability is equal to all fees, assessments and other charges that the out-of-state bank or extranational institution would have paid under the Bank Act had the out-of-state bank or extranational institution duly applied for and received a certificate of authority to conduct banking business in this state and filed all reports required under the Bank Act, plus all penalties imposed under the Bank Act for failure to pay the fees and charges. The Attorney General may bring proceedings to recover amounts due this state under the provisions of this section. [1989 c.324 70; 1997 c.631 305; 2011 c.263 17]
If an out-of-state bank or extranational institution that has a certificate of authority under ORS 713.020 ceases to exist because of a statutory merger or consolidation with any other out-of-state bank, an extranational institution or other entity, the resulting institution shall, within 60 days after the effective date of the merger or consolidation, file with the Director of the Department of Consumer and Business Services a certificate from the appropriate public officer of the state, territory or country under the laws of which the out-of-state bank or extranational institution is organized, or other evidence satisfactory to the director to the effect that the out-of-state bank or extranational institution has merged or consolidated and has ceased to exist. [1989 c.324 71; 1997 c.631 306; 2011 c.263 18]
(1) An out-of-state bank, including a savings bank organized under the laws of another state, may open, occupy or maintain a branch in this state that results from: (a) Acquiring another bank or branch of another bank that is located in this state; or (b) Merging with or converting from another bank or branch of another bank that is located in this state. (2) An out-of-state bank may conduct banking business in this state under the provisions of subsection (1) of this section or by opening one or more de novo branches in this state if the laws of the jurisdiction in which the out-of-state banks principal office is located expressly permit an Oregon bank to open one or more de novo branches in the jurisdiction under conditions that are not more restrictive than the conditions this chapter imposes on an out-of-state bank. (3) An out-of-state bank must submit an application for a certificate of authority to conduct banking business in this state to the Director of the Department of Consumer and Business Services at the time that the out-of-state bank files with the out-of-state banks home state or primary federal regulator for approval to open, occupy or maintain a branch in this state. (4) At the time the out-of-state bank applies for a certificate of authority, the out-of-state bank must pay the application fee prescribed in ORS 713.150. (5) If the director authorizes an out-of-state bank to open, occupy or maintain a branch in this state, the out-of-state bank may exercise the powers and authorities that the laws of this state authorize for Oregon banks unless the laws of the out-of-state banks home state limit the powers and authorities. (6) If the director determines that an out-of-state banks opening, occupying or maintaining of a branch in this state is not consistent with the laws of this state or that the branch would operate in an unsafe or unsound manner, the director shall notify the out-of-state bank that: (a) The director has denied the out-of-state banks application for a certificate of authority to conduct banking business in this state; and (b) The out-of-state bank may not conduct banking business at a branch located in this state. (7) If the director determines that a branch that an out-of-state bank maintains in this state is being operated in violation of the laws of this state or that the branch is being operated in an unsafe or unsound manner, the director may take all enforcement actions the director could take with respect to an Oregon bank, except that the director shall notify the responsible bank supervisory agency of each enforcement action the director takes and, to the extent practicable, shall consult and cooperate with the responsible bank supervisory agency in pursuing and resolving the enforcement action. [1997 c.631 284; 2011 c.263 19]
The Director of the Department of Consumer and Business Services may not deny a certificate of authority to an out-of-state bank or extranational institution solely because the laws of the state or country under which the out-of-state bank or extranational institution is organized, or the laws that govern the organization and internal affairs of the out-of-state bank or extranational institution, differ from the laws of this state. This chapter does not authorize this state to regulate the organization or internal affairs of an out-of-state bank or extranational institution. [1997 c.631 285; 2011 c.263 20]
An extranational institution may not accept deposits at an office in this state in an amount less than $250,000, unless the Federal Deposit Insurance Corporation insures the insurable deposits of the office or the Federal Deposit Insurance Act and the regulations of the Federal Deposit Insurance Corporation do not require insurance. [1997 c.631 289; 2011 c.263 21]
(1) For purposes of this section, "foreign association" means a corporation organized to transact savings and loan business under federal law or under the laws of another state or territory of the United States, the home state or territory of which is a state or territory other than Oregon. (2) Subject to subsection (3) of this section, an out-of-state bank, extranational institution or foreign association, without being authorized to transact banking business or savings and loan business in this state, may take, acquire, hold and enforce notes secured by mortgages or trust deeds and make commitments to purchase the notes. The out-of-state bank, extranational institution or foreign association may foreclose the mortgages or trust deeds in the courts of this state, acquire the mortgaged property, hold, own and operate the property for a period not exceeding five years and dispose of the property. The activities that this subsection authorizes an out-of-state bank, extranational institution or foreign association to engage in do not constitute transacting business in this state for the purposes of ORS chapter 60. (3) Before an out-of-state bank, extranational institution or foreign association engages in an activity described in subsection (2) of this section, the out-of-state bank, extranational institution or foreign association shall first file with the Department of Consumer and Business Services a notice that states that the out-of-state bank, extranational institution or foreign association intends to engage in one or more of the activities described in subsection (2) of this section. The out-of-state bank, extranational institution or foreign association shall pay an initial filing fee of $200 and an annual fee of $200. The notice must include the address of the principal place of business of the out-of-state bank, extranational institution or foreign association. (4) An out-of-state bank, extranational institution or foreign association that is authorized to transact banking business in this state under ORS 713.160 need not comply with subsection (3) of this section. (5) An out-of-state bank, extranational institution or foreign association that indirectly engages in the activities described in subsection (2) of this section because of a beneficial interest in a pool of notes secured by mortgages or trust deeds need not comply with subsection (3) of this section. [1999 c.30 4; 2009 c.541 32; 2015 c.244 87; 2017 c.209 1]
The Director of the Department of Consumer and Business Services may impose on any person that violates any provision of this chapter a civil penalty of up to $1,000 for each day during which the offense continues. The penalty shall be assessed and collected in the manner prescribed in ORS 706.570 (3). [1997 c.631 308; 2015 c.244 88]
Banking institutions shall not establish or maintain branches except as expressly authorized in ORS 714.025 to 714.079 and 714.995. [1997 c.631 312]
(1)(a) A banking institution may establish and operate one or more branches within or outside this state. Not later than 30 days before the board of directors of a banking institution establishes a branch, the banking institution shall file a notice with the Director of the Department of Consumer and Business Services that sets forth the name of the banking institution, the proposed location of the branch and the date on which the branch will begin operating. The director shall promptly advise the banking institution if the notice is incomplete or if the director requires additional information. (b) The director may limit or restrict a banking institutions ability to establish an additional branch if the director determines that establishing an additional branch would adversely affect the banking institutions safety and soundness. A banking institution may appeal the directors decision in a contested case proceeding in accordance with ORS chapter 183. (2) Mobile banking facilities described in ORS 714.035 and temporary branches are branches for purposes of this section. A temporary branch is a branch that operates for a period not to exceed 60 days, a period that may not be extended. The application fee for a temporary branch is $100. The director may establish rules regarding temporary branches. (3) Branches to be located in other countries or to be located in dependencies or insular possessions of the United States are subject to the requirements of this section and ORS 714.045. [1997 c.631 313; 2015 c.244 88a]
A banking institution may, in accordance with ORS 714.025, establish one or more mobile facilities to engage in the banking business or to transact trust business. Mobile banking facilities may operate within this state and in other states. [1997 c.631 314; 2015 c.244 88b]
(1) A banking institution may establish branches in foreign countries or dependencies or insular possessions of the United States in accordance with ORS 714.025 if it possesses stockholders equity of at least $1 million. (2) A banking institution operating such branches shall furnish information concerning the condition of the branches to the Director of the Department of Consumer and Business Services upon demand. (3) The director may order special examinations of such branches. (4) The director may promulgate rules regarding such branches pursuant to ORS 183.310, 183.315, 183.330, 183.335, 183.341 and 183.410. [1997 c.631 315]
The Director of the Department of Consumer and Business Services shall investigate each notice that a banking institution files under ORS 714.025. With respect to notices for branches that the banking institution will locate outside this state, the director shall promptly provide the local bank supervisory agency or regulator with a copy of the notice and an opportunity to comment on the notice. The director is not bound by the local bank supervisory agencys or regulators comments. [1997 c.631 316; 2015 c.244 88c]
With respect to notices to establish branches in this state or another state, the Director of the Department of Consumer and Business Services may limit or restrict a banking institutions ability to establish a branch, except that the directors failure to limit or restrict the banking institutions ability to establish the branch within 30 days after receiving a complete notice is a decision not to limit or restrict the banking institutions ability to establish the branch. With respect to notices by banking institutions to establish branches in foreign countries or dependencies or insular possessions of the United States, the director may limit or restrict a banking institutions ability to establish a branch, except that the directors failure to limit or restrict the banking institutions ability to establish the branch within 90 days after receiving a complete notice is a decision not to limit or restrict the banking institutions ability to establish a branch. [1997 c.631 317; 2015 c.244 88d]
At a banking institutions request, the Director of the Department of Consumer and Business Services shall issue and deliver a certificate to authorize each branch for which the banking institution has given notice under ORS 714.025 to conduct business. [1997 c.631 318; 2015 c.244 88e]
A branch shall commence business within one year after the banking institution files notice with the Director of the Department of Consumer and Business Services under ORS 714.025. The director may extend for one additional year the period within which the banking institution may establish the branch. If a branch fails to commence business within the year or any extension of time the director grants, the director shall deem the banking institution to have withdrawn the notice and the branch may not open or operate. [1997 c.631 319; 2015 c.244 88f]
(1) A banking institution may exercise the same powers and engage in the same activities at a branch or branches located in states outside this state as are permitted the banking institution within this state. (2) A banking institution may exercise the same powers and engage in the same activities at a branch or branches located in foreign countries and dependencies or insular possessions of the United States as are permitted the banking institution within this state and in addition may exercise such additional powers as are permitted to such branches under 12 C.F.R. 211.3(b), 12 C.F.R. 347.3(c) and other applicable federal law. This subsection shall not be construed to permit a banking institution that opens, occupies or maintains one or more branches in a foreign country or dependency or insular possession of the United States to use the branch or branches or engage in any activities within this state that are not permitted to the banking institution under the laws of this state. [1997 c.631 320]
Upon the call for a report of condition by the Director of the Department of Consumer and Business Services: (1) Each Oregon commercial bank and Oregon savings bank shall report to the director the total deposits held at each of its branches; and (2) Each non-Oregon institution and each federal bank that in either case holds deposits of the State of Oregon or any political subdivision thereof, or that underwrites bonds or other debt instruments issued by the state or any political subdivision thereof, shall report to the director the total deposits held at each of its branches located in the State of Oregon. [1997 c.631 321]
A banking institution may close and relocate branches provided the banking institution provides the Director of the Department of Consumer and Business Services with a copy of any notice required under 12 U.S.C. 1831r-1(a), or comparable federal law, at the time and in the form required by such law or laws. [1997 c.631 322]
(1) An out-of-state bank may occupy and maintain the out-of-state banks initial branches in this state if and only if the out-of-state bank acquires the branches in accordance with ORS chapters 711 and 713. (2) An out-of-state bank that is properly occupying and maintaining one or more branches in this state in accordance with ORS chapters 711 and 713 may thereafter open, occupy and maintain one or more additional branches in this state. (3) An out-of-state bank that acquires branches in accordance with ORS chapters 711 and 713 is entitled to exercise powers and engage in activities at the out-of-state banks branches in this state as provided in ORS 713.010 and applicable federal law. [1997 c.631 324; 2015 c.244 88g]
(1) An extranational banking institution may occupy and maintain branches in this state as permitted by ORS chapter 713 and applicable federal law. (2) An extranational banking institution may exercise powers and engage in activities at branches located in this state as permitted by ORS chapter 713 and applicable federal law. [1997 c.631 325]
(1) If the operator of an ATM charges a fee to any person to use the ATM, the operator shall disclose to persons using the ATM that a fee will be imposed for the ATM transaction. (2) Subject to subsection (3) of this section, the disclosure required under subsection (1) of this section shall be made electronically during the ATM transaction and shall allow the person who will be charged a fee to cancel the ATM transaction without incurring a fee. The disclosure shall also be printed on the ATM transaction receipt. (3) The Director of the Department of Consumer and Business Services may adopt rules conforming the disclosure requirements of subsection (2) of this section to disclosure requirements contained in: (a) Any law enacted by the Congress of the United States; or (b) Any regulation adopted by any federal agency having regulatory authority over ATMs. [1997 c.631 310b]
(1) A banking institution, through its own facilities or those of an entity described in ORS 708A.160, may make available for use by its customers and others one or more ATMs. Every transaction initiated through an ATM shall be subject to verification by the banking institution either by direct wire transmission or otherwise. (2) ORS 714.025 does not apply to the establishment and maintenance of ATMs. [1975 c.193 3; 1993 c.381 2; 1997 c.631 309]
No person shall use or attempt to use an ATM facility for the purpose of obtaining any information concerning an account or line of credit other than the persons own account or line of credit without the prior approval of an authorized signer on the account or line of credit. No person having received prior approval of the customer shall utilize such authority to obtain through the use of the ATM any information not necessary to the transaction which the customer seeks to accomplish through its use. [1975 c.193 9; 1993 c.381 7; 1997 c.631 310]
(1) It is the intent of the Legislative Assembly in enacting ORS 714.280 to 714.315 to enhance the safety of consumers using ATMs and night deposit facilities in Oregon without discouraging the siting of ATMs and night deposit facilities in locations convenient to consumers homes and workplaces. Since decisions concerning safety at ATMs and night deposit facilities are inherently subjective, the Legislative Assembly intends to establish as the standard of care applicable to operators of ATMs and night deposit facilities in connection with user safety, the compliance with the objective standards and information requirements of ORS 714.280 to 714.315. The Legislative Assembly further recognizes the need for uniformity as to the establishment of safety standards for ATMs and night deposit facilities and intends with ORS 714.280 to 714.315 to supersede and preempt any rule, regulation, code or ordinance of any city, county, municipality or local agency regarding customer safety at ATMs and night deposit facilities in this state. (2) It is not the intent of the Legislative Assembly in enacting ORS 714.280 to 714.315 to impose a duty to relocate or modify ATMs or night deposit facilities upon the occurrence of any particular events or circumstances, but rather to establish a means for the evaluation of all ATMs and night deposit facilities as provided in ORS 714.210 to 714.992. [1993 c.381 9,11]
Before installing any ATM or night deposit facility, the operator shall adopt procedures for evaluating the safety of the ATM or night deposit facility. For ATMs and night deposit facilities installed on or before July 1, 1994, operators shall adopt procedures not later than July 1, 1994. The procedures shall include a consideration of the following: (1) The extent to which the lighting for the ATM or night deposit facility complies or will comply with the standards required by ORS 714.290 and 714.295. (2) The presence of landscaping, vegetation or other obstructions in the area of the ATM or night deposit facility, the access area and the defined parking area. (3) The incidence of crimes of violence in the immediate neighborhood of the ATM or night deposit facility, as reflected in the records of the local law enforcement agency and of which the operator has actual knowledge. [1993 c.381 10]
(1) Each operator of an ATM or night deposit facility installed after July 1, 1994, shall comply with ORS 714.295. Compliance with ORS 714.295 by operators of ATMs and night deposit facilities existing on or before July 1, 1994, shall be optional until July 1, 1996, and mandatory thereafter. This section shall apply to an operator of an ATM or night deposit facility only to the extent that the operator controls the access area or defined parking area to be lighted. (2) If an access area or a defined parking area is not controlled by the operator of an ATM or night deposit facility, and if the person who leased the ATM or night deposit facility site to the operator controls the access area or defined parking area, the person who controls the access area or defined parking area shall comply with ORS 714.295 regarding any ATM or night deposit facility installed after July 1, 1994. Regarding any ATM or night deposit facility installed on or before July 1, 1994, the person shall comply with ORS 714.295 no later than July 1, 1996. [1993 c.381 12]
The operator, owner or other person responsible for the ATM or night deposit facility shall provide lighting during hours of darkness for an open and operating ATM or night deposit facility and any defined parking area, access area and the exterior of an enclosed ATM or night deposit facility installation according to the following standards: (1) There shall be a minimum of 10 candlefoot power at the face of the ATM or night deposit facility and extending in an unobstructed direction outward five feet. (2) There shall be a minimum of two candlefoot power within 50 feet in all unobstructed directions from the face of the ATM or night deposit facility. In the event the ATM or night deposit facility is located within 10 feet of the corner of the building and the ATM or night deposit facility is generally accessible from the adjacent side, there shall be minimum of two candlefoot power along the first 40 unobstructed feet of the adjacent side of the building. (3) There shall be a minimum of two candlefoot power in that portion of the defined parking area within 60 feet of the ATM or night deposit facility. [1993 c.381 13]
The issuers of access devices shall furnish customers receiving the devices with notices of basic safety precautions which customers should employ while using an ATM or night deposit facility. This information shall be furnished by personally delivering or by mailing the information to each customer whose mailing address as to the account to which the access device relates is in this state. This information shall be furnished with respect to access devices issued after July 1, 1994, at or before the time the customer is furnished with the customers access device. With respect to a customer to whom an access device has been issued on or before July 1, 1994, the information shall be delivered or mailed to the customer on or before December 31, 1994. Only one notice need be furnished per household, and if access devices are furnished to more than one customer for a single account or set of accounts or on the basis of a single application or other request for the access devices, only a single notice need be furnished in satisfaction of the notification responsibilities as to all those customers. The information may be included with other disclosures related to the access device furnished to the customer, such as with any initial or periodic disclosure statement furnished pursuant to the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.). [1993 c.381 14; 2021 c.97 81]
The requirements of ORS 714.280 (2) and 714.285 to 714.295 shall not apply to any ATM or night deposit facility that is: (1) Located inside of a building, unless it is a freestanding installation that exists for the sole purpose of providing an enclosure for the ATM or night deposit facility. (2) Located inside of a building, except to the extent that a transaction can be conducted from outside the building. (3) Located in any area, including any access area, building, enclosed space or parking area that is not controlled by the operator. [1993 c.381 15]
ORS 714.210 to 714.315 supersede and preempts all rules, regulations, codes, statutes or ordinances of all cities, counties, municipalities and local agencies regarding customer safety at ATMs or night deposit facilities located in Oregon. [1993 c.381 16]
Compliance with ORS 714.280 to 714.300 shall create a rebuttable presumption that the operator of the ATM or night deposit facility in question has provided adequate measures for the safety of users of the ATM or night deposit facility. [1993 c.381 17]
Violation knowingly of ORS 714.270 is a Class C felony. [1975 c.193 10]
Each day a banking institution operates a branch with respect to which the banking institution has not filed notice with the Director of the Department of Consumer and Business Services under ORS 714.025, the banking institution is subject to a penalty of up to $1,000. The penalty shall be assessed and collected as prescribed in ORS 706.570 (3). [1997 c.631 323; 2015 c.244 89]
(1) If a company proposes to become a financial holding company or a bank holding company of an Oregon stock bank, when the company files its application and any related materials with the Federal Reserve Board, the company shall submit to the Director of the Department of Consumer and Business Services copies of the application and related materials. (2) The director may submit comments and recommendations for approval or disapproval to the Federal Reserve Board concerning any application to become a financial holding company or a bank holding company of an Oregon stock bank that is filed with the Federal Reserve Board. (3) Following the filing of an application to become a financial holding company or a bank holding company and the submission to the director of the materials described in subsection (1) of this section, the company shall submit to the director copies of any written communications between itself and the Federal Reserve Board that relate to the application, including copies of any written approval or denial of the application. A copy of each such written communication shall be submitted to the director within 10 days after the original thereof is sent or received by the company. [1997 c.631 329; 2001 c.377 30]
An out-of-state financial holding company or an out-of-state bank holding company may become the financial holding company or the bank holding company of: (1) An Oregon stock bank or an in-state federal stock bank, by itself or together with any predecessor, only if the Oregon stock bank or in-state federal stock bank has been engaged in the business of banking in this state for a period of not less than three years prior to the date on which the out-of-state financial holding company or the out-of-state bank holding company becomes the financial holding company or the bank holding company of the Oregon stock bank or in-state federal stock bank. (2) An Oregon stock bank organized under ORS 707.025 that has merged with or acquired all or substantially all of the assets and liabilities of an Oregon stock bank or in-state federal stock bank, by itself or together with any predecessor, only if the Oregon stock bank or in-state federal stock bank has been engaged in the business of banking in this state for a period of not less than three years prior to the date on which the out-of-state financial holding company or the out-of-state bank holding company becomes the financial holding company or the bank holding company of the Oregon stock bank. [1997 c.631 330; 2001 c.377 31]
(1) An Oregon nonstock bank may, pursuant to rules adopted by the Director of the Department of Consumer and Business Services, reorganize so that the resulting entities are an Oregon stock savings bank, controlled by a mutual financial holding company or a mutual bank holding company. For purposes of this section, a "mutual financial holding company or a mutual bank holding company" is a financial holding company or a bank holding company that does not issue capital stock. The mutual financial holding company shall be mutually owned by the depositors of the reorganizing Oregon nonstock bank and shareholders of other companies under the control of the mutual financial holding company. The mutual bank holding company shall be mutually owned by the depositors of the reorganizing Oregon nonstock bank. (2) A mutual bank holding company may acquire or invest in the stock of one or more stock savings banks. (3) A mutual bank holding company may merge with or acquire another mutual bank holding company. (4) A mutual bank holding company formed under this section shall be subject to the provisions of this chapter. (5) The director is authorized to adopt rules to carry out the provisions of this section. [1997 c.631 330a; 2001 c.377 32]
(1) The Director of the Department of Consumer and Business Services may examine the books, accounts, records and files of a financial holding company or a bank holding company of an Oregon stock bank when the director considers it necessary to evaluate the condition of the Oregon stock bank that is a subsidiary of the financial holding company or the bank holding company. (2) The financial holding company or the bank holding company examined shall pay to the director the actual cost of the examination, as determined by the director. [1973 c.797 340; 1997 c.631 326; 2001 c.377 33]
(1) A financial holding company or a bank holding company of an Oregon stock bank shall submit to the Director of the Department of Consumer and Business Services, in a form and format specified by the director, a copy of specified reports that the financial holding company or the bank holding company is required to submit to the Federal Reserve Board. The financial holding company or bank holding company shall submit the copies to the director within the time periods required by applicable federal law and regulation for filing the originals with the Federal Reserve Board. (2) The director may call for additional information from a financial holding company or a bank holding company, in a form and format that the director may prescribe by rule or order, if the director considers the additional information necessary in order to obtain full knowledge of the condition of the Oregon stock bank that the financial holding company or the bank holding company controls. The financial holding company or the bank holding company shall submit the additional information to the director within the time period prescribed by the director. (3) If a financial holding company or a bank holding company fails to submit a report or additional information as required by this section, the financial holding company or the bank holding company shall pay to the director a penalty of up to $1,000 for each day the financial holding company or bank holding company fails to comply. If the financial holding company or the bank holding company delays or refuses to pay the penalty upon demand by the director, the director may maintain an action in the directors name against the delinquent financial holding company or bank holding company for the recovery of the penalty. [1973 c.797 341; 1997 c.631 327; 2001 c.377 34; 2009 c.541 36]
A financial holding company or a bank holding company may acquire and hold all or part of the stock of a corporation that is or may thereafter be licensed as an insurance producer as required by ORS 744.053 to transact one or more of the classes of insurance described in ORS 744.062, subject to the following requirements: (1) The acquisition and holding of such stock shall be subject to the approval of the Director of the Department of Consumer and Business Services. The director shall base consideration for approval on the condition of the financial holding company or the bank holding company, the adequacy of a formal business plan for the insurance activities and the existence of satisfactory management for the corporation. (2) The director may revoke or restrict the ongoing authority of the financial holding company or the bank holding company to hold stock in the corporation if the condition of the financial holding company or the bank holding company or of any bank owned by it substantially deteriorates or if the insurance activities are adversely affecting the financial holding company or the bank holding company or any bank owned by it. (3) For each calendar year during which a financial holding company or a bank holding company owns all or part of any corporation licensed as an insurance producer as required by ORS 744.053, the financial holding company or the bank holding company shall file a written report with the director. The report shall be filed no later than March 31 of the following year and shall disclose the insurance activities of the corporation. The required contents of the report shall be established by the director by rule. The reports filed with the director under this subsection shall be available for public inspection in the office of the director. (4) The corporation shall not in any manner use customer information obtained by the institution from another insurance producer to promote, develop or solicit insurance business for the corporation unless the other insurance producer consents to such use of the customer information. (5) The corporation shall be subject to the limitations applicable to depository institutions under ORS 746.213 to 746.219. For the purpose of this subsection, "depository institution" has the meaning given that term in ORS 746.213. [1987 c.916 4; 1989 c.331 30; 1989 c.701 66; 1997 c.831 3; 2001 c.191 54; 2001 c.377 35; 2003 c.363 9; 2003 c.364 60a; 2005 c.194 2]
(1) A financial holding company or bank holding company may share financial and credit information concerning its customers with any company of which it directly or indirectly controls 50 percent or more of the voting shares. Any company so controlled by a financial holding company or bank holding company may share information concerning its customers with the financial holding company or bank holding company and with any other company so controlled by the same financial holding company or bank holding company. This section shall not be construed as otherwise permitting or limiting the sharing or disclosure of information. (2) For purposes of this section, "customers" includes but is not limited to depositors, borrowers, credit card holders, lessees, purchasers under contracts and applicants for credit. [1985 c.357 2; 2001 c.377 36]
(1) The provisions of ORS chapter 706 relating to financial institutions, the following sections in the Bank Act and any other provisions of the Bank Act that by their terms pertain to Oregon savings banks shall apply to Oregon savings banks: ORS 707.075, 707.080, 707.090, 707.100, 707.120, 707.145, 707.150, 707.155, 707.170, 707.180, 707.252, 707.254, 707.625, 707.642, 707.646 (1), 707.660, 707.665, 707.670 to 707.764, 708A.175, 708A.405, 708A.410, 708A.420 to 708A.535, 708A.590, 708A.600, 708A.640, 708A.645, 708A.655, 708A.990, 711.405 to 711.670, 711.980 and 714.075. (2) In addition to the statutes listed in subsection (1) of this section, to the extent applicable, the following provisions of the Bank Act apply to Oregon stock savings banks: ORS 707.050, 707.110, 707.140, 707.195, 707.200 to 707.230, 707.244 to 707.250, 707.256, 707.258 to 707.272, 707.350, 707.380 to 707.410, 707.415, 707.610 to 707.623, 707.644, 707.646 (2) and 707.648. [1973 c.797 345; 1975 c.544 44; 1977 c.555 15; 1979 c.88 24; 1981 c.192 24; 1983 c.37 25; 1983 c.367 4; 1985 c.762 46; 1985 c.786 46; 1985 c.796 4; 1987 c.197 8a; 1989 c.324 72; 1997 c.631 331; 1999 c.506 4]
Any number of persons, not less than five, desiring to organize an Oregon savings bank shall, as prospective incorporators, first file an application with the Director of the Department of Consumer and Business Services for authority to organize an Oregon savings bank. The applicants shall pay to the director at the time of their application a fee of $2,500, no part of which will be refunded. The application shall be signed by one of the applicants. The following information and documents shall be included in or with the application: (1) The corporate name. (2) The proposed location of the initial principal place of business. (3) The name, occupation, residence and post-office address of each prospective incorporator. (4) The proposed articles of incorporation. The following apply: (a) If the Oregon savings bank is to be organized as an Oregon stock savings bank, the articles of incorporation shall conform to the provisions set forth in ORS 707.110; and (b) If the Oregon savings bank is to be organized as an Oregon nonstock bank, the articles of incorporation shall conform to the provisions set forth in ORS 716.040. (5) The names and residence addresses of the proposed senior officers and the names, occupations and residence addresses of proposed initial directors. (6) If the Oregon savings bank is being organized as an Oregon stock savings bank, the number of shares of voting stock proposed to be subscribed for by the incorporators and each of the proposed directors and senior officers, and the names of any other persons who are expected to subscribe for, to own or to control more than 10 percent of the voting stock and the amount of stock for which each proposes to subscribe. (7) Evidence satisfactory to the director of the character, financial responsibility and ability of the prospective incorporators, directors and senior officers. (8) Evidence satisfactory to the director, in the form of a business plan and such additional information as the director may require, demonstrating that the proposed Oregon savings bank is likely to be financially successful. (9) The proposed operating policies of the Oregon savings bank. (10) Any other information that the director may require. [1973 c.797 346; 1977 c.135 58; 1979 c.88 25; 1997 c.631 332; 2003 c.14 444]
The Director of the Department of Consumer and Business Services shall investigate and rule on the application for authority to organize in the manner specified for institutions in ORS 707.080, 707.090 and 707.145. [1973 c.797 347; 1977 c.135 30; 1997 c.631 333]
(1) Not less than five persons may associate themselves by articles of incorporation to form an Oregon savings bank, either as an Oregon stock savings bank or as an Oregon nonstock bank. If the Oregon savings bank is organized as an Oregon stock savings bank, its articles of incorporation shall conform to the provisions set forth in ORS 707.110. If the Oregon savings bank is organized as an Oregon nonstock bank, its articles of incorporation shall conform to the provisions of subsection (2) of this section, be executed in duplicate, signed by the incorporators and submitted to the Director of the Department of Consumer and Business Services. (2) The articles of incorporation of an Oregon nonstock bank shall specify: (a) The name by which the Oregon nonstock bank is to be known. (b) The initial principal place where its business is to be transacted, naming the city or town and county. (c) The address, including street and number, and mailing address, if different, of its initial registered office and the name of its initial registered agent at that office. (d) The name of each incorporator. (e) The term of its existence, which may be perpetual. (f) The purpose for which it is organized. (g) The sums that each incorporator will contribute in cash to the initial guaranty fund and the expense fund, as provided in ORS 716.060 and 716.070. (h) The initial board of directors of the Oregon nonstock bank, composed of not less than five persons, at least three of whom shall be incorporators, who shall serve until their successors are regularly elected and qualified. (3) The articles of incorporation also may contain any lawful provisions for the regulation of the business, for the conduct of the affairs of the Oregon nonstock bank, defining and regulating the powers of the directors or eliminating or limiting the personal liability of directors to the extent permitted under ORS 707.110 (5)(c). [Amended by 1973 c.797 349; 1989 c.447 2; 1991 c.883 12; 1997 c.631 334; 2005 c.192 12]
(1) If the Director of the Department of Consumer and Business Services finds that the articles of incorporation conform to law, the director shall, within 60 days after receiving the articles of incorporation and when all fees have been paid: (a) Indorse on each of the duplicate originals the word "Filed," and the month, day and year of the filing. (b) File one of the duplicate originals in the office of the director. (c) Issue a certificate of incorporation to which the director shall affix the other duplicate original. (2) The certificate of incorporation, with one of the duplicate originals affixed thereto shall be returned to the incorporators or their representative. (3) Upon issuance of the certificate of incorporation, the corporate existence of a savings bank begins. [Amended by 1973 c.797 350]
Before an Oregon nonstock bank may conduct its business, its incorporators shall create: (1) A guaranty fund, as provided in ORS 716.060, for the protection of its depositors against loss on its investments, and (2) An expense fund, as provided in ORS 716.070, to pay the expense of organizing the Oregon nonstock bank and the operating expenses. [1973 c.797 351; 1997 c.631 335]
(1) The guaranty fund or liquidation account consists of payments in cash made by the incorporators and of all sums credited to the guaranty fund as required by ORS 716.780 or federal law. (2) If a financial institution that is converting to another type of financial institution has a guaranty fund or liquidation account, the Oregon nonstock bank that results from the conversion must maintain the guaranty fund or liquidation account and may use the guaranty fund or liquidation account only for the purposes for which the financial institution used the guaranty fund or liquidation account before the conversion. [Amended by 1973 c.797 352; 1997 c.631 336; 2011 c.263 22]
(1) The incorporators of an Oregon nonstock bank shall create an expense fund by depositing to the credit of the Oregon nonstock bank in cash an amount determined by the Director of the Department of Consumer and Business Services. They shall also enter into an agreement or undertaking with the director as trustee for the depositors with the Oregon nonstock bank to make further contributions in cash to the expense fund of the Oregon nonstock bank as may be necessary to pay the operating expenses until the Oregon nonstock bank can pay them from its earnings, in addition to the dividends as declared and credited to its depositors. The agreement or undertaking shall fix the liability of the incorporators jointly and severally for a reasonable amount as approved or determined by the director. In addition to the undertaking of the incorporators, the director may require a surety bond executed by an entity authorized to transact, within this state, the business of surety, or an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008. The agreement or undertaking and letter of credit or surety bond shall be filed in the office of the director. (2) The amounts contributed to the expense fund of the Oregon nonstock bank by the incorporators is not a liability of the Oregon nonstock bank except as provided in ORS 716.800. [Amended by 1973 c.797 353; 1991 c.331 117; 1997 c.631 337]
(1) The Director of the Department of Consumer and Business Services shall examine the condition of an Oregon nonstock bank when the Oregon nonstock bank files with or submits to the director: (a) A copy of its articles of incorporation, as required by ORS 716.040; (b) A list of incorporators, showing name, address, sums paid into the guaranty and expense fund, sworn to by the president or cashier; (c) The sworn statement of an officer that all requirements of law have been complied with; and (d) A list of the directors and officers elected. (2) If, upon examination, the director determines that the Oregon nonstock bank has complied with the applicable requirements of ORS 716.028 to 716.070, the director shall issue to the Oregon nonstock bank a charter to do business as an Oregon nonstock bank under this chapter. [Amended by 1973 c.797 354; 1987 c.216 6; 1997 c.631 338]
(1) If an Oregon savings bank fails to complete its organization and receive from the Director of the Department of Consumer and Business Services a charter within one year after the date of filing its articles of incorporation, the Oregon savings bank shall cease to exist and the articles of incorporation are void. (2) All persons purporting to act as or on behalf of an Oregon savings bank, knowing there was no incorporation, are jointly and severally liable for all liabilities created while so acting. [Amended by 1973 c.797 356; 1997 c.631 339]
An Oregon savings bank shall not transact any business, except as incidental or necessary to its organization, until: (1) It has received its charter from the Director of the Department of Consumer and Business Services; and (2) The director is satisfied that either: (a) In the case of an Oregon stock savings bank, the incorporators have obtained paid subscriptions in at least the amount of the initial approved paid-in capital; or (b) In the case of an Oregon nonstock bank, the incorporators have made the deposit of the: (A) Initial guaranty fund required by ORS 716.060. (B) Expense fund required by ORS 716.070, and, if the director so requires, have entered into the agreement or undertaking with the director and filed the agreement and the security therefor as prescribed in ORS 716.070. [Amended by 1973 c.797 358; 1997 c.631 340]
(1) An Oregon nonstock bank may amend its articles of incorporation, from time to time, in any and as many respects as may be desired, so long as its articles of incorporation as amended contain only such provisions as might be lawfully contained in original articles of incorporation at the time of making such amendment. (2) In particular, and without limitation upon such general power of amendment, an Oregon nonstock bank may amend its articles of incorporation, from time to time, so as: (a) To change its corporate name. (b) To change its period of duration. (c) To change, enlarge or diminish its corporate purposes. [1979 c.88 18; 1997 c.631 341]
The articles of incorporation of an Oregon nonstock bank may be amended by a resolution adopted by a majority of the directors of the Oregon nonstock bank. Any number of amendments may be submitted to the directors and voted upon by them at one meeting. [1979 c.88 19; 1997 c.631 342]
The articles of amendment shall be executed in duplicate by the Oregon nonstock bank by its president or a vice president and by its cashier, its secretary or an assistant secretary, and shall set forth: (1) The name of the Oregon nonstock bank. (2) If the amendment alters or changes any provision of the original or amended articles of incorporation, an identification by reference or description of the affected provision and a statement of its text as it is amended to read. If the amendment strikes or deletes any provision of the original or amended articles of incorporation, an identification by reference or description of the provision so stricken or deleted and a statement that it is stricken out or deleted. If the amendment is an addition to the original or amended articles of incorporation, a statement of that fact and the full text of each provision added. (3) The date of the adoption of the amendment by the directors. [1979 c.88 20; 1997 c.631 343]
(1) An Oregon nonstock bank may by action taken in the same manner as required for amendment of its articles of incorporation adopt restated articles of incorporation. The restated articles of incorporation may contain any changes in the articles of incorporation that could be made by amendment regularly adopted. Adoption of restated articles of incorporation containing any such changes shall have the effect of amending the existing articles of incorporation to conform to the restated articles of incorporation. Restated articles of incorporation shall contain a statement that they supersede the theretofore existing articles of incorporation and amendments thereto. (2) Restated articles of incorporation shall contain all the statements required by this chapter to be included in original articles of incorporation except that no statement shall be made with respect to the number, names and addresses of directors constituting the initial board of directors or the name of each incorporator, or the sums each incorporator contributed to the initial guaranty fund. (3) Restated articles of incorporation when executed and filed in the manner prescribed by this chapter for articles of amendment shall supersede the theretofore existing articles of incorporation and amendments thereto. The Director of the Department of Consumer and Business Services shall upon request certify a copy of the articles of incorporation, or the articles of incorporation as restated, or any amendments to either thereof. (4) The restated articles of incorporation, when submitted for filing, shall be accompanied by a statement, executed in duplicate by the Oregon nonstock bank by an authorized officer, setting forth: (a) The name of the Oregon nonstock bank. (b) The date of the adoption of the restated articles of incorporation by the directors. [1979 c.88 23; 1997 c.631 344]
The initial bylaws of an Oregon savings bank shall be adopted by its board of directors. The power to alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless, in the case of an Oregon stock savings bank, such power is reserved to the stockholders by the articles of incorporation or bylaws. The bylaws may contain any provisions for the regulation and management of the affairs of the Oregon savings bank as are not inconsistent with law or the articles of incorporation. [1997 c.631 364]
(1) Each Oregon savings bank shall continuously maintain in this state a registered agent and registered office that may be, but need not be, the same as any of its places of business. (2) A registered agent shall be: (a) An individual who resides in this state and whose business office is identical to the registered office; (b) A domestic corporation, domestic limited liability company, domestic professional corporation or domestic nonprofit corporation whose business office is identical to the registered office; or (c) A foreign corporation, foreign limited liability company, foreign professional corporation or foreign nonprofit corporation authorized to transact business in this state whose business office is identical to the registered office. [2005 c.192 8]
(1) An Oregon savings bank may change its registered office or registered agent by delivering to the Director of the Department of Consumer and Business Services for filing a statement of change that sets forth: (a) The name of the Oregon savings bank; (b) If the registered office is to be changed, the address, including street and number, of the new registered office; (c) If the registered agent is to be changed, the name of the new registered agent and that the new agent has consented to the appointment; and (d) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical. (2) If a registered agent changes the street address of the agents business office, the registered agent shall change the street address of the registered office of the Oregon savings bank for which the agent is the registered agent by notifying the Oregon savings bank in writing of the change and signing, either manually or in facsimile, and delivering to the director a statement that complies with the requirements of subsection (1) of this section and recites that the Oregon savings bank has been notified of the change. (3) The filing of the statement by the director terminates the existing registered office or agent, or both, on the effective date of the filing and establishes the newly appointed registered office or agent, or both, as that of the Oregon savings bank. [2005 c.192 9]
(1) A registered agent may resign as agent upon delivering a signed statement to the Director of the Department of Consumer and Business Services and giving notice in the form of a copy of the statement to the Oregon savings bank. The statement may include a statement that the registered office is also discontinued. (2) Upon delivery of the signed statement, the director shall file the resignation statement. The copy of the statement given to the Oregon savings bank under subsection (1) of this section shall be addressed to the Oregon savings bank at its mailing address or principal office as shown by the records of the director. (3) The agency appointment is terminated and the registered office discontinued, if so provided, on the 31st day after the date on which the statement was filed by the director unless, prior to that date, the Oregon savings bank appoints a successor registered agent as provided in ORS 716.187, thereby terminating the capacity of such agent. [2005 c.192 10]
(1) The registered agent appointed by an Oregon savings bank shall be an agent of the Oregon savings bank upon whom any process, notice or demand required or permitted by law to be served upon the Oregon savings bank may be served. (2) The Director of the Department of Consumer and Business Services shall be an agent of an Oregon savings bank, including a dissolved Oregon savings bank, upon whom any such process, notice or demand may be served whenever the Oregon savings bank fails to appoint or maintain a registered agent in this state or whenever the Oregon savings banks registered agent cannot with reasonable diligence be found at the registered office. (3) Service shall be made on the director by: (a) Serving the director or a clerk on duty at the office of the director a copy of the process, notice or demand, with any papers required by law to be delivered in connection with the service, and the required fee for each party being served or by mailing to the office of the director a copy of the process, notice or demand and the required fee for each party being served by certified or registered mail; (b) Transmittal by the person instituting the proceedings of notice of the service on the director and a copy of the process, notice or demand and accompanying papers to the Oregon savings bank being served by certified or registered mail: (A) At the last registered office of the Oregon savings bank as shown by the records of the director; and (B) At such address the use of which the person initiating the proceedings knows or, on the basis of reasonable inquiry, has reason to believe is most likely to result in actual notice; and (c) Filing with the appropriate court or other body, as part of the return of service, the return receipt of mailing and an affidavit of the person initiating the proceedings stating that this section has been complied with. (4) The director shall keep a record of all processes, notices and demands served upon the director under this section. (5) After completion of initial service upon the director, no additional documents need be served upon the director to maintain jurisdiction in the same proceeding or to give notice of any motion or provisional process. (6) Nothing contained in this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon an Oregon savings bank in any other manner now or hereafter permitted by law, or enlarge the purposes for which service on the director is permitted where such purposes are limited by other provisions of law. [2005 c.192 11]
(1) Subject to the written approval of the Director of the Department of Consumer and Business Services, the board of directors of a savings bank may fix the fee to be paid directors who are not acting as officers or employees of the savings bank. (2) An attorney for a savings bank, although a director thereof, may receive a reasonable compensation for professional services. [1973 c.797 359]
(1) The board of directors of an Oregon savings bank shall manage and control the affairs of the Oregon savings bank. The board shall consist of not fewer than five members. (2) A person shall not be a director of an Oregon savings bank if the person: (a) Has been adjudicated a bankrupt, taken the benefit of any insolvency law or made a general assignment for the benefit of creditors within the 10 years immediately prior to the persons election as a director. (b) Has allowed a judgment recovered against the person for a sum of money to remain unsatisfied of record or unsecured on appeal for a period of more than three months. [Amended by 1961 c.278 1; 1971 c.219 1; 1973 c.797 360; 1983 c.37 26; 1985 c.786 47; 1997 c.631 345]
(1) A board member of an Oregon nonstock bank may be removed from office by the affirmative vote of three-fourths of the directors at any regular meeting of the board if: (a) The board members conduct is of such character as to be injurious to the Oregon nonstock bank; (b) A written copy of the charges made against the board member has been served upon the board member personally, and upon the Director of the Department of Consumer and Business Services, at least two weeks before the meeting; and (c) The vote of the directors by ayes and noes is entered in the record of the minutes of the meeting. (2) The office of a director of an Oregon nonstock bank immediately becomes vacant if the director: (a) Becomes disqualified for any of the reasons specified in ORS 716.210 (2). (b) Has failed to attend the regular meetings of the board of directors, or to perform any of the duties as director, for a period of six successive months, unless excused by the board for the failure. (3) A director who has forfeited or vacated office is not eligible for reelection unless the forfeiture or vacancy occurred solely by reason of the directors neglect of official duties as prescribed in subsection (2)(b) of this section. [Amended by 1961 c.278 2; 1973 c.797 364; 1997 c.631 346]
A savings bank may invest its assets only as provided by ORS 716.420 to 716.590. [Amended by 1973 c.797 366; 1979 c.88 27]
An Oregon savings bank may invest the funds mentioned in ORS 716.410: (1) In the obligations specified in ORS 708A.115 (1), without limitation. (2) Subject to a limitation of five percent of the assets of the Oregon savings bank, in the obligations specified in ORS 708A.115 (2). (3) In shares of any mutual fund or unit trust, the assets of which are invested solely in obligations described in and limited under ORS 708A.115. [Amended by 1959 c.185 12; 1961 c.157 1; 1963 c.407 1; 1971 c.219 2; 1973 c.797 367; 1981 c.192 26; 1985 c.786 53; 1997 c.631 347]
(1) A savings bank may invest the funds mentioned in ORS 716.410 in equipment trust certificates that are, at the time of purchase, rated in one of the three highest grades by a recognized investment service organization that has been engaged regularly and continuously for a period of not less than 10 years in rating bonds. (2) Not more than 15 percent of the assets of a savings bank may be invested under this section and not more than three percent of its assets may be invested in any one corporation. [1959 c.185 11 (enacted in lieu of 716.440); 1973 c.797 368]
An Oregon savings bank may invest the funds mentioned in ORS 716.410: (1) In the notes of any person, with a pledge as collateral of securities or personal property which are eligible for investment under ORS 716.410 to 716.590 and have an actual cash market value at least 25 percent greater than the amount of the loan. (2) In the obligations of any person secured by an assignment of a life insurance policy, having a cash surrender value of not less than 100 percent of the amount of the obligations, plus an amount equal to one annual premium on the insurance policy. (3) In loans, secured or unsecured, insured or guaranteed in part or in full by the United States or any instrumentality thereof, or by this state or instrumentality thereof, or for which a conditional guarantee has been issued. The limitations prescribed by ORS 716.552 to 716.574 shall not apply to loans made under this subsection, but the aggregate amount of loans made under this subsection and ORS 716.552 shall not exceed 85 percent of the assets of any Oregon savings bank. (4) In loans secured as specified under ORS 708A.345. (5) In commercial paper with a maturity of 180 days or less, subject to a limitation of one percent of the total assets of the Oregon savings bank for each obligor. (6) In unsecured loans, retail installment contracts, leases and loans secured by security interests in personal property and by mortgages and deeds of trust covering real estate, that are not otherwise eligible for investment by an Oregon savings bank when the obligations are for home or property repairs, alterations, appliances, improvements or additions, home furnishing, for installation of underground utilities, for educational purposes, for manufactured dwellings used or to be used for permanent or semipermanent housing or for any other nonbusiness purpose, if: (a) The application for the loan states that the proceeds are to be used for one of the purposes listed in this subsection. (b) The loans evidenced by a note or other evidence of obligation made pursuant to this subsection to any one individual do not exceed one percent of the assets of the Oregon savings bank and the aggregate amount of such loans do not exceed 20 percent of the assets of the Oregon savings bank. (c) In the case of leases, the lease conforms to ORS 708A.180 and 708A.560. (7) In secured or unsecured commercial, corporate, business and agricultural loans or leases of personal property, not to exceed 25 percent of the assets of the Oregon savings bank and not to exceed one percent of its assets to any one person. Leases shall conform to ORS 708A.180 and 708A.560. (8) Subsection (5) of this section shall not be construed to permit an Oregon savings bank to make loans on or for inventory of articles held for sale as merchandise, except manufactured dwellings. [Amended by 1963 c.393 1; 1969 c.211 2; 1971 c.219 3; 1973 c.797 369; 1975 c.544 47; 1977 c.135 33; 1979 c.88 28; 1981 c.192 27; 1983 c.37 28; 1985 c.786 54; 1987 c.528 3; 1993 c.52 1; 1997 c.631 348]
A savings bank may invest the funds mentioned in ORS 716.410 in promissory notes made payable on demand to the order of the savings bank, secured by the pledge and assignment of a time or savings account or any other kind of deposit account, including but not limited to an automatic savings to checking transfer account or a negotiable order of withdrawal account, if the account is fully or partially federally insured as collateral security for the payment of the notes. The loan shall not exceed 100 percent of the balance due the owner of the time or savings account. [Amended by 1961 c.239 1; 1973 c.797 370; 1981 c.192 28]
[Amended by 1959 c.185 13; 1961 c.277 1; 1965 c.215 1; 1967 c.198 1; 1969 c.211 3; 1971 c.219 4; 1973 c.797 371; renumbered 716.552]
[Amended by 1973 c.797 373; renumbered 716.578]
[Amended by 1973 c.797 374; renumbered 716.582]
[Amended by 1973 c.797 375; renumbered 716.584]
(1) A savings bank may invest the funds mentioned in ORS 716.410 in: (a) Bankers acceptances and bills of exchange of the kind and maturities made eligible by law for rediscount with Federal Reserve Banks, if they are accepted by an institution or a national bank. (b) Bills of exchange drawn by the seller on the purchaser of goods and accepted by the purchaser, if they are of the kind and maturities made eligible by law for rediscount with Federal Reserve Banks and are indorsed by a national bank or an institution. (c) Savings or time accounts insured in part or wholly by an agency of the federal government. (2) Not more than 20 percent of the assets of a savings bank may be invested in the acceptances mentioned in subsection (1) of this section. Not more than five percent of the aggregate credited to the depositors of a savings bank may be invested in the acceptances of or deposited with an institution or a national bank of which a director of the savings bank is a director. The aggregate amount of the liability of an institution or a national bank to a savings bank, whether as principal or indorser, for acceptances held by the savings bank and deposits made with it, may not exceed 25 percent of the stockholders equity of the institution or of the paid-in capital and retained earnings of the national bank. [Amended by 1973 c.797 376; 1999 c.59 223]
A savings bank may invest the funds mentioned in ORS 716.410 in the bonds, notes and debentures of any corporation incorporated under the laws of and operating in any state of the United States, which are rated at the time of purchase under authority of this section in one of the four highest grades by a recognized service organization that has been regularly engaged for a period of 10 years or more in rating or grading bonds. However, not more than one percent of the assets of the savings bank shall be invested in bonds, notes and debentures of any one corporation, and not more than 20 percent of the assets shall be invested under this section. [Amended by 1969 c.211 4; 1971 c.219 5; 1973 c.797 377; 1977 c.135 34; 1981 c.192 29]
A savings bank may invest the funds mentioned in ORS 716.410 in the common stock of: (1) Any federally chartered corporation that is chartered for the purpose of providing secondary markets for the sale of mortgages by savings banks. (2) The Federal Home Loan Bank. [1975 c.544 46]
A savings bank may invest not more than five percent of its assets in each of the following categories of investments: (1) In obligations issued or guaranteed by the International Bank for Reconstruction and Development. (2) In obligations issued or guaranteed by the Inter-American Development Bank. (3) In obligations issued or guaranteed by the Asian Development Bank. (4) In obligations issued or guaranteed by the African Development Bank. [1959 c.185 2; 1973 c.797 378; 1985 c.456 1]
A savings bank may invest the funds mentioned in ORS 716.410 in bonds issued by the Dominion of Canada for which the faith of the Dominion of Canada is pledged, or bonds issued or guaranteed by a province of the Dominion of Canada. Such investments may be made only if: (1) The interest and principal of such bonds is payable in the United States, or with exchange to a city in the United States, in lawful money of the United States or its equivalent; and (2) The bonds at the time of purchase pursuant to the authority of this section are rated in one of the four highest grades by a rating organization recognized in the United States that has been regularly engaged for a period of 10 years or more in rating or grading bonds. [1959 c.185 3; 1977 c.135 35]
A savings bank may invest the funds mentioned in ORS 716.410 in notes or bonds, secured by first or junior mortgages or deeds of trust upon real estate. [Formerly 716.470; 1979 c.199 8; 1979 c.810 3; 1985 c.554 5]
(1) In participation with other mortgagees, a savings bank may invest the funds mentioned in ORS 716.410 in notes or bonds secured by mortgage or deed of trust upon real estate. (2) An agreement setting forth the manner in which the participating mortgagees shall administer the mortgage and acquired real estate, if any, shall be executed on behalf of each of the mortgagees by two of their authorized officers. [1973 c.797 371a; 1977 c.135 36; 1985 c.554 6]
A savings bank may invest in loans secured by pledge of the notes or bonds specified in ORS 716.552, if the notes or bonds pledged as collateral are at least 25 percent more than the loans which they secure. [1973 c.797 371b]
A savings bank may invest the funds mentioned in ORS 716.410, in notes or bonds secured by mortgage or deed of trust upon leasehold estates in real property, if the lease is binding upon the owners of the fee title to the leased premises, in full force and free from default. [1973 c.797 371c; 1985 c.554 7]
A savings bank may invest the funds mentioned in ORS 716.410 in notes or bonds secured by a mortgage, deed of trust or similar instrument to finance the construction of buildings and improvements appurtenant thereto, if before making the investment, the savings bank requires sufficient guarantee from the contractor, builder or owner for the completion of the construction in accordance with the plans and specifications and within the estimated contract price for the construction. Moneys shall be advanced from time to time during the progress of construction upon a certificate of estimate to be furnished by the architect, contractor, builder or superintendent in charge of construction or the owner. [1973 c.797 371d; 1977 c.135 37; 1985 c.554 8]
A savings bank may invest the funds mentioned in ORS 716.410 in notes or bonds secured by a mortgage, deed of trust or other instrument for the purpose of financing the acquisition and development of land for primarily commercial, industrial or residential usage. A loan may be made on real estate which is to be improved with the developments to be paid for from the proceeds of the loan if the proceeds will be used for that purpose. [1973 c.797 371e; 1985 c.554 9]
In loans upon real property, the borrower shall furnish the savings bank with: (1) A note or bond secured by a mortgage or deed of trust on the real estate upon which the loan is made; and (2) A policy of title insurance issued by a reliable title insurance company authorized to insure titles within the state in which the property is situated. [1973 c.797 371f; 1985 c.554 10]
If a loan is secured by mortgage, deed of trust or other similar instrument on real estate, the mortgage, deed of trust or other instrument shall contain provisions requiring the maintenance of insurance on the buildings on the premises to the reasonable amount as stipulated in the mortgage, deed of trust or other instrument. The policy shall be payable, in case of loss, to the savings bank and shall be deposited with the savings bank except where the savings banks interest is insured under a blanket policy of insurance. [1973 c.797 371g; 1985 c.554 11]
(1) An application for a mortgage loan or renewal or extension of a mortgage loan shall be written and show the date, name of the applicant, amount of loan requested and the security offered. (2) A mortgage loan shall be granted only upon the written report of at least two members of the board of investment of the savings bank certifying on the application, according to their best judgment, the value of the property to be mortgaged and recommending the loan. The application and written report shall be filed and preserved with the savings banks records. (3) Every mortgage and deed of trust and every assignment of a mortgage taken or held by a savings bank shall be held in its own name and immediately recorded in the office of the proper officer of the county in which the mortgaged property is located. [1973 c.797 371h]
(1) The purchase of a bona fide contract covering a sale of real estate is a loan on real estate within the meaning of ORS 716.552 to 716.574. (2) A savings bank may acquire contracts covering a sale of real estate if all other requirements of ORS 716.552 to 716.574 are satisfied. [1973 c.797 371i; 1985 c.554 12]
A savings bank may take and hold by purchase and assignment from third persons notes, bonds, mortgages and deeds of trust eligible for investment under ORS 716.552 to 716.574. [Formerly 716.480]
(1) If deposits are less than $1 million, a single loan on real estate shall not exceed $10,000. When deposits exceed $1 million but are less than $2 million, a single loan on real estate shall not exceed two and one-half percent of the deposits. When deposits exceed $2 million, a single loan on real estate shall not exceed two percent of the savings banks deposit liability. (2) A loan may exceed the limitations prescribed in subsection (1) of this section if the borrower furnishes the savings bank with a copy of an agreement entered into with a financially responsible person wherein the person agrees to refinance or repurchase, without recourse, the entire loan: (a) Upon completion of the construction, if the loan is a construction loan; or (b) Within six months from the date of the loan, if the loan is not a construction loan. [Formerly 716.500]
(1) A savings bank may issue and honor credit cards for the purpose of making loans to one or more persons. The loans shall be made by the means determined by the board of investment of the savings bank including, but not limited to, the means of paying to or for the account of a party the amount of a sales slip, voucher or other evidence of a transaction in which goods or services are sold or cash advanced to the party in reliance on a credit card issued by the savings bank. (2) The savings bank may advance cash to a person holding a credit card issued by the savings bank or any other person who, directly or indirectly, has agreed to pay to or for the account of the savings bank the amount of cash advanced by it in reliance on credit cards issued by the other person. (3) Credit cards, loans, advances and documents used in connection with the use of credit cards shall be in the form and upon the terms and conditions prescribed by the board of investment of the savings bank, including, but not limited to, terms and conditions as to revocation, rates of interest and other charges, maturity dates and security, if any. (4) A savings bank may become a stockholder, member of, or otherwise affiliated with, an organization that, in the opinion of the board of directors of the savings bank, will enable the savings bank to exercise fully the powers granted under this section. [1973 c.797 375a]
(1) A savings bank may invest the funds mentioned in ORS 716.410 in the capital stock of a corporation organized under the laws of this state if: (a) All of the capital stock of the corporation is owned by one or more savings banks organized under the laws of this state; (b) The activities of the corporation are performed directly or through one or more wholly owned subsidiaries, and consist only of one or more of the following: (A) Originating, purchasing, selling and servicing education loans and loans and participations in loans secured by first liens upon real estate and manufactured dwellings, including brokerage and warehousing of loans; (B) Making any investment which would be an authorized investment of a savings bank organized under the laws of this state; (C) Performing services for savings banks organized under the laws of this state; or (D) Making investments in unimproved real estate for the purpose of prompt development and subdivision; (c) The aggregate outstanding investment in the capital stock, obligations, or other securities of service corporations and subsidiaries thereof, including all loans, secured and unsecured, to the service corporations or any subsidiaries thereof and to joint ventures of the service corporation or subsidiaries, whether or not the savings bank is a stockholder in the service corporation, do not exceed three percent of the savings banks assets. For the purpose of this subsection the term "aggregate outstanding investment" means the sum of the amounts paid for the acquisition of capital stock or securities and amounts invested in obligations of service corporations, less amounts received from the sale of capital stock or securities of service corporations and amounts paid to the savings bank to retire obligations of service corporations; and (d) The corporation executes and files with the Director of the Department of Consumer and Business Services a written agreement in the form prescribed by the Director that the corporation will permit and pay the cost of examinations and audits by the director as the director considers necessary. (2) If one of the savings banks holds more than 40 percent of the stock, the corporation, including any subsidiary, shall not incur or have outstanding at any time debts in excess of the following limitations: (a) In the case of an unsecured debt other than to a holder of its capital stock, the lesser of an amount equal to one percent of the assets of the holder or holders of its capital stock or to the investment in the stock, obligations or other securities of the corporation by the holder or holders of its capital stock, excluding secured debts owed by the corporation to the holder or holders; and (b) In the case of a secured debt, other than to a holder of its capital stock, the lesser of an amount equal to four percent of the assets of the holder or holders of its capital stock or four times the investment in the stock obligations or other securities of the corporation by the holder or holders of its capital stock excluding secured debts owed by the corporation to the holder or holders. [1973 c.797 375b; 1981 c.192 31; 1987 c.911 15; 1999 c.59 224; 2005 c.80 5]
A savings bank may invest the funds mentioned in ORS 716.410 in investments which do not qualify under any of the provisions of ORS 716.420 to 716.590, however an investment shall not be made under this section: (1) If the amount of the investment exceeds one percent of the assets of the savings bank or 10 percent of the total amount of its guaranty fund, undivided profits and unallocated reserves, whichever is less; (2) If the aggregate amount of all the investments exceeds or by the making of the investment will exceed five percent of its assets; or (3) In the equity securities of any one issuer if the aggregate amount invested by the savings bank under this section together with the amount invested in the equity securities of the issuer under any other provision of law exceeds or by the making of the investment will exceed the limitations under subsections (1) and (2) of this section. [1973 c.797 375c; 1981 c.192 32]
A savings bank may pledge its assets to secure public funds as provided under ORS chapter 295. For the purposes of this section, "public funds" has the meaning given that term in ORS 295.001. [1973 c.288 7; 1999 c.311 6; 2007 c.71 232]
An Oregon savings bank may acquire and hold all or part of the stock of a corporation that is or may thereafter be licensed as an insurance producer as required by ORS 744.053 to transact one or more of the classes of insurance described in ORS 744.062, subject to the following requirements: (1) The acquisition and holding of such stock shall be subject to the approval of the Director of the Department of Consumer and Business Services. The director shall base consideration for approval on the condition of the Oregon savings bank, the adequacy of a formal business plan for the insurance activities and the existence of satisfactory management for the corporation. (2) The director may revoke or restrict the ongoing authority of the Oregon savings bank to hold stock in the corporation if the condition of the Oregon savings bank substantially deteriorates or if the insurance activities are adversely affecting the Oregon savings bank. (3) For each calendar year during which an Oregon savings bank owns all or part of any corporation licensed as an insurance producer as required by ORS 744.053, the Oregon savings bank shall file a written report with the director. The report shall be filed no later than March 31 of the following year and shall disclose the insurance activities of the corporation. The required contents of the report shall be established by the director by rule. The reports filed with the director under this subsection shall be available for public inspection in the office of the director. (4) The corporation shall not in any manner use customer information obtained by the Oregon savings bank from another insurance producer to promote, develop or solicit insurance business for the corporation unless the other insurance producer consents to such use of the customer information. (5) The corporation shall be subject to the limitations applicable to depository institutions under ORS 746.213 to 746.219. For the purpose of this subsection, "depository institution" has the meaning given that term in ORS 746.213. [1987 c.916 7; 1989 c.331 31; 1989 c.701 67; 1997 c.831 4,4a; 2001 c.191 55; 2003 c.363 10; 2003 c.364 61a; 2005 c.194 3]
(1) Notwithstanding any provision contained in ORS chapters 706 to 715, except as limited by articles of incorporation of an Oregon savings bank: (a) Oregon savings banks are authorized to engage in those activities in which federal savings banks may engage and may acquire and retain those investments that federal savings banks may acquire and retain, subject to the conditions and restrictions that apply to federal savings banks. (b) Oregon savings banks shall have all powers necessary or convenient to effect any or all of the purposes for which the Oregon savings bank is organized or to perform any or all of the acts expressly or impliedly authorized or required under ORS chapter 706 or this chapter. (c) Subsidiaries of Oregon savings banks are authorized to engage in those activities in which subsidiaries of federal savings banks may engage and may acquire and retain those investments that subsidiaries of federal savings banks may acquire and retain, subject to the conditions and restrictions that apply to subsidiaries of federal savings banks. (d) Activities and investments referred to in paragraphs (a) to (c) of this subsection that require notice to or approval of the Director of the Office of Thrift Supervision shall not require such notice or approval but shall require notice to or approval of the Director of the Department of Consumer and Business Services. For purposes of this section, references in federal statutes, regulations and other authorities that prescribe permissible activities and investments of federal savings banks and subsidiaries of federal savings banks shall be considered whenever practicable to refer to comparable provisions of Oregon law. The Director of the Department of Consumer and Business Services may approve an activity or investment that requires director approval subject to such conditions as the director deems appropriate. (2) The purpose of this section is to grant Oregon savings banks and their subsidiaries investment and activity powers and authorities equivalent to that permitted federal savings banks under federal law. [1973 c.797 379; 1987 c.197 9; 1989 c.324 73; 1997 c.631 350]
A savings bank, subject to the restrictions and limitations contained in this chapter, may: (1) Receive time deposits and demand deposits of money without restriction. (2) Offer time and savings accounts and other kinds of deposit accounts, including but not limited to automatic savings to checking transfer accounts and negotiable order of withdrawal accounts, to individuals and nonprofit corporations. (3) Exercise by its board of directors or authorized officers or agents, subject to law, all powers necessary to carry on the business of savings banks. (4) Pay depositors when requested by them, by drafts upon deposits to the credit of the savings bank in any city in the United States, and charge current rates of exchange for the drafts. (5) Borrow money, and pledge securities to secure the money borrowed, but any amount borrowed in excess of 20 percent of deposits shall first be approved in writing by the Director of the Department of Consumer and Business Services. The failure to obtain the approval of the director shall not make an excess loan invalid as to the lender. (6) Collect or protest promissory notes or bills of exchange owned by the savings bank or held by it as collateral, and charge the usual fees for the collection or protest. (7) Sell gold or silver received in payment of interest or principal of obligations owned by the savings bank, or from depositors in the ordinary course of business. (8) Become a member of the Federal Reserve Bank or the Federal Home Loan Bank of the district in which the savings bank is located. (9) Conduct a trust business and exercise all the powers of a trust company as defined by ORS 709.150 upon compliance with the laws of this state relating to the regulations of a trust business. (10) Be licensed as an insurance producer as required by ORS 744.053 to transact one or more of the classes of insurance described in ORS 744.062 except for title insurance. With respect to the exercise of the power granted under this subsection, other than the maintenance of any insurance license granted to a savings bank prior to September 27, 1987, or the licensing of the savings bank to transact types of limited class insurance, as that term is defined in ORS 744.052, designated by the Director of the Department of Consumer and Business Services: (a) The conduct by the savings bank of insurance producer activities shall be subject to the approval of the director. The director shall base consideration for approval on the condition of the savings bank, the adequacy of a formal business plan for the insurance activities and the existence of satisfactory management for the insurance activity. (b) The director may revoke or restrict the ongoing authority of the savings bank to engage in the insurance producer activity if the condition of the savings bank substantially deteriorates or if the insurance activities are adversely affecting the savings bank. (c) The savings bank shall file a written report with the director no later than March 31 each year disclosing the insurance activities of the savings bank. The required contents of the report shall be established by the director by rule. The reports filed with the director under this paragraph shall be available for public inspection in the office of the director. (d) The savings bank shall not in any manner use customer information obtained from another insurance producer to promote, develop or solicit insurance business for the savings bank unless the other insurance producer consents to such use of the customer information. [Amended by 1955 c.690 1; 1957 c.167 1; 1969 c.211 5; 1971 c.219 6; 1973 c.797 380; 1981 c.192 33; 1987 c.916 5; 1989 c.331 32; 1989 c.701 68; 1993 c.52 2; 1995 c.334 4; 1997 c.831 5; 2001 c.191 56; 2003 c.363 11; 2003 c.364 62a]
(1) An Oregon nonstock bank may issue transferable certificates showing the amounts contributed by any incorporator or director to the guaranty or expense funds of the Oregon nonstock bank. (2) The certificate shall show that it does not constitute a liability of the Oregon nonstock bank, except as provided in ORS 716.800. (3) A certificate shall not be transferred by an incorporator or director without the prior written consent of the Director of the Department of Consumer and Business Services. [1973 c.797 381; 1997 c.631 351]
(1) The cost of the land and buildings to be used by an Oregon nonstock bank for the transaction of its business shall not exceed: (a) 50 percent of the guaranty fund and undivided profits account of the Oregon nonstock bank; or (b) 50 percent of the capital, as defined in ORS 708A.290, of the Oregon stock savings bank. (2) The Director of the Department of Consumer and Business Services may approve an amount in excess of the limitation prescribed under subsection (1) of this section if the director finds that an excess amount is reasonably necessary for the operation of the business and does not adversely affect the public interest. [Amended by 1971 c.219 8; 1973 c.797 382; 1997 c.631 352]
(1) If at the close of any dividend period the guaranty fund of an Oregon nonstock bank is impaired or is less than 10 percent of the amount due to depositors, a sum not less than five percent of the net earnings for the period shall be deducted from the net earnings and credited to its guaranty fund, after declaration of dividends, if the deduction will not compel the Oregon nonstock bank to reduce its dividends to depositors below the rate of one percent per annum. (2) If the guaranty fund accumulated from earnings equals or exceeds 10 percent of the amount due depositors and the net earnings for a dividend period are sufficient, the minimum dividend shall be four percent, unless a smaller percentage is authorized by rule promulgated by the Director of the Department of Consumer and Business Services. [Amended by 1973 c.797 386; 1975 c.544 48; 1997 c.631 353]
(1) To determine the amount of a guaranty fund of an Oregon nonstock bank, the total liabilities due and accrued, undivided profits and net earnings since the last declaration of dividends shall be subtracted from the total assets. In determining the value of the assets: (a) Securities, other evidences of indebtedness and other interest-bearing obligations shall be carried at a sum, not to exceed their cost to the Oregon nonstock bank, calculated according to accepted principles of accounting. (b) Real estate shall not be estimated above cost unless its fair market value has been determined by written appraisal made by a certified appraiser and approved by the board of the Oregon nonstock bank, in which case the real estate may be carried at the fair market value determined by the appraisal. If the real estate has been acquired by foreclosure or judgment at more than its actual fair market value, the value of the real estate shall be determined by written appraisal made by a certified appraiser and approved by the board of the Oregon nonstock bank and filed with the Oregon nonstock bank. (c) Except as provided in subsection (2) of this section, the following shall be excluded: (A) Assets that have been disallowed by the Director of the Department of Consumer and Business Services or the directors of the Oregon nonstock bank; (B) Debts owed to an Oregon nonstock bank that have remained due and upon which no interest has been paid for more than one year; and (C) Debts on which a judgment has been recovered which has remained unsatisfied for more than two years. (2) A debt mentioned in subsection (1)(c) of this section may be carried as an asset and will not be excluded in determining the value of the assets if: (a) The director, upon application by the Oregon nonstock bank, fixes a valuation at which the debt may be carried as an asset; or (b) The debt is secured by a first mortgage upon real estate and is carried as an asset at the amount of the debt secured by the mortgage or at the actual fair market value of the real estate as determined by written appraisal made by a certified appraiser and approved by the board of the Oregon nonstock bank and filed with the Oregon nonstock bank, whichever is smaller. [Amended by 1973 c.797 387; 1997 c.631 354; 2003 c.576 551]
(1) Contributions made by the incorporators or directors to the expense fund may be repaid pro rata to the contributors from that portion of the guaranty fund created from earnings if the payments will not reduce the guaranty fund below 10 percent of the total amount due depositors. If the Oregon nonstock bank liquidates before the contributions to the expense fund have been repaid, any contributions to the expense fund remaining after the payment of the expenses of liquidation and the payment to depositors in full may be repaid to the contributors pro rata. (2) When the contributions of the incorporators or directors to the expense fund have been returned to the contributors, the contributions made to the guaranty fund by incorporators or directors may be returned to them pro rata from that portion of the guaranty fund created from the earnings of the Oregon nonstock bank, if the repayments will not reduce the earned portion of the guaranty fund below 10 percent of the amount due depositors. If the Oregon nonstock bank liquidates before the contributions to the guaranty fund have been repaid, any portion of the contributions not needed for the payment of the expenses of liquidation, the payment of depositors in full and the repayment of contributions to the expense fund may be repaid to the contributors pro rata. (3) The board of directors may create a fund to be known as the guarantors reimbursement fund. One percent of the net earnings at the close of any dividend period may be paid in the guarantors reimbursement fund if it can be done without reducing the dividend rate below one percent per annum. The guarantors reimbursement fund may accumulate until it is equal to the amount contributed by the incorporators to the guaranty and expense funds, at which time the fund shall be used to repay the incorporators the amounts contributed by them to the guaranty and expense funds, if that portion of the guaranty fund created from earnings amounts to at least $15,000. [Amended by 1973 c.797 388; 1997 c.631 355]
Earnings of a savings bank shall be calculated on an accrual basis according to generally accepted accounting principles. [1973 c.797 389]
(1) Every Oregon nonstock bank shall regulate the rate of dividends upon the amounts to the credit of its time depositors so that time depositors receive dividends on their deposits in accordance with the terms of their respective deposit agreements with the Oregon nonstock bank, after transferring: (a) To the guaranty fund any amount considered by the directors to be expedient and for the security of the depositors; and (b) To undivided profits, for the purpose of maintaining its rate of dividends, the amount considered by the directors as wise. (2) An Oregon nonstock bank may classify its time depositors according to the character, amount or duration of their deposits with the Oregon nonstock bank, and may regulate its dividends so that each time depositor shall receive the same ratable portion of dividends as all others in the same class of time depositors. (3) Dividends may be apportioned upon unimpaired contributions to the initial guaranty fund and to the expense fund, and may be credited and paid to the contributors. If the guaranty fund of any Oregon nonstock bank is sufficiently large to permit the return of the contributions, the contributors may receive dividends on the contributions not exceeding the highest rate paid to depositors. (4) An Oregon nonstock bank may issue certificates of deposit and agree to pay dividends on the amounts deposited at a rate specified in the certificate for the entire term of the certificate. (5) An Oregon nonstock bank shall not: (a) Declare, credit or pay any dividend except as authorized by a vote of a majority of the board of directors and recorded in its minutes according to the ayes and noes upon each vote. (b) Pay any dividend other than the regular monthly, quarterly, semiannual or annual dividend, or the dividends prescribed in this subsection. (c) Declare, credit or pay dividends on any amount to the credit of a depositor for a longer period than it has been credited, but deposits made not later than the 10th business day of any month, or withdrawn upon one of the last three business days of the month ending any quarterly or semiannual dividend period, may have dividends declared upon them for the whole of the period or month when they were so deposited or withdrawn. If authorized in the bylaws, accounts closed between dividend periods may be credited with dividends at the rate of the last dividend, computed from the last dividend period to the date when closed. (6) A notice posted in an Oregon nonstock bank of a change in the rate of dividends is equivalent to a personal notice. [Amended by 1963 c.409 1; 1969 c.211 7; 1971 c.219 11; 1973 c.797 390; 1975 c.544 49; 1983 c.37 29; 1997 c.631 356]
If any dividend is declared and credited in excess of profits earned together with surplus and undivided profits since the last declaration of dividends and appearing to the credit of the Oregon nonstock bank, after making the deduction for expenses and the guaranty fund as provided in ORS 716.780 and 716.830, the directors voting for the dividend shall be jointly and severally liable to the Oregon nonstock bank for the amount of the excess so declared and credited. [Amended by 1973 c.797 391; 1975 c.544 49a; 1997 c.631 357]
An Oregon nonstock bank shall not use any sign or notice or publish or circulate any advertisement in which the surplus or guaranty fund is stated in excess of its value, as determined under this chapter, unless the nature of the excess clearly appears. [Amended by 1973 c.797 392; 1997 c.631 358]
[1975 c.544 52; 1997 c.631 359; renumbered 716.991 in 2001]
(1) Subject to the written approval of the Director of the Department of Consumer and Business Services and if necessary or expedient, the board of directors of an Oregon nonstock bank may adopt, by resolution passed by the affirmative vote of two-thirds of the directors, at a meeting called for that purpose, a plan to close the business, liquidate the assets, pay money due first to depositors, including those depositors whose deposits are uninsured, second to holders of consumer repurchase agreements, third to holders of capital notes, and then to other creditors, distribute the remaining assets, if any, as provided by this chapter and the plan of liquidation and surrender the corporate charter. The plan shall provide that any assets remaining after payment of depositors, holders of consumer repurchase agreements, capital noteholders and other creditors, and payment of the costs of liquidation and dissolution, shall be distributed to the time depositors and to other persons entitled thereto according to their several interests as determined by this chapter and the plan of liquidation. Each depositor shall receive a share of the remaining assets based on an apportionment as provided by the plan of dissolution approved by the director. (2) Before approving the plan for closing the Oregon nonstock bank under subsection (1) of this section, the director may make a special examination of the condition and affairs of the Oregon nonstock bank. [Amended by 1973 c.797 394; 1979 c.88 30; 1983 c.37 30; 1997 c.631 360]
(1) Upon approval of a plan under ORS 716.900, the directors shall mail written notice of their intention to close the Oregon nonstock bank to the last-known address of all depositors and other creditors. (2) All deposits and amounts reserved for creditors that remain unclaimed after six months from the date of the written notice required under subsection (1) of this section shall be reported and transferred by the directors to the State Treasurer as unclaimed property under ORS 98.352. (3) A copy of the report of unclaimed deposits and amounts reserved for creditors filed with the State Treasurer shall be filed with the Director of the Department of Consumer and Business Services. [1973 c.797 395; 1983 c.37 31; 1993 c.694 38; 1997 c.631 361; 2019 c.678 75; 2021 c.424 23]
After the directors of an Oregon nonstock bank have filed their report and deposited the unclaimed funds with the State Treasurer as required under ORS 716.905, the directors shall report their proceedings to the Director of the Department of Consumer and Business Services. Upon filing the report and the petition of the directors with the Director of the Department of Consumer and Business Services, the director shall order the charter surrendered, the directors discharged from liability accruing after the order, and the existence of the Oregon nonstock bank terminated. [Amended by 1973 c.797 396; 1997 c.631 362; 2019 c.678 76]
An Oregon stock savings bank may go into voluntary liquidation in accordance with the procedures and subject to the provisions set forth for institutions in ORS 711.215 to 711.250. [1997 c.631 365]
Any person who violates ORS 716.850 shall forfeit and pay to the State Treasurer to be deposited in the Consumer and Business Services Fund a civil penalty in an amount determined by the Director of the Department of Consumer and Business Services of not more than $2,500. The civil penalty may be recovered as provided in ORS 706.980. [Formerly 716.855]
As used in ORS 717.200 to 717.320, 717.900 and 717.905, unless the context requires otherwise: (1) "Applicant" means a person that files an application for a license under ORS 717.200 to 717.320, 717.900 and 717.905. (2) "Authorized delegate" means a person that a licensee designates under the provisions of ORS 717.200 to 717.320, 717.900 and 717.905 to sell or issue payment instruments or engage in the business of transmitting money on the licensees behalf. (3) "Control" means possessing, directly or indirectly, the power to direct or cause the direction of a persons management and policies, whether through ownership of voting securities, by contract or otherwise. (4) "Controlling person" means any person in control of a licensee or applicant for a license. (5) "Controlling shareholder" means any person, or group of persons acting in concert, that owns 25 percent or more of any voting class of an applicants stock. (6)(a) "Electronic instrument" means a card or other tangible object for transmitting or paying money that contains a microprocessor chip, magnetic stripe or other means for storing information, that is prefunded and for which the value is decremented upon each use. (b) "Electronic instrument" does not include a card or other tangible object that the issuer may redeem in the issuers goods or services. (7) "Executive officer" means the licensees president, chairperson of the executive committee, senior officer responsible for the licensees business, chief financial officer and any other person who performs similar functions. (8) "Licensee" means a person licensed under ORS 717.200 to 717.320, 717.900 and 717.905. (9) "Material litigation" means any litigation that, according to generally accepted accounting principles, is significant to an applicants or licensees financial health and to which the applicant or licensee must refer in the applicants or licensees annual audited financial statements, report to shareholders or similar documents. (10) "Money" means a medium of exchange that: (a) The United States or a foreign government authorizes or adopts; or (b) Represents value that substitutes for currency but that does not benefit from government regulation requiring acceptance of the medium of exchange as legal tender. (11) "Money transmission" means selling or issuing payment instruments or engaging in the business of receiving money for transmission, or transmitting money within the United States or to locations abroad by any and all means, including but not limited to payment instrument, wire, facsimile or electronic transfer. (12) "Nationwide Multistate Licensing System" means a system that the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, or assigns of the Conference of State Bank Supervisors or the American Association of Residential Mortgage Regulators, develop and maintain for participating state agencies to use in licensing and registering mortgage loan originators and other persons that provide nondepository financial services. (13)(a) "Payment instrument" means any electronic or written check, draft, money order, travelers check or other electronic or written instrument or order for transmitting or paying money, sold or issued to one or more persons, whether or not the instrument is negotiable. (b) "Payment instrument" does not include any credit card voucher, any letter of credit or any instrument that is redeemable by the issuer in goods or services. (14) "Outstanding payment instrument" means any payment instrument that a licensee issued and sold in the United States, or that a licensee issued and an authorized delegate of the licensee sold in the United States, and that has been reported to the licensee as having been sold but that has not yet been paid by or for the licensee. (15) "Permissible investments" means: (a) Cash; (b) Certificates of deposit or other debt obligations of a financial institution, either domestic or foreign; (c) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by member banks of the Federal Reserve System; (d) Any investment security bearing a rating of one of the three highest grades as defined by a nationally recognized organization that rates such securities; (e) Investment securities that are obligations of the United States Government, or agencies or instrumentalities of the United States Government, or obligations that the United States guarantees fully as to principal and interest, or any obligations of any state, municipality or any political subdivision of a state or municipality; (f) Shares in a money market mutual fund, interest-bearing bills, notes or bonds, debentures or stock traded on any national securities exchange or national market system, mutual funds primarily composed of such securities or a fund composed of one or more permissible investments as set forth herein; (g) Any demand borrowing agreement or agreements made with a corporation or a subsidiary of a corporation the capital stock of which is listed on a national securities exchange; (h) Receivables that are due to a licensee from the licensees authorized delegates under a contract described in ORS 717.270 and that are not past due or doubtful of collection; or (i) Any other investments or security device approved by the Director of the Department of Consumer and Business Services. (16) "Person" means an individual, partnership, association, joint stock association, limited liability company, trust or corporation. (17) "Remit" means either to pay funds directly to a licensee or representatives of a licensee authorized to receive the funds, or to deposit the funds in a bank, credit union or savings and loan association or other similar financial institution in an account that the licensee specifies. (18) "Security device" means a surety bond, irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 or other similar security acceptable to the Director of the Department of Consumer and Business Services. [1999 c.571 2; 2001 c.104 283; 2015 c.118 6]
(1) A person, other than a person that is exempt under ORS 717.210, may not conduct a money transmission business without a license that the Director of the Department of Consumer and Business Services issues in accordance with ORS 717.200 to 717.320, 717.900 and 717.905. (2) A licensee may conduct business in this state at one or more locations that the licensee owns directly or indirectly, through one or more authorized delegates, or both. A licensee is required to obtain only one license under ORS 717.200 to 717.320, 717.900 and 717.905. (3) Conducting a money transmission business does not alone constitute banking or branch banking for the purposes of the Bank Act. (4) The director has jurisdiction over a person that conducts a money transmission business whether or not the person is a licensee or authorized delegate. (5) The director, consistent with the requirements of ORS 717.200 to 717.320, 717.900 and 717.905, may administer a program to issue and renew licenses for money-transmission businesses by means of an agreement with the Nationwide Multistate Licensing System. [1999 c.571 3; 2015 c.118 7]
(1) ORS 717.200 to 717.320, 717.900 and 717.905 do not apply to: (a) Any company that accepts deposits in this state and that is insured under the Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq., as amended. (b) Credit unions or trust companies. (c) The United States Government or any department, agency or instrumentality thereof. (d) The United States Postal Service. (e) Any state or political subdivision of a state. (f) The provision or electronic transfer of government benefits for any federal, state or county government or other agency as defined in the Federal Reserve Board Regulation E (12 C.F.R. part 205), by a contractor for and on behalf of the United States Government or any department, agency or instrumentality of the United States, or any state or any political subdivision of a state. (g) The provision or handling of electronic or other transfer of escrowed moneys by an escrow agent licensed under ORS 696.511 to the extent that the escrow agent is: (A) Closing an escrow, as defined in ORS 696.505; (B) Engaging in activity related to a collection escrow, as defined in ORS 696.505; or (C) Serving as a trustee of a trust deed in accordance with ORS 86.713. (h) Authorized delegates of a licensee, acting within the scope of authority conferred by a written contract as described in ORS 717.270. (i) Any bank holding company as defined in the federal Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq., as amended, or any financial holding company as defined in ORS 706.008. (j) Any savings and loan holding company as defined in 12 U.S.C. 1467a (a)(1)(D), as amended. (2) The Director of the Department of Consumer and Business Services by rule or order may modify or waive the application of ORS 717.200 to 717.320, 717.900 and 717.905 to any person or group of persons if the director determines that adequate regulation of the person or group of persons is provided by law or by another agency of this state. (3) The director by rule or order may temporarily suspend the application of ORS 717.200 to 717.320, 717.900 and 717.905 to any person or group of persons while the director considers whether an exemption should be granted and during the pendency of any rulemaking proceeding proposing to create an exemption. [1999 c.571 4; 2001 c.377 50; 2013 c.444 3]
(1) Each licensee shall at all times have a net worth of not less than $100,000, calculated in accordance with generally accepted accounting principles. Licensees engaging in money transmission at more than one location or through authorized delegates shall have an additional net worth of $25,000 per location in this state, not to exceed a maximum of $500,000. (2) Every applicant, at the time of filing of an application for a license under ORS 717.200 to 717.320, 717.900 and 717.905 and at all times after a license is issued, shall be in good standing in the state of its incorporation or organization. (3) Each licensee shall at all times possess permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate face amount of all outstanding payment instruments issued or sold by the licensee in the United States. This requirement may be waived by the Director of the Department of Consumer and Business Services if the dollar volume of a licensees outstanding payment instruments does not exceed the amount of any security device posted by the licensee under ORS 717.225. (4) In the event of the bankruptcy of the licensee, permissible investments, even if commingled with other assets of the licensee, are considered by operation of law to be held in trust for the benefit of the purchasers and holders of the licensees outstanding payment instruments. [1999 c.571 5]
(1)(a) A person shall apply for a license under ORS 717.200 to 717.320, 717.900 and 717.905 in writing on a form and in a format the Director of the Department of Consumer and Business Services prescribes by rule. (b) The director, by rule, may conform the practices, procedures and information that the Department of Consumer and Business Services uses to issue and renew licenses for conducting a money transmission business to the requirements of the Nationwide Multistate Licensing System. (2) For all applicants, the application must contain: (a) The applicants exact name and principal address, any fictitious name, assumed business name or trade name the applicant uses to conduct business and the location of the applicants business records; (b) The history of the applicants material litigation and criminal convictions for the five-year period before the date of the application; (c) A history of operations and a description of the business activities in which the applicant seeks to engage in this state; (d) A list of the applicants proposed authorized delegates in the state, if any, at the time the applicant files the license application; (e) A sample authorized delegate contract, if applicable; (f) A sample form of payment instrument, if applicable; (g) The address of each location at which the applicant and the applicants authorized delegates, if any, propose to conduct a money transmission business in this state; (h) The name and address of the clearing bank or banks on which the applicants payment instruments will be drawn or through which the payment instruments will be payable; (i) A business plan; and (j) Fingerprints for each individual who has an ownership interest in the applicant and for each individual with supervisory responsibility over the applicants activities, with which the director may conduct a criminal records check that the director may process through the Nationwide Multistate Licensing System. (3) If the applicant is a corporation, the application must contain all of these items: (a) The date of the applicants incorporation and state of incorporation. (b) A certificate of good standing from the state in which the applicant was incorporated. (c) A description of the corporate structure of the applicant, including the identity of any parent or subsidiary of the applicant, and the disclosure of whether any parent or subsidiary is publicly traded on any stock exchange. (d) The name, business and residence address and employment history for the past five years of the applicants executive officers and the officers or managers who will be in charge of the applicants money transmission business. (e) The name, business and residence address of the applicants controlling shareholders and the controlling shareholders employment histories for the five-year period before the date of the application. (f) The history of material litigation and criminal convictions for all of the applicants executive officers and controlling shareholders in the five-year period before the date of the application. (g) A copy of the applicants most recent audited financial statement, including balance sheet, statement of income or loss, statement of changes in shareholder equity and statement of changes in financial position and, if available, a copy of the applicants audited financial statements for the immediately preceding two-year period. If the applicant is a wholly owned subsidiary of another corporation, the applicant may submit either the parent corporations consolidated audited financial statements for the current year and for the immediately preceding two-year period, or the parent corporations Form 10K reports filed with the United States Securities and Exchange Commission for the prior three years, in lieu of the applicants financial statements. If the applicant is a wholly owned subsidiary of a corporation with a principal place of business outside the United States, the applicant may submit similar documentation filed with the parent corporations foreign regulator to satisfy the requirements of this paragraph. (h) Copies of all filings, if any, the applicant made with the United States Securities and Exchange Commission, or with a similar regulator in a country other than the United States, within the year preceding the date of the application. (4) If the applicant is not a corporation, the application must contain: (a) The name, business and residence address, personal financial statement and employment history for the past five years of each principal of the applicant and the name, business and residence address, and employment history for the past five years of any other person that will be in charge of the applicants money transmission business; (b) The history of material litigation and criminal convictions in the five-year period before the date of the application for each individual who has any ownership interest in the applicant and each individual who exercises supervisory responsibility with respect to the applicants activities; and (c) Copies of the applicants audited financial statements, including balance sheet, statement of income or loss, and statement of changes in financial position, for the current year and, if available, a copy of the applicants audited financial statements for the immediately preceding two-year period. (5) The director, for good cause shown or in order to conform the departments licensing and license renewal program to the requirements of the Nationwide Multistate Licensing System, may waive any requirement of this section with respect to any license application or may allow an applicant to submit substituted information in a license application in lieu of the information required under subsection (2) of this section. [1999 c.571 6; 2005 c.21 12; 2015 c.118 8; 2019 c.106 4]
(1) Each license application shall be accompanied by a security device in the amount of $25,000. If the applicant proposes to engage in business under ORS 717.200 to 717.320, 717.900 and 717.905 at more than one location through authorized delegates or otherwise, the amount of the security device shall increase by $5,000 per location, not to exceed a maximum of $150,000. The security device shall be in a form satisfactory to the Director of the Department of Consumer and Business Services and shall run to the State of Oregon for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee with respect to the receipt, handling, transmission and payment of money in connection with the sale and issuance of payment instruments or transmission of money. The aggregate liability on any security device shall not exceed the principal sum of the security device. Claimants against the licensee may bring suit directly on the security device or the director may bring suit on behalf of such claimants, either in one action or in successive actions. (2) In lieu of the requirements of subsection (1) of this section, a licensee may deposit with the director, or with insured institutions as defined in ORS 706.008 located in this state and designated by the licensee and approved by the director, securities in an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the security device applicable under subsection (1) of this section or portion thereof. The securities shall be held to secure the same obligations as would the security device. The depositor shall be entitled to receive all interest and dividends on the securities and may, with the approval of the director, substitute other securities for those deposited. The director, in writing, for good cause shown, may require the depositor to substitute other securities for those deposited. As used in this subsection, "securities" includes interest-bearing stocks and bonds, notes, debentures or other obligations of the United States Government or any agency or instrumentality of the United States Government, or guaranteed by the United States Government, or of this state, or of a city, county, district or instrumentality of this state, or guaranteed by this state. (3) The security device shall remain in effect until cancellation, which may occur only after 30 days written notice to the director. Cancellation shall not affect any liability incurred or accrued during the 30-day period. (4) The security device shall remain in place for no longer than five years after the licensee ceases money transmission operations in this state. However, notwithstanding this provision, the director may permit the security device to be reduced or eliminated prior to that time to the extent that the amount of the licensees payment instruments outstanding in this state are reduced. The director may also permit a licensee to substitute a letter of credit or such other form of security device acceptable to the director for the security device in place at the time the licensee ceases money transmission operations in this state. (5) In the event of bankruptcy of the licensee, the security device shall be considered by operation of law to be held in trust for the benefit of purchasers and holders of the licensees outstanding payment instruments. [1999 c.571 7]
At the time an applicant submits an application, the applicant shall pay to the Director of the Department of Consumer and Business Services a fee of $1,000 for a license term that expires at the end of the calendar year in which the applicant submitted the application. [1999 c.571 8; 2015 c.118 9]
(1) Upon the filing of a complete application, the Director of the Department of Consumer and Business Services shall review the application and may investigate the financial condition and responsibility, financial and business experience, character and general fitness of the applicant. The director may conduct an on-site investigation of the applicant, the reasonable cost of which shall be paid by the applicant. The director may disapprove an application if the director finds that the applicant: (a) Is insolvent, either in the sense that the persons liabilities exceed the persons assets or that the person cannot meet obligations as they mature, or that the person is in such financial condition that the person cannot continue in business with safety to the persons customers; (b) Has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession; (c) Has willfully or repeatedly violated or failed to comply with a provision of the Oregon Bank Act, Oregon Securities Law, Oregon Credit Union Act, Oregon Consumer Finance Act or Pawnbrokers Act or any rule or order of the director adopted under those laws; (d) Has been convicted of a crime, an essential element of which is fraud; (e) Is not qualified to engage in the business of money transmission on the basis of such factors as training, experience and knowledge of the business; (f) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving an aspect of the banking business or of the money transmission business; (g) Is the subject of an order of the director subjecting the person to a civil penalty or removing the person from an office in any entity regulated by the director; or (h) Is the subject of an order entered within the past five years, subjecting the person to a civil penalty or removing the person from an office in a state or federally chartered, licensed or regulated financial services company. (2) The director may also disapprove an application if the director finds that a controlling person is subject to a provision of subsection (1) of this section except subsection (1)(a) or (e) of this section. If a controlling person is the sole owner of the applicant, then the director may disapprove an application if the director finds that the controlling person is subject to a provision of subsection (1) of this section. (3) If the director finds that the applicants business will be conducted honestly, fairly and in a manner commanding the confidence and trust of the community, and that the applicant has fulfilled the requirements imposed by ORS 717.200 to 717.320, 717.900 and 717.905 and has paid the required license fee, the director shall issue a license to the applicant authorizing the applicant to conduct money transmission business in this state for a term of one year. If these requirements have not been met, the director shall deny the application in writing and shall describe the reasons for the denial. (4) An order of the director denying an application under ORS 717.200 to 717.320, 717.900 and 717.905 shall state the grounds upon which the order is based and shall not become effective for at least 20 days after written notice of the order has been sent by registered or certified mail to the applicant at the principal place of business of the applicant. (5) Appeals from an order of the director denying an application may be taken to the courts of this state as provided by ORS chapter 183. [1999 c.571 9; 2009 c.541 37; 2011 c.597 289]
(1)(a) To renew a license, each licensee shall pay to the Director of the Department of Consumer and Business Services a nonrefundable annual fee of $500 or a fee that the director sets by rule in an amount that does not exceed $1,000. (b) In addition to paying the fee described in paragraph (a) of this subsection, a licensee shall provide information necessary for the director to evaluate the licensees renewal application. The director shall prescribe the information required by rule. The director may require a licensee to renew a license under the terms of the directors agreement with the Nationwide Multistate Licensing System. (2) At the time the licensee pays the renewal fee, the licensee shall submit an annual report on a date and in a form and format the director prescribes by rule. The annual report must describe the condition and operations of the money transmission business during the preceding calendar year and must include: (a) A copy of the licensees most recent audited consolidated annual financial statement, including a balance sheet, statement of income or loss, statement of changes in shareholder equity and statement of changes in financial position. In the case of a licensee that is a wholly owned subsidiary of another corporation, the consolidated audited annual financial statement of the parent corporation may be filed in lieu of the licensees audited annual financial statement. (b) For the most recent quarter for which data are available before the date of the renewal application, but not more than 120 days before the renewal date, a description of the number of payment instruments the licensee sold in this state, the dollar amount of the payment instruments and the dollar amount of payment instruments currently outstanding. (c) A description of any material changes to any of the information the licensee submitted on the licensees original application that the licensee has not previously reported to the director on any other report required to be filed with the director. (d) A list of the licensees permissible investments. (e) A list of the locations within this state at which the licensee or an authorized delegate of the licensee is conducting business regulated by ORS 717.200 to 717.320, 717.900 and 717.905. [1999 c.571 10; 2015 c.118 10]
Within 15 days following the occurrence of any one of the events listed in this section, a licensee shall file a written report with the Director of the Department of Consumer and Business Services describing the event and the events expected effect on the licensees activities in this state: (1) The filing for bankruptcy or reorganization by the licensee or the licensees sole owner; (2) The commencement of revocation or suspension proceedings against the licensee by any state or governmental authority with regard to the licensees money transmission activities; (3) Any felony indictment of the licensee or any of its key officers or directors; (4) Any felony conviction of the licensee or any of its key officers or directors; or (5) The theft of payment instruments from the licensee in an amount equal to or greater than 10 percent of a licensees monthly amount of outstanding payment instruments. [1999 c.571 11]
(1) Within 15 days of a change or acquisition of control of a licensee, the licensee shall provide notice of the change to the Director of the Department of Consumer and Business Services in writing and in a form the director may prescribe by rule. The notice shall be accompanied by such information, data and records as the director may require by rule. (2) Notwithstanding subsection (1) of this section, the director may waive the notice requirement if the director determines that the change in control does not pose any risk to the interests of the public. [1999 c.571 12]
(1) The Director of the Department of Consumer and Business Services may conduct an annual on-site examination of a licensee upon reasonable notice to the licensee. The examination may be conducted at the principal place of business of the licensee. Upon reasonable notice, the director may also conduct an examination of any location of the licensee and its authorized delegates. The on-site examination may be conducted in conjunction with examinations to be performed by representatives of agencies of other states. In lieu of an annual on-site examination, the director may accept the examination report of an agency of another state or a report prepared by an independent accountancy organization. Reports so accepted are considered for all purposes as an official report of the director. (2) The director may conduct an on-site examination of a licensee or any authorized delegate without prior notice to the licensee or authorized delegate if the director has a reasonable basis to believe that the licensee or authorized delegate is in violation of any provision of ORS 717.200 to 717.320, 717.900 and 717.905. The examination may be conducted at the principal place of business of the licensee or authorized delegate. (3) The director shall have authority to examine under oath all persons whose testimony the director may require in order to conduct the examination. (4) Each licensee examined under this section shall pay $60 per hour for each examiner, plus costs of an examination, to the director. The director may maintain an action for the recovery of such costs in any court of competent jurisdiction. [1999 c.571 13; 2001 c.104 284]
(1) Each licensee shall make, keep and preserve the following books, accounts and other records for a period of three years: (a) A record of each payment instrument sold; (b) A general ledger, posted at least once per month, containing all assets, liabilities, capital, income and expense accounts; (c) Settlement sheets received from authorized delegates; (d) Bank statements and bank reconciliation records; (e) Records of outstanding payment instruments; (f) Records of each payment instrument paid within the three-year period; and (g) A list of the names and addresses of all the licensees authorized delegates. (2) Books, accounts and other records required to be maintained under subsection (1) of this section may be maintained: (a) In a photographic, electronic or other similar form. (b) At a location outside this state, so long as the books, accounts and other records are made accessible to the Director of the Department of Consumer and Business Services following seven days written notice. [1999 c.571 14]
(1) The Director of the Department of Consumer and Business Services may by order suspend or revoke a license issued under ORS 717.200 to 717.320, 717.900 and 717.905 if the director finds that: (a) Any fact or condition exists that, if it had existed at the time when the licensee applied for a license, would have been grounds for denying the application; (b) The licensees net worth is inadequate and the licensee, following 10 days written notice from the director, fails to take such steps as the director considers necessary to remedy the inadequacy; (c) The licensee has violated any material provision of ORS 717.200 to 717.320, 717.900 and 717.905 or of any rule or order validly adopted or issued by the director under ORS 717.200 to 717.320, 717.900 and 717.905; (d) The licensee is conducting its business in an unsafe or unsound manner; (e) The licensee is insolvent; (f) The licensee has suspended payment of its obligations, has made an assignment for the benefit of its creditors or has admitted in writing its inability to pay its debts as they become due; (g) The licensee has applied for an adjudication of bankruptcy, reorganization, arrangement or other relief under any bankruptcy proceeding; (h) The licensee refuses to permit the director to make any examination authorized by ORS 717.200 to 717.320, 717.900 and 717.905; (i) The licensee knowingly fails to make any report required by ORS 717.200 to 717.320, 717.900 and 717.905; (j) The licensee has failed to maintain the security device or other securities as required by ORS 717.225; (k) The licensee has engaged in fraud in the conduct of the money transmission business; (L) The licensee knowingly has submitted false information to the director; or (m) The licensee has failed to terminate an authorized delegate when so ordered by the director. (2) The suspension or revocation of a license shall not: (a) Affect the licensees civil or criminal liability for acts committed prior to the suspension or revocation; (b) Affect the liability of the surety on the licensees security device; or (c) Entitle the licensee to a return of any part of the license or renewal fee. (3) Except for nonpayment of any fees required by ORS 717.200 to 717.320, 717.900 and 717.905 and except as provided in subsection (4) of this section, a license shall not be revoked or suspended by the director without opportunity for a hearing in accordance with ORS chapter 183. (4) If required to protect the public interest, a license may be suspended without a hearing in accordance with ORS 183.430 (2). (5) An order of the director revoking or suspending a license issued under ORS 717.200 to 717.320, 717.900 and 717.905 shall state the grounds upon which the order is based and, except for a summary order issued in accordance with ORS 183.430 (2), shall not become effective for at least 20 days after written notice of the order has been sent by registered or certified mail to the licensee at the principal place of business of the licensee. (6) Appeals from an order of the director revoking or suspending a license may be taken to the courts of this state as provided by ORS chapter 183. [1999 c.571 15]
Licensees desiring to conduct a money transmission business through authorized delegates shall authorize each delegate to operate pursuant to an express written contract. The contract shall specify the following: (1) That the licensee appoints the person as the licensees delegate with authority to engage in money transmission on behalf of the licensee; (2) That neither a licensee nor an authorized delegate may authorize subdelegates without the written consent of the Director of the Department of Consumer and Business Services; and (3) That licensees, authorized delegates and subdelegates are subject to supervision and regulation by the director. [1999 c.571 16]
(1) An authorized delegate shall not make any fraudulent or false statement or misrepresentation to a licensee or to the Director of the Department of Consumer and Business Services. (2) All money transmission activities conducted by authorized delegates shall be strictly in accordance with the licensees written procedures provided to the authorized delegate. (3) An authorized delegate shall remit all money owing to the licensee in accordance with the terms of the contract between the licensee and the authorized delegate. The failure of an authorized delegate to remit all money owing to a licensee within the time prescribed shall result in liability of the authorized delegate to the licensee for three times the licensees actual damages. (4) An authorized delegate is considered to consent to the directors inspection, with or without prior notice to the licensee or authorized delegate, of the books and records of the authorized delegate when the director has a reasonable basis to believe that the licensee or authorized delegate is in noncompliance with ORS 717.200 to 717.320, 717.900 and 717.905. (5) An authorized delegate is under a duty to act only as authorized under the contract with the licensee. An authorized delegate that exceeds the delegates authority is subject to cancellation of the delegates contract and further disciplinary action by the director. (6) All funds, not including fees, received by an authorized delegate from the sale or delivery of a payment instrument issued by a licensee, or received by an authorized delegate for transmission, shall constitute trust funds owned by and belonging to the licensee during the period beginning when the funds are received by the authorized delegate and ending when the funds or an equivalent amount are remitted by the authorized delegate to the licensee. If an authorized delegate commingles any such funds with any other funds or property owned or controlled by the authorized delegate, all commingled proceeds and other property shall be impressed with a trust in favor of the licensee in an amount equal to the amount of the proceeds due the licensee. (7) An authorized delegate shall report to the licensee the theft or loss of payment instruments within 24 hours from the time the authorized delegate first knows of the theft or loss. [1999 c.571 17]
(1) For any reason specified in subsection (2) of this section, the Director of the Department of Consumer and Business Services may issue an order suspending or barring an authorized delegate from continuing to be or becoming an authorized delegate during the period specified in the order. An order issued under this section shall require the licensee to terminate the licensees relationship with the authorized delegate during the period specified in the order. (2) The director may issue an order under subsection (1) of this section if the director finds that an authorized delegate or any director, officer, employee or controlling person of the authorized delegate has: (a) Violated any provision of ORS 717.200 to 717.320, 717.900 and 717.905 or of any rule adopted or order issued under ORS 717.200 to 717.320, 717.900 and 717.905; (b) Engaged or participated in any unsafe or unsound act with respect to the business of selling or issuing payment instruments of the licensee or the business of money transmission; or (c) Made or caused to be made in any application or report filed with the director, or in any proceeding before the director, any statement that was, at the time and in the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact that is required to be stated in the application or report. (3) Except as provided in subsection (4) of this section, the director shall not issue an order under this section without opportunity for a hearing in accordance with ORS chapter 183. (4) If required for the immediate protection of the public interest, an authorized delegate may be suspended without a hearing in accordance with ORS 183.430 (2). (5) An order of the director suspending or barring an authorized delegate under this section shall state the grounds upon which the order is based and, except for a summary order issued in accordance with ORS 183.430 (2), shall not become effective for at least 20 days after written notice of the order has been sent by registered or certified mail to the authorized delegate at the authorized delegates principal place of business. (6) Appeals from an order of the director suspending or barring an authorized delegate may be taken to the courts of this state as provided by ORS chapter 183. [1999 c.571 18]
(1) The responsibility of a licensee to any person for a money transmission conducted on that persons behalf by the licensee or the licensees authorized delegate shall be limited to the amount of money transmitted or the face amount of the payment instrument purchased plus statutory interest. (2) In addition to any amounts under subsection (1) of this section, the court may award a prevailing party reasonable costs and attorney fees. [1999 c.571 19]
(1) If the Director of the Department of Consumer and Business Services determines that any person has engaged in, is engaging in or is about to engage in any act or practice constituting a violation of ORS 717.200 to 717.320 or of any rule adopted or order issued under ORS 717.200 to 717.320, the director may: (a) Order the person to cease and desist from the unlawful act or practice; and (b) Take any affirmative action as may be necessary to carry out the provisions of ORS 717.200 to 717.320, including assessing the costs of any investigation. (2) Except as provided in subsection (3) of this section, the director may not issue an order under this section without opportunity for a hearing in accordance with ORS chapter 183. (3) If required for the immediate protection of the public interest, the director may issue a cease and desist order without a hearing in accordance with ORS 183.430 (2). (4) A cease and desist order of the director under ORS 717.200 to 717.320, 717.900 and 717.905 must state the grounds upon which the order is based and, except for a summary order issued in accordance with ORS 183.430 (2), does not become effective for at least 20 days after written notice of the order has been sent by registered or certified mail to the person at the persons principal place of business. (5) Appeals from a cease and desist order of the director may be taken to the courts of this state as provided by ORS chapter 183. [1999 c.571 20; 2005 c.338 23]
(1) If the Director of the Department of Consumer and Business Services believes that any person has engaged in, is engaging in or is about to engage in any act or practice constituting a violation of any provision of ORS 717.200 to 717.320, 717.900 and 717.905, or of any rule or order adopted or issued under ORS 717.200 to 717.320, 717.900 and 717.905, the director may initiate an action in the Circuit Court for Marion County to enjoin the act or practice and to enforce compliance with any provision of ORS 717.200 to 717.320, 717.900 and 717.905 or of any rule or order adopted or issued under ORS 717.200 to 717.320, 717.900 and 717.905. Upon a proper showing, a permanent or temporary injunction, restraining order or writ of mandamus shall be granted or a receiver or conservator may be appointed for the defendants assets. The director shall not be required to post a bond. The court may award a prevailing party reasonable attorney fees and costs. (2) The director may enter into consent orders at any time with any person to resolve any matter arising under ORS 717.200 to 717.320, 717.900 and 717.905. A consent order must be signed by the person to whom it is issued or a duly authorized representative, and must indicate agreement to the terms contained in the consent order. A consent order need not constitute an admission by any person that any provision of ORS 717.200 to 717.320, 717.900 and 717.905, or of any rule or order adopted or issued under ORS 717.200 to 717.320, 717.900 and 717.905, has been violated, nor need it constitute a finding by the director that the person has violated any provision of ORS 717.200 to 717.320, 717.900 and 717.905, or of any rule or order adopted or issued under ORS 717.200 to 717.320, 717.900 and 717.905. (3) Notwithstanding the issuance of a consent order, the director may seek civil or criminal penalties or compromise civil penalties concerning matters encompassed by the consent order, unless the consent order by its terms expressly precludes the director from so doing. [1999 c.571 22]
(1) For purposes of an investigation or proceeding under ORS 717.200 to 717.320, 717.900 and 717.905, the Director of the Department of Consumer and Business Services may administer oaths and affirmations, subpoena witnesses and compel their attendance, take evidence and require the production of books, papers, correspondence, memoranda, agreements or other documents or records that the director considers relevant or material to the inquiry. Each witness who appears before the director under a subpoena shall receive the fees and mileage provided for witnesses in ORS 44.415 (2). (2) If a person fails to comply with a subpoena issued pursuant to this section or a party or witness refuses to testify on any matter, the judge of the circuit court of any county, on the application of the director, shall compel obedience by proceedings for contempt as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify. [1999 c.571 23]
(1) Any licensee, authorized delegate or other person that knowingly engages in the money transmission business under ORS 717.200 to 717.320, 717.900 and 717.905, with or without filing a license application, is considered to have: (a) Consented to the jurisdiction of the courts of this state for all actions arising under ORS 717.200 to 717.320, 717.900 and 717.905; and (b) Appointed the Director of the Department of Consumer and Business Services as the licensees, delegates or persons lawful agent for the purpose of accepting service of process in any action, suit or proceeding that may arise under ORS 717.200 to 717.320, 717.900 and 717.905. (2) Within three business days after service of process upon the director, the director shall transmit by certified mail copies of all lawful process accepted by the director as an agent to the person for whom service of process is accepted at the persons last known address. Service of process shall be considered complete three business days after the director deposits copies of the documents in the United States mail. [1999 c.571 26]
(1) The Director of the Department of Consumer and Business Services may adopt rules for the purpose of carrying out the provisions of ORS 717.200 to 717.320, 717.900 and 717.905. (2) In addition to the notice requirements of ORS chapter 183, before the director adopts a permanent rule, the director shall submit a copy of the proposed rule to each licensee. [1999 c.571 25]
All fees, charges, costs and civil penalties collected by the Director of the Department of Consumer and Business Services under ORS 717.200 to 717.320, 717.900 and 717.905 shall be paid to the State Treasurer and credited as provided in ORS 705.145. [1999 c.571 28; 2011 c.597 290]
ORS 717.200 to 717.320, 717.900 and 717.905 may be cited as the "Oregon Money Transmitters Act." [1999 c.571 27]
(1) If the Director of the Department of Consumer and Business Services finds that a person has violated any provision of ORS 717.200 to 717.320, 717.900 and 717.905, or of a rule adopted or order issued under ORS 717.200 to 717.320, 717.900 and 717.905, the director may impose a civil penalty in an amount specified by the director, not to exceed $1,000 for each violation or, in the case of a continuing violation, $1,000 for each day that the violation continues. Civil penalties under this section shall be imposed in the manner described in ORS 183.745. A penalty shall not be assessed under this section until after the person subject to the penalty has been notified in writing of the nature of the violation and has been afforded a reasonable period of time, as set forth in the notice, to correct the violation and has failed to do so. (2) Appeals from orders of the director under this section may be taken to the courts of this state as provided by ORS chapter 183. (3) The director may compromise and settle with and collect civil penalties from any person for violations of any provision of ORS 717.200 to 717.320, 717.900 and 717.905, or of any rule adopted or order issued under ORS 717.200 to 717.320, 717.900 and 717.905. [1999 c.571 21]
(1) Except as provided in this section, violation of any provision of ORS 717.200 to 717.320, 717.900 and 717.905 is a Class A misdemeanor. (2) Any person that makes a material, false statement in any document filed or required to be filed under ORS 717.200 to 717.320, 717.900 and 717.905 with the intent to deceive the recipient of the document is guilty of a Class C felony. (3) Any person that engages in the business of money transmission without a license is guilty of a Class C felony. [1999 c.571 24]
[Amended by 1953 c.401 11; 1959 c.227 10; 1961 c.398 11; 1971 c.757 8; 1973 c.368 2; 1975 c.582 79; renumbered 722.206]
[Amended by 1959 c.227 11; 1975 c.582 69; renumbered 722.136]
[Amended by 1953 c.401 11; 1959 c.227 13; 1961 c.398 13; 1965 c.306 9; 1967 c.234 2; 1975 c.582 70; renumbered 722.138]
[Amended by 1953 c.401 11; 1961 c.280 9; 1971 c.757 10; 1975 c.582 117; renumbered 722.434]
[Amended by 1975 c.582 76; renumbered 722.162]
[Amended by 1975 c.582 129; renumbered 722.468]
[1967 c.234 9; 1975 c.582 65; renumbered 722.118]
[Amended by 1959 c.227 23; 1961 c.398 30; 1975 c.582 100; renumbered 722.328]
[1963 c.288 10; 1975 c.582 106; renumbered 722.352]
[1967 c.257 2; 1975 c.582 104; renumbered 722.338]
[1975 c.582 128; 1983 c.696 28; 1985 c.762 72a; 1985 c.786 63; 1987 c.373 60; 1991 c.734 96; renumbered 722.991 in 2001]
[1971 c.757 17; 1975 c.582 93; renumbered 722.306]
[Amended by 1975 c.582 133; renumbered 722.478]
[Amended by 1975 c.582 138; renumbered 722.506]
[Amended by 1975 c.582 139; renumbered 722.508]
As used in this chapter, unless the context requires otherwise: (1) "Assets" means property, a right or a claim with future objectively measurable value that is owned or effectively controlled by a credit union. (2) "Capital" means a credit unions reserves, undivided earnings and allowances for loan loss. (3) "Corporate central credit union" means a cooperative organization whose members consist primarily of other credit unions and whose purposes are: (a) To accumulate and prudently manage the liquidity of its member credit unions through interlending and investment services; (b) To act as an intermediary for member credit unions to the payment systems and facilitate funds transfers between its member credit unions and other financial institutions or their agents; (c) To obtain liquid funds from other credit union organizations, financial intermediaries and other sources; and (d) To perform such other financial services that benefit its member credit unions and that are authorized in writing by the Director of the Department of Consumer and Business Services. (4) "Department" means the Department of Consumer and Business Services. (5) "Director" means the Director of the Department of Consumer and Business Services. (6) "Equity" means a credit unions reserves and undivided earnings. (7) "Home state" means the state in which the credit union is chartered. (8) "Host state" means the state in which a credit union conducts business, but that is not the home state. (9) "Interstate credit union" means a credit union chartered under the provisions of this chapter or under the authority of the laws of another state and operating in this state and in one or more other states. (10) "Official" means any of the following: (a) An individual who is or was a director or officer of the credit union; or (b) An individual who is or was a member of a credit unions credit committee or supervisory committee. (11) "Regular reserve" means an irrevocable reserve set aside to cover losses. [1985 c.762 80; 1987 c.158 151; 1987 c.373 62; 1987 c.650 1; 1993 c.744 25; 1995 c.319 7; 1999 c.185 1]
This chapter shall be known and may be cited as the "Oregon Credit Union Act." [1975 c.652 2; 1985 c.762 78; 1985 c.801 1; 1987 c.158 152; 1987 c.373 63; 1987 c.650 2]
A credit union is a cooperative, nonprofit association, incorporated under the laws of this state, for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest and providing an opportunity for its members to use and control their own money in order to improve their economic and social condition. [1975 c.652 3]
As used in ORS 723.136 and 723.464 to 723.498, "credit union" means a credit union organized under this chapter, an interstate credit union doing business in this state or a federal credit union. [1999 c.185 18; 2001 c.104 286]
(1) Any seven or more residents of this state or another appropriate jurisdiction, of legal age, who have a common bond referred to in ORS 723.172 may organize a credit union and become charter members thereof by complying with this section. (2) The incorporators shall execute the documents, including the articles of incorporation, required by the Director of the Department of Consumer and Business Services to apply for a credit union charter. The articles shall state: (a) The name, which shall include the words "credit union" and which shall not be the same as that of any other existing credit union in this state. (b) The location where the proposed credit union is to have its principal place of business. (c) The par value, if any, of the shares of the credit union shall be defined in the bylaws. (d) The full name, residence and post-office address of each of the incorporators. (e) The number of its directors, which shall not be less than five, and the names of the incorporators who shall be its directors until the first annual meeting of shareholders. (f) The number of members of the supervisory committee, which shall not be less than three, and the name, residence and post-office address of the persons who are to serve as members until the first meeting of directors. (3) The incorporators shall prepare and adopt bylaws for the general government of the credit union, which shall be consistent with this chapter. (4) The incorporators shall forward the articles of incorporation and the bylaws to the Director of the Department of Consumer and Business Services, together with a filing fee in an amount that the director sets by rule. The director shall issue a certificate of approval if the articles and the bylaws are in conformity with this chapter and the director is satisfied that the ability of the proposed credit union to operate successfully is favorable. The director shall return a copy of the bylaws and the articles to the applicants or their representatives, which shall be preserved in the permanent files of the credit union. The application shall be acted upon by the director within 60 days. (5) The subscribers for a credit union charter shall not transact any business until formal approval of the articles and bylaws has been received. [1975 c.652 4; 1985 c.762 85; 1987 c.286 1; 1999 c.185 2; 2007 c.343 1]
The Director of the Department of Consumer and Business Services may not issue a certificate of approval under ORS 723.012 if a person named in the articles of incorporation submitted for approval: (1) Is insolvent or bankrupt; (2) Has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession; (3) Has willfully or repeatedly violated or failed to comply with a provision of the Oregon Bank Act, the Oregon Credit Union Act, the Oregon Consumer Finance Act, the Oregon Securities Law, the Oregon Mortgage Lender Law or the Pawnbrokers Act, or an administrative rule or order adopted under an Act identified in this subsection; (4) Has been convicted of a crime, an essential element of which is fraud; (5) Is not qualified to conduct a credit union business on the basis of such factors as training, experience and knowledge of the business; (6) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the credit union business; (7) Is the subject of an order of the director subjecting the person to a civil penalty, or removing the person from an office in any entity regulated by the director; or (8) Is the subject of an order that was issued by the regulatory authority of another state, or of the federal government, with authority over banking institutions, credit unions, consumer finance companies, savings associations, securities firms or mortgage lenders, that was entered within the past five years and that subjects the person to a civil penalty or removes the person from an office in a state banking institution, a national bank, a state or federal credit union, a state or federal savings association or a consumer finance company, or from a position as a securities broker or dealer, a state or federal investment adviser or a mortgage lender. [1977 c.135 42; 1985 c.762 86; 1987 c.373 63a; 1987 c.650 3; 1999 c.185 3; 2009 c.541 38; 2011 c.597 291]
In order to simplify the organization of credit unions, the Director of the Department of Consumer and Business Services shall cause to be prepared a form of articles of incorporation and a form of bylaws, consistent with this chapter, which may be used by credit union incorporators for their guidance. The articles of incorporation and bylaws shall be available without charge to persons desiring to organize a credit union. [1975 c.652 5; 1985 c.762 87]
(1) The articles of incorporation or the bylaws may be amended as provided in the bylaws. Amendments to the articles of incorporation or bylaws shall be submitted to the Director of the Department of Consumer and Business Services, together with a fee established by rule of the director. (2) Amendments to articles of incorporation are effective upon approval in writing by the director. (3) Amendments to bylaws submitted to the director in accordance with subsection (1) of this section become effective 30 days after submission, unless the director, within that time, notifies the submitter in writing that the director either disapproves the amendments or requires submission of additional information. If the director requires submission of additional information, the amendments become effective 30 days after the date the information is submitted, unless the director disapproves the amendments within that time. [1975 c.652 6; 1991 c.635 1; 1999 c.185 4; 2017 c.35 1]
With the exception of a credit union organized under this chapter or of any other credit union act, or an association of credit unions or a recognized chapter thereof, any person using a name or title containing the words "credit union" or any derivation thereof or representing themselves in their advertising or otherwise as conducting business as a credit union shall be fined not more than $500 or imprisoned not more than one year, or both, and may be permanently enjoined from using such words in its name. [1975 c.652 7; 1985 c.762 88]
(1) A credit union may establish a place of business or change the credit unions place of business within this state 30 days after notifying the Director of the Department of Consumer and Business Services in writing. (2) A credit union may establish one or more mobile facilities to engage in credit union operations. Mobile facilities of a credit union that have the membership described in ORS 723.172 (3)(a) may operate in this state or in other states. Mobile facilities of a credit union that have the membership described in ORS 723.172 (3)(b) may operate only within the well-defined local community, neighborhood or rural district that the credit union serves. (3) A credit union may establish additional places of business 30 days after notifying the director in writing. The director may limit or restrict a credit unions ability to establish additional places of business upon written notice to the credit union if the director determines that an addition would adversely affect the credit unions safety and soundness. (4) A credit union may share office space with one or more credit unions and contract with a person or corporation to provide facilities or personnel. [1975 c.652 8; 1977 c.135 44; 1991 c.635 3; 1997 c.832 1; 1999 c.185 55; 2005 c.95 1; 2007 c.343 2; 2009 c.234 1; 2015 c.458 1]
The fiscal year of each credit union shall end on the last day of December. [1975 c.652 9]
(1) A credit union chartered under this chapter may operate in another state unless prohibited by the laws of the other state. Oregon is the home state for any credit union chartered under this chapter. (2) A credit union organized under the laws of another state may conduct business as a credit union in this state with the approval of the Director of the Department of Consumer and Business Services under the conditions described in subsection (3) of this section. Oregon is the host state for any credit union chartered under the laws of any other state and conducting business as a credit union in this state. The state that charters the credit union is the home state of the credit union. (3) The director may issue a branch certificate to a credit union chartered in another state for the purposes of operating in this state if all of the following conditions are met: (a) The credit union is organized under a credit union law substantially similar to this chapter; (b) The credit union files an application that includes an agreement to comply with all rules prescribed by the director; (c) The credit union agrees to submit an annual or other regular report of examination from the supervising agency of the state in which it is chartered; (d) The credit union agrees to authorize the examination of its parent credit union by the director and to pay the fee determined under ORS 723.114; (e) The field of membership of the credit union meets the definition of membership as defined in ORS 723.172; (f) The credit union acknowledges that laws of this state relating to consumer protection apply to transactions with residents of this state; (g) The credit union has account insurance comparable to that required for credit unions incorporated under this chapter; (h) The credit union designates and maintains an agent for the service of process in this state; and (i) The credit union submits quarterly financial reports as required by the director. (4) The director may suspend or revoke the certificate of any credit union for which Oregon is the host state for any violation of the provisions of this chapter or rules or orders issued by the director. [1975 c.652 10; 1981 c.412 6; 1985 c.762 89; 1987 c.373 63b; 1999 c.185 5]
In accordance with ORS chapter 183, the Director of the Department of Consumer and Business Services may adopt rules for the purpose of carrying out this chapter. [1975 c.652 11; 1985 c.762 90; 1991 c.331 123; 1991 c.635 4; 1999 c.185 6]
(1) Credit unions shall report to the Director of the Department of Consumer and Business Services annually by a date established by the director on forms supplied and in the manner specified by the director for that purpose. Additional reports may be required. (2) A civil penalty in an amount to be established by rule of the director, but not to exceed $1,000 for each day a report is in arrears shall be levied against the offending credit union unless it is excused for cause by the director. [1975 c.652 12; 1991 c.635 2; 1999 c.185 7; 2011 c.597 292]
(1) The Director of the Department of Consumer and Business Services shall examine each credit union to determine its condition and whether the credit union is complying with the laws of this state and such other matters as the director may prescribe. For the purpose of conducting an examination or any part thereof, the director may employ an independent consultant determined by the director as qualified to conduct examinations. Except as provided in subsection (3) of this section, examinations under this subsection must be conducted not less frequently than 24 months apart. (2) For purposes of an examination under subsection (1) of this section: (a) Each credit union and all of its officers and agents shall be required to give to representatives of the director full access to all of the credit unions books, papers, securities, records and other sources of information under their control. (b) The director may subpoena witnesses, administer oaths, compel the giving of testimony and require the submission of documents. (3) Instead of an examination under subsection (1) of this section, the director may accept an examination or report made by an agency of the United States Government under statutes of the United States. (4) A report of an examination under subsection (1) of this section shall be forwarded to the executive officer of each credit union within 60 days after completion. The report shall contain comments relative to the management of the affairs of the credit union and also as to the general condition of its assets. Within 45 days after the receipt of the report, the directors and supervisory committee members shall meet to consider matters contained in the report and shall report in writing to the director on the manner in which the credit union is complying or will comply with the directors recommendations. [1975 c.652 13; 1977 c.135 45; 1985 c.762 91; 1987 c.373 63c; 1999 c.185 8]
(1) Each credit union shall pay to the Director of the Department of Consumer and Business Services each year a fee set in a schedule the director adopts by rule. The fee shall be paid by the date set by the director in the rule establishing the schedule. (2) In addition to any fee collected under subsection (1) of this section, whenever the director devotes any extra attention to the affairs of a credit union, either upon determination by the director or upon request of the credit union, the fee for the extra service shall be the actual cost of the extra service. (3) The director shall set or change the fee schedule described in subsection (1) of this section after considering: (a) The amount of other moneys available for the director to use in performing the directors duties; (b) The costs the director will incur in performing the directors duties in the year in which the director will collect the fee; and (c) The amount the director needs to establish and maintain a reasonable emergency fund. [1985 c.762 92; 1987 c.171 6; 1987 c.373 64; 2009 c.541 39]
A credit union shall maintain all books, records, accounting systems and procedures in accordance with such rules as the Director of the Department of Consumer and Business Services from time to time prescribes. In prescribing such rules, the director shall consider the relative size of a credit union and its reasonable capability of compliance. [1975 c.652 14; 1991 c.635 5; 1999 c.185 9]
(1) The Director of the Department of Consumer and Business Services shall receive and file in the Department of Consumer and Business Services all reports required under this chapter. (2) Except as provided in subsection (3) of this section, the records of the department pertaining to the administration of this chapter are available for public inspection unless the director determines in a particular instance that the credit union or the directors, members, officers or employees of the credit union have an interest in keeping the records confidential that outweighs the public interest in disclosing the records, or that the records are exempt from disclosure under ORS 192.338, 192.345 and 192.355. A determination by the director under this subsection is subject to review under ORS 192.311 to 192.478. (3) Except as provided in subsections (4) and (5) of this section, the following records of the department are exempt from disclosure or production and shall be treated as confidential as provided in ORS 705.137: (a) Examination reports and work papers, directives, orders and correspondence that relate to examination reports. (b) Financial statements of and investigatory information concerning persons subject to investigation by the director under ORS 723.014 or 723.132. (c) Proprietary information. (d) Reviews of financial statements submitted to the director. (e) The name of a member or borrower and the amount of shares, deposits or debts of a member or borrower. (f) Correspondence, reports or other information obtained from or provided to the Financial Crimes Enforcement Network established by order of the United States Secretary of the Treasury. (4) Notwithstanding subsection (3) of this section and except as otherwise provided in this subsection, the director may disclose a record that is specified in this subsection and that pertains to a credit union that has been liquidated under ORS 723.676 if the director determines in a particular instance that the public interest in disclosing the record outweighs the interests of the credit union or of the directors, members, officers or employees of the credit union in keeping the record confidential. The director may not disclose a record or portion of a record that contains proprietary information or information that relates to an individuals financial activities or affairs unless the director concludes that the activities or affairs were a direct and substantial contributing factor in the failure of the credit union. This subsection applies to the following records of the department: (a) Examination reports and work papers, directives, orders and correspondence that relate to examination reports. (b) Investigatory information concerning persons subject to investigation by the director under ORS 723.014 or 723.132. (c) Reviews of financial statements. (d) Reports filed under ORS 723.106. (5) Notwithstanding ORS 40.270, an officer of the department may be examined concerning records that are exempt from disclosure under subsection (2) or (3) of this section. The records are subject to production if the court before which a civil or criminal action is pending finds that the examination and production is essential for establishing a claim or defense. In making a finding under this subsection, if the court views the records, the court shall do so in camera. (6) All records of the department pertaining to the condition of credit unions may be furnished to: (a) The National Credit Union Administration. (b) The Federal Home Loan Bank of which the credit union is a member or to which the credit union has applied for membership. (c) The State Treasurer if the credit union is a depository of public fund deposits. (d) The respective credit union. (7) If the director is requested to disclose a record subject to this section and the record contains both material that is exempt from disclosure under this section or any other provision of law and material that is not exempt from disclosure, the director shall separate the exempt and nonexempt material and may disclose only the nonexempt material. [2005 c.95 3; 2009 c.541 40]
(1) A credit union shall obtain and maintain a fidelity bond or irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, that includes coverage in accordance with rules of the Director of the Department of Consumer and Business Services, to protect the credit union against losses caused by occurrences such as fraud, dishonesty, forgery, embezzlement, misappropriation, misapplication of duty and all acts of agents, directors, officers, committee members, employees or attorneys of the credit union. The minimum amount of the bond or letter of credit is based on the amount of the credit unions total assets in accordance with the following table: ______________________________________________________________________________ Total Assets Minimum Amount of Bond or Letter of Credit $0 to $4,000,000 $250,000 or coverage equal to the credit unions total assets, whichever is less. $4,000,001 to $50,000,000 $100,000 plus $50,000 for each $1,000,000 of total assets or fraction of total assets over $1,000,000. $50,000,001 to $500,000,000 $2,550,000 plus $10,000 for each $1,000,000 of total assets or fraction of total assets over $50,000,000, with a maximum of $5,000,000. More than $500,000,000 1% of the credit unions total assets rounded to the nearest $100,000,000, with a maximum of $9,000,000. ______________________________________________________________________________ (2) A fidelity bond or letter of credit must include a faithful performance clause to cover the chief financial officer. The director must approve the fidelity bond or letter of credit and may require additional amounts as the director considers necessary. (3) Claims upon a fidelity bond or letter of credit that exceed one percent of the credit unions reserves and undivided earnings or that are related to the errors or omissions of an officer, director or committee member must be reported to the director. [1975 c.652 15; 1987 c.286 2; 1991 c.331 124; 1995 c.319 1; 1997 c.249 216; 1997 c.631 542; 1997 c.832 2; 1999 c.185 10; 2001 c.308 1; 2009 c.234 2; 2013 c.480 1]
The Director of the Department of Consumer and Business Services may institute any action or other proceeding that the director considers necessary for enforcing any provision of this chapter or any rule, order or action adopted, issued or taken by the director under this chapter. [1987 c.215 10]
The Director of the Department of Consumer and Business Services by order may direct a credit union to remove any officer, director or committee member of the credit union for any reason stated in ORS 723.014. [1987 c.650 6]
(1) The Director of the Department of Consumer and Business Services by rule may establish guidelines for determining whether a credit union predominantly serves low-income members. If the director, using the guidelines established in accordance with this subsection, determines that a credit union predominantly serves low-income members, the credit union may: (a) Receive deposits from a person that is not a member of the credit union and allow the person to hold shares in the credit union; and (b) Issue secondary capital accounts that are subject to any terms and conditions that the Director of the Department of Consumer and Business Services may prescribe by rule. (2) For purposes of this section, "secondary capital account" means a deposit or share account that is not insured by the National Credit Union Administration, or another primary share insurer approved by the Director of the Department of Consumer and Business Services, and that is subordinate to all other claims against the credit union, including claims of creditors, owners of share accounts and the National Credit Union Administration or another insurer approved by the Director of the Department of Consumer and Business Services. Secondary capital accounts that the credit union issues in accordance with this section are equity as defined in ORS 723.001 for the purposes of ORS 723.631 and for any other purpose. (3) The powers set forth in this section are in addition to the powers the credit union has under ORS 723.152. [2007 c.343 5; 2021 c.97 82]
(1) The Director of the Department of Consumer and Business Services may enter into cooperative, coordinating and information sharing agreements with another credit union supervisory agency, with the Financial Crimes Enforcement Network established by order of the United States Secretary of the Treasury or with an organization affiliated with or representing one or more credit union supervisory agencies. The director may enter into the agreements in order to examine or supervise a non-Oregon institution branch or other office or place of business located in this state or to examine or supervise a branch of a credit union that is chartered in Oregon and is located in another state. The director may accept an agency report made pursuant to an agreement entered into under this section in lieu of the directors own examination or investigation. The agreement may resolve conflicts of laws and specify the manner in which examination, supervision and application processes will be coordinated between this state and the home state of the non-Oregon institution. The director may also share information with the Federal Home Loan Bank and the directors of the Federal Home Loan Bank. (2) The director may enter into a contract with a credit union supervisory agency that has concurrent jurisdiction over a credit union operating a branch or other office or place of business in this state to engage the services of the agencys examiners at a reasonable rate of compensation or to provide the services of the directors examiners to the agency at a reasonable rate of compensation. The contract is exempt from competitive bidding requirements under the provisions of ORS chapters 279A and 279B. The contract may resolve conflicts of laws and specify the manner in which examination, supervision and application processes will be coordinated between this state and the home state of the non-Oregon institution. (3) The director may enter into joint examinations or joint enforcement actions with other credit union supervisory agencies that have concurrent jurisdiction over a non-Oregon institution branch or other office or place of business located in this state or a branch of a credit union that is chartered in Oregon and is located in another state. Conducting a joint examination or enforcement action under this subsection does not prevent the director from conducting an independent examination or enforcement action at any time if the director determines that carrying out the directors responsibilities or ensuring compliance with the laws of this state requires the independent action. With respect to examinations or enforcement actions that involve non-Oregon institutions, the director may recognize: (a) The exclusive authority of the credit union supervisory agency of the home state of the non-Oregon institution over corporate governance matters; and (b) The primary responsibility of the credit union supervisory agency of the home state of the non-Oregon institution over safety and soundness matters. (4) The director may share fees collected from non-Oregon institutions under the provisions of this chapter with another credit union supervisory agency or an organization affiliated with or representing one or more credit union supervisory agencies in accordance with agreements between the agency or organization and the director. [1999 c.185 39; 2003 c.794 324; 2009 c.541 41]
In addition to the powers conferred by the general corporation law a credit union may, subject to the restrictions and limitations contained in this chapter and the credit unions bylaws: (1) Make contracts. (2) Sue and be sued. (3) Adopt, use and alter a common seal. (4) Acquire, lease, hold and dispose of property, either in whole or in part, necessary or incidental to the credit unions operations. (5) At the discretion of the board of directors, require any person admitted to membership to pay an entrance fee or annual membership fee, or both. (6) Receive savings from members of the credit union in the form of various classes of shares, deposits or deposit certificates, deposit accounts or special-purpose thrift accounts. (7) Receive from members of the credit union or from another credit union deposits or deposit certificates, deposit accounts or various classes of shares payable on nonnegotiable request. (8) Lend the credit unions funds to members of the credit union and to other credit unions as provided in this chapter. (9) Acquire and lease personal property at the request of a member of the credit union who wishes to lease the property on terms requiring payment, during the term of the lease, of rents that exceed the total expenditures made by the credit union for the acquisition, ownership, financing and protection of the property. Rents may include residual value payments that are the obligation of a responsible third party. (10) Borrow from any source in accordance with policy established by the board of directors and issue debentures pursuant to a plan approved by the Director of the Department of Consumer and Business Services. The debentures shall be subordinate to the shares and deposits of the credit union. (11) Discount and sell any eligible obligations, subject to rules adopted by the Director of the Department of Consumer and Business Services. (12) Sell all or substantially all of the credit unions assets or purchase all or substantially all of the assets of another credit union, subject to the approval of the Director of the Department of Consumer and Business Services. (13) Invest surplus funds as provided in this chapter. (14) Make deposits in legally chartered banks, savings banks, savings and loan associations, trust companies and credit unions. (15) Assess charges to a member of the credit union in accordance with the credit unions bylaws for the members failure to meet the members obligations to the credit union promptly. (16) Hold membership in other credit unions organized under this chapter or other state or federal laws, and in other associations and organizations composed of credit unions. (17) Declare dividends, pay interest on deposit and deposit certificate accounts and pay interest refunds to borrowers as provided in this chapter. (18) Offer products and services reasonably related to the purposes of a credit union as set forth in ORS 723.006. (19) Receive deposits from the federal government or this state, or any agency or political subdivision thereof. (20) Make donations or contributions to any civic, charitable, political or community organization as authorized by the board of directors. (21) Act as a custodian of qualified pension funds of members of the credit union if permitted by federal law. (22) Purchase or make available insurance for the credit unions directors, officers, agents, employees and members. (23) Allow members of the credit union to use share accounts, deposit accounts or deposit certificate accounts as share draft accounts as provided in ORS 723.434. (24) Provide digital signature verification or other electronic authentication services to members of the credit union. (25) Act as trustee or custodian for members of the credit union under any written trust instrument or custodial agreement in connection with a tax-advantaged savings plan authorized under the Internal Revenue Code, including but not limited to individual retirement, deferred compensation, education savings and health savings accounts, provided that the trust instrument or custodial agreement requires all funds subject to the instrument or agreement to be invested exclusively in share or deposit accounts in the credit union. The State of Oregon, or the applicable instrumentality or municipality, is considered to be a member of the credit union with respect to such deposits, except that the state or other instrumentality or municipality is not entitled to vote, hold office or otherwise participate in the management or operation of the credit union. (26) Indemnify the directors, officers, employees and committee members or other volunteers of the credit union in accordance with the provisions of the credit unions articles, bylaws and the indemnification provisions of ORS chapter 60. (27) Sell negotiable checks, including travelers checks, money orders and other money transfer instruments, including domestic and international electronic funds transfers, to persons eligible for credit union membership under ORS 723.172, whether or not such persons are members of the credit union. (28) For a fee, cash checks and money orders and send or receive domestic and international electronic funds transfers for persons eligible for credit union membership under ORS 723.172, whether or not such persons are members of the credit union. The fee a credit union may charge for cashing checks or money orders in accordance with this subsection may not exceed the following amounts, as appropriate: (a) For a check or money order issued by the federal government or an agency of the federal government, by this state or an agency of this state, by any other state or political subdivision thereof or by the government of the municipality in which a person is cashing the check or money order, or for a check that is a payroll check drawn against an account held in a financial institution in this state: (A) $5 or two percent of the face value of the check or money order, whichever is greater, if the person cashing the check or money order provides valid and current government-issued photo identification; or (B) $5 or 2-1/2 percent of the face value of the check or money order, whichever is greater, if the person cashing the check or money order does not provide valid and current government-issued photo identification. (b) For a check or money order not described in paragraph (a) of this subsection: (A) $5 or three percent of the face value of the check or money order, whichever is greater, if the person cashing the check or money order provides valid and current government-issued photo identification; or (B) $5 or 3-1/2 percent of the face value of the check or money order, whichever is greater, if the person cashing the check or money order does not provide valid and current government-issued photo identification. (29) Exercise other powers that are necessary to carry out the credit unions purpose. [1975 c.652 16; 1981 c.290 3; 1983 c.37 36b; 1985 c.762 93; 1985 c.801 2; 1987 c.650 4; 1999 c.185 11; 2001 c.104 287; 2001 c.308 2; 2003 c.405 10; 2005 c.95 4; 2007 c.343 3]
(1) Notwithstanding any other provision of law, in addition to the powers and authorities provided under the laws of this state, a credit union may exercise any of the powers that were available to a federal credit union as of January 1, 2022. At least 45 days before exercising a power under this subsection, a credit union shall provide to the Director of the Department of Consumer and Business Services written notice of the credit unions intent to exercise the power. The notice must describe the power and specify the statutory or regulatory authority or other legal basis for the federal credit union power the credit union intends to exercise. (2) Notwithstanding any other provision of law, in addition to the powers and authorities provided under the laws of this state, a credit union may, after obtaining approval from the director and subject to any limitations the director prescribes, exercise any of the powers conferred after January 1, 2022, upon a federal credit union that does business in this state and that is subject to the regulations of the administrator of the National Credit Union Administration or the successor or successors of the administrator, or any of the powers conferred on a credit union that is chartered under the laws of another state and does business in this state, if the director finds that exercising the powers: (a) Serves the public and members convenience and advantage; and (b) Equalizes and maintains the quality of competition among credit unions chartered under the laws of this state, of another state and under federal law. [1975 c.652 17; 1991 c.635 6; 1997 c.832 3; 2013 c.480 2; 2017 c.35 4; 2019 c.45 2; 2021 c.125 1]
(1) As used in this section: (a) "Organization" means a corporation, limited liability company, partnership or association, trust, estate or other entity and a director, officer, employee, member, partner, personal representative, trustee or volunteer of the corporation, limited liability company, partnership or association, trust, estate or other entity. (b) "Well-defined local community, neighborhood or rural district" means one or more adjacent precincts, districts, cities, counties or other boundaries defined by the state or a unit of local government or by a state or local government agency. (2) The membership of a credit union is limited to and consists of the incorporators to the articles of incorporation and other persons within the common bond set forth in the bylaws that have been duly admitted as members, have paid any required entrance fee or membership fee and have complied with any other requirements that the articles of incorporation or bylaws specify. (3) Credit union membership may include: (a) One or more groups, each having a common bond of occupation or association; or (b) Persons who live or work in, or organizations located within, a well-defined local community, neighborhood or rural district. (4) Credit union membership may also include any of the immediate family of a person who is eligible for membership in the credit union under subsection (3) of this section. For the purposes of this subsection, "immediate family" includes an eligible members foster parent or legally appointed guardian. (5) In determining whether adjacent precincts, districts, cities, counties or other boundaries defined by the state or a unit of local government or by any state or local government agency form a well-defined local community, neighborhood or rural district, the Director of the Department of Consumer and Business Services shall consider: (a) Interactions or shared interests that tie the precincts, districts, cities, counties or other boundaries together; (b) The size of the population of the proposed well-defined local community, neighborhood or rural district; (c) The size of the geographic area of the proposed well-defined local community, neighborhood or rural district; and (d) Other criteria that the director considers relevant in accordance with the purposes of this chapter. (6)(a) A credit union may not add a group with a separate bond of occupation or association to the credit unions membership unless, at the time the credit union adds the group to the credit unions membership, the group does not contain more than 3,000 members. (b) The limitation in paragraph (a) of this subsection does not apply to: (A) A group the director determines could not feasibly or reasonably establish a new credit union because the group lacks volunteer resources, financial resources or other factors the director considers important for successfully forming a new credit union; or (B) A group transferred to the credit union in connection with a merger, consolidation or transfer the director approved, or in connection with the liquidation of another credit union. (7) Notwithstanding subsection (3) of this section, a credit union, the membership of which includes one or more groups that have a common bond of occupation or association, may add to the credit unions membership persons who live or work in, or organizations located within, a well-defined local community, neighborhood or rural district if: (a) The director determines that the well-defined local community, neighborhood or rural district is underserved by other depository institutions, as defined in section 19(b)(1)(A) of the Federal Reserve Act, 12 U.S.C. 461(b)(1)(A), based on data of the National Credit Union Administration and the federal banking agencies, as defined in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. 1813; and (b) The credit union establishes and maintains an office or facility in the well-defined local community, neighborhood or rural district at which credit union services are available. (8) In reviewing a proposed amendment to a credit unions bylaws that would include an additional group within the credit unions membership, the director shall consider: (a) Whether, within the preceding year, the credit union has engaged in any unsafe or unsound practice that is material; (b) Whether the credit union has the capitalization, administrative capability and financial resources to serve the additional group; and (c) Other factors the director may prescribe by rule. [1975 c.652 18; 1999 c.730 1; 2009 c.234 3; 2015 c.458 2]
Business and nonbusiness organizations composed of individuals who are eligible for membership, or whose employees are eligible for membership, may be admitted to membership in the same manner and under the same conditions as individuals. [1975 c.652 19; 1987 c.286 3; 1999 c.185 56; 2001 c.308 3]
Any credit union organized under the laws of this state may permit membership of any other credit union organized under the laws of this state, of any other state or of the United States. [1975 c.652 20]
Notwithstanding any other provision of this chapter, a credit union may receive deposits from the State of Oregon of moneys belonging to the Deferred Compensation Fund established under ORS 243.411. With respect to such deposits, the State of Oregon shall be deemed to be a member of the credit union, except that the state shall not be entitled to vote, hold office or otherwise participate in the management or operation of the credit union. [1977 c.721 17; 1997 c.179 31]
A member who leaves the credit unions field of membership may be permitted to retain the members membership in the credit union. [1975 c.652 21; 2009 c.234 4]
The members of the credit union shall not be personally or individually liable for the payment of the debts of the credit union. [1975 c.652 22; 1981 c.903 10]
(1) The annual meeting and any special meetings of the members of the credit union shall be held at the time and in the manner indicated by the bylaws. (2) At meetings described in subsection (1) of this section, a member has one vote, irrespective of the amount of that members shareholdings. A member may not vote by proxy, but a member may vote by mail or electronic ballot if allowed by the bylaws of the credit union. The board of directors shall establish procedures to safeguard the confidentiality and integrity of the voting process. As used in this subsection, "electronic" has the meaning given that term in ORS 84.004. (3) The board may establish a minimum age as a qualification of eligibility to vote at meetings of the members. [1975 c.652 23; 1999 c.185 12; 2005 c.95 5; 2019 c.45 3]
(1) Subject to subsection (2) of this section, a credit union may expel any member of the credit union who: (a) Has not carried out the members engagements with the credit union; (b) Creates an undue risk of loss to the credit union, as determined in accordance with the bylaws of the credit union; (c) Has been convicted of a criminal offense; (d) Fails to comply with the provisions of this chapter or of the credit unions articles, bylaws or policies; (e) Threatens, harasses or abuses any member, employee, board or committee member or agent of the credit union; or (f) Habitually neglects to pay the members debts or becomes insolvent or bankrupt. (2) A credit union that expels a member shall inform the member in writing of the reasons for the expulsion and give the expelled member reasonable opportunity to request the credit unions board of directors to reinstate the member. Members of a credit union who withdraw or are expelled shall not be relieved of any liability to the credit union. The amounts paid in on shares or deposited by such members, together with any dividends credited to their shares and any interest which has accrued on their deposits, shall be repaid to them in the order of their withdrawal or expulsion, as funds become available therefor, but the credit union may deduct from such payments any sums due to the credit union from such members. [1975 c.652 24; 1985 c.762 94; 1999 c.185 13; 2007 c.343 6; 2017 c.35 2]
(1) A credit union must be directed by a board that consists of an odd number of directors, at least five in number, who are elected by and from the credit unions members in the manner provided in the credit unions bylaws. Members of the board hold office for such terms as the bylaws provide. (2) The board of directors shall appoint a supervisory committee of not less than three members at the organizational meeting and within 60 days following each annual meeting of the members for such terms as the bylaws provide. (3) The board of directors shall appoint a credit committee that consists of an odd number not less than three for such terms as the bylaws provide. The members of the credit union may instead elect the members of the credit committee from among the membership of the credit union at the annual members meeting. In lieu of the credit committee, the board of directors may appoint a credit manager. (4) The board of directors may appoint temporary or successor directors or temporary or successor credit committee or supervisory committee members to serve in place of absent directors or committee members. [1975 c.652 25; 1997 c.832 4; 2009 c.234 5]
Within such time as the Director of the Department of Consumer and Business Services may establish, a record of the names and addresses of the members of the board, committees and all officers of the credit union shall be filed with the director on forms provided and in the manner prescribed by the director. [1975 c.652 26; 1991 c.635 7; 1999 c.185 14]
(1) Subject to subsection (2) of this section, the board of directors may fill any vacancies occurring in the board until successors elected at the next annual meeting have qualified. (2) If a vacancy occurring in the board reduces the number of directors to five or fewer, the board shall fill the vacancy until a successor elected at the next annual meeting has qualified. (3) The board shall also fill vacancies in the credit and supervisory committees or in the office of credit manager. [1975 c.652 27; 2005 c.95 6]
A credit union may pay to the credit unions directors and supervisory committee members reasonable compensation for service as directors and supervisory committee members and may reimburse directors, supervisory committee members and other committee members while the directors or committee members are on official business for necessary expenses incidental to performing the official business. [1975 c.652 28; 1991 c.635 8; 2015 c.458 3]
No director, committee member, officer, agent or employee of the credit union shall in any manner, directly or indirectly, participate in the deliberation upon or the determination of any question affecting pecuniary interest or the pecuniary interest of any corporation, partnership or association (other than the credit union) in which the director, committee member, officer, agent or employee is directly or indirectly interested. [1975 c.652 29]
(1) At the organizational meeting of the board of directors and within 60 days after each annual meeting of the members, the directors shall elect an executive officer, whom the directors may designate as chairperson of the board or president, a vice chairperson of the board or one or more vice presidents, a treasurer and a secretary. The treasurer and the secretary may be the same individual. The persons that the board of directors elects are the executive officers of the corporation. (2) The terms of the officers are one year, unless the bylaws prescribe a different term. Officers may continue to serve until the successors of the officers are chosen and have duly qualified. (3) The bylaws must prescribe the duties of the officers. [1975 c.652 30; 1987 c.286 4; 1991 c.635 9; 2009 c.234 6; 2013 c.480 3; 2019 c.45 1]
The board of directors shall have the general direction of the business affairs, funds and records of the credit union. [1975 c.652 31]
From the persons elected to the board, the board may appoint an executive committee of not less than three directors who may be authorized to act for the board in all respects, subject to such conditions and limitations as are prescribed by the board. [1975 c.652 32]
The board of directors of a credit union shall hold regular meetings. The Director of the Department of Consumer and Business Services may specify by rule the minimum frequency of meetings of the board of directors. [1975 c.652 33; 1999 c.185 15; 2009 c.234 7; 2011 c.327 1; 2017 c.35 3]
(1) The board of directors shall manage the business and affairs of the credit union. The duties of the board include, but are not limited to, the duties listed in this section. The board may not delegate duties listed in subsection (2) of this section. The board may delegate the duties listed in subsection (3) of this section to a committee, officer or employee of the credit union, who shall provide appropriate information to the board regarding the exercise of the duties. (2) The board shall: (a) Establish the requirements for membership in the credit union, including the par value, if any, of a share; (b) Authorize interest refunds, if any, to members from income earned and received in proportion to the interest the members pay on classes of loans and under conditions that the board prescribes; (c) Authorize the employment of persons necessary to carry on the business of the credit union and fix the compensation of the manager or chief executive officer; (d) Authorize the conveyance of property; (e) Suspend members of the credit or supervisory committee for failing to perform the members duties; (f) Appoint any special committees the board considers necessary; (g) Limit the number of shares and the amount of deposits that a member may own and ensure that limitations adopted under this subsection apply alike to all members; and (h) Establish policies and controls regarding the investment of surplus funds. (3) In addition to the duties listed in subsection (2) of this section, and subject to subsection (1) of this section, the board shall: (a) Act upon applications for membership. If this duty is delegated, a record of an approval or denial of membership must be made available to the board. A person to whom a committee, officer or employee of the credit union denies membership may appeal the denial to the board. (b) Purchase a blanket fidelity bond, in accordance with ORS 723.122. (c) Determine from time to time the interest rate or rates that shall be charged on loans. (d) Declare dividends on shares and share certificates in accordance with the provisions of the bylaws and determine the prospective dividend rate to be paid on shares and share certificates and the interest rate or rates that will be paid on deposits and deposit certificates. (e) Designate a depository or depositories for the funds of the credit union. (f) Borrow or lend money to carry out the functions of the credit union. [1975 c.652 34; 1981 c.412 7; 1985 c.762 95; 1985 c.801 3; 1987 c.286 5; 1997 c.832 5; 2005 c.95 7; 2013 c.480 4]
The credit committee shall have the general supervision of all loans to members. [1975 c.652 35]
The credit committee shall meet as often as the business of the credit union requires and not less frequently than once a month to consider applications for loans. No loan shall be made unless it is approved by a majority of the committee who are present at the meeting at which the application is considered. [1975 c.652 36]
(1) The credit committee may appoint one or more loan officers and delegate the power to approve or disapprove loans, subject to such limitations or conditions as the credit committee prescribes. (2) Loan applications not approved by a loan officer may be reviewed by the credit committee. [1975 c.652 37; 1987 c.286 6]
The board of directors of a credit union may appoint a chief credit officer in lieu of a credit committee to approve or disapprove loans under conditions that the board prescribes. If the board appoints a chief credit officer in lieu of a credit committee, the provisions of ORS 723.302 to 723.312 do not apply and the credit union may not make a loan unless the chief credit officer approves the loan, except that the chief credit officer may appoint one or more loan officers with the power to approve loans subject to limitations or conditions that the chief credit officer prescribes. [1975 c.652 38; 2011 c.327 2]
(1) The supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the credit union and shall submit a report of the audit to the board of directors and the Director of the Department of Consumer and Business Services and a summary of that report to the members at the next annual meeting of the credit union. It shall make or cause to be made such supplementary audits or examinations as it deems necessary or as are required by the director or by the board of directors, and submit reports of these supplementary audits to the board of directors. (2) The supervisory committee shall cause the accounts of the members to be verified with the records of the credit union from time to time in accordance with subsection (3) of this section. This verification shall be done not less frequently than every two years. (3) Verification of members accounts shall be made using either of the following methods: (a) A controlled verification of 100 percent of members share and loan accounts; or (b) A controlled random statistical sampling method in accordance with rules that the director may prescribe. (4) Records of accounts verified shall be maintained and retained until the next verification of members accounts is completed. [1975 c.652 39; 1991 c.635 10]
(1) The supervisory committee by a unanimous vote may suspend any member of the board until the next members meeting. The next members meeting must be held not less than 14 nor more than 45 days after the suspension. At the meeting the members shall decide whether to remove the suspended officer or board member. (2) The board may remove any member of the supervisory committee for failing to perform duties prescribed in this chapter or in the credit unions articles of incorporation, bylaws or policies. (3) A person may not serve as a director if the person has defaulted on payment of a voluntary obligation to the credit union or has otherwise caused the credit union to incur a financial loss. [1975 c.652 40; 1985 c.762 96; 1999 c.185 16; 2005 c.95 8; 2013 c.480 5]
(1) If a director, officer or committee member of a credit union has reason to believe that a person has violated any provision of the Oregon Credit Union Act for which criminal prosecution is provided, such official shall give the information relative to the violation to the appropriate federal, state or local law enforcement officer having jurisdiction of the violation, and to the Director of the Department of Consumer and Business Services. (2) If the matter is referred to the Attorney General or to a district attorney, such official promptly shall investigate the violation and institute such action against the person as the information and investigation requires or justifies. The cost of the investigation and action shall be paid by the county or state in the manner in which other criminal actions are paid. [1979 c.88 33]
(1) Shares may be subscribed to, paid for and transferred in such manner as the bylaws prescribe. (2) A certificate need not be issued to denote ownership of a share in a credit union. [1975 c.652 42; 1985 c.801 4; 1987 c.158 153; 1987 c.650 7]
(1) At such intervals and for such periods as the board of directors may authorize, and after provision for the required reserves, the board of directors may declare dividends to be paid on shares or share certificates. Dividends may be paid at various rates, or not paid at all, with due regard to the conditions that pertain to each class of share. (2) Subject to the approval of the board of directors, accounts closed between dividend periods may be credited with dividends at the rate set by the board of directors. [1975 c.652 43; 1985 c.206 1; 1985 c.801 5; 1995 c.319 2; 2001 c.308 4]
(1) A credit union may receive savings in deposit and deposit certificate accounts from its members and other credit unions, subject to such conditions as the board of directors establishes. (2) Deposit and deposit certificate accounts differ from shares and share certificates in that a predeclared rate of return, as determined from time to time at such rates and upon such classes of deposit and deposit certificate accounts as are established by the board of directors, shall be established on deposit accounts. (3) Interest may be paid on deposits and deposit certificates at various rates with due regard to the conditions that pertain to each type of account such as minimum balance, notice and time requirements. (4) In the event of liquidation of a credit union, shares and share certificates shall be subordinate to the claims of depositors and other creditors. [1975 c.652 44; 1985 c.801 8]
A member may designate any person or persons to hold shares, deposits and thrift club accounts with the member in joint tenancy, with or without the right of survivorship, but no joint tenant, unless a member in the members own right, shall be permitted to vote, obtain loans, or hold office or be required to pay an entrance or membership fee. [1975 c.652 47; 1977 c.555 16; 1991 c.635 11]
Shares may be issued and deposits may be held in the name of a member in trust for a beneficiary, including a minor, but no beneficiary, unless a member in the beneficiarys own right, shall be permitted to vote, obtain loans, hold office or be required to pay an entrance or membership fee. [1975 c.652 48; 1977 c.555 17]
(1) A credit union may allow a member holding a regular share or deposit account to use that account as a share draft account as provided in this section, subject to conditions established by the board of directors. (2) As used in this section: (a) "Share draft" means a negotiable or nonnegotiable draft used to withdraw shares or deposits from a share draft account. (b) "Share draft account" means any regular share account or deposit account from which the credit union allows shares or deposits to be withdrawn by means of a share draft or other order. (3) The terms "share draft" and "share draft account" may encompass accounts whether the underlying account is a share account or a deposit account, without changing the type of account. [1981 c.290 2; 1983 c.37 36c; 1999 c.185 40]
[1975 c.652 49; renumbered 723.454]
[1975 c.652 50; 1981 c.257 1; renumbered 723.457]
[1975 c.652 51; renumbered 723.460]
A credit union may certify a share draft issued by the credit union. A credit union that certifies a share draft may immediately charge the amount of the share draft to the drawers share draft account. [1985 c.206 5; 1987 c.286 7; 1999 c.185 41]
Shares, share certificates, deposits and deposit certificates may be withdrawn for payment to the account holder or to third parties in accordance with the manner and procedures established by the board of directors. The board of directors may restrict one class of shares so that a share in the class may not be redeemed, withdrawn or transferred except upon termination of membership in the credit union. [1985 c.801 7]
[1981 c.298 1; renumbered 723.463]
The credit union shall have a lien on all funds of a member or joint owner on deposit with the credit union in any individual or joint account held in any capacity, for any obligation of the member or joint owner to the credit union. [Formerly 723.436; 1991 c.635 12; 1999 c.185 57]
(1) Whenever the losses of any credit union, resulting from a depreciation in value of its loans or investments or otherwise, exceed its undivided earnings and reserve fund so that the estimated value of its assets is less than the total amount due the shareholders, the credit union may by a majority vote of the entire membership order a reduction in the shares of each of its shareholders to divide the loss proportionately among the members. (2) If the credit union thereafter realizes from such assets a greater amount than was fixed by the order of reduction, such excess shall be divided proportionately among the shareholders whose assets were reduced, but only to the extent of such reduction. [Formerly 723.446]
Any deposit to a credit union made to an account in the name of a minor shall be held for the exclusive right and benefit of the minor and free from the control or lien of all other persons, except other parties to the account and creditors, and shall be paid, in accordance with the terms of the account, together with any interest thereon, to or upon the order of the minor. [1999 c.185 20]
(1) On the death of a member of a credit union, if the deposit to the credit of the deceased member is $25,000 or less, the credit union may, upon receipt of an affidavit from a person claiming the deposit as provided in subsection (3) of this section, or a declaration from the Department of Human Services or the Oregon Health Authority as provided in subsection (4) of this section, pay the moneys on deposit: (a) To the surviving spouse on demand of the surviving spouse at any time after the death of the member; (b) If there is no surviving spouse, to the Oregon Health Authority or the Department of Human Services, on demand of the authority or the department no less than 46 days and no more than 75 days after the death of the member when there is a preferred claim arising under ORS 411.708, 411.795 or 416.350; (c) If there is no surviving spouse and no authority or department claim, to the members surviving children 18 years of age or older; (d) If there is no surviving spouse, authority claim, department claim or surviving child 18 years of age or older, to the members surviving parents; (e) If there is no surviving spouse, authority claim, department claim, surviving child 18 years of age or older or surviving parent, to the members surviving brothers and sisters 18 years of age or older; or (f) If there is no surviving spouse, authority claim, department claim, surviving child 18 years of age or older, surviving parent or surviving brothers or sisters 18 years of age or older, to any other surviving heir of the member. (2)(a) A credit union may not pay moneys on deposit under subsection (1)(c) to (f) of this section earlier than 46 days after the death of the member. (b) A credit union may not pay moneys on deposit under subsection (1)(c) to (f) of this section earlier than 76 days after the death of the member unless the financial institution obtains prior verbal or written authorization from the Oregon Health Authority or its designated representative and the Department of Human Services or its designated representative. (3) An affidavit or declaration submitted under this section must: (a) State where and when the member died; (b) State that the total deposits of the deceased member in all financial institutions in this state do not exceed $25,000; (c) Show the relationship of the affiant or declarant to the deceased member; and (d) Embody a promise to pay the expenses of last sickness, funeral expenses and just debts of the deceased member out of the deposit, to the full extent of the deposit if necessary, in the order of priority prescribed by ORS 115.125, and to distribute any remaining moneys to the persons who are entitled to those moneys by law. (4) A credit union shall accept from the Department of Human Services or the Oregon Health Authority, without additional requirements, a declaration under penalty of perjury meeting the requirements of subsection (3) of this section. A declaration submitted under this section must be signed by the declarant and must include the following sentence immediately above the signature line of the declarant: "I hereby declare under penalty of perjury that I am authorized by the Department of Human Services or the Oregon Health Authority to make this declaration, that the above statement is true to the best of my knowledge and belief, and that I understand that it is subject to penalty for perjury." (5) In the event the member died intestate without known heirs, an estate administrator of the State Treasurer appointed under ORS 113.235 shall be the affiant and shall receive the moneys for deposit into the Unclaimed Property and Estates Fund as escheated property and subject to claims under ORS 116.253. (6) The credit union shall determine the relationship of the affiant or declarant to the deceased member. However, payment of the moneys in good faith to the affiant or declarant discharges and releases the transferor from any liability or responsibility for the transfer in the same manner and with the same effect as if the property had been transferred, delivered or paid to a personal representative of the estate of the deceased member. (7) A probate proceeding is not necessary to establish the right of the surviving spouse, Oregon Health Authority, Department of Human Services, surviving children, surviving parents, surviving brothers and sisters or an estate administrator of the State Treasurer to withdraw the deposits upon the filing of the affidavit or declaration. If a personal representative is appointed in an estate where a withdrawal of deposits was made under this section, the person withdrawing the deposits shall account for them to the personal representative. (8) When a credit union transfers moneys under subsection (1) of this section, the transferor may require the transferee to furnish the transferor with a written indemnity agreement, indemnifying the transferor against loss for moneys paid to the extent of the amount of the deposit. (9)(a) Moneys disbursed to the Department of Human Services under subsection (1) of this section may be made payable only to the department. (b) Moneys disbursed to the Oregon Health Authority under subsection (1) of this section may be made payable only to the authority. (10) This section is subject to the rights of other parties to the account under ORS 723.474 to 723.498. [1999 c.185 21; 2003 c.395 24; 2005 c.381 28; 2007 c.369 3; 2009 c.11 93; 2009 c.595 1115; 2011 c.720 218; 2017 c.51 2; 2019 c.678 77; 2021 c.424 25]
(1) A credit union shall be obligated to recognize an adverse claim to a deposit it holds only if the adverse claimant gives notice to the credit union of its claim and: (a) Procures a restraining order, injunction or other appropriate process against the credit union in an action wherein the person to whose credit the deposit stands is made a party and served with summons; or (b) Delivers to the credit union in a form, and with sureties acceptable to the credit union, a bond or an irrevocable letter of credit issued by a financial institution, as defined in ORS 706.008, indemnifying the credit union from any liability, damage or expenses on account of the payment of the adverse claim or the dishonor of the check or other order of the person to whose credit the deposit stands. (2) This section does not apply when the person in whose name the account is carried is a fiduciary for the adverse claimant, and the affidavit of the adverse claimant states the facts constituting the fiduciary relationship and the facts showing reasonable cause of belief on the part of the claimant that the fiduciary is about to misappropriate the deposit. (3) A credit union may, at its option, interplead a deposit that is subject to any adverse claim. [1999 c.185 22]
If a person who owns a share or deposit account subject to check authorizes another person as agent to draw checks against the account, the credit union, in the absence of written notice to the contrary, may presume that any check drawn by the agent in the manner authorized by the terms and conditions of the account, including checks drawn to the personal order of the agent, is drawn for a purpose authorized by the principal and within the scope of the authority conferred upon the agent. [1999 c.185 23]
A credit union may refuse to pay any check, draft or order drawn upon it when the officers or employees of the credit union have reason to believe that the person signing or indorsing the instrument was so under the influence of alcohol, drugs or controlled substances or that the person was otherwise so incapacitated as to make it reasonably doubtful whether the person was capable of transacting business at the time of signing or indorsing the check, draft or order. [1999 c.185 24]
As used in ORS 723.474 to 723.498, unless the context requires otherwise: (1) "Account" means a contract of deposit of funds between a member and a credit union and includes a checking account, savings account, certificate of deposit and share account. (2) "Beneficiary" means a person named in a trust account as one for whom a party to the account is named as trustee. (3) "Joint account" means an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship. (4) "Multiple-party account" means a joint account, a P.O.D. account or a trust account. "Multiple-party account" does not include: (a) Accounts established for the deposit of funds of a partnership, joint venture or other association for business purposes; or (b) Accounts controlled by one or more persons as the duly authorized agent or trustee for a corporation, unincorporated association, charitable or civic organization, or a regular fiduciary or trust account where the relationship is established other than by deposit agreement. (5) "Net contribution" of a party to a joint account means the sum of all deposits made to the account by or for the party, less all withdrawals made by or for the party that have not been paid to or applied to the use of any other party, plus a pro rata share of any interest or dividends included in the current balance. "Net contribution" includes any proceeds of deposit life insurance added to the account by reason of the death of the party whose net contribution is in question. (6) "Party" means a person who, by the terms of the multiple-party account, has a present right, subject to request, to payment from a multiple-party account. A P.O.D. payee or beneficiary of a trust account is a party only after the account becomes payable to the payee or beneficiary by reason of the payee or beneficiary surviving the original party or trustee. "Party" includes a guardian, conservator, personal representative or assignee, including an attaching creditor, of a party. "Party" also includes a person identified as a trustee of an account, whether or not a beneficiary is named, but does not include any named beneficiary unless the named beneficiary has a present right of withdrawal. (7) "Payment" of sums on deposit includes withdrawal, payment on check or other directive of a party, any pledge of sums on deposit by a party and any setoff, deduction or other disposition of all or part of an account pursuant to a pledge. (8) "P.O.D. account" means an account payable on request: (a) To one person during the lifetime of the person and upon the death of the person to one or more P.O.D. payees; or (b) To one or more persons during their lifetimes and upon the death of all of them to one or more P.O.D. payees. (9) "P.O.D. payee" means a person designated on a P.O.D. account as the person to whom the account is payable on request after the death of one or more persons. (10) "Request" means a proper request for withdrawal, or a check or order for payment, that complies with all conditions of the account, including special requirements concerning necessary signatures and regulations of the credit union. If the credit union conditions withdrawal or payment on advance notice, for purposes of ORS 723.474 to 723.498, the request for withdrawal or payment is treated as immediately effective and a notice of intent to withdraw is treated as a request for withdrawal. (11) "Sums on deposit" means the balance payable on a multiple-party account including interest, dividends and any deposit life insurance proceeds added to the account by reason of the death of a party. (12) "Trust account" means an account in the name of one or more parties as trustee for one or more beneficiaries where the relationship is established by the form of the account and the deposit agreement with the credit union, and there is no subject of the trust other than the sums on deposit in the account. It is not essential that payment to the beneficiary be mentioned in the deposit agreement. A trust account does not include a regular trust account under a testamentary trust, a trust agreement that has significance apart from the account, or a fiduciary account arising from a fiduciary relationship such as attorney-client. (13) "Withdrawal" includes payment to a third person pursuant to check or other directive of a party. [1999 c.185 25]
The provisions of ORS 723.478, 723.480 and 723.482 concerning beneficial ownership between parties or between parties and P.O.D. payees or beneficiaries of multiple-party accounts are relevant only to controversies between those persons and their creditors and other successors, and have no bearing on the power of withdrawal of those persons as determined by the terms of account contracts. The provisions of ORS 723.486 to 723.496 govern the liability of credit unions that make payments pursuant thereto, and their setoff rights. [1999 c.185 26]
(1) A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each party to the sums on deposit, unless there is clear and convincing evidence of a different intent. (2) A P.O.D. account belongs to the original party during the lifetime of the party and not to the P.O.D. payee or payees. If two or more persons are named as original parties, during their lifetimes, rights between them are governed by subsection (1) of this section. (3) Unless a contrary intent is manifested by the terms of the account or the deposit agreement, or there is other clear and convincing evidence of an irrevocable trust, a trust account belongs beneficially to the trustee during the lifetime of the trustee. If two or more parties are named as trustees of the account, during their lifetimes, beneficial rights between them are governed by subsection (1) of this section. If there is an irrevocable trust, the account belongs beneficially to the beneficiary. [1999 c.185 27]
(1) Sums remaining on deposit at a credit union at the death of a party to a joint account are rebuttably presumed to belong to the surviving party or parties against the estate of the decedent. If there are two or more surviving parties, their respective ownerships during their lifetimes shall be in proportion to their previous ownership interests under ORS 723.478, augmented by an equal share for each survivor of any interest the decedent may have owned in the account immediately before death. The right of survivorship continues between the surviving parties. (2) If the account is a P.O.D. account: (a) Upon the death of one of two or more original parties, the rights to any sums remaining on deposit are governed by subsection (1) of this section. (b) Upon the death of the sole original party or the survivor of two or more original parties, any sums remaining on deposit belong to the P.O.D. payee or payees, if surviving, or to the survivor of them if one or more die before the original party. If two or more P.O.D. payees survive, there is no right of survivorship in the event of death of a P.O.D. payee thereafter unless the terms of the account or deposit agreement expressly provide for survivorship between them. (3) If the account is a trust account: (a) Upon the death of one of two or more trustees, the rights to any sums remaining on deposit are governed by subsection (1) of this section. (b) Upon the death of the sole trustee or the survivor of two or more trustees, any sums remaining on deposit belong to the person or persons named as beneficiaries, if surviving, or to the survivor of them if one or more die before the trustee, unless there is clear and convincing evidence of a contrary intent. If two or more beneficiaries survive, there is no right of survivorship in the event of death of any beneficiary thereafter unless the terms of the account or deposit agreement expressly provide for survivorship between them. (4) In other cases, the death of any party to a multiple-party account has no effect on beneficial ownership of the account, other than to transfer the rights of the decedent as part of the estate of the decedent. (5) A right of survivorship arising under this section or from the express terms of the account, a beneficiary designation in a trust account or a P.O.D. payee designation cannot be changed by will. (6) The rebuttable presumption under subsection (1) of this section may be overcome by evidence establishing that: (a) The deceased party intended a different result; or (b) The deceased party lacked capacity when the joint account was established. (7) A credit union is not liable for distributing sums remaining on deposit at the death of a party to a joint account to a surviving party or parties in accordance with the account agreement unless, prior to distributing sums to a surviving party or parties: (a) The credit union has received notice of an adverse claim under ORS 723.468; and (b) The adverse claimant proceeds as required under ORS 723.468. [1999 c.185 28; 2003 c.256 2]
The provisions of ORS 723.480 that apply to rights of survivorship are determined by the form of the account at the time of death of a party. Subject to satisfaction of the requirements of the credit union, the form of an account may be altered by a written order given by a party to the credit union. The order must be signed by the party, be received by the credit union during the partys lifetime, and not be countermanded by other written order of the same party during the lifetime of the party. [1999 c.185 29]
Any transfers resulting from the application of ORS 723.480 are effective by reason of the account contracts involved and application of ORS 723.480. The transfers are not to be considered as testamentary or subject to administration in the estate of a deceased party. [1999 c.185 30]
Credit unions may enter into multiple-party accounts to the same extent that they may enter into single-party accounts. Any multiple-party account may be paid, on request, to any one or more of the parties. For purposes of establishing net contributions a credit union shall not be required to inquire about the source of funds received for deposit to a multiple-party account, or to inquire about the proposed application of any sum withdrawn from an account. [1999 c.185 31]
Any sums in a joint account may be paid, on request, to any party without regard to whether any other party is incapacitated or deceased at the time the payment is requested. Payment may not be made to the personal representative or heirs of a deceased party unless: (1) Proof of death is presented to the credit union, showing that the decedent was the last surviving party; or (2) There is no right of survivorship under ORS 723.480. [1999 c.185 32]
Any P.O.D. account may be paid, on request, to any original party to the account. Payment may be made, on request, to the P.O.D. payee or to the personal representative or heirs of a deceased P.O.D. payee upon presentation to the credit union of proof of death showing that the P.O.D. payee survived all persons named as original parties. Payment may be made to the personal representative or heirs of a deceased original party if proof of death is presented to the credit union showing that the decedent was the survivor of all other persons named on the account either as an original party or as a P.O.D. payee. [1999 c.185 33]
Any trust account may be paid, on request, to any trustee. Unless the credit union has received written notice that the beneficiary has a vested interest not dependent upon the beneficiary surviving the trustee, payment may be made to the personal representative or heirs of a deceased trustee if proof of death is presented to the credit union showing that the decedent survived all other persons named on the account as either trustee or beneficiary. Payment may be made, on request, to the beneficiary upon presentation to the credit union of proof of death showing that the beneficiary or beneficiaries survived all persons named as trustees. [1999 c.185 34]
Payment made pursuant to ORS 723.486, 723.488, 723.490 or 723.492 discharges the credit union from all claims for amounts paid, whether or not the payment is consistent with the beneficial ownership of the account between parties, P.O.D. payees or beneficiaries, or their successors. The protection given by this section does not extend to payments made after a credit union has received written notice from any party able to request present payment that states that withdrawals in accordance with the terms of the account should not be permitted. Unless the notice is withdrawn by the person giving it, the successor of any deceased party must concur in any demand for withdrawal if the credit union is to be protected under this section. No other notice or any other information shown to have been available to a credit union shall affect its right to the protection provided by this section. The protection provided by this section shall have no bearing on the rights of parties in disputes between themselves or their successors concerning the beneficial ownership of funds in or withdrawn from multiple-party accounts. [1999 c.185 35]
Without qualifying any other statutory or common law right to setoff or lien, and subject to any contractual provision, if a party to a multiple-party account is indebted to a credit union, the credit union has a right to setoff against the account in which the party has or had immediately before the death of the party a present right of withdrawal. The amount of the account subject to setoff is that proportion to which the debtor is, or was immediately before the death of the debtor, beneficially entitled and, in the absence of proof of net contributions, to an equal share with all parties having present rights of withdrawal. [1999 c.185 36]
Nothing in ORS 723.426, 723.432, 723.474, 723.476 or 723.478 shall preclude a party to an account from adding the name of another person to the account with the designation of "agent." The agent shall have no present or future interest in the sums on deposit in the account, but the credit union may honor requests for payment from the accounts by the agent, unless the principal is deceased at the time the payment is requested and the credit union has actual knowledge of the death. Payments from the account by the credit union at the request of the agent shall discharge the credit union from all claims for amounts so paid. [1999 c.185 37]
A credit union may make loans to members of the credit union for such purpose and upon such security and terms as the credit committee, credit manager or loan officer approves. A person who is not a member of the credit union may be a guarantor or co-obligor on a credit unions loan to a member of the credit union. [1975 c.652 52; 1981 c.412 8; 2007 c.343 7]
Every application for a loan shall be made in the form prescribed by the credit committee, credit manager or loan officer. The application shall state the security, if any offered. Each loan shall be evidenced by a written document. [1975 c.652 53; 1991 c.635 14]
(1) A credit union may not make a loan to any member in an aggregate amount that exceeds $100,000, or 15 percent of the credit unions equity, whichever is greater. In determining the amount of loans to be made to a member, loans for which that member is a guarantor or surety must be included, as well as loans to persons who are not individuals if the individual member is a principal or owner of the person who is not an individual or the loan is for that members benefit. (2) The restrictions in subsection (1) of this section do not apply to any loan that is fully guaranteed by shares or deposits. [1975 c.652 54; 1977 c.628 3; 1979 c.88 34; 1987 c.650 8; 1995 c.319 8; 1999 c.185 42; 2013 c.480 6]
A member may receive a loan in installments, or in one sum, and may pay the whole or any part of the members loan on any day on which the office of the credit union is open for business. [1975 c.652 55]
The credit committee, credit manager, or loan officer may approve in advance upon their own motion or upon application by a member, a line of credit, and advances may be granted to such member within the limit of such extension of credit. Where a line of credit has been approved, no additional loan applications are required as long as the aggregate obligation does not exceed the limit of such extension of credit. [1975 c.652 56; 1987 c.286 8]
(1) Loans to credit union members may be shared with other credit unions, corporations or financial organizations. (2) A credit union may participate in guaranteed loan programs of the federal government, the State of Oregon or any other state. (3) A credit union may purchase the conditional sales contracts, notes and similar instruments of its members. (4) A credit union may purchase the leases of its members if the leases satisfy the requirements of ORS 723.152 (9). [1975 c.652 57; 1999 c.185 43]
(1) For the purposes of this section, "management team" means the president or chief executive officer of a credit union or an individual who holds a position in a credit union of vice president or higher who has policymaking authority or authority to approve loans. (2) A credit union may make a loan to a director, a member of the credit unions management team, the chief credit officer or a member of the credit unions supervisory and credit committees if the credit union makes the loan under the following conditions: (a) The loan complies with the provisions of this chapter that apply to loans to other borrowers and is not on terms more favorable than terms extended to other borrowers. (b)(A) Except as provided in subparagraph (B) of this paragraph, if the combined aggregate amount of loans to an individual described in this subsection exceeds five percent of the credit unions equity or $100,000, whichever is less, the board of directors must approve making the loans in excess of the specified aggregate amount. (B) The aggregate amount of loans specified in subparagraph (A) of this paragraph does not include a loan that is: (i) For an amount that is equal to or less than the conforming loan limit that the Federal Housing Finance Agency specifies, or $400,000, whichever is greater; and (ii) Secured by a first lien on the borrowers principal residence. (c) The combined aggregate amount of loans to all individuals described in this subsection may not exceed 10 percent of the credit unions assets. (d) If a loan to a director, a member of the credit unions management team, the chief credit officer or a member of the credit unions supervisory or credit committee is not subject to approval by the board of directors under paragraph (b) of this subsection, after the loan is approved, the loan must be reported to the board of directors at the next meeting of the board of directors. (3)(a) Except as provided in paragraph (b) of this subsection, a director, officer or committee member may not become a surety or guarantor for a loan or advance made by the credit union unless the board of directors approves. (b) A director, officer or committee member may become a surety or guarantor for the spouse or children of the director, officer or committee member without the approval of the board of directors. (4) The Director of the Department of Consumer and Business Services may waive the requirements of this section by rule or order at a credit unions request. The Director of the Department of Consumer and Business Services may establish by rule a higher amount than the amount set in subsection (2)(b) of this section and may specify by rule the type of loans to directors, officers or committee members that the board of directors of the credit union must approve. (5) A director, a member of the credit unions management team, the chief credit officer or a member of the credit unions supervisory or credit committee may not participate in approving or disbursing a loan in which the director, member of the credit unions management team, chief credit officer or member of the credit unions supervisory or credit committee has a direct or indirect financial interest. [1975 c.652 58; 1985 c.206 2; 1985 c.762 98; 1987 c.286 9; 1997 c.832 7; 1999 c.185 44; 2009 c.234 8; 2011 c.327 3]
Any officer, director or member of a committee of a credit union who knowingly permits a loan to be made or participates in a loan to a nonmember of the credit union shall be primarily liable to the credit union for the amount thus illegally loaned. The illegality of such loan shall be no defense in any action by the credit union to recover the amount loaned. [1975 c.652 59]
(1) A credit union may purchase or make available life savings, loan protection and other forms of insurance for its members in amounts related to their respective ages, shares, deposits or loan balances or to any combination of them. (2) A credit union may enter into cooperative marketing arrangements to facilitate its members voluntary purchases of insurance. [1975 c.652 60; 1999 c.185 45]
A credit union may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the credit union, or who is or was serving at the request of the credit union as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such persons status as such, whether or not the credit union would have the power to indemnify such person against such liability. [1975 c.652 61]
(1) Each credit union shall secure insurance on shares and deposits from the National Credit Union Administration under the Federal Credit Union Act or its successor, or from any other insuring organization that provides comparable coverages and is approved by the Director of the Department of Consumer and Business Services. Any one share of a member, as designated in the bylaws of the credit union, may be excluded from the requirement for insurance. (2) The director may make available condition and examination reports to the appropriate insuring organization and may accept any report of examination made by such organization. The director may appoint the appropriate insuring organization as liquidating agent of an insured credit union. [1975 c.652 62; 1977 c.549 1; 1985 c.801 9; 1987 c.286 10; 1999 c.185 46]
A credit union may enter into cooperative marketing arrangements to facilitate its members voluntary purchases of such goods and services as are in the interest of improving economic and social conditions of the members. Said investment shall not exceed one percent of the credit unions assets. Notwithstanding any other provision of law, the taxable income from such activities which are conducted by the credit union shall be subject to tax pursuant to ORS 317.920. [1975 c.652 63; 1983 c.162 56; 1999 c.185 47]
A credit union may invest funds not used in loans to members in: (1) Securities, obligations or other instruments of or issued by or fully guaranteed as to principal and interest by the United States or an agency of the United States or in a trust or trusts established directly or collectively in the securities, obligations or instruments described in this subsection. (2) Obligations of a state of the United States, the agencies or instrumentalities of the federal government, the District of Columbia, the Commonwealth of Puerto Rico and the several territories organized by Congress, or a political subdivision of a state, district, commonwealth or territory identified in this subsection. (3) Certificates of deposit or passbook type accounts issued by a state or national bank, mutual savings bank or savings and loan association. (4) Loans to or in shares or deposits of other credit unions. (5) Stocks, membership units or other ownership interests in, or loans to, a corporation, limited liability company or mutual association in an amount not to exceed five percent of assets if the purposes for which the corporation, limited liability company or mutual association is organized are primarily to service or otherwise assist credit union operations. (6) Shares of a credit union cooperative society organized under the laws of this state or of the laws of the United States in a total amount not exceeding one percent of the shares, deposits and surplus of the credit union. (7) Loans to a national or state credit union association or corporation of which the credit union is a member, except that the loans must be limited to not more than five percent of the assets of the credit union. (8) Other investments the Director of the Department of Consumer and Business Services approves by rule or order. [1975 c.652 64; 1987 c.286 11; 1999 c.185 48; 2005 c.95 9; 2011 c.327 4; 2021 c.125 3]
(1) A credit union shall establish and maintain a regular reserve for contingencies. The Director of the Department of Consumer and Business Services may adopt rules prescribing: (a) Minimum net worth requirements for credit unions; and (b) Actions a credit union must take when the net worth of the credit union falls below the applicable minimum net worth requirement. (2) In addition to the regular reserve required in subsection (1) of this section, a credit union shall establish a reserve for loan losses in accordance with generally accepted accounting principles issued by the Financial Accounting Standards Board or a successor organization. [1981 c.192 38 (enacted in lieu of 723.632); 1995 c.319 3; 2005 c.95 10; 2009 c.234 9]
(1) Subject to subsection (2) of this section, the board of directors of a credit union may authorize losses to be charged to the regular reserve after first depleting the balance of the undivided earnings account and other appropriations of undivided earnings designated by the management of the credit union or by the regulatory authorities. (2) An authorization may be made under subsection (1) of this section only if the charge will not cause the net worth of the credit union to fall below any minimum net worth requirement prescribed by the Director of the Department of Consumer and Business Services under ORS 723.631. The authorization must state the amount charged to the regular reserve and include an explanation of the need for the charge. (3) Upon application of a credit union, the director may approve a charge to the regular reserve that will cause the net worth of the credit union to fall below any minimum net worth requirement prescribed by the director under ORS 723.631. [1975 c.652 66; 1981 c.192 39; 1999 c.185 49; 2005 c.95 11]
(1) In addition to the regular reserve established under ORS 723.631, special reserves to protect the interest of members shall be established, as provided in this section: (a) When required by rule; or (b) When found by the board of directors of the credit union or by the Director of the Department of Consumer and Business Services, or if the members accounts are insured by the National Credit Union Administration, the Administrator of the National Credit Union Administration, in any special case, to be necessary for that purpose. (2) Special reserves belong to the credit union and shall be used to provide liquidity for the credit union. A credit union may not pay regular or special dividends from the special reserve. [1975 c.652 68; 1981 c.192 40; 1995 c.319 4]
(1) If it appears that any credit union is bankrupt or insolvent, or that it has willfully violated any provision of this chapter, or is operating in an unsafe or unsound manner, the Director of the Department of Consumer and Business Services shall issue an order temporarily suspending the credit unions operations for not less than 30 nor more than 60 days. The board of directors shall be given notice by registered mail or by certified mail with return receipt of such suspension, and a list of the specific violations of this chapter. (2) Upon receipt of the suspension notice, the credit union shall cease all operations, except those authorized by the director. The board of directors shall then file with the director a reply to the suspension notice, and may request a hearing to present a plan of corrective actions proposed if it desires to continue operations. The board may request that the credit union be declared insolvent and a liquidating agent be appointed. (3) Upon receipt from the suspended credit union of evidence that the conditions causing the order of suspension have been corrected, the director may revoke the suspension notice and permit the credit union to resume normal operations. (4) If the director, after issuing notice of suspension and providing an opportunity for a hearing, rejects the credit unions plan to continue operations, the director may then revoke the credit unions charter, appoint a liquidating agent and liquidate the credit union. The credit union may request the appropriate court to stay execution of such action. Involuntary liquidation may not be ordered prior to the conclusion of suspension procedures outlined in this section. (5) If, within the suspension period, the credit union fails to answer the suspension notice or request a hearing, the director may then revoke the credit unions charter, appoint a liquidating agent and liquidate the credit union. [1975 c.652 69; 1985 c.762 99; 1991 c.249 68]
(1) A credit union may elect to dissolve voluntarily and liquidate its affairs in the manner prescribed in this section. (2) The board of directors shall adopt a resolution recommending the credit union be dissolved voluntarily and directing that the question of liquidation be submitted to the members. (3) Within 10 days after the board of directors decides to submit the question of liquidation to the members, the president or chairperson of the board shall notify the Director of the Department of Consumer and Business Services thereof in writing setting forth the reasons for the proposed action. Within 10 days after the members act on the question of liquidation, the president or chairperson of the board shall notify the director in writing as to whether or not the members approved the proposed liquidation. (4) As soon as the board of directors decides to submit the question of liquidation to the members, payment on shares, withdrawal of shares, making any transfer of shares to loans and interest, making investments of any kind and granting loans shall be suspended pending action by members on the proposal to liquidate. On approval by the members of such proposal, all such business transactions shall be permanently discontinued. Necessary expenses of operation shall, however, continue to be paid on authorization of the board of directors or liquidating agent during the period of liquidation. (5) For a credit union to enter voluntary liquidation, approval by a majority of the members in writing or by a two-thirds majority of the members present at a regular or special meeting of the members is required. Where authorization for liquidation is to be obtained at a meeting of the members, notice in writing shall be given to each member by first class mail to the members last-known address at least 10 days prior to such meeting. (6) A liquidating credit union shall continue in existence for the purpose of discharging its debts, collecting and distributing its assets and doing all acts required in order to wind up its business and may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully adjusted. (7) The board of directors or the liquidating agent shall use the assets of the credit union to pay: First, expenses incidental to liquidating including any surety bond that may be required; and, second, any liability due nonmembers. Assets then remaining shall be distributed to the members proportionately to the shares and deposits held by each member as of the date dissolution was voted. (8) As soon as the board of directors or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed as set forth in this section, they shall execute a certificate of dissolution on a form prescribed by the director and file the same, together with all pertinent books and records of the liquidating credit union, with the director, whereupon such credit union shall be dissolved. [1975 c.652 70; 1999 c.185 50]
(1)(a) A credit union chartered in this state may, with the approval of the Director of the Department of Consumer and Business Services, merge with another credit union under the existing charter of the other credit union pursuant to a plan that the majority of each board of directors of each credit union joining in the merger agrees to and that is approved by the affirmative vote of a majority of the members of the merging credit union that vote on the merger. (b) The director may approve a merger without regard to common bond differences between the credit unions if one of the credit unions is insolvent or in danger of insolvency, and: (A) An emergency requiring expeditious action exists; (B) Other alternatives are not reasonably available; and (C) The public interest would best be served by approving the merger. (2) After the directors agree to a plan and the members of the merging credit union approve the plan, the president and secretary of the credit union shall execute a certificate of merger, which shall set forth all of the following: (a) The time and place of the meeting of the board of directors at which the board agreed to the plan. (b) The vote in favor of adopting the plan. (c) A copy of the resolution or other action by which the board agreed to the plan. (d) The time of the meeting of the members at which the members approved the plan. (e) The vote by which the members approved the plan. (3) The certificate and a copy of the plan of merger must be forwarded to the director, certified by the director and returned to the continuing credit union within 30 days. (4) After the director returns the certificate, all property, property rights and members interest of the merged credit union shall vest in the continuing credit union without deed, indorsement or other instrument of transfer, and the continuing credit union under whose charter the merger was effected assumes all debts, obligations and liabilities of the merged credit union. The rights and privileges of the members of the merged credit union remain intact. (5) This section permits a credit union chartered under the laws of another state or of the United States to merge with a credit union chartered under the laws of this state, and a credit union chartered under the laws of this state to merge with a credit union chartered under the laws of another state or of the United States, to the same extent that the laws of this state permit two or more credit unions chartered under the laws of this state to merge. (6)(a) After the board of directors of a credit union that is chartered in this state has approved a plan to merge with another credit union, if a member of the credit union opposes the plan to merge and wishes to inform other members of the credit union of the members opposition, the member may submit a proposed statement of opposition to the credit union and may ask the credit union to disseminate the statement of opposition to the other members. (b) If the credit union maintains on the Internet and publicizes to the credit unions members a public forum for communications concerning the plan to merge or other issues related to the credit union, the credit union, within 14 calendar days after receiving the proposed statement of opposition from the member and subject to paragraph (e) of this subsection, shall publish the statement of opposition on the public forum. (c) If the credit union does not make a public forum available on the Internet and if the credit union received the members proposed statement of opposition at least 28 days before the date on which the members of the credit union are to vote on the plan to merge, subject to paragraph (e) of this subsection, the credit union shall: (A) Notify the member, within seven days after receiving the statement of opposition, of: (i) Any limit, which may not be less than 500 words, that the credit union may impose on the length of the statement of opposition; and (ii) The estimated reasonable cost to reproduce and mail the statement of opposition as a stand-alone document or the estimated cost to include the statement of opposition in any informational or persuasive material concerning the plan to merge that the credit union disseminates to credit union members. The credit unions estimate of the cost of including the statement of opposition in the credit unions material may not exceed two cents multiplied by the number of the credit unions members. (B) Reproduce and mail the statement of opposition to the credit unions members or include the statement of opposition in the credit unions informational or persuasive materials concerning the plan to merge, within 10 days after receiving payment of the cost estimated in subparagraph (A)(ii) of this paragraph, if the member agrees to the limit the credit union imposes on the length of the statement of opposition and pays the cost at least 14 days before the date on which the members of the credit union are to vote on the plan to merge. (d) For purposes of paragraph (c) of this subsection, informational and persuasive material concerning the plan to merge does not include a notice of the meeting at which the credit unions members are to consider the plan to merge, a summary of the merger plan or other items that state or federal law requires the credit union to send to credit union members. (e)(A) The credit union shall notify the credit union member within seven days after receiving the proposed statement of opposition if the credit union declines to disseminate the statement of opposition because the statement of opposition: (i) Is false or misleading with respect to a material fact at the time and in light of the circumstances in which the statement is made; (ii) Omits a material fact that is necessary for the statement of fact not to be false or misleading; (iii) Relates to a personal claim or grievance or solicits personal gain by or business advantage for any party; (iv) Is not sufficiently related to the credit unions business or affairs; (v) Impugns, directly or indirectly, a persons character, integrity or personal reputation or without an expressed factual basis charges a person with illegal, improper or immoral conduct; or (vi) Impugns the stability or soundness of the credit union. (B) The credit union may decline to disseminate the proposed statement of opposition if the credit union member does not agree to the limits the credit union imposes on the length of the statement of opposition or fails within the time limits set in paragraph (c) of this subsection to pay the cost of mailing the statement or including the statement with the credit unions informational or persuasive material concerning the plan to merge. (C) The credit union may not decline to disseminate the statement of opposition for reasons other than the reasons identified in subparagraph (A) or (B) of this paragraph. (f)(A) A credit union member may appeal to the director the credit unions decision under paragraph (e)(A) of this subsection not to disseminate the credit union members statement of opposition. An appeal under this paragraph is not a contested case, as defined in ORS 183.310, and a party to the appeal is not entitled to notice and an opportunity for a hearing under ORS 183.413 to 183.470. As part of the appeal, the credit union member shall provide the director with: (i) The proposed statement of opposition; (ii) A statement of reasons for disagreeing with the credit unions decision under paragraph (e)(A) of this subsection not to disseminate the statement of opposition; and (iii) The credit union members name, address and telephone number or other contact information. (B) Before issuing an order under this paragraph, the director shall request from the credit union a statement of reasons for declining to disseminate the proposed statement of opposition. The director shall consider the credit union members proposed statement of opposition and statement of reasons and the credit unions statement of reasons and shall arrive at an independent determination as to whether the credit union correctly declined to disseminate the credit union members proposed statement for the reasons identified in paragraph (e)(A) of this subsection. (C) The director by order shall uphold the credit unions decision under paragraph (e)(A) of this subsection or shall require the credit union to disseminate the credit union members proposed statement of opposition in accordance with the provisions of this subsection. The directors order is subject to appeal only as provided in ORS 183.484. [1975 c.652 71; 1999 c.185 51; 2011 c.327 5; 2019 c.45 4; 2021 c.125 2]
(1) A credit union chartered under the laws of this state may be converted to a credit union chartered under the laws of the United States, subject to the approval of the National Credit Union Administration. (2) A credit union chartered under the laws of the United States may convert to a credit union chartered under the laws of this state subject to approval of the Director of the Department of Consumer and Business Services. [1975 c.652 72; 1987 c.286 12]
Any central credit union may be organized and operated under this chapter with all the rights and powers of any credit union organized under this chapter, except those granted to a corporate central credit union under ORS 723.730, and shall be subject to all provisions of this chapter not inconsistent with ORS 723.702 to 723.730. Such a credit union shall use the term "central" in its official name. [1975 c.652 73; 1985 c.762 100; 1999 c.185 52]
Membership in a central credit union is limited to: (1) Credit unions organized and operating under this chapter or under any other credit union act. (2) Officers, directors, committee members and employees of such credit unions; officials and employees of any association of credit unions; and employees of federal or state governmental agencies responsible for the supervision of credit unions in this state. (3) Organizations and associations of those persons or organizations enumerated in subsection (1) or (2) of this section. (4) Employees of an employer with insufficient numbers to form or conduct the affairs of a credit union that would provide substantially similar services and facilities. (5) Persons in the field of membership of liquidated credit unions or of credit unions that have entered into or are about to enter into voluntary or involuntary liquidation proceedings. (6) Members of the immediate families of all members qualified above. [1975 c.652 74; 1985 c.762 101; 1999 c.185 53]
Each credit union becoming a member of such central credit union may designate one person to be its voting representative in the central credit union, which person shall be designated by the board of directors of the member credit union. Such voting representative shall be eligible to hold office in the central credit union as if such person were a member of the central credit union. [1975 c.652 75]
(1) A central credit union shall have all of the rights and powers of any other credit union organized under this chapter and the additional rights and powers specified in this section, notwithstanding any limitations or restrictions found elsewhere in this chapter. (2) A central credit union may make loans to other credit unions, purchase shares of and make deposits in other credit unions and, with the approval of the director, obtain or acquire the assets and liabilities of any credit union operating in this state that enters into liquidation. (3) A central credit union may invest in and grant loans to associations of credit unions, central funds of credit unions or organizations chartered to provide service to credit unions. (4) A central credit union may borrow money from any source. It may also issue debentures pursuant to a plan approved by the director. The debentures must be subordinate to the deposits and shares of the credit union. [1975 c.652 76; 1985 c.762 102]
Membership in a corporate central credit union shall be limited to credit unions organized under federal law or under the laws of states listed in the bylaws of the corporate central credit union, and to subsidiaries of any such credit unions, associations of any such credit unions and affiliates of such associations. A corporate central credit union shall have all the powers, rights and obligations imposed upon or granted central credit unions under this chapter, except: (1) It shall be exempt from the regular reserve requirements of ORS 723.631, but shall be required to establish and maintain a minimum capital to assets ratio as set by the Director of the Department of Consumer and Business Services by rule. (2) It shall be exempt from the bond or letter of credit requirements of ORS 723.122, but shall be required to obtain and maintain a fidelity bond in accordance with any rules adopted by the director. (3) It may buy and sell any form of marketable debt obligations of domestic corporations or of federal, state or local government units in accordance with an investment plan approved by the director prior to the purchase or sale of the obligation. (4) A corporate central credit union may make loans or establish lines of credit to a member without regard to the limit set in ORS 723.512. Notwithstanding ORS 723.502 or any other provision of law limiting allowable interest on a loan, a corporate central credit union and a member may agree in writing on the rate of interest that shall be charged on such loans. (5) A corporate central credit union may issue membership capital share accounts as provided by rule. [1977 c.628 2; 1981 c.192 41; 1981 c.256 1; 1985 c.206 3; 1995 c.319 6; 1997 c.832 8; 1999 c.185 54]
Any credit union subject to this chapter shall be deemed an institution for savings within the meaning of the law that exempts such institutions from taxation. No law, except as stated in this section, that taxes corporations in any form, or the shares thereof or the accumulations therein, shall apply to credit unions doing business in accordance with this chapter unless the credit unions are specifically named in the law. [1975 c.652 77; 1985 c.762 103; 2009 c.541 42]
The shares of any credit union shall not be subject to stock transfer taxes, either when issued or when transferred from one member to another. [1975 c.652 78]
The participation by a credit union in any government program providing unemployment, Social Security, old age pension or other benefits shall not be deemed a waiver of the taxation exemption hereby granted. [1975 c.652 79]
If the Director of the Department of Consumer and Business Services has reason to believe that a person has violated any provision of the Oregon Credit Union Act for which criminal prosecution is provided, the director shall give the information relative to the violation to the federal, state or local law enforcement agency having jurisdiction of the violation. This section does not apply, however, if an official of the credit union has reported the information to the proper law enforcement officer under ORS 723.338. [1975 c.652 81; 1979 c.88 36]
The Attorney General shall conduct all actions begun by the Director of the Department of Consumer and Business Services under authority of the Oregon Credit Union Act, and may require the assistance of the district attorney of the district in which the action is conducted. [1975 c.652 82]
(1) No credit union officer, director, employee or agent, shall willfully: (a) With intent to deceive, falsify any book of account, report, statement, record or other document of a credit union whether by alteration, false entry, omission or otherwise. (b) Sign, issue, publish or transmit to a governmental office any book of account, report, statement, record or other document which the person knows to be false. (c) By means of deceit, obtain a signature to a writing which is a subject of forgery. (d) With intent to deceive, destroy any credit union book of account, report, statement, record or other document. (2) No person shall maliciously and knowingly spread false reports about the management or finances of any credit union. [1975 c.652 83]
A person may not knowingly give or cause to be given to the Director of the Department of Consumer and Business Services any document or any oral or written statement or report that is false in any material respect, in the course of any investigation or examination by the director under this chapter. [1987 c.215 7]
(1) The Director of the Department of Consumer and Business Services may issue and serve upon a credit union or a director, officer, committee member, employee or agent of a credit union an order to cease and desist from a practice or a violation as follows: (a) The director may issue an order to cease and desist from an unsafe or unsound practice when the director has reasonable cause to believe that the person to whom the order is directed is engaging, has engaged or is about to engage in an unsafe or unsound practice in conducting the business of the credit union. (b) The director may issue an order to cease and desist from a violation when the director has reasonable cause to believe that the person to whom the order is directed is violating, has violated or is about to violate a law, rule or regulation of this state or the United States, an order of the director or a provision of the articles of incorporation or bylaws of the credit union. (2) An order under subsection (1) of this section must include the following: (a) A statement of the facts that constitute the practice or violation. (b) A provision that requires the person named in the order to cease and desist from the practice or violation. The provision may be mandatory or otherwise. (c) The effective date of the order. (d) A notice to the person named in the order of the right to a contested case hearing under ORS chapter 183. (3) If the practice or violation specified in the order or the continuation of the practice or violation is likely to prejudice the interest of the members of a credit union, the director may issue an order effective immediately or at a later date. In all other cases, the order is effective 30 days after the date of the order unless the person named in the order requests a hearing on the order. (4) An order under this section remains in effect until a court order or the director withdraws the order. (5) If an individual named in an order under this section fails to comply with the order, the director may issue an order that removes or suspends the individual from the office or position the individual holds. The removal or suspension is in addition to any penalty provided by ORS 723.995 for failure to comply with an order issued under this section. [1975 c.544 56; 1977 c.135 46; 1987 c.215 8; 1987 c.286 13; 2009 c.541 42a]
[1975 c.544 57; 1981 c.192 42; 1985 c.762 104; 1987 c.215 9; 1987 c.373 65; 1991 c.734 97; renumbered 723.995 in 1995]
A credit union may not contract for any of the services described in this section to be performed for the credit union unless both the credit union and the person performing the services agree to be subject to regulation and examination by the Director of the Department of Consumer and Business Services to the same extent as if the services were performed by the credit union. This section applies to the following services: (1) Check and deposit sorting and posting. (2) Computation and posting of interest and other credits and charges. (3) Any other bookkeeping, accounting or similar functions performed for a credit union. [1987 c.650 9; 1997 c.832 9]
The provisions of the Oregon Credit Union Act shall apply to the fullest extent permitted by the laws and Constitutions of the United States and of the State of Oregon, to all existing credit unions organized under any general Act of this state. [1975 c.652 85]
(1) The Oregon Credit Union Act may be amended, repealed or modified, but such amendment, repeal or modification shall not take away or impair any remedy for any liability which shall have been previously incurred. (2) The repeal of a previous law by section 88, chapter 652, Oregon Laws 1975, shall not affect any right accrued or established, or any liability or penalty incurred, under the provisions of such previous law, prior to the repeal thereof. [1975 c.652 86,87; 1985 c.762 105]
(1) A person is not personally liable for an act or omission the person does or fails to do in good faith and in compliance with a statute, rule or order of the Director of the Department of Consumer and Business Services under this chapter regardless of whether the statute, rule or order is later amended, rescinded or determined to be invalid by judicial or other authority. (2) A director or officer of a credit union is not personally liable to the credit union or to members of the credit union for damages that result from the directors or officers exercising judgment or discretion in connection with the directors or officers duties or responsibilities or from the directors or officers act or omission in rendering service to the credit union, except to the extent that, in exercising judgment or discretion or in rendering service to the credit union, the director or officer fails to act in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances and in a manner that the director or officer reasonably believes is in the best interests of the credit union. (3)(a) A director, in discharging the directors duties, may rely on information, opinions, reports or statements, including financial statements and other financial data that any of the following persons prepare or present: (A) An officer or employee of the credit union that the director reasonably believes is competent and reliable with respect to the matters the officer or employee prepares or presents; (B) Legal counsel, public accountants or other persons with respect to matters that the director reasonably believes are within the counsels, accountants or other persons professional or expert competence; or (C) A committee of the board of directors of which the director is not a member if the director reasonably believes that the committee merits the directors confidence. (b) A director does not act in good faith, with due care or in a manner that the director reasonably believes is in the interests of the credit union if the director has knowledge concerning a matter that makes the directors reliance on the information, opinions, reports, statements or data described in paragraph (a) of this subsection unwarranted. (4) This section does not bar a cause of action against the credit union or change any liability of the credit union that arises out of an act or omission of a director, officer or other who is exempt from liability for negligence under this section. [1999 c.185 38; 2013 c.480 7]
(1) This section applies to the safe deposit box of any person who is the sole lessee or last surviving lessee of the box and who has died. (2) Subject to ORS 114.537, upon being furnished with a certified copy of the decedents death record or other evidence of death satisfactory to the credit union, the credit union within which the box is located shall cause or permit the box to be opened, and the contents of the box examined, at the request of an individual who furnishes an affidavit stating: (a) That the individual believes the box may contain the will of the decedent, a trust instrument creating a trust of which the decedent was a trustor or a trustee at the time of the decedents death, documents pertaining to the disposition of the remains of the decedent, documents pertaining to property of the estate of the decedent or property of the estate of the decedent; and (b) That the individual is an interested person and wishes to open the box to conduct a will search or trust instrument search, obtain documents relating to the disposition of the decedents remains or inventory the contents of the box or remove property of the estate of the decedent pursuant to a small estate affidavit filed under ORS 114.515. (3) For the purpose of this section, "interested person" means any of the following: (a) A person named as personal representative of the decedent in a purported will of the decedent; (b) The surviving spouse or any heir of the decedent; (c) A person who was serving as the court-appointed guardian or conservator of the decedent or as trustee for the decedent immediately prior to the decedents death; (d) A person named as successor trustee in a purported trust instrument creating a trust of which the decedent was a trustor or a trustee at the time of the decedents death; (e) A person designated by the decedent in a writing that is acceptable to the credit union and is filed with it prior to the decedents death; (f) A person who immediately prior to the death of the decedent had the right of access to the box as an agent of the decedent under a durable power of attorney; (g) If there are no heirs of the decedent, an estate administrator of the State Treasurer appointed under ORS 113.235; or (h) A person who is authorized to file a small estate affidavit under ORS 114.515. (4) If the box is opened for the purpose of conducting a will search, the credit union shall remove any document that appears to be a will, make a true and correct copy of it and deliver the original will to a person designated in the will to serve as the decedents personal representative, or if no such person is designated or the credit union cannot, despite reasonable efforts, determine the whereabouts of such person, the credit union shall retain the will or deliver it to a court having jurisdiction of the estate of the decedent. A copy of the will shall be retained in the box. At the request of the interested person, a copy of the will, together with copies of any documents pertaining to the disposition of the remains of the decedent, may be given to the interested person. (5) If the box is opened for the purpose of conducting a trust instrument search, the credit union shall remove any document that appears to be a trust instrument creating a trust of which the decedent was a trustor or trustee at the time of the decedents death, make a true and correct copy of it and deliver the original trust instrument to a person designated in the trust instrument to serve as the successor trustee on the death of the decedent. If no such person is designated or the credit union cannot, despite reasonable efforts, determine the whereabouts of such person, the credit union shall retain the trust instrument. A copy of the trust instrument shall be retained in the box. At the request of any interested person, a copy of the trust instrument may be given to the interested person. (6) If the box is opened for the purpose of obtaining documents pertaining to the disposition of the decedents remains, the credit union shall comply with subsection (4) or (5) of this section with respect to any will or trust instrument of the decedent found in the box, and may in its discretion either: (a) Make and retain in the box a copy of any documents pertaining to the disposition of the remains of the decedent and tender the original documents to the interested person; or (b) Provide a copy of any documents pertaining to the disposition of the remains of the decedent to the interested person and retain the original documents in the box. (7) If the box is opened for the purpose of making an inventory of its contents, the credit union shall comply with subsection (4) or (5) of this section with respect to any will or trust instrument of the decedent that is found in the box, and shall cause the inventory to be made. The inventory must be attested to by a representative of the credit union and may be attested to by the interested person, if the interested person is present when the inventory is made. The credit union shall retain the original inventory in the box, and shall furnish a copy of the inventory to the interested person upon request. (8) If the interested person is an affiant of a small estate affidavit filed under ORS 114.515 and delivers a certified copy of the affidavit in the manner provided by ORS 114.535, the credit union shall provide to the affiant access to the decedents property. The credit union shall comply with subsection (4) or (5) of this section if a will or trust instrument of the decedent is found in the box. Subject to ORS 114.537, the credit union shall allow the affiant to take possession of the personal property in the box. (9) The credit union may presume the truth of any statement contained in the affidavit required to be furnished under this section and ORS 114.535, and when acting in reliance upon such an affidavit, the credit union is discharged as if it had dealt with the personal representative of the decedent. The credit union is not responsible for the adequacy of the description of any property included in an inventory of the contents of a box, or for the conversion of the property in connection with actions performed under this section, except for conversion by intentional acts of the credit union or its employees, directors, officers or agents. If the credit union is not satisfied that the requirements of this section have been satisfied, the credit union may decline to open the box. (10) If the interested person or affiant does not furnish the key needed to open the box, and the credit union must incur expense in gaining entry to the box, the credit union may require that the interested person or affiant pay the expense of opening the box. (11) Any examination of the contents of a box under this section shall be conducted in the presence of at least one employee of the credit union. [1999 c.506 11; 2003 c.395 25; 2011 c.422 5; 2013 c.366 83; 2019 c.165 27; 2019 c.678 78]
(1) Violation of ORS 723.816 (1) is a Class C felony. (2) Violation of ORS 723.816 (2) is a Class A misdemeanor. [1975 c.652 84]
(1) The Director of the Department of Consumer and Business Services may assess any person who violates any provision of this chapter or any rule or final order issued under this chapter a civil penalty of not more than $2,000 for each violation or $10,000 in the aggregate for all violations within any three-month period. In the case of an individual agent or employee of a credit union, the civil penalty shall be not more than $1,000 for each violation or $5,000 in the aggregate for all violations within any three-month period. The director shall count each day that a violation continues as a separate violation. (2) In addition to the civil penalty provided by subsection (1) of this section, a credit union or a director, officer, committee member, agent or employee of a credit union who violates any provision of this chapter, or any rule or final order issued under this chapter, may be assessed a civil penalty in an amount determined by the director but not to exceed the amount by which the person profited as a result of the violation. (3) Civil penalties under this section shall be imposed as provided in ORS 183.745. (4) If a civil penalty is assessed against a director, officer, committee member, agent or employee of a credit union, unless the director provides otherwise, the director, officer, committee member, agent or employee shall forfeit the penalty and the penalty shall not be paid either directly or indirectly by the credit union. (5) All moneys collected under this section shall be paid to the State Treasurer and credited as provided in ORS 705.145. [Formerly 723.826]
As used in this chapter: (1)(a) "Broker or facilitator" means a person that conducts a business in which, for a fee or consideration, the person: (A) Processes, receives or accepts for delivery to a lender an application for a consumer finance loan, individually or in conjunction or cooperation with another person; (B) Accepts and delivers to a lender all or most of the proceeds of a payment made in connection with a consumer finance loan; or (C) Assists in making a consumer finance loan in a material capacity other than as a lender. (b) "Broker or facilitator" does not include a mortgage broker, as that term is defined in ORS 86A.100, a mortgage loan originator, as that term is defined in ORS 86A.200, or an employee of a licensee. (2) "Consumer finance loan" means a loan or line of credit that is unsecured or secured by personal or real property and that has periodic payments and terms longer than 60 days. (3) "Licensee" means a person licensed under this chapter. (4) "Nationwide Multistate Licensing System" means a system that the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, or assignees of the Conference of State Bank Supervisors or the American Association of Residential Mortgage Regulators, develop and maintain for participating state agencies to use in licensing and registering mortgage loan originators, as defined in ORS 86A.200, and other persons that provide nondepository financial services. [Amended by 1985 c.762 106; 1987 c.373 66; 1993 c.744 26; 2007 c.603 1; 2009 c.863 33; 2010 c.23 29,30; 2019 c.106 5]
Nothing in this chapter shall be construed or held to limit the rights, powers or privileges granted to any person by any law of this state or of the United States whereby the loaning of money or extending of credit is regulated, provided that such person is operating in compliance with the provisions of such law. [Formerly 725.040]
This chapter shall be known as the Oregon Consumer Finance Act. [Amended by 1955 c.71 1]
[Renumbered 725.015]
(1)(a) Except as provided in ORS 82.010, 82.020 and 82.025 and subject to paragraph (b) of this subsection, a person may not conduct a business in which the person makes a consumer finance loan of $50,000 or less or acts as an agent, broker or facilitator for a person that makes a consumer finance loan of $50,000 or less unless the person first obtains a license under this chapter. (b) If at the time a person made a consumer finance loan of $50,000 or less the person did not have a license that the Director of the Department of Consumer and Business Services issued under this chapter, the consumer finance loan is void, and the person, or a successor, assignee or affiliate of the person, may not deposit a borrowers or consumers check, withdraw moneys from a borrowers or consumers account or otherwise collect, receive or retain principal, interest, a fee or a charge related to or in connection with the consumer finance loan. (2) This section does not apply to a person that does not collect a fee or consideration in connection with a consumer finance loan or an application for a consumer finance loan and that: (a) Does not interact directly with a borrower or consumer; (b) Acts solely as an intermediary between the borrower or consumer and a lender or a person that conducts business as a broker or facilitator for a consumer finance loan; (c) Transmits information, electronically or otherwise, concerning the borrower or consumer to a lender or a person that conducts business as a broker or facilitator for a consumer finance loan; or (d) Prepares, issues or delivers a negotiable instrument to a lender or a person that conducts business as a broker or facilitator for a consumer finance loan for subsequent delivery to a borrower or consumer. (3) A person may collect principal, interest, a fee or a charge related to or in connection with a consumer finance loan if the license the director issued under this chapter lapsed inadvertently or by mistake. [1989 c.424 2; 2007 c.603 2; 2010 c.23 31; 2015 c.490 1]
No licensee shall take: (1) Any power of attorney from any borrower, except a power of attorney to effectuate the transfer of the ownership of any motor vehicle at the time of making a loan on a motor vehicle. (2) Any note or promise to pay which does not accurately disclose the actual amount of the loan, the time for which it is made, the rate of interest charged or the schedule of payments agreed upon, or any instrument in which blanks are left to be filled in after execution. [Amended by 1955 c.71 3; 1971 c.450 2; 1979 c.88 41; 1981 c.412 13]
No licensee or other person shall advertise, print, display, publish, distribute or broadcast or cause or permit to be advertised, printed, displayed, published, distributed or broadcast in any manner whatsoever any statement or representation with regard to the rates, terms or conditions for loans which is false, misleading or deceptive.
A license shall not be granted to any person under this chapter unless the person is legally qualified to conduct business in this state. [Amended by 1999 c.469 1]
(1) Application for a license required under ORS 725.045 shall be in writing in a form prescribed by the Director of the Department of Consumer and Business Services. The application shall contain the name and both the residence and business addresses of each individual applicant, of each member of a partnership or association that applies for a license and of each officer or director of a corporation that applies for a license. The application shall also contain the county and city with street and number, if any, where the business is to be conducted and any other information the director may require. (2) An applicant, at the time the applicant applies for a license under this section, shall pay to the director a license fee determined under ORS 725.185 for the period terminating on the last day of the current calendar year. If the director denies the applicant a license for cause or if the applicant withdraws the application after the director investigates the applicant, the director shall refund the license fee paid under this subsection, less an amount that reflects the directors administrative and investigative costs for the application. [Amended by 1955 c.71 4; 1977 c.135 49; 1985 c.762 114; 2009 c.541 43]
(1) Conditioned upon an applicants compliance with this chapter and the payment of the license fee, the Director of the Department of Consumer and Business Services, within 90 days after the date the applicant filed the application described in ORS 725.120, shall disapprove the application or shall issue and deliver a license to the applicant to make loans in accordance with this chapter at the location specified in the application. However, before issuing a license, the director must first find upon investigation that: (a) The financial responsibility, experience, character and general fitness of the applicant, and of the applicants members if the applicant is a partnership or association, and of the applicants officers and directors if the applicant is a corporation, are such as to command the confidence of the community and to warrant the belief that the business will be operated honestly, fairly and efficiently within the purposes of this chapter; (b) Grounds to disapprove an application described in ORS 725.145 do not exist and that, in the judgment of the director, no other reasons or conditions warrant the refusal to grant a license; and (c) The applicant obtained a corporate surety bond that meets the requirements specified in ORS 86A.227 if the applicant employs or intends to employ a mortgage loan originator, as defined in ORS 86A.200, or is otherwise subject to ORS 86A.200 to 86A.239. (2) A license issued under this section is a continuing license and remains in full force and effect until the licensee surrenders the license as provided in ORS 725.250 or the director revokes or suspends the license as provided in ORS 725.230. (3) The director, consistent with the requirements of this chapter, may issue a license under this section by means of an agreement with the Nationwide Multistate Licensing System and may, by rule, conform the practices, procedures and information that the Department of Consumer and Business Services uses to issue a license to the requirements of the Nationwide Multistate Licensing System. [Amended by 1955 c.71 5; 1963 c.167 1; 1977 c.135 50; 1985 c.762 115; 1999 c.469 2; 2009 c.863 34; 2019 c.106 6]
The Director of the Department of Consumer and Business Services may disapprove an application for a license if a person named in the application submitted pursuant to ORS 725.120: (1) Is insolvent, either in the sense that the persons liabilities exceed the persons assets or that the person cannot meet the persons obligations as they mature, or is in such financial condition that the person cannot continue in business with safety to the persons customers; (2) Has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession; (3) Has knowingly or repeatedly violated or failed to comply with any provision of the Oregon Bank Act, the Oregon Credit Union Act, the Oregon Consumer Finance Act or the Pawnbrokers Act, or any administrative rule or order adopted under an Act identified in this subsection; (4) Has been convicted of a crime, an essential element of which is fraud; (5) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving an aspect of the consumer finance business; (6) Is the subject of an order of the director subjecting the person to a civil penalty under the Bank Act or ORS chapter 723 or this chapter, or removing the person from an office in any entity regulated under the Bank Act or ORS chapter 723 or this chapter; or (7) Is the subject of an order that was issued by the regulatory authority of another state or of the federal government with authority over banking institutions, savings associations, credit unions or consumer finance companies, that was entered within the past five years and that subjects the person to a civil penalty or removes the person from an office in a state banking institution, a national bank, a state or federal savings association, a state or federal credit union or a consumer finance company. [1977 c.135 48; 1985 c.762 116; 1987 c.373 68; 1987 c.650 11; 2009 c.541 44; 2011 c.597 293]
If the Director of the Department of Consumer and Business Services disapproves an application for a license, the director shall notify the applicant immediately, giving the reason for the disapproval. [Amended by 1985 c.762 117; 1987 c.650 12]
The license shall be in a form prescribed by the Director of the Department of Consumer and Business Services and shall state the address at which the business is to be conducted and the full name of the licensee. The license shall be kept conspicuously posted in the place of business of the licensee and shall not be transferable or assignable. [Amended by 1955 c.71 6; 1985 c.762 118]
(1) Each licensee shall pay to the Director of the Department of Consumer and Business Services each year the license fee set in a schedule the director adopts by rule. The fee shall be paid by the date set by the director in the rule establishing the schedule. (2) In addition to any license fee collected under subsection (1) of this section, whenever the director devotes any extra attention to the affairs of a licensee, either upon determination by the director or upon request of the licensee, the fee for the extra service shall be the actual cost of the extra service. (3) The director shall set or change the fee schedule described in subsection (1) of this section after considering: (a) The amount of other moneys available for the director to use in performing the directors duties; (b) The costs the director will incur in performing the directors duties in the year in which the director will collect the fee; and (c) The amount the director needs to establish and maintain a reasonable emergency fund. [1985 c.762 119; 1987 c.171 7; 1987 c.373 69; 2009 c.541 45]
(1) On or before February 15 of each year, or on such other date established by the Director of the Department of Consumer and Business Services by rule, every licensee shall file a report with the director. The report shall contain relevant information required by the director concerning the business and operations during the preceding calendar year of each licensed place of business conducted by the licensee within the state. The report shall be in the form prescribed by the director. (2) Every licensee who fails to file any report required under this chapter within the time specified may be subject to a penalty of $10 per day for each days delay. [Amended by 1955 c.71 8; 1973 c.428 2; 1985 c.762 120; 1999 c.469 3; 2005 c.21 13]
No licensee shall transact any business within the scope of this chapter except under the name and at the place of business named in the license. The Director of the Department of Consumer and Business Services may issue more than one license to the same licensee if the licensee complies with all the provisions of this chapter governing an original issuance of a license for each such additional license. However, each additional license shall be for a separate and distinct place of business for making and completing loans as provided in this chapter. [Amended by 1985 c.762 121]
(1) When a licensee wishes to change the place of business to another location, the licensee shall submit written notice thereof, together with the license, to the Director of the Department of Consumer and Business Services. The director shall amend the license of the licensee to reflect the new location and shall return the amended license to the licensee. (2) A change in the place of business of a licensee to a location outside the city named in the original license may be allowed under the same license only if the director determines that the new location will serve substantially the same community as is served at the location named in the original license. (3) If the director disapproves the proposed new location of the business, the director shall immediately notify the licensee of the disapproval and return the license unchanged to the licensee. [Amended by 1955 c.71 9; 1985 c.762 122; 1987 c.650 13; 1999 c.469 4]
(1) The Director of the Department of Consumer and Business Services may revoke a license under this chapter upon 10 days notice to the licensee stating the contemplated action and in general the grounds for the action and after giving the licensee reasonable opportunity for a hearing, if the director finds that: (a) The licensee failed to pay the annual license fee or to comply with a demand, ruling or requirement of the director made pursuant to this chapter or, if the licensee is a corporation, to comply with provisions of law that require the licensee to keep the corporation in good standing; (b) The licensee has violated a provision of this chapter or a rule made by the director under the authority of this chapter; (c) The licensee employs mortgage loan originators licensed under ORS 86A.200 to 86A.239 and failed to: (A) File with the director and to maintain a corporate surety bond required under ORS 86A.227; or (B) Certify to the director in a form and manner the director specifies by rule that the licensee has independently verified that every individual the licensee hired or intends to hire as a mortgage loan originator meets the requirements set forth in ORS 86A.186 and 86A.200 to 86A.239; (d) The licensee, in connection with the activities of a mortgage loan originator: (A) Failed to maintain a corporate surety bond as provided in ORS 86A.227; (B) Failed to comply with: (i) The Truth in Lending Act, 15 U.S.C. 1601 et seq. and Regulation Z, 12 C.F.R. part 226, as in effect on October 1, 2009; (ii) The Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq. and Regulation X, 24 C.F.R. part 3500, as in effect on January 1, 2010; (iii) The Equal Credit Opportunity Act, 15 U.S.C. 1691 et seq. and Regulation B, 12 C.F.R. 202.9, 202.11, 202.12 and 202.14, as in effect on July 30, 2009; or (iv) 12 U.S.C. 5101 et seq. and regulations adopted under 12 U.S.C. 5101 et seq.; (e) The licensee employed a device, scheme or artifice to defraud or engage in an act, practice or course of business that operates or would operate as a fraud or deceit; (f) The licensee knowingly made an untrue statement of a material fact or omitted from a statement a material fact that would make the statement not misleading in light of the circumstances under which the licensee made the statement; (g) The licensee made or filed or caused to be made or filed with the director a statement, report or document that the licensee knew was false in a material respect or matter; or (h) A fact or condition exists that, if the fact or condition had existed at the time the licensee originally applied for the license, clearly would have warranted the director in refusing originally to issue the license. (2) The director, without notice or hearing, may suspend a license issued under this chapter for a period not exceeding 30 days, pending investigation. (3) The director may revoke or suspend only the particular license with respect to which grounds for revocation or suspension may occur or exist, or, if the director finds that the grounds for revocation or suspension are of general application to all or more than one of the licensees offices, the director may revoke or suspend all the licenses or such number of the licenses issued to the licensee as the grounds for revocation or suspension apply to, as the case may be. [Amended by 1955 c.71 10; 1985 c.762 123; 2009 c.863 35]
(1) If the Director of the Department of Consumer and Business Services denies a license, or proposes to revoke or suspend a license, opportunity for hearing shall be accorded as provided in ORS chapter 183. (2) Conduct of hearings, issuance of orders and judicial review of rules and orders shall be as provided in ORS chapter 183. [1971 c.734 176; 1985 c.762 124; 1987 c.650 14]
(1) Any licensee may surrender any license issued to the licensee by delivering written notice to the Director of the Department of Consumer and Business Services that the licensee thereby surrenders the license. (2)(a) A licensee shall surrender any license issued to the licensee under which there has been no material loan activity for a period of 12 consecutive months. (b) For purposes of this subsection, "material loan activity" includes new loans, refinancing of existing loans or formal extensions of existing loan repayment provisions in excess of 30 days. (3) Surrender of a license under subsection (1) or (2) of this section shall not affect the licensees civil or criminal liability for acts committed prior to surrender. [Amended by 1985 c.762 125; 1999 c.469 5]
The revocation, suspension or surrender of any license shall not impair or affect the rights or obligations of any preexisting lawful contract between the licensee and any borrower. [Amended by 1955 c.71 11]
The Director of the Department of Consumer and Business Services may reinstate any revoked license upon the licensees compliance with the provisions of law or any demand, ruling or requirement made by the director under this chapter. For such reinstatement of license the licensee shall pay a fee of $25. [Amended by 1985 c.762 126]
(1) For discovering violations of this chapter and securing information required by the Director of the Department of Consumer and Business Services under this chapter, the director at any time may investigate the loans and business, including the books, accounts, records and files used in the loans and business, of every person licensed or required to be licensed under this chapter. (2) For purposes of subsection (1) of this section: (a) A person licensed or required to be licensed under this chapter shall give the director free access to the persons place of business, books, accounts, safes and vaults. (b) The director may: (A) Make an investigation without prior notice to the person being investigated. (B) Compel the attendance of witnesses and examine the witnesses under oath. (C) Require the production of documents or records. (3) Each person examined under this section shall pay the actual cost of an investigation to the director. The director may maintain an action for the recovery of the costs in any court of competent jurisdiction. [Amended by 1955 c.71 12; 1973 c.428 3; 1981 c.412 14; 1985 c.762 127; 1987 c.215 15; 1999 c.469 6; 2005 c.338 24]
(1) Each licensee is subject to inspection by the Director of the Department of Consumer and Business Services. The director shall conduct an examination of each licensee to determine whether the licensee is complying with the provisions of this chapter and rules adopted thereunder and to secure information required by the director under this chapter. The examinations of a licensee shall be conducted not more than 24 months apart. (2) In addition to examinations under subsection (1) of this section, the director may conduct examinations of a licensee at other times as the director deems necessary. (3) For purposes of any examination under this section: (a) The director shall have free access to the place of business and to the books, accounts, safes and vaults of the licensee. (b) The director may conduct an examination without prior notice to the licensee. (c) The director shall have authority to examine under oath all persons whose testimony the director may require in order to conduct the examination. [1987 c.215 14]
If the Director of the Department of Consumer and Business Services finds that any officer or director of a licensee is dishonest, reckless or incompetent, or refuses to comply with the law, rules of the director or any written requirements or instructions of the director, the director may issue a written order to the individual removing or suspending the individual from the individuals office or position. [1977 c.135 52; 1985 c.762 128]
The Director of the Department of Consumer and Business Services by order may direct a licensee to remove an officer or director of the licensee from office for any of the reasons stated in ORS 725.145. [1987 c.650 16]
A person may not knowingly give or cause to be given to the Director of the Department of Consumer and Business Services any document or any oral or written statement or report that is false in any material respect, in the course of any investigation or examination by the director under this chapter. [1987 c.215 12]
The Director of the Department of Consumer and Business Services may make such specific rulings, demands and findings as may be necessary for the proper conduct of the business regulated by this chapter and the enforcement of this chapter in addition to and not inconsistent with this chapter. [Amended by 1985 c.762 129]
Subject to the provisions of this chapter, the Director of the Department of Consumer and Business Services may prescribe the form of the books and records to be kept by the licensee. All such books and records shall be preserved and available for at least two years after making the final entry on any loan recorded therein. [Amended by 1985 c.762 130]
(1) A licensee may: (a) Charge, contract for and receive in connection with a consumer finance loan made in accordance with this chapter a finance charge that, when expressed as an annual percentage rate, does not exceed the greater of: (A) 36 percent; or (B) 30 percentage points in excess of the discount window primary credit rate. The Director of the Department of Consumer and Business Services on the second Friday of December shall determine by order from published sources available on that date the discount rate upon which the annual percentage rate set forth in this subparagraph will be based as of January 1 of the following calendar year. The annual percentage rate set forth in this subparagraph shall apply to each new loan made during the succeeding calendar year for the entire term of the loan, including all renewals of the loan. (b) Contract for and receive in connection with a consumer finance loan made in accordance with this chapter, and in addition to the finance charge described in paragraph (a) of this subsection, other reasonable and bona fide fees, expenses or damages, subject to oversight and regulation by the Department of Consumer and Business Services. For purposes of this paragraph, "fees, expenses or damages" includes, but is not limited to: (A) Items exempted from the computation of the finance charge in accordance with the Truth in Lending Act, 15 U.S.C. 1605(d) and (e), as that Act existed on July 2, 2007, and similar pass-through fees or charges; (B) Prepayment fees and late fees; (C) Fees and damages in accordance with ORS 30.701; (D) Actual expenses the licensee reasonably incurs in collecting a consumer finance loan that the borrower or consumer has failed to repay according to the terms of the consumer finance loan contract; and (E) Amounts associated with the collection of a defaulted loan that are authorized by statute or awarded by a court of law. (c) For purposes of this subsection, "finance charge" and "annual percentage rate" have the meanings given those terms in the federal Truth in Lending Act, 15 U.S.C. 1601 et seq. (2) When a precomputed loan contract is originally scheduled to be repaid in 62 months or less and requires repayment in substantially equal or consecutive monthly installments of principal and interest combined, the interest or consideration may be precomputed, contracted for and earned on scheduled unpaid principal balances on the assumption that all scheduled payments will be made when due. In such cases, every payment may be applied to the combined total of principal and precomputed interest until the contract is fully paid, and the acceptance or payment of interest or consideration on any loan made under the provisions of this subsection does not constitute payment, deduction or receipt of the interest or consideration in advance. The precomputed interest or consideration is subject to the following adjustments: (a) When a default of more than 10 days in the payment of any scheduled installment occurs, the licensee may charge and collect a default charge not exceeding five percent of the unpaid amount of the installment or $5, whichever is less. A default charge may be collected only once on an installment, but may be collected at the time the default charge accrues or at any time thereafter. A default charge may not be assessed with respect to an installment that is paid in full on or within 10 days after a scheduled installment due date when an earlier maturing installment or a default or deferral charge on an earlier maturing installment may not have been paid in full even though all or part of such installment payment is applied to an earlier maturing installment, or a default or deferral charge. (b) If the payment of all unpaid installments is deferred one or more full months, and if the contract so provides, the licensee may charge and collect a deferral charge not exceeding the annual percentage rate specified in subsection (1)(a) of this section and previously disclosed to the borrower pursuant to the federal Truth in Lending Act applied to the sum of the installments deferred for the length of the deferral period. The deferral period is that period in which no scheduled installment is required to be paid by reason of the deferral. The charge may be collected at the time of deferral or at any time thereafter. A deferral charge may not be made for the deferral of any installment with respect to which a default charge has been collected, unless the default charge is deducted from the deferral charge. If prepayment of the loan in full occurs during the deferral period, in addition to any other rebate which may be required, the borrower shall receive a rebate of the portion of the deferral applicable to the unexpired months in the deferral period, for which purpose a fraction of an unexpired month exceeding 15 days is considered to be a month. (c) Upon prepayment in full of the unpaid balance of a precomputed loan, a rebate of unearned interest or consideration shall be made as provided in this paragraph. The amount of the rebate shall be not less than the total interest contracted for to maturity, less the greater of: (A) Ten percent of the amount financed or $75, whichever is less; or (B) The interest or consideration earned to the installment due date nearest the date of prepayment, computed by applying the simple interest rate of the loan to the actual principal balances outstanding, for the periods of time the balances were actually outstanding. For purposes of rebate computations under this subparagraph, the installment due date preceding the date of prepayment is nearest if prepayment occurs 15 days or less after that installment date. If prepayment occurs more than 15 days after the preceding installment due date, the next succeeding installment due date is nearest to the date of prepayment. In determining the simple interest rate, the licensee may apply to the scheduled payments the actuarial method by which each scheduled payment is applied first to accrued and unpaid interest or consideration and any amount remaining is applied to reduction of the principal balance. (3) If the borrower agrees to perform certain duties to insure or preserve the collateral and fails to perform those duties, the licensee may pay for the performance of the duties and add the amounts paid to the unpaid principal balance. A charge may be made for sums advanced, at the rate provided for in the loan agreement. (4) The loan contract may provide that after default and referral the borrower shall pay the licensee for reasonable attorney fees actually paid by the licensee to an attorney who is not a salaried employee of the licensee. [Amended by 1955 c.71 13; 1971 c.450 3; 1973 c.428 4; 1975 c.567 2; 1977 c.432 1; 1979 c.326 3; 1979 c.879 7; 1981 c.412 15; 1981 c.910 8a; 2006 c.3 2; 2007 c.473 3; 2007 c.603 3a; 2009 c.541 46; 2010 c.23 32]
(1) As used in this section and ORS 725.347, "open-end loan plan" means a plan or arrangement, the agreement for which expressly states that it is made pursuant to this section under which loans are made, and under which: (a) The licensee may permit the borrower to obtain advances of money from the licensee from time to time or the licensee may advance money on behalf of the borrower from time to time as directed by the borrower; (b) The unpaid principal balances and interest or consideration are debited to an account; (c) Interest or consideration is calculated on the unpaid principal balance in the borrowers account from time to time, which balance may include all advances made on behalf of the borrower and all charges authorized under ORS 725.340 and this section; and (d) The borrower has the privilege of paying the unpaid balance in full or in installments. (2) A licensee may make loans under an open-end loan plan and may contract for and receive interest or consideration only as provided in ORS 725.340. (3) A security interest in real or personal property may be taken to secure an open-end loan plan. Any security interest in real or personal property shall be promptly released if there has been no outstanding balance for 12 months and the borrower either does not have or surrenders the unilateral right to create a new outstanding balance or if the account is terminated at the borrowers request and paid in full. (4) ORS 725.050 (2), 725.340 (2) and 725.360 (1), (2) and (4) do not apply to any open-end loan plan. (5) The open-end loan plan agreement shall contain the name and address of the borrower and of the licensee and shall disclose the date of the agreement, the method of determining the minimum periodic payments which will be required to pay the initial and any subsequent advances, the conditions under which interest or consideration may be imposed, the method of determining the principal balance upon which interest or consideration may be imposed, the method of determining the amount of the interest or consideration, each periodic rate and the range of balances to which each rate is applicable and the corresponding annual percentage rate in accordance with Regulation Z promulgated by the Board of Governors of the Federal Reserve System under section 105 of the Consumer Credit Protection Act (15 U.S.C. 1604), and the nature of the security taken. (6) Except for an account which the licensee deems to be uncollectible or with respect to which delinquency collection procedures have been instituted, the licensee shall deliver or cause to be delivered to the borrower, for each billing cycle at the end of which there is an unpaid balance of more than $1 in the account or with respect to which interest or consideration is imposed, a statement setting forth the outstanding balance in the account at the beginning of the billing cycle, the nature, date and amount of any subsequent advance during the cycle, the amounts and dates of payments credited to the account during the billing cycle, the amount of any interest or consideration debited to the account during the billing cycle, each periodic rate and the range of balances to which each rate is applicable and the corresponding annual percentage rate in accordance with Regulation Z promulgated by the Board of Governors of the Federal Reserve System under section 105 of the Consumer Credit Protection Act (15 U.S.C. 1604), the balance on which the interest or consideration was calculated, a statement of how that balance was determined, the closing date of the billing cycle, the outstanding balance on that closing date and the minimum monthly payment required. [1977 c.522 2; 1981 c.412 16; 1983 c.37 36d; 1985 c.370 2; 2007 c.603 4]
(1) As used in this section, "open-end credit card plan" means an open-end loan plan under which: (a) The licensee issues one or more cards, checks, letters of credit or other devices to the borrower; and (b) The borrower may obtain advances from the licensee, either directly or in connection with purchases of goods and services, by using the card, check, letter of credit or other device. (2) A licensee may transact business and extend credit to borrowers under an open-end credit card plan. A licensee may offer an open-end credit card plan in conjunction with noncredit features or services available to the borrower through use of the card or other device. The noncredit features or services shall not be subject to regulation under this chapter. (3) The agreement between the licensee and the borrower relating to the open-end credit card plan shall conform to the requirements of ORS 725.345 (5), except that the borrowers name and address and the date of the agreement need not be included in the agreement if the borrower has submitted a signed and dated application to the licensee seeking the issuance of one or more cards or other devices. [1985 c.370 4; 2007 c.603 5]
On and after September 20, 1985, ORS 725.210 applies to loans and advances pursuant to ORS 725.345, provided that a licensee that applied for and received a license before September 20, 1985, for a location outside the State of Oregon may receive and hold one or more licenses relating to locations outside the State of Oregon, including one additional license for a location not licensed on or before September 20, 1985, and may transact business at such licensed locations. With respect to such a licensee only, loans and advances under open-end loan plans or open-end credit card plans shall be considered to be business transacted where the applications or agreements in connection with the loan plans or credit card plans are approved by the licensee. [1985 c.370 1a]
(1) As used in this section, "earnings" means salary, wages or other compensation for service. (2) No licensee shall take an assignment of earnings as payment of or as security for payment of a loan. An assignment in violation of this subsection is unenforceable by the assignee and revocable by the assignor. Nothing in this subsection is intended to prevent an employee from authorizing deductions from the earnings of the employee if the authorization is revocable. (3) For the purpose of this section, a sale of unpaid earnings made in consideration of the payment of money to or for the account of the seller of the earnings is considered a loan to the seller, secured by an assignment of earnings. [1971 c.232 3]
Every licensee shall: (1) Deliver to the borrower at the time any loan is made a statement in the English language showing in clear and distinct terms: (a) The name and address of the borrower and of the licensee. (b) The amount and the date of the loan and of its maturity or terms of payment. (c) The rate of interest agreed upon or consideration to be charged therefor. (d) The nature of the security for the loan, if a lien on personal property has been taken by chattel mortgage, bill of sale, collateral agreement or otherwise. (2) Make available to the borrower upon request a plain and complete receipt for all payments made on account of any such loan at the time such payments are received by the licensee, specifying the amount applied to interest, if any, the date to which the interest is paid, the amount applied to principal, if any, and the unpaid principal balance of such loan, if any remains. (3) Permit payment to be made in advance in any amount on any loan at any time. (4) Upon repayment of the loan in full or upon renewal thereof, mark indelibly such obligation signed by the borrower with the word "Paid" or "Renewed." In the case of repayment in full the licensee also shall do the following: (a) To the extent and in the manner required by law, release any mortgage or security agreement that no longer secures a loan, and restore any security or collateral. (b) Release any Uniform Commercial Code filing that no longer secures a loan, to the extent and in the manner required by ORS 79.0513. (c) Return any assignment given by the borrower. (d) Return to the borrower the canceled note evidencing the loan or alternatively, acknowledge in writing to the borrower that the loan has been repaid. [Amended by 1971 c.450 4; 1973 c.428 5; 1975 c.567 3; 1987 c.650 17; 2001 c.445 182]
This chapter does not affect loans made or payable in other jurisdictions and lawful where made or payable. [Amended by 1979 c.88 42; 2007 c.472 1; 2010 c.23 33]
(1) A director or officer of a licensee who has reason to believe that a defalcation has occurred at any office of the licensee shall give the information to the appropriate local, state or federal law enforcement officer having jurisdiction of the violation. (2) A licensee shall notify the Director of the Department of Consumer and Business Services of any defalcation that occurs at any office of the licensee within five days after the discovery of the defalcation. When directed by the director to do so, the licensee shall cause an audit to be made of the business of the licensed office where the defalcation occurred, in accordance with the directors instructions. [1979 c.88 38; 1987 c.650 18]
If the Director of the Department of Consumer and Business Services has reason to believe that a defalcation has occurred at an office of a licensee, the director may give the information concerning the violation to the appropriate federal, state or local law enforcement agency having jurisdiction of the violation. This section does not apply, however, if the licensee has reported the information to the appropriate law enforcement officer under ORS 725.385. [1979 c.88 40; 1985 c.762 133]
(1) The Director of the Department of Consumer and Business Services may issue and serve upon the following persons an order to cease and desist from a violation when the director has reasonable cause to believe that the person to whom the order is directed is violating, has violated or is about to violate any provision of this chapter or a rule or order of the director: (a) A licensee. (b) A director, officer, employee or agent of a licensee. (c) A person acting as a consumer finance lender without a license. (2) An order under subsection (1) of this section must include the following: (a) A statement of the facts constituting the violation. (b) A provision requiring the person named in the order to cease and desist from the violation. The provision may be mandatory or otherwise. (c) The effective date of the order. (d) A notice to the person named in the order of the right to a contested case hearing under ORS chapter 183. (3) An order under this section is effective 30 days after the date of the order unless the person named in the order requests a hearing on the order. (4) An order under this section remains in effect until it is withdrawn by the director or by a court. (5) If an individual named in an order under this section fails to comply with the order, the director may issue an order removing or suspending the individual from the office or position held by the individual. The removal or suspension is in addition to any penalty provided by ORS 725.910 for failure to comply with an order issued under this section. [1987 c.215 13; 2005 c.338 25]
The Director of the Department of Consumer and Business Services may institute any action or other proceeding that the director considers necessary for enforcing any provision of this chapter or any rule, order or action adopted, issued or taken by the director under this chapter. [1987 c.215 17]
(1) In accordance with ORS chapter 183, the Director of the Department of Consumer and Business Services may adopt rules for the purposes of protecting borrowers and consumers, providing clarity to licensees and lenders and otherwise carrying out and enforcing this chapter. The rules may include, but are not limited to, provisions that establish loan forms, terms, charges and fees. (2) In addition to the notice requirements of ORS chapter 183, before the director adopts a rule, the director shall submit a copy of the rule to each licensee. [1985 c.762 110; 1987 c.650 19; 2007 c.603 6]
A person may not be held personally liable for an act done or omitted by the person in good faith and in compliance with a rule or order of the Director of the Department of Consumer and Business Services under this chapter regardless of whether the rule or order is later amended or rescinded or is later determined by judicial or other authority to be invalid. [1987 c.445 6]
(1) The Director of the Department of Consumer and Business Services may assess against any person who violates any provision of this chapter, or any rule or final order of the director under this chapter, a civil penalty in an amount determined by the director of not more than $2,500. In addition, if a licensee commits such a violation, the director may revoke the license of the licensee. (2) Civil penalties under this section shall be imposed as provided in ORS 183.745. (3) Except as provided in subsection (4) of this section, all moneys collected under this section shall be paid to the State Treasurer and credited as provided in ORS 705.145. (4) In addition to any other penalty provided by law, the director may assess against any person who lends money without the license required under this chapter a civil penalty in an amount equal to the interest received that exceeds nine percent per annum. The director shall pay all moneys collected under this subsection to the Department of State Lands for the benefit of the Common School Fund. [1975 c.544 59; 1981 c.412 17; 1985 c.762 134; 1987 c.215 16; 1987 c.373 70; 1991 c.734 98; 2001 c.445 203]
As used in ORS 725A.010 to 725A.092 and 725A.990: (1)(a) "Broker or facilitator" means a person that conducts a business in which, for a fee or consideration, the person: (A) Processes, receives or accepts for delivery to a lender an application for a loan, individually or in conjunction or cooperation with another person; (B) Accepts and delivers to a lender all or most of the proceeds of a payment made in connection with a loan; or (C) Assists in making a loan in a material capacity other than as a lender. (b) "Broker or facilitator" does not include a mortgage broker, as defined in ORS 86A.100, a mortgage loan originator, as defined in ORS 86A.200, or an employee of a licensee. (2) "Earnings" means salary, wages or other compensation for service. (3)(a) "Lender" means an individual, corporation, association, firm, partnership, limited liability company or joint stock company that is engaged in the business of making loans. (b) "Lender" does not include a financial institution or a trust company, as those terms are defined in ORS 706.008. (4) "Licensee" means a person licensed under ORS 725A.024. (5) "Nationwide Multistate Licensing System" means a system that the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, or assignees of the Conference of State Bank Supervisors or the American Association of Residential Mortgage Regulators, develop and maintain for participating state agencies to use in licensing and registering mortgage loan originators, as defined in ORS 86A.200, and other persons that provide nondepository financial services. (6)(a) "Payday loan" means a loan of not more than $50,000, other than a purchase money loan, in which: (A) The primary purpose is personal, family or household use; (B) The loan agreement specifies a term of not more than 60 days or specifies that a payday loan lender may demand repayment within 60 days; and (C) The evidence of the loan is usually a check or electronic repayment agreement provided by or on behalf of the borrower. (b) "Payday loan" does not include a loan with a term longer than 60 days in which a lender may accelerate repayment if the borrower defaults. (7) "Payday loan lender" means a lender that is engaged in the business of making loans, at least 10 percent of which are payday loans. (8) "Title loan" means: (a) A loan of not more than $50,000, other than a purchase money loan, in which: (A) The title to a motor vehicle, recreational vehicle, boat or mobile home is security for the loan; (B) The loan agreement specifies a term of not more than 60 days and requires the borrower to repay the entire amount in a single payment; and (C) The lender is a title loan lender; (b) A loan of a type substantially equivalent to a loan described in paragraph (a) of this subsection that the Director of the Department of Consumer and Business Services designates by rule or order as a title loan; or (c) A sale-leaseback arrangement between a consumer and a purchaser for a motor vehicle, recreational vehicle, boat or mobile home in an amount that does not exceed $50,000 if: (A) The title and all rights to the motor vehicle, recreational vehicle, boat or mobile home do not transfer from the consumer to the purchaser in a bona fide sale of the motor vehicle, recreational vehicle, boat or mobile home or the consumer retains equity in the motor vehicle, recreational vehicle, boat or mobile home after the consumers sale to the purchaser; (B) The purchaser and the consumer agree within 60 days of the date on which the consumer sells the motor vehicle, recreational vehicle, boat or mobile home to the purchaser that the consumer has an option to or will repurchase the motor vehicle, recreational vehicle, boat or mobile home from the purchaser for a nominal price or a price other than the market value, determined at the time the lease expires, of the motor vehicle, recreational vehicle, boat or mobile home; (C) During the term in which the consumer leases the motor vehicle, recreational vehicle, boat or mobile home, the purchaser or an agent of the purchaser holds a check, electronic repayment agreement or other evidence of the consumers agreement to repurchase the motor vehicle, recreational vehicle, boat or mobile home that was provided by or on behalf of the consumer; or (D) The director by rule or order designates the sale-leaseback arrangement as a title loan. (9) "Title loan lender" means a lender that is engaged in the business of making loans, at least 10 percent of which are title loans. [2010 c.23 1; 2019 c.106 7]
(1) ORS 725A.010 to 725A.092 and 725A.990 do not limit a persons rights, powers or privileges under a law of this state or of the United States that regulates the persons lending money or extending credit, provided that the person complies with the provisions of the law. (2) Except as otherwise provided in subsection (3) of this section, ORS 725A.010 to 725A.092 and 725A.990 do not affect a loan made or payable in another jurisdiction and lawful where made or payable. (3)(a) A person is subject to ORS 725A.010 to 725A.092 and 725A.990 if in the persons capacity as a lender the person makes a payday loan or title loan to a consumer who resides in or maintains a domicile in this state and the consumer: (A) Negotiates or agrees to the terms of the payday loan or title loan in person, by mail, by telephone or via the Internet while the consumer is physically present in this state; (B) Enters into or executes a contract with the person for a payday loan or title loan in person, by mail, by telephone or via the Internet while the consumer is physically present in this state; or (C) Makes a payment on the payday loan or title loan in this state. (b) For purposes of this subsection, a consumer makes a payment on a payday loan or title loan in this state if: (A) A person, for purposes of receiving or processing a payment on the payday loan or title loan, debits an account that the consumer holds in a branch of a financial institution that is located in this state; or (B) The consumer makes a payment on the payday loan or title loan with a negotiable instrument that is drawn on a financial institution that is, or a branch of which is, located in this state. [2010 c.23 2]
(1)(a) Except as provided in ORS 82.010, 82.020 and 82.025 and subject to subsection (2) of this section, a person may not conduct business as a payday loan lender or a title loan lender unless the person obtains a license under ORS 725A.024. (b) A person may not act as an agent, broker or facilitator for making a payday loan or title loan unless the person obtains a license under ORS 725A.024, regardless of whether the principal that makes the payday loan or title loan must obtain a license under paragraph (a) of this subsection. (2) If at the time a person made a payday loan or title loan the person did not have a license from the Director of the Department of Consumer and Business Services under ORS 725A.024, the payday loan or title loan is void, and the person, or a successor, assignee or affiliate of the person, may not deposit a borrowers or consumers check, withdraw moneys from a borrowers or consumers account or otherwise collect, receive or retain principal, interest, a fee or a charge related to or in connection with the payday loan or title loan. (3) Subsection (1) of this section does not apply to a person that does not collect a fee or consideration in connection with a payday loan or title loan or an application for a payday loan or title loan and: (a) Does not interact directly with a borrower or consumer; (b) Acts solely as an intermediary between the borrower or consumer and a lender or a person that conducts business as a broker or facilitator for a payday loan or title loan; (c) Transmits information, electronically or otherwise, concerning the borrower or consumer to a lender or a person that conducts business as a broker or facilitator for a payday loan or title loan; or (d) Prepares, issues or delivers a negotiable instrument to a lender or a person that conducts business as a broker or facilitator for a payday loan or title loan, for subsequent delivery to a borrower or consumer. (4) The director by order may determine whether and how a person may collect principal, interest, a fee or a charge related to or in connection with a payday loan or title loan if the director determines that a license the director issued under ORS 725A.024 lapsed inadvertently or by mistake. [2010 c.23 3; 2015 c.490 2]
(1) An applicant for a license as a payday loan lender or a title loan lender shall apply to the Director of the Department of Consumer and Business Services in writing on a form and in a manner that the director prescribes by rule. An application for a license as a payday loan lender or a title loan lender must: (a) List the applicants name, residence address and business address; (b) Name and list the residence address and business address for the applicants officers and directors, if the applicant is a corporation, or for the applicants members, if the applicant is a partnership, limited liability company or other association; (c) Identify the county and city in which, and the street address, if any, at which the applicant will conduct business; and (d) Provide other information the director requires. (2)(a) At the time the applicant submits an application under this section, the applicant shall pay to the director a license fee in an amount the director sets under ORS 725A.028. Except as provided in paragraph (b) of this subsection, the license fee is not refundable. (b) If the director for cause does not issue a license or if the applicant withdraws the application after the director has investigated the applicant, the director shall refund the license fee, less an amount the director retains to pay the administrative and investigative costs the director incurred in connection with the application. [2010 c.23 4]
(1)(a) Within 90 days after receiving an application under ORS 725A.022, the Director of the Department of Consumer and Business Services shall issue and deliver to the applicant a license to conduct business in accordance with ORS 725A.010 to 725A.092 at the location identified in the application if the director finds that: (A) The applicant and the applicants members, if the applicant is a partnership, limited liability company or other association, or the applicants officers and directors, if the applicant is a corporation, have the financial responsibility, experience, character and general fitness necessary to command the confidence of the community and to warrant the belief that the applicant will operate the business honestly, fairly and efficiently and in compliance with the provisions of ORS 725A.010 to 725A.092. (B) The applicant has paid the fee required under ORS 725A.022. (C) Grounds do not exist under ORS 725A.026 to disapprove the application. (D) Other reasons or conditions that would warrant the directors refusal to issue a license do not exist. (b) The director, consistent with the requirements of ORS 725A.010 to 725A.092, may issue a license under this section by means of an agreement with the Nationwide Multistate Licensing System and may, by rule, conform the practices, procedures and information that the Department of Consumer and Business Services uses to issue a license to the requirements of the Nationwide Multistate Licensing System. (2) An applicant may not become a licensee under this section unless the applicant is legally qualified to conduct business in this state. (3)(a) The director shall disapprove an application and deny the applicant a license if the director finds that the applicant does not meet the standard set forth in subsection (1)(a)(A) of this section or has not paid the required application fee or that grounds, reasons or conditions described in subsection (1)(a)(B), (C) or (D) of this section exist and warrant the directors disapproval and denial. (b) If the director disapproves an application or denies the applicant a license under paragraph (a) of this subsection, the director shall notify the applicant immediately and shall state the directors reasons for the disapproval or denial. (4)(a) The director by rule shall prescribe the form of the license the director issues under this section. At a minimum, the director shall require the license to display the licensees full name and the address at which the licensee conducts business. (b) A license the director issues under this section: (A) Is not transferable or assignable; and (B) Remains in full force and effect until: (i) The director revokes or suspends the license in accordance with ORS 725A.034; or (ii) The licensee surrenders the license in accordance with ORS 725A.038. (5) The director may issue more than one license to the same licensee if the director finds that for each additional license the licensee meets the qualifications set forth in this section. Each license the director issues must be for a separate and distinct place in which the licensee conducts business in accordance with ORS 725A.010 to 725A.092. [2010 c.23 5; 2019 c.106 8]
(1) The Director of the Department of Consumer and Business Services may disapprove an application submitted under ORS 725A.022 and deny a license to the applicant if a person named in the application: (a) Cannot meet financial obligations as the obligations mature, has liabilities that exceed assets or is in a financial condition that prevents the person from conducting business with safety to consumers; (b) Engaged in dishonest, fraudulent or illegal practices or conduct in a business or profession; (c) Failed to comply with or knowingly or repeatedly violated a provision of or a rule adopted under the Bank Act, ORS chapter 723, 725 or 726 or ORS 725A.010 to 725A.092 and 725A.990; (d) Was convicted of a crime, an essential element of which is fraud; (e) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing a practice or conduct in connection with making payday loans, title loans or consumer loans; or (f) Is subject to an order in which: (A) The director imposed a fine or other civil penalty on the person under the Bank Act, ORS chapter 723, 725 or 726 or ORS 725A.010 to 725A.092 and 725A.990; (B) The director removed the person from an office in an entity regulated under the Bank Act, ORS chapter 723 or 725 or ORS 725A.010 to 725A.092 and 725A.990; or (C) A state or federal agency with authority over banking institutions, savings associations, credit unions or consumer finance companies, within a five-year period before the applicant submitted an application under ORS 725A.022: (i) Imposed a fine or other civil penalty on the person; or (ii) Removed the person from an office in a state banking institution, a national bank, a state or federal savings association, a state or federal credit union or a consumer finance company. (2) If the director denies a license to an applicant under this section, the director shall provide the applicant with a reasonable opportunity for a hearing under ORS chapter 183. [2010 c.23 6]
(1) A licensee each year shall pay to the Director of the Department of Consumer and Business Services a license fee in an amount the director specifies by rule. The licensee shall pay the fee not later than the date the director sets in the rule. (2) The director shall specify the amount of the fee described in subsection (1) of this section after considering: (a) The amount of other moneys available for the director to use in performing the directors duties; (b) The costs the director will incur in performing the directors duties in the year in which the director will collect the fee; and (c) The amount the director needs to establish and maintain a reasonable emergency fund. (3) In addition to any license fee the director collects under subsection (1) of this section, whenever the director devotes extra attention to a licensees affairs, either when the licensee requests the attention or the director determines that the extra attention is necessary, the director shall charge as a fee for the extra attention the actual cost the director incurs. [2010 c.23 7]
(1) On or before February 15 of each year, or on a date the Director of the Department of Consumer and Business Services establishes by rule, a licensee shall file a report with the director in a form and with the content the director prescribes by rule. The report must contain information the director requires concerning the licensees business and the operations at each place of business in which the licensee conducts business in this state during the preceding calendar year under the terms of a license issued under ORS 725A.024. (2) The director may assess against a licensee a penalty of $10 for each day after February 15, or after the date the director specifies in subsection (1) of this section, during which the licensee fails to file a report required under this section. [2010 c.23 8]
(1) A licensee may not conduct a business that is subject to ORS 725A.010 to 725A.092 and 725A.990 except under the name and at the place of business named in the license. The licensee at all times shall display the license conspicuously in the licensees place of business. (2) A licensee that changes the location at which the licensee conducts business as a payday loan lender or title loan lender shall notify the Director of the Department of Consumer and Business Services in writing and return the licensees license. The director shall amend the license to reflect the new location and return the amended license to the licensee. (3) The director may allow the licensee to change the location in which the licensee conducts business as a payday loan lender or title loan lender to a location outside the city named in the original license only if the director determines that the new location will serve substantially the same community that the location named in the original license served. (4) If the director disapproves the proposed new location, the director shall immediately notify the licensee of the disapproval and return the license unchanged to the licensee. [2010 c.23 9]
(1) The Director of the Department of Consumer and Business Services may revoke a license issued under ORS 725A.024 if the director: (a) Gives the licensee 10 days written notice in which the director specifies the action the director will take and the general grounds for the action; (b) Provides the licensee with reasonable opportunity for a hearing under ORS chapter 183 in connection with the action; and (c) Finds that: (A) The licensee failed to pay the annual license fee; (B) The licensee failed to comply with a demand, ruling or requirement the director made under ORS 725A.010 to 725A.092 and 725A.990; (C) The licensee, if the licensee is a corporation, failed to keep the corporation in good standing under applicable provisions of law; (D) The licensee violated a provision of ORS 725A.010 to 725A.092 and 725A.990 or a rule the director adopted under ORS 725A.010 to 725A.092 and 725A.990; or (E) A fact or condition exists that clearly would have warranted the directors refusing to issue the license had the fact or condition existed at the time the licensee submitted an application under ORS 725A.022. (2) The director, without notice or hearing, may suspend a license for a period not exceeding 30 days, pending investigation. The director shall provide the licensee with a reasonable opportunity for a hearing under ORS chapter 183 if the director proposes to suspend a license for a period longer than 30 days. (3) The director may revoke or suspend only the particular license with respect to which grounds for revocation or suspension exist. If the director finds that grounds for revoking or suspending a license exist with respect to more than one of the locations in which a licensee operates, the director may revoke or suspend the license issued to the licensee for each location with respect to which grounds for revocation or suspension exist. [2010 c.23 10]
The Director of the Department of Consumer and Business Services may reinstate a license the director revoked if the licensee: (1) Complies with applicable provisions of law; (2) Complies with a demand, ruling or requirement the director issues or imposes; and (3) Pays a fee of $25. [2010 c.23 11]
(1) A licensee may deliver a written notice to the Director of the Department of Consumer and Business Services to surrender a license the director issued to the licensee under ORS 725A.024. (2)(a) A licensee shall surrender a license under which no material loan activity has occurred for a period of 12 consecutive months. (b) For purposes of this subsection, "material loan activity" includes a new loan, a loan that refinances an existing loan or a formal extension of existing loan repayment provisions for more than 30 days. (3) A licensees surrendering a license under subsection (1) or (2) of this section does not affect the licensees civil or criminal liability for acts the licensee committed before surrendering the license. [2010 c.23 12]
Revocation, suspension or surrender of a license issued under ORS 725A.024 does not impair or affect the rights or obligations specified in a lawful contract between the licensee and a borrower that existed before the revocation, suspension or surrender. [2010 c.23 13]
(1) The Director of the Department of Consumer and Business Services, to secure information the director requires and to ensure compliance with ORS 725A.010 to 725A.092 and 725A.990 and rules the director adopts under ORS 725A.010 to 725A.092 and 725A.990: (a) May at any time investigate a licensee or a person required under ORS 725A.020 to obtain a license. (b) Shall examine a licensee not less than once every two years and may inspect and examine the licensee at other times that the director determines are necessary. (2) For purposes of subsection (1) of this section: (a) A licensee or a person required to obtain a license as a payday loan lender or title loan lender is subject to inspection and shall give the director free access to the licensees or persons place of business, books, accounts, records, files, safes and vaults. (b) The director may: (A) Conduct an investigation or examination without prior notice to the person the director investigates or examines. (B) Compel the attendance of a witness or other person from whom the director requires testimony necessary to conduct an investigation or examination and examine the witness or person under oath. (C) Require a licensee or a person required to obtain a license as a payday loan lender or title loan lender to produce books, accounts, records, files or other documents. (c) A person may not knowingly give or cause to be given to the director a document or an oral or written statement or report that is false in any material respect. (3) If the director investigates or examines under this section a licensee or a person required to obtain a license as a payday loan lender or title loan lender, the licensee or person shall pay the director for the actual cost of the investigation or examination. The director may maintain an action to recover the cost in a court of competent jurisdiction. [2010 c.23 14]
The Director of the Department of Consumer and Business Services may specify the form and content of the books and records the licensee must keep in accordance with the provisions of ORS 725A.010 to 725A.092 and 725A.990. The licensee shall preserve and make available the books and records for a period of at least two years after the licensee makes the final entry in connection with a loan or account recorded in the book or record. [2010 c.23 15]
(1) A director or officer of a licensee who has reason to believe that a defalcation has occurred at an office of the licensee shall report the defalcation to the local, state or federal law enforcement officer with jurisdiction. (2) A licensee, within five days after the discovery of a defalcation that occurs at an office of the licensee, shall notify the Director of the Department of Consumer and Business Services. If the director instructs the licensee to do so, the licensee shall cause an audit to be made of the business of the licensed office where the defalcation occurred, in accordance with the directors instructions. (3) The Director of the Department of Consumer and Business Services may report a defalcation to a federal, state or local law enforcement agency with jurisdiction if the licensee has not reported the defalcation in accordance with subsection (1) of this section. [2010 c.23 16]
A licensee shall: (1) Deliver to the borrower at the time the licensee makes a loan a statement in the English language that shows in clear and distinct terms: (a) The borrowers and the licensees names and addresses. (b) The amount of the loan, the date on which the licensee made the loan and the maturity of or payment terms for the loan. (c) The interest rate to which the licensee and borrower agreed and the consideration the licensee will charge for the loan. (d) The nature of the security for the loan, if the licensee has taken a lien on personal property by chattel mortgage, bill of sale, collateral agreement or otherwise. (2) Make available to the borrower upon request a plain and complete receipt for all payments the borrower made on a loan at the time the licensee receives the payments. The receipt must: (a) Specify the amount, if any, that the licensee applied toward interest; (b) Identify the date to which the interest is paid; (c) Specify the amount, if any, the licensee applied toward principal; and (d) State the unpaid principal balance for the loan, if a principal balance remains. (3) Permit a borrower at any time to pay any amount in advance on any loan. (4) Mark the word "Paid" or "Renewed" indelibly on the note, or on other evidence of the debt or obligation that bears the borrowers signature, whenever the borrower pays the loan in full or renews the loan. If the borrower repays the loan in full, the licensee shall also: (a) Release a mortgage or security agreement that no longer secures the loan and restore any security or collateral, to the extent and in the manner required by law. (b) Release a Uniform Commercial Code filing that no longer secures the loan, to the extent and in the manner required under ORS 79.0513. (c) Return any assignment the borrower gave. (d) Return to the borrower the canceled note or other evidence of the loan or, alternatively, acknowledge to the borrower in writing that the borrower has repaid the loan. [2010 c.23 17]
A licensee or other person may not advertise, print, display, publish, distribute or broadcast or cause or permit to be advertised, printed, displayed, published, distributed or broadcast in any manner whatsoever a statement or representation that is false, misleading or deceptive with respect to a rate, term or condition for a payday loan or title loan. [2010 c.23 18]
(1) A licensee or a person required under ORS 725A.020 to obtain a license may not: (a) Take from a consumer: (A) A power of attorney, except a power of attorney to transfer ownership of a motor vehicle at the time the licensee or the person makes a loan secured by a motor vehicle. (B) A note or promise to pay that does not accurately disclose the actual amount or the term of the loan, the rate of interest charged and the schedule of payments for the loan. (C) An instrument in which blank spaces remain to be filled in after execution. (D) An assignment of earnings as payment or as security for a loan. An assignment that violates this subparagraph is unenforceable by the assignee and revocable by the assignor. For purposes of this subparagraph, if the licensee or the person pays money to or on behalf of a consumer in return for a right or claim to all or a portion of the consumers unpaid earnings, the licensee or the person has made a loan to the consumer that is secured by an assignment of earnings. This subparagraph does not preclude an employee from authorizing deductions from the employees earnings if the authorization is revocable. (b) Conduct business where liquor or lottery tickets are sold or where gambling devices are located. (c) Charge a consumer: (A) More than the actual amount that the vendor or service provider charges the licensee or the person for access to or use of the system described in ORS 725A.090; or (B) More than one fee per loan transaction for dishonored checks or insufficient funds, regardless of how many checks or debit agreements the licensee or the person obtains from the consumer for the transaction. The fee may not exceed $20. (d) Collect a fee for a dishonored check under ORS 30.701 or seek or recover statutory damages or attorney fees from a consumer for a dishonored check under ORS 30.701. The licensee or the person may recover from the consumer a fee that an unaffiliated financial institution charges to the licensee or the person for each dishonored check. For a dishonored check or insufficient funds, the fees described in this subsection are the only remedy the licensee or the person may pursue and the only fees the licensee or the person may charge. (e) Make a loan to a consumer who has not fully repaid an outstanding payday loan or title loan. This paragraph does not prohibit a licensee or person from renewing an existing payday loan or title loan as provided in ORS 725A.010 to 725A.092 and 725A.990. (2) The provisions of ORS 725A.010 to 725A.092 and 725A.990 do not prevent a licensee or a person required under ORS 725A.020 to obtain a license from recovering amounts associated with collecting a defaulted loan that are authorized by statute or awarded by a court of law. [2010 c.23 19; 2019 c.188 1]
A title loan lender may not: (1) Make or renew a title loan at a rate of interest that exceeds 36 percent per annum, excluding a one-time origination fee that the title loan lender may charge for the loan. (2) Charge during the term of a title loan, including all renewals of the loan, more than one origination fee of $10 per $100 of the loan amount or $30, whichever is less. (3) Make or renew a title loan for a term of less than 31 days. (4) Make or renew a title loan to a consumer without forming a good faith belief that the consumer has the ability to repay the title loan. In forming a good faith belief, the title loan lender shall consider factors that the Director of the Department of Consumer and Business Services specifies by rule. A title loan lender complies with this subsection if the title loan lender meets the conditions the director specifies. (5) Charge a consumer a fee or interest other than a fee or interest described in subsection (1) or (2) of this section or in ORS 725A.060 (1)(c) or (d). (6) Include in a title loan contract: (a) A hold-harmless clause; (b) A confession of judgment or other waiver of the right to notice and the opportunity to be heard in an action; (c) A provision in which the consumer agrees not to assert against the lender or a holder in due course a claim or defense arising out of the contract; (d) An executory waiver or a limitation of exemption from attachment, execution or other process on real or personal property the consumer holds, owns or is due, unless the waiver or limitation applies only to property that is subject to a security interest executed in connection with the loan; or (e) A clause that permits interest to continue after the consumers motor vehicle, recreational vehicle, boat or mobile home has been repossessed. (7) Require or accept from a consumer a set of keys to the motor vehicle, recreational vehicle, boat or mobile home the title to which secures the title loan. (8) Make more than one outstanding title loan that is secured by one title. (9) Renew an existing title loan that is secured by one title more than two times after the loan is first made. (10) Make a new title loan to a consumer within seven days after the date on which the consumer fully repays a previous title loan. [2010 c.23 20; 2019 c.188 2]
A payday loan lender may not: (1) Make or renew a payday loan at a rate of interest that exceeds 36 percent per annum, excluding a one-time origination fee that the payday loan lender may charge for the loan. (2) Charge during the term of a payday loan, including all renewals of the loan, more than one origination fee of $10 per $100 of the loan amount or $30, whichever is less. (3) Make or renew a payday loan for a term of less than 31 days. (4) Charge a consumer a fee or interest other than a fee or interest described in subsection (1) or (2) of this section or in ORS 725A.060 (1)(c) or (d). (5) Include in a payday loan contract: (a) A hold-harmless clause; (b) A confession of judgment or other waiver of the right to notice and the opportunity to be heard in an action; (c) A provision in which the consumer agrees not to assert against the lender or a holder in due course a claim or defense arising out of the contract; or (d) An executory waiver or a limitation of exemption from attachment, execution or other process on real or personal property the consumer holds, owns or is due, unless the waiver or limitation applies only to property that is subject to a security interest executed in connection with the loan. (6) Renew an existing payday loan more than two times. (7) Make a new payday loan to a consumer within seven days after the date on which the consumer fully repays a previous payday loan. [2010 c.23 21; 2019 c.188 3]
(1) A person who claims to be aggrieved by a practice that violates a provision of ORS 725A.020, 725A.060, 725A.062 or 725A.064 or a rule adopted under ORS 725A.092 that regulates a licensee or a person required under ORS 725A.020 to obtain a license may, not later than one year after the date of the alleged violation, file with the Director of the Department of Consumer and Business Services a verified written complaint. The complaint must state the name and address of the licensee or the person alleged to have committed the unlawful practice and the particulars of the alleged unlawful practice. The director may require the complaint to set forth other information that the director considers pertinent. (2) A title loan lender shall state in every contract for a title loan, in a type size equal to at least 12-point type, that the consumer or the consumers attorney may file a complaint with the director as provided in this section. (3) After receiving a complaint under this section, the director may, under ORS 725A.050, investigate the unlawful practice and the licensee or the person alleged in the complaint to have committed the unlawful practice. [2010 c.23 22]
(1) If the Director of the Department of Consumer and Business Services has reasonable cause to believe that a person violated, is violating or is about to violate a provision of ORS 725A.010 to 725A.092 and 725A.990 or a rule the director adopted or an order the director issued under ORS 725A.010 to 725A.092 and 725A.990, the director may order the person to cease and desist from the violation. (2) The director, in an order the director issues under subsection (1) of this section, shall: (a) State the facts constituting the violation; (b) Require the person named in the order to cease and desist from the violation or to meet specific conditions; (c) State the effective date of the order; and (d) Advise the person named in the order that the person has a right to a contested case hearing under ORS chapter 183. (3) An order under this section is effective 30 days after the date of the order, unless the person named in the order requests a hearing on the order, and remains in effect until the director or a court withdraws the order. (4) If an individual named in an order under this section fails to comply with the order, in addition to imposing a penalty under ORS 725A.990, the director may issue an order to remove or suspend the individual from the individuals office or position. [2010 c.23 23]
(1) If the Director of the Department of Consumer and Business Services finds that an officer or director of a licensee is dishonest, reckless or incompetent or refuses to comply with the law, with a rule the Department of Consumer and Business Services adopted or with a written requirement or instruction the department imposed or issued, the Director of the Department of Consumer and Business Services may order the licensee to suspend the licensees officer or director from the officer or directors office or position. (2) The Director of the Department of Consumer and Business Services, for any of the reasons set forth in ORS 725A.026, may order a licensee to remove an officer or director of the licensee from office. [2010 c.23 24]
A person is not personally liable for an act the person does or fails to do in good faith and in compliance with a rule or order the Director of the Department of Consumer and Business Services adopted or issued under ORS 725A.010 to 725A.092 and 725A.990, even if the director amends or rescinds the rule or order or a judicial or other authority determines that the rule or order is invalid. [2010 c.23 25]
(1)(a) The Director of the Department of Consumer and Business Services, by contract with a vendor or service provider or otherwise, may develop and implement a system by means of which a licensee may: (A) Determine whether a consumer has an outstanding loan; (B) Determine the number of loans the consumer has outstanding; (C) Determine the dates on which the consumer entered into or renewed a loan contract subject to ORS 725A.010 to 725A.092 and 725A.990; (D) Provide loan counseling to consumers in accordance with standards the director specifies; and (E) Obtain other information necessary to comply with the provisions of ORS 725A.010 to 725A.092 and 725A.990. (b) The director by rule may specify the form and content of the system, but shall ensure at a minimum that the information entered into or stored by the system is: (A) Accessible to and usable by licensees and the director from any location in this state; and (B) Secured against public disclosure, tampering, theft or unauthorized acquisition or use. (2) The information in the system described in subsection (1) of this section is not subject to public inspection or disclosure and is not subject to discovery, subpoena or other compulsory process except in an action brought under ORS 725A.010 to 725A.092 and 725A.990. (3) A vendor or service provider that operates or administers the system described in subsection (1) of this section may charge a licensee a fee or fees for access to or use of the system in amounts that the director approves by rule. The licensee may not charge a consumer, directly or indirectly, any amount to recover or otherwise compensate for the cost of a fee the licensee pays under this subsection. (4)(a) If the system described in subsection (1) of this section is developed and implemented, licensees subject to ORS 725A.010 to 725A.092 and 725A.990, within one business day after conducting a loan transaction that generates information that the system described in subsection (1) of this section requires, shall enter or update the information. (b) A licensee, after the date on which the licensee ceases to make loans subject to ORS 725A.010 to 725A.092 and 725A.990, shall continue to enter and update information for loans that are outstanding or that have not yet expired. (c) Within 10 business days after ceasing to make loans subject to ORS 725A.010 to 725A.092 and 725A.990, a licensee shall submit to the director for approval a plan for continuing compliance with this subsection. The director shall promptly approve or disapprove the plan and may require the licensee to submit a new or modified plan that ensures compliance with this subsection. (5) The director by rule shall establish requirements for retaining, archiving and deleting information entered into or stored by the system described in subsection (1) of this section. [2010 c.23 26; 2017 c.215 1]
(1) The Director of the Department of Consumer and Business Services, in accordance with ORS chapter 183, may adopt rules for the purposes of protecting borrowers and consumers, providing clarity to licensees and otherwise carrying out and enforcing the provisions of ORS 725A.010 to 725A.092 and 725A.990. The rules may include, but are not limited to, provisions that establish loan forms, terms, charges and fees. (2) Before the director adopts a rule under subsection (1) of this section, the director shall submit a copy of the rule to each licensee. (3) The director may institute an action or proceeding and make a specific ruling, demand or finding that the director considers necessary to carry out or enforce a provision of ORS 725A.010 to 725A.092 and 725A.990 or a rule the director adopted, an order the director issued or an action the director took to carry out or enforce the provisions of ORS 725A.010 to 725A.092 and 725A.990. [2010 c.23 27]
As used in ORS 725A.500 to 725A.530: (1) "Affiliate" means a person that controls, is controlled by or is under common control with another person. (2) "Applicant" means a person that applies for a license to engage in business as a student loan servicer in this state. (3) "Borrower" means a resident of this state who has received or agreed to pay a student loan or another person who shares responsibility with the resident for repaying a student loan. (4) "Branch office" means a location at which a business entity services a student loan other than the business entitys headquarters or principal place of business. (5) "Business entity" means a corporation, limited liability company, partnership, limited partnership, business trust, joint venture or other form of business organization the constituent parts of which share a common economic interest. (6) "Controller" means: (a) A director, officer or general partner of a business entity; (b) A managing member of a limited liability company; (c) A person that has a direct or indirect right to vote 10 percent or more of the securities of a business entity that have voting rights or the power to sell or cause the sale of 10 percent or more of any class of a business entitys securities; (d) A person that has contributed 10 percent or more to a partnerships capital or has the right to receive a distribution of 10 percent or more of a partnerships capital or assets upon dissolution; or (e) A person that, under the terms of a contract or because the person has an ownership interest in another person, has the power to manage or set policies for the other person or otherwise direct the other persons operations or affairs. (7) "Licensee" means a person that has applied for and obtained or renewed a license from the Director of the Department of Consumer and Business Services to engage in business as a student loan servicer in this state. (8) "Manager" means an individual who has supervisory authority over employees and operations at a business entitys branch office or other business location. (9) "Person" means an individual or a business entity. (10) "Service a student loan" means to: (a) Receive a scheduled periodic payment from a borrower under the terms of a student loan; (b) Apply payments of principal and interest and other payments from a borrower in accordance with the terms of a student loan; or (c) Perform other administrative services with respect to a student loan including, but not limited to, performing any of the following actions during periods in which a payment on a student loan is not due: (A) Maintaining account records for the student loan; (B) Communicating with the borrower about the student loan on behalf of the lender; or (C) Interacting with a borrower to prevent a default on a student loan or to enable the activities described in paragraphs (a) and (b) of this subsection. (11) "Student loan" means a loan the proceeds of which a borrower uses primarily for personal use to pay education expenses or other school-related expenses. [2021 c.651 1] Note: 725A.500 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) A person may not directly or indirectly service a student loan in this state unless the person obtains or renews a license under ORS 725A.506. (2) Subsection (1) of this section does not apply to: (a) A financial institution, as defined in ORS 706.008. (b) A financial holding company or bank holding company, both as defined in ORS 706.008, if the financial holding company or bank holding company does no more than control an affiliate or subsidiary, as defined in 12 U.S.C. 1841(d), and does not engage in business as a student loan servicer. (c) An attorney who is licensed or otherwise authorized to practice law in this state if the attorney services a student loan only incidentally in the course of practicing law. (d) A public body, as defined in ORS 174.109. (e) A public university listed in ORS 352.002. (f) A community college, as defined in ORS 341.005. (g) The Oregon Health and Science University. (h) A nonprofit, private, post-secondary institution that the Higher Education Coordinating Commission has authorized to confer academic degrees under ORS 348.594 to 348.615. (i) A state agency or a private nonprofit institution or organization that has an agreement with the United States Secretary of Education under section 428(b) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)), solely to the extent of the agencys, institutions or organizations actions as a guarantor that engages in averting defaults. The exemption set forth in this paragraph does not extend to the agencys, institutions or organizations actions in servicing a student loan. (j) A person that the Director of the Department of Consumer and Business Services designates by rule or order as exempt. (3) Notwithstanding subsection (2) of this section, the director may require any person to obtain a license under ORS 725A.506 before the person services a student loan in this state if the director determines that the person has violated state or federal law or has engaged in a course of dealing that is fraudulent, deceptive or dishonest. (4)(a) If the director reasonably believes that a person is subject to ORS 725A.500 to 725A.530 or is engaging in or is about to engage in an act or practice that constitutes servicing a student loan in this state without first obtaining a license as provided in subsection (1) of this section, the director may: (A) Order the person to: (i) Cease and desist from the act or practice; or (ii) Affirmatively perform an act; or (B) Apply to a circuit court of this state to enjoin the person from engaging in the act or practice. (b) The director shall state in reasonable detail the facts on which the director bases an order under paragraph (a)(A) of this subsection. (c) If a person that is subject to an order under paragraph (a)(A) of this subsection requests a hearing, the director shall schedule and give notice of a hearing in accordance with ORS chapter 183. If the person does not request a hearing, the directors order becomes final 30 days after the date of the order. (5) The director may waive or modify a requirement set forth in this section if the director determines that a persons compliance with the requirement would cause the person to violate federal law. [2021 c.651 2] Note: 725A.503 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1)(a) A person that is subject to the requirement to obtain or renew a license under ORS 725A.503 shall submit an application to the Director of the Department of Consumer and Business Services in the manner, on a form and with the contents that the director specifies by rule. (b) The director by rule may require an applicant to submit the application described in paragraph (a) of this subsection to the Nationwide Multistate Licensing System instead of, or in addition to, submitting the application to the director. (2)(a) An applicant shall submit with or as part of an application under subsection (1) of this section: (A) Fingerprints from all of the applicants controllers and managers; (B) A unique identifier that the applicant applies for and receives from the Nationwide Multistate Licensing System; (C) The name and address of the applicants registered agent in this state; (D) The street address of the applicants principal place of business and of each branch office in this state at or from which the applicant will service a student loan; (E) The name of the manager of each branch office the applicant maintains in this state; (F) The assumed business name, if any, that the applicant intends to use or under which the applicant intends to operate; and (G) Other information the director requires to conduct a state and national criminal background history and background check and evaluate the application. (b) The director by rule may modify or waive, for an application to renew a license, any requirement under paragraph (a) of this subsection that the director determines is not necessary for evaluating or approving the application for renewal. (3) At the time an applicant submits an application under subsection (1) of this section, the applicant shall also: (a) Pay to the director a fee in an amount that the director specifies by rule. The director shall specify a fee that is sufficient, when aggregated with fees from other applicants, to meet the directors cost of administering ORS 725A.500 to 725A.530. (b) Submit to the director a corporate surety bond or irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, that runs to the State of Oregon in an amount the director specifies by rule. If the applicant seeks to renew a license and previously submitted a corporate surety bond or irrevocable letter of credit, the applicant shall show that the corporate surety bond or irrevocable letter of credit remains effective in the amount the director specifies. (4)(a) Except as provided in paragraph (c) of this subsection, the director may not issue or renew a license under this section unless the director finds that: (A) The applicant submitted a complete application that does not contain a material misstatement; (B) The application identifies a registered agent in this state; (C) The application names a manager for each of the applicants branch offices in this state; (D) The applicant and the applicants controllers, registered agents and managers have not pleaded guilty or no contest in, or been convicted by, a state, federal, foreign or military court: (i) In the seven years before the date of the application, if the plea or conviction was for a felony, or for a misdemeanor an essential element of which involved a false statement or dishonesty; or (ii) At any time before the date of the application if the plea or conviction was for a felony an element of which was fraud, dishonesty, a breach of trust or laundering a monetary instrument; (E) The applicant and the applicants controllers, registered agents and managers have demonstrated adequate financial responsibility, character and general fitness to command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently under the provisions of ORS 725A.500 to 725A.530; (F) The applicant has paid the fee and submitted the corporate surety bond or irrevocable letter of credit required under subsection (3) of this section; and (G) The applicant has passed the directors background checks and has satisfied any other criteria for evaluating the applicants financial responsibility and fitness that the director specifies by rule. (b) An applicant need not report a conviction on an application under this section if the conviction was later pardoned or expunged. (c)(A) The director shall: (i) Find that an applicant that services a student loan under a contract with the United States Secretary of Education under 20 U.S.C. 1087f meets the criteria set forth in paragraph (a) of this subsection without the need to comply with the procedures set forth in subsections (2) and (3) of this section, except that the applicant must pay the fee required under subsection (3) of this section and identify a registered agent in this state or appoint the director as the applicants registered agent; and (ii) Issue and renew a license for an applicant that is described in and complies with the provisions of sub-subparagraph (i) of this subparagraph. (B) Except as otherwise provided in this paragraph, a licensee that obtains a license under this paragraph is subject to all of the requirements and conditions set forth in ORS 725A.500 to 725A.530. (d) A licensee that obtained a license under paragraph (c) of this subsection shall notify the director in writing within seven days after the date on which the contract described in paragraph (c)(A) of this subsection expires or terminates. At the expiration or termination of the contract, the licensee becomes subject to the criteria set forth in this subsection and subsections (2) and (3) of this section and, to continue to service a student loan in this state, must meet the criteria within 30 days after the date on which the contract expires or terminates. The director shall suspend the license of a licensee described in this paragraph that fails to meet the criteria. (5)(a) Except as provided in paragraph (c) of this subsection, the director may deny, revoke or decline to renew a license if an applicant, a licensee or a person that services a student loan: (A) Does not meet the criteria set forth in subsection (4) of this section that the director has not waived or modified under subsection (2)(b) of this section; (B) Engages in a course of conduct that violates state or federal law or that constitutes fraudulent, deceptive or dishonest dealing; (C) Has had a license to service a student loan denied or revoked in another jurisdiction; (D) Fails or refuses to comply with the directors written request under ORS 725A.524 to respond to a complaint against the applicant or licensee; or (E) Fails or refuses to comply with a final order the director issued. (b) The director shall provide a licensee with notice and an opportunity for a hearing under ORS chapter 183 before revoking or declining to renew a license. (c) The director may not deny, revoke or decline to renew a license the director issues under subsection (4)(c) of this section, but the director may place conditions on issuing or renewing the license. (6)(a) A license that the director issues or renews under this section expires on December 31 of the calendar year in which the director issued or renewed the license and is not transferable or assignable. A licensee shall display a copy of the license at the licensees principal place of business and at each branch office in this state at or from which the licensee services a student loan. (b) An applicant that intends to renew a license shall apply for the renewal at least 30 days before the license expires. (c) A licensee may reinstate a license that has expired only if the licensee applies to renew the license under this section within the time permitted by the Nationwide Multistate Licensing System. (d) A licensee may not service a student loan during a period in which the licensee has applied to reinstate a license unless the director has given conditional approval to the licensee. The conditional approval may specify which accounts the licensee may service and which services the licensee may provide during the period in which the licensees application for reinstatement is pending. (e) A licensee that ceases servicing student loans in this state or otherwise ceases transacting business in this state shall, within 10 days after doing so, surrender to the director any unexpired license the director issued under this section. A licensees surrender of a license under this paragraph does not reduce or eliminate any civil or criminal liability that arises from any of the licensees acts or omissions that occurred before the surrender. [2021 c.651 3] Note: 725A.506 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) A licensee shall designate and maintain a principal place of business at or from which the licensee services student loans in this state and shall designate a registered agent in this state. (2)(a) If a licensee does not maintain a principal place of business in this state, the licensee shall nevertheless designate a registered agent in this state. The registered agent must be available to receive on the licensees behalf any notice, demand or service of process permitted by law to be given, made or delivered to, or served upon, the licensee. (b) If the licensee does not designate a registered agent in this state, or if the licensees registered agent cannot with reasonable diligence be located, the Director of the Department of Consumer and Business Services is the licensees registered agent. (3) A licensee may not use or operate under an assumed business name unless the licensee first registers the assumed business name under ORS chapter 648 and lists the name on an application under ORS 725A.506 or in a notice to the director under ORS 725A.515. [2021 c.651 4] Note: 725A.509 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) A licensee shall maintain in accordance with generally accepted accounting principles sufficient liquidity, operating reserves and tangible net worth to permit the licensee to adequately meet all costs, expenses and other financial requirements related to servicing student loans in this state. The Director of the Department of Consumer and Business Services may specify by rule the standards a licensee must meet to comply with the requirements set forth in this subsection. (2)(a) If a licensee fails to meet the applicable standards for liquidity, operating reserves and tangible net worth set forth in subsection (1) of this section, the director may take and retain possession of the licensees property, business and assets located in this state until the licensee returns, under the directors supervision or oversight, to compliance with the applicable standards. (b) In taking and retaining possession of the licensees property, business and assets under paragraph (a) of this subsection, the director shall conduct an inventory appropriate for establishing a receivership for the licensee and file a copy of the inventory with: (A) The Department of Consumer and Business Services; and (B) Each of the licensees controllers, at the last address for each controller that the director has in the directors records. (3) If a licensee refuses to permit the director to take and retain possession of the licensees property, business and assets under subsection (2) of this section or if the director can show that the interests of the licensees borrowers or creditors require the appointment of a receiver, the director may apply to the circuit court in the county in which the licensees principal place of business in this state is located for an order to appoint a receiver to take and retain possession of, operate or liquidate the licensees property, business and assets. The court may appoint the director as the receiver. (4) If, 60 days after the date on which the director took possession of a licensees property, business and assets under subsection (2) of this section, the licensee has not returned to compliance with the applicable standards described in subsection (1) of this section, the director shall liquidate the licensees property, business and assets and revoke the licensees license to service student loans in this state. If the director is not the receiver for the licensees property, business and assets, the director shall apply to the circuit court in the county in which the licensees principal place of business in this state is located for an order to appoint the director or another person as receiver. [2021 c.651 5] Note: 725A.512 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1)(a) A licensee shall notify the Director of the Department of Consumer and Business Services in writing at least 30 days before the licensee: (A) Relocates or closes the licensees principal place of business or a branch office in this state; or (B) Opens a branch office that the licensee did not list in an application under ORS 725A.506. (b) In a notice under paragraph (a) of this subsection, the licensee shall list, as applicable: (A) The new address to which the licensee relocates the licensees principal place of business or any branch office; and (B) The address for any new branch office the licensee opens. (2)(a) A licensee shall notify the director in writing not later than 30 days after: (A) Any appointment, resignation or other change occurs in the licensees controllers, registered agents or managers; or (B) Any material change occurs in the information that the licensee submitted in an application under ORS 725A.506. (b) The licensee shall provide in a notice under paragraph (a)(A) of this subsection the name, address and title of any new controller, registered agent or manager the licensee appoints. (3)(a) A licensee shall notify the director in writing not later than 10 days after: (A) Filing for bankruptcy or reorganization; (B) A controller, registered agent or manager of the licensee becomes subject to an indictment that is related in any manner to the licensees activities; (C) The licensee receives notice of a final order issued in this or another state that: (i) Demands that the licensee cease and desist from any act; (ii) Suspends or revokes a license or registration; or (iii) Constitutes any other formal or informal regulatory action against the licensee; (D) The licensee registers or changes and uses or operates under an assumed business name; (E) The licensee ceases doing business or ceases servicing student loans; or (F) Any other change in the licensees operations or governance occurs in a manner or with an effect that the director determines by rule is significant enough to warrant the licensee notifying the director. (b) A licensee shall specify in a notice under paragraph (a)(C) of this subsection the reasons any final order sets forth for taking a regulatory action against the licensee. (c) A licensee shall identify in a notice under paragraph (a)(E) of this subsection the location in which the licensee stores records related to student loan servicing in this state and shall provide the name and contact information for an individual with authority to provide access to the records. (4) A licensee shall notify the director immediately if the licensee changes registered agents or if the name or address of the licensees registered agent in this state changes. In the notice, the licensee shall update the name and address of the registered agent. [2021 c.651 6] Note: 725A.515 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) The Director of the Department of Consumer and Business Services has general supervisory authority over: (a) Each licensee in this state; (b) Any person that services a student loan in this state, if the person is subject to ORS 725A.500 to 725A.530 or if the director required the person to obtain a license under ORS 725A.503 (3); and (c) Any person that had a license that the director withdrew, canceled, suspended, conditioned or revoked, if the person continues to service a student loan. (2)(a) The authority described in subsection (1) of this section includes the authority to examine a licensee or a person described in subsection (1) of this section at any time. (b) The director may charge and collect from a licensee or a person the director examines under this section the costs the director incurs in conducting the examination. (3) In order to conduct an examination under this section, the director may: (a) Retain attorneys, accountants or other professionals and specialists as examiners, auditors or investigators. (b) Enter into agreements or relationships with other government officials or regulatory associations to share resources, to use and create standardized methods, procedures, documents, databases, records, information or evidence, to reduce the directors regulatory burden or to improve efficiency. (c) Participate in multistate examinations that the Conference of State Bank Supervisors or the federal Consumer Financial Protection Bureau schedules and conducts. In conducting an examination under this paragraph, the director shall follow the protocol that the conference or bureau establishes for the examination. (d) Accept and rely on examination or investigation reports from other government officials in this or another state. (4) Books, accounts, papers, records, files, correspondence, contracts and agreements, disclosures, documentation and other information, material or evidence the director obtains in an examination under this section is confidential and subject to the provisions of ORS 705.137, except that a borrower may request to inspect material related to the borrowers student loan that the director by rule specifies is available for inspection. The director shall authenticate the borrowers identity before disclosing any material to the borrower. (5) The director may adopt rules for the purpose of implementing ORS 725A.500 to 725A.530. [2021 c.651 7] Note: 725A.518 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) Except as otherwise required under federal law, in a federal student loan agreement or in a contract between the federal government and a person that services a student loan, a person that services a student loan shall: (a) Assess any fee that the person may assess against a borrower within 45 days after the borrower incurs the fee. (b) Accept and credit, or treat as credited, to the borrowers account all amounts the person receives at the address to which the borrower has been instructed to send payments or notifications of payment on the borrowers student loan. The person must credit the payment, or treat the payment as credited, within one business day after receiving the payment or notification of payment if the borrower has provided sufficient information to credit the account. If the person uses the scheduled method of accounting and the person receives a regularly scheduled payment before the scheduled due date, the person shall credit the payment to the borrowers account not later than the scheduled due date. (c) Correct promptly any errors the person makes and refund promptly any fees the person assesses against the borrower in error. (d) Maintain adequate records of each student loan transaction for not less than two years, or a period otherwise specified by law, after a final payment on a student loan or after the person assigns the student loan, whichever occurs first. At the request of the Director of the Department of Consumer and Business Services and within five days after the request or the within the time the director specifies in the request, the person shall make the records available to the director or send the records to the director in the manner the director specifies by rule. (2) A person that services a student loan may not, directly or indirectly: (a) Employ any device, scheme or artifice to defraud another person; (b) Knowingly make an untrue statement of a material fact or omit a material fact that is necessary to make the persons statement true in light of the circumstances in which the person makes the statement, or misrepresent the amount, nature or terms of any fee or payment due or claimed to be due on a student loan or the terms and conditions of a loan agreement or the borrowers obligations under the loan agreement; (c) Obtain property by fraud or misrepresentation; (d) Knowingly misapply or recklessly apply payments to the outstanding balance of a student loan; (e) Engage in an act, practice or course of business that operates or that the person intends to operate as a fraud or deceit upon another person; (f) Make or file with the Department of Consumer and Business Services, or cause to be made or filed with the department, a statement, report or document that the person knows is false in any material respect or manner; or (g) Fail to respond to a consumer complaint, or to communication from the ombudsman appointed or designated under ORS 725A.530, within 30 calendar days or within a reasonable time that the student loan ombudsman specifies in the communication. The person may request in writing that the student loan ombudsman allow not more than 30 additional calendar days within which to respond if in the request the person explains why the additional time is reasonable and necessary. (3) Subsections (1) and (2) of this section do not apply to: (a) A financial institution, as defined in ORS 706.008. (b) A financial holding company or bank holding company, both as defined in ORS 706.008, if the financial holding company or bank holding company does no more than control an affiliate or subsidiary, as defined in 12 U.S.C. 1841(d), and does not engage in business as a student loan servicer. (c) An attorney who is licensed or otherwise authorized to practice law in this state if the attorney services a student loan only incidentally in the course of practicing law. (d) A public body, as defined in ORS 174.109. (e) A public university listed in ORS 352.002. (f) A community college, as defined in ORS 341.005. (g) The Oregon Health and Science University. (h) A nonprofit, private, post-secondary institution that the Higher Education Coordinating Commission has authorized to confer academic degrees under ORS 348.594 to 348.615. [2021 c.651 8] Note: 725A.521 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) If the Director of the Department of Consumer and Business Services receives a complaint concerning a person that services a student loan, the director: (a) Shall notify the person of the complaint, provide a copy of the complaint in the notice and require the person to respond to the complaint and to the director within 30 days after the date of the notice; (b) May investigate the complaint and require the person to provide books, accounts, papers, records, files, correspondence, contracts and agreements, disclosures, documentation and other information, material or evidence necessary for the directors investigation; and (c) May investigate the person and the persons policies and practices with respect to servicing a student loan and require the person to provide books, accounts, papers, records, files, documentation and other information, material or evidence necessary for the directors investigation. (2)(a) Except as provided in paragraph (b) of this subsection, books, accounts, papers, records, files, correspondence, contracts and agreements, disclosures, documentation and other information, material or evidence the director receives or possesses as a consequence of an investigation under subsection (1) of this section are confidential unless state or federal law or a court order permits or requires disclosure. (b) The director may share any item listed in paragraph (a) of this subsection with any state or federal agency. (3) The director may charge and collect from a person the director investigates under this section the costs the director incurs in conducting the investigation. (4) This section does not apply to: (a) A financial institution, as defined in ORS 706.008. (b) A financial holding company or bank holding company, both as defined in ORS 706.008, if the financial holding company or bank holding company does no more than control an affiliate or subsidiary, as defined in 12 U.S.C. 1841(d), and does not engage in business as a student loan servicer. [2021 c.651 9] Note: 725A.524 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) If, after conducting an investigation, the Director of the Department of Consumer and Business Services determines that a person that services a student loan has violated ORS 725A.500 to 725A.530, violated a rule the director adopted or an order the director issued under ORS 725A.500 to 725A.530 or violated another applicable law, the director may order the person to: (a) Cease and desist from any act that constitutes a violation of ORS 725A.500 to 725A.530. (b) Resolve any complaint the director received under ORS 725A.524 and pay the borrower that submitted the complaint any damages to which the borrower would be entitled under law. (c) Pay a borrower any amount the person received from the borrower as compensation while engaging in any action that constituted a violation of ORS 725A.500 to 725A.530. (2)(a) In addition to and not in lieu of any other penalty provided by law, the director may impose a civil penalty under ORS 183.745 in an amount of not more than $5,000 for each instance in which a person violates, aids or abets another person in violating, or procures a violation of ORS 725A.500 to 725A.530 or an order the director issues under ORS 725A.500 to 725A.530. (b) Each instance described in paragraph (a) of this subsection is a separate violation and each day in which a person engages in a continuous violation is a separate violation. The director may not impose a penalty that exceeds $20,000 for a continuous violation. (3) The director may assess the costs of conducting an administrative proceeding under this section against the person that is the subject of the administrative proceeding or may include the costs of the administrative proceeding in any civil penalty the director imposes under this section. (4) A person that is subject to a civil penalty under this section may appeal the penalty as provided in ORS chapter 183. (5) The director shall deposit any amount the director receives under this section to the General Fund of the State Treasury. [2021 c.651 10] Note: 725A.527 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021.
(1) The Director of the Department of Consumer and Business Services shall appoint or designate an ombudsman within the Department of Consumer and Business Services for the purposes set forth in subsection (2) of this section. (2) The ombudsman that the director appoints or designates under subsection (1) of this section shall, in consultation with the director or with other individuals the director designates: (a) Receive, review and attempt to resolve complaints from borrowers. The ombudsman may consult or collaborate with student loan servicers, institutions of higher education, federal regulators or regulators in this state or other states and any other person that participates in activities related to student loans. (b) Compile and analyze data on complaints from borrowers. (c) Assist borrowers in understanding the borrowers rights and responsibilities under the terms of the borrowers student loans. (d) Provide information about problems that borrowers have with student loans and recommend methods for addressing the problems to the public, to state agencies in this state or in other states, to members of the Legislative Assembly and to other persons that have an interest in student loans or in lending and servicing practices related to student loans. (e) Monitor and analyze the substance and implementation of federal, state and local laws, regulations, rules and policies related to student loans and borrowers and recommend any changes the ombudsman deems necessary. (f) Review the history of any student loan for which the borrower has provided consent for the review. (g) Publicize the ombudsmans availability and the services that the ombudsman provides to borrowers and other persons that participate in activities related to student loans. (h) Establish an education program for borrowers that, at a minimum, discusses key loan terms, documentation requirements, monthly payment obligations, income-based repayment options, loan forgiveness opportunities and requirements, and disclosure requirements. The ombudsman may provide the program or may contract with a vendor to provide a program that meets standards the ombudsman specifies. The ombudsman or vendor may provide the program remotely or electronically. (i) Take any other action that is necessary to implement the duties described in this section. (3) By July 1 of each year, the director shall submit a report to a committee or interim committee of the Legislative Assembly related to higher education that: (a) Summarizes the ombudsmans activities in implementing this section; (b) Evaluates the effectiveness of the ombudsman and the ombudsmans activities in implementing this section and makes recommendations for any changes that are necessary in the ombudsmans powers or responsibilities; and (c) Recommends changes in law or rule or in the application or implementation of laws or rules related to servicing student loans that are necessary to achieve regulatory compliance among student loan servicers and otherwise to reduce the incidence of problems and complaints from borrowers. [2021 c.651 11] Note: 725A.530 becomes operative July 1, 2022. See section 13, chapter 651, Oregon Laws 2021. Note: Section 14, chapter 651, Oregon Laws 2021, provides: Sec. 14. The Director of the Department of Consumer and Business Services shall first submit the report required under section 11 (3) of this 2021 Act [725A.530 (3)] by July 1, 2023. [2021 c.651 14]
(1) The Director of the Department of Consumer and Business Services may assess a civil penalty of not more than $2,500 against a person who violates a provision of ORS 725A.010 to 725A.092 and 725A.990 or a rule the director adopted or final order the director issued under ORS 725A.010 to 725A.092 and 725A.990. The director, in addition to imposing a penalty under this subsection for the violation, may revoke the licensees license. (2) A civil penalty under this section must be imposed as provided in ORS 183.745. (3) Except as provided in subsection (4) of this section, moneys collected under this section must be paid to the State Treasurer and credited as provided in ORS 705.145. (4) In addition to any other penalty provided by law, the director may assess against a person who makes a payday loan or title loan in violation of ORS 725A.020 a civil penalty in an amount equal to the interest the person receives that exceeds nine percent per annum. The director shall pay all moneys collected under this subsection to the Department of State Lands for the benefit of the Common School Fund. [2010 c.23 28]
As used in this chapter: (1) "Pawnbroker" means a person, copartnership, association or corporation that: (a) Lends money at a rate of interest greater than 10 percent per annum on the deposit or pledge of personal property; (b) Purchases personal property on the direct or implied condition of selling the personal property back at a stipulated price that would amount to paying interest or consideration in excess of 10 percent per annum; or (c) Does business as a storage warehouse operator and lends money at a rate of interest greater than 10 percent per annum upon goods, wares, merchandise or personal property pledged or deposited as collateral security. (2)(a) "Personal property" means tangible property a person owns, including: (A) Chattels and movables, such as merchandise, furniture, goods, machinery, tools and equipment, supplies and media; (B) Pledges that are not required to be registered with the Department of Transportation; (C) Snowmobiles, as defined in ORS 801.490; (D) Trailers that have a loaded weight of not more than 8,000 pounds and that are designed or manufactured, or are otherwise suitable, for carrying a boat, snowmobile or all-terrain vehicle; and (E) Equipment used for farming. (b) "Personal property" does not include: (A) Pledges that are required to be registered with the Department of Transportation, unless the pledge is a snowmobile or a trailer described in paragraph (a) of this subsection; (B) Choses in action; (C) Securities or printed evidence of indebtedness; or (D) Intangible property. (3) "Pledge" means personal property deposited with a pawnbroker in the course of the business of the pawnbroker. (4) "Pledgor" means a person who delivers a pledge into the possession of a pawnbroker, unless the person discloses that the person is or was acting for another, in which event "pledgor" means the disclosed principal. (5) "Pledge loan" means a loan that a pawnbroker makes to a pledgor and that is secured by a pledge. [Amended by 1971 c.168 1; 1985 c.762 135; 1987 c.373 71; 1993 c.744 27; 2013 c.261 1]
This chapter shall be known as the Pawnbrokers Act. It is applicable to any person who qualifies under its provisions, and to such other person as shall by violating any of its provisions be subject to the penalties provided in ORS 726.990.
Nothing in this chapter shall be construed or held to limit the rights, powers or privileges granted to any person by any law of this state or of the United States whereby the loaning of money or extending of credit is regulated, provided, that such person is operating in compliance with the provisions of such law.
No person shall engage or continue in the business of a pawnbroker, or use any assumed business name or advertising that in any way would lead the public to believe the person is a licensed pawnbroker, except as authorized by this chapter and without first procuring a license from the Director of the Department of Consumer and Business Services as provided in this chapter. [Amended by 1979 c.202 1]
The Director of the Department of Consumer and Business Services may not issue a license to a corporation, limited liability company or limited liability partnership or to a person using an assumed business name unless: (1) The limited liability company or limited liability partnership has filed the required documents under ORS chapter 63 or 67; (2) The person using the assumed business name has registered the name under ORS chapter 648; or (3) The corporation is an Oregon corporation in good standing or a foreign corporation legally qualified to do business in this state. [Amended by 2007 c.360 1]
(1) An application for the license shall be in writing in a form prescribed by the Director of the Department of Consumer and Business Services. (2) The application shall contain: (a) If the applicant is an individual, the name and both the residence and business addresses of the applicant; (b) If the applicant is a partnership or association, the name and both the residence and business addresses of every member of the partnership or association; (c) If the applicant is a corporation, the name and both the residence and business addresses of each officer and director of the corporation; (d) The county and city with street and number, if any, where the business is to be conducted; and (e) Any other information that the director may require. (3) The applicant at the time of making application for the applicants first licensed location in this state shall pay to the director a nonrefundable application fee of $500. [Amended by 1971 c.218 1; 1985 c.762 136; 1997 c.842 1; 2007 c.360 2]
(1) A bond in the sum of $25,000 executed by the applicant as obligor, together with a surety company authorized to do business in this state as surety or an irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 in the amount of $25,000 shall accompany the application and be maintained by the pawnbroker licensee with the Director of the Department of Consumer and Business Services. This bond or letter of credit shall be executed to the State of Oregon and for the use of the state and of any person who may have a cause of action against the obligor of the bond or the letter of credit issuer under this chapter. The bond or letter of credit shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this chapter and of all rules and regulations lawfully made by the director under this chapter, and will pay to the state and to any such person any and all moneys that may become due or owing to the state or to such person from the obligor under and by virtue of the provisions of this chapter. The Attorney General shall approve the form of any bond or letter of credit that may be accepted by the director under this section. (2) If any person is aggrieved by the misconduct of a pawnbroker or by the pawnbrokers violation of any law and recovers judgment therefor, the person may, after the return unsatisfied either in whole or in part of any execution issued upon the judgment, maintain an action for the persons own use upon the bond or letter of credit of the pawnbroker in any court having jurisdiction of the amount claimed. The director shall furnish to anyone applying therefor, a certified copy of any such bond or letter of credit filed with the director. The certified copy is prima facie evidence in any court that the bond or letter of credit was duly executed and delivered by each pawnbroker whose name appears on the bond or letter of credit. [Amended by 1971 c.218 2; 1979 c.202 2; 1991 c.331 125; 1993 c.18 155; 1997 c.631 544; 2003 c.176 1; 2007 c.360 3]
The Director of the Department of Consumer and Business Services may not grant a license to engage in the business of pawnbroker to any person if any person named in the application submitted pursuant to ORS 726.060: (1) Is insolvent, either in the sense that the persons liabilities exceed the persons assets or that the person cannot meet obligations as they mature, or is in such financial condition that the person cannot continue in business with safety to the persons customers; (2) Has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession; (3) Has willfully or repeatedly violated or failed to comply with a provision of the Oregon Bank Act, the Oregon Credit Union Act, the Oregon Consumer Finance Act or the Pawnbrokers Act, or any administrative rule or order adopted under an Act identified in this subsection; (4) Has been convicted of a crime, an essential element of which is fraud; (5) Is not qualified to conduct a pawnbroker business on the basis of such factors as training, experience and knowledge of the business; (6) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving an aspect of the pawnbroker business; (7) Is the subject of an order of the director, subjecting the person to a civil penalty, or removing the person from an office in an entity regulated by either director; or (8) Is the subject of an order that was issued by the regulatory authority of another state or of the federal government with authority over such banking institutions, credit unions, consumer finance companies or savings associations, that was entered within the past five years and that subjects the person to a civil penalty or removes the person from an office in a state banking institution, a national bank, a state or federal savings association, a state or federal credit union or a consumer finance company. [1977 c.135 55; 1985 c.762 137; 2009 c.541 47; 2011 c.597 294]
(1) Conditioned upon the applicants compliance with this chapter, the payment of the license fee and the filing of a bond or letter of credit on a form approved by the Attorney General, and in the absence of any reason or condition that in the judgment of the Director of the Department of Consumer and Business Services might warrant the refusal of the granting of a license, including the reasons set out in ORS 726.075, the director shall issue a license within 45 days after the date a complete application was received. (2) If the application is denied, the director shall indorse on the application with the date the word "Disapproved" and shall immediately advise the applicant by registered mail or by certified mail with return receipt of the reason for the denial. [Amended by 1971 c.218 3; 1977 c.135 56; 1991 c.249 69; 2007 c.360 4]
The licenses shall be in a form prescribed by the Director of the Department of Consumer and Business Services and shall state the address at which the business is to be conducted and the full name of the pawnbroker. The license shall be kept conspicuously posted in the place of business of the pawnbroker and shall not be transferable or assignable. [Amended by 1971 c.218 4]
No pawnbroker shall transact any business within the scope of this chapter except under the name at the place of business named in the license. The Director of the Department of Consumer and Business Services may issue more than one license to the same pawnbroker upon the pawnbrokers compliance with all the provisions of this chapter governing an original issuance of a license for each such additional license. Each additional license shall be for a separate and distinct place of business for the making and completing of pledge loans as provided in this chapter.
Whenever a pawnbroker changes the place of business to another location within the same city or town, the pawnbroker shall at once give written notice of the change to the Director of the Department of Consumer and Business Services and shall surrender the pawnbrokers license for cancellation. Thereupon a new license shall be issued by the director for the new location. A change in the place of business of a pawnbroker to a location outside of the city or town named in the original license is not permitted under the same license. [Amended by 1971 c.218 5; 2007 c.360 5]
(1) Each pawnbroker shall pay to the Director of the Department of Consumer and Business Services each year the license fee determined by the director under subsection (2) of this section. (2) The director may charge and collect a license fee from each pawnbroker, according to a license fee schedule established by the director by rule, for the purpose of defraying the costs of performing supervision, enforcement and other duties imposed by law upon the director in respect to pawnbrokers. In setting the license fee schedule and allocating license fees among pawnbrokers, the director shall take into consideration the costs of performing the duties of the director relative to each pawnbroker, the amount of all other moneys paid to the director under this chapter and the cost of developing and maintaining a reasonable emergency fund. License fees under this subsection shall be assessed and paid upon approval of a new license application, and not later than December 15 or such date as may be specified by the director by rule for renewal of a license. (3) In addition to the license fee collected under subsection (2) of this section, whenever the director devotes any extra attention to the affairs of a pawnbroker, either upon determination by the director or upon request of the pawnbroker, the fee for the extra service shall be the actual cost thereof. [1985 c.762 139; 1997 c.842 2; 2007 c.768 56]
Every pawnbroker, on or before January 15, shall submit to the Director of the Department of Consumer and Business Services an annual report in a form prescribed by the director, giving the following information: (1) The number of pledge loans and total amount outstanding at the beginning of the year. (2) The number of pledge loans made during the year and the aggregate amount of the pledge loans. (3) The number of pledge loans canceled during the year and the aggregate amount of the canceled pledge loans. (4) The number of pledge loans and total amount outstanding at the close of the year. (5) Any other information requested by the director. [Amended by 2005 c.21 14]
(1) The Director of the Department of Consumer and Business Services may revoke any license under this chapter if the director finds that: (a) The pawnbroker has failed to pay the annual license fee or to maintain in effect the required bond or to comply with any demand, ruling or requirement of the director lawfully made pursuant to and within the authority of this chapter or to comply with the provisions of law to keep the corporation in good standing if such pawnbroker is a corporation; (b) The pawnbroker has violated any provision of this chapter or any rule or regulation lawfully made by the director under and within the authority of this chapter; or (c) Any fact or condition exists which, if it had existed at the time of the original application for a license, would have warranted the director in refusing originally to issue the license. (2) The director may, without notice or hearing, suspend any license for a period not exceeding 30 days, pending investigation. (3) The director may revoke or suspend only the particular license with respect to which grounds for revocation or suspension occur or exist, or, if the director finds that such grounds for revocation or suspension are of general application to all offices or to more than one office operated by the pawnbroker, the director shall revoke or suspend all the licenses issued to the pawnbroker or such number of licenses as such grounds apply to, as the case may be. [Amended by 1971 c.734 177; 1977 c.135 57]
(1) Where the Director of the Department of Consumer and Business Services proposes to refuse to issue a license, or proposes to revoke or suspend a license, opportunity for hearing shall be accorded as provided in ORS chapter 183. (2) Judicial review of orders under subsection (1) of this section shall be as provided in ORS chapter 183. [1971 c.734 179]
The Director of the Department of Consumer and Business Services may reinstate any suspended license or issue a new license to a pawnbroker whose license has been revoked, upon the pawnbrokers compliance with the provisions of law or any demand, ruling or requirement lawfully made by the director pursuant to and within the authority of this chapter. For such reinstatement or issuance of a new license a fee of $25 shall be paid.
Every license issued under this chapter shall remain in force until it has been surrendered, revoked or suspended in accordance with the provisions of this chapter. No revocation, suspension or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the pawnbroker and any borrower. [Amended by 1971 c.218 7]
Any pawnbroker may surrender any license by delivering to the Director of the Department of Consumer and Business Services written notice that the pawnbroker thereby surrenders such license, but such surrender shall not affect the pawnbrokers civil or criminal liability for acts committed prior to the surrender.
(1)(a) For the purpose of discovering violations of this chapter or securing information required by the Director of the Department of Consumer and Business Services under this chapter, the director at any time, either personally or by an examiner or other employee of the Department of Consumer and Business Services, may investigate the pledge loans and business and examine the books, accounts, records and files used in the pledge loans and business of every pawnbroker and of every person that the director has reason to believe is acting as a pawnbroker without a license, whether that person acts or claims to act as principal or agent, or under or without the authority of this chapter. (b) For the purposes of paragraph (a) of this subsection: (A) Every pawnbroker and person that the director has reason to believe is acting as a pawnbroker without a license shall give the director, examiner or other employee of the department free access to the persons place of business, books, accounts, papers, records, files, safes and vaults; and (B) The director, examiner or other employee may: (i) Compel the attendance of witnesses and examine the witnesses under oath; and (ii) Require the production of documents or records. (c) The actual cost of each examination shall be paid to the director by every person examined. The director may maintain an action for recovery of costs in any court of competent jurisdiction. (2) As often as the director determines necessary, the director, examiner or other employee of the department shall make an examination of the pledge loans and business, office records and files of each licensed pawnbroker. The examination shall occur at the licensed location of the pawnbroker. (3) As often as the director determines necessary, each licensed pawnbroker shall submit to the director for examination, at the office of the director, those books, records and documents prescribed by the director by rule. [Amended by 1973 c.449 1; 1985 c.762 140; 2003 c.176 2; 2005 c.338 28; 2007 c.360 6]
(1) For the purpose of an investigation or proceeding under the Pawnbrokers Act, the Director of the Department of Consumer and Business Services may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of books, papers, correspondence, memoranda, agreements or other documents or records that the director considers relevant or material to the inquiry. (2) If a person fails to comply with a subpoena issued under subsection (1) of this section or a party or witness refuses to testify on any matter, the judge of the circuit court for any county, on the application of the director, shall compel obedience in the manner provided by law in the case of disobedience to a subpoena issued in a civil action in the circuit court. (3) Each witness who appears before the director under a subpoena shall receive the fees and mileage provided for witnesses in ORS 44.415 (2), except a witness subpoenaed at the instance of parties other than the director or an examiner shall not be compensated for attendance or travel unless the director certifies that the testimony of the witness was material to the matter investigated. (4) The director in any investigation may cause the depositions of witnesses to be taken in the manner prescribed by law for like depositions in civil suits in the circuit court. [1979 c.202 9; 1985 c.762 141; 1989 c.980 21]
(1) The Director of the Department of Consumer and Business Services shall administer and enforce this chapter. (2) In accordance with ORS chapter 183, the director may adopt rules and make any specific rulings, demands and findings as may be necessary for the proper conduct of the pawnbroker business and the enforcement of this chapter. (3) In addition to the notice requirements of ORS chapter 183, before the director adopts a rule, the director shall submit a copy of the rule to each pawnbroker. [Amended by 1985 c.762 142]
No pawnbroker shall: (1) Transact any business between the hours of 9 p.m. and 7 a.m. except that on Saturday the pawnbroker may transact business up to the hour of 10 p.m. (2) Accept a pledge from any person who is under the age of 18 years. (3) Convert or dispose of any unredeemed pledge before the time to redeem it has expired or before the pledge has been forfeited to the pawnbroker as provided in ORS 726.400. [Amended by 1975 c.739 1]
(1) Every pawnbroker shall keep a register in which the pawnbroker records in ink or in electronic form: (a) The date of the transaction. (b) The serial number of the pledge loan. (c) The name and address of the pledgor, or if a person acting as agent for a disclosed principal makes a pledge, the name and address of the principal and the agent. (d) An identifying description of the pledge. (e) The amount of the pledge loan. (f) The date on which the pledge loan was canceled. (g) A notation as to whether the pledge was redeemed or renewed, or whether the pledge was forfeited. (h) A notation that indicates that a lien search of the pledge has been conducted in the pledgors county of residence or with the state agency that is responsible for recording liens on the category of property to which the pledge belongs. (2) All entries in the register must be made in the English language and must be open to the inspection of any public official, police officer or any other person who is duly authorized or empowered by the laws of this state to make an inspection. (3) Every pawnbroker shall maintain an alphabetical file from which can be determined the total obligations of any one pledgor. (4) Subject to the provisions of this chapter, the Director of the Department of Consumer and Business Services may prescribe the form of other books and records the pawnbroker must keep. All records shall be preserved and available for at least two years after making the final entry on any pledge loan recorded in the books or records. [Amended by 1979 c.202 3; 1987 c.373 72; 2007 c.360 7; 2013 c.261 2]
(1) In addition to the register required under ORS 726.280, a pawnbroker shall record for each transaction, in a physical or an electronic form, the date, the name and address of the pledgor, the type and number of any proof of identification the pledgor presents, a physical description of the pledgor and an identifying description of the article pledged. (2) The pawnbroker shall deliver each record in a physical or an electronic form, or a copy of the record, made under this section, within three days after the date of the transaction, to the local police agency that has jurisdiction over the location at which the pawnbroker has a place of business. (3) A pawnbroker may keep a register required under ORS 166.427 in a physical or an electronic form and may deliver the register to the local police agency in electronic form. [1979 c.202 10; 2016 c.70 1]
The pawnbroker shall at the time of making a loan require the pledgor or agent of the pledgor to write the signature and address of the pledgor or the agent of the pledgor on a card, ticket, stub or any other approved record, bearing the serial number of the loan corresponding to that recorded in the pawnbrokers register as provided in ORS 726.280. If the person is unable to write, the person shall sign the persons mark, and in such event the pawnbroker shall record on the signature card, stub or record such information as will enable the pawnbroker to identify the person in case of the loss of the ticket.
(1) A pawnbroker at the time the pawnbroker makes a pledge loan shall deliver to the pledgor or an agent of the pledgor a memorandum or pawn ticket on which the pawnbroker shall legibly write or print the following: (a) The date of the transaction. (b) The serial number of the pledge loan. (c) The article or articles pledged. (d) The amount of the pledge loan. (e) The rate of interest charged on the loan. (f) The name and address of the pawnbroker. (g) An accurate summary of the notice requirements of ORS 726.400. (h) A statement as to whether the pawnbroker is storing or will store the pledge off the premises of the business location at which the pawnbroker makes the pledge loan. (i) Other terms and conditions the pawnbroker may wish to insert that are not inconsistent with this chapter. (2) Nothing that appears on the pawn ticket relieves the pawnbroker of the obligation to exercise reasonable care in safekeeping articles pledged with the pawnbroker. [Amended by 1979 c.202 4; 2009 c.372 1; 2019 c.10 1]
(1) Except as otherwise provided in this chapter, a person that holds a memorandum or pawn ticket is the person entitled to redeem the pledge associated with the memorandum or pawn ticket. A pawnbroker shall deliver the pledge to the person presenting such memorandum or pawn ticket upon payment of principal and interest due on the pledge loan. (2) If a pawnbroker holds a pledge at a location that is off the premises of the business location at which the pawnbroker made the pledge loan or at which a person redeems the pledge, the pawnbroker shall return the pledge within two business days after the date on which the person redeems the pledge. [Amended by 2019 c.10 2]
When a pawn ticket, instead of being presented in person, is sent to the pawnbroker by mail, accompanied with a money order, bank draft or cash for the amount due including the cost of shipment and packing as desired, the pledge shall be securely packed and forwarded by the pawnbroker in accordance with the remitters instructions. If the remittance is insufficient to cover the amount due and the cost of shipment and packing as desired, the pawnbroker shall either notify the remitter of the amount of the deficiency or send the pledge subject to the payment of the deficiency by the consignee. The pawnbrokers liability for the pledge shall cease upon delivery thereof to the carrier or the agent of the carrier. [Amended by 1973 c.449 4; 1981 c.192 43]
Except as otherwise provided in this chapter, a pawnbroker shall not be required to deliver a pledge except upon surrender of the pawn ticket, unless the ticket is impounded or its negotiation enjoined by a court of competent jurisdiction.
If a pawn ticket or memorandum is lost, destroyed or stolen, the pledgor shall notify the pawnbroker of the loss, destruction or theft in writing. The pawnbroker shall treat receipt of the notice as a stop against the pledge loan, and thereafter the provisions of ORS 726.310 and 726.320 do not apply to the pledge loan. Before delivering the pledge or issuing a new pawn ticket, the pawnbroker may require the pledgor to make an affidavit of the alleged loss, destruction or theft and may charge a fee of not more than $3 for the lost, destroyed or stolen ticket. Not more than five days after receiving notice of the loss, destruction or theft of the ticket, the pawnbroker shall permit the pledgor either to redeem the pledge or to receive a new ticket upon paying accrued interest. The pawnbroker shall incur no liability for permitting the pledgor to redeem the pledge or receive a new ticket unless the pawnbroker has previously received written notice of an adverse claim. This section does not limit or affect the pawnbrokers legal liability in cases where goods are stolen or other legal defects exist in the pledgors title with respect to the pledge. [Amended by 2007 c.360 8; 2009 c.372 2]
The alteration of a pawn ticket shall not excuse the pawnbroker who issued it from liability to deliver the pledge according to the terms of the pawn ticket as originally issued, but shall relieve the pawnbroker of any other liability to the pledgor or holder of the pawn ticket.
If a pawn ticket is presented to a pawnbroker which purports to be the one issued by the pawnbroker, but which is found to be spurious, the pawnbroker may seize and retain it without any liability whatsoever to the holder thereof. Any such pawn ticket so seized shall be delivered or mailed immediately to the Director of the Department of Consumer and Business Services accompanied by a letter of explanation. [Amended by 1987 c.373 73]
(1) If more than one person claims the right to redeem a pledge, the pawnbroker is not liable for refusing to deliver the pledge until the respective rights of the claimants have been adjudicated unless the pawnbroker fails to verify whether the pledge is subject to a lien or other encumbrance, if the pledge is: (a) A boat, as defined in ORS 830.005; (b) A snowmobile, as defined in ORS 801.490; (c) A trailer, as described in ORS 726.010 (2)(a)(D); or (d) An all-terrain vehicle that is not required to be registered with the Department of Transportation. (2) In an action brought against the pawnbroker for recovery of the pledge, the pawnbroker may as a defense require all known claimants to interplead. (3) If either claimant does not bring an action against the pawnbroker within 30 days after notice of an adverse claim, the pawnbroker may dispose of the pledge as provided in this chapter. [Amended by 2013 c.261 3]
(1) A pawnbroker is liable for the loss of a pledge or a part of a pledge or for an injury to a pledge that results from failure to exercise reasonable care. Reasonable care includes maintaining sufficient insurance coverage against possible loss as a result of fire, theft and burglary so as to protect the interest of the pledgor for the amount of the loan. (2)(a) A pawnbroker may store large items, including items identified in paragraph (c) of this subsection, off the premises of the business location at which the pawnbroker makes the pledge loan only if: (A) The pawnbroker and the pledgor agree in writing that the pawnbroker may store the large item as described in this paragraph; (B) The pawnbroker maintains a business location at which the pawnbroker displays a license the Director of the Department of Consumer and Business Services issued under ORS 726.080; and (C) The off-premises location complies with all requirements this chapter or the director sets forth for pawnbroker business locations with respect to security, bonding, insurance and notice. (b) A pawnbroker may have only one off-premises location at which the pawnbroker stores large items for each business location for which the pawnbroker has the license described in paragraph (a)(B) of this subsection. (c) A pawnbroker shall hold a pledge in a gated, secured facility that is designed, constructed, furnished and maintained to present physical deterrents to a persons ability to enter into the facility without authorization and remove the pledge, if the pledge is: (A) A boat, as defined in ORS 830.005; (B) A snowmobile, as defined in ORS 801.490; (C) A trailer, as described in ORS 726.010 (2)(a)(D); or (D) An all-terrain vehicle that is not required to be registered with the Department of Transportation. (d) The director by rule may define "large items" for the purposes of this subsection. (3) The pawnbroker has the burden of proof to establish due care if a pledge is lost. (4) The pawnbroker has a first lien on any pledge for the amount of the pledge loan and interest in all cases except where goods are stolen or where a prior lien exists by virtue of any provision of law. [Amended by 1979 c.202 5; 2013 c.261 4; 2019 c.10 3]
(1)(a) Except as provided in paragraph (b) of this subsection, a pawnbroker may not charge, contract for or receive interest at a rate in excess of three percent per month. (b) A pawnbroker may charge one months interest or $3 on pledge loans redeemed within the first month if interest accumulated amounts to less. The pawnbroker may not compound the interest and may not deduct or receive an amount in advance. (2) A pawnbroker may charge a set-up fee of 10 percent for loans and loan renewals with a minimum charge of $2 and a maximum charge of $250. (3) A pawnbroker may charge a storage fee of not more than five percent for loans and loan renewals, with a minimum charge of $2 and a maximum charge of $250. (4) Except as provided by law, a pawnbroker may not charge, contract for or receive an amount in addition to the interest provided for in this section. [Amended by 1973 c.449 5; 1979 c.202 6; 1981 c.192 44; 1985 c.795 1; 1997 c.842 3; 2009 c.372 3; 2015 c.90 1]
(1) A pawnbroker may charge a pledgor or customer a $3 fee if the pledgor or customer places a firearm with the pawnbroker. The pawnbroker may charge a $1 fee to renew the pledgors or customers placement of the firearm with the pawnbroker. (2) In addition to the fees described in subsection (1) of this section, a pawnbroker may charge a pledgor or customer any fee that a government entity imposes on the pawnbroker for holding or transferring a firearm. [1973 c.449 3; 1997 c.842 4; 2009 c.372 4; 2014 c.54 1]
(1) Unless a pledgor and a pawnbroker agree to a longer loan period and the longer loan period is written on the pawn ticket, a pledge loan must be made for a period of 60 days. A pledge may be redeemed and the pledge loan repaid at any time before the loan period expires. A pawn ticket must clearly state the expiration date of the loan. (2) A pledgor and a pawnbroker may agree to renew a pledge loan for successive periods of 60 days or longer. A loan is a renewal of the original loan if the pledgor pays only the interest and the fees on the loan or pays a portion of the principal, the interest and the fees on the loan and accepts another pledge loan from the pawnbroker on the same pledge on the same day. (3) Except for a pledge that secures a pledge loan of $500 or less, the pawnbroker may not deem a pledge to be forfeited until: (a) The pawnbroker notifies the pledgor that the pledge is at risk of forfeiture after the period described in subsection (1) of this section expires; and (b) The pledgor has had an opportunity to redeem the pledge as provided in this section. (4)(a) Except as provided in paragraph (b) of this subsection, the notice described in subsection (3) of this section must be in writing and delivered postpaid in a securely closed envelope addressed to the pledgor at the last-known address shown on the pawnbrokers record by regular mail. (b) At the time the pawnbroker makes or renews the loan, the pledgor may agree in writing to receive the notice described in subsection (3) of this section by electronic mail or other electronic means instead of by regular mail. (5)(a) Delivery of a notice under this section occurs when the notice is mailed or sent electronically as provided in this section. The pawnbroker shall bear any postal costs for the notice. (b) As evidence of delivery of the notice described in paragraph (a) of this subsection, the pawnbroker shall keep for at least two years: (A) A copy of, and the returned envelope for, each notice the pawnbroker sends by regular mail; and (B) An electronic record of each notice the pawnbroker sends by electronic mail or other electronic means. (6) A pledgor has a grace period of 30 days after the pledge loan period expires or 30 days after the delivery date specified in subsection (5) of this section of the notice required under this section, whichever date is later, in which to redeem the pledge or to renew the loan by paying any renewal fee and all the accrued interest and fees to date. There is no grace period after a renewal expires. (7) A pledge is forfeited if the pledge is not redeemed within the renewal period, if any, or within 30 days after the loan period expires or 30 days after the delivery date specified in subsection (5) of this section of a notice given under this section, whichever date is later. The pawnbroker acquires the pledgors title and interest in the forfeited pledge and the right to hold and dispose of the pledge as the pawnbrokers own property. [Amended by 1973 c.449 6; 1979 c.202 7; 1981 c.192 45; 1985 c.795 2; 1997 c.842 5; 2009 c.372 5; 2010 c.14 1; 2014 c.54 2; 2017 c.56 1]
Every pawnbroker shall keep an indelible record, fully itemized, of all forfeited pledges. The record shall contain the following information: (1) The number of the pledge. (2) The name and address of the pledgor. (3) The date of the pledge loan or the date of the last payment received as interest or principal. (4) The date of mailing notice. (5) The date of forfeiture. [Amended by 1985 c.795 3]
If any pawnbroker or agent, member, officer or employee thereof, or any other person is found by the Director of the Department of Consumer and Business Services to have charged, contracted for or received any interest, fees or other charges in excess of those permitted by ORS 726.390, then the pledge loan shall be void. The pawnbroker shall forfeit the right to collect or receive any principal, interest or charges whatsoever. The pawnbroker shall upon order of the director return to the pledgor free from the pawnbrokers lien the pledge pledged by the pledgor without tender of principal and interest and shall pay into the county school fund of the county wherein the loan is made all payments and all fees or other charges previously collected under such pledge loan. [Amended by 1975 c.544 59a; 1987 c.373 74]
(1) The Director of the Department of Consumer and Business Services may, if the director has reason to believe that a person has: (a) Violated, is violating or is about to violate ORS 726.040, 726.100, 726.110, 726.130, 726.270, 726.280, 726.285, 726.290, 726.300, 726.390, 726.400 or 726.410, a rule adopted under ORS 726.260 or an order issued under this chapter, issue an order to cease and desist from the violation. (b) Failed to file the annual report required by ORS 726.130, issue an order to file the report. (c) Filed information under ORS 726.060, 726.110, 726.130 or 726.250 that is false or untruthful, issue an order to correct the filing. (d) Failed to maintain in effect the bond or an irrevocable letter of credit required under ORS 726.070, issue an order to remedy the failure. (2)(a) The director shall serve an order under this section on the person named in the order. (b) An order issued under this section becomes effective upon service on the person named in the order. (c) ORS 183.413 to 183.470 apply to an order issued under this section. (d) Notwithstanding paragraph (c) of this subsection, a person may not obtain a hearing on the order unless the person requests the hearing in writing within 20 days after service of the order. (e) A person who does not request a contested case hearing may not obtain judicial review of the order. (f) The director may vacate or modify an order issued under this section. A modified order is effective upon service on the person named in the order. (3) The authority conferred by this section is in addition to and not in lieu of any other authority conferred on the director. [2005 c.338 27]
A city or county may impose and collect from a pawnbroker a fee of not more than $1 for each pledge loan the pawnbroker makes in a calendar year, except a renewal of a pledge loan, for the purpose of administering and using a system, including an electronic database, to track pledged articles. The pawnbroker may charge a pledgor only the amount of the fee that the city or county imposes under this section. [2009 c.372 7]
(1) Any person who violates ORS 726.040, 726.100, 726.110, 726.130, 726.270, 726.280, 726.285, 726.290, 726.300, 726.390, 726.400 or 726.410 or any rule adopted under ORS 726.260 or an order issued under ORS 726.440 shall forfeit a civil penalty in an amount determined by the Director of the Department of Consumer and Business Services of not more than $2,500. The civil penalty forfeited shall be paid into the State Treasury and credited as provided in ORS 705.145. In addition, the director may revoke the license of any licensee who violates any such provision. (2) The civil penalty may be recovered in an action brought in the name of the State of Oregon in any court of appropriate jurisdiction or may be imposed as provided in ORS 183.745. (3) In any court action with respect to a civil penalty, including judicial review under ORS 183.745, the court may review the penalty as to both liability and reasonableness of amount. [1975 c.544 61; 1985 c.762 143; 1991 c.734 99; 2005 c.338 29]
(1) Violation, or participation in the violation, of any provision of this chapter by any pawnbroker or any agent, member, officer or employee thereof, or any other person is a Class B misdemeanor. (2) Upon conviction under subsection (1) of this section, no license shall be granted to such person, nor to the spouse in a marriage of such person, nor to any partnership, association or corporation of which the person is an agent or member, until two years after the date of the conviction. [Amended by 1971 c.743 425; 1987 c.373 75; 2011 c.597 295; 2015 c.629 58]
Note: 727.010, 727.020, 727.030, 727.040, 727.050, 727.060, 727.110, 727.120, 727.130, 727.140, 727.150, 727.160, 727.170, 727.180, 727.190, 727.200, 727.210, 727.220, 727.230, 727.240, 727.250, 727.260, 727.270, 727.310, 727.320, 727.330, 727.340, 727.350, 727.360, 727.370, 727.380, 727.390 and 727.990, all part of the Motor Vehicle Finance Act, repealed by 1955 c.71 17. See 725.027.
ORS chapters 731, 732, 733, 734, 735, 737, 742, 743, 743A, 743B, 744, 746, 748 and 750 may be cited as the Insurance Code. [1967 c.359 1; 1973 c.97 1; 1975 c.769 1]
The Legislative Assembly declares that the Insurance Code is for the protection of the insurance-buying public. [Formerly 736.003]
The Insurance Code shall regulate the business of insurance and every person engaged therein in accordance with the intent of Congress as expressed in the Act of March 9, 1945, as amended (Public Law 15, 79th Congress, 15 U.S.C. 1011 to 1014) which states in part that no Act of Congress shall be construed to invalidate, impair or supersede any law enacted by any state for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance. [1967 c.359 3]
The Insurance Code shall be liberally construed and shall be administered and enforced by the Director of the Department of Consumer and Business Services to give effect to the policy stated in ORS 731.008. [1967 c.359 4]
No person shall transact insurance in this state or relative to a domestic risk without complying with the applicable provisions of the Insurance Code. [1967 c.359 5]
The Insurance Code applies to: (1) A fraternal benefit society complying with ORS chapter 748, only as provided in such chapter. (2) A health care service contractor complying with ORS 750.005 to 750.095, only as provided in such sections. (3) A legal expense organization complying with ORS 750.505 to 750.715, only as provided in such sections. (4) A multiple employer welfare arrangement complying with ORS 750.301 to 750.341, only as provided in such sections. [1967 c.359 6; 1971 c.425 1; 1973 c.97 2; 1975 c.769 2; 1989 c.331 23; 1993 c.265 2; 1993 c.615 26; 2005 c.31 6]
(1) The State Accident Insurance Fund Corporation is subject as a domestic insurer to ORS 731.248, 731.252, 731.256, 731.258, 731.260, 731.296 to 731.316, 731.488, 731.574, 731.592, 731.594, 731.730, 731.731, 731.735, 731.737, 731.870, 731.988, 731.992, 733.010 to 733.060, 733.140 to 733.170, 733.210, 737.205, 737.215, 737.225, 737.235 to 737.340, 737.505 and 737.560, ORS chapters 742, 743, 743A, 743B and 744 and ORS 746.015, 746.075, 746.110, 746.145 to 746.155, 746.230 and 746.240. However: (a) The requirements of the Director of the Department of Consumer and Business Services under ORS 733.010 to 733.060, 733.140 to 733.170 and 733.210 govern in the case of a conflict between those requirements and the requirements of any accounting system prescribed by the Oregon Department of Administrative Services. (b) The filing requirements of ORS 737.205 to 737.340, 737.505 and 737.560 are in lieu of any similar filing requirements prescribed by any other law of this state. (c) The requirements of ORS chapters 743, 743A and 743B are applicable only with respect to excess workers compensation insurance furnished by the corporation. (d) The provisions of ORS chapter 744 apply only with respect to the regulation of insurance producers. (e) For each year that the Secretary of State conducts an audit of the State Accident Insurance Fund Corporation under ORS 297.210, the director may accept the audit and a copy of the Secretary of States audit report in lieu of the requirements of ORS 731.488 if the director determines that the purposes of ORS 731.488 are adequately served by the Secretary of States audit and report. The Secretary of State shall file a copy of its audit report of the State Accident Insurance Fund Corporation with the director. (2) The provisions of subsection (1) of this section govern in the case of a conflict between those provisions and the provisions of ORS chapter 656 that apply only to the State Accident Insurance Fund Corporation. [1971 c.385 2; 1977 c.405 5; 1979 c.815 7; 1979 c.829 7; 1987 c.884 4; 1989 c.701 69; 1991 c.340 1; 1991 c.401 31; 1993 c.447 116; 1995 c.79 356; 1999 c.633 5; 2003 c.364 63; 2003 c.689 1; 2008 c.22 3]
Except as provided in ORS 743.029 or as specifically provided by law, the Insurance Code does not apply to any of the following to the extent of the subject matter of the exemption: (1) A bail bondsman, other than a corporate surety and its agents. (2) A fraternal benefit society that has maintained lodges in this state and other states for 50 years prior to January 1, 1961, and for which a certificate of authority was not required on that date. (3) A religious organization providing insurance benefits only to its employees, if the organization is in existence and exempt from taxation under section 501(c)(3) of the federal Internal Revenue Code on September 13, 1975. (4) Public bodies, as defined in ORS 30.260, that either individually or jointly establish a self-insurance program for tort liability in accordance with ORS 30.282. (5) Public bodies, as defined in ORS 30.260, that either individually or jointly establish a self-insurance program for property damage in accordance with ORS 30.282. (6) Cities, counties, school districts, community college districts, community college service districts or districts, as defined in ORS 198.010 and 198.180, that either individually or jointly insure for health insurance coverage, excluding disability insurance, their employees or retired employees, or their dependents, or students engaged in school activities, or combination of employees and dependents, with or without employee or student contributions, if all of the following conditions are met: (a) The individual or jointly self-insured program meets the following minimum requirements: (A) In the case of a school district, community college district or community college service district, the number of covered employees and dependents and retired employees and dependents aggregates at least 500 individuals; (B) In the case of an individual public body program other than a school district, community college district or community college service district, the number of covered employees and dependents and retired employees and dependents aggregates at least 500 individuals; and (C) In the case of a joint program of two or more public bodies, the number of covered employees and dependents and retired employees and dependents aggregates at least 1,000 individuals; (b) The individual or jointly self-insured health insurance program includes all coverages and benefits required of group health insurance policies under ORS chapters 743, 743A and 743B; (c) The individual or jointly self-insured program must have program documents that define program benefits and administration; (d) Enrollees must be provided copies of summary plan descriptions including: (A) Written general information about services provided, access to services, charges and scheduling applicable to each enrollees coverage; (B) The programs grievance and appeal process; and (C) Other group health plan enrollee rights, disclosure or written procedure requirements established under ORS chapters 743, 743A and 743B; (e) The financial administration of an individual or jointly self-insured program must include the following requirements: (A) Program contributions and reserves must be held in separate accounts and used for the exclusive benefit of the program; (B) The program must maintain adequate reserves. Reserves may be invested in accordance with the provisions of ORS chapter 293. Reserve adequacy must be calculated annually with proper actuarial calculations including the following: (i) Known claims, paid and outstanding; (ii) A history of incurred but not reported claims; (iii) Claims handling expenses; (iv) Unearned contributions; and (v) A claims trend factor; and (C) The program must maintain adequate reinsurance against the risk of economic loss in accordance with the provisions of ORS 742.065 unless the program has received written approval for an alternative arrangement for protection against economic loss from the Director of the Department of Consumer and Business Services; (f) The individual or jointly self-insured program must have sufficient personnel to service the employee benefit program or must contract with a third party administrator licensed under ORS chapter 744 as a third party administrator to provide such services; (g) The public body, or the program administrator in the case of a joint insurance program of two or more public bodies, files with the Director of the Department of Consumer and Business Services copies of all documents creating and governing the program, all forms used to communicate the coverage to beneficiaries, the schedule of payments established to support the program and, annually, a financial report showing the total incurred cost of the program for the preceding year. A copy of the annual audit required by ORS 297.425 may be used to satisfy the financial report filing requirement; and (h) Each public body in a joint insurance program is liable only to its own employees and no others for benefits under the program in the event, and to the extent, that no further funds, including funds from insurance policies obtained by the pool, are available in the joint insurance pool. (7) All ambulance services. (8) A person providing any of the services described in this subsection. The exemption under this subsection does not apply to an authorized insurer providing such services under an insurance policy. This subsection applies to the following services: (a) Towing service. (b) Emergency road service, which means adjustment, repair or replacement of the equipment, tires or mechanical parts of a motor vehicle in order to permit the motor vehicle to be operated under its own power. (c) Transportation and arrangements for the transportation of human remains, including all necessary and appropriate preparations for and actual transportation provided to return a decedents remains from the decedents place of death to a location designated by a person with valid legal authority under ORS 97.130. (9)(a) A person described in this subsection who, in an agreement to lease or to finance the purchase of a motor vehicle, agrees to waive for no additional charge the amount specified in paragraph (b) of this subsection upon total loss of the motor vehicle because of physical damage, theft or other occurrence, as specified in the agreement. The exemption established in this subsection applies to the following persons: (A) The seller of the motor vehicle, if the sale is made pursuant to a motor vehicle retail installment contract. (B) The lessor of the motor vehicle. (C) The lender who finances the purchase of the motor vehicle. (D) The assignee of a person described in this paragraph. (b) The amount waived pursuant to the agreement shall be the difference, or portion thereof, between the amount received by the seller, lessor, lender or assignee, as applicable, that represents the actual cash value of the motor vehicle at the date of loss, and the amount owed under the agreement. (10) A self-insurance program for tort liability or property damage that is established by two or more affordable housing entities and that complies with the same requirements that public bodies must meet under ORS 30.282 (6). As used in this subsection: (a) "Affordable housing" means housing projects in which some of the dwelling units may be purchased or rented, with or without government assistance, on a basis that is affordable to individuals of low income. (b) "Affordable housing entity" means any of the following: (A) A housing authority created under the laws of this state or another jurisdiction and any agency or instrumentality of a housing authority, including but not limited to a legal entity created to conduct a self-insurance program for housing authorities that complies with ORS 30.282 (6). (B) A nonprofit corporation that is engaged in providing affordable housing. (C) A partnership or limited liability company that is engaged in providing affordable housing and that is affiliated with a housing authority described in subparagraph (A) of this paragraph or a nonprofit corporation described in subparagraph (B) of this paragraph if the housing authority or nonprofit corporation: (i) Has, or has the right to acquire, a financial or ownership interest in the partnership or limited liability company; (ii) Has the power to direct the management or policies of the partnership or limited liability company; (iii) Has entered into a contract to lease, manage or operate the affordable housing owned by the partnership or limited liability company; or (iv) Has any other material relationship with the partnership or limited liability company. (11) Except as provided in ORS 735.500 and 735.510, a person certified by the Department of Consumer and Business Services to operate a retainer medical practice. (12) A fund established by the Board of Governors of the Oregon State Bar under ORS 9.080. [1967 c.359 8; 1975 c.314 1; 1977 c.428 4; 1981 c.891 1; 1985 c.811 1; 1987 c.97 1; 1987 c.288 1; 1991 c.958 2; 1993 c.265 4; 1995 c.79 357; 1995 c.582 1; 1995 c.629 1; 1997 c.795 3; 1999 c.502 4; 2003 c.342 1; 2005 c.175 1; 2007 c.174 1; 2007 c.826 1; 2009 c.244 1; 2009 c.470 5; 2009 c.867 48; 2011 c.9 90; 2011 c.130 6; 2011 c.499 4; 2013 c.698 12,37; 2015 c.318 41,42; 2017 c.101 51,52; 2017 c.384 8,9; 2021 c.497 16] Note: The amendments to 731.036 by section 2, chapter 595, Oregon Laws 2021, become operative upon receipt of approval from the Centers for Medicare and Medicaid Services to carry out 735.520. See section 4, chapter 595, Oregon Laws 2021. The text that is operative on and after the approval is set forth for the users convenience. Except as provided in ORS 743.029 or as specifically provided by law, the Insurance Code does not apply to any of the following to the extent of the subject matter of the exemption: (1) A bail bondsman, other than a corporate surety and its agents. (2) A fraternal benefit society that has maintained lodges in this state and other states for 50 years prior to January 1, 1961, and for which a certificate of authority was not required on that date. (3) A religious organization providing insurance benefits only to its employees, if the organization is in existence and exempt from taxation under section 501(c)(3) of the federal Internal Revenue Code on September 13, 1975. (4) Public bodies, as defined in ORS 30.260, that either individually or jointly establish a self-insurance program for tort liability in accordance with ORS 30.282. (5) Public bodies, as defined in ORS 30.260, that either individually or jointly establish a self-insurance program for property damage in accordance with ORS 30.282. (6) Cities, counties, school districts, community college districts, community college service districts or districts, as defined in ORS 198.010 and 198.180, that either individually or jointly insure for health insurance coverage, excluding disability insurance, their employees or retired employees, or their dependents, or students engaged in school activities, or combination of employees and dependents, with or without employee or student contributions, if all of the following conditions are met: (a) The individual or jointly self-insured program meets the following minimum requirements: (A) In the case of a school district, community college district or community college service district, the number of covered employees and dependents and retired employees and dependents aggregates at least 500 individuals; (B) In the case of an individual public body program other than a school district, community college district or community college service district, the number of covered employees and dependents and retired employees and dependents aggregates at least 500 individuals; and (C) In the case of a joint program of two or more public bodies, the number of covered employees and dependents and retired employees and dependents aggregates at least 1,000 individuals; (b) The individual or jointly self-insured health insurance program includes all coverages and benefits required of group health insurance policies under ORS chapters 743, 743A and 743B; (c) The individual or jointly self-insured program must have program documents that define program benefits and administration; (d) Enrollees must be provided copies of summary plan descriptions including: (A) Written general information about services provided, access to services, charges and scheduling applicable to each enrollees coverage; (B) The programs grievance and appeal process; and (C) Other group health plan enrollee rights, disclosure or written procedure requirements established under ORS chapters 743, 743A and 743B; (e) The financial administration of an individual or jointly self-insured program must include the following requirements: (A) Program contributions and reserves must be held in separate accounts and used for the exclusive benefit of the program; (B) The program must maintain adequate reserves. Reserves may be invested in accordance with the provisions of ORS chapter 293. Reserve adequacy must be calculated annually with proper actuarial calculations including the following: (i) Known claims, paid and outstanding; (ii) A history of incurred but not reported claims; (iii) Claims handling expenses; (iv) Unearned contributions; and (v) A claims trend factor; and (C) The program must maintain adequate reinsurance against the risk of economic loss in accordance with the provisions of ORS 742.065 unless the program has received written approval for an alternative arrangement for protection against economic loss from the Director of the Department of Consumer and Business Services; (f) The individual or jointly self-insured program must have sufficient personnel to service the employee benefit program or must contract with a third party administrator licensed under ORS chapter 744 as a third party administrator to provide such services; (g) The public body, or the program administrator in the case of a joint insurance program of two or more public bodies, files with the Director of the Department of Consumer and Business Services copies of all documents creating and governing the program, all forms used to communicate the coverage to enrollees, the schedule of payments established to support the program and, annually, a financial report showing the total incurred cost of the program for the preceding year. A copy of the annual audit required by ORS 297.425 may be used to satisfy the financial report filing requirement; and (h) Each public body in a joint insurance program is liable only to its own employees and no others for benefits under the program in the event, and to the extent, that no further funds, including funds from insurance policies obtained by the pool, are available in the joint insurance pool. (7) All ambulance services. (8) A person providing any of the services described in this subsection. The exemption under this subsection does not apply to an authorized insurer providing such services under an insurance policy. This subsection applies to the following services: (a) Towing service. (b) Emergency road service, which means adjustment, repair or replacement of the equipment, tires or mechanical parts of a motor vehicle in order to permit the motor vehicle to be operated under its own power. (c) Transportation and arrangements for the transportation of human remains, including all necessary and appropriate preparations for and actual transportation provided to return a decedents remains from the decedents place of death to a location designated by a person with valid legal authority under ORS 97.130. (9)(a) A person described in this subsection who, in an agreement to lease or to finance the purchase of a motor vehicle, agrees to waive for no additional charge the amount specified in paragraph (b) of this subsection upon total loss of the motor vehicle because of physical damage, theft or other occurrence, as specified in the agreement. The exemption established in this subsection applies to the following persons: (A) The seller of the motor vehicle, if the sale is made pursuant to a motor vehicle retail installment contract. (B) The lessor of the motor vehicle. (C) The lender who finances the purchase of the motor vehicle. (D) The assignee of a person described in this paragraph. (b) The amount waived pursuant to the agreement shall be the difference, or portion thereof, between the amount received by the seller, lessor, lender or assignee, as applicable, that represents the actual cash value of the motor vehicle at the date of loss, and the amount owed under the agreement. (10) A self-insurance program for tort liability or property damage that is established by two or more affordable housing entities and that complies with the same requirements that public bodies must meet under ORS 30.282 (6). As used in this subsection: (a) "Affordable housing" means housing projects in which some of the dwelling units may be purchased or rented, with or without government assistance, on a basis that is affordable to individuals of low income. (b) "Affordable housing entity" means any of the following: (A) A housing authority created under the laws of this state or another jurisdiction and any agency or instrumentality of a housing authority, including but not limited to a legal entity created to conduct a self-insurance program for housing authorities that complies with ORS 30.282 (6). (B) A nonprofit corporation that is engaged in providing affordable housing. (C) A partnership or limited liability company that is engaged in providing affordable housing and that is affiliated with a housing authority described in subparagraph (A) of this paragraph or a nonprofit corporation described in subparagraph (B) of this paragraph if the housing authority or nonprofit corporation: (i) Has, or has the right to acquire, a financial or ownership interest in the partnership or limited liability company; (ii) Has the power to direct the management or policies of the partnership or limited liability company; (iii) Has entered into a contract to lease, manage or operate the affordable housing owned by the partnership or limited liability company; or (iv) Has any other material relationship with the partnership or limited liability company. (11) Except as provided in ORS 735.500 and 735.510, a person certified by the Department of Consumer and Business Services to operate a retainer medical practice. (12) A fund established by the Board of Governors of the Oregon State Bar under ORS 9.080. (13) An association or group of eligible employers, as defined in ORS 735.520, that administers a self-insured program to provide health insurance coverage, excluding disability insurance, to their employees or retired employees or their dependents or a combination of employees and dependents, with or without employee contributions, if all of the following conditions are met: (a) The number of covered employees and dependents and retired employees and dependents aggregates at least 500 individuals; (b) The program includes all coverages and benefits required of group health insurance policies under ORS chapters 743, 743A and 743B; (c) The program has program documents that define program benefits and administration; (d) Enrollees of the program are provided copies of summary plan descriptions including: (A) Written general information about services provided, access to services, charges and scheduling applicable to each enrollees coverage; (B) The programs grievance and appeal process; and (C) Other group health plan enrollee rights, disclosure or written procedure requirements established under ORS chapters 743, 743A and 743B; (e) Program contributions and reserves are held in separate accounts and used for the exclusive benefit of the program; (f) The program maintains adequate reserves, which may be invested in accordance with the provisions of ORS chapter 293, calculated annually with proper actuarial calculations including the following: (A) Known claims, paid and outstanding; (B) A history of incurred but not reported claims; (C) Claims handling expenses; (D) Unearned contributions; and (E) A claims trend factor; (g) The program maintains adequate reinsurance against the risk of economic loss in accordance with the provisions of ORS 742.065 unless the program has received written approval for an alternative arrangement for protection against economic loss from the Director of the Department of Consumer and Business Services; (h) The program has sufficient personnel to service the program or contracts with a third party administrator licensed under ORS chapter 744 as a third party administrator to provide such services; and (i) The program files with the director copies of all documents creating and governing the program, all forms used to communicate the coverage to enrollees, the schedule of payments established to support the program and, annually, a financial report showing the total incurred cost of the program for the preceding year.
(1) As used in this section: (a) "Charitable gift annuity" has the meaning given that term in section 501(m)(5) of the Internal Revenue Code, as amended and in effect on January 1, 2006. (b) "Charitable organization" means an organization to which contributions may be made that are charitable contributions under section 170(c) of the Internal Revenue Code, as amended and in effect on January 1, 2006. (2) The Insurance Code does not apply to a charitable organization that issues charitable gift annuities if, on the date that the charitable organization issues the charitable gift annuity, the charitable organization: (a) Has a minimum of $300,000 in net assets as shown by an annual audited financial statement prepared by an independent certified public accountant and kept on file by the charitable organization; (b) Except as provided in subsection (3) of this section, has been in continuous operation for at least five years or is a successor to or an affiliate of a charitable organization that has been in continuous operation for at least five years; and (c) Maintains a separate and distinct trust fund as a reserve fund adequate to meet the future payments under all outstanding annuity agreements. The amount in the reserve fund must be an amount no less than an amount computed on the basis of the transfers to which it relates in accordance with the standard of valuation based on current mortality tables and interest rate recommended by a national organization organized for the purpose of providing educational and other services to American charities regarding gift annuities and other forms of planned gifts. The reserve fund may include one or more single premium annuities that pay the entire amount of one or more charitable gift annuities issued by the charitable organization if each single premium annuity is issued by an authorized insurer that is also authorized to transact insurance in the state in which the charitable organization has its principal office and in the state in which the single premium annuity is issued. (3) The Insurance Code does not apply to an educational institution or nonprofit corporation that issued a charitable gift annuity before January 1, 2006, under a certificate of authority issued under ORS 731.704 (repealed in 2005). (4) When a charitable organization that is subject to subsection (2) of this section enters into an agreement for a charitable gift annuity, the charitable organization shall disclose in writing to the donor that the charitable gift annuity is not issued by an insurance company, is not subject to regulation by the State of Oregon and is not protected by an insurance guaranty association. (5) A charitable organization that is not subject to subsection (2) of this section must hold a certificate of authority to issue charitable gift annuities. [2005 c.31 2] Note: 731.038 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
ORS 731.038 (2)(a) and (b) does not apply to an educational institution or nonprofit corporation that holds a certificate of authority issued under ORS 731.704 (repealed in 2005) on the day before January 1, 2006. An educational institution or nonprofit corporation subject to this section shall keep on file an annual audited financial statement prepared by an independent certified public accountant. [2005 c.31 3] Note: 731.039 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 731 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) An exempt insurer who holds a certificate of exemption issued by the Director of the Department of Consumer and Business Services before January 1, 2003, may continue transacting insurance. (2) In order to continue a certificate of exemption, an exempt insurer to whom subsection (1) of this section applies must file its annual statement and pay the fees established by the director by March 1 of each year. (3) An exempt insurer shall be subject to ORS 731.296 to 731.316, 731.414, 731.418, 731.574, 731.988, 731.992, 733.010 to 733.115, 733.140 to 733.210, 743A.040, 746.075 and 746.110. [Formerly 736.020; 1979 c.870 1; 1981 c.752 15; 1989 c.413 2; 2003 c.802 174; 2005 c.22 485]
Any policy, other than a variable annuity policy, whose form has been filed with and approved by the Director of the Department of Consumer and Business Services is exempt from the application of ORS 59.005 to 59.505, 59.710 to 59.830, 59.991 and 59.995, and the marketing of such policy is likewise exempt. [1967 c.359 10; 2007 c.393 2]
Except where the context otherwise requires, the definitions given in the Insurance Code govern its construction. [1967 c.359 11]
"Action" means any action, suit or legal proceeding. [1967 c.359 12]
[1967 c.359 13; 1991 c.810 1; 2001 c.191 20; 2003 c.364 1; renumbered 731.104 in 2003]
(1) An "authorized" insurer is one authorized by a subsisting certificate of authority to transact insurance in this state. (2) An "unauthorized" insurer is one not so authorized. [1967 c.359 14]
(1) "Certificate" means a written statement evidencing the coverage of a person insured under a group insurance policy. (2) "Certificate holder" means an employee or member of a group insured under a group insurance policy. [1981 c.752 11]
(1) A "certificate of authority" is one issued by the Director of the Department of Consumer and Business Services pursuant to the Insurance Code evidencing the authority of an insurer to transact insurance in this state. (2) A "license" is authority granted by the director pursuant to the Insurance Code for the licensee to engage in a business or operation of insurance in this state other than as an insurer, and the certificate by which such authority is evidenced. [1967 c.359 15]
(1) "Commercial liability insurance" means insurance for a business, professional, nonprofit or governmental entity against legal, contractual or assumed liability for death, injury or disability of any human, or for damage to property, arising out of acts or omissions in the course of the conduct of the entity. (2) "Commercial liability insurance" does not include the following lines of insurance or classes of business: (a) Marine and transportation insurance; (b) Wet marine and transportation insurance; (c) FAIR plans and automobile assigned risk insurance; (d) Workers compensation and employers liability insurance; (e) Nuclear liability insurance; (f) Fidelity and surety insurance; (g) Hazardous waste and environmental impairment insurance; (h) Aviation insurance; or (i) Commercial automobile insurance. (3) As used in this section, "commercial automobile" means a four wheel passenger or station wagon type of vehicle used as a public or private conveyance, including a motor vehicle of the utility, pickup, sedan delivery or panel truck type used for wholesale or retail delivery, and a farm truck. [1987 c.774 32] Note: 731.074 was added to and made a part of the Insurance Code but was not added to ORS chapter 731 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
"Covered life" means a subscriber, policyholder, certificate holder, spouse, dependent child or any other individual insured under an insurance policy or whose benefits are administered by a third party administrator licensed under ORS 744.702. [2009 c.595 1194] Note: 731.075 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) "Department" means the Department of Consumer and Business Services. (2) "Director" means the Director of the Department of Consumer and Business Services. [1967 c.359 16; 1987 c.373 76; 1993 c.744 28]
(1) "Domestic insurer" means an insurer formed under the laws of this state. (2) "Foreign insurer" means an insurer formed under the laws of a state other than this state. (3) "Alien insurer" means an insurer formed under the laws of any country other than the United States of America or a state thereof. [1967 c.359 17]
"Domestic risk" means a subject of insurance resident, located or to be performed in this state. [1967 c.359 18]
The "domicile" of an insurer means: (1) As to insurers formed under the laws of Canada or any province thereof, the province in which the insurers head office is located. (2) As to other alien insurers, as provided in ORS 731.096. (3) As to all other insurers, the state under the laws of which the insurer was formed or, if the insurer has been redomesticated to another state, the state to which it has been redomesticated. [1967 c.359 19; 1995 c.639 13]
(1) The domicile of an alien insurer, other than insurers formed under the laws of Canada or a province thereof, shall be that state designated by the insurer in writing filed with the Director of the Department of Consumer and Business Services at time of admission to this state or before January 1, 1962, whichever date is the later, and may be any one of the following states: (a) The state in which the insurer was first authorized to transact insurance; (b) The state in which is located the insurers principal place of business in the United States; or (c) The state in which is held the largest deposit of assets of the insurer in trust for the protection of its policyholders and creditors in the United States. (2) If the insurer makes no such designation its domicile shall be deemed to be that state in which is located its principal place of business in the United States. [Formerly 736.240]
"Essential health benefits" are the items and services prescribed by the Department of Consumer and Business Services by rule in accordance with federal law, including: (1) Ambulatory patient services. (2) Emergency services. (3) Hospitalization. (4) Maternity and newborn care. (5) Mental health and substance use disorder services, including behavioral health treatment. (6) Prescription drugs. (7) Rehabilitative and habilitative services and devices. (8) Laboratory services. (9) Preventive and wellness services and chronic disease management. (10) Pediatric services, including oral and vision care. [2013 c.681 2] Note: 731.097 and 731.098 were added to and made a part of 731.004 to 731.150 by legislative action but were not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
"Group health insurance" means that form of health insurance covering groups of persons described in this section, with or without one or more members of their families or one or more of their dependents, or covering one or more members of the families or one or more dependents of such groups of persons, and issued upon one of the following bases: (1) Under a policy issued to an employer or trustees of a fund established by an employer, who shall be deemed the policyholder, insuring employees of such employer for the benefit of persons other than the employer. As used in this subsection, "employees" includes: (a) The officers, managers and employees of the employer; (b) The individual proprietor or partners if the employer is an individual proprietor or partnership; (c) The officers, managers and employees of subsidiary or affiliated corporations; (d) The individual proprietors, partners and employees of individuals and firms, if the business of the employer and such individual or firm is under common control through stock ownership, contract or otherwise; (e) The trustees or their employees, or both, if their duties are principally connected with such trusteeship; (f) The leased workers of a client employer; and (g) Elected or appointed officials if a policy issued to insure employees of a public body provides that the term "employees" includes elected or appointed officials. (2) Under a policy issued to an association, including a labor union, that has an active existence for at least one year, that has a constitution and bylaws and that has been organized and is maintained in good faith primarily for purposes other than that of obtaining insurance, which shall be deemed the policyholder, insuring members, employees or employees of members of the association for the benefit of persons other than the association or its officers or trustees. (3) Under a policy issued to the trustees of a fund established by two or more employers in the same or related industry or by one or more labor unions or by one or more employers and one or more labor unions or by an association as described in subsection (2) of this section, insuring employees of the employers or members of the unions or of such association, or employees of members of such association for the benefit of persons other than the employers or the unions or such association. As used in this subsection, "employees" may include the officers, managers and employees of the employer, and the individual proprietor or partners if the employer is an individual proprietor or partnership. The policy may provide that the term "employees" includes the trustees or their employees, or both, if their duties are principally connected with such trusteeship. (4) Under a policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state, to insure any class or classes of individuals that could be insured under such group life policy. [2013 c.681 7] Note: See note under 731.097.
"Independently procured insurance" means insurance procured directly by an insured from a nonadmitted insurer as defined in ORS 735.405. [2011 c.660 2] Note: 731.099 was added to and made a part of ORS chapter 731 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) "Insurance" means a contract whereby one undertakes to indemnify another or pay or allow a specified or ascertainable amount or benefit upon determinable risk contingencies. (2) "Insurance" so defined includes annuities. (3) "Insurance" so defined includes a contract under which one other than a manufacturer, builder, seller or lessor of the subject property undertakes to perform or provide, for a fixed term and consideration, repair or replacement service or indemnification therefor for the operational or structural failure of specified real or personal property or property components. Insurance does not include contracts with a telecommunications utility as defined in ORS 759.005, for repair, replacement or maintenance of customer-owned inside wiring. (4) "Insurance" so defined does not include a contract under which an owner rents or leases an animal to a person or to a public body, as defined in ORS 174.109, if the owner retains an obligation to provide for veterinary care or other needs of the animal. [1967 c.359 21; 1981 c.247 1; 1985 c.633 5; 1987 c.447 111; 2017 c.677 5]
"Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance. For purposes of this definition: (1) "Negotiate" means to confer directly with or to offer advice directly to a purchaser or prospective purchaser of a particular policy of insurance concerning any of the substantive benefits, terms or conditions of the policy, if the person engaged in that act: (a) Sells insurance; or (b) Obtains insurance from insurers for purchasers. (2) "Sell" means to exchange a policy of insurance by any means, for money or its equivalent, on behalf of an insurer. (3) "Solicit" means to attempt to sell a policy of insurance or to ask or urge a person to apply for a particular kind of insurance from a particular insurer. [Formerly 731.062]
"Insurer" includes every person engaged in the business of entering into policies of insurance. [1967 c.359 22]
"Judgment" includes a final order. [1967 c.359 23; 2003 c.576 553]
"Limited benefit coverage" means: (1) Health insurance that provides: (a) Coverage for accident only, specific disease or condition only, credit or disability income; (b) Dental only coverage; or (c) Vision only coverage; and (2) Independent, noncoordinated, hospital-only indemnity insurance or other fixed indemnity insurance. [2016 c.11 2] Note: 731.114 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
"Person" means an individual or a business entity. For the purpose of this definition, "business entity" means a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity. [1967 c.359 24; 1983 c.327 12; 2001 c.191 21]
"Policy" means the written contract or written agreement for or effecting insurance, by whatever name called, and includes all clauses, riders, indorsements and papers which are a part thereof and annuities. [1967 c.359 25]
"Reinsurance" means a contract under which an originating insurer, called the "ceding" insurer, procures insurance for itself in another insurer, called the "assuming" insurer or the "reinsurer," with respect to part or all of an insurance risk of the originating insurer. [1967 c.359 26]
"Required capitalization" means the minimum combined paid-up capital and surplus required by the Insurance Code of a stock insurer, or the minimum surplus so required of an insurer without capital stock. [1967 c.359 27]
When used in context signifying a jurisdiction other than the State of Oregon, "state" means any state, district, territory, commonwealth or possession of the United States of America. [1967 c.359 28; 2001 c.191 22]
(1) "Stock insurer" means an incorporated insurer whose capital is divided into shares and owned by its stockholders. (2) "Mutual insurer" means an incorporated insurer without capital stock and the governing body of which is elected by its policyholders. This definition does not exclude as a "mutual insurer" a foreign insurer found by the Director of the Department of Consumer and Business Services to be organized on the mutual plan under the laws of its domicile, but having temporary share capital or providing for election of the insurers governing body on a reasonable basis by policyholders and others. (3) "Reciprocal insurer" means an unincorporated aggregation of persons known as "subscribers," operating individually and collectively through an attorney in fact common to all such persons, interexchanging among themselves reciprocal agreements of indemnity. [1967 c.359 29]
"Surplus lines insurance" means any insurance on an Oregon home state risk, permitted to be placed through a surplus lines licensee with a nonadmitted insurer eligible to accept such insurance, other than reinsurance, wet marine and transportation insurance, independently procured insurance, life insurance and health insurance and annuities. For purposes of this section, "home state" has the meaning given that term in ORS 735.405. [1987 c.774 113; 1991 c.810 24; 2011 c.660 20] Note: 731.144 was added to and made a part of ORS chapter 731 but was not added to any smaller series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) "Transact insurance" means one or more of the following acts effected by mail or otherwise: (a) Making or proposing to make an insurance contract. (b) Taking or receiving any application for insurance. (c) Receiving or collecting any premium, commission, membership fee, assessment, due or other consideration for any insurance or any part thereof. (d) Issuing or delivering policies of insurance. (e) Directly or indirectly acting as an insurance producer for, or otherwise representing or aiding on behalf of another, any person in the solicitation, negotiation, procurement or effectuation of insurance or renewals thereof, the dissemination of information as to coverage or rates, the forwarding of applications, the delivering of policies, the inspection of risks, the fixing of rates, the investigation or adjustment of claims or losses, the transaction of matters subsequent to effectuation of the policy and arising out of it, or in any other manner representing or assisting a person with respect to insurance. (f) Advertising locally or circularizing therein without regard for the source of such circularization, whenever such advertising or circularization is for the purpose of solicitation of insurance business. (g) Doing any other kind of business specifically recognized as constituting the doing of an insurance business within the meaning of the Insurance Code. (h) Offering a multistate qualified health plan to individuals or small employers through the program administered by the United States Office of Personnel Management pursuant to 42 U.S.C. 18054. (i) Doing or proposing to do any insurance business in substance equivalent to any of paragraphs (a) to (h) of this subsection in a manner designed to evade the provisions of the Insurance Code. (2) Subsection (1) of this section does not include, apply to or affect the following: (a) Making investments within a state by an insurer not admitted or authorized to do business within such state. (b) Except as provided in ORS 743.015, doing or proposing to do any insurance business arising out of a policy of group life insurance or a policy of blanket health insurance, if the master policy was validly issued to cover a group organized primarily for purposes other than the procurement of insurance and was delivered in and pursuant to the laws of another state in which: (A) The insurer was authorized to do an insurance business; (B) The policyholder is domiciled or otherwise has a bona fide situs; and (C) With respect to a policy of blanket health insurance, the policy was approved by the director of such state. (c) Except as provided in ORS 743.015, doing or proposing to do any insurance business arising out of a policy of group health insurance, if the master policy was validly issued to cover an employer group other than an association, trust or multiple employer welfare arrangement and was delivered in and pursuant to the laws of another state in which: (A) The insurer was authorized to do an insurance business; and (B) The policyholder is domiciled or otherwise has a bona fide situs. (d) Investigating, settling, or litigating claims under policies lawfully written within a state, or liquidating assets and liabilities, all resulting from the insurers former authorized operations within such state. (e) Transactions within a state under a policy subsequent to its issuance if the policy was lawfully solicited, written and delivered outside the state and did not cover a subject of insurance resident, located or to be performed in the state when issued. (f) The continuation and servicing of life or health insurance policies remaining in force on residents of a state if the insurer has withdrawn from such state and is not transacting new insurance therein. (3) If mail is used, an act shall be deemed to take place at the point where the matter transmitted by mail is delivered and takes effect. [1967 c.359 30; 1971 c.231 10; 1989 c.784 4; 2003 c.364 64; 2007 c.752 1,6; 2013 c.681 9; 2015 c.515 4; 2019 c.285 3]
It is intended that certain insurance coverages may come within the definitions of two or more classes of insurance as defined in the Insurance Code, and the inclusion of such coverage within one definition shall not exclude it as to any other class of insurance within the definition of which such coverage is likewise reasonably includable. [1967 c.359 32]
(1) "Annuity" or "annuity policy" means any agreement to make periodic payments, whether fixed or variable in amount, where the making of all or some of such payments, or the amount of any such payment, is dependent upon the continuance of human life, except payments made pursuant to the settlement provisions of a life insurance policy, and includes additional benefits operating to safeguard the policy from lapse or to provide a special surrender value or special benefit or annuity in the event of total and permanent disability of the annuitant. (2) "Annuity" does not include a charitable remainder annuity trust or a charitable remainder unitrust as defined in section 664(d) of the Internal Revenue Code. [1967 c.359 33; 1993 c.377 1]
"Variable life insurance" and "variable annuity" mean those forms of life insurance or annuity benefits, respectively, which vary according to the investment experience of a separate account or accounts maintained by the insurer with respect to policies providing such benefits. For convenience, reference to "variable life insurance" in the Insurance Code includes variable life insurance and variable annuities as defined in this section, except if the inclusion of variable annuities obviously is inapplicable or if the context requires, or the Insurance Code provides, otherwise. [1973 c.435 2]
"Casualty insurance" means: (1) Insurance against legal, contractual or assumed liability for death, injury or disability of any human, or for damage to property; and provision for medical, hospital, surgical and disability benefits to injured persons including insurance against the risk of economic loss assumed under a less than fully insured employee health benefit plan and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as coverage for personal injury protection benefits under a motor vehicle liability policy or as an incidental coverage with or supplemental to liability insurance; (2) Motor vehicle physical damage, burglary and theft, glass, boiler and machinery, credit and livestock insurance; (3) Insurance of the obligations accepted by, imposed upon or assumed by employers under law for death, disablement or occupational diseases of employees; (4) Insurance which undertakes to perform or provide repair or replacement service or indemnification therefor for the operational or structural failure of specified real or personal property or property components; and (5) Insurance against any other kind of loss, damage or liability properly a subject of insurance and not within any other class of insurance otherwise defined, if such insurance is not disapproved by the Director of the Department of Consumer and Business Services as being contrary to law or public policy. [1967 c.359 34; 1981 c.247 2; 1993 c.649 5; 2007 c.241 22]
"Health insurance" means insurance of humans against bodily injury, disablement or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness or childbirth, or against expense incurred in prevention of sickness, in dental care or optometrical service, and every insurance appertaining thereto, including insurance against the risk of economic loss assumed under a less than fully insured employee health benefit plan. "Health insurance" does not include workers compensation coverages. [1967 c.359 35; 1993 c.649 6]
(1)(a) "Home protection insurance" means that part of casualty insurance that includes only insurance which undertakes to perform or provide repair or replacement service or indemnification therefor for the operational or structural failure of the insured home, components of the home or personal property relating to the home or its components, and does not include protection against consequential damage from the operational or structural failure. (b)(A) "Home protection insurance" does not include a home service agreement. (B) As used in this paragraph, "home service agreement" means a contract or agreement for a specific limited duration to: (i) Service, repair or replace in an existing home the mechanical or appliance system or the components that break down due to normal wear and tear or inherent defects; or (ii) Provide incidental service, repair or replacement to cover leaks and failures in roofing systems. (c) As used in this subsection, "home" means a single living unit or multiple living units, including manufactured dwellings, used primarily as residences. (2) "Home protection insurer" means an insurer under policies of home protection insurance, other than an insurer transacting other forms of casualty insurance or any form of reinsurance. [1981 c.247 4; 2003 c.283 1]
"Industrial life insurance" means that form of life insurance written under policies of face amount of $2,500 or less, under which premiums are payable monthly or more often and the policy specifies it is an industrial life insurance policy. [1967 c.359 36]
(1) "Life insurance" means insurance on human lives and every insurance appertaining thereto and includes the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insureds or premium payers disability and optional modes of settlement of proceeds of life insurance including annuity benefits payable under such a settlement provision. "Life insurance" does not include workers compensation coverages. (2) For convenience, reference to "life insurance" in the Insurance Code includes life insurance as defined in subsection (1) of this section and annuities as defined in ORS 731.154, except if the inclusion of annuities obviously is inapplicable or if the context requires, or the Insurance Code provides, otherwise. [1967 c.359 37]
"Marine and transportation insurance" includes: (1) Insurance against any and all kinds of loss of or damage to: (a) Vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builders risks, and all personal property floater risks including bailees customers risks; (b) Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance or use of automobiles); (c) Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same is in course of transportation or otherwise; and (d) Bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and civil commotion, or any of them, are the only hazards to be covered; piers, wharves, docks, and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and civil commotion or any of them; other aids to navigation and transportation, including dry docks and marine railways, against all risks. (2) Marine protection and indemnity insurance meaning insurance against, or against legal liability of the insured for, loss, damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person. [Formerly 745.005]
"Mortgage insurance" means insurance against financial loss by reason of: (1) Nonpayment of principal, interest and other sums agreed to be paid under the terms of an obligation secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real or personal property; or (2) Nonpayment of rent and other sums agreed to be paid under the terms of a written lease for the possession, use or occupancy of real property, such insurance also being referred to in the Insurance Code as "lease insurance." [1967 c.359 39; 1969 c.692 1]
"Property insurance" means insurance on real or personal property of every kind and of every interest therein, whether on land, water or in the air, against loss or damage from any and all hazard or cause, and against consequential loss from such loss or damage, other than noncontractual legal liability for loss or damage. "Property insurance" does not include title insurance. [1967 c.359 40]
"Surety insurance" means insurance guaranteeing the fidelity of persons holding places of trust, the performance of duties, contracts, bonds and undertakings, including the signing thereof as surety, and insuring the performance of obligations of employers under workers compensation laws by surety bond. [1967 c.359 41]
"Title insurance" means insurance of owners of property or others having an interest therein or liens or encumbrances thereon, against loss by encumbrance, defective titles, invalidity or adverse claim to title. [1967 c.359 42]
"Wet marine and transportation insurance" is that part of marine and transportation insurance that includes only: (1) Insurance upon vessels, crafts, hulls and of interests therein or with relation thereto; (2) Insurance of marine builders risks, marine war risks and contracts referred to in ORS 731.174 (2) or any replacement thereof; (3) Insurance of freights and disbursements pertaining to a subject of insurance coming within this section; (4) Insurance of personal property and interests therein, in course of exportation from or importation into any country, and in course of transportation coastwise or on inland waters, including transportation by land, water, or air from point of origin to final destination, in respect to, appertaining to or in connection with, any and all risks or perils of navigation, transit or transportation, and while being prepared for and while awaiting shipment, and during any delays, storage, transshipment or reshipment incident thereto; (5) Insurance on operations of railroads engaged in transportation in interstate commerce and their property used in such operations; and (6) Insurance of aircraft operated in scheduled interstate flight, or cargo of such aircraft, or against this liability other than workers compensation and employers liability arising out of the ownership, maintenance or use of such aircraft. [1967 c.359 43; 1987 c.774 114]
The Director of the Department of Consumer and Business Services shall have the power to: (1) Contract for and procure, on a fee or part-time basis, or both, such actuarial, technical or other professional services as may be required for the discharge of duties. (2) Obtain such other services as the director considers necessary or desirable, including participation in organizations of state insurance supervisory officials and appointment of advisory committees. A member of an advisory committee so appointed shall receive no compensation for services as a member, but, subject to any other applicable law regulating travel and other expenses of state officers, shall receive actual and necessary travel and other expenses incurred in the performance of official duties. (3) Establish within the Department of Consumer and Business Services a workers compensation rating bureau to provide rating information that is based upon and relevant to activities conducted in this state, to enable the director to carry out the provisions of ORS chapter 737. In lieu of creating a rating bureau within the department, the director may contract with any rating organization in other states if the director finds that such a contract would provide the information required by this section. [Formerly 736.503; 1987 c.373 77; 1987 c.884 50; 2003 c.14 445]
(1) No officer or employee of the Department of Consumer and Business Services delegated responsibilities in the enforcement of the Insurance Code shall: (a) Be a director, officer, or employee of or be financially interested in any person regulated by the department or office of the department that is delegated responsibility in the enforcement of the Insurance Code, except as a policyholder or claimant under an insurance policy or by reason of rights vested in commissions, fees, or retirement benefits related to services performed prior to affiliation with the department; or (b) Be engaged in any other business or occupation interfering with or inconsistent with the duties of the office or employment. (2) No person shall directly or indirectly give or pay, or offer to give or pay, to the Director of the Department of Consumer and Business Services, or any officer or employee of the department, and the director or such officer or employee shall not directly or indirectly solicit, receive or accept any fee, compensation, loan, gift or other thing of value in addition to the compensation and expense allowance provided by law, for: (a) Any service rendered or to be rendered as such director, officer or employee, or in connection therewith; (b) Services rendered or to be rendered in relation to legislation; (c) Extra services rendered or to be rendered; or (d) Any cause whatsoever related to any person regulated by the department or office of the department that is delegated responsibility in the enforcement of the Insurance Code. (3) This section does not permit any conduct, affiliation or interest that is otherwise prohibited by public policy. [1967 c.359 50; 1987 c.373 78]
(1) For the purpose of an investigation or proceeding under the Insurance Code, the Director of the Department of Consumer and Business Services may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of books, papers, correspondence, memoranda, agreements or other documents or records which the director considers relevant or material to the inquiry. Each witness who appears before the director under a subpoena shall receive the fees and mileage provided for witnesses in ORS 44.415 (2). (2) If a person fails to comply with a subpoena so issued or a party or witness refuses to testify on any matters, the judge of the circuit court for any county, on the application of the director, shall compel obedience by proceedings for contempt as in the case of disobedience of the requirements of a subpoena issued from such court or a refusal to testify therein. [1967 c.359 51; 1989 c.980 22]
(1) The Director of the Department of Consumer and Business Services shall enforce the provisions of the Insurance Code for the public good, and shall execute the duties imposed by the code. (2) The director has the powers and authority expressly conferred by or reasonably implied from the provisions of the Insurance Code. (3) The director may conduct such examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized, as the director considers proper to determine whether any person has violated any provision of the Insurance Code or to secure information useful in the lawful administration of any such provision. The cost of such additional examinations and investigations shall be borne by the state. (4) The director has such additional powers and duties as may be provided by other laws of this state. [1967 c.359 52]
(1) The Director of the Department of Consumer and Business Services shall hold a hearing upon written demand for a hearing by a person aggrieved by any act, threatened act or failure of the director to act. The demand must state the grounds therefor. (2) To the extent applicable and not inconsistent with subsection (1) of this section, the provisions of ORS chapter 183 shall govern the hearing procedure and any judicial review thereof. [1967 c.359 53; 1991 c.401 1]
In accordance with the applicable provisions of ORS chapter 183, the Director of the Department of Consumer and Business Services may make reasonable rules necessary for or as an aid to the effectuation of the Insurance Code. No such rule shall extend, modify or conflict with the Insurance Code or the reasonable implications thereof. [1967 c.359 54]
(1) Orders of the Director of the Department of Consumer and Business Services shall be effective only when in writing and signed by the director or by the authority of the director. Orders shall be filed in the Department of Consumer and Business Services. (2) Every such order shall state: (a) Its effective date; (b) Its intent or purpose; (c) The grounds on which based; and (d) The provisions of the Insurance Code pursuant to which action is taken or proposed to be taken. (3) Except as may be provided in the Insurance Code respecting particular procedures, an order or notice may be given by delivery to the person to be ordered or notified or by mailing it by certified or registered mail, return receipt requested, postage prepaid, addressed to the person at the residence or principal place of business of the person as last of record in the department. Notice so mailed shall be deemed to have been given when deposited in a letter depository of a United States post office. [1967 c.359 55]
(1) Whenever the Director of the Department of Consumer and Business Services has reason to believe that any person has been engaged or is engaging or is about to engage in any violation of the Insurance Code, the director may issue an order, directed to such person, to discontinue or desist from such violation or threatened violation. The copy of the order forwarded to the person involved shall set forth a statement of the specific charges and the fact that the person may request a hearing within 20 days of the date of mailing. Where a hearing is requested, the director shall set a date for the hearing to be held within 30 days after receipt of the request, and shall give the person involved written notice of the hearing date at least seven days prior thereto. The person requesting the hearing must establish to the satisfaction of the director that such order should not be complied with. The order shall become final 20 days after the date of mailing unless within such 20-day period the person to whom it is directed files with the director a written request for a hearing. To the extent applicable and not inconsistent with the foregoing, the provisions of ORS chapter 183 shall govern the hearing procedure and any judicial review thereof. Where the hearing has been requested, the directors order shall become final at such time as the right to further hearing or review has expired or been exhausted. (2) No order of the director under this section or order of a court to enforce the same shall in any way relieve or absolve any person affected by such order from any liability under any other laws of this state. (3) The powers vested in the director pursuant to this section are supplementary and not in lieu of any other powers to suspend or revoke certificates of authority or licenses or to enforce any penalties, fines or forfeitures, authorized by law with respect to any violation for which an order of discontinuance has been issued. [Formerly 736.835]
(1) The Director of the Department of Consumer and Business Services may institute actions or other lawful proceedings that the director deems necessary to enforce a provision of the Insurance Code or any order or action the director makes or takes in pursuance of law. (2) As part of or in addition to any action or proceeding the director institutes against an insurer under subsection (1) of this section, the director may: (a) Seek restitution on a consumers behalf for actual damages the consumer suffers as a result of the insurers violation of a provision of the Insurance Code or applicable federal law or the insurers breach of an insurance contract or policy the insurer has with the consumer; and (b) Seek other equitable relief the director deems appropriate under the circumstances. (3) If the director has reason to believe that a person has violated a provision of the Insurance Code or another law that applies to insurance operations, and if the violation is subject to criminal prosecution and in the opinion of the director criminal prosecution is warranted, the director shall give the information about the violation to the Attorney General or district attorney that has jurisdiction over the violation. The Attorney General or district attorney promptly shall institute an action or a proceeding against the person as the information requires or justifies. (4) An action or proceeding that the director institutes under subsection (1) of this section is an exercise of the directors regulatory authority and, except as otherwise provided in subsection (3) of this section, does not create a cause of action for any other person. [1967 c.359 57; 2013 c.618 1]
(1) The Attorney General upon request of the Director of the Department of Consumer and Business Services may proceed in the courts of this state or any reciprocal state to enforce an order or decision in any court proceeding or in any administrative proceeding before the director. (2) As used in this section: (a) "Reciprocal state" means any state the laws of which contain procedures substantially similar to those specified in this section for the enforcement of decrees or orders in equity issued by courts located in other states, against any insurer incorporated or authorized to do business in such state. (b) "Foreign decree" means any decree or order in equity of a court located in a reciprocal state, including a court of the United States located therein, against any insurer incorporated or authorized to do business in this state. (c) "Qualified party" means a state regulatory agency acting in its capacity to enforce the insurance laws of its state. (3) The Director of the Department of Consumer and Business Services of this state shall determine which states qualify as reciprocal states and shall maintain at all times an up-to-date list of such states. (4) A copy of any foreign decree authenticated in accordance with the statutes of this state may be filed in the office of the clerk of any circuit court of this state. The clerk, upon verifying with the director that the decree or order qualifies as a foreign decree shall treat the foreign decree in the same manner as a judgment of a circuit court of this state. A foreign decree so filed has the same effect and shall be deemed as a judgment of a circuit court of this state, and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a circuit court of this state and may be enforced or satisfied in like manner. (5)(a) At the time of the filing of the foreign decree, the Attorney General shall make and file with the clerk of the court an affidavit setting forth the name and last-known post-office address of the defendant. (b) Promptly upon the filing of the foreign decree and the affidavit, the clerk shall mail notice of the filing of the foreign decree to the defendant at the address given and to the director of this state and shall make a note of the mailing in the register of the court. In addition, the Attorney General may mail a notice of the filing of the foreign decree to the defendant and to the director of this state and may file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk shall not affect the enforcement proceedings if proof of mailing by the Attorney General has been filed. (c) No execution or other process for enforcement of a foreign decree filed under subsection (4) of this section shall issue until 30 days after the date the decree is filed. (6)(a) If the defendant shows the circuit court that an appeal from the foreign decree is pending or will be taken, or that a stay of execution has been granted, the court shall stay enforcement of the foreign decree until the appeal is concluded, the time for appeal expires, or the stay of execution expires or is vacated, upon proof that the defendant has furnished the security for the satisfaction of the decree required by the state in which it was rendered. (b) If the defendant shows the circuit court any ground upon which enforcement of a judgment of any circuit court of this state would be stayed, the court shall stay enforcement of the foreign decree for an appropriate period, upon requiring the same security for satisfaction of the decree which is required in this state for a judgment. [1969 c.336 5; 2003 c.576 219]
(1) The Department of Consumer and Business Services may require an insurer to provide a written notice to an insured to fully effectuate any law the department is responsible for enforcing, including, but not limited to, laws regarding: (a) Enrollment periods. (b) The termination of coverage. (c) The availability of coverage outside of an open enrollment period. (d) The rights of insureds. (2) The department may prescribe by rule the form, manner and contents of any required notices. Any requirements must be designed to minimize the administrative burden on insurers, including by allowing notices to be combined into one notice, as appropriate. [2013 c.681 5] Note: 731.259 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
No person shall file or cause to be filed with the Director of the Department of Consumer and Business Services any article, certificate, report, statement, application or any other information required or permitted to be so filed under the Insurance Code and known to such person to be false or misleading in any material respect. [Formerly 736.650]
(1) A complaint made to the Director of the Department of Consumer and Business Services against any person regulated by the Insurance Code, and the record of the complaint, is confidential and may not be disclosed except as provided in ORS 705.137. The complaint, and the record of the complaint, may not be used in any action, suit or proceeding except to the extent the director considers necessary in prosecuting apparent violations of the Insurance Code or other law. (2) Data gathered pursuant to an investigation by the director of a complaint is confidential, may not be disclosed except as provided in ORS 705.137 and may not be used in any action, suit or proceeding except to the extent the director considers necessary in investigating or prosecuting apparent violations of the Insurance Code or other law. (3) Notwithstanding subsections (1) and (2) of this section, the director shall establish by rule a method for publishing an annual statistical report containing the insurers name and the number, percentage, type and disposition of complaints the Department of Consumer and Business Services receives against each insurer that transacts insurance within this state. [1967 c.359 59; 1971 c.231 11; 1987 c.481 1; 1987 c.774 149; 2001 c.377 4; 2016 c.62 1,2]
(1) Photographs or microphotographs in the form of film or prints of documents and records made by the Director of the Department of Consumer and Business Services for the files of the director shall have the same force and effect as the originals thereof, and duly certified or authenticated reproductions of such photographs or microphotographs shall be as admissible in evidence as are the originals. (2) Upon request of any person and payment of the applicable fee, the director shall furnish a certified copy of any record in the office of the director which is then subject to public inspection. (3) Copies of original records or documents in the office of the director certified by the director shall have the same force and effect and be received in evidence in all courts equally and in like manner as if they were originals. [1967 c.359 60]
(1) The Director of the Department of Consumer and Business Services shall prepare annually, as soon after March 1 as is consistent with full and accurate preparation, a report of the official transactions of the director under the Insurance Code. The report shall include: (a) In condensed form statements made to the director by every insurer authorized to do business in this state. (b) A statement of all insurers authorized to do business in this state as of the date of the report. (c) A list of insurers whose business in this state was terminated and the reason for the termination. If the termination was a result of liquidation or delinquency proceedings brought against the insurer in this or any other state, the report shall include the amount of the insurers assets and liabilities so far as those amounts are known to the director. (d) A statement of the operating expenses of the Department of Consumer and Business Services under the Insurance Code, including salaries, transportation, communication, printing, office supplies, fixed charges and miscellaneous expenses. (e) A detailed statement of the moneys, fees and taxes received by the department under the Insurance Code and from what source. (f) Any other pertinent information and matters as the director considers to be in the public interest. (2) The director shall give notice of the publication of the report to: (a) The office of the Speaker of the House of Representatives; (b) The office of the President of the Senate; and (c) The chair or cochairs of the Joint Committee on Ways and Means if the Legislative Assembly is in session or of the Emergency Board or the Joint Interim Committee on Ways and Means if during the interim. [Formerly 736.520; 1987 c.373 79; 2005 c.185 8; 2012 c.107 18]
The Director of the Department of Consumer and Business Services shall continuously review the Insurance Code and shall work with the Director of the Oregon Health Authority to review the health insurance provisions of the Insurance Code and may, from time to time, make recommendations for changes therein. [1967 c.359 62; 2009 c.595 1117]
The Director of the Department of Consumer and Business Services shall publish: (1) Pamphlet or booklet copies of the insurance laws of this state; (2) The directors annual report; (3) Such copies of results of investigations or examinations of insurers for public distribution as the director considers to be in the public interest; (4) Such compilations as the director considers advisable from time to time of the general orders of the director then in force; and (5) Such other material as the director may compile and consider relevant and suitable for the effective administration of the Insurance Code. [1967 c.359 63]
The Director of the Department of Consumer and Business Services may sell, at a price reasonably calculated to cover the costs of preparation, any of the copies, compilations or materials described in ORS 731.280. [1971 c.231 2; 1982 s.s.1 c.17 3]
Copies of the insurance laws in pamphlet form may be sold by the Director of the Department of Consumer and Business Services at a reasonable price. The director may distribute free of charge one copy of such pamphlet to each of the following: (1) Authorized insurers and licensed rating organizations; (2) Insurance departments of other states; and (3) Public agencies. However, the director may distribute such quantities to public agencies as the director determines. [1967 c.359 64; 2003 c.364 65]
The Department of Consumer and Business Services shall record each complaint the department receives, including the subsequent disposition of the complaint. The record of a complaint shall be maintained for a period of not less than seven years. The records of complaints shall be indexed whenever applicable both by the name of the insurer and by the name of the insurance producer involved. The Director of the Department of Consumer and Business Services shall consider such complaints before issuing or continuing any certificate of authority or license of an insurer or insurance producer named in such complaints. [Formerly 736.580; 2003 c.364 66; 2003 c.802 168]
(1) Except as provided in subsections (2), (3) and (4) of this section, all fees, charges and other moneys received by the Department of Consumer and Business Services or the Director of the Department of Consumer and Business Services under the Insurance Code shall be deposited in the fund created by ORS 705.145 and are continuously appropriated to the department for the payment of the expenses of the department in carrying out the Insurance Code. (2) All taxes and penalties paid pursuant to the Insurance Code shall be paid to the director and after deductions of refunds shall be paid by the director to the State Treasurer, at the end of every calendar month or more often in the directors discretion, for deposit in the General Fund to become available for general governmental expenses. (3) All premium taxes received by the director pursuant to ORS 731.820 shall be paid by the director to the State Treasurer for deposit in the State Fire Marshal Fund. (4) Assessments received by the department under sections 3 and 5, chapter 538, Oregon Laws 2017, and penalties received by the department under section 6, chapter 538, Oregon Laws 2017, shall be paid into the State Treasury and credited to the Health System Fund established under section 2, chapter 538, Oregon Laws 2017. [Formerly 736.525; 1981 c.652 3; 1982 s.s.1 c.17 1; 1987 c.373 80; 1991 c.67 193; 2009 c.867 13; 2011 c.597 296; 2015 c.70 21; 2017 c.538 13]
The Director of the Department of Consumer and Business Services may address any proper inquiries to any insurer, licensee or its officers in relation to its activities or condition or any other matter connected with its transactions. Any such person so addressed shall promptly and truthfully reply to such inquiries using the form of communication requested by the director. The reply shall be verified by an officer of such person, if the director so requires. A reply is subject to the provisions of ORS 731.260. [Formerly 736.542; 1975 c.298 1]
(1) The Director of the Department of Consumer and Business Services shall examine every authorized insurer, including an audit of the financial affairs of such insurer, as often as the director determines an examination to be necessary but at least once each five years. An examination shall be conducted for the purpose of determining the financial condition of the insurer, its ability to fulfill its obligations and its manner of fulfillment, the nature of its operations and its compliance with the Insurance Code. The director may also make such an examination of any surplus lines insurance producer or any person holding the capital stock of an authorized insurer or surplus lines insurance producer for the purpose of controlling the management thereof as a voting trustee or otherwise, or both. (2) Instead of conducting an examination of an authorized foreign or alien insurer, the director may accept an examination report on the insurer that is prepared by the insurance department for the state of domicile or state of entry of the insurer if: (a) At the time of the examination the insurance department of the state was accredited under the Financial Regulation Standards and Accreditation Program or successor program of the National Association of Insurance Commissioners; or (b) The examination was performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by such an accredited insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department. (3) Examination of an alien insurer shall be limited to its insurance transactions, assets, trust deposits and affairs in the United States except as otherwise required by the director. [Formerly 736.545; 1979 c.870 2; 1981 c.874 18; 1990 c.2 46; 1993 c.447 1; 2003 c.364 67]
(1) When the Director of the Department of Consumer and Business Services determines that an examination should be conducted, the director shall appoint one or more examiners to perform the examination and instruct them as to the scope of the examination. In conducting the examination, each examiner shall consider the guidelines and procedures in the examiner handbook, or its successor publication, adopted by the National Association of Insurance Commissioners. The director may prescribe the examiner handbook or its successor publication and employ other guidelines and procedures that the director determines to be appropriate. (2) When making an examination, the director may retain appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as needed. The cost of retaining such professionals and specialists shall be borne by the person that is the subject of the examination. (3) At any time during the course of an examination, the director may take other action pursuant to the Insurance Code. (4) Facts determined and conclusions made pursuant to an examination shall be presumptive evidence of the relevant facts and conclusions in any judicial or administrative action. [1993 c.447 2]
The Director of the Department of Consumer and Business Services, whenever the director deems it advisable in the interest of policyholders or for the public good, shall investigate into the affairs of any person engaged in, proposing to engage in or claiming or advertising to engage in: (1) Transacting insurance in this state; (2) Organizing or receiving subscriptions for or disposing of the stock of or in any manner taking part in the formation or business of an insurer; or (3) Holding capital stock of one or more insurers for the purpose of controlling the management thereof as voting trustee or otherwise. [1967 c.359 69]
(1) Upon an examination or investigation the Director of the Department of Consumer and Business Services may examine under oath all persons who may have material information regarding the property or business of the person being examined or investigated. (2) Every person being examined or investigated shall produce all books, records, accounts, papers, documents and computer and other recordings in its possession or control relating to the matter under examination or investigation, including, in the case of an examination, the property, assets, business and affairs of the person. (3) With regard to an examination, the officers, directors and agents of the person being examined shall provide timely, convenient and free access at all reasonable hours at the offices of the person being examined to all books, records, accounts, papers, documents and computer and other recordings. The officers, directors, employees and agents of the person must facilitate the examination. [Formerly 736.555; 1993 c.447 3]
(1) Not later than the 60th day after completion of an examination, the examiner in charge of the examination shall submit to the Director of the Department of Consumer and Business Services a full and true report of the examination, verified by the oath of the examiner. The report shall comprise only facts appearing upon the books, papers, records, accounts, documents or computer and other recordings of the person, its agents or other persons being examined or facts ascertained from testimony of individuals concerning the affairs of such person, together with such conclusions and recommendations as reasonably may be warranted from such facts. (2) The director shall make a copy of the report submitted under subsection (1) of this section available to the person who is the subject of the examination and shall give the person an opportunity to review and comment on the report. The director may request additional information or meet with the person for the purpose of resolving questions or obtaining additional information, and may direct the examiner to consider the additional information for inclusion in the report. (3) Before the director files the examination report as a final examination report or makes the report or any matters relating thereto public, the person being examined shall have an opportunity for a hearing. A copy of the report must be mailed by certified mail to the person being examined. The person may request a hearing not later than the 30th day after the date on which the report was mailed. This subsection does not limit the authority of the director to disclose a preliminary or final examination report as otherwise provided in this section. (4) The director shall consider comments presented at a hearing requested under subsection (3) of this section and may direct the examiner to consider the comments or direct that the comments be included in documentation relating to the report, although not as part of the report itself. The director may file the report as a final examination report at any time after consideration of the comments or at any time after the period for requesting a hearing has passed if a hearing is not requested. (5) A report filed as a final examination report is subject to public inspection. The director, after filing any report, if the director considers it for the interest of the public to do so, may publish any report or the result of any examination as contained therein in one or more newspapers of the state without expense to the person examined. (6) All work papers, recorded information, documents and copies thereof that are produced or obtained by or disclosed to the director or any other person in the course of an examination or in the course of analysis by the director of the financial condition or market conduct of an insurer are confidential and are exempt from public inspection as provided in ORS 705.137. If the director, in the directors sole discretion, determines that disclosure is necessary to protect the public interest, the director may make available work papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the director or any other person in the course of the examination. (7) The director may disclose the content of an examination report that has not yet otherwise been disclosed or may disclose any of the materials described in subsection (6) of this section as provided in ORS 705.137. [Formerly 736.560; 1993 c.447 4; 1999 c.364 1; 2001 c.377 5]
(1) No cause of action may arise and no liability may be imposed against the Director of the Department of Consumer and Business Services, an authorized representative of the director or any examiner appointed by the director for any statements made or conduct performed in good faith pursuant to an examination or investigation. (2) No cause of action may arise and no liability may be imposed against any person for communicating or delivering information or data to the director or an authorized representative of the director or examiner pursuant to an examination or investigation if the communication or delivery was performed in good faith and without fraudulent intent or an intent to deceive. (3) This section does not abrogate or modify in any way any common law or statutory privilege or immunity otherwise enjoyed by any person to which subsection (1) or (2) of this section applies. (4) The court may award reasonable attorney fees to the prevailing party in a cause of action arising out of activities of the director or an examiner in carrying out an examination or investigation. [1993 c.447 5; 1995 c.618 127]
Any person examined under ORS 731.300 shall pay to the Director of the Department of Consumer and Business Services the just and legitimate costs of the examination as determined by the director, including actual necessary transportation and traveling expenses. [Formerly 736.565; 1969 c.336 6]
(1) Any act set forth in ORS 731.146 by an unauthorized insurer is equivalent to and shall constitute an irrevocable appointment by such insurer, binding upon the insurer, the executor of the insurer or administrator, or successor in interest if a corporation, of the Secretary of State or the successor in office, to be the true and lawful attorney of such insurer. All lawful process in any action in any court by the Director of the Department of Consumer and Business Services or by the state and any notice, order, pleading or process in any proceeding before the director which arises out of transacting insurance in this state by such insurer may be served upon the Secretary of State or the successor in office. Transacting insurance in this state by an unauthorized insurer shall be signification of its agreement that lawful process in a court action and any notice, order, pleading, or process in an administrative proceeding before the director so served shall be of the same legal force and validity as personal service of process in this state upon such insurer. (2) Service of process in such action shall be made by delivering to and leaving with the Secretary of State, or one of the assistants, two copies of the document served and by payment to the Secretary of State of the fee prescribed by law. Service upon the Secretary of State shall be service upon the principal. (3) The Secretary of State shall forward by certified mail one of the copies of such process or such notice, order, pleading, or process in proceedings before the director to the defendant in such court proceeding or to whom the notice, order, pleading, or process in such administrative proceeding is addressed or directed at its last-known principal place of business and shall keep a record of all process so served on the defendant. Such record shall show the day and hour of service. Service is sufficient, provided: (a) Notice of service and a copy of the court process or the notice, order, pleading, or process in the administrative proceeding are sent within 10 days thereafter by certified mail by the plaintiff or the plaintiffs attorney in the court proceeding or by the director in the administrative proceeding to the defendant at the last-known principal place of business of the defendant. (b) The defendants receipt or receipts issued by the post office with which the letter is certified or registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and an affidavit of the plaintiff or the plaintiffs attorney in court proceeding or of the director in administrative proceeding, showing compliance therewith are filed with the clerk of the court in which such action is pending or with the director in administrative proceedings, on or before the date the defendant in the court or administrative proceeding is required to appear or respond thereto, or within such further time as the court or director may allow. (4) No plaintiff shall be entitled to a judgment or a determination by default in any court or administrative proceeding in which court process or notice, order, pleading, or process in proceedings before the director is served under this section until the expiration of 45 days after the date of filing of the affidavit of compliance. (5) Nothing in this section shall limit or affect the right to serve any process, notice, order, or demand upon any person or insurer in any other manner now or hereafter permitted by law. [1969 c.336 3]
(1) Before an unauthorized insurer files or causes to be filed any pleading in any court action or any notice, order, pleading, or process in an administrative proceeding before the Director of the Department of Consumer and Business Services instituted against such person or insurer, by services made as provided in ORS 731.324, such insurer shall deposit with the clerk of the court in which such action is pending, or with the director in administrative proceedings before the director, cash or securities. The insurer may also file with such clerk or director a bond with good and sufficient sureties, to be approved by the clerk or director, or an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, in an amount to be fixed by the court or director sufficient to secure the payment of any final judgment which may be rendered in such action or administrative proceeding. (2) The director, in any administrative proceeding in which service is made as provided in ORS 731.324, may order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (1) of this section and to defend such action. (3) Nothing in subsection (1) of this section shall be construed to prevent an unauthorized insurer from filing a motion to quash a writ or to set aside service thereof made in the manner provided in ORS 731.324. [1969 c.336 4; 1991 c.331 126; 1997 c.631 545]
No person shall act as an insurer and no insurer shall directly or indirectly transact insurance in this state except as authorized by a subsisting certificate of authority issued to the insurer by the Director of the Department of Consumer and Business Services. [1967 c.359 73]
When the Director of the Department of Consumer and Business Services believes, from evidence satisfactory to the director, that any insurer is violating or about to violate the provisions of ORS 731.354, the director may cause a complaint to be filed in the Circuit Court of Marion County to enjoin and restrain such insurer from continuing such violation. The court shall have jurisdiction of the proceeding and shall have the power to make and enter an order or judgment awarding such preliminary or final injunctive relief as in its judgment is proper. [1969 c.336 2]
Upon application a domestic insurer shall be granted a certificate of authority to transact any class of insurance permitted by the Insurance Code and provided for in its articles of incorporation upon its compliance with all the laws of this state and the rules of the Department of Consumer and Business Services relating to such insurers. [Formerly 736.085]
(1) A foreign or alien insurer may be authorized to transact insurance in this state when it has complied with the following requirements: (a) It shall file with the Director of the Department of Consumer and Business Services a certified copy of its charter, articles of incorporation or deed of settlement and a statement of its financial condition and business in all states in such form and detail as the director may require, signed and sworn to by at least two of its executive officers or the United States manager. (b) It shall satisfy the director that it is fully and legally organized under the laws of its state or government to do the business it proposes to transact. (c) It shall satisfy the director that it is possessed of and will maintain at all times its required capitalization. (d) It shall make such deposits with the Department of Consumer and Business Services as are required by the provisions of the Insurance Code. (2) Upon compliance with the requirements of this section and all other requirements imposed on such insurer by the Insurance Code, the director shall issue to it a certificate of authority. [Formerly 736.205; 1999 c.196 1]
(1) An authorized foreign insurer may become a domestic insurer: (a) By complying with all of the requirements of law relating to the organization and authorization of a domestic insurer of the same type; (b) By filing articles of incorporation that are amended to comply with all of the requirements of law relating to the organization and authorization of a domestic insurer of the same type; and (c) By designating its principal place of business at a place in this state. (2) If the Director of the Department of Consumer and Business Services determines that an authorized foreign insurer has complied with the requirements of subsection (1) of this section, the insurer is entitled to a certificate of authority to transact insurance in this state and shall be subject as a domestic insurer to the authority and jurisdiction of this state. [1995 c.639 9; 1997 c.771 24]
A domestic insurer, upon the approval of the Director of the Department of Consumer and Business Services, may transfer its domicile to any other state in which it is admitted to transact the business of insurance. Upon such a transfer the insurer ceases to be a domestic insurer and may be authorized in this state if qualified as a foreign insurer. The director shall approve such a proposed transfer unless the director determines that the transfer is not in the interest of the policyholders of this state. [1995 c.639 10]
(1) The certificate of authority, insurance producer appointments and licenses, rates and other items allowed by the Director of the Department of Consumer and Business Services pursuant to the discretion of the director that are in existence at the time an authorized insurer transfers its domicile to this or any other state as provided in ORS 731.363 or 731.367 or by merger, consolidation or any other lawful method shall continue in full force and effect upon the transfer if the insurer remains authorized to transact insurance in this state. (2) All outstanding policies of a transferring insurer shall remain in full force and effect and need not be indorsed as to the new name of the insurer or its new location unless so ordered by the director. A transferring insurer shall file new policy forms with the director on or before the effective date of the transfer but may use existing policy forms with appropriate indorsements if allowed by the director, according to any conditions established by the director. (3) Each transferring insurer shall notify the director of the details of the proposed transfer and shall file promptly any resulting amendments to corporate or other organizational documents filed or required to be filed with the director. (4) This section applies to a domestic insurer that transfers its domicile to another state and to an authorized foreign insurer that transfers its domicile either to this state or to another state. [1995 c.639 11; 1997 c.771 25; 2003 c.364 68]
[Formerly 749.040; 1971 c.231 42; 1977 c.651 1; 1993 c.709 4; renumbered 731.369 in 1995]
An unincorporated authorized foreign insurer transfers its domicile to this state when the Director of the Department of Consumer and Business Services determines that it has complied with all of the requirements of law relating to the organization and authorization of a domestic insurer of the same type as provided in ORS 731.363. No merger, consolidation or other method shall be required to effect a transfer of the domicile of the unincorporated insurer to this state and no vote or approval of the policyholders, members or subscribers of the unincorporated insurer shall be required. Any agreement of indemnity, appointment or governance or any similar agreement shall continue in full force after the transfer if the unincorporated insurer remains an authorized insurer. The laws of this state, however, shall govern all such agreements regardless of any other law to the contrary, and such agreements shall be considered to be modified to reflect that this state is the principal place of business and domicile of the unincorporated insurer. [1995 c.639 12]
(1) A reciprocal insurer, through its attorney, shall file with the Director of the Department of Consumer and Business Services a declaration, verified by the oath of such attorney, setting forth: (a) The name or title of the reciprocal insurer. (b) The location of the principal office of the reciprocal insurer. (c) The class or classes of insurance to be effected or exchanged. (d) A copy of the form of power of attorney or instrument under which such insurance is to be effected or exchanged. (e) A copy of the policy under or by which such contracts of insurance are effected or exchanged among the subscribers. (f) That applications have been made for insurance in the amounts required by subsection (2) of this section, and that such applications will be concurrently effective when the reciprocal insurer is authorized to commence business by the director. (g) If a foreign or alien reciprocal insurer, that there has been deposited and shall be maintained at all times with the State Treasurer or other proper official of the state in which the insurer is domiciled $50,000 in cash or securities, as a general deposit for the benefit of subscribers wherever located. Where the laws of the home state do not provide for the acceptance of such a deposit, the deposit may be made with a bank or trust company in escrow subject to the control of the insurance commissioner of the home state, and such deposit shall be released only upon the written order of such insurance commissioner. A certification from the insurance director or other proper state official of the state in which the reciprocal insurer is domiciled shall be attached to the application for the certificate of authority. (2) The reciprocal insurer must have bona fide applications for insurance aggregating not less than $3 million upon at least 200 risks, except in the case of wet marine hull insurance written by a domestic reciprocal insurer for persons whose earned income, in whole or in part, is derived from taking and selling food resources living in an ocean, bay or river, the applications must cover at least 25 hulls and the insurance must aggregate at least $125,000. (3) The applicant shall furnish any other relevant information required by the director, except no reciprocal insurer shall be required to furnish or file the names or addresses of its policyholders or subscribers. [Formerly 731.366]
(1) The application for a certificate of authority shall be accompanied by a sworn statement of a reciprocal insurer showing the financial condition of the insurer as of December 31 immediately preceding. The Director of the Department of Consumer and Business Services may require a supplemental statement to be furnished as of a later date. (2) Concurrently with the filing of the declaration provided for by the terms of ORS 731.369, the attorney shall file with the director an instrument in writing executed for the subscribers conditioned that upon the issuance of certificate of authority, action may be brought in the county in which the property insured thereunder is situated or where the injured person resides, and service of process may be had as provided in ORS 731.434 in all actions in this state arising out of policies issued by the reciprocal insurer, which service shall be valid and binding upon all subscribers exchanging at any time reciprocal or interinsurance contracts through such attorney. Actions may be brought against or defended in the name of the reciprocal insurer adopted by the subscribers. [Formerly 749.050]
Except where inconsistent with other provisions of the Insurance Code, a reciprocal insurer in its own name, as in the case of an individual, may purchase, receive, own, hold, lease, mortgage, pledge or encumber by deed of trust or otherwise, manage and sell real estate for the purposes and objects of the insurer including, but not limited to, investment for the production of income or for its accommodation in the convenient transaction of its business. Any contract, including but not limited to a deed, lease, mortgage, deed of trust, purchase or sale agreement or any other contract to be executed in the name of the insurer, may be executed by the attorney in fact designated by the insurers subscribers. [1991 c.401 35] Note: 731.371 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
A certificate of authority is not required of an insurer with respect to the following: (1) Transactions pursuant to surplus lines coverages lawfully written under the Insurance Code. (2) Reinsurance, when transacted by an insurer duly authorized by the insurers state of domicile to transact the class of insurance involved. (3) Wet marine and transportation insurance. [1967 c.359 78; 2015 c.505 1]
No foreign or alien insurer that has complied with the requirements of the Insurance Code shall be subject to any other provisions of the laws of this state relating to admission or licensing of foreign or alien corporations. [Formerly 736.220]
(1) Subject to subsection (2) of this section, any foreign or alien insurer, without being authorized to transact business in this state, may take, acquire, hold and enforce notes secured by real estate mortgages or trust deeds and make commitments to purchase such notes. A foreign or alien insurer may foreclose the mortgages and trust deeds in the courts of this state, acquire the mortgaged property, hold, own and operate the property for a period not exceeding five years and dispose of the property. The activities authorized under this subsection by such a foreign or alien insurer shall not constitute transacting business in this state for the purposes of ORS chapter 60. (2) Before a foreign or alien insurer engages in any of the activities described in subsection (1) of this section, the foreign or alien insurer shall first file with the Department of Consumer and Business Services a statement signed by its president, secretary, treasurer or general manager that it constitutes the Director of the Department of Consumer and Business Services its attorney for service of process, and shall pay an initial filing fee of $200 and an annual license fee of $200. The statement shall include the address of the principal place of business of the foreign or alien insurer. (3) The director, upon receiving service of process as authorized by subsection (2) of this section, immediately shall forward by registered mail or by certified mail with return receipt all documents served upon the director to the principal place of business of the foreign or alien insurer. (4) A foreign or alien insurer that indirectly engages in the activities described in subsection (1) of this section because of its beneficial interest in a pool of notes secured by real estate mortgages or trust deeds need not comply with subsection (2) of this section. [1987 c.94 118; 1991 c.249 70]
Engaging in the activities authorized by ORS 731.380 by a foreign or alien insurer shall not subject the foreign or alien insurer to any tax, license fee or charge, except as provided in ORS 731.380, for the privilege of doing business within the State of Oregon or to any tax measured by net or gross income. However, if the foreign or alien insurer acquires any property given as security for such a mortgage or trust deed, all income accruing to the foreign or alien insurer solely from the ownership, sale or other disposal of such property is subject to taxation in the same manner and on the same basis as income of corporations doing business in this state. [1987 c.94 119]
To qualify for and hold authority to transact insurance in this state an insurer must be an incorporated insurer, or a reciprocal insurer or an incorporated fraternal benefit society. [1967 c.359 80]
(1) The Director of the Department of Consumer and Business Services shall establish standards by rule for determining whether the continued operation of an authorized insurer may be hazardous to the policyholders or to the insurance-buying public generally, for the purpose of carrying out ORS chapter 734 and other provisions of the Insurance Code that authorize the director to take action against such an insurer. If the director makes such a determination, the director may order the insurer to take one or more of the following actions: (a) Reduce the total amount of present and potential liability for policy benefits by reinsurance. (b) Reduce, suspend or limit the volume of business being accepted or renewed. (c) Reduce general insurance and commission expenses by methods specified by the director. (d) Increase the capital and surplus of the insurer. (e) Suspend or limit the declaration and payment of dividends by the insurer to its stockholders or to its policyholders. (f) Limit or withdraw from certain investments or discontinue certain investment practices to the extent the director determines such action to be necessary. (2) The director may exercise authority under subsection (1) of this section in addition to or instead of any other authority that the director may exercise under the Insurance Code. (3) The director may issue an order under this section with or without a hearing. An insurer subject to an order issued without a hearing may file a written request for a hearing to review the order. Such a request shall not stay the effect of the order. The hearing shall be held within 30 days after the filing of the request. The director shall complete the review within 30 days after the record for the hearing is closed, and shall discontinue the action taken under subsection (1) of this section if the director determines that none of the conditions giving rise to the action exists. [1993 c.447 14]
The Director of the Department of Consumer and Business Services shall not grant or continue authority to transact insurance in this state for any insurer: (1) The management of which is found by the director to be untrustworthy or so lacking in insurance experience as to make the proposed operation or the continued operation hazardous to the insurance-buying public; or (2) That the director has good reason to believe is affiliated directly or indirectly through ownership, control, reinsurance transactions or other insurance or business relations, with any person whose business operations are or have been marked to the detriment of policyholders, stockholders, investors, creditors or the public, by manipulation or dissipation of assets, manipulation of accounts or reinsurance, or by similar injurious actions. [1967 c.359 81; 1993 c.447 15]
No certificate of authority may be issued to any state, province or foreign government nor to any instrumentality, political subdivision or agency thereof. [Formerly 736.080]
An insurer that otherwise qualifies therefor may be authorized to transact any one class or combination of classes of insurance, except: (1) A reciprocal insurer shall not transact life insurance or title insurance. (2) A title insurer shall be a stock insurer, and shall not transact any other class of insurance. (3) A mortgage insurer shall be a stock insurer, and shall not transact any other class of insurance. [1967 c.359 83; 1969 c.692 2]
No domestic, foreign or alien insurer shall deliver or issue for delivery in this state variable life insurance or variable annuity policies unless the insurer is authorized to transact life insurance in this state and the Director of the Department of Consumer and Business Services is satisfied that its condition and method of operation in connection with the issuance of such policies will not render its operation hazardous to its policyholders or the public in this state. In making the determination the director shall consider, among other things: (1) The history and financial condition of the insurer; (2) The character, responsibility and fitness of the officers and directors of the insurer; and (3) The laws and rules under which the insurer is authorized by its domicile to issue such policies. [1973 c.435 4]
The Director of the Department of Consumer and Business Services at any time may amend an insurers certificate of authority to accord with lawful changes in the insurers charter or insuring powers. [1967 c.359 84]
(1) The Director of the Department of Consumer and Business Services shall issue to an insurer a certificate of authority if upon completion of the application for a certificate of authority by the insurer the director finds, from the application and such other investigation and information the director may acquire, that the insurer is fully qualified and entitled thereto under the Insurance Code. (2) The director shall take all necessary action and shall either issue or refuse to issue a certificate of authority within a reasonable time after the completion of the application for such authority. (3) The certificate of authority, if issued, shall specify the class or classes of insurance the insurer is authorized to transact in this state. The director may issue authority limited to particular subclasses of insurance or types of insurance coverages within the scope of a class of insurance. [1967 c.359 85]
(1) An insurers subsisting certificate of authority is evidence of its authority to transact in this state the class or classes of insurance specified therein, either as direct insurer or as reinsurer or as both. (2) Although issued to the insurer the certificate of authority is at all times the property of this state. Upon any suspension, revocation or termination thereof the insurer promptly shall deliver the certificate of authority to the Director of the Department of Consumer and Business Services. [1967 c.359 86]
(1) A certificate of authority shall continue in force as long as the insurer is entitled thereto under the Insurance Code and until suspended or revoked by the Director of the Department of Consumer and Business Services, or terminated at the request of the insurer; subject, however, to continuance of the certificate by the insurer each year by: (a) Payment prior to April 1 of the continuation fee established by the director; (b) Due filing by the insurer of its annual statement for the calendar year preceding; (c) Due filing by the insurer of each annual statement supplement; and (d) Payment by the insurer of premium taxes with respect to the preceding calendar year as required by ORS 731.808 to 731.834. (2) A certificate of authority that is not continued by the insurer under subsection (1) of this section expires on the 60th day after the date on which the payment or filing is due. (3) The director promptly shall notify the insurer of impending expiration of its certificate of authority. (4) The director, in the discretion of the director, upon the insurers request made not later than the 90th day after expiration, may reinstate a certificate of authority which the insurer has permitted to expire, after the insurer has cured all its failures which resulted in the expiration and has paid the fee for reinstatement established by the director. Otherwise the insurer shall be granted another certificate of authority only after filing application therefor and meeting all other requirements as for an original certificate of authority in this state. [1967 c.359 87; 1989 c.413 3; 1995 c.639 1]
(1) The Director of the Department of Consumer and Business Services shall refuse to continue, or shall suspend or revoke, an insurers certificate of authority if: (a) As a foreign insurer, it no longer meets the requirements for the authority; or as a domestic insurer, it has failed to cure an impairment of required capitalization within the time allowed therefor by the director under ORS 732.230; (b) The insurer knowingly exceeds its charter powers or powers granted under its certificate of authority; or (c) As a foreign or alien insurer, its certificate of authority to transact insurance is suspended or revoked by its domicile. (2) Except in cases of impairment of required capitalization or suspension or revocation by another domicile as referred to in subsection (1)(c) of this section, the director shall refuse, suspend or revoke the certificate of authority only after a hearing granted to the insurer, unless the insurer waives such hearing in writing. [1967 c.359 88]
(1) The Director of the Department of Consumer and Business Services may refuse to continue or may suspend or revoke an insurers certificate of authority if the director finds after a hearing that: (a) The insurer has violated or failed to comply with any lawful order of the director, or any provision of the Insurance Code other than those for which suspension or revocation is mandatory. (b) The insurer is in unsound condition, or in such condition or using such methods and practices in the conduct of its business, as to render its further transaction of insurance in this state hazardous or injurious to its policyholders or to the public. (c) The insurer has failed, after written request by the director, to remove or discharge an officer or director who has been convicted in any jurisdiction of an offense which, if committed in this state, constitutes a misdemeanor involving moral turpitude or a felony, or is punishable by death or imprisonment under the laws of the United States, in any of which cases the record of the conviction shall be conclusive evidence. (d) The insurer is affiliated with and under the same general management, interlocking directorate or ownership as another insurer that transacts direct insurance in this state without having a certificate of authority therefor, except as permitted under the Insurance Code. (e) The insurer or an affiliate or holding company of the insurer refuses to be examined or any director, officer, employee or representative of the insurer, affiliate or holding company refuses to submit to examination relative to the affairs of the insurer, or to produce its accounts, records, and files for examination when required by the director or an examiner of the Department of Consumer and Business Services, or refuse to perform any legal obligation relative to the examination. (f) The insurer has failed to pay any final judgment rendered against it in this state upon any policy, bond, recognizance or undertaking issued or guaranteed by it, within 30 days after the judgment became final, or within 30 days after time for taking an appeal has expired, or within 30 days after dismissal of an appeal before final determination, whichever date is the later. (g) The insurer fails to comply with ORS 742.534 (1). (h) The insurer has failed to comply with ORS 476.270 (1), (2) or (3) or 654.097 (1). (2) Without advance notice or a hearing thereon, the director may suspend immediately the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings, have been commenced in any state by the public insurance supervisory official of such state. [1967 c.359 89; 1971 c.321 17; 1971 c.523 10; 1975 c.585 4; 1981 c.701 3; 1993 c.447 7]
(1) All suspensions or revocations of, or refusals to continue, an insurers certificate of authority shall be by order of the Director of the Department of Consumer and Business Services order. (2) Upon suspending, revoking or refusing to continue the insurers certificate of authority, the director forthwith shall give notice thereof to the insurers insurance producers in this state of record in the Department of Consumer and Business Services, and likewise shall suspend or revoke the authority of such insurance producers to represent the insurer. The director also shall give notice to the insurance supervisory authority in jurisdictions in which the insurer is authorized, if a domestic insurer, or in its domicile if a foreign or alien insurer. (3) In the discretion of the director, the director may publish notice of such suspension, revocation or refusal in one or more newspapers of general circulation in this state. [1967 c.359 90; 2003 c.364 69]
(1) In an order suspending the certificate of authority of an insurer, the Director of the Department of Consumer and Business Services may provide that the suspension expires at the end of a specified period or when the director determines that the cause or causes of the suspension have terminated. During the suspension the director may rescind or shorten the suspension by further order. (2) During the suspension period the insurer shall not solicit or write any new business in this state, but shall file its annual statement and pay fees, licenses and taxes as required under the Insurance Code, and may service its business already in force in this state, as if the certificate of authority had continued in full force. (3) Upon expiration of a specific suspension period, if within such period the certificate of authority has not terminated, the insurers certificate of authority automatically shall reinstate unless the director finds that the cause or causes of the suspension have not terminated, or that the insurer is otherwise not in compliance with the requirements of the Insurance Code, and of which the director shall give the insurer notice not less than 30 days in advance of the expiration of the suspension period. (4) When the director determines that a suspension should expire because the cause or causes have terminated, the director shall reinstate the certificate of authority of the insurer unless the certificate of authority has expired within the suspension period. (5) Upon reinstatement of the insurers certificate of authority, the authority of its insurance producers in this state to represent the insurer shall likewise reinstate. The director promptly shall notify the insurer and its insurance producers in this state of record in the Department of Consumer and Business Services, of such reinstatement. If pursuant to ORS 731.422 the director has published notice of suspension, in like manner the director shall publish notice of the reinstatement. [1967 c.359 91; 1989 c.700 1; 2003 c.364 70]
(1) A person who is prohibited by 18 U.S.C. 1033 from engaging or participating in the business of insurance because of a conviction of a felony involving dishonesty or a breach of trust or conviction of a crime under 18 U.S.C. 1033 may apply to the Director of the Department of Consumer and Business Services for a written consent to engage or participate in the business of insurance. (2) The director shall establish by rule a procedure and standards by which the director may issue a written consent to engage or participate in the business of insurance to a person convicted of a crime described in subsection (1) of this section. (3) The director shall not issue a license under the Insurance Code to an applicant who has been convicted of a crime referred to in subsection (1) of this section unless the director also issues a written consent. (4) If a person issued a license under the Insurance Code has been convicted of a crime referred to in subsection (1) of this section or is subsequently the subject of such a conviction, the director shall revoke, suspend or refuse to renew the license. The person may apply to the director for a written consent as provided in subsection (1) of this section. [2001 c.191 59] Note: 731.428 was added to and made a part of ORS chapter 731 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) No insurer shall be formed or authorized to transact insurance in this state which has or will have, or which uses or will use as an assumed business name, a name or principal identifying name factor: (a) That is the same as or deceptively similar to: (A) Any other insurer so formed or authorized; (B) Any name reserved or registered as authorized by this section; (C) Any name on file with the Secretary of State pursuant to ORS chapter 60, 65 or 648; or (D) The name of any insurer that was authorized to transact insurance in this state within the preceding 10 years if insurance policies issued by such other insurer still are outstanding in this state. With the consent of the insurer issuing such policies, the Director of the Department of Consumer and Business Services may waive this provision if the director finds that the waiver will not be detrimental to the public; or (b) That is deceptive or misleading as to the type of organization of the insurer or that does not indicate the insurer is transacting insurance. (2) Any insurer doing business in this state may file and register with the director in writing, in its articles of incorporation or otherwise, an assumed name that it will use in transacting insurance in this state. Such name may not be a name prohibited by subsection (1) of this section. (3) Any person may reserve a name for use as a corporate name or an assumed business name in transacting insurance in this state by filing in writing with the director a reservation of such name. Such name may not be a name prohibited by subsection (1) of this section. Such reservation shall expire six months after the date of filing unless: (a) If filed by an insurer, it is using such name as an authorized insurer; or (b) If filed by a noninsurer, it has filed with the director a formal application for a permit to form an insurer in this state. If a valid reservation is on file, the director may accept the filing of a same or deceptively similar name by another person which filing shall become effective, in the order of filing, at the expiration of the six-month provision unless the original reservation does not expire pursuant to this subsection. (4) When an insurer is merged as provided in the Insurance Code, the surviving insurer may retain the use of the name for a period of five years after the effective date of merger. If such name is retained, use of the same or deceptively similar name by other insurers shall be prohibited as specified under this section during the five-year period. [1967 c.359 92; 1987 c.414 161a; 1987 c.846 2; 1993 c.447 104]
(1) The provisions, procedures and requirements of ORS chapter 60 relating to a registered office, registered agent and to service of process, notice and demand shall govern all insurers transacting insurance in this state, whether authorized or unauthorized, except that the Director of the Department of Consumer and Business Services shall be substituted for the Secretary of State as the person with whom all filings shall be made and upon whom, in the circumstances specified by statute, such service may be effected. (2) This section shall not apply to insurers for whom a certificate of authority is not required under ORS 731.374. [1967 c.359 93; 1987 c.846 3; 1995 c.79 358]
(1) A title insurer, in order to receive and maintain a certificate of authority, shall own and maintain at all times a title plant covering a period of at least the immediately preceding 50 years except years before 1960 and consisting of a general index, adequate maps and currently posted tract or geographic indexes for all the lands in the county in which title insurance policies or other title services are to be issued or provided. Either directly or through its insurance producer, a title insurer also shall own and maintain for each additional county in which it shall be authorized to transact a title insurance business a comparable title plant or obtain from a person having a comparable title plant for such additional county or counties title insurance showing the status of the title. (2) The means by which tract or geographic indexes may be currently posted for purposes of subsection (1) of this section include but are not limited to maintenance of the information on ledger sheets, separate cards or sheets of film, whether bound in books or contained in envelopes or storage files, or maintenance of the information on punch cards, computer tape, disc or similar machine compatible form. All title services by a title insurer must be provided in this state. The information upon which the title services are based must be maintained and must be capable of reproduction in this state at all times. (3) Every title insurance transaction by a title insurer or insurance producer involving the status of title of an Oregon title risk shall be based on one or more title plants which: (a) Cover the location of the risk; (b) Meet the requirements of this section; and (c) Are owned and maintained by one or more title insurers or insurance producers as provided in subsections (4), (5) and (6) of this section. (4) For any county with a population of 500,000 or more, or any county with a population of 200,000 or more that is contiguous to a county with a population of 500,000 or more, ownership and maintenance of a title plant shall be as provided in this subsection: (a) The title plant referred to in subsection (1) of this section may be owned and maintained on an exclusive basis or on a joint basis as provided in paragraph (b) of this subsection. (b) A title plant is owned and maintained on a joint basis under this subsection if two or more persons own and maintain a portion of the title plant as joint venturers, partners, shareholders or participants in another form of joint, several or common property ownership recognized under the laws of this state. If ownership of a title plant is held by fewer than four title insurers or insurance producers, each share of ownership shall be at least 25 percent. If ownership of a title plant is held by four or more insurers or insurance producers, all shares shall be equal. (5) A title insurer authorized to transact title insurance in this state and every insurance producer of such an authorized title insurer shall own and maintain a title plant. (6) In any county not described in subsection (4) of this section, a title insurer or its insurance producers transacting title insurance business shall solely own a title plant for that county in conformance with subsections (1) and (2) of this section and shall maintain a title plant for that county on an exclusive basis or a joint basis in conformance with subsections (1) and (2) of this section. A title plant for a county is maintained on a joint basis under this subsection if a title insurer or insurance producer obtains current posting information for its tract or geographic indexes from one or more other title insurers or insurance producers or from a provider that is wholly owned in equal shares by the title insurers or insurance producers utilizing the providers services. [Formerly 748.084; 1983 c.322 1; 1999 c.183 1; 2003 c.364 71]
A title plant that conforms on December 31, 1999, with ORS 731.438 (1) and (2) (1997 Edition) satisfies the requirements of ORS 731.438 (1) as amended by section 1, chapter 183, Oregon Laws 1999, if it also contains after that date a general index, adequate maps and currently posted tract or geographic indexes for all lands in the county. [1999 c.183 3]
An insurer may not transact a life insurance business upon a mutual assessment plan within this state. [Formerly 739.105; 2005 c.185 1]
An insurer may accept, from a holder of a life insurance policy, deposits in addition to current premium payments to provide a fund for payment of future premiums or to make possible the future acquisition of additional insurance, annuities or other benefits, whether the interest to be paid on such deposits be fixed or variable. Such deposits, or any portion thereof, not used for the purposes described in this section shall be refunded to the policyholder or, upon the death of the policyholder, to designated beneficiaries. [1967 c.359 96]
Except as authorized by the federal Gramm-Leach-Bliley Act (P.L. 106-102), an insurer may not engage in any business except the making of insurance or a kind of business related to the insurance business. However, a foreign or alien insurer may engage, outside this state, in any business permitted by its articles of incorporation and the laws of the state of its domicile; and a title insurer also may engage in business as an escrow agent; provided, however, that a title insurer engaging in business as an escrow agent shall be subject to the provisions of ORS 696.505 to 696.590 in respect to its escrow activities. [1967 c.359 97; 1971 c.398 5; 1977 c.351 13; 2001 c.377 57]
No domestic insurer, or any of the representatives thereof, shall transact insurance in any jurisdiction in which such insurer is not authorized in accordance with the laws of such jurisdiction. [Formerly 736.645]
(1) Individuals, partnerships and corporations of this state, hereby designated as subscribers, may exchange reciprocal or interinsurance contracts with each other, or with individuals, partnerships and corporations of other states and countries, providing indemnity among themselves from any loss which may be insured against under the Insurance Code, except life insurance and title insurance. Such contracts may be executed by an attorney, agent or other representative, hereby designated as attorney, duly authorized and acting for such subscribers. The attorney may be an individual, firm or corporation organized under the laws of this state or any other state or territory and having a principal office at the place designated by the subscribers in the power of attorney. (2) Any corporation now or hereafter organized under the laws of the state, in addition to the rights, powers and franchises specified in its articles of incorporation, may exchange insurance contracts of the kind and character described in subsection (1) of this section. The right to exchange such contracts is declared to be incidental to the purpose for which such corporations are organized and as much granted as the rights and powers expressly conferred. [Formerly 749.010]
A reciprocal insurer having a surplus of not less than $500,000 may issue nonassessable policies. [1967 c.359 100]
(1) The rights and power of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers. (2) The power of attorney must set forth: (a) The powers of the attorney. (b) That the attorney may accept service of process on behalf of the insurer. (c) The services to be performed by the attorney in general. (d) The maximum amount to be deducted from advance premiums or deposits to be paid to the attorney. (e) Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount not less than one nor more than 10 times the premium or premium deposit stated in the policy. (3) The power of attorney may: (a) Provide for the right of substitution of the attorney and revocation of the power of attorney and rights thereunder; (b) Impose such restrictions upon the exercise of the power as are agreed upon by the subscribers; (c) Provide for the exercise of any right reserved to the subscribers directly or through their advisory committee; and (d) Contain other lawful provisions. (4) The terms of any power of attorney or agreement collateral thereto shall be reasonable and equitable, and no such power or agreement or any amendment thereof, shall be used or be effective in this state until approved by the Director of the Department of Consumer and Business Services. [1967 c.359 101; 1997 c.249 217]
(1) Any instrument required to be verified by the oath of the attorney for a reciprocal insurer may, in case of an incorporated attorney, be verified by the oath of the president, vice president, secretary or other executive officer of such corporation. (2) The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer. (3) The Director of the Department of Consumer and Business Services may refuse, suspend or revoke the certificate of authority, in addition to other grounds therefor, for failure of a reciprocal insurers attorney to comply with any provision of the Insurance Code. (4) The attorney for an authorized foreign or alien reciprocal insurer shall not, by virtue of discharge of its duties as such attorney with respect to the insurers transactions in this state, be thereby deemed to be doing business in this state within the meaning of any laws of this state applying to foreign persons. [Formerly 749.140]
(1)(a) Every insurer authorized to issue workers compensation coverage to subject employers as required by ORS chapter 656 shall maintain a place of business in this state where the insurer shall: (A) Process claims and make available complete records of claims for compensation made to the insurer under ORS chapter 656. (B) Make available upon request complete records, including all records submitted electronically, of all workers compensation insurance policies issued as required by ORS chapter 656. (C) Make available records identifying the specific persons covered by an employer electing coverage pursuant to ORS 656.039. (b) Notwithstanding the requirement in paragraph (a) of this subsection that an insurer process claims at a place of business in this state, the Director of the Department of Consumer and Business Services by rule may allow the insurer to process claims remotely from a place of business in this state. (2) An insurer may dispose of the records described in subsection (1) of this section only in accordance with the rules of the director. The records must be available to the Department of Consumer and Business Services for examination and audit at all reasonable times upon notice by the department to the insurer. (3) In lieu of maintaining a place of business in this state for the purpose of complying with this section, an insurer may make such records available at places of business in this state operated by service companies, if: (a) Each service company is incorporated in or authorized to do business in this state; (b) An agreement between the insurer and the service company grants each service company a power of attorney to act for the insurer in workers compensation coverage and claims proceedings under ORS chapter 656; and (c) The agreement between the insurer and each service company is approved by the director. (4) Notwithstanding subsection (3) of this section, an insurer may not: (a) Enter into a service agreement contract with one of the insurers insureds unless the insured has service contracts with other insurers; or (b) Process claims or maintain claims records at more than eight locations at any one time. [1975 c.585 2; 1981 c.874 8; 1987 c.373 80a; 1989 c.630 1; 1991 c.67 194; 2003 c.170 10; 2007 c.241 23; 2021 c.21 3]
An insurer shall not issue workers compensation insurance policies pursuant to ORS chapter 656 unless it furnishes occupational safety and health loss control consultative services to its insured employers consistent with the requirements of ORS 654.097. [1975 c.585 3; 1981 c.874 9; 1987 c.373 80b; 1987 c.884 61; 2007 c.241 24]
(1) Except as provided in subsection (5) of this section, an insurance company selling commercial liability insurance and authorized to do business in Oregon may not withdraw from, fail to renew or cancel any line of insurance or class of business without supplying appropriate written justification to the Director of the Department of Consumer and Business Services. (2) Justification for withdrawal, failure to renew or cancellation may include, but need not be limited to: (a) Insufficient premium income; (b) Loss experience or expectation of future loss in the particular line of insurance or class of business; (c) Necessity for uncompetitive or uneconomic rate increases; (d) Increased hazard in the risks assumed or material change in the line of insurance or class of business that could not have been reasonably contemplated by the insurance company at the time the company began selling the line of insurance or class of business in Oregon; or (e) Change in the availability or costs of reinsurance. (3) The director shall issue an order approving or disapproving the withdrawal from, failure to renew or cancellation of a line of insurance or class of business. (4) An order issued under this section shall include a provision requiring the insurer to notify affected insureds at least 60 days before the effective date of any withdrawal, failure to renew or cancellation approved by the director. (5) This section does not apply to a surplus lines insurer. [1987 c.774 34]
(1) No insurer or insurance producer selling a policy of group life insurance or group health insurance subject to the exemption in ORS 731.146 (2)(b) is authorized to sell membership in a group for the purpose of qualifying an applicant who is an individual for the insurance. (2) No insurer or insurance producer selling membership in a group is authorized to offer a policy of group life insurance or group health insurance subject to the exemption in ORS 731.146 (2)(b) for the purpose of selling membership in the group. [1989 c.784 2; 2003 c.364 72; 2007 c.752 2,7]
(1) An insurer may limit the drug outlets or pharmacists from which a person covered under a health insurance policy issued by the insurer is authorized by the insurer to obtain services only if the insurer first provides an opportunity to drug outlets and pharmacists to offer to participate as a provider of services as provided in this section. An insurer to which this section applies must provide notice of the opportunity by mailing a notice to the professional organization representing drug outlets and pharmacists in the service area of the insurer. The notice must be given at least 10 days before the deadline for receiving offers. The notice shall state the following: (a) The date after which offers will not be considered. (b) The services to be provided under the policy. (c) That each offer must contain a statement that the drug outlet or pharmacist is in compliance with the requirements of the State Board of Pharmacy. (d) The name and address of the person or office designated for receipt of the offers. (2) The services to which this section applies are the services normally provided by drug outlets and pharmacists, including but not limited to prescription drugs. (3) A professional organization that has received notice pursuant to subsection (1) of this section shall take reasonable steps to relay the notice to each drug outlet registered with the State Board of Pharmacy that is in the relevant service area. (4) The following apply to an offer submitted by a drug outlet or pharmacist in response to a notice given under subsection (1) of this section: (a) The offer must be in writing. (b) The offer must be submitted to the person or office designated in the notice. (c) The drug outlet or pharmacist must agree to provide services specified by the insurer. (5) An insurer to which this section applies may select any drug outlet or pharmacist of its choice on whatever basis the insurer alone determines to be appropriate. Nothing in this section prohibits an insurer from contracting with one or more drug outlets or pharmacists exclusively for services to be provided to its insureds. [1993 c.391 2]
(1) The exemption in ORS 731.146 (2)(b) does not apply to an insurer that offers coverage under a group health insurance policy or a group life insurance policy in this state unless the Director of the Department of Consumer and Business Services determines that the exemption applies. (2) The insurer shall submit evidence to the director that the exemption applies. When a master policy is delivered or issued for delivery outside this state to trustees of a fund for two or more employers, for one or more labor unions, for one or more employers and one or more labor unions or for an association, the insurer shall also submit evidence showing compliance with: (a) ORS 743.526, for a policy of group health insurance; or (b) ORS 743.354, for a policy of group life insurance. (3) The director shall review the evidence submitted and may request additional evidence as needed. (4) An insurer shall submit to the director any changes in the evidence submitted under subsection (2) of this section. (5) The director may order an insurer to cease offering a policy or coverage under a policy if the director determines that the exemption under ORS 731.146 (2)(b) is no longer satisfied. (6) Coverage under a master group life or health insurance policy delivered or issued for delivery outside this state that does not qualify for the exemption in ORS 731.146 (2)(b) may be offered in this state if the director determines that the state in which the policy was delivered or issued for delivery has requirements that are substantially similar to those established under ORS 743.360 or 743.522 (2) and that the policy satisfies those requirements. (7) This section does not apply to any master policy issued to a multistate employer or labor union. (8) The director may adopt rules to carry out this section. [1989 c.784 3; 2001 c.943 1; 2005 c.22 486; 2007 c.752 3,8]
(1) Each insurer shall have an annual audit conducted by an independent certified public accountant and shall file an audited financial report annually with the Director of the Department of Consumer and Business Services. The annual audited financial report shall disclose: (a) The financial position of the insurer as of the end of the most recent calendar year; and (b) The results of the insurers operations, cash flows and changes in capital and surplus for the year then ended. (2) The director shall adopt rules with respect to the following matters as needed for carrying out the requirements of this section: (a) Required contents and format of the audited financial report. (b) Requirements for filing the report. (c) Requirements applicable to qualifications and designation of certified public accountants for purposes of audits under this section. The requirements may include limitations on length of service for certified public accountants and may permit recognition of accountants comparably qualified under the laws of another country. (d) Requirements applicable to evaluation of the accounting procedures of an insurer and its system of internal control by a certified public accountant. (e) Standards governing the scope and preparation of the audit. (f) Requirements and procedures relating to the reporting of the adverse financial condition of an insurer by a certified public accountant. (g) Requirements and procedures relating to the reporting of significant deficiencies for internal controls of an insurer. (h) Exemptions. (i) Any other matter that the director determines to be needed for preparation of or inclusion in the financial report. [1991 c.401 15]
(1)(a) An insurer shall notify a claimant in writing at the time the insurer pays $5,000 or more to settle a third-party liability claim if: (A) The claimant is a natural person; (B) The insurer or an agent or other representative of the insurer, including the insurers attorney, delivers the payment to the claimant or to the claimants attorney, agent or other representative by draft, check or other form of payment; and (C) The claimant or the claimants attorney has provided contact information or a mailing address to the insurer. (b) An insurer may comply with paragraph (a) of this subsection by sending to the claimant a copy of the cover letter that accompanies the insurers settlement payment to the claimants attorney. Any notice to the claimant other than a copy of the cover letter may not include more than: (A) A statement that the insurer has paid a settlement; (B) The amount of the settlement; (C) The date on which the insurer paid the settlement; (D) The insurers name; and (E) Any identifying number for the claim. (2) Subsection (1) of this section does not: (a) Create a cause of action against an insurer for the insurers failure to provide the notice described in subsection (1) of this section; or (b) Create for the claimants attorney a defense to any cause of action based on an insurers failure to provide the notice described in subsection (1) of this section. (3) Subsection (1) of this section authorizes an insurer or the insurers attorney to communicate with the claimant for the purpose of delivering the notice described in subsection (1) of this section even if the insurer or the insurers attorney knows that the claimant is represented by an attorney. (4) This section does not invalidate or otherwise affect a settlement for which an insurer made a payment. [2021 c.140 2] Note: 731.492 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) No insurer shall retain any risk on any one subject of insurance, whether a domestic risk or not, in an amount exceeding 10 percent of its surplus to policyholders, or in the case of title insurance, more than 50 percent of such surplus, except that an insurance company, including a reciprocal insurance company, comprised solely of 1,000 or more licensed Oregon physicians organized for the purpose of insuring for professional liability may consider aggregate insurance as surplus to policyholders for purposes of this section and shall not be allowed to retain the risk on any one subject of insurance in excess of two and one-half percent of such aggregate insurance. (2) For purposes of this section, aggregate insurance is insurance which provides coverage in the event that the total fund of an insurance company, including a reciprocal insurance company, which is available to pay claims for occurrences of any one year, is exhausted. Aggregate insurance shall be in an amount equal to at least five times the annual premium collected by the insurance company. (3) A "subject of insurance" for the purposes of this section: (a) As to insurance against fire and hazards other than windstorm, earthquake and other catastrophic hazards, includes all properties insured by the same insurer that customarily are considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of any other hazard insured against; (b) As to group life and health insurance, refers individually to each person benefited under the group policy as a separate subject; and (c) As to mortgage insurance, includes all obligations secured by real property in a single tract, or in multiple tracts not separated by at least one-half mile. (4) Reinsurance ceded as authorized by ORS 731.508 shall be deducted in determining risk retained. As to surety risks, deduction also shall be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the suretys consent and for the suretys protection. (5) As to alien insurers, this section relates only to risks and surplus to policyholders of the insurers United States branch. (6) As used in this section, "surplus to policyholders," in addition to the insurers capital and surplus, includes any voluntary reserves that are not required pursuant to law, includes the contingency reserve held for mortgage insurance as required by ORS 733.100, and shall be determined from the last sworn statement of the insurer on file with the Director of the Department of Consumer and Business Services, or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk. (7) This section does not apply to wet marine and transportation insurance or to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy. [1967 c.359 103; 1969 c.692 3; 1975 c.796 12]
(1) An insurer may accept reinsurance only of such risks, and retain risk thereon within such limits, as it is otherwise authorized to insure. (2) Except as provided in ORS 731.512, 732.517 to 732.546 or 742.150 to 742.162, an insurer may reinsure risks with an insurer authorized to transact such insurance in this state, or in any other solvent insurer approved or accepted by the Director of the Department of Consumer and Business Services for the purpose of such reinsurance. The director shall not approve or accept any such reinsurance by a ceding domestic insurer in an unauthorized insurer which the director finds for good cause would be contrary to the interests of the policyholders or stockholders of such domestic insurer. (3) Credit shall not be allowed, as an asset or as a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under a contract or contracts reinsured by the assuming insurer on the basis of reported claims allowed by the court hearing the liquidation proceeding, without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator except: (a) When the contract or other written agreement specifically provides another payee of the reinsurance in the event of the insolvency of the ceding insurer; or (b) When the assuming insurer, with the consent of the direct insured or insureds, has assumed the policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees. (4) For the purposes of subsection (3) of this section, the reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall, within a reasonable time after the claim is filed in the liquidation proceeding, give written notice to the assuming insurer of the pendency of a claim against the ceding insurer on the contract reinsured. During the pendency of the claim, an assuming insurer may investigate the claim and interpose, at its own expense, in the proceeding in which the claim is to be adjudicated any defenses that the assuming insurer determines to be available to the ceding insurer or its liquidator. The expense may be filed as a claim against the insolvent ceding insurer to the extent of a proportionate share of the benefit that may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. When two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose one or more defenses to the claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though the expense had been incurred by the ceding insurer. (5) The director may disallow credit that would otherwise be allowed if the director determines that allowing credit would be contrary to accurate financial reporting or proper financial management, or may be hazardous to policyholders of the insurer or the insurance-buying public generally. The director may make such a determination only according to standards established by the director by rule. This subsection applies only to insurers who transact life insurance or health insurance, or both. (6) Upon request of the director, a ceding insurer promptly shall inform the director in writing of the cancellation or any other material change of any of its reinsurance treaties or arrangements. (7) This section does not apply to wet marine and transportation insurance. [1967 c.359 104; 1993 c.447 68; 1995 c.30 9; 1995 c.638 1; 2001 c.318 14]
(1) The purpose of ORS 731.509, 731.510, 731.511, 731.512 and 731.516 is to protect the interests of insureds, claimants, ceding insurers, assuming insurers and the public generally. The Legislative Assembly declares that the intent of the Legislative Assembly is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom insurers and reinsurers owe obligations. In furtherance of that state interest, the Legislative Assembly mandates that upon the insolvency of an alien insurer or reinsurer that provides security to fund the alien insurers or reinsurers United States obligations in accordance with ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the assets representing the security must be maintained in the United States and claims must be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets must be distributed in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurers. The Legislative Assembly declares that the laws contained in ORS 731.509, 731.510, 731.511, 731.512 and 731.516 are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012. (2) The Director of the Department of Consumer and Business Services may not allow credit for reinsurance to a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded unless credit is allowed as provided under ORS 731.508 and unless the reinsurer meets the requirements of: (a) Subsection (4) of this section; (b) Subsection (5) of this section and ORS 731.511 (1); (c) Subsection (6) of this section; (d) Subsections (7) and (8) of this section; (e) ORS 731.511; or (f)(A) Subsection (9) of this section; and (B) Additional requirements that the director specifies by rule, which may include: (i) The valuation of assets or reserve credits; (ii) The amount and forms of security that support reinsurance arrangements; and (iii) The circumstances under which the director will reduce or eliminate credit. (3) The director shall allow credit under subsection (4), (5) or (6) of this section or under ORS 731.511 only with respect to cessions of the kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in the state in which the assuming insurer is domiciled or, if the assuming insurer is an alien insurer, the state in which the assuming insurer is entered and is licensed or authorized to transact insurance or reinsurance. The director may allow credit under subsection (6) or (7) of this section only if the assuming insurer satisfies applicable requirements under subsection (10) of this section. (4) The director shall allow credit if the reinsurance is ceded to an authorized assuming insurer that accepts reinsurance of risks and retains the risk of the reinsurance within such limits as the assuming insurer is otherwise authorized to insure in this state, as provided in ORS 731.508. (5) The director shall allow credit if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state, as provided in ORS 731.511. The director may not allow credit to a domestic ceding insurer if the director has revoked accreditation of the assuming insurer after notice and opportunity for hearing. (6) The director shall allow credit if the reinsurance is ceded to a foreign assuming insurer or a United States branch of an alien assuming insurer meeting all of the following requirements: (a) The foreign assuming insurer must be domiciled in a state employing standards regarding credit for reinsurance that equal or exceed the standards applicable under this section. The United States branch of an alien assuming insurer must be entered through a state employing such standards. (b) The foreign assuming insurer or United States branch of an alien assuming insurer must maintain a combined capital and surplus in an amount not less than $20,000,000. The requirement of this paragraph does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. (c) The foreign assuming insurer or United States branch of an alien assuming insurer must submit to the authority of the director to examine the foreign assuming insurers or alien assuming insurers books and records. (7) The director shall allow credit if the reinsurance is ceded to an assuming insurer that maintains a trust fund meeting the requirements of this subsection and subsection (8) of this section and that also complies with other requirements of this subsection and subsection (8) of this section. The trust fund must be maintained in a qualified United States financial institution, as defined in ORS 731.510 (1), for the payment of the valid claims of the assuming insurers United States policyholders and ceding insurers and the assigns and successors in interest of the policyholders and ceding insurers. The assuming insurer must report annually to the director information that is substantially the same as information authorized insurers must report on the annual statement form under ORS 731.574, in order to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to the directors examination of the assuming insurers books and records and shall pay to the director the expenses of the examination. (8) The following requirements apply to the following categories of assuming insurers: (a)(A) For a single assuming insurer, the trust fund must consist of funds in trust in an amount not less than the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers. In addition, except as provided in subparagraph (B) of this paragraph, the assuming insurer must maintain a trusteed surplus of not less than $20,000,000. (B) At any time after the assuming insurer permanently discontinues underwriting, for at least three full years, new business that the trust secures, the commissioner that has principal regulatory oversight over the trust may authorize a reduction in the required trusteed surplus, but only after finding based on an assessment of the risk that the new required surplus level is adequate to protect United States ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and must consider all material risk factors, including, if applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurers liquidity or solvency. The commissioner may not reduce the amount of the minimum required trusteed surplus below 30 percent of the assuming insurers liabilities that are attributable to reinsurance that United States ceding insurers covered by the trust have ceded. (b) For a group that includes incorporated and individual unincorporated underwriters: (A) For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after August 1, 1995, the trust must consist of a trusteed account in an amount not less than the groups several liabilities attributable to business United States domiciled ceding insurers have ceded to any member of the group. (B) For reinsurance ceded under reinsurance agreements with an inception date on or before July 31, 1995, and not amended or renewed after that date, notwithstanding the other provisions of ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the trust must consist of a trusteed account in an amount not less than the groups several insurance and reinsurance liabilities attributable to business written in the United States. (C) In addition to the trusts described in subparagraphs (A) and (B) of this paragraph, the group shall maintain in trust a trusteed surplus of which $100,000,000 must be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account. (D) The incorporated members of the group may not engage in any business other than underwriting as a member of the group and are subject to the same level of regulation and solvency control by the groups domiciliary regulator as are the unincorporated members. (E) Within 90 days after the groups financial statements are due to be filed with the groups domiciliary regulator, the group shall provide to the director an annual certification by the groups domiciliary regulator of the solvency of each underwriter member or, if certification is unavailable, financial statements of each underwriter member of the group prepared by independent certified public accountants. (c) For the group of incorporated insurers described in this paragraph, the trust must be in an amount equal to the groups several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group. This paragraph applies to a group of incorporated insurers under common administration that complies with the annual reporting requirements contained in subsection (7) of this section and that has continuously transacted an insurance business outside the United States for at least three years immediately before applying for accreditation. Such a group must have an aggregate policyholders surplus of $10,000,000,000 and must submit to the authority of this state to examine the groups books and records and bear the expense of the examination. The group shall also maintain a joint trusteed surplus of which $100,000,000 must be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any such liabilities. Each member of the group shall make available to the director an annual certification of the members solvency by the members domiciliary regulator and the members independent certified public accountant. (d) The form of the trust and any amendment to the trust must be approved by the insurance commissioner of the state in which the trust is domiciled or by the insurance commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust. (e) The form of the trust and any trust amendments also must be filed with the insurance commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust must vest legal title to the trusts assets in the trusts trustees for the benefit of the assuming insurers United States ceding insurers and the assigns and successors in interest of the ceding insurers. The trust and the assuming insurer are subject to examination as determined by the director. The trust must remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. (f) Not later than March 1 of each year, the trustees of each trust shall report to the director in writing the balance of the trust, list the trusts investments at the preceding year end and certify the date of termination of the trust, if a termination is planned, or certify that the trust will not expire prior to the following December 31. (9) The director shall allow credit if the reinsurance is ceded to an assuming insurer that does not meet the requirements of subsection (4), (5), (6) or (7) of this section or ORS 731.511 (1) or (4), but only as to the insurance of risks located in jurisdictions in which the reinsurance is required by applicable law or regulation of that jurisdiction. (10) If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the director may not allow the credit permitted by subsections (6) and (7) of this section unless the assuming insurer agrees in the reinsurance agreement to the provisions stated in this subsection. This subsection does not conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate the parties disputes, if such an obligation is created in the agreement. The assuming insurer must agree in the reinsurance agreement: (a) That if the assuming insurer fails to perform the assuming insurers obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction and will abide by the final decision of the court or of any appellate court in the event of an appeal; and (b) To designate the director or a designated attorney as the assuming insurers true and lawful attorney upon whom any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding company may be served. (11) The director shall allow credit if the reinsurance is ceded to the Oregon Reinsurance Program established in section 18, chapter 538, Oregon Laws 2017. (12) If the assuming insurer does not meet the requirements of subsection (4), (5) or (6) of this section or ORS 731.511 (1) or (4), the director may not allow the credit permitted by subsection (7) of this section unless the assuming insurer agrees in the trust agreements to the following conditions: (a) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because the trust fund contains an amount less than the applicable amount required by subsection (8)(a), (b) or (c) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of the grantors state or country of domicile, the trustee shall comply with an order of the insurance commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance commissioner with regulatory oversight all the assets of the trust fund. (b) The assets must be distributed by and claims must be filed with and valued by the insurance commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that apply to the liquidation of domestic insurance companies. (c) If the insurance commissioner with regulatory oversight determines that the assets of the trust fund or any part of the assets is not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the insurance commissioner of the state in which the trust is domiciled shall return the assets or part of the assets in accordance with the laws of the state and the terms of the trust agreement that are consistent with the laws of the state. (d) The grantor shall waive any right otherwise available to the grantor under United States law that is inconsistent with this subsection. [1993 c.447 65; 1995 c.99 1; 2001 c.318 15; 2013 c.698 5,35; 2017 c.538 23; 2019 c.151 20] Note: The amendments to 731.509 by section 25, chapter 538, Oregon Laws 2017, become operative January 2, 2024. See section 46, chapter 538, Oregon Laws 2017. The text that is operative on and after January 2, 2024, including amendments by section 21, chapter 151, Oregon Laws 2019, is set forth for the users convenience. (1) The purpose of ORS 731.509, 731.510, 731.511, 731.512 and 731.516 is to protect the interests of insureds, claimants, ceding insurers, assuming insurers and the public generally. The Legislative Assembly declares that the intent of the Legislative Assembly is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom insurers and reinsurers owe obligations. In furtherance of that state interest, the Legislative Assembly mandates that upon the insolvency of an alien insurer or reinsurer that provides security to fund the alien insurers or reinsurers United States obligations in accordance with ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the assets representing the security must be maintained in the United States and claims must be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets must be distributed in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurers. The Legislative Assembly declares that the laws contained in ORS 731.509, 731.510, 731.511, 731.512 and 731.516 are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012. (2) The Director of the Department of Consumer and Business Services may not allow credit for reinsurance to a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded unless credit is allowed as provided under ORS 731.508 and unless the reinsurer meets the requirements of: (a) Subsection (4) of this section; (b) Subsection (5) of this section and ORS 731.511 (1); (c) Subsection (6) of this section; (d) Subsections (7) and (8) of this section; (e) ORS 731.511; or (f)(A) Subsection (9) of this section; and (B) Additional requirements that the director specifies by rule, which may include: (i) The valuation of assets or reserve credits; (ii) The amount and forms of security that support reinsurance arrangements; and (iii) The circumstances under which the director will reduce or eliminate credit. (3) The director shall allow credit under subsection (4), (5) or (6) of this section or under ORS 731.511 only with respect to cessions of the kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in the state in which the assuming insurer is domiciled or, if the assuming insurer is an alien insurer, the state in which the assuming insurer is entered and is licensed or authorized to transact insurance or reinsurance. The director may allow credit under subsection (6) or (7) of this section only if the assuming insurer satisfies applicable requirements under subsection (10) of this section. (4) The director shall allow credit if the reinsurance is ceded to an authorized assuming insurer that accepts reinsurance of risks and retains the risk of the reinsurance within such limits as the assuming insurer is otherwise authorized to insure in this state, as provided in ORS 731.508. (5) The director shall allow credit if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state as provided in ORS 731.511. The director may not allow credit to a domestic ceding insurer if the director has revoked accreditation of the assuming insurer after notice and opportunity for hearing. (6) The director shall allow credit if the reinsurance is ceded to a foreign assuming insurer or a United States branch of an alien assuming insurer meeting all of the following requirements: (a) The foreign assuming insurer must be domiciled in a state employing standards regarding credit for reinsurance that equal or exceed the standards applicable under this section. The United States branch of an alien assuming insurer must be entered through a state employing such standards. (b) The foreign assuming insurer or United States branch of an alien assuming insurer must maintain a combined capital and surplus in an amount not less than $20,000,000. The requirement of this paragraph does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. (c) The foreign assuming insurer or United States branch of an alien assuming insurer must submit to the authority of the director to examine the foreign assuming insurers or the alien assuming insurers books and records. (7) The director shall allow credit if the reinsurance is ceded to an assuming insurer that maintains a trust fund meeting the requirements of this subsection and subsection (8) of this section and that also complies with other requirements of this subsection and subsection (8) of this section. The trust fund must be maintained in a qualified United States financial institution, as defined in ORS 731.510 (1), for the payment of the valid claims of the assuming insurers United States policyholders and ceding insurers and the assigns and successors in interest of the policyholders and ceding insurers. The assuming insurer must report annually to the director information that is substantially the same as information authorized insurers must report on the annual statement form under ORS 731.574, in order to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to the directors examination of the assuming insurers books and records and shall pay to the director the expenses of the examination. (8) The following requirements apply to the following categories of assuming insurers: (a)(A) For a single assuming insurer, the trust fund must consist of funds in trust in an amount not less than the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers. In addition, except as provided in subparagraph (B) of this paragraph, the assuming insurer must maintain a trusteed surplus of not less than $20,000,000. (B) At any time after the assuming insurer permanently discontinues underwriting, for at least three full years, new business that the trust secures, the commissioner that has principal regulatory oversight over the trust may authorize a reduction in the required trusteed surplus, but only after finding based on an assessment of the risk that the new required surplus level is adequate to protect United States ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and must consider all material risk factors including, if applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurers liquidity or solvency. The commissioner may not reduce the amount of the minimum required trusteed surplus below 30 percent of the assuming insurers liabilities that are attributable to reinsurance that United States ceding insurers covered by the trust have ceded. (b) For a group that includes incorporated and individual unincorporated underwriters: (A) For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after August 1, 1995, the trust must consist of a trusteed account in an amount not less than the groups several liabilities attributable to business United States domiciled ceding insurers have ceded to any member of the group. (B) For reinsurance ceded under reinsurance agreements with an inception date on or before July 31, 1995, and not amended or renewed after that date, notwithstanding the other provisions of ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the trust must consist of a trusteed account in an amount not less than the groups several insurance and reinsurance liabilities attributable to business written in the United States. (C) In addition to the trusts described in subparagraphs (A) and (B) of this paragraph, the group shall maintain in trust a trusteed surplus of which $100,000,000 must be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account. (D) The incorporated members of the group may not engage in any business other than underwriting as a member of the group and are subject to the same level of regulation and solvency control by the groups domiciliary regulator as are the unincorporated members. (E) Within 90 days after the groups financial statements are due to be filed with the groups domiciliary regulator, the group shall provide to the director an annual certification by the groups domiciliary regulator of the solvency of each underwriter member or, if certification is unavailable, financial statements of each underwriter member of the group prepared by independent certified public accountants. (c) For the group of incorporated insurers described in this paragraph, the trust must be in an amount equal to the groups several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group. This paragraph applies to a group of incorporated insurers under common administration that complies with the annual reporting requirements contained in subsection (7) of this section and that has continuously transacted an insurance business outside the United States for at least three years immediately before applying for accreditation. Such a group must have an aggregate policyholders surplus of $10,000,000,000 and must submit to the authority of this state to examine the groups books and records and bear the expense of the examination. The group shall also maintain a joint trusteed surplus of which $100,000,000 must be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any such liabilities. Each member of the group shall make available to the director an annual certification of the members solvency by the members domiciliary regulator and the members independent certified public accountant. (d) The form of the trust and any amendment to the trust must be approved by the insurance commissioner of the state in which the trust is domiciled or by the insurance commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust. (e) The form of the trust and any trust amendments also must be filed with the insurance commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust must vest legal title to the trusts assets in the trusts trustees for the benefit of the assuming insurers United States ceding insurers and the assigns and successors in interest of the ceding insurers. The trust and the assuming insurer are subject to examination as determined by the director. The trust must remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. (f) Not later than March 1 of each year, the trustees of each trust shall report to the director in writing the balance of the trust, list the trusts investments at the preceding year end and certify the date of termination of the trust, if a termination is planned, or certify that the trust will not expire prior to the following December 31. (9) The director shall allow credit if the reinsurance is ceded to an assuming insurer that does not meet the requirements of subsection (4), (5), (6) or (7) of this section or ORS 731.511 (1) or (4), but only as to the insurance of risks located in jurisdictions in which the reinsurance is required by applicable law or regulation of that jurisdiction. (10) If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the director may not allow the credit permitted by subsections (6) and (7) of this section unless the assuming insurer agrees in the reinsurance agreement to the provisions stated in this subsection. This subsection does not conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate the parties disputes, if such an obligation is created in the agreement. The assuming insurer must agree in the reinsurance agreement: (a) That if the assuming insurer fails to perform the assuming insurers obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction and will abide by the final decision of the court or of any appellate court in the event of an appeal; and (b) To designate the director or a designated attorney as the assuming insurers true and lawful attorney upon whom any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding company may be served. (11) If the assuming insurer does not meet the requirements of subsection (4), (5) or (6) of this section or ORS 731.511 (1) or (4), the director may not allow the credit permitted by subsection (7) of this section unless the assuming insurer agrees in the trust agreements to the following conditions: (a) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because the trust fund contains an amount less than the applicable amount required by subsection (8)(a), (b) or (c) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of the grantors state or country of domicile, the trustee shall comply with an order of the insurance commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance commissioner with regulatory oversight all the assets of the trust fund. (b) The assets must be distributed by and claims must be filed with and valued by the insurance commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that apply to the liquidation of domestic insurance companies. (c) If the insurance commissioner with regulatory oversight determines that the assets of the trust fund or any part of the assets is not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the insurance commissioner of the state in which the trust is domiciled shall return the assets or part of the assets in accordance with the laws of the state and the terms of the trust agreement that are consistent with the laws of the state. (d) The grantor shall waive any right otherwise available to the grantor under United States law that is inconsistent with this subsection.
(1) Subject to the provisions of ORS 731.508 relating to allowance of credit for reinsurance, the Director of the Department of Consumer and Business Services shall allow a reduction from liability for the reinsurance a domestic insurer cedes to a reinsurer that does not meet the requirements of ORS 731.509 in an amount that does not exceed the liabilities the ceding insurer carries, as provided in this section. The reduction must be in the amount of funds held by or on behalf of the ceding insurer, including funds a reinsurer holds in trust for the ceding insurer as security for payment of obligations under a reinsurance contract with the reinsurer, if the security: (a) Is held in the United States subject to withdrawal solely by and under the exclusive control of the ceding insurer; or (b) In the case of a trust, is held in a qualified United States financial institution. For purposes of this paragraph, a qualified United States financial institution is an institution that: (A) Is organized, or, in the case of a United States branch or agency office of a foreign banking organization, is licensed, under the laws of the United States or any state and has been granted authority to operate with fiduciary powers; and (B) Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies. (2) The security for purposes of subsection (1) of this section may be in any of the following forms: (a) Cash. (b) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners and qualifying as allowed assets. (c) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution, effective not later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding company on or before the filing date of the ceding companys annual statement. Letters of credit issued or confirmed by an institution meeting applicable standards of issuer acceptability as of the dates of issuance or confirmation of the letters of credit are acceptable as security, notwithstanding the subsequent failure of the issuing or confirming institution to meet applicable standards of issuer acceptability, until the letters of credit expire or are extended, renewed, modified or amended, whichever occurs first. For purposes of this paragraph, a qualified United States financial institution is an institution that: (A) Is organized or, in the case of a United States office of a foreign banking organization, is licensed, under the laws of the United States or any state; (B) Is regulated, supervised and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and (C) Has been determined by the director to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the director. For the purpose of making a determination under this subparagraph, the director shall consider and may accept determinations made by the Securities Valuation Office of the National Association of Insurance Commissioners as to whether a financial institution meets the offices standards of financial conditions and standing. (d) Any other form of security acceptable to the director. (3) The director by rule may specify additional requirements for: (a) Valuing assets or reserve credits; (b) Setting the amount and forms of security to support reinsurance arrangements; and (c) The circumstances under which the director will reduce or eliminate credit. (4) In addition to the authority of the director described in subsection (3) of this section, the director by rule may adopt guidelines, rules, regulations or interpretive letters from the National Association of Insurance Commissioners that apply to reinsurance collateral requirements for alien reinsurers. [1993 c.447 66; 2001 c.318 16; 2019 c.151 22]
(1) For purposes of allowing credit to a ceding domestic insurer under ORS 731.509 if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state, an insurer may be accredited as a reinsurer in this state if the insurer: (a) Files and maintains with the Director of the Department of Consumer and Business Services evidence of the insurers submission to the jurisdiction of this state; (b) Submits to the authority of the director to examine the insurers books and records; (c) Is authorized or licensed to transact insurance or reinsurance in at least one state or, in the case of a United States branch of an alien assuming insurer, is entered through and authorized or licensed to transact insurance or reinsurance in at least one state; (d) Files annually with the director a copy of the insurers annual statement filed with the insurance department of the insurers state of domicile and a copy of the insurers most recent audited financial statement; and (e) Satisfies either of the following requirements: (A) Maintains combined capital and surplus in an amount that is not less than $20,000,000. An application for accreditation by an insurer who maintains the amount of combined capital and surplus specified in this subparagraph is approved if the application is not disapproved on or before the 90th day after the application is complete and is filed with the director. (B) Maintains combined capital and surplus in an amount less than $20,000,000. An insurer applying for accreditation that maintains the amount of combined capital and surplus specified in this subparagraph is not accredited until the director approves the application for accreditation. (2) An insurer that is accredited as a reinsurer in this state may accept reinsurance only of those risks and retain the risk of the reinsurance within such limits as the accredited reinsurer is otherwise authorized to insure directly in a state in which the accredited reinsurer is authorized or licensed to transact insurance. (3) The director may revoke the accreditation of an assuming insurer if the director determines that the assuming insurer has failed to continue to meet any of the requirements of subsection (1) of this section. (4)(a) The director shall allow credit if the reinsurance is ceded to an assuming insurer that the director certifies has: (A) Maintained a minimum amount of capital and a surplus, or the equivalent, in an amount the director specifies by rule; (B) Maintained a financial strength rating from two or more rating agencies that the director by rule deems acceptable for this purpose; (C) Agreed to submit to the jurisdiction of the state, to appoint the director as the assuming insurers agent for the service of process in this state and to provide security for 100 percent of the assuming insurers liabilities that are attributable to reinsurance that ceding insurers have ceded, if the assuming insurer resists enforcement of a United States judgment; (D) Agreed to meet applicable information filing requirements that the director specifies by rule; (E) Included a covenant in the language of any trust the assuming insurer maintains to secure the assuming insurers obligations under ORS 731.509 (8), and in the language of an agreement between the assuming insurer and the commissioner with principal regulatory authority over the assuming insurer, that requires the assuming insurer to fund out of the remaining surplus of the trust any deficiency in a trust account that terminates; and (F) Satisfied any other requirements that the director specifies for certification. (b) The director may accredit an association as a reinsurer, including an incorporated underwriter or individual unincorporated underwriters, if the association, the incorporated underwriter or the individual unincorporated underwriter, as appropriate, meets the requirements set forth in paragraph (a) of this subsection and, in addition: (A) Satisfies minimum capital and surplus requirements by means of the capital and surplus equivalents, net of liabilities, of the association and the associations members, which must include a joint central fund with an amount that the director determines is adequate to satisfy any unsatisfied obligation of the association or a member of the association; (B) Does not engage, as an incorporated member of the association, in any business other than underwriting and is subject to the same level of regulation and solvency control as the associations unincorporated members are under the associations domiciliary regulator; and (C) Provides to the director each year, within 90 days after the association must file financial statements with the associations domiciliary regulator, a certification from the associations domiciliary regulator as to the solvency of each underwriting member of the association or, if a certification is not available, financial statements of each underwriting member of the association that certified public accounts have prepared. (5)(a) The director shall publish a list of jurisdictions that the director considers qualified for the purpose of accrediting as a reinsurer an assuming insurer that is licensed and domiciled in the jurisdiction. (b) To determine whether a domiciliary jurisdiction outside the United States is qualified for the purpose described in paragraph (a) of this subsection, the director shall: (A) Evaluate and monitor how appropriate and effective the jurisdictions insurance supervisory system is and the extent to which the jurisdiction affords reinsurers that are licensed and domiciled in the United States rights, benefits and reciprocal recognition; (B) Require that the jurisdiction share information and cooperate with the director in any matter that concerns a reinsurer that the director accredits and that is domiciled within the jurisdiction; (C) Refuse to accredit a jurisdiction if the jurisdiction does not promptly and adequately enforce final United States judgments and arbitration awards; and (D) Consider other criteria the director deems appropriate. (c) To determine whether a domiciliary jurisdiction inside the United States is qualified for the purpose described in paragraph (a) of this subsection, the director shall: (A) Consider the list of qualified jurisdictions that the National Association of Insurance Commissioners publishes and, if the director accredits a jurisdiction that does not appear on the National Association of Insurance Commissioners list, justify the directors accreditation with appropriate documentation in accordance with rules the director adopts for this purpose; and (B) Accredit United States jurisdictions that meet the requirements of the National Association of Insurance Commissioners financial standards and accreditation program. (d) If an assuming insurers domiciliary jurisdiction ceases to qualify under paragraph (b) or (c) of this subsection, the director may suspend indefinitely the assuming insurers accreditation as a reinsurer. (6)(a) The director by rule shall designate rating agencies upon which the director will rely for financial strength ratings for accredited reinsurers and shall give appropriate consideration to the rating agencies financial strength ratings in assigning ratings to each accredited reinsurer. The director shall publish a list of the accredited reinsurers together with the directors corresponding rating for each. (b) An accredited reinsurer shall secure obligations the accredited reinsurer assumes from ceding insurers at a level that is consistent with the rating the director assigns and in accordance with rules the director adopts. (7)(a) In order for a ceding domestic insurer to qualify for full financial statement credit for reinsurance that the ceding domestic insurer cedes to an accredited reinsurer, the accredited reinsurer must maintain security in a form that is acceptable to the director and that is consistent with the requirements of ORS 731.510 or maintain security in a trust fund in accordance with ORS 731.509 (8), except as otherwise provided in this section. (b) If an accredited reinsurer maintains a trust fund to fully secure the accredited reinsurers obligations under ORS 731.509 (8) and the trust fund is a multibeneficiary trust, the accredited reinsurer shall maintain separate trust accounts for the obligations the accredited reinsurer incurs under reinsurance agreements the accredited reinsurer issued or renewed as an accredited reinsurer with reduced security, as provided under this section or under comparable laws of other United States jurisdictions, and for obligations the accredited reinsurer incurs that are subject to ORS 731.509 (8). (c) The minimum trusteed surplus requirements under ORS 731.509 (8) do not apply to an accredited reinsurer that maintains a multibeneficiary trust for the purpose of securing obligations under this subsection, except that the trust must maintain a minimum trusteed surplus of $10,000,000. (8) The director shall reduce the allowable credit for ceding insurers by an amount that is proportionate to any deficiency in the security required for an accredited reinsurer under this section. The director may also reduce the allowable credit further if the director finds that a material risk exists that the accredited reinsurer will not pay the accredited reinsurers obligations in full when due. (9)(a) Except as provided in paragraph (b) of this subsection, the director shall require an accredited reinsurer that has become inactive or has voluntarily surrendered accreditation as an accredited reinsurer, or for which the director has revoked or suspended accreditation, to secure 100 percent of the reinsurers obligations. (b) The security requirement described in paragraph (a) of this subsection does not apply to an accredited reinsurer that is inactive, or for which the director has suspended accreditation, if the director maintains a high rating for the reinsurer under subsection (6) of this section. (10) The director may accredit an assuming insurer as a reinsurer in this state if a jurisdiction that the National Association of Insurance Commissioners has qualified as meeting the associations financial standards and accreditation has certified the assuming insurer as a reinsurer. The director may also assign to the accredited reinsurer the rating that the qualifying jurisdiction assigned to the accredited reinsurer. (11) An accredited reinsurer that ceases to assume new business in this state may apply to the director to become inactive and to qualify for a reduction in security for the business the accredited reinsurer maintains. An inactive accredited reinsurer shall comply with all other applicable requirements of this section and the director shall assign a rating to the accredited reinsurer that accounts for the reasons that the accredited reinsurer is not assuming new business, if the reasons are relevant to the rating. (12)(a) The director may suspend or revoke an assuming insurers accreditation as a reinsurer in this state if the assuming insurer fails to meet applicable requirements for accreditation. (b) The director shall give an accredited reinsurer notice and an opportunity for a hearing before taking action under paragraph (a) of this subsection and a suspension or revocation is not effective until after the directors final order unless: (A) The accredited reinsurer waives the opportunity for a hearing; (B) The director bases the final order on regulatory action by the accredited reinsurers domiciliary jurisdiction or on the accredited reinsurers having voluntarily surrendered or terminated the accredited reinsurers authorization to transact insurance or reinsurance in the domiciliary jurisdiction or in a jurisdiction whose certification of the reinsurer formed the basis upon which the director accredited the reinsurer in this state under subsection (10) of this section; or (C) The director finds that an emergency requires immediate action and a court does not stay the directors action. (13) A reinsurance contract issued or renewed after the director suspends an accredited reinsurers certification does not qualify for credit unless the reinsurer secures the reinsurers obligations in accordance with ORS 731.510. The director may not grant credit for reinsurance after the effective date of the directors revocation of accreditation unless the reinsurer secures the reinsurers obligations in accordance with subsections (6), (7) and (9) of this section or ORS 731.510. (14) The director may adopt rules to implement the provisions of this section including, but not limited to, rules that adopt guidelines, rules, regulations or interpretive letters from the National Association of Insurance Commissioners that apply to reinsurance collateral requirements for alien reinsurers. [1993 c.447 67; 2019 c.151 23; 2021 c.204 3]
(1) No insurer shall withdraw from this state until its direct liability to its policyholders and obligees under all its insurance policies then in force in this state has been assumed by another authorized insurer under an agreement approved by the Director of the Department of Consumer and Business Services. In the case of a life insurer, its liability pursuant to policies issued in this state in settlement of proceeds under its policies shall likewise be so assumed. (2) The director may waive this requirement if the director finds upon examination that a withdrawing insurer then is fully solvent and that the protection to be given its policyholders in this state will not be impaired by the waiver. (3) The assuming insurer within a reasonable time shall replace the assumed insurance policies with its own, or by indorsement thereon acknowledge its liability thereunder. (4) This section is in addition to the requirements of ORS 732.517 to 732.546 and 742.150 to 742.162. [1967 c.359 105; 1995 c.30 10]
(1) A ceding insurer shall manage the ceding insurers reinsurance recoverables in proportion to the ceding insurers book of business. A domestic ceding insurer shall notify the Director of the Department of Consumer and Business Services within 30 days after reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers exceeds or is likely to exceed 50 percent of the domestic ceding insurers surplus, as last reported to the ceding insurers policyholders. In the notification, the domestic ceding insurer shall demonstrate that the domestic ceding insurer is safely managing the exposure. (2) A ceding insurer shall diversify the ceding insurers reinsurance program. A domestic ceding insurer shall notify the director within 30 days after ceding to any single assuming insurer or group of affiliated assuming insurers more than 20 percent of the ceding insurers gross written premium in the previous calendar year or after determining that the ceded reinsurance will likely exceed this percentage. In the notification, the domestic ceding insurer shall demonstrate that the domestic ceding insurer is safely managing the exposure. [2019 c.151 2]
(1) As used in this section, "policyholders position" means the aggregate amount of mortgage insurance policies covering amounts of insured obligations, divided by the insurers surplus to policyholders as defined in ORS 731.504 (6). (2) Except as provided in subsection (3) of this section, a mortgage insurer shall not have outstanding at any time a policyholders position greater than 25. (3)(a) The Director of the Department of Consumer and Business Services may waive the requirement in subsection (2) of this section in response to the request of a mortgage insurer if the director finds that the mortgage insurers policyholders position is reasonable in relation to the mortgage insurers aggregate insured risk and adequate to the mortgage insurers financial needs. (b) The request of the mortgage insurer must be made in writing at least 60 days prior to the date the mortgage insurer expects to exceed the policyholders position allowed by subsection (2) of this section, and shall at a minimum address the factors set forth in subsection (4) of this section that the director may use in making a decision on the waiver request. (4) In determining whether a mortgage insurers requested policyholders position is reasonable in relation to the mortgage insurers aggregate insured risk and adequate to the mortgage insurers financial needs, the director may consider the following factors: (a) The size of the mortgage insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria. (b) The extent to which the mortgage insurers business is diversified across time, geography, credit quality, origination and distribution channels. (c) The nature and extent of the mortgage insurers reinsurance program. (d) The quality, diversification and liquidity of the mortgage insurers assets and investment portfolio. (e) The historical and projected trends in the magnitude of the mortgage insurers policyholders position. (f) The policyholders position maintained by other comparable mortgage insurers. (g) The adequacy of the mortgage insurers reserves. (h) The quality and liquidity of investments in affiliates of the mortgage insurer. The director may treat any such investment as a nonadmitted asset for purposes of determining the adequacy of the mortgage insurers policyholders position. (i) The quality of the mortgage insurers earnings and the extent to which the reported earnings of the mortgage insurer include extraordinary items. (j) An independent actuarys opinion as to the reasonableness and adequacy of the mortgage insurers historical and projected policyholders position. (k) The capital contributions that have been invested or are available for future investment in the mortgage insurer. (L) The historical and projected trends in the components of the mortgage insurers aggregate insured risk including, but not limited to, the quality and type of the risks included in the aggregate insured risk. (m) Any other factors the director believes are relevant in making a decision on the request. (5) The director may retain accountants, actuaries or other experts to assist the director in the review of the mortgage insurers request submitted under subsection (3) of this section. (6) Any waiver granted by the director under subsection (3) of this section is: (a) In effect for a specified period of time, not to exceed two years. The mortgage insurer may request an extension of the waiver for a period not exceeding two additional years, and the director shall review the extension request based upon the factors set forth in subsection (4) of this section. (b) Subject to any terms and conditions that the director considers necessary to restore the mortgage insurers policyholders position to 25 or lower as required by subsection (2) of this section. (7) The director may adopt rules to carry out the provisions of this section. (8) The director shall charge a fee for a waiver request under this section designed to reimburse the Department of Consumer and Business Services for all costs incurred by the department in reviewing the waiver request. [1969 c.692 5; 1977 c.600 1; 2010 c.46 1]
(1) Credit must be allowed if reinsurance is ceded to an assuming insurer that meets each of the conditions set forth below: (a) The assuming insurer must be licensed in a reciprocal jurisdiction and have the assuming insurers home office in, or be domiciled in, as applicable, the reciprocal jurisdiction. For purposes of this paragraph, a reciprocal jurisdiction is a jurisdiction that meets one of the following: (A) A jurisdiction outside the United States that is subject to an in-force covered agreement with the United States, each within the jurisdictions legal authority or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union. For purposes of this subparagraph, a covered agreement is an agreement entered into under the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. 313 and 314, that is currently in effect or in a period of provisional application and that addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance. (B) A United States jurisdiction that meets the requirements for accreditation under the National Association of Insurance Commissioners Financial Regulation Standards and Accreditation Program. (C) A qualified jurisdiction, as the Director of the Department of Consumer and Business Services determines in accordance with ORS 731.511 (5), that is not otherwise described in subparagraph (A) or (B) of this paragraph and that meets other requirements the director specifies by rule that are consistent with the terms and conditions of in-force covered agreements. (b) The assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus, or an equivalent, calculated according to the methodology of the assuming insurers domiciliary jurisdiction, in an amount set forth in rule. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus equivalents, net of liabilities, calculated according to the methodology applicable in the assuming insurers domiciliary jurisdiction, and a central fund containing a balance in amounts set forth in rule. (c) The assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio, as applicable, that is set forth in rule. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer is licensed and has the assuming insurers head office or is domiciled. (d) The assuming insurer must agree and provide adequate assurance to the director, in a form the director specifies by rule, as follows: (A) The assuming insurer must provide prompt written notice and explanation to the director if the assuming insurer falls below the minimum requirements set forth in paragraph (b) or (c) of this subsection or if any regulatory action is taken against the assuming insurer for serious noncompliance with applicable law. (B) The assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process. The director may require that consent for service of process be provided to the director and included in each reinsurance agreement. This subparagraph does not limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent that such agreements are unenforceable under applicable insolvency or delinquency laws. (C) Wherever enforcement is sought, the assuming insurer must consent in writing to pay all final judgments that a ceding insurer or the ceding insurers successor obtains in a jurisdiction that has declared the final judgment enforceable. (D) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurers liabilities attributable to reinsurance ceded under the reinsurance agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which the final judgment was obtained or of a properly enforceable arbitration award, whether the ceding insurer or the ceding insurers legal successor obtains the final judgment or arbitration award on behalf of the ceding insurer or the ceding insurers resolution estate. (E) The assuming insurer must confirm that the assuming insurer is not presently participating in any solvent scheme of arrangement that involves this states ceding insurers and, if the assuming insurer does enter into a solvent scheme of arrangement, must agree to notify the ceding insurer and the director and provide security in an amount equal to 100 percent of the assuming insurers liabilities to the ceding insurer. The security must be in a form that the director specifies by rule consistent with the provisions of ORS 731.510 and 731.511. (e) At the directors request, the assuming insurer or the assuming insurers legal successor must provide on the assuming insurers behalf and on behalf of any of the assuming insurers legal predecessors, documentation the director specifies by rule. (f) The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements in accordance with criteria the director specifies by rule. (g) The assuming insurers supervisory authority must confirm to the director every year, as of the preceding December 31 or on the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set forth in paragraphs (b) and (c) of this subsection. (h) This subsection does not preclude an assuming insurer from providing the director with information on a voluntary basis. (2) The director shall timely create and publish a list of reciprocal jurisdictions as follows: (a) The directors list must include any reciprocal jurisdiction described in subsection (1)(a)(A) and (B) of this section, and the director shall consider for inclusion in the list any other reciprocal jurisdiction included on the list of reciprocal jurisdictions that the National Association of Insurance Commissioners publishes. The director may include on the directors list a jurisdiction that does not appear on the National Association of Insurance Commissioners list in accordance with criteria the director specifies by rule. (b) The director may remove a jurisdiction from the list the director publishes after determining, in accordance with a process the director specifies by rule, that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction, except that the director may not remove from the list a reciprocal jurisdiction described in subsection (1)(a)(A) and (B) of this section. The director shall allow credit for reinsurance ceded to an assuming insurer that has a home office in, or is domiciled in, a jurisdiction the director removed from the directors list of reciprocal jurisdictions, if otherwise allowed under applicable provisions of the Insurance Code. (3) The director shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this section and to which cessions will be granted credit in accordance with this section. The director may add an assuming insurer to the list if a jurisdiction that the National Association of Insurance Commissioners has accredited has added the assuming insurer to the jurisdictions list of assuming insurers or if, upon initial eligibility, the assuming insurer submits information to the director as required under subsection (1)(d) of this section and complies with any additional requirements that the director may impose by rule, except to the extent that the additional requirements conflict with an applicable covered agreement. (4) If the director determines that an assuming insurer no longer meets one or more of the requirements under this section, the director may revoke or suspend the eligibility of the assuming insurer for recognition under this section in accordance with procedures the director specifies by rule. The effect of the directors revocation or suspension is: (a) A reinsurance agreement issued, amended or renewed after the effective date of the assuming insurers suspension does not qualify for credit except to the extent that the assuming insurers obligations under the reinsurance agreement are secured in accordance with ORS 731.510 and rules the director adopts. (b) Credit for reinsurance after the effective date of the assuming insurers revocation of eligibility may not be granted with respect to any reinsurance agreements the assuming insurer entered into, including reinsurance agreements the assuming insurer entered into before the effective date of the revocation, except to the extent that the assuming insurers obligations under the reinsurance agreement are secured consistent with the provisions of ORS 731.510 and rules the director adopts. (5) If subject to a legal process of rehabilitation, liquidation or conservation, as applicable, the ceding insurer or a representative of the ceding insurer may seek and obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities, if the court in which the proceedings are pending determines that the order is appropriate. (6) This section does not limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in the reinsurance agreement, except as expressly prohibited under the Insurance Code or other applicable law, rule or regulation. (7)(a) Credit may be taken under this section only for reinsurance agreements entered into, amended or renewed on or after September 25, 2021, and only with respect to losses incurred and reserves reported on or after the later of: (A) The date on which the assuming insurer has met all eligibility requirements under subsection (1) of this section; and (B) The effective date of the new reinsurance agreement, amendment or renewal. (b) This subsection does not alter or impair a ceding insurers right to take credit for reinsurance, to the extent that credit is not available under this section, as long as the reinsurance qualifies for credit under any other applicable provision of the Insurance Code. (8) This section does not: (a) Authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement, except as permitted by the terms of the reinsurance agreement; or (b) Limit or in any way alter the capacity of parties to any reinsurance agreement to renegotiate the reinsurance agreement. [2021 c.204 2]
(1) Except as provided in subsections (2) to (6) of this section and ORS 731.562 and 731.566, to qualify for authority to transact insurance in this state an insurer shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $2.5 million. (2) An insurer transacting any workers compensation insurance business shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $5 million. (3) An insurer transacting mortgage insurance shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $4 million. (4) A home protection insurer shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than 10 percent of the aggregate of premiums charged on its policies currently in force, but the required amount shall not be less than $250,000 or more than $1 million. (5) A domestic insurer applying for its original certificate of authority in this state shall possess, when first so authorized, additional capital or surplus, or any combination thereof, of not less than $500,000. However, the additional amount in the case of a home protection insurer shall be not less than $10,000. (6) For the protection of the public, the Director of the Department of Consumer and Business Services may require an insurer to possess and maintain capital or surplus, or any combination thereof, in excess of the amount otherwise required under this section, ORS 731.562 or 731.566, owing to the type, volume and nature of insurance business transacted by the insurer, if the director determines that the greater amount is necessary for maintaining the insurers solvency according to standards established by rule. In developing such standards, the director shall consider model standards adopted by the National Association of Insurance Commissioners. For the purpose of determining the reasonableness and adequacy of an insurers capital and surplus, the director must consider at least the following factors, as applicable: (a) The size of the insurer, as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria. (b) The extent to which the business of the insurer is diversified among the several lines of insurance. (c) The number and size of risks insured in each line of business. (d) The extent of the geographical dispersion of the insured risks of the insurer. (e) The nature and extent of the reinsurance program of the insurer. (f) The quality, diversification and liquidity of the investment portfolio of the insurer. (g) The recent past and projected future trend in the size of the investment portfolio of the insurer. (h) The combined capital and surplus maintained by other comparable insurers. (i) The adequacy of the reserves of the insurer. (j) The quality and liquidity of investments in affiliates. The director may treat any such investment as a disallowed asset for purposes of determining the adequacy of combined capital and surplus whenever in the judgment of the director the investment so warrants. (k) The quality of the earnings of the insurer and the extent to which the reported earnings include extraordinary items. [1967 c.359 106; 1969 c.335 1; 1969 c.692 6; 1981 c.247 5; 1987 c.483 1; 1993 c.447 9; 2001 c.318 1]
To qualify for authority to transact title insurance in this state, an insurer shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $2.5 million. [Formerly 748.010; 1987 c.483 2; 2001 c.318 2]
To qualify for authority to transact insurance in this state, a reciprocal insurer shall possess and thereafter maintain a surplus of not less than $2.5 million, and any reciprocal insurer that exchanges policies of insurance covering workers compensation insurance shall possess and thereafter maintain a surplus of not less than $5 million. [1967 c.359 109; 1975 c.274 1; 1977 c.651 2; 1987 c.483 3; 1993 c.709 3; 2001 c.318 3]
No advancement made by the subscribers or the attorney of a reciprocal insurer shall be withdrawn or refunded except out of the surplus of the insurer in excess of its required capitalization, and then only upon the written consent of the Director of the Department of Consumer and Business Services. [1967 c.359 110]
(1) Except as provided in subsection (4) of this section, every authorized insurer shall file with the Director of the Department of Consumer and Business Services, on or before March 1 of each year, a financial statement for the year ending December 31 immediately preceding. This statement shall be on a form prescribed by the director. The statement shall contain such detailed exhibit of the condition and transactions of the insurer, in such form and otherwise, as the director prescribes. The director shall consider and may prescribe the annual statement blank or other form established by the National Association of Insurance Commissioners, including instructions prepared by the National Association of Insurance Commissioners for completing the blank or other form. If the director prescribes the blank or other form established by the National Association of Insurance Commissioners, including the instructions, an insurer submitting the annual statement blank or form established by the National Association of Insurance Commissioners must complete the blank or form according to the instructions. The director may require the filing of information in addition to the information required in the annual statement. The director may also require additional filings as the director determines necessary. (2) The financial statement filed by an insurer under subsection (1) of this section shall be verified by the oaths of the president and secretary of the insurer or, in their absence, by two other principal officers. The statement of an alien company shall embrace only its condition and transactions in the United States, unless the director requires otherwise, and shall be verified by the oath of its resident manager or principal representatives in the United States. Facsimile signatures are acceptable and shall have the same force as original signatures. (3) The director may grant an extension of time for filing the annual statement. (4) A home protection insurer may adopt a fiscal year other than the calendar year for its financial statements filed with the director under subsection (1) of this section by declaring the fiscal year in its application for a certificate of authority. An adopted fiscal year may not be changed without the consent of the insurance supervisory official of the insurers domicile. The financial statement of a home protection insurer on other than the calendar year basis shall be filed with the director on or before the first day of the third month which follows the end of the fiscal year. (5) An insurer, subject to requirements set forth in rules made by the director, may publish financial statements, or information based on financial statements, prepared on a basis that is in accordance with requirements of a competent authority and differs from the basis of the statements required to be filed with the director. (6) It is the intention of the Legislative Assembly that the director consider and follow the accounting, reporting and other standards, practices and procedures established by the National Association of Insurance Commissioners in order to: (a) Strengthen and improve regulation of insurer solvency by the Department of Consumer and Business Services; (b) Promote uniform and consistent regulation of insurance by this state and the other states; (c) Reduce regulatory costs owing to unnecessary differences in the laws of the various states; and (d) Obtain and maintain accreditation of this states insurance regulatory program by the National Association of Insurance Commissioners. [Formerly 736.120; 1975 c.231 1; 1981 c.247 6; 1993 c.447 12]
As used in ORS 731.592 and 731.594, "insurer" includes, but is not limited to: (1) An insurer, as defined in ORS 731.106. (2) A health care service contractor, as defined in ORS 750.005, including, but not limited to, a health maintenance organization. (3) A multiple employer welfare arrangement, as defined in ORS 750.301. (4) A legal entity that is self-insured and provides insurance services to its employees. (5) An insurer, as defined in ORS 656.005. (6) An employer authorized under ORS chapter 656 to self-insure its workers compensation risk. (7) A fraternal benefit society, as described in ORS 748.106. (8) An insurance producer, as defined in ORS 731.104. [1999 c.633 2; 2003 c.364 73; 2007 c.241 25]
(1) Notwithstanding ORS 746.665, an insurer shall cooperate with any law enforcement agency or other state or federal agency that is investigating or prosecuting suspected criminal conduct involving insurance. The insurer shall provide any information requested by the agency unless the information is subject to a legal privilege that would prohibit disclosure. (2) If an insurer has reason to believe that criminal conduct involving insurance has been, is being or is about to be committed, the insurer shall notify the appropriate agency of that fact. The insurer is not required to notify the agency if the information or any part of the information upon which the belief is based is protected from disclosure by legal privilege. (3) An insurer providing information under this section may request information relating to the investigation that is in the possession or control of the agency. The agency may not provide an insurer with information that is privileged or confidential. Otherwise, the agency shall disclose requested information unless disclosure would jeopardize an ongoing investigation or prosecution. The agency may require that the insurer not disclose the information to any other person. (4) A person who has reason to believe criminal conduct involving insurance has been, is being or is about to be committed, or who collects, reviews or analyzes information concerning suspected criminal conduct involving insurance, may furnish any unprivileged information in the persons possession concerning the suspected criminal conduct to an insurer who requests the information for the purpose of detecting, prosecuting or preventing criminal conduct involving insurance. (5) If an insurer or agency does not provide information as required by this section and the suspected criminal conduct results in a conviction, the insurer or agency is not eligible for any compensation to which the insurer or agency might otherwise be entitled from any award under ORS 137.106. [1999 c.633 3]
Unless it is shown that the person, including an insurer, acted with actual malice, a person who discloses or provides information under ORS 731.592 has immunity from any civil liability that might otherwise be incurred or imposed with respect to the disclosure or provision of the information. A person has the same immunity with respect to participating in any judicial proceeding resulting from the disclosure or provision of information. [1999 c.633 4]
The following deposits of insurers shall be accepted and held by the Department of Consumer and Business Services for the purposes for which such deposits are made and are subject to the applicable provisions of the Insurance Code: (1) Deposits required or permitted under the Insurance Code. (2) Deposits of domestic insurers made pursuant to the laws of other jurisdictions. [1967 c.359 112; 1999 c.196 2]
(1) Except as provided in subsection (2) of this section, deposits made in this state under ORS 731.624 shall be held for the faithful performance by the insurer of all insurance obligations, including claims for unearned premiums, with respect to domestic risks pertaining to the particular class of insurance for which the deposit was made. However, there shall be excluded from each such obligation the same amount as is excluded in determining the obligation of the Oregon Insurance Guaranty Association under ORS 734.510 to 734.710. (2) If at any time a deposit made under ORS 731.624 by a particular insurer is insufficient to perform the insurance obligations upon the faithful performance of which the deposit was conditioned, then any other deposit made under ORS 731.624 by that insurer shall be so used to the extent that such other deposit is not used to perform the insurance obligations upon the faithful performance of which such other deposit was conditioned. (3) Deposits made by insurers and reinsurers in this state under ORS 731.628 shall be held for the payment of compensation benefits to workers employed by insured employers other than those insured with the State Accident Insurance Fund Corporation to whom the insurer has issued a workers compensation insurance policy under ORS chapter 656. Deposits made by insurers and reinsurers under ORS 731.628 also shall be held to reimburse the Department of Consumer and Business Services, subject to approval by the Director of the Department of Consumer and Business Services, for costs incurred by the department in processing workers compensation claims of insurers which have been placed in liquidation, receivership, rehabilitation or other such status for the orderly conservation or distribution of assets, pursuant to the laws of this state or any other state. (4) A deposit made in this state by a domestic insurer transacting insurance in another jurisdiction, and as required by the laws of such jurisdiction, shall be held for the purpose or purposes required by such laws. (5) Deposits of foreign and alien insurers required pursuant to ORS 731.854 shall be held for such purposes as are required by such law, and as specified by the directors order by which the deposit is required. (6) Deposits of domestic reciprocal insurers required pursuant to ORS 731.632 shall be held for the benefit of subscribers wherever located. [1967 c.359 113; 1971 c.231 12; 1977 c.793 6; 1981 c.854 57; 1987 c.236 1; 1989 c.700 2; 2007 c.241 26]
While the insurer remains unimpaired and is in compliance with the Insurance Code it may: (1) Demand, receive, sue for and recover the income from the assets deposited; (2) Exchange and substitute for the deposited assets, or any part thereof, other eligible assets of equivalent or greater value; and (3) At any reasonable time inspect such deposit. [1967 c.359 114]
(1) For the purpose of determining the sufficiency of its deposit in this state the assets of the insurer on deposit shall be valued at current market value. (2) If assets deposited by an insurer are subject to material fluctuations in market value, the Director of the Department of Consumer and Business Services, in the discretion of the director, may require the insurer to deposit and maintain on deposit additional assets in such amount as reasonably is necessary to assure that the deposit at all times will have a market value of not less than the amount specified under or pursuant to the law by which the deposit is required. (3) If for any reason the current market value of such assets falls below the amount of deposit required of the insurer, the insurer shall promptly deposit other or additional assets eligible for deposit in an amount sufficient to cure the deficiency. The insurer has 30 days in which to cure the deficiency after notice thereof from the director. [1967 c.359 115]
(1) The insurer shall assign in trust to the Director of the Department of Consumer and Business Services and successors in office all securities being deposited through the director under the Insurance Code that are not negotiable by delivery; or, in lieu of such assignment, the insurer may give the director an irrevocable power of attorney authorizing the director to transfer the securities or any part thereof for any purpose within the scope of the Insurance Code. (2) Upon release to the insurer, or other person entitled thereto, of any such security the director shall reassign the security to such insurer or person; or, in the case of power of attorney given pursuant to subsection (1) of this section, the director shall deliver the power of attorney, together with the securities covered thereby, to the insurer or person entitled thereto. [1967 c.359 116; 1979 c.870 3; 1987 c.158 154]
Every insurer, before transacting insurance in this state, shall make the following deposits with the Department of Consumer and Business Services: (1) Foreign or alien insurers transacting surety insurance in this state, $250,000. (2) Foreign or alien insurers transacting title insurance in this state, $100,000. (3) Foreign or alien insurers transacting home protection insurance in this state, $100,000. (4) Foreign or alien insurers transacting mortgage guaranty insurance in this state, $500,000. [1967 c.359 117; 1981 c.247 7; 1987 c.483 4; 1999 c.196 3]
(1) In addition to any other requirement therefor under the Insurance Code, each insurer other than the State Accident Insurance Fund Corporation that issues workers compensation insurance policies to employers under ORS chapter 656 shall deposit with the Department of Consumer and Business Services an amount that is the greater of the following amounts: (a) $100,000. (b) An amount equal to the sum described in this paragraph less credits for approved reinsurance that the insurer may take under subsection (2) of this section. The sum under this paragraph is the sum of the following, computed as of December 31 next preceding in respect to workers compensation insurance policies written subject to ORS chapter 656: (A) The aggregate of the present values at four percent interest of the determined and estimated future loss and loss-expense payments upon claims incurred more than three years next preceding the date of computation. (B) The aggregate of the amounts computed under this subparagraph for each of the three years next preceding the date of computation. The amount for each year shall be 65 percent of the earned premiums for the year less all loss and loss-expense payments made upon claims incurred in the corresponding year, except that the amount for any year shall not be less than the present value at four percent interest of the determined and estimated future loss and loss-expense payments upon claims incurred in that year. (2) Before an insurer may take a credit for reinsurance under subsection (1)(b) of this section, the reinsurer must deposit with the department an amount equal to the credit to be taken. (3) An insurer may be allowed the credit referred to in subsection (1)(b) of this section only when the reinsurer has deposited with the department an amount equal to the credit. [1967 c.359 118; 1971 c.231 13; 1979 c.870 4; 1981 c.854 58; 1987 c.483 5; 1989 c.700 3; 1999 c.196 4; 2007 c.241 27]
Every domestic reciprocal insurer shall deposit with the Department of Consumer and Business Services $50,000, except such an insurer which exchanges policies of insurance covering only wet marine hull insurance for persons whose earned income, in whole or in part, is derived from taking and selling food resources living in an ocean, bay or river. [1967 c.359 119; 1977 c.651 3; 1993 c.709 5; 1999 c.196 5]
(1) Except as provided in subsection (3) of this section, every alien insurer, before transacting insurance in this state as an authorized insurer, shall deposit with the Department of Consumer and Business Services the sum of the following amounts: (a) The amount of its outstanding liabilities arising out of its insurance transactions in the United States; and (b) Its required capitalization. (2) ORS 731.640 (1)(d) does not apply with respect to such deposit. (3) In lieu of such deposit, the insurer may furnish evidence satisfactory to the Director of the Department of Consumer and Business Services that it maintains in the United States, by way of trust deposits with public depositories or with trust institutions acceptable to the director, assets at least equal to the deposit otherwise required by this section. [1967 c.359 120; 1999 c.196 6]
(1) Deposits which are required or permitted under the Insurance Code shall consist only of the following: (a) Cash. (b) Amply secured obligations of the United States, a state or a political subdivision thereof. (c) Certificates of deposit or other investments described in ORS 733.650 (4). The Director of the Department of Consumer and Business Services may promulgate rules to limit such investments. (d) A surety bond, approved by the director, executed by an authorized surety insurer that is not under common ownership, management or control with the person making the deposit. This paragraph does not apply to deposits made by surety insurers or to workers compensation deposits made under ORS 731.628. (e) Amply secured obligations of a corporation rated by the National Association of Insurance Commissioners as Class 1. This paragraph applies only to that portion of the total deposit that exceeds $50 million. The director may adopt rules to require periodic review of the secured obligations of a corporation allowed under this paragraph. (2) Deposits of domestic insurers made pursuant to the laws of other jurisdictions shall consist of cash or securities as required or permitted by the laws of such jurisdictions. [1967 c.359 121; 1973 c.450 1; 1981 c.854 61; 1999 c.196 6a; 2003 c.123 1]
The Director of the Department of Consumer and Business Services, in performing duties under ORS 731.604 to 731.652 and after consultation with the State Treasurer, may enter into contracts with banks qualified to act as trust companies and as depositories of state funds to hold and service securities deposited by insurers with the Department of Consumer and Business Services. The insurers whose securities are held and serviced by the banks shall pay for the cost of such contracts. [1969 c.143 2; 1999 c.196 7; 2001 c.104 288]
(1) Except as otherwise provided in the Insurance Code, no judgment creditor or other claimant of an insurer shall have the right to levy upon any of the assets or securities of the insurer held on deposit in this state. (2) As to deposits made in this state pursuant to ORS 731.854, levy thereupon shall be permitted only if expressly so provided in the order of the Director of the Department of Consumer and Business Services under which the deposit is required. [1967 c.359 122]
(1) Every deposit made in this state by an insurer pursuant to the Insurance Code shall be so held as long as there is outstanding any liability of the insurer as to which the deposit was required, except as follows: (a) If the deposit was required under ORS 731.854, the deposit shall be held for so long as the basis of such retaliation exists. (b) If the deposit was required of a reinsurer under ORS 731.628, the deposit shall be held as long as there is outstanding any liability of the reinsurer with respect to which the deposit was made. (2) No surety insurer shall be permitted to withdraw its deposit for a period of three years after discontinuing business within this state. (3) The Director of the Department of Consumer and Business Services shall release a deposit: (a) To the insurer upon extinguishment by reinsurance or otherwise of all liability of the insurer for the security of which the deposit is held. If extinguishment is by reinsurance, the assuming insurer shall be one authorized to transact such insurance in this state. (b) To the insurer, while unimpaired, to the extent such deposit is in excess of the amount required. (c) To the surviving corporation or to such person as it may designate for the purpose, upon effectuation of a merger of the depositing insurer, if the surviving insurer is authorized to transact insurance in this state. (4) The director shall release a deposit by an insurer upon order of a court of competent jurisdiction, to the receiver, conservator, rehabilitator, or liquidator of the insurer, or to any other properly designated official or officials who succeed to the management and control of the insurers assets pursuant to delinquency proceedings brought against the insurer. The director shall release a deposit by a reinsurer under ORS 731.628 upon order of a court of competent jurisdiction, to the receiver, conservator, rehabilitator, or liquidator of the ceding insurer, or to any other properly designated official or officials who succeed to the management and control of the insurers assets pursuant to delinquency proceedings brought against the ceding insurer. [1967 c.359 123; 1989 c.700 4; 1993 c.447 106; 1999 c.196 8]
(1) Before releasing any deposit or portion thereof to the insurer, as provided in ORS 731.648, the Director of the Department of Consumer and Business Services shall require the insurer to file with the director a written statement in such form and with such verification as the director deems advisable setting forth the facts upon which it bases its entitlement to such release. (2) If release of the deposit is claimed by the insurer upon the ground that all its liabilities, as to which the deposit was held, have been assumed by another insurer authorized to transact insurance in this state, the insurer shall file with the director a copy of the contract or agreement of such reinsurance duly attested under the oath of an officer of each of the insurers that are parties thereto. (3) If release of the deposit is claimed by a domestic insurer upon the ground that all its liabilities, as to which the deposit was held, have been terminated other than by reinsurance, the director shall make an examination of the affairs of the insurer for determination of the actuality of such termination. (4) Upon being satisfied by such statement and reinsurance contract, or examination of the insurer if required under subsection (3) of this section, or by such other examination of the affairs of the insurer as the director deems advisable to make, that the insurer is entitled to the release of its deposit or portion thereof as provided in ORS 731.648, the director shall release the deposit or excess portion thereof to the insurer or its authorized representative. (5) If the director willfully fails faithfully to keep, deposit, account for or surrender any such assets or securities deposited through the director in the manner as authorized or required under the Insurance Code, the director shall be liable therefor upon the directors official bond, and suit may be brought upon the bond by any person injured by such failure. The director shall not, however, have any liability as to any assets or securities of an insurer released by the director in good faith pursuant to the authority vested in the director under the Insurance Code. [1967 c.359 124; 1999 c.196 9]
(1) Every authorized insurer shall file with the National Association of Insurance Commissioners, on or before March 1 of each year, a copy of its annual statement blank, along with additional filings required by the Director of the Department of Consumer and Business Services for the preceding year. The information filed with the National Association of Insurance Commissioners must be in the same format and scope as that required by the director and must include the signed jurat page and the actuarial certification. Each amendment and each addendum to the annual statement filing subsequently filed with the director must also be filed with the National Association of Insurance Commissioners. (2) A foreign insurer that is domiciled in a state having a law substantially similar to the provisions of subsection (1) of this section is considered to be in compliance with this section. (3) An insurer making a filing under subsection (1) of this section must pay the National Association of Insurance Commissioners the fee established by the National Association of Insurance Commissioners for filing, reviewing or processing the information. [1993 c.447 100]
Except in the case of malfeasance in office or willful or wanton neglect of duty or authority, there shall be no liability on the part of, and no cause of action of any nature shall arise against, any of the following persons by virtue of their collection, review, analysis or dissemination of the data and information collected from the filings required by ORS 731.730: (1) Members of the National Association of Insurance Commissioners and the delegates and authorized committees, subcommittees and task forces of the National Association of Insurance Commissioners. (2) Employees of the National Association of Insurance Commissioners. (3) The Director of the Department of Consumer and Business Services or any representative of the director. (4) The insurance regulatory official of another state or any representative of such an official. [1993 c.447 101]
All financial analysis ratios and examination synopses concerning insurers that are submitted to the Director of the Department of Consumer and Business Services by the Insurance Regulatory Information System of the National Association of Insurance Commissioners are confidential as provided in ORS 705.137. [1993 c.447 102; 2001 c.377 6]
(1) A person or other entity described in this subsection acting without malice, fraudulent intent or bad faith is not subject to civil liability, and no cause of action of any nature may exist against such a person or entity, when the person is performing authorized functions, including publication or dissemination of information, regarding any activity described in subsection (3) of this section. This subsection applies to the following persons and entities: (a) Law enforcement officials and their agents and employees. (b) The National Association of Insurance Commissioners, the Department of Consumer and Business Services, a federal or state governmental agency established to detect and prevent activities described in subsection (3) of this section and any other organization established for the same purpose, and agents, employees or designees of any such person or entity. (2) A person acting without malice, fraudulent intent or bad faith is not subject to liability by virtue of filing reports or furnishing information regarding any activity described in subsection (3) of this section with or to any person or other entity described in subsection (1) of this section. (3) The activities referred to in subsections (1) and (2) of this section include but are not limited to the following, whether any activity is suspected or anticipated or has occurred: (a) Acts or omissions by a person who presents a statement described in this paragraph to or by an insurer or an insurance producer, causes such a statement to be presented to or by an insurer or an insurance producer, or prepares such a statement with knowledge or belief that it will be presented to or by an insurer or an insurance producer. This paragraph applies to any statement that the person knows to contain false information as part of, in support of or concerning any fact relating to the following, or conceals relevant information relating to the following: (A) An application for the issuance of insurance. (B) The rating of insurance. (C) A claim for payment or benefit pursuant to any insurance. (D) Premiums paid on insurance. (E) Payments made in accordance with the terms of insurance coverage. (F) An application for a certificate of authority. (G) The financial condition of an insurer. (H) The acquisition of any insurer. (b) Solicitation or an attempt to solicit new or renewal insurance by or for an insolvent insurer or other person subject to regulation under the Insurance Code. (c) Removal or an attempt to remove assets or any record of assets, transactions and affairs from the home office or other place of business of the insurer or other person subject to regulation under the Insurance Code, or from the place of safekeeping of such a person, or who conceals or attempts to conceal the assets or record from the Director of the Department of Consumer and Business Services. (d) Diversion, an attempt to divert or a conspiracy to divert funds of an insurer or other person subject to regulation under the Insurance Code, or of any other person, in connection with: (A) The transaction of insurance. (B) The conduct of business activities by an insurer or other person subject to regulation under the Insurance Code. (C) The formation, acquisition or dissolution of an insurer or other person subject to regulation under the Insurance Code. (4) This section does not abrogate or modify in any way any common law or statutory privilege or immunity otherwise enjoyed by a person or entity made immune from liability under this section. (5) The court may award reasonable attorney fees to the prevailing party in any tort action against a person who claims immunity under the provisions of this section. [1993 c.447 103; 1995 c.618 128; 2003 c.364 74]
(1) A report filed with the Director of the Department of Consumer and Business Services according to requirements established by rule for disclosure of material acquisitions or dispositions of assets and disclosure of material nonrenewals, cancellations and revisions of ceded reinsurance agreements shall be confidential as provided in ORS 705.137. (2) The director may direct the insurer to furnish copies of a report described in subsection (1) of this section to the National Association of Insurance Commissioners. (3) The director may disclose or use a report as considered necessary by the director in the administration of the Insurance Code or other law. (4) Information contained in documents described in subsections (1) to (3) of this section that is also contained in financial statements of insurers filed under ORS 731.574 or in final examination reports filed under ORS 731.312 is not confidential under this section. [1995 c.638 3; 2001 c.377 7]
(1) A report filed with the Director of the Department of Consumer and Business Services according to requirements established by rule for the purpose of determining the amount of capital or surplus, or any combination thereof, that should be possessed and maintained by an insurer under ORS 731.554 or by a health care service contractor under ORS 750.045, or under the laws of another state establishing similar requirements, shall be confidential and shall not be disclosed except as provided in ORS 705.137. (2) A financial plan of action stating corrective actions to be taken by an insurer or health care service contractor in response to a determination of inadequate capital or surplus, or any combination thereof, that is filed by the insurer or health care service contractor with the director according to requirements established by rule shall be confidential and shall not be disclosed except as provided in ORS 705.137. (3) The results or report of any examination or analysis of an insurer or health care service contractor performed by the director in connection with a financial plan described in subsection (2) of this section and any corrective order issued by the director pursuant to such an examination or analysis shall be confidential and shall not be disclosed except as provided in ORS 705.137. (4) Information contained in documents described in subsections (1) to (3) of this section that is also contained in financial statements of insurers or health care service contractors filed under ORS 731.574 or in final examination reports filed under ORS 731.312 is not confidential under this section. [1995 c.638 4; 2001 c.318 19; 2001 c.377 8]
(1) The Director of the Department of Consumer and Business Services may use the following only for the purpose of monitoring the solvency of insurers and health care service contractors and the need for possible corrective action with respect to insurers and health care service contractors: (a) Reports and financial plans of action that are made confidential under ORS 731.752; and (b) Instructions adopted and amended by the National Association of Insurance Commissioners for use by insurers and health care service contractors in preparing reports and financial plans of action referred to in paragraph (a) of this subsection. (2) The director may not use reports, financial plans of action and instructions referred to in subsection (1) of this section for ratemaking, for reviewing rate filings or in a rate proceeding related thereto, or to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that an insurer, a health care service contractor or an affiliate is authorized to transact. Such reports and financial plans of action also shall not be introduced as evidence in a rate proceeding. (3) This section does not restrict the authority of the director to use information included in reports, financial plans or instructions referred to in subsection (1) of this section that is available from other sources. [1995 c.638 5; 2001 c.318 20]
As used in ORS 731.760 to 731.770: (1) "Insurance compliance audit" means a voluntary internal evaluation, review, assessment, audit or investigation that is undertaken to identify or prevent noncompliance with, or promote compliance with, laws, regulations, orders or industry or professional standards, and that is conducted by or on behalf of an insurer regulated under the Insurance Code. (2) "Insurance compliance self-evaluative audit document" means a document prepared as a result of or in connection with an insurance compliance audit. "Insurance compliance self-evaluative audit document" includes, but is not limited to: (a) A written response to the findings of an insurance compliance audit. (b) Field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, exhibits, computer-generated or electronically recorded information, phone records, maps, charts, graphs and surveys, provided this supporting information is collected or developed solely for the purpose of an insurance compliance audit. (c) An insurance compliance audit report prepared by an auditor, who may be an employee of the insurer or an independent contractor, which may include the scope of the audit, the information gained in the audit and conclusions and recommendations, with exhibits and appendices. (d) Memoranda and documents analyzing portions or all of the insurance compliance audit report and discussing potential implementation issues. (e) An implementation plan that addresses correcting past noncompliance, improving current compliance and preventing future noncompliance. (f) Analytic data generated in the course of conducting the insurance compliance audit, not including any analytic data that exists independently of the audit or existed before the audit was conducted. [2001 c.329 2]
(1) Except as provided in ORS 731.760 to 731.770, an insurance compliance self-evaluative audit document is privileged information and is not discoverable, or admissible as evidence, in any civil, criminal or administrative proceeding. (2) Except as provided in ORS 731.760 to 731.770, any person who performs or directs the performance of an insurance compliance audit, any officer, employee or agent of an insurer who is involved with an insurance compliance audit and any consultant who is hired for the purpose of performing an insurance compliance audit may not be examined in any civil, criminal or administrative proceeding about the insurance compliance audit or any insurance compliance self-evaluative audit document. [2001 c.329 3]
(1) ORS 731.761 does not limit the authority of the Director of the Department of Consumer and Business Services to acquire any insurance compliance self-evaluative audit document or to examine any person in connection with the document. If the director determines that the actions of an insurer are egregious, the director may introduce and use the document in any administrative proceeding or civil action under the Insurance Code. The director may require that an insurer submit an insurance compliance self-evaluative audit document for the purpose of an examination or investigation conducted under this chapter. An insurer may also voluntarily submit an insurance compliance self-evaluative audit document to the director. (2) Any insurance compliance self-evaluative audit document submitted to the director under this section and in the possession of the director remains the property of the insurer and is not subject to disclosure or production under ORS 192.311 to 192.478. (3)(a) The director shall consider the corrective action taken by an insurer to eliminate problems identified in the insurance compliance self-evaluative audit document as a mitigating factor when determining a civil penalty or other action against the insurer. (b) The director may, in the directors sole discretion, decline to impose a civil penalty or take other action against an insurer based on information obtained from an insurance compliance self-evaluative audit document if the insurer has taken reasonable corrective action to eliminate the problems identified in the document. (4) Disclosure of an insurance compliance self-evaluative audit document to a governmental agency, whether voluntarily or pursuant to compulsion of law, does not constitute a waiver of the privilege set forth in ORS 731.761 for any other purpose. (5) The director may not be compelled to produce an insurance compliance self-evaluative audit document. [2001 c.329 4]
(1) The privilege set forth in ORS 731.761 does not apply to the extent that the privilege is expressly waived by the insurer that prepared or caused to be prepared the insurance compliance self-evaluative audit document. (2) The privilege set forth in ORS 731.761 does not apply in any civil, criminal or administrative proceeding commenced by the Attorney General relating to Medicaid fraud, without regard to whether the proceeding is brought on behalf of the state, a state agency or a federal agency. An insurer may request an in camera review of any document or other evidence to be released or used under this subsection and may request that appropriate protective orders be entered governing release and use of the material. (3) In any civil proceeding a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in ORS 731.761 is asserted if the court determines that the material is not subject to the privilege, or that the privilege is asserted for a fraudulent purpose, including but not limited to an assertion of the privilege for an insurance compliance audit that was conducted for the purpose of concealing a violation of any federal, state or local law or rule. Nothing in this subsection shall be construed to limit the authority of the Director of the Department of Consumer and Business Services to acquire, examine and use insurance compliance self-evaluative audit documents under ORS 731.762. (4) In a criminal proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in ORS 731.761 is asserted if the court determines that: (a) The privilege is asserted for a fraudulent purpose, including but not limited to an assertion of the privilege for an insurance compliance audit that was conducted for the purpose of concealing a violation of any federal, state or local law or rule; (b) The material is not subject to the privilege; or (c) The material contains evidence relevant to commission of a criminal offense, and: (A) A district attorney or the Attorney General has a compelling need for the information; (B) The information is not otherwise available; or (C) The district attorney or Attorney General is unable to obtain the substantial equivalent of the information by any other means without incurring unreasonable cost and delay. [2001 c.329 5]
(1) Within 30 days after a district attorney or the Attorney General serves on an insurer a written request by certified mail for disclosure of an insurance compliance self-evaluative audit document, the insurer that prepared or caused the document to be prepared may file in circuit court a petition requesting an in camera hearing on whether the insurance compliance self-evaluative audit document or portions of the document are privileged under ORS 731.761 or subject to disclosure. Failure by the insurer to file a petition waives the privilege only with respect to the specific request. (2) A petition filed by an insurer under this section must contain the following information: (a) The date of the insurance compliance self-evaluative audit document. (b) The identity of the person that conducted the audit. (c) The general nature of the activities covered by the insurance compliance audit. (d) An identification of the portions of the insurance compliance self-evaluative audit document for which the privilege is being asserted. (3) Within 45 days after the filing of a petition by an insurer under this section, the court shall schedule an in camera hearing to determine whether the insurance compliance self-evaluative audit document or portions of the document are privileged under ORS 731.761. (4) The court, after an in camera review pursuant to this section, may require disclosure of material for which the privilege established by ORS 731.761 is asserted if the court determines that any of the conditions set forth in ORS 731.764 are met. Upon making such a determination, the court may compel the disclosure of only those portions of an insurance compliance self-evaluative audit document relevant to issues in dispute in the underlying proceeding. Any disclosure that is compelled by the court will not be considered to be a public document or be deemed to be a waiver of the privilege for any other civil, criminal or administrative proceeding. A party unsuccessfully opposing disclosure may apply to the court for an appropriate order protecting the document from further disclosure. (5) An insurer asserting the privilege established under ORS 731.761 has the burden of establishing that the privilege applies. If the insurer establishes that the privilege applies, a party seeking disclosure under ORS 731.764 has the burden of proving the elements set forth in ORS 731.764. [2001 c.329 6]
The privilege established under ORS 731.761 does not apply to any of the following: (1) Documents, communications, data, reports or other information expressly required to be collected, developed, maintained or reported to a regulatory agency under the Insurance Code or other state or federal law; (2) Information obtained by observation or monitoring by any regulatory agency; or (3) Information obtained from a source other than the insurance compliance audit. [2001 c.329 7]
Nothing in ORS 731.760 to 731.770, or in the release of any insurance compliance self-evaluative audit document under ORS 731.760 to 731.770, shall limit, waive or abrogate the scope or nature of any statutory or common law privilege or other limitation on admissibility of evidence including, but not limited to, the work product doctrine, the lawyer-client privilege under ORS 40.225 or the subsequent remedial measures exclusion provided by ORS 40.185. [2001 c.329 8]
(1) Except as otherwise provided in this section, each authorized insurer doing business in this state shall pay assessments that the Director of the Department of Consumer and Business Services determines are necessary to support the legislatively authorized budget of the Department of Consumer and Business Services with respect to functions of the department under the Insurance Code. The director shall determine the assessments according to one or more percentage rates established by the director by rule. The director shall specify in the rule when assessments shall be made and payments shall be due. The premium-weighted average of the percentage rates may not exceed nine-hundredths of one percent of the gross amount of premiums received by an insurer or the insurers insurance producers from and under the insurers policies covering direct domestic risks, after deducting the amount of return premiums paid and the amount of dividend payments made to policyholders with respect to such policies. In the case of reciprocal insurers, the amount of savings paid or credited to the accounts of subscribers shall be deducted from the gross amount of premiums. In establishing the percentage rate or rates, the director shall use the most recent premium data approved by the director. In establishing the amounts to be collected under this subsection, the director shall take into consideration the expenses of the department for administering the Insurance Code and the fees collected under subsection (2) of this section. When the director establishes two or more percentage rates: (a) Each rate shall be based on such expenses of the department ascribed by the director to the line of insurance for which the rate is established. (b) Each rate shall be applied to the gross amount of premium received by an insurer or its insurance producers for the applicable line of insurance as provided in this subsection. (2) The director may collect fees for specific services provided by the department under the Insurance Code according to a schedule of fees established by the director by rule. The director may collect such fees in advance. In establishing the schedule for fees, the director shall take into consideration the cost of each service for which a fee is imposed. (3)(a) Notwithstanding the provisions of ORS 743A.067 (7)(e) and 743A.067 (9), for the purpose of mitigating inequity in the health insurance market, the director may assess a fee on any insurer that offers a health benefit plan, as defined in ORS 743B.005, that is exempt from a provision of ORS chapter 743A or other provision of the Insurance Code that requires specified coverage by health benefit plans. (b) Any fees collected under paragraph (a) of this subsection must be the actuarial equivalent of costs attributed to the provision and administration of the required coverage by an insurer that is not exempt. (c) Nothing in this section limits the authority of the director to enforce the provisions of ORS chapter 743A if an insurer unlawfully fails to comply. (d) Notwithstanding ORS 646A.628, fees paid in accordance with paragraph (a) of this subsection shall be deposited in the General Fund to become available for general governmental expenses. (4) Establishment and amendment of the schedule of fees under subsection (2) of this section are subject to prior approval of the Oregon Department of Administrative Services and a report to the Emergency Board prior to adopting the fees and shall be within the budget authorized by the Legislative Assembly as that budget may be modified by the Emergency Board. (5) The director may not collect an assessment under subsection (1) of this section from any of the following persons: (a) A fraternal benefit society complying with ORS chapter 748. (b) Any person or class of persons designated by the director by rule. (6) The director may not collect an assessment under subsection (1) of this section with respect to premiums received from any of the following policies: (a) Workers compensation insurance policies. (b) Wet marine and transportation insurance policies. (c) Any category of policies designated by the director by rule. [1967 c.359 131; 1971 c.231 14; 1971 c.425 7; 1983 c.94 1; 1985 c.697 17; 1987 c.373 81; 1989 c.331 24; 1989 c.413 1; 1991 c.371 1; 1991 c.703 40; 1991 c.958 5; 1993 c.265 5; 2003 c.364 75; 2005 c.31 7; 2007 c.560 1; 2019 c.285 4]
As used in ORS 731.804, 731.812, 731.820, 731.830 and 731.834, "gross amount of premiums" means the consideration paid by insureds to an insurer for policies of insurance, and includes all premiums, assessments, dues and fees received or derived, or obligations taken therefor, by whatever term known. [1967 c.359 132; 1989 c.413 5; 2019 c.493 4]
Every foreign or alien insurer, in its annual statement to the Director of the Department of Consumer and Business Services, shall set forth the gross amount of premiums received by it or its insurance producers, return premiums paid, dividend payments made to policyholders, savings paid or credited to the accounts of subscribers in the case of a reciprocal insurer, and insurance benefit payments to policyholders, from and under its policies covering direct domestic risks in the preceding calendar year. [1967 c.359 133; 2003 c.364 76]
(1)(a) For the purpose of maintaining the Department of the State Fire Marshal and paying the expenses incident thereto, every insurer transacting insurance covering the peril of fire shall pay a tax to the Director of the Department of Consumer and Business Services, on or before April 1 of each year, equal to 1.15 percent of the gross amount of premiums received by it or its insurance producers from such business, from and under its policies covering direct domestic risks in the preceding calendar year after deducting the amount of return premiums paid and the amount of dividend payments made to policyholders or, in the case of a reciprocal insurer, the amount of savings paid or credited to the accounts of subscribers, with respect to such policies. (b) For the purpose of paragraph (a) of this subsection the following portions of the amounts required to be reported by line of business in the annual financial statement required by ORS 731.574 shall be considered premiums for insurance covering the peril of fire: (A) Fire, 100 percent. (B) Homeowners and farm owners multiple peril, 65 percent. (C) Commercial multiple peril, 50 percent. (D) Inland marine, 20 percent. (E) Automobile physical damage, eight percent. (F) Aircraft physical damage, eight percent. (2) If an insurer ceases to do business or collect premiums on direct domestic risks, it thereupon shall make a report to the director of its premiums subject to taxation as provided in subsection (1) of this section and collected or due as of the date when it ceased to do business or collect premiums on direct domestic risks, and not theretofore reported, and shall forthwith pay to the director the tax thereon. (3) If the director, during the period in which the director under ORS 731.836 may collect taxes owing under this section, finds the amount of such taxes paid by an insurer to have been incorrect, the director shall charge or credit the insurer with the difference between the correct amount of tax and the amount actually paid. [1967 c.359 135; 1967 c.453 4; 1971 c.231 15; 1975 c.275 1; 1983 c.130 1; 1989 c.700 6; 2003 c.364 77; 2013 c.191 1; 2021 c.539 144] Note: The name of the office of the State Fire Marshal is being changed to the Department of the State Fire Marshal. The name change becomes operative on July 1, 2023. See sections 89 and 155a, chapter 539, Oregon Laws 2021. Between July 1, 2022, and July 1, 2023, references to the Department of the State Fire Marshal shall be construed to mean the office of the State Fire Marshal in the Department of State Police. See section 155c, chapter 539, Oregon Laws 2021. Note: The amendments to 731.820 by section 144, chapter 539, Oregon Laws 2021, become operative July 1, 2022. See section 155, chapter 539, Oregon Laws 2021. The text that is operative until July 1, 2022, is set forth for the users convenience. (1)(a) For the purpose of maintaining the office of State Fire Marshal and paying the expenses incident thereto, every insurer transacting insurance covering the peril of fire shall pay a tax to the Director of the Department of Consumer and Business Services, on or before April 1 of each year, equal to 1.15 percent of the gross amount of premiums received by it or its insurance producers from such business, from and under its policies covering direct domestic risks in the preceding calendar year after deducting the amount of return premiums paid and the amount of dividend payments made to policyholders or, in the case of a reciprocal insurer, the amount of savings paid or credited to the accounts of subscribers, with respect to such policies. (b) For the purpose of paragraph (a) of this subsection the following portions of the amounts required to be reported by line of business in the annual financial statement required by ORS 731.574 shall be considered premiums for insurance covering the peril of fire: (A) Fire, 100 percent. (B) Homeowners and farm owners multiple peril, 65 percent. (C) Commercial multiple peril, 50 percent. (D) Inland marine, 20 percent. (E) Automobile physical damage, eight percent. (F) Aircraft physical damage, eight percent. (2) If an insurer ceases to do business or collect premiums on direct domestic risks, it thereupon shall make a report to the director of its premiums subject to taxation as provided in subsection (1) of this section and collected or due as of the date when it ceased to do business or collect premiums on direct domestic risks, and not theretofore reported, and shall forthwith pay to the director the tax thereon. (3) If the director, during the period in which the director under ORS 731.836 may collect taxes owing under this section, finds the amount of such taxes paid by an insurer to have been incorrect, the director shall charge or credit the insurer with the difference between the correct amount of tax and the amount actually paid.
(1) Every insurer with a tax obligation under section 2, chapter 786, Oregon Laws 1995, ORS 731.820 or ORS 731.854 and 731.859 shall make prepayment of the tax obligations under section 2, chapter 786, Oregon Laws 1995, ORS 731.820, 731.854 and 731.859 for the current calendar years business, if the sum of the tax obligations under section 2, chapter 786, Oregon Laws 1995, ORS 731.820, 731.854 and 731.859 for the preceding calendar years business is $400 or more. (2) The Director of the Department of Consumer and Business Services shall credit the prepayment toward the appropriate tax obligations of the insurer for the current calendar year under section 2, chapter 786, Oregon Laws 1995, or ORS 731.820 or ORS 731.854 and 731.859. (3) The amounts of the prepayments shall be percentages of the insurers tax obligation based on the preceding calendar years business adjusted, if necessary, to reflect the declining percentages set forth in section 2 (3), chapter 786, Oregon Laws 1995, applicable for the current year, and shall be paid to the director by the due dates and in the following amounts: (a) On or before June 15, 45 percent; (b) On or before September 15, 25 percent; and (c) On or before December 15, 25 percent. (4) The effect of transferring policies of insurance from one insurer to another insurer is to transfer the tax prepayment obligation with respect to such policies. (5) On or before June 1 of each year, the director shall notify each insurer required to make prepayments in that year of the amount of each prepayment, and shall provide remittance forms to be used by the insurer. However, an insurers responsibility to make prepayments is not affected by failure of the director to send, or the insurer to receive, the notice or forms. [1980 c.10 2; 1995 c.786 5]
(1) Wet marine and transportation insurance written by authorized foreign or alien insurers within this state shall be taxed only on that proportion of the total underwriting profit of the authorized insurer from wet marine and transportation insurance written within the United States that the gross premiums of the authorized insurer from wet marine and transportation insurance written within this state bear to the gross premiums of the authorized insurer from wet marine and transportation insurance written within the United States. (2) The "underwriting profit," for purposes of this section, is arrived at by deducting from the net earned premiums on wet marine and transportation insurance policies written within the United States during the calendar year: (a) The losses incurred; and (b) Expenses incurred, including all taxes, state and federal, in connection with net earned premiums. (3) The amount of "net earned premiums" on wet marine and transportation insurance policies written during the calendar year is the sum of paragraphs (a) and (b) of this subsection less paragraph (c) of this subsection: (a) Gross premiums on wet marine and transportation insurance policies written during the calendar year, less any and all return premiums, any and all premiums on policies not taken and any and all premiums paid for reinsurance. (b) Unearned premiums on outstanding marine business at the end of the preceding calendar year. (c) Unearned premiums on outstanding marine business at the end of the current calendar year. (4) "Losses incurred," as used in this section, means gross losses incurred during the calendar year under policies written within the United States, less reinsurance claims collected or collectible and salvages or recoveries collectible from any source applicable to the losses. (5) "Expenses incurred" includes: (a) Specific expenses incurred on earned wet marine and transportation insurance premiums, consisting of all commissions, agency expenses, taxes, licenses, fees, loss-adjustment expenses, and all other expenses incurred directly and specifically in connection with the premiums, less recoveries or reimbursements on account of or in connection with commissions or other expenses collected or collectible because of reinsurance or from any other source. (b) General expenses incurred on earned premiums, consisting of that proportion of general or overhead expenses, such as salaries of officers and employees, printing and stationery, all taxes of this state and of the United States, except as otherwise provided in this section, and all other expenses not chargeable specifically to a particular class of insurance, that the net premiums of insurance written bear to the total net premiums written by an authorized insurer from all classes of insurance written by the authorized insurer during the current calendar year. However, in arriving at the "underwriting profit" for purposes of taxation under this section there may not be deducted in respect to expenses incurred, as defined and specified in this subsection, amounts that, in the aggregate, exceed 40 percent of the gross premiums on the insurance policies. [Formerly 745.145; 2019 c. 493 1]
(1) Each authorized insurer transacting wet marine and transportation insurance in this state shall file annually on or before June 15 with the Director of the Department of Consumer and Business Services and in the form prescribed by the director, a report of all the items pertaining to the authorized insurers insurance business as enumerated and prescribed in ORS 731.824. (2) Each authorized insurer that has written wet marine and transportation insurance in this state for three years shall furnish to the director a statement of all of the items referred to in subsection (1) of this section, in the form prescribed by the director, for each of the preceding three calendar years. An authorized insurer that has not written wet marine and transportation insurance for three years shall furnish to the director a statement of all items for each of the calendar years during which the authorized insurer has written wet marine and transportation insurance. (3) On or before June 15 of each year, if the authorized insurer has transacted wet marine and transportation insurance for three years, the authorized insurer shall: (a) Ascertain the average annual underwriting profit, as provided in ORS 731.824, derived by the authorized insurer from wet marine and transportation insurance business written within the United States during the last preceding three calendar years. (b) Ascertain the proportion that the average annual premiums of the authorized insurer from wet marine and transportation insurance written by the authorized insurer in this state during the last preceding three calendar years bears to the average total of wet marine and transportation insurance premiums of the authorized insurer during the same three years. (c) Pay five percent on this proportion of the average annual underwriting profit of the authorized insurer from wet marine and transportation insurance to the director as a tax upon the insurance written by the authorized insurer in this state during the current calendar year. (4) The authorized insurer each year shall compute the tax, according to the method described in this section, upon the authorized insurers average annual underwriting profit from wet marine and transportation insurance during the preceding three years, including the current calendar year. At the expiration of each current calendar year, the profit or loss on wet marine and transportation insurance business of that year is to be added or deducted, and the profit or loss upon the insurance business of the first calendar year of the preceding three-year period is to be dropped so that the computation of underwriting profit for purposes of taxation under this section will always be on a three-year average. (5) An authorized insurer that has not written wet marine and transportation insurance in this state for three years shall, until the authorized insurer has transacted wet marine and transportation insurance in this state for three years, be taxed on the basis of the authorized insurers annual underwriting profit on wet marine and transportation insurance written within the United States for the current calendar year, subject, however, to an adjustment in the tax as soon as the authorized insurer, in accordance with the provisions of this section, is enabled to compute the tax on the three-year basis. (6) In the case of authorized mutual insurers, the authorized insurer may not include in the underwriting profit, when computing the tax prescribed by this section, the amounts refunded by the mutual insurers on account of premiums previously paid by the policyholders of the mutual insurers. (7) If the director, during the period in which the director under ORS 731.836 may collect taxes owing under this section, finds the amount of taxes paid by an authorized insurer to have been incorrect, the director shall charge or credit the authorized insurer with the difference between the correct amount of tax and the amount actually paid. (8) If an authorized insurer ceases to transact wet marine and transportation insurance in this state, the authorized insurer shall report to the director the items the authorized insurer has not previously reported pertaining to the insurance business, as enumerated and described in this section, to the date on which the authorized insurer ceased to transact wet marine and transportation insurance, and shall forthwith pay to the director the taxes computed according to this section and the annual authorization fees thereon. [Formerly 745.150; 1969 c.158 1; 1975 c.250 1; 1989 c.700 7; 2019 c.493 2]
An insurance producer shall pay to the Director of the Department of Consumer and Business Services a premium tax that is equal to three-fourths of one percent of the gross amount of premiums the insurance producer receives for wet marine and transportation insurance that the insurance producer places with unauthorized or nonadmitted insurers if the insureds home state is Oregon. [2019 c.493 6]
(1) Each producer of nonadmitted wet marine and transportation insurance shall keep a full and true record of each nonadmitted wet marine and transportation insurance contract placed on an Oregon home state risk. The record must include a copy of the policy, certificate, cover note or other evidence of insurance that the Director of the Department of Consumer and Business Services specifies by rule. (2) A producer shall keep the record described in subsection (1) of this section open at all reasonable times to the directors examination, without notice, for a period of not less than five years after termination of the nonadmitted wet marine and transportation insurance contract. [2019 c.493 7]
(1) An insurance producer that places wet marine and transportation insurance with a nonadmitted insurer shall collect taxes on the insurance in addition to the gross amount of premiums the insurance producer and other intermediaries charge. If an insurance producer collects taxes under this subsection, the insurance producer shall return directly to the policyholder the taxes that the state credited to the licensee on any portion of the premium that is unearned at the termination of the insurance. The insurance producer may not absorb the taxes or rebate any part of the taxes for any reason. (2) Each producer of nonadmitted wet marine and transportation insurance shall file with the Director of the Department of Consumer and Business Services, in accordance with the directors prescription, a verified report of any Oregon home state risk nonadmitted wet marine and transportation insurance the producer transacted during the previous 90 days and shall accompany the report with payment of the tax due on each transaction. The report need not show transacted insurance that the producer filed in an earlier report. The report must show: (a) Gross amount of premiums or return premium; and (b) The amount of the tax. (3) The director may require insurance producers to file the report described in subsection (2) of this section on a form the director specifies or on a form that the Surplus Line Association of Oregon prescribes. If the director specifies that a producer must file the report on a Surplus Line Association of Oregon form, the association shall file the report with the director. The director may also permit electronic filing and may exempt a licensee from the requirement to file for good cause shown. (4) Notwithstanding subsection (2) of this section, if an insurance producers license is terminated or not renewed for any reason, the taxes described in this section are due on the 30th day after the termination or nonrenewal. (5) The director by rule may establish requirements for filing reports on nonadmitted wet marine and transportation insurance transacted outside this state on Oregon home state risks for the purpose of collecting taxes on insurance that covers Oregon home state risks that is placed outside this state. (6) The director may collect taxes on 100 percent of the gross amount of premiums on Oregon home state risks for the purposes of carrying out the Nonadmitted and Reinsurance Reform Act of 2010 (P.L. 111-203, Title V, Subtitle B). If the director enters into a compact or otherwise establishes procedures with other states under ORS 735.418, the director by rule shall establish procedures to facilitate reporting, collecting, paying, allocating and disbursing premium taxes on Oregon home state risks that also include risks that are allocable to other states. (7) If an insurance producer does not pay within the prescribed time a tax the producer must collect under this section, the director may bring an action against the insurance producer to recover the amount of the unpaid tax. [2019 c.493 8]
The Director of the Department of Consumer and Business Services shall commence an action for the recovery of taxes payable under ORS 731.820, 731.824, 731.828 and 731.859 not later than the later of the following: (1) Five years after the date such taxes were payable to the director under such sections; or (2) Three years after the date on which the report of examination by the domiciliary state of the insurer, disclosing that such taxes were owing by the insurer under such sections, was filed with the director. [1967 c.359 139; 1969 c.158 4; 1989 c.700 8]
(1) The retaliatory tax imposed upon a foreign or alien insurer under ORS 731.854 and 731.859, or the corporate excise tax imposed upon a foreign or alien insurer under ORS chapter 317, is in lieu of all other state taxes upon premiums, taxes upon income, franchise or other taxes measured by income that might otherwise be imposed upon the foreign or alien insurer except the fire insurance premiums tax imposed under ORS 731.820, the tax imposed upon wet marine and transportation insurers under ORS 731.824 and 731.828 and the assessment imposed under section 5, chapter 538, Oregon Laws 2017. However, all real and personal property, if any, of the insurer shall be listed, assessed and taxed the same as real and personal property of like character of noninsurers. Nothing in this subsection shall be construed to preclude the imposition of the assessments imposed under ORS 656.612 upon a foreign or alien insurer. (2) Subsection (1) of this section applies to a reciprocal insurer and its attorney in its capacity as such. (3) Subsection (1) of this section applies to foreign or alien title insurers and to foreign or alien wet marine and transportation insurers issuing policies and subject to taxes referred to in ORS 731.824 and 731.828. (4) The State of Oregon hereby preempts the field of regulating or of imposing excise, privilege, franchise, income, license, permit, registration, and similar taxes, licenses and fees upon insurers and their insurance producers and other representatives as such, and: (a) No county, city, district, or other political subdivision or agency in this state shall so regulate, or shall levy upon insurers, or upon their insurance producers and representatives as such, any such tax, license or fee; except that whenever a county, city, district or other political subdivision levies or imposes generally on a nondiscriminatory basis throughout the jurisdiction of the taxing authority a payroll, excise or income tax, as otherwise provided by law, such tax may be levied or imposed upon domestic insurers; and (b) No county, city, district, political subdivision or agency in this state shall require of any insurer, insurance producer or representative, duly authorized or licensed as such under the Insurance Code, any additional authorization, license, or permit of any kind for conducting therein transactions otherwise lawful under the authority or license granted under this code. [1967 c.359 140; 1969 c.600 12; 1973 c.515 1; 1973 c.583 2; 1995 c.786 6; 2003 c.364 78; 2009 c.867 25; 2015 c.70 22; 2017 c.538 14]
If, on account of the provisions of section 2, chapter 786, Oregon Laws 1995, and the amendments to ORS 731.840 by section 6, chapter 786, Oregon Laws 1995, the amendments to ORS 750.329 by section 11, chapter 786, Oregon Laws 1995, the amendments to ORS 317.010 by section 12, chapter 786, Oregon Laws 1995, and the amendments to ORS 317.080 by section 13, chapter 786, Oregon Laws 1995, any insurer authorized to transact business in Oregon on January 1, 1997, is subject to the local taxes, licenses and fees described in ORS 731.840 (4)(a) as of January 1, 1997, and was not so subject before January 1, 1997, the authority of the local government to impose those taxes is preempted by the State of Oregon and no county, city, district or other political subdivision or agency in this state shall levy or impose upon such insurer, or upon its insurance producers or representatives, any excise, privilege, franchise, income, license, permit, registration or similar tax, license or fee. [1995 c.786 20; 2003 c.364 79]
(1) The Director of the Department of Consumer and Business Services may grant, for good cause shown, a request for an adjustment of the amount of the prepayment due under ORS 731.822 or an extension of time for payment of taxes under ORS 731.808 to 731.834 and 731.859. The extension shall be requested no later than the due date and may not exceed 30 days or one month, whichever is longer, except that an extension of time for payments under ORS 731.822 may not exceed 10 days. (2) Interest at the rate of two-thirds of one percent per month or fraction of a month shall accrue on any such tax payment not made by the due date (determined without regard to extensions). (3) A penalty of 10 percent of the tax amount shall be imposed upon any late payment of any such tax, except for a payment made within an extension period as provided in subsection (1) of this section or when the director believes extenuating circumstances justify waiver of the penalty. [1975 c.230 2; 1980 c.10 4; 1995 c.786 7]
No personal liability shall arise against any director, trustee, officer or agent of any insurer on account of any taxes or fees paid pursuant to any statute, law or ordinance, even though such statute, law or ordinance is subsequently declared or held to be invalid. [1967 c.359 141]
(1) When by or pursuant to the laws of any other state or foreign country any taxes, licenses and other fees, in the aggregate, and any fines, penalties, deposit requirements or other material obligations, prohibitions or restrictions are or would be imposed upon insurers domiciled in this state, or upon the insurance producers or representatives of such insurers, which are in excess of such taxes, licenses and other fees, in the aggregate, or which are in excess of the fines, penalties, deposit requirements or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the insurance producers or representatives of such insurers, of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses and other fees, in the aggregate, or fines, penalties or deposit requirements or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the Director of the Department of Consumer and Business Services upon the insurers, or upon the insurance producers or representatives of such insurers, of such other state or country doing business or seeking to do business in this state. Any tax, license or other fee or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on insurers domiciled in this state or their insurance producers or representatives shall be deemed to be imposed by such state or country within the meaning of this subsection. (2) Foreign reciprocal or interinsurance exchanges filing a consolidated return for purposes of ORS chapter 317 shall prepare and file a separate individual retaliatory tax calculation. The excise tax for the consolidated group shall be allocated for retaliatory tax purposes among the individual foreign insurers writing Oregon premiums. The allocation, after excluding the domestic share as determined by the Director of the Department of Consumer and Business Services by rule, shall be in the proportion that the premiums written in Oregon by a foreign insurer of the group bears to the total premiums written in Oregon by all foreign insurers in the group writing premiums in Oregon. (3) This section does not apply as to personal income taxes, nor as to local ad valorem taxes on real or personal property nor as to special purpose obligations or assessments heretofore imposed by another state in connection with particular classes of insurance, other than property insurance; except that deductions, from premium taxes or other taxes otherwise payable, allowed on account of real estate or personal property taxes paid shall be taken into consideration by the director in determining the propriety and extent of retaliatory action under this section. (4) For the purpose of applying this section to an alien insurer, its domicile shall be determined in accordance with ORS 731.092 and 731.096. (5) For the purpose of applying this section to foreign and alien insurers, the following specifically shall be treated as taxes imposed by this state: (a) The corporate excise tax imposed under ORS chapter 317, without taking into consideration the amount of any reduction due to the credit allowed under ORS 315.533. (b) The assessments imposed under ORS 731.804 made to support the legislatively authorized budget of the Department of Consumer and Business Services with respect to the functions of the department under the Insurance Code. (c) The assessments paid by insurers on behalf of their insureds under ORS 656.612. [Formerly 736.237; 1995 c.786 7a; 2003 c.364 80; 2013 c.744 4]
(1) On or before April 1 of each year, each foreign or alien insurer shall: (a) Determine and report to the Director of the Department of Consumer and Business Services whether the provisions of the laws of any state or country require the imposition of the burdens specified by ORS 731.854; (b) Compute the amount owing under ORS 731.854; and (c) Pay to the director that amount. (2) If the director, during the period in which the director under ORS 731.836 may collect taxes owing under this section, finds the amount of such taxes paid by an insurer to have been incorrect, the director shall charge or credit the insurer with the difference between the correct amount of tax and the amount actually paid. (3) Notwithstanding ORS 314.835 or 314.840 or any other law concerning the confidentiality of tax returns, the Department of Consumer and Business Services may disclose to the Department of Revenue, and the Department of Revenue may disclose to the Department of Consumer and Business Services, tax returns and all other information necessary to carry out the provisions of this section and ORS 731.854. [1969 c.158 3 (enacted in lieu of 731.858); 1989 c.700 9; 2021 c.204 4]
(1) When the Governor declares a state of emergency under ORS 401.165, the Director of the Department of Consumer and Business Services may issue an order that addresses any or all of the following matters related to insurance policies issued in this state: (a) Reporting requirements for claims; (b) Grace periods for payment of insurance premiums and performance of other duties by insureds; and (c) Temporary postponement of cancellations and nonrenewals. (2) An order by the director under subsection (1) of this section may remain effective for not more than 30 days unless the director extends the termination date for the order for an additional period of not more than 30 days or for subsequent additional periods of not more than 30 days. The director may extend the order if, in the directors judgment, the circumstances warrant an extension. The order must specify, by line of insurance: (a) The geographic areas in which the order applies, which must be within but may be less extensive than the geographic area specified in the Governors proclamation of a state of emergency and must be specified according to an appropriate means of delineation, such as United States Postal Service ZIP codes or other appropriate means; and (b) The date on which the order becomes effective and the date on which the order terminates. (3) The director shall adopt rules that establish general criteria for orders issued under this section and may adopt emergency rules applicable to a specific proclamation of a state of emergency by the Governor. (4) The rulemaking authority set forth in this section does not limit or affect the rulemaking authority otherwise granted to the director by law. [2008 c.22 2]
(1) A person that violates any provision of the Insurance Code, any lawful rule or final order of the Director of the Department of Consumer and Business Services or any judgment that a court makes in response to the directors application, shall forfeit and pay to the General Fund of the State Treasury a civil penalty in an amount determined by the director that does not exceed $10,000 for each offense. The civil penalty for individual insurance producers, adjusters or insurance consultants may not exceed $1,000 for each offense. Each violation is a separate offense. (2) In addition to the civil penalty specified in subsection (1) of this section, a person that violates any provision of the Insurance Code, any lawful rule or final order of the director or any judgment that a court makes in response to the directors application, may be required to forfeit and pay to the General Fund of the State Treasury a civil penalty in an amount determined by the director that does not exceed the amount by which the person profited in any transaction that violates the provision, rule, order or judgment. (3) In addition to the civil penalties specified in subsections (1) and (2) of this section, an insurer that must submit a report under ORS 742.400 and that fails to do so within the specified time may be required to pay to the General Fund of the State Treasury a civil penalty in an amount determined by the director that does not exceed $10,000. (4) In addition to the penalties specified in subsection (1), (2), (5) and (6) of this section, a director or officer of an insurance holding company system who engages in a transaction or makes an investment that has not been properly reported under, or does not otherwise comply with, ORS 732.517 to 732.596, who knowingly participates in or assents to the transaction or investment, or who permits another officer or an agent of the insurance holding company system to engage in the transaction or make the investment, shall pay, in the director or officers individual capacity, a civil penalty in an amount determined by the director that does not exceed $10,000. (5) In addition to the penalties specified in subsections (1), (2), (4) and (6) of this section, an insurer or other person that fails to make a required filing or demonstrate a good faith effort to comply with a filing requirement under ORS 732.527, 732.537, 732.539, 732.542 or 732.544 shall pay a civil penalty in an amount determined by the director that does not exceed $50,000. (6) In addition to the penalties specified in subsections (1), (2), (4) and (5) of this section, an insurer or other person that violates a cease and desist order the director has issued under ORS 731.252 in connection with a violation of a provision of ORS 732.517 to 732.596 may be subject to a civil penalty in an amount determined by the director that does not exceed $10,000 for each day of the violation. (7) A civil penalty imposed under this section may be recovered either as provided in subsection (8) of this section or in an action brought in the name of the State of Oregon in any court of appropriate jurisdiction. (8) Civil penalties under this section must be imposed and enforced in accordance with ORS 183.745. (9) The provisions of this section are in addition to and not in lieu of any other enforcement provisions specified in the Insurance Code. [1967 c.359 144; 1971 c.231 16; 1987 c.774 65; 1989 c.701 70; 1991 c.401 2; 1991 c.734 120; 1993 c.265 6; 1997 c.131 5; 2003 c.364 81; 2003 c.576 220; 2013 c.370 15]
(1) A violation of ORS 731.260 is a Class A misdemeanor. (2) A violation of a provision of ORS 732.517 to 732.596 is a Class C felony. (3) An officer, director or employee of an insurance holding company system who willfully and knowingly makes, causes to be made, or subscribes to, a false statement, report or filing with the intent to deceive the Director of the Department of Consumer and Business Services in the performance of the directors duties under ORS 732.517 to 732.596 is guilty of a Class C misdemeanor. The officer, director or employee shall pay any fines imposed under this subsection in the officers, directors or employees individual capacity. (4) A violation of any provision of the Insurance Code for which the Insurance Code or other applicable laws of this state do not provide a greater penalty, in addition to any applicable prescribed denial, suspension or revocation of any certificate or license or any civil forfeiture, is a Class A misdemeanor. [1967 c.359 145; 1987 c.158 154a; 2011 c.597 297; 2013 c.370 16]
(1) Except where inconsistent with the express provisions of the Insurance Code, ORS chapter 60, shall, to the extent applicable, govern the powers, duties and relationships of domestic insurers. (2) The following sections in ORS chapter 60 do not apply to insurers: ORS 60.004, 60.007 to 60.014, 60.016, 60.017 to 60.024, 60.031, 60.044, 60.051 to 60.057, 60.094 to 60.101, 60.311, 60.470 to 60.534, 60.701 to 60.717, 60.734 to 60.744, 60.787, 60.954, 60.957 to 60.967 and 60.992. (3) ORS 60.224, 60.774 (2)(c) and 60.777 (4) do not apply to insurers without capital stock. (4) The enumeration in subsections (2) and (3) of this section of inapplicable sections in ORS chapter 60 is not exclusive or a limitation upon subsection (1) of this section. (5) To the extent applicable and not inconsistent with subsections (1) to (4) of this section, ORS chapter 60 shall apply to insurers without capital stock as well as to insurers with capital stock. Where applicable to insurers without capital stock, references in ORS chapter 60 to "shareholders" shall be deemed references to "policyholders" or "subscribers" as the case may be. (6) In applying ORS chapter 60 as provided in this section, unless the context requires otherwise: (a) "Office of Secretary of State" or "office" means the Department of Consumer and Business Services. (b) "Secretary of State" means the Director of the Department of Consumer and Business Services. (c) "Corporation" and "domestic corporation" mean a domestic insurer. [1967 c.359 146; 1985 c.728 108; 1987 c.846 1; 2001 c.352 7; 2003 c.14 446]
No person shall organize or solicit or receive any money for the organization of a domestic insurer without a subsisting permit to organize an insurer issued by the Director of the Department of Consumer and Business Services pursuant to ORS 732.055. The director shall not require a fee for filing an application for such a permit in the case of the organization of a reciprocal insurer that exchanges policies of insurance covering only wet marine hull insurance for persons whose earned income, in whole or in part, is derived from taking and selling food resources living in an ocean, bay or river. [1967 c.359 147; 1977 c.651 4; 1989 c.413 6; 1991 c.401 3; 1993 c.709 6]
Any person or persons desiring to organize a domestic stock insurer shall, as prospective incorporators, first file an application with the Director of the Department of Consumer and Business Services for a permit to organize such an insurer. The applicants shall pay the applicable fee to the director at the time the application is filed. The application shall be on forms provided by the director, shall be signed by the applicants and verified. The form shall specify information with regard to the following: (1) The class or classes of insurance to be transacted. (2) The full names and addresses of each person who will own or control, directly or indirectly, 10 percent or more of the stock. (3) The full name and residence address of each person associated or to be associated in the formation, organization, operation, management, stock underwriting or financing of the insurer. (4) Full disclosure of the terms of all pertinent agreements and understandings existing or proposed among and between such persons so associated. A copy of all such agreements and understandings shall be filed with the application. (5) The full name and residence address of the proposed directors and officers, including information regarding the character, financial responsibility, business ability and experience in the business of insurance or businesses related thereto, of each. (6) The proposed capitalization, the plan of financing and for solicitation of stock, and a summary of the plan of operation, including types of policies to be issued. (7) Such additional information, including but not limited to financial data, actuarial projections and copies of proposed policies, which the director may by rule or otherwise require. [1967 c.359 148; 1989 c.413 7; 1991 c.401 4]
[Amended by 1967 c.359 661; renumbered 751.015]
Any one or more persons desiring to organize a domestic insurer without capital stock shall, as prospective organizers, first file an application with the Director of the Department of Consumer and Business Services for a permit to organize such an insurer. The provisions and requirements of ORS 732.025 shall govern such application; in addition, the application shall be accompanied by: (1) A copy of each policy for which applications are proposed to be solicited, together with a copy of the proposed application form, and application literature to be used in such solicitation; and (2) A schedule of premiums or premium rates proposed to be charged in connection with such insurance for which applications shall be solicited. [1967 c.359 149]
[Amended by 1967 c.359 662; renumbered 751.025]
Upon receipt of an application for a permit to organize an insurer, the Director of the Department of Consumer and Business Services shall make such investigation of the facts and conditions as the director deems necessary, including the holding of a public hearing on the application if the director considers it desirable or if requested by the applicant. [1967 c.359 150]
[Amended by 1967 c.359 665; renumbered 751.055]
(1) Within 90 days after the filing of the application for a permit to organize an insurer, the Director of the Department of Consumer and Business Services shall approve or disapprove the application. (2) The 90-day period referred to in subsection (1) of this section may be extended by the director for an additional period not to exceed 30 days if the director gives written notice within such 90-day period to the applicant that the director needs such additional time. (3) The director shall approve an application for a permit to organize an insurer only if the director finds that: (a) The application is complete; (b) The documents filed with the application are in proper form; (c) The proposed financial structure is adequate; (d) The character, reputation, financial responsibility and general fitness of the persons named in the application or otherwise found to be associated with or have an interest in the proposed insurer are such as to command the confidence of the public; (e) The proposed directors are collectively competent to assume responsibility for the management and general policies and procedures of an insurer proposing to issue the class or classes of insurance specified; (f) The proposed management, collectively, possesses the requisite general business ability and experience in the business of insurance of the class or classes specified in the application; and (g) No fact is then known to the director which would prevent the proposed insurer from completing its organization and receiving a certificate of authority to transact insurance in this state. [1967 c.359 151]
[Amended by 1961 c.178 1; 1967 c.359 666; renumbered 751.065]
Any changes in the information furnished in the application for a permit to organize an insurer shall be reported immediately to the Director of the Department of Consumer and Business Services by the persons to whom the permit was issued. [1967 c.359 152]
After notice to the applicant stating the grounds therefor, the Director of the Department of Consumer and Business Services may revoke or suspend a permit to organize an insurer for any ground for which the issuance of the permit could be denied. [1967 c.359 153]
One or more natural persons of the age of 21 years or older or one or more financially responsible corporations may act as incorporators of a domestic insurer upon compliance with the provisions of the Insurance Code. [1967 c.359 154]
(1) To the extent not otherwise inconsistent with the Insurance Code, the articles of incorporation of a domestic insurer shall conform to ORS 60.047 and, in addition, shall contain the purpose or purposes for which the insurer is organized and the class or classes of insurance or reinsurance to be made. It shall be sufficient to state, either alone or with other purposes, that the purpose of the insurer is to make insurance and reinsurance of all classes for which an insurer may be authorized under the Insurance Code. By such statement, all such classes shall be within the purposes of the insurer, except for express limitations in the articles, if any. (2) The articles or other basic document of a mutual or reciprocal insurer shall include the qualifications and rights of members or subscribers of the insurer. [1967 c.359 155; 1987 c.846 4]
[Amended by 1967 c.359 667; renumbered 751.075]
The incorporators shall file with the Director of the Department of Consumer and Business Services within six months of the issuance of the organization permit under ORS 732.055: (1) Duplicate originals of the articles of incorporation signed by all of the incorporators. (2) A corporate surety bond payable to the director and the directors successors, as trustee, in the sum of $25,000, or, in lieu thereof, a like amount in an irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 or in approved securities or cash, conditioned upon the faithful accounting to the insurer upon completion of its organization and the receipt of its certificate of authority from the director, or to the shareholders, members, applicants for policies and creditors, or to the trustee, receiver or assignee of the insurer, duly appointed in any proceeding in any court or department of competent jurisdiction in this state, in accordance with their respective rights in case the organization of the insurer is not completed and the certificate of authority is not procured from the director. Such bond, letter of credit or deposit shall be in the form prescribed by the director. [1967 c.359 156; 1991 c.331 127; 1997 c.631 546]
[Amended by 1967 c.359 668; renumbered 751.085]
(1) If the Director of the Department of Consumer and Business Services finds that the articles of incorporation and the bond, letter of credit or securities filed with the director conform to law and the sureties on any bond are acceptable, the director shall, when all fees established by the director have been paid: (a) Indorse on each of such duplicate originals of the articles the word "filed," and the month, day and year of the filing thereof. (b) File one of such duplicate originals in the directors office. (c) Issue a certificate of incorporation to which the director shall affix the other duplicate original. (d) Return to the incorporators or their representative the certificate of incorporation with the duplicate original. (2) Upon the issuance of the certificate of incorporation, the insurers corporate existence shall begin and the insurer shall have all authority and power, subject to the limitations prescribed in the Insurance Code, as may be necessary and proper to complete its organization, obtain its initial capital and otherwise complete the requirements to qualify for a certificate of authority to transact the class or classes of insurance proposed in its articles of incorporation. In the case of an insurer without capital stock, the authority and power shall include the solicitation of applications for insurance and receipt in advance of premium payments for any insurance for which the proposed form of application, policies, literature and advertisements pertaining thereto have been filed with and approved by the director. An insurer shall not otherwise transact any business or incur any indebtedness until its certificate of authority to transact insurance has been granted. (3) The issuance of the certificate of incorporation shall be conclusive evidence that all conditions precedent required to be performed by the incorporators have been complied with and that the insurer has been incorporated under the laws of this state, except as against this state in a proceeding to cancel or revoke the certification of incorporation or any certificate of authority to transact insurance or for involuntary dissolution of the insurer. [1967 c.359 157; 1989 c.413 8; 1991 c.331 128]
[Amended by 1967 c.359 669; renumbered 751.095]
If the proposed domestic insurer is to issue securities, it shall comply with the applicable provisions of ORS 59.005 to 59.505, 59.710 to 59.830, 59.991 and 59.995. However, the Director of the Department of Consumer and Business Services shall not allow the registration of securities of a proposed domestic insurer unless the organizers of such insurer have been issued an organization permit under ORS 732.055, and have received a certificate of incorporation under ORS 732.115. [1967 c.359 158; 1987 c.414 162]
[Amended by 1967 c.359 670; renumbered 751.105]
No person shall solicit subscriptions for the capital stock of, or, in the case of an insurer without capital stock, applications for insurance in, any insurer in the process of organization unless the insurer has filed the insurers name and address with the Director of the Department of Consumer and Business Services. [1967 c.359 159]
[Amended by 1967 c.359 671; renumbered 751.115]
(1) A subscription to the capital stock of an insurer in the process of organization must contain a stipulation that no sum shall be used for commission, promotion or organization expenses in excess of a stated percent of the amount paid upon the subscription. This stated amount may not exceed 15 percent. (2) Sums paid by subscribers and applicants must be deposited under an escrow agreement approved by the Director of the Department of Consumer and Business Services in a bank, trust company or savings association in the state until the insurer has procured a certificate of authority from the director. (3) Every subscription for stock or every application for insurance in an insurer made prior to the insurers receipt of a certificate of authority must contain a stipulation that the money, securities or evidences of debt advanced by the subscriber or applicant must be returned to the subscriber or applicant without deduction in case the insurer fails to complete the insurers organization or procure the insurers certificate of authority or issue the policy applied for. [1967 c.359 160; 2009 c.541 48]
[Amended by 1967 c.359 672; renumbered 751.125]
(1) If the Director of the Department of Consumer and Business Services finds that any domestic insurer has not completed its organization and qualified for a certificate of authority within two years from the date of filing its articles of incorporation, the director may order the application abandoned and close the files in which event its corporate powers shall expire and the director shall proceed as for an impaired insurer. (2) If any domestic insurer does not commence to issue policies within one year from the date of receiving its certificate of authority, the director shall proceed as for an impaired insurer. [1967 c.359 161]
[Amended by 1967 c.359 673; renumbered 751.135]
The directors, incorporators, and organizers of any insurer organized under the Insurance Code and those entitled to participation in the profits of such insurer shall be jointly and severally liable for all debts or liabilities of such insurer until it has received a certificate of authority. [1967 c.359 162]
Any person who assumes to act as a corporate insurer without a permit to organize and without the issuance of a certificate of incorporation by the Director of the Department of Consumer and Business Services or who assumes to transact insurance business without a certificate of authority to transact such business issued by the director shall be jointly and severally liable for all liabilities created while so acting. [1967 c.359 163; 1981 c.633 80; 1987 c.846 5]
Except as otherwise provided in the Insurance Code or the articles of incorporation of an insurer, a domestic insurer shall have: (1) The general and emergency powers granted to corporations by ORS 60.077 and 60.081; (2) The powers granted to insurers by the Insurance Code; and (3) All powers necessary or convenient to effect any or all of the purposes for which the corporation is organized or to perform any or all of the acts expressly or impliedly authorized or required under the Insurance Code. [1967 c.359 164; 1987 c.846 6]
The provision of ORS 60.084 shall not affect the right of any policyholder of a domestic insurer or the Director of the Department of Consumer and Business Services from asserting the lack of capacity or power of an insurer, by reason of any provision of the Insurance Code, to do any act or make any conveyance or transfer of real or personal property. [1967 c.359 165; 1987 c.846 7]
No domestic insurer shall make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or other governing body. [1967 c.359 166]
(1) No domestic insurer shall make any contract whereby any person is granted or is to enjoy in fact the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with and approved by the Director of the Department of Consumer and Business Services. The contract filed with the director shall be accompanied by such application for approval as the director by rule may consider reasonably appropriate to the purposes of this section. The contract shall be deemed approved unless disapproved by the director within 20 days after date of filing, subject to such reasonable extension of time as the director may require by notice given within such 20 days. Notice of any disapproval shall be delivered to the insurer in writing, stating the grounds therefor. (2) Any such contract shall provide that any such producer of an insurers business shall within 90 days after expiration of each calendar year furnish the insurers board of directors or other governing body a written statement of: (a) Amounts received under or on account of the contract and amounts expended thereunder during such calendar year, including the emoluments received therefrom by the respective directors, trustees, officers, and other principal management personnel of the producer; (b) Amounts paid by the producer during such calendar year, for any purpose, to any director, trustee, officer, agent or employee of the insurer or to any person who is directly or indirectly the beneficial owner of more than 10 percent of any class of any equity security of the insurer; and (c) Such classification of items and further detail as the insurers board of directors or other governing body may reasonably require. (3) The director shall disapprove any such contract if, taking into account the customary and prevailing practices of the insurance business and such opportunities for abuse as may be apparent in any conflicts of interest revealed by the contract or application, the director finds that such contract: (a) Subjects the insurer to charges that are disproportionate to those that the insurer might reasonably be expected to incur under alternative arrangements for the production of the insurers business; (b) Is to extend for an unreasonable length of time, taking into account the incentives reasonably necessary to induce the producer to undertake the contract, the prospect of changes which are reasonably likely to render the contract unfavorable to the insurer and such other factors as the director reasonably considers appropriate; (c) Does not contain fair and adequate standards of performance; or (d) Contains other inequitable provision or provisions which impair the proper interests of stockholders, policyholders, members or subscribers of the insurer. (4) The director may, after a hearing held thereon, withdraw approval of any such contract theretofore approved by the director, if the director finds that the bases of the original approval no longer exist, or that the contract has, in actual operation, shown itself to be subject to disapproval on any of the grounds referred to in subsection (3) of this section. (5) This section does not apply as to any contract entered into prior to June 8, 1967, nor to any extension or amendment to such contract to the extent that such extension or amendment may be effected merely by notice and without further consideration. [1967 c.359 167]
No domestic insurer shall reduce its combined capital and surplus by partial distribution of its assets, by payment in the form of a dividend to stockholders or otherwise, below: (1) Its required capitalization; or (2) A greater amount which the Director of the Department of Consumer and Business Services, by rule or by order after hearing upon the motion of the director or the petition of any interested person, finds necessary to avoid injury or prejudice to the interest of policyholders or creditors. [1967 c.359 168]
(1) Whenever the Director of the Department of Consumer and Business Services determines from any showing or statement made to the director or from any examination made by the director that the assets of a domestic insurer are less than its liabilities plus required capitalization, the director may proceed immediately under the provisions of ORS chapter 734 or the director may allow the insurer a period of time, not to exceed 90 days, in which to make good the amount of the impairment with cash or authorized investments. (2) If the amount of any such impairment is not made good within the time prescribed by the director under subsection (1) of this section, the director shall proceed under the provisions of ORS chapter 734. (3) An order directing an insurer to cure an impairment is confidential as provided in ORS 705.137, for such time as the director considers proper but not exceeding the time prescribed by the director for making the amount of the impairment good. If the director determines that the public interest in disclosure outweighs the public interest in protecting or salvaging the solvency of the insurer, the director may make the order available for public inspection. [1967 c.359 169; 1991 c.401 5; 2001 c.377 9]
(1) No insurer may be dissolved voluntarily until the Director of the Department of Consumer and Business Services has approved a plan for liquidation of the insurers assets and obligations. The preparation and approval of such plan shall follow the provisions of ORS 732.517 to 732.546. (2) The plan of dissolution must provide for reinsurance of substantially all insurance in force of the insurer in accordance with the provisions of ORS 731.512. (3) The director shall require that the plan of dissolution provide adequate reserves in trust or otherwise for satisfaction of all obligations of the insurer. [1967 c.359 170; 1993 c.447 107]
(1) Any domestic insurer may hold in trust the proceeds of any life insurance policy issued by it. Such a trust shall be upon such terms and subject to such limitations as to revocation by the policyholder and control by the beneficiary thereunder as are agreed to in writing by the insurer and the policyholder. (2) Trust provisions authorized by this section shall in no manner subject the insurer to any of the provisions of the laws of this state relating to banks or trust companies. (3) The forms of such trust agreements shall be first submitted to and approved by the Director of the Department of Consumer and Business Services. [Formerly 739.410]
(1) Except as provided in subsection (4) of this section, every domestic insurer shall have and maintain the domestic insurers principal place of business and home office in this state, and shall keep within this state accurate and complete accounts and records of the domestic insurers assets, transactions, and affairs in accordance with the provisions of the Insurance Code. (2) Every domestic insurer shall have and maintain the domestic insurers assets in this state, except as to: (a) Real property and personal property appurtenant to real property that is lawfully owned by the insurer and located outside this state; and (b) Such property of the insurer as may be customary, necessary and convenient to enable and facilitate the operation of the domestic insurers branch offices and regional home offices located outside this state as referred to in subsection (4) of this section. (3) Removal or attempted removal of all or a material part of the records or assets of a domestic insurer from this state except pursuant to a merger approved by the Director of the Department of Consumer and Business Services under ORS 732.517 to 732.546, or for such reasonable purposes and periods of time as may be approved by the director in writing in advance of such removal, or concealment or attempted concealment of records or assets or a material part of the records or assets from the director, is prohibited. The director may apply under ORS 734.150 for an order to rehabilitate a domestic insurer that violates this section. (4)(a) A domestic insurer that has and maintains a principal place of business and a home office in this state may keep electronic records in this or another state. If the domestic insurer keeps electronic records in another state, the domestic insurer shall provide the director with access to the electronic records in a manner that allows the director to examine the insurer as if the electronic records were located in this state. (b) A domestic insurer complies with the requirement set forth in paragraph (a) of this subsection if the domestic insurer: (A) Provides the director with electronic access to, or printed copies of, all records that the director determines are necessary to conduct an examination of the domestic insurer: (i) Within 24 hours after the director requests the records or at a mutually agreed time; (ii) At the domestic insurers principal place of business or home office in this state; and (iii) With in-person or telephone access to the person that prepared the records, if the director requests access to the person; or (B) Makes the records available for examination at an office outside this state if the domestic insurer pays the directors transportation and related expenses as provided in ORS 731.316. (5) This section does not prohibit an insurer from: (a) Establishing and maintaining branch offices or regional home offices in other states where necessary or convenient to the transaction of the domestic insurers business, and keeping therein the detailed records and assets customary and necessary for the servicing of the domestic insurers insurance in force and affairs in the territory served by the office, as long as such records and assets are made readily available at such office for examination by the director at the directors request; (b) Having, depositing or transmitting funds and assets of the insurer in or to jurisdictions outside of this state required by the law of such jurisdiction or as reasonably and customarily required in the regular course of the domestic insurers business; or (c) Using custodial arrangements for the holding of securities owned by the insurer, either in or outside of this state, and either segregated from or commingled with securities owned by others, if the arrangements conform to rules adopted by the director for safeguarding the assets and facilitating the directors examination of insurers using such custodial arrangements. [1967 c.359 172; 1979 c.846 3; 1993 c.447 108; 2017 c.479 9]
(1) The specific purpose of this section is to facilitate the continued operation of all domestic insurers in the event a national emergency makes it impossible or impracticable for an insurer to conduct its business in strict accordance with applicable provisions of law, its bylaws or its charter. (2) The board of directors of any domestic insurer may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for the insurer, which shall be operative during such a national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes or of the insurers charter, make any provision that may be reasonably necessary for the operation of the insurer during the period of such emergency. (3) In the event the board of directors of a domestic insurer has not adopted emergency bylaws, the following provisions shall become effective upon the occurrence of such a national emergency: (a) Three directors shall constitute a quorum for the transaction of business at all meetings of the board; and (b) Any vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. (4) If there are no surviving directors, but at least three vice presidents of the insurer survive, the three vice presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and such powers as are granted by this section. By majority vote such emergency board of directors may elect other directors. If there are not at least three surviving vice presidents, the Director of the Department of Consumer and Business Services shall appoint three persons as directors who shall possess all of the powers of the previous board of directors and such powers as are granted by this section, and these persons by majority vote may elect other directors. (5) At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a national emergency and in the event of the death or incapacity of the president, the secretary or the treasurer of the insurer, such officers or any of them shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. Such list may be on the basis of named persons or position titles, shall establish the order of priority and may prescribe the conditions under which the powers of the office shall be exercised. (6) At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a national emergency the home office or principal place of business of the insurer shall be at such location as is named or described in the resolution. Such resolution may provide for alternate locations and establish an order of preference. [1967 c.359 173]
A domestic insurer may not have fewer than five directors. A director need not be a shareholder or member of the insurer unless the articles of incorporation so require, but a director must be 21 years of age or older. At least five or one-quarter of the directors, whichever is fewer, must be residents of this state. A majority of directors must be persons who are not salaried officers of the insurer. [1967 c.359 174; 1997 c.771 18; 2007 c.433 1]
No domestic insurer shall make any disbursement of $100 or more unless the sum is evidenced by: (1) A voucher signed by or on behalf of the person receiving the money or, if a voucher cannot be obtained, by an affidavit stating the reason for not obtaining the voucher; (2) A bill, invoice, statement or similar document commonly in business use submitted on account of goods supplied or services rendered or both; (3) An authorization of the board of directors, or a committee thereof or officer duly delegated by the board with authority to so authorize, in regard to compensation of officers, employees and agents; or (4) Satisfactory proof of claim, accepted and approved in the manner prescribed by the insurer, based upon provisions of a policy issued by the insurer. [Formerly 738.420]
(1) Except as set forth in a statement of acquisition described in ORS 732.523 and, in the case of the issuance or sale of the insurers securities, as approved by a majority of the board of directors having no interest therein except as shareholders or directors or failing such majority by the shareholders, a director, trustee, officer, agent or employee, or spouse or relative thereof, shall not receive any fee, commission, compensation or other valuable consideration whatsoever, directly or indirectly, for aiding, promoting or assisting: (a) The planning, preparing or executing of an activity described in ORS 732.521 (1); or (b) The planning, preparing or executing of any plan for the issuance, sale or acquisition of shares or other securities of the insurer for any purpose. (2) Except as provided in subsections (4) and (5) of this section, a director, trustee or officer of an insurer shall not: (a) Accept any money or thing of value for negotiating, procuring, recommending or aiding in: (A) The purchase or sale of property by the insurer; or (B) The making of a loan to or from the insurer. (b) Have a pecuniary interest, whether as principal, agent or beneficiary, in a purchase, sale or loan under paragraph (a) of this subsection. (3) Except as provided in subsections (4) and (5) of this section, an insurer shall not do any of the following: (a) Pay any money or thing of value to a director, trustee or officer of the insurer for negotiating, procuring, recommending or aiding in: (A) The purchase or sale of property by the insurer; or (B) The making of a loan to or from the insurer. (b) Make a loan to a director, trustee or officer of the insurer. (c) Make any advances to a director, trustee or officer of the insurer for future services to be performed. (d) Guarantee any financial obligations of a director, trustee or officer of the insurer. The prohibition under this paragraph does not apply to any guarantee of payments to be made upon death of a person insured under a credit life insurance policy. (4) An insurer may contract, or otherwise enter into a transaction, for the provision of goods or services to the insurer in the normal course of business with a director, trustee or officer, or a partnership or corporation in which a director, trustee or officer has, directly or indirectly, a proprietary interest in excess of five percent, if the interest of the director, trustee or officer is fully disclosed to the board of directors of the insurer and the board thereafter approves and authorizes the contract or transaction by a vote sufficient for the purpose without counting the vote of the interested person. (5) The prohibitions set forth in this section shall not apply to or affect: (a) The payment to any director, officer or trustee of reasonable compensation, whether based in whole or in part upon commission or otherwise; (b) The payment of a fee to any approved person for legal or other specialized or professional services rendered to the insurer and approved by the board of directors; (c) The making of loans or advances to agents or other employees of an insurer as required or as is expedient in the conduct of its business; (d) The exercising of any rights under any policy of insurance; (e) The issuance of a debt obligation by an insurer to a director, officer or trustee of the insurer; and (f) The advance of expenses to a director, officer or trustee for travel or other related business activities of the insurer. [1967 c.359 178; 1971 c.231 17; 1983 c.498 20; 1989 c.425 1; 1993 c.447 109]
No domestic insurer shall issue or have outstanding more than one class of shares, whether with or without par value. [1967 c.359 179]
A domestic insurer shall have the right to purchase or otherwise acquire, hold, pledge, transfer or dispose of its own issued shares. An insurer may acquire any such shares by purchase, exchange or disposition of its assets only from earned surplus as defined by rule, that is not otherwise restricted or, with the prior written approval of the Director of the Department of Consumer and Business Services, from other of its surplus. [1967 c.359 180; 1987 c.846 8]
(1) A proxy may be authorized in writing to vote the shares of any stockholder, or where authorized of a policyholder, of a domestic stock insurer at any regular or special stockholders meeting. (2) Such stockholders and policyholders shall be provided with adequate and accurate information with respect to the affairs of the insurer, the interests of those involved in the solicitation of proxies or consents, and the matters regarding which the proxies or consents are solicited. (3) Every form of proxy or consent and soliciting material to be used in connection therewith shall be filed with the Director of the Department of Consumer and Business Services in advance of any circulation or other use by at least 10 days, or such shorter period as the director may authorize. Circulation or use of a filed document may be made when such 10-day or shorter period has expired, unless or until the director has disapproved the filing by written notice showing wherein the document does not comply with this section or the pertinent rules. Any proxy or consent obtained in violation of this section shall be void. (4) The director may issue rules to carry out the purposes of this section and to prevent fraud or deception in connection with proxies and consents. Such rules may differ as to different types of insurers, and may include, but not by way of limitation, provisions as to: (a) Exemption from the requirements of this section for insurers subject to similar provisions of federal law, or with less than a prescribed number of stockholders; (b) Disclosure of equivalent information when no proxies or consents are solicited; (c) Form and content of proxies, consents and solicitation materials, and filing procedures therefor; (d) Procedure for presentation of stockholder proposals; and (e) Election contests. [Formerly 738.190]
As used in ORS 732.220 and 732.420 to 732.455, "equity security" means: (1) Any stock or similar security; (2) Any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; (3) Any such warrant or right; or (4) Any other security which the Director of the Department of Consumer and Business Services shall consider to be of similar nature and consider necessary or appropriate, by such rules as the director may prescribe in the public interest or for the protection of investors, to treat as an equity security. [Formerly 738.710]
The provisions of ORS 732.430, 732.435 and 732.440 do not apply to equity securities of a domestic stock insurer if: (1) Such securities are registered, or are required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934, as amended; or (2) Such insurer does not have any class of its equity securities held of record by 100 or more persons on the last business day of the year next preceding the year in which equity securities of the insurer would be subject to the provisions of ORS 732.430, 732.435 and 732.440 except for the provisions of this subsection. [Formerly 738.720]
Every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of any equity security of a domestic stock insurer, or who is a director or an officer of the insurer, shall file with the Director of the Department of Consumer and Business Services within 10 days after the person becomes a beneficial owner, director or officer, a statement, on a form prescribed by the director, of the amount of all equity securities of the insurer of which the person is the beneficial owner. If there is a change in the ownership by a person to whom this section applies, the person shall file with the director a statement, on a form prescribed by the director, indicating the persons ownership and the changes in the persons ownership. The person shall file the statement of change in ownership before the end of the second business day following the day on which the transaction was executed. If it is not feasible for the person to file the statement by the end of the second business day, the person shall file the statement according to rules adopted by the director. [Formerly 738.730; 2005 c.185 9]
(1) For the purpose of preventing the unfair use of information which may have been obtained by a beneficial owner, director or officer as described in ORS 732.430 by reason of the beneficial owner, director or officers relationship to such insurer, any profit realized by the beneficial owner, director or officer from any purchase and sale, or any sale and purchase, of any equity security of such insurer within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the insurer, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. An action to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer, or by the owner of any security of the insurer in the name and in behalf of the insurer if the insurer shall fail or refuse to bring such action within 60 days after request or shall fail diligently to prosecute the same thereafter; but no such action shall be brought more than two years after the date such profit was realized. (2) This section shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions that the Director of the Department of Consumer and Business Services by rules may exempt as not comprehended within the purpose of this section. [Formerly 738.740]
(1) No beneficial owner, director or officer, as described in ORS 732.430 directly or indirectly, shall sell any equity security of such insurer if the person selling the security or the persons principal: (a) Does not own the security sold; or (b) If owning the security, does not deliver it against such sale within 20 days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation. (2) No person shall be deemed to have violated this section if the person proves that notwithstanding the exercise of good faith the person was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense. [Formerly 738.750]
(1) The provisions of ORS 732.435 do not apply to any purchase and sale, or sale and purchase, and the provisions of ORS 732.440 do not apply to any sale, of an equity security of a domestic stock insurer not then or theretofore held by the insurer in an investment account, by a security dealer in the ordinary course of the insurers business and incident to the establishment or maintenance by the insurer of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. (2) The Director of the Department of Consumer and Business Services may, by such rules as the director considers necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market. [Formerly 738.760]
The provisions of ORS 732.430, 732.435 and 732.440 do not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules as the Director of the Department of Consumer and Business Services may adopt in order to carry out the purposes of ORS 732.420 to 732.455. [Formerly 738.770]
The Director of the Department of Consumer and Business Services shall have the power to make such rules as may be necessary for the execution of the functions vested in the director by ORS 732.420 to 732.455, and may for such purpose classify domestic stock insurers, securities, and other persons or matters within the directors jurisdiction. No provision of ORS 732.430, 732.435 and 732.440 imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule of the director, notwithstanding that such rule may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason. [Formerly 738.780]
Every domestic stock insurer shall send to each shareholder within 90 days after the end of each fiscal year of such insurer and every domestic insurer without capital stock shall make available at its annual meeting an annual report of the organization, operation and activities of such insurer, its parent if any and its subsidiaries and affiliates if any, and financial statements showing the financial condition of the insurer at the end of such fiscal year and the results of its operations for such fiscal year. The annual report shall contain such other information and financial statements and shall be in such form as the Director of the Department of Consumer and Business Services may by rule prescribe. [1967 c.359 190]
(1) A domestic mutual insurer shall be owned by and operated in the interest of its members. (2) Each owner of one or more valid and existing policies of insurance issued by a domestic mutual insurer, other than a policy of reinsurance, is a member of such insurer possessing the rights and obligations of such membership. However, two or more persons who qualify as owners under a single policy of insurance collectively shall be considered to be one member. (3) An owner is the person given the rights of ownership or the power to make transactions with the insurer under terms of the policy, including an assignee, other than the insurer which issued the policy, who has received an assignment absolute on its face subject to any reasonable minimum requirements relating to assignments found in the policy or in the bylaws of the insurer. In a policy of group life or health insurance the person contracting with the insurer and to whom the master contract is issued is the member; the lives insured and individuals holding certificates thereunder are not policyholders or members. (4) A person who, because of the death of the life insured in a policy of insurance or the death of the life referred to in an annuity policy, has obtained rights as a beneficiary to death benefits or settlement payments is not a policyholder or member. [Formerly 739.165; 2001 c.352 5]
(1) Each member of a domestic mutual insurer is entitled to one vote on each matter coming before a meeting of the members and for each director to be elected regardless of the number of policies or amount of insurance and benefits held by such member. (2) The member under a group policy shall have but one vote regardless of the number of individuals insured or benefited thereunder. (3) Two or more persons who qualify as policyholders under a single policy shall be deemed one policyholder and member for purposes of voting and collectively shall be entitled to one vote. (4) Fractional voting may not be permitted. (5) When a member is a minor, the vote shall be vested in the parent or legal guardian of the minor. (6) Cumulative voting for directors may not be permitted unless expressly provided for in the insurers articles of incorporation. (7) The right to vote shall be subject to such reasonable minimum requirements as to duration of membership as may be made in the articles of incorporation and bylaws of the insurer. (8) A member may in every case vote in person or by proxy. The right to vote by proxy shall be subject to reasonable provisions pertaining thereto, including the duration of proxies, contained in the articles of incorporation or bylaws of the insurer. [Formerly 739.170; 2001 c.352 6; 2003 c.14 447]
The following provisions shall apply to and govern meetings of members of a domestic mutual insurer and, to the extent applicable, meetings of subscribers of a domestic reciprocal insurer: (1) Unless the notice of the meeting is by personal mail or delivery to the members, or as provided in subsection (5) of this section, the annual meeting, and all special meetings of members shall be held at or in the immediate vicinity of the home office of the insurer. (2) In lieu of personal notice mailed or delivered to members, notice of the annual meeting or of a special meeting of members may be given by publishing a notice thereof once a week for two consecutive weeks in the newspaper with the largest general circulation in this state and, if the home office is located outside the city of such newspaper, then also in the newspaper with the largest general circulation published at or nearest the home office city of the insurer. The published notice shall state the time and place of the meeting and the matters to be presented and considered and, if a special meeting, shall also state the purpose for which it is called. The date of the first publication thereof shall be not less than 20 nor more than 50 days prior to the meeting date. (3) A copy of the meeting notice mailed, delivered or published shall be mailed or delivered to the Director of the Department of Consumer and Business Services at least 20 days prior to the meeting date. The director may attend any such meeting. (4) The date and time of the annual meeting shall be set forth in the bylaws. Such date and time and location of the home office of the insurer shall be set forth in the policy issued to the member or in a notice forwarded to the policyholder within 30 days after the issuance of the policy. If the date or time of such meeting is changed by amendment to the bylaws, which amendment may be adopted in the same manner as any other amendment to the bylaws, there shall be mailed or delivered to each member not less than 30 days before the date of the annual meeting, the date or time of which has been changed, a notice of the change thereof. Such a notice may be given by policy or policy indorsement or by a separate notice document. (5) Notwithstanding the provisions of subsections (1) to (4) of this section, if the director finds, after inquiry and investigation, that the operations of an insurer are not financially sound or that its management is not acting in a sound and prudent manner for the benefit of the members or that certain practices and procedures of or involving the insurers operations or management ought to be presented to the members, the director may direct that the insurer call a special meeting for such purpose or that such matters be put on the agenda at an annual meeting. In such case, the director may further direct that notice of such meeting be given in the manner prescribed in ORS 60.214. The notice shall also state that the special meeting is called, or that the particular matters are included on the agenda of the regular meeting, at the direction of the director. (6) The members present in person or represented by proxy shall constitute a quorum at a duly called meeting of members. The affirmative vote of a majority of members voting on any matter presented at such meeting shall constitute the act of the members unless the voting of a greater number is required by law or the insurers articles of incorporation or bylaws. [1967 c.359 193; 1971 c.231 43; 1987 c.846 9]
A copy of the bylaws of a domestic mutual insurer, including any amendments, shall be provided to the Director of the Department of Consumer and Business Services. The bylaws of a mutual insurer may contain any provision for managing the business and regulating the affairs of the insurer that is not inconsistent with law or the articles of incorporation. The bylaws shall contain a provision that governs the involvement of the mutual insurer in a members communication with other members regarding the business and affairs of the insurer. The bylaws may contain a provision eliminating or limiting the personal liability of a member of the board of directors to the mutual insurer or its members for monetary damages for conduct as a director, provided that no such provision may eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective and no such provision may eliminate or limit the liability of a director for: (1) Any breach of the directors duty of loyalty to the mutual insurer or its members; (2) Acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (3) Any unlawful distribution; or (4) Any transaction from which the director derived an improper personal benefit. [2001 c.352 4]
The purpose of ORS 732.517 to 732.546 is that of regulating the control or ownership of an insurer or of an insurance holding company system. A further purpose of ORS 732.517 to 732.546 is that of promoting the public interest and the interests of policyholders and shareholders by facilitating, consistent with those interests, better use of management skills and services, diversification through acquisitions, free access to capital markets, sound tax planning and open competition. [1983 c.498 5; 1993 c.447 25]
As used in ORS 732.517 to 732.546: (1) "Acquiring party" means a person that acquires or attempts to acquire control of a domestic insurer as described in ORS 732.521 (1)(a), that enters into an agreement to merge with or otherwise acquire control of a domestic insurer as described in ORS 732.521 (1)(b) or that engages in an activity described in ORS 732.521 (1)(c), or an intermediary or subsidiary corporation that holds, directly or indirectly, the assets or voting securities or assumes the liabilities of an insurer or other corporation. (2) "Acquisition" means an agreement, arrangement or activity that results in a person acquiring control of another person, directly or indirectly, including but not limited to an acquisition of voting securities, a merger, an acquisition of assets or bulk reinsurance. (3) "Domestic insurer" means an insurer formed under the laws of this state or a person that controls an insurer formed under the laws of this state. (4) "Significant portion" means, when acquired in one transaction or in a related or integrated series of transactions within any 12 consecutive month period, 10 percent or more of: (a) The assets of the insurer; or (b) The insurers insurance or major class of insurance in force. [1993 c.447 26; 2013 c.370 17]
(1) Unless a person first satisfies the provisions of ORS 732.517 to 732.546, the person may not engage in any of the following activities: (a) A person other than the person that issues voting securities of a domestic insurer may not acquire or attempt to acquire control of the domestic insurer. For purposes of this paragraph, a person acquires or attempts to acquire control of a domestic insurer if, as a result of engaging in and completing any of the following actions, in the open market or otherwise, the person would directly or indirectly control the domestic insurer, or would control the domestic insurer by exercising a right to acquire or by conversion: (A) Making a tender offer for or a request or invitation for tenders of any voting security of the domestic insurer; (B) Entering into any agreement to exchange securities for any voting security of the domestic insurer; or (C) Acquiring or seeking to acquire any voting security of the domestic insurer. (b) A person may not enter into an agreement to merge with or otherwise acquire control of a domestic insurer. (c) A person may not engage or attempt to engage in any of the following activities: (A) Acquiring, directly or indirectly, ownership of all or a significant portion of the assets of a domestic insurer. For purposes of this subparagraph, such an acquisition includes an offer, a request or invitation for offers, an acquisition or series of acquisitions in the open market, an exchange offer or agreement, an agreement that provides an option to purchase, or a purchase of or offer to purchase securities that are convertible into voting securities. (B) Bulk reinsurance by one insurer of all or a significant portion of the insurance, or a major class of the insurance, in force with another insurer or related or affiliated group of insurers. The provisions of this subparagraph do not apply to ordinary or customary reinsurance, or reinsurance pursuant to a treaty or treaties approved by the director. (C) Any other arrangement that brings together under common ownership, control or responsibility all or a significant portion of the assets, liabilities or insurance in force of two or more persons, at least one of which is a domestic insurer. (2) The provisions of subsection (1) of this section do not apply to any offer, request, invitation, agreement or acquisition the Director of the Department of Consumer and Business Services exempts by order as: (a) Not having been made or entered into for the purpose and not having the effect of changing or influencing the control or ownership of a domestic insurer; or (b) Otherwise not comprehended within the purposes of subsection (1) of this section. (3) Subject to the requirements of ORS 732.517 to 732.546, a domestic stock insurer, domestic mutual insurer, domestic reciprocal insurer or domestic health care service contractor that is a corporation for profit may merge or consolidate with a stock insurer, mutual insurer, reciprocal insurer or health care service contractor that is a corporation for profit. (4)(a) A person that seeks in any manner to give up a controlling interest in a domestic insurer shall file a confidential notice of the persons proposed divestiture with the director and send a copy of the notice to the domestic insurer at least 30 days before the person ceases to own or hold a controlling interest in the domestic insurer. The notice is confidential until the transaction that transfers control of the domestic insurer concludes, unless the director determines, at the directors sole discretion, that keeping the notice confidential will interfere with the enforcement of this subsection. (b) The director shall determine in which instances an acquisition or divestiture of control will require a person to file for and obtain approval of the transaction. (c) This subsection does not apply if a person files a statement under ORS 732.523. (5) If an acquisition is otherwise subject to this section, the acquiring party shall file a notice with the director in accordance with ORS 732.539. An acquiring party that does not file the notice may be subject to the penalty specified in ORS 731.988 (5). [1993 c.447 27,28; 1997 c.771 19; 1999 c.362 65; 2013 c.370 18]
(1) An acquiring party shall: (a) File a statement of acquisition that has the information specified in this section with the Director of the Department of Consumer and Business Services for approval. If more than one acquiring party must file a statement under this paragraph, any or all acquiring parties that are acting in concert may file a joint statement. (b) Deliver or mail to the domestic insurer to which the activity described in ORS 732.521 (1) applies, concurrently with filing the statement under paragraph (a) of this subsection, a statement that has the information specified in this section. A statement mailed under this paragraph must be sent by certified mail, return receipt requested. If a joint statement is filed under paragraph (a) of this subsection, the joint statement must be the statement mailed or delivered under this paragraph. (2) The statement an acquiring party files with the director under this section must be made under oath or affirmation and must have the following information: (a) The name and address of the domestic insurer that is subject to the acquisition and of each acquiring party that must file the statement, additional biographical and business information about each acquiring party that must file the statement, and business plans and information regarding persons who will serve as or perform functions of directors or officers, as required by the Director of the Department of Consumer and Business Services. (b) The source, nature and amount of the consideration used or to be used in effecting the activity, a description of any transaction in which funds were or are to be obtained for the activity and the identity of persons that provide the consideration. If a source of consideration is a loan made in the lenders ordinary course of business, the identity of the lender must remain confidential as provided in ORS 705.137, if the acquiring party filing the statement requests confidentiality. (c) Fully audited financial information as to the earnings and financial condition of each acquiring party for the acquiring partys preceding five fiscal years, or for as long as the acquiring party and any predecessors of the acquiring party have existed, if the acquiring party and the acquiring partys predecessors have existed for a shorter period of time, and similar unaudited information as of a date not earlier than 90 days before the statement was filed. (d) Any plan or proposals that each acquiring party that must file a statement has to liquidate the insurer, to sell the insurers assets or to merge or consolidate the insurer with any person or to make any other material change in the insurers business, corporate structure or management. (e) The number of shares of any security of a type described in ORS 732.521 that each acquiring party proposes to acquire, the terms of any offer, request, invitation, agreement or acquisition of any security of a type described in ORS 732.521 and a statement as to the method by which the acquiring party determined the fairness of the proposal. (f) The amount of each class of any security of a type described in ORS 732.521 that each acquiring party owns beneficially or concerning which each acquiring party has a right to acquire beneficial ownership. (g) A full description of any contracts, agreements or understandings with respect to any security of a type described in ORS 732.521 in which any acquiring party is involved, including but not limited to contracts, agreements or understandings that govern a transfer of any of the securities or that relate to joint ventures, loan or option arrangements, puts or calls, loan guarantees, guarantees against loss or guarantees of profits, division of losses or profits, or giving or withholding proxies. The description must identify the persons with which each acquiring party has entered into the contract, agreement or understanding. (h) The names of persons who have purchased any securities of a type described in ORS 732.521 during the 12 months before the date on which the acquiring party files the statement under this section, together with the dates of purchase and the amount and type of consideration the persons paid or agreed to pay. (i) A description of any recommendations to purchase any securities of a type described in ORS 732.521 that an acquiring party made during the 12 months before the date on which the acquiring party files the statement under this section, or of any recommendations that another person made as a result of interviewing an acquiring party or at an acquiring partys suggestion. (j) Copies of all tender offers, requests, exchange offers, invitations to tender or agreements to acquire securities of a type described in ORS 732.521, along with any additional material used to solicit the tender offers, requests, exchange offers, invitations to tender or agreements, if any additional material was distributed. (k) The term of any contract, agreement or understanding for soliciting securities of a type described in ORS 732.521 for tender that is made with or proposed to be made with a broker-dealer, together with the fees, commissions or other compensation the broker-dealer will receive in connection with the solicitation. (L) An agreement to submit an enterprise risk report under ORS 732.569 each year during which the acquiring party controls the domestic insurer and an acknowledgment that the acquiring party and all subsidiaries in the insurance holding company system that are within the acquiring partys control will provide, at the directors request, information the director needs to evaluate enterprise risk to the insurer. (m) Any additional information the director may require. (3) All requests or invitations for tenders or advertisements that make a tender offer or request or invite tenders of securities for control of a domestic insurer made by or on behalf of any acquiring party required to file the statement under this section must have the information specified in subsection (2) of this section. Copies of the materials must be filed with the director at least 10 days before the time the materials are first published or sent or given to security holders. Any additional materials that solicit or request the tenders after the initial solicitation or request must have the information specified in subsection (2) of this section. Copies of the additional materials must be filed with the director at least 10 days prior to the time the materials are first published or sent or given to security holders. (4) If any acquiring party required to file the statement under this section is a partnership, limited partnership, syndicate or other group, the director may require that the information specified in subsection (2) of this section be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group and each person that controls the partner or member. If any partner, member or person is a corporation or if the acquiring party is a corporation, the director may require that the information described in subsection (2) of this section be given with respect to the corporation and each officer and director of the corporation and each person that is directly or indirectly the beneficial owner of more than 10 percent of the outstanding securities of the corporation. (5) If any material change occurs in the facts set forth in the statement filed under this section, the party that filed the statement shall file with the director and send to the insurer, within two business days after the party learns of the change, an amendment that sets forth the change together with copies of all documents and other material relevant to the change. (6) If an offer, request, invitation, agreement or acquisition described in ORS 732.521 (1) is proposed to be made by means of a registration statement under the Securities Act of 1933 or in circumstances that require disclosing similar information under the Securities Exchange Act of 1934, or under a state law that requires a similar registration or disclosure, the party or parties may use the registration statement or disclosure to provide the information the party or parties must provide in the statement required under subsection (1) of this section. (7) Any acquiring party may file with the completed statement or within 10 days after the date on which the acquiring party filed the statement a written request for a hearing on the acquisition. The insurer that is subject to the acquisition may file with the director a written request for a hearing on the acquisition within 10 days after the acquiring party filed the completed statement. [1983 c.498 9; 1993 c.447 29; 1995 c.79 359; 2001 c.377 10; 2013 c.370 19]
(1) If a person has duly filed a written request for a hearing or if, within 10 days after an acquiring party has filed a completed statement under ORS 732.523, the Director of the Department of Consumer and Business Services finds that holding a hearing is necessary or advisable, the director shall cause a hearing to be held. (2) The hearing must be held at a time and place the director designates within 30 days after the written request for a hearing was filed or within 30 days after the date of the directors order for a hearing to be held. In addition to any other notice required under ORS chapter 183, at least 20 days before the hearing the director shall notify the person that filed the written request and the acquiring party of the hearing. At least seven days before the hearing, one or more of the insurers or other parties to the proposed activity shall give notice as the director requires to parties the director designates. The acquiring party shall bear the expense of providing the notice and, as security for the payment of the expense, shall file with the director a bond or other deposit in a form and amount acceptable to the director. (3) The hearing must be conducted in accordance with the provisions for a contested case proceeding under ORS chapter 183. [Formerly 732.535; 2013 c.370 20]
(1) If the chief insurance regulatory officials of two or more jurisdictions must approve a proposal to acquire control of an insurer, a person that files a statement with the Director of the Department of Consumer and Business Services under ORS 732.523 may request a hearing on the acquisition in a single proceeding before all of the chief insurance regulatory officials who must approve the acquisition. The person that files the statement under ORS 732.523 shall file a copy of the statement with the National Association of Insurance Commissioners within five days after filing the statement with the director. (2) A chief insurance regulatory official of another state may decline to attend the hearing on the acquisition. If the regulatory official declines to attend, the official shall notify the person that filed the statement under ORS 732.523 within 10 days after the date on which the official receives a copy of the statement. (3) The proceeding described in subsection (1) of this section must be: (a) Conducted as a public hearing before the chief insurance regulatory officials of the states in which the acquiring party and the insurer subject to the acquisition are domiciled; and (b) Held in one of the states in which the acquiring party and the insurer subject to the acquisition are domiciled. (4) A chief insurance regulatory official may attend the proceeding described in subsection (1) of this section in person or by telecommunication. [2013 c.370 4]
(1) The Director of the Department of Consumer and Business Services shall make a determination concerning the proposed activity described in ORS 732.521 (1) within a period that begins 60 days before the effective date of the activity. The director may refuse, after a public hearing, to approve a proposed activity if: (a) The activity is contrary to law or would result in a prohibited combination of risks or classes of insurance. (b) The activity is inequitable or unfair to the policyholders or shareholders of any insurer involved in, or to any other person affected by, the proposed activity. However, in connection with an acquisition of the insurers voting securities from the insurers shareholders, the director shall evaluate whether the proposed acquisition is fair to the shareholders of the insurer to be acquired only with respect to any shareholders that are unaffiliated with the acquiring party or parties and that would remain after the acquisition is completed. (c) The activity would substantially reduce the security of and service to be rendered to policyholders of any domestic insurer involved in the proposed activity, or would otherwise prejudice the interests of such policyholders in this state or elsewhere. (d) The activity provides for a foreign or alien insurer to be an acquiring party, and the director further finds that the insurer cannot satisfy the requirements of this state for transacting an insurance business involving the classes of insurance affected by the activity. (e) The activity or the completion of the activity would substantially diminish competition in insurance in this state or tend to create a monopoly. In determining whether the activity would substantially diminish competition in insurance in this state or tend to create a monopoly, the director: (A) Shall require the information described in ORS 732.539 and apply the standards set forth in ORS 732.542. (B) May not disapprove the activity if the director finds that the activity would yield substantial economies of scale or increase the availability of insurance as provided in ORS 732.542 (9). (C) May condition the directors approval of the activity on a partys removing the basis for the directors disapproval within a specific period of time. (f) After the change of control or ownership, the domestic insurer to which the activity described in ORS 732.521 (1) applies would not be able to satisfy the requirements for receiving a certificate of authority to transact the line or lines of insurance for which the domestic insurer is currently authorized. (g) The financial condition of any acquiring party might jeopardize the financial stability of the insurer. (h) The plans or proposals that the acquiring party has to liquidate the insurer, sell the insurers assets or consolidate or merge the insurer with any person, or to make any other material change in the insurers business or corporate structure or management, are unfair and unreasonable to the insurers policyholders and not in the public interest. (i) The competence, experience and integrity of the persons that would control the operation of the insurer are such that permitting the activity or permitting completion of the activity would not be in the interest of the insurers policyholders and the public. (j) The activity or completing the activity is likely to be hazardous or prejudicial to the insurance-buying public. (k) The activity is subject to other material and reasonable objections. (2) If the director disapproves the proposed activity, the director shall promptly notify, in writing, each insurer and each acquiring party involved in the proposed activity, specifying the bases, factors and reasons for the disapproval and giving each insurer and each acquiring party that filed the statement relating to the proposed activity an opportunity to amend the statement, if possible, to obviate the directors objections. (3) If the director determines that a party that acquires control of a domestic insurer must maintain or restore the domestic insurers capital to a level required under the laws and rules of this state, the director shall make and communicate the determination to the acquiring party not later than 60 days after the acquiring party files the statement required under ORS 732.523. (4) The acquiring party or parties that filed a statement of acquisition under ORS 732.523 shall file any amendment to the statement that responds to the directors objection and, if a hearing was held on the proposed activity, shall resubmit the amendment at a hearing held under this section unless the director finds that a hearing is not necessary to protect the policyholders, shareholders or any other person the proposed activity affects. (5) The director may retain at the acquiring partys expense any actuaries, accountants and other experts not otherwise a part of the directors staff as the director may reasonably need to assist the director in reviewing the proposed activity. (6) The director may establish the effective date of an activity to which ORS 732.521 (1) applies in the order that approves the activity. (7) Within 60 days after receiving a notice of approval or disapproval, any insurer or other party to a proposed activity, including the insurer subject to the acquisition, may appeal the directors final order as provided in ORS chapter 183. For purposes of the judicial review, the specifications the director must set forth in the directors written notice are the findings of fact and conclusions of law of the Department of Consumer and Business Services. (8) On petition to the court, the courts power extends to affirming the order of the director, modifying all or any part of the directors objections, adding additional objections, approving the proposed activity as submitted or subject to such modifications or changes as the court may find proper, and requiring resubmission to the boards of directors or other governing bodies or for hearing as provided in ORS 732.526. [Formerly 732.540; 2001 c.377 37; 2003 c.802 169; 2013 c.370 21; 2017 c.479 11]
(1) Following approval of a proposed activity by the Director of the Department of Consumer and Business Services or pursuant to a court order or judgment, the proposed activity shall be submitted for approval to the members of a domestic mutual insurer, the subscribers of a domestic reciprocal insurer or the shareholders of a domestic stock insurer. (2) A notice of the meeting at which the proposed activity will be submitted for approval shall set forth the time, place and purpose of the meeting. The notice, the procedure to be followed at the meeting, quorum requirements and voting at the meeting shall be governed by the provisions in the Insurance Code and the articles of incorporation and bylaws of the insurer applicable to annual or special meetings of members, subscribers or shareholders. The notice of the meeting must contain or be accompanied by a copy or summary of the statement filed under ORS 732.523. (3)(a) Unless the articles of incorporation require a greater number of affirmative votes, the proposed activity is approved: (A) By the subscribers of a domestic reciprocal insurer or the shareholders of a domestic stock insurer entitled to vote at a meeting duly called and held if the votes cast in favor of the proposed activity exceed the votes cast opposing the proposed activity; or (B) By the members of a domestic mutual insurer entitled to vote at a meeting duly called and held if the proposed activity is approved by two-thirds or more of the members voting on the proposed activity. (b) If provided in the statement filed under ORS 732.523 and approved by the director, voting on the proposed activity by the members of a domestic mutual insurer may be limited to eligible members determined in accordance with ORS 732.531 (2), and voting on the proposed activity by the subscribers of a domestic reciprocal insurer may be limited to eligible subscribers determined in accordance with ORS 732.531 (2). (c) The board of directors of a domestic mutual insurer may condition its submission of the proposed activity to the members on any legal basis. (4) If the proposed activity is approved by the members, subscribers or shareholders in accordance with this section and the activity is consummated, the activity shall bind all members of a domestic mutual insurer, all subscribers of a domestic reciprocal insurer and all shareholders of a domestic stock insurer. (5) Dissenters rights provided in ORS 60.551 to 60.594 are not available to any member of a domestic mutual insurer or any subscriber of a domestic reciprocal insurer with respect to an activity that is subject to the approval of the director. (6) An insurer, other than a domestic insurer, or another corporation that is a party to a proposed activity described in a statement filed under ORS 732.523 is subject to the laws of its domiciliary jurisdiction governing approval of its members, subscribers or shareholders. [1997 c.771 22; 2001 c.352 1; 2003 c.576 554]
(1) If a statement filed under ORS 732.523 will result in the acquisition by a stock insurer of all or a significant portion of the assets of a domestic mutual insurer or domestic reciprocal insurer, or reinsurance in a stock insurer of all or a significant portion of the insurance in force of a domestic mutual insurer or domestic reciprocal insurer, the plan must provide for consideration to each eligible member of the domestic mutual insurer or each eligible subscriber of the domestic reciprocal insurer as provided in this section. (2) A member of a domestic mutual insurer or a subscriber of a domestic reciprocal insurer shall be an eligible member or eligible subscriber if the policy of the member or subscriber is in force as of the record date, which is the date that the board of directors of the domestic mutual insurer or the domestic reciprocal insurer approves the proposed activity or some other date specified as the record date in the statement and approved by the Director of the Department of Consumer and Business Services. (3) Any consideration to be received by the eligible members or eligible subscribers shall be described in the statement. The consideration shall be allocated among the eligible members or eligible subscribers in the manner described in ORS 732.612 (6) if the domestic mutual insurer or domestic reciprocal insurer transacts primarily life or health insurance, or both. The consideration shall be allocated among the eligible members or eligible subscribers in the manner described in ORS 732.612 (7) if the domestic mutual insurer or domestic reciprocal insurer transacts primarily property or casualty insurance, or both. The allocation of the consideration among the eligible members or eligible subscribers shall be approved by the director. (4) If the proposed activity described in the statement is primarily a plan to convert the domestic mutual insurer or domestic reciprocal insurer to a stock insurer, the director may require that the proposed activity be governed by ORS 732.600 to 732.630. [Formerly 732.550; 1997 c.771 20]
Not later than the 30th day after consummation of an activity described in ORS 732.521 (1), the acquiring party shall submit to the Director of the Department of Consumer and Business Services a statement that the activity has been consummated. The statement must be made under the oath of the presiding officer of the board of directors of the acquiring party. [1993 c.447 33]
[1967 c.359 200; 1983 c.498 10; 1993 c.447 30; renumbered 732.526 in 1993]
(1) The action taken by any foreign or alien insurer or other party to the proposed activity described in ORS 732.521 (1) must be authorized by the laws of the state, country or province under which it is incorporated or organized, and each foreign or alien insurer or other party must satisfy and comply with any applicable laws thereof and with the provisions of its articles of incorporation and bylaws. (2) If a foreign or alien insurer or other party to the proposed activity is to be the acquiring, surviving, resulting or continuing insurer, it must qualify for and receive a certificate of authority to transact insurance in this state. [Formerly 732.560]
(1) As used in subsection (3)(d) of this section, "market" means the direct written insurance premium for a line of business in this state that an insurer authorized to transact insurance in this state claims in the annual financial statement the insurer files under ORS 731.574. (2) Except as provided in subsection (3) of this section, ORS 732.527, 732.539, 732.542 and 732.544 apply to an acquisition in which a change of control occurs in an insurer that is authorized to transact insurance in this state. (3) ORS 732.527, 732.539, 732.542 and 732.544 do not apply to: (a) A persons purchase of an insurers securities solely for investment purposes, provided that the person does not use the persons ownership of the securities to cause or attempt to cause an action, or to vote to take an action, that would cause a substantial decrease in competition in an insurance market in this state. If a presumption arises that a person controls the insurer by reason of the persons purchase of securities, the persons purchase of the securities is not solely for investment purposes unless the chief insurance regulatory official in the state in which the person is domiciled accepts a disclaimer of control from the person or the regulatory official affirmatively finds that the person does not control the insurer. The person or the regulatory official must communicate the disclaimer or the finding to the Director of the Department of Consumer and Business Services. (b) A persons acquisition of another person, if both the person that is acquiring the other person and the person that is subject to the acquisition are not engaged primarily in transacting insurance, either directly or through an affiliate. An exemption under this subsection from the application of ORS 732.527, 732.539, 732.542 and 732.544 is effective only if the person that is acquiring the other person notifies the director in accordance with ORS 732.539 not less than 30 days before the date on which the acquisition would be completed. The requirement to notify the director does not apply if an exclusion set forth in paragraph (a), (c), (d), (e) or (f) of this subsection applies to the acquisition. (c) An acquisition in which a person acquires another person with which the person is already affiliated. (d) An acquisition that, immediately after completion, would meet any of these conditions: (A) The combined market share held by an insurer that is acquiring another insurer and the insurer that is subject to the acquisition does not exceed five percent of the total market share in any market; (B) The market share in any market does not increase for either an insurer that is acquiring another insurer or the insurer that is subject to the acquisition; or (C) The combined market share held by an insurer that is acquiring another insurer and the insurer that is subject to the acquisition does not: (i) Exceed 12 percent of the total market share in any market; or (ii) Increase by more than two percent of the total market share in any market. (e) An acquisition for which an insurer that is acquiring another insurer must notify the director in accordance with ORS 732.539 solely because of the effect the acquisition would have on the ocean marine line of business. (f)(A) An acquisition of an insurer for which the chief insurance regulatory officer of the state in which the insurer is domiciled finds that: (i) The insurer is in failing condition; (ii) No feasible alternative exists for improving the insurers condition; and (iii) The public benefit that would arise from improving the insurers condition by means of the acquisition outweigh the detriment that may result from diminishing competition among insurers; and (B) For an exemption under this paragraph to apply, the chief insurance regulatory officer of the state in which the insurer is domiciled must communicate the regulatory officers findings to the director. [2013 c.370 5]
(1) When a merger or consolidation becomes effective, the effect on the insurers and other parties to the merger or consolidation is as follows: (a) The several insurers and other parties to the plan of merger or consolidation shall be a single insurer or other corporation, which, in the case of a merger, shall be that insurer or other corporation designated in the plan of merger as the surviving insurer or corporation, and, in the case of a consolidation, shall be the new insurer or other corporation provided for in the plan of consolidation. (b) The separate existence of all insurers and other corporations party to the plan of merger or consolidation, except the surviving or new insurer or other corporation, shall cease. (c) The surviving or new insurer or other corporation shall have all the rights, privileges, immunities and powers and shall be subject to all the duties and liabilities of an insurer organized under this chapter. If the surviving corporation is a health care service contractor, the corporation shall be subject to all the duties and liabilities of a health care service contractor under the Insurance Code. (d) The surviving or new insurer or other corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises, as well of a public as of a private nature, of each of the merging or consolidating insurers and other corporations. All property, real, personal and mixed, and all debts due on whatever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to each of the insurers and other corporations so merged or consolidated, shall be taken and deemed to be transferred to and vested in the single insurer or corporation without further act or deed. The title to any real estate, or any interest therein, vested in any of such insurers and other corporations shall not revert or be in any way impaired by reason of the merger or consolidation. (e) The surviving or new insurer or other corporation shall thenceforth be responsible and liable for all the liabilities and obligations of each of the insurers and other corporations so merged or consolidated. Any claim existing or action or proceeding pending by or against any of such insurers or other corporations may be prosecuted as if the merger or consolidation had not taken place, or such surviving or new insurer or other corporation may be substituted in its place. Neither the rights of creditors nor any liens upon the property of any such insurer or other corporation shall be impaired by such merger or consolidation. (f) In the case of a merger, the articles of incorporation of the surviving insurer or other corporation shall be deemed to be amended to the extent, if any, that changes in its articles of incorporation are stated in the plan of merger. In the case of a consolidation, the statements set forth in the articles of consolidation that are required or permitted to be set forth in the articles of incorporation of corporations organized under ORS chapter 60 shall be deemed to be the original articles of incorporation of the new corporation. (2) Subject to any shareholder rights under ORS 60.554 and 60.557, when a merger or consolidation becomes effective, in the case of an insurer or other corporation that has ceased to exist because of a merger or consolidation, the shares of that insurer or other corporation that are to be converted under the plan of merger or consolidation are void. (3) As of the date on which a merger or consolidation becomes effective, the holders of converted shares are entitled only to the shares, obligations, other securities, cash or other property into which the shares have been converted in accordance with the plan of merger or consolidation. (4) In the event of reinsurance pursuant to the plan, the applicable provisions of the Insurance Code shall govern the effects thereof. [Formerly 732.570; 1999 c.362 66]
(1)(a) A person that proposes to acquire another person, or the person that would be subject to the acquisition, must notify the Director of the Department of Consumer and Business Services and wait for the period of time specified in subsection (3) of this section before completing the acquisition. The director shall treat a notice and information that a person submits in accordance with this section as confidential and as exempt from disclosure under ORS 192.311 to 192.478. (b) A person that completes an acquisition without notifying the director as provided in this subsection may be subject to an order from the director under ORS 732.544. (2) The director by rule shall prescribe the form and content of the notice that a person must submit under subsection (1) of this section and, in prescribing the form and content of the notice, shall consider the form and content of the notice that the National Association of Insurance Commissioners prescribes for markets in which, under ORS 732.537 (2), completing an acquisition requires submitting a notice under this section. The director may require any additional information the director deems necessary to determine under ORS 732.542 whether the acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly. The additional information may include an opinion from an economist that assesses what competitive impact the acquisition may have in this state. A person that submits an economists opinion under this subsection shall also submit a summary of the economists education and experience that reflect the economists ability to render an informed opinion. (3)(a) A person may not proceed with an acquisition until 30 days after the director receives the notice under subsection (1) of this section, unless the director permits the acquisition to proceed earlier. (b) During the period of time described in paragraph (a) of this subsection, the director may, only once, require the person to submit additional information related to the acquisition. If the director requires additional information, the person may not proceed with the acquisition until 30 days after the director receives the additional information, unless the director permits the acquisition to proceed earlier. [2013 c.370 6]
[1967 c.359 201; 1979 c.562 32; 1983 c.498 11; 1993 c.447 31; renumbered 732.528 in 1993]
The courts of this state are vested with jurisdiction over every person not resident, domiciled or authorized to do business in this state who is required to file a statement with the Director of the Department of Consumer and Business Services under ORS 732.523 and over all actions involving such a person arising out of violations of ORS 732.517 to 732.546. Each such person shall be considered to have appointed the director for the purpose of service of process. [Formerly 732.580]
(1) As used in this section: (a) "Highly concentrated market" means a market in which the share that the four largest insurers hold is 75 percent or more of the market. (b) "Insurer" means a company that transacts insurance or a group of companies that transact insurance and are under common management, ownership or control. (c) "Market" means the relevant product or geographical market the Director of the Department of Consumer and Business Services determines under subsection (7) of this section. (2) The director may issue an order under ORS 732.544 if an insurer fails to submit adequate information in accordance with ORS 732.539 or if prima facie or substantial evidence of the type described in subsection (3)(a) or (b) of this section exists to support the directors determination that an acquisition may: (a) Substantially diminish competition in a line of insurance in this state; or (b) Tend to create a monopoly. (3)(a) Prima facie evidence exists to support the directors determination that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly if the acquisition: (A) Is subject to ORS 732.537; (B) Involves two or more insurers that compete in the same market; (C) Will take place in a market that has a significant trend toward increased concentration, as provided in subsection (4) of this section; and (D) Involves at least one insurer within a group of up to eight of the largest insurers in a market that has a significant trend toward increased concentration, as provided in subsection (4) of this section, and another insurer that is either within the same group or has a market share of two percent or more. (b) Substantial evidence exists to support the directors determination that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly if: (A) In a highly concentrated market the insurers involved in the acquisition hold the following shares: ______________________________________________________________________________ Insurer A Insurer B Four percent Four percent or more 10 percent Two percent or more 15 percent One percent or more ______________________________________________________________________________ (B) In a market that is not highly concentrated, the insurers involved in the acquisition hold the following shares: ______________________________________________________________________________ Insurer A Insurer B Five percent Five percent or more 10 percent Four percent or more 15 percent Three percent or more 19 percent One percent or more ______________________________________________________________________________ (4) Evidence of a significant trend toward increased concentration in the market exists if the aggregate market share of any grouping of as many as eight of the largest insurers in the market has increased by seven percent or more over a period of time that begins at least five years and not more than 10 years before the date of the notice described in ORS 732.539 and that ends on the date of the notice described in ORS 732.539. (5) Notwithstanding the requirement in subsection (2) of this section to find prima facie or substantial evidence before issuing an order under ORS 732.544, the director may issue the order if the director determines, on the basis of other substantial evidence, that the acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly. In making a determination under this subsection, the director may consider: (a) The market shares of the insurers involved in the acquisition; (b) Volatility in the relative market shares among the largest insurers in the market; (c) The number of competitors in the market; (d) The concentration of the market and any trend toward increased concentration; and (e) The ease with which an insurer may enter or exit the market. (6) The director has the burden of showing prima facie evidence for the directors determination that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly. A person may rebut the directors showing or determination under subsection (2), (3) or (5) of this section by providing substantial evidence to the contrary. (7) In determining the scope and extent of the market for the purpose of determining whether an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly, the director at a minimum shall consider definitions and guidelines that the National Association of Insurance Commissioners promulgates and information that the parties to the acquisition submit. Unless the director determines otherwise: (a) The product market is the direct written insurance premium for the line of business in this state that an insurer authorized to transact insurance in this state claims in the annual financial statement the insurer files under ORS 731.574; and (b) The geographical market is this state. (8) In the tables shown in subsection (3)(b) of this section: (a) Percentages that do not appear in the tables may be interpolated using the percentages that appear in the tables. (b) Prima facie evidence exists for the director to determine that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly if more than two insurers are involved in the acquisition and the total market share among the insurers exceeds the aggregated market share of "Insurer A" and "Insurer B" in any row shown in the tables. (c) "Insurer A" is the insurer with the largest share of the market. (9) The director may not issue an order under ORS 732.544 if: (a) The acquisition will yield substantial economies of scale or substantial economies in resource use that cannot feasibly be achieved in any other way and the economies would provide a public benefit that outweighs the public benefit of maintaining competition in the market; or (b) The acquisition would substantially increase the availability of insurance and the public benefit from increased insurance availability outweighs the public benefit of maintaining competition in the market. [2013 c.370 7]
[Formerly 732.590; renumbered 732.547 in 2013]
(1)(a) The Director of the Department of Consumer and Business Services may issue an order with the effect described in paragraph (b) of this subsection if the director determines that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly or if the director determines that a party to an acquisition has violated a provision of ORS 732.539. The director shall issue the order together with findings of fact and conclusions of law that support the order. (b) An order issued under paragraph (a) of this subsection may: (A) Require an insurer to cease and desist from transacting insurance in this state in the line of insurance the director identifies in the directors determination under paragraph (a) of this subsection; or (B) Deny an application from an insurer for a certificate of authority to transact insurance in this state. (2) The director may not issue an order under subsection (1) of this section unless the director: (a) Provides a hearing to the person that will be subject to the order; (b) Notifies the person of the impending order and the hearing within 30 days after the date on which the person submitted the notice described in ORS 732.539 and not less than 15 days before the date of the hearing; and (c) Completes the hearing and issues the order not later than 60 days after the date on which the person submitted the notice described in ORS 732.539. (3) An order issued under subsection (1) of this section does not apply if an acquisition that is the subject of the order does not proceed. (4) A person that violates an order issued under subsection (1) of this section may be subject to: (a) A civil penalty under ORS 731.988; or (b) A suspension or revocation of the persons certificate of authority. (5) Notwithstanding ORS 732.547 (4), ORS 732.547 (2) and (3) and 732.588 do not apply to an acquisition concerning which the director has issued an order under subsection (1) of this section. [2013 c.370 8]
If any provision of ORS 732.517 to 732.546 or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of ORS 732.517 to 732.546 which can be given effect without the invalid provision or application, and to this end the provisions of ORS 732.517 to 732.546 are declared to be severable. [Formerly 732.595]
(1) Whenever it appears to the Director of the Department of Consumer and Business Services that any person has committed or is about to commit a violation of any provision of ORS 732.517 to 732.546 or of any rule or order issued by the director under ORS 732.517 to 732.546, the director may apply to the Circuit Court for Marion County for an order enjoining the person, and any director, officer, employee or agent of the person, from the violation, and for such other equitable relief as the nature of the case and the interests of the policyholders, creditors and shareholders of any insurer or the public may require. (2) No security that is the subject of any agreement or arrangement regarding acquisition, or that is acquired or to be acquired, in contravention of ORS 732.517 to 732.546 or of any rule or order issued by the director under ORS 732.517 to 732.546, may be voted at any shareholders meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding. However, no action taken at any such meeting shall be invalidated by the voting of such securities unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. If an insurer or the director has reason to believe that any security of the insurer has been or is about to be acquired in contravention of ORS 732.517 to 732.546 or any rule or order issued by the director under ORS 732.517 to 732.546, the insurer or the director may apply to the Circuit Court for Marion County, or to the circuit court for the county in which the insurer has its principal place of business in this state, if any, to enjoin the violation, to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interests of the insurers policyholders, creditors and shareholders or the public may require. (3) In any case in which a person has acquired or is proposing to acquire any voting securities of an insurer in violation of ORS 732.517 to 732.546 or any rule or order issued by the director under ORS 732.517 to 732.546, the Circuit Court for Marion County, or the circuit court for the county in which the insurer has its principal place of business in this state, if any, upon the application of the insurer or the director and on such notice as the court deems appropriate, may seize or sequester any voting securities of the insurer owned directly or indirectly by the person, and issue any order with respect to the voting securities as may be appropriate to effect the provisions of ORS 732.517 to 732.546. Notwithstanding any other provision of law, for the purposes of this section, the situs of the ownership of the securities of domestic insurers is located in this state. (4) The director may exercise remedies available under this section in addition to or in lieu of any other remedy or administrative action available to the director under the Insurance Code. [Formerly 732.543]
As used in ORS 732.517 to 732.596: (1) "Affiliate" means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, another person. (2) "Control" means possessing the direct or indirect power to manage a person or set the persons policies, whether by owning voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office the person holds. (3) "Enterprise risk" means an activity, circumstance, event or series of events that involve one or more of an insurers affiliates and that, if not remedied promptly, are likely to have an adverse material effect on the insurers or the insurance holding company systems financial condition or liquidity, including but not limited to an activity, circumstance, event or series of events that would cause the insurers risk-based capital to fall into company action level or cause the Director of the Department of Consumer and Business Services to determine under ORS 731.385 that the insurer is in hazardous financial condition. (4) "Group-wide supervisor" means a regulatory official that has the authority to conduct and coordinate supervisory activities for an internationally active insurance group under ORS 732.594. (5) "Insurance holding company system" means two or more affiliated persons, one or more of which is an insurer, and includes a financial holding company as described in section 103 of the federal Gramm-Leach-Bliley Act (P.L. 106-102). (6) "Insurer" has the meaning given that term in ORS 731.106 but does not include an agency, authority or instrumentality of the United States, the Commonwealth of Puerto Rico, another state or a political subdivision of another state. (7) "Internationally active insurance group" means an insurance holding company system that includes an insurer that is registered under ORS 732.551 and that: (a) Writes premiums in three or more countries; (b) Writes 10 percent or more of the insurance holding company systems total gross written premiums outside the United States; and (c) Has $50 billion or more of total assets, or $10 billion or more of total gross written premiums, based on a three-year rolling average. (8)(a) "Person" means an individual, corporation, limited liability company, partnership, association, joint stock company, trust or unincorporated organization, or an entity or combination of entities similar to the entities described in this paragraph. (b) "Person" does not include: (A) A joint venture partnership that is engaged exclusively in owning, managing, leasing or developing real or tangible personal property; or (B) For the purposes of ORS 732.518, 732.521, 732.523, 732.526 and 732.528, a securities broker that holds, in the usual and customary brokers function, less than 20 percent of the voting securities of an insurer or of any person that controls an insurer. (9) "Security holder" means a person that owns a security of another person, including a security denominated as common stock, preferred stock or a debt obligation and any instrument that is convertible into or that is evidence of the right to acquire the security of another person. (10) "Subsidiary" means an affiliate that a person controls directly or indirectly through one or more intermediaries. (11) "Voting security" means a security that entitles the owner or holder of the security to vote at a meeting of shareholders, including a security that is convertible into a voting security or that is evidence of a right to acquire a voting security. [Formerly 732.605; 2001 c.377 38; 2013 c.370 22; 2017 c.479 10]
(1) A domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged only in one or more of the kinds of business described in ORS 733.635. (2) If an insurer ceases to control a subsidiary, the insurer must dispose of any investment in the subsidiary made pursuant to this section within three years after the time of the cessation of control or within such further time as the Director of the Department of Consumer and Business Services may prescribe, unless at any time after the investment was made, the investment meets the requirements for investment under any other provision of the Insurance Code and the insurer has notified the director of that fact. [1993 c.447 24]
[1967 c.359 203; 1993 c.447 32; renumbered 732.531 in 1993]
(1) Every authorized insurer that is a member of an insurance holding company system shall register with the Director of the Department of Consumer and Business Services as provided in this section. A foreign insurer need not register if the foreign insurer is subject to registration requirements and standards adopted by statute or rule in the jurisdiction of its domicile that are substantially similar to those contained in: (a) This section, ORS 732.552, 732.553 and 732.554; (b) ORS 732.574 (1), 732.576 and 732.582; and (c) ORS 732.574 (2) or a provision that requires each registered insurer to keep current the information required to be disclosed in its registration statement by reporting all material changes or additions not later than 15 days after the end of the month in which it learns of each such change or addition. (2) An insurer that is subject to registration under this section shall register not later than 15 days after the date the insurer becomes subject to registration, and annually thereafter on or before April 30 for the previous calendar year, unless the director for good cause shown extends the time for registration, and then within such extended time. The director may require any authorized insurer that is a member of a holding company system and is not subject to registration under this section to furnish a copy of the registration statement, the summary required in ORS 732.552 or other information filed by the insurer with the insurance regulatory authority of its domiciliary jurisdiction. [Formerly 732.615]
(1) Every insurer that is subject to the registration requirements of ORS 732.551 shall file a registration statement on a form prescribed by the Director of the Department of Consumer and Business Services. The director shall consider and may prescribe as the registration statement form for this section the form that the National Association of Insurance Commissioners prescribes. The registration statement must list, describe, summarize or include, as appropriate and as the director specifies by rule: (a) The capital structure, general financial condition, ownership and management of the insurer and any person that controls the insurer. (b) The identity and relationship of every member of the insurance holding company system. (c) The following agreements in force and transactions currently outstanding or that have occurred during the last calendar year between the insurer and the insurers affiliates: (A) Loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the insurer or of the insurer by the insurers affiliates; (B) Purchases, sales or exchanges of assets; (C) Transactions not in the ordinary course of business; (D) Guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure of the insurers assets to liability, other than insurance contracts the insurer enters into in the ordinary course of the insurers business; (E) All management agreements, service contracts and all cost-sharing arrangements; (F) Reinsurance agreements; (G) Dividends and other distributions to shareholders; and (H) Consolidated tax allocation agreements. (d) Any pledge of the insurers stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system. (e)(A) Financial statements of or within an insurance holding company system, including financial statements of affiliates, if the director requests the financial statements. (B) Financial statements that are subject to this paragraph include, but are not limited to, annual audited financial statements that the insurer or the insurance holding company system files with the United States Securities and Exchange Commission under the Securities Act of 1933 or the Securities Exchange Act of 1934. (C) An insurer that must file financial statements under this paragraph may satisfy the requirement by providing the director with the parent corporation financial statements that have been filed most recently with the United States Securities and Exchange Commission. (f) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms prescribed by the director. (g) Affidavits that state that: (A) The insurers board of directors is responsible for and oversees corporate governance and internal controls; and (B) The insurers officers or senior management have approved and implemented, and continue to maintain and monitor, corporate governance and internal control procedures. (h) Any other information the director requires by rule. (2) Each registration statement filed under this section must have a summary that outlines all items in the current registration statement that have changed from the prior registration statement. [Formerly 732.625; 2013 c.370 23]
Information that is not material for the purposes of registration under ORS 732.517 to 732.596 need not be disclosed on the registration statement filed pursuant to ORS 732.552. Unless the Director of the Department of Consumer and Business Services by rule or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, investments or guarantees involving one-half of one percent or less of an insurers admitted assets as of the December 31 next preceding the date of the registration statement or amendment shall not be deemed material for purposes of registration under ORS 732.517 to 732.596. [Formerly 732.635]
Each registered insurer shall keep current the information required to be disclosed on its registration statement by reporting all material changes or additions on amendment forms prescribed by the Director of the Department of Consumer and Business Services within 15 days after the end of the month in which the insurer learns of each such change or addition. However, except as provided in ORS 732.576, each registered insurer shall so report all dividends and other distributions to shareholders within five business days following the declaration thereof and not less than 10 business days prior to payment of the dividends and distributions, commencing from the date of receipt of the report by the director. [Formerly 732.645]
Any person within an insurance holding company system subject to registration shall provide complete and accurate information to an insurer when such information is necessary to enable the insurer to comply with the registration requirements of ORS 732.517 to 732.596. [1993 c.447 41]
The Director of the Department of Consumer and Business Services shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system. [Formerly 732.655]
[1967 c.359 205; 1983 c.498 13; 1993 c.447 34; renumbered 732.536 in 1993]
The Director of the Department of Consumer and Business Services may require or allow two or more affiliated insurers subject to registration to file a consolidated registration statement. [Formerly 732.665]
The Director of the Department of Consumer and Business Services may allow an authorized insurer that is part of an insurance holding company system to register on behalf of an affiliated insurer that is required to register under ORS 732.551 and to file all information and material required to be filed under the registration requirements of ORS 732.517 to 732.596. [Formerly 732.675]
(1) The registration requirements of ORS 732.517 to 732.596 do not apply to any insurer, information or transaction the Director of the Department of Consumer and Business Services exempts by rule or order. (2) ORS 732.521, 732.523, 732.526 and 732.528 do not apply to a transaction that is subject to the provisions of ORS 732.517 to 732.546 that relate to a merger or consolidation between or among two or more insurers. [Formerly 732.685; 2013 c.370 24]
The Director of the Department of Consumer and Business Services shall presume that a person controls another person if the person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of the other person. A person may rebut this presumption with a showing in the manner provided under ORS 732.568 that control does not exist in fact. The director may determine, after giving persons that have an interest in the directors determination notice and opportunity to be heard and after making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption that control exists in fact. [2013 c.370 12]
(1) Any person, insurer or member of an insurance holding company system may file with the Director of the Department of Consumer and Business Services a disclaimer of affiliation with any authorized insurer. The disclaimer must fully disclose all material relationships and bases for affiliation between the person, insurer or member and the insurer to which the disclaimer of affiliation applies, as well as the basis for disclaiming the affiliation. (2) After the person, insurer or member files a disclaimer, the person, insurer or member and the insurer to which the disclaimer applies are relieved of any duty to register or report under ORS 732.517 to 732.596 that may arise out of the insurers relationship with the person, insurer or member of the insurance holding company system that filed the disclaimer unless the director disallows the disclaimer. (3) A disclaimer that the person, insurer or member of the insurance holding company system files under this section is effective unless within 30 days after the director receives the disclaimer the director notifies the person, the insurer or the member of the insurance holding company system that director has disallowed the disclaimer. (4) The director shall grant a hearing if the person, insurer or member of an insurance holding company system that filed the disclaimer requests a hearing. [Formerly 732.695; 2013 c.370 25]
Every insurer that must register with the Director of the Department of Consumer and Business Services under ORS 732.551 shall file an enterprise risk report each year. The enterprise risk report must identify, to the best of the insurers knowledge and belief, the material risks within the insurance holding company system of which the insurer is a part that could pose enterprise risk to the insurer. The insurer shall file the enterprise risk report with the chief insurance regulatory official in the state that the director determines is the lead state for the insurance holding company system of which the insurer is a part. The director shall make the determination in accordance with procedures the director adopts by rule after considering procedures set forth in a Financial Analysis Handbook that the National Association of Insurance Commissioners has adopted. [2013 c.370 10]
[1967 c.359 207; 1987 c.846 11; renumbered 732.538 in 1993]
(1)(a) The Director of the Department of Consumer and Business Services may establish or participate in a temporary or a permanent supervisory college for any domestic insurer that is: (A) Registered under ORS 732.551; and (B) Part of an insurance holding company system that has international operations. (b) The director may establish or participate in a supervisory college in order to: (A) Ensure that the insurer complies with the Insurance Code; (B) Assess the insurers: (i) Financial, legal and regulatory position; (ii) Risk exposure and risk management; or (iii) Governance processes; or (C) Examine an individual insurer under ORS 732.584. (c) The director may participate in a supervisory college with state, federal, international or other regulatory agencies that supervise the insurer or the insurers affiliates. (2)(a) As part of the directors establishment of or participation in a supervisory college, the director may: (A) Specify criteria under which other regulatory agencies may become members of and participate in the supervisory college; (B) Specify the functions of the supervisory college and the roles that other regulatory agencies will undertake in the supervisory college; (C) Establish a leader among the regulatory agencies that participate in the supervisory college; (D) Plan meetings and supervisory actions, specify processes for sharing information and otherwise coordinate the activities of the supervisory college; (E) Draft a crisis management plan; (F) Determine how long the director will participate in any supervisory college; and (G) Take other actions that are necessary to participate in or facilitate a supervisory colleges operations. (b) The director may enter into agreements with other regulatory agencies under ORS 705.137 for any of the purposes identified in paragraph (a) of this subsection. (3) An insurer that is registered under ORS 732.517 to 732.596 is liable to and shall pay to the director a reasonable amount that is equal to the expenses, including reasonable travel expenses, that the director incurs as a result of the directors participation in a supervisory college under this section. The director may assess the insurer regularly in order to pay the expenses. (4) This section does not delegate to a supervisory college the directors authority within this state to regulate or supervise an insurer or the insurers affiliates. [2013 c.370 11]
The Director of the Department of Consumer and Business Services may adopt rules to carry out ORS 732.517 to 732.596. [Formerly 732.705]
(1) A transaction within an insurance holding company system to which an insurer subject to registration is a party is subject to the following standards: (a) The terms must be fair and reasonable. (b) Charges or fees for services performed must be reasonable. (c) Expenses incurred and payment received must be allocated to the insurer in conformity with customary insurance accounting practices that are consistently applied. (d) The books, accounts and records of each party to the transaction must be maintained so as to disclose clearly and accurately the nature and details of the transaction, including accounting information that is necessary to support the reasonableness of the charges or fees to the respective parties. (e) The combined capital and surplus of the insurer following any transaction with an affiliate or any shareholder dividend must be reasonable in relation to the insurers outstanding liabilities and adequate to the insurers financial needs. (f) Agreements for cost-sharing services and management must include provisions that the Director of the Department of Consumer and Business Services requires by rule. (2)(a) A domestic insurer and any person in the domestic insurers insurance holding company system may enter into a transaction described in this subsection, including an amendment to or modification of an affiliate agreement that is subject to standards set forth in this section, only if: (A) The domestic insurer has notified the director of the domestic insurers intention to enter into the transaction in writing and not later than the 30th day before the transaction, or within a shorter period the director allows; and (B) The director does not disapprove the transaction within the period. (b) A notice for a transaction that is an amendment to or modification of an affiliate agreement that was previously filed must include a statement of reasons for the change and an estimate of the financial impact the change would have on the domestic insurer. An insurer shall notify the director informally within 30 days after a previously filed agreement has terminated, and the director, after receiving the notice, shall determine the type of filing the insurer must submit, if any. (c) This subsection does not authorize or permit any transaction that, in the case of an insurer that is not a member of the same insurance holding company system, would be otherwise contrary to law. (d) This subsection applies to the following transactions: (A) Sales, purchases, exchanges, loans or extensions of credit, guarantees or investments, if the transactions equal or exceed the following: (i) With respect to insurers that are not authorized to transact life insurance, the lesser of three percent of the insurers allowed assets or 25 percent of the insurers combined capital and surplus, each as of the 31st day of December immediately preceding. (ii) With respect to insurers that are authorized to transact life insurance, three percent of the insurers allowed assets, as of the 31st day of December immediately preceding. (B) Loans or extensions of credit to any person that is not an affiliate, if the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer that is making the loans or extending the credit. This subparagraph applies to transactions that equal or exceed the following: (i) With respect to insurers that are not authorized to transact life insurance, the lesser of three percent of the insurers allowed assets or 25 percent of the insurers combined capital and surplus, each as of the 31st day of December immediately preceding. (ii) With respect to insurers that are authorized to transact life insurance, three percent of the insurers allowed assets, as of the 31st day of December immediately preceding. (C) Reinsurance agreements or modifications to reinsurance agreements, reinsurance pooling agreements and agreements in which the reinsurance premium or a change in the insurers liabilities, the projected reinsurance premium or a projected change in the insurers liabilities in any of the next three years equals or exceeds five percent of the insurers combined capital and surplus, as of the 31st day of December immediately preceding, including agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer. (D) All management agreements, service contracts, tax allocation agreements, guarantees and all cost-sharing arrangements. (E) A guarantee that a domestic insurer makes if the guarantee is not quantifiable as to amount. If the guarantee is quantifiable as to amount, the domestic insurer is not required to notify the director under this section unless the guarantee exceeds the lesser of one-half of one percent of the insurers admitted assets or 10 percent of surplus with respect to policyholders as of the 31st day of December immediately preceding. (F) Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer, the amount of which, together with the insurers existing acquisitions or investments in the person or affiliate, exceeds two and one-half percent of the insurers surplus to policyholders. An insurer that acquires or invests directly or indirectly in a subsidiary, or in an insurance affiliate that is not a subsidiary, is not required to notify the director under this section if the insurer makes the acquisition or the investment otherwise in accordance with ORS 732.517 to 732.596. (G) Any material transactions specified by rule that the director determines may adversely affect the interests of the insurers policyholders. (3) A domestic insurer may not enter into one or more transactions during any 12-month period that are part of a plan or series of like transactions with persons that are within the insurance holding company system if the purpose of the separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. (4) In reviewing a transaction in accordance with subsection (2) of this section, the director shall consider whether the transaction complies with the standards set forth in subsection (1) of this section and whether the transaction may adversely affect the interests of policyholders. (5) A domestic insurer shall notify the director not later than the 30th day after any investment the domestic insurer makes in any one corporation if the total investment the insurance holding company system makes in the corporation exceeds 10 percent of the corporations voting securities. [1993 c.447 47; 2013 c.370 26]
(1) This section applies to dividends and other distributions within an insurance holding company system. (2)(a) A domestic insurer subject to registration may not pay or make any extraordinary dividend or distribution to the domestic insurers shareholders either until 30 days after the Director of the Department of Consumer and Business Services has received notice of the declaration of the dividend or distribution, if the director has not disapproved the payment within the 30-day period, or until the date on which the director approves the payment if approval occurs within the 30-day period. (b) For purposes of this section: (A) "Extraordinary dividend or distribution" includes any dividend or distribution of cash or other property the fair market value of which, together with that of other dividends or distributions made within the period of 12 consecutive months ending on the date on which the proposed dividend or other distribution is scheduled to be paid or made, exceeds the greater of: (i) Ten percent of the combined capital and surplus of the insurer as of the 31st day of December immediately preceding; or (ii) The net gain from operations of the insurer after dividends to policyholders and federal income taxes and before realized capital gains or losses, if the insurer is authorized to transact life insurance, or the net income, if the insurer is not authorized to transact life insurance, for the 12-month period ending the 31st day of December immediately preceding. (B) "Extraordinary dividend or distribution" does not include pro rata distributions of any class of the insurers own securities. (3)(a) Except as provided in this subsection, a domestic insurer may declare or pay dividends to shareholders only from earned surplus. A domestic insurer may declare a dividend from other than earned surplus only if the director approves the declaration prior to payment of the dividend. (b) For purposes of this subsection, "earned surplus" does not include surplus arising from unrealized capital gains or revaluation of assets. (4) An insurer may declare an extraordinary dividend or distribution that is conditional upon the directors approval of the dividend or distribution. The declaration confers no rights upon shareholders until the date on which the director approves the payment of the dividend or distribution, or until 30 days after the director received notice of the declaration of the dividend or distribution under subsection (2) of this section if the director does not disapprove the payment within the 30-day period. (5) An insurer other than a life insurer, in determining whether a dividend or distribution is an extraordinary dividend or distribution, may carry forward net income from the previous two calendar years that the insurer has not already paid out as dividends. The insurer shall calculate the amount of the net income the insurer may carry forward by taking the insurers net income from the second and third preceding calendar years, not including realized capital gains, less dividends the insurer paid in the second and immediately preceding calendar years. [1993 c.447 48; 2013 c.370 27]
(1) A persons control of a domestic insurer that is subject to registration does not relieve the officers and directors of the insurer of any obligation or liability to which the officers and directors would otherwise be subject by law. The domestic insurer must be managed so as to assure the insurers separate operating identity in accordance with the Insurance Code. (2) This section does not preclude a domestic insurer from having or sharing a common management, or from using personnel, property or services jointly or cooperatively, with another person under an arrangement that meets the standards set forth in ORS 732.574. (3)(a) At least one-third of a domestic insurers directors and at least one-third of the members of each committee of the insurers board of directors must be persons who are not: (A) Officers or employees of the insurer or of any entity that controls, is controlled by or is under common control with the insurer; or (B) Beneficial owners of a controlling interest in the voting securities of the insurer or of an entity that controls, is controlled by or is under common control with the insurer. (b) A quorum for transacting business at a meeting of the insurers board of directors or any committee of the board of directors must include at least one person with the qualifications described in paragraph (a) of this subsection. (4) A domestic insurers board of directors shall establish at least one committee of which the entire membership consists of persons who have the qualifications described in subsection (3)(a) of this section. The board of directors shall give the committee the board establishes under this subsection responsibility for: (a) Recommending independent certified public accountants for the board to select; (b) Reviewing the insurers financial condition and the scope and results of any independent or internal audit; (c) Nominating candidates for election to the board of directors; (d) Recommending principal officers for selection and the compensation for the principal officers; and (e) Evaluating the principal officers performance. (5) Subsections (3) and (4) of this section do not apply to a domestic insurer if the person that controls the domestic insurer has a board of directors, and committees of the persons board of directors, that meet the requirements set forth in subsections (3) and (4) of this section. (6)(a) The Director of the Department of Consumer and Business Services may waive the requirements set forth in subsections (3) and (4) of this section if an insurer applies for a waiver and: (A) The insurer has less than $300 million in annual direct written and assumed premium, excluding premium reinsured with the Federal Crop Insurance Corporation and the National Flood Insurance Program; or (B) Unique circumstances justify the directors waiver. (b) In determining whether to grant the waiver, the director may consider what type of business entity the insurer is, the volume of insurance the insurer transacts, whether the insurer has qualified board members, the insurers ownership or organizational structure and any other factor the director deems relevant. [1993 c.447 49; 2013 c.370 28]
[1983 c.498 16; 1993 c.447 35; renumbered 732.541 in 1993]
For purposes of ORS 732.517 to 732.596, in order to determine whether the combined capital and surplus is reasonable in relation to the outstanding liabilities of the insurer and adequate to its financial needs, the Director of the Department of Consumer and Business Services must consider at least the applicable factors stated in ORS 731.554 for determining the reasonableness and adequacy of the insurers capital and surplus. [1993 c.447 50]
(1)(a) In addition to other powers that the Director of the Department of Consumer and Business Services has under the Insurance Code to examine and investigate insurers, the director may also order any insurer registered under ORS 732.517 to 732.596 to produce books, records, accounts, papers, documents and computer and other recordings the insurer or the insurers affiliates have that are necessary for the director to ascertain the insurers financial condition or to determine the insurers compliance with the Insurance Code. If the insurer fails to comply with the directors order, the director may examine the affiliates to obtain the information the director requires. (b) In examining the insurers financial condition, the director may determine the extent to which the person that controls the insurer, the insurance holding company system or an entity within the insurance holding company system may cause enterprise risk to the insurer. (c) In determining compliance with the Insurance Code, the director may order an insurer that is registered under ORS 732.517 to 732.596 to produce information the insurer does not possess but to which the insurer might have access by reason of a contractual relationship or a statutory obligation or by other means. If the insurer cannot obtain the information the director requires, the insurer shall provide the director with a detailed explanation of the reason the insurer cannot obtain the information and shall identify the person that possesses the information. If the director finds that the insurers explanation is without merit, the director may impose a civil penalty on the insurer under ORS 731.988 or may suspend or revoke the insurers certificate of authority. (2) ORS 731.302 (2) applies to an examination the director conducts under subsection (1) of this section, and an insurer shall otherwise pay the costs of an examination of the insurer under this section as provided in ORS 731.316. [1993 c.447 51; 2013 c.370 29]
(1) All information, documents and copies of information or documents obtained by or disclosed to the Director of the Department of Consumer and Business Services or any other person in the course of an examination or investigation under ORS 732.584 are subject to the provisions of ORS 731.312. (2) All information reported in accordance with ORS 732.552, 732.554, 732.574 and 732.576 is confidential and may not be made public except as provided in this subsection. The director may disclose reported information only as provided in ORS 705.137 or only if: (a) The director obtains the prior written consent of the insurer to which the reported information pertains; or (b) The director, after giving the insurer and the insurers affiliates that would be affected by the disclosure notice and opportunity to be heard, determines that disclosing the information will serve the interest of policyholders, shareholders or the public. If the director determines that disclosing the information will serve one or more of such interests, the director may publish all or any part of the information in any manner that the director determines is appropriate. (3) The directors sharing of information under ORS 732.517 to 732.596 does not delegate regulatory or rulemaking authority. The director is solely responsible for administering, executing and enforcing ORS 732.517 to 732.596. [1993 c.447 52; 2001 c.377 11; 2013 c.370 30; 2015 c.547 21] Note: The amendments to 732.586 by section 21, chapter 547, Oregon Laws 2015, apply for a limited period. See section 28, chapter 547, Oregon Laws 2015 (note below). The text that is applicable for the limited period is set forth for the users convenience. (1) All information, documents and copies of information or documents obtained by or disclosed to the Director of the Department of Consumer and Business Services or any other person in the course of an examination or investigation under ORS 732.584 are subject to the provisions of ORS 731.312. (2) All information reported in accordance with ORS 732.552, 732.554, 732.569, 732.574, 732.576 and 732.662 is confidential and may not be made public except as provided in this subsection. The director may disclose reported information only as provided in ORS 705.137 or only if: (a) The director obtains the prior written consent of the insurer to which the reported information pertains; or (b) The director, after giving the insurer and the insurers affiliates that would be affected by the disclosure notice and opportunity to be heard, determines that disclosing the information will serve the interest of policyholders, shareholders or the public. If the director determines that disclosing the information will serve one or more of such interests, the director may publish all or any part of the information in any manner that the director determines is appropriate. (3) The directors sharing of information under ORS 732.517 to 732.592 [series became 732.517 to 732.596] does not delegate regulatory or rulemaking authority. The director is solely responsible for administering, executing and enforcing ORS 732.517 to 732.592. Note: Section 28 (1), chapter 547, Oregon Laws 2015, provides: Sec. 28. (1) Section 14 of this 2015 Act and the amendments to ORS 732.586, 733.302, 733.304, 733.316, 733.318, 743.204 and 743.215 by sections 21 to 27 of this 2015 Act apply to all policies and contracts, as appropriate, that are issued on or after the operative date for the Standard Nonforfeiture Law for Life Insurance under ORS 743.204 and before the operative date of the valuation manual. [2015 c.547 28(1)]
(1) If the Director of the Department of Consumer and Business Services determines that a persons violation of any provision of ORS 732.517 to 732.596 so impairs the financial condition of a domestic insurer as to threaten insolvency or makes the insurers further transaction of business hazardous to the insurers policyholders, creditors, shareholders or the public, the director may place the insurer under supervision or in rehabilitation or liquidation as provided in ORS chapter 734. (2) If the director determines that a persons violation of ORS 732.521, 732.523, 732.526, 732.541 or 732.566 prevents the director from fully understanding the enterprise risk that an insurance holding company system or an affiliate of an insurer presents to the insurer, the director may, on the basis of the violation, disapprove a dividend or distribution and may place the insurer under supervision as provided in subsection (1) of this section. (3) If the director places an insurer under supervision as provided in ORS chapter 734 and the insurer engages in transactions within an insurance holding company system as provided in ORS 732.574, the director retains authority over the insurers operations and over transactions in which the insurer engages within an insurance holding company system of which the insurer is a member. [1993 c.447 53; 2013 c.370 31; 2017 c.479 12]
[1983 c.498 18; 1993 c.447 36; renumbered 732.543 in 1993]
(1) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order may recover, on behalf of the insurer, from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer on the insurers capital stock, or any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or the insurers subsidiary to a director, officer or employee, when such a distribution or payment is made at any time during the 12 calendar months preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (2), (3) and (4) of this section. (2) A distribution to which subsection (1) of this section applies is not recoverable if the parent or affiliate shows that the distribution was lawful and reasonable when paid and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill the insurers contractual obligations. (3) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time a distribution to which subsection (1) of this section applies was paid is liable in an amount that is not more than the amount of distributions or payments received by the person under subsection (1) of this section. Any person who otherwise controlled the insurer at the time such distributions were declared is liable up to the amount of distributions the person would have received if the distributions had been paid immediately. If two or more persons are liable with respect to the same distributions, the persons are jointly and severally liable. (4) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds. (5) To the extent that any person liable under subsection (3) of this section is insolvent or otherwise fails to pay claims due from the person pursuant to subsection (3) of this section, the persons parent corporation or holding company or other person who otherwise controlled the person liable under subsection (3) of this section when the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled the person liable under subsection (3) of this section. (6) If the director places an insurer under liquidation or rehabilitation as provided in ORS chapter 734 and the insurer engages in transactions within an insurance holding company system as provided in ORS 732.574, the director retains authority over the insurers operations and over transactions in which the insurer engages within an insurance holding company system of which the insurer is a member. [1993 c.447 54; 1995 c.638 6; 2017 c.479 13]
(1) The Director of the Department of Consumer and Business Services shall: (a) Act, in accordance with the provisions of this section, as the group-wide supervisor for any internationally active insurance group; or (b) Acknowledge another regulatory official as the group-wide supervisor for an internationally active insurance group if the internationally active insurance group: (A) Does not have substantial insurance operations in the United States; (B) Has substantial insurance operations in the United States but not in this state; or (C) Has substantial insurance operations in this state but the director determines under criteria set forth in subsections (2) and (6) of this section that the other regulatory official is the appropriate group-wide supervisor. (2) The director, in cooperation with other state, federal and international regulatory agencies, shall identify a single group-wide supervisor for each internationally active insurance group. The director may determine that the director is the appropriate group-wide supervisor for an internationally active insurance group with substantial insurance operations in this state or the director may determine that another regulatory official is the appropriate group-wide supervisor. In making the determination, the director shall consider: (a) Where the insurers that have the largest share of the internationally active insurance groups written premiums, assets or liabilities are domiciled; (b) Where the top-tier insurers within the internationally active insurance groups insurance holding company system are domiciled; (c) Where the internationally active insurance group has executive offices or the groups largest operational offices; (d) Whether another regulatory official is acting, or seeks to act, as the group-wide supervisor for the internationally active insurance group under a regulatory system that the director determines is: (A) Substantially similar to the regulations set forth in the Insurance Code; or (B) Otherwise sufficient to enable the regulatory official to engage in group-wide supervision and enterprise risk analysis and to cooperate with other regulatory officials; and (e) Whether another regulatory official that is acting, or seeks to act, as the group-wide supervisor provides the director with a reasonable degree of reciprocal acknowledgment and cooperation. (3) A regulatory official that the director determines under subsection (2) of this section is the appropriate group-wide supervisor for an internationally active insurance group may in turn acknowledge a different regulatory official as the appropriate group-wide supervisor. Before acknowledging another regulatory official as an appropriate group-wide supervisor, a regulatory official shall: (a) Consider the criteria set forth in subsection (2) of this section; (b) Cooperate with and obtain acknowledgment from other regulatory officials with responsibility for supervising the internationally active insurance group; and (c) Consult with the internationally active insurance group. (4) Notwithstanding any other provision of this section or ORS 732.596, the director shall acknowledge another regulatory official that is acting as a group-wide supervisor for an internationally active insurance group unless a material change in the internationally active insurance group requires the director to make a determination under subsection (2) of this section as to the appropriate group-wide supervisor for the internationally active insurance group. For purposes of this determination, a material change is: (a) Insurers domiciled within this state come to hold the largest share of the internationally active insurance groups written premiums, assets or liabilities; or (b) The top-tier insurers within the internationally active insurance groups insurance holding company system become domiciled in this state. (5) The director, in accordance with ORS 732.584, may order an insurer registered under ORS 732.551 to produce any information the director requires to determine whether the director may act as, or must acknowledge another regulatory official as, the group-wide supervisor for an internationally active insurance group. Before determining that the director is the appropriate group-wide supervisor for an internationally active insurance group, the director shall inform the insurer that provided the information and the controlling entity within the internationally active insurance group, and give the internationally active insurance group at least 30 days in which to provide any additional information that may relate to the directors determination. The director shall identify internationally active insurance groups for which the director acts as the group-wide supervisor on the Department of Consumer and Business Services website. (6) As the group-wide supervisor for an internationally active insurance group, the director may: (a) Assess enterprise risks within the internationally active insurance group to evaluate whether persons who manage members of the internationally active insurance group that are engaged in transacting insurance have identified the members material financial condition and liquidity risks and have established reasonable and effective mitigation measures; (b) Request from any member of an internationally active insurance group subject to the directors supervision information that is necessary and appropriate to enable the director to assess enterprise risk for the member, including information about the members: (A) Governance, risk assessment and management; (B) Capital adequacy; and (C) Material intercompany transactions; (c) Require members of internationally active insurance groups to develop and implement reasonable measures to enable the members to timely recognize and mitigate enterprise risks and, if necessary, assist the members or ask regulatory officials in jurisdictions in which the members are domiciled to compel the members to develop and implement the measures; (d) Communicate and share information, including through a supervisory college described in ORS 732.571, with other state, federal and international regulatory agencies that have authority over members of internationally active insurance groups, subject to the confidentiality provisions of ORS 705.137, 705.138, 705.139 and 732.586; (e) Enter into agreements with, or obtain information from, any insurer registered under ORS 732.551, any member of an internationally active insurance group or any other state, federal or international regulatory agency with authority over the internationally active insurance group in order to clarify or provide a basis for the directors authority as a group-wide supervisor, provided that the agreements or information: (A) Enable the director to resolve disputes with other regulatory officials; and (B) Will not serve as evidence in any proceeding that an insurer or person within an insurance holding company system that is not domiciled or organized in this state is transacting insurance in this state or is otherwise subject to the jurisdiction of this state; or (f) Perform any other activities the director deems necessary to exercise the functions of a group-wide supervisor, provided the activities are consistent with the authority and the purposes set forth in this section. (7)(a) The director may cooperate, including through a supervisory college described in ORS 732.571, with another regulatory official from a jurisdiction that the National Association of Insurance Commissioners has not accredited in the regulatory officials role as a group-wide supervisor if: (A) The director acknowledges the regulatory official as a group-wide supervisor; (B) The directors cooperation complies with the laws of this state; and (C) The regulatory official cooperates with the directors activities as a group-wide supervisor for other internationally active insurance groups as appropriate. (b) The director may refuse to acknowledge and cooperate with a regulatory official who does not reciprocate the directors acknowledgment and cooperation under this subsection. (8) The director may enter into agreements with or obtain information from an insurer registered under ORS 732.551, an affiliate of the insurer and any other state, federal or international regulatory agency if the agreement or information clarifies or provides the basis for a regulatory officials authority as a group-wide supervisor. (9) An insurer that is subject to this section, or that is a member of an internationally active insurance group that is subject to this section, shall pay the directors reasonable expenses of administering this section, including expenses associated with engaging attorneys, actuaries or other professionals and reasonable travel expenses. [2017 c.479 2]
[1983 c.498 19; renumbered 732.546 in 1993]
An insurance holding company system that is not an internationally active insurance group may request that the Director of the Department of Consumer and Business Services determine or acknowledge a group-wide supervisor for the insurance holding company system in accordance with ORS 732.594. [2017 c.479 3]
As used in ORS 732.600 to 732.630: (1) "Conversion" means a process by which a domestic mutual insurer is converted to a domestic stock insurer in accordance with ORS 732.600 to 732.630. (2) "Converted stock insurer" means a domestic stock insurer into which a domestic mutual insurer is converted in accordance with ORS 732.600 to 732.630. (3) "Converting mutual insurer" means a domestic mutual insurer that is converted to a domestic stock insurer in accordance with ORS 732.600 to 732.630. (4) "Effective date" means, with respect to a plan, the date or dates on which the plan or a part of the plan becomes effective as set forth in an order of the Director of the Department of Consumer and Business Services. (5) "Intermediate stock holding company" means a corporation that owns, either directly or through a wholly owned subsidiary, all of the outstanding shares of capital stock of a converted stock insurer and: (a) A majority of the outstanding shares of voting capital stock of which a mutual holding company owns; and (b) A majority in total value of the outstanding shares of capital stock of which a mutual holding company owns. (6) "Issuer" means a corporation the director approves and any of the following: (a) With respect to a conversion in which there is no reorganization, a converted stock insurer. (b) With respect to a reorganization that involves the organization of a stock holding company, the stock holding company. (c) With respect to a restructuring, a restructured stock holding company. (7) "Member" means: (a) With respect to a domestic mutual insurer, any owner, as defined in ORS 732.465 (3), of one or more policies of insurance, other than a policy of reinsurance, issued by the mutual insurer. (b) With respect to a mutual holding company, any owner, as defined in ORS 732.465 (3), of one or more policies of insurance, other than a policy of reinsurance, issued by the stock insurer resulting from a reorganization involving the organization of a mutual holding company and, if set forth in an order of the director, any owner of one or more policies of insurance, other than a policy of reinsurance, issued by any other insurer that is a direct or indirect subsidiary of the mutual holding company. (8) "Membership interest" means: (a) With respect to a domestic mutual insurer, any right that a member of the mutual insurer may hold by virtue of membership in the mutual insurer. (b) With respect to a mutual holding company, any right that a member of the mutual holding company may hold by virtue of membership in the mutual holding company. (9) "Mutual holding company" means a corporation organized under the laws of this state in accordance with ORS 732.620. (10) "Plan" means a plan of conversion, reorganization or restructuring. (11) "Reorganization" means a process by which a domestic mutual insurer is converted to a domestic stock insurer and either a stock holding company or a mutual holding company is organized in accordance with ORS 732.600 to 732.630. (12) "Restructured stock holding company" means a stock holding company that results from restructuring a mutual holding company. (13) "Restructuring" means a process by which a mutual holding company is restructured into a stock holding company in accordance with ORS 732.622 and 732.624. (14) "Restructuring mutual holding company" means a mutual holding company that is restructured to a stock holding company. (15) "Stock holding company" means a corporation that: (a) Owns, either directly or through one or more subsidiaries, all or part of the outstanding shares of capital stock of a converted stock insurer; (b) Is organized either as a result of a reorganization or as a result of a restructuring; and (c) Immediately after the effective date of the reorganization or restructuring, is not controlled by any other person, unless the persons control is set forth in the plan and approved by the director. As used in this paragraph, "control" has the meaning given that term in ORS 732.548. (16)(a) "Voting capital stock" means capital stock the holder of which has the right to vote in the election of directors. (b) "Voting capital stock" does not include capital stock as to which the right to vote in the election of directors is conditional upon the occurrence or nonoccurrence of a specified event. [1997 c.771 2; 2013 c.370 32]
ORS 732.600 to 732.630 are intended to enable a domestic mutual insurer, to the extent consistent with the interests of its members and the insurance buying public, to: (1) Adopt any other type of organizational structure, including a stock insurer, stock holding company or mutual holding company, that enhances its financial strength and flexibility; and (2) Support long-term growth through creative internal strategies, mergers and acquisitions. [1997 c.771 17]
(1) A domestic mutual insurer may engage in either of the following actions: (a) A conversion to a domestic stock insurer; or (b) A reorganization in which the domestic mutual insurer is converted to a domestic stock insurer; and (A) A mutual holding company is organized; or (B) A stock holding company is organized. (2) A mutual holding company may restructure into a stock holding company, as provided in ORS 732.622 and 732.624. (3) A reorganization involving the organization of a mutual holding company also may include the organization of an intermediate stock holding company and any other corporation that is permitted to be organized under ORS 732.600 to 732.630. A reorganization involving the organization of a stock holding company also may include the organization of any other corporation that is permitted to be organized under ORS 732.600 to 732.630. (4) The Director of the Department of Consumer and Business Services may adopt rules for any of the following purposes: (a) Implementing ORS 732.600 to 732.630. (b) Ensuring full and proper review of any action described in ORS 732.600 to 732.630. (c) Protecting the rights of policyholders, members and the insurance-buying public with respect to a conversion, reorganization or restructuring. [1997 c.771 3]
[1971 c.373 2; 1993 c.447 23; renumbered 732.548 in 1993]
(1) In order for a domestic mutual insurer to engage in a conversion or reorganization as provided in ORS 732.604, the board of directors of the mutual insurer must adopt a plan that meets the requirements of ORS 732.610. (2) After the board of directors of a mutual insurer has adopted a plan and before the board of directors seeks approval of the plan by the eligible members of the mutual insurer, the mutual insurer shall file the following documents with the Director of the Department of Consumer and Business Services: (a) The plan of conversion or reorganization. (b) The form of notice of the meeting at which the eligible members vote on the plan. (c) The form of any proxies to be solicited from the eligible members. Proxies must offer the eligible members the option of voting in favor or voting against the plan or abstaining. (d) Information required by ORS 732.523. (e) Other information or documentation required by the director. (3) The director shall approve, conditionally approve or disapprove a plan and other documents submitted under subsection (2) of this section, according to the standards established in ORS 732.626. The director must take such action not later than the 60th day after the director has received a completed filing of the plan and all information requested by the director or not later than the 30th day after the completion of a hearing on the plan, whichever date is later. (4) At any time before approval of a plan by the director, the board of directors of the mutual insurer may amend or withdraw the plan. (5) After approval by the director, the plan must be approved by the eligible members of the mutual insurer. Approval by the eligible members is subject to the following requirements: (a) All eligible members must be given notice of the plan and of their opportunity to vote on the plan. A copy of the plan or a summary of the plan must accompany the notice. The notice shall be mailed to the last known address of each eligible member, as shown on the records of the mutual insurer, not later than the 45th day after approval of the plan by the director. The meeting of the eligible members at which a vote on the plan will occur shall be set for a date that is not earlier than the 30th day after the date on which the mutual insurer mailed the notice of the meeting. If the mutual insurer complies substantially and in good faith with the notice requirements of this section, the mutual insurers failure to give any member or members any required notice does not impair the validity of any action taken under this section. (b) The vote required for approval must be conducted as provided in ORS 732.470 and 732.475, except as follows: (A) Only eligible members may vote on the plan. (B) An eligible member may vote in person or by proxy at the meeting at which the plan is voted upon. (C) The plan is approved by the eligible members upon the affirmative vote of two-thirds or more of the eligible members voting on the plan, unless the articles of incorporation require a greater number of affirmative votes. (6) The plan shall be carried out in accordance with its terms on the effective date of the conversion or reorganization. [1997 c.771 4; 2001 c.352 2]
The Director of the Department of Consumer and Business Services may waive the requirements of ORS 732.606 if: (1) The director determines that a domestic mutual insurer is in hazardous financial condition according to standards established under ORS 731.385 or if a rehabilitation or liquidation proceeding or an administrative supervision proceeding has been instituted against the insurer; and (2) The director determines that the transfer of the policies is in the best interests of the policyholders. [1997 c.771 16]
A plan of conversion or reorganization of a domestic mutual insurer must include the following: (1) A statement of the reasons for the proposed action. (2) A description of how the plan will be carried out, including, but not limited to, any merger, transfer, assumption, exchange, acquisition, contribution or other transaction included within the plan and a description of any stock holding company, mutual holding company, intermediate stock holding company or other corporation organized pursuant to the plan. (3) A description of all significant terms of the conversion or reorganization. (4) A description of the overall effect of the plan on policies issued by the converting mutual insurer. The description must show that policyholder interests collectively are properly preserved and protected and that the plan is fair and equitable to the policyholders. (5) A statement of the manner and method by which membership interests in the converting mutual insurer will be extinguished and consideration will be provided to the eligible members in accordance with ORS 732.612. (6) The record date for determining whether a member of the converting mutual insurer is an eligible member. (7) The proposed effective date of the conversion or reorganization or the manner in which the proposed effective date of the conversion or reorganization is established. (8) The proposed amendments to or restatement of the articles of incorporation and bylaws of the converting mutual insurer and the proposed articles of incorporation and bylaws of any stock holding company, mutual holding company, intermediate stock holding company or other corporation organized pursuant to the plan. (9) Except as otherwise provided in ORS 732.612, the valuation of the converting mutual insurer immediately before the effective date of the conversion. (10) A description of the significant terms of any offering of shares of capital stock or other securities of an issuer. (11) The intention, if any, that a director or officer of the converting mutual insurer or converted stock insurer or any stock holding company, mutual holding company, intermediate stock holding company or other corporation organized pursuant to the plan may, within the six-month period following the effective date of the conversion or reorganization, purchase or acquire shares of capital stock or other securities of an issuer to be issued pursuant to the plan. (12) A provision that all policies in force on the effective date of the conversion or reorganization will remain in force under the terms of those policies. The plan also must provide that on the effective date of the conversion or reorganization, any voting rights of the members provided for under the policies or under the Insurance Code are extinguished. Except for individual policies of life insurance, guaranteed renewable health insurance and noncancelable health insurance issued by the converting mutual insurer, the plan may authorize the converted stock insurer to issue nonparticipating policies as a substitute for participating policies upon the renewal dates of the participating policies. (13) If applicable, a provision establishing a closed block of individual policies of life insurance, guaranteed renewable health insurance and noncancelable health insurance issued by the converting mutual insurer that are participating policies and in force on the effective date of the conversion or reorganization and for which the converting mutual insurer has an experience-based dividend scale payable in the year in which the plan is adopted by the board of directors of the converting mutual insurer. The plan may provide for conditions under which the converted stock insurer may cease to maintain the closed block and its allocated assets. Regardless of such a cessation, the obligations under the individual policies constituting the closed block business remain the obligations of the converted stock insurer. Dividends on those policies must be apportioned by the board of directors of the converted stock insurer in accordance with the terms of the policies. Assets of the insurer must be allocated to the closed block in an amount producing cash flows that, together with anticipated revenues from the closed block business, are expected to be sufficient to support the closed block business, including payment of claims and those expenses and taxes specified in the plan, and provide for continuation of dividend scales in effect on the effective date if the experience underlying the dividend scales continues. The provision establishing the closed block must provide for appropriate adjustments in the dividend scales if the experience changes. [1997 c.771 5]
(1)(a) A member is an eligible member of a domestic mutual insurer for purposes of ORS 732.600 to 732.630 if the members policy is in force as of the record date for a plan of conversion or reorganization. (b) For purposes of this subsection, the record date is the date on which the mutual insurers board of directors adopts the plan of conversion or reorganization or on some other date that the plan specifies as the record date and that the Director of the Department of Consumer and Business Services approves. (2)(a) A member is an eligible member of a mutual holding company for purposes of ORS 732.622 and 732.624 if the members policy is in force as of the record date for a plan of restructuring. (b) For purposes of this subsection, the record date is the date on which the mutual holding companys board of directors adopts the plan of restructuring or on another date the plan specifies as the record date and that the director approves. [2013 c.370 14]
(1) In the case of a conversion or in the case of a reorganization that involves the organization of a stock holding company, consideration for the membership interests of the eligible members of a converting mutual insurer consists of one or any combination of the following: (a) Nontransferable subscription rights to purchase shares of capital stock of the issuer as described in subsection (2) of this section; (b) Shares of capital stock of the issuer as described in subsection (3) of this section; (c) Cash; (d) Premium credits; (e) In the case of a converting mutual insurer transacting primarily property or casualty insurance, or both, certificates of contribution that bear interest as established in the plan, that are repayable within 10 years or, if approved by the Director of the Department of Consumer and Business Services, within a longer period and that are repayable on terms set forth in the plan; (f) In the case of individual policies of life insurance, credits to policy account values or other enhancements in policy benefits; and (g) Any other form of consideration described in the plan and approved by the director. (2) A plan may provide for allocating to eligible members, without payment, nontransferable subscription rights to purchase shares of capital stock of the issuer. In addition, the plan must: (a) Allocate the subscription rights in whole shares among the eligible members. In the case of a converting mutual insurer transacting primarily life or health insurance, or both, the subscription rights must be allocated in accordance with subsection (6) of this section. In the case of a converting mutual insurer transacting primarily property or casualty insurance, or both, the subscription rights must be allocated in accordance with subsection (7) of this section. (b) Specify the expiration date of the subscription rights or authorize the board of directors of the converting mutual insurer to establish the expiration date. An eligible member may exercise the subscription rights, in whole or in part, in the manner described in the plan including, but not limited to, paying the subscription exercise price for the shares purchased. The plan may require an eligible member who exercises subscription rights to purchase a minimum number of shares unless the director determines that a minimum purchase requirement is unreasonable based on the interests of the eligible members, the converted stock insurer and the issuer. The proposed subscription exercise price per share must be set forth in the plan and must be less than the price at which shares of capital stock of the issuer will be first offered in accordance with paragraph (e) of this subsection. The boards of directors of the converting mutual insurer and the issuer shall determine the proposed subscription exercise price per share and the director must approve the proposed price based on the interests of the eligible members, the policyholders, the converted stock insurer and the issuer. (c) Provide that to the extent an eligible member does not exercise, in whole or in part, subscription rights allocated to the eligible member, the eligible member instead will receive one or more of the forms of consideration described in subsection (1) of this section that are specified in the plan. (d) Set the pro forma market value of the converted stock insurer, which is the value that is estimated to be necessary to attract full subscription for all shares offered by the issuer. The pro forma market value of the converted stock insurer must be determined by an independent valuation by a qualified person. The price per share at which the shares of capital stock of the issuer are first offered in accordance with paragraph (e) of this subsection must be equal to such pro forma market value of the converted stock insurer divided by the number of shares that would be issued if all subscription rights allocated to the eligible members are exercised. (e) Further provide that any shares of capital stock of the issuer for which subscription rights are allocated to the eligible members but that the eligible members do not purchase by exercising the members subscription rights must be sold in a public offering through an underwriter, unless the number of shares that the eligible members do not purchase is so small in number that the expense of a public offering is not warranted, in which case the plan may provide for the sale of the shares by private placement or through any other fair and equitable means approved by the director. If the director finds that market conditions or other circumstances may cause the interests of the eligible members to be adversely affected, the director may require the offering of shares to be postponed or the terms of the offering to be modified. (3) A plan may provide for allocating to the eligible members, without payment, shares of capital stock of the issuer. The plan must allocate the shares of capital stock of the issuer in whole shares among the eligible members. In the case of a converting mutual insurer transacting primarily life or health insurance, or both, the shares must be allocated in accordance with subsection (6) of this section. In the case of a converting mutual insurer transacting primarily property or casualty insurance, or both, the shares must be allocated in accordance with subsection (7) of this section. If shares of capital stock of the issuer constitute the only consideration the eligible members will receive and the plan does not provide for selling additional shares of capital stock or other securities of the issuer, the plan does not need to include the valuation of the converting mutual insurer. If the plan provides for allocating to the eligible members, without payment, shares of capital stock of the issuer, the plan may establish a reasonable period within which the eligible members to whom such shares are issued may not dispose of such shares. (4) If shares of capital stock of the issuer are issued in accordance with subsection (2) or (3) of this section, the issuer must use the issuers best efforts to encourage and assist in establishing a public market for the shares unless the director finds that a public market is not feasible or is not in the best interests of the eligible members, the converted stock insurer and the issuer. The director may provide that subscription rights or shares of capital stock of the issuer do not need to be allocated under subsection (2) or (3) of this section to eligible members who reside in a foreign country or other jurisdiction if a small number of eligible members reside in the foreign country or other jurisdiction and any registration, qualification, filing or other compliance matters under the laws of the foreign country or other jurisdiction with respect to the shares of capital stock of the issuer would be impracticable or unduly burdensome upon the issuer. (5) Regardless of the form of consideration for the membership interests of the eligible members of a converting mutual insurer, the plan may provide for selling additional shares of capital stock or other securities of the issuer to persons other than the eligible members. The issuer shall offer such additional shares or other securities at a price and on terms determined by the boards of directors of the converting mutual insurer and the issuer. (6) For a converting mutual insurer that transacts primarily life or health insurance, or both, the consideration specified in subsection (1) of this section must be allocated among the eligible members in accordance with a fair and equitable formula. The formula for allocating the consideration among the eligible members must either: (a) Allocate a fixed component of consideration per capita among the eligible members and allocate a variable component of consideration among the eligible members in proportion to the cash value of policies the eligible members hold; or (b) Allocate the consideration among the eligible members in any other manner approved by the director. (7) For a converting mutual insurer transacting primarily property or casualty insurance, or both, the consideration specified in subsection (1) of this section must be allocated among the eligible members in accordance with a fair and equitable formula. The formula for allocating the consideration among the eligible members must either: (a) Allocate the consideration among the eligible members in the proportion that the aggregate premiums the converting mutual insurer earns on the eligible members policies in force during a specified period before the record date described in ORS 732.611 (1) bear to the aggregate premiums that the converting mutual insurer earns during the same period on all eligible members policies in force. The specified period must be 36 months unless the plan specifies another period. (b) Allocate the consideration among the eligible members in any other manner approved by the director. (8) The form of consideration to be given to a class or category of eligible members may differ from the form of consideration to be given to another class or category of eligible members. The choice of the form of consideration to be given to a class or category of eligible members may take into account the type of policy, size of policy, tax status of the eligible members and other factors that the director determines are appropriate. (9) In the case of a conversion or in the case of a reorganization that involves the organization of a stock holding company, a member of the converting mutual insurer who is not an eligible member is not entitled to receive any consideration for the members membership interest. (10) In the case of a reorganization that involves the organization of a mutual holding company, the membership interests of the members of the converting mutual insurer, whether or not the members are eligible members, must be merged into the mutual holding company, and consequently the membership interests of the members of the converting mutual insurer must become membership interests in the mutual holding company. [1997 c.771 6; 2013 c.370 33]
(1) Upon the effective date of a conversion, the membership interests of all members of the converting mutual insurer, whether or not eligible members, shall be extinguished, and the eligible members of the converting mutual insurer shall be entitled to receive the consideration described in ORS 732.612 in accordance with the plan. (2) A converting mutual insurer becomes a stock insurer on the effective date of the conversion. The amended or restated articles of incorporation of the converting mutual insurer shall be filed with the Director of the Department of Consumer and Business Services and shall become effective on the effective date of the conversion. The certificate of authority of the converting mutual insurer shall be amended by the director on the effective date of the conversion. (3) A converted stock insurer continues the corporate existence of the converting mutual insurer. Except as provided in the plan, the conversion does not annul, modify or change any existing license or other authority or any of the existing civil actions, rights, contracts or liabilities of the converting mutual insurer. All property, debts and choses in action and every other interest belonging to the converting mutual insurer before the conversion are retained by the converted stock insurer without further action needed. On and after the effective date of the conversion, the converted stock insurer shall exercise all rights and powers and perform all duties conferred or imposed by law upon insurers writing the classes of insurance written by the converted stock insurer, shall retain the rights and contracts of the converting mutual insurer existing immediately before the conversion and shall be subject to all obligations and liabilities of the converting mutual insurer existing immediately before the conversion, subject to the terms of the plan. (4) Notwithstanding subsections (2) and (3) of this section, the conversion may be carried out through any other method described in the plan and approved by the director. (5) Unless otherwise specified in the plan, the directors and officers of the converting mutual insurer shall serve as directors and officers of the converted stock insurer until new directors and officers are elected. (6) The provisions of this section apply to the conversion of the converting mutual insurer whether or not the conversion is part of a reorganization. [1997 c.771 7]
[1971 c.373 3; 1981 c.247 8; 1993 c.447 37; renumbered 732.551 in 1993]
(1) Upon the effective date of a reorganization involving the organization of a stock holding company, the membership interests of all members of the converting mutual insurer, whether or not eligible members, shall be extinguished, and the eligible members of the converting mutual insurer shall be entitled to receive the consideration described in ORS 732.612 in accordance with the plan. (2) The stock holding company and any direct or indirect subsidiary of the stock holding company shall be organized at the time or times set forth in the plan. (3) As part of the plan of reorganization or in a separate transaction after the effective date of the reorganization, a stock holding company may organize one or more direct or indirect subsidiaries to conduct noninsurance business or businesses. The subsidiaries may be affiliated with the converted stock insurer or any direct or indirect parent corporation of the converted stock insurer. (4) Shares of capital stock or other securities of the converted stock insurer, the stock holding company or any direct or indirect subsidiary of the stock holding company may be issued or sold in accordance with the plan or after the effective date of the reorganization. (5) Unless otherwise specified in the plan, the directors and officers of the converting mutual insurer shall serve as directors and officers of the stock holding company and any direct or indirect subsidiary of the stock holding company until new directors and officers are elected. (6) The Director of the Department of Consumer and Business Services retains jurisdiction over the stock holding company and any direct or indirect subsidiary of the stock holding company as provided in this section and as provided in ORS 732.517 to 732.596. [1997 c.771 8]
(1) Upon the effective date of a reorganization involving the organization of a mutual holding company, the membership interests of all members of the converting mutual insurer, whether or not such members are eligible members, shall be merged into the mutual holding company. Consequently, the members of the converting mutual insurer shall become members of the mutual holding company, and the membership interests of the members of the converting mutual insurer shall become membership interests in the mutual holding company. Upon the effective date of the reorganization, the membership interests of all members of the converting mutual insurer shall be extinguished. Any owner of one or more policies of insurance, other than a policy of reinsurance, issued by the converted stock insurer after the effective date of the conversion and, if set forth in an order of the Director of the Department of Consumer and Business Services, any owner of one or more policies of insurance, other than a policy of reinsurance, issued by any other insurer that is a direct or indirect subsidiary of the mutual holding company after the effective date of the reorganization becomes a member of the mutual holding company. (2) The articles of incorporation of the mutual holding company shall be filed with the director and shall become effective at the time specified in the plan. Any intermediate stock holding company and any subsidiary of an intermediate stock holding company shall be organized at the time or times set forth in the plan. (3) Upon the effective date of a reorganization involving the organization of a mutual holding company either: (a) All outstanding shares of capital stock of the converted stock insurer must be issued to the mutual holding company; or (b) All outstanding shares of capital stock of the intermediate stock holding company must be issued to the mutual holding company. (4) If there is no intermediate stock holding company, the mutual holding company shall own at all times after the effective date of the reorganization a majority of the outstanding shares of voting capital stock of the converted stock insurer and a majority of the total value of all outstanding shares of capital stock of the converted stock insurer. Subject to such requirement of share ownership by the mutual holding company in this subsection, shares of capital stock of the converted stock insurer may be issued by the converted stock insurer or may be sold or otherwise transferred by the mutual holding company. (5) If there is an intermediate stock holding company, the mutual holding company shall own at all times after the effective date of the reorganization a majority of the outstanding shares of voting capital stock of the intermediate stock holding company and a majority of the total value of all outstanding shares of capital stock of the intermediate stock holding company. At all times after the effective date of the reorganization, the intermediate stock holding company shall own, either directly or through a wholly owned subsidiary, all outstanding shares of capital stock of the converted stock insurer. Subject to such requirement of share ownership by the mutual holding company and any intermediate stock holding company in this subsection, shares of capital stock of the intermediate stock holding company may be issued by the intermediate stock holding company or may be sold or otherwise transferred by the mutual holding company. (6) After the effective date of the reorganization, the mutual holding company must at all times have the direct or indirect power to cast at least a majority of the votes for the election of directors of: (a) The converted stock insurer; and (b) The intermediate stock holding company, if any. (7) As part of the plan of reorganization or in a separate transaction after the effective date of the reorganization, a mutual holding company may organize or acquire one or more direct or indirect subsidiaries to conduct noninsurance business or businesses. The subsidiaries may be affiliated with the converted stock insurer or any intermediate stock holding company. (8) Unless otherwise specified in the plan, the directors and officers of the converting mutual insurer shall serve as directors and officers of the mutual holding company, any intermediate stock holding company and any subsidiary of an intermediate stock holding company until new directors and officers are elected. [1997 c.771 9]
(1) A mutual holding company is a corporation. To the extent not inconsistent with the provisions of the Insurance Code or ORS 732.600 to 732.630, ORS chapter 60 governs the powers, duties and relationships of a mutual holding company. The following sections in ORS chapter 60 do not apply to a mutual holding company: ORS 60.004, 60.007 to 60.014, 60.016, 60.017 to 60.024, 60.027, 60.031, 60.051 to 60.057, 60.131 to 60.147, 60.154 to 60.177, 60.224, 60.227, 60.234, 60.241 to 60.265, 60.470 to 60.534, 60.551 to 60.594, 60.701 to 60.747, 60.787, 60.801 to 60.816 and 60.825 to 60.845. The enumeration in this subsection of inapplicable sections in ORS chapter 60 is not exclusive. (2) In applying ORS chapter 60 as provided in this section, unless the context requires otherwise, references to: (a) "Corporation" shall be deemed references to "mutual holding company." (b) "Shareholders" shall be deemed references to "members." (c) "Secretary of State" shall be deemed references to "Director of the Department of Consumer and Business Services." (3) A mutual holding company is not an insurer for purposes of the Insurance Code. However, in the event a mutual holding company engages in an activity described in ORS 732.521, then ORS 732.517 to 732.546 shall apply to the mutual holding company and the effect of such activity shall be governed by ORS 732.517 to 732.546. A mutual holding company may merge with another corporation in accordance with a plan of restructuring described in ORS 732.622 and 732.624. (4) A mutual holding company shall not dissolve or liquidate without approval by the director or unless required by judicial order. The director retains jurisdiction over a mutual holding company, any intermediate stock holding company and any subsidiary of an intermediate stock holding company as provided in this section and as provided in ORS 732.517 to 732.596. (5) The members of a mutual holding company have the rights and obligations set forth in this section and in the articles of incorporation and bylaws of the mutual holding company. No member of a mutual holding company may transfer membership in the mutual holding company or any right arising from such membership. Such limitation on the transfer of membership or rights arising from membership shall not restrict the assignment of a policy that is otherwise permissible. A member of a mutual holding company is not personally liable for the acts, debts, liabilities or obligations of the mutual holding company merely by reason of being a member. No assessment of any kind may be imposed upon a member of a mutual holding company. (6) A membership interest in a mutual holding company shall not constitute a security as defined in ORS 59.015. (7) Each member of a mutual holding company is entitled to one vote on each matter coming before a meeting of the members and for each director to be elected regardless of the number of policies or amount of insurance and benefits held by such member. The voting rights of the members of a mutual holding company shall be determined in accordance with ORS 732.470. (8) Meetings of the members of a mutual holding company shall be governed by ORS 732.475 in the same manner as if the mutual holding company were a domestic mutual insurer, except for provisions governing quorum requirements, the approval of matters by the members and the election of directors by the members. The members present in person or represented by proxy shall constitute a quorum at a duly called meeting of the members. If a quorum exists, action on a matter, other than the election of directors, is approved by the members if the votes cast in favor of the action exceed the votes cast opposing the action, unless the articles of incorporation require a greater number of affirmative votes. Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the members entitled to vote in the election at a meeting at which a quorum exists. (9) The articles of incorporation of a mutual holding company must contain the following provisions: (a) The name of the mutual holding company. The name must include the words "mutual holding company" or "mutual insurance holding company" or other words connoting the mutual character of the mutual holding company that are approved by the director. (b) A provision specifying that the mutual holding company is not authorized to issue capital stock, whether voting or nonvoting. (c) A provision setting forth any rights of the members of the mutual holding company upon dissolution or liquidation. (10) A mutual holding company shall automatically be a party to any rehabilitation or liquidation proceeding involving the converted stock insurer that as a result of a reorganization is a direct or indirect subsidiary of the mutual holding company. In such a proceeding, the assets of the mutual holding company shall be counted as assets of the estate of the converted stock insurer for the purpose of satisfying the claims of the policyholders of the converted stock insurer. [1997 c.771 10]
(1) A mutual holding company may restructure to a stock holding company in accordance with a plan of restructuring. The restructuring may include the continuation or organization of one or more corporations that become direct or indirect subsidiaries of the restructured stock holding company in accordance with the plan of restructuring. (2) In order to restructure a mutual holding company, the board of directors of the mutual holding company must adopt a plan as provided in this section. (3) A plan of restructuring must include the following: (a) A statement of the reasons for the proposed action. (b) The proposed articles of incorporation and bylaws of the restructured stock holding company, the proposed articles of incorporation and bylaws of any other corporation to be organized pursuant to the plan and the proposed amendments to or restatement of the articles of incorporation and bylaws of any other existing corporation included in the plan. (c) A description of how the plan will be carried out, including, but not limited to, any merger, transfer, assumption, exchange, acquisition, contribution or other transaction included within the plan, and a description of the restructured stock holding company and any other corporation organized pursuant to the plan. (d) A description of all significant terms of the restructuring. (e) A description of the overall effect of the plan on policies issued by any insurer that is a direct or indirect subsidiary of the restructuring mutual holding company. The description must show that policyholder interests collectively are properly preserved and protected and that the plan is fair and equitable to the policyholders. (f) A statement of the manner and method by which membership interests in the restructuring mutual holding company will be extinguished and consideration will be provided to the eligible members. (g) The record date for determining whether a member of the restructuring mutual holding company is an eligible member. (h) The proposed effective date of the restructuring or the manner in which the proposed effective date of the restructuring is established. (i) Except as otherwise provided in ORS 732.624, the valuation of the restructuring mutual holding company immediately before the effective date of the restructuring. (j) A description of the significant terms of any offering of shares of capital stock or other securities of an issuer. (k) The intention, if any, that a director or officer of the restructuring mutual holding company, any direct or indirect subsidiary of the restructuring mutual holding company or any other corporation organized pursuant to the plan may, within the six-month period following the effective date of the restructuring, purchase or acquire shares of capital stock or other securities of an issuer to be issued pursuant to the plan. (4) After the board of directors of a mutual holding company has adopted a plan and before the board of directors seeks approval of the plan by the eligible members of the mutual holding company, the mutual holding company shall file the following documents with the Director of the Department of Consumer and Business Services: (a) The plan of restructuring. (b) The form of notice of the meeting at which the eligible members vote on the plan. (c) The form of any proxies to be solicited from the eligible members. Proxies must offer the eligible members the option of voting in favor or voting against the plan or abstaining. (d) Information required by ORS 732.523. (e) Other information or documentation required by the director. [1997 c.771 11]
(1) The Director of the Department of Consumer and Business Services shall approve, conditionally approve or disapprove a plan of restructuring and other documents submitted under ORS 732.622 according to the standards established in ORS 732.626. The director must take such action not later than the 60th day after the director has received a completed filing of the plan and all information requested by the director or not later than the 30th day after the completion of a hearing on the plan, whichever date is later. (2) At any time before approval of a plan by the director, the board of directors of the mutual holding company may amend or withdraw the plan. (3) After approval by the director, the plan must be approved by the eligible members of the mutual holding company. Approval by the eligible members is subject to the following requirements: (a) All eligible members must be given notice of the plan and of their opportunity to vote on the plan. A copy of the plan or a summary of the plan must accompany the notice. The notice shall be mailed to the last known address of each eligible member, as shown on the records of the mutual holding company, not later than the 45th day after approval of the plan by the director. The meeting of the eligible members at which a vote on the plan will occur shall be set for a date that is not earlier than the 30th day after the date on which the mutual holding company mailed the notice of the meeting. If the mutual holding company complies substantially and in good faith with the notice requirements of this section, the mutual holding companys failure to give any member or members any required notice does not impair the validity of any action taken under this section. (b) The vote required for approval must be conducted as provided in ORS 732.620, except as follows: (A) Only eligible members may vote on the plan. (B) An eligible member may vote in person or by proxy at the meeting at which the plan is voted upon. (4) The plan shall be carried out in accordance with its terms on the effective date of the restructuring. A restructuring may be carried out through any method approved by the director, including, but not limited to, the organization of an interim subsidiary of the mutual holding company and the merger of the mutual holding company with and into such subsidiary. (5) The restructured stock holding company and any other corporation included in the plan of restructuring shall be organized at the time or times set forth in the plan. (6) Upon the effective date of the restructuring, the membership interests of all members of the restructuring mutual holding company, whether or not eligible members, shall be extinguished, and the eligible members of the restructuring mutual holding company shall be entitled to receive any form of consideration described in ORS 732.612 in accordance with the plan. In applying ORS 732.612 to the members of the restructuring mutual holding company, references in ORS 732.612 to the "converting mutual insurer" shall mean the restructuring mutual holding company, and references to the policies of the eligible members shall mean those policies of the eligible members that result in membership in the restructuring mutual holding company. For this purpose, ORS 732.612 shall be construed and applied so that the effect upon the eligible members of the restructuring mutual holding company is similar to the effect upon the eligible members of a converting mutual insurer. If the consideration for the membership interests of the eligible members is nontransferable subscription rights to purchase shares of capital stock of the issuer, the plan must set the pro forma market value of the restructured stock holding company in the same manner as the pro forma market value of the converted stock insurer is determined in accordance with ORS 732.612. If shares of capital stock of the issuer constitute the only consideration to be received by the eligible members of the restructuring mutual holding company and the plan does not provide for the sale of additional shares of capital stock or other securities of the issuer, the plan does not need to include the valuation of the restructuring mutual holding company. (7) Unless otherwise specified in the plan, the directors and officers of the restructuring mutual holding company shall serve as directors and officers of the restructured stock holding company until new directors and officers are elected. (8) The director retains jurisdiction over the restructured stock holding company and any direct or indirect subsidiary of the restructured stock holding company as provided in this section and as provided in ORS 732.517 to 732.596. (9) A restructured stock holding company shall automatically be a party to any rehabilitation or liquidation proceeding involving a converted stock insurer if the restructuring mutual holding company would have been a party to such proceeding under ORS 732.620. [1997 c.771 12]
[1971 c.373 4; 1993 c.447 38; renumbered 732.552 in 1993]
(1) The Director of the Department of Consumer and Business Services shall review a plan of conversion, reorganization or restructuring that is submitted to the director. Upon review, the director shall approve or conditionally approve the plan if the director finds all of the following: (a) The applicable provisions of ORS 732.600 to 732.630, and other applicable provisions of law, have been fully met. (b) The plan protects the rights of policyholders. (c) The plan will be fair and equitable to the members, and the plan will not prejudice the interests of the members. (d) The allocation of consideration among the eligible members is fair and equitable. (e) The converted stock insurer will have capital or surplus, or any combination thereof, that is required of a domestic stock insurer on initial authorization to transact like kinds of insurance, and otherwise will be able to satisfy the requirements of this state for transacting its insurance business. (f) The plan will not substantially reduce the security of the policyholders and the service to be rendered to the policyholders. (g) If a stock holding company or mutual holding company is organized, the financial condition of the stock holding company, the mutual holding company or any subsidiary thereof will not jeopardize the financial stability of the converted stock insurer. (h) The financial condition of the converting mutual insurer will not be jeopardized by the conversion or reorganization, and the conversion or reorganization will not jeopardize the financial stability of the stock holding company, the mutual holding company or any subsidiary thereof. (i) The competence, experience and integrity of those persons who will control the operation of the converted stock insurer are not contrary to the interests of policyholders of the converted stock insurer and of the public in allowing the plan to proceed. (j) Implementation of the plan will protect the interests of the insurance-buying public. (k) The activity is not subject to other material and reasonable objections. (L) All modifications required by the director have been made. (2) An approval or conditional approval of a plan by the director expires if the plan is not carried out within one year after the date of the approval or conditional approval, unless the time period is extended by the director for good cause, upon written application for such extension. (3) In connection with an approval or disapproval of a plan, when the plan must include a valuation, the director shall separately review and approve or disapprove the valuation stated in the plan, and shall make a specific finding thereon in the approval or disapproval. (4) The director may retain, at the expense of the converting mutual insurer or restructuring mutual holding company, qualified experts not otherwise a part of the staff of the Department of Consumer and Business Services to assist in reviewing the plan and supplemental documents and valuations, and in making the finding in subsection (3) of this section. (5) The director may hold a hearing for the purposes of receiving comment on whether a plan should be approved and on any other matter relating to the conversion, reorganization or restructuring. The hearing shall be held within 60 days after the director has received a completed filing of the plan and all information required by the director. [1997 c.771 13]
(1) For a period of three years following the effective date of a conversion, reorganization or restructuring, unless authorized by the Director of the Department of Consumer and Business Services, the directors, officers and employees of the converted stock insurer, any stock holding company, any mutual holding company or any subsidiary of a stock holding company or mutual holding company collectively shall not own, whether directly or indirectly, more than 25 percent of all outstanding shares issued by the converted stock insurer, any stock holding company or any subsidiary of a stock holding company or mutual holding company. (2) Except as otherwise provided in ORS 732.600 to 732.630, neither a person nor a group of persons acting in concert may acquire, through public offering, exchange or subscription rights or otherwise, more than five percent of the shares of capital stock of the converted stock insurer, any stock holding company or any subsidiary of a stock holding company or mutual holding company for a period of five years from the effective date of the conversion, reorganization or restructuring except with the approval of the director. (3) If the plan so provides and not otherwise, directors and officers of the converting mutual insurer, the converted stock insurer, any stock holding company or any subsidiary of a stock holding company or mutual holding company may, within the six-month period following the effective date of the conversion, reorganization or restructuring, purchase or acquire shares of capital stock or other securities of an issuer offered pursuant to the plan. [1997 c.771 14]
(1) Dissenters rights provided in ORS 60.551 to 60.594 are not available to any member, whether or not eligible, of a converting mutual insurer or a restructuring mutual holding company. (2) An action challenging the validity of or arising from the conversion, reorganization or restructuring or other acts taken or proposed to be taken under the plan or ORS 732.600 to 732.630 must be commenced not later than the 60th day after the effective date of the conversion, reorganization or restructuring or other acts so taken and may be pursued only if they are unlawful or fraudulent. There shall be a rebuttable presumption that any act set forth in an order of the Director of the Department of Consumer and Business Services is lawful. [1997 c.771 15]
[1971 c.373 5; 1993 c.447 39; renumbered 732.553 in 1993]
[1971 c.373 6; 1993 c.447 40; renumbered 732.554 in 1993]
As used in ORS 732.650 to 732.689: (1) "Corporate governance annual disclosure" means a report that an insurer or insurance group files with the Director of the Department of Consumer and Business Services in accordance with ORS 732.680 and 732.683. (2) "Insurance group" means insurers and affiliates within an insurance holding company system, as defined in ORS 732.548. (3) "Insurer" has the meaning given that term in ORS 732.548. (4) "Own risk and solvency assessment" means a confidential internal assessment of the material and relevant risks associated with an insurers or insurance groups business plan and of the sufficiency of capital resources to support the business plan that the insurer or insurance group conducts and that is appropriate for the nature, scale and complexity of the insurer or insurance group. (5) "Own Risk and Solvency Assessment Guidance Manual" means the Own Risk and Solvency Assessment Guidance Manual that the National Association of Insurance Commissioners develops and adopts and that the Director of the Department of Consumer and Business Services by rule or order designates as guidance and standards for completing an own risk and solvency assessment. (6) "Own risk and solvency assessment summary report" means a confidential high-level summary of an insurers or insurance groups own risk and solvency assessment. [2015 c.547 2; 2017 c.479 14] Note: 732.650 to 732.689 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 732 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) ORS 732.650 to 732.689 provide: (a) Requirements for maintaining a risk management framework and completing an own risk and solvency assessment; and (b) Guidance and instructions for filing an own risk and solvency assessment summary report with the Director of the Department of Consumer and Business Services. (2) ORS 732.650 to 732.689 apply to all insurers domiciled in this state unless an insurer is exempt under ORS 732.666. [2015 c.547 3] Note: See note under 732.650.
[1971 c.373 7; renumbered 732.558 in 1993]
An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing and reporting on the insurers material and relevant risks. The insurer satisfies this requirement if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer. [2015 c.547 4] Note: See note under 732.650.
(1) Subject to the provisions of ORS 732.666, an insurer, or the insurance group of which the insurer is a member, shall use a process that is comparable to the process described in the Own Risk and Solvency Assessment Guidance Manual to regularly conduct an own risk and solvency assessment. The insurer, or the insurance group of which the insurer is a member, shall conduct the assessment at least annually but also at any time when significant changes occur in the risk profile of the insurer or insurance group. (2) A change in the Own Risk and Solvency Assessment Guidance Manual takes effect on a date that the Director of the Department of Consumer and Business Services specifies. [2015 c.547 5] Note: See note under 732.650.
(1) At the request of the Director of the Department of Consumer and Business Services, and not more than once each year, an insurer shall submit to the director an own risk and solvency assessment summary report, or any combination of reports that together contain the information described in the Own Risk and Solvency Assessment Guidance Manual, for the insurer or the insurance group of which the insurer is a member. If the insurer is a member of an insurance group and the director is the lead state director for the insurance group, the insurer shall submit the own risk and solvency assessment summary report or combination of reports without waiting for a request from the director. (2) The insurers or insurance groups chief risk officer, or another executive who has responsibility for overseeing the insurers or insurance groups enterprise risk management process, shall attest in a signed statement in the own risk and solvency assessment summary report that to the best of the officers or executives belief and knowledge the insurer applies the enterprise risk management process described in the insurers own risk and solvency assessment summary report and that a copy of the report has been provided to the insurers board of directors or an appropriate committee of the board of directors. (3) An insurer may comply with subsection (1) of this section by providing the most recent and substantially similar report that the insurer or another member of an insurance group of which the insurer is a member provided to the director of another state or to a supervisor or regulator of a foreign jurisdiction, if the report provides information that is comparable to the information described in the Own Risk and Solvency Assessment Guidance Manual. An insurer that submits a report that is written in a language other than English must accompany the report with a translation of the report into the English language. (4) An insurer that must submit a report under this section shall submit the report in accordance with a schedule the director establishes, unless the director for good cause shown extends the time for submitting the report. [2015 c.547 6] Note: See note under 732.650.
[1971 c.373 8; 1993 c.447 42; renumbered 732.562 in 1993]
(1) An insurer is exempt from the requirements of ORS 732.650 to 732.689 if: (a) The insurer has annual direct written and unaffiliated assumed premium of less than $500 million, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program; and (b) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium of less than $1 billion, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program. (2) If an insurer is exempt under subsection (1)(a) of this section, but the insurance group of which the insurer is a member is not exempt under subsection (1)(b) of this section, the own risk and solvency assessment summary report required under ORS 732.662 must include every insurer within the insurance group. The insurer may satisfy this requirement by submitting more than one own risk and solvency assessment summary report for any combination of insurers, if the combination of reports includes every insurer within the insurance group. (3) If an insurer is not exempt under subsection (1)(a) of this section but the insurance group of which the insurer is a member is exempt under subsection (1)(b) of this section, the only own risk and solvency assessment summary report required under ORS 732.662 is the report that applies to the insurer. (4) An insurer that is not exempt under subsection (1) of this section may apply to the Director of the Department of Consumer and Business Services for a waiver from the requirements of ORS 732.650 to 732.689 based upon unique circumstances. In deciding whether to grant the insurers request for a waiver, the director may consider the type and volume of business the insurer writes, the insurers ownership and organizational structure and any other factor the director considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers that are domiciled in more than one state, the director shall coordinate with the lead state director and with the other domiciliary directors in considering whether to grant the insurers request for a waiver. (5) Notwithstanding the exemptions stated in this section, the director may require an insurer to maintain a risk management framework, conduct an own risk and solvency assessment and file an own risk and solvency assessment summary report: (a) Based on unique circumstances that include, but are not limited to, the type and volume of business the insurer writes, the insurers ownership and organizational structure, federal agency requests and international supervisor requests; or (b) If the insurer has risk-based capital that falls into company action level, meets one or more of the standards the director established under ORS 731.385 to determine whether an insurer is in hazardous financial condition or otherwise exhibits qualities that the director determines are characteristic of a troubled insurer. (6) If an insurer that was exempt under subsection (1) of this section subsequently no longer qualifies for an exemption because of changes in premium that are reflected in the insurers most recent annual statement or in the most recent annual statements of insurers within the insurance group of which the insurer is a member, the insurer has one year after the date on which the insurer is no longer exempt to comply with ORS 732.650 to 732.689. [2015 c.547 7] Note: See note under 732.650.
(1) Each insurer that must prepare an own risk and solvency assessment summary report shall prepare the report consistent with the current version of the Own Risk and Solvency Assessment Guidance Manual, subject to the requirements of subsection (2) of this section. The insurer shall maintain documentation and supporting information and make the documentation and supporting information available when the Director of the Department of Consumer and Business Services examines the insurer or at the directors request. (2) The director shall review an own risk and solvency assessment summary report, and make any additional requests for information, using procedures currently used in analyzing and examining multistate or global insurers and insurance groups. [2015 c.547 8] Note: See note under 732.650.
(1) All documents, materials or other information, including any own risk and solvency assessment summary report, that the Department of Consumer and Business Services possesses or controls, that the Director of the Department of Consumer and Business Services obtained or created or that were otherwise disclosed to the director or any other person in the course of implementing ORS 732.650 to 732.689 are confidential, are subject to the provisions of ORS 705.137, 705.138, 705.139 and 731.312 and are not subject to disclosure under ORS 192.311 to 192.478. (2) Notwithstanding subsection (1) of this section, the director may: (a) Use the documents, materials or other information in any regulatory or legal action the director brings as a part of the directors official duties. (b) Share documents, materials or other information related to an own risk and solvency assessment, including confidential documents and information, only: (A) As provided in ORS 705.137, 705.138 and 705.139 in response to a request from a chief insurance regulatory official, the National Association of Insurance Commissioners or a state, federal, foreign or international law enforcement agency; and (B) After receiving written consent from the affected insurer. (c) Share documents or materials or other information related to an own risk and solvency assessment with any third-party consultants the director designates, but only if the consultant: (A) Agrees in writing to keep the documents, materials or other information confidential; and (B) Demonstrates in writing and to the directors satisfaction that the consultant has the capacity and legal authority to keep the documents, materials or other information confidential. (3) In addition to the requirements of ORS 705.137, 705.138 and 731.312, the director shall enter into a written agreement with the National Association of Insurance Commissioners or a third-party consultant that: (a) Prohibits the National Association of Insurance Commissioners or a third-party consultant from storing the information the director or the department shares under ORS 732.650 to 732.689 in a permanent database after the underlying analysis is complete; and (b) Requires that an affected insurer must give written consent before a third-party consultant may disclose any documents, material or information the director or the department shares under ORS 732.650 to 732.689. [2015 c.547 9] Note: See note under 732.650.
[1971 c.373 9; 1993 c.447 43; renumbered 732.564 in 1993]
(1) An insurer, or the insurance group of which an insurer is a member, each year in accordance with a schedule the Director of the Department of Consumer and Business Services establishes in consultation with the insurer or insurance group, shall submit to the director or to the chief insurance regulatory official in the state that the director determines is the lead state for the insurance group, a corporate governance annual disclosure that has the information described in ORS 732.683. The director shall determine the lead state in accordance with procedures that the director adopts by rule after considering procedures that are set forth in a financial analysis handbook that the National Association of Insurance Commissioners has adopted. An insurer or a member of an insurance group that is not subject to the requirement under this subsection to submit a disclosure shall nevertheless submit the disclosure at the directors request. (2) The chief executive officer or corporate secretary of an insurer or insurance group shall sign the corporate governance annual disclosure and attest that to the best of the officers or secretarys belief and knowledge the insurer or insurance group has implemented the corporate governance practices identified in the disclosure and that the insurers or insurance groups board of directors, or an appropriate committee of the board of directors, has received a copy of the disclosure. (3)(a) An insurer or insurance group that submits a corporate governance annual disclosure under subsection (1) of this section may provide information in the disclosure: (A) At the level of the individual legal entity, an intermediate holding company or the controlling parent company, depending on how the insurer or insurance group has structured corporate governance; (B) At the level at which the insurer or insurance group determines the extent to which the insurer or insurance group will accept risk; (C) At the level at which the insurer or insurance group collectively oversees or coordinates and exercises supervision over the insurers or insurance groups earnings, capital, liquidity operations and reputation; or (D) At the level at which legal liability for failing in the duties of general corporate governance would occur. (b) An insurer or insurance group that determines the level at which the insurer or insurance group provides information in the corporate governance annual disclosure under paragraph (a)(B), (C) or (D) of this subsection shall indicate which criteria the insurer or insurance group used for the disclosure and explain any subsequent changes in the level at which the disclosure occurs. (4) If the director has determined a lead state in accordance with the procedures set forth in the financial analysis handbook described in subsection (1) of this section, an appropriate official in the lead state shall review the corporate governance annual disclosure and request any other information necessary for the review. (5) An insurer or insurance group that provides information that is substantially similar to the information required under this section or ORS 732.683 in other documents that the insurer or insurance group submits to the director, including proxy statements in conjunction with Form B requirements or other state or federal filings, need not duplicate the information in the corporate governance annual disclosure, but must include in the documents the insurer or insurance group submits to the director a cross-reference to documents that have the required information. [2017 c.479 5] Note: See note under 732.650.
(1) An insurer or insurance group has discretion as to the form and content of the insurers or insurance groups responses to inquiries in a corporate governance annual disclosure so long as the responses provide information the Director of the Department of Consumer and Business Services requires to understand the insurers or insurance groups corporate governance structure, policies and practices. The director may request additional information the director deems material and necessary to enable a clear understanding of the corporate governance policies and the reporting, information systems or controls that implement the policies. (2) Notwithstanding the discretion permitted to an insurer or insurance group under subsection (1) of this section, the insurer or insurance group shall prepare the corporate governance annual disclosure in a manner consistent with rules the director adopts under ORS 732.680. The insurer or insurance group shall maintain documentation and supporting information for the corporate governance annual disclosure and make the documentation and supporting information available during an examination of the insurer or insurance group or otherwise at the directors request. [2017 c.479 6] Note: See note under 732.650.
[1971 c.373 10; 1993 c.447 44; renumbered 732.566 in 1993]
(1)(a) Documents, materials or other information, including a corporate governance annual disclosure, that the Director of the Department of Consumer and Business Services discloses to, or receives in a submission or disclosure from, another person or otherwise possesses, controls, obtains or creates in accordance with ORS 732.680 or 732.683 contains trade secrets, is proprietary, confidential and privileged and is not subject to: (A) Disclosure under ORS 192.311 to 192.478; (B) Subpoena; or (C) Discovery and is not admissible in evidence in a private civil action. (b) The director may use documents, materials or other information described in paragraph (a) of this subsection in any regulatory or legal action to carry out the directors official duties without the prior written consent of the insurer or insurance group that provided or served as a source or subject of the documents, materials or other information but the director may not otherwise make the documents, materials or other information available to the public without prior written consent from the insurer or insurance group. (c) The director, any person that acted under the directors authority in an examination or other regulatory action or any person that under ORS 732.680 or 732.683 received shared documents, materials or other information described in paragraph (a) of this subsection may not testify concerning the documents, materials or other information in any private civil action. (2)(a) The director, in performing the directors regulatory duties, may: (A) Share documents, materials and other information described in subsection (1)(a) of this section, including information in or related to a corporate governance annual disclosure, with other state, federal or international regulatory agencies, including members of a supervisory college described in ORS 732.571, with the National Association of Insurance Commissioners and with consultants identified in ORS 732.689 if a regulatory agency, the association or a consultant requests the documents, materials or other information and: (i) Agrees in writing to maintain any privilege that applies to, and to keep confidential, the documents, materials and other information; and (ii) Verifies in writing that the regulatory agency, the association or the consultant has legal authority to keep the documents, materials and other information confidential. (B) Receive documents, materials and other information described in subsection (1)(a) of this section from the National Association of Insurance Commissioners and other state, federal and international regulatory agencies, including members of a supervisory college described in ORS 732.571. (b) The director shall maintain any privilege that applies to, and keep confidential, any documents, materials or other information the director receives from any of the persons described in paragraph (a)(B) of this subsection with notice or an understanding that the documents, materials or information are privileged or are confidential under the laws of the jurisdiction in which the person that is the source or subject of the documents, materials or other information is domiciled or exercises regulatory authority. (3) The directors or another persons disclosure of documents, materials or other information described in this section does not waive any privilege or claim of confidentiality that otherwise applies to the documents, materials or other information. [2017 c.479 7] Note: See note under 732.650.
(1)(a) The Director of the Department of Consumer and Business Services, at the expense of the insurer or insurance group from which the director receives a corporate governance annual disclosure, may retain a consultant, including an attorney, actuary, accountant or other expert, whenever the director reasonably requires assistance to review the corporate governance annual disclosure or related information and to evaluate the insurers or insurance groups compliance with this section and ORS 732.680, 732.683 and 732.686. (b) A consultant that the director retains under paragraph (a) of this subsection shall: (A) Act solely under the directors supervision; (B) Serve only in an advisory capacity; and (C) Comply with the requirements for confidentiality set forth for the director in ORS 732.686. (2) The director may not retain a consultant unless the consultant demonstrates to the director that the consultant: (a) Does not have a conflict of interest; and (b) Has internal procedures that enable the consultant to: (A) Monitor and avoid conflicts of interest; and (B) Comply with the requirements for confidentiality set forth for the director in ORS 732.686. (3) The director shall enter into a written agreement with a consultant that the director retains under subsection (1) of this section, or with the National Association of Insurance Commissioners if the director consults with the association, that specifies how the consultant or association may share and use documents, materials or other information described in ORS 732.686 (1)(a). The terms of the agreement must require the consultant or association to obtain written permission from the insurer or insurance group that is the source or subject of the documents, materials or other information before making the documents, materials or other information public and must specify: (a) Procedures and protocols for keeping the documents, materials and other information secure and confidential; (b) Conditions under which the consultant or the association may share the documents, materials or other information, including requirements that the recipient of the documents, materials or other information must: (A) Agree in writing to keep the documents, materials and other information secure and confidential; and (B) Verify in writing that the consultant or association has legal authority to keep the documents, materials or other information secure and confidential; (c) That the consultant or association may share the documents, materials and other information only with regulatory agencies in states that are domiciles of the insurer that is the source or subject of the documents, materials or other information or of an insurer within the insurance group that is the source or subject of the documents, materials or other information; (d) That the director retains ownership and control of the documents, materials or other information and that the consultant or association may use the documents, materials or other information only in accordance with the directors specifications or under the directors supervision; (e) That the consultant or association may not store the documents, materials or other information in a permanent database or another form after the consultant or association completes the consultation or finishes assisting the director; (f) That the consultant or association must immediately notify the director and the insurer or insurance group that is the source or subject of the documents, materials or other information if the consultant or association receives a subpoena or other request to disclose or produce the documents, materials or other information; and (g) That the consultant or association agrees to permit the insurer or insurance group that is the source or subject of the documents, materials or other information to intervene in any administrative or judicial proceeding that might require the consultant or association to disclose or produce the documents, materials or other information. [2017 c.479 8] Note: See note under 732.650.
[1971 c.373 11; 1993 c.447 45; renumbered 732.568 in 1993]
[1971 c.373 12; 1993 c.447 46; renumbered 732.572 in 1993]
As used in ORS 732.810 to 732.814: (1) "Control" has the meaning given that term in ORS 732.548. (2) "Controlled insurer" means an authorized insurer that an insurance producer controls directly or indirectly. (3) "Controlling producer" means an insurance producer who directly or indirectly controls an insurer. (4)(a) "Insurance producer" has the meaning given that term in ORS 731.104. (b) "Insurance producer" does not include a person who sells, solicits or negotiates an insurance contract on the insurance producers behalf. [1993 c.447 58; 2003 c.364 82; 2013 c.370 34] Note: 732.810 to 732.814 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 732 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) ORS 732.810 to 732.814 apply to an insurer who is authorized in this state to transact property insurance or casualty insurance, or both, and is: (a) Domiciled in this state; or (b) Domiciled in a state that is not accredited by the National Association of Insurance Commissioners and does not have in effect a law that the Director of the Department of Consumer and Business Services determines to be substantially similar to ORS 732.810 to 732.814. For purposes of this paragraph, a state is accredited if its insurance department or regulatory agency is determined by the National Association of Insurance Commissioners to meet the minimum financial regulatory standards promulgated and established from time to time by the National Association of Insurance Commissioners. (2) ORS 732.517 to 732.596 apply to all parties within a holding company system that is subject to ORS 732.810 to 732.814, to the extent that ORS 732.517 to 732.596 are not inconsistent with ORS 732.810 to 732.814. (3) ORS 732.810 to 732.814 do not apply to any of the following persons: (a) A risk retention group as defined in the Superfund Amendments Reauthorization Act of 1986, P.L. 99-499, 100 Stat. 1613 (1986), the Liability Risk Retention Act, 15 U.S.C.  3901 et seq. or ORS 735.305. (b) A residual market pool or a joint underwriting authority or association. (c) An insurer that is owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies or, in the case of groups and associations, an insurer that is owned by the insureds and whose exclusive purpose is to insure risks to member organizations or group members and their affiliates, or any combination thereof. [1993 c.447 59] Note: See note under 732.810.
(1) A controlled insurer shall file quarterly financial statements with the Director of the Department of Consumer and Business Services. (2) Subsections (4) to (7) of this section apply to a controlled insurer and a controlling producer if, in any calendar year, the aggregate amount of gross written premium on insurance placed with a controlled insurer by a controlling producer is equal to or greater than five percent of the allowed assets of the controlled insurer, as reported in the quarterly financial statement of the controlled insurer filed as of September 30 of the prior year. (3) Subsections (4) to (7) of this section do not apply to a controlled insurer and a controlling producer if: (a) The controlling producer places insurance only with the controlled insurer or only with the controlled insurer and a member or members of the holding company system of the controlled insurer or the parent, affiliate or subsidiary of the controlled insurer, and receives no compensation based upon the amount of premiums written in connection with the insurance, and accepts insurance placements only from nonaffiliated subproducers and not directly from insureds; and (b) The controlled insurer, except for insurance written through a residual market facility, accepts insurance placements only from a controlling producer, an insurance producer controlled by the controlled insurer or an insurance producer that is a subsidiary of the controlled insurer. (4) A controlled insurer shall not accept insurance placements from a controlling producer, and a controlling producer shall not place insurance with a controlled insurer, unless there is a written contract between the controlling producer and the insurer that complies with the requirements of this subsection. The contract must be approved by the board of directors of the insurer before it becomes effective. The contract must specify the responsibilities of each party and contain the following minimum provisions: (a) A provision authorizing the controlled insurer to terminate the contract for cause, upon written notice to the controlling producer, and requiring the controlled insurer to suspend the authority of the controlling producer to write insurance during the pendency of any dispute regarding the cause for the termination. (b) A provision requiring the controlling producer to render accounts to the controlled insurer detailing all material transactions, including information necessary to support all commissions, charges and other fees received by or owing to the controlling producer. (c) A provision requiring the controlling producer to remit all funds due under the terms of the contract to the controlled insurer on at least a monthly basis. The due date must be fixed so that premiums or installments thereof collected are remitted not later than the 90th day after the effective date of any policy placed with the controlled insurer under the contract. (d) A provision requiring that all funds collected for the controlled insurers account be held by the controlling producer in a fiduciary capacity, in one or more appropriately identified trust accounts in accordance with ORS 744.083. ORS 744.084 does not apply for purposes of this paragraph. If a controlling producer is not required to be licensed in this state, the contract must require that the funds of the controlling producer be maintained in compliance with the requirements of the domiciliary jurisdiction of the controlling producer. (e) A provision requiring the controlling producer to maintain separately identifiable records of insurance written for the controlled insurer. (f) A provision prohibiting the contract from being assigned in whole or in part by the controlling producer. (g) A provision requiring the controlled insurer to provide the controlling producer with its underwriting standards, rules and procedures, manuals setting forth the rates to be charged and the conditions for the acceptance or rejection of risks. The provision under this paragraph must also require the controlling producer to adhere to the standards, rules, procedures, rates and conditions, and must require the standards, rules, procedures, rates and conditions to be the same as those applicable to comparable business placed with the controlled insurer by an insurance producer other than the controlling producer. (h) A provision establishing the rates and terms of the controlling producers commissions, charges or other fees and the purposes for those charges or fees. The rates of the commissions, charges and other fees must not be greater than those applicable to comparable business placed with the controlled insurer by insurance producers other than controlling producers. For purposes of this paragraph and paragraph (g) of this subsection, examples of comparable business include the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits and similar quality of business. (i) If the contract provides that the controlling producer, on insurance placed with the insurer, is to be compensated contingent upon the insurers profits on that insurance, a provision that the compensation must not be determined and paid until at least five years after the premiums on casualty insurance are earned and at least one year after the premiums are earned on any other insurance. The provision under this paragraph must also require that the commissions not be paid until the adequacy of the controlled insurers reserves on remaining claims has been independently verified pursuant to subsection (6) of this section. (j) A provision establishing a limit on insurance written by the controlling producer in relation to the surplus and total insurance transacted by the controlled insurer. The insurer may establish a different limit for each line or subline of insurance. The provision under this paragraph: (A) Must require the controlled insurer to notify the controlling producer when the applicable limit is approached and prohibit the controlled insurer from accepting insurance from the controlling producer if the limit is reached. (B) Must prohibit the controlling producer from placing insurance with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached. (k) A provision that the controlling producer may negotiate but shall not bind reinsurance on behalf of the controlled insurer on insurance the controlling producer places with the controlled insurer, except that the controlling producer may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the controlled insurer contains underwriting guidelines including, for reinsurance assumed and for reinsurance ceded, a list of reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules. (5) A controlled insurer must have an audit committee of the board of directors composed of independent directors. The audit committee shall meet annually with management, the independent certified public accountants of the insurer and an independent casualty actuary or other independent loss reserve specialist acceptable to the director to review the adequacy of the loss reserves of the insurer. (6) In addition to any other required loss reserve certification, on April 1 of each year, a controlled insurer shall file with the director an opinion of an independent casualty actuary, or an independent loss reserve specialist that is acceptable to the director, reporting loss ratios for each line of insurance written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year end, including losses incurred but not reported, on insurance placed by the insurance producer. (7) A controlled insurer shall annually report to the director the amount of commissions paid to the insurance producer, the percentage such amount represents of the net premiums written and comparable amounts and percentage paid to noncontrolling producers for placements of the same kinds of insurance. [1993 c.447 60; 2003 c.364 83] Note: See note under 732.810.
A controlling producer, prior to the effective date of a policy, shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer. If the insurance is placed through a subproducer who is not a controlling producer, the controlling producer must retain in the records of the controlling producer a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured of the relationship. [1993 c.447 61] Note: See note under 732.810.
(1) If the Director of the Department of Consumer and Business Services believes that the controlling producer or any other person has not complied with ORS 732.810 to 732.814 or any rule adopted or order issued thereunder, the director may order the controlling producer to cease placing insurance with the controlled insurer. (2) If the director finds that the controlled insurer or any policyholder of the controlled insurer has suffered any loss or damage because the controlling producer or any other person has not complied with ORS 732.810 to 732.814 or any rule adopted or issued thereunder, the director may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or other appropriate relief. (3) If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to ORS chapter 734 and the receiver appointed under that order believes that the controlling producer or any other person has not complied with ORS 732.810 to 732.814 or any rule adopted or order issued thereunder, and if the insurer suffered any loss or damage because of the noncompliance, the receiver may maintain a cause of action for recovery of damages or other appropriate sanctions for the benefit of the insurer. (4) This section does not affect the authority of the director to take any other administrative action under the Insurance Code. (5) This section does not alter or affect the rights of policyholders, claimants, creditors or other third parties. [1993 c.447 62] Note: See note under 732.810.
The Interstate Insurance Product Regulation Compact is enacted into law and entered into on behalf of this state with all other jurisdictions legally joining therein in the form substantially as follows: ______________________________________________________________________________ ARTICLE I PURPOSE The purposes of this compact are, through means of joint and cooperative action among the compacting states: (1) To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products; (2) To develop uniform standards for insurance products covered under the compact; (3) To establish a central clearinghouse to receive and provide prompt review of insurance products covered under the compact and, in certain cases, advertisements related to these products, submitted by insurers authorized to do business in one or more compacting states; (4) To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard; (5) To improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the compact; (6) To create the Interstate Insurance Product Regulation Commission; and (7) To perform these and such other related functions as may be consistent with the state regulation of the business of insurance. ARTICLE II DEFINITIONS As used in this compact: (1) "Advertisement" means any material designed to create public interest in a product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy, as more specifically defined in the rules and operating procedures of the commission. (2) "Bylaws" means those bylaws established by the commission for its governance, or for directing or controlling the commissions actions or conduct. (3) "Commission" means the Interstate Insurance Product Regulation Commission established by this compact. (4) "Commissioner" means the chief insurance regulatory official of a state, including, but not limited to, a commissioner, superintendent, director or administrator. (5) "Compacting state" means any state that has enacted this compact legislation and that has not withdrawn pursuant to subsection (1), Article XIV, of this compact, or been terminated pursuant to subsection (2), Article XIV, of this compact. (6) "Insurer" means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this compact. (7) "Member" means the person chosen by a compacting state as its representative to the commission, or the persons designee. (8) "Noncompacting state" means any state that is not at the time a compacting state. (9) "Operating procedures" means procedures adopted by the commission implementing a rule, uniform standard or a provision of this compact. (10) "Product" means the form of a policy or contract, including any application, endorsement or related form that is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income or long-term care insurance product that an insurer is authorized to issue. (11) "Rule" means a statement of general or particular applicability and future effect adopted by the commission, including a uniform standard developed pursuant to Article VII of this compact, designed to implement, interpret or prescribe law or policy or describing the organization, procedure or practice requirements of the commission, which shall have the force and effect of law in the compacting states. (12) "State" means any state, district or territory of the United States of America. (13) "Third-party filer" means an entity that submits a product filing to the commission on behalf of an insurer. (14) "Uniform standard" means a standard adopted by the commission for a product line, pursuant to Article VII of this compact, and shall include all of the product requirements in aggregate. However, each uniform standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading or ambiguous provisions in a product and the form of the product made available to the public shall not be unfair, inequitable or against public policy as determined by the commission. ARTICLE III ESTABLISHMENT OF THE COMMISSION AND VENUE (1) The compacting states hereby create and establish a joint public agency known as the Interstate Insurance Product Regulation Commission. Pursuant to Article IV of this compact, the commission shall have the power to develop uniform standards for product lines, receive and provide prompt review of products filed therewith and give approval to those product filings satisfying applicable uniform standards. However, it is not intended for the commission to be the exclusive entity for receipt and review of insurance product filings. This subsection does not prohibit any insurer from filing its product in any state wherein the insurer is licensed to conduct the business of insurance, and any such filing shall be subject to the laws of the state where filed. (2) The commission is a body corporate and politic, and an instrumentality of the compacting states. (3) The commission is solely responsible for its liabilities except as otherwise specifically provided in this compact. (4) Venue is proper and judicial proceedings by or against the commission shall be brought solely and exclusively in a court of competent jurisdiction where the principal office of the commission is located. ARTICLE IV POWERS OF THE COMMISSION The commission shall have all of the following powers: (1) To adopt rules under Article VII of this compact, which shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in this compact. (2) To exercise its rulemaking authority and establish reasonable uniform standards for products covered under the compact, and advertisement related thereto, which shall have the force and effect of law and shall be binding in the compacting states, but only for those products filed with the commission. However, a compacting state shall have the right to opt out of such uniform standard pursuant to Article VII of this compact, to the extent and in the manner provided in this compact. Any uniform standard established by the commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the National Association of Insurance Commissioners Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The commission shall consider whether any subsequent amendments to the National Association of Insurance Commissioners Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the National Association of Insurance Commissioners require amending of the uniform standards established by the commission for long-term care insurance products. (3) To receive and review in an expeditious manner products filed with the commission, and rate filings for disability income and long-term care insurance products, and give approval of those products and rate filings that satisfy the applicable uniform standard, where such approval shall have the force and effect of law and be binding on the compacting states to the extent and in the manner provided in the compact. (4) To receive and review in an expeditious manner advertisement relating to long-term care insurance products for which uniform standards have been adopted by the commission, and give approval to all advertisement that satisfies the applicable uniform standard. For any product covered under this compact, other than long-term care insurance products, the commission shall have the authority to require an insurer to submit all or any part of its advertisement with respect to that product for review or approval prior to use, if the commission determines that the nature of the product is such that an advertisement of the product could have the capacity or tendency to mislead the public. The actions of the commission as provided in this section shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in the compact. (5) To exercise its rulemaking authority and designate products and advertisement that may be subject to a self-certification process without the need for prior approval by the commission. (6) To adopt operating procedures, pursuant to Article VII of this compact, that shall be binding in the compacting states to the extent and in the manner provided in this compact. (7) To bring and prosecute legal proceedings or actions in its name as the commission. However, the standing of any state insurance department to sue or be sued under applicable law shall not be affected. (8) To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence. (9) To establish and maintain offices. (10) To purchase and maintain insurance and bonds. (11) To borrow, accept or contract for services of personnel, including, but not limited to, employees of a compacting state. (12) To hire employees, professionals or specialists, and elect or appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of the compact, and determine their qualifications, and to establish the commissions personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation and qualifications of personnel. (13) To accept any and all appropriate donations and grants of money, equipment, supplies, materials and services, and to receive, utilize and dispose of the same. However, at all times the commission shall strive to avoid any appearance of impropriety. (14) To lease, purchase, accept appropriate gifts or donations of or otherwise own, hold, improve or use any property, real, personal or mixed. However, at all times the commission shall strive to avoid any appearance of impropriety. (15) To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed. (16) To remit filing fees to compacting states as may be set forth in the bylaws, rules or operating procedures. (17) To enforce compliance by compacting states with rules, uniform standards, operating procedures and bylaws. (18) To provide for dispute resolution among compacting states. (19) To advise compacting states on issues relating to insurers domiciled or doing business in noncompacting states, consistent with the purposes of this compact. (20) To provide advice and training to those personnel in state insurance departments responsible for product review, and to be a resource for state insurance departments. (21) To establish a budget and make expenditures. (22) To borrow money. (23) To appoint committees, including advisory committees comprising members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in the bylaws. (24) To provide and receive information from, and to cooperate with, law enforcement agencies. (25) To adopt and use a corporate seal. (26) To perform such other functions as may be necessary or appropriate to achieve the purposes of this compact consistent with the state regulation of the business of insurance. ARTICLE V ORGANIZATION OF THE COMMISSION (1)(a) Each compacting state shall have and be limited to one member. Each member shall be qualified to serve in that capacity pursuant to applicable law of the compacting state. Any member may be removed or suspended from office as provided by the law of the state from which the member shall be appointed. Any vacancy occurring in the commission shall be filled in accordance with the laws of the compacting state wherein the vacancy exists. Nothing herein shall be construed to affect the manner in which a compacting state determines the election or appointment and qualification of its own commissioner. (b) Each member shall be entitled to one vote and shall have an opportunity to participate in the governance of the commission in accordance with the bylaws. Notwithstanding any provision in this compact to the contrary, no action of the commission with respect to the adoption of a uniform standard shall be effective unless two-thirds of the members vote in favor thereof. (c) The commission shall, by a majority of the members, prescribe bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes and exercise the powers of the compact, including but not limited to: (A) Establishing the fiscal year of the commission. (B) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the management committee. (C) Providing reasonable standards and procedures for: (i) The establishment and meetings of other committees; and (ii) Governing any general or specific delegation of any authority or function of the commission. (D) Providing reasonable procedures for calling and conducting meetings of the commission that consist of a majority of commission members, ensuring reasonable advance notice of each such meeting and providing for the right of residents to attend each such meeting with enumerated exceptions designed to protect the publics interest, the privacy of individuals and insurers proprietary information, including trade secrets. The commission may meet in camera only after a majority of the entire membership votes to close a meeting. As soon as practicable, the commission must make public: (i) A copy of the vote to close the meeting revealing the vote of each member with no proxy votes allowed; and (ii) Votes taken during the meeting. (E) Establishing the titles, duties and authority and reasonable procedures for the election of the officers of the commission. (F) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the commission. Notwithstanding any civil service or other similar laws of any compacting state, the bylaws shall exclusively govern the personnel policies and programs of the commission. (G) Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees. (H) Providing a mechanism for winding up the operations of the commission and the equitable disposition of any surplus funds that may exist after the termination of the compact after the payment or reserving of all of its debts and obligations. (d) The commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the compacting states. (2)(a) A management committee comprising no more than 14 members shall be established as follows: (A) One member from each of the six compacting states with the largest premium volume for individual and group annuities, life, disability income and long-term care insurance products, determined from the records of the National Association of Insurance Commissioners for the prior year; (B) Four members from those compacting states with at least two percent of the market based on the premium volume described above, other than the six compacting states with the largest premium volume, selected on a rotating basis as provided in the bylaws; and (C) Four members from those compacting states with less than two percent of the market based on the premium volume described above, with one selected from each of the four zone regions of the National Association of Insurance Commissioners as provided in the bylaws. (b) The management committee shall have authority and duties as may be set forth in the bylaws, including but not limited to: (A) Managing the affairs of the commission in a manner consistent with the bylaws and purposes of the commission; (B) Establishing and overseeing an organizational structure within, and appropriate procedures for, the commission to provide for the creation of uniform standards and other rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a compacting state to opt out of a uniform standard. However, a uniform standard shall not be submitted to the compacting states for adoption unless approved by two-thirds of the members of the management committee; (C) Overseeing the offices of the commission; and (D) Planning, implementing and coordinating communications and activities with other state, federal and local government organizations in order to advance the goals of the commission. (c) The commission shall elect annually officers from the management committee, with each having such authority and duties as may be specified in the bylaws. (d) The management committee may, subject to the approval of the commission, appoint or retain an executive director for any period, upon such terms and conditions and for such compensation as the commission may deem appropriate. The executive director shall serve as secretary to the commission, but shall not be a member of the commission. The executive director shall hire and supervise such other staff as may be authorized by the commission. (3)(a) A legislative committee comprising state legislators or their designees shall be established to monitor the operations of, and make recommendations to, the commission, including the management committee. However, the manner of selection and term of any legislative committee member shall be as set forth in the bylaws. Prior to the adoption by the commission of any uniform standard, revision to the bylaws, annual budget or other significant matter as may be provided in the bylaws, the management committee shall consult with and report to the legislative committee. (b) The commission shall establish two advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives. (c) The commission may establish additional advisory committees as its bylaws may provide for the carrying out of its functions. (4) The commission shall maintain its corporate books and records in accordance with the bylaws. (5)(a) The members, officers, executive director, employees and representatives of the commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities. However, this paragraph does not protect any such person from suit or liability for any damage, loss, injury or liability caused by the intentional or willful and wanton misconduct of that person. (b) The commission shall defend any member, officer, executive director, employee or representative of the commission in any civil action seeking to impose liability arising out of any actual or alleged act, error or omission that occurred within the scope of commission employment, duties or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities. However, this paragraph does not prohibit that person from retaining the persons own counsel. Also, the actual or alleged act, error or omission must not have resulted from that persons intentional or willful and wanton misconduct. (c) The commission shall indemnify and hold harmless any member, officer, executive director, employee or representative of the commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error or omission that occurred within the scope of commission employment, duties or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities. However, the actual or alleged act, error or omission must not have resulted from the intentional or willful and wanton misconduct of that person. ARTICLE VI MEETINGS AND ACTS OF THE COMMISSION (1) The commission shall meet and take such actions as are consistent with the provisions of this compact and the bylaws. (2) Each member of the commission shall have the right and power to cast a vote to which that compacting state is entitled and to participate in the business and affairs of the commission. A member shall vote in person or by such other means as provided in the bylaws. The bylaws may provide for members participation in meetings by telephone or other means of communication. (3) The commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the bylaws. ARTICLE VII RULES AND OPERATING PROCEDURES: RULEMAKING FUNCTIONS OF THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS (1) The commission shall adopt reasonable rules, including uniform standards, and operating procedures in order to effectively and efficiently achieve the purposes of this compact. In the event the commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this compact, then such an action by the commission shall be invalid and have no force and effect. (2) Rules and operating procedures shall be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committee in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. The commission in adopting a uniform standard shall consider fully all submitted materials and issue a concise explanation of its decision. (3) A uniform standard shall become effective 90 days after its adoption by the commission or on such later date as the commission may determine. However, a compacting state may opt out of a uniform standard as provided in this Article. All other rules and operating procedures, and amendments thereto, shall become effective as of the date specified in each rule, operating procedure or amendment. (4)(a) A compacting state may opt out of a uniform standard either by legislation or regulation adopted by the insurance department under the compacting states Administrative Procedure Act. If a compacting state elects to opt out of a uniform standard by regulation, the compacting state must: (A) Give written notice to the commission no later than 10 business days after the uniform standard is adopted, or at the time the state becomes a compacting state; and (B) Find that the uniform standard does not provide reasonable protections to the residents of the state, given the conditions in the state. (b) The commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the state that warrant a departure from the uniform standard and determining that the uniform standard would not reasonably protect the residents of the state. The commissioner must consider and balance the following factors and find that the conditions in the state and needs of the residents of the state outweigh: (A) The intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the products subject to this compact; and (B) The presumption that a uniform standard adopted by the commission provides reasonable protections to consumers of the relevant product. (c) A compacting state may, at the time of its enactment of this compact, prospectively opt out of all uniform standards involving long-term care insurance products by expressly providing for such opt out in the enacted compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any state to participate in this compact. Such opt out shall be effective at the time of enactment of this compact by the compacting state and shall apply to all existing uniform standards involving long-term care insurance products and those subsequently adopted. (5) If a compacting state elects to opt out of a uniform standard, the uniform standard shall remain applicable in the compacting state electing to opt out until such time the opt out legislation is enacted into law or the regulation opting out becomes effective. Once the opt out of a uniform standard by a compacting state becomes effective as provided under the laws of that state, the uniform standard shall have no further force and effect in that state unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the state. If a compacting state opts out of a uniform standard after the uniform standard has been made effective in that state, the opt out shall have the same prospective effect as provided under Article XIV of this compact for withdrawals. (6) If a compacting state has formally initiated the process of opting out of a uniform standard by regulation, and while the regulatory opt out is pending, the compacting state may petition the commission, at least 15 days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the commission, the stay or extension thereof may postpone the effective date by up to 90 days, unless affirmatively extended by the commission. However, a stay may not be permitted to remain in effect for more than one year unless the compacting state can show extraordinary circumstances that warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge that prevents the compacting state from opting out. A stay may be terminated by the commission upon notice that the rulemaking process has been terminated. (7) Not later than 30 days after a rule or operating procedure is adopted, any person may file a petition for judicial review of the rule or operating procedure. However, the filing of such a petition shall not stay or otherwise prevent the rule or operating procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the commission consistent with applicable law and shall not find the rule or operating procedure to be unlawful if the rule or operating procedure represents a reasonable exercise of the commissions authority. (8) As used in this article, "opt out" means any action by a compacting state to decline to adopt or participate in an adopted uniform standard. ARTICLE VIII COMMISSION RECORDS AND ENFORCEMENT (1) The commission shall adopt rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and insurers trade secrets. The commission may adopt additional rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions. (2) Except as to privileged records, data and information, the laws of any compacting state pertaining to confidentiality or nondisclosure shall not relieve any compacting state of the duty to disclose any relevant records, data or information to the commission. However, disclosure to the commission shall not be deemed to waive or otherwise affect any confidentiality requirement. Except as otherwise expressly provided in this compact, the commission shall not be subject to the compacting states laws pertaining to confidentiality and nondisclosure with respect to records, data and information in its possession. Confidential information of the commission shall remain confidential after such information is provided to any commissioner. (3) The commission shall monitor compacting states for compliance with duly adopted bylaws, rules, including uniform standards, and operating procedures. The commission shall notify any noncomplying compacting state in writing of its noncompliance with commission bylaws, rules or operating procedures. If a noncomplying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state shall be deemed to be in default as set forth in Article XIV of this compact. (4) Any commissioner of a compacting state in which an insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise the states authority to oversee the market regulation of the activities of the insurer in accordance with the provisions of the states law. The commissioners enforcement of compliance with the compact is governed by the following provisions: (a) With respect to the commissioners market regulation of a product or advertisement that is approved or certified to the commission, the content of the product or advertisement shall not constitute a violation of the provisions, standards or requirements of the compact except upon a final order of the commission, issued at the request of a commissioner after prior notice to the insurer and an opportunity for hearing before the commission. (b) Before a commissioner may bring an action for violation of any provision, standard or requirement of the compact relating to the content of an advertisement not approved or certified to the commission, the commission, or an authorized commission officer or employee, must authorize the action. However, authorization under this paragraph does not require notice to the insurer, opportunity for hearing or disclosure of requests for authorization or records of the commissions action on such requests. ARTICLE IX DISPUTE RESOLUTION The commission shall attempt, upon the request of a member, to resolve any disputes or other issues that are subject to this compact and that may arise among two or more compacting states, or between compacting states and noncompacting states. The commission shall adopt an operating procedure providing for resolution of such disputes. ARTICLE X PRODUCT FILING AND APPROVAL (1) Insurers and third-party filers seeking to have a product approved by the commission shall file the product with, and pay applicable filing fees to, the commission. Nothing in this compact shall be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the states where filed. (2) The commission shall establish appropriate filing and review processes and procedures pursuant to commission rules and operating procedures. The commission shall adopt rules to establish conditions and procedures under which the commission will provide public access to product filing information. In establishing such rules, the commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a product filing or supporting information. (3) Any product approved by the commission may be sold or otherwise issued in those compacting states for which the insurer is legally authorized to do business. ARTICLE XI REVIEW OF COMMISSION DECISIONS REGARDING FILINGS (1) Not later than 30 days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or third-party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall adopt rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the commission, in disapproving a product or advertisement filed with the commission, acted arbitrarily, capriciously or in a manner that is an abuse of discretion or otherwise not in accordance with the law is subject to judicial review in accordance with subsection (4) of Article III of this compact. (2) The commission shall have authority to monitor, review and reconsider products and advertisement subsequent to their filing or approval upon a finding that the product does not meet the relevant uniform standard. Where appropriate, the commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in subsection (1) of this Article. ARTICLE XII FINANCE (1) The commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the commission may accept contributions and other forms of funding from the National Association of Insurance Commissioners, compacting states and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the commission concerning the performance of its duties is not compromised. (2) The commission shall collect a filing fee from each insurer and third-party filer filing a product with the commission to cover the cost of the operations and activities of the commission and its staff in a total amount sufficient to cover the commissions annual budget. (3) The commissions budget for a fiscal year may not be approved until it has been subject to notice and comment as set forth in Article VII of this compact. (4) The commission shall be exempt from all taxation in and by the compacting states. (5) The commission may not pledge the credit of any compacting state, except by and with the appropriate legal authority of that compacting state. (6) The commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the commission shall be subject to the accounting procedures established under its bylaws. The financial accounts and reports including the system of internal controls and procedures of the commission shall be audited annually by an independent certified public accountant. Upon the determination of the commission, but no less frequently than every three years, the review of the independent auditor shall include a management and performance audit of the commission. The commission shall make an annual report to the governor and legislature of the compacting states, which shall include a report of the independent audit. The commissions internal accounts shall not be confidential and such materials may be shared with the commissioner of any compacting state upon request. However, any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers proprietary information, including trade secrets, shall remain confidential. (7) A compacting state does not have any claim to or ownership of any property held by or vested in the commission or to any commission funds held under the provisions of this compact. ARTICLE XIII COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT (1) Any state is eligible to become a compacting state. (2) The compact shall become effective and binding upon legislative enactment of the compact into law by two compacting states. However, the commission shall become effective for purposes of adopting uniform standards for, reviewing and giving approval or disapproval of products filed with the commission that satisfy applicable uniform standards only after 26 states are compacting states or, alternatively, states representing greater than 40 percent of the premium volume for life insurance, annuity, disability income and long-term care insurance products, based on records of the National Association of Insurance Commissioners for the prior year, are compacting states. Thereafter, the compact becomes effective and binding as to any other compacting state upon enactment of the compact into law by that state. (3) Amendments to the compact may be proposed by the commission for enactment by the compacting states. An amendment does not become effective and binding upon the commission and the compacting states unless and until all compacting states enact the amendment into law. ARTICLE XIV WITHDRAWAL, DEFAULT AND TERMINATION (1)(a) Once effective, the compact shall continue in force and remain binding upon each and every compacting state. However, a compacting state may withdraw from the compact by enacting a statute specifically repealing the statute that enacted the compact into law. (b) The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any product filings approved or self-certified, or any advertisement of such products, on the date the repealing statute becomes effective, except by mutual agreement of the commission and the withdrawing state unless the approval is rescinded by the withdrawing state as provided in paragraph (e) of this subsection. (c) The commissioner of a withdrawing state shall immediately notify the management committee in writing upon the introduction of legislation repealing this compact in the withdrawing state. (d) The commission shall notify the other compacting states of the introduction of such legislation within 10 days after its receipt of notice thereof. (e) The withdrawing state is responsible for all obligations, duties and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the commission and the withdrawing state. The commissions approval of products and advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the withdrawing state, unless formally rescinded by the withdrawing state in the same manner as provided by the laws of the withdrawing state for the prospective disapproval of products or advertisement previously approved under state law. (f) Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact. (2)(a) If the commission determines that any compacting state has at any time defaulted in the performance of any of its obligations or responsibilities under this compact, the bylaws or adopted rules or operating procedures, then the commission may suspend, after notice and hearing as set forth in the bylaws, all rights, privileges and benefits conferred by this compact on the defaulting state from the effective date of default as fixed by the commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities, and any other grounds designated in commission rules. The commission shall immediately notify the defaulting state in writing of the defaulting states suspension pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state shall be terminated from the compact and all rights, privileges and benefits conferred by this compact shall be terminated from the effective date of termination. (b) Product approvals by the commission or product self-certifications, or any advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily pursuant to subsection (1) of this Article. (c) Reinstatement following termination of any compacting state requires a reenactment of the compact. (3)(a) Dissolution of the compact is effective upon the date of the withdrawal or default of the compacting state that reduces membership in the compact to one compacting state. (b) Upon the dissolution of this compact, the compact becomes null and void and shall be of no further force or effect, and the business and affairs of the commission shall be wound up and any surplus funds shall be distributed in accordance with the bylaws. ARTICLE XV SEVERABILITY AND CONSTRUCTION (1) The provisions of this compact shall be severable, and if any phrase, clause, sentence or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable. (2) The provisions of this compact shall be liberally construed. ARTICLE XVI BINDING EFFECT OF COMPACT AND OTHER LAWS (1)(a) This compact does not prevent the enforcement of any other law of a compacting state, except as provided in paragraph (b) of this subsection. (b) For any product approved or certified to the commission, the rules, uniform standards and any other requirements of the commission shall constitute the exclusive provisions applicable to the content, approval and certification of such products. For advertisement that is subject to the commissions authority, any rule, uniform standard or other requirement of the commission that governs the content of the advertisement shall constitute the exclusive provision that a commissioner may apply to the content of the advertisement. However, no action taken by the commission shall abrogate or restrict: (A) The access of any person to state courts; (B) Remedies available under state law related to breach of contract, tort or other laws not specifically directed to the content of the product; (C) State law relating to the construction of insurance contracts; or (D) The authority of the attorney general of the state, including but not limited to maintaining any actions or proceedings, as authorized by law. (c) All insurance products filed with individual states shall be subject to the laws of those states. (2)(a) All lawful actions of the commission, including all rules and operating procedures adopted by the commission, are binding upon the compacting states. (b) All agreements between the commission and the compacting states are binding in accordance with their terms. (c) Upon the request of a party to a conflict over the meaning or interpretation of commission actions, and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute. (d) In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers or jurisdiction sought to be conferred by that provision upon the commission shall be ineffective as to that compacting state, and those obligations, duties, powers or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which those obligations, duties, powers or jurisdiction are delegated by law in effect at the time this compact becomes effective. ______________________________________________________________________________ [2011 c.520 2] Note: 732.820 and 732.825 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 732 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
The Director of the Department of Consumer and Business Services or a designee of the director shall serve as this states member of the Interstate Insurance Product Regulation Commission established under the Interstate Insurance Product Regulation Compact set forth in ORS 732.820. [2011 c.520 3] Note: See note under 732.820.
In any determination of the financial condition of an insurer, there shall be allowed as assets only such assets as are owned by the insurer and which consist of: (1) Cash in the possession or control of the insurer, including the true balance of any deposit in a solvent bank or trust company. (2) Investments held in accordance with the Insurance Code, and due or accrued income items in connection therewith to the extent considered by the Director of the Department of Consumer and Business Services to be collectible. (3) Premium notes, policy loans, liens and other like policy assets on life insurance policies and accrued interest thereon, in an amount not exceeding the loan value of the policy. (4) Due premiums, deferred premiums, installment premiums, and written obligations taken for premiums, to the extent allowed by the director. (5) The amount recoverable from a reinsurer if credit for reinsurance may be allowed to the insurer under ORS 731.509 or 731.510 and amounts receivable on assumed reinsurance representing funds withheld by a solvent ceding insurer under a reinsurance treaty. (6) Deposits or equities recoverable from underwriting associations, syndicates and reinsurance funds, or from any suspended banking institution, to the extent deemed by the director to be available for the payment of losses and claims. (7) Other assets considered by the director to be available for the payment of losses and claims, at values determined by the director. [1967 c.359 208; 1971 c.321 18; 1979 c.818 1; 1993 c.447 69; 2001 c.318 7]
In addition to assets impliedly excluded by ORS 733.010, the following expressly shall not be allowed as assets in any determination of the financial condition of an insurer: (1) Advances to officers, other than policy loans, whether secured or not, and advances to employees, agents and other persons on personal security only. (2) Stock of such insurer owned by it, or any material equity therein or loans secured thereby, or any material proportionate interest in such stock acquired or held through the ownership by such insurer of an interest in another firm, corporation or business unit. (3) Tangible personal property, except such property as the insurer is otherwise permitted to acquire and retain as an investment under the Insurance Code and which is deemed by the Director of the Department of Consumer and Business Services to be available for the payment of losses and claims or which is otherwise expressly allowable, in whole or in part, as an asset. (4) The amount, if any, by which the book value of any investment as carried in the ledger assets of the insurer exceeds the value thereof as determined under the Insurance Code. [1967 c.359 209; 2001 c.318 8]
In any determination of the financial condition of an insurer, liabilities to be charged against its assets shall be calculated in accordance with the Insurance Code and shall include: (1) The amount necessary to pay all of its unpaid losses and claims incurred on or prior to the date of the statement, whether reported or unreported to the insurer, together with the expenses of adjustment or settlement thereof. (2) For insurance other than specified in subsections (3) and (4) of this section, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, calculated in accordance with the Insurance Code. (3) For life insurance policies: (a) Reserves on life insurance benefits, valued according to the tables of mortality, rates of interest, and valuation methods applicable thereto which are adopted pursuant to the Insurance Code. (b) Reserves for disability benefits, for both active and disabled lives. (c) Reserves for accidental death benefits. (d) Any additional reserves considered to be necessary by the Director of the Department of Consumer and Business Services. (4) For health insurance policies, the amount of reserves required pursuant to ORS 733.080. (5) Taxes, expenses and other obligations due or accrued at the date of the statement. (6) Any additional reserves for asset valuation contingencies or loss contingencies required by the Insurance Code or considered to be necessary by the director for the protection of policyholders and stockholders of the insurer. [1967 c.359 210]
The Director of the Department of Consumer and Business Services shall disallow reinsurance as credit against the liabilities of a ceding insurer if credit against the liabilities of the ceding insurer is not allowed as a credit to the ceding insurer under ORS 731.509 or 731.510. [1967 c.359 211; 1993 c.447 70]
If the Director of the Department of Consumer and Business Services determines that an insurers reserves, however calculated or estimated, are inadequate, the director shall require the insurer to maintain reserves in such additional amount as is needed to make them adequate. [1967 c.359 212]
(1) Every insurer shall maintain an unearned premium reserve on all policies in force. (2) The Director of the Department of Consumer and Business Services may require that such reserves shall be equal to the unearned portions of the gross premiums in force as calculated pro rata on each respective risk from the policys date of issue. In the absence of such requirement, the unearned premium reserve shall be equal to the pro rata unearned portions of the gross premiums in force as calculated by an approximation method approved by the director. After adopting a method of computing such reserves, an insurer shall not change methods without approval of the insurance supervisory official of the insurers domicile. (3) This section does not apply to: (a) Marine and transportation insurance on trip risks not terminated. (b) Health insurance. (c) Title insurance. (d) Home protection insurance under policies issued by a home protection insurer. (e) Life insurance. [1967 c.359 213; 1981 c.247 9]
As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be deemed unearned. The Director of the Department of Consumer and Business Services may require the insurer to carry a reserve equal to 100 percent of premiums on trip risks written during the month ended as of the date of statement. [1967 c.359 214]
For all health insurance policies the insurer shall maintain reserves which place a sound value on its liabilities under such policies and which are not less than the reserves according to appropriate standards set forth in rules issued by the Director of the Department of Consumer and Business Services. Except for policies of credit health insurance, such reserves for nondisabled lives shall not be less in the aggregate than the pro rata gross unearned premiums for such policies calculated in accordance with ORS 733.060. [1967 c.359 215; 1971 c.231 18]
(1) Each title insurer shall maintain a reserve for unearned premiums on its policies in force, which shall be charged as a liability in any determination of its financial condition. Such unearned premium liability shall be separate from and in addition to the insurers liability for incurred but unpaid losses and loss expenses. (2) The amount of the unearned premium reserve shall be determined according to accounting procedures approved or required by the Director of the Department of Consumer and Business Services. (3) A separate and distinct fund, known as the Title Insurance Unearned Premium Reserve Fund, shall be maintained by each title insurer in its treasury, as additional security to holders of its title insurance policies. The amount of the fund shall at least equal the amount of the unearned premium reserve liability determined in accordance with subsection (2) of this section. This fund shall be in addition to the insurers deposit with the Department of Consumer and Business Services and deposits required to be maintained with officials of other jurisdictions. The fund, to the extent of the unearned premium reserve on business in this state, shall be invested as provided for funds of a domestic insurer, except that ORS 733.630, 733.670 and 733.690 shall not be applicable to investment of the fund. The remainder of the fund may be similarly invested, or may be invested as permitted by the laws of the insurers domicile. The insurer shall keep a separate record of the cash and investments of the fund, giving complete identification of the assets belonging to the fund and showing full particulars as to withdrawals and additions. No title insurance policies shall be issued by an insurer during a period when its unearned premium reserve fund is below the required amount. [1967 c.359 216; 1999 c.196 10; 2001 c.318 9]
A home protection insurer shall maintain a reserve for unearned premiums, unpaid losses and claims incurred whether reported or unreported to the insurer and the expenses of adjustment or settlement of such losses and claims, in an aggregate amount of not less than 40 percent of the aggregate of premiums charged on the insurers policies currently in force. [1981 c.247 11]
A mortgage insurer shall establish a contingency reserve liability for the protection of policyholders against the effect of adverse economic cycles according to accounting procedures approved or required by the Director of the Department of Consumer and Business Services. [1967 c.359 217; 1969 c.692 7; 2001 c.318 10]
Reserves for variable life insurance and annuity policies shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided, any mortality guarantees, and the valuation requirements of the Standard Valuation Law. [1973 c.435 24; 1981 c.609 4]
[Formerly 739.035; 1969 c.431 1; 1973 c.636 1; 1977 c.320 11; 1981 c.609 6; renumbered 733.123]
(1) The Director of the Department of Consumer and Business Services shall disallow as an asset or as a credit against liabilities any reinsurance found by the director after a hearing thereon to have been arranged for the purpose principally of deception as to the ceding insurers financial condition as of the date of any financial statement of the insurer. Without limiting the general purport of the foregoing provision, reinsurance of any substantial part of the insurers outstanding risks contracted for in fact within four months prior to the date of any such financial statement and canceled in fact within four months after the date of such statement, or reinsurance under which the reinsurer bears no substantial insurance risk or substantial risk of net loss to itself, shall prima facie be deemed to have been arranged for the purpose principally of deception. (2) The director shall disallow as an asset any deposit, funds or other assets of the insurer found by the director after a hearing thereon: (a) Not to be in good faith the property of the insurer; (b) Not freely subject to withdrawal or liquidation by the insurer at any time for the payment or discharge of claims or other obligations arising under its policies; and (c) To be resulting from arrangements made principally for the purpose of deception as to the insurers financial condition as of the date of any financial statement of the insurer. [1967 c.359 221; 2005 c.22 487]
Assets may be allowed as deductions from corresponding liabilities, liabilities may be charged as deductions from assets, deductions from assets may be charged as liabilities, and deductions from liabilities may be allowed as assets, in accordance with the form of annual statement prescribed by the Director of the Department of Consumer and Business Services, or otherwise in the discretion of the director. [1967 c.359 222]
(1) Each bond or other evidence of debt having a fixed term and rate of interest may be valued as follows, if amply secured and not in default as to principal or interest: (a) If purchased at par, at the par value. (b) If purchased above or below par, according to an accepted method of valuation approved by the Director of the Department of Consumer and Business Services. (2) For the purpose of subsection (1) of this section, the purchase price shall not be a higher amount than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of such bond or other evidence of debt. (3) For purposes of subsections (1) and (2) of this section, the director may determine the method of calculating values. The method or valuation may not be inconsistent with any applicable method or valuation used by insurers in general or any such method or valuation then currently formulated or approved by the National Association of Insurance Commissioners or its successor organization. (4) Real property shall be valued as follows: (a) Real property acquired pursuant to a mortgage loan or contract of sale shall be valued at an amount not greater than the unpaid principal of the defaulted loan or contract at the date of such acquisition, together with any taxes and expenses paid or incurred in connection with such acquisition, and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property. (b) Other real property held by an insurer shall be valued at an amount not in excess of the cost of the acquired property and the cost of improvements thereafter made by the insurer, less a reasonable allowance for depreciation. (5) Purchase money mortgages on real property referred to in subsection (4)(a) of this section shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or 90 percent of the fair value of such real property, whichever is less. (6) Other assets, other than securities, shall be valued at cost of acquisition less any repaid portion thereof, unless the director determines that another value is proper. [1967 c.359 223; 1971 c.231 19; 1993 c.447 16; 2001 c.318 11]
(1) Securities held by an insurer, other than bonds or other evidences of debt to which ORS 733.160 applies, must be valued in the discretion of the Director of the Department of Consumer and Business Services at their market value, at their appraised value or at prices determined by the director as representing their fair market value. (2) Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value instead of market value, at the discretion of the director and in accordance with any method of valuation approved by the director. (3) Stock of a subsidiary corporation of an insurer must not be valued at an amount in excess of the net value thereof as based upon the assets only of the subsidiary that would be eligible under ORS 733.510 to 733.780 for investment of the funds of the insurer directly. (4) The director may determine the method of calculating values as provided in this section, but the method or valuation may not be inconsistent with any applicable method or valuation used by insurers in general or any such method of valuation then currently formulated or approved by the National Association of Insurance Commissioners or its successor organization. [1993 c.447 18; 2001 c.318 17]
An insurer shall keep its books, records, accounts and transaction source data in such manner that the Director of the Department of Consumer and Business Services may readily verify its statements of financial condition and ascertain whether the insurer is unimpaired, has given proper treatment to policyholders and has complied with the Insurance Code. [Formerly 738.430]
(1) In making any determination or prescribing rules relating to items such as are reported in the form of annual statement and any supplement thereto required to be filed by an insurer, the Director of the Department of Consumer and Business Services shall give consideration to recommendations made from time to time by the National Association of Insurance Commissioners, and to customary and general practice in insurance accounting. (2) The director may apply and may require insurers to use and comply with standards, practices and procedures established by the National Association of Insurance Commissioners in its manuals or other publications, including actuarial, accounting and other opinion and reporting requirements. [1967 c.359 228; 1993 c.447 20]
(1) A domestic insurer authorized to transact life insurance may establish one or more separate accounts and may allocate thereto amounts, including but not limited to proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities or benefits incidental thereto, payable in fixed or variable amounts or both. (2) The income, gains and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account without regard to other income, gains and losses of the insurer. (3) Except with the approval of the Director of the Department of Consumer and Business Services, and under the conditions the Director may prescribe as to investments and other matters that shall recognize the guaranteed nature of the benefits, assets representing reserves for benefits guaranteed as to dollar amount and duration, and for funds guaranteed as to principal amount or stated rate of interest, shall not be maintained in a separate account. (4) Unless otherwise approved by the director, and notwithstanding ORS 733.160 or 733.165, assets allocated to a separate account shall be valued at their market value on the date of valuation. If there is no readily available market, they shall be valued as provided under the terms of the policy, the rules or other written agreement applicable to the separate account. Except as may be otherwise prescribed by the director under subsection (3) of this section, however, the portion if any of the assets of a separate account equal to the insurers reserves for guaranteed benefits and funds shall be valued in accordance with the rules applicable to the insurers general assets. (5) Amounts allocated to a separate account in the exercise of the power granted by this section are owned by the insurer, and the insurer is not, nor shall it hold itself out to be, a trustee with respect to such amounts. If, and to the extent, it is so provided under the applicable policies, the portion of the assets of a separate account which equals the reserves and other policy liabilities for such account shall not be chargeable with liabilities arising out of any other business the insurer conducts. (6) No sale, exchange or other transfer of assets may be made by an insurer between any of its separate accounts or between any other investment account and one or more of its separate accounts unless: (a) In the case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the policies applicable to the account; (b) In the case of other transfers, the director has approved the transfer as being equitable; and (c) The transfer is made in the form of cash or, with the approval of the director, securities having a readily determinable market value. (7) The same separate account may not be used for both variable annuities and variable life insurance. (8) The insurer shall maintain in each separate account assets with a value at least equal to the reserves and other policy liabilities for such account. [1973 c.435 6; 1993 c.447 112]
(1) Notwithstanding any other provisions of law a domestic insurer may: (a) With respect to a separate account registered with the federal Securities and Exchange Commission as a unit investment trust, exercise voting rights, in connection with any securities of a regulated investment company registered under the federal Investment Company Act of 1940, as amended, and held in such account, in accordance with instructions from persons having interests in such account, ratably as determined by the insurer; and (b) With respect to a separate account registered with the federal Securities and Exchange Commission as a management investment company, establish for such account a committee, board, or other body, the members of which need not be otherwise affiliated with the insurer and may be elected by the vote of persons having interests in such account, ratably as determined by the insurer. Such committee, board or other body may have the power, exercisable alone or in conjunction with others, to manage the separate account and the investment of its assets. (2) The insurer or such committee, board or other body may make such other provisions in respect to the separate account as may be considered necessary to comply with any applicable federal or state laws, if the Director of the Department of Consumer and Business Services approves such provisions as not being hazardous to the insurers policyholders or the public in this state. (3) Any provision of the Insurance Code or rule of the director applicable to the officers or directors of an insurer and relating to conflicts of interest will also apply to members of a separate accounts committee, board or other similar body. No officer or director of an insurer nor any member of the committee, board or body of a separate account shall receive directly or indirectly any commission or any other compensation with respect to the purchase or sale of assets of the separate account. [1973 c.435 7; 1997 c.249 218]
ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, may be cited as the Standard Valuation Law. [1991 c.401 17]
(1) The Director of the Department of Consumer and Business Services shall annually value, or cause to be valued, the reserve liabilities for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this state, and may certify the amount of any such reserves, specifying the mortality table or tables, rate or rates of interest, and methods, net level premium method or other, used in the calculations of such reserves. For purposes of ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, reserve liabilities shall be referred to as reserves. (2) In calculating reserves, the director may use group methods and approximate averages for fractions of a year or otherwise. (3) In lieu of the valuation of the reserves required of any foreign or alien insurer under the Standard Valuation Law, the director may accept any valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided under the Standard Valuation Law and if the official of the state or jurisdiction accepts as sufficient and for all valid legal purposes the certificate of valuation of the director when the certificate states the valuation to have been made in a specified manner according to which the aggregate reserves would be at least as large as if they had been computed in the manner prescribed by the law of that state or jurisdiction. [1991 c.401 18; 2015 c.547 22] Note: The amendments to 733.302 by section 22, chapter 547, Oregon Laws 2015, apply for a limited period. See section 28, chapter 547, Oregon Laws 2015 (first note below). The text that is applicable for the limited period is set forth for the users convenience. (1) The Director of the Department of Consumer and Business Services shall annually value, or cause to be valued, the reserve liabilities for all outstanding life insurance policies and annuity and pure endowment contracts that every life insurer doing business in this state issued on or after the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance and before the operative date of the valuation manual. (2) In calculating reserves, the director may use group methods and approximate averages for fractions of a year or otherwise. (3) In lieu of the valuation of the reserves required of any foreign or alien insurer under the Standard Valuation Law, the director may accept any valuation that the insurance supervisory official of any state or other jurisdiction makes or causes to be made if the valuation complies with the minimum standard provided under the Standard Valuation Law. Note: Section 28 (1) and (2), chapter 547, Oregon Laws 2015, provides: Sec. 28. (1) Section 14 of this 2015 Act and the amendments to ORS 732.586, 733.302, 733.304, 733.316, 733.318, 743.204 and 743.215 by sections 21 to 27 of this 2015 Act apply to all policies and contracts, as appropriate, that are issued on or after the operative date for the Standard Nonforfeiture Law for Life Insurance under ORS 743.204 and before the operative date of the valuation manual. (2) Sections 15 to 17 of this 2015 Act do not apply to policies and contracts described in subsection (1) of this section. [2015 c.547 28(1),(2)] Note: Sections 14 to 17, chapter 547, Oregon Laws 2015, provide: Sec. 14. For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under section 12 of this 2015 Act [733.328]. The Director of the Department of Consumer and Business Services by rule shall adopt the minimum standard of valuation for disability, accident and sickness, accident and health insurance contracts issued on or after the operative date stated in ORS 743.204 (2) for the Standard Nonforfeiture Law for Life Insurance and before the operative date of the valuation manual. [2015 c.547 14] Sec. 15. (1) Except as provided in subsection (2) or (4) of this section, for policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under section 12 of this 2015 Act [733.328]. (2) In the absence of a specific valuation requirement, or if a specific valuation requirement in the valuation manual does not, in the opinion of the Director of the Department of Consumer and Business Services, comply with the Standard Valuation Law, the insurer shall comply with minimum valuation standards the director adopts by rule. (3) The director may engage a qualified actuary at the insurers expense to perform an actuarial examination of the insurer and to issue an opinion as to the appropriateness of any reserve assumption or method the insurer uses, or to review and issue an opinion as to an insurers compliance with any requirement set forth in the Standard Valuation Law. With respect to provisions in the Standard Valuation Law, the director may rely on the opinion of a qualified actuary that the director of another state, district or territory of the United States employs, contracts with or otherwise engages. (4) The director may require an insurer to change any assumption or method that, in the directors opinion, is necessary to comply with the requirements of the valuation manual or the Standard Valuation Law. The insurer shall adjust the reserves as the director requires. The director may take other disciplinary action in accordance with the requirements for a contested case proceeding under ORS 183. [2015 c.547 15] Sec. 16. (1) The Director of the Department of Consumer and Business Services shall prescribe the form of the valuation manual. The director shall consider and may prescribe the valuation manual or other form that the National Association of Insurance Commissioners establishes, including instructions that the National Association of Insurance Commissioners prepares for complying with the valuation manual. If the director adopts the valuation manual and instructions that the National Association of Insurance Commissioners establishes, an insurer that submits the opinion required under section 13 of this 2015 Act [733.331] must complete the opinion according to the instructions. The director may require the insurer to file information in addition to the information required in the valuation manual. (2) The director shall adopt the valuation manual and specify the operative date of the valuation manual as January 1 of the first calendar year after the first July 1 in which the director determines that all of the following have occurred: (a) The National Association of Insurance Commissioners adopted the valuation manual with an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater. (b) States that represent 75 percent of the direct premiums written as reported in the annual statements submitted in 2008 for accident and health, fraternal, health or life insurance have enacted the Standard Valuation Law, as amended by the National Association of Insurance Commissioners in 2009, or legislation that includes substantially similar terms and provisions. (c) At least 42 jurisdictions out of the 50 states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam and Puerto Rico have enacted the Standard Valuation Law, as amended by the National Association of Insurance Commissioners in 2009, or legislation that includes substantially similar terms and provisions. (3) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual are effective on the date the director specifies in adopting the change. In determining the effective date of a change to the valuation manual, the director may specify the effective date as January 1 of the first calendar year after the National Association of Insurance Commissioners has adopted the change to the valuation manual with an affirmative vote that represents: (a) At least three-fourths of the members of the National Association of Insurance Commissioners voting, but not less than a majority of the total membership; and (b) Members of the National Association of Insurance Commissioners who represent jurisdictions totaling more than 75 percent of the direct premiums written as reported in the annual statements submitted for accident and health, fraternal, health or life insurance that were most recently available before the vote described in paragraph (a) of this subsection. (4) The valuation manual must specify all of the following: (a) Minimum valuation standards for, and definitions of, the policies or contracts that are subject to section 12 of this 2015 Act [733.328]. The minimum valuation standards must be: (A) The directors reserve valuation method for life insurance contracts, other than annuity contracts, that are subject to section 12 of this 2015 Act; (B) The directors annuity reserve valuation method for annuity contracts that are subject to section 12 of this 2015 Act; and (C) Minimum reserves for all other policies or contracts that are subject to section 12 of this 2015 Act. (b) Policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation under section 17 of this 2015 Act and the minimum valuation standards that are consistent with the requirements. (c) For policies and contracts that are subject to a principle-based valuation under section 17 of this 2015 Act: (A) Requirements for the format of reports to the director under section 17 (3)(c) of this 2015 Act and information that is necessary to determine if the valuation is appropriate and complies with the Standard Valuation Law; (B) Assumptions for risks over which the insurer does not have significant control or influence; and (C) Procedures for corporate governance and oversight of the actuarial function, and a process for waiving or modifying the procedures in appropriate cases. (d) For policies that are not subject to a principle-based valuation under section 17 of this 2015 Act, that the minimum valuation standard must: (A) Be consistent with the minimum standard of valuation before the operative date of the valuation manual; or (B) Specify reserves that quantify the benefits, guarantees and funding associated with the contracts and the contracts risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring. (e) The data and the form of the data required under section 18 of this 2015 Act [733.334], to whom the data must be submitted and any related items, including data analyses and reporting of analyses, that may be required. (f) Other requirements that include, but are not limited to, requirements that relate to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of insurer experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls. [2015 c.547 16] Sec. 17. (1) As used in this section, "tail risk" means a risk that occurs either when the frequency of low probability events is higher than expected under a normal probability distribution or when there are observed events of very significant size or magnitude. (2) An insurer must establish reserves using a principle-based valuation that requires for policies or contracts, as specified in the valuation manual: (a) A quantification of the benefits, guarantees and funding associated with the contracts and the contracts risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For policies or contracts with significant tail risk, the valuation must quantify the tail risk by including assumptions concerning appropriately adverse conditions. (b) Assumptions, risk analysis methods, financial models and management techniques that are consistent with, but not necessarily identical to, assumptions, risk analysis methods, financial models and management techniques that the insurer uses within the insurers overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods. (c) Assumptions that are derived from: (A) A prescription in the valuation manual; or (B) If the valuation manual does not have a prescription, from other methods that are established using: (i) The insurers available experience, to the extent that the insurers experience is relevant and statistically credible; or (ii) Other relevant, statistically credible experience if the insurers experience is not available, relevant or statistically credible. (d) Margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve. (3) An insurer that uses a principle-based valuation for one or more policies or contracts that are subject to this section, as specified in the valuation manual, shall: (a) Establish procedures for corporate governance and for overseeing the actuarial valuation function that are consistent with the procedures described in the valuation manual. (b) Provide to the Director of the Department of Consumer and Business Services and the insurers board of directors an annual certification of the effectiveness of internal controls with respect to the principle-based valuation. The controls must be designed to ensure that all material risks inherent in the liabilities and associated assets that are subject to the valuation are included in the valuation, and that the insurer makes valuations in accordance with the valuation manual. The insurer shall base the certification on the controls that are in place as of the end of the preceding calendar year. (c) Develop, and file with the director upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual. (4) A principle-based valuation may include a prescribed formulaic reserve component. [2015 c.547 17]
(1) Each insurer transacting life insurance in this state shall submit annually to the Director of the Department of Consumer and Business Services the opinion of a qualified actuary as provided in this section. The following provisions apply with respect to opinions required under this subsection: (a) The opinion must state whether, in the opinion of the qualified actuary, the reserves and related actuarial items held in support of the policies and contracts specified by the director by rule are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The director by rule shall establish the specific requirements for the opinion and may require any other items that the director determines to be necessary to its scope. (b) The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year. (c) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the director as specified by rule. (d) The director by rule: (A) Shall adopt standards on which actuarial opinions under this subsection must be based. In adopting the standards, the director shall consider standards established from time to time by the Actuarial Standards Board of the American Academy of Actuaries. (B) Shall define "qualified actuary" for purposes of this subsection, by establishing qualifications required of an actuary for the purpose of giving the opinions. In establishing the definition, the director shall consider standards established from time to time by the American Academy of Actuaries. (C) May also adopt any other rules needed for carrying out this subsection. (e) In the case of an opinion required to be submitted by a foreign or alien insurer, the director may accept the opinion filed by the insurer with the insurance supervisory official of another state if the director determines that the opinion reasonably meets the requirements applicable to a domestic insurer. (f) Except in cases of fraud or willful misconduct, a qualified actuary shall not be liable for damages to any person other than the insurer or the director for any act, error, omission, decision or conduct with respect to the actuarys opinion. (g) For each opinion submitted under this subsection, a memorandum shall be prepared supporting the opinion. The memorandum must conform in form and substance to requirements established by the director by rule. (h) If an insurer fails to provide a supporting memorandum within the period specified by rule or if the director determines that the supporting memorandum provided by the insurer fails to meet the standards prescribed by rule or is otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and prepare any supporting memorandum that is required by the director. (i) Except as provided in this paragraph, a memorandum in the possession or control of the director that is in support of an actuarial opinion, and any other material provided by the insurer to the director in connection with the memorandum, is confidential as provided in ORS 705.137. Notwithstanding ORS 705.137, such a memorandum and other materials are subject to subpoena only for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of any action required by this section or by rules adopted under this section. Once any portion of the confidential memorandum is cited by the insurer in its marketing or is cited before any governmental agency other than a state insurance department or is released by the insurer to the news media, all portions of the confidential memorandum shall be no longer confidential. In addition to the uses and disclosures allowed under ORS 705.137, a memorandum or other material may otherwise be released by the director: (A) With the written consent of the insurer; or (B) To the American Academy of Actuaries upon request thereof, when the request states that the memorandum or other material is required for the purpose of professional disciplinary proceedings and sets forth procedures satisfactory to the director for preserving the confidentiality of the memorandum or other material. (j) Grounds for disciplinary action by the director against the insurer or the qualified actuary shall be defined by rule. (2) Unless exempted by the director by rule, each insurer transacting life insurance in this state shall include in each opinion required by subsection (1) of this section an opinion by the same actuary who prepared the opinion required by subsection (1) of this section. The following provisions apply with respect to the opinion: (a) The actuary shall state the actuarys opinion as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the director by rule, when considered in light of the assets held by the insurer with respect to the reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the insurers obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts. (b) The director may provide by rule for a transition period for establishing any higher reserves that the actuary may deem necessary in order to render the opinion required under this subsection. [1991 c.401 19; 2001 c.377 12; 2015 c.547 23] Note: The amendments to 733.304 by section 23, chapter 547, Oregon Laws 2015, apply for a limited period. See section 28, chapter 547, Oregon Laws 2015 (second note under 733.302). The text that is applicable for the limited period is set forth for the users convenience. (1) Each insurer that transacts life insurance in this state shall submit annually to the Director of the Department of Consumer and Business Services the opinion of a qualified actuary as provided in this section. The following provisions apply with respect to all opinions required under this section: (a) The opinion must state whether, in the opinion of the qualified actuary, the reserves and related actuarial items the insurer holds in support of the policies and contracts specified by the director by rule are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The director by rule shall establish the specific requirements for the opinion and may require any other items that the director determines to be necessary to the opinions scope. (b) The opinion must be submitted with an annual statement that reflects the valuation of the reserve liabilities for each year. (c) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the director as specified by rule. (d) The director by rule: (A) Shall adopt standards on which actuarial opinions under this subsection must be based. In adopting the standards, the director shall consider standards that the Actuarial Standards Board of the American Academy of Actuaries establishes from time to time. (B) Shall define "qualified actuary" for purposes of this subsection, by establishing qualifications required of an actuary for the purpose of giving the opinions. In establishing the definition, the director shall consider standards that the American Academy of Actuaries establishes from time to time. (C) May also adopt any other rules needed for carrying out this subsection. (e) The director may accept the opinion that a foreign or alien insurer submitted to the insurance supervisory official of another state as the opinion that the foreign or alien insurer must submit under this section if the director determines that the opinion reasonably meets the requirements that apply to a domestic insurer. (f) Except in cases of fraud or willful misconduct, a qualified actuary is not liable for damages to any person other than the insurer or the director for any act, error, omission, decision or conduct with respect to the actuarys opinion. (g) Except as provided in this paragraph, a memorandum in the possession or control of the director that is in support of an actuarial opinion, and any other material the insurer provides to the director in connection with the memorandum, is confidential as provided in ORS 705.137. Notwithstanding ORS 705.137, the memorandum and other materials are subject to subpoena only for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of any action required by this section or by rules adopted under this section. Once the insurer cites any portion of the confidential memorandum in the insurers marketing or before any governmental agency other than a state insurance department or the insurer releases the confidential memorandum to the news media, all portions of the confidential memorandum are no longer confidential. In addition to the uses and disclosures allowed under ORS 705.137, the director may otherwise release a memorandum or other material: (A) With the written consent of the insurer; or (B) To the American Academy of Actuaries upon request thereof, if the request states that the memorandum or other material is required for the purpose of professional disciplinary proceedings and sets forth procedures satisfactory to the director for preserving the confidentiality of the memorandum or other material. (h) The director shall define grounds for the directors disciplinary action against the insurer or the qualified actuary by rule. (2) Unless exempted by the director by rule, each insurer transacting life insurance in this state shall include in each opinion required by subsection (1) of this section an opinion by the same actuary who prepared the opinion required by subsection (1) of this section. The following provisions apply with respect to the opinion: (a) The insurer shall support the opinion with a memorandum that conforms in form and substance to requirements the director establishes by rule. If an insurer fails to provide a supporting memorandum within the period specified by rule or if the director determines that the supporting memorandum that the insurer provides fails to meet the standards prescribed by rule or is otherwise unacceptable to the director, the director may engage a qualified actuary at the insurers expense to review the opinion and the basis for the opinion and to prepare any supporting memorandum the director requires. (b) The actuary shall state the actuarys opinion as to whether the reserves and related actuarial items the insurer holds in support of the policies and contracts the director specifies by rule, when considered in light of the assets the insurer holds with respect to the reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations the insurer expects to receive and retain under the policies and contracts, provide adequately for the insurers obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts. (c) The director may provide by rule for a transition period for establishing any higher reserves that the actuary may deem necessary in order to render the opinion required under this subsection.
Except as otherwise provided in ORS 733.308 and 733.310, the minimum standard for the valuation of all outstanding life insurance policies and annuity and pure endowment contracts issued prior to the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance shall be that provided by the laws of this state in effect immediately prior to that operative date. Except as otherwise provided in ORS 733.308 and 733.310, the minimum standard for the valuation of all such policies and contracts issued on or after the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance shall be the commissioners reserve valuation methods defined in ORS 733.312, 733.314 and 733.320, three and one-half percent interest, or in the case of life insurance policies and contracts, other than annuity and pure endowment contracts, issued on or after January 1, 1974, four percent interest for such policies issued prior to January 1, 1978, five and one-half percent interest for single premium life insurance policies and four and one-half percent interest for all other such policies issued on and after January 1, 1978, and the following tables: (1) For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies: (a) The Commissioners 1941 Standard Ordinary Mortality Table for such policies issued prior to the operative date stated in ORS 743.216 (5) for the Standard Nonforfeiture Law for Life Insurance; (b) The Commissioners 1958 Standard Ordinary Mortality Table for such policies issued on or after the operative date stated in ORS 743.216 (5) for the Standard Nonforfeiture Law for Life Insurance and prior to the operative date stated in ORS 743.215 for the Standard Nonforfeiture Law for Life Insurance, except that for any category of such policies issued on female risks, all modified net premiums and present values referred to in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, may be calculated according to an age not more than six years younger than the actual age of the insured; and (c) For such policies issued on or after the operative date stated in ORS 743.215 for the Standard Nonforfeiture Law for Life Insurance: (A) The Commissioners 1980 Standard Ordinary Mortality Table; (B) At the election 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; or (C) Any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the Director of the Department of Consumer and Business Services for use in determining the minimum standard of valuation for such policies. (2) For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies: (a) The 1941 Standard Industrial Mortality Table for such policies issued prior to the operative date defined in ORS 743.216 (7) of the Standard Nonforfeiture Law for Life Insurance; and (b) For such policies issued on or after such operative date, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the director for use in determining the minimum standard of valuation for such policies. (3) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies: (a) The 1937 Standard Annuity Mortality Table; (b) At the option of the insurer, the Annuity Mortality Table for 1949, Ultimate; or (c) Any modification of either table referred to in paragraph (a) or (b) of this subsection that is approved by the director. (4) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies: (a) The Group Annuity Mortality Table for 1951; (b) Any modification of the table referred to in paragraph (a) of this subsection that is approved by the director; or (c) At the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts. (5)(a) For total and permanent disability benefits in or supplementary to ordinary policies or contracts: (A) For policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates adopted after 1980 by the National Association of Insurance Commissioners, that are approved by rule adopted by the director for use in determining the minimum standard of valuation for such policies; (B) For policies or contracts issued on or after January 1, 1961 and prior to January 1, 1966, either the tables referred to in subparagraph (A) of this paragraph or, at the option of the insurer, the Class (3) Disability Table (1926); and (C) For policies issued prior to January 1, 1961 the Class (3) Disability Table (1926). (b) Any table referred to in paragraph (a) of this subsection shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies. (6) For accidental death benefits in or supplementary to policies: (a) For policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted after 1980 by the National Association of Insurance Commissioners, that is approved by rule adopted by the director for use in determining the minimum standard of valuation for such policies. (b) For policies issued on or after January 1, 1961, and prior to January 1, 1966, either the table referred to in paragraph (a) of this subsection or, at the option of the insurer, the Inter-Company Double Indemnity Mortality Table. (c) For policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. (7) The table used under subsection (6)(a), (b) or (c) of this section shall be combined with a mortality table for calculating the reserves for life insurance policies. (8) For group life insurance, life insurance issued on the substandard basis and other special benefits, an insurer may use tables therefor that are approved by the director. [1991 c.401 20]
Except as provided in ORS 733.310, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after January 1, 1979, and for all annuities and pure endowments purchased on or after January 1, 1979, under group annuity and pure endowment contracts, shall be the commissioners reserve valuation methods defined in ORS 733.312 and 733.314 and the following tables and interest rates: (1) For individual annuity and pure endowment contracts issued prior to January 1, 1979, excluding any disability and accidental death benefit in such contracts, the 1971 Individual Annuity Mortality Table, or any modification of that table approved by the Director of the Department of Consumer and Business Services, and six percent interest for single premium immediate annuity contracts, and four percent interest for all other individual annuity and pure endowment contracts. (2) For individual single premium immediate annuity contracts issued on or after January 1, 1979, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners that is approved by rule adopted by the director for use in determining the minimum standard of valuation for such contracts, or any modification of these tables approved by the director, and seven and one-half percent interest. (3) For individual annuity and pure endowment contracts issued on or after January 1, 1979, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners that is approved by rule adopted by the director for use in determining the minimum standard of valuation for such contracts, or any modification of these tables approved by the director, and five and one-half percent interest for single premium deferred annuity and pure endowment contracts and four and one-half percent interest for all other such individual annuity and pure endowment contracts. (4) For all annuities and pure endowments purchased prior to January 1, 1979, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table or any modification of this table approved by the director, and six percent interest. (5) For all annuities and pure endowments purchased on or after January 1, 1979, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any group annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners, that is approved by the director by rule for use in determining the minimum standard of valuation for such annuities and pure endowments, or any modification of these tables approved by the director, and seven and one-half percent interest. [1991 c.401 21]
(1) The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this section: (a) All life insurance policies issued in a particular calendar year, on or after the operative date stated in ORS 743.215 for the Standard Nonforfeiture Law for Life Insurance; (b) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1982; (c) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1982, under group annuity and pure endowment contracts; and (d) The net increase, if any, in a particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts. (2) Calendar year statutory valuation interest rates shall be established as follows: (a) Except as provided in paragraph (b) of this subsection, the calendar year statutory valuation interest rates, "I", shall be determined as follows and the results rounded to the nearer one-quarter of one percent: (A) For life insurance: I=0.03+W(R10.03)+W/2(R20.09) (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options, I=0.03+W(R0.03) where R1 is the lesser of R and 0.09, R2 is the greater of R and 0.09, R is the reference interest rate defined in this section and W is the weighting factor defined in this section. (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subparagraph (B) of this paragraph, the formula for life insurance stated in subparagraph (A) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years and the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less. (D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply. (E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply. (b) If the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this paragraph differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying this paragraph, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year regardless of the operative date of ORS 743.215 as part of the Standard Nonforfeiture Law for Life Insurance. (3) Weighting factors shall be as follows: (a) The weighting factors referred to in the formulas stated in subsection (2) of this section are given in the following tables: (A) Weighting Factors for Life Insurance: Guarantee Duration Weighting (Years) Factors 10 or less 0.50 More than 10, but less than 20 0.45 More than 20 0.35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both that are guaranteed in the original policy. (B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options is 0.80. (C) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subparagraph (B) of this paragraph, shall be as specified in the following tables (i), (ii) and (iii), according to the rules and definitions in the following tables (iv), (v) and (vi): (i) For annuities and guaranteed interest contracts valued on an issue year basis: Guarantee Weighting Factor Duration for Plan Type (Years) A B C 5 or less: 0.80 0.60 0.50 More than 5, but not more than 10: 0.75 0.60 0.50 More than 10, but not more than 20: 0.65 0.50 0.45 More than 20: 0.45 0.35 0.35 (ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in table (i) above increased by: Plan Type A B C 0.15 0.25 0.05 (iii) For annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, that do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in (i) or derived in (ii) increased by: Plan Type A B C 0.05 0.05 0.05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence. (v) Plan type as used in the tables in this subsection is defined as follows: Plan Type A: At any time the policyholder: (1) may withdraw funds only with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (2) may withdraw funds without such adjustment but only in installments over five years or more; or (3) may withdraw funds only as an immediate life annuity; or (4) is not permitted to make a withdrawal. Plan Type B: Before expiration of the interest rate guarantee, the policyholder: (1) may withdraw funds only with adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (2) may withdraw funds without such adjustment but only in installments over five years or more; or (3) is not permitted to make a withdrawal. At the end of interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over a period of less than five years. Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either: (1) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or (2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (b) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this paragraph, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund. (4) The reference interest rate referred to in subsection (2) of this section is defined as follows: (a) For all life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year next preceding the year of issue, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moodys Investors Service, Inc. (b) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moodys Investors Service, Inc. (c) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in paragraph (b) of this subsection, with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moodys Investors Service, Inc. (d) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in paragraph (b) of this subsection, with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moodys Investors Service, Inc. (e) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moodys Investors Service, Inc. (f) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in paragraph (b) of this subsection, the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moodys Investors Service, Inc. (5) In the event that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds is no longer published by Moodys Investors Service, Inc. or in the event that the National Association of Insurance Commissioners determines that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moodys Investors Service, Inc. is no longer appropriate for the determination of the reference interest rate, the Director of the Department of Consumer and Business Services by rule may adopt an alternative method for determination of the reference interest rate. The director shall consider the alternative method adopted by the National Association of Insurance Commissioners. An insurer may substitute the alternative method adopted by rule. [1991 c.401 22]
(1) Except as otherwise provided in ORS 733.314 and 733.320, reserves according to the commissioners reserve valuation method for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by the policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be the uniform percentage of the respective contract premiums for such benefits that the present value, at the date of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the policy and the excess of A over B, as follows: (a) A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due, except that the net level annual premium shall not exceed the net level annual premium on the 19 year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of such policy. (b) A net one year term premium for such benefits provided for in the first policy year. (2) For any life insurance policy issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date, which is defined as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium, shall, except as otherwise provided in ORS 733.320, be the greater of the reserve as of the policy anniversary calculated as described in subsection (1) of this section and the reserve as of the policy anniversary calculated as described in subsection (1) of this section, but with (i) the value defined in subsection (1)(a) of this section being reduced by 15 percent of the amount of the excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on such date as an endowment, and (iv) the cash surrender value provided on such date being considered as an endowment benefit. The mortality and interest bases stated in ORS 733.306 and 733.310 shall be used for the purpose of making the comparison. (3) Reserves according to the commissioners reserve valuation method shall be calculated by a method consistent with subsections (1) and (2) of this section for: (a) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums; (b) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended; (c) Disability and accidental death benefits in all policies and contracts; and (d) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts. [1991 c.401 23]
(1) This section applies to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended. (2) Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in such contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by such contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of such contract, that become payable prior to the end of such respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of such contracts to determine nonforfeiture values. [1991 c.401 24]
(1) The aggregate reserves of an insurer for all life insurance policies, excluding disability and accidental death benefits, issued on or after the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance, shall not be less than the aggregate reserves calculated in accordance with the methods set forth in ORS 733.312, 733.314, 733.320 and 733.322 and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for such policies. (2) The aggregate reserves of an insurer for all policies, contracts and benefits shall not be less than the aggregate reserves determined by the qualified actuary to be necessary to render the opinion required by ORS 733.304. [1991 c.401 25; 2015 c.547 24] Note: The amendments to 733.316 by section 24, chapter 547, Oregon Laws 2015, apply for a limited period. See section 28, chapter 547, Oregon Laws 2015 (second note under 733.302). The text that is applicable for the limited period is set forth for the users convenience. (1) The aggregate reserves of an insurer for all life insurance policies, excluding disability and accidental death benefits, issued on or after the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance, may not be less than the aggregate reserves calculated in accordance with the methods set forth in ORS 733.312, 733.314, 733.320 and 733.322 and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for such policies. (2) The aggregate reserves of an insurer for all policies, contracts and benefits may not be less than the aggregate reserves that the appointed actuary determines to be necessary to render the opinion required by ORS 733.304.
(1) Reserves for all policies and contracts issued prior to the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance may be calculated, at the option of the insurer, according to any standards that produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately prior to the operative date. (2) Reserves for any category of policies, contracts or benefits as established by the Director of the Department of Consumer and Business Services, issued on or after the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance, may be calculated, at the option of the insurer, according to any standards that produce greater aggregate reserves for the category than those calculated according to the minimum standard provided in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts. (3) An insurer that at any time has adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, may, with the approval of the director, adopt any lower standard of valuation. The standard shall not be lower than the minimum provided in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, except that for the purposes of this subsection, the holding of additional reserves previously determined by a qualified actuary to be necessary to render the opinion required by ORS 733.304 shall not be deemed to be the adoption of such a higher standard of valuation. [1991 c.401 26; 2015 c.547 25] Note: The amendments to 733.318 by section 25, chapter 547, Oregon Laws 2015, apply for a limited period. See section 28, chapter 547, Oregon Laws 2015 (second note under 733.302). The text that is applicable for the limited period is set forth for the users convenience. (1) Reserves for policies and contracts issued prior to the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance may be calculated, at the option of the insurer, according to any standards that produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately prior to the operative date. (2) Reserves for any category of policies, contracts or benefits as established by the Director of the Department of Consumer and Business Services, issued on or after the operative date stated in ORS 743.204 for the Standard Nonforfeiture Law for Life Insurance, may be calculated, at the option of the insurer, according to any standards that produce greater aggregate reserves for the category than those calculated according to the minimum standard provided in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, may not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts. (3) An insurer that adopts at any time a standard of valuation that produces greater aggregate reserves than the aggregate reserves calculated according to the minimum standard provided in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, may, with the approval of the director, adopt any lower standard of valuation. The standard may not be lower than the minimum provided in ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, except that for the purposes of this subsection, holding additional reserves that the appointed actuary previously determined to be necessary to render the opinion required by ORS 733.304 does not constitute the adoption of a higher standard of valuation.
(1) Except as provided in subsection (2) of this section, if in any contract year the gross premium charged by an insurer on any life insurance policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or contract, or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this subsection are the standards stated in ORS 733.306 and 733.310. (2) For any life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, subsection (1) of this section shall apply as if the method actually used in calculating the reserve for the policy were the method described in ORS 733.312 (1). The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with ORS 733.312, and the minimum reserve calculated in accordance with this section. [1991 c.401 27]
(1) For any plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance or annuity that is of such a nature that the minimum reserves cannot be determined by the methods described in ORS 733.312, 733.314 and 733.320, the reserves held under any such plan must: (a) Be appropriate in relation to the benefits and the pattern of premiums for that plan; and (b) Be computed by a method that is consistent with the principles of ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, as determined by rules adopted by the Director of the Department of Consumer and Business Services. (2) Any policy, contract or certificate providing life insurance under a plan referred to in subsection (1) of this section must be reviewed and specifically approved by the director before it can be marketed, issued, delivered or used in this state. [1991 c.401 28]
As used in ORS 733.325 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015: (1) "Accident and health insurance" means a contract that incorporates morbidity risk and provides protection against economic loss that results from accident, sickness or a medical condition. (2) "Appointed actuary" means a qualified actuary that an insurer appoints in accordance with the valuation manual to prepare the actuarial opinion required under ORS 733.331. (3) "Deposit-type contract" means a contract that does not incorporate mortality or morbidity risks. (4) "Insurer" means an entity that has: (a) Written, issued or reinsured life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and has at least one life insurance contract, accident and health insurance contract or deposit-type contract in force or on claim; or (b) Written, issued or reinsured life insurance contracts, accident and health insurance contracts or deposit-type contracts in any state and that must hold a certificate of authority to write life insurance, accident and health insurance or deposit-type contracts in this state. (5) "Life insurance" means a contract that incorporates mortality risk, including an annuity contract and a pure endowment contract. (6) "Operative date of the valuation manual" means the date on which the Director of the Department of Consumer and Business Services adopts the valuation manual by rule in accordance with section 16, chapter 547, Oregon Laws 2015. (7) "Principle-based valuation" means a reserve valuation that uses one or more methods or one or more assumptions that the insurer determines and that must comply with section 17, chapter 547, Oregon Laws 2015, as specified in the valuation manual. (8) "Qualified actuary" means an individual who: (a) Is qualified to sign the applicable statement of actuarial opinion in accordance with standards that the director establishes by rule, taking into consideration standards that the American Academy of Actuaries establishes for actuaries that sign statements of actuarial opinion; and (b) Meets the requirements set forth in the valuation manual. (9) "Reserves" means reserve liabilities. (10) "Valuation manual" means the manual of valuation instructions that the director adopts in accordance with section 16, chapter 547, Oregon Laws 2015. [2015 c.547 11]
(1) The Director of the Department of Consumer and Business Services each year shall value, or cause to be valued, the reserve liabilities for all outstanding accident and health contracts, annuity and pure endowment contracts, deposit-type contracts and life insurance contracts that every insurer issues on or after the operative date of the valuation manual. (2) In lieu of valuing or causing a valuation of the reserves required of any foreign or alien insurer, the director may accept any valuation that the insurance supervisory official of any state or other jurisdiction makes or causes to be made if the valuation complies with the minimum standard under the Standard Valuation Law. (3) The provisions set forth in sections 15 to 17, chapter 547, Oregon Laws 2015, apply to all policies and contracts that insurers issue on or after the operative date of the valuation manual. [2015 c.547 12]
(1)(a) Every insurer that has outstanding accident and health insurance contracts, deposit-type contracts or life insurance contracts in this state and is subject to regulation by the Director of the Department of Consumer and Business Services shall annually submit to the director the opinion of an appointed actuary as to whether the reserves and related actuarial items the insurer holds in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The opinion must comply with the specific standards and scope set forth in the valuation manual and must: (A) Meet the specifications for form and substance set forth in the valuation manual and otherwise be acceptable to the director. (B) Accompany an annual statement that reflects the valuation of reserve liabilities for each year that ends on or after the operative date of the valuation manual. (C) Apply to all policies and contracts that are subject to subsection (2) of this section, plus other actuarial liabilities that the valuation manual may specify. (D) Be based on standards that the Actuarial Standards Board adopts, or that a successor to the Actuarial Standards Board adopts, and on any other additional standards that the valuation manual prescribes and that the director adopts by rule. (b) The director may accept an opinion that a foreign or alien insurer filed with the insurance supervisory official of another state as the opinion the foreign or alien insurer must submit under this section if the director determines that the opinion reasonably meets the requirements that apply to an insurer domiciled in this state. (2)(a) Every insurer that has outstanding accident and health insurance contracts, deposit-type contracts or life insurance contracts in this state, that is subject to regulation by the director and that is not exempted in the valuation manual shall include in the opinion required under subsection (1) of this section an opinion of the same appointed actuary as to whether the reserves and related actuarial items the insurer holds in support of the policies and contracts specified in the valuation manual, when considered in light of the assets the insurer holds with respect to the reserves and related actuarial items, including but not limited to investment earnings on the assets and the considerations the insurer expects to receive and retain under the policies and contracts, provide adequately for the insurers obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts. (b) For each opinion that an insurer submits under paragraph (a) of this subsection, the insurer shall support the opinion with a memorandum that meets the specifications for form and substance set forth in the valuation manual and that is otherwise acceptable to the director. If the insurer fails to provide a supporting memorandum at the directors request within a period specified in the valuation manual, or if the director determines that the supporting memorandum the insurer provides fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable, the director may engage a qualified actuary at the insurers expense to review the opinion and the basis for the opinion and to prepare the supporting memorandum the director requires. (3) Except in cases of fraud or willful misconduct, the appointed actuary is not liable for damages to any person other than the insurer and the director for any act, error, omission, decision or conduct with respect to the appointed actuarys opinion. (4) The director shall take any disciplinary action against an insurer or an appointed actuary in accordance with rules the director adopts. [2015 c.547 13]
An insurer shall submit mortality, morbidity, policyholder behavior or expense experience and other data to the appropriate entity as prescribed in the valuation manual. As used in this section, "policyholder behavior" means any action that a policyholder, a contract holder or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract that is subject to ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, including but not limited to lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization or benefit elections that the policy or contract prescribes but excluding events of mortality or morbidity that result in benefits the essential aspects of which the terms of the policy or contract prescribe. [2015 c.547 18]
(1) As used in this section, "confidential information" means: (a) A memorandum in support of an opinion submitted under ORS 733.304 or 733.331 and any other documents, materials and other information including, but not limited to, all working papers and copies of working papers that are created, produced or obtained by or disclosed to the Director of the Department of Consumer and Business Services or any other person in connection with the memorandum. (b) All documents, materials and other information including, but not limited to, all working papers and copies of working papers that are created, produced or obtained by or disclosed to the director or any other person in the course of an examination under section 15, chapter 547, Oregon Laws 2015, except that if an examination report or other material that is prepared in connection with an examination under ORS 731.312 is not held as private and confidential information under ORS 731.312, an examination report or other material that is prepared in connection with an examination under section 15 (3), chapter 547, Oregon Laws 2015, is confidential information to the same extent as the examination report or other material that was prepared under ORS 731.312. (c) Any reports, documents, materials or other information that an insurer develops in support of, or in connection with, the annual certification the insurer submits under section 17 (3)(b), chapter 547, Oregon Laws 2015, to evaluate the effectiveness of the insurers internal controls with respect to a principle-based valuation and any other documents, materials and other information including, but not limited to, all working papers and copies of working papers that are created, produced or obtained by or disclosed to the director or any other person in connection with the reports, documents, materials and other information. (d) Any principle-based valuation report developed under section 17 (3)(c), chapter 547, Oregon Laws 2015, and any other documents, materials and other information including, but not limited to, all working papers and copies of working papers that are created, produced or obtained by or disclosed to the director or any other person in connection with the report. (e) Any documents, materials, data and other information that an insurer submits under ORS 733.334 and any other documents, materials, data and other information including, but not limited to, all working papers and copies of working papers that are created or produced in connection with the materials, data and other information, to the extent that the documents, materials, data, information and working papers include information that identifies the insurer or could be used to identify a particular person, if the documents, materials data or other information and the working papers are provided to or obtained by or disclosed to the director or any other person in connection or compliance with the provision of ORS 733.334. (2)(a) Except as provided in this section, an insurers confidential information is confidential by law and privileged as provided in ORS 705.137, 705.138 and 705.139, and is not subject to ORS 192.311 to 192.478. (b) The director may share confidential information of the type defined in subsection (1)(a) or (d) of this section with state, federal and international law enforcement officials and with the Actuarial Board for Counseling and Discipline or a successor to the Actuarial Board for Counseling and Discipline, including the employees, agents, consultants and contractors of the board or law enforcement agency, if: (A) The director receives a request that states that the confidential information is necessary for the purpose of professional disciplinary proceedings; and (B) The person from which the director receives the request has the legal authority to agree, and does agree, to maintain the confidentiality of and provide a privilege for the documents, materials, data and other information in the same manner and to the same extent that the director must maintain the confidentiality of and privilege provided for the documents, materials, data and other information under this section. (c) The director may receive documents, materials, data and other information, including otherwise confidential and privileged documents, materials, data or information, from the Actuarial Board for Counseling and Discipline or a successor to the Actuarial Board for Counseling and Discipline and shall maintain the confidentiality of and provide a privilege for any document, material, data or other information the director receives with the understanding that the document, material or other information is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information. (3) Notwithstanding subsection (2) of this section: (a) The director may release confidential information of the type defined in subsection (1)(a) or (d) of this section: (A) In response to a subpoena for the purpose of defending an action that seeks damages from the appointed actuary who prepares a memorandum in support of an opinion that an insurer submits under ORS 733.304 or 733.331, or a principle-based valuation report that the insurer developed under section 17, chapter 547, Oregon Laws 2015, if the confidential information is subject to subpoena under an action required under ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015, or under a rule the director adopts under ORS 733.300 to 733.340 and sections 14 to 17, chapter 547, Oregon Laws 2015; or (B) With the written consent of the insurer. (b) Confidential information of the type defined in subsection (1)(a) or (d) of this section is no longer confidential if an insurer cites in the insurers marketing, volunteers publicly to or before a government agency other than the Department of Consumer and Business Services or an equivalent agency in another state or the employees, agents, consultants or contractors of the department or agency, or releases to the news media any portion of a memorandum in support of an opinion the insurer submitted under ORS 733.331 or a principle-based valuation report the insurer developed under section 17, chapter 547, Oregon Laws 2015. [2015 c.547 19]
(1) Specific product forms or product lines of a domestic insurer that is licensed in and does business only in this state are exempt from the requirements of section 15, chapter 547, Oregon Laws 2015, if: (a) The Director of the Department of Consumer and Business Services issues the exemption to the insurer in writing and does not subsequently revoke the exemption in writing; (b) The director identifies the specific product form or product line in the written exemption; and (c) The insurer computes reserves using assumptions and methods the insurer used before the operative date of the valuation manual and otherwise complies with any requirements the director specifies by rule. (2) ORS 733.304, 733.306, 733.308, 733.310, 733.312, 733.314, 733.316, 733.318, 733.320, 733.322 and 733.331 and section 14, chapter 547, Oregon Laws 2015, apply to an insurer that has an exemption under this section. [2015 c.547 20]
(1) Funds of a domestic insurer shall be invested, reinvested and used in the manner and subject to the conditions, restrictions and limitations set forth in ORS 733.510 to 733.780. (2) Investments of a foreign or alien insurer which would be authorized for a like domestic insurer shall be allowed as assets in any determination of its financial condition. Other investments of a foreign or alien insurer which are authorized by the laws of its domicile may be so allowed at the discretion of the Director of the Department of Consumer and Business Services. (3) The director may adopt rules establishing standards and limitations for investments by insurers that are not otherwise specifically permitted or prohibited by ORS 733.510 to 733.780. (4) The investment program of an insurer must take into account the safety of the principal of the insurer, investment yield and return, stability in the value of the investment, liquidity necessary for expected business needs of the insurer and investment diversification according to standards established by rule. The director may direct an insurer to take action to conform to the requirements of this subsection. [Formerly 738.235; 1989 c.425 2; 1993 c.447 21]
Funds of an insurer necessary to satisfy normal current operating requirements are not subject to ORS 733.510 to 733.780. Normal current operating requirements include, but are not limited to, the acquisition of personal property necessary or convenient in the operation of the insurers business. [1967 c.359 230]
As used in ORS 733.510 to 733.780: (1) "Corporation" means a corporation, joint stock association or business trust organized and existing under the laws of a sovereign. (2) "Sovereign" means the United States, or a state, or Canada or a province thereof. (3) "Political subdivision" means an incorporated county, city, town, village, municipality, or subdivision thereof, or a public corporation, district, agency, commission, authority or instrumentality, or subdivision thereof. [1967 c.359 231]
As used in ORS 733.510 to 733.780, "obligation" means a bond, debenture, note, warrant, certificate or other evidence of indebtedness. [1967 c.359 232]
As used in ORS 733.510 to 733.780, "amply secured obligation" means an obligation which is not in default and as to which no default is imminent, and which satisfies the requirements of one or more of the following subsections: (1) An obligation of a sovereign or political subdivision thereof, if it is issued, assumed or guaranteed by the governmental unit involved and is payable either from: (a) Taxes levied or which may be levied by such governmental unit; or (b) Adequate special revenues pledged or otherwise appropriated or required by law to be used for the purpose of such payment, provided the law authorizing the issuance of the obligation requires that adequate rates be fixed, maintained and collected at all times so as to produce sufficient revenue or earnings to pay all operating expenses, maintenance charges, and the principal, interest and dividends on the obligation. An obligation payable solely out of special assessments on real property benefited by local improvements shall not be considered amply secured unless the total amount so payable is less than 50 percent of the market value of the real property (including any improvements thereon) and constitutes a lien on such property. (2) An obligation issued, assumed or guaranteed by a corporation, if the corporation is solvent, has not been in default on any of its obligations during the preceding three years, and if the obligation is secured by the pledge of property the market value of which exceeds the amount of the obligation by 25 percent or more. Obligations which are the subject of ORS 733.580 and 733.600 are not included within the provisions of this subsection. (3) An obligation found to be amply secured under regulations duly promulgated by the Director of the Department of Consumer and Business Services. In making such regulations the director shall give consideration to regulations pertaining to amply secured obligations issued from time to time by the National Association of Insurance Commissioners, and shall consider the financial condition of the issuing, assuming or guaranteeing corporation as well as the existence or absence of any pledge of property as security. [1967 c.359 233]
As used in ORS 733.510 to 733.780, "unencumbered" means the nonexistence of any lien, burden or charge having priority over the lien securing the insurers investment. The following shall not be considered encumbrances on real property or leasehold interests therein: (1) Reservations of mineral, oil or timber rights, easements, rights of way, sewer rights or rights of walls. (2) Liens for taxes or assessments not delinquent. (3) Building restrictions or other restrictive covenants common to the community. (4) Where the loan is secured by a lien upon real property, a lease under which rents or profits are reserved to the owner, if in any event the security for the loan would be a first lien upon the real property except for such lease. (5) Where the loan is secured by a lien on a leasehold, a prior lien on the real property, provided the security for the loan is a first lien upon the leasehold and there exists no provision preventing the insurer from continuing the lease in force for the duration of the lease or no condition or rights of reentry or forfeiture under which such lien can be cut off, subordinated or otherwise disturbed so long as the lessees obligations under the lease are discharged. [1967 c.359 234]
As used in ORS 733.510 to 733.780, "improved real property" means: (1) Farmland used for tillage, crop or pasture; (2) Real estate on which permanent improvements, or improvements under construction or in process of construction, suitable for residence, institutional, commercial or industrial use, are situated; and (3) Real estate to be developed for the use or uses set forth in subsection (2) of this section on which improvements, or improvements under construction or in process of construction, such as streets, sidewalks, sewers and utilities which will become an integral part of such development, are situated. [1967 c.359 235; 1989 c.425 3]
Except as provided in ORS 733.578, funds of an insurer shall not be used as compensating balances for loans to other persons, or otherwise pledged for the benefit of other persons. [1975 c.232 2]
Investments of an insurer of the kind described in ORS 733.650 (4) that are made for the purpose of providing compensating balances for other persons will not be prohibited by ORS 733.575 or 733.780 while the following conditions are met: (1) The investment is made in the name of and remains the sole property of the insurer; (2) The investment is not subject to appropriation in any manner by any person, including the person for whom the compensating balance is being provided, the institution in which the deposit is made and other creditors of such persons; (3) The insurer holds an irrevocable written waiver from the depositary institution, in a form satisfactory to the Director of the Department of Consumer and Business Services, waiving all right, title and interest in or to any setoff, bankers or similar lien or other security interest in such investment or any funds represented thereby; (4) The investment is unrestricted as to right of withdrawal except for such restrictions as may be usual and customary for such investments under ORS 733.650 (4) when no compensating balance is involved; and (5) The insurer is receiving a reasonable fee, taking into consideration its return on other funds, for providing the compensating balance involved. [1975 c.232 3]
(1) Funds of an insurer at least equal to its required capitalization shall be invested and kept invested as follows: (a) In amply secured obligations of the United States, a state or a political subdivision of this state. (b) In loans secured by first liens upon improved, unencumbered real property (other than leaseholds) in this state where: (A) The lien does not exceed 50 percent of the appraised value of the property and the loan is for a term of five years or less; (B) The lien does not exceed 66-2/3 percent of the appraised value of the property provided there is an amortization plan mortgage, deed of trust or other instrument under the terms of which the installment payments are sufficient to repay the loan within a period of not more than 25 years; or (C) The investment is insured or guaranteed by the Federal Housing Administration, the United States Department of Veterans Affairs, or under Title I of the Housing Act of 1949 (providing for slum clearance and redevelopment projects) enacted by Congress on July 15, 1949. (c) In certificates of deposit or other investments described in ORS 733.650 (4), to the extent such investments are insured by the Federal Deposit Insurance Corporation. (2) Investments made pursuant to this section shall be kept free of any lien or pledge. The term "lien or pledge" as used in this section shall not include a deposit of securities with a sovereign, nor assets held in trust for the benefit or protection of all or any class of policyholders of an insurer. [Formerly 738.238; 1991 c.67 195; 1993 c.447 113]
Funds of an insurer may be invested in amply secured obligations of a sovereign, political subdivision thereof or corporation. Expressly included, but not by way of limitation, are obligations of the following federal agencies and authorities: Federal Home Loan Banks, Federal Land Banks, Home Owners Loan Corporation, Public Housing Authorities (to the extent that such obligations are secured by a pledge of annual contributions to be paid by the United States or an agency thereof), and Federal Intermediate Credit Banks. [Formerly 738.245]
(1) Funds of an insurer may be invested in: (a) Loans secured by first liens upon improved, unencumbered real property (other than leaseholds) in the manner and subject to the same terms and conditions set forth in ORS 733.580 (1)(b), except that the property may be located within the boundaries of any sovereign; for loans described in ORS 733.580 (1)(b)(B), the maximum permitted ratio of the loan to the appraised value shall be 80 rather than 66-2/3 percent, and the maximum term of the loan shall be 30 rather than 25 years. (b) Loans secured by first liens upon a leasehold of improved, unencumbered real property located within the boundaries of any sovereign if: (A) The leasehold has a period of not less than 20 years to run from the date of the loan, inclusive of the term which may be provided by an enforceable option of renewal, the loan does not exceed 70 percent of the fair market value of the leasehold together with any improvements located thereon which are subject to the lien, the terms of the loan provide for amortization payments to be made by the borrower on the principal thereof at least once in each year in amounts sufficient to completely amortize the loan within a period of four-fifths of the term of the leasehold, and the insurer is entitled to be subrogated to all rights of the lessee under the leasehold; or (B) The investment is insured or guaranteed in the manner provided in ORS 733.580 (1)(b)(C). (2) A loan upon the security of real property or a leasehold interest therein which is a participation in or a part of a series or issue shall not be made unless the insurer holds a senior participation or similar security interest in the mortgage or deed of trust giving it substantially the rights of a first mortgagee. (3) Nothing in ORS 733.510 to 733.780 shall prohibit an insurer from renewing or extending a proper loan secured by a first lien upon real property or a leasehold interest therein made pursuant to this section or to ORS 733.580 for the original or a lesser amount even though such amount is a greater percentage of the current fair market value of the real property or leasehold than would otherwise be permitted under such sections. [Formerly 738.255; 1995 c.79 360]
(1) Except as otherwise provided in ORS 733.580 and 733.600, an insurer may invest in real property only if used for the purposes or acquired in the manner and within the limits as follows: (a) The insurer may invest in the land and the buildings thereon in which it has its principal office, and in such other real property as required for its convenient accommodation in the transaction of business. Such investments shall not exceed in the aggregate 10 percent of the assets of the insurer, except with the consent of the Director of the Department of Consumer and Business Services. (b) The insurer may invest in real property that is acquired in satisfaction of loans, mortgages, liens, judgments or debts previously owing to the insurer in the course of its business. (c) The insurer may invest in real property acquired in part payment of the consideration on the sale of other real property owned by the insurer if the transaction does not increase the investment of the insurer in real property. (d) The insurer may invest in real property acquired by gift or devise or through merger, consolidation or bulk reinsurance of another insurer under the Insurance Code. (e) The insurer may invest in the vendors interest in real property subject to a contract of sale. The amount invested in the vendors interest under such a contract shall not exceed, except with the consent of the director: (A) Ninety percent of the market value of the subject real property, when the real property is one or two family residential property. (B) Eighty percent of the market value of the subject real property, when the real property is other than that described in subparagraph (A) of this paragraph. (f) The insurer may invest in real property or any interest therein that is acquired or held by purchase, lease or otherwise, other than real property used primarily for agricultural, ranch, mining, development of oil or mineral resources, recreational, amusement or club purposes, if the real property or interest therein is acquired as an investment for the production of income or acquired to be improved or developed for such investment purposes pursuant to an existing program therefor. The insurer may hold, improve, develop, maintain, manage, lease, sell and convey real property acquired by it under this paragraph. Real property and interests therein so acquired may be leased or sublet. Except with the consent of the director, an insurer shall not have an amount exceeding five percent of its assets at any one time invested in real property and interests therein under this paragraph. (g) The insurer may invest in additional real property and in equipment incident to real property if necessary or convenient for the purpose of enhancing the sale or other value of real property previously acquired or held by the insurer under paragraph (b), (c), (d) or (f) of this subsection. The real property and equipment shall be included, together with the real property for the enhancement of which it was acquired, for the purpose of applicable investment limits. (h) The insurer may invest in real property without regard to whether the property is income-producing when acquired if the insurer intends to improve the property for resale or if the insurer intends that the property will be income-producing. The insurer may also invest in real property that is income-producing and used primarily for agricultural, ranch, mining, development of oil or mineral resources, recreational, amusement or club purposes. Funds invested under this paragraph shall not exceed the lesser of five percent of the insurers assets or 50 percent of the insurers capital and surplus, except with the consent of the director. (i) Except with the consent of the director, all real property owned by the insurer under this subsection, except as to properties described in paragraphs (a) and (e) of this subsection, shall not at any time exceed 10 percent of the assets of the insurer. (2) Except as otherwise provided in subsection (3) of this section: (a) Real property acquired under this section shall be disposed of within five years after it ceases to be income-producing or to be used by the insurer for its business operation, whichever is later. (b) Real property acquired under subsection (1)(h) of this section that is not income-producing when acquired shall be disposed of within five years after acquisition if the real property is not improved for resale or if the real property is not income-producing during the five years. (c) When an investment or any combination of investments by an insurer in real property exceeds any applicable limitation under this section other than a limitation of time, the insurer, not later than the fifth year after the limitation is exceeded, shall dispose of sufficient real property that is subject to the limitation to comply with the limitation. (3) Any real property acquired under this section that otherwise qualifies as an investment under ORS 733.510 to 733.780 may be retained and held if approved as an investment in the manner prescribed by ORS 733.730 and 733.740. The director may extend the time limit prescribed in subsection (2) of this section if the interests of the insurer will suffer by a "forced sale" of the property. [Formerly 738.265; 1979 c.846 1; 1989 c.425 4; 2003 c.576 555]
(1) Funds of an insurer may be invested in stocks (including trust certificates) of solvent corporations organized and carrying on a business under the laws of a sovereign as follows: (a) Preferred or guaranteed stocks if the corporation is not in default or arrears as to any preferred or guaranteed dividend and has continuously and regularly paid such dividends during the preceding three years or has paid cash dividends for five years on common stock. (b) Common stocks as provided in paragraph (c) of this subsection if: (A) The obligations and preferred stock, if any, of such corporation are eligible for investment under ORS 733.510 to 733.780; and (B) The stock is registered on a national securities exchange regulated under the Securities Exchange Act, or if of a type not commonly so registered is regularly traded on a broad national or regional basis. (c) Notwithstanding ORS 733.780 (1), not more than 25 percent of admitted assets may be in common stocks that have not paid a cash dividend during each of the five years preceding the date of acquisition. (2) An insurer shall not invest so as to own or control more than five percent of the voting power outstanding of a corporation, nor shall it invest in the obligations or stocks of a corporation if the insurer, directors, trustees and officers own or control, or as a result thereof shall own and control, in the aggregate more than 50 percent of the voting power. This subsection does not apply to limit the amount of an insurers assets that may be invested in the voting securities of a depository institution or any company that controls the depository institution. [Formerly 738.275; 1995 c.565 1; 2001 c.377 39]
(1) Except as provided in this section, funds of an insurer may be invested in common stock, preferred stock, debt obligations and other securities of one or more corporations without regard to the provisions and limitations of ORS 733.590, 733.620, 733.770 and 733.780 (1)(a) if the corporation is engaged, or will be engaged, in the kind of business or activity that is related to the insurance business as described in ORS 733.635, provided that the insurer owns 80 percent or more of the shares of the corporation that have voting powers either alone or, with prior approval of the Director of the Department of Consumer and Business Services, in cooperation with one or more other persons. (2) Except as provided in subsection (3) of this section, the amount of funds invested as described in subsection (1) of this section may not exceed the lesser of 10 percent of the insurers assets or 50 percent of the amount of the insurers combined capital and surplus. However, after such investments, the insurers combined capital and surplus must be reasonable in relation to the insurers outstanding liabilities and adequate to the insurers financial needs. For the purpose of this subsection, the amount of an insurers investments must be calculated by: (a) Excluding the admitted value of investments in subsidiaries of the insurer; (b) Adding the total moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the insurance subsidiary or the shareholders equity of a noninsurance subsidiary, whether or not represented by the purchase of capital stock or issuance of other securities; (c) Adding to the sum determined under paragraph (b) of this subsection all amounts expended in acquiring additional common stock, preferred stock, debt obligations and other securities of a subsidiary, and all contributions to the capital or surplus of an insurance subsidiary or the shareholders equity of a noninsurance subsidiary, subsequent to its acquisition or formation; and (d) Subtracting from the sum determined under paragraph (c) of this subsection the return of any amount included in paragraph (b) or (c) of this subsection, whether the return is in the form of cash, securities or other property. (3)(a) Funds of an insurer may be invested in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in owning and managing assets authorized as investments for the insurer. However, each subsidiary must agree to limit the subsidiarys investments in any asset so that the investments will not cause the amount of the insurers total investment to exceed any of the investment limitations specified in subsection (2) of this section, or specified in ORS 733.510 to 733.780, that apply to the insurer. (b) For the purpose of this subsection, the total investment of the insurer includes: (A) Any direct investment by the insurer in an asset; and (B) The insurers proportionate share of any investment in an asset by any subsidiary of the insurer, which must be calculated by multiplying the amount of the subsidiarys investment by the percentage of the subsidiarys ownership. (4) With the approval of the director, an insurer may invest any greater amount in common stock, preferred stock, debt obligations or other securities of one or more subsidiaries. However, after such an investment, the insurers combined capital and surplus must be reasonable in relation to the insurers outstanding liabilities and adequate to the insurers financial needs. (5) Investments in common stock, preferred stock, debt obligations or other securities of one or more subsidiaries that an insurer makes in accordance with subsection (2), (3) or (4) of this section are not subject to restrictions or prohibitions set forth in the Insurance Code that would otherwise apply to an insurers investments. (6) An insurer must determine whether any investment pursuant to subsection (2), (3) or (4) of this section meets the applicable requirements on the last day of the month that immediately precedes the day on which the investment is made. The determination must be made prior to the investment by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations and the value of all previous investments in equity securities as of the day the investments were made, net of any return of capital invested, not including dividends. [1967 c.359 241; 1969 c.285 1; 1993 c.447 113a; 1995 c.638 7; 2005 c.255 1; 2013 c.370 35]
Investments authorized by ORS 733.630 may be made in corporations engaged, or which will be engaged, in one or more of the following insurance or ancillary businesses: (1) Any kind of insurance business authorized by the jurisdiction in which it is incorporated. (2) Any kind of business primarily related to the insurance business carried on by the parent. (3) Acting as an insurance producer for its parent or for any of its parents insurer subsidiaries or intermediate insurer subsidiaries. (4) Investing, reinvesting or trading in securities for its own account, that of its parent, any subsidiary of its parent, or any affiliate or subsidiary. (5) Management of any investment company subject to or registered pursuant to the Federal Investment Company Act of 1940, as amended, including related sales and services. (6) Acting as a broker-dealer subject to or registered pursuant to the Securities Exchange Act of 1934, as amended. (7) Rendering investment advice to governments, government agencies, corporations or other organizations or groups. (8) Rendering other services related to the operations of an insurance business including, but not limited to, actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal and collection services. (9) Ownership and management of assets or property which the parent could itself own and manage. (10) Acting as administrative agent for a government instrumentality which is performing an insurance function. (11) Financing of insurance premiums. (12) Owning a corporation or corporations engaged or organized to engage exclusively in one or more of the businesses specified in subsections (1) to (11) of this section. [1969 c.285 3; 2003 c.364 84]
(1) Funds of an insurer may be invested in loans secured by pledges of obligations and stocks eligible for investment under ORS 733.510 to 733.780. As of the date the loan is made, it shall not exceed in amount 80 percent of the market value of the collateral pledged. No such loan shall be made for the purpose of providing funds to purchase or carry stocks registered on a national securities exchange. (2) Funds of an insurer may be invested in loans secured by personal property or fixtures if such loan is: (a) In connection with a loan on the security of real property or a leasehold as provided in ORS 733.580 or 733.600; (b) In an amount not exceeding 20 percent of the amount loaned on the real property or leasehold; (c) For a term of not more than five years; (d) Secured by a security interest which constitutes a first lien, except for taxes not then delinquent, on tangible, permanent personal property of the borrower kept and used on the premises, other than stocks of goods held for sale or transfer in the ordinary course of business or items which by normal use will be consumed or depleted during the period of the loan; and (e) In an amount, the ratio of which to the value of the security does not exceed the ratio of the companion loan to the value of the real property or leasehold. (3) Funds of an insurer may be loaned to its own life insurance policyholder upon the security of such life insurance policy. The loan shall not exceed the cash value of the policy. [Formerly 738.285]
Funds of an insurer may be invested in the following: (1) Obligations secured by a mortgage or deed of trust payment of which is guaranteed by a policy of mortgage insurance. (2) Obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development. (3) Bank and bankers acceptances and other bills of exchange of the kind and nature made eligible by law for purchase in the open market by federal reserve banks. (4) Deposits, certificates of deposits, accounts or savings or certificate shares or accounts of or in banks, trust companies, savings and loan associations or building and loan associations insured with the Federal Deposit Insurance Corporation or qualified to do business under the laws of this state. (5) Obligations issued by trustees or receivers of a corporation created or existing under the laws of a sovereign which, or the assets of which, are being administered under the direction of a court having jurisdiction if the obligation is adequately secured as to principal and interest. (6) Transportation equipment used wholly or in part within a sovereign, or adequately secured trust certificates of participation or similar obligations or contracts evidencing an interest in such transportation equipment, where the investor is entitled to receive a determined or determinable portion of rental, purchase or other obligatory payments for use or purchase of the equipment. (7) Purchase contracts or lease-purchase agreements executed under the Federal Public Buildings Purchase Contract Act of 1954, or the Post Office Department Property Act of 1954. (8) Stock of the Federal Home Loan Bank to the extent of the minimum required by the Federal Home Loan Bank Act. An insurer acquiring such stock may exercise all rights and powers given to members under such Act, including but not by way of limitation the right to obtain advances or borrow money from such bank and to pledge collateral as security therefor. (9) Obligations issued, assumed or guaranteed by the Inter-American Development Bank. (10) Obligations issued, assumed or guaranteed by the Asian Development Bank. (11) Obligations issued, assumed or guaranteed by the African Development Bank. [Formerly 738.295; 1969 c.336 9; 1969 c.692 8; 1973 c.514 1; 1985 c.456 2; 1993 c.447 114; 2007 c.426 6]
Except as may be prescribed by the Director of the Department of Consumer and Business Services under ORS 733.220 (3) for reserves for guaranteed benefits and funds: (1) Amounts allocated to a separate account and accumulations thereon may be invested and reinvested without regard to the requirements and limitations prescribed by ORS 733.510 to 733.780, except as expressly provided for separate accounts under such sections; and (2) The investments in separate accounts shall not be considered in applying the investment limitations applicable to the general investments of the insurer. [1973 c.435 9]
An insurer shall not invest the funds of a separate account so as to have more than 10 percent of the market value of the assets of the account invested in or secured by the stocks, obligations or property of any one person or political subdivision, or invested in a single parcel of real property or any other single investment. This section does not apply to: (1) Funds equaling 25 percent of the market value of the total assets in the separate account; (2) Investments in, or loans upon, the security of the general obligations of a sovereign; or (3) Investments in certificates of deposits insured by the Federal Deposit Insurance Corporation. [1973 c.435 10; 1981 c.472 27; 1999 c.107 17]
An insurer shall not invest the funds of a separate account so as to own or control, under the insurers general and separate accounts in the aggregate, more than 10 percent of the voting power outstanding of any issuer of securities. Securities held in separate accounts, the voting rights in which are exercisable only in accordance with instructions from persons having interests in such accounts, shall not be considered in applying this section. [1973 c.435 11]
The limitations provided in ORS 733.654 and 733.656 do not apply to the investment of separate account funds in the securities of an investment company registered under the federal Investment Company Act of 1940, as amended, if the investments of the investment company comply in substance with ORS 733.654 and 733.656. [1973 c.435 12; 1997 c.249 219]
(1) Funds of an insurer may be invested in a manner not expressly prohibited under ORS 732.325 and 733.780, provided such investments are made in the exercise of the judgment and care under the circumstances then prevailing which investors of prudence, discretion and intelligence exercise in the management of their own affairs not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital. (2) Funds invested under this section shall not exceed the lesser of seven and one-half percent of the insurers assets or the excess of the insurers assets over all liabilities and required capitalization. (3) If the Director of the Department of Consumer and Business Services has reason to believe that loans or investments made pursuant to this section are not adequately secured or are not yielding an income the director may direct the insurer to report under oath the amount of such loans or investments, the security therefor and its market value. [Formerly 738.305; 1979 c.846 2; 1989 c.425 4a]
(1) An insurer may acquire and retain personal property received as a dividend, gift or devise, or pursuant to a lawful plan of merger, consolidation or reorganization or bona fide agreement of bulk reinsurance, or in satisfaction or liquidation of an obligation, or in exchange or part payment for real or personal property previously owned or to protect or enhance such property. (2) An insurer may make purchases or loan sums necessary to protect, preserve or enhance investment property, real or personal, which it is otherwise authorized to acquire or hold. (3) The Director of the Department of Consumer and Business Services shall allow as assets in any determination of the financial condition of the insurer only such property or investments acquired or retained under this section as are consistent with the customary operations of an insurer. [Formerly 738.315]
Funds of a home protection insurer may be invested in tangible personal property held by the insurer for the purpose of performing or providing repairs or replacements under its home protection policies. Funds so invested shall not exceed 25 percent of the assets of the insurer that are allowable in determining its financial condition under the Insurance Code, unless otherwise allowed under rules issued by the Director of the Department of Consumer and Business Services. [1981 c.247 13]
Funds of a title insurer may be invested in its title plant. [1967 c.359 247]
Funds of an insurer may be invested in obligations that are not investment grade as established by the Director of the Department of Consumer and Business Services by rule, but the funds that an insurer may invest under this section shall not exceed 20 percent of the insurers assets. [1989 c.425 2b; 1993 c.447 22]
Funds of a health care service contractor may be invested in all real and personal property used exclusively by the contractor to provide authorized health care services. [1967 c.359 248]
(1) An investment which was legal and proper immediately before June 8, 1967, shall be considered a proper investment and shall be subject to extension or renewal. (2) Eligibility of an investment shall be determined as of the date of its acquisition. [Formerly 738.325]
Except as may be expressly provided to the contrary in ORS 733.510 to 733.780, all investments shall be subject to the qualifications, restrictions and limitations set forth in ORS 733.510 to 733.780. [Formerly 738.333]
(1) Investments and sales or exchanges thereof, except for policy loans of an insurer issuing life insurance policies, shall be approved by the board of directors or a committee thereof charged with the duty of investing the funds of the insurer. (2) Deposits shall be made in banks or banking institutions approved by the board of directors. [Formerly 738.335]
As to each investment, an insurer shall make a written record in permanent form, signed by a person authorized by the board of directors or by a committee thereof charged with the duty of investing the funds. The record shall show the authorization and approval of the investment and in addition shall contain: (1) In the case of mortgage loans: (a) The name of the borrower; (b) The location and legal description of the property; (c) A physical description and the appraised value of the security as determined by a competent and qualified appraiser; and (d) The amount of the loan, rate of interest and terms of repayment. (2) In the case of obligations: (a) The name of the obligor; (b) A description of the security and record of earnings; (c) The amount invested and the rate of interest or dividend; and (d) The maturity and yield based upon the purchase price. (3) In the case of corporate stocks: (a) The name of the issuing corporation; (b) The record of earnings and of dividends paid for the preceding three years for preferred stock and for the preceding five years for common stock; (c) A summary of the financial statement of the corporation as of the end of the preceding fiscal year; (d) The exchange, if any, on which the stock is listed; and (e) The amount invested and the number of shares acquired and held. (4) In the case of real estate, leaseholds or vendors interests under contracts of sale therein: (a) The location and legal description of the property; (b) A physical description and the appraised value of the property and interest therein; (c) The purchase price and terms; (d) The amount of any lien known to be against the property; (e) If of a leasehold, the terms of the outstanding lease; and (f) If a vendors interest under a contract of sale, the terms and status of payments under the contract. (5) In the case of all investments: (a) The amount of any expenses and commissions incurred on account of the investment or loan and by whom and to whom payable if not covered by contracts with mortgage loan representatives or correspondents that are part of the insurers records; and (b) The name of any director, trustee or officer of the insurer, having a direct, indirect or contingent interest in the loan, security or property, or who would derive, directly or indirectly, any benefit therefrom, and the nature of such interest or benefit. [Formerly 738.345; 2005 c.22 488]
After a hearing, the Director of the Department of Consumer and Business Services may by written order require the disposal of an investment which the director finds to be made or retained in violation of the Insurance Code, or of an investment which the director, for good cause, determines to be prejudicial to, and to impair the security of, the stockholders or policyholders of the insurer. [Formerly 738.355]
On loans secured by liens upon real property or leasehold interests therein, the buildings and other improvements located on the premises shall be kept insured against loss or damage from fire in an amount not less than the unpaid balance of the obligation or the insurable value of the property, whichever is the lesser. The fire insurance policy or policies shall be payable to the insurer, or a trustee for its benefit, and continued in force until the loan is repaid or satisfied. Such policy or policies shall be held by the insurer or the trustee, unless the Director of the Department of Consumer and Business Services has determined that a different method of protecting the insurers against loss is satisfactory and has given prior approval of such method to the insurer. [1967 c.359 254; 1969 c.336 10]
(1) An insurer shall not have any combination of investments in or secured by the stocks, obligations, and property of one person, corporation or political subdivision in excess of 10 percent of the insurers assets, nor shall it invest more than 10 percent of its assets in a single parcel of real property or in any other single investment. This subsection does not apply to: (a) Investments in, or loans upon, the security of the general obligations of a sovereign; (b) Policy loans by insurers issuing life insurance policies; (c) Investments by a title insurer in its title plant, or in real property not in excess of 50 percent of the insurers combined capital and surplus; or (d) Investments by a health care service contractor in all real or personal property used exclusively by such contractor to provide authorized health care services or in real property used primarily for its home office. (2) Notwithstanding subsection (1) of this section and subject to approval by the Director of the Department of Consumer and Business Services in writing, a domestic insurer organized before 1950 may invest an amount not exceeding 15 percent of its assets in real property used primarily for its home office. [Formerly 738.375; 1983 c.732 1]
(1) An insurer shall not make investments: (a) Which at the time of purchase or acquisition are not interest-bearing or dividend or income-paying, or are in default in any respect; or (b) From which the insurer is not entitled to receive for its exclusive account and benefit the interest, dividends or income. (2) Subsection (1)(a) of this section shall not apply to property acquired under ORS 733.610, 733.670 or 733.680 if the property is acquired with the intent and expectation that it will be income-producing. (3) An insurer shall not invest its funds in any investment or security found by the Director of the Department of Consumer and Business Services to be designed to evade any prohibition of the Insurance Code. [Formerly 738.385]
As used in this chapter: (1) "Delinquency proceeding" means any proceeding commenced against an insurer pursuant to this chapter for the purpose of liquidating, rehabilitating or conserving the insurer. (2) "Foreign country" means territory not in any state. (3) "General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons. As to specifically encumbered property, "general assets" includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and assets held on deposit for the security or benefit of all policyholders or all policyholders and creditors, in more than a single state, shall be treated as general assets. (4) An insurer is "impaired" when its allowed assets do not exceed its liabilities plus its required capitalization. (5) An insurer is "insolvent" when the insurer is unable to pay its obligations when they are due, or when its allowed assets do not exceed its liabilities. (6) "Insurer" includes: (a) All persons transacting or purporting to transact insurance as insurers in this state; and (b) All persons in process of organization to become insurers. (7) "Receiver" means receiver, rehabilitator, liquidator or conservator, as the context may require. (8) "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow or otherwise, but not including special deposit claims or claims against general assets. "Secured claim" also includes claims which more than four months prior to the commencement of delinquency proceedings in the state of the insurers domicile have become liens upon specific assets by reason of judicial process. (9) "Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets. [Formerly 734.020; 1993 c.447 90]
[1967 c.359 257; renumbered 734.014 in 1989]
As used in this chapter: (1) "Domiciliary state" means the state in which an insurer is incorporated or organized or, in the case of an alien insurer, its state of entry. (2) "Ancillary state" means any state other than a domiciliary state. (3) "Reciprocal state" means any state other than this state in which in substance and effect the provisions of this chapter relating to delinquency proceedings are in force, including provisions requiring that the Director of the Department of Consumer and Business Services or equivalent insurance supervisory official be the receiver of a delinquent insurer and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers. [Formerly 734.050; 1993 c.447 91]
[Formerly 751.010; renumbered 734.018 in 1989]
[1967 c.359 260; renumbered 734.022 in 1989]
(1) For any reason stated in subsection (2) of this section, the Director of the Department of Consumer and Business Services by order may place under supervision: (a) A domestic insurer; or (b) A foreign or alien insurer, if the insurance regulatory official of its state of domicile or entry has asked the director to apply this section and ORS 734.047, 734.051 and 734.055 to the insurer. (2) The director may place an insurer under supervision if upon examination or at any other time the director determines that: (a) The condition of the insurer renders the continuance of its business hazardous to the public or to its insureds. (b) The insurer has refused to permit examination of its books, papers, accounts, records or affairs by the director or any deputy, examiner or employee representing the director. (c) A domestic insurer has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the insurer. (d) The insurer has failed to comply promptly with the applicable financial reporting statutes or rules and any request of the Department of Consumer and Business Services relating thereto. (e) The insurer has failed to observe an order of the director to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus. (f) The insurer is continuing to transact insurance or write business after its certificate of authority has been revoked or suspended by the director. (g) The insurer, by contract or otherwise, has done any of the following unlawfully, in violation of an order of the director or without first having obtained written approval of the director: (A) Totally reinsured its entire outstanding business; or (B) Merged or consolidated substantially its entire property or business with another insurer. (h) The insurer has engaged in any transaction in which it is not authorized to engage under the laws of this state. (i) The insurer has failed to comply with any other order of the director. (j) The insurer has failed to comply with any other applicable provisions of the Insurance Code. (k) The business of the insurer is being conducted fraudulently. (L) The insurer agrees to supervision. (3) If the director determines that one or more conditions set forth in subsection (2) of this section exist, the director may do all of the following: (a) Notify the insurer of the determination of the director. (b) Furnish to the insurer a written list of the requirements to abate the condition or conditions determined to exist. (c) Notify the insurer that it is under the supervision of the director and that the director is applying this section and ORS 734.047, 734.051 and 734.055. (4) The director may act as the supervisor to conduct the supervision and otherwise carry out an order under subsection (1) of this section or may appoint another person as supervisor. (5) The director or the appointed supervisor may prohibit any person from taking any of the following actions during the period of supervision without the prior approval of the director or supervisor: (a) Disposing of, conveying or encumbering any of the insurers assets or its business in force. (b) Withdrawing from any of the insurers bank accounts. (c) Lending any of the insurers funds. (d) Investing any of the insurers funds. (e) Transferring any of the insurers property. (f) Incurring any debt, obligation or liability on behalf of the insurer. (g) Merging or consolidating the insurer with another insurer or other person. (h) Entering into any new reinsurance contract or treaty. (i) Approving new premiums or renewing any policies. (j) Terminating, surrendering, forfeiting, converting or lapsing any insurance policy, certificate or contract, except for nonpayment of premiums due. (k) Releasing, paying or refunding premium deposits, accrued cash or loan values, unearned premiums, or other reserves on any insurance policy, certificate or contract. (L) Making any material change in management. (m) Increasing salaries and benefits of officers or directors. (n) Making or increasing preferential payment of bonuses, dividends or other payments determined by the director to be preferential. (o) Any other action affecting the business or condition of the insurer. (6) The director may apply to any circuit court for any restraining order, preliminary and permanent injunctions and other orders necessary to enforce a supervision order. (7) During the period of supervision, the insurer may file a written request for a hearing to review the supervision or any action taken or proposed to be taken. A request under this subsection shall not suspend the supervision. The insurer must specify in the request the manner in which the action being complained of would not result in improving the condition of the insurer. The hearing shall be held within 30 days after the filing of the request. The director shall complete the review of the supervision or other action and shall take action under subsection (8) of this section if appropriate within 30 days after the record for the hearing is closed. (8) The director shall release an insurer from supervision if the director determines upon hearing that none of the conditions giving rise to the supervision exist. [1989 c.425 6; 1991 c.401 6; 1993 c.447 88]
(1) An insurer placed under supervision must correct, eliminate or remedy the acts, transactions or practices that are the basis for the order of supervision and otherwise comply with the requirements of the Director of the Department of Consumer and Business Services within the period of time allowed by the director, not to exceed 60 days, after the date on which the order is served on the insurer. (2) If the director determines that the conditions giving rise to the supervision still exist at the end of the supervision period established in subsection (1) of this section, the director may extend the period. [1989 c.425 7; 1993 c.447 89]
[1967 c.359 261; renumbered 734.026 in 1989]
During the period of supervision of an insurer, the Director of the Department of Consumer and Business Services may institute rehabilitation or liquidation proceedings, extend the period of supervision or take any other action under the authority of the director with respect to the insurer. [1989 c.425 8]
The Director of the Department of Consumer and Business Services or supervisor on behalf of an insurer under supervision may bring an action for damages against any person who violates any order of the director under ORS 734.043 if the violation reduces the net worth of the insurer or results in loss to the insurer that the insurer would not have suffered otherwise. The director or supervisor may recover damages to the extent of the reduction or loss. [1989 c.425 9]
(1) The Director of the Department of Consumer and Business Services may file a petition with the circuit court requesting an order that: (a) Authorizes the director to seize all or part of the property, books, accounts and other records of a domestic insurer as well as the premises occupied by the insurer for transacting its business; and (b) Enjoins the domestic insurer from disposing of its property and transacting business except as allowed by written consent of the director. (2) The director must include all of the following in the petition under subsection (1) of this section: (a) An allegation that one or more grounds exist that would justify a court order for a rehabilitation or liquidation proceeding against the insurer. (b) An allegation that the interests of policyholders, creditors or the public will be endangered by delay. (c) The contents of the order that the director requests the court to issue. [1989 c.425 10]
[1967 c.359 262; renumbered 734.031 in 1989]
(1) Upon petition by the Director of the Department of Consumer and Business Services under ORS 734.059, the court may issue the requested order immediately, ex parte and without hearing. The court in its order shall specify the duration of the order. The duration of an order shall be a period sufficient to enable the director to ascertain the condition of the insurer. (2) On motion of the director or the insurer against whom an order under this section is issued, or on the courts own motion, the court may hold such hearings from time to time as the court determines are desirable, after such notice as it determines appropriate, and may extend, shorten or modify the terms of the order. (3) The court may vacate an order issued under this section if the court determines that the director has not commenced a rehabilitation or liquidation proceeding within a reasonable time. (4) An order of the court directing a rehabilitation or liquidation proceeding vacates the order issued under this section. (5) Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer. (6) At any time after a court issues an order under this section, the court may direct that notice of the order be given to a person if the court determines both of the following: (a) That the person was not notified of the hearing on the order and did not appear at the hearing. (b) That the interest of the person is or will be substantially affected by the order. [1989 c.425 11]
(1) An insurer against whom an order under ORS 734.059 is directed may petition the court for a hearing and review of the order. (2) Not later than the 15th day after the court receives a petition under subsection (1) of this section, the court shall hold the hearing and review the order. [1989 c.425 12]
[1967 c.359 263; renumbered 734.035 in 1989]
[1967 c.359 264; renumbered 734.039 in 1989]
(1) The circuit court shall have original jurisdiction of delinquency proceedings under this chapter, and any court with jurisdiction is authorized to make all necessary or proper orders to carry out the purposes of this chapter. (2) The venue of delinquency proceedings and proceedings under ORS 734.059 and 734.063 against a domestic insurer and the venue of delinquency proceedings against foreign and alien insurers shall be in the Circuit Court for Marion County. (3) At any time after the commencement of a delinquency proceeding or a proceeding under ORS 734.059 and 734.063 the court may issue an order changing the venue of the proceeding on motion of the Director of the Department of Consumer and Business Services or other interested person if the court finds the proceedings may be more economically and efficiently conducted thereby. [1967 c.359 265; 1989 c.425 13]
Notwithstanding ORS 37.040, the Oregon Receivership Code does not apply to delinquency proceedings under this chapter. [2017 c.358 57] Note: 734.113 was added to and made a part of ORS chapter 734 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Delinquency proceedings pursuant to this chapter shall constitute the sole and exclusive method of rehabilitating, liquidating or conserving an insurer, and no court shall entertain a petition for the commencement of such proceedings, or any other similar procedure, unless the same has been filed in the name of the state on the relation of the Director of the Department of Consumer and Business Services. (2) An appeal shall lie to the Court of Appeals from an order granting or refusing rehabilitation, liquidation, or conservation, and from every order in delinquency proceedings having the character of a final order as to the particular portion of the proceedings embraced therein. [1967 c.359 266; 1979 c.562 33]
(1) The Director of the Department of Consumer and Business Services shall commence a delinquency proceeding by an application to the court for an order directing the insurer to show cause why the director should not have the relief prayed for. (2) The application shall be by petition, verified by the director, setting forth the ground or grounds for the proceeding and the relief demanded. (3) If the court is satisfied from reading the directors petition that the facts therein alleged, if established, would constitute grounds for a delinquency proceeding under this chapter, the court shall issue an order to the insurer to show cause. (4) On the return of the order to show cause, and after a full hearing, the court shall either deny the application or grant the application, together with such other relief as the nature of the case and the interests of the policyholders, creditors, stockholders, members, subscribers or the public may require. (5) After commencement of a delinquency proceeding by the director, orders of the court may thereafter be made for any of the purposes relevant upon application of any interested person. [1967 c.359 267]
(1) Upon application by the Director of the Department of Consumer and Business Services for an order to show cause under ORS 734.130, or at any time thereafter, the court may, without notice, issue an injunction restraining the insurer, its officers, directors, stockholders, members, subscribers, agents, employees and all other persons from the transaction of its business or the waste or disposition of its property until the further order of the court. (2) The court may, at any time during a proceeding under this chapter, issue such other injunctions or orders to prevent any of the following activities: (a) The transaction of further business. (b) The transfer of property. (c) Interference with the receiver or with a delinquency proceeding. (d) Waste of the assets of an insurer. (e) Dissipation and transfer of bank accounts. (f) The institution or further prosecution of any actions or proceedings. (g) The obtaining of preferences, judgments, attachments, garnishments or liens against the insurer, its assets or its policyholders. (h) The levying of execution against the insurer, its assets or its policyholders. (i) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer. (j) The withholding from the receiver of books, accounts, documents or other records relating to the business of the insurer. (k) Any other threatened or contemplated action that might lessen the value of the assets of the insurer or prejudice the rights of policyholders, creditors or shareholders, or the administration of any delinquency proceeding. (3) Notwithstanding any other provision of law, no bond shall be required of the director as a prerequisite for the issuance of any injunction or restraining order pursuant to this section. [1967 c.359 268; 1993 c.447 92]
(1) Each officer, manager, director, trustee, owner, employee or agent of an insurer, and any other person with authority over or in charge of any portion of the insurers affairs, including any person who exercises control directly or indirectly over activities of the insurer through a holding company or other affiliate of the insurer, shall cooperate with the Director of the Department of Consumer and Business Services in any delinquency proceeding or any investigation preliminary to the proceeding. For purposes of this section, cooperation with the director includes at least the following: (a) Replying promptly in writing to any inquiry from the director requesting such a reply; and (b) Making available to the director any books, accounts, documents or other records, information or property of or pertaining to the insurer and in the possession, custody or control of the insurer. (2) A person shall not obstruct or interfere with the director in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto. (3) This section shall not be construed to abridge otherwise existing legal rights, including the right to resist a petition for liquidation or other delinquency proceedings, or other orders. [1993 c.447 94] Note: 734.142 and 734.144 were added to and made a part of ORS chapter 734 by legislative action but were not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) The following persons are entitled to protection under this section: (a) All receivers responsible for the conduct of a delinquency proceeding, including present and former receivers. (b) All employees of the receiver. For purposes of this section, such employees include all present and former special deputies and assistant special deputies appointed by the Director of the Department of Consumer and Business Services and all persons whom the director, special deputies, or assistant special deputies have employed to assist in a delinquency proceeding. Unless designated as special deputies, attorneys, accountants, auditors and other professional persons or firms who are retained by the receiver as independent contractors and their employees are not entitled to protection under this section. (2) The receiver and employees of the receiver shall have official immunity and shall be immune from civil action and liability, both personally and in their official capacities, for any tort claim or demand, whether groundless or otherwise, arising out of any alleged act, error or omission of the receiver or any employee occurring in the performance of their duties. For purposes of this section, "tort" has the meaning given that term in ORS 30.260. (3) The receiver and employees of the receiver shall be indemnified from the assets of the insurer against any tort claim arising out of any alleged act, error or omission of the receiver or any employee occurring in the performance of their duties, whether personally or in the official capacity of the receiver or employee. Any indemnification made under this subsection is an administrative expense of the insurer. (4) The provisions of subsections (2) and (3) of this section do not apply in case of malfeasance in office or willful or wanton neglect of duty. (5) In any legal action in which the receiver is a defendant, the portion of any settlement relating to the alleged act, error or omission of the receiver is subject to the approval of the court before which the delinquency proceeding is pending. The court may not approve the portion of the settlement if it determines: (a) That the claim did not occur in the performance of the receivers duties; or (b) That the claim was caused by malfeasance in office or willful or wanton neglect of duty by of the receiver. (6) This section shall not be construed or applied to deprive the receiver or any employee of any immunity, indemnity, benefits of law, rights or any defense otherwise available. [1993 c.447 95] Note: See note under 734.142.
The Director of the Department of Consumer and Business Services may apply for an order directing the director to rehabilitate a domestic insurer on one or more of the following grounds: (1) The insurer is impaired. (2) The insurer has failed to submit its books, papers, accounts or affairs to the reasonable inspection and examination of the director. (3) Without first obtaining the written consent of the director, the insurer has by contract of reinsurance, or otherwise, transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge, consolidate or reinsure substantially its entire property or business in or with the property or business of any other person, without first having complied with ORS 732.517 to 732.546 and 742.150 to 742.162. (4) The insurer is in such condition that its further transaction of business would be hazardous to its policyholders, creditors, stockholders or the public. (5) The insurer has violated its articles of incorporation, its bylaws, any law of this state or any order of the director. (6) Any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee or other person, has refused to be examined under oath by the director concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact, the insurer has not promptly and effectively terminated the employment and status of the person and all influence of the person on management. (7) The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator or sequestrator or similar fiduciary of the insurer or of its property other than as authorized under the Insurance Code, and the appointment has been made or is imminent, and the appointment might deprive the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings. (8) The insurer has consented to such an order through a majority of its directors, stockholders, members or subscribers. (9) The insurer has failed to pay any obligation to any state or any subdivision thereof or any final judgment rendered against it in any state within 60 days after the judgment became final or within 60 days after time for taking an appeal has expired, or within 60 days after dismissal of an appeal before final determination, whichever date is the later, if the court in which the judgment was entered had jurisdiction over the subject matter. (10) The insurer has had its certificate of authority to transact insurance in this state revoked. (11) There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurers assets, forgery or fraud affecting the insurer or other illegal conduct in, by or with respect to the insurer that if established would endanger assets in an amount threatening the solvency of the insurer. (12) The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee or other person, if the person has been found by the director to be dishonest or untrustworthy in a way affecting the insurers business. (13) Control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons found to be untrustworthy. (14) The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law or within any additional time allowed by the director. [Formerly 738.450; 1993 c.447 96; 1995 c.30 11]
(1) An order to rehabilitate a domestic insurer shall direct the Director of the Department of Consumer and Business Services forthwith to take possession of the property of the insurer and to conduct the business thereof, and to take such steps toward removal of the causes and conditions which have made rehabilitation necessary as the court may direct. (2) If at any time the director deems that further efforts to rehabilitate the insurer would be useless, the director may apply to the court for an order of liquidation under ORS 734.180. (3) The director, or any interested person upon due notice to the director, at any time may apply for an order terminating the rehabilitation proceeding and permitting the insurer to resume possession of its property and the conduct of its business, but no such order shall be granted except after a full hearing. [1967 c.359 270]
The Director of the Department of Consumer and Business Services may apply for an order directing the director to liquidate the business of a domestic insurer, regardless of whether there has been a prior order directing the director to rehabilitate such insurer, upon any of the grounds specified in ORS 734.150, or if the insurer: (1) Has ceased transacting business for a period of one year; (2) Has commenced voluntary liquidation or dissolution, or attempts to commence or prosecute any action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian, or sequestrator under any laws except the Insurance Code; (3) Has not organized or completed its organization and obtained a certificate of authority as an insurer within the time authorized by law; or (4) Is insolvent. [1967 c.359 271; 1993 c.447 97]
(1) An order to liquidate the business of a domestic insurer shall direct the Director of the Department of Consumer and Business Services forthwith to take possession of the property of the insurer, to liquidate its business, to deal with the insurers property and business in the name of the director or in the name of the insurer as the court may direct, and to give notice to all creditors who may have claims against the insurer to present such claims. (2) The director may apply under this chapter for an order dissolving the corporate existence of a domestic insurer: (a) Upon the application of the director for an order of liquidation of such insurer, or at any time after such order has been granted; or (b) Upon the grounds specified in ORS 734.170 (3), regardless of whether an order of liquidation is sought or has been obtained. [Formerly 738.470]
The Director of the Department of Consumer and Business Services may apply for an order directing the director to conserve the assets within this state of a foreign or alien insurer upon any one or more of the following grounds: (1) Any of the grounds specified in ORS 734.150; or (2) That its property has been sequestrated in any jurisdiction. [1967 c.359 273; 1993 c.447 98]
(1) An order to conserve the assets of a foreign or alien insurer shall direct the Director of the Department of Consumer and Business Services forthwith to take possession of the property of the insurer within this state and to conserve it, subject to the further direction of the court. (2) Whenever a domiciliary receiver has been appointed for any foreign or alien insurer in its domiciliary state, the court shall, on application of the director, appoint the director as the ancillary receiver in this state. (3) An order to liquidate the assets in this state of a foreign or alien insurer shall direct the director forthwith to take possession of the property of the insurer within this state and to liquidate it subject to the orders of the court and with due regard to the rights and powers of the domiciliary receiver, as provided in this chapter. [1967 c.359 274]
(1) Whenever under this chapter a receiver is to be appointed in delinquency proceedings for an insurer domiciled in this state, the court shall appoint the Director of the Department of Consumer and Business Services as such receiver. The court shall direct the receiver forthwith to take possession of the property of the insurer and to administer the same under the orders of the court. (2) Any deed or other instrument executed under this chapter shall be valid and effectual for all purposes as though the same had been executed by the person affected by any proceedings under this chapter or by its officers pursuant to the direction of its governing board or authority. The filing or recording of the order directing possession to be taken, or a certified copy thereof, in the office where instruments affecting title to property are required to be filed or recorded shall impart the same notice as would be imparted by a deed, bill of sale or other evidence of title duly filed or recorded. (3) In cases where any real property sold by the director is located in a county other than the county wherein the proceeding is pending, the director shall cause a certified copy of the order of the appointment, or order authorizing or ratifying the sale, to be filed with the recording officer for the county in which the property is located. (4) The director as domiciliary receiver shall be responsible on the official bond of the director for the proper administration of all property coming into the possession or control of the director. The court may at any time require an additional bond from the director or the deputies of the director if deemed desirable for the protection of the property. [Formerly 751.020]
(1) Upon taking possession of the property and business of any person in any proceeding under this chapter, the Director of the Department of Consumer and Business Services shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by the laws of this state for the purpose of rehabilitating, liquidating or conserving the insurer. (2) Upon taking such possession of the property and business of any person, the director as receiver shall: (a) Be vested with the insurers title and interest in and to all assets and property of every kind, both tangible and intangible, except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are prescribed in this chapter for ancillary receivers appointed in this state as to assets located in this state; (b) Possess, in the name of the insurer or in the name of the director, all rights, privileges, powers and authority granted to insurers in this state or otherwise possessed by insurers generally, without regard to any limitations thereon prescribed in the articles or bylaws of such insurer; and (c) Perform and do all acts which the director may deem necessary, advisable or expedient for the accomplishment or in aid of the purpose for which such possession was taken. [1967 c.359 276]
In connection with supervising an insurer under the Insurance Code or conducting delinquency proceedings, the Director of the Department of Consumer and Business Services may appoint one or more special deputy directors to act for the director, and may employ such counsel, clerks, and assistants as the director deems necessary. Unless otherwise provided by the director, a person so appointed is not a state employee solely by reason of such appointment. The compensation of the special deputies, counsel, clerks or assistants and all expenses of supervising the insurer under the Insurance Code or taking possession of a delinquent insurer and conducting delinquency proceedings must be paid out of the funds or assets of the insurer. A special deputy acting within limits the director imposes with respect to supervising an insurer under the Insurance Code or conducting delinquency proceedings has a receivers powers and is subject to a receivers duties. [1967 c.359 277; 2017 c.479 15]
(1) Whenever under this chapter an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this state, the court shall appoint the Director of the Department of Consumer and Business Services as ancillary receiver. The director shall file a petition requesting the appointment: (a) If the director finds that there are sufficient assets of such insurer located in this state to justify the appointment of an ancillary receiver; or (b) If 10 or more persons resident in this state having claims against such insurer file a petition with the director requesting the appointment of such ancillary receiver. (2) The domiciliary receiver of an insurer domiciled in a reciprocal state, shall be vested by operation of law with the title to all the property, contracts and rights of action, and all the books and records of the insurer located in this state, and the domiciliary receiver shall have the immediate right to recover balances due from local insurance producers and to obtain possession of any books and records of the insurer found in this state. The domiciliary receiver shall also be entitled to recover the other assets of the insurer located in this state except that upon the appointment of an ancillary receiver in this state, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this state, and shall pay the necessary expenses of the proceedings. All remaining assets the ancillary receiver shall promptly transfer to the domiciliary receiver. Subject to the provisions of this section the ancillary receiver and the deputies of the ancillary receiver shall have the same powers and be subject to the same duties with respect to the administration of such assets, as a receiver of an insurer domiciled in this state. [Formerly 751.030; 2003 c.364 85]
The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this state to recover any assets of such insurer to which the domiciliary receiver may be entitled under the laws of this state. [1967 c.359 279]
(1) In a delinquency proceeding begun in this state against an insurer domiciled in this state, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings. (2) Controverted claims belonging to claimants residing in reciprocal states may either: (a) Be proved in this state as provided by law; or (b) If ancillary proceedings have been commenced in such reciprocal states, be proved in those proceedings. (3) In the event a claimant elects to prove a claim in ancillary proceedings, if notice of the claim and opportunity to appear and be heard is afforded the domiciliary receiver of this state as provided in ORS 734.270 with respect to ancillary proceedings in this state, the final allowance of such claim by the courts in the ancillary state shall be accepted in this state as conclusive as to its amount, and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within the ancillary state. [Formerly 751.040]
(1) In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against such insurer who reside within this state may file claims either with the ancillary receiver, if any, appointed in this state, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings. (2) Controverted claims belonging to claimants residing in this state may either: (a) Be proved in the domiciliary state as provided by the law of that state; or (b) If ancillary proceedings have been commenced in this state, be proved in those proceedings. (3) In the event that any such claimant elects to prove a claim in this state, the claimant shall file a claim with the ancillary receiver in the manner provided by this chapter for the proving of claims against insurers domiciled in this state, and the claimant shall give notice in writing to the receiver in the domiciliary state, either by registered or certified mail or by personal service at least 40 days prior to the date set for hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any. If the domiciliary receiver, within 30 days after the giving of such notice, shall give notice in writing to the ancillary receiver and to the claimant, either by registered or certified mail or by personal service, of intention to contest such claim, the domiciliary receiver shall be entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim. The final allowance of the claim by the courts of this state shall be accepted as conclusive as to its amount, and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within this state. [Formerly 751.050]
(1) All claims against an insurer, against which delinquency proceedings have been begun, shall set forth in reasonable detail the amount of the claim, or the basis upon which such amount can be ascertained, the facts upon which the claim is based, and the priorities asserted, if any. All such claims shall be verified by the affidavit of the claimant, or someone authorized to act on behalf of the claimant and having knowledge of the facts, and shall be supported by such documents as may be material thereto. (2) All claims filed in this state shall be filed with the receiver, whether domiciliary or ancillary, in this state, on or before the last date for filing as specified in this chapter. (3) After the expiration of any period for filing of claims, the receiver shall report the claims filed within such period to the court, specifying in such report the recommendation of the receiver with respect to the action to be taken thereon. Upon receipt of such report, the court shall fix a time for hearing such claims and shall direct that the claimants or the receiver, as the court shall specify, shall give such notice as the court shall determine to such persons as shall appear to the court to be interested therein. All such notices shall specify the time and place of the hearing and shall concisely state the amount and nature of the claim, the priorities asserted, if any, and the recommendation of the receiver with reference thereto. (4) At the hearing all persons interested shall be entitled to appear and the court shall enter an order allowing, allowing in part, or disallowing the claim. Any such order shall be deemed to be an appealable order. [1967 c.359 282]
(1) In a delinquency proceeding against an insurer domiciled in this state, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of this state. All such claims whether owing to residents or nonresidents shall be given equal priority of payment from general assets regardless of where such assets are located. (2) In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of this state shall be preferred if like claims are preferred by the laws of that state. [1967 c.359 283]
The owners of special deposit claims against an insurer for which a receiver is appointed in this or any other state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of such deposits. If there is a deficiency in any such deposit so that claims secured thereby are not fully discharged therefrom, the claimants may share in the general assets, but such sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit. [1967 c.359 284]
The owner of a secured claim against an insurer for which a receiver has been appointed in this or any other state may surrender the security and file a claim as a general creditor, or the claim may be discharged by resort to the security, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. If the amount of the deficiency has been adjudicated in ancillary proceedings as provided in this chapter, or if it has been adjudicated by a court of competent jurisdiction in proceedings in which the domiciliary receiver has had notice and opportunity to be heard, such amount shall be conclusive; otherwise the amount shall be determined in the delinquency proceeding in the domiciliary state. [Formerly 751.080]
During the pendency of delinquency proceedings in this or any reciprocal state no action or proceeding in the nature of an attachment, garnishment or execution shall be commenced or maintained in the courts of this state against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within four months prior to the commencement of any such delinquency proceeding or at any time thereafter shall be void as against any rights arising in such delinquency proceeding. [1967 c.359 286]
The rights and liabilities of the insurer and of its creditors, policyholders, stockholders, members, subscribers, and all other persons interested in its estate, shall, unless otherwise directed by the court, be fixed as of the date on which the order directing the liquidation of the insurer is filed in the office of the clerk of the court which makes the order, subject to the provisions of ORS 734.380 with respect to the rights of claimants holding contingent claims. [1967 c.359 288]
(1) Any transfer of, or lien upon, the property of an insurer, other than as provided in ORS 734.320 which is made or created within four months prior to the commencement of a delinquency proceeding with the intent of giving to any creditor, or of enabling the creditor to obtain, a greater percentage of the debt than any other creditor of the same class, and which is accepted by such creditor having reasonable cause to believe that such a preference will occur, shall be voidable. (2) Every director, officer, employee, stockholder, member, subscriber, and any other person acting on behalf of such insurer who shall be concerned in any such act or deed and every person receiving thereby any property of such insurer or the benefit thereof, shall be personally liable therefor and shall be bound to account to the Director of the Department of Consumer and Business Services. (3) The director, as receiver in any proceeding under this chapter, may avoid any transfer of, or lien upon, the property of an insurer which any creditor, stockholder, subscriber or member of such insurer might have avoided, and may recover the property so transferred, unless such person was a bona fide holder for value prior to the commencement of the delinquency proceeding. Such property or its value may be recovered from anyone who has received it, except a bona fide holder for value as specified in this subsection. [1967 c.359 289]
Except as provided in ORS 734.310 for secured claims, the claims to be paid in full in delinquency proceedings prior to the payment of any other claims, and the order of payment, shall be: (1) Expenses of administration of the delinquency proceedings and expenses of the Oregon Insurance Guaranty Association or similar organization in another state handling claims in accordance with ORS 734.510 to 734.710; (2) All claims under policies, including third party claims and claims under nonassessable policies for unearned premiums, and all claims by the Oregon Insurance Guaranty Association, the Oregon Life and Health Insurance Guaranty Association or any similar organization in another state for payment of covered claims or contractual obligations; (3) Claims legally due and owing by the insurer to the United States; (4) If the insurer is domiciled in this state, compensation or wages actually owing to salaried employees other than officers of the insurer, for services rendered within three months prior to the commencement of the delinquency proceeding, but not exceeding $2,000 for each such employee; (5) Claims legally due and owing by the insurer to this state; and (6) Claims, including special deposit claims, owing to any person, including this state, that by the laws of this state is entitled to priority. [1967 c.359 290; 1977 c.793 7; 1983 c.223 1; 2001 c.974 3]
No offsets shall be allowed in cases of mutual debts or mutual credits between the insurer and another person in connection with any domestic delinquency proceeding under this chapter, except for cases of policy loans and cases of reinsurance and except for insurance producers balances, excluding unearned return commissions. [1967 c.359 291; 1989 c.425 14; 2003 c.364 86]
(1) A contingent claim against an insurer or a claim based upon a cause of action or suit against an insured of an insurer shall be filed, presented and reported in the same manner and within the same time limitations as provided in this chapter for a noncontingent claim. Such claims shall be allowed to share in a distribution of assets in the same manner as noncontingent claims of the same class and priority, provided that before any such sharing and distribution: (a) If the claim is a contingent claim against the insurer, it becomes an absolute claim either as a result of proof presented or litigation; or (b) If the claim is based upon a cause of action or suit against an insured of the insurer, a judgment is obtained against the insured or it may be reasonably inferred from proof presented that the claimant would be able to obtain such a judgment; in no case, however, shall all of the claims so presented and allowed arising out of a single act of the insured exceed the maximum liability of the insurer under its policy with or affecting the insured. (2) Nothing in subsection (1) of this section shall prevent or bar the Director of the Department of Consumer and Business Services from compromising a disputed claim with the claimant, whether contingent or noncontingent, if such compromise is justified and supported by the facts and circumstances. (3) If full or partial distribution to noncontingent claimants is authorized or directed by the court prior to satisfaction of the requirements of subsection (1)(a) or (b) of this section, with respect to particular claims the director shall retain a sum equal to the amount which would have been paid on the contingent claim if such requirements had then been met. The amount so withheld shall be distributed to the person or persons found by the court to be entitled thereto at such time as the claim is fully established as provided in subsection (1) of this section, or the director is satisfied that the claim is without merit or cannot be so proved or established, or the statute of limitations, if timely asserted, would bar further consideration or recovery thereon. (4) No judgment entered after the date of entry of a liquidation order shall be considered in the liquidation proceedings as evidence of liability or of the amount of damages, and no judgment entered on default or inquest or by collusion after commencement of a delinquency proceeding shall be considered as conclusive evidence in the liquidation proceeding, either of liability or of the amount of damages. [1967 c.359 292]
(1) If upon the granting of an order of liquidation under this chapter, or at any time thereafter during the liquidation proceeding, the insurer shall not be clearly solvent, the court shall, after such notice and hearing as it considers proper, make an order declaring the insurer to be insolvent. Thereupon, regardless of any prior notice which may have been given to creditors, the Director of the Department of Consumer and Business Services shall notify all persons who may have claims against the insurer and who have not filed proper proofs thereof, to present the same to the director, at a place specified in the notice, within four months from the date of the entry of such insolvency order or within such longer time as the court shall prescribe. The last day for filing of proofs of claims shall be specified in the notice. The notice shall be given in a manner determined by the court. (2) Proofs of claims may be filed subsequent to the date specified, but no such claim shall share in the distribution of the assets until all allowed claims, proofs of which have been filed on or before such date, have been paid in full. [1967 c.359 293]
Within three years from the date an order of rehabilitation or liquidation of a domestic mutual insurer or a domestic reciprocal insurer was filed in the office of the clerk of the court by which such order was made, the Director of the Department of Consumer and Business Services may make a report to the court setting forth: (1) The reasonable value of the assets of the insurer; (2) The insurers probable liabilities; and (3) The probable necessary assessment, if any, to pay all claims and expenses in full, including expenses of administration. [1967 c.359 294]
(1) Upon the basis of the report provided for in ORS 734.400, including any amendments thereof, the court, ex parte, may levy one or more assessments against all persons who, as shown by the records of the insurer, were members (in the case of a mutual insurer) or subscribers (in the case of a reciprocal insurer) at any time within one year prior to the commencement of the delinquency proceeding. (2) Such assessment or assessments shall cover the excess of the probable liabilities over the reasonable value of the assets, together with the estimated cost of collection and percentage of uncollectibility thereof. The total of all assessments against any member or subscriber, with respect to any policy, whether levied pursuant to this chapter or pursuant to any other provisions of the Insurance Code, shall be no greater than the amount specified in the policy of the member or subscriber and as limited under the Insurance Code; except that, if the court finds that the policy was issued at a rate of premium below the minimum rate lawfully permitted for the risk insured, the court may determine the upper limit of such assessment on the basis of such minimum rate. (3) No assessment shall be levied against any member or subscriber with respect to any nonassessable policy issued in accordance with the Insurance Code. [1967 c.359 295]
After levy of assessment as provided in ORS 734.410 and upon the filing of a further detailed report by the Director of the Department of Consumer and Business Services, the court shall issue an order directing each member (in the case of a mutual insurer) or each subscriber (in the case of a reciprocal insurer) if the member or subscriber shall not pay the amount assessed against the member or subscriber to the director on or before a day to be specified in the order, to show cause why the member or subscriber should not be held liable to pay such assessment together with costs as set forth in ORS 734.440, and why the director should not have judgment therefor. [1967 c.359 296]
The Director of the Department of Consumer and Business Services shall cause a notice of the assessment order issued under ORS 734.420, which shall set forth a brief summary of the contents of such order, to be: (1) Published in such manner as shall be directed by the court; and (2) Enclosed in a sealed envelope, addressed and mailed, postage prepaid, to each member or subscriber liable thereunder, at the last-known address of the member or subscriber as it appears on the records of the insurer, at least 20 days before the return day of the order to show cause specified in the assessment order. [1967 c.359 297]
(1) On the return day of the order to show cause specified in the assessment order issued under ORS 734.420, if the member or subscriber does not appear and serve verified objections upon the Director of the Department of Consumer and Business Services, the court shall make an order adjudging that such member or subscriber is liable for the amount of the assessment against the member or subscriber, together with $10 costs, and that the director may have judgment against the member or subscriber therefor. (2) If on such return day the member or subscriber shall appear and serve verified objections upon the director, there shall be a full hearing before the court or a referee to hear and determine the matter. The court, after such hearing, shall make an order either negativing the liability of the member or subscriber to pay the assessment or affirming liability to pay the whole or some part thereof, together with $25 costs and the necessary disbursements incurred at such hearing, and directing that the director, in the latter case, may have judgment therefor. [1967 c.359 298; 2003 c.576 221]
As used in ORS 734.510 to 734.710, unless the context requires otherwise: (1) "Association" means the Oregon Insurance Guaranty Association created by ORS 734.550. (2) "Board" means the board of directors of the association. (3) "Controlled insurer" means an insurer 70 percent or more of whose stock is owned by a corporation, or by two or more corporations that are under common ownership. (4)(a) "Covered claim" means an unpaid claim, including a claim for unearned premiums and a claim by the Workers Benefit Fund for payments made pursuant to ORS chapter 656, that arises out of and is within the coverage and limits of an insurance policy to which ORS 734.510 to 734.710 apply and which is in force at the time of the occurrence giving rise to the unpaid claim, made by a person insured under such policy or by a person suffering injury or damage for which a person insured under such policy is legally liable, if: (A) The insurer issuing the policy becomes an insolvent insurer after September 9, 1971; and (B) The claimant or insured is a resident of this state at the time of the occurrence giving rise to the unpaid claim, or the property for which claim arises is permanently located in this state. (b) "Covered claim" does not include: (A) Any amount in excess of the applicable limits of liability provided by an insurance policy to which ORS 734.510 to 734.710 apply; (B) Any amount due any reinsurer, insurer, insurance pool or underwriting association as subrogated recoveries or otherwise; (C) Except for claims arising out of workers compensation policies subject to ORS chapter 656, a claim filed with the association after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer; or (D) Any first party claim by an insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer, provided that an insureds net worth on such date is deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis. (5) "Dividend" means any payment made to the stockholders of a controlled insurer, which payment is directly related to ownership of the stock. (6) "Insolvent insurer" means a member insurer: (a) Authorized to transact insurance in this state either at the time the policy was issued or at the time of the occurrence giving rise to the unpaid claim; (b) Against which a final order of liquidation, with a finding of insolvency, has been entered by a court of competent jurisdiction in the insurers domicile after September 9, 1971; and (c) With respect to which no order, judgment or finding relating to the insolvency of the insurer, whether preliminary or temporary in nature or otherwise, has been issued by a court of competent jurisdiction or by any insurance commissioner, insurance department or similar official or body prior to September 9, 1971, or which was in fact insolvent prior to September 9, 1971, and such de facto insolvency was or should have been known by the chief insurance regulatory official of its domicile. (7) "Member insurer" means an insurer, including a reciprocal insurer, authorized to transact insurance in this state that writes any kind of insurance to which ORS 734.510 to 734.710 apply. (8) "Net direct written premiums" means direct gross premiums written in this state on insurance policies to which ORS 734.510 to 734.710 apply, less return premiums thereon and dividends paid or credited to policyholders on such direct business. "Net direct written premiums" does not include premiums on contracts between insurers or reinsurers. (9) "Plan" means the plan of operation of the association established pursuant to ORS 734.590. [1971 c.616 5; 1977 c.793 8; 2001 c.974 1; 2003 c.576 556]
The purpose of ORS 734.510 to 734.710 is to provide for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, to provide an association to assess the cost of such protection among insurers and to assist in the liquidation of insurers as provided in this chapter. [1971 c.616 2]
ORS 734.510 to 734.710 shall be liberally construed to effect the purposes provided in ORS 734.520. [1971 c.616 3]
ORS 734.510 to 734.710 apply to all kinds of direct insurance except life, health, title, surety, credit, mortgage guaranty, home protection insurance, wet marine and transportation insurance and insurance against the risk of economic loss assumed under a less than fully insured employee health benefit plan whether issued or delivered as health or casualty insurance. [1971 c.616 4; 1977 c.600 2; 1981 c.247 14; 1993 c.649 7]
There is created the Oregon Insurance Guaranty Association. Each insurer that is a member insurer shall become and remain a member of the association as a condition of its authority to transact insurance in this state. The association shall perform its functions in accordance with a plan of operation established under ORS 734.590, and shall exercise its powers through its board of directors. [1971 c.616 6]
The provisions, procedures and requirements of ORS chapter 60 relating to a registered office, registered agent and to service of process, notice and demand shall govern the Oregon Insurance Guaranty Association, except that the Director of the Department of Consumer and Business Services shall be substituted for the Secretary of State as the person with whom all filings shall be made and upon whom, in the circumstances specified by statute, such service may be effected. [1977 c.600 6; 1987 c.846 12]
(1) The board of directors of the Oregon Insurance Guaranty Association shall consist of nine members selected by the member insurers, subject to the approval of the Director of the Department of Consumer and Business Services. The term of each member of the board shall be as specified in the plan, but in no event for longer than four years. A vacancy on the board shall be filled for the remainder of the unexpired term in the same manner as for the initial selection. If the initial selection of members is not made within 60 days after September 9, 1971, the director may select the initial members. (2) In making or approving selections to the board, the director shall consider, among other things, whether member insurers are fairly represented. (3) A member of the board shall receive no compensation for services as a member. However, a member shall be reimbursed by the association for actual and necessary travel and other expenses incurred by the member in the performance of duties. (4) A majority of the members of the board constitutes a quorum for the transaction of business. [1971 c.616 7]
The Oregon Insurance Guaranty Association shall: (1) Be obligated to pay covered claims existing at the time of determination of insolvency of an insurer or arising within 30 days after the determination of insolvency. Except for covered claims arising out of workers compensation policies, such obligation shall include only that amount of each covered claim that is less than $300,000. The association shall pay the full amount of any covered claim arising out of a workers compensation policy, less any amount paid on a covered claim by the Workers Benefit Fund pursuant to ORS chapter 656. In no event shall the association be obligated in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises, or for claims arising after the policy expiration, policy replacement by the insured or policy cancellation caused by the insured. (2) Be the insurer to the extent of the associations obligation on the covered claims and to such extent have all the rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent. (3) Assess member insurers the amounts necessary to pay the expenses incurred by the association in meeting its obligations and exercising its duties and powers under ORS 734.510 to 734.710. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year bears to the net direct written premiums of all member insurers for the preceding calendar year, but shall in no event exceed in any one year two percent of the member insurers net direct written premiums for the preceding calendar year. Each member insurer shall be notified of an assessment not later than the 30th day before the day it is due. If the funds of the association do not provide in any one year an amount sufficient to pay the obligations and expenses of the association, the funds available shall be prorated among the obligations and expenses, and the unpaid portions shall be paid as soon thereafter as funds become available. If an assessment would cause a member insurers financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance, the association may exempt from or defer payment of the assessment, in whole or in part, by the member insurer. However, if the member insurer is a controlled insurer, the association, in making determinations regarding the exemption or deferral of assessments, shall treat all dividends paid during the three calendar years immediately preceding the year in which the assessment is made as assets of the insurer just as if such dividends had not been paid. Each member insurer designated as a servicing facility may set off against any assessment authorized payments made on covered claims and expenses incurred in the payment of such claims by the member insurer in its capacity as a servicing facility. (4) Investigate claims brought against the association and adjust, compromise, settle and pay covered claims to the extent of the associations obligation, and review settlements, releases and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which such settlements, releases and judgments may be properly contested. (5) Reimburse servicing facilities and employees of the association for obligations and expenses incurred and paid in the handling of claims on behalf of the association, and pay all other expenses the association incurs in carrying out ORS 734.510 to 734.710. [1971 c.616 8; 1977 c.793 9; 2001 c.974 9]
Any sums acquired by refund from the Oregon Insurance Guaranty Association that have previously been written off by contributing insurers and offset against corporate excise taxes or fire insurance gross premiums taxes, and are not then needed for purposes of ORS 734.510 to 734.710, shall be paid by the association to the Director of the Department of Consumer and Business Services and deposited with the State Treasurer for credit to the General Fund of this state. [1977 c.793 3; 1985 c.686 1; 1995 c.786 8; 2003 c.568 4]
(1) Each member insurer subject to an Oregon Insurance Guaranty Association assessment pursuant to ORS 734.570 (3) shall recoup the amount of the assessment through a recoupment assessment imposed on net direct written premiums. The member insurer shall fix the amount of the recoupment assessment at an amount sufficient to reimburse the member insurer for the amount of Oregon Insurance Guaranty Association assessments paid by the member insurer. (2) Each member insurer shall annually certify to the Director of the Department of Consumer and Business Services the total amount of recoupment assessments assessed for the year and that the amount assessed does not exceed the amount of Oregon Insurance Guaranty Association assessments imposed and not previously recouped or offset against corporate excise taxes or fire insurance gross premiums taxes. (3) The director may by rule establish a minimum threshold for which a recoupment assessment under subsection (1) of this section need not be made. (4) The Department of Consumer and Business Services, pursuant to rules adopted by the director, may audit member insurer determinations of recoupment assessments. (5) Recoupment assessments shall be separately stated on premium billing statements. Recoupment assessments may not be considered gross premiums for any purpose. [2003 c.568 2]
The Oregon Insurance Guaranty Association may: (1) With the approval of the Director of the Department of Consumer and Business Services, employ or retain such persons or designate such servicing facilities as are necessary to handle claims and perform the other duties of the association. Servicing facilities so designated may be foreign corporations or associations. (2) Borrow funds necessary to carry out ORS 734.510 to 734.710, in such manner as may be specified in the plan. (3) Sue or be sued. (4) Negotiate and become a party to such contracts as are necessary to carry out ORS 734.510 to 734.710. (5) At the end of any calendar year, refund to member insurers, in proportion to an insurers payments to the association, that amount by which the board of directors find that the funds of the association exceed its current claims and expenses plus the liabilities estimated for the coming year. (6) Perform such other acts as are necessary or proper to carry out ORS 734.510 to 734.710. [1971 c.616 9]
(1) The Oregon Insurance Guaranty Association shall submit to the Director of the Department of Consumer and Business Services not later than 90 days after September 9, 1971, a plan of operation, and may thereafter submit such amendments thereto as will provide for the reasonable and equitable exercise of the duties and powers of the association. The plan of operation, and any amendments thereto, shall become effective upon approval in writing by the director. (2) If the association fails to submit a plan that receives the approval of the director as provided in subsection (1) of this section, or if the association thereafter fails to maintain a plan satisfactory to the director, the director shall by rule prescribe a plan of operation that meets the standards provided in subsection (1) of this section. A plan prescribed by the director shall remain in effect until the director by rule provides otherwise. (3) No member insurer shall fail to comply with the currently effective plan of operation. [1971 c.616 10]
A plan of operation shall: (1) Establish procedures for the submission, processing and payment of claims against the Oregon Insurance Guaranty Association. (2) Establish procedures for record keeping, payment of expenses and administration of all other financial affairs of the association. (3) Establish times and places for meetings of the board. (4) Establish procedures for selection of the board of directors and for approval of that selection by the Director of the Department of Consumer and Business Services. (5) Establish a procedure for appeal by a member insurer to the director of final actions or decisions of the association. (6) Establish such other procedures as may be necessary or proper to carry out the duties and powers of the association. [1971 c.616 11]
The Director of the Department of Consumer and Business Services shall: (1) Notify the Oregon Insurance Guaranty Association of the insolvency of an insurer not later than three days after the director receives notice of the determination of insolvency. (2) Upon request of the board, provide the association with a statement of the net direct written premiums of each member insurer for the preceding calendar year. [1971 c.616 12]
The Director of the Department of Consumer and Business Services may: (1) Require the Oregon Insurance Guaranty Association to notify the insureds of an insolvent insurer of the determination of insolvency and of their rights under ORS 734.510 to 734.710. Such notification may be by: (a) Certified or first-class mail to the address of each such person as it last appears in the records of the director or the insurer; (b) Publication in a newspaper of general circulation in this state if the addresses of those persons to be notified is not available from the records of the director or the insurer; or (c) Any combination of the methods referred to in paragraphs (a) and (b) of this subsection that the association considers likely to inform the persons of their rights under ORS 734.510 to 734.710. (2) Revoke the designation of any servicing facility that the director finds is not processing and paying claims in the manner provided in the plan and in ORS 734.510 to 734.710. [1971 c.616 13]
(1) Any person who recovers on a covered claim under ORS 734.510 to 734.710 thereby assigns the rights of the person under the insurance policy to the Oregon Insurance Guaranty Association to the extent of such recovery. Every person who seeks the protection of ORS 734.510 to 734.710 shall cooperate with the association to the same extent such person would have been required to cooperate with the insolvent insurer. The association shall have no cause of action against the insureds of an insolvent insurer for any sums paid, except for those causes of action the insolvent insurer would have had if such sums had been paid by the insolvent insurer. If an insolvent insurer operates on the assessment plan, the payment of claims by the association does not reduce the liability of the insured to the receiver for unpaid assessments. (2) Periodically the association shall file with the receiver statements of the covered claims paid by the association and estimates of anticipated claims against the association. Such filings shall preserve the rights of the association against the assets of the insolvent insurer. (3) The receiver shall be bound by settlements of covered claims by the association or a similar organization in another state. The court having jurisdiction shall grant such claims priority in accordance with ORS 734.360. [1971 c.616 14; 2001 c.974 4]
(1) Not later than 120 days from the date the order of liquidation of a member insurer is filed in the office of the clerk of the court by which the order was made, that insurers receiver shall make application to the court for approval of a proposal to disburse the insurers marshalled assets to the Oregon Insurance Guaranty Association from time to time as those assets become available. (2) A proposal made by a receiver under subsection (1) of this section shall include, but not be limited to, provisions for: (a) Reserving amounts for the payment of those claims described in ORS 734.360; (b) Disbursing the marshalled assets of the insolvent insurer to the association in an amount estimated to be at least equal to the claim payments to be made by the association for which the association could assert a claim against the insolvent insurer; (c) Disbursing the marshalled assets in the amount available when the marshalled assets do not equal the amount of the claim payments to be made by the association for which the association could assert a claim against the insolvent insurer; (d) Securing an agreement from the association to return to the receiver any assets previously disbursed that may be required to pay the claims of secured creditors and the claims described in ORS 734.360; and (e) A complete report by the association to the receiver accounting for all assets disbursed to the association under this section, expenditures made from those assets and any interest earned by the association on those assets. (3) When an insurers receiver intends to make application to a court for approval of a proposal to disburse the insurers marshalled assets to the association under this section, the receiver shall give notice of the application, at least 30 days prior to filing the application with the court, to the insurance supervisory official and the insurance guaranty agency that performs functions similar to that of the association of each state in which the insolvent insurer was authorized. [1977 c.793 2; 2001 c.974 10]
(1) Any person who has a claim under an insurance policy against an insurer other than an insolvent insurer which would also be a covered claim against an insolvent insurer must first exhaust the remedies under such policy. (2) Any person who has a claim that may also be recovered from one or more insurance guaranty agencies that perform functions similar to that of the Oregon Insurance Guaranty Association shall first seek recovery from whichever organization serves the place of residence of the insured, except that: (a) Recovery on first party claims for damage to property with a permanent location shall first be sought from whichever organization serves the location of the property; and (b) Recovery on workers compensation claims shall first be sought from whichever organization serves the residence of the claimant. (3) Any recovery under ORS 734.510 to 734.710 from the association shall be reduced by the amount of any recovery pursuant to subsections (1) and (2) of this section. [1971 c.616 16; 1977 c.793 10]
(1) Whenever the board obtains any information indicating that any member insurer is impaired or in a financial condition hazardous to the policyholders or the public, the board shall so notify the Director of the Department of Consumer and Business Services. (2) The board may request the director to examine any member insurer that the board in good faith believes to be impaired or in a financial condition hazardous to the policyholders or the public. The director shall cause the examination to begin within 30 days after the receipt of any such request. Except as otherwise provided in ORS 734.510 to 734.710, the examination shall be conducted as provided in ORS chapter 731. (3) The director shall report the results of an examination to the board and shall notify the board whenever the director has reasonable cause to believe during an examination that the insurer is impaired or insolvent. The results of the completed examination shall not be released to the board before release to the public. The request for examination shall not be available for public inspection before release of the results of the examination to the public. (4) The board may make such reports and recommendations to the director regarding the insolvency, liquidation, rehabilitation or conservation of member insurers as the board considers appropriate. Any such reports or recommendations are not public records. [1971 c.616 17]
The Oregon Insurance Guaranty Association is subject to regulation by the Director of the Department of Consumer and Business Services in the same manner as an insurer. Not later than March 30 of each year, the board shall submit to the director, in a form approved by the director, a financial report for the preceding year. [1971 c.616 18]
Except for taxes levied on real or personal property, the Oregon Insurance Guaranty Association shall be exempt from the payment of all fees and taxes levied by this state or by any city, county, district or other political subdivision of this state. [1971 c.616 19]
No person shall have a cause of action against any member insurer, the Oregon Insurance Guaranty Association or its employees or servicing facilities, any member of the board, or the Director of the Department of Consumer and Business Services or employees of the director for any action taken by them in carrying out ORS 734.510 to 734.710. [1971 c.616 21]
(1) The insured of an insolvent insurer may not be personally liable for amounts due any reinsurer, insurer, insurance pool or underwriting association as subrogation recoveries or otherwise up to the applicable limits of liability provided by the insurance policy issued by the insolvent insurer. (2) Notwithstanding the provisions of subsection (1) of this section, and except for claims arising out of workers compensation policies subject to ORS chapter 656, the Oregon Insurance Guaranty Association may recover from the following persons the amount of any covered claim paid on behalf of such person under ORS 734.510 to 734.710: (a) Any insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under ORS 734.510 to 734.710; and (b) Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under ORS 734.510 to 734.710. [1977 c.793 4; 2001 c.974 2]
(1) Any pending proceeding in which an insolvent insurer is a party or is obligated to defend a party in any court of this state shall be stayed for 60 days after the date a receiver is appointed by the court to permit the Oregon Insurance Guaranty Association time to prepare a defense in such proceedings. (2) If any covered claim arises from a judgment based on the default of the insolvent insurer or its failure to defend an insured, the association may apply to have such judgment set aside, and, upon such application shall be permitted to defend against the claim on the merits. [1971 c.616 22]
(1) In any delinquency proceeding involving a member insurer, the claims and expenses of the insurer shall be administered as provided in ORS 734.510 to 734.710. (2) Except as otherwise provided in ORS 734.510 to 734.710, ORS 734.014, 734.026 and 734.110 to 734.440 apply to a member insurer. [1971 c.616 23]
ORS 734.750 to 734.890 may be cited as the Oregon Life and Health Insurance Guaranty Association Act. [1975 c.251 2]
As used in ORS 734.750 to 734.890, unless the context requires otherwise: (1) "Account" means one of the three accounts created under ORS 734.800. (2) "Association" means the Oregon Life and Health Insurance Guaranty Association created under ORS 734.800. (3) "Contractual obligation" means any obligation under a covered policy or contract or a certificate under a group policy or contract. (4) "Covered policy" means any policy or contract or a certificate under a group policy or contract to which ORS 734.750 to 734.890 apply. (5) "Disability insurance" means health insurance that provides income payments to an insured wage earner whose income is interrupted due to an accident or illness. "Disability insurance" does not include workers compensation insurance. (6) "Impaired insurer" means a member insurer that is subject to an order of rehabilitation under ORS 734.063 or an order of conservation under ORS 734.200 after September 13, 1975. "Impaired insurer" does not include an insolvent insurer. (7) "Insolvent insurer" means a member insurer that, after September 13, 1975, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency. (8) "Long term care insurance" has the meaning given that term in ORS 743.652. (9)(a) "Member insurer" means any insurer currently authorized to transact in this state any kind of insurance to which ORS 734.750 to 734.890 apply, regardless of whether the insurers authorization to transact insurance was, in the past, suspended, revoked, not renewed or voluntarily withdrawn. (b) "Member insurer" does not include: (A) A hospital or medical service organization, whether for-profit or nonprofit; (B) A health maintenance organization; (C) A fraternal benefit society; (D) A mandatory state pooling plan; (E) A mutual assessment company or other person that operates on an assessment basis; (F) An insurance exchange; or (G) An organization that has a certificate of authority limited to the issuance of charitable gift annuities under ORS 731.038. (10) "Premiums" means direct gross insurance, including annuity, premiums written on covered policies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. "Premiums" does not include premiums on contracts between insurers and reinsurers or any premiums on policies or contracts excluded under ORS 734.790. (11)(a) "Principal place of business" means: (A) For a plan sponsor or a person other than a natural person, the state in which the natural persons who establish policy for the direction, control and coordination of the operations of the entity as a whole primarily exercise that function, as determined by the association after considering the following factors: (i) The state in which the primary executive and administrative headquarters of the entity is located; (ii) The state in which the principal office of the chief executive officer of the entity is located; (iii) The state in which the board of directors or governing body of the entity conducts the majority of its meetings; (iv) The state in which the executive or management committee of the board of directors of the entity conducts the majority of its meetings; and (v) The state from which the management of the overall operations of the entity is directed. (B) For a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the factors set forth in subparagraph (A) of this paragraph. (C) For a plan sponsor of a benefit plan for which more than 50 percent of the participants in the benefit plan are employed in a single state, the state in which those participants are employed. (D) Absent a specific or clear designation of a principal place of business for a plan sponsor of a benefit plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the principal place of business of the association, committee, joint board of trustees or other governing body of the employer or employee organization that has the largest investment in the benefit plan. (b) As used in this subsection, "plan sponsor" means: (A) The employer for a benefit plan established or maintained by a single employer. (B) The employee organization for a benefit plan established or maintained by an employee organization. (C) For a benefit plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees or other governing bodies of the parties that establish or maintain the benefit plan. (12) "Resident" means a person to whom contractual obligations are owed by a member insurer and who resides in this state on the date a court order is entered that determines the member insurer to be an impaired insurer or an insolvent insurer. A person may be a resident of only one state, which in the case of a person other than a natural person shall be its principal place of business. A citizen of the United States who resides in a foreign country, or resides in a United States possession, territory or protectorate that does not have an association similar to the association created under ORS 734.800, shall be considered a resident of the state of domicile of the insurer that issued the policies or contracts. If a person could be covered by the association of another state, whether as an owner, payee, beneficiary or assignee, ORS 734.750 to 734.890 shall be construed with the laws of the other state to result in coverage by only one association. (13) "Structured settlement annuity" means an annuity purchased to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant. (14) "Supplemental contract" means a written agreement entered into for the distribution of proceeds under a life or health insurance policy or an annuity contract. (15) "Unallocated annuity contract" means an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent that any annuity benefits may be guaranteed to an individual under the contract or certificate. [1975 c.251 6; 1987 c.414 180; 1991 c.811 1; 2011 c.142 1]
The purpose of ORS 734.750 to 734.890 is to protect the persons specified in ORS 734.790, subject to certain limitations, against failure in the performance of contractual obligations, under life and health insurance policies and annuity contracts specified in ORS 734.790, because of the impairment or insolvency of the insurer issuing such policies or contracts. To provide this protection: (1) An association of insurers is created to enable the guarantee of payment of benefits and continuation of coverages; (2) Members of the Oregon Life and Health Insurance Guaranty Association are subject to assessment to provide funds to carry out the purpose of ORS 734.750 to 734.890; and (3) The association is authorized to assist the Director of the Department of Consumer and Business Services, in the prescribed manner, in the detection and prevention of insurer impairments or insolvencies. [1975 c.251 3; 1991 c.811 2]
ORS 734.750 to 734.890 shall be liberally construed to effect the purpose provided in ORS 734.770. [1975 c.251 5]
(1) ORS 734.750 to 734.890 provide coverage for policies and contracts specified in subsection (2) of this section to the following persons who are not provided coverage under the laws of another state: (a) To a person who is a resident, if the person is an owner of or a certificate holder under the policy or contract other than a structured settlement annuity or, in the case of an unallocated annuity contract, an employee participating in a governmental retirement plan established under section 401, 403(b) or 457 of the United States Internal Revenue Code or the beneficiaries of each such individual if deceased. (b) To a person who is not a resident, if the person is an owner of or a certificate holder under the policy or contract other than a structured settlement annuity or, in the case of an unallocated annuity contract, an employee participating in a governmental retirement plan established under section 401, 403(b) or 457 of the United States Internal Revenue Code or the beneficiaries of each such individual if deceased. This paragraph applies to a person who is not a resident only if all of the following conditions are met: (A) The insurer that issued the policy or contract must be a member insurer. (B) The state in which the person resides must have an association similar to the Oregon Life and Health Insurance Guaranty Association. (C) The person must not be eligible for coverage by an association in the state in which the person resides, as described in subparagraph (B) of this paragraph, due to the fact that the insurer was not authorized to transact insurance or licensed in that state at the time specified in the states guaranty association law. (c) To a person who, regardless of where the person resides, is a beneficiary, assignee or payee of the persons covered under paragraph (a) or (b) of this subsection. This paragraph does not include a nonresident certificate holder under a group policy or contract. (d) To a person who is a payee under a structured settlement annuity, or to the beneficiary of a payee if the payee is deceased, if the payee: (A) Is a resident, regardless of where the contract owner resides; or (B) Is not a resident, but only under both of the following conditions: (i) The contract owner of the structured settlement annuity is a resident and is not afforded any coverage by an association in another state that is similar to the association created under ORS 734.800, or the contract owner of the structured settlement annuity is not a resident but the insurer that issued the structured settlement annuity is domiciled in this state and the state in which the contract owner resides has an association similar to the association created under ORS 734.800; and (ii) Neither the payee or beneficiary nor the contract owner of the structured settlement annuity is eligible for coverage by the association of the state in which the payee or contract owner resides. (2) Except as limited by ORS 734.750 to 734.890, the association shall provide coverage to the persons specified in subsection (1) of this section for direct nongroup life or health insurance policies or annuity contracts, for certificates under direct group policies or contracts, and for supplemental contracts to any of these, in each case issued by member insurers. (3) ORS 734.750 to 734.890 do not provide coverage for: (a) That portion of any policy or contract not guaranteed by the member insurer or under which the risk is borne by the policyholder or contract owner. (b) Any policy or contract or part thereof assumed by the impaired or insolvent insurer under a contract of reinsurance, other than reinsurance for which assumption certificates have been issued. (c) Any policy or contract issued by a health care service contractor complying with ORS 750.005 to 750.095. (d) Any policy or contract issued by a fraternal benefit society. (e) Any portion of a policy or contract to the extent that the interest rate on which the policy or contract is based, or to the extent that the interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract for the purpose of calculating returns or changes in value: (A) Exceeds, when averaged over the period of four years prior to the date on which the member insurer becomes either an impaired or insolvent insurer under ORS 734.750 to 734.890, whichever occurs first, a rate of interest determined by subtracting four percentage points from Moodys Corporate Bond Yield Average averaged for that same four-year period or for a lesser period if the policy or contract was issued less than four years before the member insurer becomes either an impaired or insolvent insurer under ORS 734.750 to 734.890, whichever occurred first; and (B) Exceeds, on and after the date on which the member insurer becomes either an impaired or insolvent insurer under ORS 734.750 to 734.890, whichever occurs first, the rate of interest determined by subtracting three percentage points from Moodys Corporate Bond Yield Average as most recently available. (f) Any portion of a policy or contract issued to a plan or program of an employer, association or similar entity to provide life insurance, health insurance or annuity benefits to its employees or members to the extent that the plan or program is self-funded or uninsured, including benefits payable by an employer, association or similar entity under any of the following: (A) A multiple employer welfare arrangement as defined in section 3(40) (29 U.S.C. 1002(40)) of the Employee Retirement Income Security Act of 1974, as amended. (B) A minimum premium group insurance plan. (C) A stop-loss group insurance plan. (D) An administrative services only contract. (g) Any portion of a policy or contract to the extent that it provides dividends or experience rating credits or voting rights, or provides that any fees or allowances be paid to any person, including the policyholder or contract owner, in connection with the service to or administration of the policy or contract. (h) Any policy or contract issued in this state by a member insurer at a time that the insurer did not have a certificate of authority to issue the policy or contract in this state. (i) Any unallocated annuity contract issued to or in connection with an employee benefit plan protected under the federal Pension Benefit Guaranty Corporation, regardless of whether the federal Pension Benefit Guaranty Corporation has yet become liable to make any payments with respect to the benefit plan. (j) Any portion of any unallocated annuity contract that is not issued to or in connection with a government retirement plan referred to in subsection (1) of this section, or a government lottery. (k) Any portion of a policy or contract to the extent that the assessments required by ORS 734.815 with respect to the policy or contract are preempted by federal or state law. (L) An obligation that does not arise under the express written terms of the policy or contract issued by the insurer to the policyholder or contract owner, including but not limited to: (A) Claims based on marketing materials; (B) Claims based on side letters, riders or other documents that were issued by the insurer without meeting applicable policy or contract form filing or approval requirements; (C) Misrepresentations of, or regarding, policy or contract benefits; (D) Extracontractual claims, including but not limited to claims related to bad faith in the payment of claims, punitive or exemplary damages or attorney fees or costs; or (E) A claim for penalties or consequential or incidental damages. (m) A contractual agreement that establishes the member insurers obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee that in either case is not an affiliate of the member insurer. (n) Any portion of a policy or contract to the extent that portion provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but the changes in value have not been credited to the policy or contract, or as to which the policyholders or contract owners rights are subject to forfeiture, as of the date on which the member insurer becomes either an impaired or insolvent insurer, whichever occurs first. If the interest or changes in value in a policy or contract are credited less frequently than annually, for purposes of determining the values that have been credited and are not subject to forfeiture under this paragraph, the interest or change in value that is determined by using the procedures specified in the policy or contract shall be credited as if the contractual date of crediting interest or changing value was the date of the impairment or insolvency, whichever is earlier, and may not be subject to forfeiture. (o) Any policy or contract providing any hospital, medical, prescription drug or other health care benefits under Part C or Part D of subchapter XVIII, chapter 7, Title 42 of the United States Code, or any regulations issued under those provisions. (4) As used in this section, "Moodys Corporate Bond Yield Average" means the Monthly Average Corporates as published by Moodys Investors Service, Inc., or any successor thereto. [1975 c.251 4; 1987 c.414 181; 1991 c.811 3; 2011 c.142 2; 2013 c.698 13]
(1) There is created a nonprofit legal entity to be known as the Oregon Life and Health Insurance Guaranty Association. All member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under the plan of operation established and approved under ORS 734.820, and shall exercise its powers through a board of directors established under ORS 734.805. For purposes of administration and assessment, the association shall maintain three accounts: (a) The health insurance account, composed of the following subaccounts: (A) The disability insurance subaccount; (B) The long term care insurance subaccount; and (C) The major medical and all other health insurance subaccount; (b) The life insurance account; and (c) The annuity account. (2) The association shall come under the immediate supervision of the Director of the Department of Consumer and Business Services and shall be subject to the applicable provisions of the insurance laws of this state. [1975 c.251 7; 2011 c.142 3]
(1) The board of directors of the Oregon Life and Health Insurance Guaranty Association shall consist of not less than five nor more than nine members who represent member insurers, serving terms as established in the plan of operation. The members of the board shall be selected by member insurers, subject to the approval of the Director of the Department of Consumer and Business Services. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the Director of the Department of Consumer and Business Services. To select the initial board of directors, and initially organize the association, the Director of the Department of Consumer and Business Services shall give notice to all member insurers of the time and place of the organizational meeting. In determining voting rights at the organizational meeting each member insurer shall be entitled to one vote in person or by proxy. If the board of directors is not selected within 60 days after notice of the organizational meeting, the Director of the Department of Consumer and Business Services may appoint the initial members. (2) In approving selections or in appointing members to the board, the Director of the Department of Consumer and Business Services shall consider, among other things, whether all member insurers are fairly represented. (3) Members of the board of directors may be reimbursed from the assets of the association for expenses incurred by them as members of the board, but members of the board may not otherwise be compensated by the association for their services. [1975 c.251 8; 2011 c.142 4]
(1) If a member insurer is an impaired insurer, the Oregon Life and Health Insurance Guaranty Association, in its discretion and subject to any conditions imposed by the association and approved by the Director of the Department of Consumer and Business Services, other than those that impair the contractual obligations of the impaired insurer, may: (a) Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured, any or all of the covered policies of the impaired insurer. (b) Provide such moneys, pledges, notes, loans, guarantees or other means as are proper to implement paragraph (a) of this subsection and ensure payment of the contractual obligations of the impaired insurer pending action under paragraph (a) of this subsection. (2) If a member insurer is an insolvent insurer, the association, in its discretion and subject to the approval of the director, shall take either of the following steps: (a)(A) Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured, the covered policies of the insolvent insurer; (B) Ensure payment of the contractual obligations of the insolvent insurer; and (C) Provide such moneys, pledges, notes, loans, guarantees or other means as are reasonably necessary to discharge such duties. (b) Provide benefits and coverages in accordance with the following provisions: (A) For life and health insurance policies and annuity contracts, the association shall ensure that the payment of benefits for premiums, except for terms of conversion and renewability, under the replacement coverage provided by the association is identical to the payment of benefits for premiums that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred: (i) With respect to group policies and contracts, not later than the earlier of the next renewal date under those policies or contracts or 45 days, but in no event less than 30 days, after the date on which the association becomes obligated with respect to the policies or contracts. (ii) With respect to nongroup policies and contracts, if any, not later than the earlier of the next renewal date under those policies or contracts or one year, but in no event less than 30 days, after the date on which the association becomes obligated with respect to the policies or contracts. (B) The association shall make diligent efforts to provide a 30-day notice of the termination of the benefits provided under subparagraph (A) of this paragraph to all known insureds or annuitants for nongroup policies and contracts, or to group policyholders or contract owners with respect to group policies and contracts. (C) For nongroup life and health insurance policies and annuities covered by the association, the association shall make substitute coverage available to each known insured or annuitant, or owner if other than the insured or annuitant. For an individual formerly insured or formerly an annuitant under a group policy who is not eligible for replacement group coverage, the association shall make available substitute coverage on an individual basis in accordance with the provisions of subparagraph (D) of this paragraph, if the insureds or annuitants had a right under law or under the terminated policy or annuity to convert coverage to individual coverage or to continue an individual policy or annuity that was already in force until a specified age or for a specified time, during which the insurer had no right to make changes unilaterally in any provision of the policy or annuity or had a right to make changes only to premiums or to classes of risk. (D) In providing the substitute coverage required under subparagraph (C) of this paragraph, the association: (i) May offer either to reissue the terminated coverage or to issue an alternative policy. (ii) Shall offer alternative or reissued policies without requiring evidence of insurability. (iii) May not impose any waiting period or exclusion that would not have applied under the terminated policy. (iv) May reinsure any alternative or reissued policy. (E) Any alternative policy adopted by the association must: (i) Be approved by the Director of the Department of Consumer and Business Services and the court. The association may adopt alternative policies of various types for future issuance without regard to any particular impairment or insolvency. (ii) Contain at least the minimum statutory provisions required in this state and provide benefits that are not unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates adopted by the association. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but may not reflect any changes in the health of the insured after the original policy was last underwritten. (iii) Provide coverage of a type similar to that of the policy issued by the insolvent insurer, as determined by the association. (F) If the association elects to reissue terminated coverage at a premium rate that is different from the premium rate that was charged under the terminated policy, the premium rate shall be set by the association, in accordance with the amount of insurance provided and the age and class of risk, and be subject to approval by the Director of the Department of Consumer and Business Services and the court. (G) The associations obligations with respect to coverage under any policy of the insolvent insurer or under any reissued or alternative policy shall cease on the date on which the coverage or policy is replaced by another similar policy by the policyholder, the insured or the association. (H) When proceeding under this subsection with respect to a policy or contract that carries a guaranteed minimum interest rate, the association shall ensure the payment or crediting of a rate of interest consistent with the provisions of ORS 734.790 (3). (3) Nonpayment of premiums within 31 days after the date required under the terms of any guaranteed, assumed, alternative or reissued policy or contract or substitute coverage shall terminate the associations obligations under the policy, contract or substitute coverage under ORS 734.750 to 734.890 with respect to the policy, contract or substitute coverage, except with respect to any claims incurred or any net cash surrender value or net cash withdrawal value that may be due in accordance with the provisions of ORS 734.750 to 734.890. (4) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the association. At the request of the liquidator of an insolvent insurer, the association shall provide a report to the liquidator regarding any premium collected by the association. The association is liable for unearned premiums due to policyholders or contract owners arising after the entry of the order. (5) The protection provided by ORS 734.750 to 734.890 does not apply where any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this state. (6)(a) In carrying out its duties under subsection (2) of this section, the association may impose permanent policy liens or contract liens in connection with any guaranteed, assumption or reinsurance agreement, if the court considering the lien finds that the amounts that can be assessed under ORS 734.750 to 734.890 are less than the amounts needed to ensure full and prompt performance of the insolvent insurers contractual obligations or that the economic or financial conditions affecting member insurers are sufficiently adverse to render the imposition of policy or contract liens to be in the public interest, and approves the specific policy liens or contract liens to be used. (b) In carrying out its duties under subsection (2) of this section, the association may request that there be imposed temporary moratoriums or liens on payments of cash values and policy loans or temporary moratoriums on the right to withdraw funds held in conjunction with the policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan values, and such temporary moratoriums and liens may be imposed if they are approved by the court. In addition, in the event of a temporary moratorium or moratorium charge imposed by the court on payment of cash values or policy loan values, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loan values and other rights by the association for the period of the temporary moratorium or moratorium charge that is imposed by the court, except for claims that are covered by the association to be paid in accordance with a hardship procedure that is established by the liquidator or rehabilitator and approved by the court. (7) If the association fails to act as required in subsection (2) of this section within a reasonable time, the director shall have the powers and duties of the association under ORS 734.750 to 734.890 with respect to insolvent insurers. (8) The association may render assistance and advice to the director, upon request of the director, concerning rehabilitation, payment of claims, continuance of coverage or the performance of other contractual obligations of any impaired or insolvent insurer. (9) The association shall have standing to intervene or appear before any court or agency in this state having jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under ORS 734.750 to 734.890 or with jurisdiction over any person or property against which the association has rights through subrogation or otherwise. Such standing shall extend to all matters germane to the powers and duties of the association including, but not limited to, proposals for reinsuring, modifying or guaranteeing the covered policies of the impaired or insolvent insurer and the determination of the covered policies and contractual obligations. The association may also appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise. (10)(a) Any person receiving benefits under ORS 734.750 to 734.890 shall be considered to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy to the association to the extent of the benefits received because of ORS 734.750 to 734.890, whether the benefits are payments of or on account of contractual obligations or continuation of coverage. The association may require an assignment to the association of such rights by any payee, policyholder, contract owner, beneficiary, insured or annuitant as a condition precedent to the receipt of any rights or benefits conferred by ORS 734.750 to 734.890 upon such person. The association shall be subrogated to these rights against the assets of any impaired or insolvent insurer. (b) The subrogation rights of the association under this subsection shall have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under ORS 734.750 to 734.890. (c) In addition to the rights set forth in paragraphs (a) and (b) of this subsection, the association may exercise any common law rights of subrogation or any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or to the policyholder or contract owner, beneficiary or payee of a policy or contract with respect to the policy or contract. In the case of a structured settlement annuity, these rights include but are not limited to any rights of the policyholder or contract owner, beneficiary or payee of the annuity, to the extent of benefits received under ORS 734.750 to 734.890, against a person originally or by succession responsible for the losses arising from the personal injury relating to the annuity or payment therefor, with the exception of a person responsible solely by reason of serving as an assignee in respect of a qualified assignment under section 130 of the federal Internal Revenue Code. (d) If the provisions of this subsection are determined by a court to be invalid or ineffective with respect to any person or claim for any reason, the association shall reduce the amount payable by the association with respect to the related covered obligations by the amount realized by any other person with respect to the person or claim that is attributable to the policies or contracts covered by the association. (e) If the association provides benefits with respect to a covered obligation and a person recovers amounts to which the association has rights as described in this subsection, the person shall pay to the association the portion of the recovery attributable to the policies or contracts covered by the association. (11) The contractual obligations of the impaired or insolvent insurer for which the association becomes or may become liable may not exceed the least of: (a) The contractual obligations for which the impaired or insolvent insurer is liable or would have been liable if it were not an impaired or insolvent insurer, unless such obligations are reduced as permitted by subsection (6) of this section; (b) With respect to any one life, regardless of the number of policies or contracts: (A) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance. (B) $100,000 in health insurance benefits other than basic hospital, medical and surgical insurance, major medical insurance, disability insurance or long term care insurance, including any net cash surrender and net cash withdrawal values. (C) $300,000 in disability insurance benefits. (D) $300,000 in long term care insurance benefits. (E) $500,000 in basic hospital, medical and surgical insurance or major medical insurance. (F) $250,000 in the present value of annuity benefits, including any net cash surrender and net cash withdrawal values; (c) With respect to each payee of a structured settlement annuity or the beneficiary of the payee if deceased, $250,000 in the present value of annuity benefits, in the aggregate, including any net cash surrender and net cash withdrawal values; or (d) $250,000 in the present value of annuity benefits, in the aggregate, including any net cash surrender and net cash withdrawal values, with respect to each individual participating in a governmental retirement plan established under section 401, 403(b) or 457 of the United States Internal Revenue Code covered by an unallocated annuity contract or the beneficiaries of each such individual if deceased. (12) The association may not be liable for more than: (a) $300,000 in benefits, in the aggregate, with respect to any one life under subsection (11)(b), (c) and (d) of this section, with the exception of benefits under subsection (11)(b)(E) of this section, in which case the aggregate liability of the association may not exceed $500,000 with respect to any one life. (b) With respect to one policyholder of multiple nongroup policies of life insurance, regardless of whether the policyholder is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or other persons, $5 million in benefits, regardless of the number of policies and contracts held by the policyholder. (13) The limitations set forth in subsections (11) and (12) of this section are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the associations obligations under ORS 734.750 to 734.890 may be met by the use of assets attributable to covered policies or reimbursed to the association under its subrogation and assignment rights. (14) In performing its obligations to provide coverage under ORS 734.750 to 734.890, the association is not required to guarantee, assume, reinsure or perform, or cause to be guaranteed, assumed, reinsured or performed, any contractual obligation of the impaired or insolvent insurer or contract owner under a covered policy that does not materially affect the economic values or economic benefits of the covered policy or contract. (15) The association may: (a) Enter into such contracts as are necessary or proper to carry out the provisions and purposes of ORS 734.750 to 734.890. (b) Sue or be sued, including taking any legal actions necessary or proper for recovery of any unpaid assessments under ORS 734.815 and to settle claims or potential claims against the association. (c) Borrow money to effect the purposes of ORS 734.750 to 734.890. Any notes or other evidence of indebtedness of the association not in default shall be legal investments for member insurers and may be carried as admitted assets. (d) Employ or retain such persons as are necessary to handle the financial transactions of the association, and to perform such other functions as become necessary or proper under ORS 734.750 to 734.890. (e) Negotiate and contract with any liquidator, rehabilitator, conservator or ancillary receiver to carry out the powers and duties of the association. (f) Take such legal action as may be necessary to avoid payment of improper claims. (g) Exercise, for the purposes of ORS 734.750 to 734.890 and to the extent approved by the director, the powers of a member life or health insurer, but in no case may the association issue policies other than those issued to perform the contractual obligations of the impaired or insolvent insurer. (h) Organize itself as a corporation or other legal form permitted by the laws of this state. (i) Request information from a person seeking coverage from the association to aid the association in determining its obligations under ORS 734.750 to 734.890 with respect to that person. (j) Take any other necessary or appropriate action to discharge its duties and obligations and to exercise its powers under ORS 734.750 to 734.890. (16) The duties and powers of the association described in this section are in addition to any other duties and powers of the association described in ORS 734.750 to 734.890. (17)(a) Within 180 days after the date of the order of liquidation, the association may succeed to the rights and obligations of the ceding member insurer that relate to policies or annuities covered, in whole or in part, by the association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association. Any such assumption shall be effective as of the date of the order of liquidation. The election shall be effected by the association sending written notice, return receipt requested, to the affected reinsurers. (b) To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and in order to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer shall make available upon request to the association as soon as possible after commencement of formal delinquency proceedings copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether such contracts should be assumed, and notices of any defaults under the reinsurance contracts or any known event or condition which with the passage of time could become a default under the reinsurance contracts. (c) For any reinsurance contracts assumed by the association under paragraphs (a) and (b) of this subsection: (A) The association is responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and shall be responsible for the performance of all other obligations to be performed after the date of the order of liquidation, related to policies or annuities covered by the reinsurance contract, in whole or in part, by the association. The association may charge policies or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and shall provide notice and an accounting of those charges to the liquidator. (B) The association is entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies or annuities covered, in whole or in part, by the association. Upon receipt of any such amounts, the association shall pay the beneficiary under the policy or annuity on account of which the amounts were paid a portion of the amount equal to the lesser of: (i) The amount received by the association; or (ii) The amount received by the association that is in excess of the amount equal to the benefits paid by the association on account of the policy or annuity minus the amount retained by the insurer applicable to the loss or event. (C) Within 30 days following the associations election, the association and each reinsurer shall calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies or annuities covered, in whole or in part, by the association. The calculation shall give full credit to all items paid by the insurer or its receiver or by the reinsurer prior to the election date. The reinsurer shall pay the receiver any amounts due for losses or events prior to the date of the order of liquidation, subject to any setoff for premiums unpaid for periods prior to that date, and the association or the reinsurer shall pay any remaining balance due to one another. The reinsurer and the association shall make such payments within five days after the completion of the calculation of the net balance due under each reinsurance contract. Any disputes over the amounts due to the association or the reinsurer shall be resolved by arbitration according to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due the association under subparagraph (B) of this paragraph, the receiver shall remit the amounts to the association as promptly as practicable. (d) If the association, or the receiver on the associations behalf, within 60 days after the election date pays the unpaid premiums due for periods both before and after the election date that relate to policies or annuities covered, in whole or in part, by the association, the reinsurer may not terminate the reinsurance contracts for failure to pay premiums insofar as the reinsurance contracts relate to policies or annuities covered, in whole or in part, by the association, and may not set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the association, against amounts due to the association. (e)(A) During the period from the date of the order of liquidation until the election date or, if the election date does not occur, 180 days after the date of the order of liquidation: (i) Neither the association nor the reinsurer shall have any rights or obligations under reinsurance contracts that the association has the right to assume under paragraph (a) of this subsection, whether for periods prior to or after the date of the order of liquidation; and (ii) The reinsurer, the receiver and the association shall, to the extent practicable, provide to each other data and records that are reasonably requested. (B) After the association has elected to assume a reinsurance contract, the parties rights and obligations shall be governed by paragraph (a) of this subsection. (f) If the association does not elect to assume a reinsurance contract by the election date under paragraph (a) of this subsection, the association shall have no rights or obligations, for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract. (g) When policies or annuities, or covered obligations related to policies or annuities, are transferred to an assuming insurer, the association may also transfer reinsurance on the policies or annuities for contracts assumed under paragraph (a) of this subsection, subject to the following: (A) Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred may not cover any new policies of insurance or annuities in addition to those transferred; (B) The obligations described in paragraph (a) of this subsection shall no longer apply with respect to matters arising after the effective date of the transfer; and (C) The transferring party shall give notice in writing, return receipt requested, to the affected reinsurer not less than 30 days before the effective date of the transfer. (h) The provisions of this subsection shall supersede any other provision of law or any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver or any other person. The receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contract with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to applicable setoff provisions. (i) Except as otherwise provided in this subsection, nothing in this section shall: (A) Alter or modify the terms and conditions of any reinsurance contract; (B) Abrogate or limit any rights of any reinsurer to claim that the reinsurer is entitled to rescind a reinsurance contract; (C) Grant a policyholder, contract owner or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract; (D) Limit or affect the associations rights as a creditor of the estate against the assets of the estate; or (E) Apply to reinsurance agreements covering property or casualty risks. (18) The board of directors of the association may exercise reasonable business judgment to determine the means by which the association is to provide the benefits under ORS 734.750 to 734.890 in an economical and efficient manner. (19) If the association has arranged or offered to provide the benefits of ORS 734.750 to 734.890 to a covered person under a plan or arrangement that fulfills the associations obligations under this section, the person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement. (20) Venue in a suit against the association arising under ORS 734.750 to 734.890 shall be in the Circuit Court for Marion County. (21) In carrying out its duties in connection with guaranteeing, assuming or reinsuring policies or contracts under this section, the association may, subject to approval of the court, issue substitute coverage for a policy or contract that provides an interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract for the purpose of calculating returns or changes in value by issuing an alternative policy or contract in accordance with all of the following provisions: (a) In lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for a fixed interest rate, payment of dividends with minimum guarantees, or a different method for calculating interest or changes in value. (b) There is no requirement for evidence of insurability, waiting period or other exclusion that would not have applied under the original policy or contract. (c) The alternative policy or contract is substantially similar to the original policy or contract in all other material terms. [1975 c.251 9; 1991 c.811 4; 2010 c.26 1; 2011 c.142 5; 2019 c.13 67]
(1) For the purpose of providing the funds necessary to carry out the powers and duties of the Oregon Life and Health Insurance Guaranty Association, the board of directors shall assess the member insurers, separately for each account, at such time and for such amounts as the board finds necessary. The board shall collect the assessments after 30 days written notice to the member insurers before payment is due. (2) There shall be two assessments, as follows: (a) Class A assessments shall be made for the purpose of meeting administrative and legal costs and other general expenses whether or not related to a particular impaired or insolvent insurer. (b) Class B assessments shall be made to the extent necessary to carry out the powers and duties of the association under ORS 734.810 with regard to an impaired or insolvent insurer. (3)(a) The amount of any class A assessment shall be determined by the board and may be made on a pro rata or other basis. If pro rata, the board may provide that the class A assessment be credited against future class B assessments. An assessment on another basis may not exceed $300 per member insurer in any one calendar year. The amount of any class B assessment shall be allocated for assessment purposes among the accounts in the proportion that the premiums received by the impaired or insolvent insurer on the policies covered by each account, for the last calendar year preceding the assessment in which the impaired or insolvent insurer received premiums, bears to the premiums received by such insurer for such calendar year on all covered policies. (b) Class B assessments for each account shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies covered by each account for the three most recent calendar years for which information is available preceding the year in which the insurer became impaired or insolvent, as the case may be, bears to such premiums received on business in this state for such calendar years by all assessed member insurers. (c) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer may not be made until necessary to implement the purposes of ORS 734.750 to 734.890. Classification of assessments under subsection (2) of this section and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. (4) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated or deferred, in whole or in part, the amount by which such assessment is abated or deferred shall be assessed against the other member insurers. (5) A member insurer may not be required to pay assessments in any one calendar year exceeding two percent of the insurers premiums in this state on the policies covered by the account. If a member insurers total assessment cannot be collected in any one year because of this limitation, the remaining amount due shall be collected from the insurer in future years. (6) The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future losses. (7) It shall be proper for any member insurer, in determining its premium rates and policyowner dividends for any kind of insurance within the scope of ORS 734.750 to 734.890, to consider the amount reasonably necessary to meet its assessment obligations under ORS 734.750 to 734.890. (8) The association shall issue to each insurer paying an assessment under ORS 734.750 to 734.890, other than a class A assessment, a certificate of contribution in a form prescribed by the Director of the Department of Consumer and Business Services for the amount so paid. All outstanding certificates shall be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the insurer in its financial statement as an asset in such form and for such amount, if any, and period of time as the director may approve. (9) The association may assess and collect interest on the amount of an assessment owed by a member insurer that fails to pay the assessment when due. The annual rate that may be charged under this subsection may not exceed the rate established by the director by rule. [1975 c.251 10; 1991 c.811 5; 2011 c.142 6]
(1)(a) The Oregon Life and Health Insurance Guaranty Association shall maintain on file with the Director of the Department of Consumer and Business Services a plan of operation and shall submit any amendments thereto necessary or suitable to ensure the fair, reasonable and equitable administration of the association. Amendments to the plan shall become effective upon approval in writing by the director. (b) If the association fails to submit suitable amendments to the plan, the director shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to implement the provisions of ORS 734.750 to 734.890. Such rules shall continue in force until modified by the director or superseded by amendments submitted by the association and approved by the director. (2) All member insurers shall comply with the plan of operation. (3) The plan of operation shall, in addition to requirements enumerated elsewhere in ORS 734.750 to 734.890: (a) Establish procedures for handling the assets of the association. (b) Establish the amount and method of reimbursing members of the board of directors. (c) Establish regular places and times for meetings of the board of directors. (d) Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors. (e) Establish the procedures whereby selections for the board of directors will be made and submitted to the director. (f) Establish any additional procedures for assessments under ORS 734.815. (g) Contain additional provisions necessary or proper for the execution of the powers and duties of the association. (h) Establish procedures for removing a member of the board of directors for cause, including removing a board member who represents a member insurer when the member insurer becomes either an impaired or insolvent insurer. (i) Include a policy and procedures for addressing a conflict of interest. (4) The plan of operation may provide that any or all powers and duties of the association, except those under ORS 734.810 (15)(c) and 734.815, may be delegated to a corporation, association or other organization which performs or will perform functions similar to those of the association, or its equivalent, in two or more states. Such corporation, association or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any function of the association. A delegation under this subsection shall take effect only with the approval of both the board of directors and the director, and may be made only to a corporation, association or organization which extends protection not substantially less favorable and effective than that provided by ORS 734.750 to 734.890. [1975 c.251 11; 1991 c.811 6; 2011 c.142 7]
In addition to the duties and powers enumerated elsewhere in ORS 734.750 to 734.820 and 734.830 to 734.890: (1) The Director of the Department of Consumer and Business Services shall: (a) Upon request of the board of directors, provide the Oregon Life and Health Insurance Guaranty Association with a statement of the premiums in the appropriate states for each member insurer. (b) When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time. Notice to the impaired insurer shall constitute notice to its shareholders, if any. The failure of the insurer to promptly comply with such demand shall not excuse the association from the performance of its powers and duties under ORS 734.750 to 734.890. (2) The director may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative the director may levy a forfeiture on any member insurer which fails to pay an assessment when due. Such forfeiture shall not exceed five percent of the unpaid assessment per month, but no forfeiture shall be less than $100 per month. (3) Any action of the board of directors or the association may be appealed to the director by any member insurer if such appeal is taken within 30 days of the action being appealed. Any final action or order of the director shall be subject to judicial review in a court of competent jurisdiction. (4) The liquidator, rehabilitator or conservator of any impaired insurer may notify all interested persons of the effect of ORS 734.750 to 734.890. [1975 c.251 12]
To aid in the detection and prevention of insurer impairments and insolvencies: (1) The board of directors shall, upon majority vote, notify the Director of the Department of Consumer and Business Services of any information indicating any member insurer may be an impaired insurer or insolvent insurer. (2) The board of directors may, upon majority vote, request that the director order an examination of any member insurer which the board in good faith believes to be an impaired or insolvent insurer. The director may conduct such examination. The examination may be conducted as a National Association of Insurance Commissioners examination or may be conducted by such persons as the director designates. The cost of such examination shall be paid by the Oregon Life and Health Insurance Guaranty Association and the examination report shall be treated as are other examination reports in this state. In no event shall the examination report be released to the board of directors of the association prior to its release to the public, but this shall not excuse the director from the obligation to comply with subsection (3) of this section. The director shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the director but it shall not be open to public inspection prior to the release of the examination report to the public and shall be released at that time only if the examination discloses that the examined insurer is an impaired insurer or insolvent insurer. (3) The director shall report to the board of directors when the director has reasonable cause to believe that any member insurer examined at the request of the board of directors may be an impaired insurer or insolvent insurer. (4) The board of directors may, upon majority vote, make reports and recommendations to the director upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer. Such reports and recommendations shall not be considered public records. (5) The board of directors may, upon majority vote, make recommendations to the director for the detection and prevention of insurer impairments or insolvencies. (6) The board of directors shall, at the conclusion of any insurer impairment or insolvency in which the association carried out its duties under ORS 734.750 to 734.890 or exercised any of its powers under ORS 734.750 to 734.890, prepare a report on the history and causes of such impairment or insolvency, based on the information available to the association, and submit such report to the director. [1975 c.251 13]
(1) A member insurer may offset against its corporate excise tax liabilities to this state an assessment described in ORS 734.815 (8), at the rate of 20 percent of the amount of such assessment for each of the five calendar years following the year in which such assessment was paid. In the event a member insurer should cease doing business, all uncredited assessments may be credited against its premium or corporate excise tax liabilities for the year it ceases doing business. (2) Any sums acquired by refund pursuant to ORS 734.815 (6) from the Oregon Life and Health Insurance Guaranty Association which have theretofore been written off by contributing insurers and offset against premium or corporate excise taxes as provided in subsection (1) of this section, and are not then needed for purposes of ORS 734.750 to 734.890, shall be paid by the association to the Director of the Department of Consumer and Business Services and deposited by the director with the State Treasurer for credit to the General Fund of this state. [1975 c.251 14; 1995 c.786 9] Note: Section 50, chapter 913, Oregon Laws 2009, provides: Sec. 50. An offset is not allowed under ORS 734.835 if the first tax year for which the credit would otherwise be allowed begins on or after January 1, 2028. [2009 c.913 50; 2015 c.701 13; 2021 c.525 16]
(1) Nothing in ORS 734.750 to 734.890 shall be construed to reduce the liability for unpaid assessments of the insureds on an impaired or insolvent insurer operating under a plan with assessment liability. (2) Records shall be kept of all negotiations and meetings in which the Oregon Life and Health Insurance Guaranty Association or its representatives are involved to discuss the activities of the association in carrying out its powers and duties under ORS 734.810. Records of such negotiations or meetings shall be made public only upon the termination of a liquidation, rehabilitation or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. Nothing in this subsection shall limit the duty of the association to render a report of its activities under ORS 734.850. (3) For the purpose of carrying out its obligations under ORS 734.750 to 734.890, the association shall be considered to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the association is entitled as subrogee pursuant to ORS 734.810 (10). All assets of the impaired or insolvent insurer attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by ORS 734.750 to 734.890. "Assets attributable to covered policies," as used in this subsection, is that proportion of the assets which the reserves that should have been established for such policies bear to the reserves that should have been established for all policies of insurance written by the impaired or insolvent insurer. (4) As a creditor of the impaired or insolvent insurer as established in subsection (3) of this section and consistent with the provisions of ORS 731.648, the association and other similar associations shall be entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse it, as a credit against the contractual obligations of the association as set forth in ORS 734.810. If the liquidator has not, within 120 days of a final determination of insolvency of an insurer by the court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the association may apply to the court for approval of the associations own proposal to disburse those assets. (5)(a) Prior to the termination of any liquidation, rehabilitation or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders and policyholders of the insolvent insurer and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such insolvent insurer. In such a determination, consideration shall be given to the welfare of the policyholders of the continuing or successor insurer. (b) No distribution to stockholders, if any, of an impaired or insolvent insurer shall be made until and unless the total amount of valid claims of the association for funds expended in carrying out its powers and duties under ORS 734.810 with respect to such insurer have been fully recovered by the association. (6)(a) If an order for liquidation or rehabilitation of an insurer domiciled in this state has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation, subject to the limitations of paragraphs (b), (c) and (d) of this subsection. (b) No such dividend shall be recoverable if the insurer shows that, when paid, the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations. (c) Any person who was an affiliate that controlled the insurer at the time the distributions were paid shall be liable up to the amount of distributions the person received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions the person would have received if they had been paid immediately. If two persons are liable with respect to the same distributions, they shall be jointly and severally liable. (d) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer. (e) If any person liable under paragraph (c) of this subsection is insolvent, all its affiliates that controlled it at the time the dividend was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate. [1975 c.251 15; 1991 c.811 7; 2011 c.142 8]
The Oregon Life and Health Insurance Guaranty Association shall be subject to examination and regulation by the Director of the Department of Consumer and Business Services. The board of directors shall submit to the director, not later than May 1 of each year, a financial report for the preceding calendar year in a form approved by the director, and a report of its activities during the preceding calendar year. [1975 c.251 16]
The Oregon Life and Health Insurance Guaranty Association shall be exempted from payment of all fees and all taxes levied by this state or any of its political subdivisions, except taxes levied on real property. [1975 c.251 17]
There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, the Oregon Life and Health Insurance Guaranty Association or its agents or employees, members of the board of directors, or the Director of the Department of Consumer and Business Services or the representatives of the director, for any action taken by them in the performance of their powers and duties under ORS 734.750 to 734.890. The immunity provided under this section shall extend to the participation in any organization of one or more other state associations of similar purposes and to any such organization and its agents or employees. [1975 c.251 18; 2011 c.142 9]
All proceedings in which an insolvent insurer is a party in any court in this state shall be stayed 180 days from the date an order of liquidation, rehabilitation or conservation is final to permit proper legal action by the Oregon Life and Health Insurance Guaranty Association on any matters germane to its powers or duties. As to judgment under any decision, order, verdict or finding based on default the association may apply to have such judgment set aside by the same court that made the judgment, and shall be permitted to defend against such suit on the merits. [1975 c.251 19; 2011 c.142 10]
No insurer or insurance producer shall make, publish, disseminate, circulate or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement which uses the existence of the Oregon Life and Health Insurance Guaranty Association for the purpose of sales, solicitation or inducement to purchase any form of insurance covered by the Oregon Life and Health Insurance Guaranty Association Act. This section shall not apply however to the Oregon Life and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance or to public service institutional advertisements by individual insurers. [1975 c.251 20; 2003 c.364 87]
As used in ORS 735.005 to 735.145, unless the context requires otherwise: (1) "Association" means the Oregon FAIR Plan Association created by ORS 735.045. (2) "Board" means the board of directors of the association. (3) "Essential property insurance" means insurance against direct loss to property as defined and limited in standard fire policies and extended coverage indorsements thereon, as approved by the Director of the Department of Consumer and Business Services, and insurance against the perils of vandalism and malicious mischief. "Essential property insurance" does not include automobile insurance or insurance on such types of manufacturing risks as may be excluded by the director. (4) "Inspection bureau" means the person or persons designated by the association with the approval of the director to make inspections as required under ORS 731.418, 733.010 and 735.005 to 735.145 and to perform such other duties as may be authorized by the association. (5) "Service insurer" means any insurer designated as such by the board. (6) "Member insurer" means an insurer authorized to transact insurance in this state that writes any kind of essential property insurance. (7) "Net direct written premiums" means direct gross premiums written in this state on insurance policies to which ORS 735.005 to 735.145 apply, less return premiums thereon and dividends paid or credited to policyholders on such direct business. "Net direct written premiums" does not include premiums on contracts between insurers or reinsurers. (8) "Plan" means the plan of operation of the association established pursuant to ORS 735.085. [1971 c.321 5; 1979 c.818 2]
The purpose of ORS 735.005 to 735.145 is: (1) To assure stability in the property insurance market for certain property located in this state. (2) To assure the availability of essential property insurance to the owners of insurable property. (3) To encourage maximum use, in obtaining essential property insurance, of the normal insurance market provided by authorized insurers. (4) To provide for the equitable distribution among authorized insurers of the responsibility for insuring certain insurable property for which essential property insurance cannot be obtained through the normal insurance market by the establishment of the Oregon FAIR Plan Association. [1971 c.321 2]
ORS 735.005 to 735.145 shall be liberally construed to effect the purpose provided in ORS 735.015. [1971 c.321 3]
ORS 735.005 to 735.145 apply only to essential property insurance on domestic risks. [1971 c.321 4]
There is hereby created the Oregon FAIR Plan Association. Each insurer that is a member insurer shall become and remain a member of the association as a condition of its authority to transact insurance in this state. The association shall perform its functions in accordance with a plan of operation established pursuant to ORS 735.085, and shall exercise its powers through its board of directors. [1971 c.321 6]
(1) The board of directors of the Oregon FAIR Plan Association shall consist of five members selected by the member insurers, subject to the approval of the Director of the Department of Consumer and Business Services, and four persons selected by the Governor, one of whom shall be an insurance producer holding an appointment as an Oregon insurance producer of a member insurer. Of the other three persons appointed by the Governor, one shall be a resident of a county of over 400,000 population and none shall have been an employee or insurance producer of a member insurer. The term of each member shall be as specified in the plan, but in no event for longer than four years. A vacancy on the board shall be filled for the remainder of the unexpired term in the same manner as for the initial selection. (2) In making or approving selections to the board, the Director of the Department of Consumer and Business Services shall consider among other things whether member insurers are fairly represented. (3) A member of the board shall receive no compensation for services as a member. However, a member shall be reimbursed from the assets of the association for actual and necessary travel and other expenses incurred by the member in the performance of duties. (4) A majority of the members of the board constitutes a quorum for the transaction of business. [1971 c.321 7; 1979 c.818 2a; 2003 c.364 88]
(1) The Oregon FAIR Plan Association shall: (a) Have authority on behalf of its members to arrange for the issuance of property insurance policies by service insurers and to reinsure any of those policies in whole or in part and to cede such reinsurance, subject to the plan. (b) Assess member insurers the amounts necessary to pay the expenses incurred by the association in meeting its obligations and exercising its duties and powers under ORS 735.005 to 735.145. (2) Except as provided in subsection (3)(a) and (b) of this section, the assessment of each member insurer for a particular calendar year shall be in the proportion that the net direct written premiums of the member insurer for the second preceding calendar year bears to the net direct written premiums of all member insurers for the second preceding calendar year. Each member insurer shall be notified of an assessment not later than the 30th day before the day it is due. If the funds of the association do not provide in any one year an amount sufficient to pay the expenses of the association, the funds available shall be prorated among the expenses and the unpaid portion shall be paid as soon thereafter as funds become available. If an assessment would cause a member insurers financial statement to reflect an amount of surplus less than the minimum amount required for a certificate of authority by any jurisdiction in which the member insured is authorized to transact insurance, the association may, in whole or in part, exempt the member insurer from payment of the assessment or defer payments. (3)(a) The maximum assessment of a member insurer for any calendar year shall be two percent of the insurers net direct written premiums for the second preceding calendar year. (b) The minimum assessment of a member insurer for any calendar year shall be $50. (4) Reimburse inspection bureaus, service insurers and employees of the association for expenses incurred in the inspection or insuring of property on behalf of the association, and pay all other expenses the association incurs in carrying out the provisions of ORS 735.005 to 735.145. (5) Undertake a continuing public education program in cooperation with member insurers and insurance producers to assure that the plan receives adequate attention. (6) Undertake a continuing education program to advise the public of the steps which may be taken to make property more insurable against crime, personal liability and the perils named in ORS 735.005 (3). [1971 c.321 8; 1979 c.818 3; 2003 c.364 89]
The Oregon FAIR Plan Association may: (1) With the approval of the Director of the Department of Consumer and Business Services, employ or retain such persons and designate such inspection bureaus and service insurers as are necessary to handle applications, inspect and insure property and perform the other duties of the association. (2) Borrow funds as necessary to carry out ORS 735.005 to 735.145 in such manner as may be specified in the plan. (3) Sue or be sued. (4) Negotiate and become a party to such contracts as are necessary to carry out ORS 735.005 to 735.145. (5) At the end of any calendar year, refund to member insurers, in proportion to each insurers payments to the association, the amount by which the board of directors finds that the funds of the association exceed its current liabilities plus the liabilities estimated for the coming year. (6) Perform such other acts as are necessary or proper to carry out ORS 735.005 to 735.145. [1971 c.321 9]
(1) The Oregon FAIR Plan Association shall submit to the Director of the Department of Consumer and Business Services, not later than September 7, 1971, a plan of operation, and may thereafter submit such amendments thereto as will provide for the reasonable and equitable exercise of the duties and powers of the association. The plan of operation, and any amendments thereto, shall become effective upon approval in writing by the director. (2) If the association fails to submit a plan that receives the approval of the director as provided in subsection (1) of this section, or if the association after such approval fails to maintain a plan satisfactory to the director, the director shall by rule prescribe a plan of operation that meets the standards provided in subsection (1) of this section. A plan prescribed by the director shall remain in effect until the director by rule provides otherwise. (3) No member insurer shall fail to comply with the currently effective plan. [1971 c.321 10]
The plan shall: (1) Establish procedures for the submission and processing of applications for insurance and the payment of claims for losses. (2) Establish procedures for record keeping, payment of other expenses and administration of all other financial affairs of the Oregon FAIR Plan Association. (3) Establish times and places for meetings of the board. (4) Establish procedures for selection of members of the board and for approval of such selections by the Director of the Department of Consumer and Business Services. (5) Establish a procedure for appeal to the director of final actions or decisions of the association. (6) Establish such other procedures as may be necessary or proper to carry out the duties and powers of the association. (7) Provide that the association shall file periodically with the director statements of the insurance provided through the association and estimates of anticipated claims against the association. [1971 c.321 11; 1979 c.818 4]
The Oregon FAIR Plan Association is subject to regulation by the Director of the Department of Consumer and Business Services in the same manner as an insurer, to the extent determined by the director to be necessary to carry out the purpose of ORS 735.005 to 735.145. Not later than March 30 of each year the board shall submit to the director, in a form approved by the director, a financial report for the preceding calendar year. [1971 c.321 12]
Except for taxes levied on real or personal property, the Oregon FAIR Plan Association shall be exempt from the payment of all fees and taxes levied by this state or by any city, county, district or other political subdivision of this state. [1971 c.321 13]
No person shall have a cause of action against the Oregon FAIR Plan Association or its employees or servicing facilities, any member of the board, or the Director of the Department of Consumer and Business Services or the employees of the director for any action taken by them in carrying out ORS 735.005 to 735.145. [1971 c.321 16]
As used in ORS 735.150 to 735.190: (1)(a) "Affiliate" means a business entity that, because of common ownership, common control, common operation or common management, is in the same corporate system as a parent or a member organization. (b) For purposes of this subsection, "common ownership, common control, common operation or common management" means that two or more business entities are owned, controlled, operated or managed by the same person or group of persons with: (A) Direct or indirect ownership of 80 percent or more of the outstanding voting stock of the stock corporation for a captive insurer that is a stock corporation; (B) Direct or indirect ownership of 80 percent or more of the surplus and the voting power of the mutual corporation for a captive insurer that is a mutual corporation; or (C) Direct or indirect ownership by the same member or members of 80 percent or more of the membership interests in the limited liability company for a captive insurer that is a limited liability company. (2) "Alien captive insurer" means an insurer: (a) Formed to transact insurance for a parent or affiliate of the insurer; and (b) Licensed under the laws of a nation other than the United States that imposes statutory or regulatory standards: (A) On a business entity transacting insurance in the other nation; and (B) In a form acceptable to the Director of the Department of Consumer and Business Services. (3) "Association" means a legal association of two or more persons that has been in continuous existence for at least one year if the association or its member organizations: (a) Own, control, or hold with power to vote, all of the outstanding voting securities of an association captive insurer incorporated as a stock insurer; (b) Have complete voting control over an association captive insurer incorporated as a mutual insurer; or (c) Have complete voting control over an association captive insurer formed as a limited liability company. (4) "Association captive insurer" means a business entity that insures the risks of: (a) A member organization of the association; (b) An affiliate of a member organization of the association; or (c) The association. (5) "Branch captive insurer" means an alien captive insurer that holds a certificate of authority from the Director of the Department of Consumer and Business Services to transact insurance in this state through a business division with a principal place of business in this state. (6) "Branch operation" means a business operation of a branch captive insurer in this state. (7) "Captive insurer" means any of the following that is formed or holds a certificate of authority issued under ORS 735.150 to 735.190: (a) A pure captive insurer; (b) A branch captive insurer; (c) An association captive insurer; or (d) A captive reinsurer. (8) "Captive reinsurer" means a reinsurer that is: (a) Formed or holds a certificate of authority under ORS 735.150 to 735.190; (b) Wholly owned by a qualifying reinsurer parent company; and (c) A stock corporation. (9) "Controlled unaffiliated business" means a business entity: (a) That is not in the same corporate system as a parent or the parents affiliate but has a contractual relationship with a parent or affiliate; and (b) Whose risks are managed by a pure captive insurer in accordance with rules adopted by the Director of the Department of Consumer and Business Services under ORS 735.154. (10) "Foreign captive insurer" means an insurer: (a) Formed to transact insurance for a parent or affiliate of the insurer; and (b) Licensed under the laws of another state that imposes statutory or regulatory standards: (A) On a business entity transacting insurance in the other state or jurisdiction; and (B) In a form acceptable to the Director of the Department of Consumer and Business Services. (11) "Member organization" means a person that belongs to an association. (12) "Parent" means a person that directly or indirectly owns, controls, or holds with power to vote, more than 50 percent of: (a) The outstanding voting securities of a pure captive insurer; or (b) The pure captive insurer, if the pure captive insurer is formed as a limited liability company. (13) "Pure captive insurer" means a business entity that insures risks of a parent or affiliate of the business entity. (14)(a) "Qualifying reinsurer parent company" means an accredited reinsurer in this state that has: (A) A consolidated GAAP net worth of not less than $500 million; and (B) Complies with the consolidated debt to total capital ratio established by rule by the Director of the Department of Consumer and Business Services. (b) For purposes of this subsection "consolidated GAAP net worth" means the consolidated shareholders equity determined in accordance with generally accepted accounting principles for reporting to the United States Securities and Exchange Commission. [2012 c.84 2] Note: 735.150 to 735.190 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 735 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) The provisions of the Insurance Code cited in ORS 735.150 to 735.190 apply to captive insurers. In addition, the provisions of the Insurance Code set forth in ORS chapter 731 relating to administration of the insurance laws apply to captive insurers to the extent not inconsistent with the express provisions of ORS 735.150 to 735.190. (2) In addition to the provisions of the Insurance Code set forth in subsection (1) of this section, ORS 705.137 and 705.139 apply to captive insurers. [2012 c.84 3] Note: See note under 735.150.
The Director of the Department of Consumer and Business Services may adopt rules for the administration of ORS 735.150 to 735.190. [2012 c.84 4] Note: See note under 735.150.
All documents, materials and other information in the possession of the Department of Consumer and Business Services under ORS 735.150 to 735.190 are confidential and subject to public disclosure only as provided in ORS 705.137. [2012 c.84 5] Note: See note under 735.150.
(1)(a) When permitted by its articles of incorporation or its charter and bylaws, a captive insurer may apply to the Director of the Department of Consumer and Business Services for a certificate of authority to transact any class of insurance. (b) Notwithstanding paragraph (a) of this subsection: (A) A pure captive insurer may not insure a risk other than a risk of its parent or affiliate or a controlled unaffiliated business. (B) An association captive insurer may not insure a risk other than a risk of: (i) An affiliate; (ii) A member organization of its association; or (iii) An affiliate of a member organization of its association. (C) A captive insurer may not provide workers compensation insurance, life insurance, health insurance or any personal property or personal casualty line of insurance, including but not limited to personal motor vehicle insurance coverage and homeowners insurance, and any component of such coverage. (D) A captive insurer may not accept or cede reinsurance except as provided in ORS 735.168. (2) To transact insurance in this state, a captive insurer must: (a) Obtain from the director a certificate of authority that authorizes the captive insurer to transact insurance in this state; (b) Appoint a resident registered agent to accept service of process and to otherwise act on behalf of the captive insurer in this state; and (c)(A) Hold at least once each year in this state a board of directors meeting; and (B) Maintain in this state: (i) The principal place of business of the captive insurer; or (ii) In the case of a branch captive insurer, the principal place of business for the branch operations of the branch captive insurer. (3) In the case of a captive insurer formed as a corporation, if the registered agent cannot be found with reasonable diligence at the registered office of the captive insurer, the director is the agent of the captive insurer upon whom process, notice or demand may be served. (4)(a) An applicant captive insurer formed as a corporation shall file with the director: (A) Certified copies of the articles of incorporation or the charter and bylaws of the corporation; (B) A statement under oath of the president and secretary of the corporation showing the financial condition of the corporation; and (C) Any other statement or document required by the director as adopted by rule. (b) In addition to the other information required by this subsection, an applicant captive insurer shall file with the director evidence of: (A) The amount and liquidity of the assets of the applicant captive insurer relative to the risks to be assumed by the applicant captive insurer; (B) The adequacy of the expertise, experience and character of the individual who will manage the applicant captive insurer; (C) The overall soundness of the plan of operation of the applicant captive insurer; (D) The adequacy of the loss prevention programs for any parent or member organization of the applicant captive insurer; and (E) Any other factor the director adopts by rule and considers relevant in ascertaining whether the applicant captive insurer is able to meet the policy obligations of the applicant captive insurer. (5)(a) A captive insurer shall pay to the department nonrefundable fees established by the director by rule for: (A) Examining, investigating and processing the captive insurers application for issuance of a certificate of authority; (B) Obtaining a certificate of authority for the year the director issues a certificate of authority to the captive insurer in an amount not less than $5,000; and (C) Renewing a certificate of authority in an amount not less than $5,000. (b) The fees a captive insurer pays to the Department of Consumer and Business Services for obtaining or renewing a certificate of authority are in lieu of any payment of premium assessment on receipt of premium by the captive insurer. Fees for obtaining or renewing a certificate of authority may be increased by the department by rule and may be scaled on the basis of premiums the captive insurer collects in any given year. (c) The director may retain legal, financial and examination services from outside the department to perform any functions described in ORS 735.150 to 735.190 and may charge the applicant captive insurer the reasonable cost of services performed. (6) If the director is satisfied that the documents and statements filed by the applicant captive insurer meet the requirements of ORS 735.150 to 735.190, the director may issue a certificate of authority that authorizes the captive insurer to transact insurance in this state. (7) A certificate of authority issued under this section expires annually and must be renewed by December 31 of each year beginning with the year following the year that the original certificate was issued. (8) Upon approval of the director, a foreign or alien captive insurer may become a domestic captive insurer by complying with all of the requirements of the Insurance Code relative to the organization and licensing of a domestic captive insurer of the same or equivalent type in this state and by filing with the director certified copies of the insurers articles of association, charter or other organizational document, together with any appropriate amendments adopted in accordance with the laws of this state bringing those articles of association, charter or other organizational document into compliance with the laws of this state. After complying with these requirements, the captive insurer is entitled to the necessary or appropriate certificates and licenses to continue transacting insurance in this state and is subject to the authority and jurisdiction of this state. In connection with this redomestication, the director may waive any requirements for public hearings. It is not necessary for a captive insurer redomesticating into this state to merge, consolidate, transfer assets or otherwise engage in any other reorganization, other than as specified in this section. [2012 c.84 6] Note: See note under 735.150.
A captive insurer may assume a business name only if consistent with the provisions of ORS 731.430. [2012 c.84 7] Note: See note under 735.150.
(1) To qualify for authority to transact insurance in this state, a captive insurer shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than: (a) $250,000 for a pure captive insurer. (b) $750,000 for an association captive insurer incorporated as a stock insurer or as a mutual insurer. (c) $300,000,000 for a captive reinsurer. (2) In accordance with ORS 731.554 (6), for the protection of the public, the Director of the Department of Consumer and Business Services may require a captive insurer to possess and maintain capital or surplus, or any combination thereof, in excess of the amount otherwise required under this section. (3) The capital and surplus required under subsections (1) and (2) of this section may be in the form of: (a) Cash or cash equivalent; or (b) An irrevocable letter of credit issued by an insured institution, as described in ORS 731.510, and approved by the director. (4)(a) Except as provided in paragraph (d) of this subsection, a branch captive insurer, as security for the payment of liabilities attributable to branch operations, must establish and maintain, through its branch operations, a trust fund funded by an irrevocable letter of credit or other asset approved by the director. (b) The trust fund established under this subsection shall be for the benefit of United States policyholders and United States ceding insurers under insurance policies issued or reinsurance contracts issued or assumed. (c) The amount of the security required under this subsection must be equal to or greater than: (A) The capital and surplus required under this section applicable to the line of business written by the captive insurer; and (B) The net reserves on the insurance policies or reinsurance contracts described in this subsection, including: (i) Case basis loss and allocated loss adjustment expense reserves; (ii) Losses and allocated loss adjustment expense amounts incurred but not reported; and (iii) Unearned premiums with regard to insurance transacted by branch operations. (d) In accordance with ORS 731.510, the director may permit a branch captive insurer that is required to post security for loss reserves on insurance transacted by its reinsurer to reduce the funds in the trust fund established under this section by the same amount as the security posted if the security remains posted with the reinsurer. (5) A captive insurer may pay dividends or make distributions if all the following requirements are met: (a) Submission of a report to the director listing all dividends and distributions within five business days following the declaration, and not less than 10 business days prior to payment, of the dividends and distributions, commencing from the date of receipt of the report by the director. (b) The report required under paragraph (a) of this subsection must demonstrate that the combined capital and surplus of the captive insurer following any dividend or distribution is reasonable in relation to the captive insurers outstanding liabilities and adequate to the captive insurers financial needs. (c) A captive insurer may pay dividends or distributions only from earned surplus unless the director gives prior approval for payment from another source. [2012 c.84 8] Note: See note under 735.150.
(1) A pure captive insurer must be incorporated as a stock insurer with the capital of the pure captive insurer divided into shares and held by the shareholders of the pure captive insurer. (2) An association captive insurer may be: (a) Incorporated as a stock insurer with the capital of the association captive insurer divided into shares and held by the shareholders of the association captive insurer; or (b) Incorporated as a mutual insurer without capital stock, with a governing body elected by the member organizations of the association captive insurer. (3) The requirements of ORS 732.085 apply to the incorporators of a captive insurer. (4) Any person desiring to organize a captive insurer must first file an application with the Director of the Department of Consumer and Business Services for a permit to organize the captive insurer. The applicant shall pay the applicable fee to the director at the time the application is filed. The application shall be on forms provided by the director and shall be signed by the applicants and verified. The form shall specify information about the following: (a) The character, reputation, financial responsibility and purposes of the proposed incorporators; (b) The character, reputation, financial responsibility, insurance experience and business qualifications of the proposed officers and directors and the proposed managers; (c) Any information provided to the Department of Consumer and Business Services in the application for a certificate of authority or that is maintained in the departments files; and (d) Other aspects the director considers advisable. (5) The director shall approve an application for a permit to organize a captive insurer only if the director finds that: (a) The application is complete; (b) The documents filed with the application are in the proper form; (c) The proposed financial structure is adequate; (d) The character, reputation, financial responsibility and general fitness of the persons named in the application or otherwise found to be associated with or have an interest in the proposed insurer are such as to command the confidence of the public; (e) The proposed directors are collectively competent to assume responsibility for the management and general policies and procedures of the captive insurer; (f) The proposed management, collectively, possess the requisite general business ability and experience in the business of insurance of the class or classes specified in the application; and (g) No fact is then known to the director that would prevent the proposed insurer from completing its organization and receiving a certificate of authority to transact insurance as a captive insurer. (6) To the extent not otherwise inconsistent with the provisions of ORS 735.150 to 735.190, ORS 732.095, 732.105 and 732.115 apply for the filing of the articles of incorporation of a captive insurer. (7)(a) An alien captive insurer applying to the director for a certificate of authority to act as a branch captive insurer shall obtain from the director a certificate finding that: (A) The nation of an alien captive insurer imposes statutory or regulatory standards, in a form acceptable to the director, on captive insurers transacting insurance in that nation; and (B) After considering the character, reputation, financial responsibility, insurance experience and business qualifications of the officers and directors of the alien captive insurer, and other relevant information, the establishment and maintenance of the branch operations will promote the general good of this state. (b) After the director issues a certificate under paragraph (a) of this subsection, the alien captive insurer may register with the department to do business in this state as a branch captive insurer. (8) The capital stock of a captive insurer incorporated as a stock insurer may not be issued at less than par value. (9) At least one-quarter of the members of the board of directors of a captive insurer formed as a corporation shall be residents of this state. (10)(a) A captive insurer formed as a corporation under ORS 735.150 to 735.190 has the privileges of and is subject to ORS 735.150 to 735.190 and ORS chapters 60 and 732. (b) If a conflict exists between a provision of ORS chapters 60 and 732 and a provision of ORS 735.150 to 735.190, ORS 735.150 to 735.190 shall control. (c) Except as provided in paragraph (d) of this subsection, the provisions of ORS 735.150 to 735.190 pertaining to a merger, consolidation, conversion, mutualization and redomestication apply in determining the procedures to be followed by a captive insurer in carrying out any of the transactions described in those provisions. (d) The director may waive or modify the requirements of this subsection. (11) The articles of incorporation or bylaws of a captive insurer may not authorize a quorum of a board of directors to consist of less than one-third of the fixed or prescribed number of directors as provided in rules adopted by the director. [2012 c.84 9] Note: See note under 735.150.
(1)(a) An association captive insurer must comply with the investment requirements of ORS 733.510 to 733.780. (b) Notwithstanding paragraph (a) of this subsection, the Director of the Department of Consumer and Business Services may by rule approve the use of alternative reliable methods of valuation and rating for an association captive insurer. (2)(a) A pure captive insurer is not subject to any restrictions on allowable investments under ORS 733.510 to 733.780. (b) The director may prohibit or limit an investment that threatens the solvency or liquidity of a pure captive insurer. (3) A captive insurer may not make loans to the parent of the captive insurer or an affiliate of the captive insurer. [2012 c.84 10] Note: See note under 735.150.
(1) A captive insurer may provide reinsurance on risks ceded by an affiliate of the insurer or a controlled unaffiliated business. (2) A captive insurer may take credit for reserves on risks or portions of risks ceded to reinsurers if the credit is acceptable to the Director of the Department of Consumer and Business Services. (3) Subject to the prior written approval of the director, a captive insurer may participate in a pool for the purpose of risk distribution sharing. However, a captive insurer may not join or contribute financially to a plan, pool, association or guaranty or insolvency fund in this state, and a captive insurer, or its insured or its parent or any affiliated company or any member organization of its association, may not receive a benefit from a plan, pool, association or guaranty or insolvency fund for claims arising out of the operations of the captive insurer. (4) A captive reinsurer must annually file with the department an actuarial opinion provided by a qualified actuary on loss and loss adjustment expense reserves. The qualified actuary providing the actuarial opinion must be independent and may not be an employee of the captive reinsurer or an affiliate of the captive reinsurer for which the actuarial opinion is filed. (5) A captive reinsurer may discount its loss and loss adjustment expense reserves only as allowed in rules adopted by the director. (6) The director may disallow the discounting of loss and loss adjustment reserves of a captive reinsurer if the captive reinsurer violates any provision of ORS 735.150 to 735.190. [2012 c.84 11] Note: See note under 735.150.
A captive insurer is not required to join a rating organization. [2012 c.84 12] Note: See note under 735.150.
(1) A captive insurer is not required to make a report except as specified in this section. (2)(a) Before March 1 of each year, or in accordance with rules adopted under subsection (6) of this section, a captive insurer shall submit to the Director of the Department of Consumer and Business Services a report of the financial condition of the captive insurer, verified by oath of two of the executive officers of the captive insurer. (b) A captive insurer shall report: (A) Using generally accepted accounting principles, except to the extent that the director requires, approves or accepts the use of statutory accounting principles; (B) Using a useful or necessary modification or adaptation to an accounting principle that is required, approved or accepted by the director for the type of insurance and kind of insurer to be reported upon; and (C) Supplemental or additional information required by the director. (c) Except as otherwise provided in ORS 735.150 to 735.190, an association captive insurer shall file the financial statement required by ORS 731.574. (d) For the purposes of this subsection, "statutory accounting" means a method of accounting using rules that insurance companies must follow in filing an annual financial statement with the Department of Consumer and Business Services. (3)(a) A pure captive insurer may make a written request to file the required report on a fiscal year end that is consistent with the fiscal year of the parent company of the pure captive insurer. (b) If the director grants an alternative reporting date for a pure captive insurer as described under paragraph (a) of this subsection, the annual report is due 60 days after the fiscal year end. (4)(a) Not later than 60 days after the fiscal year end, an alien captive insurer operating as a branch captive insurer in this state shall file with the director a copy of all reports and statements required to be filed under the laws of the jurisdiction in which the alien captive insurer is formed, verified by oath by two of the alien captive insurers executive officers. (b) If the director is satisfied that the annual report filed by the alien captive insurer in the jurisdiction in which the alien captive insurer is formed provides adequate information concerning the financial condition of the alien captive insurer, the director may waive the requirement for completion of the annual statement required for a captive insurer under this section with respect to business written in the alien jurisdiction. (c) A waiver granted by the director under paragraph (b) of this subsection shall be in writing and is subject to public inspection. (5) All captive insurers transacting insurance in this state shall engage a qualified actuary with knowledge of this state for purposes of determining and setting premiums to be charged by the captive insurer. (6) The director may establish by rule criteria to waive or modify the requirements of this section relating to the frequency of reporting and the contents of the report. [2012 c.84 13] Note: See note under 735.150.
(1)(a) The Director of the Department of Consumer and Business Services shall examine the affairs of each captive insurer once in each three-year period. (b) The three-year period described in paragraph (a) of this subsection is determined on the basis of three full annual accounting periods of operation. (c) The examination is to be made as of December 31 of the full three-year period or as of the last day of the month of an annual accounting period authorized for a captive insurer under this section. (d) In addition to an examination required under this subsection, the director may examine a captive insurer whenever the director determines it to be prudent. (2) During an examination under this section, the director shall thoroughly examine the affairs of the captive insurer to ascertain: (a) The financial condition of the captive insurer; (b) The ability of the captive insurer to fulfill the obligations of the captive insurer; and (c) Whether the captive insurer meets the requirements of ORS 735.150 to 735.190. (3) The director may expand the three-year period described in subsection (1) of this section to five years if during that period a captive insurer is subject to a comprehensive annual audit: (a) Of a scope satisfactory to the director; and (b) Performed by independent auditors approved by the director. (4) The director may accept a comprehensive annual independent audit in lieu of an examination if the scope of the examination is satisfactory to the director and the examination is performed by a qualified independent auditor. (5) A captive insurer that is examined under this section shall pay the expenses and charges of the examination. [2012 c.84 14] Note: See note under 735.150.
Notwithstanding the limits of risk set forth in ORS 731.504, any captive insurer for which the Director of the Department of Consumer and Business Services issues a certificate of authority under ORS 735.150 to 735.190 must comply with sound actuarial principles as determined by the director and must submit reports demonstrating such compliance to the director. [2012 c.84 15] Note: See note under 735.150.
(1) The Director of the Department of Consumer and Business Services may suspend or revoke the certificate of authority issued to a captive insurer to transact insurance in this state if the captive insurer: (a) Is insolvent or impaired as defined in ORS 734.014; (b) Fails to meet the requirements of ORS 735.150 to 735.190; (c) Refuses or fails to submit an annual report required by ORS 735.172 or any other report or statement required by law or by order of the director; (d) Fails to comply with the charter, bylaws or other organizational document of the captive insurer; (e) Fails to submit to an examination under ORS 735.174 or 735.182 or any legal obligation relative to an examination under ORS 735.174 or 735.182; (f) Refuses or fails to pay the cost of examination under ORS 735.174 or 735.182; (g) Uses methods that, although not otherwise specifically prohibited by law, render: (A) The operation of the captive insurer detrimental to the public or the policyholders of the captive insurer according to standards adopted by the director by rule; or (B) The condition of the captive insurer unsound with respect to the public or to the policyholders of the captive insurer; or (h) Otherwise fails to comply with laws of this state. (2) If the director finds, upon examination, hearing or other evidence that a captive insurer has committed any of the acts specified in subsection (1) of this section, the director may suspend or revoke the certificate of authority issued to the captive insurer if the director considers it in the best interest of the public and the policyholders of the captive insurer. [2012 c.84 16] Note: See note under 735.150.
Except as otherwise provided in ORS 735.150 to 735.190, a branch captive insurer must be a pure captive insurer with respect to business operations in this state, unless otherwise permitted by rule of the Director of the Department of Consumer and Business Services. [2012 c.84 17] Note: See note under 735.150.
(1) The Director of the Department of Consumer and Business Services shall examine only the branch operations of, and the insurance transacted by, a branch captive insurer in this state if the branch captive insurer: (a) Provides annually to the director a certificate of compliance, or an equivalent, issued by or filed with the licensing authority of the jurisdiction in which the branch captive insurer is formed; and (b) Demonstrates to the satisfaction of the director that the branch captive insurer is operating in sound financial condition in accordance with ORS 735.150 to 735.190 and all applicable laws and regulations of the jurisdiction in which the branch captive insurer is formed. (2) As a condition of its authority as a branch captive insurer, an alien captive insurer must authorize the director to examine the affairs of the alien captive insurer in the jurisdiction in which the alien captive insurer is formed. (3) An alien captive insurer that is examined under this section shall pay the expenses and charges of the examination. [2012 c.84 18] Note: See note under 735.150.
Notwithstanding ORS 731.022, a foreign captive insurer may provide insurance in this state if the foreign captive insurer meets both of the following conditions: (1) The foreign captive insurer is domiciled in a state that regulates the foreign captive insurer as a captive insurer and the captive insurer is in good standing in that state. (2) All activities related to the placement of the insurance occurs in the domicile state and the insurance otherwise complies with the laws of the domicile state, including the proposal to make an insurance contract, taking or receiving an application for insurance, collecting a premium or other consideration for the insurance and issuing or delivering policies of insurance. [2012 c.84 19] Note: See note under 735.150.
At least 35 percent of the assets of a captive reinsurer must be managed by an asset manager domiciled in this state. [2012 c.84 20] Note: See note under 735.150.
If permitted by its articles of incorporation or charter, and in accordance with ORS 735.158 and 735.190, a captive reinsurer may apply to the Director of the Department of Consumer and Business Services for a certificate of authority to transact reinsurance. [2012 c.84 21] Note: See note under 735.150.
(1) A captive reinsurer must be incorporated as a stock insurer with its capital divided into shares and held by the captive reinsurers shareholders. In incorporating, a captive reinsurer must comply with the requirements of ORS 735.164. (2) The capital stock of a captive reinsurer must be issued at par value or greater. (3) At least one member of the board of directors of a captive reinsurer incorporated in this state must be a resident of this state. [2012 c.84 22] Note: See note under 735.150.
(1) The Legislative Assembly finds that: (a) Some businesses and service providers in Oregon have experienced major problems in both the availability and affordability of commercial liability insurance. Premiums for such insurance policies have recently grown as much as 500 percent and the availability of such insurance in Oregon markets has greatly diminished. (b) These businesses and service providers are essential to achieve goals such as increased workforce productivity, family self-sufficiency and the maintenance and improvement of the health of the citizens of Oregon. The lack of adequate commercial liability insurance threatens these businesses and services. (2) The Legislative Assembly therefore declares it is the purpose of ORS 735.200 to 735.260 to remedy the problem of unavailable commercial liability insurance for these businesses and service providers by authorizing the Director of the Department of Consumer and Business Services to assist in the establishment of a market assistance plan for providing commercial liability insurance for these businesses and service providers, or, if necessary, by requiring all insurers authorized to write commercial liability insurance in Oregon to be members of one or more joint underwriting associations created to provide commercial liability insurance for these businesses and service providers. [1987 c.774 73]
As used in ORS 735.200 to 735.260: (1) "Joint underwriting association" means a mechanism requiring casualty insurers doing business in Oregon to provide commercial liability insurance to certain businesses and service providers on either an assigned risk basis or through a joint underwriting pool underwritten to standards adopted under the Insurance Code. (2) "Market assistance plan" means a mechanism through which admitted casualty insurers in this state provide commercial liability insurance for classes of risks designated by the Director of the Department of Consumer and Business Services. [1987 c.774 74]
(1) After a public hearing, the Director of the Department of Consumer and Business Services may by rule require insurers authorized to write and writing commercial liability insurance in this state to form a market assistance plan to assist businesses and service providers unable to purchase specified classes of commercial liability insurance in adequate amounts from either the admitted or nonadmitted market. (2) The market assistance plan shall operate under a plan of operations prepared by admitted insurers, eligible surplus line insurers and insurance producers, and approved by the director. [1987 c.774 75; 2003 c.364 90]
(1) The Director of the Department of Consumer and Business Services may mandate the formation of a joint underwriting association under ORS 735.220 if after directing the formation of a market assistance plan and allowing it a reasonable time to alleviate insurance availability problems, the director finds that: (a) There exist in Oregon certain businesses or service providers for which no commercial liability insurance is available; and (b) There is a need in Oregon for the goods or services provided by these businesses or service providers and the lack of available commercial liability insurance will cause a substantial number of the entities to cease operations within the state. (2) Notwithstanding subsection (1) of this section, if the lack of availability of insurance is due to legitimate insurance underwriting considerations, including past claims experience, licensing noncompliance or inadequate risk management, formation of a joint underwriting association shall not be appropriate. (3) The director may make the findings required under subsection (1) of this section only after conducting a public hearing according to the applicable provisions of ORS chapter 183. The director must specify the specific classes of business or lines of insurance determined to be unavailable. (4) At least once each year, the director shall hold a public hearing to determine if the classes of business or lines of insurance offered by the joint underwriting association are still unavailable in the voluntary insurance market. If any class or line is found to be available, the joint underwriting association shall cease to underwrite such class of business or line of insurance. [1987 c.774 76]
After finding under ORS 735.215 that there is a need in Oregon for a joint underwriting association, the Director of the Department of Consumer and Business Services may form and put into operation a temporary, nonprofit, nonexclusive joint underwriting association constituting a legal entity separate and distinct from its members for commercial liability insurance subject to the conditions and limitations contained in the Insurance Code. All funds and reserves of the association shall be separately held and invested. [1987 c.774 77]
The joint underwriting association established under ORS 735.220 shall be comprised of all insurers authorized to write and who are writing commercial liability insurance within this state on a direct basis, including the commercial liability portions of multiperil policies. Every such insurer shall remain a member of the association as a condition of its authority to continue to transact insurance in this state. [1987 c.774 78]
The board of directors of the joint underwriting association shall engage the services of an independent actuarial firm to develop and recommend actuarially sound rates, rating plans, rating rules and classifications. The Director of the Department of Consumer and Business Services shall approve rates filed by the joint underwriting association in accordance with ORS 737.310. All rates approved for the joint underwriting association shall be actuarially sound and calculated to be self-supporting. [1987 c.774 79]
The joint underwriting association formed under ORS 735.220 shall be under the administrative control of a seven person board of directors appointed by the Governor. Two directors shall represent insurance carriers participating in the association; one director shall represent insurance producers; three directors shall represent the affected classes of insureds; and one director shall be a public member with no ties to the insurance industry. The board shall elect one of its members as chairperson. [1987 c.774 80; 2003 c.364 91]
The joint underwriting association shall file an annual statement prepared by an independent certified public accountant containing a financial statement, a summary of its transactions and operations for the prior year and other information as prescribed by the Director of the Department of Consumer and Business Services by rule. [1987 c.774 81]
(1) Upon a determination of the board of directors that the joint underwriting association will be unable to pay its outstanding lawful obligations as they mature, the board shall certify the existence of this condition to the Director of the Department of Consumer and Business Services. A schedule for policyholder surcharges shall be submitted by the board at the time of certification. (2) The surcharge schedule shall become final 30 days after certification unless the director finds, after a public hearing, that the surcharge amounts are unreasonable or unjustifiable. Such surcharges may be adjusted to take into consideration the past and prospective loss and expense experience in different geographical areas within the state. Such surcharges shall be in addition to and not in lieu of the premiums charged for the coverages provided. (3) Moneys collected in accordance with subsection (2) of this section shall be held in a fund separate from other joint underwriting association funds. Such funds shall be invested in accordance with applicable law governing publicly held trust funds. The association shall file an annual financial statement covering such funds. (4) Surcharge funds shall be subject to the control of the board of directors and may be used to satisfy the legal obligations of the joint underwriting association. (5) No part of the profit or loss of the joint underwriting association shall inure to the benefit of any member insurer or be an obligation of any member insurer. [1987 c.774 82]
There shall be no liability or cause of action against any member insurer, self-insurer, or its agents or employees, the joint underwriting association or its agents or employees, members of the board of directors, the Department of Consumer and Business Services or its representatives for any action taken by or statement made by them in performance of their powers and duties under ORS 735.210 to 735.260. [1987 c.774 83]
The state is not liable to pay any debts or obligations of any association formed under ORS 735.220 and no person may assert any claim against the state or any of its agencies for any act or omission of the association. [1987 c.774 84]
The Director of the Department of Consumer and Business Services may adopt all rules necessary to insure the efficient, equitable operation of the market assistance plan or the joint underwriting association, including but not limited to rules requiring or limiting certain policy provisions. [1987 c.774 85]
If a market assistance plan is formed under ORS 735.210, or a joint underwriting association is formed under ORS 735.220, the Director of the Department of Consumer and Business Services shall by rule establish such liquor liability insurance risk and rate classifications as may be necessary to facilitate the availability and affordability of this commercial insurance product. Risk and rate classifications shall be established for all facets of the liquor industry including those who sell at wholesale or retail and the State of Oregon, as allowed by law. Risk classifications and rating plans shall be developed upon considerations including, but not limited to, the following factors: (1) Past loss experience and prospective loss experience of different license types. (2) Past loss experience and prospective loss experience in different geographic areas. (3) Prior claims experience of the individual licensee. (4) Prior compliance with public safety and alcoholic beverage laws, rules and ordinances pertaining to the sale and service of alcoholic beverages. (5) Evidence of responsible management policies including, but not limited to, procedures and actions which: (a) Encourage persons not to become intoxicated if they consume alcoholic beverages on the licensees premises; (b) Promote availability of nonalcoholic beverages and food; (c) Promote safe transportation alternatives to driving while intoxicated; (d) Prohibit employees and agents of the licensee from consuming alcoholic beverages while acting in their capacity as employee or agent; (e) Establish promotions and marketing efforts which publicize responsible business practices to the licensees customers and community; (f) Implement comprehensive training procedures; and (g) Maintain an adequate, trained number of employees and agents for the type and size of licensees business. [1987 c.774 88]
The purpose of ORS 735.300 to 735.365 is to regulate the formation and operation of risk retention groups and purchasing groups in this state formed pursuant to the provisions of the federal Liability Risk Retention Act of 1986 (P.L. 99-563). [1987 c.774 98; 1989 c.700 10]
As used in ORS 735.300 to 735.365: (1) "Director" means the Director of the Department of Consumer and Business Services of this state or the commissioner, director or superintendent of insurance in any other state. (2) "Completed operations liability" means liability arising out of the installation, maintenance or repair of any product at a site that is not owned or controlled by any person who performs that work or by any person who hires an independent contractor to perform that work. The term also includes liability for activities that are completed or abandoned before the date of the occurrence giving rise to the liability. (3) "Domicile," for purposes of determining the state in which a purchasing group is domiciled, means: (a) For a corporation, the state in which the purchasing group is incorporated; and (b) For an unincorporated entity, the state of its principal place of business. (4) "Hazardous financial condition" means that a risk retention group, based on its present or reasonably anticipated financial conditions, although not yet financially impaired or insolvent, is unlikely to be able: (a) To meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or (b) To pay other obligations in the normal course of business. (5) "Insurance" means primary insurance, excess insurance, reinsurance, surplus lines insurance and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state. (6) "Liability": (a) Means legal liability for damages, including costs of defense, legal costs and fees and other claims expenses, because of injuries to other persons, damage to their property or other damage or loss to such other persons resulting from or arising out of: (A) Any business that is for-profit or not-for-profit, or any trade, product, premises, operations or services, including professional services; or (B) Any activity of any state or local government, or any agency or political subdivision thereof. (b) Does not include personal risk liability and an employers liability with respect to its employees other than legal liability under the Federal Employers Liability Act (45 U.S.C. 51 et seq.). (7) "Personal risk liability" means liability for damages because of injury to any person, damage to property or other loss or damage resulting from any personal, familial or household responsibilities or activities, rather than from responsibilities or activities referred to in subsection (6) of this section. (8) "Plan of operation or a feasibility study" means an analysis that presents the expected activities and results of a risk retention group, and includes at a minimum: (a) The coverages, deductibles, coverage limits, rates and rating classification systems for each line of insurance the group intends to offer; (b) Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available; (c) Pro forma financial statements and projections; (d) Appropriate opinions by a qualified independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and prevent a hazardous financial condition; (e) Identification of management, underwriting procedures, managerial oversight methods and investment policies; and (f) Other matters that the director requires for liability insurance companies authorized by the insurance laws of the state in which the risk retention group is chartered. (9) "Product liability" means liability for damages because of any personal injury, death, emotional harm, consequential economic damage or property damage, including damages resulting from the loss of use of property, arising out the manufacture, design, importation, distribution, packaging, labeling, lease or sale of a product. The term does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred. (10) "Purchasing group" means any group that: (a) Has as one of its purposes the purchase of liability insurance on a group basis; (b) Purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in paragraph (c) of this subsection; (c) Is composed of members whose business or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar or common business, trade, product, services, premises or operations; and (d) Is domiciled in any state. (11) "Risk retention group" means any corporation or other limited liability association formed under the laws of any state: (a) Whose primary activity consists of assuming and spreading all, or any portion of, the liability exposure of its group members; (b) That is organized for the primary purpose of conducting the activity described in paragraph (a) of this subsection; (c) That: (A) Is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or (B) Before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of that state. However, any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since that date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability, as such terms were defined in the federal Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Amendments of 1986, before the date of the enactment of the federal Liability Risk Retention Act of 1986 (P.L. 99-563); (d) That does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person; (e) That: (A) Has as its members only persons who have an ownership interest in the group and has as its owners only persons who are members that are provided insurance by the risk retention group; or (B) Has as its sole member and sole owner an organization that is owned by persons who are provided insurance by the risk retention group; (f) Whose members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar or common business, trade, product, services, premises or operations; (g) Whose activities do not include the provision of insurance other than: (A) Liability insurance for assuming and spreading all or any portion of the liability of its group members; and (B) Reinsurance with respect to the liability of any other risk retention group, or any members of such other group, that is engaged in businesses or activities so that such group or member meets the requirement described in paragraph (f) of this subsection for membership in the risk retention group that provides such reinsurance; and (h) The name of which includes "Risk Retention Group." (12) "State" means any state of the United States or the District of Columbia. [1987 c.774 99; 1993 c.744 29]
(1) A risk retention group seeking to be organized in this state: (a) Must be organized as a liability insurer in this state and authorized by a subsisting certificate of authority issued by the director to transact liability insurance in this state, as provided in ORS chapter 732; and (b) Except as otherwise provided in ORS 735.300 to 735.365, must comply with all laws, rules and other requirements applicable to such insurers authorized to transact insurance in this state and with ORS 735.315 to the extent the requirements under ORS 735.315 are not a limitation on other laws, rules or requirements of this state. (2) Before a risk retention group may offer insurance in any state, the risk retention group shall submit for approval to the director of this state a plan of operation or a feasibility study and revisions of such plan or study if the group intends to offer any additional lines of liability insurance. (3) Immediately upon receipt of an application for organization, the director shall provide summary information concerning the filing to the National Association of Insurance Commissioners, including the name of the risk retention group, the identity of the initial members of the group, the identity of those individuals who organized the group or who will provide administrative services or otherwise influence or control the activities of the group, the amount and nature of initial capitalization, the coverages to be afforded and the states in which the group intends to operate. Providing notification to the National Association of Insurance Commissioners is in addition to and shall not be sufficient to satisfy the requirements of ORS 735.300 to 735.365. [1987 c.774 100]
Risk retention groups chartered in states other than this state and seeking to do business as a risk retention group in this state must observe and abide by the laws of this state as follows: (1) Before transacting insurance in this state, a risk retention group shall submit to the director: (a) A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, its date of chartering, its principal place of business and such information, including information on its membership, as the director may require to verify that the risk retention group is qualified under ORS 735.305 (11); (b) A copy of its plan of operation or a feasibility study and revisions of such plan or study submitted to its state of domicile. The requirement of the submission of a plan of operation or a feasibility study shall not apply with respect to any line or classification of liability insurance that: (A) Was defined in the federal Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Amendments of 1986, before October 27, 1986; and (B) Was offered before October 27, 1986, by any risk retention group that had been chartered and operating for not less than three years before October 27, 1986; and (c) A statement of registration that designates the director as its agent for the purpose of receiving service of legal documents or process. (2) A risk retention group doing business in this state shall submit to the director: (a) A copy of the groups financial statement submitted to its state of domicile, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist, under criteria established by the National Association of Insurance Commissioners; (b) A copy of each examination of the risk retention group as certified by the director or public official conducting the examination; (c) Upon request by the director, a copy of any audit performed with respect to the risk retention group; and (d) Such information as may be required to verify its continuing qualification as a risk retention group under ORS 735.305 (11). (3) A risk retention group is subject to taxation in this state as follows: (a) All premiums paid for coverage within this state to risk retention groups shall be subject to taxation at the rate applicable to foreign admitted insurers and the taxes owing shall be subject to the same interest, fines and penalties for nonpayment as those applicable to foreign admitted insurers. (b) To the extent insurance producers are used, they shall report and pay the taxes for the premiums for the risks that they have placed with or on behalf of a risk retention group not organized in this state. (c) To the extent insurance producers are not used or fail to pay the tax, each risk retention group shall pay the tax for risks insured within the state. Further, each risk retention group shall report all premiums paid to it for risks insured within the state. (4) A risk retention group and its agents and representatives shall comply with ORS 746.230 and 746.240. If the director seeks an injunction regarding such conduct, the injunction must be obtained from a court of competent jurisdiction. (5) A risk retention group must submit to an examination by the director to determine its financial condition if the director of the jurisdiction in which the group is chartered has not initiated an examination or does not initiate an examination within 60 days after a request by the director of this state. Any such examination shall be coordinated to avoid unjustified repetition. Examinations may be conducted in accordance with the examiner handbook of the National Association of Insurance Commissioners. (6) A policy issued by a risk retention group shall contain in 10 point type on the front page and the declaration page, the following notice: ______________________________________________________________________________ Notice This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and rules of your state. State insurance insolvency guaranty funds are not available for your risk retention group. ______________________________________________________________________________ (7) The following acts by a risk retention group are prohibited: (a) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in such group; and (b) The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition or is financially impaired. (8) No risk retention group shall be allowed to do business in this state if an insurer is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurers. (9) No risk retention group may offer insurance policy coverage prohibited by the Insurance Code. (10) A risk retention group not organized in this state and doing business in this state must comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by the insurance commissioner of any state if there has been a finding of financial impairment after an examination under subsection (5) of this section. [1987 c.774 101; 2003 c.364 92]
(1) No risk retention group shall be permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state. No risk retention group, or its insureds, shall receive any benefit from any such fund for claims arising out of the operations of the risk retention group. (2) A risk retention group shall participate in this states joint underwriting associations and mandatory liability pools as provided by the Insurance Code. [1987 c.774 102]
Any purchasing group meeting the criteria established under the provisions of the federal Liability Risk Retention Act of 1986 (P.L. 99-563), shall be exempt from any law of this state relating to the creation of groups for the purchase of insurance or the prohibition of group purchasing, or any law that would discriminate against a purchasing group or its members. In addition, an insurer shall be exempt from any law of this state that prohibits providing or offering to provide advantages to a purchasing group or its members based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages or other matters. A purchasing group shall be subject to all other applicable laws of this state. [1987 c.774 103]
(1) A purchasing group that intends to do business in this state shall furnish notice to the director, which shall: (a) Identify the state in which the group is domiciled; (b) Specify the lines and classifications of liability insurance that the purchasing group intends to purchase; (c) Identify the insurer from which the group intends to purchase its insurance and the domicile of the insurer; (d) Identify the principal place of business of the group; and (e) Provide such other information as may be required by the director to verify that the purchasing group is qualified under ORS 735.305 (10). (2) The purchasing group shall register with the director and designate the director as its agent solely for the purpose of receiving service of legal documents or process, except that such requirements shall not apply in the case of a purchasing group that meets the following qualifications: (a) That: (A) Was domiciled before April 1, 1986, in any state; and (B) Is domiciled on and after October 27, 1986, in any state; (b) That: (A) Before October 27, 1986, purchased insurance from an insurance carrier licensed in any state; and (B) On and after October 27, 1986, purchased insurance from an insurance carrier licensed in any state; (c) That was a purchasing group under the requirements of the federal Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Amendments of 1986, before October 27, 1986; and (d) That does not purchase insurance that was not authorized for purposes of an exemption under the federal Product Liability Risk Retention Act of 1981, as in effect before October 27, 1986. [1987 c.774 104]
A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed insurance producer acting pursuant to the surplus lines laws and regulations of that state. [1987 c.774 105; 2003 c.364 93]
The director is authorized to make use of any of the powers established under the Insurance Code to enforce the laws of this state so long as those powers are not specifically preempted by the federal Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Amendments of 1986. This includes, but is not limited to, the directors administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders and impose penalties. With regard to any investigation, administrative proceedings or litigation, the director may rely on the procedural law and rules of the state. The injunctive authority of the director in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction. [1987 c.774 106]
A risk retention group that violates any provision of ORS 735.300 to 735.365 is subject to criminal and civil penalties applicable to insurers generally, and to suspension or revocation of its certificate of authority to transact insurance. [1987 c.774 107]
Any person acting or offering to act as an insurance producer for a risk retention group or purchasing group that solicits members, sells insurance coverage, purchases coverage for its members located within this state or otherwise does business in this state shall, before commencing any such activity, obtain a license as an insurance producer from the director under ORS chapter 744. [1987 c.774 108; 1989 c.701 71; 2003 c.364 94]
An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance or operating in any state or in all states or in any territory or possession of the United States, upon a finding that such a group is in a hazardous financial condition shall be enforceable in the courts of this state. [1987 c.774 109]
The director may adopt rules that the director determines are necessary for carrying out ORS 735.300 to 735.365. [1987 c.774 110; 1989 c.700 11]
ORS 735.300 to 735.365 shall be known and may be cited as the Oregon Liability Risk Retention Law. [1987 c.774 98a]
ORS 735.400 to 735.495 shall be liberally construed and applied to promote its underlying purposes which include: (1) Protecting persons seeking insurance in this state; (2) Permitting surplus lines insurance to be placed with reputable and financially sound nonadmitted insurers and exported from this state pursuant to ORS 735.400 to 735.495; (3) Establishing a system of regulation which will permit orderly access to surplus lines insurance in this state and encourage admitted insurers to provide new and innovative types of insurance available to consumers in this state; and (4) Protecting revenues of this state. [1987 c.774 117]
As used in ORS 735.400 to 735.495: (1) "Admitted insurer" means an insurer authorized to do an insurance business in this state. (2) "Affiliated group" means any group of entities that, with respect to an insured, exercise control over the insured, are under the control of the insured, or are under common control with the insured. (3) "Capital" means funds paid in for stock or other evidence of ownership. (4) "Control" means a situation where a controlling entity: (a) Directly, or acting through one or more other persons, owns or has the power to vote 25 percent or more of any class of voting securities of the controlled entity; or (b) Directs in any manner the election of a majority of directors or trustees of the controlled entity. (5) "Eligible surplus lines insurer" means a nonadmitted insurer with which a surplus lines licensee may place surplus lines insurance. (6) "Exempt commercial purchaser" means any person purchasing commercial insurance that, at the time of placement: (a) Employs or retains a qualified risk manager to negotiate insurance coverage; (b) Has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months; and (c) Meets at least one of the following criteria: (A) The person possesses a net worth in excess of $10 million, as such amount is adjusted pursuant to ORS 735.406. (B) The person generates annual revenues in excess of $20 million, as such amount is adjusted pursuant to ORS 735.406. (C) The person employs more than 50 full-time or full-time equivalent employees for each insured or is a member of an affiliated group employing more than 100 employees in the aggregate. (D) The person is a not-for-profit organization or public entity generating annual budgeted expenses of at least $30 million, as such amount is adjusted pursuant to ORS 735.406. (E) The person is a municipality with a population in excess of 50,000 individuals. (7) "Export" means to place surplus lines insurance with a nonadmitted insurer. (8) "Home state" means, with respect to an insured: (a) The state in which an insured maintains the insureds principal place of business or, in the case of an individual, the individuals principal residence; (b) If 100 percent of the insured risk is located out of the state described in paragraph (a) of this subsection, the state to which the greatest percentage of the insureds taxable premium for that insurance contract is allocated; or (c) If two or more insureds from an affiliated group are named as insureds on a single nonadmitted insurance contract, the state, as determined pursuant to paragraph (a) or (b) of this subsection, of the member of the affiliated group that has the greatest percentage of premium attributed to it under the insurance contract. (9) "Kind of insurance" means one of the types of insurance required to be reported in the annual statement that must be filed with the Director of the Department of Consumer and Business Services by authorized insurers. (10) "Nonadmitted insurer" means an insurer not authorized to do an insurance business in this state. "Nonadmitted insurer" includes insurance exchanges as authorized under the laws of various states. "Nonadmitted insurer" does not include a risk retention group as defined in ORS 735.305. (11) "Premium tax" means any tax, assessment or other charge imposed by this state directly or indirectly based upon any payment made as consideration for insurance in an insurance contract. (12) "Producing insurance producer" means the individual insurance producer dealing directly with the party seeking insurance. (13) "Qualified risk manager" means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements: (a) The person is an employee of, or third party consultant retained by, the commercial policyholder. (b) The person provides skilled services in: (A) Loss prevention; (B) Loss reduction; or (C) Risk and insurance coverage analysis and purchase of insurance. (c) The person has: (A) A bachelors degree, from an accredited college or university, in risk management, business administration, finance, economics or any other field determined by an insurance commissioner or other regulatory official of this or any other state to demonstrate minimum competence in risk management, and has: (i) Three years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or (ii) Any designation, certification or license issued by a national insurance certification organization that is determined by the Director of the Department of Consumer and Business Services to demonstrate minimum competency in risk management; (B) At least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance, and has a designation, certification or license specified in subparagraph (A)(ii) of this paragraph; (C) At least 10 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis or purchasing commercial lines of insurance; or (D) A graduate degree, from an accredited college or university, in risk management, business administration, finance, economics or any other field determined by the director to demonstrate minimum competence in risk management. (14) "Surplus" means funds over and above liabilities and capital of the insurer for the protection of policyholders. (15) "Surplus lines licensee" means an insurance producer licensed under ORS chapter 744 to place insurance on Oregon home state risks with nonadmitted insurers. [1987 c.774 118; 1991 c.810 25; 2001 c.191 44a; 2003 c.364 38; 2011 c.660 6]
Beginning on January 1, 2015, and each fifth January 1 occurring thereafter, the amounts in ORS 735.405 (6)(c)(A), (B) and (D) shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor. [2011 c.660 7; 2019 c.57 33]
(1) Insurance may be procured through a surplus lines licensee from a nonadmitted insurer if: (a) The insurer is an eligible surplus lines insurer; (b) A diligent search has first been made among the insurers who are authorized to transact and are actually writing the particular kind and class of insurance in this state, and it is determined that the full amount or kind of insurance cannot be obtained from those insurers; and (c) All other requirements of ORS 735.400 to 735.495 are met. (2) Subsection (1)(b) of this section does not apply to a surplus lines licensee seeking to procure or place nonadmitted insurance in this state for an exempt commercial purchaser if: (a) The surplus lines licensee procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that such insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight; and (b) The exempt commercial purchaser has subsequently requested in writing that the surplus lines licensee procure or place such insurance from a nonadmitted insurer. (3) The Director of the Department of Consumer and Business Services by rule may establish requirements applicable to the placement of surplus lines insurance on Oregon home state risks by a nonresident surplus lines licensee. The rules may not interfere with or hinder implementation of the federal Gramm-Leach-Bliley Act (P.L. 106-102) with respect to licensing reciprocity among the states, or the Nonadmitted and Reinsurance Reform Act of 2010 (P.L. 111-203, Title V, Subtitle B). [1987 c.774 119; 2001 c.191 44b; 2011 c.660 9]
(1) A surplus lines licensee may not place any coverage with a nonadmitted insurer unless at the time of placement the nonadmitted insurer has done all of the following: (a) Obtained authorization to write the kind of insurance to be placed by the surplus lines licensee by the insurance supervisory official in the insurers domiciliary jurisdiction. (b) Qualified under one of the following subparagraphs: (A) Has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction that equals the greater of either the minimum capital and surplus requirements of its domiciliary jurisdiction or $15 million, except that the requirements of this subparagraph may be satisfied by an insurer possessing less than the minimum capital and surplus upon an affirmative finding of acceptability by the Director of the Department of Consumer and Business Services. The finding shall be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability and company record and reputation within the industry. In no event shall the director make an affirmative finding of acceptability when the nonadmitted insurers capital and surplus is less than $4.5 million. (B) In the case of an alien insurer, in addition to the requirements in subparagraph (A) of this paragraph, maintains in the United States an irrevocable trust fund in either a national bank or a member of the Federal Reserve System, in an amount not less than $5.4 million for the protection of all its policyholders in the United States and such trust fund consists of cash, securities, irrevocable letters of credit, or of investments of substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this state. Such trust fund, which shall be included in any calculation of capital and surplus or its equivalent, shall have an expiration date which at no time shall be less than five years. (C) In the case of a group of insurers that includes incorporated and individual unincorporated underwriters that are not listed in accordance with subparagraph (E) of this paragraph, maintains a trust fund of not less than $100 million as security to the full amount thereof for all policyholders and creditors in the United States of each member of the group, and such trust shall likewise comply with the terms and conditions established in subparagraph (B) of this paragraph for alien insurers, except that the incorporated members of the group may not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of solvency regulation and control by the groups domiciliary regulators as are the unincorporated members. (D) In the case of an insurance exchange created by the laws of individual states, maintains capital and surplus, or the substantial equivalent thereof, of not less than $75 million in the aggregate. For insurance exchanges that maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall maintain minimum capital and surplus, or the substantial equivalent thereof, of not less than $5 million. In the event the insurance exchange does not maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall meet the minimum capital and surplus requirements of subparagraph (A) of this paragraph. (E) Is listed on the NAIC Quarterly Listing of Alien Insurers maintained by the National Association of Insurance Commissioners and meets additional requirements regarding the use of the list established by rule of the director. (c) Unless qualified under paragraph (b)(E) of this subsection, provided to the director no more than six months after the close of the period reported upon a certified copy of its current annual statement that is: (A) Filed with and approved by the regulatory authority in the domicile of the nonadmitted insurer; (B) Certified by an accounting or auditing firm licensed in the jurisdiction of the insurers domicile; or (C) In the case of an insurance exchange, an aggregate combined statement of all underwriting syndicates operating during the period reported. (2) When a nonresident surplus lines licensee places surplus lines insurance outside this state that covers an Oregon home state risk, the licensee or insurance producer is subject to the requirements of subsection (1) of this section. [1987 c.774 120; 1995 c.99 2; 2001 c.191 44c; 2005 c.185 11; 2011 c.660 10]
(1) Each insured in this state who obtains independently procured insurance, or continues or renews independently procured insurance on Oregon home state risks, other than insurance procured through a surplus lines licensee, shall file, within 30 days after the date the insurance was procured, continued or renewed, a written report with the Director of the Department of Consumer and Business Services showing: (a) The name and address of the insurer; (b) The subject of the insurance; (c) The amount of premium currently charged; and (d) Additional pertinent information reasonably requested by the director. (2) The insured filing a report under subsection (1) of this section shall pay, at the time of filing the report, the director an amount equal to the taxes imposed under ORS 735.470 for the premium reported under subsection (1)(c) of this section. The filing of the report and payment of the taxes may be made by a person authorized by the insured to act on the insureds behalf. (3)(a) The director may require that reports filed under subsection (1) of this section be filed with the Surplus Line Association of Oregon. The director may require that such filings be made electronically, but may allow an exemption to this requirement for good cause shown. (b) The director may require that amounts to be paid to the director under subsection (2) of this section be paid to the Surplus Line Association of Oregon. [2011 c.660 5]
For purposes of carrying out the Nonadmitted and Reinsurance Reform Act of 2010 (P.L. 111-203, Title V, Subtitle B), after receiving express legislative approval, the Director of the Department of Consumer and Business Services is authorized to enter into a compact or to otherwise establish procedures with other states to allocate among the states the premium taxes paid to an insureds home state. [2011 c.660 4]
(1) The Director of the Department of Consumer and Business Services may declare a surplus lines insurer described in ORS 735.415 (1) ineligible if the director has reason to believe that the surplus lines insurer: (a) Is in unsound financial condition; (b) Is no longer eligible under ORS 735.415; (c) Has willfully violated the laws of this state; or (d) Does not make reasonably prompt payment of just losses and claims in this state or elsewhere. (2) The director shall promptly mail notice of all such declarations to each surplus lines licensee. [1987 c.774 121; 2001 c.191 44d]
(1) Within 90 days after the placing of any surplus lines insurance in this state on an Oregon home state risk, each surplus lines licensee shall file with the Director of the Department of Consumer and Business Services: (a) A statement signed by the licensee regarding the insurance, which shall be kept confidential as provided in ORS 705.137, including the following: (A) The name and address of the insured; (B) The identity of the insurer or insurers; (C) A description of the subject and location of the risk; (D) The amount of premium charged for the insurance; and (E) Such other pertinent information as the director may reasonably require. (b) A statement on a standardized form furnished by the director, as to the diligent efforts by the producing insurance producer to place the coverage with admitted insurers and the results thereof. The statement shall be signed by the producing insurance producer and shall affirm that the insured was expressly advised prior to placement of the insurance that: (A) The surplus lines insurer with whom the insurance was to be placed is not licensed in this state and is not subject to its supervision; and (B) In the event of the insolvency of the surplus lines insurer, losses will not be paid by the state insurance guaranty fund. (2) A surplus lines licensee placing nonadmitted insurance in this state for an exempt commercial purchaser satisfies the requirements of subsection (1)(b) of this section if the surplus lines licensee provides proof of compliance with ORS 735.410 (2). (3) The director may direct that filings required under subsection (1) of this section be made to the Surplus Line Association of Oregon. The director may also require that such filings be made electronically but may exempt a licensee from the requirement for good cause shown. (4) A nonresident surplus lines licensee who places a surplus lines policy on an Oregon home state risk shall satisfy the requirements in ORS 735.410 and the filing requirements in subsections (1) and (2) of this section. (5) Facsimile signatures and electronic signatures subject to ORS 84.001 to 84.061 are acceptable and have the same force as original signatures. [1987 c.774 122; 1993 c.182 1; 2001 c.377 13,13a; 2003 c.364 39; 2005 c.185 12; 2011 c.660 11]
(1) The Surplus Line Association of Oregon is the advisory organization of surplus lines licensees to: (a) Facilitate and encourage compliance by resident and nonresident surplus lines licensees with the laws of this state and the rules of the Director of the Department of Consumer and Business Services relative to surplus lines insurance; (b) Provide means for the examination, which must remain confidential as provided in ORS 705.137, of all surplus lines coverage written by resident and nonresident surplus lines licensees to determine whether the coverages comply with the Oregon Surplus Lines Law; (c) Communicate with organizations of admitted insurers with respect to the proper use of the surplus lines market; (d) Receive and disseminate to resident and nonresident surplus lines licensees information relative to surplus lines coverages; and (e) At the request of the director, receive and collect on behalf of the state and remit to the state premium receipts taxes for surplus lines and wet marine and transportation insurance under ORS 731.830, 735.417 or 735.470. (2) The Surplus Line Association of Oregon shall file with the director: (a) A copy of the associations constitution, articles of agreement or association or certificate of incorporation; (b) A copy of the associations bylaws and rules governing the associations activities; (c) A current list of members; (d) The name and address of a resident of this state upon whom notices or orders of the director or processes issued at the direction of the director may be served; (e) An agreement that the director may examine the Surplus Line Association of Oregon in accordance with the provisions of this section; and (f) A schedule of fees and charges. (3) The director may make or cause to be made an examination of the Surplus Line Association of Oregon. The reasonable cost of any examination must be paid by the association at the time the director presents a detailed account to the association of each cost. The officers, managers, agents and employees of the association may be examined at any time, under oath, and shall exhibit all books, records, accounts, documents or agreements governing the associations method of operation. The director shall furnish two copies of the examination report to the association and shall notify the association that the association may, within 20 days after receiving the report, request a hearing on the report or on any facts or recommendations in the report. If the director finds that the association or any member of the association has violated ORS 735.400 to 735.495, the director may issue an order requiring the discontinuance of the violation. (4)(a) The Surplus Line Association of Oregon may charge resident and nonresident surplus lines licensees and insurance producers a fee for reviewing surplus lines and wet marine and transportation insurance policies and for collecting, on behalf of the state, taxes imposed under ORS 731.830 and 735.470. (b) The association may charge insureds a fee for collecting, on behalf of the state, reports required and taxes imposed under ORS 735.417. (c) The association shall adopt bylaws implementing paragraphs (a) and (b) of this subsection. [1987 c.774 123; 2001 c.377 14; 2005 c.185 13; 2007 c.71 235; 2011 c.660 12; 2019 c.493 3]
(1) Upon placing surplus lines insurance on an Oregon home state risk, the surplus lines licensee shall promptly deliver to the insured or the producing insurance producer the policy, or if such policy is not then available, a certificate as described in subsection (4) of this section, cover note or binder. The certificate, as described in subsection (4) of this section, cover note or binder shall be executed by the surplus lines licensee and shall show the description and location of the subject of the insurance, coverages including any material limitations other than those in standard forms, a general description of the coverages of the insurance, the premium and rate charged and taxes to be collected from the insured, and the name and address of the insured and surplus lines insurer or insurers and proportion of the entire risk assumed by each, and the name of the surplus lines licensee and the licensees license number. (2) A surplus lines licensee may not issue or deliver any insurance policy or certificate of insurance or represent that insurance will be or has been written by any eligible surplus lines insurer, unless the licensee has authority from the insurer to cause the risk to be insured, or has received information from the insurer in the regular course of business that such insurance has been granted. (3) If, after delivery of an insurance policy or certificate of insurance, there is any change in the identity of the insurers, or the proportion of the risk assumed by any insurer, or any other material change in coverage as stated in the surplus lines licensees original insurance policy, or in any other material as to the insurance coverage, the surplus lines licensee shall promptly issue and deliver to the insured or the original producing insurance producer an appropriate substitute for, or indorsement of the original document, accurately showing the current status of the coverage and the insurers responsible thereunder. (4) As soon as reasonably possible after the placement of any such insurance the surplus lines licensee shall deliver a copy of the policy or, if not available, a certificate of insurance to the insured or producing insurance producer to replace an insurance policy or certificate of insurance theretofore issued. Each certificate or policy of insurance shall contain or have attached thereto a complete record of all policy insuring agreements, conditions, exclusions, clauses, indorsements or any other material facts that would regularly be included in the policy. (5) Any surplus lines licensee who fails to comply with the requirements of this section shall be subject to the penalties provided in ORS 731.988. (6) Each insurance policy or certificate of insurance negotiated, placed or procured under the provisions of ORS 735.400 to 735.495 by the surplus lines licensee shall bear the name of the licensee and the following legend in bold type: "This insurance was procured and developed under the Oregon surplus lines laws. It is NOT covered by the provisions of ORS 734.510 to 734.710 relating to the Oregon Insurance Guaranty Association. If the insurer issuing this insurance becomes insolvent, the Oregon Insurance Guaranty Association has no obligation to pay claims under this insurance." (7) The Director of the Department of Consumer and Business Services by rule may establish requirements relating to insurance policies and certificates of insurance and other applicable requirements governing placement of insurance by a nonresident surplus lines licensee outside this state that covers an Oregon home state risk. [1987 c.774 124; 2001 c.191 45a; 2003 c.364 40; 2011 c.660 13]
Insurance contracts procured under ORS 735.400 to 735.495 shall be valid and enforceable as to all parties. [1987 c.774 125]
A payment of premium to a surplus lines licensee acting for a person other than the surplus lines licensee in negotiating, continuing or renewing any policy of insurance under ORS 735.400 to 735.495 shall be deemed to be payment to the insurer, whatever conditions or stipulations may be inserted in the policy or contract notwithstanding. [1987 c.774 126]
A person may not procure any contract of surplus lines insurance with any nonadmitted insurer for an Oregon home state risk unless the person is licensed under ORS chapter 744 to transact surplus lines insurance. A person may obtain a license to transact surplus lines insurance only if the person is licensed as an insurance producer under ORS chapter 744 to transact property and casualty insurance. [1987 c.774 127; 1989 c.288 1; 1991 c.810 26; 1995 c.639 14; 2001 c.191 46; 2003 c.364 41; 2011 c.660 14]
(1) A surplus lines licensee may originate surplus lines insurance on an Oregon home state risk or accept such insurance from any other insurance producer duly licensed as to the kinds of insurance involved on an Oregon home state risk, and the surplus lines licensee may compensate the insurance producer therefor. (2) A surplus lines licensee may charge a producing insurance producer a fee or a combination of a fee and a commission when transacting surplus lines for the producing insurance producer if the surplus lines licensee has a written agreement with the producing insurance producer prior to the binding or issuance of a surplus lines insurance policy. When a surplus lines licensee transacts surplus lines insurance directly for a prospective insured, the surplus lines licensee may charge the prospective insured a fee or a combination of a fee and a commission if the surplus lines licensee has a written agreement with the prospective insured prior to the binding or issuance of a surplus lines insurance policy. (3) A producing insurance producer may charge a fee to a prospective insured when the producing insurance producer pays a fee or a combination of a fee and a commission to a surplus lines licensee under subsection (2) of this section if the producing insurance producer has a written agreement with the prospective insured prior to the binding or issuance of the surplus lines insurance policy. The fee may not exceed the amount of compensation paid by the producing insurance producer to the surplus lines licensee. (4) For the purpose of determining the charge under subsection (2) of this section, the producing insurance producer and the surplus lines licensee may agree to any allocation of the fee that the producing insurance producer charges the prospective insured under this section. (5) The fee or the fee and commission charged by a surplus lines licensee under subsection (2) of this section must be commensurate with the services provided by the surplus lines licensee. The Director of the Department of Consumer and Business Services may establish by rule minimum conditions for written agreements entered into under this section. An insurer or insurance producer who enters into a written agreement as provided in this section is not in violation of ORS 746.035 or 746.045. [1987 c.774 128; 2003 c.364 42; 2011 c.660 15]
(1) Each surplus lines licensee shall keep a full and true record of each surplus lines insurance contract placed on an Oregon home state risk by or through the licensee as required by ORS 744.068, including a copy of the policy, certificate, cover note or other evidence of insurance showing any of the following items that are applicable: (a) Amount of the insurance and perils insured; (b) Brief description of the property insured and its location; (c) Gross premium charged; (d) Any return premium paid; (e) Rate of premium charged upon the several items of property; (f) Effective date of the contract and the terms thereof; (g) Name and address of the insured; (h) Name and address of the insurer; (i) Amount of tax and other sums to be collected from the insured; and (j) Identity of the producing insurance producer, any confirming correspondence from the insurer or its representative and the application. (2) The record of each contract shall be kept open at all reasonable times to examination by the Director of the Department of Consumer and Business Services without notice for a period not less than five years following termination of the contract. [1987 c.774 129; 2001 c.191 47; 2003 c.364 43; 2011 c.660 16]
(1) On or before the end of each month, each surplus lines licensee shall file with the Director of the Department of Consumer and Business Services, as prescribed by the director, a verified report of all surplus lines insurance transacted on Oregon home state risks during the preceding 90 days. The report need not show transacted surplus lines insurance that was reported in an earlier report. The report shall show: (a) Aggregate gross premiums written; (b) Aggregate return premiums; and (c) Amount of aggregate tax. (2) The director may direct that reports required under subsection (1) of this section be made to the Surplus Line Association of Oregon and that the Surplus Line Association of Oregon file a combined report thereof with the director. The director may also require that reports required under subsection (1) of this section be made electronically but may exempt a licensee from the requirement for good cause shown. (3) For the purpose of collecting taxes on insurance covering Oregon home state risks when the insurance is placed outside this state, the director may establish by rule requirements for filing reports on surplus lines insurance transacted outside this state on Oregon home state risks. [1987 c.774 130; 2001 c.191 48; 2007 c.71 236; 2011 c.660 17]
(1)(a) The surplus lines licensee shall pay the Director of the Department of Consumer and Business Services a surplus lines premium tax equal to two percent of the gross amount of premiums received on Oregon home state risks as shown in the report required by ORS 735.465. (b) Notwithstanding ORS 731.820, the surplus lines licensee shall also pay to the director a tax equal to 0.3 percent of the premium or fees charged by the insurer or the insurers insurance producer and other intermediaries for the insurance, for the purpose of maintaining the Department of the State Fire Marshal and paying the expenses incident thereto. (c) The taxes shall be collected by the surplus lines licensee as specified by the director, in addition to the gross amount of premiums charged by the insurer or the insurers insurance producer and other intermediaries for the insurance. The taxes on any portion of the premium unearned at termination of insurance having been credited by the state to the licensee shall be returned to the policyholder directly by the surplus lines licensee or through the producing insurance producer, if any. The surplus lines licensee is prohibited from absorbing the taxes, and from rebating for any reason, any part of the taxes. (2) The surplus lines taxes are due quarterly on the 45th day following the calendar quarter in which the premium is collected. The taxes shall be paid to and reported on forms prescribed by the director or upon the directors order paid to and reported on forms prescribed by the Surplus Line Association of Oregon. (3) Notwithstanding subsection (2) of this section, if a surplus lines license is terminated or nonrenewed for any reason, the taxes described in this section are due on the 30th day after the termination or nonrenewal. (4) For the purposes of carrying out the Nonadmitted and Reinsurance Reform Act of 2010 (P.L. 111-203, Title V, Subtitle B), the director may collect taxes on 100 percent of the gross amount of premiums on Oregon home state risks. If the director enters into a compact or otherwise establishes procedures with other states pursuant to ORS 735.418, the director by rule shall establish procedures to facilitate the reporting, collection, payment, allocation and disbursement of premium taxes on Oregon home state risks that also include risks allocable to other states. (5) As used in this section, "gross amount of premiums" has the meaning given that term in ORS 731.808. [1987 c.774 131; 1989 c.288 2; 1995 c.786 10; 2001 c.191 48a; 2003 c.364 44; 2007 c.71 237; 2011 c.660 8; 2021 c.539 145] Note: The name of the office of the State Fire Marshal is being changed to the Department of the State Fire Marshal. The name change becomes operative on July 1, 2023. See sections 89 and 155a, chapter 539, Oregon Laws 2021. Between July 1, 2022, and July 1, 2023, references to the Department of the State Fire Marshal shall be construed to mean the office of the State Fire Marshal in the Department of State Police. See section 155c, chapter 539, Oregon Laws 2021. Note: The amendments to 735.470 by section 145, chapter 539, Oregon Laws 2021, become operative July 1, 2022. See section 155, chapter 539, Oregon Laws 2021. The text that is operative until July 1, 2022, is set forth for the users convenience. (1)(a) The surplus lines licensee shall pay the Director of the Department of Consumer and Business Services a surplus lines premium tax equal to two percent of the gross amount of premiums received on Oregon home state risks as shown in the report required by ORS 735.465. (b) Notwithstanding ORS 731.820, the surplus lines licensee shall also pay to the director a tax equal to 0.3 percent of the premium or fees charged by the insurer or the insurers insurance producer and other intermediaries for the insurance, for the purpose of maintaining the office of the State Fire Marshal and paying the expenses incident thereto. (c) The taxes shall be collected by the surplus lines licensee as specified by the director, in addition to the gross amount of premiums charged by the insurer or the insurers insurance producer and other intermediaries for the insurance. The taxes on any portion of the premium unearned at termination of insurance having been credited by the state to the licensee shall be returned to the policyholder directly by the surplus lines licensee or through the producing insurance producer, if any. The surplus lines licensee is prohibited from absorbing the taxes, and from rebating for any reason, any part of the taxes. (2) The surplus lines taxes are due quarterly on the 45th day following the calendar quarter in which the premium is collected. The taxes shall be paid to and reported on forms prescribed by the director or upon the directors order paid to and reported on forms prescribed by the Surplus Line Association of Oregon. (3) Notwithstanding subsection (2) of this section, if a surplus lines license is terminated or nonrenewed for any reason, the taxes described in this section are due on the 30th day after the termination or nonrenewal. (4) For the purposes of carrying out the Nonadmitted and Reinsurance Reform Act of 2010 (P.L. 111-203, Title V, Subtitle B), the director may collect taxes on 100 percent of the gross amount of premiums on Oregon home state risks. If the director enters into a compact or otherwise establishes procedures with other states pursuant to ORS 735.418, the director by rule shall establish procedures to facilitate the reporting, collection, payment, allocation and disbursement of premium taxes on Oregon home state risks that also include risks allocable to other states. (5) As used in this section, "gross amount of premiums" has the meaning given that term in ORS 731.808.
If the tax collectible by a surplus lines licensee under ORS 735.400 to 735.495 is not paid within the time prescribed, the same shall be recoverable in a suit brought by the Director of the Department of Consumer and Business Services against the surplus lines licensee. [1987 c.774 132; 1989 c.288 3; 2001 c.191 48b]
The Director of the Department of Consumer and Business Services may suspend, revoke or refuse to renew the license of a surplus lines licensee after notice and hearing as provided under the applicable provision of this states laws upon any one or more of the following grounds: (1) Removal of the surplus lines licensees office from this state, if the licensee is a resident insurance producer; (2) Removal of the surplus lines licensees office accounts and records from the principal place of business of the licensee under ORS 744.068 during the period during which such accounts and records are required to be maintained under ORS 735.460; (3) Closing of the surplus lines licensees office for a period of more than 30 business days, unless permission is granted by the director; (4) Failure to make and file required reports; (5) Failure to transmit required tax on surplus lines premiums; (6) Violation of any provision of ORS 735.400 to 735.495; or (7) For any cause for which an insurance license could be denied, revoked, suspended or renewal refused under ORS 744.074. [1987 c.774 133; 1989 c.288 4; 2001 c.191 49; 2003 c.364 45]
(1) A surplus lines insurer may be sued upon any cause of action arising in this state under any surplus lines insurance contract on an Oregon home state risk made by it or evidence of insurance issued or delivered by the surplus lines licensee pursuant to the procedure provided in ORS 735.490. Any surplus lines policy issued by the surplus lines licensee shall contain a provision stating the substance of this section and designating the person to whom process shall be delivered. (2) Each surplus lines insurer assuming surplus lines insurance shall be considered thereby to have subjected itself to ORS 735.400 to 735.495. (3) The remedies provided in this section are in addition to any other methods provided by law for service of process upon insurers. (4) When a nonresident surplus lines insurance producer transacts outside this state a surplus lines insurance contract covering an Oregon home state risk, the producer and the surplus lines insurer of the contract are subject to this section and to ORS 735.490 or to rules adopted by the director in lieu thereof. [1987 c.774 134; 1989 c.288 5; 2001 c.191 49a; 2011 c.660 18]
(1) An insurer transacting insurance on an Oregon home state risk under the provisions of ORS 735.400 to 735.495 may be sued upon any cause of action, arising under any policy of insurance so issued and delivered by it, in the courts for the county where the insurance producer who registered or delivered the policy resides or transacts business, by the service of summons and complaint made upon the insurance producer for the insurer. (2) Any insurance producer served with summons and complaint in any such cause shall forthwith mail the summons and complaint, or a true and complete copy thereof, by registered or certified mail with proper postage affixed and properly addressed, to the insurer being sued. (3) The insurer shall have 40 days from the date of the service of the summons and complaint upon the insurance producer in which to plead, answer or defend any such cause. (4) Upon service of summons and complaint upon the insurance producer for the insurer, the court in which the action is begun shall be deemed to have duly acquired personal jurisdiction of the defendant insurer so served. (5) An insurer and policyholder may agree to waive the provisions of subsections (1) to (4) of this section governing service and venue with respect to a surplus lines insurance contract for commercial property and casualty risk if the waiver is specifically referred to in the contract or in an indorsement attached to the contract. [1987 c.774 137; 2001 c.191 49b; 2003 c.364 46; 2011 c.660 19]
ORS 731.324, 731.328, 731.512 and 731.624 do not apply to surplus lines insurers. [2005 c.185 17]
(1) ORS 735.400 to 735.495 shall be known and may be cited as "The Oregon Surplus Lines Law." (2) If any provisions of ORS 735.400 to 735.495, or the application of such provision to any person or circumstance, is held invalid, the remainder of ORS 735.400 to 735.495 and the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected. [1987 c.774 116,136]
(1) As used in this section and ORS 735.510: (a) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. A person who is the owner of 10 percent or more ownership interest in a retainer medical practice or applicant for a certificate to operate a retainer medical practice is presumed to have control. (b) "Primary care" means outpatient, nonspecialty medical services or the coordination of health care for the purpose of: (A) Promoting or maintaining mental and physical health and wellness; and (B) Diagnosis, treatment or management of acute or chronic conditions caused by disease, injury or illness. (c) "Provider" means a health care professional licensed or certified under ORS chapter 677, 678, 684 or 685 who provides primary care in the ordinary course of business or practice of a profession. (d) "Retainer medical agreement" means a written agreement between a retainer medical practice and a patient or a legal representative or guardian of a patient specifying a defined and predetermined set of primary care services to be provided in consideration for a retainer medical fee. (e) "Retainer medical fee" means any fee paid to a retainer medical practice pursuant to a medical retainer agreement. (f) "Retainer medical practice" means a provider, a group of providers or a person that employs or contracts with a provider or a group of providers to provide services under the terms of a retainer medical agreement. (2) A retainer medical practice must be certified by the Department of Consumer and Business Services. To qualify to become a certified retainer medical practice or to renew a certificate, the practice: (a) May not have or have ever had a certificate of authority to transact insurance in this state. (b) May not be or have ever been licensed, certified or otherwise authorized in this state or any other state to act as an insurer, managed care organization, health care service contractor or similar entity. (c) May not be controlled by an entity described in paragraph (a) or (b) of this subsection. (3) A certified retainer medical practice: (a) Must provide only primary care and must limit the scope of services provided or the number of patients served to an amount that is within the capacity of the practice to provide in a timely manner; (b) May not bill an insurer, a self-insured plan or the state medical assistance program for a service provided by the practice to a patient pursuant to a retainer medical agreement; (c) Must be financially responsible and have the necessary business experience or expertise to operate the practice; (d) Must give the written disclosures described in subsection (4) of this section; (e) May not use or disseminate misleading, deceptive or false statements in marketing, advertising, promotional, sales or informational materials regarding the practice or in communications with patients or prospective patients; (f) May not engage in dishonest, fraudulent or illegal conduct in any business or profession; and (g) May not discriminate based on race, religion, gender, sexual identity, sexual preference or health status. (4) A certified retainer medical practice must make the following written information available to prospective patients by prominently disclosing, in the manner prescribed by the department by rule, in marketing materials and retainer medical agreements: (a) That the practice is not insurance; (b) That the practice provides only the limited scope of primary care services specified in the retainer medical agreement; (c) That a patient must pay for all services not specified in the retainer medical agreement; and (d) Any other disclosures required by the department by rule. (5) The department may by written order deny, suspend or revoke a retainer medical practice certificate or may refuse to renew a retainer medical practice certificate if the department finds that: (a) The retainer medical practice does not meet the criteria in subsections (2) to (4) of this section; (b) The retainer medical practice has provided false, misleading, incomplete or inaccurate information in the application for a certificate or renewal of a certificate; (c) The retainer medical practice provides medical services through a provider whose license to provide the medical services offered on behalf of the retainer medical practice is revoked; (d) The authority of the retainer medical practice to operate a retainer medical practice or similar practice in another jurisdiction is denied, suspended, revoked or not renewed; (e) The retainer medical practice, a person who has control over the retainer medical practice or a health care provider providing services on behalf of the retainer medical practice is charged with a felony or misdemeanor involving dishonesty; or (f) The retainer medical practice fails to comply with subsection (7) of this section. (6) With respect to a certified retainer medical practice or a retainer medical practice operating without a certificate, the department is authorized to: (a) Investigate; (b) Subpoena documents and records related to the business of the practice; and (c) Take any actions authorized by the Insurance Code that are necessary to administer and enforce this section. (7) A retainer medical practice subject to an investigation under subsection (5) of this section must: (a) Within five business days, respond to inquiries in the form and manner specified by the department; and (b) Reimburse the expenses incurred by the department in conducting the investigation. (8) A retainer medical practice may contest any order made under subsection (5) of this section in accordance with ORS chapter 183. (9) A certificate issued under subsection (2) of this section is effective for one year or for a longer period as prescribed by the department by rule. (10) The department may adopt rules necessary or appropriate to implement the provisions of this section. [2011 c.499 2] Note: 735.500 and 735.510 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 735 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
A certified retainer medical practice shall: (1) Notify the Department of Consumer and Business Services immediately whenever: (a) The license of a provider who has provided services on behalf of the practice is denied, suspended, revoked or not renewed in this state or in any other jurisdiction; or (b) The authority of the practice to operate in another jurisdiction is denied, suspended, revoked or not renewed. (2) Notify the department no later than 30 days after any change to the name, address or contact information that is provided in the application for certification under ORS 735.500. [2011 c.499 3] Note: See note under 735.500.
(1) As used in this section: (a) "Dental services contract" means a contract between an insurer and a provider or a group of providers to provide dental health services for enrollees. "Dental services contract" does not include a contract of employment or a contract creating legal entities and ownership thereof that are authorized under ORS chapter 58, 60 or 70, or other similar professional organizations permitted by statute. (b) "Enrollee" means a person entitled to receive dental health benefits from an insurer. (c) "Provider" means a person licensed or otherwise authorized by the laws of this state to administer dental health services in the ordinary course of business or practice of a profession. (2) A dental services contract may not restrict the price that a provider may charge for services provided to an enrollee unless the services are covered by the insurer. [2010 c.74 2] Note: 735.515 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 735 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Eligible employer" means an operator of a facility that: (A) Is a participating provider in the state medical assistance program; (B) Elects to participate in the Oregon Essential Workforce Health Care Program; and (C) Meets other requirements prescribed by the Oregon Health Authority by rule. (b) "Facility" includes: (A) A long term care facility licensed under ORS 441.020; (B) A residential facility as defined in ORS 443.400; and (C) An in-home care agency licensed under ORS 443.315. (2) The Oregon Essential Workforce Health Care Program is established in the Oregon Health Authority. The authority, in coordination with the Department of Human Services, shall provide supplemental payments, as approved by the Centers for Medicare and Medicaid Services, to eligible employers to be used by the eligible employers to provide health care benefits to the employees of their facilities. (3) To participate in the program, an eligible employer shall: (a) Enter into a memorandum of understanding with the authority that specifies how the supplemental payments will be used; (b) Agree to participate in evidence-based workforce and quality of care improvements; and (c) Annually report quality and other metrics. (4) The authority, in coordination with the department, may adopt rules to carry out the provisions of this section. [2021 c.595 1] Note: 735.520 becomes operative upon receipt of approval from the Centers for Medicare and Medicaid Services. See section 4, chapter 595, Oregon Laws 2021. Note: 735.520 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 735 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation. Note: Section 3, chapter 595, Oregon Laws 2021, provides: Sec. 3. (1) The Oregon Health Authority shall seek approval from the Centers for Medicare and Medicaid Services to make the supplemental payments to eligible employers under section 1 of this 2021 Act [735.520]. (2) The authority shall notify the Legislative Counsel upon receipt of the approval or denial of approval by the Centers for Medicare and Medicaid Services under subsection (1) of this section. [2021 c.595 3]
As used in ORS 735.530 to 735.552: (1) "Claim" means a request from a pharmacy or pharmacist to be reimbursed for the cost of filling or refilling a prescription for a drug or for providing a medical supply or service. (2) "Enrollee" means an individual who has enrolled for coverage in a health benefit plan for which a pharmacy benefit manager has contracted with the insurer to reimburse claims submitted by pharmacies or pharmacists for the costs of drugs prescribed for the individual. (3) "Health benefit plan" has the meaning given that term in ORS 743B.005. (4) "Insurer" has the meaning given that term in ORS 731.106. (5) "Long term care pharmacy" means a pharmacy for which the primary business is to serve a: (a) Licensed long term care facility, as defined in ORS 442.015; (b) Licensed residential facility, as defined in ORS 443.400; or (c) Licensed adult foster home, as defined in ORS 443.705. (6) "Mail order pharmacy" means a pharmacy for which the primary business is to receive prescriptions by mail, telephone or electronic transmission and dispense drugs to patients through the use of the United States Postal Service, a package delivery service or home delivery. (7) "Network pharmacy" means a pharmacy that contracts with a pharmacy benefit manager. (8) "Pharmacist" has the meaning given that term in ORS 689.005. (9) "Pharmacy" includes: (a) A pharmacy as defined in ORS 689.005; (b) A long term care pharmacy; and (c) An entity that provides or oversees administrative services for two or more pharmacies. (10) "Pharmacy benefit" means the payment for or reimbursement of an enrollees cost for prescription drugs. (11)(a) "Pharmacy benefit manager" means a person that contracts with pharmacies on behalf of an insurer offering a health benefit plan, a third party administrator or the Oregon Prescription Drug Program established in ORS 414.312 to: (A) Process claims for prescription drugs or medical supplies or provide retail network management for pharmacies or pharmacists; (B) Pay pharmacies or pharmacists for prescription drugs or medical supplies; or (C) Negotiate rebates with manufacturers for drugs paid for or procured as described in this paragraph. (b) "Pharmacy benefit manager" does not include a health care service contractor as defined in ORS 750.005. (12) "Specialty drug" means a drug that: (a) Is subject to restricted distribution by the United States Food and Drug Administration; or (b) Requires special handling, provider coordination or patient education that cannot be provided by a retail pharmacy. (13) "Specialty pharmacy" means a pharmacy capable of meeting the requirements applicable to specialty drugs. (14) "Third party administrator" means a person licensed under ORS 744.702. (15) "340B pharmacy" means a pharmacy that is authorized to purchase drugs at a discount under 42 U.S.C. 256b. [2013 c.570 2; 2017 c.73 5; 2019 c.526 3] Note: 735.530 to 735.552 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 735 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) To conduct business in this state, a pharmacy benefit manager must register with the Department of Consumer and Business Services and annually renew the registration. (2) To register under this section, a pharmacy benefit manager must: (a) Submit an application to the department on a form prescribed by the department by rule. (b) Pay a registration fee in an amount adopted by the department by rule. (3) To renew a registration under this section, a pharmacy benefit manager must pay a renewal fee in an amount adopted by the department by rule. (4) The department shall deposit all moneys collected under this section into the Consumer and Business Services Fund created in ORS 705.145. (5) Any fee adopted by the department under this section must be based on the departments reasonable costs in administering ORS 735.530 to 735.552. [2013 c.570 3; 2017 c.73 3] Note: See note under 735.530.
(1) In accordance with ORS chapter 183, the Department of Consumer and Business Services may deny an application for registration as a pharmacy benefit manager or an application for renewal of a registration as a pharmacy benefit manager, and may suspend or revoke a registration as a pharmacy benefit manager, if the department finds that an applicant or registrant: (a) Falsified an application for registration or for the renewal of a registration or engaged in any dishonest act in relation to the application; (b) Engaged in dishonesty, fraud or gross negligence in the conduct of business as a pharmacy benefit manager; (c) Engaged in conduct that resulted in a conviction of a felony under the laws of any state or of the United States, to the extent that such conduct may be considered under ORS 670.280; (d) Was convicted under the laws of any state or of the United States of any crime of which an essential element is dishonesty or fraud; (e) Had a certificate of authority or authority to conduct business as a pharmacy benefit manager denied, revoked or suspended in another state; (f) Failed to pay a civil penalty imposed by final order of the department or to comply with the terms of suspension set by the department; (g) Failed to meet the terms of a consent decree approved by a court of competent jurisdiction in this state, or a consent order made between the department and the pharmacy benefit manager; (h) Refused to be examined or to produce accounts, records or files for examination, including the refusal by any officer of the applicant or registrant to give information with respect to the affairs of the pharmacy benefit manager, or refused to perform any other legal obligation with respect to an examination by the department; or (i) Violated any rule or order of the department or any provision of the Insurance Code. (2) The department may prescribe by rule a procedure by which a pharmacy or an entity acting on behalf of a pharmacy may file a complaint with the department alleging that a pharmacy benefit manager has engaged in conduct described in this section. The department may restrict the right of a pharmacy or entity to file a complaint only to the extent necessary to prevent abuse of the complaint process. [2017 c.73 2] Note: See note under 735.530.
(1) As used in this section: (a)(A) "Generally available for purchase" means a drug is available for purchase in this state by a pharmacy from a national or regional wholesaler at the time a claim for reimbursement is submitted by a network pharmacy. (B) A drug is not "generally available for purchase" if the drug: (i) May be dispensed only in a hospital or inpatient care facility; (ii) Is unavailable due to a shortage of the product or an ingredient; (iii) Is available to a pharmacy at a price that is at or below the maximum allowable cost only if purchased in substantial quantities that are inconsistent with the business needs of a pharmacy; (iv) Is sold at a discount due to a short expiration date on the drug; or (v) Is the subject of an active or pending recall. (b) "List" means the list of drugs for which maximum allowable costs have been established. (c) "Maximum allowable cost" means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug. (d) "Multiple source drug" means a therapeutically equivalent drug that is available from at least two manufacturers. (e) "Therapeutically equivalent" has the meaning given that term in ORS 689.515. (2) A pharmacy benefit manager registered under ORS 735.532: (a) May not place a drug on a list unless there are at least two multiple source drugs, or at least one generic drug generally available for purchase. (b) Shall ensure that all drugs on a list are generally available for purchase. (c) Shall ensure that no drug on a list is obsolete. (d) Shall make available to each network pharmacy at the beginning of the term of a contract, and upon renewal of a contract, the specific authoritative industry sources, other than proprietary sources, the pharmacy benefit manager uses to determine the maximum allowable cost set by the pharmacy benefit manager. (e) Shall make a list available to a network pharmacy upon request in a format that: (A) Is electronic; (B) Is computer accessible and searchable; (C) Identifies all drugs for which maximum allowable costs have been established; and (D) For each drug specifies: (i) The national drug code; and (ii) The maximum allowable cost. (f) Shall update each list maintained by the pharmacy benefit manager every seven business days and make the updated lists, including all changes in the price of drugs, available to network pharmacies in the format described in paragraph (e) of this subsection. (g) Shall ensure that dispensing fees are not included in the calculation of maximum allowable cost. (h) May not reimburse a 340B pharmacy differently than any other network pharmacy based on its status as a 340B pharmacy. (i) May not retroactively deny or reduce a claim for reimbursement of the cost of services after the claim has been adjudicated by the pharmacy benefit manager unless the: (A) Adjudicated claim was submitted fraudulently; (B) Pharmacy benefit managers payment on the adjudicated claim was incorrect because the pharmacy or pharmacist had already been paid for the services; (C) Services were improperly rendered by the pharmacy or pharmacist; or (D) Pharmacy or pharmacist agrees to the denial or reduction prior to the pharmacy benefit manager notifying the pharmacy or pharmacist that the claim has been denied or reduced. (3) Subsection (2)(i) of this section may not be construed to limit pharmacy claim audits under ORS 735.540 to 735.552. (4) A pharmacy benefit manager must establish a process by which a network pharmacy may appeal its reimbursement for a drug subject to maximum allowable cost pricing. A network pharmacy may appeal a maximum allowable cost if the reimbursement for the drug is less than the net amount that the network pharmacy paid to the supplier of the drug. The process must allow a network pharmacy a period of no less than 60 days after a claim is reimbursed in which to file the appeal. An appeal requested under this section must be completed within 30 calendar days of the pharmacy making the claim for which appeal has been requested. (5) A pharmacy benefit manager shall allow a network pharmacy to submit the documentation in support of its appeal on paper or electronically and may not: (a) Refuse to accept an appeal submitted by a person authorized to act on behalf of the network pharmacy; (b) Refuse to adjudicate an appeal for the reason that the appeal is submitted along with other claims that are denied; or (c) Impose requirements or establish procedures that have the effect of unduly obstructing or delaying an appeal. (6) A pharmacy benefit manager must provide as part of the appeals process established under subsection (4) of this section: (a) A telephone number at which a network pharmacy may contact the pharmacy benefit manager and speak with an individual who is responsible for processing appeals; (b) A final response to an appeal of a maximum allowable cost within seven business days; and (c) If the appeal is denied, the reason for the denial and the national drug code of a drug that may be purchased by similarly situated pharmacies at a price that is equal to or less than the maximum allowable cost. (7)(a) If an appeal is upheld under this section, the pharmacy benefit manager shall: (A) Make an adjustment for the pharmacy that requested the appeal from the date of initial adjudication forward; and (B) Allow the pharmacy to reverse the claim and resubmit an adjusted claim without any additional charges. (b) If the request for an adjustment has come from a critical access pharmacy, as defined by the Oregon Health Authority by rule for purposes related to the Oregon Prescription Drug Program, the adjustment approved under paragraph (a) of this subsection shall apply only to critical access pharmacies. (8) This section does not apply to the state medical assistance program. (9) The Department of Consumer and Business Services may adopt rules to carry out the provisions of this section. [2013 c.570 11; 2013 c.570 13; 2019 c.526 4] Note: See note under 735.530.
(1) As used in this section, "out-of-pocket cost" means the amount paid by an enrollee under the enrollees coverage, including deductibles, copayments, coinsurance or other expenses as prescribed by the Department of Consumer and Business Services by rule. (2) A pharmacy benefit manager registered under ORS 735.532: (a) May not require a prescription to be filled or refilled by a mail order pharmacy as a condition for reimbursing the cost of the drug. (b) Except as provided in paragraph (c) of this subsection, may require a prescription for a specialty drug to be filled or refilled at a specialty pharmacy as a condition for the reimbursement of the cost of a drug. (c) Shall reimburse the cost of a specialty drug that is filled or refilled at a network pharmacy that is a long term care pharmacy. (d)(A) Shall allow a network pharmacy to mail, ship or deliver prescription drugs to its patients as an ancillary service. (B) Is not required to reimburse a delivery fee charged by a pharmacy for a delivery described in subparagraph (A) of this paragraph unless the fee is specified in the contract between the pharmacy benefit manager and the pharmacy. (e) May not require a patient signature as proof of delivery of a mailed or shipped prescription drug if the network pharmacy: (A)(i) Maintains a mailing or shipping log signed by a representative of the pharmacy; or (ii) Maintains each notification of delivery provided by the United States Postal Service or a package delivery service; and (B) Is responsible for the cost of mailing, shipping or delivering a replacement for a drug that was mailed or shipped but not received by the enrollee. (f) May not penalize a network pharmacy for or otherwise directly or indirectly prevent a network pharmacy from informing an enrollee of the difference between the out-of-pocket cost to the enrollee to purchase a prescription drug using the enrollees pharmacy benefit and the pharmacys usual and customary charge for the prescription drug. (3) The Department of Consumer and Business Services may adopt rules to carry out the provisions of this section. [2019 c.526 2] Note: 735.536 applies to pharmacy benefits and to contracts entered into, renewed or extended on or after January 1, 2021. See section 5, chapter 526, Oregon Laws 2019. Note: See note under 735.530.
As used in ORS 735.540 to 735.552: (1) "Audit" means an on-site or remote review of the records of a pharmacy by or on behalf of an entity. (2) "Clerical error" means a minor error: (a) In the keeping, recording or transcribing of records or documents or in the handling of electronic or hard copies of correspondence; (b) That does not result in financial harm to an entity; and (c) That does not involve dispensing an incorrect dose, amount or type of medication or dispensing a prescription drug to the wrong person. (3) "Entity" includes: (a) A pharmacy benefit manager; (b) An insurer; (c) A third party administrator; (d) A state agency; or (e) A person that represents or is employed by one of the entities described in this subsection. (4) "Fraud" means knowingly and willfully executing or attempting to execute a scheme, in connection with the delivery of or payment for health care benefits, items or services, that uses false or misleading pretenses, representations or promises to obtain any money or property owned by or under the custody or control of any person. [2013 c.570 4] Note: See note under 735.530.
An entity that audits claims or an independent third party that contracts with an entity to audit claims: (1) Must establish, in writing, a procedure for a pharmacy to appeal the entitys findings with respect to a claim and must provide a pharmacy with a notice regarding the procedure, in writing or electronically, prior to conducting an audit of the pharmacys claims; (2) May not conduct an audit of a claim more than 24 months after the date the claim was adjudicated by the entity; (3) Must give at least 15 days advance written notice of an on-site audit to the pharmacy or corporate headquarters of the pharmacy; (4) May not conduct an on-site audit during the first five days of any month without the pharmacys consent; (5) Must conduct the audit in consultation with a pharmacist who is licensed by this or another state if the audit involves clinical or professional judgment; (6) May not conduct an on-site audit of more than 250 unique prescriptions of a pharmacy in any 12-month period except in cases of alleged fraud; (7) May not conduct more than one on-site audit of a pharmacy in any 12-month period; (8) Must audit each pharmacy under the same standards and parameters that the entity uses to audit other similarly situated pharmacies; (9) Must pay any outstanding claims of a pharmacy no more than 45 days after the earlier of the date all appeals are concluded or the date a final report is issued under ORS 735.550 (3); (10) May not include dispensing fees or interest in the amount of any overpayment assessed on a claim unless the overpaid claim was for a prescription that was not filled correctly; (11) May not recoup costs associated with: (a) Clerical errors; or (b) Other errors that do not result in financial harm to the entity or a consumer; and (12) May not charge a pharmacy for a denied or disputed claim until the audit and the appeals procedure established under subsection (1) of this section are final. [2013 c.570 5] Note: See note under 735.530.
An entitys finding that a claim was incorrectly presented or paid must be based on identified transactions and not based on probability sampling, extrapolation or other means that project an error using the number of patients served who have a similar diagnosis or the number of similar prescriptions or refills for similar drugs. [2013 c.570 6] Note: See note under 735.530.
An entity that contracts with an independent third party to conduct audits may not: (1) Agree to compensate the independent third party based on a percentage of the amount of overpayments recovered; or (2) Disclose information obtained during an audit except to the contracting entity, the pharmacy subject to the audit or the holder of the policy or certificate of insurance that paid the claim. [2013 c.570 7] Note: See note under 735.530.
For purposes of ORS 735.540 to 735.552, an entity, or an independent third party that contracts with an entity to conduct audits, must allow as evidence of validation of a claim: (1) An electronic or physical copy of a prescription that complies with ORS chapter 689 if the prescribed drug was, within 14 days of the dispensing date: (a) Picked up by the patient or the patients designee; (b) Delivered by the pharmacy to the patient; or (c) Sent by the pharmacy to the patient using the United States Postal Service or other common carrier; (2) Point of sale electronic register data showing purchase of the prescribed drug, medical supply or service by the patient or the patients designee; or (3) Electronic records, including electronic beneficiary signature logs, electronically scanned and stored patient records maintained at or accessible to the audited pharmacys central operations and any other reasonably clear and accurate electronic documentation that corresponds to a claim. [2013 c.570 8] Note: See note under 735.530.
(1)(a) After conducting an audit, an entity must provide the pharmacy that is the subject of the audit with a preliminary report of the audit. The preliminary report must be received by the pharmacy no later than 45 days after the date on which the audit was completed and must be sent: (A) By mail or common carrier with a return receipt requested; or (B) Electronically with electronic receipt confirmation. (b) An entity shall provide a pharmacy receiving a preliminary report under this subsection no fewer than 45 days after receiving the report to contest the report or any findings in the report in accordance with the appeals procedure established under ORS 735.542 (1) and to provide additional documentation in support of the claim. The entity shall consider a reasonable request for an extension of time to submit documentation to contest the report or any findings in the report. (2) If an audit results in the dispute or denial of a claim, the entity conducting the audit shall allow the pharmacy to resubmit the claim using any commercially reasonable method, including facsimile, mail or electronic mail. (3) An entity must provide a pharmacy that is the subject of an audit with a final report of the audit no later than 60 days after the later of the date the preliminary report was received or the date the pharmacy contested the report using the appeals procedure established under ORS 735.542 (1). The final report must include a final accounting of all moneys to be recovered by the entity. (4) Recoupment of disputed funds from a pharmacy by an entity or repayment of funds to an entity by a pharmacy, unless otherwise agreed to by the entity and the pharmacy, shall occur after the audit and the appeals procedure established under ORS 735.542 (1) are final. If the identified discrepancy for an individual audit exceeds $40,000, any future payments to the pharmacy may be withheld by the entity until the audit and the appeals procedure established under ORS 735.542 (1) are final. [2013 c.570 9] Note: See note under 735.530.
ORS 735.540 to 735.552 do not: (1) Preclude an entity from instituting an action for fraud against a pharmacy; (2) Apply to an audit of pharmacy records when fraud or other intentional and willful misrepresentation is evidenced by physical review, review of claims data or statements or other investigative methods; or (3) Apply to a state agency that is conducting audits or a person that has contracted with a state agency to conduct audits of pharmacy records for prescription drugs paid for by the state medical assistance program. [2013 c.570 10] Note: See note under 735.530.
[2016 c.94 1; 2021 c.569 9; renumbered 413.610 in 2021]
[2016 c.94 2; renumbered 413.611 in 2021]
[2016 c.94 3; 2021 c.569 10; renumbered 413.612 in 2021]
[2016 c.94 5; 2021 c.569 11; renumbered 413.613 in 2021]
[Formerly 653.800; 2003 c.684 8; 2005 c.727 5,5a; 2005 c.744 23d,23e,23g; 2007 c.70 317; renumbered 414.841 in 2009]
[Formerly 653.805; 2003 c.128 1; 2003 c.683 4; 2003 c.784 12; 2005 c.238 6; 2005 c.262 6; 2005 c.727 6; 2005 c.744 24a; 2009 c.595 1125; renumbered 414.842 in 2009]
[Formerly 653.810; 2003 c.128 2; 2003 c.683 1; 2005 c.238 7; 2005 c.262 7; 2005 c.727 7; 2005 c.744 25; renumbered 414.844 in 2009]
[Formerly 653.815; 2005 c.744 26; renumbered 414.846 in 2009]
[Formerly 653.820; 2005 c.744 27; renumbered 414.848 in 2009]
[Formerly 653.825; 2005 c.744 28; renumbered 414.851 in 2009]
[2003 c.683 3; 2003 c.735 12; 2005 c.744 29; renumbered 414.852 in 2009]
[Formerly 653.830; 2005 c.744 30; renumbered 414.854 in 2009]
[2003 c.684 11; 2005 c.744 31; renumbered 414.856 in 2009]
[Formerly 653.835; 2005 c.744 32; 2009 c.595 1126; renumbered 414.858 in 2009]
[Formerly 653.840; 2005 c.744 33; renumbered 414.861 in 2009]
[Formerly 653.845; 2005 c.238 8; 2005 c.727 8; renumbered 414.862 in 2009]
[Formerly 653.850; 2003 c.684 9; 2005 c.744 34; 2007 c.71 238; renumbered 414.864 in 2009]
[2003 c.684 1; 2005 c.744 35; renumbered 414.866 in 2009]
[2003 c.684 2; renumbered 414.868 in 2009]
[2003 c.684 3; 2005 c.744 36; 2009 c.595 1127; renumbered 414.870 in 2009]
[2003 c.684 4; 2009 c.595 1128; renumbered 414.872 in 2009]
[1965 c.324 2; 1967 c.359 2; renumbered 731.008]
[1961 c.562 3; 1967 c.359 9; renumbered 731.042]
[Amended by 1955 c.222 1; 1967 c.359 82; renumbered 731.390]
[Amended by 1967 c.359 74; renumbered 731.358]
[Amended by 1955 c.188 1; 1961 c.466 3; 1967 c.359 111; renumbered 731.574]
[1965 c.285 94f; 1967 c.359 317; renumbered 737.348]
[1965 c.285 94g; 1967 c.359 138; renumbered 731.832]
[Amended by 1955 c.409 2; 1959 c.338 1; 1963 c.397 2; 1967 c.359 75; renumbered 731.362]
[Amended by 1967 c.359 79; renumbered 731.378]
[1961 c.472 2, 3; 1967 c.359 142; renumbered 731.854]
[1961 c.472 4; 1967 c.359 20; renumbered 731.096]
[1961 c.472 5; 1967 c.359 143; renumbered 731.858]
[1959 c.323 2; 1967 c.359 592; renumbered 746.320]
[1959 c.323 3; 1967 c.359 593; renumbered 746.330]
[1959 c.323 4,5; 1967 c.359 594; renumbered 746.340]
[1959 c.323 6; 1967 c.359 595; renumbered 746.350]
[1959 c.323 7; 1967 c.359 596; renumbered 746.360]
[1965 c.406 2; 1967 c.359 336; renumbered 743.006]
[Amended by 1967 c.359 348; renumbered 743.045]
[Amended by 1955 c.225 1; 1967 c.359 357; 1967 c.453 5; renumbered 743.072]
[Amended by 1967 c.359 349; renumbered 743.048]
[Amended by 1967 c.359 523; renumbered 743.783]
[Amended by 1965 c.611 16; 1967 c.359 371; renumbered 743.114]
[1961 c.466 2; 1967 c.359 345; renumbered 743.036]
[1961 c.466 4; 1967 c.359 363; renumbered 743.090]
[Amended by 1967 c.359 576; renumbered 746.100]
[Amended by 1963 c.462 1; 1967 c.359 559; renumbered 744.505]
[1957 c.3 2; 1967 c.359 564; renumbered 744.555]
[1963 c.580 87; 1967 c.359 44; renumbered 731.204]
[1963 c.580 88; 1967 c.359 45; renumbered 731.208]
[1963 c.580 89; 1967 c.359 47; renumbered 731.216]
[1963 c.580 90(1); 1967 c.359 48; renumbered 731.220]
[Amended by 1967 c.359 61; renumbered 731.272]
[Amended by 1961 c.308 3; 1967 c.359 66; renumbered 731.292]
[1965 c.173 2; 1967 c.359 67; renumbered 731.296]
[Amended by 1967 c.359 68; renumbered 731.300]
[Amended by 1967 c.359 70; renumbered 731.308]
[Amended by 1967 c.359 71; renumbered 731.312]
[Amended by 1957 c.34 2; 1967 c.359 72; renumbered 731.316]
[1965 c.57 2; 1967 c.359 65; renumbered 731.288]
[1955 c.500 2; 1967 c.359 577; renumbered 746.110]
[Amended by 1967 c.359 582; renumbered 746.160]
[Amended by 1967 c.359 98; renumbered 731.454]
[1965 c.173 3; 1967 c.359 58; renumbered 731.260]
[1963 c.277 2; 1967 c.359 583; renumbered 746.170]
[1963 c.277 4; 1967 c.359 584; renumbered 746.180]
[1963 c.277 3; 1967 c.359 585; renumbered 746.190]
[1963 c.277 5; 1967 c.359 586; renumbered 746.200]
[1963 c.277 6; 1967 c.359 587; renumbered 746.210]
[1965 c.105 6; 1967 c.359 567; renumbered 746.005]
[1965 c.105 8; 1967 c.359 56; renumbered 731.252]
(1) As used in this chapter, unless the context requires otherwise, "rating organization" means: (a) Every person, other than an insurer, whether located within or outside this state who has as the persons object or purpose the making of rates, rating plans or rating systems; or (b) Two or more insurers which act in concert for the purpose of making rates, rating plans or rating systems. (2) Subsection (1) of this section does not include, apply to or affect two or more insurers operating within the specific authorizations contained in ORS 737.275, 737.312, 737.365, 737.390 and 737.526. [1969 c.690 14]
[Amended by 1967 c.359 303; renumbered 737.280]
As used in this chapter, unless the context requires otherwise, "advisory organization" means every group, association or other organization of insurers, whether located within or outside this state, which assists authorized insurers which make their own filings or licensed rating organizations in rate making, by the collection and furnishing of loss or expense statistics or by the submission of recommendations, but which does not make filings under this chapter. [1969 c.690 15]
As used in this chapter, unless the context requires otherwise: (1) "Member" means: (a) An insurer that participates in or is entitled to participate in the management of a rating, advisory or other organization; or (b) For purposes of workers compensation insurance, an insurer that is affiliated or associated with a rating, advisory or other organization by agreement with the organization for the purpose of obtaining the rates and rating manuals or the services offered by the organization. (2) "Subscriber" means an insurer that is furnished at its request: (a) With rates and rating manuals by a rating organization of which it is not a member; or (b) With advisory services by an advisory organization of which it is not a member. [1969 c.690 16; 1999 c.235 6]
(1) The purpose of this chapter is to promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate or unfairly discriminatory and to authorize cooperation between insurers in rate making and other related matters. (2) It is the express intent of this chapter to permit and encourage competition between insurers on a sound financial basis. [1969 c.690 1]
This chapter applies to all forms of insurance on risks or operations in this state, except: (1) Reinsurance, other than joint reinsurance to the extent stated in ORS 737.390; (2) Insurance against loss of, or damage to, aircraft, including accessories and equipment, or against liability arising out of ownership, maintenance or use of aircraft; (3) Wet marine and transportation insurance; (4) Life insurance; (5) Health insurance; or (6) Surplus lines insurance. [1969 c.690 2; 2005 c.185 10]
(1) If the Director of the Department of Consumer and Business Services has reason to believe that a rate, rating plan or rating system filed or used by an insurer or filed by a rating or advisory organization on behalf of an insurer does not comply with the requirements and standards of this chapter, the director may issue an order directing the insurer or the rating or advisory organization to discontinue or desist from the noncompliance. An order issued under this subsection is subject to the provisions of ORS 731.252. (2) If the director holds a hearing on an order issued pursuant to subsection (1) of this section, the insurer or rating or advisory organization filing or using the rate, rating plan or rating system shall pay to the director the just and legitimate costs of the hearing, including actual necessary expenses. (3) If the director finds after a hearing under ORS 737.340 that any rate, rating plan or rating system violates the provisions of this chapter, the director may issue an order specifying the violation and stating when, within a reasonable period of time, the further use of such rate, rating plan or rating system by an insurer or rating or advisory organization shall be prohibited. (4) If the director finds after a hearing under ORS 737.215 or 737.340 that an insurer or rating or advisory organization is in violation of any provision of this chapter other than the provisions dealing with rates, rating plans or rating systems, the director may issue an order specifying the violation and requiring compliance within a reasonable time. (5) If the director finds after a hearing under ORS 737.215 that the violation of any of the provisions of this chapter applicable to it by any insurer or rating organization that has been the subject of a hearing was willful, the director may suspend or revoke the certificate of authority of such insurer or the license of such rating organization. (6) If the director finds after a hearing that any rating organization has willfully engaged in any fraudulent or dishonest act or practices, the director may suspend or revoke the license of such organization. [1969 c.690 10; 1987 c.774 143]
[Amended by 1967 c.359 308; renumbered 737.312]
(1) Every insurer shall file with the Director of the Department of Consumer and Business Services copies of the rates, rating plans and rating systems used by it. Except as provided in ORS 737.207, 737.209 and 737.320 (2), each filing shall become effective immediately on the date specified therein but not earlier than the date such filing is received by the director. This subsection does not apply to inland marine risks which by general custom of the business are not written according to manual rates or rating plans. (2) An insurer may satisfy its obligation to make such filings by becoming a member of or a subscriber to a licensed rating organization which makes such filings, and by authorizing the director to accept such filings on its behalf. Such insurer may so adopt the filings of a rating organization on part of the classes of risks insured by it and may make its own filings as to other classes which shall be uniform throughout the insurers territorial classification. This subsection does not apply to workers compensation insurance filings except to the extent that the rating organization filings of rating plans or systems under ORS 737.320 are complete and usable by an insurer without the addition of allowances for expenses, taxes or profit. (3) A filing shall be open to public inspection immediately upon submission to the director. [1969 c.690 4; 1981 c.535 16; 1987 c.774 50]
(1) As used in this section, a market may be a line, subline or classification of commercial liability insurance. (2) Filings of commercial liability insurance rates for markets specified by the Director of the Department of Consumer and Business Services shall be submitted by an insurer or rating organization to the director for review prior to the effective date if the average annual rate level increase or decrease for each market exceeds 15 percent. Factors to be considered by the director in specifying a market to be subject to this section may include: (a) The nature and extent of competition; (b) The size and significance of the coverage provided; (c) Reinsurance availability; (d) The volume of cancellations and nonrenewals; and (e) Changing conditions in the economic, judicial and social environment. (3) Except as otherwise provided in ORS 737.209, the effective date of a commercial liability insurance filing required by subsection (2) of this section to be submitted to the director for review shall be the date specified therein but not earlier than the 30th day after the filing is received by the director. After review of the filing, the director may authorize an earlier effective date, if appropriate. The 30-day waiting period may be extended to 60 days if the director gives written notice within such waiting period to the insurer or rating organization which made the filing that the extended period is needed for consideration of the filing. A filing subject to subsection (2) of this section that has not been approved or disapproved within the waiting period, or any extension thereof, shall be deemed approved. (4) Supporting actuarial data shall accompany every filing of commercial liability insurance rates. The data shall be in sufficient detail to justify the rate level change and shall demonstrate compliance with ORS 737.310 governing the making of rates. [1987 c.774 48]
(1) The Director of the Department of Consumer and Business Services may hold a hearing on a filing made pursuant to ORS 737.207 if the director determines that such a hearing would aid the director in determining whether to approve or disapprove the filing. A hearing under this section may be held at a place designated by the director and upon not less than 10 days written notice to the insurer or rating organization that made the filing and to any other person the director decides should be notified. A filing that is the subject of a hearing under this section becomes effective, if approved, as provided in subsection (4) of this section. (2) A hearing held pursuant to subsection (1) of this section must be conducted by an administrative law judge assigned from the Office of Administrative Hearings established under ORS 183.605. The administrative law judge shall report findings, conclusions and recommendations to the director within 30 days of the close of the hearing. The insurer or rating organization proposing the rate filing shall have the burden of proving that the rate proposal is justified and shall pay to the director the fair and reasonable costs of the hearing, including actual necessary expenses. (3) Within 10 days of receiving a report from the administrative law judge, the director shall issue an order approving or disapproving the filing. (4) An order issued under subsection (3) of this section may be reviewed as provided in ORS 183.480 to 183.540 for review of contested cases. A filing approved by the director under this section shall be effective 10 days after the order issued under subsection (3) of this section and shall remain effective during any review of the order. [1987 c.774 48a; 1999 c.849 175,176; 2003 c.75 62]
If the Director of the Department of Consumer and Business Services has reason to believe that noncompliance by an insurer with the requirements and standards of this chapter to be willful, or if within the period prescribed by the director in the notice required by ORS 737.336, the insurer, rating or advisory organization does not make such changes as may be necessary to correct the noncompliance specified by the director or establish to the satisfaction of the director that such specified noncompliance does not exist, then the director may hold a hearing in connection therewith, provided that within a reasonable period of time which shall be not less than 10 days before the date of such hearing, the director shall mail written notice to the insurer, rating or advisory organization involved specifying the matters to be considered at such hearing. [1969 c.690 8]
(1) Each insurer, rating organization or advisory organization shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members and of the data, statistics or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys or inspections made or used by it. An insurer providing workers compensation insurance shall maintain reasonable records showing investment income earned by the insurer, insurer profit on workers compensation insurance, accumulated reserves for vocational rehabilitation services and accumulated reserves for claim costs related to orders or awards made pursuant to ORS 656.278. (2) The maintenance of such records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this section for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating plans, rating systems or underwriting rules of such organization. (3) Such records shall be available to the Director of the Department of Consumer and Business Services for examination and inspection at any time in order to determine whether the filings made pursuant to ORS 737.205 comply with this chapter. (4) Each insurer shall maintain statistics under statistical plans compatible with the rating plans used by the insurer. An insurer may report its statistics through a recognized agency or advisory organization, except that workers compensation insurance statistics shall be reported to the workers compensation rating organization of which the insurer is a member. The director shall prescribe by rule the statistical plan for workers compensation insurance. (5)(a) The director shall designate one workers compensation statistical agency from the licensed rating organizations as the agent to which all licensed workers compensation rating organizations shall report workers compensation insurance statistics. The director shall adopt rules to ensure a competitive process in the designation of the one workers compensation statistical agency. (b) The designated workers compensation statistical agency shall assist the director in gathering workers compensation insurance statistics and making compilations of those statistics and shall make the compilations available to insurers and other licensed workers compensation rating organizations, subject to rules adopted by the director. (c) If the director licenses only one workers compensation rating organization under ORS 737.355 (2), that rating organization shall be the designated statistical agent under this subsection. (6) The ownership of the financial and statistical data submitted to a workers compensation statistical agency is vested in the submitting member insurer. The financial and statistical data shall be confidential and may not be disclosed, provided that the ownership rights of an insurer shall not limit access by the director for the purposes of performing the regulatory duties of the Department of Consumer and Business Services. [1969 c.690 11; 1981 c.535 17; 1983 c.360 2; 1987 c.884 54; 1999 c.235 2]
The data collected and maintained by each insurer, rating organization or advisory organization pursuant to ORS 737.225 shall be in sufficient detail to demonstrate the statistical significance of differences or correlations relevant to the rating plan definitions and rate differentials. [1979 c.870 6]
(1) The Director of the Department of Consumer and Business Services may make or cause to be made an examination of every insurer transacting any class of insurance to which the provisions of this chapter are applicable to ascertain whether such insurer and every rate and rating system used by it for every such class of insurance complies with the requirements and standards of this chapter. (2) The officers, managers, agents and employees of any insurer, under examination, may be examined at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation, together with all data, statistics and information of every kind and character collected or considered by such insurer in the conduct of the operations to which such examination relates. (3) The reasonable cost of any examination authorized by this section shall be paid by the organization or insurer to be examined including actual necessary transportation and traveling expenses. (4) Notwithstanding any other provision of law, all reimbursable expenses collected by the director under subsection (3) of this section shall be deposited in the fund created by ORS 705.145 for the payment of expenses incurred in conducting the examinations authorized by this section. The moneys deposited shall be continuously appropriated for such purpose. [1969 c.690 12; 1987 c.373 83]
In the event any insurer shall in collusion with any other insurer conspire to fix, set or adhere to insurance rates except as expressly sanctioned by the Insurance Code, such insurer shall be liable to any person damaged thereby for an amount equal to three times the amount of such damage together with the damaged partys attorney fees. [1969 c.690 13]
Subject to and in compliance with the provisions of this chapter authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data or carrying on of research. [1969 c.690 17]
(1) Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules or policy or bond forms of such organizations, either consistently or intermittently, but, except as provided in ORS 737.275, 737.312, 737.365, 737.390, 737.526 and subsection (2) of this section, shall not agree with each other or rating organizations or others to adhere thereto. The fact that two or more authorized insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization, or the underwriting rules or policy or bond forms prepared by a rating or advisory organization, shall not be sufficient in itself to support a finding that an agreement to so adhere exists, and may be used only for the purpose of supplementing or explaining any competent evidence of the existence of any such agreement. (2) Each insurer transacting workers compensation insurance shall adhere to the policy forms filed by the licensed workers compensation rating organization of which the insurer is a member and approved by the Director of the Department of Consumer and Business Services. [1969 c.690 19; 1971 c.385 4; 1977 c.333 1; 1981 c.535 18; 1999 c.235 3]
(1) When a worker leasing company required to be licensed by ORS 656.850 provides workers to work for a client and also provides the workers compensation coverage for those workers, the insurance premium for the clients exposure shall be based on the clients own experience rating, in the same manner as required for employers insuring directly employed workers. (2) An insurer that provides workers compensation to a worker leasing company shall maintain and report to the licensed workers compensation rating organization of which the insurer is a member separate statistical experience for each client of the worker leasing company according to the uniform statistical plan prescribed by the Director of the Department of Consumer and Business Services according to ORS 737.225 (4). (3) To reimburse expenses incurred by the insurer in segregating client experience, the insurer shall be permitted to charge the worker leasing company a reasonable fee as determined by the director. (4) The worker leasing company shall earn a separate experience rating for any administrative personnel the company employs. [1993 c.628 5; 1999 c.235 4]
With respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data, or carrying on of research, two or more admitted insurers having a common ownership or operating in this state under common management or control are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer, and to the extent that such matters relate to co-surety bonds, two or more admitted insurers executing such bonds are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer. [1969 c.690 21]
The following standards shall apply to the making and use of rates: (1) Rates shall not be excessive, inadequate or unfairly discriminatory. (2) As to all classes of insurance, other than workers compensation and title insurance: (a) No rate shall be held to be excessive unless: (A) Such rate is unreasonably high for the insurance provided; and (B) A reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable. (b) No rate shall be held inadequate unless such rate is unreasonably low for the insurance provided and: (A) Use or continued use of such rate endangers the solvency of the insurer; or (B) The use of such rate by the insurer has, or if continued will have, the effect of destroying competition or creating a monopoly. (3) Rates for each classification of coverage shall be based on the claims experience of insurers within Oregon on that classification of coverage unless that experience provides an insufficient base for actuarially sound rates. (4) Due consideration shall be given to past and prospective loss experience within this state, to the hazards of conflagration and catastrophe, to a reasonable margin for profit and to contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, to past and prospective expenses specially applicable to this state, and to all other relevant factors, including judgment factors deemed relevant, within this state. (5) In addition to subsection (4) of this section, rates for home protection insurance may include provision for unreimbursed costs of risk inspection and for loss costs under policies which are terminated without premium because the related home sale is not made. (6) In the case of fire insurance rates, consideration may be given to the experience of the fire insurance business during the most recent five-year period for which such experience is available. (7) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group of insurers with respect to any class of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expenses are applicable. (8) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates for casualty, surety or inland marine risks may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. (9) Due consideration shall be given, in the making and use of rates for all insurance, to investment income earned by the insurer, to insurer profits and to accumulated reserves for vocational rehabilitation services and for claim costs related to orders or awards made pursuant to ORS 656.278. (10) The Director of the Department of Consumer and Business Services, by rule, shall prescribe the conditions under which a division of payroll between different manual classifications is permitted for purposes of computing workers compensation premiums. (11)(a) The director shall not approve any workers compensation rating system that does not include a plan for rewarding employers, however small, that have good loss experience or programs likely to improve accident prevention. However, this paragraph is not intended to require that all employers be experience rated. (b) The director shall not approve any workers compensation rating system that does not allow the insurer to include potential third party recovery as one of the variables in the claims reserving process. (12) At the time an insurer issues a workers compensation insurance policy to an insured for the first time, the insurer shall give written notice to the insured of the rating classifications to which the insureds employees are to be assigned and shall provide an adequate description of work activities in each classification. In the event an insurer recommences coverage following its termination, the notice required under this subsection must be given only if the gap in coverage exceeds six months. (13) If an insurer determines the workers compensation insurance policy of an insured needs reclassification, the insurer: (a) May bill an additional premium for the revised classification after the insurer has provided the insured at least 60 days written notice of the reclassification. (b) Shall bill retroactively to policy inception or date of change in insureds operations for any reclassification that results in a net reduction of premium. (c) May, notwithstanding paragraph (a) of this subsection, retroactively bill an insured for reclassification during the policy year without prior notice of reclassification if the insurer shows by a preponderance of the evidence that: (A) The insured knew that the employees were misclassified, or the insured was adequately informed by the insurer of the proper classification for the insureds employees; (B) The insured provided improper or inaccurate information concerning its operations; or (C) The insureds operations changed after the date information on the employees was obtained from the insured. (14) In consultation with system participants, the director shall analyze the rating classification system to investigate changes that simplify the system and reduce costs for employers and insurers while preserving rate equity and minimizing the potential for abuse. The director shall give particular emphasis to the method of allocating payroll to rating classifications and to alternatives to methods that require verifiable payroll records. Upon completion of this analysis, the director shall implement appropriate changes to the system. (15) The director shall adopt rules to carry out the provisions of this section and may by rule specify procedures relating to rating and ratemaking by workers compensation insurers. (16) A rate increase based solely upon an insureds attaining or exceeding 65 years of age shall be presumed to be unfairly discriminatory unless the increase is clearly based on sound actuarial principles or is related to actual or reasonably anticipated experience. [Amended by 1967 c.359 307; 1969 c.690 3; 1981 c.247 15; 1981 c.535 19; 1981 c.874 19; 1983 c.360 1; 1987 c.676 1; 1987 c.774 146; 1987 c.884 52; 1991 c.768 1; 1997 c.766 1; 1997 c.768 1]
Agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to such insurance but who are unable to procure such insurance through ordinary methods. Such insurers may agree among themselves on the use of reasonable rate modifications for such insurance, such agreements and rate modifications to be subject to the approval of the Director of the Department of Consumer and Business Services. [Formerly 737.180]
Notwithstanding ORS 737.600, but subject to all other rate filing requirements of this chapter, an insurer may combine for rating purposes the experience of a group of employers covered for workers compensation insurance by the insurer, subject to applicable rules adopted by the Director of the Department of Consumer and Business Services, if: (1) All the employers in the group are members of an organization. (2) The employers in the group constitute at least 50 percent of the employers in the organization, unless the number of covered workers in the group exceeds 500, in which case the employers in the group must constitute at least 25 percent of the employers in the organization. (3) The grouping of employers is likely to substantially improve accident prevention, claims handling for the employers and reduce expenses. [1983 c.706 6; 1990 c.1 4]
(1) A workers compensation insurer shall maintain a premium audit program to aid in achieving equitable premium charges to Oregon employers and for the collection of credible statewide data for ratemaking. (2) The Director of the Department of Consumer and Business Services shall prescribe by rule a premium audit program system for workers compensation insurance. (3) The premium audit system shall include provisions for: (a) Employer education of the audit reporting function of the rating system; (b) A continuing test audit program providing for auditing of all insurers; (c) A continuous monitoring of the audit program system pursuant to ORS 737.235; (d) An appeal process pursuant to ORS 737.505 for employers to question the results of a premium audit. This process must include written notification to the employer that is included in the final premium audit billing that informs the employer of appeal rights to the director under ORS 737.505, of the requirement that a written request to initiate an appeal must be received by the director not later than the 60th day after the employer receives the final premium audit billing and of any other information the director may request by rule; and (e) Civil penalties pursuant to ORS 731.988 for violations of prescribed standards of the premium audit system. (4) Notwithstanding ORS 737.505, the provisions of this section apply to all premium audit disputes between employers and insurers in existence on July 20, 1987, regardless of the policy year involved or the date of the final audit billing. [1987 c.884 8; 1999 c.1020 5]
(1) The Director of the Department of Consumer and Business Services shall review title insurance filings, and each workers compensation insurance filing, as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this chapter. (2) The effective date of each title and workers compensation insurance filing shall be the date specified therein but not earlier than the 30th day after the date the filing is received by the director or from the date of receipt of the information furnished in support of a filing or specific portions of such filing if such supporting information is required by the director. The waiting period may be extended by the director for not more than 30 days if the director gives written notice within such waiting period to the insurer or rating organization which made the filing that the director needs such additional time for the consideration of such filing or specific portions of such filing. Upon written application by such insurer or rating organization, the director may authorize a filing or specific portions of such filing, which the director has reviewed, to become effective before the expiration of the waiting period. A filing or portions of a filing shall be deemed to meet the requirements of this chapter unless disapproved by the director within the waiting period or any extension thereof. (3) Filings of workers compensation rates, rating plans and rating systems by a workers compensation rating organization shall be limited to provisions for claim payment approved or established by the director, and shall not include allowances for or recognition of expenses, taxes or profit. A workers compensation rating organization shall make such filings with the director, which filings shall be subject to this section. The organization shall also file the workers compensation policy forms to be used by its members. The filing shall include a report of investment income. (4) Filings of workers compensation rates by an insurer shall specify allowances for expenses, taxes and profits. (5) The director shall investigate and evaluate all workers compensation filings to determine whether the filings meet the requirements of this chapter. The director shall employ such experts and other personnel as may be reasonably necessary to make such investigation and evaluation, the cost of which shall be paid out of the fund created under ORS 705.145. (6) Notwithstanding the provisions of ORS 737.205 (1), the director may require any person to comply with the requirements of subsection (2) of this section if the director has good cause to believe that a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable. (7) The director may require insurers to use, as that portion of a rate filing that constitutes the amount for claim payment, rates prescribed by the director based upon rating information determined pursuant to ORS 731.216 (3). [Amended by 1967 c.359 310; 1969 c.690 5; 1973 c.353 1; 1981 c.535 20; 1981 c.874 20; 1985 c.706 5; 1987 c.373 83a; 1987 c.884 51; 1989 c.171 83; 1989 c.700 12]
Notwithstanding any other provision of this chapter: (1) The Director of the Department of Consumer and Business Services shall adopt rules providing for approval of workers compensation rating plans that include provisions allowing for reasonable retroactive application of experience rating modification factors. Nothing in this subsection affects retrospective rating plans. (2) If the director disapproves a workers compensation rate or rating plan and the insurer or rating organization requests a hearing before the director, the burden of proof is upon the insurer or rating organization to prove that the filing meets the requirements of this chapter. (3) If the director holds a hearing on an order disapproving a workers compensation rate, rating plan or rating system, the insurer or rating or advisory organization filing or using the rate, rating plan or rating system shall pay to the director the just and legitimate costs of the hearing, including actual necessary expenses. [1987 c.884 49; 2007 c.275 1]
(1) Under such rules and regulations as the Director of the Department of Consumer and Business Services adopts, the director, by written order, may suspend or modify the requirement of filing as to any class of insurance, or subdivision or combination thereof, or as to classes of risks, for which the rates cannot practicably be filed before they are used. Such orders, rules and regulations shall be made known to insurers and rating organizations affected thereby. The director may make such examination as the director deems advisable to ascertain whether any rates affected by such order meet the standards set forth in ORS 737.310. (2) Upon the written application of the insured, stating the reasons therefor, filed with the director and approved by the director, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk. [Amended by 1967 c.359 311]
(1) No insurer shall make or issue a policy except in accordance with the filings which are in effect for the insurer as provided in this chapter. (2) This section does not apply to policies for inland marine risks as to which filings are not required. [Amended by 1967 c.359 312; 1969 c.690 6]
(1) If within the waiting period or the extension thereof, if any, as provided in ORS 737.320 (2), the Director of the Department of Consumer and Business Services finds that a filing does not meet the requirements of this chapter, the director shall send to the insurer or rating organization which made such filing written notice of disapproval of such filing, specifying therein in what respects the director finds such filing fails to meet the requirements and stating that such filing shall not become effective. (2) If the director has reason to believe that an insurer or rating or advisory organization is not complying with the requirements and standards of this chapter other than the requirements and standards dealing with rates, rating plans or rating systems, unless the director has reason to believe such noncompliance is willful, the director shall give notice in writing to such insurer or rating or advisory organization stating in what manner such noncompliance is alleged to exist and specifying a reasonable time, not less than 10 days after the date of mailing, in which such noncompliance may be corrected. [1967 c.359 313; 1969 c.690 7; 1987 c.774 144]
(1) Any person aggrieved with respect to any filing that is in effect, other than the insurer or rating organization that made the filing, may make written application to the Director of the Department of Consumer and Business Services for a hearing on the filing. The application shall specify the grounds to be relied upon by the applicant. (2) If the director finds that the application is made in good faith, that the applicant would be so aggrieved if the grounds are established, and that such grounds otherwise justify holding such a hearing, the director shall do one of the following: (a) Issue an order under ORS 737.045 (1). The director shall not act under this paragraph if the filing concerns a rate, rating plan or rating system subject to ORS 737.320 (1). (b) Hold a hearing, within 30 days after receipt of such application, at a place designated by the director and upon not less than 10 days written notice to the applicant and to the insurer or rating organization that made the filing. [Amended by 1967 c.359 314; 1969 c.690 9; 1987 c.774 145]
Conduct of the hearing, issuance of orders pursuant thereto and judicial review of orders shall be as provided in ORS chapter 183. [1971 c.734 181]
[Formerly 737.512; 1977 c.428 5; 1979 c.850 4; 1983 c.754 1; 1985 c.484 1; 1987 c.774 71; 1995 c.79 362; 1995 c.278 58; 1995 c.306 40; renumbered 737.600 in 1999]
No rating organization shall conduct its operations in this state without first filing with the Director of the Department of Consumer and Business Services a written application for a license as a rating organization for such classes of insurance, or subdivision or class of risk or a part or combination thereof as are specified in its application and shall file therewith: (1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing the conduct of its business. (2) A list of its members and subscribers. (3) The name and address of a resident of this state upon whom notices or orders of the director or process affecting such rating organization may be served. (4) A statement of its qualifications as a rating organization. This statement shall be on forms prescribed and furnished by the director and shall include: (a) In the case of a fire insurance rating organization, a showing as to its facilities for inspecting and surveying the various municipalities and fire risks in this state and for inspecting and surveying in this state the facilities for the preventing, confining and extinguishing of fires and such other information as the director may require; and (b) In the case of a title insurance rating organization, a showing that adequate representation, as determined by the director, is provided for title insurance producers. [Amended by 1967 c.359 318; 1969 c.690 18; 1979 c.501 2; 2003 c.364 97]
(1) If the Director of the Department of Consumer and Business Services finds that the applicant represents a credible statistical base, is competent, trustworthy and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business conform to the requirements of law, the director shall issue a license specifying the classes of insurance, or subdivision or class of risk or a part or combination thereof for which the applicant is authorized to act as a rating organization. Each application shall be granted or denied in whole or in part by the director within 60 days of the date of its filing with the director. (2) The director need not issue a license to each workers compensation rating organization that meets the qualifications and requirements of subsection (1) of this section. Instead, the director may issue licenses to one or more qualifying workers compensation rating organizations pursuant to a selection process established by rule. At the end of the period for which one or more licenses are issued, the director may do the following pursuant to the selection process established by rule under this subsection: (a) Renew a license or issue a license to another workers compensation rating organization; and (b) Renew or issue licenses to more than one workers compensation rating organization. (3) A license issued pursuant to this section shall remain in effect for three years unless suspended or revoked by the director. The license fee shall be as established by the director. A license issued pursuant to this section may be suspended or revoked by the director, after a hearing upon notice, in the event the rating organization ceases to meet the requirements of this section. If a license is issued to only one workers compensation rating organization and the license is suspended or revoked, the director may issue a license to another workers compensation rating organization for the remainder of the period for which the suspended or revoked license was issued. (4) Each rating organization shall notify the director promptly of every change regarding matters listed in ORS 737.350 (1), (2) and (3). (5) As a condition of receiving and holding its license, a workers compensation rating organization must exchange data with other licensed workers compensation rating organizations pursuant to rules adopted by the director that may include establishing fees for the exchange of data. [Amended by 1967 c.359 319; 1971 c.385 5; 1989 c.413 9; 1999 c.235 1]
(1) Subject to rules and regulations which have been approved by the Director of the Department of Consumer and Business Services as reasonable, each rating organization shall permit any insurer, not a member, to be a subscriber to its rating services for any class of insurance, subdivision or class of risk or a part or combination thereof for which it is authorized to act as a rating organization. Notice of proposed changes in such rules and regulations shall be given to subscribers. (2) Each rating organization shall furnish its rating services without discrimination to its members and subscribers. Any rating organization may subscribe to or purchase actuarial, technical or other services, and such services shall be available to all members and subscribers without discrimination. (3) The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, at the request of any subscriber or any such insurer, shall be reviewed by the director at a hearing held at a place designated by the director and upon at least 10 days written notice to such rating organization and to such subscriber or insurer. If the director finds that such rule or regulation is unreasonable in its application to subscribers, the director shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurers application for subscribership within 30 days after it was made, the insurer may request a review by the director as if the application had been rejected. If the director finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, the director shall order the rating organization to admit the insurer as a subscriber. If the director finds that the action of the rating organization was justified, the director shall make an order affirming its action. (4) No rating organization shall adopt any rule, the effect of which would be to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers. [Amended by 1967 c.359 320]
(1) Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this chapter hereby is authorized, provided the filings resulting from such cooperation are subject to and consistent with those sections which are applicable to filings generally. (2) The Director of the Department of Consumer and Business Services may review such cooperative activities and practices and if, after a hearing, the director finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with this chapter, the director may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with those sections and requiring the discontinuance of such activity or practice. [Amended by 1967 c.359 321; 1969 c.690 20]
No group, association or other organization of insurers which engages in joint underwriting or joint reinsurance shall engage in any activity which is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter. [Amended by 1967 c.359 326; 1969 c.690 22]
(1) Every rating organization and every insurer which makes its own rates, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, shall furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate. (2) Every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by the authorized representative, on written request by the person or authorized representative to review the manner in which such rating system has been applied in connection with the insurance afforded the person. If the rating organization or insurer fails to grant or reject such request within 30 days after it is made, the applicant may proceed in the same manner as if the application had been rejected. (3) Any party affected by the action of such rating organization or such insurer on such request, within 30 days after written notice of such action, may appeal to the Director of the Department of Consumer and Business Services, who, after a hearing held at a place designated by the director upon not less than 10 days written notice to the appellant and to such rating organization or insurer, shall affirm or reverse such action. (4) Appeals to the director pursuant to ORS 737.318 with regard to a final premium audit billing must be made within 60 days after receipt of the billing. (5) The director may, upon a showing of good cause, stay any workers compensation insurers collection effort on a final premium audit billing during the pendency of an appeal authorized by subsection (4) of this section. [Amended by 1967 c.359 327; 1987 c.884 6]
(1) Every advisory organization shall file with the Director of the Department of Consumer and Business Services: (a) A copy of its constitution, its articles of agreement or association or its certificate of incorporation and of its bylaws, rules and regulations governing its activities. (b) A list of its members. (c) The name and address of a resident of this state upon whom notices may be served. (d) An agreement that the director may examine such advisory organization in accordance with ORS 737.515. (2) Any insurer which makes its own filings or any rating organization may support its filings by statistics or adopt rate-making recommendations furnished to it by an advisory organization which has complied with this section. If, after a hearing, the director finds that the furnishing of such information or assistance involves any act or practice which is unfair or unreasonable or otherwise inconsistent with this chapter, the director may issue a written order specifying in what respects such act or practice is unfair or unreasonable or otherwise inconsistent with this chapter. If the act or practice thus specified is not modified to comply with such order, the director may issue an order requiring any insurer which makes its own filings or any rating organization to discontinue the use of the statistics or rate-making recommendations furnished to it by such advisory organization. [Amended by 1967 c.359 328; 1969 c.690 23]
[1959 c.324 2; 1967 c.359 316; renumbered 737.346]
(1) The Director of the Department of Consumer and Business Services shall make or cause to be made an examination of each rating and advisory organization complying with and referred to in ORS 737.350 or 737.510 and of each organization referred to in ORS 737.390 as often as the director deems expedient. (2) The reasonable costs of any such examination shall be paid by the organization examined, upon presentation to it of a detailed account of such costs. The officers, manager, agents and employees of any such organization may be examined at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing its methods of operation. (3) All such examinations shall be conducted as provided in ORS 731.300 to 731.316. (4) In lieu of any such examination the director may accept the report of an examination made by the insurance supervisory official of another state, pursuant to the laws of such state. [Amended by 1967 c.359 329; 2011 c.45 1]
(1) Reasonable rules and plans may be promulgated by the Director of the Department of Consumer and Business Services for the interchange of data necessary for the application of rating plans. (2) In order to further uniform administration of rate regulatory laws, the director and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers and rating organizations in other states and may consult and cooperate with them with respect to rate making and the application of rating systems. [1967 c.359 331]
No person shall willfully withhold information from or knowingly give false or misleading information to the Director of the Department of Consumer and Business Services, to any statistical agency designated by the director, to any rating organization, or to any insurer, which will affect the rates or premiums chargeable under this chapter. [Amended by 1967 c.359 332; 1969 c.690 24]
The Director of the Department of Consumer and Business Services may suspend the license of any rating organization which fails to comply with an order of the director within the time limited by such order, or any extension thereof which the director may grant. The director shall not suspend the license of any rating organization for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until such order has been affirmed. The director may determine when a suspension of license shall become effective, and it shall remain in effect for the period fixed by the director, unless the director modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded or reversed. [Amended by 1967 c.359 333]
(1) Except as provided in subsection (2) of this section, nothing contained in this chapter shall be construed as requiring any insurer to become a member of or a subscriber to any rating organization. (2) Each workers compensation insurer, including the State Accident Insurance Fund Corporation, shall be a member of a licensed workers compensation rating organization. [Amended by 1967 c.359 334; 1969 c.690 25; 1981 c.535 21; 1999 c.235 5]
(1) As used in this section, "fictitious grouping" means a grouping by way of membership, license, franchise, contract, agreement or any method other than common ownership, or use and control. (2) An insurer may not: (a) Make available, through any rating plan or form, property, inland marine, casualty or surety insurance, or any combination thereof, at a preferred rate or premium to any person based upon a fictitious grouping of that person. (b) Write or deliver a form, plan or policy of insurance covering a grouping or combination of persons or risks, any of which are within this state, at a preferred rate or form other than that offered to the public generally and persons not in the group, unless the form, plan or policy and the rates or premiums to be charged therefor have been approved by the Director of the Department of Consumer and Business Services. The director shall not approve any form, plan or policy, or the rates therefor, that would constitute a violation of paragraph (a) of this subsection. (3) This section does not apply to: (a) Policies of life or health insurance; (b) Insurance for public bodies as defined in ORS 30.260; (c) Insurance for employers subject to ORS chapter 656 who are primarily engaged in farming. Any contract negotiated by an exempt farming group, including the rate, shall be restricted to members of the group; (d) Property and casualty insurance policies for personal, family or household purposes, and not for commercial or business purposes, under the following conditions: (A) If the policies are offered to members of an association, including a labor union, which has had an active existence for at least one year, has a constitution and bylaws and is maintained in good faith for purposes other than that of obtaining insurance; (B) If the policies are based on premiums that are adequate to support coverage of the group without subsidy by other rate payers; and (C) If the insurer does not unfairly discriminate against holders of other insurance policies; (e) Liability and property insurance required under ORS 825.160 for persons who apply for or who have received authority issued by the Department of Transportation under ORS chapter 825 to transport logs, poles, pilings, peeler cores, lumber, shingles, veneer, plywood, particle board, wallboard, siding, cordwood in long or short lengths, sawdust, hog fuel, wood chips, wood pellets, bark dust or cut trees that are or will be sold for use as Christmas trees; (f) Liability or casualty insurance issued in this state on commercial risks, if: (A) The policy requires active participation in a plan of risk management which has established measures and procedures to minimize both the frequency and severity of losses; (B) The policy passes on the benefits of reduced losses to plan participants; and (C) Rates are actuarially measurable and credible and sufficiently related to actual and expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against; (g) Insurance for child care facilities that are certified in accordance with ORS chapter 329A; or (h) Liability insurance for contractors licensed under ORS chapter 701. (4) Under ORS 731.244, the director shall make rules necessary for implementation of this section. [Formerly 737.346; 2007 c.210 1]
(1) As used in this section: (a) "Project" means a construction project, a plant expansion or improvements within Oregon with an aggregate construction value in excess of $90 million that is to be completed within a defined period. The average construction value during the defined period of the project must be at least $18 million per year. "Project" does not mean a series of unrelated construction projects artificially aggregated to satisfy the $90 million requirement. (b) "Project sponsor" means public bodies, utilities, corporations and firms undertaking to construct a project in excess of $90 million and conducting business in the State of Oregon. (c) "Public body" has the meaning given the term in ORS 30.260. (2) Notwithstanding ORS 279C.530, 656.126, 737.600 or 746.160, an insurer approved to transact insurance in this state, including the State Accident Insurance Fund Corporation or an insurer as defined in ORS 656.005, may issue with the prior approval of the Director of the Department of Consumer and Business Services a policy of insurance covering the project sponsor, the prime contractor under a contract for the construction of the project, any contractors or subcontractors with whom the prime contractor may enter into contracts for the purpose of fulfilling its contractual obligations in construction of the project and any other contractors engaged by a project sponsor to provide architectural or other design services, engineering services, construction management services, other consulting services relating to the design and construction of the project or any combination thereof. (3) The following provisions apply to premiums under a policy of insurance described in subsection (2) of this section: (a) A project sponsor or a prime contractor may not charge a premium for coverage under a policy of insurance to a contractor or subcontractor with whom the project sponsor or prime contractor enters into a contract or engages for services described in subsection (2) of this section. (b) A prime contractor may not charge a project sponsor a premium for coverage under a policy of insurance other than a premium approved by the director under ORS chapter 737 prior to or at the same time as the director approves the project to which the policy applies. (c) Charging a premium prohibited by this subsection constitutes the unlawful transaction of insurance in violation of ORS 731.354. (4) The director, upon application of any insurer, shall approve the issuance of a policy of insurance to any grouping of the persons described in subsection (2) of this section if: (a) The grouping was formed for the purpose of performing a contract or a series of related contracts for the design and construction of a project for the project sponsor; (b) The project sponsor can reasonably demonstrate that the formation and operation of the grouping will substantially improve accident prevention and claims handling to the benefit of the project sponsor and the contractors and workers employed by the project sponsor on construction related projects; (c) The established rating and auditing standards required by authorized advisory organizations and rating organizations are adhered to; (d) The insurer for the grouping guarantees adequate protection to any other insurance producer that demonstrates that without such protection the producer will suffer losses that will constitute a threat to the continuation of the business of the producer; (e) The insurer for the grouping guarantees insurance coverage of the classes of insurance issued to the grouping to any contractor who, because of participation in the group, has been unable to maintain the contractors normal coverage. The insurers obligation under this paragraph shall continue until 12 months after substantial completion of the contractors work; (f) By permitting this grouping for a project sponsor, greater opportunities will be made available for historically underutilized businesses to bid on the project; (g) The project insurers agree to provide not less than 90 days notice to all insured parties of the cancellation or any material reduction in coverage for the project; (h) The insurance coverage for the grouping contains a severability of interest clause with respect to liability claims between individuals insured under the group policy and includes contractual liability coverage that applies to the various contracts and subcontracts entered into in connection with the project; and (i) The insurer places with the Department of Consumer and Business Services a special deposit of $25,000 per $100 million of construction project value, or an amount prescribed by rule of the director, whichever is greater. [1995 c.169 2; 1999 c.196 12; 1999 c.482 1; 2003 c.364 98; 2003 c.794 326; 2007 c.241 28] Note: 737.602 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 737 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
In addition to other rulemaking authority of the Director of the Department of Consumer and Business Services, the director may make rules: (1) Stating the necessary attributes that a construction project of a project sponsor and the participants in the project must have in order to qualify for the grouping permitted under ORS 737.602. The rules may include but are not limited to matters regarding an appropriate trust agreement for special deposit and adjustment of the construction project value according to an appropriate cost index; and (2) Establishing a process for a state agency or local contract review board created under ORS 279A.060 to evaluate the purchase by a public body of insurance authorized by ORS 737.602, or any agreements related thereto. [1995 c.169 3; 2003 c.794 327] Note: 737.604 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 737 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[Amended by 1959 c.369 2; 1965 c.240 1; 1967 c.359 181; renumbered 732.415]
[Amended by 1959 c.369 3; 1967 c.359 176; renumbered 732.315]
[1959 c.286 2, 5; 1967 c.359 229; renumbered 733.510]
[1959 c.286 4; 1967 c.359 236; renumbered 733.580]
[1959 c.286 6; 1967 c.359 237; renumbered 733.590]
[1959 c.286 7; 1967 c.359 238; renumbered 733.600]
[1959 c.286 8; 1967 c.359 239; renumbered 733.610]
[1959 c.286 9; 1967 c.359 240; renumbered 733.620]
[1959 c.286 10, 11; 1967 c.359 242; renumbered 733.640]
[1959 c.286 12; 1963 c.368 1; 1967 c.359 243; renumbered 733.650]
[1959 c.286 13; 1961 c.291 1; 1967 c.359 245; renumbered 733.670]
[1959 c.286 14; 1967 c.359 246; renumbered 733.680]
[1959 c.286 15; 1967 c.359 249; renumbered 733.710]
[1959 c.286 16; 1967 c.359 250; renumbered 733.720]
[1959 c.286 17; 1967 c.359 251; renumbered 733.730]
[1959 c.286 18; 1967 c.359 252; renumbered 733.740]
[1959 c.286 19; 1967 c.359 253; renumbered 733.750]
[1959 c.286 21; 1967 c.359 255; renumbered 733.770]
[1959 c.286 22; 1967 c.359 256; renumbered 733.780]
[Amended by 1959 c.369 4; 1967 c.359 177; renumbered 732.320]
[Amended by 1967 c.359 224; renumbered 733.170]
[Amended by 1967 c.359 269; renumbered 734.150]
[Amended by 1967 c.359 272; renumbered 734.180]
[1963 c.477 1; 1967 c.359 194; renumbered 732.505]
[1965 c.204 7; 1967 c.359 182; renumbered 732.420]
[1965 c.204 8; 1967 c.359 183; renumbered 732.425]
[1965 c.204 2; 1967 c.359 184; renumbered 732.430]
[1965 c.204 3; 1967 c.359 185; renumbered 732.435]
[1965 c.204 4; 1967 c.359 186; renumbered 732.440]
[1965 c.204 5; 1967 c.359 187; renumbered 732.445]
[1965 c.204 6; 1967 c.359 188; renumbered 732.450]
[1965 c.204 9; 1967 c.359 189; renumbered 732.455]
[Amended by 1967 c.359 219; renumbered 733.120]
[Amended by 1961 c.223 2; 1963 c.130 1; 1967 c.359 220; renumbered 733.130]
[1963 c.620 1; 1967 c.359 225; renumbered 733.180]
[1963 c.620 2; 1967 c.359 226; renumbered 733.190]
[1963 c.620 3; 1967 c.359 227; renumbered 733.200]
[Amended by 1963 c.478 1; 1967 c.359 95; renumbered 731.442]
[1957 c.5 2,3; 1967 c.359 191; renumbered 732.465]
[1957 c.5 4; 1967 c.359 192; renumbered 732.470]
[Amended by 1963 c.620 4; 1965 c.106 1; 1967 c.359 373; renumbered 743.153]
[Amended by 1967 c.359 397; renumbered 743.225]
[Amended by 1955 c.223 1; 1967 c.359 390; renumbered 743.204]
[Amended by 1967 c.359 391; renumbered 743.207]
[Amended by 1967 c.359 392; renumbered 743.210]
[Amended by 1967 c.359 393; renumbered 743.213]
[Amended by 1955 c.224 1; 1961 c.223 3; 1963 c.130 2; 1967 c.359 394; renumbered 743.216]
[Amended by 1967 c.359 395; renumbered 743.219]
[Amended by 1961 c.223 4; 1967 c.359 396; renumbered 743.222]
[Amended by 1967 c.359 366; renumbered 743.099]
[Amended by 1967 c.359 171; renumbered 732.240]
[Amended by 1967 c.359 398; renumbered 743.228]
[Amended by 1967 c.359 343; renumbered 743.030]
[Amended by 1967 c.359 540; renumbered 744.165]
[Amended by 1959 c.216 1; 1967 c.359 569; renumbered 746.025]
[1965 c.164 2,3; 1967 c.359 581; renumbered 746.140]
[1961 c.206 3; 1967 c.359 470; renumbered 743.561]
[1961 c.206 2; 1967 c.359 471; renumbered 743.564]
[1961 c.206 4; 1967 c.359 472; renumbered 743.567]
[1961 c.206 6; 1967 c.359 475; renumbered 743.576]
[1961 c.206 7; 1967 c.359 476; renumbered 743.579]
[1961 c.206 8; 1967 c.359 339; renumbered 743.015]
[1961 c.206 9; 1967 c.359 477; renumbered 743.582]
[1961 c.206 10; 1967 c.359 478; renumbered 743.585]
[1961 c.206 11; 1967 c.359 479; renumbered 743.588]
[1961 c.206 12; 1967 c.359 588; renumbered 746.220]
[1965 c.256 2; 1967 c.359 399; renumbered 743.231]
[1965 c.256 3; 1967 c.359 400; renumbered 743.234]
[1965 c.256 4; 1967 c.359 401; renumbered 743.237]
[1965 c.256 5; 1967 c.359 402; renumbered 743.240]
[Subsection (5) of 1959 Replacement Part enacted as 1955 c.126 2; 1961 c.206 15; subsection (6) of 1965 Replacement Part enacted as 1961 c.206 14; repealed by 1967 c.359 704]
[Amended by 1967 c.359 598; renumbered 748.105]
[Amended by 1967 c.359 599; renumbered 748.110]
[Amended by 1967 c.359 600; renumbered 748.115]
[Amended by 1967 c.359 607; renumbered 748.160]
[Amended by 1967 c.359 651; renumbered 748.545]
[Amended by 1967 c.359 602; renumbered 748.135]
[Amended by 1967 c.359 603; renumbered 748.140]
[Amended by 1967 c.359 604; renumbered 748.145]
[Amended by 1967 c.359 605; renumbered 748.150]
[Amended by 1967 c.359 606; renumbered 748.155]
[Amended by 1967 c.359 611; renumbered 748.185]
[Amended by 1967 c.359 618; renumbered 748.230]
[Amended by 1955 c.327 1; 1967 c.359 608; renumbered 748.165]
[Amended by 1967 c.359 617; renumbered 748.225]
[Amended by 1967 c.359 619; renumbered 748.235]
[Amended by 1967 c.359 620; renumbered 748.240]
[Renumbered 748.216]
[Amended by 1967 c.359 637; renumbered 748.405]
[Amended by 1967 c.359 638; renumbered 748.410]
[Amended by 1967 c.359 639; renumbered 748.415]
[Amended by 1967 c.359 640; renumbered 748.420]
[Amended by 1967 c.359 641; renumbered 748.425]
It is the intent of the Legislative Assembly that the health insurance exchange be administered in such a manner as to: (1) Incorporate the goals of improving the lifelong health of all Oregonians, increasing the quality, reliability and availability of health insurance for all Oregonians and lowering or containing the cost of health insurance so that health insurance is affordable to everyone. (2) Promote the public interest and for the benefit of the people and businesses that obtain health insurance coverage for themselves, their families and their employees through the exchange. (3) Empower Oregonians by giving them the information and tools they need to make health insurance choices that meet their needs and values. (4) Improve health care quality and public health, mitigate health disparities linked to race, ethnicity, primary language and similar factors, control costs and ensure access to affordable, equitable and high-quality health care throughout this state. (5) Be accountable to the public. (6) Encourage the development of new health insurance products that offer innovative: (a) Benefit packages for the coverage of health care services; (b) Health care delivery systems; and (c) Payment mechanisms. [2011 c.415 2; 2015 c.3 16]
(1) The duties of the Oregon Health Authority include: (a) Administering a health insurance exchange in accordance with federal law to make qualified health plans available to individuals and groups throughout this state. (b) Providing information in writing, through an Internet-based clearinghouse and through a toll-free telephone line, that will assist individuals and small businesses in making informed health insurance decisions and that may include: (A) The rating assigned to each health plan and the rating criteria that were used; (B) Quality and enrollee satisfaction survey results; and (C) The comparative costs, benefits, provider networks of health plans and other useful information. (c) Establishing and maintaining an electronic calculator that allows individuals and employers to determine the cost of coverage after deducting any applicable tax credits or cost-sharing reduction. (d) Operating a call center dedicated to answering questions from individuals seeking enrollment in a qualified health plan. (2) The authority shall: (a) Screen, certify and recertify health plans as qualified health plans according to the requirements, standards and criteria adopted by the authority under ORS 741.310 and ensure that qualified health plans provide choices of coverage. (b) Decertify or suspend, in accordance with ORS chapter 183, the certification of a health plan that fails to meet federal and state standards in order to exclude the health plan from participation in the exchange. (c) Promote fair competition of carriers participating in the exchange by certifying multiple health plans as qualified under ORS 741.310. (d) Assign ratings to health plans in accordance with criteria established by the United States Secretary of Health and Human Services and by the authority. (e) Establish open and special enrollment periods for all enrollees, and monthly enrollment periods for Native Americans that are consistent with federal law. (f) Assist individuals and groups to enroll in qualified health plans, including defined contribution plans as defined in section 414 of the Internal Revenue Code and, if appropriate, collect and remit premiums for such individuals or groups. (g) Facilitate community-based assistance with enrollment in qualified health plans by awarding grants to entities that are certified as navigators as described in 42 U.S.C. 18031(i). (h) Provide employers with the names of employees who end coverage under a qualified health plan during a plan year. (i) Certify the eligibility of an individual for an exemption from the individual responsibility requirement of section 5000A of the Internal Revenue Code. (j) Provide information to the federal government necessary for individuals who are enrolled in qualified health plans through the exchange to receive tax credits and reduced cost-sharing. (k) Provide to the federal government any information necessary to comply with federal requirements including: (A) Information regarding individuals determined to be exempt from the individual responsibility requirement of section 5000A of the Internal Revenue Code; (B) Information regarding employees who have reported a change in employer; and (C) Information regarding individuals who have ended coverage during a plan year. (L) Take any other actions necessary and appropriate to comply with the federal requirements for a health insurance exchange. (m) Work in coordination with the Oregon Health Policy Board in carrying out its duties. (3) The authority may adopt rules necessary to carry out its duties and functions under ORS 741.001 to 741.540. (4) The authority may contract or enter into an intergovernmental agreement with the federal government to perform any of the duties and functions described in ORS 741.001 to 741.540. [2011 c.415 3; 2012 c.38 1; 2012 c.107 88; 2015 c.3 17; 2021 c.569 18]
(1) The health insurance exchange is under the supervision of the Director of the Oregon Health Authority. (2) The director has such powers as are necessary to carry out ORS 741.001 to 741.540. (3) The director may employ, supervise and terminate the employment of such staff as the director deems necessary. The director shall prescribe their duties and fix their compensation. Employees administering the exchange may not be individuals who are: (a) Employed by, consultants to or members of a board of directors of: (A) An insurer or third party administrator; (B) An insurance producer; or (C) A health care provider, health care facility or health clinic; (b) Members, board members or employees of a trade association of: (A) Insurers or third party administrators; or (B) Health care providers, health care facilities or health clinics; or (c) Health care providers, unless they receive no compensation for rendering services as health care providers and do not have ownership interests in professional health care practices. [Formerly 741.201; 2021 c.569 19]
(1) The Health Insurance Exchange Advisory Committee is created to advise the Oregon Health Policy Board in the development and implementation of the policies and operational procedures governing the administration of a health insurance exchange in this state including, but not limited to, all of the following: (a) The amount of the assessment imposed on insurers under ORS 741.105. (b) The implementation of a Small Business Health Options Program in accordance with 42 U.S.C. 18031. (c) The processes and procedures to enable each insurance producer to be authorized to act for all of the insurers offering qualified health plans through the health insurance exchange. (d) The affordability of qualified health plans offered by employers under section 5000A(e)(1) of the Internal Revenue Code. (e) Outreach strategies for reaching minority and low-income communities. (f) Solicitation of customer feedback. (g) The affordability of health plans offered through the exchange. (2) The committee consists of 15 members. Fourteen members shall be appointed by the Governor and are subject to confirmation by the Senate in the manner prescribed in ORS 171.562 and 171.565. The appointed members serve at the pleasure of the Governor. The Director of the Oregon Health Authority or the directors designee shall serve as an ex officio member of the committee. (3) The 14 members appointed by the Governor must represent the interests of: (a) Insurers; (b) Insurance producers; (c) Navigators, in-person assisters, application counselors and other individuals with experience in facilitating enrollment in qualified health plans; (d) Health care providers; (e) The business community, including small businesses and self-employed individuals; (f) Consumer advocacy groups, including advocates for enrolling hard-to-reach populations; (g) Enrollees in qualified health plans; and (h) State agencies that administer the medical assistance program under ORS chapter 414. (4) The Oregon Health Policy Board or the Director of the Oregon Health Authority may solicit recommendations from the committee and the committee may initiate recommendations on its own. (5) The committee may provide annual reports to the Legislative Assembly, in the manner provided in ORS 192.245, of the findings and recommendations the committee considers appropriate, including but not limited to a report on the: (a) Adequacy of assessments for reserve programs and administrative costs; (b) Implementation of the Small Business Health Options Program; (c) Number of qualified health plans offered through the exchange; (d) Number and demographics of individuals enrolled in qualified health plans; (e) Advance premium tax credits provided to enrollees in qualified health plans; and (f) Feedback from the community about satisfaction with the operation of the exchange and qualified health plans offered through the exchange. (6) The members of the committee shall be appointed for a term fixed by the Governor, not to exceed two years, and shall serve without compensation, but shall be entitled to travel expenses in accordance with ORS 292.495. The committee may hire, subject to the approval of the director, such experts as the committee may require to discharge its duties. All expenses of the committee shall be paid out of the Health Insurance Exchange Fund established in ORS 741.102. (7) The employees of the Oregon Health Authority responsible for administering the health insurance exchange are directed to assist the committee in the performance of its duties under subsection (1) of this section and, to the extent permitted by laws relating to confidentiality, to furnish such information and advice as the members of the committee consider necessary to perform their duties under subsection (1) of this section. [2015 c.3 13; 2021 c.569 20]
The Oregon Health Authority shall conduct a state or nationwide criminal records check under ORS 181A.195 on, and for that purpose may require the fingerprints of, a person who: (1) Is employed by or applying for employment with the authority in a position related to the administration of the health insurance exchange; or (2) Is, or will be, providing services to the authority in a position related to the administration of the health insurance exchange: (a) In which the person is providing information technology services and has control over, or access to, information technology systems that would allow the person to harm the information technology systems or the information contained in the systems; (b) In which the person has access to information that is confidential or for which state or federal laws, rules or regulations prohibit disclosure; (c) That has payroll functions or in which the person has responsibility for receiving, receipting or depositing money or negotiable instruments, for billing, collections or other financial transactions or for purchasing or selling property or has access to property held in trust or to private property in the temporary custody of the authority; (d) That has mailroom duties as a primary duty or job function; (e) In which the person has responsibility for auditing the authority; (f) That has personnel or human resources functions as a primary responsibility; (g) In which the person has access to Social Security numbers, dates of birth or criminal background information; or (h) In which the person has access to tax or financial information about individuals or business entities. [Formerly 741.255; 2021 c.569 21]
[1955 c.737 10; 1963 c.349 8; 1967 c.359 426; renumbered 743.402]
The Health Insurance Exchange Fund is established in the State Treasury, separate and distinct from the General Fund. Interest earned by the Health Insurance Exchange Fund shall be credited to the fund. The Health Insurance Exchange Fund consists of moneys received by the Oregon Health Authority under ORS 741.001 to 741.540. Moneys in the fund are continuously appropriated to the authority for carrying out the purposes of ORS 741.001 to 741.540. [2015 c.3 14; 2015 c.3 15; 2021 c.569 22]
(1) The Oregon Health Authority shall establish, by rule, an administrative charge. The authority shall impose and collect the charge from all insurers participating in the health insurance exchange or offering a health plan certified by the authority and state programs participating in the health insurance exchange. The Health Insurance Exchange Advisory Committee shall advise the authority in establishing the administrative charge. The charge must be in an amount sufficient to cover the costs of grants to navigators, in-person assisters and application counselors certified under ORS 741.002 and to pay the administrative and operational expenses of the authority in carrying out ORS 741.001 to 741.540. The charge shall be paid in a manner and at intervals prescribed by the authority. (2)(a) Each insurers charge shall be based on the number of individuals, excluding individuals enrolled in state programs, who are enrolled in health plans: (A) Offered by the insurer through the exchange; and (B) Certified by the authority. (b) The charge to each state program shall be based on the number of individuals enrolled in state programs offered through the exchange. (3) The charge imposed under this section may not exceed: (a) Five percent of the premium or other monthly charge for each enrollee if the number of enrollees receiving coverage through the exchange is at or below 175,000; (b) Four percent of the premium or other monthly charge for each enrollee if the number of enrollees receiving coverage through the exchange is above 175,000 and at or below 300,000; and (c) Three percent of the premium or other monthly charge for each enrollee if the number of enrollees receiving coverage through the exchange is above 300,000. (4)(a) If charges collected under subsection (1) of this section exceed the amounts needed for the administrative and operational expenses of the authority in administering the health insurance exchange, the excess moneys collected may be held and used by the authority to offset future net losses. (b) The maximum amount of excess moneys that may be held under this subsection is the total costs and expenses described in subsection (1) of this section anticipated by the authority for a six-month period. Any moneys received that exceed the maximum shall be applied by the authority to reduce the charges imposed by this section. (5) Charges shall be based on annual statements and other reports submitted by insurers and state programs as prescribed by the authority. (6) In addition to charges imposed under subsection (1) of this section, to the extent permitted by federal law the authority may impose a fee on insurers and state programs participating in the exchange to cover the cost of commissions of insurance producers that are certified by the authority or by the United States Department of Health and Human Services to facilitate the participation of individuals and employers in the exchange. (7)(a) The authority shall establish and amend the charges and fees under this section in accordance with ORS 183.310 to 183.410. (b) If the authority intends to increase an administrative charge or fee, the notice of intended action required by ORS 183.335 shall be sent, if the Legislative Assembly is not in session, to the interim committees of the Legislative Assembly related to health, to the Joint Interim Committee on Ways and Means and to each member of the Legislative Assembly. The Director of the Oregon Health Authority shall appear at the next meetings of the interim committees of the Legislative Assembly related to health and the next meetings of the Joint Interim Committee on Ways and Means that occur after the notice of intended action is sent and fully explain the basis and rationale for the proposed increase in the administrative charges or fees. (c) If the Legislative Assembly is in session, the authority shall give the notice of intended action to the committees of the Legislative Assembly related to health and to the Joint Committee on Ways and Means and shall appear before the committees to fully explain the basis and rationale for the proposed increase in administrative charges or fees. (8) All charges and fees collected under this section shall be deposited in the Health Insurance Exchange Fund. [2011 c.415 17; 2012 c.38 4; 2012 c.107 91; 2015 c.3 18; 2021 c.569 23]
(1) As used in this section, "Small Business Health Options Program" has the meaning given that term in ORS 741.300. (2) If the Oregon Health Authority submits a request to the Oregon Department of Administrative Services to procure an information technology product or service for creating an Internet portal for the Small Business Health Options Program and the anticipated cost exceeds $1 million: (a) The authority shall, if the Legislative Assembly is not in session, notify the interim committees of the Legislative Assembly related to health, the Joint Interim Committee on Ways and Means and each member of the Legislative Assembly. The Director of the Oregon Health Authority shall appear at the next meetings of the interim committees of the Legislative Assembly related to health and the next meetings of the Joint Interim Committee on Ways and Means to fully explain the need for the product or service. (b) If the Legislative Assembly is in session, the authority shall notify the committees of the Legislative Assembly related to health and the Joint Committee on Ways and Means and the director shall appear before the committees to fully explain the need for the product or service. [2015 c.3 36a; 2021 c.569 24] Note: 741.107 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 741 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
[1955 c.737 4; 1967 c.359 427; renumbered 743.405]
[1955 c.737 9; 1967 c.359 455; renumbered 743.489]
[1965 c.35 2; 1967 c.359 456; renumbered 743.492]
[1965 c.573 2; 1967 c.359 457; renumbered 743.495]
[1965 c.573 3; 1967 c.359 458; renumbered 743.498]
[2011 c.415 9; 2012 c.38 5; 2012 c.107 92; 2015 c.3 19; renumbered 741.003 in 2015]
(1) The Oregon Health Authority shall keep an accurate accounting of the operation and all activities, receipts and expenditures of the authority with respect to the health insurance exchange. (2) The Secretary of State shall conduct an annual financial audit of the authoritys revenues and expenditures in carrying out ORS 741.001 to 741.540. The audit shall include but is not limited to: (a) A review of the sources and uses of the moneys in the Health Insurance Exchange Fund; (b) A review of charges and fees imposed and collected pursuant to ORS 741.105; and (c) A review of premiums collected and remitted. (3) Every two years, the Secretary of State shall conduct a performance audit of the exchange. (4) The Director of the Oregon Health Authority and employees of the authority responsible for administering the health insurance exchange shall cooperate with the Secretary of State in the audits and reviews conducted under subsections (2) and (3) of this section. (5) The audits shall be conducted using generally accepted accounting principles and any financial integrity requirements of federal authorities. (6) The cost of the audits required by subsections (2) and (3) of this section shall be paid by the authority. (7) The Secretary of State shall issue a report to the Governor, the President of the Senate, the Speaker of the House of Representatives, the Oregon Health Authority, the Oregon Health Policy Board and appropriate federal authorities on the results of each audit conducted pursuant to this section, including any recommendations for corrective actions. The report shall be available for public inspection, in accordance with the Secretary of States established rules and procedures governing public disclosure of audit documents. (8) To the extent the audit requirements under this section are similar to any audit requirements imposed on the authority by federal authorities, the Secretary of State and the authority shall make reasonable efforts to coordinate with the federal authorities to promote efficiency and the best use of resources in the timing and provision of information. (9) Not later than the 90th day after the Secretary of State completes and delivers an audit report issued under subsection (7) of this section, the director shall notify the Secretary of State in writing of the corrective actions taken or to be taken, if any, in response to any recommendations in the report. The Secretary of State may extend the 90-day period for good cause. [2011 c.415 21; 2012 c.38 6; 2012 c.107 93; 2015 c.3 20; 2021 c.569 25]
(1) The Director of the Oregon Health Authority shall report to the Legislative Assembly each year on: (a) The financial condition of the health insurance exchange, including actual and projected revenues and expenses of the administrative operations of the exchange and commissions paid to insurance producers out of fees collected under ORS 741.105 (6); (b) The implementation of the Small Business Health Options Program; (c) The development of the information technology system for the exchange; and (d) Any other information requested by the leadership of the Legislative Assembly. (2) The director shall provide to the Legislative Assembly, the Governor and the Oregon Health Policy Board, not later than April 15 of each year: (a) A report covering the activities and operations of the authority in administering the health insurance exchange during the previous year of operations; (b) A statement of the financial condition, as of December 31 of the previous year, of the Health Insurance Exchange Fund; and (c) Recommendations, if any, for additional groups to be eligible to purchase qualified health plans through the exchange under ORS 741.310. [2011 c.415 22; 2012 c.38 18; 2012 c.107 95; 2013 c.368 1,3; 2015 c.3 21,22; 2021 c.569 26]
[2011 c.415 20; 2015 c.3 23; renumbered 741.008 in 2015]
As used in ORS 741.001 to 741.540: (1) "Coordinated care organization" has the meaning given that term in ORS 414.025. (2) "Essential health benefits" has the meaning given that term in ORS 731.097. (3) "Health benefit plan" has the meaning given that term in ORS 743B.005. (4) "Health care service contractor" has the meaning given that term in ORS 750.005. (5) "Health insurance" has the meaning given that term in ORS 731.162, excluding disability income insurance. (6) "Health insurance exchange" or "exchange" means the division of the Oregon Health Authority that operates an American Health Benefit Exchange as described in 42 U.S.C. 18031, 18032, 18033 and 18041. (7) "Health plan" means a health benefit plan or dental only benefit plan offered by an insurer. (8) "Insurer" means an insurer as defined in ORS 731.106 that offers health insurance, a health care service contractor, a prepaid managed care health services organization or a coordinated care organization. (9) "Insurance producer" has the meaning given that term in ORS 731.104. (10) "Prepaid managed care health services organization" has the meaning given that term in ORS 414.025. (11) "State program" means a program providing medical assistance, as defined in ORS 414.025, and any self-insured health benefit plan or health plan offered to employees by the Public Employees Benefit Board or the Oregon Educators Benefit Board. (12) "Qualified health plan" means a health benefit plan certified by the authority in accordance with the requirements, standards and criteria adopted by the authority under ORS 741.310. (13) "Small Business Health Options Program" or "SHOP" means a health insurance exchange for small employers as described in 42 U.S.C. 18031. [2011 c.415 1; 2013 c.681 10; 2015 c.3 24; 2015 c.792 9; 2021 c.569 27]
(1)(a) Individuals and families may purchase qualified health plans through the health insurance exchange. (b) The following groups may purchase qualified health plans through the Small Business Health Options Program: (A) Small employers as defined in ORS 743B.005; and (B) Districts and eligible employees of districts that are subject to ORS 243.886, unless their participation is precluded by federal law. (2)(a) Only individuals who purchase qualified health plans through the exchange may be eligible to receive premium tax credits under section 36B of the Internal Revenue Code and reduced cost-sharing under 42 U.S.C. 18071. (b) Only employers that purchase health plans through the SHOP may be eligible to receive small employer health insurance credits under section 45R of the Internal Revenue Code. (3) Only an insurer that has a certificate of authority to transact insurance in this state and that meets applicable state and federal requirements for participating in the exchange may offer a qualified health plan through the exchange. Any qualified health plan must be certified under ORS 741.002. Coordinated care organizations that do not have a certificate of authority to transact insurance may serve only medical assistance recipients through the exchange and may not offer qualified health plans. (4)(a) The Oregon Health Authority shall adopt by rule uniform requirements, standards and criteria for the certification of qualified health plans, including requirements that a qualified health plan provide, at a minimum, essential health benefits and have acceptable consumer and provider satisfaction ratings. (b) The authority may limit the number of qualified health plans that may be offered through the exchange as long as the same limit applies to all insurers. (5) The authority shall certify as qualified a dental only health plan as permitted by federal law. (6) The authority, in collaboration with the Department of Human Services, shall coordinate the application and enrollment processes for the exchange and the state medical assistance program. (7) The authority may establish risk mediation programs within the exchange. (8) The authority shall establish by rule a process for certifying insurance producers to facilitate the transaction of insurance through the exchange, in accordance with federal standards and policies. (9) The authority is authorized to enter into contracts for the performance of the authoritys duties, functions or operations with respect to the exchange, including but not limited to contracting with: (a) Insurers that meet the requirements of subsections (3) and (4) of this section, to offer qualified health plans through the exchange; and (b) Navigators, in-person assisters and application counselors certified by the authority under ORS 741.002. (10)(a) The authority shall consult with stakeholders, including but not limited to representatives of school administrators, school board members, school employees and the Oregon Educators Benefit Board, regarding the plans that may be offered through the exchange to districts and eligible employees of districts under subsection (1)(b)(B) of this section and the insurers that may offer the plans. (b) The board and the authority shall each adopt rules to ensure that: (A) Any plan offered under subsection (1)(b)(B) of this section is underwritten by an insurer using a single risk pool composed of all eligible employees who are enrolled or who will be enrolled in the plan both through the exchange and by the board; and (B) In every plan offered under subsection (1)(b)(B) of this section, the coverage is comparable to plans offered by the board. (11) The authority is authorized to apply for and accept federal grants, other federal funds and grants from nongovernmental organizations for purposes of developing, implementing and administering the exchange. Moneys received under this subsection shall be deposited in the Health Insurance Exchange Fund. [2011 c.415 11; 2011 c.415 12; 2012 c.38 10,11; 2012 c.107 96,97; 2013 c.421 1,2; 2015 c.3 25; 2015 c.792 10,11; 2021 c.569 28]
The Oregon Health Authority, in developing and offering the health benefit package required by ORS 413.011 (1)(j), may not establish policies or procedures that discourage insurers from offering more comprehensive health benefit plans that provide greater consumer choice at a higher cost. The health benefit package approved by the Oregon Health Policy Board shall: (1) Promote the provision of services through an integrated health home model that reduces unnecessary hospitalizations and emergency department visits. (2) Require little or no cost sharing for evidence-based preventive care and services, such as care and services that have been shown to prevent acute exacerbations of disease symptoms in individuals with chronic illnesses. (3) Create incentives for individuals to actively participate in their own health care and to maintain or improve their health status. (4) Require a greater contribution by an enrollee to the cost of elective or discretionary health services. (5) Include a defined set of health care services that are affordable, financially sustainable and based upon the prioritized list of health services developed and updated by the Health Evidence Review Commission under ORS 414.690. [Formerly 413.064]
Health benefit plans offered through a Small Business Health Options Program, as defined in ORS 741.300, are subject to ORS 743.004, 743.022, 743.535 and 743B.003 to 743B.127 and to other provisions of the Insurance Code applicable to small employer group health insurance. [2015 c.3 36] Note: 741.342 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 741 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
The activities of insurers working under the direction of the Oregon Health Authority and the Department of Consumer and Business Services pursuant to ORS 413.011 (1)(j) or participating in the health insurance exchange administered under ORS 741.002 do not constitute a conspiracy or restraint of trade or an illegal monopoly, nor are they carried out for the purposes of lessening competition or fixing prices arbitrarily. [Formerly 413.075; 2012 c.38 19; 2015 c.3 26]
A person may not file or cause to be filed with the Oregon Health Authority any article, certificate, report, statement, application or any other information related to the health insurance exchange required or permitted by the authority to be filed, that is known by the person to be false or misleading in any material respect. [2011 c.415 24; 2015 c.3 28; 2021 c.569 29]
(1) The Oregon Health Authority may serve by regular mail or, if requested by the recipient, by electronic mail a notice described in ORS 183.415 of the authoritys determination of: (a) A persons eligibility to purchase or to continue to purchase a qualified health plan through the health insurance exchange; (b) A persons eligibility for a premium tax credit for purchasing a qualified health plan or the amount of the persons premium tax credit; or (c) A persons eligibility for cost-sharing reductions for qualified health plans and the amount of the persons cost-sharing reduction. (2) The legal presumption described in ORS 40.135 (1)(q) does not apply to a notice that is served by regular or electronic mail in accordance with subsection (1) of this section. (3) Except as provided in subsection (4) of this section, a contested case notice served in accordance with subsection (1) of this section that complies with ORS 183.415 but for service by regular or electronic mail becomes a final order against a party and is not subject to ORS 183.470 (2), upon the earlier of the following: (a) If the party fails to request a hearing, the day after the date prescribed in the notice as the deadline for requesting a hearing. (b) The date the authority or the Office of Administrative Hearings mails an order dismissing a hearing request because: (A) The party withdraws the request for hearing; or (B) Neither the party nor the partys representative appears on the date and at the time set for hearing. (4) The authority shall prescribe by rule a period of not less than 60 days after a notice becomes a final order under subsection (3) of this section within which a party may request a hearing under this subsection. If a party requests a hearing within the period prescribed under this subsection, the authority shall do one of the following: (a) If the authority finds that the party did not receive the written notice and did not have actual knowledge of the notice, refer the request for hearing to the Office of Administrative Hearings for a contested case proceeding on the merits of the authoritys intended action described in the notice. (b) Refer the request for hearing to the Office of Administrative Hearings for a contested case proceeding to determine whether the party received the written notice or had actual knowledge of the notice. The authority must show that the party had actual knowledge of the notice or that the authority mailed the notice to the partys correct address or sent an electronic notice to the partys correct electronic mail address. (5) If a party informs the authority that the party did not receive a notice served by regular or electronic mail in accordance with subsection (1) of this section, the authority shall advise the party of the right to request a hearing under subsection (4) of this section. [2013 c.678 2; 2015 c.3 29; 2021 c.569 30]
[1961 c.182 5; 1967 c.359 474; renumbered 743.573]
[1961 c.182 11; 1967 c.359 566; renumbered 744.575]
(1)(a) The Oregon Health Authority shall adopt by rule the information that must be documented in order for a person to qualify for: (A) Qualified health plan coverage through the health insurance exchange; (B) Premium tax credits; and (C) Cost-sharing reductions. (b) The documentation specified by the authority under this subsection shall include but is not limited to documentation of: (A) The identity of the person; (B) The status of the person as a United States citizen, or lawfully admitted noncitizen, and a resident of this state; (C) Information concerning the income and resources of the person as necessary to establish the persons financial eligibility for coverage, for premium tax credits and for cost-sharing reductions, which may include income tax return information and a Social Security number; and (D) Employer identification information and employer-sponsored health insurance coverage information applicable to the person. (2) The authority shall adopt by rule the information that must be documented in order to determine whether the person is exempt from a requirement to purchase or be enrolled in a health plan under section 5000A of the Internal Revenue Code or other federal law. (3) The authority shall implement systems that provide electronic access to, and use, disclosure and validation of data needed to administer the exchange, to comply with federal data access and data exchange requirements and to streamline and simplify exchange processes. (4) Information and data that the authority obtains under this section may be exchanged with other state or federal health insurance exchanges, with state or federal agencies and, subject to ORS 741.510, for the purpose of carrying out exchange responsibilities, including but not limited to: (a) Establishing and verifying eligibility for: (A) A state medical assistance program; (B) The purchase of qualified health plans through the exchange; and (C) Any other programs that are offered through the exchange; (b) Establishing and verifying the amount of a persons federal tax credit, cost-sharing reduction or premium assistance; (c) Establishing and verifying eligibility for exemption from the requirement to purchase or be enrolled in a health plan under section 5000A of the Internal Revenue Code or other federal law; (d) Complying with other federal requirements; or (e) Improving the operations of the exchange and for program analysis. [2011 c.415 14; 2015 c.3 30; 2021 c.569 31]
(1) Except as provided in subsection (3) of this section, documents, materials or other information that is in the possession or control of the Oregon Health Authority for the purpose of carrying out ORS 741.002, 741.310 and 741.500 or complying with federal health insurance exchange requirements, and that is protected from disclosure by state or federal law, remains confidential and is not subject to disclosure under ORS 192.311 to 192.478 or subject to subpoena or discovery or admissible into evidence in any private civil action in which the authority is not a named party. The authority may use confidential documents, materials or other information without further disclosure in order to carry out the duties described in ORS 741.002, 741.310 and 741.500 or to take any legal or regulatory action authorized by law. (2) Documents, materials and other information to which subsection (1) of this section applies is subject to the public officer privilege described in ORS 40.270. (3) The Director of the Oregon Health Authority may: (a) Authorize the sharing of confidential documents, materials or other information that is subject to subsection (1) of this section within the authority and subject to any conditions on further disclosure, for the purpose of carrying out the duties and functions of the authority under ORS 741.002, 741.310 and 741.500 or complying with federal health insurance exchange requirements. (b) Authorize the sharing of confidential documents, materials or other information that is subject to subsection (1) of this section or that is otherwise confidential under ORS 192.345 or 192.355 with other state or federal health insurance exchanges or regulatory authorities, the Department of Consumer and Business Services, the Department of Revenue, law enforcement agencies and federal authorities, if required or authorized by state or federal law and if the recipient agrees to maintain the confidentiality of the documents, materials or other information. (c) Receive documents, materials or other information, including documents, materials or other information that is otherwise confidential, from other state or federal health insurance exchanges or regulatory authorities, the Department of Consumer and Business Services, the Department of Revenue, law enforcement agencies or federal authorities. The authority shall maintain the confidentiality requested by the sender of the documents, materials or other information received under this section as necessary to comply with the laws of the jurisdiction from which the documents, materials or other information was received and originated. (4) The disclosure of documents, materials or other information to the authority under this section, or the sharing of documents, materials or other information as authorized in subsection (3) of this section, does not waive any applicable privileges or claims of confidentiality in the documents, materials or other information. (5) This section does not prohibit the authority from releasing to a database or other clearinghouse service maintained by federal authorities a final, adjudicated order, including a certification, recertification, suspension or decertification of a qualified health plan under ORS 741.002, if the order is otherwise subject to public disclosure. [2011 c.415 15; 2015 c.3 31; 2021 c.569 32]
(1) The Director of the Oregon Health Authority may enter into agreements governing the sharing and use of information consistent with this section and ORS 741.510 with other state or federal health insurance exchanges or regulatory authorities, the Department of Consumer and Business Services, the Department of Revenue, law enforcement agencies or federal authorities. (2) An agreement under this section must specify the duration of the agreement, the purpose of the agreement, the methods that may be employed for terminating the agreement and any other necessary and proper matters. (3) An agreement under this section does not relieve the director of any obligation or responsibility imposed by law. (4) The director may expend funds and may supply services for the purpose of carrying out an agreement under this section. [2011 c.415 16; 2015 c.3 32; 2021 c.569 33]
(1) A complaint made to the Oregon Health Authority or the Department of Consumer and Business Services with respect to any prospective or certified qualified health plan, and the record thereof, shall be confidential and may not be disclosed except as provided in ORS 741.510 and 741.520. No such complaint, or the record thereof, shall be used by the authority or the department in any action, suit or proceeding except in the investigation or prosecution of apparent violations of ORS 741.310 or other law. (2) Data gathered pursuant to an investigation of a complaint by the authority or the department shall be confidential, may not be disclosed except as provided in ORS 741.510 and 741.520 and may not be used in any action, suit or proceeding except in the investigation or prosecution of apparent violations of ORS 741.310 or other law. (3) Notwithstanding subsections (1) and (2) of this section, the authority and the department shall establish a method for making available to the public an annual statistical report containing the number, percentage, type and disposition of complaints received by the authority and the department against each health plan that is certified or that has been certified as a qualified health plan by the authority. [2011 c.415 23; 2015 c.3 33; 2021 c.569 34]
Upon receipt of any inquiry from a health care provider regarding the eligibility, coverage or benefits of an insured under an enrollees plan, an insurer shall notify the health care provider, in the manner prescribed by the insurer, that the coverage is provided through a qualified health plan. [2015 c.580 3]
(1) As used in this section and ORS 741.800: (a) "Enrollee" means a person who is: (A) Enrolled in a qualified health plan purchased through the health insurance exchange; (B) Responsible for paying the premium on the qualified health plan and has paid at least one premium; and (C) Receiving an advance payment of the premium tax credit under section 36B of the Internal Revenue Code. (b) "Grace period" means the period of three consecutive months during which an enrollees coverage continues under a qualified health plan without the payment of premiums. (c) "Health insurance exchange" has the meaning given that term in ORS 741.300. (d) "Qualified health plan" means a plan that is certified as a qualified health plan in accordance with ORS 741.310. (2) If an enrollee fails to pay a premium for a qualified health plan, the insurer shall notify any health care provider that the enrollee is in a grace period if the provider requests information from the insurer regarding the eligibility, coverage or benefits of the insureds under the enrollees plan. (3) If an insurer terminates the coverage of an enrollee based on the nonpayment of premiums during a grace period, the insurer shall pay a claim for reimbursement by a health care provider of a service performed during the grace period if: (a) The insurer fails to notify the health care provider as required by subsection (2) of this section; (b) The service is covered by the enrollees plan; and (c) The health care provider requests the information described in subsection (2) of this section not more than seven business days before providing the service and the insurer provides the information to the health care provider no later than two business days after the date of the providers request. (4) The requirements of this section may not be waived by agreement, and any provision of a contract entered into on or after January 1, 2016, that purports to waive the requirements of this section or that conflicts with the requirements of this section is null and void. [2015 c.580 2]
The Oregon Health Authority shall produce written materials containing information for consumers about the requirements for paying the premiums for qualified health plans. The authority shall distribute the materials to health care providers upon request. [2015 c.580 4; 2021 c.569 35]
(1) The Director of the Oregon Health Authority, in accordance with ORS 183.745, may impose a civil penalty for a violation of ORS 741.390 of no more than $10,000. (2) All penalties recovered under this section shall be deposited in the Health Insurance Exchange Fund. [2011 c.415 25; 2015 c.3 34; 2021 c.569 36]
Except as specifically provided in ORS 750.055 and 750.333, this chapter and ORS chapters 743, 743A and 743B apply to all insurance policies delivered or issued for delivery in this state except: (1) Reinsurance. (2) Wet marine and transportation insurance policies. (3) Surplus lines insurance policies. [Formerly 743.003; 2005 c.185 14; 2017 c.206 2]
(1) Except where otherwise provided by law, no basic policy form, or application form where written application is required and is to be made a part of the policy, or rider, indorsement or renewal certificate form shall be delivered or issued for delivery in this state until the form has been filed with and approved by the Director of the Department of Consumer and Business Services. This section does not apply to: (a) Forms of unique character which are designed for and used with respect to insurance upon a particular risk or subject; (b) Forms issued at the request of a particular life or health insurance policy owner or certificate holder and which relate to the manner of distribution of benefits or to the reservation of rights and benefits thereunder; (c) Forms of group life or health insurance policies, or both, that have been agreed upon as a result of negotiations between the policyholder and the insurer; or (d) Forms complying with specific requirements regarding delivery or issuance for delivery in this state established by the director by rule. (2) Except as provided in ORS 743.019, the director shall within 30 days after the filing of any such form approve or disapprove the form. The director shall give written notice of such action to the insurer proposing to deliver such form and when a form is disapproved the notice shall show wherein such form does not comply with the law. (3) The 30-day period referred to in subsection (2) of this section may be extended by the director for an additional period not to exceed 30 days if the director gives written notice within the first 30-day period to the insurer proposing to deliver the form that the director needs such additional time for the consideration of such form. (4) The director may at any time request an insurer to furnish the director a copy of any form exempted under subsection (1) of this section. [Formerly 736.300 and then 743.006; 2001 c.943 7; 2015 c.88 4]
(1) Notwithstanding provisions of the Insurance Code that require insurers to file rates and policy forms with the Director of the Department of Consumer and Business Services, and except as provided in subsections (3), (4) and (5) of this section, an insurer is exempt from the requirement to file with the director rates or policy forms for the classes of insurance specified in subsection (2) of this section. (2)(a) The following classes of insurance are subject to the exemption described in subsection (1) of this section: (A) Surety insurance; (B) Wet marine and transportation insurance; (C) Boiler and machinery insurance; (D) Environmental impairment and pollution insurance; (E) Kidnap and ransom insurance; (F) Political risk or expropriation insurance; (G) Insurance for property with these characteristics: (i) The owner or property manager demonstrates a willingness and determination to reduce the probability of a loss; (ii) The owner or property manager conducts periodic and thorough specialized inspections and engineering for the purpose of preventing or minimizing loss; (iii) The property has an insurable value sufficient for an insurer to charge a premium in an amount that warrants providing specialized inspection and engineering services; (iv) The property has a structural design and degree of protection that, in combination with specialized inspection and engineering services, has the effect of reducing the need for or importance of publicly provided fire protection; (v) The propertys construction uses fire resistant or incombustible heavy timber or similar materials that are well preserved and in good repair; (vi) The property has fire protection or loss prevention equipment in all areas in which fire prevention or loss protection is necessary; (vii) The owner or property manager provides security and alarm service or equivalent security services or equipment where necessary; and (viii) Sufficient numbers of hydrants, hoses and equipment, an adequate water supply and other components of a private or publicly provided fire protection system exist to protect the propertys exterior; and (H) Commercial lines insurance that the director exempts, other than coverage specified in subsection (4) of this section, for large commercial policyholders that pay an annual aggregate premium threshold amount or that meet other requirements the director specifies. (b) An exemption for the classes of insurance described in paragraph (a) of this subsection applies whether the insurer provides the insurance as a stand-alone policy, as an endorsement or as part of other insurance coverage. (3) Notwithstanding provisions of the Insurance Code that require insurers to file rates and policy forms with the director, and except as provided in subsections (4) and (5) of this section, the director by rule may exempt or amend the rate and form filing requirements for any commercial line of insurance if the director determines that: (a) The requirement is not desirable or is not necessary to protect the public; and (b) An exemption or amendment would enhance competition. (4) The following classes of insurance are not exempt under subsection (1) of this section: (a) Workers compensation insurance; (b) Medical malpractice liability insurance; (c) Commercial automobile liability insurance; (d) Coverage that an insurer issues under an assigned risk plan or through a residual market pool or residual market facility; and (e) Insurance for a project, as defined in ORS 737.602. (5) This section does not apply to any class or line of insurance that an insurer transacts with a consumer, as defined in ORS 746.600. (6)(a) The director may publish a sample disclosure notice that an insurer may issue without needing to file the disclosure with the director for review or approval if the insurer issues the disclosure together with an insurance policy that is a claims-made insurance policy or a liability insurance policy that includes defense costs within the limits of liability. (b) An insurer need not use the sample disclosure notice described in paragraph (a) of this subsection. An insurer that does not use the sample disclosure notice shall file the insurers proposed notice with the director for review and approval. If the director approves the insurers proposed notice, the insurer may issue the notice with all of the insurers claims-made insurance policies or policies that include defense costs within the limits of liability without submitting the notice to the director for further review or approval. (7) The director may adopt rules to implement this section. [2017 c.492 2] Note: 742.004 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
The Director of the Department of Consumer and Business Services shall disapprove any form requiring the directors approval: (1) If the director finds it does not comply with the law; (2) If the director finds it contains any provision, including statement of premium, or has any label, description of its contents, title, heading, backing or other indication of its provisions, which is unintelligible, uncertain, ambiguous or abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued; (3) If, in the directors judgment, its use would be prejudicial to the interests of the insurers policyholders; (4) If the director finds it contains provisions which are unjust, unfair or inequitable; (5) If the director finds sales presentation material disapproved by the director pursuant to ORS 742.009 is being used with respect to the form; or (6) If, with respect to any of the following forms, the director finds the benefits provided therein are not reasonable in relation to the premium charged: (a) Individual health insurance policy forms, including benefit certificates issued by fraternal benefit societies and individual policies issued by health care service contractors, but excluding policies referred to in ORS 743.402 as exempt from the application of ORS 743.405 to 743.498 and 743A.160; (b) Small employer group health benefit plan forms for small employers as that term is defined in ORS 743B.005, including small employer group policies issued by health care service contractors; or (c) Credit life and credit health insurance forms subject to ORS 743.371 to 743.380. [Formerly 743.009; 1991 c.182 1; 1999 c.987 4; 2017 c.206 15]
(1) The Director of the Department of Consumer and Business Services may, at any time after a hearing held not less than 20 days after written notice to the insurer, withdraw the directors approval of any form on any ground set forth in ORS 742.005. The written notice of such hearing shall state the reason for the proposed withdrawal. (2) When the director notifies an insurer of a hearing on a form under subsection (1) of this section, if the director in the directors own discretion determines that the public may suffer serious injury because of continued use of the form, the director also may order the insurer to suspend delivery of the form in this state until the director has decided whether to withdraw approval of the form. (3) No insurer shall deliver in this state: (a) A form subject to an order of suspension under subsection (2) of this section, after the effective date of the order and until the director withdraws the order. (b) A form for which the director has withdrawn approval, after the effective date of such withdrawal. The effective date of withdrawal shall be as the director may prescribe but not less than 30 days after the giving of notice of withdrawal. [Formerly 743.012]
(1) As used in this section: (a) "Health benefit plan" has the meaning given that term in ORS 743B.005. (b) "Health savings account" means an account established under section 223 of the Internal Revenue Code. (2) This section applies to a health benefit plan that is: (a) Offered by a carrier as a plan that qualifies for a health savings account distribution; and (b) Subject to a provision of the Insurance Code that prohibits a health benefit plan from applying a deductible to a specified health care service that is reimbursed by the health benefit plan. (3) The Department of Consumer and Business Services may approve a filing under ORS 742.003 for a health benefit plan described in subsection (2) of this section if: (a) The health benefit plan would be approved but for the failure of the plan to comply with the provision described in subsection (2)(b) of this section; (b) A deductible must be applied to the specified health care service for the plan to qualify for a distribution from a health savings account; and (c) The health benefit plan complies with all other applicable provisions of the Insurance Code. [2018 c.43 3] Note: 742.008 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) The Director of the Department of Consumer and Business Services, if the director considers it necessary, may require the filing by an insurer or insurance producer of any sales presentation material for use in the sale or the presentation for sale of any policy. The director, within 60 days after the filing of the sales presentation material, shall disapprove any such sales presentation material if the director finds that, in whole or in part, it is false, deceptive or misleading. Upon disapproval, such sales presentation material shall not be made, issued, circulated, displayed or given other use by the insurer or by insurance producers. (2) The director, by rule, shall require any insurance producer who sells or attempts to sell insurance to provide to each prospective insured such information as the director considers necessary to adequately inform the prospective insured regarding the insurance transaction. [Formerly 743.021; 2003 c.364 100]
[Amended by 1953 c.718 3; 1959 c.281 1; 1965 c.611 2; 1967 c.359 654; renumbered 750.005]
No policy of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss. [Formerly 743.033]
(1) All statements and descriptions in any application for an insurance policy by or in behalf of the insured, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealments of facts and incorrect statements shall not prevent a recovery under the policy unless the misrepresentations, omissions, concealments of fact and incorrect statements: (a) Are contained in a written application for the insurance policy, and a copy of the application is indorsed upon or attached to the insurance policy when issued; (b) Are shown by the insurer to be material, and the insurer also shows reliance thereon; and (c) Are either: (A) Fraudulent; or (B) Material either to the acceptance of the risk or to the hazard assumed by the insurer. (2) This section does not apply to surety insurance. [Formerly 743.042]
[1965 c.611 3; 1967 c.359 655; renumbered 750.015]
(1) Except as provided in ORS 742.043, every contract of insurance shall be construed according to the terms and conditions of the policy. When the contract is made pursuant to a written application therefor, if the insurer delivers a copy of such application with the policy to the insured, thereupon such application shall become a part of the insurance policy. Any application that is not so delivered to the insured shall not be a part of the insurance policy and the insurer shall be precluded from introducing such application as evidence in any action based upon or involving the policy. Any oral representations by the insured that are not included in an application shall not be a part of the insurance policy and the insurer shall be precluded from introducing such representations as evidence in any action based upon or involving the policy. (2) If any life or health insurance policy is reinstated or renewed, and the insured or assignee or beneficiary with a vested interest under such policy shall make written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within 30 days after the receipt at its home or branch office of such request and of satisfactory evidence of such requesting beneficiarys vested interest, deliver or mail to the person making such request a copy of such application. If such copy shall not be so delivered or mailed, the insurer shall be precluded from introducing such application as evidence in any action based upon or involving such policy or its reinstatement or renewal. (3) This section does not apply to surety insurance. [Formerly 736.305 and then 743.045]
No policy of insurance shall contain any condition, stipulation or agreement requiring such policy to be construed according to the laws of any other state or country. Any such condition, stipulation or agreement shall be invalid. [Formerly 736.315 and then 743.048]
(1) Insurance policies shall contain such standard or uniform provisions as are required by the applicable provisions of the Insurance Code. However, the insurer may at its option substitute for one or more of such provisions corresponding provisions of different wording approved by the Director of the Department of Consumer and Business Services which are in each instance not less favorable in any respect to the insured or the beneficiary. (2) If any standard or uniform provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy the insurer, with the approval of the director, shall omit from such policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of a provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy. (3) Except as provided in subsection (2) of this section, no policy shall contain any provision inconsistent with or contradictory to any standard or uniform provision used or required to be used. [Formerly 743.051]
(1) Every policy shall specify: (a) The names of the parties to the contract. (b) The subject of the insurance. (c) The hazards or perils insured against. (d) The time when the insurance thereunder takes effect and the period during which the insurance is to continue. (e) The premium. (f) The conditions and provisions pertaining to the insurance. (2) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included. (3) This section does not apply to surety insurance policies, or to group life or health insurance policies. [Formerly 743.054]
[1965 c.611 5; 1967 c.359 656; renumbered 750.025]
(1) Two or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriters policy bearing their names. Any one insurer may issue policies in the name of an underwriters department and such policy shall plainly show the true name of the insurer. (2) Two or more insurers may, with the approval of the Director of the Department of Consumer and Business Services, issue a combination policy which shall contain provisions substantially as follows: (a) That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy, and (b) That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers. (3) This section does not apply to co-surety obligations. [Formerly 743.057]
A policy may contain additional provisions not inconsistent with the Insurance Code and which are: (1) Required to be inserted by the laws of the insurers domicile; (2) Necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or (3) Desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein. [Formerly 743.060]
A policy of insurance against loss or damage resulting from accident to or injury suffered by an employee or other person and for which the person insured is liable, or against loss or damage to property caused by horses or by any vehicle drawn, propelled or operated by any motive power, and for which loss or damage the person insured is liable, shall contain within such policy a provision substantially as follows: "Bankruptcy or insolvency of the insured shall not relieve the insurer of any of its obligations hereunder. If any person or legal representative of the person shall obtain final judgment against the insured because of any such injuries, and execution thereon is returned unsatisfied by reason of bankruptcy, insolvency or any other cause, or if such judgment is not satisfied within 30 days after it is rendered, then such person or legal representatives of the person may proceed against the insurer to recover the amount of such judgment, either at law or in equity, but not exceeding the limit of this policy applicable thereto." [Formerly 743.783 and then 743.772]
No policy shall contain any provision purporting to make any portion of the charter, bylaws or other constituent document of the insurer (other than the subscribers agreement or power of attorney of a reciprocal insurer) a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section shall be invalid. [Formerly 743.063]
[1965 c.611 19; 1967 c.359 657; renumbered 750.035]
Every policy issued on the assessment plan, and the form of any application for such a policy to be signed by the applicant, shall have conspicuously printed near the top of the face thereof in boldfaced type of a size not smaller than used for any caption in the policy or application, as applicable, the words "The policyholder is subject to assessment by the company" or such other words as the Director of the Department of Consumer and Business Services may require. [Formerly 743.066]
(1) A policy in violation of the Insurance Code, but otherwise binding on the insurer, shall be held valid, but shall be construed as provided in the Insurance Code. (2) Any insurance policy issued and otherwise valid which contains any condition, omission or provision not in compliance with the Insurance Code, shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy been in full compliance with the Insurance Code. [Formerly 743.069]
(1) Except as provided in this section, when more than one class of insurance as defined in ORS 731.150 to 731.194 is effected by an insurer each class shall be written in a separate and distinct policy. Any such policy may be canceled, surrendered or otherwise terminated without affecting other premiums paid or policies held by the same insured. (2) Except as provided in this section, the same policy shall not include insurance coverages as to which the liability of the insurer for unearned premiums or the reserve for unpaid, deferred or undetermined loss claims is estimated in a different manner. (3) Insurance in one policy may be effected upon automobiles and vehicles, and the accessories and other property transported upon and used in connection therewith, against loss or damage by fire, collision and explosion, and against loss by legal liability for damage to persons or property, or both, resulting from the maintenance, use or operation of such automobiles or vehicles, and against loss by burglary, embezzlement or theft, or any one or more of them. Premiums and losses for such insurance are to be reported to the Director of the Department of Consumer and Business Services under the title "automobile insurance." For this purpose an insurer need not use the standard fire insurance policy required by ORS 742.202. (4) Insurance in one policy may be effected against loss or damage of property and against personal injury and death, and liability therefor, from explosion of steam boilers, tanks and engines, pipes and machinery connected therewith, and breakage of flywheels and machinery. Premiums and losses for such insurance are to be reported to the director under the title "steam boiler insurance." (5) Insurance under the classes of life and health insurance may be effected in one policy. (6) Insurance in one policy effected against any physical loss or damage occurring to properties may include coverage as to other perils, either on an unspecified basis as to coverage or for a single premium. (7) Insurance in one policy effected against loss or destruction of baggage while traveling which is written on a single premium nonrenewable basis may include travel ticket health insurance benefits. (8) Insurance under more than one class of insurance may be effected in one policy if the director finds that the issuance of the policy is in the best interest of the public. [Formerly 736.310 and then 743.072; 2005 c.185 2]
(1) Binders or other contracts for temporary insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable indorsements as are designated in the binder, except as superseded by the clear and express terms of the binder. (2) Except as provided in subsection (3) of this section and ORS 746.195, within 90 days after issue of a binder a policy shall be issued in lieu thereof, including within its terms the identical insurance bound under the binder and the premium therefor. (3) If the policy has not been issued a binder may be extended or renewed beyond such 90 days with the written approval of the Director of the Department of Consumer and Business Services, or in accordance with such rules relative thereto as the director may promulgate. (4) This section does not apply to life or health insurance. [Formerly 743.075]
(1) Subject to the insurers requirements for paying premiums, the insurer shall mail or deliver every policy to the insured or to the person entitled to the policy within a reasonable period of time after the insurer issues the policy, unless the insured has not met a condition required by the insurer. (2) If the insurer delivers or deposits, or must deliver or deposit, the original policy to or with any vendor, mortgagee or pledgee of any motor vehicle, and the original policy insures the vendees, mortgagors or pledgors interest in or with reference to the motor vehicle, the vendor, mortgagee or pledgee shall deliver a duplicate or memorandum of the policy that sets forth the name and address of the insurer, the insurance classification of the vehicle, the type of coverage, the limits of liability, premiums for the respective coverages and the duration of the policy to each vendee, mortgagor or pledgor that is named in the policy or that is within the group of persons the policy specifies must be included. If the policy does not cover legal liability for injury to persons or damage to the property of third parties, the face of the duplicate policy or memorandum must conspicuously state, in writing, in print or with a stamp, that the policy does not provide such coverage. This subsection does not apply to inland marine floater policies. (3) Notwithstanding the requirements set forth in subsections (1) and (2) of this section and the consent and notice requirements set forth in ORS 84.070 (2), an insurer may post on the insurers website a standard property and casualty insurance policy and endorsements that do not have personally identifiable information. If the insurer posts an insurance policy and endorsements on the insurers website in lieu of mailing or delivering the insurance policy and endorsements to the insured, the insurer shall: (a) Ensure that the insurance policy and endorsements are easily accessible for as long as the insurance policy is in force; (b) Archive expired policies and endorsements for five years after the policies expire and make archived policies available upon request; (c) Post the policy and endorsements in a manner that enables the insured to use software that is free of charge and widely available on the Internet to save and print the policy and endorsements; (d) Provide in, or simultaneously with, each declarations page that the insurer provides at the time the insurer issues or renews the policy: (A) A description of the exact policy and endorsements that the insurer purchased; (B) A statement that advises the insured of the right to request and obtain, without charge, a printed copy of the insureds policy and endorsements and instructions for making the request; and (C) The Internet address at which the insurer posted the insureds policy and endorsements; and (e) Notify the insured, in the manner in which the insurer customarily communicates with the insured, of any changes to the policy or endorsements. [Formerly 743.078; 2015 c.612 1]
(1) Except as provided in subsections (2), (4) and (5) of this section, every policy of insurance shall contain a provision stating that coverage commences at 12:01 a.m. of the date upon which the insurance takes effect. (2) A policy of insurance may provide that the time at which coverage commences shall not be prior to the time at which the policy of insurance is applied for. (3) Any statement of time in a policy shall mean time according to the legal standard of time in effect: (a) If the policy insures real property, at the location of such property; or (b) If the policy does not insure real property, at the principal place of business within Oregon of the insured; or, if the insured has no place of business within Oregon, at the residence within Oregon of the insured. (4) A binder or other contract for temporary insurance may commence coverage at an hour different from 12:01 a.m. in order to provide coverage from the agreed hour of commencement of coverage to 12:01 a.m. of the date on which the written policy as to which such binder or other contract was issued takes effect. (5) This section does not apply to life, health, mortgage, title, surety or wet marine and transportation insurance. [Formerly 743.080]
[Amended by 1955 c.372 1; 1957 c.4 1; 1965 c.611 8; 1967 c.359 658; renumbered 750.045]
Any insurance policy terminating by its terms at a specified expiration date and not otherwise renewable, may be renewed or extended at the option of the insurer, if renewed or extended upon a currently authorized policy form at the premium rate then required therefor, for a specific additional period or periods by certificate or by indorsement of the policy, without requiring the issuance of a new policy. [Formerly 743.081]
(1) An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance policy issued by such insurer, forms of proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion. (2) With respect to fire insurance, an insured shall have 90 days after receipt of proof of loss forms to furnish proof of loss, notwithstanding anything more restrictive contained in the policy. [Formerly 743.093]
Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of or estoppel to assert any provision of a policy or of any defense of the insurer thereunder: (1) Acknowledgment of the receipt of notice of loss or claim under the policy. (2) Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted. (3) Investigating any loss or claim under the policy or engaging in negotiations looking toward a possible settlement of any such loss or claim. [Formerly 743.096]
(1) In the event of the total destruction of any insured property, if the total amount of loss or agreed loss is less than the total amount insured thereon, the insurer or insurers shall return to the insured the portion of insurance premium paid for the excess of the insurance over the loss. This amount shall be paid at the same time and in the same manner as the loss. (2) This section does not apply to insurance on stocks of merchandise or property of fluctuating values where the reduced rate percentage clause is made a part of the policy. [Formerly 744.090 and then 743.111]
(1) Except as otherwise provided in subsections (2) and (3) of this section, if settlement is not made within six months from the date proof of loss is filed with an insurer and an action is brought in any court of this state upon any policy of insurance of any kind or nature, and the plaintiffs recovery exceeds the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed as part of the costs of the action and any appeal thereon. If the action is brought upon the bond of a contractor or subcontractor executed and delivered as provided in ORS 279B.055, 279B.060, 279C.380 or 701.430 and the plaintiffs recovery does not exceed the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed and allowed to the defendant as part of the costs of the action and any appeal thereon. If in an action brought upon such a bond the surety is allowed attorney fees and costs and the contractor or subcontractor has incurred expenses for attorney fees and costs in defending the action, the attorney fees and costs allowed the surety shall be applied first to reimbursing the contractor or subcontractor for such expenses. (2) Subsection (1) of this section does not apply to actions to recover personal injury protection benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer: (a) The insurer has accepted coverage and the only issue is the amount of benefits due the insured; and (b) The insurer has consented to submit the case to binding arbitration. (3) Subsection (1) of this section does not apply to actions to recover uninsured or underinsured motorist benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer: (a) The insurer has accepted coverage and the only issues are the liability of the uninsured or underinsured motorist and the damages due the insured; and (b) The insurer has consented to submit the case to binding arbitration. [Formerly 736.325 and then 743.114; 1999 c.790 1; 2003 c.794 328]
(1) A liability insurance form that provides that the cost of defending a claim is included within the stated limits of liability may not be delivered or issued for delivery in this state until the form has been filed with and approved by the Director of the Department of Consumer and Business Services. In determining whether to approve or disapprove a form filed under this section, the director shall consider, in addition to the factors specified in ORS 742.005, the circumstances and insurance needs of the proposed insureds. (2) A liability insurance form filed under this section may not be approved unless the form contains a statement approved by the director disclosing that the costs of defending a claim under the policy are included in the policy limits. [Formerly 743.115]
(1) Insurance against the risk of economic loss assumed under a less than fully insured employee health benefit plan, whether issued or delivered as health or casualty insurance, is subject to the following: (a) The policy must be issued to and insure the employer, the trustee or other sponsor of the plan, or the plan itself, but not the employees, members or participants; (b) The insurer shall pay the employer, the trustee or other sponsor of the plan, or the plan itself, not the employees, members, participants or health care providers; (c) If the policy establishes an aggregate attaching point or retention, the point or retention must not be less than 120 percent of the expected claims; and (d) If the policy establishes an attaching point or retention applicable to each individual covered by the plan, the point or retention must not be less than $10,000. (2) Insurance against the risk of economic loss assumed under a less than fully insured employee health benefit plan, whether issued or delivered as health or casualty insurance, is subject to this section and to ORS 743.523, 743.524 and 743.526, but is not subject to other provisions of ORS chapters 743, 743A and 743B. [1993 c.649 2; 1995 c.506 13; 2014 c.58 1]
(1) A domestic insurer shall not enter a transaction in which the domestic insurer assumes or transfers obligations or risks on policies under an assumption reinsurance agreement as defined in this section, unless the Director of the Department of Consumer and Business Services first approves the transaction. A domestic insurer must submit with its request for approval a proposed notice of transfer required in ORS 742.156. (2) A domestic insurer shall not assume obligations or risks on policies issued to or owned by policyholders residing in any other state unless it is authorized or licensed in the other state to transact insurance or unless the insurance regulatory official of that state has approved the assumption. (3) An authorized insurer shall not transfer obligations or risks on policies issued to or owned by residents of this state to any unauthorized insurer. (4) If each authorized foreign insurer entering an assumption reinsurance agreement that transfers the obligations or risks on policies issued to or owned by residents of this state is domiciled in a state that imposes requirements on an assumption reinsurance agreement that are substantially similar to requirements of this state, then when each such insurer enters the agreement, the insurer shall file or cause to be filed with the director the following: (a) The assumption certificate. (b) A copy of the notice of transfer required to be sent to policyholders. (c) An affidavit that the transaction is subject to substantially similar requirements in the state or states of domicile of both the transferring and assuming insurers. (5) If any authorized foreign insurer entering an assumption reinsurance agreement that transfers the obligations or risks on policies issued to or owned by residents of this state is domiciled in a state that does not impose requirements on an assumption reinsurance agreement that are substantially similar to requirements of this state, each insurer entering into the agreement shall obtain prior approval of the director and is otherwise subject to all other requirements of ORS 742.156 and 742.158 with respect to residents of this state. (6) For purposes of this section, "assumption reinsurance agreement" means a contract that both: (a) Transfers insurance obligations or risks of existing or in-force policies from a transferring insurer to an assuming insurer that acquires the obligations or risks from the transferring insurer; and (b) Is intended to effect a novation of the transferred policies with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the insurance obligations and risks of the transferring insurer under the policies are extinguished. [1995 c.30 2]
ORS 742.150 does not apply to any of the following: (1) A reinsurance agreement or transaction in which the ceding insurer remains directly liable for its insurance obligations or risks under the policies that are subject to the reinsurance agreement. (2) The substitution of one insurer for another upon the expiration of insurance coverage pursuant to statutory or contractual requirements and the issuance of a new policy by another insurer. (3) The transfer of policies pursuant to a merger or consolidation of two or more insurers to the extent that the merger or consolidation is regulated by statute. (4) An insurer that is subject to a judicial order of liquidation or rehabilitation. (5) Any reinsurance agreement or transaction to which a state insurance guaranty association is a party, but only if policyholders do not lose any rights or claims afforded under their original policies pursuant to ORS 734.510 to 734.710 or 734.750 to 734.890. (6) The transfer of liabilities from one insurer to another under a single group policy upon the request of the group policyholder. (7) A plan of conversion or reorganization to which ORS 732.600 to 732.630 apply. [1995 c.30 3; 1997 c.771 23]
The Director of the Department of Consumer and Business Services shall consider the following factors, along with other factors that the director determines to be appropriate, in reviewing a request for approval of an assumption reinsurance agreement to which ORS 742.150 applies: (1) The financial condition of the transferring and assuming insurers and the effect the transaction will have on the financial condition of each insurer. (2) The competence, experience and integrity of the persons controlling the operation of the assuming insurer. (3) The plans or proposals of the assuming party with respect to the administration of the policies subject to the proposed transfer. (4) Whether the transfer is fair and reasonable to the policyholders of both insurers. (5) Whether the notice of transfer to be provided by the insurer under ORS 742.156 is fair, adequate and not misleading. [1995 c.30 4]
(1) The transferring insurer in an assumption reinsurance agreement to which ORS 742.150 applies shall provide or cause to be provided a notice of transfer meeting the requirements established under this section to the following persons: (a) Each policyholder who has the right to terminate or otherwise alter the terms of a policy. (b) Each certificate holder whose certificate is in force on the proposed effective date of the assumption if the certificate holder has the right to keep the certificate in force without change in benefit following termination of the group policy. The right to keep the certificate in force does not include the right to elect individual coverage under the Consolidated Omnibus Budget Reconciliation Act, section 601 et seq., of the Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. 1161 et seq.). (c) The transferring insurers agents of record on the affected policies. (2) The Director of the Department of Consumer and Business Services shall prescribe the contents of the notice of transfer, methods by which insurers must give notice of the transfer and notice of opportunity to accept or reject the assumption and methods of response by the policyholders and certificate holders. [1995 c.30 5]
(1) A policyholder or certificate holder described in ORS 742.156 may reject the transfer and novation of the policy under an assumption reinsurance agreement to which ORS 742.150 applies. A policyholder or certificate holder electing to reject the assumption transaction must give notice of rejection according to the manner of response established by rule. (2) If the premium notice sent by an assuming insurer to a policyholder or a certificate holder described in ORS 742.156 satisfies the requirements of this subsection, payment of any premium to the assuming insurer during the 12-month period after the notice is received constitutes the policyholders acceptance of the transfer to the assuming insurer. Upon such a payment, a novation is effected. The premium notice must state that payment of the premium to the assuming insurer constitutes acceptance of the transfer and must provide a method for the policyholder to pay the premium while reserving the right to reject the transfer. This subsection does not apply to a policy for which premiums are collected on a weekly or monthly basis by an insurance producer who is an agent of the insurer nor to any other insurance not using premium notices. (3) After not less than 12 months from the mailing of the first notice of transfer required under ORS 742.156, if the transferring insurer has not received the consent to or rejection of the transfer and assumption from a policyholder or consent by the policyholder has not occurred under subsection (2) of this section, the transferring insurer shall send to the policyholder a second and final notice of transfer. The notice must conform to the requirements established under ORS 742.156 and must also state that the policyholder must accept or reject the transfer not later than the 30th day after the postmark date. Failure by the policyholder to accept or reject the transfer during that period constitutes consent by the policyholder and novation of the contract will be effected. For a policy for which premiums are collected on a weekly or monthly basis by an insurance producer who is an agent of the insurer or for any other insurance not using premium notices, the 12-month period and the 30-day period shall be measured from the date of delivery of the notice of transfer provided under ORS 742.156. (4) If a policyholder responds to the notice of transfer by mail, receipt of the response by the transferring insurer occurs on the date the response is postmarked. If a policyholder responds to the notice of transfer by facsimile or other electronic transmission or by registered mail, express delivery or courier service, receipt of the response by the transferring insurer occurs on the date of actual receipt by the transferring insurer. (5) If the notice of transfer for a policy for which premiums are collected on a weekly or monthly basis by an insurance producer who is an agent of the insurer or for any other insurance not using premium notices satisfies the requirements of this subsection, payment of any premium to the assuming insurer during the 12-month period after the notice is received constitutes the policyholders acceptance of the transfer to the assuming insurer. Upon such a payment, a novation is effected. The notice of transfer must state that payment of the premium to the assuming insurer constitutes acceptance of the transfer and must provide a method for the policyholder to pay the premium while reserving the right to reject the transfer. [1995 c.30 6; 2003 c.364 101]
If a policyholder consents to a transfer as provided in ORS 742.158, or if a transfer is effected under ORS 742.162, the effect of the novation of the policy subject to the assumption reinsurance agreement is that the transferring insurer is relieved of all insurance obligations or risks transferred under the assumption reinsurance agreement and the assuming insurer becomes directly and solely liable to the policyholder for those insurance obligations and risks. [1995 c.30 7]
(1) A transfer and novation effected as provided in this section is not an assumption reinsurance agreement to which ORS 742.150 applies. (2) The Director of the Department of Consumer and Business Services may effect a transfer and novation of the policies issued by a domestic insurer if the director determines that the insurer is in hazardous financial condition according to standards established under ORS 731.385, if a rehabilitation or liquidation proceeding has been instituted against the insurer or if an administrative supervision proceeding has been instituted against the insurer, and if the director determines that the transfer of the policies is in the best interest of the policyholders. The director may give notice of such a transfer to policyholders that the director determines to be adequate under the circumstances. (3) The director may accept a transfer and novation of policies issued by a foreign insurer that insure residents of this state when the transfer and novation are effected by the insurance regulatory official of the domiciliary state of the foreign insurer if the director determines that the domiciliary state has a substantially similar law and if the official has determined that the transfer of the policies is in the best interest of the policyholders and: (a) The official has determined that the insurer is in hazardous financial condition; (b) A rehabilitation or liquidation proceeding has been instituted against the insurer; or (c) An administrative proceeding has been instituted against the insurer for the purpose of supervising, reorganizing or conserving the insurer. [1995 c.30 8]
(1) No insurer, insurance producer or insured shall knowingly issue or procure any fire insurance policy upon property within this state for an amount which with any existing insurance exceeds the fair value of the risk insured or of the interest of the insured therein. (2) This section does not apply to insurance on stocks of merchandise or property of fluctuating values where the reduced rate percentage value clause is made a part of the policy. [Formerly 744.070 and then 743.603; 2003 c.364 102]
Except as provided in ORS 742.204, no fire insurer, its officers or agents, shall use any fire insurance policy or renew any fire insurance policy on property in this state unless it contains the provisions set forth in ORS 742.206 to 742.242, which shall form a portion of the contract between the insurer and the insured. [Formerly 743.606]
Any insurance policy that includes, either on an unspecified basis as to coverage or for a single premium, coverage against the peril of fire and substantial coverage against other perils need not comply with the provisions of ORS 742.202 and 742.246, if such policy: (1) Affords coverage with respect to the peril of fire, not less than the substantial equivalent of the coverage afforded by the provisions of the standard fire insurance policy as required by ORS 742.202; (2) After a review under ORS 742.005 by the Director of the Department of Consumer and Business Services, is found by the director not to violate ORS 742.005 (2); and (3) Is complete as to all its terms without reference to the standard fire insurance policy or any other policy. [Formerly 743.607; 2001 c.85 1]
A fire insurance policy shall contain provisions as follows: "In consideration of the provisions and stipulations herein or added hereto and of _____ dollars ($_____) premium this company, for the term of _____ from the _____ day of _____, 2___, to the ___ day of _____, 2___, at 12:01 a.m., at location of property involved, to an amount not exceeding _____ dollars ($_____), does insure _____ and legal representatives, to the extent of the actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, and without compensation for loss resulting from interruption of business or manufacture, nor in any event for more than the interest of the insured, against all direct loss by fire, lightning and by removal from premises endangered by the perils insured against in this policy, except as hereinafter provided, to the property described hereinafter while located or contained as described in this policy, or pro rata for five days at each proper place to which any of the property shall necessarily be removed for preservation from the perils insured against in this policy, but not elsewhere. "Assignment of this policy shall not be valid except with the written consent of this company. "This policy is made and accepted subject to the foregoing provisions and stipulations and those hereinafter stated, which hereby are made a part of this policy, together with such other provisions, stipulations and agreements as may be added hereto, as provided in this policy. "In witness whereof, this company has executed and attested these presents. __________________ Secretary. __________________ President." [Formerly 743.609]
A fire insurance policy shall contain the following provisions: (1) Subject to subsections (2) and (3) of this section, this entire policy shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto. (2) All statements made by or on behalf of the insured, in the absence of fraud, shall be deemed representations and not warranties. No such statements that arise from an error in the application shall be used in defense of a claim under the policy unless: (a) The statements are contained in a written application; and (b) A copy of the application is indorsed upon or attached to the policy when issued. (3) In order to use any representation by or on behalf of the insured in defense of a claim under the policy, the insurer must show that the representations are material and that the insurer relied on them. [Formerly 743.612]
A fire insurance policy shall contain a provision as follows: "This policy shall not cover accounts, bills, currency, deeds, evidences of debt, money or securities; nor, unless specifically named hereon in writing, bullion or manuscripts." [Formerly 743.615]
A fire insurance policy shall contain a provision as follows: "This company shall not be liable for loss by fire or other perils insured against in this policy caused, directly or indirectly, by: (a) Enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) civil war; (g) usurped power; (h) order of any civil authority except acts of destruction at the time of and for the purpose of preventing the spread of fire, provided that such fire did not originate from any of the perils excluded by this policy; (i) neglect of the insured to use all reasonable means to save and preserve the property at and after a loss, or when the property is endangered by fire in neighboring premises; (j) nor shall this company be liable for loss by theft." [Formerly 743.618]
A fire insurance policy shall contain a provision as follows: "Other insurance may be prohibited or the amount of insurance may be limited by indorsement attached hereto." [Formerly 743.621]
A fire insurance policy shall contain a provision as follows: "Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring: "(1) While the hazard is increased by any means within the control or knowledge of the insured; or "(2) While a described building, whether intended for occupancy by owner or tenant, is vacated or unoccupied beyond a period of 60 consecutive days; or "(3) As a result of explosion or riot, unless fire ensues, and in that event for loss by fire only." [Formerly 743.624]
A fire insurance policy shall contain a provision as follows: "Any other peril to be insured against or subject of insurance to be covered in this policy shall be by indorsement in writing hereon or added hereto." [Formerly 743.627]
A fire insurance policy shall contain a provision as follows: "The extent of the application of insurance under this policy and of the contribution to be made by this company in case of loss, and any other provision or agreement not inconsistent with the provisions of this policy, may be provided for in writing added hereto, but no provision may be waived except such as by the terms of this policy is subject to change." [Formerly 743.630]
A fire insurance policy shall contain a provision as follows: "No permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto. No provision, stipulation or forfeiture shall be held to be waived by any requirement or proceeding on the part of this company relating to appraisal or to any examination provided for herein." [Formerly 743.633]
(1) A fire insurance policy shall contain a provision as follows: "This policy shall be canceled at any time at the request of the insured, in which case this company shall, upon demand and surrender of this policy, refund the excess of paid premium above the customary short rates for the expired time." (2) The policy also shall provide: (a) That the insurer may cancel the policy at any time by giving 10 days written notice of cancellation to the insured in the event of nonpayment of premium or 30 days written notice for any other reason. However, when fire insurance coverage is part of a package policy including commercial liability insurance, cancellation of the policy is governed by the provisions of ORS 742.702. (b) That cancellation by the insurer may be made with or without tender of the excess of paid premium above the pro rata premium for the expired time, and that the excess, if not tendered with the cancellation, will be refunded on demand. (3) When an insurer gives notice of cancellation, the notice shall state that the excess of paid premium above the pro rata premium for the expired time, if not tendered with the notice, will be refunded on demand. [Formerly 743.636; 1991 c.768 2]
A fire insurance policy shall contain provisions as follows: (1) "If loss hereunder is made payable, in whole or in part, to a designated mortgagee not named herein as the insured, such interest in this policy may be canceled by giving to such mortgagee a 10 days written notice of cancellation." (2) "If the insured fails to render proof of loss such mortgagee, upon notice, shall render proof of loss in the form herein specified within 60 days thereafter and shall be subject to the provisions hereof relating to appraisal and time of payment and of bringing suit. If this company shall claim that no liability existed as to the mortgagor or owner, it shall, to the extent of payment of loss to the mortgagee, be subrogated to all the mortgagees rights of recovery, but without impairing mortgagees right to sue; or it may pay off the mortgage debt and require an assignment thereof and of the mortgage. Other provisions relating to the interests and obligations of such mortgagee may be added hereto by agreement in writing." [Formerly 743.639]
A fire insurance policy shall contain a provision as follows: "This company shall not be liable for a greater proportion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible or not." [Formerly 743.642]
A fire insurance policy shall contain a provision as follows: "The insured shall give immediate written notice to this company of any loss, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, furnish a complete inventory of the destroyed, damaged and undamaged property, showing in detail quantities, costs, actual cash value and amount of loss claimed; and within 90 days after receipt of proof of loss forms from the company, unless such time is extended in writing by this company, the insured shall render to this company a proof of loss, signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: The time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereto, all encumbrances thereon, all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this policy, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of loss and whether or not it then stood on leased ground, and shall furnish a copy of all the descriptions and schedules in all policies and, if required, verified plans and specifications of any building, fixtures or machinery destroyed or damaged. The insured, as often as may be reasonably required, shall exhibit to any person designated by this company all that remains of any property herein described, and submit to examinations under oath by any person named by this company, and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices, and other vouchers, or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by this company or its representative, and shall permit extracts and copies thereof to be made." [Formerly 743.645]
A fire insurance policy shall contain a provision as follows: "In case the insured and this company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for 15 days to agree upon such umpire, then, on request of the insured or this company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting the appraiser and the expenses of appraisal and umpire shall be paid by the parties equally." [Formerly 743.648]
A fire insurance policy shall contain a provision as follows: "It shall be optional with this company to take all, or any part, of the property at the agreed or appraised value, and also to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving notice of its intention so to do within 30 days after the receipt of the proof of loss herein required." [Formerly 743.651]
A fire insurance policy shall contain a provision as follows: "There can be no abandonment to this company of any property." [Formerly 743.654]
A fire insurance policy shall contain a provision as follows: "The amount of loss for which this company may be liable shall be payable 60 days after proof of loss, as herein provided, is received by this company and ascertainment of the loss is made either by agreement between the insured and this company expressed in writing or by the filing with this company of an award as herein provided." [Formerly 743.657]
A fire insurance policy shall contain a provision as follows: "No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 24 months next after inception of the loss." [Formerly 743.660; 1991 c.437 1]
A fire insurance policy shall contain a provision as follows: "This company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment therefor is made by this company." [Formerly 743.663]
Insurers issuing the standard fire insurance policy pursuant to ORS 742.202 are authorized to affix thereto or include therein a written statement that the policy does not cover loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination, all whether directly or indirectly resulting from an insured peril under said policy. However, nothing contained in this section shall be construed to prohibit the attachment to any such policy of an indorsement or indorsements specifically assuming coverage for loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination. [Formerly 744.125 and then 743.666]
(1) A fire insurer may add to the provisions required by ORS 742.202 other conditions, provisions and agreements not in conflict with law or contrary to public policy. (2) Any provision restricting or abridging the rights of the insured under the policy must be preceded by a sufficiently explanatory title printed or written in type not smaller than eight-point capital letters. (3) This section applies only to standard fire insurance policies as described in ORS 742.202 and does not apply to any other insurance policies. [Formerly 744.130 and then 743.669; 2001 c.85 2]
(1) Each person accepting a policy in a mutual fire insurer thereby becomes a member of the insurer and liable for a proportionate share of losses and operating expenses. (2) Any person or persons holding property in trust may insure the same in a mutual fire insurer, and as such trustee assume the liabilities and be entitled to the rights of a member, but shall not be personally liable upon such insurance policy. (3) A mutual fire insurer may fix the contingent and mutual liability of its members for payment of losses and expenses by a uniform rule set forth in its bylaws and policies. Such mutual liability shall not be less than twice the amount of the usual advance assessment written in the policy. (4) A mutual fire insurer that received a certificate of authority prior to September 2, 1963, and has accumulated in the regular course of business assets of not less than $200,000, of which not less than $100,000 is surplus determined as provided in the Insurance Code, may while in that condition and subject to the approval of the Director of the Department of Consumer and Business Services adopt bylaws limiting the liability of its policyholders to the premium specified in its policies. The power to issue policies with such limitation of liability continues only during the time the insurer is in such financial condition. (5) A mutual fire insurer that received a certificate of authority after September 2, 1963, and has $500,000 in surplus determined as provided in the Insurance Code, may while in that condition and subject to the approval of the director adopt bylaws limiting the liability of its policyholders to the premium specified in its policies. The power to issue policies with such limitation of liability continues only during the time the insurer is in such financial condition. (6) Every mutual fire insurer which has not limited the liability of its policyholders in accordance with subsections (4) and (5) of this section must print upon its policies such bylaws as will define the liability of a policyholder in addition to the statement required by ORS 742.036. [Formerly 744.430 and then 743.672]
An action may be brought against any member of a mutual fire insurer who neglects or refuses to pay any assessment levied by the insurer to recover the whole amount of contingent liability with costs of the action. Execution shall issue on a judgment recovered in such an action for assessments and costs only as they accrue. [Formerly 744.440 and then 743.675]
Any member of a mutual fire insurer may withdraw at any time by surrendering the members policy to the insurer, giving written notice to the secretary of intention to withdraw and paying the members share of all losses which have accrued and all assessments then due, accrued or pending. [Formerly 744.450 and then 743.678]
(1) A mutual fire insurer may cancel or terminate any fire insurance policy by giving the insured five days written notice and returning to the insured any unearned assessment computed pro rata. (2) A mutual fire insurer shall use and issue only the standard form of policy required by ORS 742.202, except that: (a) It is not required upon cancellation of the insurance policy or certificate of membership to return any part of any policy, certificate, membership or inspection fee that may have been charged. (b) Where a definite part of the amount charged has been collected for and designated as an expense assessment, it may by bylaw determine the amount of refund that shall be made from such expense assessment. (c) If it is on an assessment basis, levying assessments at such times and in such amounts as are necessary to defray its losses and expenses, it may provide by bylaw that no part of the assessments shall be returned. (d) If it is organized for the insurance of a single class of risks and the assessment charged in a flat sum, it may provide in the insurance policy that no return assessment shall be paid upon cancellation. [Formerly 744.460 and then 743.681]
(1) An insurer offering homeowner or renter liability or fire insurance may not cancel or refuse to issue or renew a policy on a private home solely on the basis that the policyholder operates a child care facility if the policyholder is registered or certified pursuant to ORS 329A.030 and 329A.250 to 329A.450. (2) A homeowner or renter liability or fire insurance policy may not provide coverage for losses arising out of or in connection with child care provided by a registered or certified child care facility. Coverage for losses arising out of or in connection with child care by a registered or certified child care facility may be provided only by a separate policy or indorsement for which premiums are assessed and paid. (3) As used in this section, "child care facility" has the meaning given in ORS 329A.250. [1995 c.685 2; 1999 c.743 23]
(1) As used in this section: (a) "Homeowner insurance" has the meaning given that term in ORS 746.600. (b) "Property" means structures and dwellings, and the contents of structures and dwellings, that are covered by a policy of homeowner insurance. (2) If a policy of homeowner insurance requires an insured to repair, rebuild or replace damaged or lost property in order to collect the full replacement cost for the property, the insurer shall, subject to the policy limits: (a) Allow an insured to repair, rebuild or replace damaged or lost property: (A) In not fewer than 12 months after the date of the insurers initial payment toward the cash value of the property that was damaged or lost; or (B) In not fewer than 24 months after the date of the insurers initial payment toward the cash value of the primary dwelling of the insured that was damaged or lost, if the damage or loss occurred in a location that was subject to a declaration of a state of emergency under ORS 401.165 and the damage or loss is directly related to the emergency that was the subject of the declaration. (b) Provide additional living expenses to an insured, subject to the policy limits for additional living expenses, for a period of 24 months after the date of the damage or loss to the insureds primary dwelling if the damage or loss occurred in a location that was subject to a declaration of a state of emergency under ORS 401.165 and the damage or loss is directly related to the emergency that was the subject of the declaration. (c) Add time to each of the periods described in paragraphs (a) and (b) of this subsection in increments of six months for a total period of not more than 24 months under paragraph (a)(A) of this subsection and a total period of not more than 36 months under paragraphs (a)(B) and (b) of this subsection if an insured, acting in good faith and with reasonable diligence, encounters unavoidable delays in obtaining a construction permit, lacks necessary construction materials, lacks available contractors to perform necessary work or encounters other circumstances beyond the insureds control. (3) Subsection (2) of this section does not prohibit an insurer from allowing an insured additional time to collect the full replacement cost for lost or damaged property or for additional living expenses. (4) A policy of homeowner insurance may not limit or deny a payment of the replacement cost or building code upgrade cost, including a payment of any extended replacement cost available under the policy coverage, for an insureds structure that was a total loss on the basis that the insured decided to rebuild in a new location or to purchase an existing structure in a new location if the policy otherwise covers the replacement cost or building code upgrade cost, except that the measure of indemnity may not exceed the replacement cost, building code upgrade cost or extended replacement cost for repairing, rebuilding or replacing the structure at the original location of the loss. [2021 c.262 2]
If a loss covered under a policy of homeowner insurance, as defined in ORS 746.600, occurs in a location that was subject to a declaration of emergency under ORS 401.165 and the loss is directly related to the emergency that was the subject of the declaration, the policy of homeowner insurance must require the insurer to combine coverage limits that apply to claims for a loss of the insureds primary dwelling and claims for a loss of other covered structures if the coverage limit that applies to the insureds primary dwelling is insufficient to pay for rebuilding or replacing the primary dwelling. The amount an insurer pays under the total combined coverage limits may not exceed the amount that would be necessary to repair the actual damage to, or replace, as appropriate, the insureds primary dwelling. The insurer shall pay in accordance with the terms of the policy of homeowner insurance the amount of any claim for a loss other than damage to the insureds primary dwelling. [2021 c.262 3]
An insurer shall provide to an insured every other year at the time the insurer offers to renew a policy of homeowner insurance, as defined in ORS 746.600, an opportunity to obtain a new estimate of the cost necessary to rebuild or replace the covered property if the insured provides information necessary for the estimate. [2021 c.262 4] Note: 742.276 becomes operative July 1, 2022. See section 6, chapter 262, Oregon Laws 2021.
(1) A home protection policy shall specify: (a) The home, home components and personal property relating to the home or its components that are covered by the policy. (b) The exclusions to and limitations on the coverage. (c) The period during which the policy will be in effect and the renewal terms, if any. (d) The particulars regarding the performance of services, if any, by or on behalf of the insurer, including but not necessarily limited to the following: (A) The kinds of services to be performed by or on behalf of the insurer, and the terms and conditions of the performance. (B) The service fee or deductible amount, if any, to be charged for the services. (C) All limitations regarding the performance of services, including any restrictions on the time period during which, or geographical area within which, services may be requested or will be performed. (D) A statement that services will be performed upon the insureds telephoned request to the insurer, without any requirement that a claim form or service application be filed before service is performed. (E) A representation that services will be initiated by or under the direction of the insurer within 48 hours after request is made for services. (e) All other provisions which are required by the Insurance Code or by rules issued by the Director of the Department of Consumer and Business Services. (2) A home protection policy shall be noncancelable during the term for which it is originally written, except for nonpayment of the premium charge for the policy or for fraud or misrepresentation of facts material to the issuance of the policy. However, a policy providing coverage while the subject home is being offered for sale is cancelable in accordance with the policy provisions if no sale is made. A home protection policy is not renewable unless its terms provide otherwise. (3) The director may adopt rules regarding home protection policies in order to protect the interests of persons affected by the policy contract. The director may not adopt rules specifying the home components or related personal property which must be covered by a home protection policy, except to the extent necessary to: (a) Obtain fairness in the exclusions from coverage; or (b) Avoid illusory coverage caused by the nature or extent of the exclusions from coverage. [Formerly 743.690]
(1) No mortgage insurer shall provide insurance with respect to an obligation which exceeds, solely or in combination with liens existing at the time the insured loan is made: (a) Ninety-five percent of the fair market value of the securing property at the time the loan is made, or such higher percentage as may be authorized by the Director of the Department of Consumer and Business Services and permitted by the insurers domicile, if the obligation insured is secured by a mortgage, deed of trust or other instrument constituting a first lien or first charge. (b) Ninety percent of the fair market value of the securing property at the time the loan is made, or such higher percentage as may be authorized by the director and permitted by the insurers domicile, if the obligation insured is secured by a mortgage, deed of trust or other instrument constituting a junior lien or junior charge. In determining the 90 percent limitation, the full amount of a line of credit to be secured by a junior lien shall be considered the amount of the loan. (2) A mortgage insurer at its option may limit its coverage net of reinsurance to a maximum of 25 percent of the amount of the obligation insured if the obligation insured is secured by a mortgage, deed of trust or other instrument constituting a first lien or first charge. In such event, the mortgage insurer may, in lieu of acquiring title to the property securing the obligation and paying the entire obligation, elect to pay its coverage percent of the obligation. In computing the aggregate amount of insured obligations under ORS 731.516, only the percent of the coverage net of reinsurance on the insured obligation shall be included in the aggregate amount. (3) A mortgage insurer may insure an obligation secured by a mortgage, deed of trust or other instrument constituting a junior lien or junior charge, subject to the following provisions: (a) The mortgage insurer shall limit its coverage net of reinsurance to a maximum of 25 percent of the amount of the obligation insured and all liens existing at the time the insured loan is made. In computing the aggregate amount of insured obligations under ORS 731.516, only the percent of the coverage net of reinsurance shall be included in the aggregate amount. (b) Notwithstanding paragraph (a) of this subsection, the mortgage insurer may elect to insure a portfolio of loans secured by instruments constituting a junior lien on real estate, provided that the total amount at risk in any one portfolio shall not at any time exceed 20 percent of the original principal mortgage loans insured. (c) In lieu of acquiring title to the property securing an obligation to which this subsection applies and paying the entire obligation, the mortgage insurer may elect to pay its coverage percent of the obligation. (4) A mortgagor shall not be required to pay, directly or indirectly, the cost of mortgage insurance on a loan secured by a junior lien when the indebtedness evidencing that loan, combined with all existing mortgage loan amounts at the time the loan is made, is less than 60 percent of the fair market value of the real estate at the time the junior loan is made. No mortgagee or financial institution shall be required to obtain mortgage insurance or junior lien mortgage insurance by reason of this section. (5) No mortgage insurer shall issue a policy of lease insurance with respect to real property not improved by a building or buildings designed to be occupied for industrial or commercial purposes. [Formerly 746.030 and then 743.705; 1991 c.67 197; 1995 c.582 2]
(1) Obligations insured by mortgage insurance policies issued in conformity with the Insurance Code shall be legal investments for all trust funds held by any executor, administrator, conservator, trustee or other person or corporation holding trust funds, and also for the funds of banks, banking institutions and trust companies, and shall be accepted by this state and its officers and officials as securities constituting any part of any fund or deposit required by law to be made with this state, or any officer or official thereof, by any trust company doing business in this state. All premiums required to be paid according to the terms of any such mortgage insurance policy may be charged to or paid out of the income from the obligations covered thereby. In the case of such fund or deposit required by law, such obligations must constitute a first lien on real property that is worth at least double the amount of such lien. (2) The provisions of subsection (1) of this section with respect to legal investments for funds shall also apply to obligations not so insured if: (a) The obligation constitutes a first lien upon a marketable title to real property; (b) There exists a lease insurance policy covering the property securing the obligation, issued in conformity with the Insurance Code; (c) The aggregate lease payments so insured exceeds the amount of the obligation; and (d) The insurer is legally bound to remit all lease insurance proceeds directly to the owner of the obligation. [Formerly 746.080 and then 743.708]
All policies and contracts of insurance covering liens or security interests in real property shall be written by authorized mortgage insurers. No other class of insurer may write any form of mortgage insurance. [Formerly 743.711]
(1) Whenever any bond, undertaking, recognizance, or other obligation is by law or the charter, ordinance, rules or regulations of any municipality, board, body, organization, court, judge or public officer required or permitted to be made, given, tendered or filed with surety or sureties, and whenever the performance of any act, duty or obligation, or the refraining from any act is required or permitted to be guaranteed, such bond, undertaking, obligation, recognizance or guaranty may be executed by an authorized surety insurer. (2) The execution by such an insurer of any such obligation is in all respects a full and complete compliance with every requirement that it be executed by one surety, or by one or more sureties, or that such sureties be residents or householders, or freeholders, or either or both, or possess any other qualification. (3) A surety insurer may be required to justify as surety. It shall be sufficient justification for such surety insurer when examined as to its qualifications to exhibit the certificate of authority issued to it by the Director of the Department of Consumer and Business Services or a certified copy thereof. [Formerly 747.080 and then 743.732]
Any receiver, assignee, guardian, conservator, trustee, executor, administrator or other fiduciary, required by law or the order of any court or judge to give a bond, letter of credit or other obligation as such, may include as a part of the lawful expense of executing the trust, such reasonable sum paid an insurer for becoming surety on the bond or an issuer of a letter of credit as may be allowed by the court in which, or judge before whom, the person is required to account. Such sum shall not exceed one percent per annum of the amount of the bond or letter of credit. [Formerly 747.100 and then 743.735; 1991 c.331 129]
Any state, county or municipal officer or officer of any school district, public board or public commission within this state, or any deputy employed in the office of any such official, who is required by law, ordinance, regulation or public policy to give a bond or letter of credit for the faithful performance of duties, shall be allowed a reasonable sum paid a surety insurer for becoming surety on the bond, or paid to a letter of credit issuer for issuing a letter of credit. Such sum shall not exceed one-half of one percent per annum of the amount of the bond or letter of credit. Such premium or fee shall be paid out of the proper state, county, municipal, district, board or commission funds. [Formerly 747.110 and then 743.738; 1991 c.331 130]
(1) Any surety insurer may contract for and receive and hold on deposit and in trust property of any kind as collateral security on any policy of guaranty or suretyship executed by it. The insurer may manage, realize on and dispose of the property so received and held on deposit as may be agreed to between it and the person making the deposit. (2) Any receiver, assignee, guardian, conservator, trustee, executor, administrator or other fiduciary or party from whom a policy of guaranty or suretyship is by law required or permitted may agree and arrange with the surety insurer for the deposit for safekeeping of any or all moneys, assets and other property for which the person is or may be responsible in a bank, savings bank, safe deposit or trust company authorized by law to do business as such, in such manner as to prevent the withdrawal or alienation of such money, assets or other property, or any part thereof, without the written consent of the surety insurer or an order of a court of competent jurisdiction or a judge thereof made on such notice to the surety insurer as the court or judge may direct. (3) Generally, it shall be lawful for a surety insurer to enter into any contract of indemnity or security with any person if such contract is not otherwise prohibited by law or against public policy. [Formerly 747.130 and then 743.741]
(1) Any official whose duty it is to approve any bond or undertaking given in favor of the state or any county, city, school district, drainage or irrigation district, board or commission within the state may cancel the bond or undertaking by serving written notice of its election so to do upon the principal and surety or sureties on such bond or undertaking 10 days before it desires the cancellation of the obligation to take effect. (2) The official at the time of serving such notice shall also file with the officer or official occupying the position of secretary or clerk of the state, county, city, school district, drainage or irrigation district, board or commission, as the case may be, at the regular place of business of such secretary or clerk, a certified copy of such notice. At the expiration of 10 days from the filing of such notice, the surety or sureties upon such bond or undertaking shall be discharged from further liability thereon. [Formerly 747.140 and then 743.744]
(1) The surety or sureties on the bond of any public official in this state shall be released from any future liability thereon upon giving notice of election to be released as provided in this section. (2) A surety desiring to be released from liability on the bond of any state officer may file with the Governor or Secretary of State 30 days before the surety desires the release to take effect, a notice in writing, duly subscribed by the surety or someone in behalf of the surety, setting forth the name and office of the person for whom the surety is surety, the amount for which the surety is liable as such, and the desire of the surety to be released from further liability on account thereof. A duplicate of such notice shall also be served personally on the officer unless the officer has left this state, in which case it may be served by publication for 20 days in some newspaper printed at the seat of government, or if none is printed there, then in such newspaper as shall be designated by the Governor or Secretary of State. (3) A surety desiring to be released from liability on the bond of any county officer may file and serve a similar notice. The notice, except when it concerns the county clerk personally, shall be filed with the county clerk. When the county clerk is personally concerned the notice shall be filed with the county treasurer. (4) A surety desiring to be released from liability on the bond of any city officer may file and serve a similar notice with the city clerk or mayor. (5) A surety desiring to be released from any other official bond or undertaking shall file and serve a similar notice with the officer, person or authority whose duty it is to approve such bonds. (6) A notice which under this section may be served by publication may be published in a newspaper in the same county or, if no newspaper is published therein, then in an adjoining or other county, without any order from any court or other authority. In all cases for which publication is provided, a printed or written notice posted in at least three conspicuous places in the county for the time specified shall be deemed legal notice thereof. [Formerly 747.150 and then 743.747]
(1) A surety wishing to terminate the liability undertaken upon any bank depository bond or undertaking given to guarantee the safekeeping and return of any public moneys deposited in the bank may do so by giving notice of election so to do to the principal and to the official whose duty it is to approve such bond or undertaking. A surety is released from any future liability upon any such depository bond or undertaking at the expiration of 30 days after the giving of such notice. (2) Where the form of depository bond or undertaking given to protect any public moneys is prescribed by statute or regulation the right to cancel such bond or undertaking shall be expressed in such bonds or undertakings by adding a paragraph to the prescribed form in substantially the following form: "The above-named surety shall have the right to terminate any future liability hereunder by serving written notice of election so to do upon the principal and (here insert the official title of the state or county treasurer, or other officials whose duty it is to approve such bond), and thereupon the said surety shall be discharged from any future liability hereunder for any default of the said principal occurring after the expiration of 30 days from and after the service of such notice." The purpose of such cancellation privilege is to afford the surety a means of obtaining definite release from its liability. (3) Any official or officials whose duty it is to approve any bank depository bond given to protect the deposits of any official moneys, on the officials own motion or upon written request from any bank in whose behalf such a bond is issued, may terminate the future liability on the bond by giving notice to the surety of elections so to do. Thereupon the surety shall be discharged from any future liability upon any such depository bond for any default of the principal occurring after the expiration of 30 days from and after the service of such notice. [Formerly 743.750]
Whenever a notice is filed, or filed and served, as provided in ORS 742.358, 742.360 and 742.362, or received after mailed as provided in ORS 742.366, the proper authority shall prescribe the penalty or amount in which a new or additional bond or undertaking shall be filed. If no such order is made the new or additional bond or undertaking shall be executed for the same amount as the original. [Formerly 747.170 and then 743.753]
(1) As used in this section: (a) "Bond" means any undertaking, recognizance or other obligation required by statute, ordinance or regulation to be executed by a surety and given to a public body by any person as a condition to the granting of a permit, license or franchise by a public body. (b) "Public body" means the state and any department, agency, board or commission of the state, any city, county, school district or other political subdivision or municipal or public corporation, any instrumentality thereof and any court. (2) The surety may cancel a bond by sending notice of cancellation by registered or certified mail to the public body with which the bond is filed and to the principal at the principals address of record with the surety. Such cancellation takes effect on the date specified in the notice but not earlier than the 30th day after the date of mailing. The surety shall have no liability under the bond for an act or default occurring after the effective date of such cancellation. (3) Notwithstanding subsection (2) of this section, a statute, ordinance, regulation or the provisions of a bond may provide procedures for release of surety on a bond. [Formerly 743.755]
A surety insurer executing any bond or undertaking under the provisions of the Insurance Code is estopped in any proceeding, to deny its corporate power to execute such bond or undertaking or to assume such liability, and all such bonds or undertakings shall in any action be construed by the rules applicable to insurance policies and indemnity contracts. [Formerly 747.180 and then 743.756]
Whenever any person is required by the provisions of any statute to give a bond to this state or any of its political subdivisions and the statute requires to be included therein any specific provisions, the bond shall have the same legal effect as though such provisions were included therein, although such provisions were omitted. [Formerly 747.190 and then 743.759]
As used in ORS 742.374 and 742.376, "guaranteed arrest bond certificate" means any printed certificate which: (1) Is issued by an automobile club or automobile association to any of its members; (2) Is signed by the member to whom it is issued; and (3) Contains a printed statement that the automobile club or automobile association and a named surety insurer guarantee the appearance of the member whose signature appears on the certificate and that, if the member does not make the appearance in court to guarantee which the certificate is posted, they will pay in an amount not to exceed $1,000 any fine or forfeiture imposed against the individual. [Formerly 747.082 and then 743.762]
Upon compliance with ORS 742.376, any authorized domestic or foreign surety insurer may become surety in an amount not to exceed $1,000 with respect to any unexpired guaranteed arrest bond certificate that is issued by an automobile club or association. [Formerly 747.084 and then 743.765]
To become surety under ORS 742.374 with respect to an unexpired guaranteed arrest bond certificate that is accepted during any year under ORS 810.320, the surety insurer shall file with the Director of the Department of Consumer and Business Services on a form prescribed by the director an undertaking so to become surety for that year. The undertaking shall state: (1) The name and address of each automobile club or automobile association with respect to any guaranteed arrest bond certificate of which the surety insurer undertakes to be surety; and (2) The unqualified obligation of the surety insurer to pay the fine or forfeiture in an amount not to exceed $1,000 with respect to any individual who: (a) Posts an unexpired guaranteed arrest bond certificate with respect to which under this section the surety insurer has undertaken to be surety; and (b) Fails to make the appearance in court to guarantee which the guaranteed arrest bond certificate was posted. [Formerly 747.086 and then 743.768]
(1) A reimbursement insurance policy insuring service contracts issued, sold or offered for sale in this state shall conspicuously state that, upon failure of the obligor to perform under the contract, the insurer that issued the policy shall pay on behalf of the obligor any sums the obligor is legally obligated to pay or shall provide the service that the obligor is legally obligated to perform according to the obligors contractual obligations under the service contracts issued by the obligor. (2) For purposes of this section and ORS 742.392: (a) "Obligor" has the meaning given in ORS 646A.152. (b) A "reimbursement insurance policy" is a policy of insurance providing reimbursement coverage for all obligations and liabilities under the terms of the service contract issued by the obligor including claims against the obligor for return of the unearned purchase price of the service contract. (c) "Service contract" has the meaning given in ORS 646A.154. [1995 c.801 7] Note: 742.390 and 742.392 were added to and made a part of the Insurance Code by legislative action but were not added to or made a part of ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
An insurer that issues a reimbursement insurance policy shall not terminate the policy until a notice of termination has been mailed or delivered to the Director of the Department of Consumer and Business Services. The notice of termination shall be mailed or delivered to the director at least 30 days prior to the date of termination. The termination of a reimbursement insurance policy shall not reduce the issuers responsibility for service contracts sold by or on behalf of obligors prior to the date of the termination. [1995 c.801 8] Note: See note under 742.390.
(1) As used in this section: (a) "Claim" means a written demand for payment from or on behalf of a covered practitioner for an injury alleged to have been caused by professional negligence that is made in a complaint filed with a court of appropriate jurisdiction. (b) "Covered practitioner" means a chiropractic physician, physician or physician assistant licensed under ORS chapter 677, nurse practitioner, optometrist, dentist, dental hygienist or naturopath. (c) "Disposition of a claim" means: (A) A judgment or award against the covered practitioner by a court, a jury or an arbitrator; (B) A withdrawal or dismissal of the claim; or (C) A settlement of the claim. (d) "Reporter" means: (A) A primary insurer; (B) A public body required to defend, save harmless and indemnify an officer, employee or agent of the public body under ORS 30.260 to 30.300; (C) An entity that self-insures or indemnifies for claims alleging professional negligence on the part of a covered practitioner; or (D) A health maintenance organization as defined in ORS 750.005. (2) Within 30 days after receiving notice of a claim, a reporter shall report the claim to the appropriate board, as follows: (a) The Oregon Medical Board if the covered practitioner is a physician or physician assistant licensed under ORS chapter 677; (b) The Oregon State Board of Nursing if the covered practitioner is a nurse practitioner; (c) The Oregon Board of Optometry if the covered practitioner is an optometrist; (d) The Oregon Board of Dentistry if the covered practitioner is a dentist or dental hygienist; (e) The Oregon Board of Naturopathic Medicine if the covered practitioner is a naturopath; or (f) The State Board of Chiropractic Examiners if the covered practitioner is a chiropractic physician. (3) The report required under subsection (2) of this section shall include: (a) The name of the covered practitioner; (b) The name of the person that filed the claim; (c) The date on which the claim was filed; and (d) The reason or reasons for the claim, except that the report may not disclose any data that is privileged under ORS 41.675. (4) Within 30 days after the date of an action taken in disposition of a claim, a reporter shall notify the appropriate board identified in subsection (2) of this section of the disposition. (5)(a) A board that receives a report of a claim under this section shall publicly post the report on the boards website if the claim results in a judicial finding or admission of liability or a money judgment, award or settlement that involves a payment to the claimant. The board may not publicly post information about claims that did not result in a judicial finding or admission of liability or a money judgment, award or settlement that involves a payment to the claimant but shall make the information available to the public upon request. (b) If a board discloses information about a claim that is the subject of a report received under this section, the board shall indicate in the disclosure whether the claim resulted in a judicial finding or an admission of liability or a money judgment, an award or a settlement that involves a payment to the claimant. A board may not publicly disclose or publish any allegations or factual assertions included in the claim unless the complaint resulted in a judicial finding or an admission of liability or a money judgment, an award or a settlement that involves a payment to the claimant. (c) For purposes of this subsection, "judicial finding" means a finding of liability by a court, a jury or an arbitrator. (6) A board that receives a report under this section shall provide copies of the report to each health care facility licensed under ORS 441.015 to 441.087, 441.525 to 441.595, 441.815, 441.820, 441.990, 442.342, 442.344 and 442.400 to 442.463 that employs or grants staff privileges to the covered practitioner. (7) A person that reports in good faith concerning any matter required to be reported under this section is immune from civil liability by reason of making the report. [Formerly 743.780 and then 743.770; 1991 c.401 7; 1997 c.131 3; 2007 c.803 1; 2009 c.43 36; 2009 c.131 1; 2009 c.581 1; 2013 c.129 38]
(1) No insurer may require membership in a professional association as a condition of issuance of medical malpractice insurance to a physician. However, nothing in this subsection prohibits an insurer from requiring as a condition of coverage of a nonmember that the nonmember agrees to be subject to reasonable risk management, loss control or other similar programs and conditions to which members are subject, whether imposed by the insurer or the association. (2) No insurer who issues medical malpractice insurance to a physician may assess any surcharge or offer any discount to the physician based on whether or not the physician is a member of a professional association. (3) For purposes of this section, joint underwriting associations and risk retention groups shall be considered insurers. [Formerly 743.771] Note: 742.405 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Adverse event" means a negative consequence of patient care that is unanticipated, is usually preventable and results in or presents a significant risk of patient injury. (b) "Claim" means a written demand for restitution for an injury alleged to have been caused by the medical negligence of a health practitioner or licensed health care facility. (c) "Health practitioner" means a person described in ORS 31.740 (1). (d) "Patients family" includes: (A) A parent, sibling or child by marriage, blood, adoption or domestic partnership. (B) A foster parent or foster child. (2) An insurer may not decline or refuse to defend or indemnify a health practitioner or a health care facility with respect to a claim, for any reason that is based on: (a) The disclosure to the patient or the patients family by the health practitioner or facility of an adverse event or information relating to the cause of an adverse event; (b) A notice of adverse health care incident filed under ORS 31.262; or (c) Participation in a discussion or mediation under ORS 31.264 or 31.268. (3) A policy or contract of insurance or indemnity may not include a provision or term excluding or limiting coverage based on: (a) The disclosure to a patient or the patients family by a health practitioner or facility of an adverse event or information relating to the cause of an adverse event; (b) A notice of adverse health care incident filed under ORS 31.262; or (c) Participation in a discussion or mediation under ORS 31.264 or 31.268. (4) An insurer may establish requirements and policy provisions for coverage of payments of compensation made under ORS 31.264 or as a result of a mediation under ORS 31.268. Requirements and policy provisions established under this subsection may not be intended to or have the effect of preventing meaningful participation in discussions and mediations under ORS 31.264 and 31.268. (5) An insurer may not provide or be required to provide information related to an adverse health care incident as defined in ORS 31.260 for credentialing purposes. [Formerly 743.056; 2021 c.271 4] Note: 742.407 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
As used in ORS 742.420 to 742.440: (1) "Discount medical plan" means a contract, agreement or other business arrangement between a discount medical plan organization and a plan member in which the organization, in exchange for fees, service or subscription charges, dues or other consideration, offers or purports to offer the plan member access to providers and the right to receive medical and ancillary services at a discount from providers. (2) "Discount medical plan organization" means a person that contracts on behalf of plan members with a provider, a provider network or another discount medical plan organization for access to medical and ancillary services at a discounted rate and determines what plan members will pay as a fee, service or subscription charge, dues or other consideration for a discount medical plan. (3) "Licensee" means a discount medical plan organization that has obtained a license from the Director of the Department of Consumer and Business Services in accordance with ORS 742.426. (4) "Medical and ancillary services" means, except when administered by or under contract with the State of Oregon, any care, service, treatment or product provided for any dysfunction, injury or illness of the human body including, but not limited to, care provided by a physician, naturopathic physician, physician assistant or nurse practitioner, inpatient care, hospital and surgical services, emergency and ambulance services, audiology services, dental care services, vision care services, mental health services, substance abuse counseling or treatment, chiropractic services, podiatric care services, laboratory services, home health care services, medical equipment and supplies or prescription drugs. (5) "Plan member" means an individual who pays fees, service or subscription charges, dues or other consideration in exchange for the right to participate in a discount medical plan. (6)(a) "Provider" means a person that has contracted or otherwise agreed with a discount medical plan organization to provide medical and ancillary services to plan members at a discount from the persons ordinary or customary fees or charges. (b) "Provider" does not include: (A) A person that, apart from any agreement or contract with a discount medical plan organization, provides medical and ancillary services at a discount or at fixed or scheduled prices to patients or customers the person serves regularly; or (B) A person that does not charge fees, service or subscription charges, dues or other consideration in exchange for providing medical and ancillary services at a discount or at fixed or scheduled prices. (7) "Provider network" means a person that negotiates directly or indirectly with a discount medical plan organization on behalf of more than one provider that provides medical or ancillary services to plan members. [2007 c.272 2; 2014 c.45 75; 2017 c.356 94] Note: 742.420 to 742.440 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A person may not conduct business as or purport to conduct business as a discount medical plan organization unless the person first obtains a license to operate as a discount medical plan organization from the Director of the Department of Consumer and Business Services in accordance with ORS 742.426. (2) The license requirement set forth in subsection (1) of this section does not apply to an insurer that offers a discount medical plan. [2007 c.272 3] Note: See note under 742.420.
(1) A discount medical plan organization shall have a written contract or other written agreement with all providers or provider networks that the organization includes or purports to include in a discount medical plan, or with an entity that contracts with or enters into an agreement with a provider network on the organizations behalf. (2) The contract or other agreement between a discount medical plan organization and a provider must include: (a) A list of the medical and ancillary services included in the discount medical plan; (b) The providers discount rate or rates or a schedule that reflects the providers fixed or discounted prices for the medical and ancillary services subject to the discount medical plan; and (c) A provision in which the provider agrees not to charge plan members more for medical and ancillary services than the amount listed in the providers price schedule or an amount that reflects the application of the providers discount rate. (3) The contract or other agreement between a discount medical plan organization and a provider network, or between an entity and a provider network when the entity contracts with or enters into an agreement with a provider network on the organizations behalf, shall require the provider network to have written agreements with providers that, in addition to meeting the requirements of subsection (2) of this section: (a) Authorize the provider network to contract with or enter into an agreement with the discount medical plan organization or the entity on behalf of the provider; and (b) Require the provider network to maintain an up-to-date list of the providers that are part of the provider network and to provide the updated list each month to the discount medical plan organization. (4) A discount medical plan organization shall retain copies of the contracts or agreements and other documents described in this section at all times during which the organization operates in this state. [2007 c.272 4] Note: See note under 742.420.
(1) Each applicant for a license to operate as a discount medical plan organization shall apply to the Director of the Department of Consumer and Business Services in a form and manner that the director prescribes by rule. An application for a license under this section must contain all of the following: (a) The applicants name, fictitious name, assumed business name and any other identity the applicant uses in conducting business. (b) The applicants business address, mailing address, electronic mail address and the Internet address of any website the applicant maintains for public access. (c) The applicants federal employer identification number or Internal Revenue Service taxpayer identification number. (d) The applicants principal place of business inside or outside this state. (e) The name of and contact information for a person that the applicant has designated to provide information to consumers or answer consumer questions. (f) The name and address of the applicants agent for the service of process, notice or demand, or a power of attorney that the applicant has executed and by which the applicant appoints the director as the applicants agent for the service of process, notice or demand. (g) A list of individual providers or providers included in the provider network that provide services in this state and a list of the medical and ancillary services the applicant offers or intends to offer to plan members as part of a discount medical plan or the Internet address of a website that lists the providers and services offered. (h) A list of the persons that the applicant has authorized or intends to authorize to market a discount medical plan in this state under a name that is different from the applicants name. (i) The name, trade name, service mark or other means by which a consumer can identify the discount medical plan the applicant offers or intends to offer and any different name, trade name, service mark or other means the applicant uses to identify the same discount medical plan to persons other than consumers. (j) A statement that discloses: (A) Any criminal conviction in the five-year period before the date of application involving the applicant, a member of the board of directors or an officer of the applicant and any person owning or having the right to acquire 10 percent or more of the voting securities of the applicant; and (B) Any pending investigation into the applicants business activities brought by a licensing, regulatory or law enforcement authority in any jurisdiction. (k) A statement in which the applicant agrees to submit to the personal jurisdiction of the courts of this state. (L) A statement that discloses any instance in which another jurisdiction has denied the applicant a license or other authority to operate as a discount medical plan organization or has suspended or revoked any such license or other authority after issuance. (m) Other information the director may require that enables the director, after reviewing all of the information submitted under this subsection, to determine whether the applicant: (A) Is financially responsible; (B) Has adequate experience and expertise to operate a discount medical plan organization; and (C) Is of good character. (2) Upon receipt of a completed application for a license to operate as a discount medical plan organization, the director may investigate the applicant as necessary to verify the information contained in the application. Except as provided in subsection (3) of this section, if the director is satisfied that the information contained in the application is accurate and complete, the director shall issue a license to the applicant. (3) The director may deny a license to any applicant if the director finds in writing that: (a) The applicant has provided false, misleading, incomplete or inaccurate information in the application; or (b) The applicant is not qualified to operate as a discount medical plan organization because the applicant is not financially responsible, does not have adequate experience or expertise, or has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession. (4) If the director denies a license under this section, the applicant may request a hearing under ORS 183.435. Upon receiving the applicants request, the director shall grant the applicant a hearing under ORS 183.413 to 183.470. [2007 c.272 5] Note: See note under 742.420.
A licensee shall: (1) Notify the Director of the Department of Consumer and Business Services immediately whenever the licensees license or other form of authority to operate as a discount medical plan organization in another jurisdiction is suspended, revoked or not renewed in that jurisdiction. (2) Describe in a notice to the director any change in the name, address or contact information of the discount medical plan organization provided in the application under ORS 742.426 within 30 days after making the change. [2007 c.272 6] Note: See note under 742.420.
A license obtained under ORS 742.426 is effective for one year, or for a longer period if the Director of the Department of Consumer and Business Services so prescribes by rule. The director shall prescribe by rule conditions and procedures under which a licensee may renew a license that has expired. [2007 c.272 7] Note: See note under 742.420.
A discount medical plan organization shall establish or provide, in connection with every discount medical plan: (1) A 30-day period in which new plan members may review the discount medical plan and decide whether to continue or to cancel the plan for any reason. The discount medical plan organization shall provide to a member who cancels a discount medical plan within the 30-day period a full and unconditional refund for any fees, service or subscription charges, dues or other consideration the member paid, except that the discount medical plan organization may retain the amount of any one-time processing fee that is less than an amount established by the Director of the Department of Consumer and Business Services by rule. The 30-day period begins on the day following the date on which the member completed any application for the plan or the day following the date on which the member paid any fees, service or subscription charges, dues or other consideration, whichever is later. (2) A standard set of procedures by which a new plan member may obtain a refund under subsection (1) of this section. (3) A toll-free telephone line and an Internet website. The toll-free telephone line must enable plan members to contact the discount medical plan organization with questions and requests for assistance. The website must list all providers in the organizations provider network, and the organization must provide the same information to plan members in writing upon request. (4) Disclosures, in writing in a font not less than 12 points in size and on the first content page of advertisements, marketing materials or brochures made available to the public and relating to a discount medical plan, that: (a) The discount medical plan is not insurance; and (b) Plan members must pay for all medical and ancillary services, but will receive a discount from providers. [2007 c.272 8] Note: See note under 742.420.
(1) A person may not use or disseminate in marketing, advertising, promotional, sales or plan documents or other informational materials for discount medical plans or in communications with plan members or prospective plan members: (a) Misleading, deceptive or false statements; or (b) The terms "health plan," "coverage," "copay," "copayments," "deductible," "preexisting condition," "guaranteed issue," "premium," "preferred provider organization" or other terms in a manner that could reasonably mislead an individual into believing that the discount medical plan is insurance. (2) For the purposes of subsection (1) of this section, "misleading, deceptive or false statements" includes, but is not limited to, statements that: (a) Are misleading in fact or implication, including statements that, while containing truthful elements, conceal or omit information necessary or relevant for a consumer to make informed decisions concerning discount medical plans; or (b) Have a capacity or tendency to mislead or deceive based on the overall impression a reasonable consumer may form after seeing or hearing the statements. (3) A person may not represent in any marketing, advertising, promotional, sales or plan documents or other informational materials for a discount medical plan or in communications with plan members or prospective plan members that the State of Oregon reviews or approves the discount medical plan. (4) Before a person uses an advertisement, a brochure, a discount card or promotional or marketing material for marketing, promoting, selling or distributing a discount medical plan, the discount medical plan organization shall approve the material in writing. (5) At the request of the Director of the Department of Consumer and Business Services, a discount medical plan organization shall submit to the director an advertisement, a brochure, a discount card or promotional or marketing material used for marketing, promoting, selling or distributing a discount medical plan. [2007 c.272 9] Note: See note under 742.420.
The Director of the Department of Consumer and Business Services may investigate a person operating or purporting to operate as a discount medical plan organization and may require the person at any time to produce marketing, promotional and advertising materials, records, books, files or other information the person uses in conducting business as a discount medical plan organization. During an investigation, the person shall respond to the directors inquiries promptly and truthfully and in the manner or form the director requires. The person subject to an investigation under this section shall pay the expenses incurred in conducting the investigation. [2007 c.272 10] Note: See note under 742.420.
(1) The Director of the Department of Consumer and Business Services by order may suspend, revoke or refuse to renew a license issued under ORS 742.426 if the director finds in writing that: (a) Any fact or condition exists that, if the fact or condition had existed at the time the licensee applied for a license to operate as a discount medical plan organization, would have been grounds for the director to deny a license to the licensee; (b) The licensee has not complied or is not complying with the licensees obligations under ORS 742.424, 742.426, 742.428, 742.432 or 742.436 or any rule adopted thereunder or the licensee has violated or is violating a prohibition under ORS 742.434; or (c) The licensees license or other authority to operate as a discount medical plan organization in another state has been suspended or revoked or has not been renewed. (2) A licensee subject to an order of the director suspending or revoking a license shall have an opportunity for a hearing under ORS 183.413 to 183.470. (3) After the director issues a final order to suspend or revoke a license, the person subject to the order may not conduct further business as a discount medical plan organization in this state. Immediately after the director issues a final order suspending or revoking a license, the person subject to the order shall: (a) Cease operations as a discount medical plan organization in this state; (b) Cancel all pending transactions with plan members and refund any fees, service or subscription charges, dues or other consideration collected in exchange for services the person would have provided to plan members in connection with a discount medical plan after the effective date of the final order suspending or revoking the persons license; and (c) Wind up all business conducted in connection with the persons operations as a discount medical plan organization in this state, if necessary. [2007 c.272 11] Note: See note under 742.420.
(1) A person, a municipal or other public corporation or, at the request of the Director of the Department of Consumer and Business Services, the Attorney General may bring an action in a circuit court of this state against a person that operates or purports to operate as a discount medical plan organization but that has not obtained a license under ORS 742.426, to: (a) Enjoin the person from operating or purporting to operate as a discount medical plan organization or from violating ORS 742.432 or 742.434 or any rule adopted thereunder; or (b) Recover actual damages or statutory damages under this section that arise from the persons violation of ORS 742.432 or 742.434 or any rule adopted thereunder. (2) A plaintiff may bring an action under this section in the county where: (a) The plaintiff resides or conducts business; or (b) The defendant marketed, offered for sale or sold, promoted, distributed or advertised a discount medical plan. (3) If the court finds that the defendant has violated ORS 742.422, 742.432 or 742.434 or any rule adopted thereunder, the court shall enjoin the defendant from continuing the violation. (4) Unless a plaintiff seeks actual or statutory damages under this section, the plaintiff need not allege or prove actual damages to bring an action for an injunction under this section. (5) In addition to injunctive relief, the plaintiff who prevails in an action brought under this section is entitled to recover from the defendant: (a) $100 for each discount medical plan membership sold or otherwise distributed within this state or $10,000, whichever is greater; (b) Three times the amount of actual damages, if any, that the plaintiff sustained; (c) Reasonable attorney fees; (d) Costs; and (e) Any other relief the court deems proper. (6) A plaintiff must commence an action under this section within two years after the date on which the violation described in subsection (1) of this section occurred or within two years after the plaintiff bringing the action discovered or in the exercise of reasonable diligence should have discovered the violation. The plaintiff may have an additional 180 days after the two-year period provided in this subsection within which to commence an action if the plaintiff can prove by a preponderance of the evidence that the plaintiff failed to timely commence the action because of conduct by the defendant calculated solely to induce the plaintiff to refrain from or postpone commencement of the action. (7) The remedies provided in this section are cumulative and are in addition to any other applicable criminal, civil or administrative penalties. [2007 c.272 12] Note: See note under 742.420.
(1) Every insurer that issues motor vehicle insurance that is designed to meet either the financial or future responsibility requirements of ORS chapter 806 shall issue with the policy proof of insurance that shows the effective date and the expiration date of the insurance. (2) An insurer may provide proof of insurance under this section by issuing a card or, if the insured agrees, through electronic means. (3) Nothing in this section requires an insurer to provide proof of insurance at any time other than when the policy is issued or renewed. [1993 c.746 1; 2013 c.108 1] Note: 742.447 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 742 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
An insurer issuing motor vehicle liability insurance policies in this state may not assign an insured or applicant for insurance to a higher risk category than the person would otherwise be assigned to solely because the person has: (1) Let a prior motor vehicle liability policy lapse, unless the person was in violation of ORS 806.010 at any time after the prior policy lapsed; or (2) Had driving privileges suspended pursuant to ORS 809.280 (6) or (8) if the suspension is based on a nondriving offense. [1989 c.419 2; 1991 c.860 6; 2011 c.355 22]
(1) Every motor vehicle liability insurance policy issued for delivery in this state shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged therefor, the policy period and the limits of liability. (2) Every motor vehicle liability insurance policy issued for delivery in this state shall contain an agreement or indorsement stating that, as respects bodily injury and death or property damage, or both, the insurance provides either: (a) The coverage described in ORS 806.070 and 806.080; or (b) The coverage described in ORS 806.270. (3) The agreement or indorsement required by subsection (2) of this section shall also state that the insurance provided is subject to all the provisions of the Oregon Vehicle Code relating to financial responsibility requirements as defined in ORS 801.280 or future responsibility filings as defined in ORS 801.290, as appropriate. (4) Every motor vehicle liability insurance policy issued for delivery in this state shall provide liability coverage to at least the limits specified in ORS 806.070. (5) Every motor vehicle liability insurance policy issued for delivery in this state shall provide liability coverage, up to the limits of coverage under the policy for a vehicle owned by the named insured, for the operation by the named insured of a motor vehicle provided to the named insured, without regard to whether the named insured is charged for the use of the motor vehicle, if: (a) The motor vehicle is provided to the named insured by a person engaged in the business of repairing or servicing motor vehicles; and (b) The motor vehicle is provided to the named insured as a temporary replacement vehicle while the named insureds vehicle is being repaired or serviced. (6) A motor vehicle liability insurance policy issued for delivery in this state may exclude by name from coverage required by subsection (2)(a) of this section any person other than the named insured, for any of the reasons stated in subsection (7) of this section. When an insurer excludes a person as provided by this subsection, the insurer shall obtain a statement or indorsement, signed by each of the named insureds, that the policy will not provide any coverage required by subsection (2)(a) of this section when the motor vehicle is driven by any named excluded person. (7) A person may be excluded from coverage under a motor vehicle liability insurance policy as provided in subsection (6) of this section: (a) Because of the driving record of the person. The Director of the Department of Consumer and Business Services by rule may establish restrictions on the use of the driving record in addition to other restrictions established by law. (b) Because of any reason or set of criteria established by the director by rule. (8) Every motor vehicle liability insurance policy issued for delivery in this state shall contain a provision that provides liability coverage for each family member of the insured residing in the same household as the insured in an amount equal to the amount of liability coverage purchased by the insured. [Formerly 486.541 and then 743.776; 1991 c.768 3; 1999 c.438 2; 2007 c.782 1]
The motor vehicle liability insurance policy required by ORS 806.010, 806.060, 806.080, 806.240 or 806.270 need not insure any liability under any workers compensation law; nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance or repair of a vehicle; nor any liability for damage to property owned by, rented to, in charge of, or transported by the insured. [Formerly 486.546 and then 743.778]
The liability of an insurer with respect to the motor vehicle liability insurance policy required by ORS 806.060, 806.240 or 806.270 shall become absolute whenever injury or damage covered by the policy occurs. The policy may not be canceled or annulled as to such liability by any agreement between the insurer and the insured after the occurrence of the injury or damage. No statement made by the insured or on behalf of the insured and in violation of the policy shall defeat or void the policy. This section does not apply to motor vehicle liability insurance policies other than those required in connection with ORS 806.060, 806.240 or 806.270. [Formerly 486.551 and then 743.779]
Every motor vehicle liability insurance policy shall be subject to the following provisions, which need not be contained therein: (1) The policy, the written application therefor, if any, and any rider or indorsement that does not conflict with the laws relating to motor vehicle liability insurance policies shall constitute the entire contract between the parties. (2) The satisfaction by the insured of a judgment for injury or damage shall not be a condition precedent to the right or duty of the insurer to make payment on account of such injury or damage. (3) Any binder issued pending the issuance of a motor vehicle liability insurance policy shall be deemed to fulfill the requirements for such a policy. [Formerly 486.556 and then 743.781]
Any motor vehicle liability insurance policy may provide that the insured shall reimburse the insurer for any payment the insurer would not have been obligated to make under the terms of the policy except for the provisions of ORS 742.450 to 742.464, 806.080 and 806.270 and it may further provide for the prorating of the insurance thereunder with other valid and collectible insurance. [Formerly 486.561 and then 743.782; 1995 c.79 363]
The insurer shall have the right to settle any claim covered by the policy, and if such settlement is made in good faith, the amount thereof shall be deductible from the limits of liability specified in respect to a motor vehicle liability insurance policy. [Formerly 486.564 and then 743.784]
Any policy which grants the coverage required for a motor vehicle liability insurance policy under ORS 742.450, 806.080 and 806.270 may also grant any lawful coverage in excess of or in addition to the required coverage, and such excess or additional coverage shall not be subject to the provisions of ORS 742.031, 742.400 and 742.450 to 742.464. With respect to a policy which grants such excess or additional coverage only that part of the coverage which is required by ORS 806.080 and 806.270 is subject to the requirements of those sections. [Formerly 486.566 and then 743.785]
(1) In the event of a dispute between the insurer and insured under a motor vehicle liability policy concerning coverage for physical damage, if the policy contains a provision authorizing the insured to obtain an independent appraisal by a competent and disinterested person of the physical damage, that provision shall apply. An independent appraisal conducted under this section shall be performed by a person who has been issued a vehicle appraiser certificate under ORS 819.480 or a person who has been issued a vehicle appraiser certificate or license by another state or government body. (2) When a motor vehicle liability policy contains a provision for resolving a dispute through appraisal of a motor vehicle insured under the policy, the insurer shall reimburse the insured for the reasonable appraisal costs if the final appraisal decision under the policy provision is greater than the amount of the insurers last offer prior to the incurrence of the appraisal costs. (3) If a motor vehicle liability policy does not contain a provision described in subsection (1) of this section, then notwithstanding any other provision of the policy, any resolution of the dispute shall be subject to rules adopted by the Director of the Department of Consumer and Business Services. [Formerly 743.840; 2009 c.65 4; 2011 c.134 1]
For purposes of statutes mandating kinds or amounts of coverage that motor vehicle liability policies must contain, the following shall not be considered motor vehicle liability policies: (1) Comprehensive general liability policies. (2) Excess liability policies. (3) Umbrella liability policies. [1993 c.709 10]
(1) A rate, rating plan or rating system filed with the Director of the Department of Consumer and Business Services for a motor vehicle insurance policy offering liability, personal injury protection or collision coverage shall provide an appropriate reduction in premium charges for such coverage if: (a) The principal operator of a covered motorcycle has successfully completed a motorcycle rider education course established under ORS 802.320. The course must be completed no more than three years prior to the beginning of the policy period for which the discounted rate applies. (b) The motorcycle is not classified, for underwriting purposes, as used for a business. (2) If the person qualifying for a premium reduction under subsection (1) of this section is the principal operator of two or more motorcycles, the premium discount applies to only one motorcycle. No more than one premium discount may be applied to one motorcycle. (3) If a motor vehicle insurance policy insures motorcycles and other vehicles, the appropriate reduction in premium charges applies only to the motorcycle portion of the policy. [2009 c.771 2] Note: 742.480 to 742.486 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Except as otherwise provided in this section, the premium reduction required under ORS 742.480 shall be effective for an insured for a three-year period after successful completion of the approved course. [2009 c.771 3] Note: See note under 742.480.
An organization offering a motorcycle rider education course established under ORS 802.320 shall issue a certificate to each person who successfully completes the course. The person shall present the certificate to an insurer to qualify for the premium reduction required under ORS 742.480. [2009 c.771 4] Note: See note under 742.480.
(1) Any rate, rating plan or rating system filed with the Director of the Department of Consumer and Business Services for a motor vehicle insurance policy offering liability, personal injury protection or collision coverage, shall provide an appropriate reduction in premium charges for such coverage if: (a) The principal operator of the covered vehicle is an insured 55 years of age or older. (b) The principal operator of the covered vehicle has successfully completed, within the appropriate time as specified in this subsection, a motor vehicle accident prevention course approved by the Department of Transportation. To meet the requirements of this subsection, a course must be completed no more than three years prior to the beginning of the policy period for which the discounted rate applies if the person is less than 70 years of age at the time of taking the course or no more than two years prior to the beginning of the policy period for which the discounted rate applies if the person is 70 years of age or more at the time of taking the course. (c) There are no persons under 25 years of age who regularly operate the vehicle. (d) The vehicle is not classified for underwriting purposes as used for a business. (2) If the person qualifying for a premium reduction under subsection (1) of this section is the principal operator of two or more vehicles, the premium discount shall apply to only one vehicle. No more than one premium discount may be applied to one vehicle. [1989 c.379 2,4]
Except as otherwise provided in this section, the premium reduction required by ORS 742.490 (1) shall be effective for an insured for a three-year period after successful completion of the approved course if the person is less than 70 years of age at the time of taking the course or for a two-year period after successful completion of an approved course if the person is 70 years of age or more at the time of taking the course. An insurer may require, as a condition of maintaining the discount, that the insured: (1) Not be involved in an accident for which the insured is at fault; and (2) Not be convicted of or plead guilty or nolo contendere to a moving traffic violation. [1989 c.379 3]
Any organization offering a motor vehicle accident prevention course approved by the Department of Transportation shall issue a certificate to each person who successfully completes the course. The person shall present the certificate to an insurer to qualify for the premium discount required under ORS 742.490 (1). [1989 c.379 5]
No person shall receive a discount under ORS 742.490 to 742.494 if the person takes the approved course as a punishment, specified by a court or other government entity, for a moving traffic violation. [1989 c.379 6]
As used in ORS 742.500 to 742.506: (1) "Bodily injury" has the meaning given that term in ORS 742.504. (2) "Insured" has the meaning given that term in ORS 742.504. (3)(a) "Motor vehicle" means every self-propelled device in, upon or by which any person or property is or may be transported or drawn upon a public highway. (b) "Motor vehicle" does not include: (A) A device used exclusively on stationary rails or tracks; (B) Motor trucks, as defined in ORS 801.355, that have a registration weight, as defined in ORS 803.430, of more than 8,000 pounds, if the insured has employees that operate the trucks and a workers compensation law, a disability benefits law or a similar law covers the employees; or (C) Farm-type tractors or self-propelled equipment designed for use principally off public highways. (4) "Sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages" has the meaning given that term in ORS 742.504. (5) "Uninsured motorist coverage" means coverage within the terms and conditions specified in ORS 742.504 that insures the insured or the heirs or legal representative of the insured for all sums that the insured or the heirs or legal representative is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises from owning, maintaining or using an uninsured vehicle in amounts or limits not less than the amounts or limits prescribed for bodily injury or death under ORS 806.070. (6) "Uninsured vehicle" has the meaning given that term in ORS 742.504. [Formerly 743.786; 2015 c.5 1]
(1) Every motor vehicle liability policy that insures against a loss that a natural person suffers and that results from liability imposed by law for bodily injury or death that arises out of owning, maintaining or using a motor vehicle shall provide in the policy or by indorsement on the policy uninsured motorist coverage if the policy is either: (a) Issued for delivery in this state; or (b) Issued or delivered by an insurer that does business in this state with respect to any motor vehicle then principally used or principally garaged in this state. (2)(a) A motor vehicle bodily injury liability policy must have the same limits for uninsured motorist coverage as for bodily injury liability coverage unless a named insured in writing elects lower limits. The insured may not elect limits lower than the amounts prescribed to meet the requirements of ORS 806.070 for bodily injury or death. Uninsured motorist coverage must include underinsurance coverage for bodily injury or death caused by accident and arising out of the ownership, maintenance or use of a motor vehicle with motor vehicle liability insurance that provides recovery in an amount that is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. Underinsurance coverage must be equal to the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle up to the limits of the uninsured motorist coverage. (b) If a named insured elects lower limits, the named insured shall sign a statement to elect lower limits within 60 days after the time the named insured makes the election. The statement must acknowledge that a named insured was offered uninsured motorist coverage with the limits equal to those for bodily injury liability. The statement must have a brief summary that is not part of the insurance contract and that describes what uninsured motorist coverage provides and what the underinsured coverage provides. The summary must also state the price for coverage with limits equal to the named insureds bodily injury liability limits and the price for coverage with the lower limits the named insured requested. The statement remains in force until a named insured rescinds the statement in writing or until the motor vehicle bodily injury liability limits are changed. The Department of Consumer and Business Services shall approve the form of statement that complies with this paragraph. (c) A statement electing lower limits need not be signed if vehicles are either added to or subtracted from a policy or if the policy is amended, renewed, modified or replaced by the same insurer or an insurer within a group of companies that is under common ownership or control, unless the liability limits of the policy are changed. (3) The insurer that issues the policy may offer one or more options of uninsured motorist coverage that are larger than the amounts prescribed to meet the requirements of ORS 806.070 and in excess of the limits provided under the policy for motor vehicle bodily injury liability insurance. Offers of uninsured motorist coverage must include underinsurance coverage for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using a motor vehicle with motor vehicle liability insurance that provides recovery in an amount that is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. Underinsurance coverage must be equal to the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises from owning, maintaining or using an uninsured vehicle up to the limits of the uninsured motorist coverage. (4) Underinsurance coverage is subject to ORS 742.504 and 742.542. (5) Uninsured motorist coverage and underinsurance coverage must provide coverage for bodily injury or death if the amount of liability insurance recovered is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. (6) Uninsured motorist coverage and underinsurance coverage must provide coverage for bodily injury or death if the amount recovered from a self-insurer is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. (7) As used in this section and except as otherwise provided in this subsection, "amount recovered from other motor vehicle liability insurance policies" means the proceeds of liability insurance or the proceeds received from a public body under ORS 30.260 to 30.300 that are recovered by or on behalf of the injured party. Proceeds recovered on behalf of the injured party include proceeds the injured partys insurer receives as reimbursement for personal injury protection benefits the insurer provides to the injured person, proceeds the medical providers of the injured person receive and proceeds received as attorney fees on the claim of the injured person. If applicable liability insurance policy limits are exhausted upon payment, settlement or judgment by division among two or more injured persons, "amount recovered from other motor vehicle liability insurance policies" means the proceeds that are recovered by or on behalf of the injured person but does not include any proceeds of the liability policy that other injured persons receive. [Formerly 743.789; 1993 c.709 11; 1997 c.808 1; 2003 c.220 1; 2005 c.235 1; 2007 c.287 2; 2007 c.782 2; 2009 c.67 14; 2015 c.5 2]
Every policy required to provide the coverage specified in ORS 742.502 shall provide uninsured motorist coverage that in each instance is no less favorable in any respect to the insured or the beneficiary than if the following provisions were set forth in the policy. However, nothing contained in this section requires the insurer to reproduce in the policy the particular language of any of the following provisions: (1)(a) Notwithstanding ORS 30.260 to 30.300, the insurer will pay all sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages from the owner or operator of an uninsured vehicle because of bodily injury sustained by the insured caused by accident and arising out of the ownership, maintenance or use of the uninsured vehicle. Determination as to whether the insured, the insureds heirs or the insureds legal representative is legally entitled to recover such damages, and if so, the amount thereof, shall be made by agreement between the insured and the insurer, or, in the event of disagreement, may be determined by arbitration as provided in subsection (10) of this section. (b) No judgment against any person or organization alleged to be legally responsible for bodily injury, except for proceedings instituted against the insurer as provided in this policy, shall be conclusive, as between the insured and the insurer, on the issues of liability of the person or organization or of the amount of damages to which the insured is legally entitled. (2) As used in this policy: (a) "Bodily injury" means bodily injury, sickness or disease, including death resulting therefrom. (b) "Hit-and-run vehicle" means a vehicle that causes bodily injury to an insured arising out of physical contact of the vehicle with the insured or with a vehicle the insured is occupying at the time of the accident, provided: (A) The identity of either the operator or the owner of the hit-and-run vehicle cannot be ascertained; (B) The insured or someone on behalf of the insured reported the accident within 72 hours to a police, peace or judicial officer, to the Department of Transportation or to the equivalent department in the state where the accident occurred, and filed with the insurer within 30 days thereafter a statement under oath that the insured or the legal representative of the insured has a cause or causes of action arising out of the accident for damages against a person or persons whose identities are unascertainable, and setting forth the facts in support thereof; and (C) At the insurers request, the insured or the legal representative of the insured makes available for inspection the vehicle the insured was occupying at the time of the accident. (c) "Insured," when unqualified and when applied to uninsured motorist coverage, means: (A) The named insured as stated in the policy and any person designated as named insured in the schedule and, while residents of the same household, the spouse of any named insured and relatives of either, provided that neither the relative nor the spouse is the owner of a vehicle not described in the policy and that, if the named insured as stated in the policy is other than an individual or spouses in a marriage who are residents of the same household, the named insured shall be only a person so designated in the schedule; (B) Any child residing in the household of the named insured if the insured has performed the duties of a parent to the child by rearing the child as the insureds own although the child is not related to the insured by blood, marriage or adoption; and (C) Any other person while occupying an insured vehicle, provided the actual use thereof is with the permission of the named insured. (d) "Insured vehicle," except as provided in paragraph (e) of this provision, means: (A) The vehicle described in the policy or a newly acquired or substitute vehicle, as each of those terms is defined in the public liability coverage of the policy, insured under the public liability provisions of the policy; or (B) A nonowned vehicle operated by the named insured or spouse if a resident of the same household, provided that the actual use thereof is with the permission of the owner of the vehicle and the vehicle is not owned by nor furnished for the regular or frequent use of the insured or any member of the same household. (e) "Insured vehicle" does not include a trailer of any type unless the trailer is a described vehicle in the policy. (f) "Occupying" means in or upon or entering into or alighting from. (g) "Phantom vehicle" means a vehicle that causes bodily injury to an insured arising out of a motor vehicle accident that is caused by a vehicle that has no physical contact with the insured or the vehicle the insured is occupying at the time of the accident, provided: (A) The identity of either the operator or the owner of the phantom vehicle cannot be ascertained; (B) The facts of the accident can be corroborated by competent evidence other than the testimony of the insured or any person having an uninsured motorist claim resulting from the accident; and (C) The insured or someone on behalf of the insured reported the accident within 72 hours to a police, peace or judicial officer, to the Department of Transportation or to the equivalent department in the state where the accident occurred, and filed with the insurer within 30 days thereafter a statement under oath that the insured or the legal representative of the insured has a cause or causes of action arising out of the accident for damages against a person or persons whose identities are unascertainable, and setting forth the facts in support thereof. (h) "State" includes the District of Columbia, a territory or possession of the United States and a province of Canada. (i) "Stolen vehicle" means an insured vehicle that causes bodily injury to the insured arising out of a motor vehicle accident if: (A) The vehicle is operated without the consent of the insured; (B) The operator of the vehicle does not have collectible motor vehicle bodily injury liability insurance; (C) The insured or someone on behalf of the insured reported the accident within 72 hours to a police, peace or judicial officer or to the equivalent department in the state where the accident occurred; and (D) The insured or someone on behalf of the insured cooperates with the appropriate law enforcement agency in the prosecution of the theft of the vehicle. (j) "Sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages" means the amount of damages that: (A) A claimant could have recovered in a civil action from the owner or operator at the time of the injury after determination of fault or comparative fault and resolution of any applicable defenses; (B) Are calculated without regard to the tort claims limitations of ORS 30.260 to 30.300; and (C) Are no larger than benefits payable under the terms of the policy as provided in subsection (7) of this section. (k) "Uninsured vehicle," except as provided in paragraph (L) of this provision, means: (A) A vehicle with respect to the ownership, maintenance or use of which there is no collectible motor vehicle bodily injury liability insurance, in at least the amounts or limits prescribed for bodily injury or death under ORS 806.070 applicable at the time of the accident with respect to any person or organization legally responsible for the use of the vehicle, or with respect to which there is collectible bodily injury liability insurance applicable at the time of the accident but the insurance company writing the insurance denies coverage or the company writing the insurance becomes voluntarily or involuntarily declared bankrupt or for which a receiver is appointed or becomes insolvent. It shall be a disputable presumption that a vehicle is uninsured in the event the insured and the insurer, after reasonable efforts, fail to discover within 90 days from the date of the accident, the existence of a valid and collectible motor vehicle bodily injury liability insurance applicable at the time of the accident. (B) A hit-and-run vehicle. (C) A phantom vehicle. (D) A stolen vehicle. (E) A vehicle that is owned or operated by a self-insurer: (i) That is not in compliance with ORS 806.130 (1)(c); or (ii) That provides recovery to an insured in an amount that is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. (L) "Uninsured vehicle" does not include: (A) An insured vehicle, unless the vehicle is a stolen vehicle; (B) Except as provided in paragraph (k)(E) of this subsection, a vehicle that is owned or operated by a self-insurer within the meaning of any motor vehicle financial responsibility law, motor carrier law or any similar law; (C) A vehicle that is owned by the United States of America, Canada, a state, a political subdivision of any such government or an agency of any such government; (D) A land motor vehicle or trailer, if operated on rails or crawler-treads or while located for use as a residence or premises and not as a vehicle; (E) A farm-type tractor or equipment designed for use principally off public roads, except while actually upon public roads; or (F) A vehicle owned by or furnished for the regular or frequent use of the insured or any member of the household of the insured. (m) "Vehicle" means every device in, upon or by which any person or property is or may be transported or drawn upon a public highway, but does not include devices moved by human power or used exclusively upon stationary rails or tracks. (3) This coverage applies only to accidents that occur on and after the effective date of the policy, during the policy period and within the United States of America, its territories or possessions, or Canada. (4)(a) This coverage does not apply to bodily injury of an insured with respect to which the insured or the legal representative of the insured shall, without the written consent of the insurer, make any settlement with or prosecute to judgment any action against any person or organization who may be legally liable therefor. (b) This coverage does not apply to bodily injury to an insured while occupying a vehicle, other than an insured vehicle, owned by, or furnished for the regular use of, the named insured or any relative resident in the same household, or through being struck by the vehicle. (c) This coverage does not apply so as to inure directly or indirectly to the benefit of any workers compensation carrier, any person or organization qualifying as a self-insurer under any workers compensation or disability benefits law or any similar law or the State Accident Insurance Fund Corporation. (d) This coverage does not apply with respect to underinsured motorist benefits unless: (A) The limits of liability under any bodily injury liability insurance applicable at the time of the accident regarding the injured person have been exhausted by payment of judgments or settlements to the injured person or other injured persons; (B) The described limits have been offered in settlement, the insurer has refused consent under paragraph (a) of this subsection and the insured protects the insurers right of subrogation to the claim against the tortfeasor; (C) The insured gives credit to the insurer for the unrealized portion of the described liability limits as if the full limits had been received if less than the described limits have been offered in settlement, and the insurer has consented under paragraph (a) of this subsection; or (D) The insured gives credit to the insurer for the unrealized portion of the described liability limits as if the full limits had been received if less than the described limits have been offered in settlement and, if the insurer has refused consent under paragraph (a) of this subsection, the insured protects the insurers right of subrogation to the claim against the tortfeasor. (e) When seeking consent under paragraph (a) or (d) of this subsection, the insured shall allow the insurer a reasonable time in which to collect and evaluate information related to consent to the proposed offer of settlement. The insured shall provide promptly to the insurer any information that is reasonably requested by the insurer and that is within the custody and control of the insured. Consent will be presumed to be given if the insurer does not respond within a reasonable time. For purposes of this paragraph, a "reasonable time" is no more than 30 days from the insurers receipt of a written request for consent, unless the insured and the insurer agree otherwise. (5)(a) As soon as practicable, the insured or other person making claim shall give to the insurer written proof of claim, under oath if required, including full particulars of the nature and extent of the injuries, treatment and other details entering into the determination of the amount payable hereunder. The insured and every other person making claim hereunder shall submit to examinations under oath by any person named by the insurer and subscribe the same, as often as may reasonably be required. Proof of claim shall be made upon forms furnished by the insurer unless the insurer fails to furnish the forms within 15 days after receiving notice of claim. (b) Upon reasonable request of and at the expense of the insurer, the injured person shall submit to physical examinations by physicians, naturopathic physicians, physician assistants or nurse practitioners selected by the insurer and shall, upon each request from the insurer, execute authorization to enable the insurer to obtain medical reports and copies of records. (6) If, before the insurer makes payment of loss hereunder, the insured or the legal representative of the insured institutes any legal action for bodily injury against any person or organization legally responsible for the use of a vehicle involved in the accident, a copy of the summons and complaint or other process served in connection with the legal action shall be forwarded immediately to the insurer by the insured or the legal representative of the insured. (7)(a) The limit of liability stated in the declarations as applicable to "each person" is the limit of the insurers liability for all damages because of bodily injury sustained by one person as the result of any one accident and, subject to the above provision respecting each person, the limit of liability stated in the declarations as applicable to "each accident" is the total limit of the companys liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident. (b) Any amount payable under the terms of this coverage because of bodily injury sustained in an accident by a person who is an insured under this coverage shall be reduced by the amount paid and the present value of all amounts payable on account of the bodily injury under any workers compensation law, disability benefits law or any similar law. (c) Any amount payable under the terms of this coverage because of bodily injury sustained in an accident by a person who is an insured under this coverage shall be reduced by the credit given to the insurer pursuant to subsection (4)(d)(C) or (D) of this section. (d) The amount payable under the terms of this coverage may not be reduced by the amount of liability proceeds offered, described in subsection (4)(d)(B) or (D) of this section, that has not been paid to the injured person. If liability proceeds have been offered and not paid, the amount payable under the terms of the coverage shall include the amount of liability limits offered but not accepted due to the insurers refusal to consent. The insured shall cooperate so as to permit the insurer to proceed by subrogation or assignment to prosecute the claim against the uninsured motorist. (8) No action shall lie against the insurer unless, as a condition precedent thereto, the insured or the legal representative of the insured has fully complied with all the terms of this policy. (9)(a) With respect to bodily injury to an insured: (A) While occupying a vehicle owned by a named insured under this coverage, the insurance under this coverage is primary. (B) While occupying a vehicle not owned by a named insured under this coverage, the insurance under this coverage shall apply only as excess insurance over any primary insurance available to the occupant that is similar to this coverage, and this excess insurance coverage shall then apply only to the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. (b) With respect to bodily injury to an insured while occupying any motor vehicle used as a public or livery conveyance, the insurance under this coverage shall apply only as excess insurance over any other insurance available to the insured that is similar to this coverage, and this excess insurance coverage shall then apply only to the amount by which the applicable limit of liability of this coverage exceeds the sum of the applicable limits of liability of all other insurance. (10) If any person making claim hereunder and the insurer do not agree that the person is legally entitled to recover damages from the owner or operator of an uninsured vehicle because of bodily injury to the insured, or do not agree as to the amount of payment that may be owing under this coverage, then, in the event the insured and the insurer elect by mutual agreement at the time of the dispute to settle the matter by arbitration, the arbitration shall take place as described in ORS 742.505. Any judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof, provided, however, that the costs to the insured of the arbitration proceeding do not exceed $100 and that all other costs of arbitration are borne by the insurer. "Costs" as used in this provision does not include attorney fees or expenses incurred in the production of evidence or witnesses or the making of transcripts of the arbitration proceedings. The person and the insurer each agree to consider themselves bound and to be bound by any award made by the arbitrators pursuant to this coverage in the event of such election. At the election of the insured, the arbitration shall be held: (a) In the county and state of residence of the insured; (b) In the county and state where the insureds cause of action against the uninsured motorist arose; or (c) At any other place mutually agreed upon by the insured and the insurer. (11) In the event of payment to any person under this coverage: (a) The insurer shall be entitled to the extent of the payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of the person against any uninsured motorist legally responsible for the bodily injury because of which payment is made; (b) The person shall hold in trust for the benefit of the insurer all rights of recovery that the person shall have against such other uninsured person or organization because of the damages that are the subject of claim made under this coverage, but only to the extent that the claim is made or paid herein; (c) If the insured is injured by the joint or concurrent act or acts of two or more persons, one or more of whom is uninsured, the insured shall have the election to receive from the insurer any payment to which the insured would be entitled under this coverage by reason of the act or acts of the uninsured motorist, or the insured may, with the written consent of the insurer, proceed with legal action against any or all persons claimed to be liable to the insured for the injuries. If the insured elects to receive payment from the insurer under this coverage, then the insured shall hold in trust for the benefit of the insurer all rights of recovery the insured shall have against any other person, firm or organization because of the damages that are the subject of claim made under this coverage, but only to the extent of the actual payment made by the insurer; (d) The person shall do whatever is proper to secure and shall do nothing after loss to prejudice such rights; (e) If requested in writing by the insurer, the person shall take, through any representative not in conflict in interest with the person, designated by the insurer, such action as may be necessary or appropriate to recover payment as damages from such other uninsured person or organization, such action to be taken in the name of the person, but only to the extent of the payment made hereunder. In the event of a recovery, the insurer shall be reimbursed out of the recovery for expenses, costs and attorney fees incurred by the insurer in connection therewith; and (f) The person shall execute and deliver to the insurer any instruments and papers as may be appropriate to secure the rights and obligations of the person and the insurer established by this provision. (12)(a) The parties to this coverage agree that no cause of action shall accrue to the insured under this coverage unless within two years from the date of the accident: (A) Agreement as to the amount due under the policy has been concluded; (B) The insured or the insurer has formally instituted arbitration proceedings; (C) The insured has filed an action against the insurer; or (D) Suit for bodily injury has been filed against the uninsured motorist and, within two years from the date of settlement or final judgment against the uninsured motorist, the insured has formally instituted arbitration proceedings or filed an action against the insurer. (b) For purposes of this subsection: (A) "Date of settlement" means the date on which a written settlement agreement or release is signed by an insured or, in the absence of these documents, the date on which the insured or the attorney for the insured receives payment of any sum required by the settlement agreement. An advance payment as defined in ORS 31.550 shall not be deemed a payment of a settlement for purposes of the time limitation in this subsection. (B) "Final judgment" means a judgment that has become final by lapse of time for appeal or by entry in an appellate court of an appellate judgment. [Formerly 743.792; 1993 c.18 156; 1993 c.596 38; 1997 c.808 2; 2003 c.175 2; 2005 c.22 490; 2005 c.236 1; 2005 c.246 2; 2005 c.247 2; 2007 c.131 1; 2007 c.287 3; 2007 c.328 5,6; 2007 c.457 1; 2007 c.782 3; 2009 c.67 15,16; 2011 c.192 2; 2014 c.45 76; 2015 c.5 3; 2015 c.629 59; 2017 c.356 95]
Unless the parties agree otherwise, arbitration proceedings under ORS 742.504 shall be conducted as follows: (1) Parties to an arbitration proceeding shall submit the dispute to arbitration by a panel of three arbitrators. The panel shall consist of one arbitrator chosen by each party and one arbitrator chosen by the two arbitrators previously chosen to sit on the panel. (2) An arbitration proceeding shall be conducted under local court rules in the county where the arbitration is held. [2007 c.328 2] Note: 742.505 was added to and made a part of ORS chapter 742 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
Notwithstanding the contrary provisions of any policy, the provisions of ORS 742.504 (9) shall control allocation of responsibility between insurers, except that if all policies potentially involved expressly allocate responsibility between insurers, or self-insurers, without repugnancy, then the terms of the policies shall control. [Formerly 743.795; 2015 c.5 6]
As used in this section and ORS 742.510: (1) "Covered motor vehicle" means a private passenger motor vehicle or a self-propelled mobile home that is owned by the named insured for which a premium has been paid for coverage under this section and ORS 742.510. (2) "Insured vehicle" means a motor vehicle described in the declarations for which a specific premium charge indicates that underinsured motorists coverage is afforded but the term "insured vehicle" shall not include a vehicle while used as a public or livery conveyance. (3) "Private passenger motor vehicle" means a four-wheel passenger or station wagon type motor vehicle not more than 12 years old and not used as a public or livery conveyance, and includes any other four-wheel motor vehicle of the utility, pickup body, sedan delivery or panel truck type not used for wholesale or retail delivery. (4)(a) "Uninsured vehicle" means: (A) A vehicle with respect to the ownership, maintenance or use of which there is no collectible property damage insurance, in at least the amounts or limits prescribed under ORS 806.070 (2)(c) applicable at the time of the accident with respect to any person or organization legally responsible for the use of such vehicle, or with respect to which there is such collectible insurance applicable at the time of the accident but the insurance company writing the same denies coverage thereunder or, within two years of the date of the accident, such company writing the same becomes voluntarily or involuntarily declared bankrupt or for which a receiver is appointed or becomes insolvent. It shall be a disputable presumption that a vehicle is uninsured in the event the insured and the insurer, after reasonable efforts, fail to discover within 90 days from the date of the accident, the existence of valid and collectible property damage insurance applicable at the time of the accident. (B) A hit-and-run vehicle as defined in subsection (5) of this section. (C) A phantom vehicle as defined in subsection (5) of this section. (b) As used in this section and ORS 742.510, "uninsured vehicle" does not include: (A) An insured vehicle; (B) A vehicle which is owned or operated by a self-insurer within the meaning of any motor vehicle financial responsibility law, motor carrier law or any similar law; (C) A vehicle which is owned by the United States of America, Canada, a state, a political subdivision of any such government or an agency of any of the foregoing; (D) A land motor vehicle or trailer, if operated on rails or crawler-treads or while located for use as a residence or premises and not as a vehicle; (E) A farm-type tractor or equipment designed for use principally off public roads, except while actually upon public roads; or (F) A vehicle owned by or furnished for the regular or frequent use of the insured or any member of the household of the insured. (5) As used in this section: (a) "Hit-and-run vehicle" means a vehicle that causes damage to the covered vehicle of an insured arising out of physical contact between the vehicles, provided: (A) There cannot be ascertained the identity of either the operator or the owner of such hit-and-run vehicle; (B) The insured or someone on behalf of the insured reports the accident within 72 hours to a police, peace or judicial officer, to the Department of Transportation or to the equivalent department in the state where the accident occurred, and files with the insurer within 30 days thereafter a statement under oath that the insured or the legal representative of the insured has a cause or causes of action arising out of such accident for damages against a person or persons whose identity is unascertainable, and setting forth the facts in support thereof; and (C) At the insurers request, the insured or the legal representative of the insured makes available for inspection the vehicle which was insured at the time of the accident. (b) "Phantom vehicle" means a vehicle that causes damage to the covered vehicle of an insured, although there is no physical contact between the vehicles, provided: (A) There cannot be ascertained the identity of either the operator or the owner of such phantom vehicle; (B) The facts of such accident can be corroborated by competent evidence other than the testimony of the insured or any passenger in the insured motor vehicle; and (C) The insured or someone on behalf of the insured shall have reported the accident within 72 hours to a police, peace or judicial officer, to the Department of Transportation or to the equivalent department in the state where the accident occurred, and shall have filed with the insurer within 30 days thereafter a statement under oath that the insured or the legal representative of the insured has a cause or causes of action arising out of such accident for damages against a person or persons whose identity is unascertainable, and setting forth the facts in support thereof. [Formerly 743.796; 2003 c.175 3] Note: 742.508 and 742.510 [formerly 743.796 and 743.797] were added to and made a part of ORS chapter 743 by legislative action but were not added to ORS chapter 742 or any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Every insurer issuing motor vehicle liability insurance policies on private passenger motor vehicles or on self-propelled mobile homes for delivery in this state shall have for sale coverage for property damage to a vehicle of the insured caused by an uninsured vehicle. Coverage offered under this section shall be at least the amount prescribed to meet the requirements of ORS 806.070 for insurance for injury to or destruction of the property of others in any one accident. (2) A policy with the coverage described in this section does not cover the first $300 of property damage to the covered motor vehicle as the result of an accident with a hit-and-run vehicle or phantom vehicle. In all other cases the first $200 damage is not covered. (3) Coverage for property damage described in this section: (a) Applies only to the amount of damages the insured may be legally entitled to recover. (b) Does not include coverage for loss of use of the covered vehicle. [Formerly 743.797; 1991 c.768 5] Note: See note under 742.508.
As used in ORS 742.518 to 742.542: (1) "Evaluation services" means physical examinations or reviews of medical records of beneficiaries conducted at the request of an insurer by either an employee of the insurer or a third-party medical record or bill review service to determine whether the provision or continuation of medical services is necessary or reasonable. (2) "Managed care services" means any system of health care delivery that attempts to control or coordinate use of health care services in order to contain health care expenditures or improve quality of health care services. (3) "Motor vehicle" means a self-propelled land motor vehicle or trailer, other than: (a) A farm-type tractor or other self-propelled equipment designed for use principally off public roads, while not upon public roads; (b) A vehicle operated on rails or crawler-treads; or (c) A vehicle located for use as a residence or premises. (4) "Motorcycle" and "moped" have the meanings given those terms in ORS 801.345 and 801.365. (5) "Occupying" means in, or upon, or entering into or alighting from. (6) "Pedestrian" means a person while not occupying a self-propelled vehicle other than a wheelchair or a similar low-powered motorized or mechanically propelled vehicle that is designed specifically for use by a person with a physical disability and that is determined to be medically necessary for the occupant of the wheelchair or other low-powered vehicle. (7) "Personal injury protection benefits" means the benefits described in ORS 742.518 to 742.542. (8) "Private passenger motor vehicle" means a four-wheel passenger or station wagon type motor vehicle not used as a public or livery conveyance, and includes any other four-wheel motor vehicle of the utility, pickup body, sedan delivery or panel truck type not used for wholesale or retail delivery other than farming, a self-propelled mobile home and a farm truck. (9) "Proof of loss" means documentation that allows an insurer to determine whether a person is entitled to personal injury protection benefits and the amount of any benefit that is due. (10) "Provider" has the meaning given that term in ORS 743B.001. (11) "Taxi company" means a corporation, limited liability company, partnership or other association that provides transportation services for compensation that passengers may request by means of telephone, software applications, websites or other Internet-based electronic technology or by visible, audible or otherwise physically perceptible signaling directly to a hired driver who provides the transportation services with a motor vehicle that the hired driver: (a) Owns and operates in affiliation with the corporation, limited liability company, partnership or other association; (b) Leases or rents from the corporation, limited liability company, partnership or other association; or (c) Has other authorization from the corporation, limited liability company, partnership or other association to use for the purposes described in this subsection. (12) "Transportation network company" means a corporation, limited liability company, partnership or other association that provides a software or digital application, the express purpose of which is to connect to the Internet and enable a prospective passenger to seek and obtain transportation services from a driver who operates a personal motor vehicle for the purpose of providing transportation services for compensation in affiliation with the corporation, limited liability company, partnership or other association. [2005 c.465 2; 2007 c.70 318; 2007 c.692 1; 2021 c.222 1]
(1)(a) Every motor vehicle liability policy issued for delivery in this state that covers any private passenger motor vehicle shall provide personal injury protection benefits to the person insured thereunder, members of that persons family residing in the same household, children not related to the insured by blood, marriage or adoption who are residing in the same household as the insured and being reared as the insureds own, passengers occupying the insured motor vehicle and pedestrians struck by the insured motor vehicle. (b) A transportation network company shall provide a motor vehicle liability policy with personal injury protection benefits to each driver who operates a personal motor vehicle in affiliation with the transportation network company. (c) A taxi company shall provide a motor vehicle liability policy with personal injury protection benefits to each driver who operates a taxi in affiliation with the taxi company. (d) The personal injury protection benefits described in paragraphs (b) and (c) of this subsection must, at all times during which the driver operates the personal motor vehicle or the taxi to provide transportation services to passengers in affiliation with the transportation network company or the taxi company, cover the driver of the personal motor vehicle or taxi, any passengers that occupy the personal motor vehicle or taxi and pedestrians that are struck by the personal motor vehicle or taxi. (e) Notwithstanding paragraphs (b), (c) and (d) of this subsection, an insurer may exclude from a motor vehicle liability policy for a private passenger motor vehicle any coverage, including personal injury protection benefits, for a loss or injury that occurs while a driver is operating a private passenger motor vehicle to provide transportation services for compensation in affiliation with a transportation network company. (2) Personal injury protection benefits apply to a persons injury or death resulting: (a) In the case of the person insured under the policy and members of that persons family residing in the same household, from the use, occupancy or maintenance of any motor vehicle, except the following vehicles: (A) A motor vehicle, including a motorcycle or moped, that is owned or furnished or available for regular use by any of such persons and that is not described in the policy; (B) A motorcycle or moped which is not owned by any of such persons, but this exclusion applies only when the injury or death results from such persons operating or riding upon the motorcycle or moped; and (C) A motor vehicle not included in subparagraph (A) or (B) of this paragraph and, except as provided in paragraph (c) of this subsection, not a private passenger motor vehicle. However, this exclusion applies only when the injury or death results from such persons operating or occupying the motor vehicle. (b) In the case of a passenger occupying or a pedestrian struck by the insured motor vehicle, from the use, occupancy or maintenance of the vehicle. (c) In the case of a person insured under the policy who operates a personal motor vehicle or a taxi with which the person provides transportation services to passengers for compensation in affiliation with a transportation network company or a taxi company, from the use, occupancy or maintenance of the personal motor vehicle or taxi. (3) Personal injury protection benefits consist of payments for expenses, loss of income and loss of essential services as provided in ORS 742.524. (4) An insurer shall pay all personal injury protection benefits promptly after proof of loss has been submitted to the insurer. (5) The potential existence of a cause of action in tort does not relieve an insurer from the duty to pay personal injury protection benefits. (6) Disputes between insurers and beneficiaries about the amount of personal injury protection benefits, or about the denial of personal injury protection benefits, shall be decided by arbitration if mutually agreed to at the time of the dispute. Arbitration under this subsection shall take place as described in ORS 742.521. (7) An insurer: (a) May not enter into or renew any contract that provides, or has the effect of providing, managed care services to beneficiaries. (b) May enter into or renew any contract that provides evaluation services for beneficiaries. [Formerly 743.800; 1991 c.768 6; 1993 c.282 1; 1993 c.596 39; 1995 c.658 114; 1997 c.344 1,2; 1997 c.808 3,4; 1999 c.434 1; 2003 c.813 1; 2005 c.465 3; 2007 c.328 8; 2021 c.222 2]
(1) Arbitration proceedings under ORS 742.520 shall be conducted under local court rules in the county where the arbitration is held. (2) Findings and awards made in an arbitration proceeding under this section: (a) Are binding on the parties to the arbitration proceeding; (b) Are not binding on any other party; and (c) May not be used for the purpose of collateral estoppel. [2007 c.328 3] Note: 742.521 was added to and made a part of ORS chapter 742 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Costs to the insured of the arbitration proceeding under ORS 742.520 (6) shall not exceed $100 and all other costs of arbitration shall be borne by the insurer. (2) As used in this section, "costs" does not include attorney fees or expenses incurred in the production of evidence or witnesses or the making of transcripts of the arbitration proceedings. [Formerly 743.802; 2007 c.328 9]
(1) Personal injury protection benefits required by ORS 742.520 consist of the following payments for the injury or death of each person: (a) All reasonable and necessary expenses of medical, hospital, dental, surgical, ambulance and prosthetic services incurred within two years after the date of the persons injury, but not more than $15,000 in the aggregate for all such expenses of the person. Expenses of medical, hospital, dental, surgical, ambulance and prosthetic services are presumed to be reasonable and necessary unless the provider receives notice of denial of the charges not more than 60 calendar days after the insurer receives from the provider notice of the claim for the services. At any time during the first 50 calendar days after the insurer receives notice of claim, the provider shall, within 10 business days, answer in writing questions from the insurer regarding the claim. For purposes of determining when the 60-day period provided by this paragraph has elapsed, counting of days shall be suspended if the provider does not supply written answers to the insurer within 10 days and may not resume until the answers are supplied. (b) If the injured person is usually engaged in a remunerative occupation and if disability continues for at least 14 days, 70 percent of the loss of income from work during the period of the injured persons disability until the date the person is able to return to the persons usual occupation. This benefit is subject to a maximum payment of $3,000 per month and a maximum payment period in the aggregate of 52 weeks. As used in this paragraph, "income" includes but is not limited to salary, wages, tips, commissions, professional fees and profits from an individually owned business or farm. (c) If the injured person is not usually engaged in a remunerative occupation and if disability continues for at least 14 days, the expenses reasonably incurred by the injured person for essential services that were performed by a person who is not related to the injured person or residing in the injured persons household in lieu of the services the injured person would have performed without income during the period of the persons disability until the date the person is reasonably able to perform such essential services. This benefit is subject to a maximum payment of $30 per day and a maximum payment period in the aggregate of 52 weeks. (d) All reasonable and necessary funeral expenses incurred within one year after the date of the persons injury, but not more than $5,000. (e) If the injured person is a parent of a minor child and is required to be hospitalized for a minimum of 24 hours, $25 per day for child care, with payments to begin after the initial 24 hours of hospitalization and to be made for as long as the person is unable to return to work if the person is engaged in a remunerative occupation or for as long as the person is unable to perform essential services that the person would have performed without income if the person is not usually engaged in a remunerative occupation, but not to exceed $750. (2) With respect to the insured person and members of that persons family residing in the same household, an insurer may offer forms of coverage for the benefits required by subsection (1)(a), (b) and (c) of this section with deductibles of up to $250. [Formerly 743.805; 1991 c.768 7; 2003 c.813 2; 2005 c.341 1; 2009 c.66 1; 2015 c.5 4]
(1) Except as provided in subsection (2) of this section, a provider shall charge a person who receives personal injury protection benefits or that persons insurer the lesser of: (a) An amount that does not exceed the amount the provider charges the general public; or (b) An amount that does not exceed the fee schedules for medical services published pursuant to ORS 656.248 for expenses of medical, hospital, dental, surgical and prosthetic services. (2) For expenses of hospital services that are subject to the adjusted cost-to-charge ratio specified for a hospital in the hospital fee schedule published pursuant to ORS 656.248, a provider of hospital services shall charge a person who receives personal injury protection benefits or that persons insurer the greater of: (a) The amount of the hospital charges multiplied by the adjusted cost-to-charge ratio specified for the hospital; or (b) Ninety percent of the hospital charges. [2003 c.813 4; 2005 c.341 4; 2011 c.707 1]
(1) The personal injury protection benefits with respect to: (a) The insured and members of the family of the insured residing in the same household injured while occupying the insured motor vehicle shall be primary. (b) Passengers injured while occupying the insured motor vehicle shall be primary. (c) The insured and members of family residing in the same household injured as pedestrians shall be primary. (d) The insured and members of family residing in the same household injured while occupying a motor vehicle not insured under the policy shall be excess. (e) Pedestrians injured by the insured motor vehicle, other than the insured and members of family residing in the same household, shall be excess over any other collateral benefits to which the injured person is entitled, including but not limited to insurance benefits, governmental benefits or gratuitous benefits. (2) The personal injury protection benefits may be reduced or eliminated, if it is so provided in the policy, when the injured person is entitled to receive, under the laws of this state or any other state or the United States, workers compensation benefits or any other similar medical or disability benefits. [Formerly 743.810]
An insurer who denies payment of personal injury protection benefits to or on behalf of an insured shall: (1) Provide written notice of the denial, within 60 calendar days of receiving a claim from the provider, to the insured, stating the reason for the denial and informing the insured of the method for contesting the denial; and (2) Provide a copy of the notice of the denial, within 60 calendar days of receiving a claim from the provider, to a provider of services under ORS 742.524 (1)(a). [Formerly 743.812; 1993 c.265 1]
If personal injury protection benefits are paid based on information that appeared to establish proof of loss and the insurer paying the benefits later determines the insurer was not responsible for the payment, the insurer shall give notice and explanation to the provider that the payment was incorrectly issued. Immediately after receiving the notice and explanation the provider shall promptly repay the insurer. [2007 c.692 3]
(1) The insurer may exclude from the coverage for personal injury protection benefits any injured person who: (a) Intentionally causes self-injury; (b) Is participating in any prearranged or organized racing or speed contest or practice or preparation for any such contest; or (c) Willfully conceals or misrepresents any material fact in connection with a claim for personal injury protection benefits. (2) The insurer may exclude from the coverage for the benefits required by ORS 742.524 (1)(b) and (c) any person injured as a pedestrian in an accident outside this state, other than the insured person or a member of that persons family residing in the same household. [Formerly 743.815; 2005 c.341 2]
Nothing in ORS 742.518 to 742.542 is intended to prevent an insurer from providing more favorable benefits than the personal injury protection benefits described in ORS 742.520, 742.524 and 742.530. [Formerly 743.820]
(1) Except as provided in ORS 742.544, every authorized motor vehicle liability insurer whose insured is or would be held legally liable for damages for injuries sustained in a motor vehicle accident by a person for whom personal injury protection benefits have been furnished by another such insurer, or for whom benefits have been furnished by an authorized health insurer, shall reimburse such other insurer for the benefits it has so furnished if it has requested such reimbursement, has not given notice as provided in ORS 742.536 that it elects recovery by lien in accordance with that section and is entitled to reimbursement under this section by the terms of its policy. Reimbursement under this subsection, together with the amount paid to injured persons by the liability insurer, shall not exceed the limits of the policy issued by the insurer. (2) In calculating such reimbursement, the amount of benefits so furnished shall be diminished in proportion to the amount of negligence attributable to the person for whom benefits have been so furnished, and the reimbursement shall not exceed the amount of damages legally recoverable by the person. (3) Disputes between insurers as to such issues of liability and the amount of reimbursement required by this section shall be decided by arbitration. (4) Findings and awards made in such an arbitration proceeding are not admissible in any action at law or suit in equity. (5) If an insurer does not request reimbursement under this section for recovery of personal injury protection payments, then the insurer may only recover personal injury protection payments under the provisions of ORS 742.536 or 742.538. [Formerly 743.825; 1993 c.709 7; 2007 c.392 1]
(1) If an authorized motor vehicle liability insurer has furnished personal injury protection benefits, or an authorized health insurer has furnished benefits, to a person who was injured in a motor vehicle accident and the injured person makes a claim, or brings legal action, for damages for injuries against any other person, the injured person shall give notice of the claim or legal action to the insurer by personal service or by registered or certified mail. Service of a copy of the summons and complaint or copy of other process served in connection with the legal action is sufficient notice to the insurer, in which case a return showing service of the notice must be filed with the clerk of the court but is not a part of the record except to give notice. (2) An insurer may elect to seek reimbursement as provided in this section for benefits the insurer has furnished to the injured person out of any recovery the injured person obtains from a claim or legal action if the insurer has not been a party under ORS 742.534 to an interinsurer reimbursement proceeding with respect to benefits the insurer furnished to the injured person and the insurer is entitled by the terms of the insurers policy to the benefit of this section. The insurer shall give written notice of an election under this subsection by personal service or by registered or certified mail within 30 days after receiving the notice or knowledge of the claim or legal action to the person who made the claim or brought the legal action and to the person against whom the injured person made a claim or brought legal action. In the case of a legal action, a return showing service of the notice of election must be filed with the clerk of the court but is not a part of the record except to give notice to the claimant and the defendant of the lien of the insurer. (3) If the insurer serves a written notice of the insurers election under subsection (2) of this section and, if applicable, files a return showing service: (a) Subject to ORS 742.544, an insurer has a lien, for not more than the amount of benefits the insurer furnished, against an injured persons recovery in an action for damages, less a proportionate amount of not more than 100 percent of the expenses, costs and attorney fees the injured person incurred in connection with the recovery. The proportionate amount must be calculated as the ratio between the amount of the lien before a reduction under this paragraph and the amount of the recovery. (b) The injured person shall include the benefits the insurer furnished as damages in a claim or legal action. (c) In the case of a legal action, the action must be taken in the name of the injured person. (4) As used in this section, "makes a claim" means delivers a written demand for a specific amount of damages that meets requirements reasonably established by the directors rule. [Formerly 743.828; 2019 c.460 1]
If a motor vehicle liability insurer has furnished personal injury protection benefits, or a health insurer has furnished benefits, to a person who was injured in a motor vehicle accident and the interinsurer reimbursement benefit of ORS 742.534 is not available under the terms of that section, the insurer has not elected recovery by lien as provided in ORS 742.536, and the insurer is entitled by the terms of the insurers policy to the benefit of this section: (1) Subject to ORS 742.544, the insurer is entitled to the proceeds of any settlement or judgment that results from the exercise of any rights of recovery the injured person has against any person legally responsible for the accident, to the extent of the benefits the insurer furnished less the insurers share of expenses, costs and attorney fees the injured person incurred in connection with the recovery. (2) The injured person shall hold in trust for the benefit of the insurer the amount to which the insurer is entitled under this section, which may not exceed the amount of benefits the insurer furnished. (3) The injured person shall do whatever is proper to secure, and may not prejudice, the rights an insurer has under this section. (4) If requested in writing by the insurer, the injured person shall take, in the injured persons name and through any representative the insurer designates who is not in conflict in interest with the injured person, such action as is necessary or appropriate to recover the amounts to which the insurer is entitled under this section, including amounts for the injured persons share of expenses, costs and attorney fees that the insurer incurred in connection with the recovery. (5) In calculating respective shares of expenses, costs and attorney fees under this section, the basis of allocation must be the respective proportions borne to the total recovery by: (a) Benefits the insurer furnished; and (b) The total recovery less the benefits the insurer furnished. (6) The injured person shall execute and deliver to the insurer instruments and papers as are appropriate to secure the rights and obligations of the insurer and the injured person as established by this section. (7) Any provisions in a motor vehicle liability insurance policy or health insurance policy giving rights to the insurer relating to subrogation or the subject matter of this section must be construed and applied in accordance with the provisions of this section. [Formerly 743.830; 2019 c.460 2]
The Director of the Department of Consumer and Business Services shall have authority to issue such rules as are reasonably necessary to carry out the purposes of ORS 742.518 to 742.542. [Formerly 743.833]
Payment by a motor vehicle liability insurer of personal injury protection benefits for its own insured shall be applied in reduction of the amount of damages that the insured may be entitled to recover from the insurer under uninsured or underinsured motorist coverage for the same accident but may not be applied in reduction of the uninsured or underinsured motorist coverage policy limits. [Formerly 743.835; 1997 c.808 10]
(1)(a) As used in this subsection, "total amount of the recovery" means the amount that a person injured in a motor vehicle accident recovers from: (A) Underinsured motorist benefits described in ORS 742.502 (2); (B) Liability insurance coverage the injured person receives from other parties involved in the motor vehicle accident; (C) Personal injury protection benefits or health insurance benefits; and (D) Any other payment by or on behalf of the party that caused the motor vehicle accident. (b) An insurer may not receive a reimbursement or subrogation for personal injury protection benefits or health benefits the insurer provided to a person injured in a motor vehicle accident from any recovery the injured person obtains in an action for damages except to the extent that: (A) The injured person first receives full compensation for the injured persons injuries; and (B) The reimbursement or subrogation is paid only from the total amount of the recovery in excess of the amount that fully compensates for the injured persons injuries. (2) For purposes of this section, the following rebuttable presumptions apply: (a) The amount of any judgment that an injured person obtains is the amount necessary to fully compensate for the injured persons injuries. (b) An injured person has received full compensation for the injured persons injuries if the amount of the recovery is less than the coverage available to the injured person from the sum of benefits paid under another persons motor vehicle liability policy, under an underinsured motorist policy described in ORS 742.502 (2), as personal injury protection payments and from any other source of payment from or on behalf of the party whose fault caused the injuries. (c) An injured person has not received full compensation for the injured persons injuries if the injured person recovers an amount that is equal to the coverage available to the injured person from the sum of benefits paid under another persons motor vehicle liability policy, under an underinsured motorist policy described in ORS 742.502 (2), as personal injury protection payments and from any other source of payment from or on behalf of the party whose fault caused the injuries. (3) An insurer may not deny or refuse to provide benefits that are otherwise available to an injured person because of the potential the injured person has to make a claim or bring an action against another person or enter into a settlement with another person. (4) A person with whom an injured person enters into a settlement or from whom the injured person obtains a judgment in connection with a claim or action may not name an insurer that seeks a reimbursement or subrogation under ORS 742.536 or 742.538 as a payee on a check, draft or other form of payment in satisfaction of the claim or judgment. (5) An insurer may not delay, withhold or reduce benefits to an injured person because of an act or omission for which a third party is or may be liable or as a means of enforcing or attempting to enforce a claim for reimbursement or subrogation. (6) An insurer that receives a reimbursement for benefits the insurer provided to an injured person shall apply the amount of the reimbursement as a credit against any lifetime maximum benefit set forth for the injured person in the policy, benefit plan or contract under which the insurer paid the benefits. (7) A provision in a policy, benefit plan or contract that permits reimbursement or subrogation other than as provided in this section is void and unenforceable. (8) This section does not: (a) Prohibit insurers from coordinating benefits; (b) Limit an insurers right to seek reimbursement or subrogation to recover, without reduction, amounts the insurer paid for property damage; (c) Limit an insurer that provided coverage against underinsured motorists from pursuing a claim against a party at fault; or (d) Require a person to repay more than the amount of personal injury protection benefits that the person actually received. [1993 c.709 9; 2015 c.5 5; 2019 c.460 4]
(1) When a motor vehicle liability insurer obtains a release for bodily injuries within 60 calendar days following an accident from a person who is eligible to receive personal injury protection benefits under ORS 742.518 to 742.542, the release must state that, subject to the motor vehicle liability insurers applicable limits of liability, the rights of an insurer furnishing personal injury protection to recover payments made for medical benefits from the motor vehicle liability insurer are not impaired. (2) Nothing in this section impairs the rights of a motor vehicle liability insurer to contest a recovery claim from an insurer furnishing personal injury protection, based upon liability or the reasonableness or necessity of medical benefits paid by the insurer furnishing personal injury protection. [2009 c.545 2] Note: 742.546 and 742.548 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
If a representative of a motor vehicle liability insurer obtains a release for a claim of bodily injuries in person from a person who is eligible to receive personal injury protection benefits under ORS 742.518 to 742.542: (1) The representative of the insurer must provide the eligible person with a clear and conspicuous notice substantially similar to the following, which shall be incorporated into the insurers release or provided in a separate document: ______________________________________________________________________________ THE DOCUMENT YOU ARE BEING ASKED TO SIGN IS A BINDING CONTRACT THAT CONCLUDES YOUR CLAIM(S) AGAINST THE PARTIES IT IDENTIFIES. AFTER YOU SIGN IT YOU WILL NOT BE ABLE TO MAKE ANY FURTHER CLAIM(S) AGAINST THESE PARTIES. ______________________________________________________________________________ (2) The eligible person may rescind the release if the person provides the insurer written notice of rescission no later than five business days after the execution of the release and then promptly performs all other requisite acts for rescission of a contract. For the purposes of this subsection, notice of rescission is provided to an insurer on the date and time shown on a properly addressed proof of mailing or electronic transmission. [2009 c.545 3] Note: See note under 742.546.
When an insurer declares a motor vehicle a total loss and offers to make a cash settlement to an insured or third-party owner of the motor vehicle, the insurer shall provide the insured or third-party owner: (1) Any valuation or appraisal reports relied upon by the insurer to determine value; and (2) A written statement in a form provided by the Director of the Department of Consumer and Business Services that includes: (a) Information about total loss, vehicle valuation and the duties of the insurer; and (b) The manner in which and under what circumstances the insured may contact the Division of Financial Regulation of the Department of Consumer and Business Services. [2009 c.65 2; 2017 c.17 55] Note: 742.554 and 742.558 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) An insurer shall pay the insured or third-party owner of a motor vehicle the amount of the motor vehicles value that is not in dispute if the insurer declares the motor vehicle a total loss and the insurer and the insured or third-party owner are unable to agree on the value of the motor vehicle. Acceptance of payment of the undisputed amount neither waives the rights of the insured or third-party owner under the policy nor prevents the insured or third-party owner from pursuing a claim for additional amounts. Payment of the undisputed amount by the insurer does not waive any rights of the insurer under the policy. (2) An insurer is not obligated to pay the undisputed amount under subsection (1) of this section until the insured or third-party owner of the motor vehicle: (a) Agrees to execute documents sufficient to transfer ownership of the motor vehicle to the insurer; and (b) Authorizes the insurer, at the insurers expense, to move the motor vehicle to a disclosed location selected by the insurer, where the motor vehicle will remain available for inspection and evaluation for not fewer than 14 calendar days. (3) After the expiration of the 14-day period under subsection (2) of this section, the insurer may proceed with the salvage sale of the motor vehicle. [2009 c.65 3] Note: See note under 742.554.
As used in ORS 742.560 to 742.572: (1) "Cancellation" means termination of coverage by an insurer, other than termination at the request of the insured, during a policy period. (2) "Expiration" means termination of coverage by reason of the policy having reached the end of the term for which it was issued or the end of the period for which a premium has been paid. (3) "Nonpayment of premium" means failure of the named insured to discharge when due any of the insureds obligations in connection with the payment of premiums on the policy, or any installment of such premium, whether the premium is payable directly to the insurer or an insurance producer who is its agent or indirectly under any premium finance plan or extension of credit. (4) "Nonrenewal" means a notice by an insurer to the named insured that the insurer is unwilling to renew a policy. (5) "Policy" means any insurance policy that provides automobile liability coverage, uninsured motorist coverage, automobile medical payments coverage or automobile physical damage coverage on individually owned private passenger vehicles, including pickup and panel trucks and station wagons, that are not used as a public or livery conveyance for passengers, nor rented to others. However, ORS 742.560 to 742.572 do not apply to any policy: (a) Issued under an automobile assigned risk plan; (b) Insuring more than four automobiles; (c) Covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards; or (d) Issued principally to cover personal or premises liability of an insured even though such insurance may also provide some incidental coverage for liability arising out of the ownership, maintenance or use of a motor vehicle on the premises of such insured or on the ways immediately adjoining such premises. (6) "Renewal" or "to renew" means to continue coverage for an additional policy period upon expiration of the current policy period of a policy. Any policy with a policy period or term of less than six months shall for the purpose of ORS 742.560 to 742.572 be considered as if written for a policy period or term of six months. Any policy written for a term longer than one year or any policy with no fixed expiration date shall for the purpose of ORS 742.560 to 742.572 be considered as if written for successive policy periods or terms of one year but not extending beyond the actual term for which the policy was written. [Formerly 743.900; 2003 c.364 103; 2007 c.71 239]
(1) A notice of cancellation of a policy shall be effective only if it is based on one or more of the following reasons: (a) Nonpayment of premium. (b) Fraud or material misrepresentation affecting the policy or in the presentation of a claim thereunder, or violation of any of the terms or conditions of the policy. (c) The named insured or any operator either resident in the same household or who customarily operates an automobile insured under the policy has had driving privileges suspended or revoked pursuant to law during the policy period, or, if the policy is a renewal, during its policy period or the 180 days immediately preceding its effective date. An insurer may not cancel a policy for the reason that the driving privileges of the named insured or operator were suspended pursuant to ORS 809.280 (6) or (8) if the suspension was based on a nondriving offense. (2) This section shall not apply to any policy or coverage which has been in effect less than 60 days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy. (3) This section shall not apply to nonrenewal. [Formerly 743.905; 1991 c.860 7a; 2011 c.355 23]
(1) No notice of cancellation of a policy to which ORS 742.562 applies shall be effective unless mailed or delivered by the insurer to the named insured at least 30 days prior to the effective date of cancellation and accompanied by a statement of the reason or reasons for cancellation, provided, however, that where cancellation is for nonpayment of premium at least 10 days notice of cancellation accompanied by the reason therefor shall be given. (2) This section shall not apply to nonrenewal. [Formerly 743.910]
(1) An insurer shall offer renewal of a policy to an insured, contingent upon payment of premium as stated in the offer, unless the insurer mails or delivers to the named insured, at the address shown in the policy, at least 30 days advance notice of nonrenewal. The notice must contain or be accompanied by a statement of the reason or reasons for nonrenewal. (2)(a) If an insurer offers to an insured, in lieu of a renewal, a replacement policy from a different company that is part of a group of companies that is under the same ownership or control as the insurer, any new terms, rates and policy provisions in the replacement policy take effect on the renewal date if the insurer sends the insured and any insurance producer with whom the insured previously dealt notice at least 45 days before the renewal date. The notice must include the replacement policy or a description of any terms in the replacement policy that differ from the policy that the insurer will not renew. (b) An insured may cancel a replacement policy at any point before the replacement policy becomes effective. (c) Earned premium for any period of time in which a replacement policy was in effect before a cancellation must be calculated pro rata at the lower of the current rate or the previous years rate. (d) If an insured accedes to a replacement policy, any increase in premium or change in policy terms is effective on the day after the previous policy expires. (e) The notice required under this subsection applies only if the company that offers a replacement policy is different from the company that issued the policy that would otherwise be subject to renewal. (3) An insurer need not notify the named insured or any other insured of nonrenewal of the policy if the insurer has mailed or delivered a notice of expiration or cancellation on or prior to the 30th day preceding expiration of the policy period. (4) Notwithstanding an insurers failure to comply with this section, the policy terminates on the effective date of any replacement or succeeding automobile insurance policy, with respect to any automobile designated in both policies. (5) An insurer may not refuse to renew a policy for the reason that the driving privileges of the named insured or any operator either resident in the same household or who customarily operates an automobile insured under the policy were suspended pursuant to ORS 809.280 (6) or (8) if the suspension was based on a nondriving offense. [Formerly 743.916; 1991 c.860 7b; 2011 c.355 24; 2017 c.250 1]
Proof of mailing notice of cancellation, notice of replacement, notice of intention not to renew or notice of reasons for cancellation, to the named insured at the address shown in the policy, is sufficient proof of notice. [Formerly 743.920; 2017 c.250 2]
When automobile bodily injury and property damage liability coverage is canceled, other than for nonpayment of premium, or in the event of failure to renew automobile bodily injury and property damage liability coverage to which ORS 742.566 applies, the insurer shall notify the named insured of possible eligibility for automobile liability insurance through any insurance pool or facility operating in this state, whether voluntarily or under statute or rule. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew. [Formerly 743.925]
There shall be no liability on the part of and no cause of action of any nature shall arise against the Director of the Department of Consumer and Business Services or against any insurer, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal, for any statement made by any of them in any written notice of cancellation or nonrenewal, or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal, or providing of information pertaining thereto, or for statements made or evidence submitted at any hearings conducted in connection therewith. [Formerly 743.930]
Every insurer that issues motor vehicle insurance that is designed to meet either the financial or future responsibility requirements of ORS chapter 806 shall report to the Department of Transportation within 30 days of the day that a person or the insurer cancels or fails to renew such a policy and within 15 days of the day that an insurer issues such a policy. The insurer shall report the persons name and residence address, the vehicle identification number of each vehicle covered by the policy, whether the policy was bought, canceled or not renewed and any other information required by the department by rule under ORS 806.195. [1993 c.746 4]
As used in ORS 742.585 to 742.600: (1) "Owners insurance policy" means a private passenger motor vehicle liability insurance policy that includes: (a) All coverage necessary to comply with the financial or future responsibility requirements of ORS chapter 806; (b) The personal injury protection coverage required under ORS 742.518 to 742.542; (c) The uninsured motorist coverage required under ORS 742.500 to 742.506; and (d) Any optional coverage selected by the owner. (2) "Personal vehicle sharing" means the use of a private passenger motor vehicle by persons other than the vehicles registered owner in connection with a personal vehicle sharing program. (3) "Personal vehicle sharing program" means a legal entity qualified to do business in this state engaged in the business of facilitating the sharing of private passenger motor vehicles for noncommercial use by individuals within this state. (4) "Private passenger motor vehicle" means a four-wheel passenger or station wagon type motor vehicle insured under a motor vehicle liability insurance policy covering a single individual or individuals residing in the same household as the named insured. (5) "Program insurance policy" means a motor vehicle liability insurance policy that is obtained by the personal vehicle sharing program and that: (a) Includes all coverage needed to comply with the financial or future responsibility requirements of ORS chapter 806; (b) Includes the personal injury protection coverage required under ORS 742.518 to 742.542; (c) Includes the uninsured motorist coverage required under ORS 742.500 to 742.506; (d) Includes comprehensive property damage coverage for the vehicle; (e) Includes collision property damage coverage for the vehicle; and (f) Does not include any other optional coverage selected by the owner of the vehicle and included in the owners insurance policy. [2011 c.457 2] Note: 742.585 to 742.600 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 742 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
For each vehicle that the program facilitates the use of, a personal vehicle sharing program shall: (1) Provide a program insurance policy with coverage for the vehicle, the designated operator of the vehicle and all persons who, with the consent of the named insured, use the motor vehicle insured under the policy. The limits for any coverage included in the program insurance policy that is also included in the owners insurance policy must be equal to or greater than the coverage limits provided in the owners insurance policy, as reported to the program by the owner. However, the program may not provide liability coverage that is less than three times the limits specified in ORS 806.070. (2) Provide the vehicles registered owner with a proof of compliance with the insurance requirements of this section and the financial or future responsibility requirements of ORS chapter 806, a copy of which must be maintained in the vehicle by the vehicles registered owner at all times when the vehicle is operated by any person other than the vehicles registered owner pursuant to the program. (3) Collect, maintain and make available to the vehicles registered owner, the vehicles registered owners primary motor vehicle liability insurer and any government agency as required by law, at the cost of the program: (a) Verifiable electronic records that identify the date and time, initial and final locations of the vehicle and miles driven when the vehicle is under the control of a person other than the vehicles registered owner pursuant to the program; and (b) Any information concerning damages or injuries arising out of personal vehicle sharing pursuant to the program. (4) Not knowingly permit the vehicle to be operated as a commercial vehicle by a personal vehicle sharing user while engaged in personal vehicle sharing. For the purposes of this subsection, "commercial vehicle" has the meaning given that term in ORS 826.001. (5) Ensure that the vehicle is a private passenger motor vehicle. (6) Facilitate the installation, operation and maintenance of signage and computer hardware and software necessary for the vehicle to be used in the program. (7) Indemnify the vehicles registered owner for the cost of damage or theft of equipment installed under subsection (6) of this section and any damage caused to the vehicle by the installation, operation or maintenance of the equipment. (8) Provide the vehicles registered owner and any person operating the vehicle pursuant to the program with a disclosure that contains information explaining the requirements of this section. [2011 c.457 3] Note: See note under 742.585.
(1) Notwithstanding any provision in the owners insurance policy and notwithstanding ORS chapters 742, 806, 822 and 825 and ORS 30.010 to 30.100, 30.135, 30.480 and 30.485, in the event of any loss or injury that occurs at any time when the vehicle is under the operation and control of a person, other than the vehicles registered owner, pursuant to a personal vehicle sharing program, or is otherwise under the control of a personal vehicle sharing program, the program shall assume all liability of the vehicle owner and shall be considered the vehicle owner for all purposes. (2) Nothing in subsection (1) of this section: (a) Limits the liability of a personal vehicle sharing program for any acts or omissions by the program that result in injury to any persons as a result of the use or operation of the program; or (b) Limits the ability of the personal vehicle sharing program to, by contract, seek indemnification from the vehicles registered owner for any claims paid by the personal vehicle sharing program for any loss or injury resulting from fraud or material misrepresentation in the maintenance of the vehicle by the vehicles registered owner. (3) A personal vehicle sharing program continues to be liable under subsection (1) of this section until: (a) The vehicle is returned to a location designated by the program; and (b)(A) The expiration of the time period established for the vehicle occurs; (B) The intent to terminate the vehicles personal vehicle sharing use is verifiably communicated to the program; or (C) The vehicles registered owner takes possession and control of the vehicle. (4)(a) A personal vehicle sharing program shall assume liability for a claim in which a dispute exists as to who was in control of a private passenger motor vehicle when the loss giving rise to the claim occurred. (b) The insurer of the vehicle shall indemnify the program to the extent of the insurers obligation under the owners insurance policy, if it is determined that the vehicles registered owner was in control of the vehicle at the time of the loss. (5) If a private passenger motor vehicles registered owner is named as a defendant in a civil action for any loss or injury that occurs at any time when the vehicle is under the operation and control of a person, other than the vehicles registered owner, pursuant to a personal vehicle sharing program, or is otherwise under the control of a personal vehicle sharing program, the program shall have the duty to defend and indemnify the vehicles registered owner. (6) Notwithstanding any provision in the owners insurance policy, while the vehicle is under the operation and control of a person, other than the vehicles registered owner, pursuant to a personal vehicle sharing program, or is otherwise under the control of a personal vehicle sharing program: (a) The insurer of the vehicle on file with the Department of Transportation may exclude any and all coverage afforded under the insurers policy; and (b) A primary or excess insurer of the owners, operators or maintainers of the vehicle may notify an insured that the insurer has no duty to defend or indemnify any person or organization for liability for any loss that occurs during use of the vehicle pursuant to a personal vehicle sharing program. (7) An owners insurance policy for a private passenger motor vehicle may not be canceled, voided, terminated, rescinded or nonrenewed solely on the basis that the vehicle has been made available for personal vehicle sharing pursuant to a personal vehicle sharing program that is in compliance with the provisions of ORS 742.585 to 742.600. [2011 c.457 4] Note: See note under 742.585.
A private passenger motor vehicle insured by the vehicles registered owner under an owners insurance policy may not be classified as a commercial motor vehicle, for-hire motor vehicle, permissive use motor vehicle or livery solely because the vehicles registered owner allows the vehicle to be used for personal vehicle sharing if: (1) The personal vehicle sharing is conducted under a personal vehicle sharing program. (2) The annual revenue received by the vehicles registered owner that was generated by the personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle, including depreciation, interest, lease payments, motor vehicle loan payments, insurance, maintenance, parking, fuel, cleaning, automobile repair and costs associated with personal vehicle sharing, including but not limited to the installation, operation and maintenance of computer hardware and software, signage identifying the vehicle as a personal vehicle sharing vehicle and any fees charged by a personal vehicle sharing program. [2011 c.457 5] Note: See note under 742.585.
(1) An insurer offering casualty insurance or commercial liability insurance may not cancel or refuse to issue or renew a policy solely on the basis that the policyholder holds a public office. (2) An insurer offering casualty insurance or commercial liability insurance may not include a provision in the insurance contract limiting coverage under the contract solely on the basis that the policyholder holds a public office. [1997 c.778 2]
As used in ORS 742.700 to 742.710: (1) "Cancellation" means termination of a policy at a date other than its expiration date. (2) "Expiration date" means the date upon which coverage under a policy ends. For a policy written for a term longer than one year or with no fixed expiration date, "expiration date" means the annual anniversary date of the policy. (3) "Nonpayment of premium" means the failure or inability of the named insured to discharge any obligation in connection with the payment of premium on a policy of insurance subject to ORS 742.700 to 742.710, whether the payments are payable directly to the insurer or an insurance producer who is its agent or indirectly payable under a premium finance plan or extension of credit. (4) "Nonrenewal" means the refusal of an insurer to renew a policy at its expiration date. (5) "Renewal" or "renew" means the issuance of, or the offer to issue by an insurer, a policy succeeding a policy previously issued and delivered by the same insurer or the issuance of a certificate or notice extending the terms of an existing policy for a specified period beyond its expiration date. [Formerly 743.940; 2003 c.364 104]
(1) Except as provided in ORS 742.710, a contract of commercial liability insurance may not be canceled by an insurer before the expiration of the policy, except on one or more of the following grounds: (a) Nonpayment of premium. (b) Fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy or in presenting a claim under the policy. (c) Substantial increase in the risk of loss after insurance coverage has been issued or renewed, including but not limited to an increase in exposure due to rules, legislation or court decision. (d) Failure to comply with reasonable loss control recommendations. (e) Substantial breach of contractual duties, conditions or warranties. (f) Determination by the Director of the Department of Consumer and Business Services that the continuation of a line of insurance or class of business to which the policy belongs will jeopardize a companys solvency or will place the insurer in violation of the insurance laws of Oregon or any other state. (g) Loss or decrease in reinsurance covering the risk. (h) Any other reason approved by the director by rule. (2) Cancellation of a commercial liability policy shall not be effective until at least 10 working days after the insured receives a written notice of cancellation. The notice shall state the effective date of and the reason for cancellation and shall inform the insured of the hearing rights established by ORS 742.704. (3) This section does not apply to policies canceled because of action by an insurer under ORS 731.482. [Formerly 743.942]
Within 30 days after receiving a notice of cancellation under ORS 742.702, an insured may request a hearing before the Director of the Department of Consumer and Business Services. The purpose of this hearing shall be limited to establishing the existence of the proof or evidence given by the insurer in its notice of cancellation. The burden of proving the reason for cancellation shall be upon the insurer. [Formerly 743.944]
(1) If an insurer offers or purports to renew a commercial liability policy, but on terms less favorable to the insured or at higher rates, the new terms or rates may take effect on the renewal date, if the insurer provides the insured, and the insurance producer if any, 45 days written notice. If the insurer does not provide such notice, the insured may cancel the renewal policy within 45 days after receipt of the notice or delivery of the renewal policy. Earned premium for the period of time the renewal policy was in force shall be calculated pro rata at the lower of the current or previous years rate. If the insured accepts the renewal, any premium increase or changes in terms shall be effective immediately following the prior policys expiration date. (2) Nonrenewal of a commercial liability policy shall not be effective until at least 45 days after the insured receives a written notice of nonrenewal. If, after an insurer provides a notice of nonrenewal as described in this subsection, the insurer extends the policy 90 days or less, an additional notice of nonrenewal is not required with respect to the extension. (3) Subsection (1) of this section does not apply: (a) If the change is a rate, form or plan filed with the Director of the Department of Consumer and Business Services and applicable to the entire line of insurance or class of business to which the policy belongs; or (b) To a premium increase based on the altered nature or extent of the risk insured against. (4) If a commercial liability policy is issued for a term longer than one year, and for additional consideration a premium is guaranteed, the insurer may not refuse to renew the policy or increase the premium for the term of that policy. [Formerly 743.946; 2003 c.364 105; 2005 c.102 1]
A post office certificate of mailing to the named insured at the named insureds last-known address shall constitute conclusive proof that the named insured received the notice of cancellation or nonrenewal on the third calendar day after the date of the certificate of mailing. [Formerly 743.948]
(1) ORS 742.700 to 742.708 do not apply to: (a) Any commercial liability insurance policy that has not been previously renewed if the policy has been in effect less than 60 days at the time notice of cancellation is mailed or otherwise delivered. (b) Any policy subject to the provisions of ORS 742.560 to 742.572. (c) Workers compensation insurance. (d) Any assigned risk program. (e) Any excess liability insurance policy, including any commercial umbrella policy and any excess umbrella policy. (2) The Director of the Department of Consumer and Business Services may suspend, in whole or in part, the applicability of ORS 742.700 to 742.708 to any insurer if, in the directors discretion, its application will endanger the ability of the insurer to fulfill its contractual obligations. [Formerly 743.950; 2005 c.185 15]
[1967 c.359 335; renumbered 742.001 in 1989]
(1) Each carrier offering a health benefit plan shall submit to the Director of the Department of Consumer and Business Services on or before April 1 of each year a report that contains: (a) The following information for the preceding year that is derived from the exhibit of premiums, enrollment and utilization included in the carriers annual report: (A) The total number of members; (B) The total amount of premiums; (C) The total amount of costs for claims; (D) The medical loss ratio; (E) The average amount of premiums per member per month; and (F) The percentage change in the average premium per member per month, measured from the previous year. (b) The following aggregate financial information for the preceding year that is derived from the carriers annual report: (A) The total amount of general administrative expenses, including identification of the five largest nonmedical administrative expenses; (B) The total amount of the surplus maintained; (C) The total amount of the reserves maintained for unpaid claims; (D) The total net underwriting gain or loss; and (E) The carriers net income after taxes. (2) A carrier shall electronically submit the information described in subsection (1) of this section in a format and according to instructions prescribed by the Department of Consumer and Business Services by rule. (3) The department shall evaluate the reporting requirements under subsection (1)(a) of this section by the following market segments: (a) Individual health benefit plans; (b) Health benefit plans for small employers; (c) Health benefit plans for employers described in ORS 743B.010; and (d) Health benefit plans for employers that are not small employers. (4) The department shall make the information reported under this section available to the public through a searchable public website on the Internet. [Formerly 743.748] Note: Definitions for 743.004 may be found in 743B.005.
(1) As used in this section: (a) "Covered entity" has the meaning given that term in ORS 192.556 but excludes state agencies. (b) "Protected health information" has the meaning given that term in ORS 192.556. (2) A covered entity that is required to file an annual financial statement under ORS 731.574 shall file with the Department of Consumer and Business Services, along with the financial statement, a protection of health information report. The report may be in the form of a letter, must be signed by the chief executive officer of the covered entity and must: (a) State the responsibility of the covered entitys management to establish and maintain adequate safeguards and procedures for protecting the confidentiality of personally identifiable and protected health information that the covered entity retains in electronic and hard copy form; (b) Contain assurances that the signing officer has disclosed to the governing board of the covered entity: (A) All significant deficiencies in the design or operation of recordkeeping systems or controls that could adversely affect the covered entitys ability to protect the confidentiality of personally identifiable and protected health information; (B) Any breaches of the security of personally identifiable and protected health information, whether material or not, that involve management or other employees who have a significant role in the covered entitys recordkeeping systems or controls; and (C) All necessary steps that have been taken to address deficiencies in the design or operation of recordkeeping systems or controls and to resolve any material weaknesses identified to or by the covered entitys auditors; and (c) Contain assurances that the signing officer has identified for the governing board of the covered entity any material weaknesses in the recordkeeping systems or controls. (3) The protection of health information report is confidential and not subject to disclosure under ORS 192.311 to 192.478. [2015 c.133 2] Note: 743.005 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[Formerly 736.300; renumbered 742.003 in 1989]
(1) A carrier offering a health benefit plan, an insurer offering insurance against the risk of economic loss assumed under a less than fully insured employee health plan described in ORS 742.065 and a third party administrator licensed under ORS 744.702 shall annually submit to the Department of Consumer and Business Services, in a form and manner prescribed by the department, data concerning the number of covered lives of the carrier, insurer or third party administrator, reported by line of business and by zip code. (2) The department shall aggregate the data collected under subsection (1) of this section and may publish reports on the number of covered lives in Oregon, by line of business and by region. [Formerly 743.818] Note: 743.007 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
The Department of Consumer and Business Services shall develop by rule reporting requirements as necessary for the consistent and efficient implementation of ORS 743B.200, 743B.202, 743B.250 and 743B.423. In order to minimize duplicative reporting requirements, the department shall accept copies of reports prepared for national accreditation organizations as sufficient to meet the reporting requirements developed pursuant to this section to the extent that the reports include the information required by the department pursuant to this section. [Formerly 743.819] Note: Definitions for 743.008 may be found in 743B.001.
[1967 c.359 337; 1969 c.336 11; 1973 c.608 1; renumbered 742.005 in 1989] Note: Sections 42 and 43, chapter 12, Oregon Laws 2020 (first special session), provide: Sec. 42. Section 43 of this 2020 special session Act is added to and made a part of the Insurance Code. [2020 s.s.1 c.12 42] Sec. 43. An insurer transacting insurance in this state may not consider any information collected and reported under section 40 of this 2020 special session Act to: (1) Deny, limit, cancel, rescind or refuse to renew a policy of insurance; (2) Establish premium rates for a policy of insurance; or (3) Establish the terms and conditions of a policy of insurance. [2020 s.s.1 c.12 43] Note: Section 6, chapter 549, Oregon Laws 2021, provides: Sec. 6. Sections 40, 41 and 43, chapter 12, Oregon Laws 2020 (first special session), are repealed on January 1, 2023. [2021 c.549 6]
(1) 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): (a) Establishing minimum benefit standards; (b) 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 insurers compliance; (c) 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; and (d) Establishing requirements for carriers offering health benefit plans that spend less than 12 percent of total medical expenditures on payments for primary care to submit with each rate filing a plan to increase spending on payments for primary care as a percentage of total medical expenditures by at least one percent each plan year. (2) As used in this section: (a) "Primary care" means family medicine, general internal medicine, naturopathic medicine, obstetrics and gynecology, pediatrics or general psychiatry. (b) "Total medical expenditures" means payments to reimburse the cost of physical and mental health care provided to enrollees, excluding prescription drugs, vision care and dental care, whether paid on a fee-for-service basis or as part of a capitated rate or other type of payment mechanism. [1979 c.857 2; 1997 c.96 1; 1999 c.987 4a; 2017 c.489 5] Note: The amendments to 743.010 by section 15, chapter 489, Oregon Laws 2017, become operative January 1, 2023. See section 20, chapter 489, Oregon Laws 2017. The text that is operative on and after January 1, 2023, is set forth for the users convenience. (1) 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): (a) Establishing minimum benefit standards; (b) 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 insurers compliance; (c) 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; and (d) Establishing requirements for carriers offering health benefit plans to spend at least 12 percent of total medical expenditures on payments for primary care. (2) As used in this section: (a) "Primary care" means family medicine, general internal medicine, naturopathic medicine, obstetrics and gynecology, pediatrics or general psychiatry. (b) "Total medical expenditures" means payments to reimburse the cost of physical and mental health care provided to enrollees, excluding prescription drugs, vision care and dental care, whether paid on a fee-for-service basis or as part of a capitated rate or other type of payment mechanism.
[1967 c.359 338; 1989 c.700 13; renumbered 742.007 in 1989]
[1989 c.474 2; 2003 c.364 106; renumbered 743B.300 in 2015]
(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 insurers schedules of premium rates filed with the director. [Formerly 739.595; 1969 c.336 12; 1971 c.231 20; 2005 c.185 3]
(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. Premium rates are subject to approval, disapproval or withdrawal of approval by the director as provided in ORS 742.003, 742.005, 742.007 and, for health benefit plans as defined in ORS 743B.005, ORS 743.019. (2) Except as provided in ORS 743B.013 and subsection (3) of this section, a rate filing by a carrier for any of the following health benefit plans subject to ORS 743.004, 743.022, 743.535 and 743B.003 to 743B.127 shall be available for public inspection immediately upon submission of the filing to the director: (a) Health benefit plans for small employers. (b) Individual health benefit plans. (3) The director may by rule: (a) Specify all information a carrier must submit as part of a rate filing under this section; and (b) Identify the information submitted that will be exempt from disclosure under this section because the information constitutes a trade secret and would, if disclosed, harm competition. (4) The director, after conducting an actuarial review of the rate filing, may approve a proposed premium rate for a health benefit plan for small employers or for an individual health benefit plan if, in the directors discretion, the proposed rates are: (a) Actuarially sound; (b) Reasonable and not excessive, inadequate or unfairly discriminatory; and (c) Based upon reasonable administrative expenses. (5) In order to determine whether the proposed premium rates for a health benefit plan for small employers or for an individual health benefit plan are reasonable and not excessive, inadequate or unfairly discriminatory, the director may consider: (a) The insurers financial position, including but not limited to profitability, surplus, reserves and investment savings. (b) Historical and projected administrative costs and medical and hospital expenses, including expenses for drugs reported under ORS 743.025. (c) Historical and projected loss ratio between the amounts spent on medical services and earned premiums. (d) Any anticipated change in the number of enrollees if the proposed premium rate is approved. (e) Changes to covered benefits or health benefit plan design. (f) Changes in the insurers health care cost containment and quality improvement efforts since the insurers last rate filing for the same category of health benefit plan. (g) Whether the proposed change in the premium rate is necessary to maintain the insurers solvency or to maintain rate stability and prevent excessive rate increases in the future. (h) Any public comments received under ORS 743.019 pertaining to the standards set forth in subsection (4) of this section and this subsection. (6) The director shall require insurers to charge the same premium for a plan sold through the health insurance exchange as the insurer charges for the identical plan sold outside of the exchange. (7) The requirements of this section do not supersede other provisions of law that require insurers, health care service contractors or multiple employer welfare arrangements providing health insurance to file schedules or tables of premium rates or proposed premium rates with the director or to seek the directors approval of rates or changes to rates. [1967 c.359 340; 2007 c.391 1; 2009 c.595 31; 2013 c.681 11; 2015 c.88 2; 2018 c.7 8; 2019 c.441 2; 2021 c.569 37]
(1) When an insurer files a schedule or table of premium rates for individual or small employer health benefit plans under ORS 743.018, the Department of Consumer and Business Services shall open a 30-day public comment period on the rate filing that begins on the date the insurer files the schedule or table of premium rates. The department shall post all of the comments received to the departments website without delay. (2) After the close of the public comment period described in subsection (1) of this section, the department shall issue a preliminary decision to approve, disapprove or modify a rate filing. The department shall notify the insurer of, and make available to the public, the preliminary decision, including: (a) An explanation of the findings and rationale that are the basis for the preliminary decision; and (b) Any actuarial or other analyses, calculations or evaluations relied upon by the department in arriving at the preliminary decision. (3) The department shall provide the insurer or any person adversely affected or aggrieved by the preliminary decision the opportunity to meet with the department to discuss and respond to the preliminary decision. However, an insurer or other person may not substitute new facts or data for the facts or data submitted by the insurer in the filing. The meeting shall: (a) Include a department employee who reviewed the rate filing; and (b) Comply with the requirements of ORS 192.610 to 192.690. (4)(a) The department shall issue a proposed order, no later than 30 days after the department issues a preliminary decision under subsection (2) of this section, to approve, disapprove or modify the rate filing based on the information submitted during the public comment period. (b) In issuing the proposed order, the department may not consider new facts or data that are offered as a substitute for the facts or data submitted by the insurer in the filing. (c) The department shall mail the proposed order to the insurer and post the proposed order to the departments website. (d) The proposed order must include: (A) An explanation of the findings and rationale that are the basis for the proposed order, including any actuarial or other analyses, calculations or evaluations relied upon by the department in its findings or rationale; and (B) Notice of the right of the insurer or any person adversely affected or aggrieved by the proposed order to request a review by the Director of the Department of Consumer and Business Services, in accordance with subsection (6) of this section, no later than 10 days after the date that the proposed order was issued. (5) If the insurer or person adversely affected or aggrieved by the proposed order does not timely request a review of the proposed order by the director, the director shall issue a final order as described in subsection (6)(d) of this section. (6) If the insurer or a person adversely affected or aggrieved by the proposed order timely requests a review by the director of the proposed order: (a) The requester may not substitute new facts or data for the facts and data that were submitted by the insurer in the filing, but may provide a brief, memorandum or analysis based on the evidence contained in the filing or received and considered by the department during the public comment period; (b) The director may not delegate the decision-making authority for the request for review to any other individual; (c) The director shall issue a final order no later than 30 days after the request for review is received by the director; and (d) The final order shall include: (A) An explanation of the findings and rationale that are the basis for the final order; and (B) Notice of the right to a contested case hearing in accordance with ORS chapter 183. (7)(a) If, following the issuance of a final order under subsection (6)(c) of this section but before the effective date of the premium rates approved by the final order, an event occurs that materially affects the directors decision to approve the rates, the director may open a new public comment period for a period of time that the director determines is necessary to receive comments concerning the event. Based upon the event and the public comments received, the director shall affirm the final order by providing a written explanation of the basis for affirming the final order or issue a new proposed order, as described in subsection (4) of this section. (b) In the consideration of public comments or the event described in paragraph (a) of this subsection or in issuing any new proposed order, the director: (A) May not consider new facts or data that are offered as a substitute for the facts or data submitted by the insurer in the original filing. (B) May consider supplemental facts or data reasonably related to the event described in paragraph (a) of this subsection. (8) Subsections (2) to (7) of this section do not require the department to perform any actuarial or other analyses, calculations or evaluations. (9) The department may adopt rules modifying the procedures described in subsections (2) to (7) of this section, but only to the extent necessary to comply with 42 U.S.C. 300gg-94. [2009 c.595 28; 2013 c.681 36; 2015 c.88 3; 2019 c.441 1]
An insurer licensed by the Department of Consumer and Business Services shall include in any rate filing under ORS 743.018 with respect to individual and small employer health benefit plans, as defined in ORS 743B.005, a statement of administrative expenses in the form and manner prescribed by the department by rule. The statement must include, but is not limited to: (1) A statement of administrative expenses on a per member per month basis; and (2) An explanation of the basis for any proposed premium rate increases or decreases. [2009 c.595 29; 2019 c.441 3]
[1967 c.359 341; 1971 c.231 21; 1973 c.525 1; renumbered 742.009 in 1989]
Premium rates for individual health benefit plans shall be subject to the following provisions: (1) Each carrier must file the carriers initial geographic average rate and any changes to the geographic average rate for its individual health benefit plans with the Director of the Department of Consumer and Business Services. (2) The premium rates charged during a rating period for individual health benefit plans issued to individuals shall not vary from the individual geographic average rate, except that the premium rate may be adjusted to reflect differences in benefit design, age, tobacco use and family composition. For age adjustments to the individual plans, a carrier shall apply uniformly its schedule of age adjustments for individual health benefit plans as approved by the director. (3) A carrier may not increase the rates of an individual health benefit plan more than once in a 12-month period except as approved by the director. Annual rate increases shall be effective on the anniversary date of the individual health benefit plans issuance. The percentage increase in the premium rate charged for an individual health benefit plan for a new rating period may not exceed the sum of the following: (a) The percentage change in the carriers geographic average rate for its individual health benefit plan measured from the first day of the prior rating period to the first day of the new period; and (b) Any adjustment attributable to differences in benefit design, age, tobacco use and family composition. (4) A carrier offering an individual health benefit plan in this state shall include: (a) In one risk pool, all of the insureds residing in this state who are covered in the carriers individual health benefit plans that are not grandfathered health plans or student health plans; and (b) In a separate risk pool, all of the insureds residing in this state who are covered in the carriers individual grandfathered health plans. [Formerly 743.767] Note: Definitions for 743.022 may be found in 743B.005.
(1) As used in this section: (a) "Explanation of benefits" means claim processing advice or notification of action on claims. (b) "Payment, remittance and reconciliation information" means all information required for premium billing or invoicing, facilitating timely electronic payment of premiums due, delinquency notification, final billing notification or termination of coverage. (c) "Plan renewal information" means all correspondence and materials related to an offer to renew insurance provided by an insurer to a health insurance purchaser. (d) "Quote information" means all correspondence and materials related to an offer to insure or a rate quotation provided by an insurer to a health insurance purchaser. (e) "Sale and enrollment information" means all information documenting the sale of a policy or certificate of health insurance, the renewal of a policy or certificate of health insurance, the enrollment of members in a group health insurance plan or the enrollment of an individual in an individual health insurance plan, including but not limited to: (A) The application for insurance; (B) Initial and ongoing documentation required by the insurer to be provided by an insured to establish eligibility and enrollment, adjudicate and process claims and prove prior creditable coverage or duplicate coverage; (C) Premium information; (D) Documentation of the payment of a premium; and (E) Membership identification cards. (2) Notwithstanding any other provision of law, in the administration of small employer group health insurance or individual health insurance, an insurer may elect to communicate one or more of the following by electronic means: (a) Quote information. (b) Sale and enrollment information. (c) Payment, remittance and reconciliation information except notices required by ORS 743B.323 and 743B.330. (d) Explanation of benefits. (e) Plan renewal information. (f) Notifications required by law. (g) Other communications, documentation, revisions or materials otherwise provided on paper. (3) An insurer that elects to communicate by electronic means shall offer a small employer group member or individual applying for coverage and coverage renewal the option to receive by regular mail one or more of the types of communications described in subsection (2) of this section. (4) Electronic administration of small employer group or individual health insurance plans shall be transacted using secure systems specifically designed by the insurer for the purpose of electronic health insurance administration. (5) An insurer who elects to offer discounted rates for a health insurance plan utilizing electronic administration shall include the schedule of discounts for utilization of electronic administration as part of a small employer group health insurance or individual health insurance rate filing. The rate discounts may be graduated and must be proportionate to the amount of administrative cost savings the insurer anticipates as a result of the use of electronic transactions described in subsections (2) to (4) of this section. (6) Discounted rates allowed under subsection (5) of this section shall be applied uniformly to all similarly situated small employer group or individual health insurance purchasers of an insurer. (7) Discounts in premium rates under subsections (5) and (6) of this section are not premium rate variations for purposes of ORS 743.022 or 743B.013 (8). (8) This section does not require an insurer to offer discounted rates for a health insurance plan utilizing electronic administration or require a small employer group or an individual health insurance purchaser to use electronic administration. [Formerly 743.777] Note: 743.023 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[1967 c.359 342; renumbered 743.040 in 2015]
(1) An insurer shall include with any filing under ORS 743.018 the following information regarding drugs reimbursed by the insurer under policies or certificates issued in this state: (a) The 25 most frequently prescribed drugs; (b) The 25 most costly drugs as a portion of total annual spending; (c) The 25 drugs that have caused the greatest increase in total plan spending from one year to the next; and (d) The impact of the costs of prescription drugs on premium rates. (2) The Department of Consumer and Business Services shall conduct a public hearing annually on prescription drug prices, information reported to the department under ORS 646A.689 and information described in subsection (1) of this section. (3) The department shall regularly update the interim committees of the Legislative Assembly related to health on the information described in subsection (1) of this section. (4) Subsection (1) of this section applies to an insurer that issues policies or certificates of health insurance for sale in this state that include a prescription drug benefit. [2018 c.7 5] Note: 743.025 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[1967 c.359 342a; 1991 c.182 2; 2009 c.331 1; 2015 c.629 60; renumbered 743.038 in 2015]
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]
(1) The Department of Consumer and Business Services may adopt by rule uniform standards applicable to persons listed in subsection (2) of this section for health care financial and administrative transactions, including uniform standards for: (a) Eligibility inquiry and response; (b) Claim submission; (c) Payment remittance advice; (d) Claims payment or electronic funds transfer; (e) Claims status inquiry and response; (f) Claims attachments; (g) Prior authorization; (h) Provider credentialing; or (i) Health care financial and administrative transactions identified by the stakeholder work group described in ORS 743.031. (2) Any uniform standards adopted under subsection (1) of this section apply to: (a) Health insurers. (b) Prepaid managed care health services organizations as defined in ORS 414.025. (c) Coordinated care organizations as defined in ORS 414.025. (d) Third party administrators. (e) Any person or public body that either individually or jointly establishes a self-insurance plan, program or contract, including but not limited to persons and public bodies that are otherwise exempt from the Insurance Code under ORS 731.036. (f) Health care clearinghouses or other entities that process or facilitate the processing of health care financial and administrative transactions from a nonstandard format to a standard format. (g) Any other person identified by the department that processes health care financial and administrative transactions between a health care provider and an entity described in this subsection. (3) In developing or updating any uniform standards adopted under subsection (1) of this section, the department shall consider recommendations from the Oregon Health Authority under ORS 743.031. [Formerly 743.061] Note: 743.029 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[Formerly 739.420; renumbered 743.044 in 2015]
(1) The Oregon Health Authority shall convene a stakeholder work group to recommend uniform standards for health care financial and administrative transactions, including, to the extent allowed by law, standards applicable to commercial health insurance plans, self-funded plans and state governmental health plans and programs. (2) The authority shall report uniform standards recommended under subsection (1) of this section to the Department of Consumer and Business Services for consideration in the adoption of uniform standards by the department under ORS 743.029. (3) The stakeholder work group, in recommending uniform standards under subsection (1) of this section, shall consider or incorporate any applicable national standards for administrative simplification and timelines for implementation of national standards for administrative simplification that are established pursuant to federal law. [Formerly 743.062] Note: 743.031 and 743.034 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 743 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
[1967 c.359 344; renumbered 742.011 in 1989]
(1) The Department of Consumer and Business Services and the Oregon Health Authority shall confer before the department finalizes rules implementing uniform standards under ORS 743.029, for the purpose of reconciling any differences between the departments and the authoritys requirements for health care financial and administrative transactions described in ORS 743.029. If the Department of Consumer and Business Services proposes to amend any rule concerning uniform standards for health care financial and administrative transactions under ORS 743.029 or the authority proposes to amend any rule in a manner that would be inconsistent with the uniform standards, the agency proposing to amend the rules shall notify the other agency. The agencies shall confer before a final rule is adopted to ensure that the standards remain uniform and consistent to the extent practicable. (2) The Department of Human Services shall be subject to the uniform standards adopted by the Department of Consumer and Business Services and the authority under ORS 743.029 that are applicable to the operations of the Department of Human Services. [Formerly 743.064] Note: See note under 743.031.
(1) The Department of Consumer and Business Services, in consultation with the Oregon Health Authority, shall develop by rule a form that providers in this state shall use to request prior authorization for prescription drug benefits. The form must: (a) Be uniform for all providers; (b) Not exceed two pages; (c) Be electronically available and transmissible; and (d) Include a provision under which additional information may be requested and provided. (2) If a person described in ORS 743.029 (2) requires prior authorization for prescription drug benefits, the person must allow the use of the form developed under subsection (1) of this section. (3) The department may adopt rules to implement this section. [Formerly 743.065; 2021 c.154 9] Note: 743.035 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[1973 c.521 2; renumbered 743.721 in 1989]
A life or health insurance policy upon an individual, except a policy of group life insurance or of group or blanket health insurance, may not 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 a spouse in a marriage. (4) A person may effectuate insurance that provides for the funeral expenses of an adult who is dependent upon the person for support and maintenance. (5) A person may effectuate insurance that provides for the funeral expenses of an adult if the person: (a) Is closely related to the adult by blood or by law or has a substantial interest in the adult engendered by love and affection; and (b) Has a lawful and substantial interest in having the life, health and bodily safety of the adult continue. [Formerly 743.027]
(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]
(1) Any individual of competent legal capacity may procure or effect an insurance policy on the individuals own life or body for the benefit of any person. However, except as provided in ORS 743.044, 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 individuals 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. [Formerly 743.024]
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]
[1967 c.359 347; 1985 c.465 1; renumbered 742.013 in 1989]
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]
(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 743.030]
[Formerly 736.305; 1971 c.231 22; 1985 c.465 2; renumbered 742.016 in 1989]
(1) When a policy of insurance is effected by any person on any persons 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 persons 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 persons 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]
(1) A policy of group life insurance or the proceeds thereof payable to a person or persons other than the individual insured or the individuals 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 creditors 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]
[Formerly 736.315; renumbered 742.018]
(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]
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 insureds 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]
[1967 c.359 350; renumbered 742.021 in 1989]
[1971 c.372 2; renumbered 743.719 in 1989]
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]
[1967 c.359 351; renumbered 742.023 in 1989]
[2011 c.30 2; 2013 c.5 15,16; renumbered 742.407 in 2015]
[1967 c.359 352; renumbered 742.026 in 1989]
[1967 c.359 353; renumbered 742.028 in 1989]
[2011 c.130 2; 2015 c.792 12; renumbered 743.029 in 2015]
[2011 c.130 3; renumbered 743.031 in 2015]
[1967 c.359 354; renumbered 742.033 in 1989]
[2011 c.130 5; renumbered 743.034 in 2015]
[2013 c.596 2; renumbered 743.035 in 2015]
[1967 c.359 355; 1971 c.231 23; renumbered 742.036 in 1989]
[1967 c.359 356; renumbered 742.038 in 1989]
[Formerly 736.310; 1971 c.231 24; 1973 c.149 1; renumbered 742.041 in 1989]
[1967 c.359 358; 1975 c.391 1; 1977 c.742 8; renumbered 742.043 in 1989]
[1967 c.359 359; renumbered 742.046 in 1989]
[1971 c.231 5; 1983 c.249 1; renumbered 742.048 in 1989]
[1967 c.359 360; renumbered 742.051 in 1989]
[2011 c.561 1; renumbered 743B.500 in 2015]
[2011 c.561 3; renumbered 743B.501 in 2015]
[1967 c.359 361; renumbered 743.041 in 1989]
[2011 c.561 4; renumbered 743B.502 in 2015]
[2011 c.561 5; renumbered 743B.503 in 2015]
[1967 c.359 362; renumbered 743.043 in 1989]
[1967 c.359 364; renumbered 742.053 in 1989]
[1967 c.359 365; renumbered 742.056 in 1989]
[Formerly 739.405; renumbered 743.046 in 1989]
ORS 743.100 to 743.109 may be cited as the Life and Health Insurance Policy Language Simplification Act. [Formerly 743.350]
(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]
[1967 c.359 367; renumbered 743.047 in 1989]
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]
(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]
[1967 c.359 368; renumbered 743.049 in 1989]
(1) No policy form shall be delivered or issued for delivery in this state unless: (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 12-point type, 13-point leading for health benefit plans, as defined in ORS 743B.005, and 10-point type, 11-point leading for all other policies; (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; 2015 c.515 5]
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 directors 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]
[1967 c.359 369; renumbered 743.050 in 1989]
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]
[Formerly 744.090; renumbered 742.058 in 1989]
[Formerly 736.325; 1971 c.123 1; 1981 c.667 1; renumbered 742.061 in 1989]
[1987 c.774 46; 1989 c.376 1; renumbered 742.063 in 1989]
[1971 c.603 2; 1981 c.422 1; 1981 c.891 2; renumbered 743.701 in 1989]
[1967 c.271 2,3; renumbered 743.703 in 1989]
[1987 c.720 2; renumbered 743.704 in 1989]
[1981 c.254 2; renumbered 743.706 in 1989]
[1975 c.135 2; renumbered 743.707 in 1989]
[1975 c.338 2; renumbered 743.709 in 1989]
[1979 c.268 6; renumbered 743.710 in 1989]
[1979 c.785 20; renumbered 743.712 in 1989]
[1979 c.1 15; renumbered 743.713 in 1989]
[1981 c.422 5; 1989 c.721 54; 1989 c.1080 1; renumbered 743.714 in 1989]
[1987 c.739 2,4b; renumbered 743.715 in 1989]
[1985 c.536 1; renumbered 743.716 in 1989]
[1985 c.312 2; renumbered 743.717 in 1989]
[1985 c.747 59; renumbered 743.700 in 1989]
[1987 c.530 2; renumbered 743.718 in 1989]
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]
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]
(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 insureds 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) Human immunodeficiency virus or 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; 2019 c.280 15]
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]
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]
A life insurance policy shall contain a provision relating to the time and place of payment of premium. [1967 c.359 376]
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]
(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]
(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]
A life insurance policy shall contain a provision that the policy constitutes the entire contract between the parties. [1967 c.359 380]
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]
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 insurers published rate at date of issue. [1967 c.359 382]
(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]
(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 insurers 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]
(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 Moodys Corporate Bond Yield Average - Monthly Average Corporates, as published by Moodys 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 Moodys Corporate Bond Yield Average - Monthly Average Corporates is no longer published by Moodys Investors Service, Inc., or if the National Association of Insurance Commissioners determines that the Moodys 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 directors 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]
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]
(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 insureds 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]
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]
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]
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]
(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]
(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]
(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]
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]
(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]
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]
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]
(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]
(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]
(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 childs age is 26, is uniform in amount after the childs 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]
A life insurance policy may not: (1) Limit 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) Purport to be issued or to take effect more than six months before the original application for the insurance was made; (3) Require 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 of the policy; or (4) Exclude coverage for loss of life that results from another persons act of terrorism. [Formerly 739.315; 2021 c.72 1]
(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]
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]
"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]
"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]
"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]
No profit-sharing, charter or founders policy shall be issued or delivered in this state. [Formerly 739.720]
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 policyholders 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]
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]
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 policyholders account; and (b) In the case of a life insurance policy, the dollar amount of the death benefit. [1973 c.435 15]
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]
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]
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]
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]
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]
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]
(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]
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]
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]
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]
(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]
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]
(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]
(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]
(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]
(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 annuitants 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]
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]
(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]
(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]
(1) Notwithstanding the provisions of ORS 743.275 to 743.295, the Department of Consumer and Business Services may adopt rules to regulate the penalties, fees or other charges that an insurer imposes for a withdrawal, before maturity or after the owner or annuitant dies, from an individual deferred annuity policy. (2) In adopting rules under subsection (1) of this section, the department shall consider: (a) Standards, regulations, rules, policies or guidelines that other states, public and private national organizations and other bodies apply to impositions of the types of penalties, fees or charges described in subsection (1) of this section; (b) Whether the penalty, fee or charge the insurer imposes is appropriate for and suited to achieving the insurers stated purpose in imposing the penalty, fee or charge; (c) How an insurer calculates the penalty, fee or charge; (d) The benefits to which the penalty, fee or charge applies; (e) Whether the insurer could take actions other than imposing a penalty, fee or charge in order to achieve the purpose for which the insurer imposed the penalty, fee or charge; (f) When insurers may or do not impose penalties, fees or charges for withdrawals before maturity or after the owner or annuitant dies; (g) Limitations on the amount of the insurers penalty, fee or charge; and (h) Other aspects, facts, circumstances or elements that the department deems relevant. [2015 c.85 2]
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]
(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]
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]
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]
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 persons lifetime nor unless it is contained in a written instrument signed by the person. [1967 c.359 416]
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]
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]
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]
(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 insureds 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]
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]
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 insurers 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]
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 persons 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]
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]
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]
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]
(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]
[1979 c.708 2; renumbered 743.100 in 1989]
(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]
[1979 c.708 3; renumbered 743.101 in 1989]
(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]
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.
[1979 c.708 4; renumbered 743.103 in 1989]
(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]
(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]
[1979 c.708 5; renumbered 743.104 in 1989]
[1979 c.708 6; renumbered 743.106 in 1989]
[1979 c.708 7; renumbered 743.107 in 1989]
[1979 c.708 8; renumbered 743.109 in 1989]
(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]
(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]
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]
(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]
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]
(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]
(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]
(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]
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]
(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]
ORS 743.405 to 743.498 and 743A.160 do not 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, except as expressly provided in ORS 750.055; 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. [Formerly 741.022; 2001 c.356 5; 2013 c.698 19; 2017 c.206 3]
An individual health insurance policy must meet the following requirements: (1) The policy must include a statement of the entire money and other considerations due. (2) The policy must state the time at which the insurance takes effect and terminates. (3) The policy may purport to insure only one person, unless an adult member of a family applies for coverage of family members or other dependents. (4) The policy may not be issued individually to an individual in a group of persons described in ORS 731.098 for the purpose of separating the individual from health insurance benefits offered or provided in connection with a group health benefit plan. (5)(a) 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 12-point type. (b) 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 policy must state the exceptions and reductions of indemnity. Except those required by ORS 743.411 to 743.477, exceptions and reductions shall be printed at the insurers 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; 2009 c.11 94; 2011 c.9 91; 2011 c.500 6; 2013 c.681 12]
A group health insurance policy shall contain in substance the following provisions: (1) A provision that, in the absence of fraud, all statements made by applicants, the policyholder or an insured person shall be deemed representations and not warranties, and that no statement made for the purpose of effecting insurance shall avoid the insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to the policyholder or to the person or the beneficiary of the person. (2) A provision that the insurer will furnish to the policyholder for delivery to each employee or member of the insured group a statement in summary form of the essential features of the insurance coverage of the employee or member, to whom the insurance benefits are payable, and the applicable rights and conditions set forth in ORS 743B.340, 743B.341 and 743B.343 to 743B.347. If dependents are included in the coverage, only one statement need be issued for each family unit. (3) A provision that to the group originally insured may be added from time to time eligible new employees or members or dependents, as the case may be, in accordance with the terms of the policy. [Formerly 743.528] Note: 743.406 was made a part of ORS chapter 743 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
Except as provided in ORS 742.021, a health insurance policy shall contain the provisions set forth in ORS 743.411 to 743.444. The provisions shall be preceded individually by the caption appearing in the sections or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the Director of the Department of Consumer and Business Services may approve. [1967 c.359 428; 2011 c.9 92]
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]
[1977 c.632 2; 1981 c.319 1; 2001 c.900 230; renumbered 743A.160 in 2007]
(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 insurers 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]
An insurer offering an individual health benefit plan may establish a due date for payment of the first premium for the plan no earlier than 15 days after the date that the coverage begins or 15 days after the insurer sends the initial invoice to the insured, whichever is later. [2021 c.205 3] Note: 743.416 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A policy of health insurance issued to an individual residing in this state shall specify a minimum grace period following the premium due date for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. Unless a longer grace period is provided by federal law, the grace period must be at least: (a) Ten days for a policy other than an individual health benefit plan; and (b) Thirty days for an individual health benefit plan. (2) A policy that contains a cancellation provision may add at the end of the provision described in subsection (1) of this section the following clause or an equivalent clause approved by the Department of Consumer and Business Services: "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, or an equivalent clause approved by the department, at the beginning of the provision described 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." (4) Subsections (2) and (3) of this section may not be construed to permit the cancellation of or refusal to renew a policy if the cancellation or refusal to renew is otherwise prohibited by the Insurance Code or rules adopted by the department to carry out the provisions of the Insurance Code. [1967 c.359 431; 1989 c.784 19; 2001 c.943 9; 2013 c.681 13; 2021 c.205 5]
(1) A health insurance policy, other than a health benefit plan as defined in ORS 743B.005, 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; 2013 c.681 13a]
(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 insureds 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]
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]
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]
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]
(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 insureds 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 insurers 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]
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]
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]
(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 insurers option. [1967 c.359 440]
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 shall be in the words that 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; 2011 c.9 93]
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]
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]
(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]
(1) A health insurance policy may contain a provision as follows: "INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss, and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the like amount of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage." (2) If the policy provision set forth in subsection (1) of this section is included in a policy which also contains the policy provision set forth in ORS 743.462, there shall be added to the caption of the provision set forth in subsection (1) of this section the phrase "EXPENSE INCURRED BENE- FITS." The insurer may, at its option, include in this provision a definition of "other valid coverage," approved as to form by the Director of the Department of Consumer and Business Services, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and by hospital or medical service organizations, and to any other coverage the inclusion of which may be approved by the director. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the policy provision set forth in this section with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers compensation or employers liability statute), whether provided by a governmental agency or otherwise, shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the policy provision set forth in this section no third party liability coverage shall be included as "other valid coverage." [1967 c.359 445]
(1) A health insurance policy may contain a provision as follows: "INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined." (2) If the policy provision set forth in subsection (1) of this section is included in a policy which also contains the policy provision set forth in ORS 743.459, there shall be added to the caption of the provision set forth in subsection (1) of this section the phrase "OTHER BENEFITS." The insurer may, at its option, include in this provision a definition of "other valid coverage," approved as to form by the Director of the Department of Consumer and Business Services, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the director. In the absence of such definition such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the policy provision set forth in this section with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers compensation or employers liability statute), whether provided by a governmental agency or otherwise, shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the policy provision set forth in this section no third party liability coverage shall be included as "other valid coverage." [1967 c.359 446]
(1) A health insurance policy may contain a provision as follows: "RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or the average monthly earnings of the insured for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of $200 or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time." (2) The policy provision set forth in subsection (1) of this section may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 50 or, in the case of a policy issued after age 44, for at least five years from its date of issue. The insurer may, at its option, include in this provision a definition of "valid loss of time coverage," approved as to form by the Director of the Department of Consumer and Business Services, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the director or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute (including any workers compensation or employers liability statute), or benefits provided by union welfare plans or by employer or employee benefit organizations. [1967 c.359 447]
A health insurance policy may contain a provision as follows: "UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom." [1967 c.359 448]
A health insurance policy may contain a provision as follows: "CANCELLATION: The insurer may cancel this policy by written notice delivered to the insured, or mailed to the last address of the insured as shown by the records of the insurer. The notice must state the reason for cancellation and the date on which the cancellation shall be effective. Except as provided under the GRACE PERIOD provision of this policy for nonpayment of premium, cancellation shall not become effective earlier than the 30th day after the date of the notice. After the policy has been continued beyond its original term, the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation." [1967 c.359 449; 1989 c.784 20]
An insurer selling individual health insurance policies may cancel or refuse to renew an individual health insurance policy only if the insurer makes a determination to cancel or not to renew all policies of the same type and form as the individual policy, or if the ground for cancellation or nonrenewal is any of the following and is stated as a provision of the policy: (1) A fraudulent or material misstatement made by the applicant in an application for the health policy. A material misstatement is subject to any time limit, as specified by law and included in the policy, for voiding the policy on the basis of a misstatement. For purposes of this subsection, a misstatement may include an incorrect statement or a misrepresentation, omission or concealment of fact; (2) Excess or other insurance in the same insurer, as described in ORS 743.456; (3) Nonpayment of premium; or (4) Any other reason specified by the Director of the Department of Consumer and Business Services by rule. [1989 c.784 18; 1991 c.182 5] Note: 743.472 was added to and made a part of 743.405 to 743.498 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
A health insurance policy may contain a provision as follows: "CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date hereby is amended to conform to the minimum requirements of such statutes." [1967 c.359 450]
A health insurance policy may contain a provision as follows: "ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a contributing cause was the insureds commission of or attempt to commit a felony or to which a contributing cause was the insureds being engaged in an illegal occupation." [1967 c.359 451]
[1967 c.359 452; 1979 c.744 64; 2007 c.128 1; renumbered 743A.164 in 2007]
The provisions of a health insurance policy that are the subject of ORS 743.408 to 743.477, or any corresponding provisions that are used in lieu thereof in accordance with the Insurance Code, shall be printed in the consecutive order of such sections or, at the option of the insurer, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse or likely to mislead a person to whom the policy is offered, delivered or issued. [1967 c.359 453; 2009 c.11 95; 2011 c.9 94]
As used in ORS 743.402 to 743.498, the word "insured" shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits and rights provided therein. [1967 c.359 454; 2011 c.9 95]
If any health insurance policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy shall continue in force subject to any right of cancellation until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy. [Formerly 741.170]
Every health insurance policy except single premium nonrenewable policies shall have printed on its face or attached thereto a notice stating in substance that the person to whom the policy is issued shall be permitted to return the policy within 10 days of its delivery to the purchaser and to have the premium paid refunded if, after examination of the policy, the purchaser is not satisfied with it for any reason. If a policyholder or purchaser pursuant to such notice returns the policy to the insurer at its home or branch office or to the insurance producer through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy had been issued. [Formerly 741.180; 2003 c.364 109]
(1) No health insurance policy shall contain the following unqualified terms except as provided in this subsection: (a) The unqualified terms "noncancelable" or "noncancelable and guaranteed renewable" may be used only in a policy which the insured has the right to continue in force for life by the timely payment of premiums set forth in the policy, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. (b) The unqualified term "guaranteed renewable," except as provided in paragraph (a) of this subsection, may be used only in a policy which the insured has the right to continue in force for life by the timely payment of premiums, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes. (2) The limitations prescribed in subsection (1) of this section on the use of the term "noncancelable" shall also apply to any synonymous term such as "not cancelable" and such limitations on the use of the term "guaranteed renewable" shall also apply to any synonymous term such as "guaranteed continuable." [Formerly 741.190]
(1) A health insurance policy which is noncancelable or guaranteed renewable as those terms are used in ORS 743.495, except that the insureds right is for a limited period of more than one year rather than for life, shall contain the applicable one of the following statements, or such other statement which, in the opinion of the Director of the Department of Consumer and Business Services, is equally clear or more definite as to the subject matter: (a) "THIS POLICY IS NONCANCELABLE ______" (designating the applicable period such as, for example, "to age ___ (specify)," or "for the period of ___ (specify) years from date of issuance") if the policy is noncancelable for such period. (b) "THIS POLICY IS GUARANTEED RENEWABLE ______" (designating the applicable period such as, for example, "to age ___ (specify)," or "for the period of ___ (specify) years from date of issuance") if the policy is guaranteed renewable for such period. (2) Except for policies meeting the conditions specified in ORS 743.495 or subsection (1) of this section, and except as provided in subsection (3) of this section, a health insurance policy shall contain the applicable one of the following statements, or such other statement which, in the opinion of the director, is equally clear or more definite as to the subject matter: (a) "THIS POLICY MAY BE CANCELED BY THE INSURER ONLY FOR A REASON PERMITTED BY LAW" if the policy contains a provision for cancellation by the insurer. (b) "THE INSURER MAY REFUSE TO RENEW THIS POLICY ONLY FOR A REASON PERMITTED BY LAW" if the policy is not guaranteed renewable. (3) The limitations and requirements as to the use of terms contained in ORS 743.495 and this section shall not prohibit the use of other terms for policies having other guarantees of renewability, provided such terms, in the opinion of the director are accurate, clear and not likely to be confused with the terms contained in ORS 743.495 and this section, and are incorporated in a concise statement relating to the guarantees of renewability. (4) The statement required by this section shall be printed in a type not smaller than the type used for captions. It shall appear prominently on the first page of the policy and shall be a part of the brief description if the policy has a brief description on its first page. [Formerly 741.200; 1989 c.784 20a]
[2011 c.500 4a; 2012 c.24 1; renumbered 743B.330 in 2015]
(1) A leasing company may offer group health insurance to its leased workers. If the leasing company does not offer group health insurance to its leased workers, the client employer may offer group health insurance to the leased workers. (2) If a leasing company offers group health insurance to its leased workers, the leasing company shall offer group health insurance to all its leased workers in the same manner. [Formerly 743.533]
(1) As used in this section and ORS 743.521: (a) "Client employer" means an employer to whom workers are provided under contract and for a fee on a leased basis by a worker leasing company licensed under ORS 656.850. (b) "Employee" may include a retired employee. (c) "Leased worker" means a worker provided by a worker leasing company licensed under ORS 656.850. (2) Group health insurance may be offered to a resident of this state under a group health insurance policy issued to a group other than one of the groups described in ORS 731.098 if: (a) The Director of the Department of Consumer and Business Services finds that: (A) The issuance of the policy is in the best interest of the public; (B) The issuance of the policy would result in economies of acquisition or administration; and (C) The benefits are reasonable in relation to the premiums charged; and (b) The premium for the policy is paid either from funds of a policyholder, from funds contributed by a covered person or from both. [1967 c.359 461; 1975 c.229 1; 1989 c.784 13; 2001 c.943 4; 2005 c.22 492; 2013 c.681 14]
(1) No person selling group health insurance is authorized to sell membership in an association, including a labor union, for the purpose of qualifying an applicant who is an individual for group health insurance. (2) No person selling membership in an association, including a labor union, is authorized to offer group health insurance for the purpose of selling membership in the association. [1989 c.784 10]
(1) An insurer may not offer a policy of group health insurance to an association as the policyholder or offer coverage under such a policy, whether issued in this or another state, unless the Director of the Department of Consumer and Business Services determines that the association satisfies the requirements of an association under ORS 731.098 (2). (2) An insurer shall submit evidence to the director that the association satisfies the requirements under ORS 731.098 (2). The director shall review the evidence and may request additional evidence as needed. (3) An insurer shall submit to the director any changes in the evidence submitted under subsection (2) of this section. (4) The director may order an insurer to cease offering health insurance to an association if the director determines that the association does not meet the standards under ORS 731.098 (2). (5) The director may adopt rules to carry out this section. [1989 c.784 11; 2005 c.22 493; 2013 c.681 14a]
(1) An insurer may not offer a policy of group health insurance described in ORS 731.098 (3) that insures persons in this state or offer coverage under such a policy, whether the policy is to be issued in this or another state, unless the Director of the Department of Consumer and Business Services determines that the requirements of this section and ORS 731.098 (3) are satisfied. (2) The director shall determine with respect to a policy whether the trustees are the policyholder. If the director determines that the trustees are the policyholder and if the policy is issued or proposed to be issued in this state, the policy is subject to the Insurance Code. If the director determines that the trustees are not the policyholder, the evidence of coverage that is issued or proposed to be issued in this state to a participating employer, labor union or association shall be deemed to be a group health insurance policy subject to the provisions of the Insurance Code. The director may determine that the trustees are not the policyholder if: (a) The evidence of coverage issued or proposed to be issued to a participating employer, labor union or association is in fact the primary statement of coverage for the employer, labor union or association; and (b) The trust arrangement is under the actual control of the insurer. (3) An insurer shall submit evidence to the director showing that the requirements of subsection (2) of this section and ORS 731.098 (3) are satisfied. The director shall review the evidence and may request additional evidence as needed. (4) An insurer shall submit to the director any changes in the evidence submitted under subsection (3) of this section. (5) The director may adopt rules to carry out this section. [1989 c.784 12; 2005 c.22 494; 2013 c.681 56]
[1979 c.797 2; 1981 c.395 1; renumbered 743B.340 in 2015]
[1967 c.359 463; 1981 c.752 13; 1997 c.716 23; 2013 c.681 57; renumbered 743.406 in 2015]
[1977 c.402 5; 1991 c.182 6; renumbered 743B.341 in 2015]
[1985 c.634 2; renumbered 743B.342 in 2015]
[1967 c.359 464; 1985 c.747 71; 1989 c.784 23; 2015 c.588 3; renumbered 743B.460 in 2015]
[2001 c.943 5; renumbered 743.521 in 2015]
[1967 c.359 465; renumbered 743.536 in 2015]
(1) As used in this section, "guaranteed association" means an association that: (a) The Director of the Department of Consumer and Business Services has determined under ORS 743.524 meets the requirements described in ORS 731.098 (2); and (b) Is a statewide nonprofit organization representing the interests of individuals licensed under ORS chapter 696. (2) A carrier may offer a health benefit plan to a guaranteed association if the plan provides health benefits covering 500 or more members or dependents of members of the association. (3) When a carrier offers coverage to a guaranteed association under subsection (2) of this section, the carrier shall offer coverage to all members of the association and all dependents of the members of the association without regard to the actual or expected health status of any member or any dependent of a member of the association. (4) A carrier offering a health benefit plan under subsection (2) of this section shall establish premium rates as follows: (a) For the initial 12-month period of coverage, the carrier shall submit to the director a certified statement that the premium rates charged to the guaranteed association are actuarially sound. The statement must be signed by an actuary certifying the accuracy of the rating methodology as established by the American Academy of Actuaries. (b) For any subsequent 12-month period of coverage, according to a rating methodology as established by the American Academy of Actuaries. (5) A member of a guaranteed association may apply for coverage offered by a carrier under subsection (2) of this section only: (a) If the member has been an active member of the association for no less than 30 days; (b) During an annual open enrollment period offered by the association; and (c) After meeting any additional eligibility requirements agreed upon by the association and the carrier. (6) Notwithstanding subsection (5) of this section, if a member or a dependent of a member of a guaranteed association terminates coverage under the health benefit plan, the member or dependent shall be excluded from coverage for 12 months from the date of termination of coverage. The member may enroll for coverage of the member or the dependent during an annual open enrollment period following the expiration of the exclusion period. [Formerly 743.757] Note: Definitions for 743.535 may be found in 743B.005.
"Blanket health insurance" means that form of a health insurance covering groups of persons defined in this section and issued on one of the following bases: (1) Under a policy issued to a common carrier or to an operator, owner or lessee of a means of transportation, who shall be deemed the policyholder, insuring a group of persons who may become passengers and which group is defined by reference to their travel status on such common carrier or means of transportation. (2) Under a policy issued to an employer, who shall be deemed the policyholder, insuring any group of employees, dependents or guests, defined by reference to specified hazards incident to an activity or activities or operations of the policyholder. (3) Under a policy issued to a college, school or other institution of learning, a school district or districts, or school jurisdictional unit, or to the head, principal or governing board of any such educational unit, who or which shall be deemed the policyholder, insuring students, teachers or employees. (4) Under a policy issued to a religious, charitable, recreational, educational, or civic organization, or branch thereof, which shall be deemed the policyholder, insuring any group of members or participants defined by reference to specified hazards incident to an activity or activities or operations sponsored or supervised by such policyholder. (5) Under a policy issued to a sports team, camp or sponsor thereof, who shall be deemed the policyholder, insuring members, campers, employees, officials or supervisors. (6) Under a policy issued to a volunteer fire department, first aid, civil defense, or other such volunteer organization, which shall be deemed the policyholder, insuring any group of members or participants defined by reference to specified hazards incident to an activity or activities or operations sponsored or supervised by such policyholder. (7) Under a policy issued to a newspaper or other publisher, which shall be deemed the policyholder, insuring its carriers. (8) Under a policy issued to an association, including a labor union, which has a constitution and bylaws and which has been organized and is maintained in good faith for purposes other than that of obtaining insurance, which shall be deemed the policyholder, insuring any group of members or participants defined by reference to specified hazards incident to an activity or activities or operations sponsored or supervised by such policyholder. (9) Under a policy issued to cover any other risk or class of risks which, in the discretion of the Director of the Department of Consumer and Business Services, may be properly eligible for blanket health insurance. The discretion of the director may be exercised on an individual risk basis or class of risks basis, or both. [Formerly 743.534]
A blanket health insurance policy shall contain provisions which in the opinion of the Director of the Department of Consumer and Business Services are not less favorable to the policyholder and the individual insureds than the provisions described in ORS 743.411, 743.423, 743.426, 743.429, 743.432, 743.438 and 743.441. [1967 c.359 466]
An individual application need not be required from a person insured under a blanket health insurance policy, nor shall it be necessary for the insurer to furnish each person a certificate. [1967 c.359 467]
All benefits under a blanket health insurance policy shall be payable to the person insured, or to the designated beneficiary or beneficiaries of the person, or to the estate of the person, except that if the person insured is a minor or otherwise not competent to give a valid release, such benefits may be made payable to the parent, guardian or other person actually supporting the person. However, the policy may provide that all or a portion of any indemnities provided by such policy on account of hospital, nursing, medical or surgical services may, at the option of the insurer and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but the policy may not require that the services be rendered by a particular hospital or person. Payment so made shall discharge the obligation of the insurer with respect to the amount of insurance so paid. [1967 c.359 468]
The Director of the Department of Consumer and Business Services may exempt from the policy form filing and approval requirements of ORS 742.003, for so long as the director deems proper, any blanket health insurance policy to which in the opinion of the director such requirements may not practicably be applied, or may dispense with such filing and approval whenever, in the opinion of the director, it is not desirable or necessary for the protection of the public. [1967 c.359 469]
(1) Student health insurance is subject to ORS 743.537, 743.540, 743.543, 743.546 and 743B.475, except as provided in this section. (2) Coverage under a student health insurance policy may be mandatory for all students at the institution, voluntary for all students at the institution, or mandatory for defined classes of students and voluntary for other classes of students. As used in this subsection, "classes" refers to undergraduates, graduate students, domestic students, international students or other like classifications. Any differences based on a students nationality may be established only for the purpose of complying with federal law in effect when the policy is issued. (3) When coverage under a student health insurance policy is mandatory, the policyholder may allow any student subject to the policy to decline coverage if the student provides evidence acceptable to the policyholder that the student has similar health coverage. (4) A student health insurance policy may provide for any student to purchase optional supplemental coverage. (5) Student health insurance coverage for athletic injuries may: (a) Exclude coverage for injuries of students who have not obtained medical release for a similar injury; and (b) Be provided in excess of or in addition to any other coverage under any other health insurance policy, including a student health insurance policy. (6) A student health insurance policy may provide that coverage under the policy is secondary to any other health insurance for purposes of guidelines established under ORS 743B.475. (7) A student health insurance policy may provide, on request by the policyholder, that all or any portion of any indemnities provided by such policy on account of hospital, nursing, medical or surgical services may, at the insurers option, be paid directly to the hospital or person rendering such services. However, the amount of any such payment shall not exceed the amount of benefit provided by the policy with respect to the service or billing of the provider of aid. The amount of such payments pursuant to one or more assignments shall not exceed the amount of expenses incurred on account of such hospitalization or medical or surgical aid. (8) An insurer providing student health insurance as primary coverage may negotiate and enter into contracts for alternative rates of payment with providers and offer the benefit of such alternative rates to insureds who select such providers. An insurer may utilize such contracts by offering a choice of plans at the time an insured enrolls, one of which provides benefits only for services by members of a particular provider organization with whom the insurer has an agreement. If an insured chooses such a plan, benefits are payable only for services rendered by a member of that provider organization, unless such services were requested by a member of such organization or are rendered as the result of an emergency. (9) Payments made under subsection (8) of this section shall discharge the insurers obligation with respect to the amount of insurance paid. (10) An insurer shall provide each student health insurance policyholder with a current roster of institutional and professional providers under contract to provide services at alternative rates under the group policy and shall also make such lists available for public inspection during regular business hours at the insurers principal office within this state. (11) As used in this section, "student health insurance": (a) Means that form of health insurance under a policy issued to a college, school or other institution of learning, a school district or districts, or school jurisdictional unit, or recognized student government at a public university listed in ORS 352.002, or to the head, principal or governing board of any such educational unit, who or which shall be deemed the policyholder, that is available exclusively to students at the college, school or other institution. (b) Does not include a student health benefit plan as defined in ORS 743.551. [1995 c.623 2; 2011 c.637 289; 2013 c.681 15]
(1) As used in this section, "student health benefit plan" means a plan that is subject to rules adopted by the United States Department of Health and Human Services under 42 U.S.C. 18118(c). (2) Notwithstanding any other provision of law, the Department of Consumer and Business Services shall by rule and in a manner consistent with federal law in effect on January 1, 2017, adopt requirements for student health benefit plans. [2013 c.681 4; 2017 c.152 3] Note: 743.551 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[1973 c.143 3; 2013 c.681 15a; 2015 c.515 6; renumbered 743B.475 in 2015]
[1987 c.411 2; 1989 c.721 55; 1991 c.67 198; 1991 c.470 19; 1991 c.654 2; 1999 c.1086 1; 2001 c.900 217; 2003 c.33 5; 2005 c.705 1; 2007 c.71 240; renumbered 743A.168 in 2007]
[1991 c.673 3,4; 1993 c.454 1; 1997 c.716 24; 2001 c.943 11; 2013 c.681 58; renumbered 743B.320 in 2015]
[Formerly 739.565; renumbered 743.371 in 1989]
[1991 c.673 5; renumbered 743B.321 in 2015]
[Formerly 739.570; 1969 c.336 13; 1989 c.1073 1; renumbered 743.372 in 1989]
[2001 c.943 8; renumbered 743B.323 in 2015]
[2001 c.943 16; renumbered 743B.324 in 2015]
[Formerly 739.575; renumbered 743.373 in 1989]
[1967 c.359 473; renumbered 743.374 in 1989]
[Formerly 741.425; renumbered 743.375 in 1989]
[Formerly 739.585; renumbered 743.376 in 1989]
[Formerly 739.590; renumbered 743.377 in 1989]
[Formerly 739.600; renumbered 743.378 in 1989]
[Formerly 739.603; renumbered 743.379 in 1989]
[Formerly 739.610; renumbered 743.380 in 1989]
[Formerly 743.851; renumbered 743B.343 in 2015]
[Formerly 743.852; 2003 c.576 557; 2011 c.500 6a; 2012 c.24 2; renumbered 743B.344 in 2015]
[Formerly 743.853; 2015 c.515 7; renumbered 743B.345 in 2015]
[Formerly 744.070; renumbered 742.200 in 1989]
[1967 c.359 481; 1967 c.453 3; renumbered 742.202 in 1989]
[1967 c.453 2; renumbered 742.204 in 1989]
[1967 c.359 482; 1971 c.231 26; renumbered 742.206 in 1989]
[Formerly 743.850; 2009 c.73 3,4; 2011 c.500 6b,6c; 2012 c.24 3; 2013 c.681 16; renumbered 743B.347 in 2015]
[1967 c.359 483; 1985 c.465 3; renumbered 742.208 in 1989]
[1967 c.359 484; renumbered 742.210 in 1989]
[1967 c.359 485; renumbered 742.212 in 1989]
[1967 c.359 486; renumbered 742.214 in 1989]
[1967 c.359 487; renumbered 742.216 in 1989]
[1967 c.359 488; renumbered 742.218 in 1989]
[1967 c.359 489; renumbered 742.220 in 1989]
[1967 c.359 490; renumbered 742.222 in 1989]
[1967 c.359 491; 1989 c.426 2; renumbered 742.224 in 1989]
[1967 c.359 492; renumbered 742.226 in 1989]
[1967 c.359 493; renumbered 742.228 in 1989]
[1967 c.359 494; 1989 c.426 1; renumbered 742.230 in 1989]
[1967 c.359 495; renumbered 742.232 in 1989]
(1) ORS 743.650 to 743.665 may be known and cited as the "Long Term Care Insurance Act." (2) The purpose of ORS 743.650 to 743.665 is to: (a) Promote the public interest in long term care insurance; (b) Promote the availability of long term care insurance policies; (c) Protect applicants for long term care insurance from unfair or deceptive sales or enrollment practices; (d) Establish standards for long term care insurance; (e) Facilitate public understanding and comparison of long term care insurance policies; (f) Facilitate flexibility and innovation in the development of long term care insurance coverage; and (g) Ensure that Oregon residents who purchase insurance for long term care shall have access to policies providing for a comprehensive range of benefits. (3) The requirements of ORS 743.650 to 743.665, 748.603 and 750.055 apply to policies and certificates delivered or issued for delivery in this state on or after December 31, 1989. ORS 743.650 to 743.665, 748.603 and 750.055 are not intended to supersede the obligations of entities subject to ORS 743.650 to 743.665, 748.603 and 750.055 to comply with the substance of other applicable insurance laws insofar as such laws do not conflict with ORS 743.650 to 743.665, 748.603 and 750.055, except that laws and rules designed and intended to apply to Medicare supplement insurance policies shall not be applied to long term care insurance. A policy that is not advertised, marketed or offered as long term care insurance or nursing home insurance is not required to meet the requirements of ORS 743.650 to 743.665, 748.603 and 750.055. [1989 c.1022 1,2,3; 2007 c.486 1]
[1967 c.359 496; renumbered 742.234 in 1989]
As used in ORS 743.650 to 743.665, unless the context requires otherwise: (1) "Applicant" means: (a) In the case of an individual long term care insurance policy, the person who seeks to contract for benefits; and (b) In the case of a group long term care insurance policy, the proposed certificate holder. (2) "Benefit trigger" means a contractual provision in a long term care insurance policy that conditions the payment of benefits on an insureds inability to perform activities of daily living or on an insureds cognitive impairment. For qualified long term care insurance, the "benefit trigger" is the determination that an insured is a chronically ill individual, as defined in section 7702B(c) of the Internal Revenue Code. (3) "Certificate" means any certificate issued under a group long term care insurance policy, if the policy has been delivered or issued for delivery in this state. (4) "Group long term care insurance" means a long term care insurance policy that is delivered or issued for delivery in this state and issued to: (a) One or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations; (b) Any professional, trade or occupational association for its members or former or retired members, or combination thereof, if such association: (A) Is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation; and (B) Has been maintained in good faith for purposes other than obtaining insurance; (c)(A) An association or a trust or the trustee of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering the policy within this state, the association or associations, or the insurer of the association or associations shall file evidence with the director that the association or associations have been organized and maintained in good faith for purposes other than that of obtaining insurance; have been in active existence for at least one year; and have a constitution and bylaws that provide that: (i) The association or associations hold regular meetings not less than annually to further purposes of the members; (ii) Except for credit unions, the association or associations collect dues or solicit contributions from members; and (iii) The members have voting privileges and representation on the governing board and committees; and (B) Sixty days after the filing, the association or associations shall be considered to satisfy the organizational requirements, unless the director makes a finding that the association or associations do not satisfy those organizational requirements; or (d) A group other than as described in paragraphs (a), (b) and (c) of this subsection, subject to a finding by the director that: (A) The issuance of the group policy is not contrary to the best interest of the public; (B) The issuance of the group policy would result in economies of acquisition or administration; and (C) The benefits are reasonable in relation to the premiums charged. (5) "Long term care insurance" means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than 24 consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis; for one or more necessary or medically necessary services, including but not limited to nursing, diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. "Long term care insurance" includes group and individual annuities and life insurance policies or riders that provide directly or supplement long term care insurance. "Long term care insurance" also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity, and qualified long term care insurance contracts. Long term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital and medical service corporations; prepaid health plans; or health maintenance organizations, health care service contractors or any similar organization to the extent they are otherwise authorized to issue life or health insurance. "Long term care insurance" does not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset protection coverage, catastrophic coverage, accident only coverage, specified disease or specified accident coverage or limited benefit coverage. With regard to life insurance, "long term care insurance" does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits and when neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long term care. Notwithstanding any other provision of ORS 743.650 to 743.665, any product advertised, marketed or offered as long term care insurance is subject to ORS 743.650 to 743.665. (6) "Policy" means any policy, contract, subscriber agreement, rider or indorsement delivered or issued for delivery in this state by an insurer; fraternal benefit society; nonprofit health, hospital or medical service corporation; prepaid health plan; or health maintenance organization, health care service contractor or any similar organization. (7) "Qualified long term care insurance" means: (a) The portion of a life insurance contract that provides long term care insurance coverage by rider or as part of the contract and that satisfies the requirements of section 7702B(b) and (e) of the Internal Revenue Code; or (b) Individual or group long term care insurance as defined in this section that meets all of the following requirements of section 7702B(b) of the Internal Revenue Code: (A) The only insurance protection provided under the contract is coverage of qualified long term care services. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate. (B) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, or would be reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subparagraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payer. A contract does not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate. (C) The contract is guaranteed renewable within the meaning of section 7702B(b)(1)(C) of the Internal Revenue Code. (D) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in subparagraph (E) of this paragraph. (E) All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract. (F) The contract meets the consumer protection provisions set forth in section 7702B(g) of the Internal Revenue Code. [1989 c.1022 4; 1993 c.744 30; 1995 c.79 364; 2007 c.486 2; 2011 c.69 3; 2016 c.11 3]
Group long term care insurance coverage may not be offered to a resident of this state under a group policy issued in another state to a group described in ORS 743.652 (4)(d), unless this state or another state having statutory and regulatory long term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met. [1989 c.1022 5; 1991 c.67 199; 2007 c.486 3; 2011 c.69 4]
[1967 c.359 497; renumbered 742.236 in 1989]
(1)(a) The Director of the Department of Consumer and Business Services shall adopt rules that include standards for full and fair disclosure setting forth the manner, content and required disclosures for the sale of long term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, program for public understanding, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, underwriting at time of application, requirements for replacement, recurrent conditions and definitions of terms and that include required procedures for internal and external review of whether the conditions of a benefit trigger have been met. (b) In adopting rules under this section, the Director of the Department of Consumer and Business Services must give timely notice to, and shall consider recommendations from the Director of Human Services. (2) A long term care insurance policy may not: (a) Be canceled, nonrenewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder; (b) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; (c) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care; (d) Exclude coverage for Alzheimers disease and related dementias; (e) Be nonrenewed or otherwise terminated for nonpayment of premiums until 31 days overdue and then only after notice of nonpayment is given the policyholder prior to expiration of the 31 days, except as otherwise provided by rule; or (f) Be sold to provide less than 24 months coverage. (3)(a) A long term care insurance policy or certificate other than a policy or certificate issued to a group described in ORS 743.652 (4)(a), (b) or (c) may not use a definition of "preexisting condition" that is more restrictive than the following: "Preexisting condition" means a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person. (b) A long term care insurance policy or certificate other than a policy or certificate thereunder issued to a group described in ORS 743.652 (4)(a), (b) or (c) may not exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within six months following the effective date of coverage of an insured person. (c) The Director of the Department of Consumer and Business Services may extend the limitation periods set forth in paragraphs (a) and (b) of this subsection as to specific age group categories or specific policy forms upon findings that the extension is in the best interest of the public. (d) The definition of preexisting condition does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, over the 10 years immediately prior to the date of application, and, on the basis of the answers on the application, from underwriting in accordance with that insurers established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in paragraph (b) of this subsection expires. A long term care insurance policy or certificate may not exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in paragraph (b) of this subsection. (4) A long term care insurance policy may not be delivered or issued for delivery in this state if the policy: (a) Conditions eligibility for any benefits on a prior hospitalization requirement; (b) Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or (c) Conditions eligibility for any benefits other than waiver of premium or post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement. (5)(a) A long term care insurance policy containing post-confinement, post-acute care or recuperative benefits must clearly label in a separate paragraph of the policy or certificate titled "Limitations or Conditions of Eligibility for Benefits" all such limitations or conditions, including any required number of days of confinement. (b) A long term care insurance policy or rider that conditions eligibility of noninstitutional benefits on the prior receipt of institutional care may not require a prior institutional stay of more than 30 days. (6) Individual long term care insurance applicants shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Long term care insurance policies and certificates must have a notice prominently printed on the first page or attached thereto stating in substance that the applicant has the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group described in ORS 743.652 (4)(a), the applicant is not satisfied for any reason. This subsection also applies to denials of applications. Any refund must be made within 30 days of the return or denial. (7)(a)(A) An outline of coverage shall be delivered to a prospective applicant for long term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose. (B) The Director of the Department of Consumer and Business Services by rule must prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage. (C) In the case of solicitations by an insurance producer, the insurance producer must deliver the outline of coverage prior to the presentation of an application or enrollment form. (D) In the case of direct response solicitations, the outline of coverage must be presented in conjunction with any application or enrollment form. (E) In the case of a policy issued to a group described in ORS 743.652 (4)(a), an outline of coverage is not required to be delivered as long as the information described in paragraph (b) of this subsection is contained in other materials related to the enrollment. Upon request, these other materials must be made available to the Director of the Department of Consumer and Business Services. (b) The outline of coverage must include: (A) A description of the principal benefits and coverage provided in the policy; (B) A statement of the principal exclusions, reductions and limitations contained in the policy; (C) A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium. Continuation or conversion provisions of group coverage shall be specifically described; (D) A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions; (E) A description of the terms under which the policy or certificate may be returned and premium refunded; (F) A brief description of the relationship of cost of care and benefits; and (G) A statement that discloses to the policyholder or certificate holder whether the policy is intended to be qualified long term care insurance as defined in ORS 743.652. (8) A certificate issued pursuant to a group long term care insurance policy if the policy is delivered or issued for delivery in this state shall include: (a) A description of the principal benefits and coverage provided in the policy; (b) A statement of the principal exclusions, reductions and limitations contained in the policy; and (c) A statement that the group master policy determines governing contractual provisions. (9) If an application for a long term care insurance policy or certificate is approved, the insurer must deliver the policy or certificate to the applicant no later than 30 days after the date of approval. (10) At the time of policy delivery, a policy summary must be delivered for an individual life insurance policy that provides long term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer must deliver the policy summary upon the applicants request, but regardless of request must make delivery not later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary must also include the provisions required in this subsection. The required provision may be incorporated into a basic illustration or into the life insurance policy summary if required by rule. The following provisions must be included in the summary: (a) An explanation of how the long term care benefit interacts with other components of the policy, including deductions from death benefits; (b) An illustration of the amount of benefits, the length of benefits and the guaranteed lifetime benefits, if any, for each covered person; (c) Any exclusions, reductions and limitations on benefits of long term care; (d) A statement that any long term care inflation protection option required by rule is not available under the policy; and (e) If applicable to the policy type, the following: (A) A disclosure of the effects of exercising other rights under the policy; (B) A disclosure of guarantees related to long term care costs of insurance charges; and (C) Current and projected maximum lifetime benefits. (11) When a long term care benefit that is funded through a life insurance policy by an acceleration of the death benefit is in benefit payment status, the insurer must provide a monthly report to the policyholder. The report must include: (a) Any long term care benefits paid out during the month; (b) An explanation of any changes in the policy, such as death benefits or cash values, owing to payment of long term care benefits; and (c) The amount of long term care benefits existing or remaining. (12) If a claim under a long term care insurance policy is denied, then not later than the 60th day after the date of a written request by the policyholder or certificate holder, or a personal or authorized representative of either, the insurer must: (a) Provide a written explanation of the reasons for the denial; and (b) Make available all information directly related to the denial. (13) Long term care insurance policies shall include a clear description of the process for appealing and resolving disputes regarding whether the conditions of a benefit trigger have been met. (14) A policy may not be advertised, marketed or offered as long term care or nursing home insurance unless it complies with the provisions of ORS 743.650 to 743.665. (15) Rules adopted pursuant to ORS 743.650 to 743.665 shall be in accordance with the provisions of ORS chapter 183. (16) This section is exempt from ORS 743A.001. [1989 c.1022 6,7; 1991 c.67 200; 2003 c.364 110; 2007 c.486 4; 2011 c.69 5]
(1) No long term care insurance policy shall be delivered or issued for delivery in this state unless the policy determines eligibility for benefits through a determination that is not more restrictive than requiring that: (a) The policyholder be functionally impaired and needing assistance in any three or more activities of daily living as defined by the Director of the Department of Consumer and Business Services, by rule, after consultation with the Director of Human Services. (b) Benefits must be payable when the beneficiary is receiving covered services from any of the following providers approved by the insurer: (A) Nursing home; (B) Assisted living; (C) Home care; and (D) Adult foster care. (c) The insurer shall approve nursing home, assisted living, home care, adult foster home and any other providers of covered services by using standards that have been submitted to and approved by the director in consultation with the Director of Human Services. (2) No long term care policy that offers only nursing home benefits shall be sold in this state. [1989 c.1022 13,14; 2003 c.14 449]
[1967 c.359 498; renumbered 742.238 in 1989]
(1)(a) An insurer may not issue an individual long term care insurance policy until the insurer receives from an applicant for the policy: (A) A written designation of the full name and residential address of at least one person, in addition to the applicant, to whom the insurer can send notice of a lapse or termination of the policy because of a failure to pay a premium; or (B) A written waiver that the applicant has signed and dated and in which the applicant elects not to designate another person to whom an insurer can send the notice described in subparagraph (A) of this paragraph. The waiver must read substantially as follows: ______________________________________________________________________________ I understand that I have a right to designate at least one other person other than myself to receive notice of lapse or termination of this insurance policy for failing to pay a premium. I understand that the insurer will not send a notice until 30 days after a premium is due and remains unpaid. I elect NOT to designate a person other than myself to receive this notice. ______________________________________________________________________________ (b) At least once every two years an insurer shall notify a policy owner of the policy owners right to change the person the policy owner designates to receive the notice described in paragraph (a)(A) of this subsection. (c) An applicants designation of another person to receive the notice described in paragraph (a)(A) of this subsection does not constitute the other persons acceptance of a liability for services an insurer provides to an insured under an individual long term care insurance policy. (d) If a policy owner pays premiums for an individual long term care insurance policy by means of a payroll deduction or a deduction from a pension payment, the requirement to obtain a designation from the policy owner as provided in paragraph (a)(A) of this subsection does not apply until 60 days after the policy owner stops paying premiums through a payroll deduction or a deduction from a pension payment. (2) In addition to the requirement specified in subsection (1) of this section, an individual long term care insurance policy must provide for reinstating coverage after a lapse if the insurer receives proof that the policy owner was cognitively impaired or had a loss of functional capacity before the expiration of any grace period for premium payments that is set forth in the policy. An insured may request reinstatement under this subsection within five months after the insurance policy lapsed and the insurer may require the insured to pay all past due premiums. For purposes of this subsection, the standard for determining cognitive impairment or a loss of functional capacity may not be more stringent than any criteria set forth in the insurance policy for determining cognitive impairment or a loss of functional capacity for the purposes of showing eligibility for benefits. (3) A notice that an individual life insurance policy, individual long term care insurance policy or individual disability income policy has lapsed because of a failure to pay a premium is effective only if the insurer: (a) Sends a written notice at least 30 days before the date of the lapse; (b) Accompanies the notice with an explanation of the reason for the lapse; and (c) Sends the notice: (A) By first class mail, postage prepaid, to the last-known address of the policy owner and designee, if any; or (B) To the last-known electronic mail address for the policy owner and designee, if any, that is in the insurers records, provided that the policy owner and designee consent to receive notices related to the policy owners insurance policy electronically. (4) This section does not apply to an individual life insurance policy, an individual long term care insurance policy or an individual disability income policy that requires a premium payment each month or at more frequent intervals. (5) The Director of the Department of Consumer and Business Services may adopt rules to implement the requirements of this section. [2015 c.91 2] Note: 743.658 was added to and made a part of ORS chapter 743 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
[1967 c.359 499; renumbered 742.240 in 1989]
(1) For a policy or certificate that has been in force for less than six months, an insurer may rescind a long term care insurance policy or certificate or deny an otherwise valid long term care insurance claim upon a showing of a misrepresentation that is material to the acceptance for coverage. (2) For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long term care insurance policy or certificate or deny an otherwise valid long term care insurance claim upon a showing of a misrepresentation that is material to the acceptance for coverage and also pertains to the condition for which benefits are sought. (3) After a policy or certificate has been in force for two years, the policy or certificate is not contestable upon the ground of misrepresentation alone. The policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insureds health. (4) A long term care insurance policy or certificate may not be field issued based on medical or health status. A policy or certificate is field issued for the purposes of this subsection if the policy or certificate is issued by an insurance producer or a third party administrator pursuant to underwriting authority granted to the insurance producer or third party administrator by an insurer. (5) If an insurer has paid benefits under the long term care insurance policy or certificate, the insurer may not recover the benefit payments in the event that the policy or certificate is rescinded. (6) This section does not apply to the remaining death benefit of a life insurance policy in the event of the death of the insured if the policy accelerates benefits for long term care, but this section otherwise applies to a life insurance policy that accelerates benefits for long term care. In the event of the death of an insured, the remaining death benefits under the life insurance policy are governed by ORS 743.168. (7) This section is exempt from ORS 743A.001. [2007 c.486 6]
[1967 c.359 500; renumbered 742.242 in 1989]
(1) Except as provided in subsection (2) of this section, a long term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate including a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. If the policyholder or certificate holder declines the nonforfeiture benefit, the insurer must provide a contingent benefit upon lapse that is available for a specified period of time following a substantial increase in premium rates. (2) When a group long term care insurance policy is issued, the offer required in subsection (1) of this section must be made to the group policyholder. However, if the policy is issued as group long term care insurance as described in ORS 743.652 (4)(d), other than to a continuing care retirement community or similar entity, the offering shall be made to each proposed certificate holder. (3) The Director of the Department of Consumer and Business Services by rule shall specify: (a) The type or types of nonforfeiture benefits to be offered as part of long term care insurance policies and certificates; (b) The standards for nonforfeiture benefits; and (c) The standards governing contingent benefits upon lapse, including a determination of the specified period of time during which a contingent benefit upon lapse will be available and the substantial premium increase that triggers a contingent benefit upon lapse as described in subsection (1) of this section. (4) This section is exempt from ORS 743A.001. [2007 c.486 7; 2011 c.69 6]
The Director of the Department of Consumer and Business Services shall adopt by rule prompt payment requirements for long term care insurance. The rules shall include a definition of "claim" and a definition of "clean claim." In adopting the rules, the director shall consider the prompt payment requirements in long term care insurance model acts developed by the National Association of Insurance Commissioners. [2011 c.69 2]
[Formerly 744.125; renumbered 742.244 in 1989]
[Formerly 744.130; renumbered 742.246 in 1989]
[Formerly 744.430; renumbered 742.248 in 1989]
[Formerly 744.440; renumbered 742.250 in 1989]
[Formerly 744.450; renumbered 742.252 in 1989]
As used in ORS 743.680 to 743.689, unless the context requires otherwise: (1) "Applicant" means: (a) In the case of an individual Medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits. (b) In the case of a group Medicare supplement policy or subscriber contract, the proposed certificate holder. (2) "Certificate" means any certificate issued under a group Medicare supplement policy, which certificate has been delivered or issued for delivery in this state. (3) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the Social Security Amendments of 1965. (4) "Medicare supplement policy" means a group or individual policy of insurance or a subscriber contract which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. [1989 c.255 1; 1993 c.113 1]
[Formerly 744.460; renumbered 742.254 in 1989]
(1) Except as otherwise specifically provided, ORS 743.680 to 743.689 apply to: (a) All Medicare supplement policies and subscriber contracts delivered or issued for delivery in this state on or after May 31, 1989; and (b) All certificates issued under group Medicare supplement policies or subscriber contracts, which certificates have been delivered or issued for delivery in this state on or after May 31, 1989. (2) ORS 743.680 to 743.689 do not apply to a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations. [1989 c.255 2]
(1) A Medicare supplement insurance policy, contract or certificate in force in the state may not contain benefits which duplicate benefits provided by Medicare. (2) The Director of the Department of Consumer and Business Services shall adopt by rule specific standards for policy provisions of Medicare supplement policies and certificates. The standards shall be in addition to and in accordance with applicable laws of this state. A requirement of the Insurance Code relating to minimum required policy benefits, other than the minimum standards contained in ORS 743.680 to 743.689, may not apply to Medicare supplement policies. The standards may cover, but not be limited to: (a) Terms of renewability; (b) Initial and subsequent conditions of eligibility; (c) Nonduplication of coverage; (d) Probationary periods; (e) Benefit limitations, exceptions and reductions; (f) Elimination periods; (g) Requirements for replacement; (h) Recurrent conditions; and (i) Definitions of terms. (3) Provisions established by the director governing eligibility for Medicare supplement insurance shall not be limited to persons qualifying for Medicare by reason of age. (4) The director may adopt by rule standards that specify prohibited policy provisions not otherwise specifically authorized by statute which, in the opinion of the director, are unjust, unfair or unfairly discriminatory to any person insured or proposed for coverage under a Medicare supplement policy. (5) Notwithstanding any other provision of law of this state, a Medicare supplement policy may not deny a claim for losses incurred more than six months from the effective date of coverage for a preexisting condition. The policy may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician or naturopathic physician within six months before the effective date of coverage. (6) The director shall adopt by rule standards for benefits and claims payment under Medicare supplement policies. [1989 c.255 3,4; 1993 c.113 3; 2017 c.356 97]
(1) Every insurer providing group Medicare supplement insurance benefits to a resident of this state pursuant to ORS 743.682 shall file a copy of the master policy and any certificate used in this state in accordance with the filing requirements and procedures applicable to group Medicare supplement policies issued in this state. However, no insurer shall be required to make a filing earlier than 30 days after insurance was provided to a resident of this state under a master policy issued for delivery outside this state. (2) Medicare supplement policies shall return benefits which are reasonable in relation to the premium charged. The Director of the Department of Consumer and Business Services shall adopt by rule minimum standards for loss ratios of Medicare supplement policies on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums in accordance with accepted actuarial principles and practices. Every entity providing Medicare supplement policies or certificates in this state shall file annually its rates, rating schedule and supporting documentation demonstrating that it is in compliance with the applicable loss ratio standards of this state. All filings of rates and rating schedules shall demonstrate that the actual and expected losses in relation to premiums comply with the requirements of ORS 743.680 to 743.689. (3) No entity shall provide compensation to insurance producers which is greater than the renewal compensation which would have been paid on an existing policy if the existing policy is replaced by another policy with the same company where the new policy benefits are substantially similar to the benefits under the old policy and the old policy was issued by the same insurer or insurer group. [1989 c.255 5; 2003 c.364 111]
(1) In order to provide for full and fair disclosure in the sale of Medicare supplement policies, no Medicare supplement policy or certificate shall be delivered in this state unless an outline of coverage is delivered to the applicant at the time application is made. (2) The Director of the Department of Consumer and Business Services shall prescribe the format and content of the outline of coverage required by subsection (1) of this section. The director shall consult with the Governors Commission on Senior Services concerning the content and format of the outline of coverage, especially in reference to the ease with which senior citizens may understand the form and compare the coverage provided under the policy to which the outline of coverage refers. For purposes of this section, "format" means style, arrangements and overall appearance, including such items as the size, color and prominence of type and arrangement of text and captions. The outline of coverage required by subsection (1) of this section shall include at least the following: (a) A description of the principal benefits and coverage provided in the policy; (b) A statement of the renewal provisions, including any reservation by the insurer of a right to change premiums and disclosure of the existence of any automatic renewal premium increases based on the policyholders age; and (c) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions. (3) Insurers shall fill out the standardized form and have the completed information included on the form approved by the director before selling supplemental Medicare coverage in this state. (4) In the purchase or renewal of a Medicare supplement policy, a copy of the outline of coverage must be used in explaining policy coverage to a purchaser and shall be provided to the applicant at the time the sales presentation is made. The completed outline of coverage shall be considered part of the sales presentation materials for the purposes of ORS 742.009. (5) The insurer shall obtain acknowledgment of receipt or certify delivery of the outline of coverage at the time of sale. (6) The director may adopt by rule a standard form and the contents of an informational brochure for persons eligible for Medicare, which is intended to improve the buyers ability to select the most appropriate coverage and improve the buyers understanding of Medicare. Except in the case of direct response insurance policies, the director may require by rule that the information brochure be provided to any prospective insureds eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the director may require by rule that the prescribed brochure be provided upon request to any prospective insureds eligible for Medicare, but in no event later than the time of policy delivery. (7) The director may adopt by rule captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not Medicare supplement coverages, for all health insurance policies sold to persons eligible for Medicare, other than: (a) Medicare supplement policies; or (b) Disability income policies. (8) The director may adopt rules governing the full and fair disclosure of the information in connection with the replacement of health insurance policies, subscriber contracts or certificates by persons eligible for Medicare. [1989 c.255 6; 1993 c.113 2; 1997 c.96 2]
Medicare supplement policies or certificates shall have a notice prominently printed on the first page of the policy or certificate or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this section shall be paid directly to the applicant by the insurer in a timely manner. [1989 c.255 7]
Every insurer, health care service plan or other entity providing Medicare supplement insurance or benefits in this state shall provide a copy of any Medicare supplement advertisement intended for use in this state whether through written, radio or television medium to the Director of the Department of Consumer and Business Services of this state for review or approval by the director to the extent it may be required under state law. [1989 c.255 8]
Rules adopted pursuant to ORS 743.680 to 743.689 shall be subject to the provisions of ORS chapter 183. [1989 c.255 9]
In addition to any other applicable penalties for violations of the Insurance Code, the Director of the Department of Consumer and Business Services may require insurers violating any provision of ORS 743.680 to 743.689 or rules adopted pursuant to ORS 743.680 to 743.689 to cease marketing any Medicare supplement policy or certificate in this state which is related directly or indirectly to a violation or may require such insurer to take such actions as are necessary to comply with the provisions of ORS 743.680 to 743.689, or both. [1989 c.255 10]
[1981 c.247 17; renumbered 742.280 in 1989]
[2003 c.748 2; renumbered 743A.110 in 2007]
[1999 c.428 2; 2001 c.104 289; renumbered 743A.080 in 2007]
[2001 c.742 2; renumbered 743A.184 in 2007]
[1997 c.573 2; renumbered 743A.060 in 2007]
[1997 c.573 3; renumbered 743A.062 in 2007]
[1997 c.651 2; 2003 c.137 1; renumbered 743A.012 in 2007]
[Formerly 743.145; 2005 c.69 1; 2005 c.482 3; 2007 c.313 4; renumbered 743A.001 in 2007]
[Formerly 743.116; renumbered 743A.010 in 2007]
[Formerly 743.117; 2005 c.442 4; renumbered 743A.040 in 2007]
[Formerly 746.030; 1969 c.692 9; 1973 c.179 1; 1982 s.s.1 c.5 1; 1987 c.846 13; renumbered 742.282 in 1989]
[Formerly 743.119; renumbered 743A.148 in 2007]
[Formerly 743.120; 1991 c.674 2; 1995 c.506 10; renumbered 743A.090 in 2007]
[Formerly 746.080; 1969 c.692 10; 1973 c.823 150; renumbered 742.284 in 1989]
[Formerly 743.123; renumbered 743A.048 in 2007]
[Formerly 743.125; renumbered 743A.088 in 2007]
[1987 c.846 15; renumbered 742.286 in 1989]
[Formerly 743.128; renumbered 743A.036 in 2007]
[Formerly 743.132; 1993 c.142 15; 2005 c.22 496; renumbered 743A.028 in 2007]
[Formerly 743.135; renumbered 743A.024 in 2007]
[Formerly 743.143; renumbered 743A.180 in 2007]
[Formerly 743.147; renumbered 743A.014 in 2007]
[Formerly 743.052; renumbered 743A.032 in 2007]
[1979 c.866 4; 1987 c.774 56; renumbered 742.300 in 1989]
[Formerly 743.037; renumbered 743A.084 in 2007]
[1979 c.866 5; 1981 c.525 1; 1987 c.774 57; renumbered 742.302 in 1989]
[1997 c.695 3 (enacted in lieu of 743.724); 2003 c.446 1; 2007 c.346 1; renumbered 743A.044 in 2007]
[1997 c.496 2; 2003 c.263 1; renumbered 743A.188 in 2007]
[1993 c.575 2; 1999 c.429 1; renumbered 743A.100 in 2007]
[1993 c.576 2; 1999 c.429 2; renumbered 743A.104 in 2007]
[1993 c.407 2; renumbered 743A.070 in 2007]
[1991 c.916 3; 1993 c.18 157; 1993 c.615 25; 1993 c.649 8; 1993 c.744 31; 1995 c.603 1,36; 1997 c.716 1,2; 1999 c.547 8; 1999 c.987 6; 2001 c.943 6; 2003 c.364 112; 2005 c.744 38; 2007 c.389 1; 2009 c.595 1135; 2011 c.500 7,49; 2012 c.38 20; 2013 c.681 17,59; 2013 c.698 20; 2015 c.3 50,51; 2015 c.515 8,9; renumbered 743B.005 in 2015]
[1991 c.916 2; 1993 c.18 158; 1993 c.649 11; 1995 c.603 2; 1997 c.716 4; 2011 c.500 8; 2013 c.681 18; 2015 c.515 11; renumbered 743B.003 in 2015]
[Formerly 747.080; renumbered 742.350 in 1989]
[1991 c.916 4; 1993 c.18 159; 1995 c.603 3; 1999 c.987 7; 2007 c.389 4; subsection (3) of 2007 Edition enacted as 2007 c.389 3; 2011 c.500 9; 2013 c.681 19; 2015 c.3 52; renumbered 743B.010 in 2015]
[1991 c.916 5; 1993 c.18 160; 1995 c.603 4; 1997 c.716 5; 1999 c.987 8; 2007 c.389 5; 2007 c.752 4,9; 2010 c.81 1,2,3; 2011 c.500 12,13; 2013 c.681 20; 2015 c.515 12; renumbered 743B.011 in 2015]
[Formerly 747.100; 1973 c.823 151; renumbered 742.352 in 1989]
[1991 c.916 6; 1993 c.649 12; 1995 c.603 5; 1997 c.716 6; 1999 c.987 9; 2011 c.500 14; 2013 c.681 21; 2015 c.515 13; renumbered 743B.012 in 2015]
[1991 c.916 7; 1993 c.18 161; 1993 c.649 10; 1995 c.603 6,37; 1997 c.716 7,8; 1999 c.987 10; 2001 c.943 12; 2003 c.364 113; 2003 c.599 4,6; 2003 c.748 5; 2007 c.389 6,7; 2007 c.391 2; 2009 c.595 1136; 2011 c.500 15; 2013 c.681 22; 2015 c.515 14; renumbered 743B.013 in 2015]
[Formerly 747.110; renumbered 742.354 in 1989]
[Formerly 747.130; renumbered 742.356 in 1989]
[Formerly 747.140; renumbered 742.358 in 1989]
[1991 c.916 12; 1993 c.18 164; 1995 c.603 10,38; 1999 c.987 11; 2003 c.364 114; 2011 c.500 16; 2013 c.681 23; 2015 c.515 15; renumbered 743B.100 in 2015]
[Formerly 747.150; renumbered 742.360 in 1989]
[2005 c.765 2; 2007 c.752 5,10; 2011 c.500 17,18; 2013 c.681 24; 2013 c.698 21,38; renumbered 743.004 in 2015]
[1997 c.716 20; renumbered 743B.102 in 2015]
[1967 c.359 516; renumbered 742.362 in 1989]
[1995 c.603 15; 1997 c.716 10; 2011 c.500 19; 2013 c.681 25; 2015 c.515 18; renumbered 743B.103 in 2015]
[1995 c.603 16; 1997 c.716 11; 1999 c.987 12; 2013 c.681 26; renumbered 743B.104 in 2015]
[Formerly 747.170; 1969 c.526 2; renumbered 742.364 in 1989]
[1995 c.603 17; 1995 c.603 40; 1997 c.716 12,13; 1999 c.987 13; 2001 c.943 13; 2003 c.748 6; 2011 c.500 20; 2013 c.681 27; 2015 c.515 19; renumbered 743B.105 in 2015]
[1969 c.526 1; renumbered 742.366 in 1989]
[Formerly 747.180; renumbered 742.368 in 1989]
[2005 c.571 2; 2013 c.681 60; renumbered 743.535 in 2015]
[1997 c.716 21; 2011 c.500 21; renumbered 743B.110 in 2015]
[Formerly 747.190; renumbered 742.370 in 1989]
[Formerly 747.082; 1989 c.634 1; renumbered 742.372 in 1989]
[1995 c.603 20; 1997 c.716 26; renumbered 735.616 in 1997]
[2011 c.500 2; renumbered 743B.120 in 2015]
[Formerly 747.084; 1989 c.634 2; renumbered 742.374 in 1989]
[1995 c.603 22,41; 1997 c.716 15,16; 1999 c.987 15; 2001 c.943 14; 2003 c.748 7; 2011 c.500 24; 2012 c.24 4; 2013 c.681 28; 2013 c.698 22; 2015 c.515 20,21; renumbered 743B.125 in 2015]
[1995 c.603 23; 1999 c.987 16; 2011 c.500 25; 2013 c.681 29; 2013 c.698 23; renumbered 743.022 in 2015]
[Formerly 747.086; 1983 c.338 964; 1989 c.634 3; renumbered 742.376 in 1989]
[1995 c.603 24; 1999 c.987 17; 2003 c.364 116; 2003 c.590 1,3; 2013 c.681 61; 2013 c.698 39; 2015 c.515 22,22a; renumbered 743B.126 in 2015]
[Formerly 743.780; 1987 c.774 60; renumbered 742.400 in 1989]
[1987 c.774 151; renumbered 742.405 in 1989]
[Formerly 743.783; renumbered 742.031 in 1989]
[1995 c.603 25; renumbered 743B.127 in 2015]
[Formerly 486.097; renumbered 806.190 in 1987]
[Formerly 486.541; renumbered 742.450 in 1989]
[2010 c.75 2 to 5; 2011 c.500 45; 2013 c.1 93; 2013 c.160 1; 2013 c.681 30; renumbered 743.023 in 2015]
[Formerly 486.546; renumbered 742.454 in 1989]
[Formerly 486.551; 1989 c.700 14; renumbered 742.456 in 1989]
[1975 c.796 10; 1977 c.448 12; 1985 c.103 14; 1985 c.323 10; 1985 c.624 17a; renumbered 743.770; renumbered 742.400 in 1989]
[Formerly 486.556; 1989 c.700 15; renumbered 742.458 in 1989]
[Formerly 486.561; 1989 c.700 16; renumbered 742.460 in 1989]
[Formerly 736.320; renumbered 743.772; renumbered 742.031 in 1989]
[Formerly 486.564; 1989 c.700 17; renumbered 742.462 in 1989]
[Formerly 486.566; renumbered 742.464 in 1989]
[1967 c.482 1; 1971 c.523 11; 1979 c.842 7; 1983 c.338 965; renumbered 742.500 in 1989]
As used in ORS 743.788: (1) "Carrier" has the meaning given that term in ORS 743B.005. (2) "Enrollee" has the meaning given that term in ORS 743B.005. (3) "Health benefit plan" has the meaning given that term in ORS 743B.005. [2001 c.549 2]
(1) A carrier that provides coverage for prescription drugs provided on an outpatient basis and issues a card or other technology for claims processing, or an administrator of a health benefit plan including, but not limited to, a third party administrator for a self-insured plan, a pharmacy benefits manager and an administrator of a state administered plan, shall issue to an enrollee a prescription drug identification card or other technology that contains all information required for proper claims adjudication. (2) Upon renewal of a health benefit plan, a carrier or administrator shall issue a prescription drug identification card or other technology containing all current information required for proper claims adjudication. (3) A carrier or administrator of a health benefit plan is not required to issue a prescription drug identification card or other technology separate from another identification card or technology issued to an enrollee under the health benefit plan if the identification card or technology contains all of the information required for proper claims adjudication. [2001 c.549 3]
[1967 c.482 2; 1975 c.390 1; 1981 c.586 1; 1983 c.338 966; 1987 c.632 1; renumbered 742.502 in 1989]
The Director of the Department of Consumer and Business Services may adopt rules to implement ORS 743.788 and may consider any relevant standards developed by a standards development organization accredited by the American National Standards Institute that represents organizations interested in electronic standardization with the pharmacy services sector of the health care industry and the requirements of the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191. [2001 c.549 4]
[2005 c.482 2; renumbered 743A.108 in 2007]
[1967 c.482 3; 1977 c.600 3; 1979 c.842 8; 1983 c.338 967; renumbered 742.504 in 1989]
[2003 c.91 4; renumbered 743A.064 in 2007]
[2005 c.477 2; renumbered 743A.120 in 2007]
[1979 c.842 10; renumbered 742.506 in 1989]
[1987 c.742 3; renumbered 742.508 in 1989]
[1987 c.742 2; renumbered 742.510 in 1989]
[2005 c.628 2; renumbered 743A.050 in 2007]
[2005 c.765 6; renumbered 743A.124 in 2007]
[1971 c.523 2; 1973 c.551 1; 1975 c.784 1; 1979 c.871 45; 1981 c.414 1; 1983 c.338 968; 1987 c.588 1; renumbered 742.520 in 1989]
[1995 c.672 1; 1997 c.343 18; 2001 c.266 1; 2001 c.747 5; 2003 c.87 21; 2003 c.137 3,4; 2005 c.418 2; 2009 c.806 3; 2009 c.807 4; 2011 c.500 26; 2012 c.24 5; 2013 c.596 3; 2013 c.681 61a; 2015 c.59 3,4; 2015 c.218 2,3; 2015 c.470 4,5; renumbered 743B.001 in 2015]
[1987 c.588 5; renumbered 742.522 in 1989]
[1995 c.672 2; 1997 c.343 19; 1997 c.759 4; 1999 c.271 1; 2001 c.266 4; 2013 c.129 19; renumbered 743B.405 in 2015]
[1997 c.343 3; 2001 c.266 15; 2003 c.87 22; 2011 c.500 27; 2012 c.24 6; 2013 c.681 37; 2015 c.59 5; 2015 c.218 4; 2015 c.470 6; renumbered 743B.250 in 2015]
[1971 c.523 3; 1973 c.551 2; 1975 c.784 2; 1981 c.414 2; 1987 c.588 2; 1989 c.775 1; renumbered 742.524 in 1989]
[1995 c.672 6; 1997 c.343 20; 2011 c.500 28; 2012 c.24 7; renumbered 743B.422 in 2015]
[1997 c.343 4; 2011 c.500 29; renumbered 743B.423 in 2015]
[1995 c.672 4; 1997 c.343 1; 1999 c.987 19; renumbered 743B.220 in 2015]
[1971 c.523 4; 1973 c.551 4; 1975 c.784 3; renumbered 742.526 in 1989]
[1995 c.672 7a; 2001 c.104 290; 2003 c.87 23; renumbered 743B.424 in 2015]
[1987 c.588 4; renumbered 742.528 in 1989]
[1995 c.669 2; renumbered 743.845 in 1997]
[1997 c.343 5; 2003 c.14 450; renumbered 743B.200 in 2015]
[1971 c.523 5; 1973 c.551 3; 1975 c.784 4; 1981 c.414 3; renumbered 742.530 in 1989]
[1995 c.506 2; renumbered 743.847 in 1997]
[1997 c.343 6; 2001 c.266 6; renumbered 743B.202 in 2015]
[2009 c.595 1195; 2015 c.515 23; renumbered 743.007 in 2015]
[1997 c.343 11; renumbered 743.008 in 2015]
[1971 c.523 6; 1975 c.784 5; 1981 c.414 4; renumbered 742.532 in 1989]
[1997 c.343 7; renumbered 743B.204 in 2015]
[2011 c.322 2,3; 2012 c.24 8; 2012 c.38 21; 2013 c.681 31; 2015 c.3 53; renumbered 743B.130 in 2015]
[1997 c.343 8; renumbered 743B.195 in 2015]
(1) As used in this section, "healthy behaviors" means participating in constructive behaviors that encourage fitness, healthy eating and other activities that are beneficial to good health. (2) An insurer offering a health benefit plan, as defined in ORS 743B.005, may pay cash dividends to enrollees in the plan who participate in a program approved by the insurer that promotes healthy behaviors. (3) Dividends paid pursuant to this section are not premium variations for the purposes of ORS 743.022. [2009 c.461 2] Note: 743.824 and 743.826 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 743 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[1971 c.523 7; 1975 c.784 6; 1987 c.569 4; 1987 c.632 2; renumbered 742.534 in 1989]
(1) As used in this section: (a) "Catastrophic plan" means a health benefit plan that meets the requirements for a catastrophic plan under 42 U.S.C. 18022(e). (b) "Minimum essential coverage" has the meaning given that term in section 5000A(f) of the Internal Revenue Code. (2) A carrier may offer a catastrophic plan only to an individual who: (a) Is under 30 years of age at the beginning of the plan year; or (b) Is exempt from any state or federal penalties imposed for failing to maintain minimum essential coverage during the plan year. [2011 c.322 4; 2012 c.38 22; 2015 c.3 54; 2015 c.515 24] Note: See note under 743.824.
[1997 c.343 10; 2003 c.87 24; 2003 c.137 5; 2005 c.418 3; renumbered 743B.197 in 2015]
[1975 c.784 8; renumbered 742.536 in 1989]
[1997 c.343 12; renumbered 743B.400 in 2015]
[1971 c.523 8; 1975 c.784 9; renumbered 742.538 in 1989]
[1997 c.343 13; 2009 c.595 1137; 2015 c.318 46; renumbered 743B.206 in 2015]
[1975 c.784 12; renumbered 742.540 in 1989]
[1997 c.343 15; renumbered 743B.403 in 2015]
[1971 c.523 9; 1975 c.784 10; 1987 c.632 3; renumbered 742.542 in 1989]
[1997 c.343 16; renumbered 743B.420 in 2015]
[1997 c.343 17; 2003 c.137 6; 2005 c.418 4; renumbered 743B.550 in 2015]
[1985 c.527 2; renumbered 742.466 in 1989]
[1999 c.749 2; renumbered 743A.250 in 2013]
[Formerly 743.813; 1999 c.607 1; 2001 c.104 291; 2011 c.500 30; renumbered 743B.222 in 2015]
[Formerly 743.816; 2007 c.484 2; 2011 c.602 58; 2015 c.792 13; renumbered 743B.470 in 2015]
[1981 c.752 1; 1983 c.817 1; 1987 c.505 1; renumbered 743.610 in 1989]
[1987 c.505 3; renumbered 743.600 in 1989]
[1987 c.505 3a,4; 1989 c.784 22; renumbered 743.601 in 1989]
[1987 c.505 5; renumbered 743.602 in 1989]
[2001 c.266 3; renumbered 743B.225 in 2015]
[1981 c.752 2; renumbered 743.611 in 1989]
[2001 c.266 5; renumbered 743B.227 in 2015]
[2001 c.266 8; 2011 c.500 31; renumbered 743B.252 in 2015]
[2001 c.266 9; renumbered 743B.253 in 2015]
[2001 c.266 10; 2011 c.500 32; renumbered 743B.254 in 2015]
[1981 c.752 3; renumbered 743.613 in 1989]
[2001 c.266 11; 2011 c.500 33; renumbered 743B.255 in 2015]
[2001 c.266 12; 2011 c.500 34; renumbered 743B.256 in 2015]
[2001 c.266 13; 2011 c.500 35; renumbered 743B.257 in 2015]
[2001 c.266 14; 2011 c.500 36; renumbered 743B.258 in 2015]
[1981 c.752 4; renumbered 743.614 in 1989]
[2001 c.747 2; renumbered 743.911 in 2007]
[2001 c.747 3; renumbered 743.913 in 2007]
[1981 c.752 5; renumbered 743.616 in 1989]
[2007 c.390 1; renumbered 743B.280 in 2015]
[2007 c.390 2; renumbered 743B.281 in 2015]
[1981 c.752 6; renumbered 743.617 in 1989]
[2007 c.390 3; renumbered 743B.282 in 2015]
[2007 c.390 4; 2011 c.500 37; renumbered 743B.283 in 2015]
[1981 c.752 7; renumbered 743.619 in 1989]
[2007 c.390 5; renumbered 743B.284 in 2015]
[1981 c.752 8; renumbered 743.620 in 1989]
[1981 c.752 9; renumbered 743.622 in 1989]
[2007 c.390 6; renumbered 743B.285 in 2015]
[2011 c.500 4; 2013 c.681 32; renumbered 743B.310 in 2015]
[1971 c.476 2; 1975 c.570 1; renumbered 742.560 in 1989]
[1971 c.476 3; renumbered 742.562 in 1989]
[1971 c.476 4; 1977 c.600 7; 1989 c.426 3; renumbered 742.564 in 1989]
[Formerly 743.866; 2015 c.218 1; 2015 c.515 25; renumbered 743B.450 in 2015]
[2009 c.807 2; 2011 c.660 21; renumbered 743B.451 in 2015]
[Formerly 743.868; renumbered 743B.452 in 2015]
[1975 c.570 3 (enacted in lieu of 743.915); 1977 c.600 8; 1989 c.426 4; renumbered 742.566 in 1989]
[2009 c.807 3; 2011 c.660 22; renumbered 743B.453 in 2015]
[2009 c.806 2; renumbered 743B.454 in 2015]
[1971 c.476 6; renumbered 742.568 in 1989]
[2013 c.681 3; renumbered 743B.800 in 2015]
[1971 c.476 7; renumbered 742.570 in 1989]
[1971 c.476 8; 1977 c.600 4; renumbered 742.572 in 1989]
[1987 c.774 36; renumbered 742.700 in 1989]
[1987 c.774 37; renumbered 742.702 in 1989]
[1987 c.774 38; renumbered 742.704 in 1989]
[1987 c.774 39,40; 1989 c.700 18; renumbered 742.706 in 1989]
[1987 c.774 41; renumbered 742.708 in 1989]
[1987 c.774 42; 1989 c.181 1; renumbered 742.710 in 1989]
(1) Except as provided in subsection (4) of this section, any statute described in subsection (2) of this section that becomes effective on or after July 13, 1985, is repealed on the sixth anniversary of the effective date of the statute, unless the Legislative Assembly specifically provides otherwise. (2) This section governs any statute that applies to individual or group health insurance policies and does any of the following: (a) Requires the insurer to include coverage for specific physical or mental conditions or specific hospital, medical, surgical or dental health services. (b) Requires the insurer to include coverage for specified persons. (c) Requires the insurer to provide payment or reimbursement to specified providers of services if the services are within the lawful scope of practice of the provider and the insurance policy provides payment or reimbursement for those services. (d) Requires the insurer to provide any specific coverage on a nondiscriminatory basis. (e) Forbids the insurer to exclude from payment or reimbursement any covered services. (f) Forbids the insurer to exclude coverage of a person because of that persons medical history. (3) A repeal of a statute under subsection (1) of this section does not apply to any insurance policy in effect on the effective date of the repeal. However, the repeal of the statute applies to a renewal or extension of an existing insurance policy on or after the effective date of the repealer as well as to a new policy issued on or after the effective date of the repealer. (4) This section does not apply to ORS 743A.020, 743A.080, 743A.100, 743A.104 and 743A.108. [Formerly 743.700]
No policy of health insurance shall exclude from payment or reimbursement losses incurred by an insured for any covered service because the service was rendered at any hospital owned or operated by the State of Oregon or any state approved community mental health program or community developmental disabilities program. [Formerly 743.701; 2011 c.720 221]
(1) As used in this section: (a) "Behavioral health assessment" means an evaluation by a behavioral health clinician, in person or using telemedicine, to determine a patients need for immediate crisis stabilization. (b) "Behavioral health clinician" means: (A) A licensed psychiatrist; (B) A licensed psychologist; (C) A licensed nurse practitioner with a specialty in psychiatric mental health; (D) A licensed clinical social worker; (E) A licensed professional counselor or licensed marriage and family therapist; (F) A certified clinical social work associate; (G) An intern or resident who is working under a board-approved supervisory contract in a clinical mental health field; or (H) Any other clinician whose authorized scope of practice includes mental health diagnosis and treatment. (c) "Behavioral health crisis" means a disruption in an individuals mental or emotional stability or functioning resulting in an urgent need for immediate outpatient treatment in an emergency department or admission to a hospital to prevent a serious deterioration in the individuals mental or physical health. (d) "Emergency medical condition" means a medical condition: (A) That manifests itself by acute symptoms of sufficient severity, including severe pain, that a prudent layperson possessing an average knowledge of health and medicine would reasonably expect that failure to receive immediate medical attention would: (i) Place the health of a person, or an unborn child in the case of a pregnant woman, in serious jeopardy; (ii) Result in serious impairment to bodily functions; or (iii) Result in serious dysfunction of any bodily organ or part; (B) With respect to a pregnant woman who is having contractions, for which there is inadequate time to effect a safe transfer to another hospital before delivery or for which a transfer may pose a threat to the health or safety of the woman or the unborn child; or (C) That is a behavioral health crisis. (e) "Emergency medical screening exam" means the medical history, examination, ancillary tests and medical determinations required to ascertain the nature and extent of an emergency medical condition. (f) "Emergency medical service provider" has the meaning given that term in ORS 682.025. (g) "Emergency medical services transport" means an emergency medical services providers evaluation and stabilization of an individual experiencing a medical emergency and the transportation of the individual to the nearest medical facility capable of meeting the needs of the individual. (h) "Emergency services" means, with respect to an emergency medical condition: (A) An emergency medical services transport; (B) An emergency medical screening exam or behavioral health assessment that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency medical condition; and (C) Such further medical examination and treatment as are required under 42 U.S.C. 1395dd to stabilize a patient, to the extent the examination and treatment are within the capability of the staff and facilities available at a hospital. (i) "Grandfathered health plan" has the meaning given that term in ORS 743B.005. (j) "Health benefit plan" has the meaning given that term in ORS 743B.005. (k) "Prior authorization" has the meaning given that term in ORS 743B.001. (L) "Stabilize" means to provide medical treatment as necessary to: (A) Ensure that, within reasonable medical probability, no material deterioration of an emergency medical condition is likely to occur during or to result from the transfer of the patient to or from a facility; and (B) With respect to a pregnant woman who is in active labor, to perform the delivery, including the delivery of the placenta. (2) All insurers offering a health benefit plan shall provide coverage without prior authorization for emergency services. (3) A health benefit plan, other than a grandfathered health plan, must provide coverage required by subsection (2) of this section: (a) For the services of participating providers, without regard to any term or condition of coverage other than: (A) The coordination of benefits; (B) An affiliation period or waiting period permitted under part 7 of the Employee Retirement Income Security Act, part A of Title XXVII of the Public Health Service Act or chapter 100 of the Internal Revenue Code; (C) An exclusion other than an exclusion of emergency services; or (D) Applicable cost-sharing; and (b) For the services of a nonparticipating provider: (A) Without imposing any administrative requirement or limitation on coverage that is more restrictive than requirements or limitations that apply to participating providers; (B) Without imposing a copayment amount or coinsurance rate that exceeds the amount or rate for participating providers; (C) Without imposing a deductible, unless the deductible applies generally to nonparticipating providers; and (D) Subject only to an out-of-pocket maximum that applies to all services from nonparticipating providers. (4) All insurers offering a health benefit plan shall provide information to enrollees in plain language regarding: (a) What constitutes an emergency medical condition; (b) The coverage provided for emergency services; (c) How and where to obtain emergency services; and (d) The appropriate use of 9-1-1. (5) An insurer offering a health benefit plan may not discourage appropriate use of 9-1-1 and may not deny coverage for emergency services when 9-1-1 is used. (6) This section is exempt from ORS 743A.001. [Formerly 743.699; 2011 c.500 38; 2017 c.273 4; 2019 c.358 41; 2021 c.312 1]
(1) As used in this section, "health benefit plan" has the meaning given that term in ORS 743B.005. (2) Notwithstanding ORS 743.543, with respect to a health benefit plan or a Medicare supplement insurance policy that provides coverage for ambulance care and transportation, the insurer shall indemnify directly the provider of the ambulance care and transportation. [Formerly 743.718; 2013 c.91 1; 2015 c.588 4] Note: See 743A.001.
(1) As used in this section: (a) "Health benefit plan" has the meaning given that term in ORS 743B.005. (b) "Osteopathic physician" means a person who holds a degree of Doctor of Osteopathic Medicine and is licensed under ORS 677.100 to 677.228. (2) An insurer that offers a health benefit plan that reimburses the cost of an osteopathic manipulative treatment provided by an osteopathic physician shall reimburse the cost of the evaluation conducted by the osteopathic physician that resulted in the osteopathic manipulative treatment. (3) An insurer may not deny reimbursement for an osteopathic manipulative treatment or an evaluation described in subsection (2) of this section on the basis that the evaluation is conducted on the same date that the osteopathic manipulative treatment is provided. [2018 c.31 2] Note: See 743A.001. Note: 743A.018 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) An individual or group health insurance policy that provides coverage for acupuncture services performed by a physician shall provide coverage for acupuncture services performed by an acupuncturist licensed under ORS 677.757 to 677.770. (2) The coverage required by subsection (1) of this section may be made subject to provisions of the policy that apply to other benefits under the policy, including, but not limited to, provisions related to deductibles and coinsurance and shall be computed in the same manner whether performed by a physician or an acupuncturist. (3) Subsection (1) of this section does not require group practice health maintenance organizations that are federally qualified pursuant to Title XIII subchapter XI of the Public Health Service Act (42 U.S.C. 300e et seq.) to employ acupuncturists licensed under ORS 677.757 to 677.770. (4) This section also applies to health care service contractors, as defined in ORS 750.005, and trusts carrying out multiple employer welfare arrangements, as defined in ORS 750.301. [2007 c.313 2] Note: 743A.020 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Whenever any individual or group health insurance policy or blanket health insurance policy described in ORS 743.536 (3) provides for payment or reimbursement for any service within the lawful scope of service of a clinical social worker licensed under ORS 675.530: (1) The insured under the policy shall be entitled to the services of a clinical social worker licensed under ORS 675.530, upon referral by a physician or psychologist. (2) The insured under the policy shall be entitled to have payment or reimbursement made to the insured or on behalf of the insured for the services performed. The payment or reimbursement shall be in accordance with the benefits provided in the policy and shall be computed in the same manner whether performed by a physician, by a psychologist or by a clinical social worker, according to the customary and usual fee of clinical social workers in the area served. [Formerly 743.714; 2009 c.442 46]
Notwithstanding any provisions of any policy of insurance covering dental health, whenever such policy provides for reimbursement for any service that is within the lawful scope of practice of a denturist, the insured under such policy shall be entitled to reimbursement for such service, whether the service is performed by a licensed dentist or a licensed denturist as defined in ORS 680.500. [Formerly 743.713] Note: 743A.028 was added to and made a part of the Insurance Code by law but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Notwithstanding any provision of a policy of health insurance, whenever the policy provides for payment of a surgical service, the performance for the insured of such surgical service by any dentist acting within the scope of the dentists license is compensable if performance of that service by a physician acting within the scope of the physicians license would be compensable. [Formerly 743.719]
(1) If a policy of insurance covering dental health provides for coverage for services performed by a dentist licensed under ORS chapter 679, the policy must also cover the services when they are performed by an expanded practice dental hygienist, as defined in ORS 679.010, who has entered into a provider contract with the insurer. (2) The provisions of ORS 743A.001 do not apply to this section. [2011 c.716 11] Note: 743A.034 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Whenever any policy of health insurance provides for reimbursement for a primary care or mental health service provided by a licensed physician, the insured under the policy is entitled to reimbursement for such service if provided by a licensed physician assistant or a licensed nurse practitioner if the service is within the lawful scope of practice of the physician assistant or nurse practitioner. (2)(a) The reimbursement of a service described in subsection (1) of this section that is provided by a licensed physician assistant or a licensed nurse practitioner who is in an independent practice shall be in the same amount as the reimbursement paid under the policy to a licensed physician performing the service in the area served. (b) As used in this subsection, "independent practice" means the licensed physician assistant or the licensed nurse practitioner bills insurers for services provided by the physician assistant or nurse practitioner using the: (A) Diagnosis and procedure codes applicable to the services; (B) Physician assistants or nurse practitioners own name; and (C) National provider identifier for: (i) The physician assistant or nurse practitioner; and (ii) If required by the insurer, the facility in which the physician assistant or nurse practitioner provides the services. (3) This section does not apply to group practice health maintenance organizations that are federally qualified pursuant to Title XIII of the Health Maintenance Organization Act or other insurers that employ physicians, licensed physician assistants or licensed nurse practitioners to provide primary care or mental health services and do not compensate such practitioners on a fee-for-service basis. (4) An insurer may not reduce the reimbursement paid to a licensed physician in order to comply with this section. [Formerly 743.712; 2013 c.430 1,4; 2015 c.377 1; 2016 c.54 1; 2019 c.358 42]
Notwithstanding any provision of any policy of health insurance, whenever the policy provides for payment or reimbursement for a service that is within the lawful scope of practice of a licensed optometrist, the insurer shall provide payment or reimbursement for the service, whether the service is performed by a physician or a licensed optometrist. Unless the policy provides otherwise, there shall be no reimbursement for ophthalmic materials, lenses, spectacles, eyeglasses or appurtenances thereto. [Formerly 743.703]
(1) An insurer may not refuse a claim solely on the ground that the claim was submitted by a physician assistant rather than by a supervising physician for the physician assistant. (2) This section is exempt from ORS 743A.001. [Formerly 743.725; 2010 c.43 9] Note: The amendments to 743A.044 by section 17, chapter 349, Oregon Laws 2021, become operative July 15, 2022, and apply to claims submitted on and after July 15, 2022. See sections 18 and 21, chapter 349, Oregon Laws 2021. The text that is operative on and after July 15, 2022, is set forth for the users convenience. (1) An insurer may not refuse a claim solely on the ground that the claim was submitted by a physician assistant rather than by a physician, podiatric physician or employer with whom the physician assistant has entered into a collaboration agreement, as defined in ORS 677.495. (2) This section is exempt from ORS 743A.001.
Whenever any provision of any individual or group health insurance policy or contract provides for payment or reimbursement for any service which is within the lawful scope of a psychologist licensed under ORS 675.010 to 675.150: (1) The insured under such policy or contract shall be free to select, and shall have direct access to, a psychologist licensed under ORS 675.010 to 675.150, without supervision or referral by a physician or another health practitioner, and wherever such psychologist is authorized to practice. (2) The insured under such policy or contract shall be entitled to have payment or reimbursement made to the insured or on the insureds behalf for the services performed. Such payment or reimbursement shall be in accordance with the benefits provided in the policy and shall be the same whether performed by a physician or a psychologist licensed under ORS 675.010 to 675.150. [Formerly 743.709]
Notwithstanding any provisions of a health benefit plan as defined in ORS 743B.005, whenever the plan provides for payment or reimbursement for a service that is within the lawful scope of practice of a pharmacist, the insurer: (1) May provide payment or reimbursement for the service when the service is provided by a pharmacist; and (2) Shall provide, in the same manner as would be provided for any other health care provider, payment or reimbursement for: (a)(A) The prescription of emergency refills of insulin and associated insulin-related devices and supplies as described in ORS 689.696; and (B) The service provided by the pharmacist; (b)(A) The prescription, dispensation and administration of preexposure and post-exposure prophylactic antiretroviral therapies pursuant to ORS 689.704 and any rules adopted by the State Board of Pharmacy under ORS 689.645 and 689.704; and (B) The service provided by the pharmacist; and (c)(A) The prescription and dispensation of other prescription drugs by a licensed pharmacist if the State Board of Pharmacy or any state law authorizes the drug to be prescribed and dispensed by pharmacists licensed under ORS chapter 689; and (B) The service provided by the pharmacist. (3) This section is exempt from ORS 743A.001. [2015 c.362 8; 2019 c.95 5; 2021 c.365 4] Note: 743A.051 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) If a group health benefit plan, as described in ORS 743B.005, provides for coverage for services performed by a clinical social worker or nurse practitioner, the plan also must cover services provided by a professional counselor or marriage and family therapist licensed under ORS 675.715 to 675.835 when the counselor or therapist is acting within the counselors or therapists lawful scope of practice. (2) Health maintenance organizations may limit the receipt of covered services performed by professional counselors and marriage and family therapists to services provided by or upon referral by providers contracting with the health maintenance organization. Health maintenance organizations and health care service contractors may create substantive plan benefit and reimbursement differentials at the same level as, and subject to limitations not more restrictive than, those imposed on coverage or reimbursement of expenses arising out of other medical conditions and apply them to contracting and noncontracting providers. (3) The provisions of ORS 743A.001 do not apply to this section. [2009 c.549 2] Note: 743A.052 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a)(A) "Audio only" means the use of audio telephone technology, permitting real-time communication between a health care provider and a patient for the purpose of diagnosis, consultation or treatment. (B) "Audio only" does not include: (i) The use of facsimile, electronic mail or text messages. (ii) The delivery of health services that are customarily delivered by audio telephone technology and customarily not billed as separate services by a health care provider, such as the sharing of laboratory results. (b) "Health benefit plan" has the meaning given that term in ORS 743B.005. (c) "Health professional" means a person licensed, certified or registered in this state to provide health care services or supplies. (d) "Health service" means physical, oral and behavioral health treatment or service provided by a health professional. (e) "Originating site" means the physical location of the patient. (f) "State of emergency" includes: (A) A state of emergency declared by the Governor under ORS 401.165; or (B) A state of public health emergency declared by the Governor under ORS 433.441. (g) "Telemedicine" means the mode of delivering health services using information and telecommunication technologies to provide consultation and education or to facilitate diagnosis, treatment, care management or self-management of a patients health care. (2) A health benefit plan and a dental-only plan must provide coverage of a health service that is provided using telemedicine if: (a) The plan provides coverage of the health service when provided in person by a health professional; (b) The health service is medically necessary; (c) The health service is determined to be safely and effectively provided using telemedicine according to generally accepted health care practices and standards; and (d) The application and technology used to provide the health service meet all standards required by state and federal laws governing the privacy and security of protected health information. (3) Except as provided in subsection (4) of this section, permissible telemedicine applications and technologies include: (a) Landlines, wireless communications, the Internet and telephone networks; and (b) Synchronous or asynchronous transmissions using audio only, video only, audio and video and transmission of data from remote monitoring devices. (4) During a state of emergency, a health benefit plan or dental-only plan shall provide coverage of a telemedicine service delivered to an enrollee residing in the geographic area specified in the declaration of the state of emergency, if the telemedicine service is delivered using any commonly available technology, regardless of whether the technology meets all standards required by state and federal laws governing the privacy and security of protected health information. (5) A health benefit plan and a dental-only plan may not: (a) Distinguish between rural and urban originating sites in providing coverage under subsection (2) of this section or restrict originating sites that qualify for reimbursement. (b) Restrict a health care provider to delivering services only in person or only via telemedicine. (c) Use telemedicine health care providers to meet network adequacy standards under ORS 743B.505. (d) Require an enrollee to have an established patient-provider relationship with a provider to receive telemedicine health services from the provider or require an enrollee to consent to telemedicine services in person. (e) Impose additional certification, location or training requirements for telemedicine providers or restrict the scope of services that may be provided using telemedicine to less than a providers permissible scope of practice. (f) Impose more restrictive requirements for telemedicine applications and technologies than those specified in subsection (3) of this section. (g) Impose on telemedicine health services different annual dollar maximums or prior authorization requirements than the annual dollar maximums and prior authorization requirements imposed on the services if provided in person. (h) Require a medical assistant or other health professional to be present with an enrollee at the originating site. (i) Deny an enrollee the choice to receive a health service in person or via telemedicine. (j) Reimburse an out-of-network provider at a rate for telemedicine health services that is different than the reimbursement paid to the out-of-network provider for health services delivered in person. (k) Restrict a provider from providing telemedicine services across state lines if the services are within the providers scope of practice and: (A) The provider has an established practice within this state; (B) The providers employer operates health clinics or licensed health care facilities in this state; (C) The provider has an established relationship with the patient; or (D) The patient was referred to the provider by the patients primary care or specialty provider located in this state. (L) Prevent a provider from prescribing, dispensing or administering drugs or medical supplies or otherwise providing treatment recommendations to an enrollee after having performed an appropriate examination of the enrollee in person, through telemedicine or by the use of instrumentation and diagnostic equipment through which images and medical records may be transmitted electronically. (m) Establish standards for determining medical necessity for services delivered using telemedicine that are higher than standards for determining medical necessity for services delivered in person. (6) A health benefit plan and a dental-only plan shall: (a) Work with contracted providers to ensure meaningful access to telemedicine services by assessing an enrollees capacity to use telemedicine technologies that comply with accessibility standards, including alternate formats, and providing the optimal quality of care for the enrollee given the enrollees capacity; (b) Ensure access to auxiliary aids and services to ensure that telemedicine services accommodate the needs of enrollees who have difficulty communicating due to a medical condition, who need an accommodation due to disability or advanced age or who have limited English proficiency; (c) Ensure access to telemedicine services for enrollees who have limited English proficiency or who are deaf or hard-of-hearing by providing interpreter services reimbursed at the same rate as interpreter services provided in person; and (d) Ensure that telemedicine services are culturally and linguistically appropriate and trauma-informed. (7) The coverage under subsection (2) of this section is subject to: (a) The terms and conditions of the health benefit plan or dental-only plan; and (b) Subject to subsection (8) of this section, the reimbursement specified in the contract between the plan and the health professional. (8)(a) A health benefit plan and dental-only plan must pay the same reimbursement for a health service regardless of whether the service is provided in person or using any permissible telemedicine application or technology. (b) Paragraph (a) of this subsection does not prohibit the use of value-based payment methods, including capitated, bundled, risk-based or other value-based payment methods, and does not require that any value-based payment method reimburse telemedicine health services based on an equivalent fee-for-service rate. (9) This section does not require a health benefit plan or dental-only plan to reimburse a health professional: (a) For a health service that is not a covered benefit under the plan; (b) Who has not contracted with the plan; or (c) For a service that is not included within the Healthcare Procedure Coding System or the American Medical Associations Current Procedural Terminology codes or related modifier codes. (10) This section is exempt from ORS 743A.001. [2009 c.384 2; 2015 c.340 1; 2017 c.309 5; 2021 c.117 3] Note: 743A.058 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation. Note: Section 4, chapter 117, Oregon Laws 2021, provides: Sec. 4. No later than March 1, 2023, the Department of Consumer and Business Services shall report to the interim committees of the Legislative Assembly related to health on the impact of the reimbursement specified in ORS 743A.058 (8) on the cost of health insurance premiums in this state. [2021 c.117 4]
As used in ORS 743A.062, "peer-reviewed medical literature" means scientific studies printed in journals or other publications that publish original manuscripts only after the manuscripts have been critically reviewed by unbiased independent experts for scientific accuracy, validity and reliability. "Peer-reviewed medical literature" does not include internal publications of pharmaceutical manufacturers. [Formerly 743.695]
(1) As used in this section, "medical assistance program" means the state program that provides medical assistance as defined in ORS 414.025. (2) An insurance policy or contract providing coverage for a prescription drug to a resident of this state may not: (a) Exclude coverage of the drug for a particular indication solely on the grounds that the indication has not been approved by the United States Food and Drug Administration if the Health Evidence Review Commission established under ORS 414.688 or the Pharmacy and Therapeutics Committee established under ORS 414.353 determines that the drug is recognized as effective for the treatment of that indication: (A) In publications that the commission or the committee determines to be equivalent to: (i) The American Hospital Formulary Service drug information; (ii) "Drug Facts and Comparisons" (Lippincott-Raven Publishers); (iii) The United States Pharmacopoeia drug information; or (iv) Other publications that have been identified by the United States Secretary of Health and Human Services as authoritative; (B) In the majority of relevant peer-reviewed medical literature; or (C) By the United States Secretary of Health and Human Services; or (b) For an insured who is enrolled in the medical assistance program: (A) Except as provided in subsection (3) of this section, require a prescription for the drug to be filled or refilled at a mail order pharmacy; or (B) Require a prescription for the drug to be filled or refilled at a pharmacy that is not a local pharmacy enrolled in the medical assistance program. (3) Subsection (2)(b)(A) of this section does not prohibit an insurer from requiring a medical assistance recipient to fill or refill a prescription for a specialty drug at a mail order pharmacy that is a specialty pharmacy. (4) Required coverage of a prescription drug under this section shall include coverage for medically necessary services associated with the administration of that drug. (5) Nothing in this section requires coverage for any prescription drug if the United States Food and Drug Administration has determined use of the drug to be contraindicated. (6) Nothing in this section requires coverage for experimental drugs not approved for any indication by the United States Food and Drug Administration. (7) This section is exempt from ORS 743A.001. [Formerly 743.697; 2011 c.720 222; 2021 c.339 1]
(1) A prescription drug benefit program, or a prescription drug benefit offered under a health benefit plan as defined in ORS 743B.005, must provide for reimbursement for up to a 90-day supply of a prescription drug dispensed by a pharmacy, as defined in ORS 689.005, if: (a) The prescription drug is covered by the program or plan; (b) An initial 30-day supply of the prescription drug has been previously dispensed to the program or plan member; and (c) The quantity of the prescription drug dispensed does not exceed the total remaining quantity of the prescription drug that the prescribing practitioner authorized to be dispensed through refills. (2) The coverage required by subsection (1) of this section may be limited by the terms and conditions of a pharmacy network contract, or a prescription drug benefit program or health benefit plan, that are related to the reimbursement rate of the prescription drug. (3) The coverage required by subsection (1) of this section may be limited by formulary restrictions that are related to the prescription drug. (4) This section does not apply to the reimbursement of prescription drugs classified as a controlled substance in Schedule II. (5) This section is exempt from ORS 743A.001. [2015 c.661 2] Note: 743A.063 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) All health insurance policies that provide a prescription drug benefit, except those policies in which coverage is limited to expenses from accidents or specific diseases that are unrelated to the coverage required by this subsection, must include coverage for prescription drugs dispensed by a licensed practitioner at a rural health clinic for an urgent medical condition if there is not a pharmacy within 15 miles of the clinic or if the prescription is dispensed for a patient outside of the normal business hours of any pharmacy within 15 miles of the clinic. (2) The coverage required by subsection (1) of this section is subject to the terms and conditions of the prescription drug benefit provided under the policy. (3) As used in this section, "urgent medical condition" means a medical condition that arises suddenly, is not life-threatening and requires prompt treatment to avoid the development of more serious medical problems. [Formerly 743.793] Note: See 743A.001.
An insurer offering a health benefit plan, as defined in ORS 743B.005, that provides coverage of prescription eye drops shall provide coverage for one early refill of a prescription for eye drops to treat glaucoma if all of the following criteria are met: (1) The refill is requested by an insured less than 30 days after the later of: (a) The date the original prescription was dispensed to the insured; or (b) The date that the last refill of the prescription was dispensed to the insured. (2) The prescriber indicates on the original prescription that a specific number of refills will be needed. (3) The refill does not exceed the number of refills that the prescriber indicated under subsection (2) of this section. (4) The prescription has not been refilled more than once during the 30-day period prior to the request for an early refill. [2011 c.660 25] Note: See 743A.001. Note: 743A.065 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A prescription drug benefit program, or a prescription drug benefit offered under a health benefit plan as defined in ORS 743B.005 or under a student health insurance policy, must provide payment, coverage or reimbursement for: (a) Prescription contraceptives; and (b) If covered for other drug benefits under the program, plan or policy, outpatient consultations, including pharmacist consultations, examinations, procedures and medical services that are necessary to prescribe, dispense, deliver, distribute, administer or remove a prescription contraceptive. (2) The coverage required by subsection (1) of this section: (a) May be subject to provisions of the program, plan or policy that apply equally to other prescription drugs covered by the program, plan or policy, including but not limited to required copayments, deductibles and coinsurance; and (b) Must reimburse a health care provider or dispensing entity for a dispensing of contraceptives intended to last for a: (A) Three-month period for the first dispensing of the contraceptive to an insured; and (B) Twelve-month period for subsequent dispensings of the same contraceptive to the insured regardless of whether the insured was enrolled in the program, plan or policy at the time of the first dispensing. (3) As used in this section, "prescription contraceptive" means a drug or device that requires a prescription and is approved by the United States Food and Drug Administration to prevent pregnancy. (4) A religious employer is exempt from the requirements of this section with respect to a prescription drug benefit program or a health benefit plan it provides to its employees. A "religious employer" is an employer: (a) Whose purpose is the inculcation of religious values; (b) That primarily employs persons who share the religious tenets of the employer; (c) That primarily serves persons who share the religious tenets of the employer; and (d) That is a nonprofit organization under section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code. (5) This section is exempt from the provisions of ORS 743A.001. [2007 c.182 3; 2015 c.412 1; 2017 c.289 4] Note: 743A.066 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Contraceptives" means health care services, drugs, devices, products or medical procedures to prevent a pregnancy. (b) "Enrollee" means an insured individual and the individuals spouse, domestic partner and dependents who are beneficiaries under the insured individuals health benefit plan. (c) "Health benefit plan" has the meaning given that term in ORS 743B.005, excluding Medicare Advantage Plans and including health benefit plans offering pharmacy benefits administered by a third party administrator or pharmacy benefit manager. (d) "Prior authorization" has the meaning given that term in ORS 743B.001. (e) "Religious employer" has the meaning given that term in ORS 743A.066. (f) "Utilization review" has the meaning given that term in ORS 743B.001. (2) A health benefit plan offered in this state must provide coverage for all of the following services, drugs, devices, products and procedures: (a) Well-woman care prescribed by the Department of Consumer and Business Services by rule consistent with guidelines published by the United States Health Resources and Services Administration. (b) Counseling for sexually transmitted infections, including but not limited to human immunodeficiency virus and acquired immune deficiency syndrome. (c) Screening for: (A) Chlamydia; (B) Gonorrhea; (C) Hepatitis B; (D) Hepatitis C; (E) Human immunodeficiency virus and acquired immune deficiency syndrome; (F) Human papillomavirus; (G) Syphilis; (H) Anemia; (I) Urinary tract infection; (J) Pregnancy; (K) Rh incompatibility; (L) Gestational diabetes; (M) Osteoporosis; (N) Breast cancer; and (O) Cervical cancer. (d) Screening to determine whether counseling related to the BRCA1 or BRCA2 genetic mutations is indicated and counseling related to the BRCA1 or BRCA2 genetic mutations if indicated. (e) Screening and appropriate counseling or interventions for: (A) Tobacco use; and (B) Domestic and interpersonal violence. (f) Folic acid supplements. (g) Abortion. (h) Breastfeeding comprehensive support, counseling and supplies. (i) Breast cancer chemoprevention counseling. (j) Any contraceptive drug, device or product approved by the United States Food and Drug Administration, subject to all of the following: (A) If there is a therapeutic equivalent of a contraceptive drug, device or product approved by the United States Food and Drug Administration, a health benefit plan may provide coverage for either the requested contraceptive drug, device or product or for one or more therapeutic equivalents of the requested drug, device or product. (B) If a contraceptive drug, device or product covered by the health benefit plan is deemed medically inadvisable by the enrollees provider, the health benefit plan must cover an alternative contraceptive drug, device or product prescribed by the provider. (C) A health benefit plan must pay pharmacy claims for reimbursement of all contraceptive drugs available for over-the-counter sale that are approved by the United States Food and Drug Administration. (D) A health benefit plan may not infringe upon an enrollees choice of contraceptive drug, device or product and may not require prior authorization, step therapy or other utilization review techniques for medically appropriate covered contraceptive drugs, devices or other products approved by the United States Food and Drug Administration. (k) Voluntary sterilization. (L) As a single claim or combined with other claims for covered services provided on the same day: (A) Patient education and counseling on contraception and sterilization. (B) Services related to sterilization or the administration and monitoring of contraceptive drugs, devices and products, including but not limited to: (i) Management of side effects; (ii) Counseling for continued adherence to a prescribed regimen; (iii) Device insertion and removal; and (iv) Provision of alternative contraceptive drugs, devices or products deemed medically appropriate in the judgment of the enrollees provider. (m) Any additional preventive services for women that must be covered without cost sharing under 42 U.S.C. 300gg-13, as identified by the United States Preventive Services Task Force or the Health Resources and Services Administration of the United States Department of Health and Human Services as of January 1, 2017. (3) A health benefit plan may not impose on an enrollee a deductible, coinsurance, copayment or any other cost-sharing requirement on the coverage required by this section. A health care provider shall be reimbursed for providing the services described in this section without any deduction for coinsurance, copayments or any other cost-sharing amounts. (4) Except as authorized under this section, a health benefit plan may not impose any restrictions or delays on the coverage required by this section. (5) This section does not exclude coverage for contraceptive drugs, devices or products prescribed by a provider, acting within the providers scope of practice, for: (a) Reasons other than contraceptive purposes, such as decreasing the risk of ovarian cancer or eliminating symptoms of menopause; or (b) Contraception that is necessary to preserve the life or health of an enrollee. (6) This section does not limit the authority of the Department of Consumer and Business Services to ensure compliance with ORS 743A.063 and 743A.066. (7) This section does not require a health benefit plan to cover: (a) Experimental or investigational treatments; (b) Clinical trials or demonstration projects, except as provided in ORS 743A.192; (c) Treatments that do not conform to acceptable and customary standards of medical practice; (d) Treatments for which there is insufficient data to determine efficacy; or (e) Abortion if the insurer offering the health benefit plan excluded coverage for abortion in all of its individual, small employer and large employer group plans during the 2017 plan year. (8) If services, drugs, devices, products or procedures required by this section are provided by an out-of-network provider, the health benefit plan must cover the services, drugs, devices, products or procedures without imposing any cost-sharing requirement on the enrollee if: (a) There is no in-network provider to furnish the service, drug, device, product or procedure that is geographically accessible or accessible in a reasonable amount of time, as defined by the Department of Consumer and Business Services by rule consistent with the requirements for provider networks in ORS 743B.505; or (b) An in-network provider is unable or unwilling to provide the service in a timely manner. (9) An insurer may offer to a religious employer a health benefit plan that does not include coverage for contraceptives or abortion procedures that are contrary to the religious employers religious tenets only if the insurer notifies in writing all employees who may be enrolled in the health benefit plan of the contraceptives and procedures the employer refuses to cover for religious reasons. (10) If the Department of Consumer and Business Services concludes that enforcement of this section may adversely affect the allocation of federal funds to this state, the department may grant an exemption to the requirements but only to the minimum extent necessary to ensure the continued receipt of federal funds. (11) An insurer that is subject to this section shall make readily accessible to enrollees and potential enrollees, in a consumer-friendly format, information about the coverage of contraceptives by each health benefit plan and the coverage of other services, drugs, devices, products and procedures described in this section. The insurer must provide the information: (a) On the insurers website; and (b) In writing upon request by an enrollee or potential enrollee. (12) This section does not prohibit an insurer from using reasonable medical management techniques to determine the frequency, method, treatment or setting for the coverage of services, drugs, devices, products and procedures described in subsection (2) of this section, other than coverage required by subsection (2)(g) and (j) of this section, if the techniques: (a) Are consistent with the coverage requirements of subsection (2) of this section; and (b) Do not result in the wholesale or indiscriminate denial of coverage for a service. [2017 c.721 2; 2019 c.284 5] Note: See 743A.001. Note: 743A.067 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A health benefit plan that provides coverage for cancer chemotherapy treatment must provide coverage for a prescribed, orally administered anticancer medication used to kill or slow the growth of cancerous cells on a basis no less favorable than intravenously administered or injected cancer medications that are covered as medical benefits. (2) As used in this section, "health benefit plan" has the meaning given that term in ORS 743B.005. (3) The provisions of ORS 743A.001 do not apply to this section. [2007 c.566 2] Note: 743A.068 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Health benefit plan" has the meaning given that term in ORS 743B.005. (b) "Insulin" has the meaning given that term in ORS 689.696. (2) A health benefit plan offered in this state may not require an enrollee in the plan to incur cost-sharing or other out-of-pocket costs, as adjusted under subsection (3) of this section, that exceed $75 for each 30-day supply of a type of insulin prescribed for the treatment of diabetes or $225 for each 90-day supply. (3) The Department of Consumer and Business Services shall, by rule, annually adjust the maximum cost specified in subsection (2) of this section by the percentage increase, if any, in the cost of living for the previous calendar year, based on changes in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor. (4) The coverage under this section may not be subject to a deductible imposed by a health benefit plan. (5) This section does not prohibit a health benefit plan from using a drug formulary or other utilization review protocol applicable to prescription drug coverage under the plan. (6) This section is not subject to ORS 743A.001. [2021 c.160 2] Note: 743A.069 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) All policies providing health insurance, as defined in ORS 731.162, except those policies whose coverage is limited to expenses from accidents or specific diseases that are unrelated to the coverage required by this section, shall include coverage for a nonprescription elemental enteral formula for home use, if the formula is medically necessary for the treatment of severe intestinal malabsorption and a physician has issued a written order for the formula and the formula comprises the sole source, or an essential source, of nutrition. (2) The coverage required by subsection (1) of this section may be made subject to provisions of the policy that apply to other benefits under the policy including, but not limited to, provisions related to deductibles and coinsurance. Deductibles and coinsurance for elemental enteral formulas shall be no greater than those for any other treatment for the condition under the policy. (3) This section is exempt from ORS 743A.001. [Formerly 743.729; 2009 c.703 1]
(1) As used in this section, "carrier," "enrollee" and "health benefit plan" have the meanings given those terms in ORS 743B.005. (2) A health benefit plan offered in this state must reimburse the cost of universal newborn nurse home visiting services as prescribed by the Oregon Health Authority by rule under ORS 433.301 (7). (3) The coverage must be provided without any cost-sharing, coinsurance or deductible applicable to the services. (4) Carriers must offer the services in their health benefit plans but enrollees are not required to receive the services as a condition of coverage and may not be penalized or in any way discouraged from declining the services. (5) A carrier must notify an enrollee about the services whenever an enrollee adds a newborn to coverage. (6) A carrier may use in-network providers or may contract with local public health authorities to provide the services. (7) This section does not require a carrier to reimburse the cost of the services in any specific manner. The services may be reimbursed using: (a) A value-based payment methodology; (b) A claim invoicing process; (c) Capitated payments; (d) A payment methodology that takes into account the need for a community-based entity providing the services to expand its capacity to provide the services and address health disparities; or (e) Any other methodology agreed to by the carrier and the provider of the services. (8) Carriers shall report to the authority, in the form and manner prescribed by the authority, data regarding claims submitted for services covered under this section to monitor the provision of the services. [2019 c.552 3] Note: See 743A.001. Note: 743A.078 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section, "pregnancy care" means the care necessary to support a healthy pregnancy and care related to labor and delivery. (2) All health benefit plans as defined in ORS 743B.005 must provide payment or reimbursement for expenses associated with pregnancy care and childbirth. Benefits provided under this section shall be extended to all enrollees, enrolled spouses and enrolled dependents. [Formerly 743.693; 2011 c.500 39]
(1) Except as provided in subsections (2) and (3) of this section, a health benefit plan, as defined in ORS 743B.005, may not require a copayment or impose a coinsurance requirement or a deductible on the covered health services, medications and supplies that are medically necessary for a woman to manage her diabetes during the period of each pregnancy, beginning with conception and ending six weeks postpartum. (2) Subsection (1) of this section does not apply to a high deductible health plan described in 26 U.S.C. 223. (3) The coverage required by subsection (1) of this section may be limited by network and formulary restrictions that apply to other benefits under the plan. Subsection (1) of this section does not apply to services, medications, test strips and syringes that are not covered due to the network or formulary restrictions. (4) An insurer may require an enrollee or the enrollees health care provider to notify the insurer orally, in a timely manner, that the enrollee is diabetic and is pregnant or has given birth and is within six weeks postpartum. [2013 c.682 2; 2014 c.74 1] Note: 743A.082 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Each policy of health insurance shall provide: (1) The same payments for costs of maternity to unmarried women that it provides to married women, including the spouses in marriages of insured persons choosing family coverage; and (2) The same coverage for the child of an unmarried woman that the child of an insured married person choosing family coverage receives. [Formerly 743.721; 2015 c.629 61]
No policy of health insurance may be denied or canceled by the insurer solely because the mother of the insured used drugs containing diethylstilbestrol prior to the insureds birth. [Formerly 743.710]
(1)(a) All individual and group health benefit plans, as defined in ORS 743B.005, that include coverage for a family member of the insured shall also provide that the health insurance benefits applicable for children in the family shall be payable with respect to: (A) A child of the insured from the moment of birth; and (B) An adopted child effective upon placement for adoption. (b) All individual and group health benefit plans, as defined in ORS 743B.005, that include coverage for a family member of the insured shall also provide that the health insurance benefits applicable for children in the family shall be payable with respect to a disabled child of the insured who is 26 years of age or older, if: (A) The insured provides a statement from a physician certifying that the child has an ongoing disability that prevents the child from engaging in self-sustaining employment; (B) The child was covered by a parents insurance for at least two years immediately before the time the child exceeded the age for eligibility for coverage under the parents insurance; and (C)(i) The insured claims the child as a dependent of the insured for tax purposes; (ii) The child files a tax return properly showing adjusted gross income that does not exceed 150 percent of the federal poverty level; or (iii) The insured is the legal guardian of the insureds child. (2) The coverage of natural and adopted children required by subsection (1) of this section shall consist of coverage of preventive health services and treatment of injury or sickness, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. (3) If payment of an additional premium is required to provide coverage for a child, the policy may require that notification of the birth of the child or of the placement for adoption of the child and payment of the premium be furnished to the insurer within 31 days after the date of birth or date of placement in order to effectuate the coverage required by this section and to have the coverage extended beyond the 31-day period. (4) In any case in which a policy provides coverage for dependent children of participants or beneficiaries, the policy shall provide benefits to dependent children placed with participants or beneficiaries for adoption under the same terms and conditions as apply to the natural, dependent children of the participants and beneficiaries, regardless of whether the adoption has become final. (5) As used in this section: (a) "Child" means an individual who is: (A) Under 26 years of age; or (B) Disabled and 26 years of age or older, for purposes of coverage under subsection (1)(b) of this section. (b) "Disabled" means to have a developmental disability, mental illness or a physical disability that began prior to the age of 26 and that prevents an individual from engaging in self-sustaining employment. (c) "Placement for adoption" means the assumption and retention by a person of a legal obligation for total or partial support of a child in anticipation of the adoption of the child. The childs placement with a person terminates upon the termination of such legal obligations. (d) "Self-sustaining employment" means employment with annual earnings that exceed 150 percent of the federal poverty level. (6) The provisions of ORS 743A.001 do not apply to this section. [Formerly 743.707; 2011 c.500 40; 2013 c.681 33; 2021 c.342 5]
(1) Every health insurance policy that covers hospital, medical or surgical expenses, other than coverage limited to expenses from accidents or specific diseases, shall provide coverage of mammograms as follows: (a) Mammograms for the purpose of diagnosis in symptomatic or high-risk individuals at any time upon referral of an individuals health care provider; and (b) An annual mammogram for the purpose of early detection for an individual 40 years of age or older, with or without referral from the individuals health care provider. (2) An insurance policy described in subsection (1) of this section must not limit coverage of mammograms to the schedule provided in subsection (1) of this section if the individual is determined by the individuals health care provider to be at high risk for breast cancer. [Formerly 743.727; 2017 c.152 4]
All policies providing health insurance, except those policies whose coverage is limited to expenses from accidents or specific diseases that are unrelated to the coverage required by this section, shall include coverage for pelvic examinations and Pap smear examinations as follows: (1) Annually for individuals 18 to 64 years of age; and (2) At any time upon referral of an individuals health care provider. [Formerly 743.728; 2017 c.152 5]
(1) All health benefit plans, as defined in ORS 743B.005, shall include coverage of the human papillomavirus vaccine for beneficiaries under the health benefit plan who are at least 11 years of age but no older than 26 years of age. (2) ORS 743A.001 does not apply to this section. [2009 c.630 2; 2017 c.152 6] Note: 743A.105 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A health insurance policy that covers hospital, medical or surgical expenses, other than coverage limited to expenses from accidents or specific diseases, shall provide coverage for a complete and thorough physical examination of the breast, including but not limited to a clinical breast examination, performed by a health care provider to check for lumps and other changes for the purpose of early detection and prevention of breast cancer as follows: (a) Annually for individuals 18 years of age and older; and (b) At any time at the recommendation of an individuals health care provider. (2) An insurance policy must provide coverage of physical examinations of the breast as described in subsection (1) of this section regardless of whether a health care provider performs other preventative health examinations or makes a referral for other preventative health examinations at the same time the health care provider performs the breast examination. (3) This section applies to health care service contractors, as defined in ORS 750.005, and trusts carrying out a multiple employer welfare arrangement, as defined in ORS 750.301. [Formerly 743.791; 2017 c.152 7] Note: 743A.108 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section, "mastectomy" means the surgical removal of all or part of a breast or a breast tumor suspected to be malignant. (2) All insurers offering a health benefit plan as defined in ORS 743B.005 shall provide payment, coverage or reimbursement for mastectomy and for the following services related to a mastectomy as determined by the attending physician and enrollee to be part of the enrollees course or plan of treatment: (a) All stages of reconstruction of the breast on which a mastectomy was performed, including but not limited to nipple reconstruction, skin grafts and stippling of the nipple and areola; (b) Surgery and reconstruction of the other breast to produce a symmetrical appearance; (c) Prostheses; (d) Treatment of physical complications of the mastectomy, including lymphedemas; and (e) Inpatient care related to the mastectomy and post-mastectomy services. (3) An insurer providing coverage under subsection (2) of this section shall provide written notice describing the coverage to the enrollee at the time of enrollment in the health benefit plan and annually thereafter. (4) A health benefit plan must provide a single determination of prior authorization for all services related to a mastectomy covered under subsection (2) of this section that are part of the enrollees course or plan of treatment. (5) When an enrollee requests an external review of an adverse benefit determination as defined in ORS 743B.001 by the insurer regarding services described in subsection (2) of this section, the insurer or the Director of the Department of Consumer and Business Services must expedite the enrollees case pursuant to ORS 743B.252 (5). (6) The coverage required under subsection (2) of this section is subject to the same terms and conditions in the plan that apply to other benefits under the plan. (7) This section is exempt from ORS 743A.001. [Formerly 743.691; 2011 c.208 1; 2011 c.500 41]
(1) The Department of Consumer and Business Services shall make written materials available on the departments website to educate breast cancer patients about the availability of insurance coverage for breast reconstruction surgery and breast prostheses following a mastectomy. The department shall update the materials at least annually. (2) The department shall place a link to the educational materials described in subsection (1) of this section close to links on the website to information for consumers about health insurance and under a tab designated "Breast Reconstruction Education." The materials must include links to information about breast reconstruction surgery published by governmental entities with a nexus to this state or nonprofit organizations with expertise in breast reconstruction surgery, including but not limited to information about: (a) The availability of the option to have breast reconstruction surgery following a mastectomy including that the breast reconstruction surgery may be performed at the time of a mastectomy or may be delayed until a later date. (b) Prostheses or breast forms as alternatives to breast reconstruction surgery. (c) The requirements of the Womens Health and Cancer Rights Act of 1998 (P.L. 105-277) including the right to breast reconstruction surgery following a mastectomy even if the surgery is delayed until a later date. (3) The department may include educational information about breast reconstruction surgery in newsletters or similar publications that the department sends to consumers or carriers on a weekly or monthly basis. [2017 c.163 2] Note: 743A.111 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 743A or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) A health benefit plan, as defined in ORS 743B.005, shall provide coverage for all colorectal cancer screening examinations and laboratory tests assigned either a grade of A or a grade of B by the United States Preventive Services Task Force. (2) If an insured is 50 years of age or older, an insurer may not impose cost sharing on the coverage required by subsection (1) of this section and the coverage shall include, at a minimum: (a)(A) Fecal occult blood tests; (B) Colonoscopies, including the removal of polyps during a screening procedure; or (C) Double contrast barium enemas; and (b) A colonoscopy, including the removal of polyps during the procedure, if the insured has a positive result on any fecal test assigned either a grade of A or a grade of B by the United States Preventive Services Task Force. (3) If an insured is at high risk for colorectal cancer, the coverage required by subsection (1) of this section shall include colorectal cancer screening examinations and laboratory tests as recommended by the treating physician. (4) For the purposes of subsection (3) of this section, an individual is at high risk for colorectal cancer if the individual has: (a) A family medical history of colorectal cancer; (b) A prior occurrence of cancer or precursor neoplastic polyps; (c) A prior occurrence of a chronic digestive disease condition such as inflammatory bowel disease, Crohns disease or ulcerative colitis; or (d) Other predisposing factors. (5) Subsection (2)(b) of this section does not apply to a high deductible health plan described in 26 U.S.C. 223. [Formerly 743.799; 2014 c.9 1; 2015 c.206 1] Note: See 743A.001. Note: 743A.124 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A health benefit plan, as defined in ORS 743B.005, that provides coverage of radiation therapy for the treatment of prostate cancer must provide coverage for proton beam therapy for the treatment of prostate cancer on a basis no less favorable than the coverage of radiation therapy. (2) The coverage of proton beam therapy under subsection (1) of this section may be subject to prior authorization, as defined in ORS 743B.001, or other utilization review, as defined in ORS 743B.001, if the prior authorization or utilization review applied to proton beam therapy is no more restrictive than the prior authorization or utilization review applied to radiation therapy. (3) This section is exempt from ORS 743A.001. [2019 c.466 2; 2021 c.384 1] Note: 743A.130 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A health benefit plan, as defined in ORS 743B.005, shall reimburse the cost of: (a) Bilateral cochlear implants if medically appropriate for the treatment of hearing loss; and (b) Programming and reprogramming cochlear implants. (2) For purposes of ORS 746.230, a reasonable investigation of a claim for bilateral cochlear implants must include a request to the treating surgeon for a written recommendation based on peer-reviewed medical literature and for the medical findings that support the recommendation. (3) A health benefit plan shall reimburse the cost of repair and replacement parts for a cochlear implant if the repair or parts are not covered by a warranty and are necessary for the device to be functional for the user. (4) The provisions of this section are exempt from ORS 743A.001. [2007 c.504 2; 2018 c.9 1] Note: 743A.140 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Hearing aid" means any nondisposable, wearable instrument or device designed to aid or compensate for impaired human hearing and any necessary ear mold, part, attachments or accessory for the instrument or device, except batteries and cords. (b) "Hearing assistive technology systems" means devices used with or without hearing aids or cochlear implants to improve the ability of a user with hearing loss to hear in various listening situations, such as being located a distance from a speaker, in an environment with competing background noise or in a room with poor acoustics or reverberation. (2) A health benefit plan, as defined in ORS 743B.005, shall provide payment, coverage or reimbursement for: (a) One hearing aid per hearing impaired ear if: (A) Prescribed, fitted and dispensed by a licensed audiologist with the approval of a licensed physician; and (B) Medically necessary for the treatment of hearing loss in an enrollee in the plan who is: (i) 18 years of age or younger; or (ii) 19 to 25 years of age and enrolled in a secondary school or an accredited educational institution. (b) Ear molds and replacement ear molds: (A) Up to four times per plan year for enrollees who are younger than eight years of age; and (B) At least once per year for enrollees who are: (i) Eight to 18 years of age; or (ii) 19 to 25 years of age and enrolled in a secondary school or an accredited educational institution. (c) One box of replacement batteries per year for each hearing aid. (d) Necessary diagnostic and treatment services at least twice per year for enrollees who are younger than four years of age and at least once per year for enrollees who are four years of age or older, including: (A) Hearing tests appropriate for an enrollees age or developmental need; (B) Hearing aid checks; and (C) Aided testing. (e) Bone conduction sound processors, if necessary for appropriate amplification of the hearing loss. (f) Hearing assistive technology systems for an enrollee who is younger than 19 years of age, if necessary for appropriate amplification of the hearing loss. (3) An insurer may not impose any financial or contractual penalty upon an audiologist if an enrollee elects to purchase a hearing aid or other device priced higher than the benefit amount by paying the difference between the benefit amount and the price of the hearing aid or other device. (4) A health benefit plan shall provide the benefits described in subsection (2)(a), (e) and (f) of this section: (a) Every 36 months; or (b) For hearing aids, more frequently than every 36 months if modifications to an existing hearing aid will not meet the needs of an enrollee who is: (A) Under 19 years of age; or (B) 19 to 25 years of age and enrolled in a secondary school or an accredited educational institution. (5) An insurer must contract with pediatric audiologists in sufficient numbers and geographic locations in this state to comply with ORS 743B.202 and 743B.505. (6) Insurance producers shall ensure that enrollees have access to navigators or other assisters to facilitate the diagnosis of hearing loss and needed amplification and ensure that technologies are available to treat hearing loss in enrollees who are 19 years of age or younger. Upon receiving a claim for reimbursement for the diagnosis of hearing loss, an insurer shall provide notice of the coverage limits to the enrollee or to the parent or legal guardian of the enrollee. With respect to enrollees with hearing loss who are younger than 19 years of age, an insurer shall provide educational materials to the parent or legal guardian of the enrollee and shall have a process in place to ensure that appropriate technologies are available. (7) The payment, coverage or reimbursement required under this section may be subject to provisions of the health benefit plan that apply to other durable medical equipment benefits covered by the plan, including but not limited to provisions relating to deductibles, coinsurance and prior authorization. (8) This section is exempt from ORS 743A.001. [2009 c.553 2; 2011 c.500 42a; 2015 c.515 26; 2018 c.9 2] Note: 743A.141 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) The Legislative Assembly declares that all group health insurance policies providing hospital, medical or surgical expense benefits, other than limited benefit coverage, include coverage for maxillofacial prosthetic services considered necessary for adjunctive treatment. (2) As used in this section, "maxillofacial prosthetic services considered necessary for adjunctive treatment" means restoration and management of head and facial structures that cannot be replaced with living tissue and that are defective because of disease, trauma or birth and developmental deformities when such restoration and management are performed for the purpose of: (a) Controlling or eliminating infection; (b) Controlling or eliminating pain; or (c) Restoring facial configuration or functions such as speech, swallowing or chewing but not including cosmetic procedures rendered to improve on the normal range of conditions. (3) The coverage required by subsection (1) of this section may be made subject to provisions of the policy that apply to other benefits under the policy including, but not limited to, provisions relating to deductibles and coinsurance. (4) The services described in this section shall apply to individual health policies entered into or renewed on or after January 1, 1982. [Formerly 743.706; 2016 c.11 5]
(1) As used in this section, "craniofacial anomaly" means a physical disorder identifiable at birth that affects the bony structures of the face or head, including but not limited to cleft palate, cleft lip, craniosynostosis, craniofacial microsomia and Treacher Collins syndrome. (2) All health benefit plans, as defined in ORS 743B.005, providing coverage of hospital, surgical or dental services, shall provide coverage for dental and orthodontic services for the treatment of craniofacial anomalies if the services are medically necessary to restore function. (3) This section does not require coverage for the treatment of: (a) Developmental maxillofacial conditions that result in overbite, crossbite, malocclusion or similar developmental irregularities of the teeth; or (b) Temporomandibular joint disorder. (4) Coverage required by this section may be subject to copayments, deductibles and coinsurance imposed on similar services by the terms of the plan. (5) This section does not limit or supersede any coverage required by ORS 743A.028, 743A.032 or 743A.148. (6) This section is exempt from ORS 743A.001. [2012 c.21 2] Note: 743A.150 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
A health insurance policy providing coverage for hospital or medical expenses, other than limited benefit coverage, shall provide, at the request of the applicant, coverage for expenses arising from treatment for alcoholism. The following conditions apply to the requirement for such coverage: (1) The applicant shall be informed of the applicants option to request this coverage. (2) The inclusion of the coverage may be made subject to the insurers usual underwriting requirements. (3) The coverage may be made subject to provisions of the policy that apply to other benefits under the policy, including but not limited to provisions relating to deductibles and coinsurance. (4) The policy may limit hospital expense coverage to treatment provided by the following facilities: (a) A health care facility licensed as required by ORS 441.015. (b) A health care facility accredited by the Joint Commission. (5) Except as permitted by subsection (3) of this section, the policy may not limit payments thereunder for alcoholism to an amount less than $4,500 in any 24-consecutive month period and the policy shall provide coverage, within the limits of this subsection, of not less than 80 percent of the hospital and medical expenses for treatment for alcoholism. [Formerly 743.412; 2016 c.11 6; 2017 c.17 56] Note: See 743.402.
(1) As used in this section: (a) "Behavioral health assessment" means an evaluation by a provider, in person or using telemedicine, to determine a patients need for behavioral health treatment. (b) "Behavioral health condition" has the meaning prescribed by rule by the Department of Consumer and Business Services. (c) "Behavioral health crisis" means a disruption in an insureds mental or emotional stability or functioning resulting in an urgent need for immediate outpatient treatment in an emergency department or admission to a hospital to prevent a serious deterioration in the insureds mental or physical health. (d) "Facility" means a corporate or governmental entity or other provider of services for the treatment of behavioral health conditions. (e) "Generally accepted standards of care" means: (A) Standards of care and clinical practice guidelines that: (i) Are generally recognized by health care providers practicing in relevant clinical specialties; and (ii) Are based on valid, evidence-based sources; and (B) Products and services that: (i) Address the specific needs of a patient for the purpose of screening for, preventing, diagnosing, managing or treating an illness, injury or condition or symptoms of an illness, injury or condition; (ii) Are clinically appropriate in terms of type, frequency, extent, site and duration; and (iii) Are not primarily for the economic benefit of an insurer or payer or for the convenience of a patient, treating physician or other health care provider. (f) "Group health insurer" means an insurer, a health maintenance organization or a health care service contractor. (g) "Median maximum allowable reimbursement rate" means the median of all maximum allowable reimbursement rates, minus incentive payments, paid for each billing code for each provider type during a calendar year. (h) "Prior authorization" has the meaning given that term in ORS 743B.001. (i) "Program" means a particular type or level of service that is organizationally distinct within a facility. (j) "Provider" means: (A) A behavioral health professional or medical professional licensed or certified in this state who has met the credentialing requirement of a group health insurer or an issuer of an individual health benefit plan that is not a grandfathered health plan as defined in ORS 743B.005 and is otherwise eligible to receive reimbursement for coverage under the policy; (B) A health care facility as defined in ORS 433.060; (C) A residential facility as defined in ORS 430.010; (D) A day or partial hospitalization program; (E) An outpatient service as defined in ORS 430.010; or (F) A provider organization certified by the Oregon Health Authority under subsection (8) of this section. (k) "Relevant clinical specialties" includes but is not limited to: (A) Psychiatry; (B) Psychology; (C) Clinical sociology; (D) Addiction medicine and counseling; and (E) Behavioral health treatment. (L) "Standards of care and clinical practice guidelines" includes but is not limited to: (A) Patient placement criteria; (B) Recommendations of agencies of the federal government; and (C) Drug labeling approved by the United States Food and Drug Administration. (m) "Utilization review" has the meaning given that term in ORS 743B.001. (n) "Valid, evidence-based sources" includes but is not limited to: (A) Peer-reviewed scientific studies and medical literature; (B) Recommendations of nonprofit health care provider professional associations; and (C) Specialty societies. (2) A group health insurance policy or an individual health benefit plan that is not a grandfathered health plan providing coverage for hospital or medical expenses, other than limited benefit coverage, shall provide coverage for expenses arising from the diagnosis of behavioral health conditions and medically necessary behavioral health treatment at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising from treatment for other medical conditions. The following apply to coverage for behavioral health treatment: (a) The coverage may be made subject to provisions of the policy that apply to other benefits under the policy, including but not limited to provisions relating to copayments, deductibles and coinsurance. Copayments, deductibles and coinsurance for treatment in health care facilities or residential facilities may not be greater than those under the policy for expenses of hospitalization in the treatment of other medical conditions. Copayments, deductibles and coinsurance for outpatient treatment may not be greater than those under the policy for expenses of outpatient treatment of other medical conditions. (b) The coverage of behavioral health treatment may not be made subject to treatment limitations, limits on total payments for treatment, limits on duration of treatment or financial requirements unless similar limitations or requirements are imposed on coverage of other medical conditions. The coverage of eligible expenses of behavioral health treatment may be limited to treatment that is medically necessary as determined in accordance with this section and no more stringently under the policy than for other medical conditions. (c) The coverage of behavioral health treatment must include: (A) A behavioral health assessment; (B) No less than the level of services determined to be medically necessary in a behavioral health assessment of the specific needs of a patient or in a patients care plan: (i) To effectively treat the patients underlying behavioral health condition rather than the mere amelioration of current symptoms such as suicidal ideation or psychosis; and (ii) For care following a behavioral health crisis, to transition the patient to a lower level of care; (C) Treatment of co-occurring behavioral health conditions or medical conditions in a coordinated manner; (D) Treatment at the least intensive and least restrictive level of care that is safe and most effective and meets the needs of the insureds condition; (E) A lower level or less intensive care only if it is comparably as safe and effective as treatment at a higher level of service or intensity; (F) Treatment to maintain functioning or prevent deterioration; (G) Treatment for an appropriate duration based on the insureds particular needs; (H) Treatment appropriate to the unique needs of children and adolescents; (I) Treatment appropriate to the unique needs of older adults; and (J) Coordinated care and case management as defined by the Department of Consumer and Business Services by rule. (d) The coverage of behavioral health treatment may not limit coverage for treatment of pervasive or chronic behavioral health conditions to short-term or acute behavioral health treatment at any level of care or placement. (e) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan shall have a network of providers of behavioral health treatment sufficient to meet the standards described in ORS 743B.505. If there is no in-network provider qualified to timely deliver, as defined by rule, medically necessary behavioral treatment to an insured in a geographic area, the group health insurer or issuer of an individual health benefit plan shall provide coverage of out-of-network medically necessary behavioral health treatment without any additional out-of-pocket costs if provided by an available out-of-network provider that enters into an agreement with the insurer to be reimbursed at in-network rates. (f) A provider is eligible for reimbursement under this section if: (A) The provider is approved or certified by the Oregon Health Authority; (B) The provider is accredited for the particular level of care for which reimbursement is being requested by the Joint Commission or the Commission on Accreditation of Rehabilitation Facilities; (C) The patient is staying overnight at the facility and is involved in a structured program at least eight hours per day, five days per week; or (D) The provider is providing a covered benefit under the policy. (g) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan must use the same methodology to set reimbursement rates paid to behavioral health treatment providers that the group health insurer or issuer of an individual health benefit plan uses to set reimbursement rates for medical and surgical treatment providers. (h) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan must update the methodology and rates for reimbursing behavioral health treatment providers in a manner equivalent to the manner in which the group health insurer or issuer of an individual health benefit plan updates the methodology and rates for reimbursing medical and surgical treatment providers, unless otherwise required by federal law. (i) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan that reimburses out-of-network providers for medical or surgical services must reimburse out-of-network behavioral health treatment providers on the same terms and at a rate that is in parity with the rate paid to medical or surgical treatment providers. (j) Outpatient coverage of behavioral health treatment shall include follow-up in-home service or outpatient services if clinically indicated under any medical necessity, utilization or other clinical review conducted for the diagnosis, prevention or treatment of behavioral health conditions or relating to service intensity, level of care placement, continued stay or discharge. The policy may limit coverage for in-home service to persons who are homebound under the care of a physician only if clinically indicated under any medical necessity, utilization or other clinical review conducted for the diagnosis, prevention or treatment of behavioral health conditions or relating to service intensity, level of care placement, continued stay or discharge. (k)(A) Subject to the patient or client confidentiality provisions of ORS 40.235 relating to physicians, ORS 40.240 relating to nurse practitioners, ORS 40.230 relating to psychologists, ORS 40.250 and 675.580 relating to licensed clinical social workers and ORS 40.262 relating to licensed professional counselors and licensed marriage and family therapists, a group health insurer or issuer of an individual health benefit plan may provide for review for level of treatment of admissions and continued stays for treatment in health facilities, residential facilities, day or partial hospitalization programs and outpatient services by either staff of a group health insurer or issuer of an individual health benefit plan or personnel under contract to the group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan, or by a utilization review contractor, who shall have the authority to certify for or deny level of payment. (B) Review shall be made according to criteria made available to providers in advance upon request. (C) Review shall be performed by or under the direction of a physician licensed under ORS 677.100 to 677.228, a psychologist licensed by the Oregon Board of Psychology, a clinical social worker licensed by the State Board of Licensed Social Workers or a professional counselor or marriage and family therapist licensed by the Oregon Board of Licensed Professional Counselors and Therapists, in accordance with standards of the National Committee for Quality Assurance or Medicare review standards of the Centers for Medicare and Medicaid Services. (D) Review may involve prior approval, concurrent review of the continuation of treatment, post-treatment review or any combination of these. However, if prior approval is required, provision shall be made to allow for payment of urgent or emergency admissions, subject to subsequent review. If prior approval is not required, group health insurers and issuers of individual health benefit plans that are not grandfathered health plans shall permit providers, policyholders or persons acting on their behalf to make advance inquiries regarding the appropriateness of a particular admission to a treatment program. Group health insurers and issuers of individual health benefit plans that are not grandfathered health plans shall provide a timely response to such inquiries. Noncontracting providers must cooperate with these procedures to the same extent as contracting providers to be eligible for reimbursement. (L) Health maintenance organizations may limit the receipt of covered services by enrollees to services provided by or upon referral by providers contracting with the health maintenance organization. Health maintenance organizations and health care service contractors may create substantive plan benefit and reimbursement differentials at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising out of other medical conditions and apply them to contracting and noncontracting providers. (3) This section does not prohibit a group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan from managing the provision of benefits through common methods, including but not limited to selectively contracted panels, health plan benefit differential designs, preadmission screening, prior authorization of services, utilization review or other mechanisms designed to limit eligible expenses to those described in subsection (2)(b) of this section provided such methods comply with the requirements of this section. (4) The Legislative Assembly finds that health care cost containment is necessary and intends to encourage health insurance plans designed to achieve cost containment by ensuring that reimbursement is limited to appropriate utilization under criteria incorporated into the insurance, either directly or by reference, in accordance with this section. (5) To ensure the proper use of any medical necessity, utilization or other clinical review conducted for the diagnosis, prevention or treatment of behavioral health conditions or relating to service intensity, level of care placement, continued stay or discharge, a group health insurer or an issuer of an individual health benefit plan shall provide, at no cost: (a) A formal education program, presented by nonprofit clinical specialty associations or other entities authorized by the department, to educate the insurers or the issuers staff and any individuals described in subsection (2)(k) of this section who conduct reviews. (b) To stakeholders, including participating providers and insureds, the medical necessity, utilization or other clinical review criteria and any education or training materials or resources regarding medical necessity, utilization or other clinical review criteria, to the extent permitted by copyright laws. (6) This section does not prevent a group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan from contracting with providers of health care services to furnish services to policyholders or certificate holders according to ORS 743B.460 or 750.005, subject to the following conditions: (a) A group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan is not required to contract with all providers that are eligible for reimbursement under this section. (b) An insurer or health care service contractor shall, subject to subsection (2) of this section, pay benefits toward the covered charges of noncontracting providers of services for behavioral health treatment. The insured shall, subject to subsection (2) of this section, have the right to use the services of a noncontracting provider of behavioral health treatment, whether or not the behavioral health treatment is provided by contracting or noncontracting providers. (7)(a) This section does not require coverage for: (A) Educational or correctional services or sheltered living provided by a school or halfway house; (B) A long-term residential mental health program that lasts longer than 45 days unless clinically indicated under any medical necessity, utilization or other clinical review conducted by the insurer for the diagnosis, prevention or treatment of behavioral health conditions or relating to service intensity, level of care placement, continued stay or discharge; (C) Psychoanalysis or psychotherapy received as part of an educational or training program, regardless of diagnosis or symptoms that may be present; (D) A court-ordered sex offender treatment program; or (E) Support groups. (b) Notwithstanding paragraph (a)(A) of this subsection, an insured may receive covered outpatient services under the terms of the insureds policy while the insured is living temporarily in a sheltered living situation. (8) The Oregon Health Authority shall establish a process for the certification of an organization described in subsection (1)(j)(F) of this section that: (a) Is not otherwise subject to licensing or certification by the authority; and (b) Does not contract with the authority, a subcontractor of the authority or a community mental health program. (9) The Oregon Health Authority shall adopt by rule standards for the certification provided under subsection (8) of this section to ensure that a certified provider organization offers a distinct and specialized program for the treatment of mental or nervous conditions. (10) The Oregon Health Authority may adopt by rule an application fee or a certification fee, or both, to be imposed on any provider organization that applies for certification under subsection (8) of this section. Any fees collected shall be paid into the Oregon Health Authority Fund established in ORS 413.101 and shall be used only for carrying out the provisions of subsection (8) of this section. (11) The intent of the Legislative Assembly in adopting this section is to reserve benefits for different types of care to encourage cost effective care and to ensure continuing access to levels of care most appropriate for the insureds condition and progress in accordance with this section. This section does not prohibit an insurer from requiring a provider organization certified by the Oregon Health Authority under subsection (8) of this section to meet the insurers credentialing requirements as a condition of entering into a contract. (12) The Director of the Department of Consumer and Business Services and the Oregon Health Authority, after notice and hearing, may adopt reasonable rules not inconsistent with this section that are considered necessary for the proper administration of this section. The director shall adopt rules making it a violation of this section for a group health insurer or issuer of an individual health benefit plan other than a grandfathered health plan to require providers to bill using a specific billing code or to restrict the reimbursement paid for particular billing codes other than on the basis of medical necessity. (13) This section does not: (a) Prohibit an insured from receiving behavioral health treatment from an out-of-network provider or prevent an out-of-network behavioral health provider from billing the insured for any unreimbursed cost of treatment. (b) Prohibit the use of value-based payment methods, including global budgets or capitated, bundled, risk-based or other value-based payment methods. (c) Require that any value-based payment method reimburse behavioral health services based on an equivalent fee-for-service rate. [Formerly 743.556; 2009 c.442 47; 2009 c.549 11; 2013 c.375 1; 2013 c.581 1; 2013 c.681 62; 2016 c.11 7; 2017 c.6 29; 2017 c.17 57; 2017 c.273 5; 2017 c.409 35; 2019 c.284 6; 2019 c.285 5; 2021 c.629 5] Note: The amendments to 743A.168 by section 8, chapter 629, Oregon Laws 2021, become operative January 1, 2023. See section 9, chapter 629, Oregon Laws 2021. The text that is operative on and after January 1, 2023, is set forth for the users convenience. (1) As used in this section: (a) "Behavioral health assessment" means an evaluation by a provider, in person or using telemedicine, to determine a patients need for behavioral health treatment. (b) "Behavioral health condition" has the meaning prescribed by rule by the Department of Consumer and Business Services. (c) "Behavioral health crisis" means a disruption in an insureds mental or emotional stability or functioning resulting in an urgent need for immediate outpatient treatment in an emergency department or admission to a hospital to prevent a serious deterioration in the insureds mental or physical health. (d) "Facility" means a corporate or governmental entity or other provider of services for the treatment of behavioral health conditions. (e) "Generally accepted standards of care" means: (A) Standards of care and clinical practice guidelines that: (i) Are generally recognized by health care providers practicing in relevant clinical specialties; and (ii) Are based on valid, evidence-based sources; and (B) Products and services that: (i) Address the specific needs of a patient for the purpose of screening for, preventing, diagnosing, managing or treating an illness, injury or condition or symptoms of an illness, injury or condition; (ii) Are clinically appropriate in terms of type, frequency, extent, site and duration; and (iii) Are not primarily for the economic benefit of an insurer or payer or for the convenience of a patient, treating physician or other health care provider. (f) "Group health insurer" means an insurer, a health maintenance organization or a health care service contractor. (g) "Median maximum allowable reimbursement rate" means the median of all maximum allowable reimbursement rates, minus incentive payments, paid for each billing code for each provider type during a calendar year. (h) "Prior authorization" has the meaning given that term in ORS 743B.001. (i) "Program" means a particular type or level of service that is organizationally distinct within a facility. (j) "Provider" means: (A) A behavioral health professional or medical professional licensed or certified in this state who has met the credentialing requirement of a group health insurer or an issuer of an individual health benefit plan that is not a grandfathered health plan as defined in ORS 743B.005 and is otherwise eligible to receive reimbursement for coverage under the policy; (B) A health care facility as defined in ORS 433.060; (C) A residential facility as defined in ORS 430.010; (D) A day or partial hospitalization program; (E) An outpatient service as defined in ORS 430.010; or (F) A provider organization certified by the Oregon Health Authority under subsection (9) of this section. (k) "Relevant clinical specialties" includes but is not limited to: (A) Psychiatry; (B) Psychology; (C) Clinical sociology; (D) Addiction medicine and counseling; and (E) Behavioral health treatment. (L) "Standards of care and clinical practice guidelines" includes but is not limited to: (A) Patient placement criteria; (B) Recommendations of agencies of the federal government; and (C) Drug labeling approved by the United States Food and Drug Administration. (m) "Utilization review" has the meaning given that term in ORS 743B.001. (n) "Valid, evidence-based sources" includes but is not limited to: (A) Peer-reviewed scientific studies and medical literature; (B) Recommendations of nonprofit health care provider professional associations; and (C) Specialty societies. (2) A group health insurance policy or an individual health benefit plan that is not a grandfathered health plan providing coverage for hospital or medical expenses, other than limited benefit coverage, shall provide coverage for expenses arising from the diagnosis of behavioral health conditions and medically necessary behavioral health treatment at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising from treatment for other medical conditions. The following apply to coverage for behavioral health treatment: (a) The coverage may be made subject to provisions of the policy that apply to other benefits under the policy, including but not limited to provisions relating to copayments, deductibles and coinsurance. Copayments, deductibles and coinsurance for treatment in health care facilities or residential facilities may not be greater than those under the policy for expenses of hospitalization in the treatment of other medical conditions. Copayments, deductibles and coinsurance for outpatient treatment may not be greater than those under the policy for expenses of outpatient treatment of other medical conditions. (b) The coverage of behavioral health treatment may not be made subject to treatment limitations, limits on total payments for treatment, limits on duration of treatment or financial requirements unless similar limitations or requirements are imposed on coverage of other medical conditions. The coverage of eligible expenses of behavioral health treatment may be limited to treatment that is medically necessary as determined in accordance with this section and no more stringently under the policy than for other medical conditions. (c) The coverage of behavioral health treatment must include: (A) A behavioral health assessment; (B) No less than the level of services determined to be medically necessary in a behavioral health assessment of the specific needs of a patient or in a patients care plan: (i) To effectively treat the patients underlying behavioral health condition rather than the mere amelioration of current symptoms such as suicidal ideation or psychosis; and (ii) For care following a behavioral health crisis, to transition the patient to a lower level of care; (C) Treatment of co-occurring behavioral health conditions or medical conditions in a coordinated manner; (D) Treatment at the least intensive and least restrictive level of care that is safe and most effective and meets the needs of the insureds condition; (E) A lower level or less intensive care only if it is comparably as safe and effective as treatment at a higher level of service or intensity; (F) Treatment to maintain functioning or prevent deterioration; (G) Treatment for an appropriate duration based on the insureds particular needs; (H) Treatment appropriate to the unique needs of children and adolescents; (I) Treatment appropriate to the unique needs of older adults; and (J) Coordinated care and case management as defined by the Department of Consumer and Business Services by rule. (d) The coverage of behavioral health treatment may not limit coverage for treatment of pervasive or chronic behavioral health conditions to short-term or acute behavioral health treatment at any level of care or placement. (e) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan shall have a network of providers of behavioral health treatment sufficient to meet the standards described in ORS 743B.505. If there is no in-network provider qualified to timely deliver, as defined by rule, medically necessary behavioral treatment to an insured in a geographic area, the group health insurer or issuer of an individual health benefit plan shall provide coverage of out-of-network medically necessary behavioral health treatment without any additional out-of-pocket costs if provided by an available out-of-network provider that enters into an agreement with the insurer to be reimbursed at in-network rates. (f) A provider is eligible for reimbursement under this section if: (A) The provider is approved or certified by the Oregon Health Authority; (B) The provider is accredited for the particular level of care for which reimbursement is being requested by the Joint Commission or the Commission on Accreditation of Rehabilitation Facilities; (C) The patient is staying overnight at the facility and is involved in a structured program at least eight hours per day, five days per week; or (D) The provider is providing a covered benefit under the policy. (g) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan must use the same methodology to set reimbursement rates paid to behavioral health treatment providers that the group health insurer or issuer of an individual health benefit plan uses to set reimbursement rates for medical and surgical treatment providers. (h) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan must update the methodology and rates for reimbursing behavioral health treatment providers in a manner equivalent to the manner in which the group health insurer or issuer of an individual health benefit plan updates the methodology and rates for reimbursing medical and surgical treatment providers, unless otherwise required by federal law. (i) A group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan that reimburses out-of-network providers for medical or surgical services must reimburse out-of-network behavioral health treatment providers on the same terms and at a rate that is in parity with the rate paid to medical or surgical treatment providers. (j) Outpatient coverage of behavioral health treatment shall include follow-up in-home service or outpatient services if clinically indicated under criteria and guidelines described in subsection (5) of this section. The policy may limit coverage for in-home service to persons who are homebound under the care of a physician only if clinically indicated under criteria and guidelines described in subsection (5) of this section. (k)(A) Subject to the patient or client confidentiality provisions of ORS 40.235 relating to physicians, ORS 40.240 relating to nurse practitioners, ORS 40.230 relating to psychologists, ORS 40.250 and 675.580 relating to licensed clinical social workers and ORS 40.262 relating to licensed professional counselors and licensed marriage and family therapists, a group health insurer or issuer of an individual health benefit plan may provide for review for level of treatment of admissions and continued stays for treatment in health facilities, residential facilities, day or partial hospitalization programs and outpatient services by either staff of a group health insurer or issuer of an individual health benefit plan or personnel under contract to the group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan, or by a utilization review contractor, who shall have the authority to certify for or deny level of payment. (B) Review shall be made according to criteria made available to providers in advance upon request. (C) Review shall be performed by or under the direction of a physician licensed under ORS 677.100 to 677.228, a psychologist licensed by the Oregon Board of Psychology, a clinical social worker licensed by the State Board of Licensed Social Workers or a professional counselor or marriage and family therapist licensed by the Oregon Board of Licensed Professional Counselors and Therapists, in accordance with standards of the National Committee for Quality Assurance or Medicare review standards of the Centers for Medicare and Medicaid Services. (D) Review may involve prior approval, concurrent review of the continuation of treatment, post-treatment review or any combination of these. However, if prior approval is required, provision shall be made to allow for payment of urgent or emergency admissions, subject to subsequent review. If prior approval is not required, group health insurers and issuers of individual health benefit plans that are not grandfathered health plans shall permit providers, policyholders or persons acting on their behalf to make advance inquiries regarding the appropriateness of a particular admission to a treatment program. Group health insurers and issuers of individual health benefit plans that are not grandfathered health plans shall provide a timely response to such inquiries. Noncontracting providers must cooperate with these procedures to the same extent as contracting providers to be eligible for reimbursement. (L) Health maintenance organizations may limit the receipt of covered services by enrollees to services provided by or upon referral by providers contracting with the health maintenance organization. Health maintenance organizations and health care service contractors may create substantive plan benefit and reimbursement differentials at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising out of other medical conditions and apply them to contracting and noncontracting providers. (3) This section does not prohibit a group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan from managing the provision of benefits through common methods, including but not limited to selectively contracted panels, health plan benefit differential designs, preadmission screening, prior authorization of services, utilization review or other mechanisms designed to limit eligible expenses to those described in subsection (2)(b) of this section provided such methods comply with the requirements of this section. (4) The Legislative Assembly finds that health care cost containment is necessary and intends to encourage health insurance plans designed to achieve cost containment by ensuring that reimbursement is limited to appropriate utilization under criteria incorporated into the insurance, either directly or by reference, in accordance with this section. (5)(a) Any medical necessity, utilization or other clinical review conducted for the diagnosis, prevention or treatment of behavioral health conditions or relating to service intensity, level of care placement, continued stay or discharge must be based solely on the following: (A) The current generally accepted standards of care. (B) For level of care placement decisions, the most recent version of the levels of care placement criteria developed by the nonprofit professional association for the relevant clinical specialty. (C) For medical necessity, utilization or other clinical review conducted for the diagnosis, prevention or treatment of behavioral health conditions that does not involve level of care placement decisions, other criteria and guidelines may be utilized if such criteria and guidelines are based on the current generally accepted standards of care including valid, evidence-based sources and current treatment criteria or practice guidelines developed by the nonprofit professional association for the relevant clinical specialty. Such other criteria and guidelines must be made publicly available and made available to insureds upon request to the extent permitted by copyright laws. (b) This subsection does not prevent a group health insurer or an issuer of an individual health benefit plan other than a grandfathered health plan from using criteria that: (A) Are outside the scope of criteria and guidelines described in paragraph (a)(B) of this subsection, if the guidelines were developed in accordance with the current generally accepted standards of care; or (B) Are based on advancements in technology of types of care that are not addressed in the most recent versions of sources specified in paragraph (a)(B) of this subsection, if the guidelines were developed in accordance with current generally accepted standards of care. (c) For all level of care placement decisions, an insurer shall authorize placement at the level of care consistent with the insureds score or assessment using the relevant level of care placement criteria and guidelines as specified in paragraph (a)(B) of this subsection. If the level of care indicated by the criteria and guidelines is not available, the insurer shall authorize the next higher level of care. If there is disagreement about the appropriate level of care, the insurer shall provide to the provider of the service the full details of the insurers scoring or assessment using the relevant level of care placement criteria and guidelines specified in paragraph (a)(B) of this subsection. (6) To ensure the proper use of any criteria and guidelines described in subsection (5) of this section, a group health insurer or an issuer of an individual health benefit plan shall provide, at no cost: (a) A formal education program, presented by nonprofit clinical specialty associations or other entities authorized by the department, to educate the insurers or the issuers staff and any individuals described in subsection (2)(k) of this section who conduct reviews. (b) To stakeholders, including participating providers and insureds, the criteria and guidelines described in subsection (5) of this section and any education or training materials or resources regarding the criteria and guidelines. (7) This section does not prevent a group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan from contracting with providers of health care services to furnish services to policyholders or certificate holders according to ORS 743B.460 or 750.005, subject to the following conditions: (a) A group health insurer or issuer of an individual health benefit plan that is not a grandfathered health plan is not required to contract with all providers that are eligible for reimbursement under this section. (b) An insurer or health care service contractor shall, subject to subsection (2) of this section, pay benefits toward the covered charges of noncontracting providers of services for behavioral health treatment. The insured shall, subject to subsection (2) of this section, have the right to use the services of a noncontracting provider of behavioral health treatment, whether or not the behavioral health treatment is provided by contracting or noncontracting providers. (8)(a) This section does not require coverage for: (A) Educational or correctional services or sheltered living provided by a school or halfway house; (B) A long-term residential mental health program that lasts longer than 45 days unless clinically indicated under criteria and guidelines described in subsection (5) of this section; (C) Psychoanalysis or psychotherapy received as part of an educational or training program, regardless of diagnosis or symptoms that may be present; (D) A court-ordered sex offender treatment program; or (E) Support groups. (b) Notwithstanding paragraph (a)(A) of this subsection, an insured may receive covered outpatient services under the terms of the insureds policy while the insured is living temporarily in a sheltered living situation. (9) The Oregon Health Authority shall establish a process for the certification of an organization described in subsection (1)(j)(F) of this section that: (a) Is not otherwise subject to licensing or certification by the authority; and (b) Does not contract with the authority, a subcontractor of the authority or a community mental health program. (10) The Oregon Health Authority shall adopt by rule standards for the certification provided under subsection (9) of this section to ensure that a certified provider organization offers a distinct and specialized program for the treatment of mental or nervous conditions. (11) The Oregon Health Authority may adopt by rule an application fee or a certification fee, or both, to be imposed on any provider organization that applies for certification under subsection (9) of this section. Any fees collected shall be paid into the Oregon Health Authority Fund established in ORS 413.101 and shall be used only for carrying out the provisions of subsection (9) of this section. (12) The intent of the Legislative Assembly in adopting this section is to reserve benefits for different types of care to encourage cost effective care and to ensure continuing access to levels of care most appropriate for the insureds condition and progress in accordance with this section. This section does not prohibit an insurer from requiring a provider organization certified by the Oregon Health Authority under subsection (9) of this section to meet the insurers credentialing requirements as a condition of entering into a contract. (13) The Director of the Department of Consumer and Business Services and the Oregon Health Authority, after notice and hearing, may adopt reasonable rules not inconsistent with this section that are considered necessary for the proper administration of this section. The director shall adopt rules making it a violation of this section for a group health insurer or issuer of an individual health benefit plan other than a grandfathered health plan to require providers to bill using a specific billing code or to restrict the reimbursement paid for particular billing codes other than on the basis of medical necessity. (14) This section does not: (a) Prohibit an insured from receiving behavioral health treatment from an out-of-network provider or prevent an out-of-network behavioral health provider from billing the insured for any unreimbursed cost of treatment. (b) Prohibit the use of value-based payment methods, including global budgets or capitated, bundled, risk-based or other value-based payment methods. (c) Require that any value-based payment method reimburse behavioral health services based on an equivalent fee-for-service rate. Note: Section 7, chapter 411, Oregon Laws 1987, provides: Sec. 7. Application of ORS 743A.001 to ORS 743A.168 and 750.055. ORS 743.145 [renumbered 743A.001] does not apply to section 2 of this Act [743A.168] because section 2 of this Act constitutes a reenactment of ORS 743.557 and 743.558 [section 2, chapter 698, Oregon Laws 1977, and section 2, chapter 613, Oregon Laws 1973, both repealed in 1987] or to ORS 750.055 because of its amendment by this Act. [1987 c.411 7]
(1) A health benefit plan as defined in ORS 743B.005 must provide payment, coverage or reimbursement of at least $500 for a tobacco use cessation program for a person enrolled in the plan who is 15 years of age or older. (2) As used in this section, "tobacco use cessation program" means a program recommended by a physician that follows the United States Public Health Service guidelines for tobacco use cessation. "Tobacco use cessation program" includes education and medical treatment components designed to assist a person in ceasing the use of tobacco products. (3) This section is exempt from ORS 743A.001. [2009 c.503 2] Note: 743A.170 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A health benefit plan, as defined in ORS 743B.005, shall provide coverage of medically necessary therapy and services for the treatment of traumatic brain injury. (2) This section is exempt from ORS 743A.001. [2009 c.423 2]
For purpose of coverage by group health insurers, health care service contractors and health maintenance organizations, reimbursement for treatment of Tourette Syndrome shall be made on the basis of the diagnosis and treatment modality employed. [Formerly 743.717] Note: See 743A.001.
(1) As used in this section: (a) "Health benefit plan" has the meaning given that term in ORS 743B.005. (b) "Originating site" means a location where health services are provided or where the patient is receiving a telemedical health service. (c) "Telemedical" means delivered through a two-way electronic communication, including but not limited to video, audio, Voice over Internet Protocol or transmission of telemetry, that allows a health professional to interact with a patient, a parent or guardian of a patient or another health professional on a patients behalf, who is at an originating site. (2) A health benefit plan must provide coverage of a telemedical health service provided in connection with the treatment of diabetes if: (a) The plan provides coverage of the health service when provided in person by the health professional; (b) The health service is medically necessary; (c) The telemedical health service relates to a specific patient; and (d) One of the participants in the telemedical health service is a representative of an academic health center. (3) A health benefit plan may not distinguish between rural and urban originating sites in providing coverage under subsection (2) of this section. (4) A health benefit plan may subject coverage of a telemedical health service under subsection (2) of this section to all terms and conditions of the plan, including but not limited to deductible, copayment or coinsurance requirements that are applicable to coverage of a comparable health service when provided in person. (5) This section does not require a health benefit plan to reimburse a provider for a health service that is not a covered benefit under the plan. [2011 c.312 2] Note: See 743A.001. Note: 743A.185 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) All individual and group health insurance policies providing coverage for hospital, medical or surgical expenses, other than coverage limited to expenses from accidents or specific diseases, shall include coverage for treatment of inborn errors of metabolism that involve amino acid, carbohydrate and fat metabolism and for which medically standard methods of diagnosis, treatment and monitoring exist, including quantification of metabolites in blood, urine or spinal fluid or enzyme or DNA confirmation in tissues. Coverage shall include expenses of diagnosing, monitoring and controlling the disorders by nutritional and medical assessment, including but not limited to clinical visits, biochemical analysis and medical foods used in the treatment of such disorders. (2) As used in this section, "medical foods" means foods that are formulated to be consumed or administered enterally under the supervision of a physician, as defined in ORS 677.010, that are specifically processed or formulated to be deficient in one or more of the nutrients present in typical nutritional counterparts, that are for the medical and nutritional management of patients with limited capacity to metabolize ordinary foodstuffs or certain nutrients contained therein or have other specific nutrient requirements as established by medical evaluation and that are essential to optimize growth, health and metabolic homeostasis. (3) This section is exempt from ORS 743A.001. [Formerly 743.726]
(1) A health benefit plan, as defined in ORS 743B.005, must cover for a child enrolled in the plan who is under 18 years of age and who has been diagnosed with a pervasive developmental disorder all medical services, including rehabilitation services, that are medically necessary and are otherwise covered under the plan. (2) The coverage required under subsection (1) of this section, including rehabilitation services, may be made subject to other provisions of the health benefit plan that apply to covered services, including but not limited to: (a) Deductibles, copayments or coinsurance; (b) Prior authorization or utilization review requirements; or (c) Treatment limitations regarding the number of visits or the duration of treatment. (3) As used in this section: (a) "Medically necessary" means in accordance with the definition of medical necessity that is specified in the policy, certificate or contract for the health benefit plan and that applies uniformly to all covered services under the health benefit plan. (b) "Pervasive developmental disorder" means a neurological condition that includes autism spectrum disorder, developmental delay, developmental disability or mental retardation. (c) "Rehabilitation services" means physical therapy, occupational therapy or speech therapy services to restore or improve function. (4) The provisions of ORS 743A.001 do not apply to this section. (5) The definition of "pervasive developmental disorder" is not intended to apply to coverage required under ORS 743A.168 or section 2, chapter 771, Oregon Laws 2013. [2007 c.872 2; 2013 c.771 7] Note: The amendments to 743A.190 by section 20, chapter 771, Oregon Laws 2013, become operative January 2, 2030. See section 24, chapter 771, Oregon Laws 2013, as amended by section 6, chapter 674, Oregon Laws 2015, and section 2, chapter 650, Oregon Laws 2021. The text that is operative on and after January 2, 2030, is set forth for the users convenience. (1) A health benefit plan, as defined in ORS 743B.005, must cover for a child enrolled in the plan who is under 18 years of age and who has been diagnosed with a pervasive developmental disorder all medical services, including rehabilitation services, that are medically necessary and are otherwise covered under the plan. (2) The coverage required under subsection (1) of this section, including rehabilitation services, may be made subject to other provisions of the health benefit plan that apply to covered services, including but not limited to: (a) Deductibles, copayments or coinsurance; (b) Prior authorization or utilization review requirements; or (c) Treatment limitations regarding the number of visits or the duration of treatment. (3) As used in this section: (a) "Medically necessary" means in accordance with the definition of medical necessity that is specified in the policy, certificate or contract for the health benefit plan and that applies uniformly to all covered services under the health benefit plan. (b) "Pervasive developmental disorder" means a neurological condition that includes autism spectrum disorder, developmental delay, developmental disability or mental retardation. (c) "Rehabilitation services" means physical therapy, occupational therapy or speech therapy services to restore or improve function. (4) The provisions of ORS 743A.001 do not apply to this section. (5) The definition of "pervasive developmental disorder" is not intended to apply to coverage required under ORS 743A.168. Note: 743A.190 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A health benefit plan, as defined in ORS 743B.005: (a) Shall provide coverage for the routine costs of the care of patients enrolled in and participating in approved clinical trials; (b) May not exclude, limit or impose additional conditions on the coverage of the routine costs for items and services furnished in connection with participation in an approved clinical trial; and (c) May not include provisions that discriminate against an individual on the basis of the individuals participation in an approved clinical trial. (2) As used in this section, "routine costs": (a) Means all medically necessary conventional care, items or services consistent with the coverage provided by the health benefit plan if typically provided to a patient who is not enrolled in a clinical trial. (b) Does not include: (A) The drug, device or service being tested in the approved clinical trial unless the drug, device or service would be covered for that indication by the health benefit plan if provided outside of an approved clinical trial; (B) Items or services required solely for the provision of the drug device or service being tested in the clinical trial; (C) Items or services required solely for the clinically appropriate monitoring of the drug, device or service being tested in the clinical trial; (D) Items or services that are provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient; (E) Items or services customarily provided by a clinical trial sponsor free of charge to any participant in the clinical trial; or (F) Items or services that are not covered by the health benefit plan if provided outside of the clinical trial. (3) As used in this section, "approved clinical trial" means a clinical trial that is: (a) Funded by the National Institutes of Health, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, the Centers for Medicare and Medicaid Services, the United States Department of Defense or the United States Department of Veterans Affairs; (b) Supported by a center or cooperative group that is funded by the National Institutes of Health, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, the Centers for Medicare and Medicaid Services, the United States Department of Defense or the United States Department of Veterans Affairs; (c) Conducted as an investigational new drug application, an investigational device exemption or a biologics license application subject to approval by the United States Food and Drug Administration; or (d) Exempt by federal law from the requirement to submit an investigational new drug application to the United States Food and Drug Administration. (4) The coverage required by this section may be subject to provisions of the health benefit plan that apply to other benefits within the same category, including but not limited to copayments, deductibles and coinsurance. (5) An insurer that provides coverage required by this section is not, based upon that coverage, liable for any adverse effects of the approved clinical trial. (6) This section is exempt from ORS 743A.001. [2009 c.274 2; 2013 c.681 34]
(1) As used in this section: (a) "Eye care practitioner" means an optometrist or ophthalmologist licensed by the State of Oregon. (b) "Eye care services" means health care services related to the care of the eye and related structures as specified by a health benefit plan. (c) "Health benefit plan" has the meaning provided for that term in ORS 743B.005. (2) Any insurer that offers a health benefit plan that provides coverage of eye care services shall allow any enrollee to receive covered eye care services on an emergency basis without first receiving a referral or prior authorization from a primary care provider. However, an insurer may require the enrollee to receive a referral or prior authorization from a primary care provider for any subsequent surgical procedures. Nothing in this subsection shall be construed to require that covered eye care services rendered by an eye care practitioner on an emergency basis be furnished in a hospital or similar medical facility. (3) An insurer described in subsection (2) of this section may not: (a) Impose a deductible or coinsurance for eye care services that is greater than the deductible or coinsurance imposed for other medical services under the health benefit plan. (b) Require an eye care practitioner to hold hospital privileges as a condition of participation as a provider in the health benefit plan. (4) Nothing in this section: (a) Requires an insurer to provide coverage or reimbursement of eye care services; (b) Requires an insurer to provide coverage or reimbursement of refractive surgery, ophthalmic materials, lenses, eyeglasses or other appurtenances; or (c) Prevents an enrollee from receiving eye care or other covered services from the enrollees primary care provider in accordance with the terms of the enrollees health benefit plan. (5) This section is exempt from ORS 743A.001. [Formerly 743.842] Note: 743A.250 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Child abuse assessment" has the meaning given that term in ORS 418.782. (b) "Childrens advocacy center" has the meaning given that term in ORS 418.782. (c) "Forensic interview" has the meaning given that term in ORS 418.782. (d) "Health benefit plan" has the meaning given that term in ORS 743B.005. (2) A health benefit plan shall provide payment to or reimburse a childrens advocacy center for the services provided by the center: (a) In conducting a child abuse assessment of a child enrolled in the plan; and (b) That are related to the child abuse assessment including, but not limited to: (A) A forensic interview; and (B) Mental health treatment. (3) The payment or reimbursement made in accordance with this section must be proportionate to the scope and intensity of the services provided by the childrens advocacy center. (4) This section is exempt from ORS 743A.001. [2015 c.100 4; 2019 c.141 28] Note: 743A.252 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Detainee" means an insured who is: (A) In the custody of a local supervisory authority pending the disposition of charges; or (B) In a detention facility pending final adjudication by a juvenile court. (b) "Detention facility" has the meaning given that term in ORS 419A.004. (c) "Health benefit plan" has the meaning given that term in ORS 743B.005. (d) "Supervisory authority" has the meaning given that term in ORS 144.087. (2) Except as provided in subsection (4) of this section, an insurer offering a health benefit plan may not deny reimbursement for any service or supply covered by the plan or cancel the coverage of an insured under the plan on the basis that: (a) The insured is a detainee; (b) The insured receives publicly funded medical care while in the custody of a local supervisory authority or in a detention facility; or (c) The care was provided to the insured by an employee or contractor of a county, a local supervisory authority or a detention facility, if the employee or contractor meets the credentialing criteria of the health benefit plan. (3) An insurer shall reimburse a county for the costs of covered services or supplies provided to a detainee, in an amount that is no less than 115 percent of the Medicare rate for the service or supply. (4) An insurer offering a health benefit plan may: (a) Deny coverage for the treatment of injuries resulting from a violation of law; (b) Exclude from any requirements for reporting quality outcomes or performance, any covered services provided to a detainee; (c) Impose utilization controls under the health benefit plan that apply to services provided by in-network providers to insureds who are not in custody or in a detention facility, including a requirement for prior authorization; (d) Impose the requirements for billing and medical coding for covered services provided to a detainee that the insurer imposes on other providers; (e) Deny coverage of diagnostic tests or health evaluations required, as a matter of course, for all detainees; (f) Limit coverage of hospital and ambulatory surgical center services provided to a detainee to services provided by in-network hospitals and ambulatory surgical centers; and (g) Reimburse an out-of-network renal dialysis facility at either the in-network or the out-of-network rate paid by the insurer for dialysis provided to a detainee. (5)(a) An insurer may not refuse to credential a health care provider who is an employee or contractor of a county, a local supervisory authority or a detention facility on the basis that the employee or contractor provides the services in a facility operated by the local supervisory authority or in a detention facility. (b) If an insurer refuses to credential a health care provider who is an employee or contractor of a county, a local supervisory authority or a detention facility, the insurer must give written notice to the provider explaining the reasons for the refusal. (6) This section does not: (a) Impair any right of an employer to remove an employee from coverage under a health benefit plan; (b) Release carriers from the requirement to coordinate benefits for persons who are insured by more than one carrier; or (c) Limit an insurers right to rescind coverage in accordance with ORS 743B.310. (7) A public body, as defined in ORS 174.109, may not pay health benefit plan premiums on behalf of a detainee. [2014 c.97 2; 2017 c.329 1] Note: See 743A.001. Note: 743A.260 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Notwithstanding any other provision of law, a health benefit plan that is not a grandfathered health plan: (1) Must provide coverage of preventive health services as prescribed by the United States Department of Health and Human Services pursuant to 42 U.S.C. 300gg-13 in rules adopted and in effect on January 1, 2017; and (2) May not impose cost-sharing requirements on an enrollee for preventive health services, except as allowed by federal law. [Formerly 743B.120]
(1) As used in this section: (a) "Condition of public health importance" has the meaning given that term in ORS 431A.005. (b) "Disease outbreak" has the meaning given that term in ORS 431A.005. (c) "Enrollee" means an individual residing in this state who: (A) Is enrolled in a health benefit plan; and (B) The Public Health Director determines may be affected by a disease outbreak, epidemic or other condition of public health importance. (d) "Epidemic" has the meaning given that term in ORS 431A.005. (e) "Health benefit plan" has the meaning given that term in ORS 743B.005. (f) "Insurer" means a person with a certificate of authority to transact insurance in this state. (g) "Utilization review" has the meaning given that term in ORS 743B.001. (2) If the director determines that there exists a disease outbreak, epidemic or other condition of public health importance in a geographic area of this state or statewide, an insurer shall, for enrollees in a health benefit plan offered by the insurer, cover the cost of necessary antitoxins, serums, vaccines, immunizing agents, antibiotics, antidotes and other pharmaceutical agents, medical supplies or other prophylactic measures approved by the United States Food and Drug Administration that the director deems necessary to prevent the spread of the disease, epidemic or other condition of public health importance. (3) An insurer may not restrict coverage under subsection (2) of this section by: (a) Requiring that the health services be administered by an in-network provider; (b) Imposing cost-sharing requirements that are greater than the cost-sharing requirements for similar covered services; (c) Requiring prior authorization or other utilization review measures; or (d) Limiting coverage in any manner that prevents an enrollee from accessing the necessary health services. [2017 c.719 2; 2019 c.284 7] Note: See 743A.001. Note: 743A.264 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743A or any series therein. See Preface to Oregon Revised Statutes for further explanation. Note: Sections 2 and 22, chapter 771, Oregon Laws 2013, provide: Sec. 2. (1) As used in this section and section 3a, chapter 771, Oregon Laws 2013: (a)(A) "Applied behavior analysis" means the design, implementation and evaluation of environmental modifications, using behavioral stimuli and consequences, to produce significant improvement in human social behavior, including the use of direct observation, measurement and functional analysis of the relationship between environment and behavior, that is provided by: (i) A licensed health care professional as defined in ORS 676.802; (ii) A behavior analyst or assistant behavior analyst licensed under ORS 676.810; or (iii) A behavior analysis interventionist registered under ORS 676.815 who receives ongoing training and supervision by a licensed behavior analyst, by a licensed assistant behavior analyst or by a licensed health care professional. (B) "Applied behavior analysis" does not mean psychological testing, neuropsychology, psychotherapy, cognitive therapy, sex therapy, psychoanalysis, hypnotherapy and long-term counseling as treatment modalities. (b) "Autism spectrum disorder" has the meaning given that term in the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) published by the American Psychiatric Association. (c) "Diagnosis" means medically necessary assessment, evaluation or testing. (d) "Health benefit plan" has the meaning given that term in ORS 743B.005. (e) "Medically necessary" means in accordance with the definition of medical necessity that is specified in the policy or certificate for the health benefit plan and that applies to all covered services under the plan. (f) "Treatment for autism spectrum disorder" includes applied behavior analysis for up to 25 hours per week and any other mental health or medical services identified in the individualized treatment plan, as described in subsection (6) of this section. (2) A health benefit plan shall provide coverage of: (a) The screening for and diagnosis of autism spectrum disorder by a licensed neurologist, pediatric neurologist, developmental pediatrician, psychiatrist or psychologist, who has experience or training in the diagnosis of autism spectrum disorder; and (b) Medically necessary treatment for autism spectrum disorder and the management of care, for an individual who begins treatment before nine years of age, subject to the requirements of this section. (3) This section does not require coverage for: (a) Services provided by a family or household member; (b) Services that are custodial in nature or that constitute marital, family, educational or training services; (c) Custodial or respite care, equine assisted therapy, creative arts therapy, wilderness or adventure camps, social counseling, telemedicine, music therapy, neurofeedback, chelation or hyperbaric chambers; (d) Services provided under an individual education plan in accordance with the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq.; (e) Services provided through community or social programs; or (f) Services provided by the Department of Human Services or the Oregon Health Authority, other than employee benefit plans offered by the department and the authority. (4) An insurer may not terminate coverage or refuse to issue or renew coverage for an individual solely because the individual has received a diagnosis of autism spectrum disorder or has received treatment for autism spectrum disorder. (5) Coverage under this section may be subject to utilization controls that are reasonable in the context of individual determinations of medical necessity. An insurer may require: (a) An autism spectrum disorder diagnosis by a professional described in subsection (2)(a) of this section if the original diagnosis was not made by a professional described in subsection (2)(a) of this section. (b) Prior authorization for coverage of a maximum of 25 hours per week of applied behavior analysis recommended in an individualized treatment plan approved by a professional described in subsection (2)(a) of this section for an individual with autism spectrum disorder, as long as the insurer makes a prior authorization determination no later than 30 calendar days after receiving the request for prior authorization, notwithstanding ORS 743B.423. (6) If an individual is receiving applied behavior analysis, an insurer may require submission of an individualized treatment plan, which shall include all elements necessary for the insurer to appropriately determine coverage under the health benefit plan. The individualized treatment plan must be based on evidence-based screening criteria. An insurer may require an updated individualized treatment plan, not more than once every six months, that includes observed progress as of the date the updated plan was prepared, for the purpose of performing utilization review and medical management. The insurer may require the individualized treatment plan to be approved by a professional described in subsection (2)(a) of this section, and to include the: (a) Diagnosis; (b) Proposed treatment by type; (c) Frequency and anticipated duration of treatment; (d) Anticipated outcomes stated as goals, including specific cognitive, social, communicative, self-care and behavioral goals that are clearly stated, directly observed and continually measured and that address the characteristics of the autism spectrum disorder; and (e) Signature of the treating provider. (7)(a) Once coverage for applied behavior analysis has been approved, the coverage continues as long as: (A) The individual continues to make progress toward the majority of the goals of the individualized treatment plan; and (B) Applied behavior analysis is medically necessary. (b) An insurer may require periodic review of an individualized treatment plan, as described in subsection (6) of this section, and modification of the individualized treatment plan if the review shows that the individual receiving the treatment is not making substantial clinical progress toward the goals of the individualized treatment plan. (8) Coverage under this section may be subject to requirements and limitations no more restrictive than those imposed on coverage or reimbursement of expenses arising from the treatment of other medical conditions under the policy or certificate, including but not limited to: (a) Requirements and limitations regarding in-network providers; and (b) Provisions relating to deductibles, copayments and coinsurance. (9) This section applies to coverage for up to 25 hours per week of applied behavior analysis for an individual if the coverage is first requested when the individual is under nine years of age. This section does not limit coverage for any services that are otherwise available to an individual under ORS 743A.168 or 743A.190, including but not limited to: (a) Treatment for autism spectrum disorder other than applied behavior analysis or the services described in subsection (3) of this section; (b) Applied behavior analysis for more than 25 hours per week; or (c) Applied behavior analysis for an individual if the coverage is first requested when the individual is nine years of age or older. (10) Coverage under this section includes treatment for autism spectrum disorder provided in the individuals home or a licensed health care facility or, for treatment provided by a licensed health care professional as defined in ORS 676.802 or a behavior analyst or assistant behavior analyst licensed under ORS 676.810, in a setting approved by the health care professional, behavior analyst or assistant behavior analyst. (11) An insurer that provides coverage of applied behavior analysis in accordance with a decision of an independent review organization that was made prior to January 1, 2016, shall continue to provide coverage, subject to modifications made in accordance with subsection (7) of this section. (12) ORS 743A.001 does not apply to this section. [2013 c.771 2; 2015 c.674 9; 2019 c.284 11] Sec. 22. Section 2, chapter 771, Oregon Laws 2013, is repealed January 2, 2030. [2013 c.771 22; 2021 c.650 1]
As used in this section and ORS 743.008, 743.029, 743.035, 743A.190, 743B.195, 743B.197, 743B.200, 743B.202, 743B.204, 743B.220, 743B.225, 743B.227, 743B.250, 743B.252, 743B.253, 743B.254, 743B.255, 743B.256, 743B.257, 743B.258, 743B.310, 743B.400, 743B.403, 743B.405, 743B.420, 743B.422, 743B.423, 743B.424, 743B.450, 743B.451, 743B.452, 743B.453, 743B.454, 743B.505, 743B.550, 743B.555 and 743B.602: (1) "Adverse benefit determination" means an insurers denial, reduction or termination of a health care item or service, or an insurers failure or refusal to provide or to make a payment in whole or in part for a health care item or service, that is based on the insurers: (a) Denial of eligibility for or termination of enrollment in a health benefit plan; (b) Rescission or cancellation of a policy or certificate; (c) Imposition of a preexisting condition exclusion as defined in ORS 743B.005, source-of-injury exclusion, network exclusion, annual benefit limit or other limitation on otherwise covered items or services; (d) Determination that a health care item or service is experimental, investigational or not medically necessary, effective or appropriate; (e) Determination that a course or plan of treatment that an enrollee is undergoing is an active course of treatment for purposes of continuity of care under ORS 743B.225; or (f) Denial, in whole or in part, of a request for prior authorization, a request for an exception to step therapy or a request for coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to other utilization review requirements. (2) "Authorized representative" means an individual who by law or by the consent of a person may act on behalf of the person. (3) "Clinical review criteria" means screening procedures, decision rules, medical protocols and clinical guidance used by an insurer or other entity in conducting utilization review and evaluating: (a) Medical necessity; (b) Appropriateness of an item or health service for which prior authorization is requested or for which an exception to step therapy has been requested as described in ORS 743B.602; or (c) Any other coverage that is subject to utilization review. (4) "Credit card" has the meaning given that term in 15 U.S.C. 1602. (5) "Electronic funds transfer" has the meaning given that term in ORS 293.525. (6) "Enrollee" has the meaning given that term in ORS 743B.005. (7) "Essential community provider" has the meaning given that term in rules adopted by the Department of Consumer and Business Services consistent with the description of the term in 42 U.S.C. 18031 and the rules adopted by the United States Department of Health and Human Services, the United States Department of the Treasury or the United States Department of Labor to carry out 42 U.S.C. 18031. (8) "Grievance" means: (a) A communication from an enrollee or an authorized representative of an enrollee expressing dissatisfaction with an adverse benefit determination, without specifically declining any right to appeal or review, that is: (A) In writing, for an internal appeal or an external review; or (B) In writing or orally, for an expedited response described in ORS 743B.250 (2)(d) or an expedited external review; or (b) A written complaint submitted by an enrollee or an authorized representative of an enrollee regarding the: (A) Availability, delivery or quality of a health care service; (B) Claims payment, handling or reimbursement for health care services and, unless the enrollee has not submitted a request for an internal appeal, the complaint is not disputing an adverse benefit determination; or (C) Matters pertaining to the contractual relationship between an enrollee and an insurer. (9) "Health benefit plan" has the meaning given that term in ORS 743B.005. (10) "Independent practice association" means a corporation wholly owned by providers, or whose membership consists entirely of providers, formed for the sole purpose of contracting with insurers for the provision of health care services to enrollees, or with employers for the provision of health care services to employees, or with a group, as described in ORS 731.098, to provide health care services to group members. (11) "Insurer" includes a health care service contractor as defined in ORS 750.005. (12) "Internal appeal" means a review by an insurer of an adverse benefit determination made by the insurer. (13) "Managed health insurance" means any health benefit plan that: (a) Requires an enrollee to use a specified network or networks of providers managed, owned, under contract with or employed by the insurer in order to receive benefits under the plan, except for emergency or other specified limited service; or (b) In addition to the requirements of paragraph (a) of this subsection, offers a point-of-service provision that allows an enrollee to use providers outside of the specified network or networks at the option of the enrollee and receive a reduced level of benefits. (14) "Medical services contract" means a contract between an insurer and an independent practice association, between an insurer and a provider, between an independent practice association and a provider or organization of providers, between medical or mental health clinics, and between a medical or mental health clinic and a provider to provide medical or mental health services. "Medical services contract" does not include a contract of employment or a contract creating legal entities and ownership thereof that are authorized under ORS chapter 58, 60 or 70, or other similar professional organizations permitted by statute. (15)(a) "Preferred provider organization insurance" means any health benefit plan that: (A) Specifies a preferred network of providers managed, owned or under contract with or employed by an insurer; (B) Does not require an enrollee to use the preferred network of providers in order to receive benefits under the plan; and (C) Creates financial incentives for an enrollee to use the preferred network of providers by providing an increased level of benefits. (b) "Preferred provider organization insurance" does not mean a health benefit plan that has as its sole financial incentive a hold harmless provision under which providers in the preferred network agree to accept as payment in full the maximum allowable amounts that are specified in the medical services contracts. (16) "Prior authorization" means a form of utilization review that requires a provider or an enrollee to request a determination by an insurer, prior to the provision of health care that is subject to utilization review, that the insurer will provide reimbursement for the health care requested. "Prior authorization" does not include referral approval for evaluation and management services between providers. (17)(a) "Provider" means a person licensed, certified or otherwise authorized or permitted by laws of this state to administer medical or mental health services in the ordinary course of business or practice of a profession. (b) With respect to the statutes governing the billing for or payment of claims, "provider" also includes an employee or other designee of the provider who has the responsibility for billing claims for reimbursement or receiving payments on claims. (18) "Step therapy" means a utilization review protocol, policy or program in which an insurer requires certain preferred drugs for treatment of a specific medical condition be proven ineffective or contraindicated before a prescribed drug may be reimbursed. (19) "Utilization review" means a set of formal techniques used by an insurer or delegated by the insurer designed to monitor the use of or evaluate the medical necessity, appropriateness, efficacy or efficiency of health care items, services, procedures or settings. [Formerly 743.801; 2017 c.101 54; 2017 c.384 10; 2019 c.284 8,12; 2021 c.154 7,8]
The purposes of ORS 743.004, 743.022, 743.535, 743B.003 to 743B.127 and 743B.800 are: (1) To promote the availability of health insurance coverage to groups regardless of their enrollees health status or claims experience; (2) To prevent abusive rating practices; (3) To require disclosure of rating practices to purchasers of small employer and individual health benefit plans; (4) To prohibit the use of preexisting condition exclusions; (5) To encourage the availability of individual health benefit plans for individuals who are not enrolled in group health benefit plans; (6) To improve renewability and continuity of coverage for employers and covered individuals; (7) To improve the efficiency and fairness of the health insurance marketplace; and (8) To ensure that health insurance coverage in Oregon satisfies the requirements of the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the Patient Protection and Affordable Care Act (P.L. 111-148) as amended by the Health Care and Education Reconciliation Act (P.L. 111-152), and that enforcement authority for those requirements is retained by the Director of the Department of Consumer and Business Services. [Formerly 743.731; 2021 c.281 1]
For purposes of ORS 743.004, 743.007, 743.022, 743.416, 743.417, 743.535, 743B.003 to 743B.127, 743B.109, 743B.128, 743B.250 and 743B.323: (1) "Actuarial certification" means a written statement by a member of the American Academy of Actuaries or other individual acceptable to the Director of the Department of Consumer and Business Services that a carrier is in compliance with the provisions of ORS 743B.012 based upon the persons examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the carrier in establishing premium rates for small employer health benefit plans. (2) "Affiliate" of, or person "affiliated" with, a specified person means any carrier who, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a specified person. For purposes of this definition, "control" has the meaning given that term in ORS 732.548. (3) "Affiliation period" means, under the terms of a group health benefit plan issued by a health care service contractor, a period: (a) That is applied uniformly and without regard to any health status related factors to an enrollee or late enrollee; (b) That must expire before any coverage becomes effective under the plan for the enrollee or late enrollee; (c) During which no premium shall be charged to the enrollee or late enrollee; and (d) That begins on the enrollees or late enrollees first date of eligibility for coverage and runs concurrently with any eligibility waiting period under the plan. (4) "Bona fide association" means an association that: (a) Has been in active existence for at least five years; (b) Has been formed and maintained in good faith for purposes other than obtaining insurance; (c) Does not condition membership in the association on any factor relating to the health status of an individual or the individuals dependent or employee; (d) Makes health insurance coverage that is offered through the association available to all members of the association regardless of the health status of the member or individuals who are eligible for coverage through the member; (e) Does not make health insurance coverage that is offered through the association available other than in connection with a member of the association; (f) Has a constitution and bylaws; and (g) Is not owned or controlled by a carrier, producer or affiliate of a carrier or producer. (5) "Carrier" means any person who provides health benefit plans in this state, including: (a) A licensed insurance company; (b) A health care service contractor; (c) A health maintenance organization; (d) An association or group of employers that provides benefits by means of a multiple employer welfare arrangement and that: (A) Is subject to ORS 750.301 to 750.341; or (B) Is fully insured and otherwise exempt under ORS 750.303 (4) but elects to be governed by ORS 743B.010 to 743B.013; or (e) Any other person or corporation responsible for the payment of benefits or provision of services. (6) "Dependent" means the spouse or child of an eligible employee, subject to applicable terms of the health benefit plan covering the employee. (7) "Eligible employee" means an employee who is eligible for coverage under a group health benefit plan. (8) "Employee" means any individual employed by an employer. (9) "Enrollee" means an employee, dependent of the employee or an individual otherwise eligible for a group or individual health benefit plan who has enrolled for coverage under the terms of the plan. (10) "Exchange" means the health insurance exchange as defined in ORS 741.300. (11) "Exclusion period" means a period during which specified treatments or services are excluded from coverage. (12) "Financial impairment" means that a carrier is not insolvent and is: (a) Considered by the director to be potentially unable to fulfill its contractual obligations; or (b) Placed under an order of rehabilitation or conservation by a court of competent jurisdiction. (13)(a) "Geographic average rate" means the arithmetical average of the lowest premium and the corresponding highest premium to be charged by a carrier in a geographic area established by the director for the carriers: (A) Group health benefit plans offered to small employers; or (B) Individual health benefit plans. (b) "Geographic average rate" does not include premium differences that are due to differences in benefit design, age, tobacco use or family composition. (14) "Grandfathered health plan" has the meaning prescribed by rule by the United States Secretaries of Labor, Health and Human Services and the Treasury pursuant to 42 U.S.C. 18011(e) that is in effect on January 1, 2017. (15) "Group eligibility waiting period" means, with respect to a group health benefit plan, the period of employment or membership with the group that a prospective enrollee must complete before plan coverage begins. (16)(a) "Health benefit plan" means any: (A) Hospital expense, medical expense or hospital or medical expense policy or certificate; (B) Subscriber contract of a health care service contractor as defined in ORS 750.005; or (C) Plan provided by a multiple employer welfare arrangement or by another benefit arrangement defined in the federal Employee Retirement Income Security Act of 1974, as amended, to the extent that the plan is subject to state regulation. (b) "Health benefit plan" does not include: (A) Coverage for accident only, specific disease or condition only, credit or disability income; (B) Coverage of Medicare services pursuant to contracts with the federal government; (C) Medicare supplement insurance policies; (D) Coverage of TRICARE services pursuant to contracts with the federal government; (E) Benefits delivered through a flexible spending arrangement established pursuant to section 125 of the Internal Revenue Code of 1986, as amended, when the benefits are provided in addition to a group health benefit plan; (F) Separately offered long term care insurance, including, but not limited to, coverage of nursing home care, home health care and community-based care; (G) Independent, noncoordinated, hospital-only indemnity insurance or other fixed indemnity insurance; (H) Short term health insurance policies; (I) Dental only coverage; (J) Vision only coverage; (K) Stop-loss coverage that meets the requirements of ORS 742.065; (L) Coverage issued as a supplement to liability insurance; (M) Insurance arising out of a workers compensation or similar law; (N) Automobile medical payment insurance or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance; or (O) Any employee welfare benefit plan that is exempt from state regulation because of the federal Employee Retirement Income Security Act of 1974, as amended. (17) "Individual health benefit plan" means a health benefit plan: (a) That is issued to an individual policyholder; or (b) That provides individual coverage through a trust, association or similar group, regardless of the situs of the policy or contract. (18) "Initial enrollment period" means a period of at least 30 days following commencement of the first eligibility period for an individual. (19) "Late enrollee" means an individual who enrolls in a group health benefit plan subsequent to the initial enrollment period during which the individual was eligible for coverage but declined to enroll. However, an eligible individual shall not be considered a late enrollee if: (a) The individual qualifies for a special enrollment period in accordance with 42 U.S.C. 300gg or as prescribed by rule by the Department of Consumer and Business Services; (b) The individual applies for coverage during an open enrollment period; (c) A court issues an order that coverage be provided for a spouse or minor child under an employees employer sponsored health benefit plan and request for enrollment is made within 30 days after issuance of the court order; (d) The individual is employed by an employer that offers multiple health benefit plans and the individual elects a different health benefit plan during an open enrollment period; or (e) The individuals coverage under Medicaid, Medicare, TRICARE, Indian Health Service or a publicly sponsored or subsidized health plan, including, but not limited to, the medical assistance program under ORS chapter 414, has been involuntarily terminated within 63 days after applying for coverage in a group health benefit plan. (20) "Multiple employer welfare arrangement" means a multiple employer welfare arrangement as defined in section 3 of the federal Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1002, that is subject to ORS 750.301 to 750.341. (21) "Preexisting condition exclusion" means a limitation or exclusion of benefits or a denial of coverage based on a medical condition being present before the effective date of coverage or before the date coverage is denied, whether or not any medical advice, diagnosis, care or treatment was recommended or received for the condition before the date of coverage or denial of coverage. (22) "Premium" includes insurance premiums or other fees charged for a health benefit plan, including the costs of benefits paid or reimbursements made to or on behalf of enrollees covered by the plan. (23) "Rating period" means the 12-month calendar period for which premium rates established by a carrier are in effect, as determined by the carrier. (24) "Representative" does not include an insurance producer or an employee or authorized representative of an insurance producer or carrier. (25)(a) "Short term health insurance policy" means a policy of health insurance that is in effect for a period of three months or less, including the term of a renewal of the policy. (b) As used in this subsection, "term of a renewal" includes the term of a new short term health insurance policy issued by an insurer to a policyholder no later than 60 days after the expiration of a short term health insurance policy issued by the insurer to the policyholder. (26) "Small employer" means an employer who employed an average of at least one but not more than 50 full-time equivalent employees on business days during the preceding calendar year and who employs at least one full-time equivalent employee on the first day of the plan year, determined in accordance with a methodology prescribed by the Department of Consumer and Business Services by rule. [Formerly 743.730; 2017 c.152 8,8a; 2021 c.205 6; 2021 c.281 2]
(1) If an affiliated group of employers is treated as a single employer under section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, a carrier may issue a single group health benefit plan to the affiliated group on the basis of the number of employees in the affiliated group if the group requests such coverage. (2) Subsequent to the issuance of a health benefit plan to a small employer, other than a plan issued through the health insurance exchange, a carrier shall determine annually the number of employees of the employer for purposes of determining the employers ongoing eligibility as a small employer. (3)(a) ORS 743B.010 to 743B.013 shall continue to apply to a health benefit plan issued outside of the exchange to a small employer until the plan anniversary date following the date the employer no longer meets the definition of a small employer. (b) ORS 743B.010 to 743B.013 shall continue to apply to an employer that receives coverage through the exchange until the employer no longer receives coverage through the exchange and is no longer a small employer. [Formerly 743.733]
(1) Except as provided in subsection (2) of this section, every health benefit plan shall be subject to the provisions of ORS 743B.010 to 743B.013, if the plan provides health benefits covering one or more employees of a small employer and if any one of the following conditions is met: (a) Any portion of the premium or benefits is paid by a small employer or any employee is reimbursed, whether through wage adjustments or otherwise, by a small employer for any portion of the health benefit plan premium; or (b) The health benefit plan is treated by the employer or any of the employees as part of a plan or program for the purposes of section 106, section 125 or section 162 of the Internal Revenue Code of 1986, as amended. (2) Subsection (1) of this section does not apply to: (a) An individual health benefit plan for which a portion of the premium is reimbursed through a qualified small employer health reimbursement arrangement as defined in section 9831 of the Internal Revenue Code; or (b) An individual health benefit plan that is considered to be integrated with a health reimbursement arrangement or other account-based group health plan authorized by federal law. (3) Except as otherwise provided by ORS 743B.010 to 743B.013 or other law, no health benefit plan offered to a small employer shall: (a) Inhibit a carrier from contracting with providers or groups of providers with respect to health care services or benefits; or (b) Impose any restriction on the ability of a carrier to negotiate with providers regarding the level or method of reimbursing care or services provided under health benefit plans. (4)(a) A carrier may provide different health benefit plans to different categories of employees of a small employer when the employer has chosen to establish different categories of employees in a manner that does not relate to the actual or expected health status of such employees or their dependents. The categories must be based on bona fide employment-based classifications that are consistent with the employers usual business practice. (b) Except as provided in ORS 743B.012 (7), a carrier that offers coverage to a small employer shall offer coverage to all eligible employees of the small employer. (c) If a small employer elects to offer coverage to dependents of eligible employees, the carrier shall offer coverage to all dependents of eligible employees. (5) An insurer may not deny, delay or terminate participation of an individual in a group health benefit plan or exclude coverage otherwise provided to an individual under a group health benefit plan based on a preexisting condition of the individual. [Formerly 743.734; 2017 c.152 9; 2019 c.285 6]
(1) As a condition of transacting business in the small employer health insurance market in this state, a carrier shall offer small employers all of the carriers health benefit plans, approved by the Department of Consumer and Business Services for use in the small employer market, for which the small employer is eligible. (2) A carrier shall issue to a small employer any health benefit plan that is offered by the carrier if the small employer applies for the plan and agrees to make the required premium payments and to satisfy the other provisions of the health benefit plan. (3) A multiple employer welfare arrangement, professional or trade association or other similar arrangement established or maintained to provide benefits to a particular trade, business, profession or industry or their subsidiaries may not issue coverage to a group or individual that is not in the same trade, business, profession or industry as that covered by the arrangement. The arrangement shall accept all groups and individuals in the same trade, business, profession or industry or their subsidiaries that apply for coverage under the arrangement and that meet the requirements for membership in the arrangement. For purposes of this subsection, the requirements for membership in an arrangement may not include any requirements that relate to the actual or expected health status of the prospective enrollee. (4) A carrier shall, pursuant to subsection (2) of this section, accept applications from and offer coverage to a small employer group covered under an existing health benefit plan regardless of whether a prospective enrollee is excluded from coverage under the existing plan because of late enrollment. When a carrier accepts an application for a small employer group, the carrier may continue to exclude the prospective enrollee excluded from coverage by the replaced plan until the prospective enrollee would have become eligible for coverage under that replaced plan. (5) A carrier is not required to accept applications from and offer coverage pursuant to subsection (2) of this section if the department finds that acceptance of an application or applications would endanger the carriers ability to fulfill its contractual obligations or result in financial impairment of the carrier. (6) A carrier shall actively market all health benefit plans that are offered by the carrier to small employers in the geographical areas in which the carrier makes coverage available or provides benefits. (7)(a) Subsection (2) of this section does not require a carrier to offer coverage to or accept applications from: (A) A small employer if the small employer is not physically located in the carriers approved service area; (B) An employee of a small employer if the employee does not work or reside within the carriers approved service areas; or (C) Small employers located within an area where the carrier reasonably anticipates, and demonstrates to the department, that it will not have the capacity in its network of providers to deliver services adequately to the enrollees of those small employer groups because of its obligations to existing small employer group contract holders and enrollees. (b) A carrier that does not offer coverage pursuant to paragraph (a)(C) of this subsection may not offer coverage in the applicable service area to new employer groups other than small employers until the carrier resumes enrolling groups of new small employers in the applicable area. (8) For purposes of ORS 743B.010 to 743B.013, except as provided in this subsection, carriers that are affiliated carriers or that are eligible to file a consolidated tax return pursuant to ORS 317.715 shall be treated as one carrier and any restrictions or limitations imposed by ORS 743B.010 to 743B.013 apply as if all health benefit plans delivered or issued for delivery to small employers in this state by the affiliated carriers were issued by one carrier. However, any insurance company or health maintenance organization that is an affiliate of a health care service contractor located in this state, or any health maintenance organization located in this state that is an affiliate of an insurance company or health care service contractor, may treat the health maintenance organization as a separate carrier and each health maintenance organization that operates only one health maintenance organization in a service area in this state may be considered a separate carrier. (9) A carrier that elects to discontinue offering all of its health benefit plans to small employers under ORS 743B.013 (3)(e) or elects to discontinue renewing all such plans is prohibited from offering health benefit plans to small employers in this state for a period of five years from: (a) The date of notice to the department pursuant to ORS 743B.013 (3)(e); or (b) If notice is not provided under paragraph (a) of this subsection, the date on which the department provides notice to the carrier that the department has determined that the carrier has effectively discontinued offering health benefit plans to small employers in this state. (10) The department may, in accordance with ORS 743B.129, shorten the period of prohibition described in subsection (9) of this section if necessary to ensure, in all geographic areas of this state, that: (a) A competitive health insurance market exists; (b) Small employers have a reasonable number of health insurance options available to them; and (c) Consumers who purchase insurance are protected. [Formerly 743.736; 2017 c.206 4]
(1) A health benefit plan issued to a small employer: (a) Other than a grandfathered health plan, must cover essential health benefits consistent with 42 U.S.C. 300gg-11. (b) May require an affiliation period that does not exceed two months for an enrollee or 90 days for a late enrollee. (c) May not apply a preexisting condition exclusion to any enrollee. (2) Late enrollees in a small employer health benefit plan may be subjected to a group eligibility waiting period that does not exceed 90 days. (3) Each small employer health benefit plan is renewable with respect to all eligible enrollees at the option of the policyholder, small employer or contract holder unless: (a) The policyholder, small employer or contract holder fails to pay the required premiums. (b) The policyholder, small employer or contract holder or, with respect to coverage of individual enrollees, an enrollee or a representative of an enrollee engages in fraud or makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan. (c) The number of enrollees covered under the plan is less than the number or percentage of enrollees required by participation requirements under the plan. (d) The small employer fails to comply with the contribution requirements under the health benefit plan. (e) The carrier discontinues both offering and renewing all of the carriers small employer health benefit plans in this state or in a specified service area within this state. In order to discontinue plans under this paragraph, the carrier: (A) Must give notice of the decision to the Department of Consumer and Business Services and to all policyholders covered by the plans; (B) May not cancel coverage under the plans for 180 days after the date of the notice required under subparagraph (A) of this paragraph if coverage is discontinued in the entire state or in a specified service area, except that: (i) The carrier shall cancel coverage in accordance with subparagraph (C) of this paragraph if the cancellation is for a specified service area in the circumstances described in subparagraph (C) of this paragraph; and (ii) The Director of the Department of Consumer and Business Services may specify a cancellation date other than the cancellation date specified in this subparagraph if the carrier is subject to a delinquency proceeding, as defined in ORS 734.014; and (C) May not cancel coverage under the plans for 90 days after the date of the notice required under subparagraph (A) of this paragraph if coverage is discontinued in a specified service area because of an inability to reach an agreement with the health care providers or organization of health care providers to provide services under the plans within the service area. (f) The carrier discontinues both offering and renewing a small employer health benefit plan in a specified service area within this state because of an inability to reach an agreement with the health care providers or organization of health care providers to provide services under the plan within the service area. In order to discontinue a plan under this paragraph, the carrier: (A) Must give notice to the department and to all policyholders covered by the plan; (B) May not cancel coverage under the plan for 90 days after the date of the notice required under subparagraph (A) of this paragraph; and (C) Must offer in writing to each small employer covered by the plan, all other small employer health benefit plans that the carrier offers to small employers in the specified service area. The carrier shall issue any such plans pursuant to the provisions of ORS 743B.010 to 743B.013. The carrier shall offer the plans at least 90 days prior to discontinuation. (g) The carrier discontinues both offering and renewing a health benefit plan, other than a grandfathered health plan, for all small employers in this state or in a specified service area within this state, other than a plan discontinued under paragraph (f) of this subsection. (h) The carrier discontinues both offering and renewing a grandfathered health plan for all small employers in this state or in a specified service area within this state, other than a plan discontinued under paragraph (f) of this subsection. (i) With respect to plans that are being discontinued under paragraph (g) or (h) of this subsection, the carrier must: (A) Offer in writing to each small employer covered by the plan, all other health benefit plans that the carrier offers to small employers in the specified service area. (B) Issue any such plans pursuant to the provisions of ORS 743B.010 to 743B.013. (C) Offer the plans at least 90 days prior to discontinuation. (D) Act uniformly without regard to the claims experience of the affected policyholders or the health status of any current or prospective enrollee. (j) The Director of the Department of Consumer and Business Services orders the carrier to discontinue coverage in accordance with procedures specified or approved by the director upon finding that the continuation of the coverage would: (A) Not be in the best interests of the enrollees; or (B) Impair the carriers ability to meet contractual obligations. (k) In the case of a small employer health benefit plan that delivers covered services through a specified network of health care providers, there is no longer any enrollee who lives, resides or works in the service area of the provider network. (L) In the case of a health benefit plan that is offered in the small employer market only to one or more bona fide associations, the membership of an employer in the association ceases and the termination of coverage is not related to the health status of any enrollee. (4) A carrier may modify a small employer health benefit plan at the time of coverage renewal. The modification is not a discontinuation of the plan under subsection (3)(e), (g) and (h) of this section. (5) Notwithstanding any provision of subsection (3) of this section to the contrary, a carrier may not rescind the coverage of an enrollee in a small employer health benefit plan unless: (a) The enrollee or a person seeking coverage on behalf of the enrollee: (A) Performs an act, practice or omission that constitutes fraud; or (B) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan; (b) The carrier provides at least 30 days advance written notice, in the form and manner prescribed by the department, to the enrollee; and (c) The carrier provides notice of the rescission to the department in the form, manner and time frame prescribed by the department by rule. (6) Notwithstanding any provision of subsection (3) of this section to the contrary, a carrier may not rescind a small employer health benefit plan unless: (a) The small employer or a representative of the small employer: (A) Performs an act, practice or omission that constitutes fraud; or (B) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan; (b) The carrier provides at least 30 days advance written notice, in the form and manner prescribed by the department, to each plan enrollee who would be affected by the rescission of coverage; and (c) The carrier provides notice of the rescission to the department in the form, manner and time frame prescribed by the department by rule. (7)(a) A carrier may continue to enforce reasonable employer participation and contribution requirements on small employers. However, participation and contribution requirements shall be applied uniformly among all small employer groups with the same number of eligible employees applying for coverage or receiving coverage from the carrier. In determining minimum participation requirements, a carrier shall count only those employees who are not covered by an existing group health benefit plan, Medicaid, Medicare, TRICARE, Indian Health Service or a publicly sponsored or subsidized health plan, including but not limited to the medical assistance program under ORS chapter 414. (b) A carrier may not deny a small employers application for coverage under a health benefit plan based on participation or contribution requirements but may require small employers that do not meet participation or contribution requirements to enroll during the open enrollment period beginning November 15 and ending December 15. (8) Premium rates for small employer health benefit plans, except grandfathered health plans, are subject to the following provisions: (a) Each carrier must file with the department the initial geographic average rate and any changes in the geographic average rate with respect to each health benefit plan issued by the carrier to small employers. (b)(A) The variations in premium rates charged during a rating period for health benefit plans issued to small employers must be based solely on the factors specified in subparagraph (B) of this paragraph. A carrier may elect which of the factors specified in subparagraph (B) of this paragraph apply to premium rates for health benefit plans for small employers. All other factors must be applied in the same actuarially sound way to all small employer health benefit plans. (B) The variations in premium rates described in subparagraph (A) of this paragraph may be based only on one or more of the following factors as prescribed by the department by rule: (i) The ages of enrolled employees and their dependents, except that the rate for adults may not vary by more than three to one; (ii) The level at which enrolled employees and dependents of enrolled employees engage in tobacco use, except that the rate may not vary by more than 1.5 to one; and (iii) Adjustments to reflect differences in family composition. (C) A carrier shall apply the carriers schedule of premium rate variations as approved by the department and in accordance with this paragraph. Except as otherwise provided in this section, the premium rate established by a carrier for a small employer health benefit plan applies uniformly to all employees of the small employer enrolled in that plan. (c) Except as provided in paragraph (b) of this subsection, the variation in premium rates between different health benefit plans offered by a carrier to small employers must be based solely on objective differences in plan design or coverage, age, tobacco use and family composition and must not include differences based on the risk characteristics of groups assumed to select a particular health benefit plan. (d) A carrier may not increase the rates of a health benefit plan issued to a small employer more than once in a 12-month period. Annual rate increases are effective on the plan anniversary date of the health benefit plan issued to a small employer. The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following: (A) The percentage change in the geographic average rate measured from the first day of the prior rating period to the first day of the new period; and (B) Any adjustment attributable to changes in age and differences in family composition. (9) Premium rates for grandfathered health plans are subject to requirements prescribed by the department by rule. (10) In connection with the offering for sale of any health benefit plan to a small employer, each carrier shall make a reasonable disclosure as part of the carriers solicitation and sales materials of: (a) The full array of health benefit plans that are offered to small employers by the carrier; (b) The authority of the carrier to adjust rates and premiums, and the extent to which the carrier considers age, tobacco use, family composition and geographic factors in establishing and adjusting rates and premiums; and (c) The benefits and premiums for all health insurance coverage for which the employer is qualified. (11)(a) Each carrier shall maintain at the carriers principal place of business a complete and detailed description of the carriers rating practices and renewal underwriting practices relating to the carriers small employer health benefit plans, including information and documentation that demonstrate that the carriers rating methods and practices are based upon commonly accepted actuarial practices and are in accordance with sound actuarial principles. (b) A carrier offering a small employer health benefit plan shall file with the department at least once every 12 months an actuarial certification that the carrier is in compliance with ORS 743B.010 to 743B.013 and that the rating methods of the carrier are actuarially sound. Each certification must be in a uniform form and manner and must contain such information as specified by the department. The carrier shall retain a copy of each certification at the carriers principal place of business. A carrier is not required to file the actuarial certification under this paragraph if the department has approved the carriers rate filing within the preceding 12-month period. (c) A carrier shall make the information and documentation described in paragraph (a) of this subsection available to the department upon request. Except as provided in ORS 743.018 and except in cases of violations of ORS 743B.010 to 743B.013, the information is proprietary and trade secret information and is not subject to disclosure to persons outside the department except as agreed to by the carrier or as ordered by a court of competent jurisdiction. (12) A carrier may not provide any financial or other incentive to any insurance producer that would encourage the insurance producer to sell health benefit plans of the carrier to small employer groups based on a small employer groups anticipated claims experience. (13) For purposes of this section, the date a small employer health benefit plan is continued is the anniversary date of the first issuance of the health benefit plan. (14) A carrier shall include a provision that offers coverage to all eligible employees of a small employer and to all dependents of the eligible employees to the extent the employer chooses to offer coverage to dependents. (15) All small employer health benefit plans must contain special enrollment periods during which eligible employees and dependents may enroll for coverage, as provided by federal law and rules adopted by the department. (16) A small employer health benefit plan may not impose annual or lifetime limits on the dollar amount of essential health benefits. [Formerly 743.737; 2017 c.479 16a; 2017 c.701 23]
(1) The Department of Consumer and Business Services shall adopt by rule a method for determining whether: (a) An employee is an eligible employee as defined in ORS 743B.005; and (b) An employer is a small employer as defined in ORS 743B.005. (2) The method adopted by the department under subsection (1) of this section must be consistent with corresponding federal requirements for the Small Business Health Options Program as defined in ORS 741.300. [2015 c.515 3a] Note: 743B.020 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) In order to ensure the broadest availability of small employer and individual health benefit plans, the Department of Consumer and Business Services may approve market conduct and other requirements for carriers and insurance producers, including: (a) Registration by each carrier with the department of the carriers intention to offer group health benefit plans under ORS 743B.010 to 743B.013 or individual health benefit plans, or both. (b) To the extent deemed necessary by the department to ensure the fair distribution of high-risk individuals and groups among carriers, periodic reports by carriers and insurance producers concerning small employer and individual health benefit plans issued, provided that reporting requirements shall be limited to information concerning case characteristics and numbers of health benefit plans in various categories sold or issued to small employers and individuals. (c) Methods concerning periodic demonstration by carriers offering health benefit plans to individuals or small employers and insurance producers that the carriers and insurance producers are selling or issuing health benefit plans in fulfillment of the purposes of ORS 743.004, 743.022, 743.535 and 743B.003 to 743B.127. (2) The department may require carriers and insurance producers offering health benefit plans to individuals or small employers to use the open and special enrollment periods prescribed by the department by rule. [Formerly 743.745]
All carriers that offer individual or group health benefit plans shall provide certifications and disclosure of coverage in accordance with 42 U.S.C. 300gg(e) and 300gg-43 as amended and in effect on July 1, 1997. [Formerly 743.749]
(1) A carrier may not: (a) Require an applicant to provide health-related information as a precondition for the issuance of an individual health benefit plan policy; or (b) Deny coverage under an individual health benefit plan policy based on health-related information provided by the applicant. (2) A carrier may require an enrollee in a health benefit plan to complete the standard health statement prescribed by the department for the purpose of: (a) Managing the enrollees health care; or (b) Administering: (A) A program of health promotion or disease prevention, as described in 42 U.S.C. 300gg-4; (B) A program to promote healthy behaviors under ORS 743.824; or (C) A wellness program defined by the department by rule. [Formerly 743.751; 2021 c.281 3]
(1) Except in the case of a late enrollee and as otherwise provided in this section, a carrier offering a group health benefit plan to a group of two or more prospective certificate holders shall not decline to offer coverage to any eligible prospective enrollee and shall not impose different terms or conditions on the coverage, premiums or contributions of any enrollee in the group that are based on the actual or expected health status of the enrollee. (2) A carrier that elects to discontinue offering all of its group health benefit plans under ORS 743B.105 (5)(e), elects to discontinue renewing all such plans or elects to discontinue offering and renewing all such plans is prohibited from offering health benefit plans in the group market in this state for a period of five years from: (a) The date of notice to the Director of the Department of Consumer and Business Services pursuant to ORS 743B.105 (5)(e); or (b) If notice is not provided under paragraph (a) of this subsection, the date on which the director provides notice to the carrier that the director has determined that the carrier has effectively discontinued offering group health benefit plans in this state. (3) The Department of Consumer and Business Services may, in accordance with ORS 743B.129, shorten the period of prohibition described in subsection (2) of this section if necessary to ensure, in all geographic areas of this state, that: (a) A competitive health insurance market exists; (b) Group purchasers have a reasonable number of health insurance options available to them; and (c) Consumers who purchase insurance are protected. (4) Subsection (1) of this section applies only to group health benefit plans that are not small employer health benefit plans. (5) Nothing in this section shall prohibit an employer from providing different group health benefit plans to various categories of employees as defined by the employer nor prohibit an employer from providing health benefit plans through different carriers so long as the employers categories of employees are established in a manner that does not relate to the actual or expected health status of the employees or their dependents. (6) A multiple employer welfare arrangement, professional or trade association, or other similar arrangement established or maintained to provide benefits to a particular trade, business, profession or industry or their subsidiaries, shall not issue coverage to a group or individual that is not in the same trade, business, profession or industry or their subsidiaries as that covered by the arrangement. The arrangement shall accept all groups and individuals in the same trade, business, profession or industry or their subsidiaries that apply for coverage under the arrangement and that meet the requirements for membership in the arrangement. For purposes of this subsection, the requirements for membership in an arrangement shall not include any requirements that relate to the actual or expected health status of the prospective enrollee. [Formerly 743.752; 2017 c.206 5]
The following requirements apply to all group health benefit plans other than small employer health benefit plans covering two or more certificate holders: (1) A carrier offering a group health benefit plan may not decline to offer coverage to any eligible prospective enrollee and may not impose different terms or conditions on the coverage, premiums or contributions of any enrollee in the group that are based on the actual or expected health status of the enrollee. (2) A group health benefit plan may not apply a preexisting condition exclusion to any enrollee but may impose: (a) An affiliation period that does not exceed two months for an enrollee or three months for a late enrollee; or (b) A group eligibility waiting period for late enrollees that does not exceed 90 days. (3) Each group health benefit plan shall contain a special enrollment period during which eligible employees and dependents may enroll for coverage, as provided by federal law and rules adopted by the Department of Consumer and Business Services. (4)(a) A carrier shall issue to a group any of the carriers group health benefit plans offered by the carrier for which the group is eligible, if the group applies for the plan, agrees to make the required premium payments and agrees to satisfy the other requirements of the plan. (b) The department may waive the requirements of this subsection if the department finds that issuing a plan to a group or groups would endanger the carriers ability to fulfill the carriers contractual obligations or result in financial impairment of the carrier. (5) Each group health benefit plan shall be renewable with respect to all eligible enrollees at the option of the policyholder unless: (a) The policyholder fails to pay the required premiums. (b) The policyholder or, with respect to coverage of individual enrollees, an enrollee or a representative of an enrollee engages in fraud or makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan. (c) The number of enrollees covered under the plan is less than the number or percentage of enrollees required by participation requirements under the plan. (d) The policyholder fails to comply with the contribution requirements under the plan. (e) The carrier discontinues both offering and renewing, all of the carriers group health benefit plans in this state or in a specified service area within this state. In order to discontinue plans under this paragraph, the carrier: (A) Must give notice of the decision to the department and to all policyholders covered by the plans; (B) May not cancel coverage under the plans for 180 days after the date of the notice required under subparagraph (A) of this paragraph if coverage is discontinued in the entire state or in a specified service area, except that: (i) The carrier shall cancel coverage in accordance with subparagraph (C) of this paragraph if the cancellation is for a specified service area in the circumstances described in subparagraph (C) of this paragraph; and (ii) The Director of the Department of Consumer and Business Services may specify a cancellation date other than the cancellation date specified in this subparagraph if the carrier is subject to a delinquency proceeding, as defined in ORS 734.014; and (C) May not cancel coverage under the plans for 90 days after the date of the notice required under subparagraph (A) of this paragraph if coverage is discontinued in a specified service area because of an inability to reach an agreement with the health care providers or organization of health care providers to provide services under the plans within the service area. (f) The carrier discontinues both offering and renewing a group health benefit plan in a specified service area within this state because of an inability to reach an agreement with the health care providers or organization of health care providers to provide services under the plan within the service area. In order to discontinue a plan under this paragraph, the carrier: (A) Must give notice of the decision to the department and to all policyholders covered by the plan; (B) May not cancel coverage under the plan for 90 days after the date of the notice required under subparagraph (A) of this paragraph; and (C) Must offer in writing to each policyholder covered by the plan, all other group health benefit plans that the carrier offers in the specified service area. The carrier shall offer the plans at least 90 days prior to discontinuation. (g) The carrier discontinues both offering and renewing a group health benefit plan, other than a grandfathered health plan, for all groups in this state or in a specified service area within this state, other than a plan discontinued under paragraph (f) of this subsection. (h) The carrier discontinues both offering and renewing a grandfathered health plan for all groups in this state or in a specified service are within this state, other than a plan discontinued under paragraph (f) of this subsection. (i) With respect to plans that are being discontinued under paragraph (g) or (h) of this subsection, the carrier must: (A) Offer in writing to each policyholder covered by the plan, one or more health benefit plans that the carrier offers to groups in the specified service area. (B) Offer the plans at least 90 days prior to discontinuation. (C) Act uniformly without regard to the claims experience of the affected policyholders or the health status of any current or prospective enrollee. (j) The director orders the carrier to discontinue coverage in accordance with procedures specified or approved by the director upon finding that the continuation of the coverage would: (A) Not be in the best interests of the enrollees; or (B) Impair the carriers ability to meet contractual obligations. (k) In the case of a group health benefit plan that delivers covered services through a specified network of health care providers, there is no longer any enrollee who lives, resides or works in the service area of the provider network. (L) In the case of a health benefit plan that is offered in the group market only to one or more bona fide associations, the membership of an employer in the association ceases and the termination of coverage is not related to the health status of any enrollee. (6) A carrier may modify a group health benefit plan at the time of coverage renewal. The modification is not a discontinuation of the plan under subsection (5)(e), (g) and (h) of this section. (7) Notwithstanding any provision of subsection (5) of this section to the contrary, a carrier may not rescind the coverage of an enrollee under a group health benefit plan unless: (a) The enrollee: (A) Performs an act, practice or omission that constitutes fraud; or (B) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan; (b) The carrier provides at least 30 days advance written notice, in the form and manner prescribed by the department, to the enrollee; and (c) The carrier provides notice of the rescission to the department in the form, manner and time frame prescribed by the department by rule. (8) Notwithstanding any provision of subsection (5) of this section to the contrary, a carrier may not rescind a group health benefit plan unless: (a) The plan sponsor or a representative of the plan sponsor: (A) Performs an act, practice or omission that constitutes fraud; or (B) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan; (b) The carrier provides at least 30 days advance written notice, in the form and manner prescribed by the department, to each plan enrollee who would be affected by the rescission of coverage; and (c) The carrier provides notice of the rescission to the department in the form, manner and time frame prescribed by the department by rule. (9) A group health benefit plan may not impose annual or lifetime limits on the dollar amount of essential health benefits. [Formerly 743.754; 2017 c.479 17]
(1) An insurer offering a short term health insurance policy in this state shall include in any policy document, application materials or advertisements related to the policy a notice informing an insured or prospective insured under the policy that: (a) The policy is not subject to certain federal requirements for health insurance, including requirements in the Patient Protection and Affordable Care Act (P.L. 111-148) as amended by the Health Care and Education Reconciliation Act (P.L. 111-152); (b) The insured or prospective insured should carefully review the policy documents; and (c) If the policy expires or an insured loses coverage under the policy, the insured may have to wait until the next annual open enrollment period to enroll in another policy of health insurance. (2) The Department of Consumer and Business Services may adopt rules to implement this section, including rules prescribing the form or manner of the notice described in subsection (1) of this section or any additional information that must be included in the notice. [2021 c.205 2] Note: 743B.109 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
The Department of Consumer and Business Services may adopt rules incorporating, implementing and administering the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191), the Patient Protection and Affordable Care Act (P.L. 111-148) as amended by the Health Care and Education Reconciliation Act (P.L. 111-152) and federal regulations that are issued in conjunction with the Acts. [Formerly 743.758]
[Formerly 743.764; 2017 c.152 10; renumbered 743A.262 in 2017]
(1) With respect to coverage under an individual health benefit plan, a carrier may not impose a preexisting condition exclusion or an individual coverage waiting period. (2) With respect to individual coverage under a grandfathered health plan, a carrier: (a) May impose an exclusion period for specified covered services applicable to all individuals enrolling for the first time in the individual health benefit plan. (b) May not impose a preexisting condition exclusion unless the exclusion complies with the following requirements: (A) The exclusion applies only to a condition for which medical advice, diagnosis, care or treatment was recommended or received during the six-month period immediately preceding the individuals effective date of coverage. (B) The exclusion expires no later than six months after the individuals effective date of coverage. (c) May not impose a waiting period. (3) An individual health benefit plan other than a grandfathered health plan must cover, at a minimum, all essential health benefits. (4)(a) A carrier shall issue any individual health benefit plan offered by the carrier, other than a grandfathered health plan, to any individual who applies for the health benefit plan, if: (A) The individual resides in the geographic area where the plan is offered; (B) The individual agrees to make the required premium payments; and (C) Issuance of the health benefit plan is not otherwise prohibited by law. (b) The Department of Consumer and Business Services may allow a carrier to cap the number of individuals enrolled in an individual health benefit plan offered by the carrier if the department finds that issuing the health benefit plan to more individuals than are currently enrolled in the plan would have a material adverse effect upon the carriers ability to fulfill the carriers contractual obligations or result in the financial impairment of the carrier. (c) Except as otherwise provided in this section and ORS 743.022, a carrier offering an individual health benefit plan may not impose different terms or conditions on the coverage provided or the premium charged based on the actual or expected health status of an enrollee or prospective enrollee. (5) A carrier shall renew an individual health benefit plan, including a health benefit plan issued through a bona fide association, unless: (a) The policyholder fails to pay the required premiums. (b) The policyholder or a representative of the policyholder engages in fraud or makes an intentional misrepresentation of a material fact as prohibited by the terms of the policy. (c) The carrier discontinues both offering and renewing all of the carriers individual health benefit plans in this state or in a specified service area within this state. In order to discontinue the plans under this paragraph, the carrier: (A) Shall give notice of the decision to the Department of Consumer and Business Services and to all policyholders covered by the plans; (B) May not cancel coverage under the plans for 180 days after the date of the notice required under subparagraph (A) of this paragraph if coverage is discontinued in the entire state or in a specified service area, except that: (i) The carrier shall cancel coverage in accordance with subparagraph (C) of this paragraph if the cancellation is for a specified service area in the circumstances described in subparagraph (C) of this paragraph; and (ii) The Director of the Department of Consumer and Business Services may specify a cancellation date other than the cancellation date specified in this subparagraph if the carrier is subject to a delinquency proceeding, as defined in ORS 734.014; and (C) May not cancel coverage under the plans for 90 days after the date of the notice required under subparagraph (A) of this paragraph if coverage is discontinued in a specified service area because of an inability to reach an agreement with the health care providers or organization of health care providers to provide services under the plans within the service area. (d) The carrier discontinues both offering and renewing an individual health benefit plan in a specified service area within this state because of an inability to reach an agreement with the health care providers or organization of health care providers to provide services under the plan within the service area. In order to discontinue a plan under this paragraph, the carrier: (A) Shall give notice of the decision to the department and to all policyholders covered by the plan; (B) May not cancel coverage under the plan for 90 days after the date of the notice required under subparagraph (A) of this paragraph; and (C) Shall offer in writing to each policyholder covered by the plan, all other individual health benefit plans that the carrier offers in the specified service area. The carrier shall offer the plans at least 90 days prior to discontinuation. (e) The carrier discontinues both offering and renewing an individual health benefit plan, other than a grandfathered health plan, for all individuals in this state or in a specified service area within this state, other than a plan discontinued under paragraph (d) of this subsection. (f) The carrier discontinues both offering and renewing a grandfathered health plan for all individuals in this state or in a specified service area within this state, other than a plan discontinued under paragraph (d) of this subsection. (g) With respect to plans that are being discontinued under paragraph (e) or (f) of this subsection, the carrier shall: (A) Offer in writing to each policyholder covered by the plan, all health benefit plans that the carrier offers to individuals in the specified service area. (B) Offer the plans at least 90 days prior to discontinuation. (C) Act uniformly without regard to the claims experience of the affected policyholders or the health status of any current or prospective enrollee. (h) The Director of the Department of Consumer and Business Services orders the carrier to discontinue coverage in accordance with procedures specified or approved by the director upon finding that the continuation of the coverage would: (A) Not be in the best interests of the enrollee; or (B) Impair the carriers ability to meet the carriers contractual obligations. (i) In the case of an individual health benefit plan that delivers covered services through a specified network of health care providers, the enrollee no longer lives, resides or works in the service area of the provider network and the termination of coverage is not related to the health status of any enrollee. (j) In the case of a health benefit plan that is offered in the individual market only through one or more bona fide associations, the membership of an individual in the association ceases and the termination of coverage is not related to the health status of any enrollee. (6) A carrier may modify an individual health benefit plan at the time of coverage renewal. The modification is not a discontinuation of the plan under subsection (5)(c), (e) and (f) of this section. (7) Notwithstanding any other provision of this section, and subject to the provisions of ORS 743B.310 (2) and (4), a carrier may rescind an individual health benefit plan if the policyholder or a representative of the policyholder: (a) Performs an act, practice or omission that constitutes fraud; or (b) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the policy. (8) A carrier that continues to offer coverage in the individual market in this state is not required to offer coverage in all of the carriers individual health benefit plans. However, if a carrier elects to continue a plan that is closed to new individual policyholders instead of offering alternative coverage in the carriers other individual health benefit plans, the coverage for all existing policyholders in the closed plan is renewable in accordance with subsection (5) of this section. (9) An individual health benefit plan may not impose annual or lifetime limits on the dollar amount of essential health benefits. (10) A grandfathered health plan may not impose lifetime limits on the dollar amount of essential health benefits. (11) This section does not require a carrier to actively market, offer, issue or accept applications for: (a) A bona fide association health benefit plan from individuals who are not members of the bona fide association; or (b) A grandfathered health plan from individuals who are not eligible for coverage under the plan. [Formerly 743.766; 2017 c.479 18; 2019 c.285 7; 2021 c.281 4]
(1) Each carrier shall actively market all individual health benefit plans sold by the carrier that are not grandfathered health plans. (2) Except as provided in subsection (3) of this section, no carrier or insurance producer shall, directly or indirectly, discourage an individual from filing an application for coverage because of the health status, claims experience, occupation or geographic location of the individual. (3) Subsection (2) of this section does not apply with respect to information provided by a carrier to an individual regarding the established geographic service area or a restricted network provision of a carrier. (4) Rejection by a carrier of an application for coverage shall be in writing and shall state the reason or reasons for the rejection. (5) The Director of the Department of Consumer and Business Services may establish by rule additional standards to provide for the fair marketing and broad availability of individual health benefit plans. (6) A carrier that elects to discontinue offering all of its individual health benefit plans under ORS 743B.125 (5)(c) or to discontinue both offering and renewing all such plans is prohibited from offering and renewing health benefit plans in the individual market in this state for a period of five years from the date of notice to the director pursuant to ORS 743B.125 (5)(c) or, if such notice is not provided, from the date on which the director provides notice to the carrier that the director has determined that the carrier has effectively discontinued offering individual health benefit plans in this state. This subsection does not apply with respect to a health benefit plan discontinued in a specified service area by a carrier that covers services provided only by a particular organization of health care providers or only by health care providers who are under contract with the carrier. (7) The Department of Consumer and Business Services may, in accordance with ORS 743B.129, shorten the period of prohibition described in subsection (6) of this section if necessary to ensure, in all geographic areas of this state, that: (a) A competitive health insurance market exists; (b) Consumers have a reasonable number of health insurance options available to them; and (c) Consumers who purchase insurance are protected. [Formerly 743.769; 2017 c.206 6; 2019 c.285 8]
The Director of the Department of Consumer and Business Services shall adopt all rules necessary for the implementation and administration of ORS 743.022, 743B.125 and 743B.126. [Formerly 743.773]
Notwithstanding ORS 743B.012, 743B.013 and 743B.105, a carrier is not required to actively market: (1) A health benefit plan sold only to a bona fide association, to groups that are not members of the bona fide association; (2) A grandfathered health plan, to a group or individual who is not eligible for coverage under the plan; (3) A group health benefit plan, to a group that is not eligible for coverage under the plan; (4) A qualified health plan sold only through the health insurance exchange, to an individual or group outside of the exchange; or (5) A policy of group health insurance that may be delivered or issued for delivery in this state without the approval of the Director of the Department of Consumer and Business Services under ORS 742.003 (1). [2015 c.515 3] Note: 743B.128 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section, "procedural requirements" means the processes that the Department of Consumer and Business Services will use to obtain public input such as public hearings, rule comment periods and the electronic distribution of information by the department. (2) The department shall adopt rules establishing standards for shortening the period of prohibition under ORS 743B.012 (10), 743B.104 (3) and 743B.126 (7). The standards may include but are not limited to: (a) Specified procedural requirements. (b) Documentary standards for the submission of information by carriers or interested parties on whether the requirements of ORS 743B.012 (10), 743B.104 (3) and 743B.126 (7) have been met. (c) Factors the department will consider in determining whether the requirements of ORS 743B.012 (10), 743B.104 (3) and 743B.126 (7) have been met, which may include: (A) The reasons why the carrier elected to discontinue offering its health benefit plans in this state; (B) The intent of the carrier in resuming to offer health benefit plans in this state; and (C) Reasonable conditions, consistent with the Insurance Code, under which a carrier may be permitted to resume offering health benefit plans in this state. [2017 c.206 7] Note: 743B.129 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 743B or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) In each individual or small group market, in which a carrier offers a health benefit plan through or outside of the health insurance exchange described in ORS 741.310, the carrier must offer to residents of this state bronze and silver plans meeting the requirements of subsection (2) of this section and, if offered through the health insurance exchange, certified by the Oregon Health Authority as qualified health plans. (2) The department shall prescribe by rule, in accordance with federal requirements, the form, level of coverage and benefit design for the bronze and silver plans that must be offered under subsection (1) of this section. (3) As used in this section, "health benefit plan" has the meaning given that term in ORS 743B.005. [Formerly 743.822; 2019 c.285 9; 2021 c.569 38] Note: 743B.130 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
The Department of Consumer and Business Services shall enforce insurer compliance with the federal Newborns and Mothers Health Protection Act of 1996. [Formerly 743.823]
The Director of the Department of Consumer and Business Services shall appoint a Health Care Consumer Protection Advisory Committee with fair representation of health care consumers, providers and insurers. The committee shall advise the director regarding the implementation of ORS 743.008, 743A.012, 743B.001, 743B.195, 743B.197, 743B.200, 743B.202, 743B.204, 743B.220, 743B.250, 743B.400, 743B.403, 743B.405, 743B.420, 743B.422, 743B.423, 743B.424 and 743B.550 and other issues related to health care consumer protection. [Formerly 743.827; 2017 c.101 55; 2017 c.384 11]
Each insurer offering managed health insurance in this state shall: (1) Have a quality assessment program that enables the insurer to evaluate, maintain and improve the quality of health services provided to enrollees. The program shall include data gathering that allows the plan to measure progress on specific quality improvement goals chosen by the insurer. (2) File an annual summary with the Department of Consumer and Business Services that describes quality assessment activities, including any activities related to credentialing of providers, and reports any progress on the insurers quality improvement goals. (3) File annually with the department the following information: (a) Results of all publicly available federal Centers for Medicare and Medicaid Services reports and accreditation surveys by national accreditation organizations. (b) The insurers health promotion and disease prevention activities, if any, including a summary of screening and preventive health care activities covered by the insurer. [Formerly 743.814; 2017 c.101 56; 2017 c.384 12]
An insurer offering managed health insurance or preferred provider organization insurance in this state shall: (1) File an annual summary with the Department of Consumer and Business Services that reports on the scope and adequacy of the insurers network and the insurers ongoing monitoring to ensure that all covered services are reasonably accessible to enrollees. The Director of the Department of Consumer and Business Services shall adopt rules establishing uniform indicators that insurers offering managed health insurance or preferred provider organization insurance must use for reporting under this subsection, including but not limited to reporting on the scope and adequacy of networks. For the purpose of developing the rules, the director shall consult with an advisory committee appointed by the director. The advisory committee must include representatives of persons likely to be affected by the rules, including consumers, purchasers of health insurance and insurers that offer managed health insurance or preferred provider organization insurance. (2) Establish a means to provide to the insurers managed care plan or preferred provider organization insurance enrollees, purchasers and providers a meaningful opportunity to participate in the development and implementation of insurer policy and operation through: (a) The establishment of advisory panels; (b) Consultation with advisory panels on major policy decisions; or (c) Other means including but not limited to: (A) Governing board meetings or special meetings at which enrollees, purchasers and providers are invited to express opinions; and (B) Enrollee councils that are given a reasonable opportunity to meet with the governing board or its designee. [Formerly 743.817]
All insurers offering managed health insurance in this state shall include in contracts with providers a provision requiring that in the event the insurer fails to pay for health care services covered by the health benefit plan, the provider shall not bill or otherwise attempt to collect from enrollees for amounts owed by insurers, and enrollees shall not be liable to the provider for any sums owed by the insurer. Nothing in this section shall be construed to in any manner limit the applicability of ORS 750.095 (2). [Formerly 743.821]
(1) All insurers offering a health benefit plan in this state that requires an enrollee to designate a participating primary care physician shall: (a) Permit the enrollee to change participating primary care physicians at will, except that the enrollee may be restricted to making changes no more frequently than two times in any 12-month period and may be limited to designating only those participating primary care physicians accepting new patients. (b) Have available for employer purchasers of group health plans a point-of-service benefit plan providing for payment for the services of a provider on a fee-for-service or discounted fee-for-service basis with reasonable access to a broad array of licensed providers in the insurers geographic service area. Any higher premium for the point-of-service benefit plan may not exceed true actuarial cost, including administrative costs, to the insurer. (2) A health maintenance organization that is exempt from federal income tax under Internal Revenue Code section 501(c)(3) or (4) shall not be required to offer a point-of-service benefit plan as required by subsection (1)(b) of this section if offering such a plan could result in loss of federal tax-exempt status. Until such time as the federal government establishes guidelines for health maintenance organizations exempt from federal income tax that offer point-of-service benefit plans, such a health maintenance organization shall not be required to offer a point-of-service benefit plan if: (a) Enrollment in Internal Revenue Code section 501(m) coverages exceeds five percent of its business; or (b) Revenue from Internal Revenue Code section 501(m) coverages exceeds five percent of its revenue. (3) A health maintenance organization that is federally qualified under 42 U.S.C. 300e et seq. shall not be required to offer a point-of-service benefit plan in a manner or to an extent that is inconsistent with federal law and regulation. [Formerly 743.808]
(1) As used in this section, "womens health care provider" means an obstetrician or gynecologist, physician assistant specializing in womens health, advanced registered nurse practitioner specialist in womens health, naturopathic physician specializing in womens health or certified nurse midwife, practicing within the applicable lawful scope of practice. (2) Every health insurance policy that covers hospital, medical or surgical expenses and requires an enrollee to designate a participating primary care provider shall permit a female enrollee to designate a womens health care provider as the enrollees primary care provider if: (a) The womens health care provider meets the standards established by the insurer in collaboration with interested parties, including but not limited to the Oregon section of the American College of Obstetricians and Gynecologists; and (b) The womens health care provider requests that the insurer make the provider available for designation as a primary care provider. (3) If a female enrollee has designated a primary care provider who is not a womens health care provider, an insurance policy as described in subsection (2) of this section shall permit the enrollee to have direct access to a womens health care provider, without a referral or prior authorization, for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology. (4) The standards established by the insurer under subsection (2) of this section shall not prohibit an insurer from establishing the maximum number of participating primary care providers and participating womens health care providers necessary to serve a defined population or geographic service area. [Formerly 743.845; 2017 c.356 96]
(1) As used in this section, "continuity of care" means the feature of a health benefit plan under which an enrollee who is receiving care from an individual provider is entitled to continue with care with the individual provider for a limited period of time after the medical services contract terminates. (2) An insurer offering managed health insurance or preferred provider organization insurance in this state shall provide continuity of care to an enrollee under a health benefit plan if: (a) A medical services contract or other contract for an individual providers services is terminated; (b) The provider no longer participates in the provider network; and (c) The insurer does not cover services when services are provided to enrollees by the individual provider or covers services at a benefit level below the benefit level specified in the plan for out-of-network providers. (3) In order to obtain continuity of care, an enrollee must request continuity of care from the insurer. (4) An enrollee of a health benefit plan is entitled to continuity of care when the following conditions are met: (a) The enrollee is undergoing an active course of treatment that is medically necessary and, by agreement of the individual provider and the enrollee, it is desirable to maintain continuity of care; and (b) The contractual relationship between the individual provider and the insurer described in subsection (2) of this section with respect to the plan covering the enrollee has ended, except as provided in subsection (5) of this section. (5) A health benefit plan is not required to provide continuity of care when the contractual relationship between the individual provider and the insurer described in subsection (2) of this section ends under one of the following circumstances: (a) The contractual relationship between the individual provider and the insurer has ended because the individual provider: (A) Has retired; (B) Has died; (C) No longer holds an active license; (D) Has relocated out of the service area; (E) Has gone on sabbatical; or (F) Is prevented from continuing to care for patients because of other circumstances; or (b) The contractual relationship has terminated in accordance with provisions of the medical services contract relating to quality of care and all contractual appeal rights of the individual provider have been exhausted. (6) A health benefit plan is not required to provide continuity of care if the enrollee leaves a health benefit plan or if the policyholder discontinues the plan in which the enrollee is enrolled. (7) Except as provided for pregnancy in subsection (8) of this section, an enrollee who is entitled to continuity of care shall receive the care until the earlier of the following dates: (a) The day following the date on which the active course of treatment entitling the enrollee to continuity of care is completed; or (b) The 120th day after the date of notification by the insurer to the enrollee of the termination of the contractual relationship with the individual provider, as required by subsection (9) of this section. (8) An enrollee who is undergoing care for a pregnancy and who becomes entitled to continuity of care after commencement of the second trimester of the pregnancy shall receive the care until the later of the following dates: (a) The 45th day after the birth; or (b) As long as the enrollee continues under an active course of treatment, but not later than the 120th day after the date of notification by the insurer to the enrollee of the termination of the contractual relationship with the individual provider as required by subsection (9) of this section. (9) An insurer shall give written notice of the termination of the contractual relationship between the insurer and the individual provider and of the right to obtain continuity of care to those enrollees that the insurer knows or reasonably should know are under the care of the individual provider. The notice may be given prior to the date on which the termination of the contractual relationship with the individual provider takes effect only if the insurer gives notice in a good faith belief that the termination will take effect as stated in the notice. In any event, the notice shall be given to those enrollees not later than the 10th day after the date on which the termination of the contractual relationship with the individual provider takes effect. If the insurer first learns the identity of an affected enrollee after the date of termination of the contractual relationship with the individual provider or after the date on which the insurer gave notice to the other affected enrollees, then the insurer shall give a notice of termination to the affected enrollee not later than the 10th day after learning that enrollees identity. (10) For the purpose of notifying an enrollee under subsection (7)(b) or (8)(b) of this section: (a) The date of notification by the insurer is the earlier of the date on which the enrollee receives the notice or the date on which the insurer receives or approves the request for continuity of care. (b) If an individual provider belongs to a provider group, the provider group may deliver the notice if the insurer agrees that the provider group may do so and if the notice clearly provides the information that the plan is required to provide to the enrollee under subsection (9) of this section. (11) A health benefit plan may condition continuity of care upon the requirement that the individual provider adhere to the medical services contract between the provider and the insurer and accept the contractual reimbursement rate applicable at the time of contract termination or, if the contractual reimbursement rate was not based on a fee for service, a rate equivalent to the contractual rate. [Formerly 743.854]
(1) If an insurer offers a health benefit plan that requires, as a condition of coverage for specialty care services, a referral by a physician who is authorized under the plan or under the medical services contract between the physician and the insurer to refer an enrollee to specialty care services, the insurer must include the requirements of this section in the plan. The requirements apply only to benefits for which the member is contractually eligible under the plan. The requirements are as follows: (a) The plan must establish and implement a procedure for standing referrals, so that an enrollee is not required to obtain approval from the authorized physician for each appointment with a specialist after the initial appointment. (b) The plan must allow a standing referral for an enrollee if the authorized physician determines that the enrollee needs continuing care from a specialist. (c) The plan must allow an enrollee to request and obtain a second medical opinion or consultation from a second physician who is a network provider and who is authorized to make decisions regarding the need for a referral to a specialist. If the plan does not have a network provider available to give a second medical opinion or consultation, the plan must allow the enrollee to obtain the opinion or consultation from a similarly qualified physician who is not a network provider. The plan may not impose a charge for the second medical opinion or consultation that is greater than the cost that the enrollee would otherwise pay for an initial medical opinion or consultation from the second physician. (2) A specialist to whom an enrollee is referred must make regular reports to the authorized physician under subsection (1) of this section in accordance with best practices for coordinated care as established by the insurer. [Formerly 743.856]
All insurers offering a health benefit plan in this state shall: (1) Provide to all enrollees directly or in the case of a group policy to the employer or other policyholder for distribution to enrollees, to all applicants, and to prospective applicants upon request, the following information: (a) The insurers written policy on the rights of enrollees, including the right: (A) To participate in decision making regarding the enrollees health care. (B) To be treated with respect and with recognition of the enrollees dignity and need for privacy. (C) To have grievances handled in accordance with this section. (D) To be provided with the information described in this section. (b) An explanation of the procedures described in subsection (2) of this section for making coverage determinations and resolving grievances. The explanation must be culturally and linguistically appropriate, as prescribed by the Department of Consumer and Business Services by rule, and must include: (A) The procedures for requesting an expedited response to an internal appeal under subsection (2)(d) of this section or for requesting an expedited external review of an adverse benefit determination; (B) A statement that if an insurer does not comply with the decision of an independent review organization under ORS 743B.256, the enrollee may sue the insurer under ORS 743B.258; (C) The procedure to obtain assistance available from the insurer, if any, and from the Department of Consumer and Business Services in filing grievances; and (D) A description of the process for filing a complaint with the department. (c) A summary of benefits and an explanation of coverage in a form and manner prescribed by the department by rule. (d) A summary of the insurers policies on prescription drugs, including: (A) Cost-sharing differentials; (B) Restrictions on coverage; (C) Prescription drug formularies; (D) Procedures by which a provider with prescribing authority may prescribe clinically appropriate drugs not included on the formulary; (E) Procedures for the coverage of clinically appropriate prescription drugs not included on the formulary; and (F) A summary of the criteria for determining whether a drug is experimental or investigational. (e) A list of network providers and how the enrollee can obtain current information about the availability of providers and how to access and schedule services with providers, including clinic and hospital networks. The list must be available online and upon request in printed format. (f) Notice of the enrollees right to select a primary care provider and specialty care providers. (g) How to obtain referrals for specialty care in accordance with ORS 743B.227. (h) Restrictions on services obtained outside of the insurers network or service area. (i) The availability of continuity of care as required by ORS 743B.225. (j) Procedures for accessing after-hours care and emergency services as required by ORS 743A.012. (k) Cost-sharing requirements and other charges to enrollees. (L) Procedures, if any, for changing providers. (m) Procedures, if any, by which enrollees may participate in the development of the insurers corporate policies. (n) A summary of how the insurer makes decisions regarding coverage and payment for treatment or services, including a general description of any prior authorization and utilization review requirements that affect coverage or payment. (o) Disclosure of any risk-sharing arrangement the insurer has with physicians or other providers. (p) A summary of the insurers procedures for protecting the confidentiality of medical records and other enrollee information and the requirement under ORS 743B.555 that a carrier or third party administrator send communications containing protected health information only to the enrollee who is the subject of the protected health information. (q) An explanation of assistance provided to non-English-speaking enrollees. (r) Notice of the information available from the department that is filed by insurers as required under ORS 743B.200, 743B.202 and 743B.423. (2) Establish procedures, in accordance with requirements adopted by the department, for making coverage determinations and resolving grievances that provide for all of the following: (a) Timely notice of adverse benefit determinations. (b) A method for recording all grievances, including the nature of the grievance and significant action taken. (c) Written decisions. (d) An expedited response to a request for an internal appeal that accommodates the clinical urgency of the situation. (e) At least one but not more than two levels of internal appeal for group health benefit plans and one level of internal appeal for individual health benefit plans and for any denial of an exception to a prescription drug formulary. If an insurer provides: (A) Two levels of internal appeal, a person who was involved in the consideration of the initial denial or the first level of internal appeal may not be involved in the second level of internal appeal; and (B) No more than one level of internal appeal, a person who was involved in the consideration of the initial denial may not be involved in the internal appeal. (f)(A) An external review that meets the requirements of ORS 743B.252, 743B.254 and 743B.255, after the enrollee has exhausted internal appeals or after the enrollee has been deemed to have exhausted internal appeals. (B) An enrollee shall be deemed to have exhausted internal appeals if an insurer fails to strictly comply with this section and federal requirements for internal appeals. (g) The opportunity for the enrollee to receive continued coverage of an approved and ongoing course of treatment under the health benefit plan pending the conclusion of the internal appeal process. (h) The opportunity for the enrollee or any authorized representative chosen by the enrollee to: (A) Submit for consideration by the insurer any written comments, documents, records and other materials relating to the adverse benefit determination; and (B) Receive from the insurer, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the adverse benefit determination. (3) Establish procedures for notifying affected enrollees of: (a) A change in or termination of any benefit; and (b)(A) The termination of a primary care delivery office or site; and (B) Assistance available to enrollees in selecting a new primary care delivery office or site. (4) Provide the information described in subsection (2) of this section and ORS 743B.254 at each level of internal appeal to an enrollee who is notified of an adverse benefit determination or to an enrollee who files a grievance. (5) Upon the request of an enrollee, applicant or prospective applicant, provide: (a) The insurers annual report on grievances and internal appeals submitted to the department under subsection (8) of this section. (b) A description of the insurers efforts, if any, to monitor and improve the quality of health services. (c) Information about the insurers procedures for credentialing network providers. (6) In addition to the requirements in ORS 743B.423 and 743B.602, provide, upon the request of an enrollee, a written summary of information that the insurer may consider in its utilization review of a particular condition or disease, to the extent the insurer maintains such criteria. This subsection does not require an insurer to advise an enrollee how the insurer would cover or treat that particular enrollees disease or condition. Utilization review criteria that are proprietary shall be subject to oral disclosure only. (7) Maintain for a period of at least six years written records that document all grievances described in ORS 743B.001 (8)(a) and make the written records available for examination by the department or by an enrollee or authorized representative of an enrollee with respect to a grievance made by the enrollee. The written records must include but are not limited to the following: (a) Notices and claims associated with each grievance. (b) A general description of the reason for the grievance. (c) The date the grievance was received by the insurer. (d) The date of the internal appeal or the date of any internal appeal meeting held concerning the appeal. (e) The result of the internal appeal at each level of appeal. (f) The name of the covered person for whom the grievance was submitted. (8) Provide to the department, in the format prescribed by the department, an annual summary of the insurers aggregate data regarding: (a) Grievances; (b) Internal appeals; (c) Requests for external review; and (d) The following information about requests for prior authorization received by the insurer: (A) The number of requests received; (B) The number of requests that were initially denied and the reasons for the denials, including, but not limited to, lack of medical necessity or failure to provide additional clinical information requested by the insurer; (C) The number of requests that were initially approved; and (D) The number of denials that were reversed by internal appeals or external reviews. (9) Allow the exercise of any rights described in this section or ORS 743B.252 or 743B.255 by an authorized representative. (10) Procedures adopted under subsection (2) of this section for health benefit plans other than grandfathered health plans must be consistent with 42 U.S.C. 300-gg-19 and rules adopted by the United States Department of Health and Human Services implementing 42 U.S.C. 300-gg-19. (11) An adverse benefit determination under subsection (2)(a) of this section that is provided to an enrollee in a health benefit plan other than a grandfathered health plan must: (a) Be provided in a culturally and linguistically appropriate manner; (b) Be consistent with federal requirements regarding the manner and content for notices of benefit determinations and federal requirements for the full and fair review of adverse benefit determinations; and (c) Include the information required by subsection (4) of this section and: (A) Information sufficient to identify the claim involved, the date of services, the health care provider and, if applicable, the claim amount; (B) A statement describing the availability, upon request, of the information described in subsection (12) of this section; (C) The specific reason for the adverse benefit determination, a reference to the specific plan provisions on which the determination is based, the denial code and the meaning of the denial code and a description of the standard that was used to make the determination, if any; (D) A description of available internal appeals and external reviews, including expedited appeals and reviews, and instructions on how to initiate an appeal or review; and (E) Contact information for the office of consumer assistance within the Department of Consumer and Business Services. (12) Upon the request of an enrollee, an insurer that makes an adverse benefit determination with respect to the enrollee under a health benefit plan other than a grandfathered health plan must provide the enrollee with the diagnosis code, the meaning of the diagnosis code, the treatment code and the meaning of the treatment code that are associated with the adverse benefit determination. (13) An adverse benefit determination issued to an enrollee following the final level of internal appeals by an insurer under a health benefit plan other than a grandfathered health plan must, in addition to the requirements under subsection (11) of this section, include: (a) An explanation and discussion of the decision to uphold the initial adverse benefit determination; and (b) An authorization form, or other document that complies with state and federal privacy laws and is approved by the department, with which an enrollee that requests an external review under ORS 743B.255 may authorize the insurer and the enrollees treating health care provider to disclose medical records or other protected health information pertinent to the external review. [Formerly 743.804; 2017 c.152 11; 2019 c.284 9; 2021 c.154 2; 2021 c.205 7]
(1) An insurer offering health benefit plans in this state shall have an external review program that meets the requirements of this section and ORS 743B.255 and rules adopted by the Director of the Department of Consumer and Business Services to carry out the provisions of this section and ORS 743B.250 and 743B.255. Each insurer shall provide the external review through an independent review organization that is under contract with the director to provide external review. Each health benefit plan must allow an enrollee, by applying to the insurer or the director, to obtain review by an independent review organization of a dispute relating to an adverse benefit determination by the insurer on one or more of the following: (a) Whether a course or plan of treatment is medically necessary. (b) Whether a course or plan of treatment is experimental or investigational. (c) Whether a course or plan of treatment that an enrollee is undergoing is an active course of treatment for purposes of continuity of care under ORS 743B.225. (d) Whether a course or plan of treatment is delivered in an appropriate health care setting and with the appropriate level of care. (e) Whether an exception to the health benefit plans prescription drug formulary should be granted. (2) An insurer shall incur all costs of its external review program. The insurer may not establish or charge a fee payable by enrollees for conducting external review. (3)(a) When an enrollee applies for external review, the director shall appoint an independent review organization. When an independent review organization is appointed, the insurer shall forward all medical records and other relevant materials to the independent review organization no later than five business days after the appointment. The insurer shall produce additional information as requested by the independent review organization to the extent that the information is reasonably available to the insurer. An independent review organization may reverse the adverse benefit determination if the insurer fails to furnish records, information and materials to the independent review organization in a timely manner. (b) Paragraph (a) of this subsection does not require an insurer to disclose protected health information to an independent review organization if the disclosure is prohibited by state or federal law. (4) An enrollee may submit additional information to the independent review organization no later than five business days after the enrollees receipt of notification of the appointment of the independent review organization and the organization must consider the information in its review. (5) The insurer and the director shall expedite the external review: (a) If the adverse benefit determination concerns an admission, the availability of care, a continued stay or a health care service for a medical condition for which the enrollee received emergency services, as defined in ORS 743A.012, and has not been discharged from a health care facility; or (b) If a provider with an established clinical relationship to the enrollee certifies in writing and provides supporting documentation that the ordinary time period for external review would seriously jeopardize the life or health of the enrollee or the enrollees ability to regain maximum function. [Formerly 743.857; 2017 c.152 12; 2021 c.205 8]
(1) The Director of the Department of Consumer and Business Services shall contract with independent review organizations as provided in this section for the purpose of providing external review under ORS 743B.252. The director may have contracts with no more than five independent review organizations at any one time. Contracts shall be let with independent review organizations on a biennial basis. A contract may be renewed if both parties agree. (2) The director shall seek public comment when the director proposes to enter into a contract with an independent review organization or proposes to renew or not renew a contract. (3) When evaluating proposals to contract with independent review organizations, the director shall consider factors that include but are not limited to relative expertise, professionalism, quality of compliance with the rules established under subsection (4) of this section, cost and record of past performance. (4) The director shall adopt rules governing independent review organizations, their composition and their conduct. The rules shall include but need not be limited to: (a) Professional qualifications of health care providers, physicians or contract specialists making external review determinations; (b) Criteria requiring independent review organizations to demonstrate protections against bias and conflicts of interest; (c) Procedures for conducting external reviews; (d) Procedures for complaint investigations; (e) Procedures for ensuring the confidentiality of medical records transmitted to the independent review organizations for use in external reviews; (f) Fairness of procedures used by independent review organizations; (g) Fees for external reviews; (h) Timelines for decision making and notice to the parties; and (i) Quality assurance mechanisms to ensure timeliness and quality of review. (5) The director shall develop procedures for assigning cases filed by enrollees to independent review organizations under contract with the director. The cases shall be assigned on a random basis. The procedures shall allow an insurer only one opportunity to reject the assignment of an independent review organization to a particular case. [Formerly 743.858]
An insurer offering a health benefit plan shall include in the plan the following statements, in boldfaced type or otherwise emphasized: (1) A statement of the right of an enrollee to apply for external review by an independent review organization; (2) A statement that an enrollee applying for external review by an independent review organization may be required to authorize the release of any medical records necessary to conduct the external review; and (3) A statement that if the insurer does not follow a decision of an independent review organization, the enrollee has the right to sue the insurer. [Formerly 743.859; 2021 c.205 9]
(1) An enrollee shall apply in writing for external review of an adverse benefit determination by the insurer of a health benefit plan not later than the 180th day after receipt of the insurers final written decision following its grievance and internal appeal process under ORS 743B.250. (2) An enrollee is eligible for external review only if the enrollee has exhausted the plans internal appeal procedures established pursuant to ORS 743B.250 or be deemed to have exhausted the plans internal appeal procedures. The insurer may waive the requirement of compliance with the internal appeal procedures and have a dispute referred directly to external review upon the enrollees consent. An enrollee is deemed to have exhausted the internal appeal procedures if the insurer fails to strictly comply with ORS 743B.250 and federal requirements for internal appeals. (3) An enrollee who applies for external review of an adverse benefit determination shall provide complete and accurate information to the independent review organization as provided in ORS 743B.252. [Formerly 743.861; 2021 c.205 10]
(1) An independent review organization shall perform the following duties when appointed under ORS 743B.252 to review a dispute under a health benefit plan between an insurer and an enrollee: (a) Decide whether the dispute pertains to an adverse benefit determination and notify the enrollee and insurer in writing of the decision. If the decision is against the enrollee, the independent review organization shall notify the enrollee of the right to file a complaint with or seek other assistance from the Department of Consumer and Business Services and the availability of other assistance as specified by the department. (b) Appoint a reviewer or reviewers as determined appropriate by the independent review organization. At least one reviewer must be a clinician in the same or a similar specialty as the provider who prescribed the treatment that is under review. (c) Notify the enrollee of information that the enrollee is required to provide and any additional information the enrollee may provide, and when the information must be submitted as provided in ORS 743B.252. (d) Notify the insurer of additional information the independent review organization requires and when the information must be submitted as provided in ORS 743B.252. (e) Decide the dispute relating to the adverse benefit determination of the insurer and issue the decision in writing. (2) A decision by an independent review organization shall be based on expert medical judgment after consideration of the enrollees medical record, the recommendations of each of the enrollees providers, relevant medical, scientific and cost-effectiveness evidence and standards of medical practice in the United States. An independent review organization must make its decision in accordance with the coverage described in the health benefit plan, except that the independent review organization may override the insurers standards for medically necessary or experimental or investigational treatment if the independent review organization determines that the standards of the insurer are unreasonable or are inconsistent with sound medical practice. (3) When review is expedited, the independent review organization shall issue a decision not later than the third day after the date on which the enrollee applies to the insurer for an expedited review or the Director of the Department of Consumer and Business Services orders an expedited review. (4) When a review is not expedited, the independent review organization shall issue a decision not later than the 30th day after the enrollee applies to the insurer for a review or the director orders a review. (5) An independent review organization shall file synopses of its decisions with the director according to the format and other requirements established by the director. The synopses shall exclude information that is confidential, that is otherwise exempt from disclosure under ORS 192.345 and 192.355 or that may otherwise allow identification of an enrollee. The director shall make the synopses public. [Formerly 743.862; 2021 c.154 3]
(1) An insurer shall comply in a timely manner with a decision of an independent review organization under ORS 743B.256 that reverses, in whole or in part, an adverse benefit determination. If an insurer fails to comply with the decision, the Director of the Department of Consumer and Business Services may impose on the insurer a civil penalty of not more than $1 million. (2) A decision of an independent review organization is admissible in any legal proceeding involving the insurer or the enrollee and involving the disputed issues subject to external review. (3) The sanctions under subsection (1) of this section and the remedies under subsection (2) of this section are in addition to and not in lieu of other sanctions, rights and remedies provided by law or contract. [Formerly 743.863]
(1) An enrollee who is the subject of a decision of an independent review organization has a private right of action against the insurer for damages arising from an adverse benefit determination by the insurer that is subject to external review if the insurer fails to comply with the decision. (2) The Legislative Assembly intends that there is no private right of action under subsection (1) of this section if a court finds subsection (1) of this section to be unconstitutional or otherwise void. [Formerly 743.864]
(1) As used in this section: (a) "Adverse benefit determination" means a denial, reduction, termination of or failure to provide or pay, in whole or in part, for a benefit, including: (A) A denial, reduction, termination of or failure to provide or pay for a benefit that is based on a determination of a participants or beneficiarys eligibility to participate in a policy; and (B) A rescission of coverage with respect to a participant or beneficiary. (b) "Claim procedure" means an insurers procedure for filing benefit claims, providing notice of benefit determinations and appealing adverse benefit determinations. (2) An insurer that offers, issues or renews a disability income insurance policy in this state may not: (a) Unduly delay, inhibit or hamper a claimants submission of a claim for benefits under the disability income insurance policy or the insurers processing, consideration or determination of the claim; (b) Require a claimant to request more than two appeals of an adverse benefit determination to exhaust the insurers appeals process; or (c) Require mandatory arbitration of an adverse benefit determination unless the arbitration: (A) Constitutes one of the appeals described in paragraph (b) of this subsection and complies with the requirements that apply to an appeal; and (B) Does not preclude the claimant from challenging the result of the arbitration under applicable law. (3) An insurer that issues or renews a disability income insurance policy in this state shall: (a) Describe and provide to each person eligible for benefits under the policy a written summary of all claim procedures, timelines and deadlines that apply to claims under the policy. (b) Permit an authorized representative of a claimant to act on the claimants behalf in making a claim or appealing an adverse benefit determination, subject to the insurers reasonable determination as to whether the claimant has in fact authorized the representative to act on the claimants behalf. (c) Establish and administer processes and safeguards to ensure and verify that the insurer: (A) Determines benefit claims in accordance with the provisions of the policy and all other applicable laws, regulations and procedures; and (B) Applies policy provisions consistently among claims. (d) Determine and adjudicate all claims and appeals in a manner that ensures the independence and impartiality of the individuals who make the determinations or adjudications. (e) Notify each claimant of an adverse benefit determination not later than 45 days after receiving a claim, except that an insurer may extend the time within which the insurer may give the notification for a maximum of two additional 30-day periods if the insurer determines that the insurer needs additional information from the claimant or the delay is the result of circumstances beyond the insurers control and: (A) The insurer notifies the claimant of each extension before the expiration of the initial 45-day period or the first extension, as appropriate; and (B) The insurer explains, describes or states, as appropriate, in each notification of an extension: (i) The standards that apply to the determination; (ii) Any unresolved issues that prevent a determination; (iii) Any additional information the claimant must provide for the determination, giving a date not later than 45 days from the date of the notification for the claimant to provide the information; and (iv) The date by which the insurer expects to make the determination. (f) Notify the claimant in writing, by printed or electronic means, of the details of each adverse benefit determination, including any adverse benefit determination that follows an appeal of a previous adverse benefit determination. The Director of the Department of Consumer and Business Services may adopt rules that specify: (A) The form and format of the notification; and (B) Contents of the notification that include, at a minimum: (i) The specific reason for the adverse benefit determination; (ii) The specific policy provisions on which the insurer based the adverse benefit determination; (iii) A description of any additional information the claimant must provide to complete a claim or appeal and an explanation of why the information is necessary; (iv) A description of the insurers claim procedures and time limits within which a claimant must request an appeal, along with a statement that the claimant has a right to bring a civil action following the adverse benefit determination once the claimant exhausts the claimants remedies under the insurers appeals process; (v) An explanation of the insurers determination that includes, if applicable: (I) Reasons why the insurer did not agree with or follow advice, opinions or recommendations from vocational consultants or health care providers who evaluated or treated the claimant and that the claimant included in the claim, or why the insurer disagreed with a determination by the United States Social Security Administration; and (II) The advice, opinions and recommendations of the insurers medical or vocational consultants, even if the insurer did not rely on the advice, opinions or recommendations in making the adverse benefit determination; (vi) Specific summaries or citations of the insurers claim procedures, internal rules, guidelines, protocols, standards or other criteria on which the insurer relied in making the adverse benefit determination, or a statement that the insurer does not have or did not use specific claim procedures, rules, guidelines, protocols, standards or other criteria; and (vii) A statement that explains the claimants reasonable right of access, upon request and free of charge, to copies of all documents, records and other information that are related to the claim and the adverse benefit determination, along with procedures for obtaining the documents, records and other information. (g) Establish and maintain a claim procedure under which a claimant has a reasonable opportunity to appeal an adverse benefit determination under conditions that ensure a full and fair consideration of the claim and the adverse benefit determination. The insurer in the claim procedure shall give the claimant: (A) At least 180 days after the date of the adverse benefit determination within which to appeal; (B) An opportunity to submit written comments, documents, records and other information related to the claim; (C) Upon request and free of charge, reasonable access to and copies of all of the insurers documents, records and other information related to the claim; (D) Due consideration of the comments, documents, records and other information the claimant submits during the appeal, without regard to whether the claimant submitted the comments, documents, records or other information for the initial determination; (E) A proceeding in which the official that conducts the proceeding: (i) Does not defer to the adverse benefit determination; (ii) Is not the official who made the adverse benefit determination or a subordinate of the official; and (iii) Consults with a health care provider who has appropriate training and experience to make an informed medical judgment concerning the claim, if a determination of the claim requires a medical judgment, but who is not a health care provider who participated in the adverse benefit determination, or a subordinate of the health care provider; and (F) The identities of medical providers or vocational consultants from whom the insurer obtained advice, opinions or recommendations concerning the adverse benefit determination, even if the insurer did not rely on the advice, opinions or recommendations in making the adverse benefit determination. (4)(a) If in an appeal of an adverse benefit determination an insurer intends to consider evidence or a rationale that the insurer did not previously consider in making the adverse benefit determination, the insurer shall, as soon as possible and before making a determination in the appeal, notify the claimant of the evidence and the rationale and in the notification provide the claimant with copies of the evidence and an explanation of the rationale, free of any charge. The insurers notification must allow the claimant a reasonable time within which to respond to the evidence or rationale. (b) An insurer shall complete an appeal of an adverse benefit determination and notify the claimant of the insurers determination of the appeal not later than 45 days after receiving the claimants request for the appeal, except that the insurer may extend for not more than an additional 45 days the time within which the insurer may complete the appeal if the insurer: (A) Determines that special circumstances require the delay; and (B) Gives the claimant: (i) Notice of the extension before the expiration of the initial 45-day period; (ii) An explanation of the special circumstances that caused the delay; and (iii) A date by which the insurer expects to make and give the claimant notice of a determination of the appeal. (5) The period of time within which an insurer must make a determination on a claim or an appeal begins when the insurer receives notice of the claim or appeal, even if the notice does not include all information necessary to make a determination with respect to the claim or appeal. If the insurer must extend the period within which the insurer must make a determination because the claimant failed to submit necessary information, the period is tolled from the date on which the insurer notifies the claimant of the need for additional information until the date on which the claimant responds to the notice. (6)(a) Except as provided in paragraph (b) of this subsection, a claimant has exhausted the claimants administrative remedies with respect to a claim or appeal of an adverse benefit determination if the insurer does not adhere strictly to the requirements of this section. (b) An insurers failure to adhere strictly to the requirements of this section that is de minimis and does not or is not likely to cause prejudice or harm to the claimant does not constitute a claimants exhaustion of the claimants administrative remedies with respect to a claim or appeal if the failure is not part of a pattern or practice of failures by the insurer and the insurer demonstrates that the failure: (A) Was for good cause or was a result of circumstances beyond the insurers control; and (B) Occurred in the context of an ongoing, good-faith exchange of information between the insurer and the claimant. (c) A claimant may request from the insurer a written explanation of the failure, which the insurer must provide within 10 days after receiving the request. In the explanation, the insurer must specify the basis for any assertion by the insurer that the failure does not constitute an exhaustion of the claimants administrative remedies with respect to the claim or appeal. [2021 c.73 2] Note: 743B.260 becomes operative January 1, 2023. See section 4, chapter 73, Oregon Laws 2021. Note: 743B.260 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
As used in ORS 743B.280 to 743B.285: (1) "In-network" means performed by a provider or provider group that has directly contracted with the insurer. (2) "Out-of-network" means performed by a provider or provider group that has not contracted or has indirectly contracted with the insurer. [Formerly 743.871] Note: 743B.280 to 743B.285 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 743B or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) An insurer offering a health benefit plan as defined in ORS 743B.005 must establish a procedure for providing to an enrollee in the plan a reasonable estimate of an enrollees costs for an in-network procedure or service covered by the enrollees health benefit plan, in advance of the procedure or service, when an enrollee or an enrollees authorized representative provides the following information to the insurer: (a) The type of procedure or service; (b) The name of the provider; (c) The enrollees member number or policy number; and (d) If requested by the insurer, the site where the procedure or service will be performed. (2) The estimate of costs described in subsection (1) of this section must include an itemization of: (a) The enrollees deductible; (b) The amount of the deductible that has been met by processed claims; (c) Coinsurance, copayment or other cost share to be paid by the enrollee for the procedure or service; and (d) Any applicable benefit maximum. (3) Subsections (1) and (2) of this section apply to the insurers five most common procedures or services within each of the following categories: (a) Office visits; (b) Diagnostic radiology and imaging; (c) Diagnostic pathology and laboratory procedures; (d) Normal vaginal delivery; (e) Immunizations; (f) Orthopedic-musculoskeletal surgery; and (g) Digestive system endoscopy. (4) In addition to the information specified in subsections (1) and (2) of this section, the insurers estimate must include the following disclosures: (a) That other services may be provided to the enrollee that are medically necessary and appropriate as part of the common procedures, of which the insurer or enrollee may not be aware at the time of the inquiry and for which the enrollee may have additional financial responsibility; (b) That the enrollee may be responsible for costs of procedures or services not covered by the plan; (c) How an enrollee may contact the insurer for an explanation, if the estimate differs from the actual cost or if the enrollee has other questions; and (d) The toll-free telephone number of the consumer advocacy unit of the Department of Consumer and Business Services and the address for the departments consumer information and complaints website. (5) An insurer must make the information required by this section available to enrollees and in-network providers through an interactive website and by toll-free telephone. (6) This section does not prohibit an insurer from providing information in addition to or in more detail than the information required by this section. [Formerly 743.874] Note: See note under 743B.280.
(1) An insurer offering a health benefit plan as defined in ORS 743B.005 must establish a procedure for providing to an enrollee in the plan a reasonable estimate of the enrollees costs for an out-of-network procedure or service covered by the enrollees health benefit plan, including the difference between the insurers allowable charge and the billed charge for the procedure or service, in advance of the procedure or service, when an enrollee or an enrollees authorized representative provides the following information to the insurer: (a) The type of procedure or service; (b) The name of the provider; (c) The enrollees member number or policy number; (d) If requested by the insurer, the site where the procedure or service will be performed; and (e) The providers billed charge amount. (2) The estimate of costs described in subsection (1) of this section must include an itemization of: (a) The enrollees deductible; (b) The amount of the deductible that has been met by processed claims; (c) Coinsurance, copayment or other cost share to be paid by the enrollee for the procedure or service; (d) Any applicable benefit maximum; (e) The difference between the insurers allowable charge and the billed charge for the procedure or service; and (f) The insurers average payment or allowable charge for the procedure or service if performed in-network. (3) Subsections (1) and (2) of this section apply to the insurers five most common procedures or services within each of the following categories: (a) Office visits; (b) Diagnostic radiology and imaging; (c) Diagnostic pathology and laboratory procedures; (d) Normal vaginal delivery; (e) Immunizations; (f) Orthopedic-musculoskeletal surgery; and (g) Digestive system endoscopy. (4) In addition to the information specified in subsections (1) and (2) of this section, the insurers estimate must include the following disclosures: (a) That other services may be provided to the enrollee that are medically necessary and appropriate as part of the common procedures, of which the insurer or enrollee may not be aware at the time of the inquiry and for which the enrollee may have additional financial responsibility; (b) That the enrollee may be responsible for costs of procedures or services not covered by the plan; (c) How an enrollee may contact the insurer for an explanation, if the estimate differs from the actual cost or if the enrollee has other questions; and (d) The toll-free telephone number of the consumer advocacy unit of the Department of Consumer and Business Services and the address for the departments consumer information and complaints website. (5) An insurer must make the information required by this section available to enrollees and out-of-network providers through an interactive website and by toll-free telephone. (6) This section does not prohibit an insurer from providing information in addition to or in more detail than the information required by this section. [Formerly 743.876] Note: See note under 743B.280.
An insurer offering a health benefit plan as defined in ORS 743B.005 must submit to the Director of the Department of Consumer and Business Services: (1) Upon request by the director, the methodology used to determine the insurers allowable charges for out-of-network procedures and services or, if the insurer uses a third party to determine the charges, the methodology used by the third party to determine allowable charges; (2) For approval, a written explanation of the method used by the insurer to determine the allowable charge, that is in plain language and that must be provided upon request to enrollees directly, or, in the case of group coverage, to the employer or other policyholder for distribution to enrollees; and (3) Information prescribed by the director as necessary to assess the effect of the disclosure requirements in ORS 743B.281 and 743B.282 on the individual and group health insurance markets. [Formerly 743.878] Note: See note under 743B.280.
The Director of the Department of Consumer and Business Services may waive the requirements of ORS 743B.281 or 743B.282 to allow an insurer to use an alternative disclosure mechanism, provided that the mechanism enables enrollees to access information substantially similar to or more extensive than the information disclosed in ORS 743B.281 or 743B.282. [Formerly 743.883] Note: See note under 743B.280.
The Director of the Department of Consumer and Business Services shall adopt rules necessary to carry out the purposes of ORS 743B.280 to 743B.285. [Formerly 743.893] Note: See note under 743B.280.
(1) As used in this section: (a) "Emergency services" has the meaning given that term in ORS 743A.012. (b) "Enrollee" means: (A) An individual who is enrolled in a health benefit plan or a covered dependent or beneficiary of the individual; or (B) A subscriber to a health care service contract or a covered dependent or beneficiary of the subscriber. (c) "Health benefit plan" has the meaning given that term in ORS 743B.005. (d) "Health care facility" has the meaning given that term in ORS 442.015, excluding long term care facilities. (e) "Health care service contractor" has the meaning given that term in ORS 750.005. (f) "In-network" has the meaning given that term in ORS 743B.280. (g) "Out-of-network" means a provider or provider group that has not contracted or has indirectly contracted with the insurer or health care service contractor. (2) A provider who is an out-of-network provider may not bill an enrollee in the health benefit plan or health care service contract for emergency services or other inpatient or outpatient services provided at an in-network health care facility. (3) Subsection (2) of this section does not apply: (a) To applicable coinsurance, copayments or deductible amounts that apply to services provided by an in-network provider; or (b) To services, other than emergency services, provided to enrollees who choose to receive services from an out-of-network provider. (4) If an enrollee chooses to receive services from an out-of-network provider, the provider shall inform the enrollee that the enrollee will be financially responsible for coinsurance, copayments or other out-of-pocket expenses attributable to choosing an out-of-network provider. [2017 c.417 2; 2018 c.43 4,6] Note: 743B.287 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
An insurer offering a policy or certificate of health insurance may not prohibit a hospital, as a condition of reimbursing a claim for hospital services, from paying or waiving all or a portion of a copayment or deductible owed by an insured under the policy or certificate. [2019 c.497 9] Note: 743B.290 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(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 applicants existing policy or policies and coverage being offered to replace or supplement the applicants existing coverage. [Formerly 743.013]
(1) As used in this section, "rescind" means to retroactively cancel or discontinue coverage under a health benefit plan or group or individual health insurance policy for reasons other than failure to timely pay required premiums or required contributions toward the cost of coverage. (2) An insurer may not rescind coverage of an individual under a health benefit plan or group or individual health insurance policy unless: (a) The individual or a person seeking coverage on behalf of the individual: (A) Performs an act, practice or omission that constitutes fraud; or (B) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan or policy; and (b) The insurer provides at least 30 days advance written notice, in the form and manner prescribed by the Department of Consumer and Business Services, to the individual. (3) An insurer may not rescind coverage of a group under a health benefit plan unless: (a) The plan sponsor: (A) Performs an act, practice or omission that constitutes fraud; or (B) Makes an intentional misrepresentation of a material fact as prohibited by the terms of the plan; and (b) The insurer provides at least 30 days advance written notice, in the form and manner prescribed by the department, to each plan enrollee or policy holder who would be affected by the rescission of coverage. (4) An insurer that rescinds a plan or policy must provide notice of the rescission to the department in the form, manner and time frame prescribed by the department by rule. (5) This section does not apply to long term care insurance that is subject to ORS 743.650 to 743.665. [Formerly 743.894] Note: 743B.310 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A group health insurance policy shall contain a provision allowing a minimum grace period of 10 days after the premium due date for payment of premium. (2) An insurer of a group health insurance policy providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases, that seeks to terminate a policy for nonpayment of premium shall notify the policyholder as described in ORS 743B.323. (3) An insurer of a group health insurance policy providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases, shall notify the group policyholder when the policy is terminated and the coverage is not replaced by the group policyholder. The notice required under this subsection: (a) Must be given on a form prescribed by the Department of Consumer and Business Services; (b) Must explain the rights of the certificate holders regarding continuation of coverage provided by federal and state law; and (c) Must be given by mail and must be mailed not later than 10 working days after the date on which the group policy terminates according to the terms of the policy. (4) A group health insurance policy to which subsection (3) of this section applies shall contain a provision requiring the insurer to notify the group policyholder when the policy is terminated and the coverage is not replaced by the group policyholder. Each certificate issued under the policy shall also contain a statement of the provision required under this subsection. (5) If an insurer fails to give notice as required by this section, the insurer shall continue the group health insurance policy of the group policyholder in full force from the date notice should have been provided until the date that the notice is received by the policyholder and shall waive the premiums owing for the period for which the coverage is continued under this subsection. The time period within which the certificate holder may exercise any right to continuation shall commence on the date that the policyholder receives the notice. (6) The insurer shall supply the employer holding the terminated policy with the necessary information for the employer to be able to notify properly the employee of the employees right to continuation of coverage under state and federal law. [Formerly 743.560]
ORS 743B.320 applies to multiple employer trusts when an employer ceases to participate therein. [Formerly 743.562]
(1) Before a health insurer selling an individual policy or group health benefit plan may cancel a policy for nonpayment of premium, the insurer must mail a separate notice to the policyholder informing the policyholder that the premium was not received and that the policy will be terminated as of the premium due date if the premium is not received by the end of the applicable grace period required by ORS 743.417 and 743B.320. (2) The notice described in subsection (1) of this section shall be in writing and mailed by first class mail to the last-known address of the policyholder at least: (a) Ten days prior to the end of the grace period specified in ORS 743.417 (1)(a) and 743B.320; or (b) Fifteen days prior to the end of the grace period specified in ORS 743.417 (1)(b). (3) The Department of Consumer and Business Services may prescribe by rule the information that must be contained in the notice required by subsection (1) of this section. [Formerly 743.565; 2021 c.205 11]
The Director of the Department of Consumer and Business Services shall adopt rules necessary for the implementation and administration of ORS 743B.323 and the amendments to ORS 743.417, 743.420, 743B.013, 743B.105, 743B.125 and 743B.320 by sections 9 to 14, chapter 943, Oregon Laws 2001. [Formerly 743.566] Note: 743B.324 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 743B or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section, "health benefit plan" has the meaning given that term in ORS 743B.005. (2) An insurer shall notify a policyholder in writing if the insurer cancels or does not renew the policyholders individual health benefit plan. The notice shall be sent to the policyholders last-known mailing address by first class mail in a specially marked envelope or, if the policyholder has elected to receive communications from the insurer electronically, to the policyholders last-known electronic mail address using a mechanism that will confirm delivery to the address. (3) If the cancellation or nonrenewal results in a refund to the policyholder of all or part of a premium, the insurer must mail with the refund a written explanation that includes: (a) The effective date of the cancellation; (b) The reason for the cancellation; and (c) The time period to which the refund is applicable. (4) For any cancellation or nonrenewal due to a reported death of the policyholder, the insurer must: (a) Confirm the accuracy of the reported death. (b) If the death is confirmed: (A) Provide any dependents covered by the plan with information about how to continue coverage or obtain alternative coverage; and (B) Issue any refund that is due to the estate of the deceased in accordance with subsection (3) of this section. (5) If an insurer cancels or does not renew an individual health benefit plan and fails to comply with the requirements of this section, the insurer shall continue the coverage under the plan for the policyholder and any dependents covered by the plan until the date that the insurer has complied with the requirements of this section. The insurer shall waive any premiums owed for the period during which the coverage was continued under this subsection and shall process all claims incurred by the policyholder or any covered dependents according to the terms of the plan. (6) This section does not apply: (a) To a cancellation requested by the policyholder if the insurer documents the request and confirms the request with the policyholder; (b) To a cancellation or nonrenewal that results from a policyholder making a change in coverage with the same insurer; or (c) To a cancellation due to nonpayment of premium. [Formerly 743.499] Note: 743B.330 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Every group health insurance policy delivered or issued for delivery in this state shall contain in substance the following provisions, applicable to the coverage for hospital or medical services or expenses provided under the policy: (a) A provision that, when the premium for the policy or any part thereof is paid by an employer under the terms of a collective bargaining agreement, if there is a cessation of work by employees insured under the policy due to a strike or lockout, the policy, upon timely payment of the premium, will continue in effect with respect to those employees insured by the policy on the date of the cessation of work who continue to pay their individual contribution and who assume and pay the contribution due from the employer. (b) A provision that, when an employee insured under the policy pays a contribution pursuant to paragraph (a) of this subsection, if the policyholder is not a trustee of a fund established or maintained in whole or in part by an employer, the employees individual contribution shall be: (A) The rate in the policy, on the date cessation of work occurs, applicable to an individual in the class to which the employee belongs as set forth in the policy; or (B) If the policy does not provide for a rate applicable to individuals, an amount equal to the amount determined by dividing the total monthly premium in effect under the policy at the date of cessation of work by the total number of persons insured under the policy on such date. (c) A provision that, when an employee insured under the policy pays a contribution pursuant to paragraph (a) of this subsection, if the policyholder is a trustee of a fund established or maintained in whole or in part by an employer, the employees individual contribution shall be the amount which the employee and employer would have been required to contribute if the cessation of work had not occurred. (2) Every group health insurance policy delivered or issued for delivery in this state may contain in substance the following provisions applicable to the coverage for hospital or medical services or expenses provided under the policy: (a) A provision that, when employees insured under the policy pay contributions pursuant to subsection (1)(a) of this section, the continuation of insurance under the policy is contingent upon the collection of individual contributions by the union representing the employees when the policyholder is not a trustee and by the policyholder or the policyholders agent when the policyholder is a trustee. (b) A provision that, when employees insured under the policy pay contributions pursuant to subsection (1)(a) of this section, the continuation of insurance under the policy on each employee is contingent upon timely payment of contributions by the employees and timely payment of the premium by the entity responsible for collecting the individual contributions. (c) A provision that, when employees insured under the policy pay contributions pursuant to subsection (1)(a) of this section, each individual premium rate under the policy may be increased by not more than 20 percent, or by any higher percentage approved by the Director of the Department of Consumer and Business Services, during the period of cessation of work in order to provide sufficient compensation to the insurer for increased administrative costs and increased mortality and morbidity. If the policy contains the provision allowed under this paragraph, an employees contribution paid under subsection (1)(a) of this section shall be increased by the same percentage. (d) A provision that, when the policy is a policy insuring employees and which may continue in effect as provided in subsection (1)(a) of this section, if the premium is unpaid at the date of cessation of work and the premium became due prior to such cessation of work, the continuation of insurance is contingent upon payment of the premium prior to the date the next premium becomes due under the terms of the policy. (e) Any provision with respect to the continuation of the policy as provided in subsection (1)(a) of this section that the director may approve. (3) Nothing in this section shall be deemed to limit any right which the insurer may have in accordance with the terms of a policy to increase or decrease the premium rates before, during or after a cessation of work by employees insured under the policy when the insurer had the right to increase the premium rates even if the cessation of work did not occur. If such a premium rate change is made, it shall be effective on such date as the insurer shall determine in accordance with the terms of the policy. (4) Nothing in this section shall be deemed to require continuation of any coverage in a group health insurance policy insuring employees and which may continue in effect as provided in subsection (1)(a) of this section for longer than: (a) The time that 75 percent of insured employees continue such coverage; (b) For an individual employee, the time at which the employee takes full-time employment with another employer; or (c) Six months after cessation of work by the insured employees. [Formerly 743.527]
(1) Every group health insurance policy that provides coverage for hospital or medical services or expenses shall provide that the insurer shall continue its obligation for benefits under the policy for any person insured under the policy who is hospitalized on the date of termination if the policy is terminated and immediately replaced by a group health insurance policy issued by another insurer. Any payment required under this section is subject to all terms, limitations and conditions of the policy except those relating to termination of benefits. Any obligation by an insurer under this section continues until the hospital confinement ends or hospital benefits under the policy are exhausted, whichever is earlier. (2) The Director of the Department of Consumer and Business Services may adopt rules providing for uninterrupted coverage for individuals insured under a group health insurance policy providing coverage for hospital or medical expenses, when such a policy is replaced by a policy of similar benefits, whether issued by the same insurer or another. [Formerly 743.529]
Every policy of group health insurance delivered or issued for delivery in this state shall contain a provision applicable to the coverage for hospital or medical services or expenses provided under the policy that if an employee incurs an injury or illness for which a workers compensation claim is filed, that policy will continue in effect with respect to that employee upon timely payment by the employee of the premium that includes the individual contribution and the contribution due from the employer under the applicable benefit plan. The employee may maintain such coverage until whichever of the following events first occurs: (1) The employee takes full-time employment with another employer; or (2) Six months from the date that the employee first makes payment under this section. [Formerly 743.530]
(1) A group health insurance policy providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases, shall contain a provision that: (a) The surviving spouse of a certificate holder may continue coverage under the policy, at the death of the certificate holder, with respect to the spouse and any dependent children whose coverage under the policy otherwise would terminate because of the death of the certificate holder if the surviving spouse is 55 years of age or older at the time of the death; and (b) The divorced or legally separated spouse of a certificate holder may continue coverage under the policy, upon dissolution of marriage with, or legal separation from, the certificate holder, with respect to the divorced or legally separated spouse and any dependent children whose coverage under the policy otherwise would terminate because of the dissolution of marriage or legal separation, if the divorced or legally separated spouse is 55 years of age or older at the time of the dissolution or legal separation. (2) Continued coverage for dental, vision care or prescription drug expenses shall be offered to legally separated, divorced or surviving spouses and any dependent children eligible under subsection (1) of this section if such coverage is or was available to the certificate holder. [Formerly 743.600]
(1) As used in subsections (1) to (6) of this section, "plan administrator" means: (a) The person designated as the plan administrator by the instrument under which the group health insurance plan is operated; or (b) If no plan administrator is designated, the plan sponsor. (2) Within 60 days of legal separation or the entry of a judgment of dissolution of marriage, a legally separated or divorced spouse eligible for continued coverage under ORS 743B.343 who seeks such coverage shall give the plan administrator written notice of the legal separation or dissolution. The notice shall include the mailing address of the legally separated or divorced spouse. (3) Within 30 days of the death of a covered person whose surviving spouse is eligible for continued coverage under ORS 743B.343, the group policyholder shall give the plan administrator written notice of the death and of the mailing address of the surviving spouse. (4) Within 14 days of receipt of notice under subsection (2) or (3) of this section, the plan administrator shall notify the legally separated, divorced or surviving spouse that the policy may be continued. The notice shall be mailed to the mailing address provided to the plan administrator and shall include: (a) A form for election to continue the coverage; (b) A statement of the amount of periodic premiums to be charged for the continuation of coverage and of the method and place of payment; and (c) Instructions for returning the election form by mail within 60 days after the date of mailing of the notice by the plan administrator. (5) Failure of the legally separated, divorced or surviving spouse to exercise the election in accordance with subsection (4) of this section shall terminate the right to continuation of benefits. (6) If a plan administrator fails to notify the legally separated, divorced or surviving spouse as required by subsection (4) of this section, premiums shall be waived from the date the notice was required until the date notice is received by the legally separated, divorced or surviving spouse. (7) The provisions of this section and ORS 743B.343 and 743B.345 apply only to employers with 20 or more employees and group health insurance plans with 20 or more certificate holders on a typical business day during the preceding calendar year. [Formerly 743.601]
If a legally separated, divorced or surviving spouse elects continuation of coverage under ORS 743B.344 (1) to (6): (1) The monthly premium for the continuation shall not be greater than the amount that would be charged if the legally separated, divorced or surviving spouse were a current certificate holder of the group plan plus the amount that the group policyholder would contribute toward the premium if the legally separated, divorced or surviving spouse were a certificate holder of the group plan, plus an additional amount not to exceed two percent of the certificate holder and group plan holder contributions, for the costs of administration. (2) The first premium shall be paid by the legally separated, divorced or surviving spouse within 45 days of the date of the election. (3) The right to continuation of coverage shall terminate upon the earliest of any of the following: (a) The failure to pay premiums when due, including any grace period allowed by the policy; (b) The date that the group policy is terminated as to all group members except that if a different group policy is made available to group members, the legally separated, divorced or surviving spouse shall be eligible for continuation of coverage as if the original policy had not been terminated; (c) The date on which the legally separated, divorced or surviving spouse becomes insured under any other group health plan; (d) The date on which the legally separated or divorced spouse remarries; or (e) The date on which the legally separated, divorced or surviving spouse becomes eligible for federal Medicare coverage. [Formerly 743.602]
(1) As used in this section: (a) "Covered person" means an individual who was a certificate holder under a group health insurance policy: (A) On the day before a qualifying event; and (B) During the three-month period ending on the date of the qualifying event. (b) "Qualified beneficiary" means: (A) A spouse or dependent child of a covered person who, on the day before a qualifying event, was insured under the covered persons group health insurance policy; or (B) A child born to or adopted by a covered person during the period of the continuation of coverage under this section who would have been insured under the covered persons policy if the child had been born or adopted on the day before the qualifying event. (c) "Qualifying event" means the loss of membership in a group health insurance policy caused by: (A) Voluntary or involuntary termination of the employment of a covered person; (B) A reduction in hours worked by a covered person; (C) A covered person becoming eligible for Medicare; (D) A qualified beneficiary losing dependent child status under a covered persons group health insurance policy; (E) Termination of membership in the group covered by the group health insurance policy; or (F) The death of a covered person. (2)(a) A grandfathered health plan, as defined in ORS 743B.005, providing coverage under a group health insurance policy for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases, must contain a provision that a covered person and any qualified beneficiary may continue coverage under the policy as provided in this section. (b) A group health insurance policy that provides coverage for one or more of the essential health benefits, other than a grandfathered health plan, must contain a provision that a covered person and any qualified beneficiary may continue coverage under the policy as provided in this section. (3) Continuation of coverage is not available to a covered person or qualified beneficiary who is eligible for: (a) Medicare; or (b) The same coverage under any other program that was not covering the covered person or qualified beneficiary on the day before a qualifying event. (4) The continued coverage must be offered in the same manner as it is provided to other certificate holders under the group health insurance policy. (5) A covered person or qualified beneficiary must submit a written request for continuation of coverage to the insurer within the time prescribed by the insurer, except that an insurer may not require a request to be submitted less than 10 days after the later of: (a) The date of a qualifying event; or (b) The date the insurer provides the notice required by subsection (10) of this section. (6) A covered person or qualified beneficiary who requests continuation of coverage shall pay the premium on a monthly basis and in advance to the insurer or to the employer or policyholder, whichever the group policy provides. The required premium payment may not exceed the group premium rate for the insurance being continued under the group policy as of the date the premium payment is due. (7) Continuation of coverage as provided under this section ends on the earliest of the following dates: (a) Nine months after the date of the qualifying event that was the basis for the continuation of coverage. (b) The end of the period for which the last timely premium payment for the coverage is received by the insurer. (c) The premium payment due date coinciding with or next following the date that continuation of coverage ceases to be available in accordance with subsection (3) of this section. (d) The date that the policy is terminated. However, if the policyholder replaces the terminated policy with similar coverage under another group health insurance policy: (A) The covered person and qualified beneficiaries may obtain coverage under the replacement policy for the balance of the period that the covered person or qualified beneficiary would have remained covered under the terminated policy in accordance with this section; and (B) The terminated policy must continue to provide benefits to the covered person and qualified beneficiaries to the extent of that policys accrued liabilities and extensions of benefits as if the replacement had not occurred. (8) A qualified beneficiary who is not eligible for continuation of coverage under ORS 743B.343 may continue coverage under this section upon the dissolution of marriage with or the death of the covered person in the same manner that a covered person may exercise the right to continue coverage under this section. (9) A covered person rehired by an employer no later than nine months after the layoff of the covered person by the employer may not be subjected to a waiting period for coverage under the employers group health insurance policy if the covered person was eligible for coverage at the time of the layoff, regardless of whether the covered person continued coverage during the layoff. (10) If an insurer terminates the group health insurance coverage of a covered person or qualified beneficiary without providing replacement coverage that meets the criteria in subsection (7)(d) of this section, the insurer shall provide written notice to the covered person and any qualified beneficiary no later than 10 days after the insurer is notified of the qualifying event under subsection (5) of this section. The notice shall include information prescribed by the Director of the Department of Consumer and Business Services. (11) This section applies only to employers who are not required to make available continuation of health insurance benefits under Titles X and XXII of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, P.L. 99-272, April 7, 1986. [Formerly 743.610]
(1) All clinical decisions regarding length of stay in a health care facility as defined in ORS 442.015, transfer between levels of care and follow-up care shall be the decision of the treating provider in consultation with the patient, as appropriate. (2) An insurer may not terminate or restrict the practice privileges of any provider solely on the basis of one or more decisions made pursuant to subsection (1) of this section. [Formerly 743.829]
No insurer may terminate or otherwise financially penalize a provider for: (1) Providing information to or communicating with a patient in a manner that is not slanderous, defamatory or intentionally inaccurate concerning: (a) Any aspect of the patients medical condition; (b) Any proposed treatment or treatment alternatives, whether covered by the insurers health benefit plan or not; or (c) The providers general financial arrangement with the insurer. (2)(a) Referring a patient to another provider, whether or not that provider is under contract with the insurer. If a provider refers a patient to another provider, the referring provider shall: (A) Comply with the insurers written policies and procedures with respect to any such referrals; and (B) Inform the patient that the referral services may not be covered by the insurer. (b) Allocation of costs for referral services shall be a matter of contract between the provider and the insurer. Allocation of costs to the provider by contract shall not be considered a penalty under this section. [Formerly 743.834]
(1) A medical services contract may not require the provider, as an element of the contract or as a condition of compensation for services, to agree: (a) In the event of alleged improper medical treatment of a patient, to indemnify the other party to the medical services contract for any damages, awards or liabilities including but not limited to judgments, settlements, attorney fees, court costs and any associated charges incurred for any reason other than the negligence or intentional act of the provider or the providers employees; (b) To charge the other party to the medical services contract a rate for services rendered pursuant to the medical services contract that is no greater than the lowest rate that the provider charges for the same service to any other person; (c) To deny care to a patient because of a determination made pursuant to the medical services contract that the care is not covered or is experimental, or to deny referral of a patient to another provider for the provision of such care, if the patient is informed that the patient will be responsible for the payment of such noncovered, experimental or referral care and the patient nonetheless desires to obtain such care or referral; or (d) Upon the providers withdrawal from or termination or nonrenewal of the medical services contract, not to treat or solicit a patient even at that patients request and expense. (2) A medical services contract shall: (a) Grant to the provider adequate notice and hearing procedures, or such other procedures as are fair to the provider under the circumstances, prior to termination or nonrenewal of the medical services contract when such termination or nonrenewal is based upon issues relating to the quality of patient care rendered by the provider. (b) Set forth generally the criteria used by the other party to the medical services contract for the termination or nonrenewal of the medical services contract. (c) Entitle the provider to an annual accounting accurately summarizing the financial transactions between the parties to the medical services contract for that year. (d) Allow the provider to withdraw from the care of a patient when, in the professional judgment of the provider, it is in the best interest of the patient to do so. (e) Provide that a physician licensed under ORS 677.100 to 677.228 shall be retained by the other party to the medical services contract and shall be responsible for all final medical and mental health decisions relating to coverage or payment made pursuant to the medical services contract. (f) Provide that a physician, as defined in ORS 677.010, who is practicing in conformity with ORS 677.095 may advocate a decision, policy or practice without being subject to termination or penalty for the sole reason of such advocacy. (g)(A) Entitle the party to the medical services contract who is being reimbursed for the provision of health care services on a basis that includes financial risk withholds, or the partys representative, to a full accounting of health benefits claims data and related financial information on no less than a quarterly basis by the party to a medical services contract who has made reimbursement, as follows: (i) The data shall include all pertinent information relating to the health care services provided, including related provider and patient information, reimbursements made and amounts withheld under the financial risk withhold provisions of the medical services contract for the period of time under reconciliation and settlement between the parties. (ii) Any reconciliation and settlement undertaken pursuant to a medical services contract shall be based directly and exclusively upon data provided to the party who is being reimbursed for the provision of health care services. (iii) All data, including supplemental information or documentation, necessary to finalize the reconciliation and settlement provisions of a medical services contract relating to financial risk withholds shall be provided to the party who is being reimbursed for the provision of health care services no later than 30 days prior to finalizing the reconciliation and settlement. (B) Nothing in this paragraph shall be construed to prevent parties to a medical services contract from mutually agreeing to alternative reconciliation and settlement policies and procedures. (h) Provide that when continuity of care is required to be provided under a health benefit plan by ORS 743B.225, the insurer and the individual provider shall provide continuity of care to enrollees as provided in ORS 743B.225. (3) The other party to a medical services contract shall not: (a) Refer to other documents or instruments in a contract unless the nonprovider party agrees to make available to the provider for review a copy of the documents or instruments within 72 hours of request; or (b) Provide as an element of a contract with a third party relating to the provision of medical services to a patient of the provider that the providers patient may not sue or otherwise recover from the nonprovider party, or must hold the nonprovider party harmless for, any and all expenses, damages, awards or liabilities that arise from the management decisions, utilization review provisions or other policies or determinations of the nonprovider party that have an impact on the providers treatment decisions and actions with regard to the patient. (4) An insurer, independent practice association, medical or mental health clinic or other party to a medical services contract shall provide the criteria for selection of parties to future medical services contracts upon the request of current or prospective parties. [Formerly 743.803; 2017 c.409 36]
(1) As used in this section: (a) "Contractual discount" means a percentage reduction, required under a contract with an insurer, in a vision care providers usual and customary rate for vision care services and materials. (b) "Discount card" means a card or other purchasing mechanism or device that is not insurance or a discount medical plan, as defined in ORS 742.420, that purports to offer discounts or access to discounts in health-related purchases from health care providers. (c) "Materials" includes, but is not limited to: (A) Lenses; (B) Devices containing lenses; (C) Contact lenses; (D) Prisms; (E) Lens treatments and contact lens coatings; (F) Orthopedic or prosthetic devices to correct, relieve or treat defects or abnormal conditions of the human eye or adnexa; and (G) Vision training. (d) "Vision care insurance" means a health benefit plan or a policy or certificate of insurance that covers vision care services and materials. (e) "Vision care provider" includes: (A) A person licensed to practice optometry under ORS chapter 683; and (B) A physician licensed under ORS 677.100 to 677.228 to practice medicine who has completed a residency program in ophthalmology. (f) "Vision care services" means services provided by a vision care provider within the scope of the providers license to practice optometry or ophthalmology. (2) A contract between a vision care provider and an entity that offers vision care insurance or a vision care discount card may not: (a) Limit or specify the fee that a vision care provider may charge for vision care services or materials that are not reimbursed, in whole or in part, by the vision care insurance or discount card. (b) Require a vision care provider to participate in one vision care insurance plan or discount card program as a condition for participating in another insurance plan. (c) Change the terms, the contractual discount or the reimbursement rates, under vision care insurance or a vision care discount card, without a signed acknowledgment that the vision care provider agrees to the changes. (d) Directly or indirectly restrict or limit a vision care providers choice of suppliers of materials. (3) This section does not prohibit the use of a discount card by a patient of a vision care provider if: (a) The enrollment of the vision care provider is: (A) Completely voluntary; and (B) Not conditioned upon the vision care providers participation in any other discount card program with different provider terms and conditions or in another insurance plan; and (b) The discount card program does not reimburse the vision care provider for the cost of the vision care services that were discounted. [2015 c.832 2; 2017 c.409 37] Note: 743B.406 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) An insurer shall provide a naturopathic physician the choice of applying to be credentialed by the insurer as a primary care provider or as a specialty care provider. (2) To be credentialed by an insurer as a primary care provider, a naturopathic physician must meet the credentialing requirements as established by the insurer. [2015 c.224 2] Note: 743B.407 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Except in the case of misrepresentation, prior authorization determinations shall be subject to the following requirements: (1) Prior authorization determinations relating to benefit coverage and medical necessity shall be binding on the insurer if obtained no more than 60 days prior to the date the service is provided. (2) Prior authorization determinations relating to enrollee eligibility shall be binding on the insurer if obtained no more than five business days prior to the date the service is provided. [Formerly 743.837; 2021 c.154 4]
All utilization review performed pursuant to a medical services contract to which an insurer is not a party shall comply with the following: (1) The criteria used in the review process and the method of development of the criteria shall be made available for review to a party to such medical services contract upon request. (2) A physician licensed under ORS 677.100 to 677.228 shall be responsible for all final recommendations regarding the necessity or appropriateness of services or the site at which the services are provided and shall consult as appropriate with medical and mental health specialists in making such recommendations. (3) Any patient or provider who has had a request for treatment or payment for services denied as not medically necessary or as experimental shall be provided an opportunity for a timely appeal before an appropriate medical consultant or peer review committee. (4) Except as provided in subsection (5) of this section, a determination on a providers or an enrollees request for prior authorization of a nonemergency service must be issued within a reasonable period of time appropriate to the medical circumstances but no later than two business days after receipt of the request, and qualified health care personnel must be available for same-day telephone responses to inquiries concerning certification of continued length of stay. (5) If additional information from an enrollee or a provider is necessary to make a determination on a request for prior authorization, no later than two business days after receipt of the request, the enrollee and the provider shall be notified in writing of the specific additional information needed to make the determination. The determination must be issued by the later of: (a) Two business days after receipt of a response to the request for additional information; or (b) Fifteen days after the date of the request for additional information unless otherwise provided by federal law. [Formerly 743.806; 2017 c.409 38; 2019 c.284 3; 2021 c.205 12] Note: See note under 743B.405.
(1) All insurers offering a health benefit plan in this state that provide utilization review or have utilization review provided on their behalf shall file an annual summary with the Department of Consumer and Business Services that describes all utilization review policies, including delegated utilization review functions, and documents the insurers procedures for monitoring of utilization review activities. (2) All utilization review activities conducted pursuant to subsection (1) of this section shall comply with the following: (a) In addition to the requirements of ORS 743B.602, in establishing utilization review, the insurer must use clinical review criteria that are evidence-based and continuously updated based on new evidence and research, and take into account new developments in treatment. (b) The insurer must adjudicate claims for reimbursement in accordance with ORS 743B.450 based on the information submitted by the provider and may not require the provider to resubmit the information. (c) The criteria and the process used in the utilization review and the method of development of the criteria must be made available for review to contracting providers. (d) The insurer must have a website where: (A) The following information is clearly posted: (i) All requirements for requesting coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to utilization review, including the specific documentation required for a request to be considered complete. (ii) A list of the specific treatments, drugs, devices or diagnostic or laboratory tests that are subject to utilization review. (B) A provider can make a secure electronic submission, meeting industry standards for privacy, of a request for coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to utilization review, along with needed forms and documents, and receive an electronic acknowledgement of receipt of the request. (e) If the insurer deems as incomplete a request made for coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to utilization review, the insurer must inform the provider of the specific information needed for the request to be considered complete. (f) The insurer must use a physician licensed under ORS 677.100 to 677.228 to make all final recommendations regarding coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to utilization review and to consult as needed. (g) The insurer must give a provider notice in writing of a denial of a request for coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to utilization review. The notice must be written in plain language, be understandable to providers and patients, and include the specific reason for the denial based on evidence-based, peer-reviewed literature. If the denial is based on terms in a policy or certificate of insurance, the denial must cite the specific language in the policy or certificate. (h) The insurer must make available to any provider who has had a request for treatment or payment for services denied as not medically necessary or as experimental shall be provided an opportunity for a timely appeal before an appropriate medical consultant or peer review committee. (i) Except as provided in paragraph (j) of this subsection, an insurer must issue a determination on a providers or an enrollees request for coverage of a nonemergency treatment, drug, device or diagnostic or laboratory test that is subject to utilization review within a reasonable period of time appropriate to the medical circumstances but no later than two business days after receipt of the request, and qualified health care personnel must be available for same-day telephone responses to inquiries concerning certification of continued length of stay. (j) If the insurer requires additional information from an enrollee or a provider to make a determination on a request for coverage of a treatment, drug, device or diagnostic or laboratory test that is subject to utilization review, no later than two business days after receipt of the request, the insurer shall notify the enrollee and the provider in writing of the additional information needed to make the determination. The insurer shall issue the determination by the later of: (A) Two business days after receipt of a response from the provider or enrollee to the request for additional information; or (B) Fifteen days after the date of the request for additional information. (k) If a change in a drug formulary or other change in coverage impacts the coverage of any enrollees treatment plan and the enrollee has been stabilized on the treatment plan for at least 90 days, the insurer must continue to provide coverage of the treatment until utilization review and all internal appeals and external reviews are completed. (L) The insurer may not alter utilization review requirements, or initiate or implement new utilization review requirements, without giving a 60-day advance notice to all participating providers. (m) In addition to the requirements of ORS 743B.420, an approved request for coverage of a treatment, other than a prescription drug, shall be binding on the insurer for a period ending on the later of the following: (A) The reasonable duration of the treatment based on clinical standards; or (B) Sixty days after the date that the treatment begins following approval of prior authorization. (n) Except as provided in paragraph (o) of this subsection, an approved request for coverage of a prescription drug shall be binding on the insurer for one year from the date that the treatment begins following approval of the request if the drug: (A) Is prescribed as a maintenance therapy that is expected to last at least 12 months based on medical or scientific evidence; (B) Continues to be prescribed throughout the 12-month period; and (C)(i) Is prescribed for a condition that is within the scope of use for the drug as approved by the United States Food and Drug Administration; or (ii) Has been proven to be a safe and effective form of treatment for the enrollees medical condition based on clinical practice guidelines developed from peer-reviewed medical literature. (o) Paragraph (n) of this subsection does not apply if: (A) A therapeutic equivalent of the prescription drug or a generic alternative to the prescription drug is or becomes available as a substitute for the drug for which prior authorization is requested or was approved; or (B) A biologic product is or becomes available that is determined by the United States Food and Drug Administration to be interchangeable with the drug for which prior authorization is requested or approved. (p) Paragraphs (k), (m) and (n) of this subsection do not require an insurer to reimburse the cost of care for a patient who is no longer enrolled in the health benefit plan offered by the insurer. [Formerly 743.807; 2017 c.409 39; 2019 c.284 4; 2021 c.154 5] Note: Section 12 (1), chapter 154, Oregon Laws 2021, provides: Sec. 12. (1) An entity subject to ORS 743B.423 must meet the website requirements in ORS 743B.423, as amended by section 5, chapter 154, Oregon Laws 2021, no later than June 1, 2022. [2021 c.154 12(1); 2021 c.365 6c(1)]
The provisions of ORS 743B.001, 743B.220, 743B.405 and 743B.422 do not apply to medical services contracts for services to be provided under ORS chapter 656. [Formerly 743.811] Note: See note under 743B.405.
(1) An insurer offering a health benefit plan as defined in ORS 743B.005 may not: (a) Require prior authorization: (A) During the first 60 days of treatment, including medication therapy, prescribed for opioid or opiate withdrawal; or (B) For post-exposure prophylactic antiretroviral drugs or at least one preexposure prophylactic antiretroviral drug; or (b) Restrict the reimbursement for medication therapies, preexposure prophylactic antiretroviral drugs or post-exposure prophylactic antiretroviral drugs to in-network pharmacists or pharmacies. (2) This section is not subject to ORS 743A.001. (3) This section does not prohibit prior authorization for opioids or opiates prescribed for purposes other than medication therapy or treatment of opioid or opiate abuse or addiction. (4) Subsection (1)(b) of this section does not apply to a health maintenance organization as defined in ORS 750.005. [2017 c.683 4; 2021 c.365 5] Note: 743B.425 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Behavioral health benefits" means insurance coverage of mental health treatment and services and substance use disorder treatment and services. (b) "Carrier" has the meaning given that term in ORS 743B.005. (c) "Geographic region" means the geographic area of the state established by the Department of Consumer and Business Services for the purpose of determining geographic average rates, as defined in ORS 743B.005. (d) "Health benefit plan" has the meaning given that term in ORS 743B.005. (e) "Median maximum allowable reimbursement rate" means the median of all maximum allowable reimbursement rates, minus incentive payments, paid for each billing code for each provider type during a calendar year. (f) "Mental health treatment and services" means the treatment of or services provided to address any condition or disorder that falls under any of the diagnostic categories listed in the mental disorders section of the current edition of the: (A) International Classification of Disease; or (B) Diagnostic and Statistical Manual of Mental Disorders. (g) "Nonquantitative treatment limitation" means a limitation that is not expressed numerically but otherwise limits the scope or duration of behavioral health benefits. (h) "Substance use disorder treatment and services" means the treatment of or services provided to address any condition or disorder that falls under any of the diagnostic categories listed in the substance use section of the current edition of the: (A) International Classification of Disease; or (B) Diagnostic and Statistical Manual of Mental Disorders. (2) Each carrier that offers an individual or group health benefit plan in this state that provides behavioral health benefits shall conduct an annual analysis of whether the processes, strategies, specific evidentiary standards or other factors the carrier used to design, determine applicability of and apply each nonquantitative treatment limitation to behavioral health benefits within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, specific evidentiary standards or other factors the carrier used to design, determine applicability of and apply each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits. (3) On or before March 1 of each year, all carriers that offer individual or group health benefit plans in this state that provide behavioral health benefits shall report to the Department of Consumer and Business Services, in the form and manner prescribed by the department, the following information: (a) The specific plan or coverage terms or other relevant terms regarding the nonquantitative treatment limitations and a description of all mental health or substance use disorder and medical or surgical benefits to which each such term applies in each respective benefits classification. (b) The factors used to determine that the nonquantitative treatment limitations will apply to mental health or substance use disorder benefits and medical or surgical benefits. (c) The evidentiary standards used for the factors identified in paragraph (b) of this subsection, when applicable, provided that every factor is defined, and any other source or evidence relied upon to design and apply the nonquantitative treatment limitations to mental health or substance use disorder benefits and medical or surgical benefits. (d) The comparative analyses demonstrating that the processes, strategies, evidentiary standards and other factors used to apply the nonquantitative treatment limitations to mental health or substance use disorder benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards and other factors used to apply the nonquantitative treatment limitations to medical or surgical benefits in the benefits classification. (e) The specific findings and conclusions reached by the insurer with respect to the health insurance coverage, including any results of the analyses described in paragraphs (a) to (d) of this subsection that indicate that the plan or coverage is or is not in compliance with this section. (f) The number of denials of behavioral health benefits and medical and surgical benefits, the percentage of denials that were appealed, the percentage of appeals that upheld the denial and the percentage of appeals that overturned the denial. (g) The percentage of claims for behavioral health benefits and medical and surgical benefits that were paid to in-network providers and the percentage of such claims that were paid to out-of-network providers. (h) The median maximum allowable reimbursement rate for each time-based office visit billing code for each behavioral treatment provider type and each medical provider type. (i) The reimbursement rate in each geographic region for a time-based office visit and the percentage of the Medicare rate the reimbursement rate represents, paid to: (A) Psychiatrists. (B) Psychiatric mental health nurse practitioners. (C) Psychologists. (D) Licensed clinical social workers. (E) Licensed professional counselors. (F) Licensed marriage and family therapists. (j) The reimbursement rate in each geographic region for a time-based office visit and the percentage of the Medicare rate the reimbursement rate represents, paid to: (A) Physicians. (B) Physician assistants. (C) Licensed nurse practitioners. (k) The specific findings and conclusions of the carrier under subsection (2) of this section demonstrating compliance with ORS 743A.168 and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343) and rules adopted thereunder. (L) Other data or information the department deems necessary to assess a carriers compliance with mental health parity requirements. (4) No later than September 15 of each calendar year, the department shall report to the interim committees of the Legislative Assembly related to mental or behavioral health, in the manner provided in ORS 192.245, the information reported under subsection (3) of this section, including the departments overall comparison of carriers coverage of mental health treatment and services and substance use disorder treatment and services to carriers coverage of medical or surgical treatments or services. [2021 c.629 2] Note: The amendments to 743B.427 by section 7, chapter 629, Oregon Laws 2021, become operative January 1, 2025. See section 9, chapter 629, Oregon Laws 2021. The text that is operative on and after January 1, 2025, is set forth for the users convenience. (1) As used in this section: (a) "Behavioral health benefits" means insurance coverage of mental health treatment and services and substance use disorder treatment and services. (b) "Carrier" has the meaning given that term in ORS 743B.005. (c) "Geographic region" means the geographic area of the state established by the Department of Consumer and Business Services for the purpose of determining geographic average rates, as defined in ORS 743B.005. (d) "Health benefit plan" has the meaning given that term in ORS 743B.005. (e) "Median maximum allowable reimbursement rate" means the median of all maximum allowable reimbursement rates, minus incentive payments, paid for each billing code for each provider type during a calendar year. (f) "Mental health treatment and services" means the treatment of or services provided to address any condition or disorder that falls under any of the diagnostic categories listed in the mental disorders section of the current edition of the: (A) International Classification of Disease; or (B) Diagnostic and Statistical Manual of Mental Disorders. (g) "Nonquantitative treatment limitation" means a limitation that is not expressed numerically but otherwise limits the scope or duration of behavioral health benefits. (h) "Substance use disorder treatment and services" means the treatment of or services provided to address any condition or disorder that falls under any of the diagnostic categories listed in the substance use section of the current edition of the: (A) International Classification of Disease; or (B) Diagnostic and Statistical Manual of Mental Disorders. (2) Each carrier that offers an individual or group health benefit plan in this state that provides behavioral health benefits shall conduct an annual analysis of whether the processes, strategies, specific evidentiary standards or other factors the carrier used to design, determine applicability of and apply each nonquantitative treatment limitation to behavioral health benefits within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, specific evidentiary standards or other factors the carrier used to design, determine applicability of and apply each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits. (3) On or before March 1 of each year, all carriers that offer individual or group health benefit plans in this state that provide behavioral health benefits shall report to the Department of Consumer and Business Services, in the form and manner prescribed by the department, the following information: (a) The specific plan or coverage terms or other relevant terms regarding the nonquantitative treatment limitations and a description of all mental health or substance use disorder and medical or surgical benefits to which each such term applies in each respective benefits classification. (b) The factors used to determine that the nonquantitative treatment limitations will apply to mental health or substance use disorder benefits and medical or surgical benefits. (c) The evidentiary standards used for the factors identified in paragraph (b) of this subsection, when applicable, provided that every factor is defined, and any other source or evidence relied upon to design and apply the nonquantitative treatment limitations to mental health or substance use disorder benefits and medical or surgical benefits. (d) The comparative analyses demonstrating that the processes, strategies, evidentiary standards and other factors used to apply the nonquantitative treatment limitations to mental health or substance use disorder benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards and other factors used to apply the nonquantitative treatment limitations to medical or surgical benefits in the benefits classification. (e) The specific findings and conclusions reached by the insurer with respect to the health insurance coverage, including any results of the analyses described in paragraphs (a) to (d) of this subsection that indicate that the plan or coverage is or is not in compliance with this section. (f) Other data or information the department deems necessary to assess a carriers compliance with mental health parity requirements. (4) No later than September 15 of each calendar year, the department shall report to the interim committees of the Legislative Assembly related to mental or behavioral health, in the manner provided in ORS 192.245, the information reported under subsection (3) of this section, including the departments overall comparison of carriers coverage of mental health treatment and services and substance use disorder treatment and services to carriers coverage of medical or surgical treatments or services. Note: 743B.427 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Except as provided in this subsection, when a claim under a health benefit plan is submitted to an insurer by a provider on behalf of an enrollee, the insurer shall pay a clean claim or deny the claim not later than 30 days after the date on which the insurer receives the claim. If an insurer requires additional information before payment of a claim, not later than 30 days after the date on which the insurer receives the claim, the insurer shall notify the enrollee and the provider in writing and give the enrollee and the provider an explanation of the additional information needed to process the claim. The insurer shall pay a clean claim or deny the claim not later than 30 days after the date on which the insurer receives the additional information. (2) A contract between an insurer and a provider may not include a provision governing payment of claims that limits the rights and remedies available to a provider under this section and ORS 743B.452 or has the effect of relieving either party of its obligations under this section and ORS 743B.452. (3) An insurer may pay a claim using a credit card or electronic funds transfer payment method that imposes on the provider a fee or similar charge to process the payment if: (a) The insurer notifies the provider, in advance, of the fee or other charges associated with the use of the credit card or electronic funds transfer payment method; (b) The insurer offers the provider an alternative payment method that does not impose fees or similar charges on the provider; and (c) The provider or a designee of the provider elects to accept a payment of the claim using the payment method. (4) An insurer shall establish a method of communicating to providers the procedures and information necessary to complete claim forms. The procedures and information must be reasonably accessible to providers. (5) This section does not create an assignment of payment to a provider. (6) Each insurer shall report to the Director of the Department of Consumer and Business Services on its compliance under this section according to requirements established by the director. (7) The director shall adopt by rule a definition of "clean claim" and shall consider the definition of "clean claim" used by the federal Department of Health and Human Services for the payment of Medicare claims. [Formerly 743.911]
(1) As used in this section, "refund" means the return, either directly or through an offset to a future claim, of some or all of a payment already received by a health care provider. (2) Except in the case of fraud or abuse of billing, and except as provided in subsections (3) and (5) of this section, a health insurer may not: (a) Request from a health care provider a refund of a payment previously made to satisfy a claim unless the health insurer: (A) Requests the refund in writing on or before the last day of the period specified by the contract with the health care provider or 18 months after the date the payment was made, whichever is earlier; and (B) Specifies in the written request why the health insurer believes the provider owes the refund. (b) Request that a contested refund be paid earlier than six months after the health care provider receives the request. (3) A health insurer may not do the following for reasons related to coordination of benefits with another health insurer or entity responsible for payment of a claim: (a) Request from a health care provider a refund of a payment previously made to satisfy a claim unless the health insurer: (A) Requests the refund in writing within 30 months after the date the payment was made; (B) Specifies in the written request why the health insurer believes the provider owes the refund; and (C) Includes in the written request the name and mailing address of the other health insurer or entity that has primary responsibility for payment of the claim. (b) Request that a contested refund be paid earlier than six months after the provider receives the request. (4) If a health care provider fails to contest a refund request in writing to the health insurer within 30 days after receiving the request, the request is deemed accepted and the provider must pay the refund within 30 days after the request is deemed accepted. If the provider has not paid the refund within 30 days after the request is deemed accepted, the health insurer may recover the amount through an offset to a future claim. (5) A health insurer may at any time request from a health care provider a refund of a payment previously made to satisfy a claim if: (a) A third party, including a government entity, is found responsible for satisfaction of the claim as a consequence of liability imposed by law; and (b) The health insurer is unable to recover directly from the third party because the third party has already paid or will pay the provider for the health care services covered by the claim. (6) If a contract between a health insurer and a health care provider conflicts with this section, the provisions of this section prevail. However, nothing in this section prohibits a health care provider from choosing at any time to refund to a health insurer any payment previously made to satisfy a claim. (7) This section neither permits nor precludes a health insurer from recovering from a subscriber, enrollee or beneficiary any amounts paid to a health care provider for benefits to which the subscriber, enrollee or beneficiary was not entitled under the terms and conditions of the health plan, insurance policy or other benefit agreement. (8) This section applies to health benefit plans. [Formerly 743.912] Note: 743B.451 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) An insurer that fails to pay a claim to a provider within the timelines established in ORS 743B.450 shall pay simple interest of 12 percent per annum on the unpaid amount of the claim that is due and owing, accruing from the date after the payment was due until the claim is paid. Interest on any overdue payment for a claim begins to accrue on the 31st day after: (a) The date on which the insurer received the claim; or (b) The date the insurer receives the requested additional information. (2) The interest is payable with the payment of the claim. An insurer is not required to pay interest that is in the amount of $2 or less on any claim. (3) The availability of interest under subsection (1) of this section is in addition to and not in lieu of administrative actions and penalties that may be imposed by the Director of the Department of Consumer and Business Services under the Insurance Code. [Formerly 743.913]
(1) Except in the case of fraud and except as provided in subsection (3) of this section, a health care provider may not: (a) Request additional payment from a health insurer to satisfy a claim unless the provider: (A) Requests the additional payment in writing on or before the last day of the period specified by the contract or 18 months after the date the claim was denied or payment intended to satisfy the claim was made, whichever is earlier; and (B) Specifies in the written request why the provider believes the health insurer owes the additional payment. (b) Request that an additional payment be paid earlier than six months after the health insurer receives the request. (2) A health insurer may not consider a health care providers claim untimely if the claim is made no later than 12 months after a different insurer: (a) Denied the claim in whole or in part; or (b) Requested a refund of an erroneous payment made on the claim. (3) A health care provider may not do the following for reasons related to coordination of benefits with another health insurer or entity responsible for payment of a claim: (a) Request additional payment from a health insurer to satisfy a claim unless the provider: (A) Requests the additional payment in writing within 30 months after the date the claim was denied or payment intended to satisfy the claim was made; (B) Specifies in the written request why the provider believes the health insurer owes the additional payment; and (C) Includes in the written request the name and mailing address of the other health insurer or entity that has disclaimed responsibility for payment of the claim. (b) Request that the additional payment be paid earlier than six months after the health insurer receives the request. (4) If a contract between a health insurer and a health care provider conflicts with this section, the provisions of this section prevail. However, nothing in this section prohibits a health insurer from choosing at any time to make additional payments to a health care provider to satisfy a claim. (5) This section applies to health benefit plans. [Formerly 743.917] Note: 743B.453 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Complete application" means a providers application to a health insurer to become a credentialed provider that includes: (A) Information required by the health insurer; (B) Proof that the provider is licensed by a health professional regulatory board as defined in ORS 676.160, the Long Term Care Administrators Board, the Board of Licensed Dietitians or the Behavior Analysis Regulatory Board; (C) Proof of current registration with the Drug Enforcement Administration of the United States Department of Justice, if applicable to the providers practice; and (D) Proof that the provider is covered by a professional liability insurance policy or certification meeting the health insurers requirements. (b) "Credentialing period" means the period beginning on the date a health insurer receives a complete application and ending on the date the health insurer approves or rejects the complete application or 90 days after the health insurer receives the complete application, whichever is earlier. (c) "Health insurer" means an insurer that offers managed health insurance or preferred provider organization insurance, other than a health maintenance organization as defined in ORS 750.005. (2) A health insurer shall approve or reject a complete application within 90 days of receiving the application. (3)(a) A health insurer shall pay all claims for medical services covered by the health insurer that are provided by a provider during the credentialing period. (b) A provider may submit claims for medical services provided during the credentialing period during or after the credentialing period. (c) A health insurer may pay claims for medical services provided during the credentialing period: (A) During or after the credentialing period. (B) At the rate paid to nonparticipating providers. (d) If a provider submits a claim for medical services provided during the credentialing period within six months after the end of the credentialing period, the health insurer may not deny payment of the claim on the basis of the health insurers rules relating to timely claims submission. (4) Subsection (3) of this section does not require a health insurer to pay claims for medical services provided during the credentialing period if: (a) The provider was previously rejected or terminated as a participating provider in any health benefit plan underwritten or administered by the health insurer; (b) The rejection or termination was due to the objectively verifiable failure of the provider to provide medical services within the recognized standards of the providers profession; and (c) The provider was given the opportunity to contest the rejection or termination before a panel of peers in a proceeding conducted in conformity with the Health Care Quality Improvement Act of 1986, 42 U.S.C. 11101 et seq. [Formerly 743.918; 2017 c.101 23; 2018 c.61 26] Note: 743B.454 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
An insurer offering a health benefit plan, as defined in ORS 743B.005, that reimburses the costs of services provided by a national primary care medical home payment model, conducted by the Center for Medicare and Medicaid Innovation in accordance with 42 U.S.C. 1315a, that includes performance-based incentive payments for primary care, shall offer similar alternative payment methodologies to reimburse the costs of services provided by patient centered primary care homes identified in accordance with ORS 413.259 that serve beneficiaries of the health benefit plan. [2017 c.489 7] Note: 743B.458 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) An insurer may negotiate and enter into contracts for alternative rates of payment with providers to provide services covered by a group health insurance policy and may offer the benefit of such alternative rates to insureds who select such providers. An insurer may utilize such contracts by offering a choice of plans at the time an insured enrolls, one of which provides benefits only for services by members of a particular provider organization with whom the insurer has an agreement. If an insured chooses such a plan, benefits are payable only for services rendered by a member of that provider organization, unless such services were requested by a member of such organization or are rendered as the result of an emergency. (2) Benefits paid by an insurer to a provider under subsection (1) of this section shall discharge the insurers obligation with respect to the amount of insurance so paid. (3) Insurers shall provide group policyholders with a current roster of institutional and professional providers under contract to provide services at alternative rates under their group policy and shall also make such lists available for public inspection during regular business hours at the insurers principal office within this state. [Formerly 743.531]
(1) As used in this section: (a) "Health benefit plan" has the meaning given that term in ORS 743B.005. (b) "Provider" means a person licensed, certified or otherwise authorized or permitted by laws of this state to administer medical or mental health services, including substance use disorder services, in the ordinary course of business or practice of a profession. (2) Except as provided in ORS 743.543 and 743.550, a provider that bills an insurer for covered services provided to an individual who is insured under a health benefit plan or a Medicare supplement insurance policy issued by the insurer shall be reimbursed by the insurer by a direct payment issued to the provider. [2015 c.588 2] Note: 743B.462 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) For the purposes of this section: (a) "Health insurer" or "insurer" means an employee benefit plan, self-insured plan, managed care organization or group health plan, a third party administrator, fiscal intermediary or pharmacy benefit manager of the plan or organization, or other party that is by statute, contract or agreement legally responsible for payment of a claim for a health care item or service. (b) "Medicaid" means medical assistance provided under 42 U.S.C. 1396a (section 1902 of the Social Security Act). (2) A health insurer is prohibited from considering the availability or eligibility for medical assistance in this or any other state under Medicaid when considering eligibility for coverage or making payments under its group or individual plan for eligible enrollees, subscribers, policyholders or certificate holders. (3) To the extent that payment for covered expenses has been made under the state Medicaid program for health care items or services furnished to an individual, in any case when a third party has a legal liability to make payments, the state is considered to have acquired the rights of the individual to payment by any other party for those health care items or services. (4) An insurer may not deny a claim submitted by the state Medicaid agency, a prepaid managed care health services organization, as defined in ORS 414.025, or a coordinated care organization, as defined in ORS 414.025, under subsection (3) of this section based on the date of submission of the claim, the type or format of the claim form or a failure to present proper documentation at the point of sale that is the basis of the claim if: (a) The claim is submitted by the agency, the prepaid managed care health services organization or the coordinated care organization within the three-year period beginning on the date on which the health care item or service was furnished; and (b) Any action by the agency, the prepaid managed care health services organization or the coordinated care organization to enforce its rights with respect to the claim is commenced within six years of the agencys or organizations submission of the claim. (5) An insurer must provide to the state Medicaid agency, a prepaid managed care health services organization or a coordinated care organization, upon request, the following information: (a) The period during which a Medicaid recipient, the spouse or dependents may be or may have been covered by the plan; (b) The nature of coverage that is or was provided by the plan; and (c) The name, address and identifying numbers of the plan. (6) An insurer may not deny enrollment of a child under the group or individual health plan of the childs parent on the ground that: (a) The child was born out of wedlock; (b) The child is not claimed as a dependent on the parents federal tax return; or (c) The child does not reside with the childs parent or in the insurers service area. (7) When a child has group or individual health coverage through an insurer of a noncustodial parent, the insurer must: (a) Provide such information to the custodial parent as may be necessary for the child to obtain benefits through that coverage; (b) Permit the custodial parent or the provider, with the custodial parents approval, to submit claims for covered services without the approval of the noncustodial parent; and (c) Make payments on claims submitted in accordance with paragraph (b) of this subsection directly to the custodial parent, the provider or, if a claim is filed by the state Medicaid agency, a prepaid managed care health services organization or a coordinated care organization, directly to the agency or the organization. (8) When a parent is required by a court or administrative order to provide health coverage for a child, and the parent is eligible for family health coverage, the insurer must: (a) Permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the coverage without regard to any enrollment season restrictions; (b) If the parent is enrolled but fails to make application to obtain coverage for the child, enroll the child under family coverage upon application of the childs other parent, the state agency administering the Medicaid program or the state agency administering 42 U.S.C. 651 to 669, the child support enforcement program; and (c) Not disenroll or eliminate coverage of the child unless the insurer is provided satisfactory written evidence that: (A) The court or administrative order is no longer in effect; or (B) The child is or will be enrolled in comparable health coverage through another insurer which will take effect not later than the effective date of disenrollment. (9) An insurer may not impose requirements on a state agency that has been assigned the rights of an individual eligible for medical assistance under Medicaid and covered for health benefits from the insurer if the requirements are different from requirements applicable to an agent or assignee of any other individual so covered. (10) The provisions of ORS 743A.001 do not apply to this section. [Formerly 743.847]
The Director of the Department of Consumer and Business Services shall by rule establish guidelines for the coordination of benefits for individual and group health insurance, including: (1) The procedures by which persons insured under the policies are to be made aware of the existence of a coordination of benefits provision; (2) The benefits which may be subject to such a provision; (3) The effect of such a provision on the benefits provided; (4) Establishment of the order of benefit determination; and (5) Reasonable claim administration procedures to expedite claim payments. [Formerly 743.552] Note: Sections 1, 3, 4 and 5, chapter 575, Oregon Laws 2015, provide: Sec. 1. (1) As used in this section: (a) "Carrier" means an insurer that offers a health benefit plan, as defined in ORS 743B.005. (b) "Prominent carrier" means: (A) A carrier with annual premium income at a threshold, of no less than $50 million, established by the Department of Consumer and Business Services by rule. (B) The Public Employees Benefit Board. (C) The Oregon Educators Benefit Board. (2) All prominent carriers shall, and carriers other than prominent carriers may, report to the Department of Consumer and Business Services, no later than October 1 of each year, the proportion of the carriers total medical expenses that are allocated to primary care. (3) The department shall share with the Oregon Health Authority the information reported so that the authority may prepare the evaluation and report described in section 2, chapter 575, Oregon Laws 2015. (4) The department, in collaboration with the authority, shall adopt rules prescribing the primary care services for which costs must be reported under subsection (2) of this section. [2015 c.575 1; 2017 c.489 12] Sec. 3. No later than February 1 of each year, the Oregon Health Authority and the Department of Consumer and Business Services shall report to the Legislative Assembly, in the manner provided in ORS 192.245: (1) The percentage of the medical expenses of carriers, coordinated care organizations, the Public Employees Benefit Board and the Oregon Educators Benefit Board that is allocated to primary care; and (2) How carriers, coordinated care organizations, the Public Employees Benefit Board and the Oregon Educators Benefit Board pay for primary care. [2015 c.575 3; 2016 c.26 7] Sec. 4. (1) The Legislative Assembly declares that collaboration among insurers, purchasers and providers of health care to coordinate service delivery systems and develop innovative reimbursement methods in support of integrated and coordinated health care delivery is in the best interest of the public. The Legislative Assembly therefore declares its intent to exempt from state antitrust laws, and to provide immunity from federal antitrust laws through the state action doctrine, the activities specified in section 2 (2) of this 2015 Act, of the participants in the primary care payment reform collaborative, that might otherwise be constrained by such laws. (2) The Director of the Oregon Health Authority or the directors designee shall engage in state supervision of the primary care payment reform collaborative to ensure that the activities and discussions of the participants in the collaborative are limited to the activities described in section 2 (2) of this 2015 Act. (3) Groups that include, but are not limited to, health insurance companies, health care centers, hospitals, health service organizations, employers, health care providers, health care facilities, state and local governmental entities and consumers may meet to facilitate the development, implementation and operation of the Primary Care Transformation Initiative in accordance with section 2 of this 2015 Act. (4) The Oregon Health Authority may conduct a survey of the entities and individuals specified in subsection (3) of this section to assist in the evaluation of the Primary Care Transformation Initiative. (5) A survey or meeting under subsection (3) or (4) of this section is not a violation of state antitrust laws and shall be considered state action for purposes of federal antitrust laws through the state action doctrine. [2015 c.575 4] Sec. 5. (1) Sections 1 to 4, chapter 575, Oregon Laws 2015, are repealed on December 31, 2027. (2) Section 3 of this 2017 Act is repealed on December 31, 2027. [2015 c.575 5; 2016 c.26 8; 2017 c.489 19]
As used in this section and ORS 743B.501 to 743B.503: (1)(a) "Contracting entity" means any person that contracts directly with a provider for the delivery of health care services or contracts with a third party for the purpose of selling or making available to the third party the providers health care services or discounted rates or the services or rates of a provider panel under a provider network contract. (b) "Contracting entity" includes a person under common ownership and control of a contracting entity. (c) "Contracting entity" does not include: (A) A managed care organization that is certified under ORS 656.260; (B) A discount medical plan organization as defined in ORS 742.420; (C) The state medical assistance program; (D) An independent practice association; or (E) A self-funded, employer-sponsored health insurance plan regulated under the Employee Retirement Income Security Act of 1974, as codified and amended at 29 U.S.C. 1001, et seq., or any person that provides only administrative services to the self-funded employer-sponsored health insurance plan. (2) "Health care services" means the treatment of humans for bodily injury, disablement or death by accidental means or as a result of sickness or childbirth, or in prevention of sickness, but does not include treatment for bodily injury, disablement or occupational diseases incurred as a result of employment. (3) "Independent practice association" has the meaning given that term in ORS 743B.001. (4) "Person" has the meaning given that term in ORS 731.116. (5)(a) "Provider" includes: (A) A physician as defined in ORS 677.010. (B) A physician group, independent practice association, physician-controlled organization, hospital organization or other provider organization that contracts with a provider for the purpose of facilitating the providers participation in a provider network contract. (C) A person licensed, certified or otherwise authorized or permitted by the laws of this state to administer medical services or mental health services in the ordinary course of business or practice of a profession. (b) "Provider" does not include a contracting entity. (6) "Provider network contract" means a contract between a provider and a contracting entity for the provision of health care services to patients other than Medicare enrollees or medical assistance recipients. (7)(a) "Third party" means a person that enters into a contract with a contracting entity or with another party, other than a provider, for the right to exercise the rights of the contracting entity under a provider network contract. (b) "Third party" includes any of the following: (A) A payer that directly reimburses the cost of the delivery of health care services; (B) A third party administrator or other entity that administers or processes claims on behalf of a payer; (C) A preferred provider organization or network; (D) A physician-controlled organization or a hospital organization; or (E) An entity that is engaged in the electronic transmission of claims between a contracting entity and a payer and does not provide to another party access to the health care services and discounted rates of a provider. (c) "Third party" does not include: (A) Entities offering health care services under the same brand pursuant to a brand licensing agreement with the same licenser; or (B) A self-funded, employer-sponsored health insurance plan regulated under the Employee Retirement Income Security Act of 1974, as codified and amended at 29 U.S.C. 1001, et seq., or any person that provides only administrative services to the self-funded employer-sponsored health insurance plan. [Formerly 743.082]
(1) A contracting entity that does not have a certificate of authority shall register with the Department of Consumer and Business Services as a contracting entity by submitting the following information to the department in written or electronic form as prescribed by the department along with any fee prescribed by the department: (a) The official name of the entity and any secondary, alternative or substitute designations. (b) The mailing address and telephone number of the headquarters of the entity. (c) The name and telephone number of a representative of the entity who shall serve as the primary contact for the department. (2) The requirements of this section do not apply to a contracting entity that is under common ownership and control of a contracting entity that is licensed by or has a certificate of authority from the department. [Formerly 743.083] Note: 743B.501 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A contracting entity or a third party may not contract with another third party to provide access to the health care services and discounted rates of a provider under a provider network contract unless: (a) The third party contract is specifically authorized by the provider network contract; and (b) The third party contract obligates the third party to comply with all applicable terms, limitations and conditions of the provider network contract. (2) A contracting entity that provides access to the health care services and discounted rates of a provider under a provider network contract shall: (a) Give to the provider in writing or electronically, at the time a provider network contract is entered into, a list of all third parties known by the contracting entity at the time to which the contracting entity has or will provide access to the health care services and discounted rates of a provider under the provider network contract; (b) Maintain an Internet website, toll-free telephone number or other readily available mechanism through which a provider may obtain a list, updated at least every 90 days, of all third parties that have access to the providers health care services and discounted rates under the provider network contract; (c) Provide each third party listed under paragraph (a) or (b) of this subsection with information necessary to enable the third party to comply with all relevant terms, limitations and conditions of the provider network contract; (d) Require a third party to identify on each remittance or explanation of payment sent to a provider the source of any contractual discount in rates taken by the third party under the provider network contract; and (e)(A) Notify each third party listed under paragraph (a) or (b) of this subsection of the termination of the provider network contract no later than 30 days prior to the effective date of the termination; and (B) Require third parties to cease claiming entitlement to discounted rates or other rights under a provider network contract after the termination of the contract. (3) The notice required under subsection (2)(e)(A) of this section can be provided by any reasonable means, including but not limited to written notice, electronic communication or an update to an electronic database. (4) Subject to any applicable continuity of care requirements, agreements or contractual provisions: (a) A third partys right to access a providers health care services and discounted rates under a provider network contract shall terminate on the date the provider network contract is terminated; (b) Claims for health care services performed after the termination date of the provider network contract are not eligible for processing and payment in accordance with the provider network contract; and (c) Claims for health care services performed before the termination date of the provider network contract, but processed after the termination date, are eligible for processing and payment in accordance with the provider network contract. (5)(a) All information made available to a provider in accordance with the requirements of this section and ORS 743B.503 shall be confidential and may not be disclosed to any person not involved in the providers practice or the administration thereof without the prior written consent of the contracting entity. (b) This section and ORS 743B.503 may not be construed to prohibit a contracting entity from requiring a provider to execute a reasonable confidentiality agreement to ensure that confidential or proprietary information disclosed by the contracting entity is not used for any purpose other than the providers direct practice management or billing activities. [Formerly 743.085] Note: See note under 743B.500.
(1) A contract between a third party and a contracting entity or between two third parties with respect to a provider network contract must comply with this section and ORS 743B.502. (2)(a) A third party shall inform the contracting entity and providers under a contracting entitys provider network contract of a website, toll-free number or other readily available mechanism to identify the names of all third parties to which the third party provides access to the health care services and discounted rates of a provider under the provider network contract. (b) The third party shall update the website described in paragraph (a) of this subsection at least every 90 days to reflect all third parties currently provided access. Upon request, the third party shall make the information available to a provider via telephone or through direct notification. (3) A provider may refuse to accept as payment in full a discounted payment made by a third party under the terms of a provider network contract if there is no valid contractual basis for the discount or the discount is taken in violation of this section or ORS 743B.502. [Formerly 743.086] Note: See note under 743B.500.
(1) An insurer offering a health benefit plan in this state that provides coverage to individuals or to small employers, as defined in ORS 743B.005, through a specified network of health care providers shall: (a) Contract with or employ a network of providers that is sufficient in number, geographic distribution and types of providers to ensure that all covered services under the health benefit plan, including mental health and substance abuse treatment, are accessible to enrollees for initial and follow-up appointments without unreasonable delay. (b)(A) With respect to health benefit plans offered through the health insurance exchange under ORS 741.310, contract with a sufficient number and geographic distribution of essential community providers, where available, to ensure reasonable and timely access to a broad range of essential community providers for low-income, medically underserved individuals in the plans service area in accordance with the network adequacy standards established by the Department of Consumer and Business Services; (B) If the health benefit plan offered through the health insurance exchange offers a majority of the covered services through physicians employed by the insurer or through a single contracted medical group, have a sufficient number and geographic distribution of employed or contracted providers and hospital facilities to ensure reasonable and timely access for low-income, medically underserved enrollees in the plans service area, in accordance with network adequacy standards adopted by the Department of Consumer and Business Services; or (C) With respect to health benefit plans offered outside of the health insurance exchange, contract with or employ a network of providers that is sufficient in number, geographic distribution and types of providers to ensure access to care by enrollees who reside in locations within the health benefit plans service area that are designated by the Health Resources and Services Administration of the United States Department of Health and Human Services as health professional shortage areas or low-income zip codes. (c) Annually report to the Department of Consumer and Business Services, in the format prescribed by the department, the insurers network of providers for each health benefit plan. (2)(a) An insurer may not discriminate with respect to participation under a health benefit plan or coverage under the plan against any health care provider who is acting within the scope of the providers license or certification in this state. (b) This subsection does not require an insurer to contract with any health care provider who is willing to abide by the insurers terms and conditions for participation established by the insurer. (c) This subsection does not prevent an insurer from establishing varying reimbursement rates based on quality or performance measures. (d) Rules adopted by the Department of Consumer and Business Services to implement this section shall be consistent with the provisions of 42 U.S.C. 300gg-5 and the rules adopted by the United States Department of Health and Human Services, the United States Department of the Treasury or the United States Department of Labor to carry out 42 U.S.C. 300gg-5 that are in effect on January 1, 2017. (3) The Department of Consumer and Business Services shall use one of the following methods in an annual evaluation of whether the network of providers available to enrollees in a health benefit plan meets the requirements of this section: (a) An approach by which an insurer submits evidence that the insurer is complying with at least one of the factors prescribed by the department by rule from each of the following categories: (A) Access to care consistent with the needs of the enrollees served by the network; (B) Consumer satisfaction; (C) Transparency; and (D) Quality of care and cost containment; or (b) A nationally recognized standard adopted by the department and adjusted, as necessary, to reflect the age demographics of the enrollees in the plan. (4) In evaluating an insurers network of mental and behavioral health providers under subsection (3) of this section, the department shall ensure that the network includes: (a) An adequate number and geographic distribution, as prescribed by the department by rule, of licensed professional counselors, licensed marriage and family therapists, licensed clinical social workers, psychologists and psychiatrists who are accepting new patients, based on the needs of the insureds under the policy or certificate, including but not limited to providers who can address the needs of: (A) Children and adults; (B) Individuals with limited English proficiency or who are illiterate; (C) Individuals with diverse cultural or ethnic backgrounds; (D) Individuals with chronic or complex behavioral health conditions; and (E) Other groups specified by the department by rule; and (b) An adequate number of the providers described in paragraph (a) of this subsection in all geographic areas where the insurer offers plans. (5) This section does not require an insurer to contract with an essential community provider that refuses to accept the insurers generally applicable payment rates for services covered by the plan. (6) This section does not require an insurer to submit provider contracts to the department for review. [2015 c.59 2; 2017 c.152 13; 2021 c.629 6] Note: 743B.505 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
Nothing in ORS 743.008, 743A.012, 743B.195, 743B.197, 743B.200, 743B.202, 743B.204, 743B.250, 743B.400, 743B.403, 743B.420, 743B.423 and 743B.550 shall be construed to require disclosure of information that is otherwise privileged or confidential under any other provision of law. [Formerly 743.839; 2021 c.97 83]
(1) As used in this section: (a) "Carrier" has the meaning given that term in ORS 743B.005. (b) "Communication" includes: (A) An explanation of benefits notice; (B) Information about an appointment; (C) A notice of an adverse benefit determination; (D) A carriers or third party administrators request for additional information regarding a claim; (E) A notice of a contested claim; (F) The name and address of a provider, a description of services provided and other visit information; and (G) Any written, oral or electronic communication described in this paragraph from a carrier or a third party administrator to a policyholder, certificate holder or enrollee that contains protected health information. (c) "Confidential communications request" means a request from an enrollee to a carrier or third party administrator that communications be sent directly to the enrollee and that the carrier or third party administrator refrain from sending communications concerning the enrollee to the policyholder or certificate holder. (d) "Protected health information" has the meaning given that term in ORS 192.556. (2) A carrier and a third party administrator doing business in this state: (a) Shall permit any enrollee to submit a confidential communications request. (b) Shall update an enrollee on the status of implementing a confidential communications request upon the enrollees inquiry. (3) The procedure adopted by a carrier or third party administrator for enrollees to make confidential communications requests: (a) Must allow enrollees to use the form described in subsection (4) of this section and may also allow enrollees to make the request by other means such as telephone or the Internet. (b) Shall ensure that the confidential communications request remains in effect until the enrollee revokes the request in writing or submits a new confidential communications request. (c) Shall ensure that the confidential communications request is acted upon and implemented by the carrier or third party administrator not later than seven days after receipt of a request by electronic means or 30 days after receipt of a request in hard copy. (d) May not require an enrollee to waive any right to limit disclosure under this section as a condition of eligibility for or coverage under a health benefit plan. (e) Must be easy to understand and to complete. (4) The Department of Consumer and Business Services shall work with stakeholders to develop and make available to the public a standardized form that an enrollee may submit to a carrier or third party administrator to make a confidential communications request. The department may encourage health care providers to clearly display the form and make it available to patients. At a minimum, the form must: (a) Inform an enrollee about the enrollees right to have protected health information sent to the enrollee and not disclosed to the policyholder or certificate holder; (b) Allow an enrollee to indicate where to redirect communications containing protected health information, including a specified mail or electronic mail address or specified telephone number; (c) Allow an enrollee to designate a mail or electronic mail address or telephone number for the carrier or third party administrator to contact the enrollee if additional information or clarification is necessary to process the confidential communications request; and (d) Include a disclaimer that it may take up to 30 days from the date of receipt for a carrier or third party administrator to process the form. (5) If an insurer makes an adverse benefit determination regarding a claim concerning health care provided to an enrollee who has made a confidential communications request: (a) The enrollee has the right to appeal the determination; and (b) The policyholder or certificate holder may not appeal the adverse benefit determination unless the enrollee has signed an authorization to disclose claims information relevant to the appeal. (6) As used in this section, "enrollee" does not include an individual who is in the custody of the Department of Corrections. (7) The department shall interpret this section in a manner that is consistent with federal law. [2015 c.470 2] Note: 743B.555 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Health plan" means: (A) A "health benefit plan" as defined in ORS 743B.005; and (B) A self-insured health plan offered by the Oregon Health and Science University. (b) "Synchronization policy" means a procedure for aligning the refill dates of a patients prescription drugs so that drugs that are refilled at the same frequency may be refilled concurrently. (2) A health plan that includes prescription drug coverage shall implement a synchronization policy for the dispensing of prescription drugs to the plans enrollees. (3) A health plan shall reimburse the cost of prescription drugs dispensed in accordance with the plans synchronization policy. (4) If a drug is dispensed in less than a 30-day supply for the purpose of synchronizing a patients prescription drug refills, a health plan shall: (a) Prorate the copayment; or (b) Adjust the copayment using a method approved by the Department of Consumer and Business Services. (5) A health plan shall fully reimburse the dispensing fee for partially filled or refilled prescription drugs. (6) This section does not apply to prescription drugs that: (a) Are in unit-of-use packaging for which synchronization is not possible; (b) Are controlled substances; or (c) Have been identified by the United States Drug Enforcement Administration as having a high risk of diversion. (7) The coverage required by this section may be limited by formulary restrictions applied to a prescription drug by a health plan. (8)(a) This section does not apply to a prepaid group practice health plan with at least 200,000 enrollees in this state. (b) As used in this subsection, "prepaid group practice health plan" means a health care service contractor that provides physician services to its enrollees through an integrated health care delivery system using, primarily, a single group of physicians contracted on a prepaid, capitated basis. [2014 c.25 2; 2015 c.800 1; 2017 c.309 6] Note: 743B.601 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section: (a) "Beneficiary" means an individual receiving health care that is provided or reimbursed by an entity that provides health care coverage. (b) "Health care coverage" includes any of the following that reimburse the cost of prescription drugs: (A) A health benefit plan; (B) An insurance policy or certificate; (C) A medical services contract; (D) A multiple employer welfare arrangement, as defined in ORS 750.301; (E) A contract or agreement with a health care service contractor, as defined in ORS 750.005, or a preferred provider organization; (F) Claims payments by a pharmacy benefit manager, as defined in ORS 735.530, or other third party administrator; and (G) An accident insurance policy or any other insurance contract. (2) An entity that provides health care coverage that requires step therapy shall: (a) Post to the entitys website clear explanations that are easily accessible to prescribing practitioners and beneficiaries of the coverage, written in plain language and understandable to practitioners and beneficiaries, of: (A) The clinical criteria for each step therapy protocol and the criteria for approving an exception to step therapy; (B) The procedure by which a practitioner may submit to the entity the practitioners medical rationale for determining that a particular step therapy is not appropriate for a particular beneficiary based on the beneficiarys medical condition and history; and (C) The documentation, if any, that a practitioner must submit to the entity for the entity to determine the appropriateness of step therapy for a specific beneficiary. (b) Provide a clear, readily accessible and convenient process for a prescribing practitioner to request an exception to step therapy, which may be the same process used to request exceptions to other coverage restrictions or limitations. (c) Approve a request for an exception to step therapy if the entity determines that the evidence submitted by the prescribing practitioner is sufficient to establish that: (A) The prescription drug required by the step therapy is contraindicated or will cause the beneficiary to experience a clinically predictable adverse reaction; (B) The prescription drug required by the step therapy is expected to be ineffective based on the known clinical characteristics of the beneficiary and the known characteristics of the prescription drug regimen; (C) The beneficiary has tried the drug required by the step therapy, a drug in the same pharmacologic class as the drug required by the step therapy or a drug with the same mechanism of action as the drug required by the step therapy, and the beneficiarys use of the drug required by the step therapy was discontinued due to the lack of efficacy or effectiveness, a diminished effect or an adverse reaction; (D) For a period of at least 90 days the beneficiary has experienced a positive therapeutic outcome from the drug for which the exception is requested while enrolled in the current or immediately preceding health care coverage and changing to the drug required by the step therapy may cause a clinically predictable adverse reaction or physical or mental harm to the beneficiary; or (E) The prescription drug required by the step therapy is not in the best interest of the beneficiary based on medical necessity. (d) Grant or deny a request for an exception to step therapy or an appeal of a denial of coverage no later than 72 hours or two business days, whichever is later, after receipt of the request unless exigent circumstances exist. If exigent circumstances exist the entity shall grant or deny the request for an exception no later than one business day after receipt of the request. A request for an exception to step therapy or an appeal of a denial of coverage shall be deemed granted if the entity fails to act within the time frames specified in this paragraph. (3) A prescribing practitioner may not use a pharmaceutical sample for the sole purpose of qualifying for an exception to step therapy under subsection (2)(c)(C) or (D) of this section. (4) This section does not prevent: (a) An entity that provides health care coverage from requiring a beneficiary to try an AB-rated generic equivalent or a biological product that is a biosimilar agent approved by the United States Food and Drug Administration prior to covering the equivalent brand name prescription drug; (b) An entity that provides health care coverage from denying a request for an exception to allow coverage of a drug that has been removed from the market due to the safety concerns of the United States Food and Drug Administration; or (c) A practitioner from prescribing a prescription drug that is medically appropriate regardless of coverage. [2014 c.55 4; 2021 c.365 6,6a] Note: Section 12 (2), chapter 154, Oregon Laws 2021, provides: Sec. 12. (2) An entity described in ORS 743B.602 must meet the website requirements in ORS 743B.602, as amended by section 6a of this 2021 Act [section 6a, chapter 365, Oregon Laws 2021], no later than June 1, 2022. [2021 c.154 12(2); 2021 c.365 6c(2)] Note: 743B.602 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) As used in this section, "health benefit plan" means a health benefit plan, as defined in ORS 743B.005, that is offered in the individual or small group market. (2) The Department of Consumer and Business Services may establish by rule a procedure for adjusting risk between insurers. If a procedure is established: (a) The procedure may include: (A) An assessment imposed on an insurer if the actuarial risk of the enrollees in the insurers health benefit plans is less than the average actuarial risk of all enrollees in all health benefit plans in this state; and (B) Payments to insurers if the actuarial risk of the enrollees in the insurers health benefit plans is greater than the average actuarial risk of all enrollees in all health benefit plans in this state. (b) The methodology for adjusting risk between insurers must be consistent with 42 U.S.C. 18063 and regulations adopted by the Secretary of the United States Department of Health and Human Services to carry out 42 U.S.C. 18063 that are in effect on January 1, 2019. [Formerly 743.923; 2017 c.152 14; 2019 c.285 10] Note: 743B.800 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation. Note: Sections 1 to 8, 17 to 21 and 48, chapter 538, Oregon Laws 2017, provide: Sec. 1. Sections 2 to 8 of this 2017 Act are added to and made a part of the Insurance Code. [2017 c.538 1] Sec. 2. (1) The Health System Fund is established in the State Treasury, separate and distinct from the General Fund. Interest earned by the Health System Fund shall be credited to the fund. (2) Amounts in the Health System Fund are continuously appropriated to the Department of Consumer and Business Services for the purposes of: (a) Administering the Oregon Reinsurance Program established in section 18 of this 2017 Act; and (b) Transferring moneys to the Oregon Health Authority to: (A) Provide medical assistance and other health services under ORS chapter 414. (B) Pay refunds due under section 11 of this 2017 Act. (C) Pay administrative costs incurred by the authority to administer the assessment described in section 9 of this 2017 Act. [2017 c.538 2] Sec. 3. (1) As used in this section: (a) "Insured" means an eligible employee or family member, as defined in ORS 243.105, who is enrolled in a self-insured health benefit plan under ORS 243.105 to 243.285. (b) "Premium equivalent" means a claim for reimbursement of the cost of a health care item or service provided to an insured, other than a dental or vision care item or service, and the administrative costs associated with the claim. (2) No later than 45 days following the end of a calendar quarter, the Public Employees Benefit Board shall pay an assessment at the rate of two percent on the gross amount of premium equivalents received during the calendar quarter. (3) The assessment shall be paid to the Department of Consumer and Business Services and shall be accompanied by a verified report, on a form prescribed by the department, together with any information required by the department. (4) The assessment imposed under this section is in addition to and not in lieu of any tax, surcharge or other assessment imposed on the board. (5) If the department determines that the assessment paid by the board under this section is incorrect, the department shall charge or credit to the board the difference between the correct amount of the assessment and the amount paid by the board. (6) The board is entitled to notice and an opportunity for a contested case hearing under ORS chapter 183 to contest an action of the department taken pursuant to subsection (5) of this section. (7) Moneys received by the department under this section shall be paid into the State Treasury and credited to the Health System Fund established under section 2, chapter 538, Oregon Laws 2017. [2017 c.538 3; 2019 c.2 4] Sec. 4. Section 3, chapter 538, Oregon Laws 2017, applies to premium equivalents received by the Public Employees Benefit Board, or a third party administrator that contracts with the board to administer a self-insured health benefit plan, during the period from January 1, 2020, through December 31, 2026. [2017 c.538 4; 2019 c.2 5] Sec. 5. (1) As used in this section: (a) "Gross amount of premiums" has the meaning given that term in ORS 731.808. (b) "Health plan" means: (A) A health benefit plan as defined in ORS 743B.005; and (B) Insurance described in ORS 742.065. (2) No later than 45 days following the end of a calendar quarter, an insurer shall pay an assessment at the rate of two percent of the gross amount of premiums earned by the insurer during that calendar quarter that were derived from health plans delivered or issued for delivery in Oregon. (3) The assessment shall be paid to the Department of Consumer and Business Services and shall be accompanied by a verified form prescribed by the department together with any information required by the department, that reports: (a) All health plans issued or renewed by the insurer during the calendar quarter for which the assessment is paid; and (b) The gross amount of premiums by line of insurance, derived by the insurer from all health plans issued or renewed by the insurer during the calendar quarter for which the assessment is paid. (4) The assessment imposed under this section is in addition to and not in lieu of any tax, surcharge or other assessment imposed on an insurer. (5) Any rate filed for the departments approval may include amounts paid by the insurer under this section as a valid element of administrative expense or retention. (6) Moneys received by the department under this section shall be paid into the State Treasury and credited to the Health System Fund established under section 2, chapter 538, Oregon Laws 2017. [2017 c.538 5; 2019 c.2 6] Sec. 6. (1) If the Public Employees Benefit Board fails to timely file a verified form or to pay an assessment required under section 3, chapter 538, Oregon Laws 2017, the Department of Consumer and Business Services shall impose a penalty on the board of up to $500 per day of delinquency. The total amount of penalties imposed under this section for a calendar quarter may not exceed five percent of the assessment due for that calendar quarter. (2) If an insurer fails to timely file a verified form or to pay an assessment required under section 5, chapter 538, Oregon Laws 2017, the department shall impose a penalty on the insurer of the greater of: (a) An amount determined under ORS 731.988; or (b) Five percent of the assessment due for the calendar quarter. (3) Any penalty imposed under this section is in addition to and not in lieu of the assessment imposed under sections 3 and 5, chapter 538, Oregon Laws 2017. [2017 c.538 6; 2019 c.2 7] Sec. 7. (1) If the Department of Consumer and Business Services determines that the assessment paid by the insurer under section 5 of this 2017 Act is incorrect, the department shall charge or credit to the insurer the difference between the correct amount of the assessment and the amount paid by the insurer. (2) An insurer that is aggrieved by an action of the department taken pursuant to subsection (1) of this section shall be entitled to notice and an opportunity for a contested case hearing under ORS chapter 183. [2017 c.538 7] Sec. 8. Section 5, chapter 538, Oregon Laws 2017, applies to premiums earned by an insurer for the period beginning January 1, 2020, and ending December 31, 2026. [2017 c.538 8; 2019 c.2 8] Sec. 17. Sections 18 to 21 of this 2017 Act are added to and made a part of the Insurance Code. [2017 c.538 17] Sec. 18. The Oregon Reinsurance Program is established in the Department of Consumer and Business Services for the purposes of stabilizing the rates and premiums for individual health benefit plans and providing greater financial certainty to consumers of health insurance in this state. [2017 c.538 18] Sec. 19. (1) As used in this section: (a) "Attachment point" means the threshold dollar amount, adopted by the Department of Consumer and Business Services by rule, for claims costs incurred by a reinsurance eligible health benefit plan for an insured individuals covered benefits in a benefit year, after which threshold the claims costs for the benefits are eligible for reinsurance payments. (b) "Coinsurance rate" means the rate, adopted by the department by rule, at which the department will reimburse a reinsurance eligible health benefit plan for claims costs incurred for an insured individuals covered benefits in a benefit year after the attachment point and before the reinsurance cap. (c) "Health benefit plan" has the meaning given that term in ORS 743B.005. (d) "Reinsurance cap" means the threshold dollar amount, adopted by the department by rule, for claims costs incurred by a reinsurance eligible health benefit plan for an insured individuals covered benefits in a benefit year, after which threshold the claims costs for the benefits are no longer eligible for state reinsurance payments. (e) "Reinsurance eligible health benefit plan" means a health benefit plan providing individual coverage that: (A) Is delivered or issued for delivery in this state; and (B) Is not a grandfathered health plan as defined in ORS 743B.005. (f) "Reinsurance eligible individual" means an individual who is insured in a reinsurance eligible health benefit plan. (2) An issuer of a reinsurance eligible health benefit plan becomes eligible for a reinsurance payment when the claims costs for a reinsurance eligible individuals covered benefits in a calendar year exceed the attachment point. The amount of the payment shall be the product of the coinsurance rate and the issuers claims costs for the reinsurance eligible individual that exceed the attachment point, up to the reinsurance cap. (3) After the department adopts by rule the attachment point, reinsurance cap or coinsurance rate, the department may, only if necessary to pay out the full amount of funding budgeted for the Oregon Reinsurance Program when claims received are less than the amount of claims that were projected: (a) Change the attachment point during that benefit year; or (b) Increase the coinsurance rate during the benefit year. (4) The department may adopt rules necessary to carry out the provisions of this section including, but not limited to, rules prescribing: (a) The amount, manner and frequency of reinsurance payments; and (b) Reporting requirements for issuers of reinsurance eligible health benefit plans. [2017 c.538 19; 2019 c.2 1] Sec. 20. (1) As used in this section: (a) "Health benefit plan" has the meaning given that term in ORS 743B.005. (b) "Oregon Reinsurance Program" means the program established in section 18 of this 2017 Act. (c) "Reinsurance eligible individual" has the meaning given that term in section 19 of this 2017 Act. (2) An insurer that offers a health benefit plan must report to the Department of Consumer and Business Services, in the form and manner prescribed by the department by rule, information about reinsurance eligible individuals insured by the health benefit plan as necessary for the department to calculate reinsurance payments under the Oregon Reinsurance Program. [2017 c.538 20] Sec. 21. In a rate filing under ORS 743.018, an insurer must identify the impact of reinsurance payments under section 19 of this 2017 Act on projected claims costs and in the development of rates. [2017 c.538 21] Sec. 48. Sections 18 to 22, chapter 538, Oregon Laws 2017, are repealed on January 2, 2028. [2017 c.538 48; 2019 c.2 3] Note: Section 2, chapter 26, Oregon Laws 2016, provides: Sec. 2. The Department of Consumer and Business Services shall have sole authority to apply for a waiver for state innovation under 42 U.S.C. 18052. The department shall apply for a waiver to receive funding to implement the Oregon Reinsurance Program established in section 18, chapter 538, Oregon Laws 2017, and apply for subsequent renewals of the waiver to continue the program as long as revenue from the assessment under section 5, chapter 538, Oregon Laws 2017, is available. [2016 c.26 2; 2017 c.538 24; 2019 c.2 2]
(1) A health benefit plan may not exclude, and shall expedite preauthorizations required for, work-related injuries or occupational diseases if: (a) The injured worker is covered by workers compensation insurance and the health benefit plan; and (b) The injured worker has submitted a workers compensation claim for the work-related injury or occupational disease that has not been accepted or denied by the workers compensation carrier. (2) A health benefit plan subject to this section shall guarantee payment for preauthorized medical services to the provider of those medical services according to the terms, conditions and benefits of the plan if the claim is found not to be a compensable workers compensation claim. (3) As used in this section, "health benefit plan" has the meaning given that term in ORS 743B.005. (4) The provisions of ORS 743A.001 do not apply to this section. [2014 c.94 2; 2017 c.309 7] Note: 743B.810 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.
[1979 c.501 1; 1989 c.701 41; renumbered 744.240 in 1989]
[1967 c.359 526; 1989 c.701 22; renumbered 744.054 in 1989]
[1971 c.231 8; 1989 c.701 42; renumbered 744.245 in 1989]
[1967 c.359 527; 1971 c.385 6; 1979 c.501 3; 1979 c.829 9a; 1981 c.247 18; 1983 c.464 1; 1985 c.762 188; 1989 c.701 23; renumbered 744.057 in 1989]
[1991 c.810 22; 2001 c.191 23; renumbered 744.077 in 2001]
[1967 c.359 529; 1983 c.76 2; 1987 c.916 8; 1989 c.331 33; 1989 c.701 25; renumbered 744.066 in 1989]
As used in ORS 744.052 to 744.089: (1) "Business entity" has the meaning given that term in ORS 731.116. (2) "Home state" means any state, district or territory of the United States, in which an insurance producer maintains the insurance producers principal place of residence or principal place of business and is licensed to act as an insurance producer. (3) "Limited class credit insurance" includes but is not limited to credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, and guaranteed automobile protection insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing the credit obligation that the Director of the Department of Consumer and Business Services determines should be designated a form of limited class credit insurance. (4) "Limited class credit insurance producer" means a person required to be licensed to sell, solicit or negotiate one or more forms of limited class credit insurance coverage to individuals through a master, corporate, group or individual policy. (5) "Limited class insurance" includes but is not limited to credit, mortgage, automobile dealer guaranteed automobile protection and any other form of insurance designated by the director as a form of limited class insurance. (6) "Limited class insurance producer" means a person required to be licensed to sell, solicit or negotiate one or more forms of limited class insurance coverage to individuals through a master, corporate, group or individual policy. (7) "Negotiate," "sell" and "solicit" have the meanings given those terms in ORS 731.104. (8) "Terminate" means to cancel the relationship between an insurance producer and the insurer or to revoke an insurance producers authority to sell, solicit or negotiate insurance. (9) "Uniform Application" means the current version of the Uniform Application for resident and nonresident insurance producer licensing, produced by the National Association of Insurance Commissioners. (10) "Uniform Business Entity Application" means the current version of the Uniform Business Entity Application for resident and nonresident business entities, produced by the National Association of Insurance Commissioners. [2001 c.191 2; 2003 c.364 2]
A person may not sell, solicit or negotiate insurance in this state for any class or classes of insurance unless the person is licensed as an insurance producer for that class or those classes in accordance with ORS 744.052 to 744.089. [2001 c.191 3; 2003 c.364 3]
[1967 c.359 530; 1971 c.231 27; 1987 c.222 1; 1989 c.701 27; renumbered 744.071 in 1989]
(1) ORS 744.052 to 744.089 do not require an insurer to obtain a license as an insurance producer as required by ORS 744.053. For purposes of this section, the term "insurer" does not include an insurers officers, directors, employees, subsidiaries or affiliates. (2) A license as an insurance producer is not required of any of the following: (a) An officer, director or employee of an insurer or an insurance producer, if the officer, director or employee does not receive any commission on or fee for policies written or sold to insure risks residing, located or to be performed in this state and: (A) The officers, directors or employees activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance; (B) The officers, directors or employees function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance; or (C) The officer, director or employee is acting in the capacity of an agency supervisor assisting insurance producers when the persons activities are limited to providing technical advice and assistance to insurance producers and do not include the sale, solicitation or negotiation of insurance. (b) A person who does either of the following, when the person does not receive any commission or fee for the service: (A) Secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities or group or blanket health insurance or for the purpose of enrolling individuals under plans, issuing certificates under plans or otherwise assisting in administrative plans; or (B) Performs administrative services related to mass-marketed property and casualty insurance. (c) An employer or an association of employers or its officers, directors or employees, or the trustees of an employee trust plan: (A) To the extent that the employers, associations, directors, officers, employees or trustees are engaged in the administration or operation of a program of employee benefits for the employers or associations own employees or the employees of its subsidiaries or affiliates; (B) To the extent that the program of employee benefits involves the use of insurance issued by an insurer; and (C) As long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the insurer issuing the insurance. (d) An employee of an insurer or an organization employed by insurers who is engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who is not individually engaged in the sale, solicitation or negotiation of insurance. (e) A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or electronic mass media, the distribution of which is not limited to residents of this state, but only if the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state. (f) A person who is not a resident of this state who sells, solicits or negotiates a policy of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that policy, but only if the person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state. (g) A salaried full-time employee who counsels or advises the employer of the employee relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, but only if the employee does not sell or solicit insurance or receive any commission. (h) An attorney in fact of an authorized reciprocal insurer, or the salaried representative of the insurer or attorney who does not receive any commission. (i) A person engaging in the lawful transaction of reinsurance. (j) Salaried employees of title insurance producers or insurers, except for the individual or individuals designated as exercising the powers conferred by a title insurance producers license. (k) Any agent or representative of persons exempt from the Insurance Code under ORS 731.036 or holding a certificate of exemption under ORS 731.042, with respect to the exempted transactions. (L) Any agent or representative of a fraternal benefit society who devotes, or intends to devote, less than 50 percent of the agents or representatives time to the solicitation and procurement of insurance policies for that society. Any person who in the preceding calendar year has solicited and procured life insurance policies on behalf of any fraternal benefit society for an amount of insurance in excess of $50,000 or, in the case of any other class or classes of insurance that the society might write, on the persons of more than 25 individuals, and who has received or will receive a commission or other compensation therefor, shall be presumed to be devoting, or intending to devote, 50 percent or more of the persons time to the solicitation and procurement of insurance policies for that society. (m) An individual engaging in the lawful transaction of home protection insurance if the individual is a real estate licensee as defined in ORS 696.010, and if the transaction of such insurance by the individual is subject to a written contract, to which the insurer is a party, governing the individuals activities in the transaction. (n) Salaried employees of a financial institution or trust company, as those terms are defined in ORS 706.008, who, in the regular course of business with the customers of the financial institution or trust company, present the customers with written information about savings account annuities issued by an authorized insurer. Any person who purchases such an annuity may rescind the transaction within 10 days after the issuance of the contract. For purposes of this paragraph, "savings account annuities" means annuities purchased with the proceeds of a savings account, certificate or share in a financial institution or trust company. (3) A person who provides general insurance advice in connection with providing other professional services such as legal services, trust services, tax and accounting services, financial planning or investment advisory services is not considered to be soliciting the sale of insurance for the purpose of the definition of "insurance producer" in ORS 731.104. [2001 c.191 4; 2003 c.364 4; 2003 c.802 175; 2007 c.71 242; 2007 c.319 34]
(1) An individual applying for a resident insurance producer license must pass a written examination unless the individual is exempt from the prelicensing education and examination requirement as provided in ORS 744.067. The examination must test the knowledge of the individual concerning the class or classes of insurance for which application is made, the duties and responsibilities of an insurance producer and the insurance statutes and rules of this state. Except as provided in subsection (2) of this section, the examination required by this section shall be developed and conducted by the Director of the Department of Consumer and Business Services. An individual may apply for a resident insurance producer license only if the individual has established in this state a residence or a place of business for acting as an insurance producer. (2) The director may make arrangements, including contracting with a private testing service, for developing and administering the examination and collecting applicable fees. (3) Each individual applying to take an examination shall pay fees as established by the director. (4) An individual who fails to appear for the examination as scheduled or fails to pass the examination may reapply to take the examination according to requirements and procedures established by the director by rule. [2001 c.191 5; 2003 c.364 5]
(1) An individual applying for a resident insurance producer license shall apply to the Director of the Department of Consumer and Business Services on the Uniform Application and shall declare that the statements made in the application are true, correct and complete to the best of the individuals knowledge and belief. Before approving the application, the director must find that the individual: (a) Is at least 18 years of age; (b) Has not committed an act that is a ground for action on a license set forth in ORS 744.074; (c) When required by the director, has completed a prelicensing course of study for the lines of authority for which the person has applied; (d) Has paid all applicable fees; and (e) Has successfully passed the examination for the lines of authority for which the person has applied. (2) A business entity acting as an insurance producer is required to obtain an insurance producer license. Application shall be made on the Uniform Business Entity Application. Before approving the application, the director must find that: (a) The business entity has paid all applicable fees; and (b) The business entity has designated a licensed insurance producer responsible for the business entitys compliance with the insurance laws and rules of this state. (3) The director may require any documents necessary to verify the information contained in an application. (4) Each insurer that sells, solicits or negotiates any form of limited class credit insurance shall provide to each limited class credit insurance producer a program of instruction, which is subject to review and approval by the director. [2001 c.191 6; 2003 c.364 6]
(1) The Insurance Code does not limit or prohibit the licensing of a banking institution, as defined in ORS 706.008, as an insurance producer to transact one or more of the classes of insurance described in ORS 744.062, except for title insurance. (2) The Insurance Code does not limit or prohibit the licensing, as an insurance producer to transact one or more of the classes of insurance described in ORS 744.062, of any of the following: (a) A corporation owned in whole or in part by a banking institution under ORS 708A.120, 716.588 or 716.594. (b) A corporation owned in whole or in part by a financial holding company or a bank holding company, as defined in ORS 706.008. [1989 c.701 24; 1997 c.631 548; 2001 c.191 24; 2001 c.377 51; 2003 c.364 7; 2005 c.194 5]
(1) Unless the Director of the Department of Consumer and Business Services refuses to issue or renew a license pursuant to ORS 744.074, a person who has met the requirements of ORS 744.058 and 744.059, or ORS 744.063, shall be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following classes of insurance: (a) Life insurance as defined in ORS 731.170. (b) Health insurance as defined in ORS 731.162. (c) Property insurance as defined in ORS 731.182. (d) Casualty insurance as defined in ORS 731.158. (e) Variable life insurance, including variable annuities. (f) Property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes. (g) Limited class credit insurance. (h) Any form of insurance designated by the director as a form of limited class insurance. (i) Title insurance as defined in ORS 731.190. A license for the class of title insurance may be issued only to a resident insurance producer. (j) Any other class of insurance permitted under the Insurance Code or rules adopted thereunder. (2) For assistance in performance of the directors duties, the director may participate with the National Association of Insurance Commissioners, or any affiliate or subsidiary that the National Association of Insurance Commissioners oversees, in a centralized producer licensing registry in which insurance producer licenses and appointments are centrally or simultaneously effected for all states that require an insurance producer license. The director may adopt by rule any uniform standards and procedures as are necessary to participate in the registry, including the centralized collection of fees for licenses or appointments that are processed through the registry. (3) An insurance producer may apply to amend a license for the purpose of adding or deleting a class of insurance on the license in the manner prescribed for license application in ORS 744.059 or 744.063, or as otherwise prescribed by the director. [2001 c.191 8; 2003 c.364 8]
(1) Unless the Director of the Department of Consumer and Business Services refuses to issue or renew a license pursuant to ORS 744.074, a nonresident person shall receive a nonresident insurance producer license if: (a) The person is currently licensed as a resident insurance producer and is in good standing in the persons home state; (b) The person has submitted the proper request for a nonresident insurance producer license and has paid the applicable fees; (c) The person has submitted or transmitted to the director the resident insurance producer license application that the person submitted to the persons home state, or in lieu of that application, a completed Uniform Application; and (d) The persons home state grants nonresident insurance producer licenses to residents of this state on the same basis. (2) The director may verify the insurance producers licensing status through the Producer Database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries. (3) A nonresident insurance producer licensed in this state who moves from one state to another state or a resident insurance producer who moves from this state to another state shall file with the director a change of address and provide certification from the new resident state not later than the 30th day after the change of legal residence. No fee or license application is required under this subsection. (4) A person licensed as a surplus lines insurance producer in the persons home state shall receive a nonresident surplus lines insurance producer license pursuant to subsection (1) of this section. Except as provided in subsection (1) of this section, nothing in this section supersedes any provision of ORS 735.400 to 735.495. (5) Notwithstanding any other provision of ORS 744.052 to 744.089, the director shall issue a nonresident limited class insurance producer license pursuant to subsection (1) of this section to a person who is licensed as a limited class credit insurance producer or as another type of limited class insurance producer under the laws of the persons home state that restrict the authority of the license to less than the authority prescribed in ORS 744.062 for the classes of life insurance, health insurance, property insurance or casualty insurance. (6) A license for the class of title insurance may not be issued to a nonresident insurance producer. (7) The director is the attorney in fact of a person to whom a license is issued under this section, and upon whom all legal process in any action or proceeding against the person may be served. Any legal process against the person that is served upon the director has the same legal force and validity as if served upon the person. The authority of the director under this subsection continues as long as any liability remains outstanding in this state. The director becomes the attorney in fact of the person on the date that the director issues the nonresident insurance producer license to the person. [2001 c.191 7; 2003 c.364 9]
(1) Unless denied a license pursuant to ORS 744.074, a person who is currently licensed as a resident insurance producer in a Canadian province, in Mexico or in a state that does not grant nonresident insurance producer licenses to residents of this state on the same basis that this state grants nonresident insurance producer licenses under ORS 744.063 shall receive a nonresident insurance producer license if: (a) The Director of the Department of Consumer and Business Services determines that the insurance regulator in the persons place of residence grants nonresident insurance producer licenses to residents of this state on the same basis that the director grants nonresident insurance producer licenses to residents of the other jurisdiction or on the same basis that the insurance regulator grants insurance producer licenses to residents of the other jurisdiction, or on another basis that is reasonable and fair to licensees of this state; and (b) The person meets all of the following requirements: (A) The person is in good standing as a resident insurance producer in the persons place of residence in Canada, Mexico or the persons state of residence. (B) The person has submitted the proper request for a nonresident insurance producer license and has paid the applicable fees. (C) The person has submitted or transmitted to the Director of the Department of Consumer and Business Services the resident insurance producer license application that the person submitted to the insurance regulator in the persons place of residence, or in lieu of that application, a completed Uniform Application. (D) The person has taken and passed a written examination specified by the director under this section with respect to the authority to transact the class or classes of insurance for which the applicant has applied. The requirement of an examination does not apply to an applicant that is a business entity. (E) The person has satisfied any other qualifications established by the director by rule or has satisfied qualifications that the director establishes by rule in lieu of the qualifications established in this subsection. (2) A person who is licensed by this state to sell, solicit or negotiate insurance as a nonresident insurance producer under this section may sell, solicit or negotiate any policy of insurance upon domestic risks to the same extent and upon the same terms as provided by the insurance regulator in the persons place of residence for residents of this state transacting a like business in a province of Canada, in Mexico or in the persons state of residence. (3) The examination requirement under subsection (1) of this section is subject to waiver if: (a) The director determines that a written examination or other comparable requirement acceptable to the director is required of applicants for a resident insurance producer license in the other jurisdiction; (b) The insurance regulator of the other jurisdiction certifies that the applicant holds a valid license as a resident insurance producer in the other jurisdiction and either passed the written examination, was the holder of a resident insurance producer license prior to the time the written examination was first required or meets the other comparable requirement acceptable to the director; and (c) In the other jurisdiction, a resident of this state is privileged to procure an insurance producer license upon conditions that the director determines to be reasonable and fair to licensees of this state. (4) The director shall establish the form of the nonresident insurance producer license issued under this section. (5) A person licensed as a surplus lines insurance producer in the persons home state is eligible for a nonresident surplus lines insurance producer license in the manner provided for nonresident insurance producer licenses in subsection (1) of this section. A person to whom a nonresident surplus lines insurance producer license is issued under this section is subject to ORS 735.400 to 735.495. (6) The director is the attorney in fact of a person to whom a license is issued under this section, and upon whom all legal process in any action or proceeding against the person may be served. Any legal process against the person that is served upon the director has the same legal force and validity as if served upon the person. The authority of the director under this subsection continues as long as any liability remains outstanding in this state. The director becomes the attorney in fact of the person on the date that the director issues the nonresident insurance producer license to the person. This subsection does not apply to a person to whom a nonresident surplus lines insurance producer license is issued. [2001 c.191 9; 2003 c.364 10]
(1) An individual who applies for a resident insurance producer license in this state who is or was previously licensed as an insurance producer for the same lines of authority in another state is not required to complete any prelicensing education or examination. The exemption under this subsection is available only if the individual is currently licensed in the other state or if the application is received by the Director of the Department of Consumer and Business Services not later than the 90th day after the applicants previous license was terminated and if the other state issues a certification that, at the time of termination, the applicant was in good standing in that state or the states Producer Database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries indicate that the applicant is or was licensed in good standing for the class of insurance requested. (2) A person licensed as an insurance producer in another state who moves to this state must apply for a resident insurance producer license not later than the 90th day after the date on which the person established legal residence in order to qualify for a resident insurance producer license pursuant to ORS 744.059. Neither prelicensing education nor an examination is required of a person to whom this subsection applies in order to obtain a license in a class of insurance described in ORS 744.062 if the person held a license in that class in the other state, except when the director has determined otherwise by rule. (3) An individual who holds an industry designation described in this subsection is not required to complete prelicensing education or the examination required in ORS 744.058 if the director is satisfied, by examination or otherwise, that the applicant is knowledgeable in the particulars of the applicable provisions of the Insurance Code. This subsection applies to: (a) An applicant for a license authorizing the applicant to transact property or casualty insurance or both, upon whom the American Institute for Chartered Property Casualty Underwriters has conferred the Chartered Property Casualty Underwriter (C.P.C.U.) designation. (b) An applicant for a license authorizing the applicant to transact life or health insurance, or both, upon whom the American College has conferred the Chartered Life Underwriter (C.L.U.) designation. (4) The director may recognize one or more industry designations as exempting an applicant from the prelicensing education requirement or the examination required in ORS 744.058 or both. For each industry designation that the director recognizes and for the extent of the exemption to be given, the director shall consider the content, quality and scope of the educational program required for the designation as well as other factors determined by the director to be relevant. (5) An individual is not required to complete prelicensing education or the examination required in ORS 744.058 or 744.064 for the following licenses: (a) A license authorizing the individual to transact a type of limited class insurance, except as the director otherwise provides by rule. (b) A license authorizing the individual to transact title insurance. [2001 c.191 10; 2003 c.364 11]
(1) An insurance producer shall notify the Director of the Department of Consumer and Business Services prior to transacting business under the insurance producer license under any name other than the insurance producers legal name and prior to changing, deleting or adding an assumed business name in connection with the insurance producers business under the insurance producer license. (2) A resident insurance producer shall keep at the principal place of business of the insurance producer the usual and customary records pertaining to the business under the resident insurance producer license. All such records shall be kept available and open to the inspection of the director during business hours. A resident insurance producer shall keep records of insurance transacted by the insurance producer under the license for three years following expiration of the policy unless the director designates another period. (3) A nonresident insurance producer shall keep at the principal place of business of the insurance producer the usual and customary records pertaining to the business under the nonresident insurance producer license. All such records shall be kept available and open to the inspection of the director during business hours. For the purpose of this subsection, if a nonresident insurance producer has a place of transacting insurance in this state, that place shall be the principal place of business for the nonresident insurance producer. A nonresident insurance producer shall keep records of insurance transacted by the insurance producer under the nonresident insurance producer license for three years following expiration of the policy unless the director designates another period. (4) An insurance producer shall notify the director of any of the following changes not later than the 30th day after the date of the change: (a) A change of address or telephone number of the principal place of business or any location at which the insurance producer transacts business under the license in this state. (b) The opening or closing of a location at which the insurance producer transacts business under the license in this state. (c) A change of residence. This paragraph applies only to a resident insurance producer. (5) Not later than the 30th day after the authority of an individual insurance producer to act for an insurance producer that is a business entity has commenced or terminated, the business entity shall notify the director of the commencement or termination. The director may establish by rule a different period within which the business entity must notify the director under this subsection. [2001 c.191 11; 2003 c.364 12]
[Amended by 1967 c.359 480; renumbered 743.603]
(1) An insurance producer license remains in effect unless revoked or suspended as long as all applicable fees are paid by the due date and, if the licensee is a resident individual insurance producer, as long as the licensee has met applicable continuing education requirements for resident individual insurance producers under subsection (4) of this section by the due date. The renewal fee is due on the last day of the month in which the second anniversary of the initial issuance date of the license occurs and on the second anniversary following each renewal. The Director of the Department of Consumer and Business Services may establish another renewal period for the purpose of coordination with any national registration or licensing system. (2) As a condition for or in connection with the renewal of an insurance producer license the director may require the insurance producer to file information with the director regarding use made of the license during the previous year or two years, and especially showing whether the license has been used principally for the writing of personal or controlled insurance, as defined in ORS 746.065. (3) The director may require an insurance producer, as a condition for renewal of the insurance producer license, to fulfill any or all of the requirements then applicable to the original issuance of the license. (4) The director by rule may establish requirements for continuing education that each resident individual insurance producer must satisfy as a condition for renewing the resident insurance producer license. The hours of education so required shall not exceed 45 hours annually during the first five years an individual is licensed, 24 hours annually during the next five years an individual is licensed, and 12 hours annually for individuals licensed for more than 10 years or for individuals who have received the designation C.P.C.U., C.L.U. or comparable designation recognized by the director. Continuing education shall not be required for: (a) Any person to whom a license is issued without examination pursuant to ORS 744.067 (5); (b) Any person who before January 1, 2010: (A) Requests an exemption from the requirement; (B) Is authorized to transact only life insurance; (C) Is 58 years of age or older; (D) Has 10 or more years of experience as a licensed insurance producer; and (E) Is servicing only existing policies; or (c) Any person whose license is indorsed to authorize the person to act as a reinsurance intermediary broker or reinsurance intermediary manager, or both, as described in ORS 744.800, but the exemption applies solely for the purpose of maintaining the indorsement and does not affect any continuing education requirement that otherwise applies. (5) In connection with establishing continuing education requirements under subsection (4) of this section, the director may make arrangements, including contracting with a private service, for establishing and operating a program and standards for approving and registering continuing education programs and their providers. (6) An individual insurance producer who allows the insurance producer license to lapse may apply to the director to reinstate the same license within 12 months from the due date for renewal without having to take and pass a written examination, but the insurance producer must pay an amount for the reinstatement that is equal to double the unpaid renewal fee for any renewal fee paid after the due date and must complete any continuing education requirements not satisfied to date, including the period for which the license was lapsed. A license reinstated under this subsection is effective upon the date that the director grants the reinstatement. (7) An individual insurance producer who is unable to comply with license renewal procedures due to military service or another extenuating circumstance such as a long term medical disability may request a waiver from compliance with those procedures. The insurance producer may also request a waiver of any examination requirement or any penalty imposed for failure to comply with renewal procedures. [2001 c.191 12; 2003 c.364 13; 2009 c.96 1]
(1) The Director of the Department of Consumer and Business Services may issue a temporary insurance producer license for a period not to exceed 180 days without requiring a written examination if the director determines that the temporary license is necessary for the servicing of an insurance business in the following cases: (a) To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the insurance producer, for the recovery or return of the insurance producer to the business, or to provide for the training and licensing of new personnel to operate the insurance producers business; (b) To a member or employee of a business entity licensed as an insurance producer, upon the death or disability of the individual designated in the business entity application or the license; (c) To the designee of a licensed insurance producer entering active service in the Armed Forces of the United States; or (d) In any other circumstance in which the director determines that the public interest will best be served by the issuance of the license. (2) The director may by order limit the authority of any temporary licensee in any way that the director determines to be necessary to protect insureds and the public. The director may require the temporary licensee to have a suitable sponsor who is a licensed insurance producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The director may revoke a temporary license if the interest of insureds or the public is endangered. A temporary license may not continue after the owner or the personal representative disposes of the business. [2001 c.191 13; 2003 c.364 14]
(1) The Director of the Department of Consumer and Business Services may place a licensee on probation or suspend, revoke or refuse to issue or renew an insurance producer license and may take other actions authorized by the Insurance Code in lieu thereof or in addition thereto, for any one or more of the following causes: (a) Providing incorrect, misleading, incomplete or materially untrue information in the license application. (b) Violating any insurance laws, or violating any rule, subpoena or order of the director or of the insurance commissioner of another state or Mexico or Canada. (c) Obtaining or attempting to obtain a license through misrepresentation or fraud. (d) Improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business. (e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance. (f) Having been convicted of a felony, of a misdemeanor involving dishonesty or breach of trust, or of an offense punishable by death or imprisonment under the laws of the United States. The record of the conviction shall be conclusive evidence of the conviction. (g) Having admitted or been found to have committed any unfair trade practice or fraud related to insurance. (h) Using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere. (i) Cancellation, revocation, suspension or refusal to renew by any state of a license or other evidence of authority to act as an adjuster or an insurance producer or consultant. The record of the cancellation, revocation, suspension or refusal to renew shall be conclusive evidence of the action taken. (j) Cancellation, revocation, suspension or refusal to renew by any state or federal agency, by a Canadian province or by the government of Mexico of the authority to practice law or to practice under any other regulatory authority if the cancellation, revocation, suspension or refusal to renew was related to the business of an adjuster or an insurance producer or consultant, or if dishonesty, fraud or deception was involved. The record of the cancellation, revocation, suspension or refusal to renew shall be conclusive evidence of the action taken. (k) Forging another persons name to an application for insurance or to any document related to an insurance transaction. (L) Improperly using notes or any other reference material to complete an examination for an insurance license. (m) Knowingly accepting insurance business from an individual who is not licensed. (n) Error by the director in issuing or renewing a license. (o) Failing to pay a civil penalty assessed by the director that has become final by operation of law or upon appeal. (p) Failing to pay any fee or charge to the director. (q) Failing to comply with continuing education requirements applicable to the license or any class of insurance authorized under the license, unless the director has waived the requirements. (2) If the director refuses to issue or renew an insurance producer license, the director shall notify the applicant or licensee and inform the applicant or licensee in writing of the reason for the refusal to issue or renew and of the applicants or licensees rights under ORS chapter 183. (3) The director may suspend, revoke or refuse to issue or renew the insurance producer license of a business entity if the director determines that an individual licensees violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the partnership or corporation but the violation was not reported to the director and corrective action was not taken. [2001 c.191 14; 2003 c.364 15]
(1) An insurer or insurance producer may not pay a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in this state if that person is required to be licensed as an insurance producer and is not so licensed. (2) A person shall not accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is required to be licensed as an insurance producer and is not so licensed. (3) Renewal or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in this state if the person was required to be licensed as an insurance producer at the time of the sale, solicitation or negotiation and was then so licensed. (4) An insurer or insurance producer may pay or assign commissions, service fees, brokerages or other valuable consideration to an insurance agency or to persons who do not sell, solicit or negotiate insurance in this state, except when the payment or assignment would violate ORS 746.045 or 746.055. [2001 c.191 15; 2003 c.364 16]
(1) The Director of the Department of Consumer and Business Services shall establish by rule the conditions under which a person who is licensed as an insurance producer and as an insurance consultant may accept a commission or a fee, or both, in a transaction or in related transactions. The director may establish different conditions for such products as employee benefit plans, insurance for personal, family or household purposes and insurance for commercial purposes, and for any other insurance product as determined appropriate by the director. In developing rules under this subsection, the director shall take into account the requirements and characteristics of the different insurance products and the varying degrees of trade practice regulation needed. (2) Except as otherwise provided by rule, an insurance producer who is not licensed as an insurance consultant may receive only commission. [Formerly 744.039; 2003 c.364 17]
(1) An insurance producer shall not act as an agent of an insurer unless: (a) The insurance producer is an appointed agent of that insurer; or (b) The insurance producer transacts insurance on behalf of another insurance producer who is an appointed agent of that insurer according to conditions and limitations established by the Director of the Department of Consumer and Business Services by rule. (2) Each insurer shall maintain a current list of insurance producers contractually authorized to accept applications on behalf of the insurer. Each insurer shall make the list available to the director upon request. (3) An insurance producer may represent as agent under one insurance producer license as many insurers as may appoint the insurance producer in accordance with this section. (4) Except as provided in a group contract of insurance under subsection (5) of this section, any person who solicits or procures an application for insurance as an agent of the insurer shall in all matters relating to the application for insurance and the policy issued in consequence of the application be regarded as the agent of the insurer issuing the policy and not the agent of the insured. Any provision in the application and policy to the contrary is invalid and of no effect. (5) A group contract of insurance and the individual certificate issued pursuant to the group contract may contain provisions stating whether the group policyholder acts as the agent of the individual insured or as the agent of the insurer. [2001 c.191 16; 2003 c.364 18]
(1) An insurer or authorized representative of the insurer who terminates the appointment, employment, contract or other insurance business relationship with an insurance producer shall notify the Director of the Department of Consumer and Business Services not later than the 30th day after the effective date of the termination, in the manner prescribed by the director, if the reason for termination is one of the reasons set forth in ORS 744.074 or if the insurer has knowledge that the insurance producer was found by a court, government body or self-regulatory organization authorized by law to have engaged in any of the activities set forth in ORS 744.074. Upon the written request of the director, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the insurance producer. (2) An insurer or the authorized representative of the insurer shall promptly notify the director in a manner acceptable to the director if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the director in accordance with subsection (1) of this section if the insurer had then known of its existence. (3) Not later than the 15th day after making a notification required by subsection (1) or (2) of this section, the insurer shall mail a copy of the notification to the insurance producer at the insurance producers last known business address. If the insurance producer is terminated for cause for any of the reasons listed in ORS 744.074, the insurer shall provide a copy of the notification to the insurance producer at the insurance producers last known business address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier. (4) Not later than the 30th day after the insurance producer has received a notification under subsection (3) of this section, the insurance producer may file with the director written comments concerning the substance of the notification. The insurance producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer. The comments shall become a part of the directors file and shall accompany every copy of a report distributed or disclosed for any reason about the insurance producer as allowed under subsection (5) of this section. (5) In the absence of actual malice, an insurer, the authorized representative of the insurer, an insurance producer, the director or an organization of which the director is a member and that compiles the information and makes it available to other insurance regulators or regulatory or law enforcement agencies shall not be subject to civil liability. In the absence of actual malice, a civil cause of action shall not arise against any such entity or its agents or employees as a result of any statement or information required by or provided pursuant to this section, or any information relating to any statement that may be requested in writing by the director from an insurer or insurance producer, or relating to a statement by a terminating insurer or insurance producer to an insurer or insurance producer, that is limited exclusively to whether a termination for cause under subsection (1) of this section was reported to the director. Immunity under this subsection is available only if the propriety of any termination for cause under subsection (1) of this section is certified in writing by an officer or authorized representative of the insurer terminating the relationship. (6) In any action brought against a person who may have immunity under subsection (5) of this section for making any statement required by this section or providing any information relating to any statement that may be requested in writing by the director, the party bringing the action must plead specifically in any allegation that subsection (5) of this section does not apply because the person making the statement or providing the information did so with actual malice. (7) Subsections (5) and (6) of this section do not abrogate or modify any existing statutory or common law privileges or immunities. (8) The director may take any administrative action authorized by the Insurance Code, including suspension or revocation of a license or certificate of authority, against an insurer, the authorized representative of an insurer or an insurance producer who fails to file notice as required by this section or who is found by a court of competent jurisdiction to have filed notice with actual malice. (9) Any information, documents, records or other data in the control or possession of the director that are furnished by an insurer or an insurance producer, or an employee or agent thereof acting on behalf of the insurer or insurance producer, or that are obtained by the director in an investigation pursuant to this section shall be confidential, shall not be subject to subpoena and shall not be subject to discovery nor admissible in evidence in any private civil action. The director, however, may use the confidential information, documents, records or other data in administering this section and in the furtherance of any other regulatory or legal action brought as a part of the directors duties. The information, documents, records or other data referred to in this subsection are subject to the public officer privilege described in ORS 40.270. [2001 c.191 17; 2003 c.364 19]
(1) An insurer may terminate an agency appointment at any time as provided in this section. Termination shall be without prejudice to the contract rights, if any, of the insurance producer so terminated. The insurer shall give written notice of the termination and the date thereof to the insurance producer at least 90 days prior to the effective date of the termination. The notice must specify the reasons for the termination. The insurer shall deliver the notice either in person or by mail at the address last provided by the insurance producer to the insurer. The insurance producer shall not have a cause of action against the insurer as a result of any statement in the notice unless the statement is false and the insurer knew the statement was false when made. (2) An insurer may terminate an agency appointment without giving the notice required by subsection (1) of this section on any of the grounds specified in this subsection. The following are grounds for termination under this subsection: (a) The insurance producers insurance license is denied, restricted, revoked, suspended or canceled by any public authority; (b) The insurance producers business is sold, transferred or merged and the insurer has not appointed the successor; (c) The insurance producer is insolvent or fails to remit balances to the insurer in accordance with the agreement; (d) The insurance producer commits fraud or engages in intentional misconduct; (e) The insurer amends its certificate of authority in order to discontinue a class of insurance; (f) The insurer ceases selling insurance in this state; or (g) The insurer and insurance producer mutually agree to terminate the agency appointment. (3) An insurance producer may terminate an agency appointment at any time, but the termination shall be without prejudice to the contract rights, if any, of the appointing insurer. The insurance producer shall give written notice of the termination and the date thereof to the director not later than the 30th day after the effective date of the termination, and to the insurer. The director may require reasonable proof from the insurance producer that the insurance producer has given such notice to the insurer. [Formerly 744.175; 2003 c.364 20]
The Director of the Department of Consumer and Business Services shall waive any requirement for a nonresident insurance producer license applicant with a valid resident insurance producer license from the applicants home state, except the requirements imposed by ORS 744.063, if the applicants home state grants nonresident insurance producer licenses to residents of this state on the same basis. [2001 c.191 18; 2003 c.364 21]
(1) All premium funds received by a resident insurance producer shall be accounted for and maintained in a trust account separate from all other business and personal funds. (2) Except as provided in subsection (3) of this section, a resident insurance producer may not commingle or otherwise combine premiums with any other moneys. (3) A resident insurance producer may commingle with premium funds in the trust account required by subsection (1) of this section any additional funds the insurance producer deems prudent for the purpose of advancing premiums, establishing reserves for the paying of return premiums, or for any contingencies that may arise in the course of receiving and transmitting premium or return premium funds. (4) This section does not apply to: (a) Any financial institution or trust company, as those terms are defined in ORS 706.008, or any entity licensed under ORS chapter 725 or 726. (b) Any class of insurance producers that the Director of the Department of Consumer and Business Services designates by rule. The director may exempt a class of insurance producer from this section if the director determines that the requirements of this section are unduly burdensome to the insurance producers in relation to the public good served. [Formerly 744.225; 2003 c.364 22]
(1) In lieu of the trust account required by ORS 744.083, a resident insurance producer may keep a certificate of deposit from an institution insured by the federal government or an instrumentality thereof if the resident insurance producer has an average monthly balance of premium funds received and held for the last 12 months of at least $2 million. A resident insurance producer who keeps a certificate of deposit shall have satisfactory evidence of the certificate available at all times for inspection by the Director of the Department of Consumer and Business Services. (2) A certificate of deposit authorized under subsection (1) of this section shall be for an amount at least equal to the average monthly balance of premium funds received and held by the resident insurance producer for the last 12 months. Nothing in this subsection requires that the required amount of the certificate of deposit be calculated, or the amount changed, more often than once a month. (3) The director may adopt rules specifying what constitutes satisfactory evidence for purposes of subsection (1) of this section. (4) Authorization to use a certificate of deposit may be revoked by the director at any time upon a determination that the resident insurance producer has failed to comply with the provisions of this section or rules adopted under subsection (3) of this section. Upon revocation, the resident insurance producer shall comply immediately with the provisions of ORS 744.083. [Formerly 744.227; 2003 c.364 23]
The Legislative Assembly finds that it is in the interest of the insurance-buying public that insurance producers authorized to transact title insurance be subject to the Insurance Code. It is declared to be the intent of the Legislative Assembly that the Insurance Code shall apply to such insurance producer only to the extent necessary for the regulation of title insurance ratemaking and unfair trade practices. [Formerly 744.240; 2003 c.364 24]
The Director of the Department of Consumer and Business Services may require the filing by an insurer of any compensation agreements for insurance producers who are appointed by the insurer as agents of the insurer under ORS 744.078. No such filing shall be deemed a "public record" as defined in ORS 192.311. [Formerly 744.245; 2003 c.364 25]
(1) An individual may not sell, solicit or negotiate long term care insurance unless the individual is licensed as an insurance producer for health or life insurance and satisfies the following training requirements: (a) The individual must complete a one-time training course of not less than eight hours before selling, soliciting or negotiating long term care insurance; and (b) The individual must complete ongoing training of not less than four hours in each 24-month period following the one-time training course. (2) The Director of the Department of Consumer and Business Services may approve as continuing education courses under ORS 744.072 any courses offered to satisfy the training requirements of this section. (3) The training required by this section must consist of topics related to long term care insurance, long term care services and, if applicable, qualified state long term care insurance partnership programs, including but not limited to: (a) State and federal rules and requirements and the relationship between qualified state long term care insurance partnership programs and other public and private coverage of long term care services, including Medicaid. (b) Available long term care services and providers. (c) Changes or improvements in long term care services or providers. (d) Alternatives to the purchase of private long term care insurance. (e) The effect of inflation on benefits and the importance of inflation protection. (f) Consumer suitability standards and guidelines. (4) The training required by this section may not include training that is insurer or company product specific or that includes any sales or marketing information, materials or training, other than those required by state or federal law. (5) An insurer must: (a) Obtain verification that an insurance producer receives training required by this section before an insurance producer sells, solicits or negotiates the insurers long term care insurance products. (b) Maintain records subject to the states record retention requirements. (c) Make the verification obtained under paragraph (a) of this subsection available to the director upon request. (6) An insurer must maintain records with respect to the training of its insurance producers concerning the distribution of its partnership policies that will allow the director to provide assurance to the state Medicaid agency that insurance producers have received training on the topics described in subsection (3)(a) of this section and that insurance producers have demonstrated an understanding of the partnership policies and their relationship to public and private coverage of long term care, including Medicaid, in this state. An insurer must make the records available to the director upon request. (7) The satisfaction in any state of the training required by this section is considered to satisfy the training required by this section. [2007 c.486 9]
(1) An insurance producer shall report to the Director of the Department of Consumer and Business Services any administrative action taken against the insurance producer in another jurisdiction or by another governmental agency in this state not later than the 30th day after the date of the final disposition of the matter. This report shall include a copy of the order, consent to order and other relevant legal documents. (2) Not later than the 30th day after the initial pretrial hearing date, an insurance producer shall report to the director any criminal prosecution of the insurance producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents. [2001 c.191 19; 2003 c.364 26]
[Amended by 1967 c.359 370; renumbered 743.111]
(1) An insurer or insurance producer may charge a commission, a service fee or a combination of the two when transacting insurance in other than the following categories of insurance: (a) Insurance that covers an individuals person, property or liability; (b) Life or health insurance for groups of fewer than 51 lives; or (c) Insurance on a commercial or public entity paying combined annual premiums of less than $100,000 for the insurance. (2) An insurer or insurance producer may charge a commission or service fee other than the commission or fee filed in accordance with ORS 737.205 only if the insurer or insurance producer has a written agreement with the prospective insured prior to the binding or issuance of an insurance policy. The Director of the Department of Consumer and Business Services may establish by rule minimum conditions for written agreements entered into under this subsection. An insurer or insurance producer who enters into a written agreement as provided in this subsection is not in violation of ORS 746.035 or 746.045. [2003 c.364 17b]
(1) As used in this section: (a) "Retail insurance producer" means an insurance producer who directly solicits or sells an insurance policy to a prospective insured or directly negotiates an insurance policy with a prospective insured. (b) "Wholesale insurance producer" means an insurance producer who solicits or sells an insurance policy to a prospective insured through a retail insurance producer or negotiates an insurance policy for a prospective insured with a retail insurance producer and does not solicit or sell directly to or negotiate directly with a prospective insured. (2) A wholesale insurance producer who sells, solicits or negotiates a policy directly with a retail insurance producer and not on behalf of a prospective insured may charge the retail insurance producer a fee or a combination of a fee and a commission if the wholesale insurance producer has a written agreement with the retail insurance producer prior to the binding or issuance of the insurance policy. The charge must be commensurate with the services provided by the wholesale insurance producer. (3) A retail insurance producer may charge a fee to a prospective insured when the retail insurance producer pays a fee or a combination of a fee and a commission to a wholesale insurance producer under subsection (2) of this section if the retail insurance producer has a written agreement with the prospective insured prior to the binding or issuance of the insurance policy. The fee may not exceed the amount of compensation paid by the retail insurance producer to the wholesale insurance producer. (4) For the purpose of determining the charge under subsection (2) of this section, the retail insurance producer and wholesale insurance producer may agree to any allocation of the fee that the retail insurance producer charges the consumer under this section. The Director of the Department of Consumer and Business Services may establish by rule minimum conditions for written agreements entered into under this section. An insurer or insurance producer who enters into a written agreement as provided in this section is not in violation of ORS 746.035 or 746.045. [2003 c.364 26b]
As used in ORS 744.101 to 744.107: (1) "Business entity" has the meaning given that term in ORS 731.116. (2) "Limited travel insurance producer" means: (a) A managing general agent licensed under ORS 744.300 to 744.316; or (b) An insurance producer licensed under ORS 744.052 to 744.089 to negotiate, sell or solicit travel insurance. (3) "Negotiate" has the meaning given that term in ORS 731.104. (4) "Offer and disseminate travel insurance" means: (a) To provide general information regarding the travel insurance, including a description of coverage and price; (b) To disseminate and process applications for travel insurance coverage; or (c) To collect premiums on behalf of a limited travel insurance producer. (5) "Sell" has the meaning given that term in ORS 731.104. (6) "Solicit" has the meaning given that term in ORS 731.104. (7)(a) "Travel insurance" means insurance coverage for personal risks incidental to planned travel, including: (A) Interruption or cancellation of a trip or event; (B) Loss of baggage or personal effects; (C) Damages to accommodations or rental vehicles; or (D) Sickness, accident, disability or death occurring during travel. (b) "Travel insurance" does not include medical plans providing comprehensive medical protection for travelers with trips lasting six months or longer. (8) "Travel retailer" means a business entity that makes travel arrangements for or provides other travel services to customers. [2015 c.675 2]
(1) Notwithstanding the provisions of ORS 744.053, a travel retailer may offer and disseminate travel insurance on behalf of and at the direction of a limited travel insurance producer and may receive compensation for doing so. (2) A limited travel insurance producer may direct a travel retailer to offer and disseminate travel insurance pursuant to subsection (1) of this section only if the following conditions are met: (a) The name, contact information and license number of the limited travel insurance producer are clearly identified on marketing materials and fulfillment packages distributed by the travel retailer to customers; (b) The limited travel insurance producer, at the time of licensure and thereafter, establishes and maintains a register, in a form approved by the Director of the Department of Consumer and Business Services, that contains the following information for each travel retailer that offers and disseminates travel insurance at the direction of the limited travel insurance producer: (A) The name, address, contact information and federal employer identification number of the travel retailer; (B) The name, address and contact information of an officer or person who directs or controls the operations of the travel retailer; and (C) An affidavit executed under oath by the travel retailer stating that the travel retailer is not guilty of any offense under 18 U.S.C. 1033; (c) The limited travel insurance producer submits the register described in paragraph (b) of this subsection to the director within 30 days of a request by the director; (d) The limited travel insurance producer designates an employee who is a limited travel insurance producer as responsible for ensuring the compliance of the limited travel insurance producer with the laws, rules and regulations of this state; (e) The employee designated in paragraph (d) of this subsection, as well as the president, secretary, treasurer and any other person who directs or controls the insurance operations of the limited travel insurance producer, all comply with fingerprinting requirements established by the director; (f) The limited travel insurance producer does not owe any outstanding fees relating to insurance licensing; and (g) Each employee of the travel retailer whose duties include offering and disseminating travel insurance receives a program of instruction or training that contains instructions on the types of insurance offered, ethical sales practices, required disclosures to customers and any other content that the director may prescribe. (3) A travel retailer that offers and disseminates travel insurance shall make available to customers brochures or other written materials that: (a) Provide the identity and contact information of the insurer and the limited travel insurance producer; (b) Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and (c) Explain that a travel retailer that is not a limited travel insurance producer is not qualified or authorized to answer technical questions about the terms and conditions of the travel insurance offered by the travel retailer or to evaluate the adequacy of a customers existing insurance coverage. (4) A travel retailer that is not a limited travel insurance producer may not: (a) Evaluate or interpret the technical terms, benefits or conditions of travel insurance offered by the travel retailer; (b) Evaluate or advise concerning a prospective purchasers existing insurance coverage; or (c) Hold itself out as an insurance expert or a limited travel insurance producer. [2015 c.675 3]
If the Director of the Department of Consumer and Business Services determines that a travel retailer has violated any provision of ORS 744.101 or 744.104, the director may, in addition to imposing any penalties authorized under the Insurance Code: (1) Direct the limited travel insurance producer to implement a corrective action plan with the travel retailer; or (2) Direct the limited travel insurance producer to revoke its authorization of the travel retailer to transact travel insurance on its behalf and under its license and to remove the travel retailer from its register described in ORS 744.104 (2)(b). [2015 c.675 4]
The Director of the Department of Consumer and Business Services shall adopt rules to implement and administer the provisions of ORS 744.101 to 744.107. [2015 c.675 5] Note: 744.111 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 744 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
[1959 c.367 1; 1967 c.359 501; renumbered 743.666]
[Amended by 1955 c.226 1; 1967 c.359 502; renumbered 743.669]
[1967 c.359 541; 1975 c.769 6; 1989 c.692 1,2; 1989 c.701 36; 2001 c.191 24a; renumbered 744.081 in 2001]
[1967 c.359 543; 1989 c.413 12; 1989 c.701 32,81d; renumbered 744.123 in 1989]
[1967 c.359 544; 1977 c.820 2; 1979 c.501 6; 1981 c.817 3; 1983 c.76 6; 1989 c.701 31; renumbered 744.119 in 1989]
[1967 c.359 545; 1989 c.413 13; 1989 c.701 40; renumbered 744.235 in 1989]
[1987 c.569 2; 1989 c.701 38; 1997 c.631 549; 2001 c.191 24b; renumbered 744.083 in 2001]
[1989 c.680 2; 2001 c.191 24c; renumbered 744.084 in 2001]
[Formerly 744.012; renumbered 744.086 in 2001]
[Formerly 744.017; 1999 c.55 4; renumbered 744.087 in 2001]
[1967 c.359 546; 1969 c.336 15; 1983 c.76 7; 1985 c.697 15; 1987 c.774 141; 1989 c.701 8; renumbered 744.013 in 1989]
[1971 c.231 9; 1983 c.76 8; 1985 c.697 16; 1989 c.701 9; renumbered 744.014 in 1989]
[1967 c.359 547; 1983 c.76 9; 1989 c.701 10; renumbered 744.016 in 1989]
(1) A person shall not act as a managing general agent with respect to risks located in this state for an authorized insurer unless the person holds a license issued under ORS 744.062 authorizing the person to act as an insurance producer and indorsed to authorize the person to act as a managing general agent. (2) A person shall not act as a managing general agent representing a domestic insurer with respect to risks located outside this state unless the person holds a license issued under ORS 744.062 authorizing the person to act as an insurance producer and indorsed to authorize the person to act as a managing general agent. (3) For purposes of ORS 744.300 to 744.316, a person acts as a managing general agent when the person: (a) Negotiates and binds ceding reinsurance contracts on behalf of an authorized insurer or manages all or part of the insurance business of an authorized insurer, including the management of a separate division, department or underwriting office, and acts as an insurance producer for the insurer, whether the person is known as a managing general agent, manager or other similar term; and (b) With or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year, together with either or both of the following activities: (A) Adjusting or paying claims in excess of an amount determined by the Director of the Department of Consumer and Business Services. (B) Negotiating reinsurance on behalf of the insurer. (4) The provisions of ORS 744.062 governing application for amendment of a license apply to the indorsement of the license of an insurance producer for authority to act as a managing general agent, except that an examination is not required for the indorsement. (5) The provisions of this section are subject to exemptions stated in ORS 744.301. [1991 c.495 2; 2001 c.191 39; 2003 c.364 119]
The following persons are exempt from ORS 744.300: (1) An employee of an insurer, when the employee is acting as a managing general agent for the insurer. (2) A United States manager of the United States branch of an alien insurer. (3) An underwriting manager who, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer and is subject to ORS 732.517 to 732.596, and whose compensation is not based on the volume of premiums written. (4) The attorney or attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney. [1991 c.495 3; 1993 c.447 63a]
(1) A managing general agent must maintain with the Director of the Department of Consumer and Business Services at all times a current certificate of errors and omissions insurance, in an amount established by the director by rule, from an insurer authorized to transact insurance in this state or from any other insurer acceptable to the director according to standards established by rule. The insurance must cover errors and omissions of and any violation of fiduciary responsibility by the managing general agent or its employees, or both. (2) If the director determines that insurance required under this section is not generally available at a reasonable cost, the director by rule may suspend the requirement of insurance, but must reimpose the requirement when the insurance once again becomes generally available. [1991 c.495 4]
A person acting as a managing general agent shall not place business with an insurer unless a written contract is in force between the parties. The following requirements apply to such a contract: (1) The contract must set forth the responsibilities of each party. (2) The contract must specify the division of responsibility for a particular function, when both parties share responsibility for the function. (3) The contract must include at least the following provisions: (a) That the insurer may terminate the contract for cause upon written notice to the managing general agent, and may suspend the underwriting authority of the managing general agent while any dispute regarding the cause for termination is pending. (b) That at least monthly, the managing general agent shall report all transactions and remit all funds due under the contract to the insurer. (c) That with respect to all funds collected by a managing general agent for the account of an insurer, the managing general agent must comply with ORS 744.083 or 744.084, except that the managing general agent may retain in the account an amount not exceeding three months estimated claims payments and allocated loss adjustment expenses. (d) That the managing general agent shall maintain separate records of business written by the managing general agent. Further, that the managing general agent shall allow the insurer access to all accounts and records related to its business, shall keep all such accounts and records in a form usable by the insurer and shall allow the insurer to copy all such accounts and records. (e) That the managing general agent shall not assign the contract either in whole or part. (f) Appropriate underwriting guidelines, including: (A) The maximum annual premium volume; (B) The basis of the rates to be charged; (C) The types of risks that may be written; (D) Maximum limits of liability; (E) Applicable exclusions; (F) Territorial limitations; (G) Policy cancellation provisions; and (H) The maximum policy period. (g) That the insurer may cancel or nonrenew any policy of insurance, subject to applicable statutes and rules governing cancellation and nonrenewal of insurance policies. (h) Provisions addressing the timely transmission of the data, when electronic claims files exist. (i) That if the contract provides for a sharing of interim profits of the managing general agent and if the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits shall not be paid to the managing general agent until one year after they are earned for property or surety insurance business and five years after they are earned on casualty business and not until the profits have been verified pursuant to ORS 744.313. (j) That a managing general agent shall not do any of the following: (A) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines that include, for both reinsurance assumed and ceded, a list of reinsurers with which the automatic agreements are in effect, the coverage and amounts or percentages that may be reinsured and commission schedules. (B) Commit the insurer to participate in insurance or reinsurance syndicates. (C) Appoint any insurance producer without assuring that the insurance producer is licensed in this state to transact the type of insurance for which the insurance producer is appointed. (D) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. The contract must also provide that if prior approval is given, the managing general agent must forward a report to the insurer promptly. (E) Appoint a submanaging general agent. (k) Provisions establishing which disputes, if any, arising under the contract shall be decided by arbitration, mediation or other means of dispute resolution. (L) If the managing general agent will calculate the loss reserves or a portion thereof, provisions: (A) That the insurer is ultimately responsible for reporting the loss reserves; and (B) That the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves calculated for losses incurred and outstanding on business produced by the managing general agent, in addition to any other required loss reserve actuarial opinion, as provided in ORS 744.313. (4) In addition to the requirements of subsection (3) of this section, if the contract permits the managing general agent to settle claims on behalf of the insurer, the contract must also include at least the following provisions: (a) The time requirements within which the managing general agent must report claims to the insurer. (b) A requirement that the managing general agent must send a copy of the claim file or report of claim to the insurer at its request or as soon as it becomes known to the managing general agent that the claim: (A) Has the potential of exceeding an amount determined by the Director of the Department of Consumer and Business Services or the limit set by the insurer, whichever is less; (B) Involves a coverage dispute; (C) May exceed the claim settlement authority of the managing general agent; or (D) Is of a serious nature as predetermined by the insurer by written guidelines. (c) A provision establishing the settlement authority granted the managing general agent for claims in general and specific guidelines for handling claims that exceed the amount established by the director or the insurer, whichever is less. (d) A provision that all claim files are the joint property of the insurer and managing general agent, except upon an order of liquidation of the insurer, and that in the event of such an order: (A) The files become the sole property of the insurer or its estate; and (B) The managing general agent shall have reasonable access to and the right to copy the files on a timely basis. (e) A provision that the insurer may terminate for cause any settlement authority granted to the managing general agent upon written notice by the insurer to the managing general agent or upon the termination of the contract, and that the insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination. (5) The contract must provide that the insurer may not allow the managing general agent to pay or commit the insurer to pay a claim in excess of a specified amount, net of reinsurance, without approval by the insurer. The amount shall not exceed the amount established in ORS 744.308. [1991 c.495 5; 2003 c.364 120]
(1) An insurer shall not allow a managing general agent, without prior approval of the insurer, to pay or commit the insurer to pay a claim over the amount, net of reinsurance, specified in the contract under ORS 744.306. The amount established in the contract shall not exceed one percent of the insurers policyholder surplus as of December 31 of the last completed calendar year. (2) Neither an insurer nor a managing general agent may allow a subagent of the managing general agent to serve on the board of directors of the insurer. (3) An insurer and a managing general agent may not jointly employ any individual. [1991 c.495 6]
A managing general agent shall maintain all of its books, bank accounts and records in a form usable by the Director of the Department of Consumer and Business Services. The managing general agent shall allow the director access to all of its books, bank accounts and records. [1991 c.495 7]
(1) An insurer shall have on file an independently performed financial examination of each managing general agent with which it has done business, in a form prescribed by the Director of the Department of Consumer and Business Services. (2) An insurer is ultimately responsible for reporting the loss reserves. If a managing general agent calculates the loss reserves or a portion thereof, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves calculated for losses incurred and outstanding on business produced by the managing general agent. The requirement under this subsection is in addition to any other required loss reserve actuarial opinion. The actuary must be a member in good standing of an association of actuaries determined by the director to have established adequate professional standards for membership. (3) Periodically, but not less frequently than annually, an insurer shall conduct an on-site review of the underwriting and claims processing operations of the managing general agent. (4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer. The officer must not be affiliated with the managing general agent. (5) Not later than the 30th day after entering into a contract with a managing general agent, and not later than the 30th day after terminating such a contract, an insurer shall provide written notification of the appointment or termination to the director. A notice of appointment shall include any information required by the director. (6) An insurer shall review its books and records each calendar quarter to determine if any insurance producer who previously had not produced and underwritten sufficient gross direct written premium to meet the description of a managing general agent in ORS 744.300 has become a managing general agent subject to ORS 744.300 to 744.316. When an insurer determines that an insurance producer has become a managing general agent: (a) The insurer shall promptly notify the insurance producer and the director of its determination. (b) The insurer and insurance producer must fully comply with ORS 744.300 to 744.316 not later than the 60th day after the date of notification under paragraph (a) of this subsection. (7) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer or controlling shareholder of any of its managing general agents. This subsection does not apply to relationships governed by ORS 732.517 to 732.596. (8) The acts of a managing general agent shall be regarded as the acts of the insurer on whose behalf the managing general agent is acting. The director may examine a managing general agent as if it were the insurer. [1991 c.495 8,9; 2003 c.364 121]
The Director of the Department of Consumer and Business Services may adopt rules to carry out ORS 744.300 to 744.316. [1991 c.495 10]
If the Director of the Department of Consumer and Business Services finds that a managing general agent has violated any provision of ORS 744.300 to 744.316, the director may order the managing general agent to reimburse the insurer or the rehabilitator or liquidator of the insurer for losses incurred by the insurer because of the violation. The director may take action under this section in addition to or instead of any other action the director may take under the Insurance Code. [1993 c.447 63c]
As used in ORS 744.318 to 744.384, 744.991 and 744.992: (1) "Advertising" means any written, electronic or printed communication or any communication by means of recorded telephone messages or transmission on radio, television, the Internet or similar communications media, including film strips, motion pictures and videos, published, disseminated, circulated or placed directly before the public in this state for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy or to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy pursuant to a life settlement contract. (2) "Business of life settlements" means an activity involved in, but not limited to, the offering, soliciting, negotiating, procuring, effectuating, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner acquiring an interest in a life insurance policy by means of a life settlement contract. (3) "Chronically ill" means: (a) Being unable to perform at least two activities of daily living, such as eating, toileting, moving around, bathing or dressing; (b) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or (c) Having a level of disability similar to that described in paragraph (a) of this subsection as determined by the Director of the Department of Consumer and Business Services. (4)(a) "Financing entity" means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a life settlement provider, credit enhancer or any other person or entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, but: (A) Whose principal activity related to the transaction is providing funds to effect the life settlement or purchase of one or more settled policies; and (B) Who has an agreement in writing with one or more licensed life settlement providers to finance the acquisition of life settlement contracts. (b) "Financing entity" does not include a nonaccredited investor or a life settlement purchaser. (5) "Licensee" means a life settlement provider, life settlement broker or life settlement investment agent. (6) "Life insurance producer" means any person licensed in this state as a resident or nonresident insurance producer who has received qualification or authority under ORS 744.062 or 744.063 to transact life insurance. (7)(a) "Life settlement broker" means a person, including a life insurance producer, working exclusively on behalf of an owner and for a fee, commission or other valuable consideration, who offers or attempts to negotiate life settlement contracts between an owner and one or more life settlement providers or one or more life settlement brokers. Notwithstanding the manner in which the life settlement broker is compensated, a life settlement broker is deemed to represent only the owner, and not the life insurance producer or the life settlement provider, and owes a fiduciary duty to the owner to act according to the owners instructions and in the best interest of the owner. (b) "Life settlement broker" does not include an attorney, a certified public accountant or a financial planner, accredited by a nationally recognized accreditation agency, who is retained to represent the owner and whose compensation is not paid directly or indirectly by the life settlement provider or purchaser. (8)(a) "Life settlement contract" means a written agreement between an owner and a life settlement provider or any affiliate of the life settlement provider establishing the terms under which compensation or anything of value is or will be paid, which compensation or value is less than the expected death benefits of the policy, in return for the owners present or future assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance. (b) "Life settlement contract" includes the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns a life insurance policy or certificate of insurance if the trust or other entity was formed for the principal purpose of acquiring one or more life insurance contracts insuring the life of a person residing in this state. (c) "Life settlement contract" also includes a premium finance loan made for a life insurance policy by a lender to an owner on, before or after the date of issuance of the policy if: (A) The owner or the insured receives on the date of the premium finance loan a guarantee of a future life settlement value of the policy; or (B) The owner or the insured agrees on the date of the premium finance loan to sell the policy or any portion of its death benefit on any date following the issuance of the policy. (d) "Life settlement contract" does not include: (A) A policy loan or accelerated death benefit made by the insurer pursuant to the policys terms; (B) Loan proceeds that are used solely to pay: (i) Premiums for the policy; or (ii) The costs of the loan, including, without limitation, interest, arrangement fees, utilization fees and similar fees, closing costs, legal fees and expenses, trustee fees and expenses and third party collateral provider fees and expenses, including fees payable to letter of credit issuers; (C) A loan made by a bank or other licensed financial institution in which the lender takes an interest in a life insurance policy solely to secure repayment of a loan or, if there is a default on the loan and the policy is transferred, the transfer of such a policy by the lender. However, neither the default itself nor the transfer of the policy in connection with a default may occur pursuant to an agreement or understanding with any other person for the purpose of evading regulation under ORS 744.318 to 744.384, 744.991 and 744.992; (D) A premium finance loan made by a lender that does not violate the provisions of ORS 746.405 to 746.530, if the premium finance loan is not described in paragraph (c) of this subsection; (E) An agreement in which all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured, or are trusts established primarily for the benefit of such parties; (F) Any designation, consent or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee; (G) A legitimate business succession planning arrangement: (i) Between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by its shareholders; (ii) Between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by its partners; or (iii) Between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by its members; (H) An agreement entered into by a service recipient, or a trust established by the service recipient and a service provider, or a trust established by the service provider, who performs significant services for the service recipients trade or business; or (I) Any other contract, transaction or arrangement exempted from the definition of life settlement contract by the director based on a determination that the contract, transaction or arrangement is not of the type intended to be regulated by ORS 744.318 to ORS 744.384, 744.991 and 744.992. (9) "Life settlement investment agent" means a person who is an appointed or contracted agent of a licensed life settlement provider who solicits or arranges the funding for the purchase of a life settlement by a life settlement purchaser and who is acting on behalf of a life settlement provider. (10)(a) "Life settlement provider" means a person, other than an owner, that enters into or effectuates a life settlement contract with an owner resident in this state. (b) "Life settlement provider" does not include: (A) A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy solely as collateral for a loan; (B) A premium finance company making premium finance loans and exempted by the director from the licensing requirement under ORS 746.405 to 746.530 that takes an assignment of a life insurance policy solely as collateral for a loan; (C) The issuer of the life insurance policy; (D) An insurer certified under ORS 731.354 or accredited under ORS 731.511 that provides stop loss coverage or financial guaranty insurance to a life settlement provider, purchaser, financing entity, special purpose entity or related provider trust; (E) An individual who enters into or effectuates no more than one agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit; (F) A financing entity; (G) A special purpose entity; (H) A related provider trust; (I) A life settlement purchaser; or (J) Any other person that the director determines is not the type of person intended to be covered by the definition of "life settlement provider." (11) "Life settlement purchase agreement" means a contract or agreement, entered into by a life settlement purchaser and to which the owner is not a party, to purchase a life insurance policy or an interest in a life insurance policy that is entered into for the purpose of deriving an economic benefit. (12)(a) "Life settlement purchaser" means a person who, to derive an economic benefit: (A) Provides a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy; or (B) Owns or acquires or is entitled to a beneficial interest in a trust that owns a life settlement contract or is the beneficiary of a life insurance policy that has been or will be the subject of a life settlement contract. (b) "Life settlement purchaser" does not include: (A) A licensee under ORS 744.321, 744.323 or 744.324; (B) An accredited investor or qualified institutional buyer as defined in Rule 501(a) or Rule 144A promulgated under the Federal Securities Act of 1933, as amended; (C) A financing entity; (D) A special purpose entity; or (E) A related provider trust. (13)(a) "Owner" means the owner of a life insurance policy or a certificate holder under a group policy who resides in this state and enters or seeks to enter into a life settlement contract. For the purposes of ORS 744.318 to 744.384, 744.991 and 744.992, an owner shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except when specifically addressed. If there is more than one owner on a single policy and the owners are residents of different states, the transaction shall be governed by the law of the state in which the owner having the largest ownership percentage resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all the owners. (b) "Owner" does not include: (A) A licensee under ORS 744.321, 744.323 or 744.324, including a life insurance producer acting as a life settlement broker under ORS 744.323; (B) A qualified institutional buyer as defined in Rule 144A promulgated under the Federal Securities Act of 1933, as amended; (C) A financing entity; (D) A special purpose entity; or (E) A related provider trust. (14) "Policy" means an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state. (15) "Related provider trust" means a trust established by a licensed life settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. (16) "Settled policy" means a life insurance policy or certificate that has been acquired by a life settlement provider pursuant to a life settlement contract. (17) "Special purpose entity" means a corporation, partnership, trust, limited liability company or other similar entity formed solely to provide either direct or indirect access to institutional capital markets: (a) For a financing entity or licensed life settlement provider; (b) In connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by qualified institutional buyers as defined in Rule 144 promulgated under the Securities Act of 1933, as amended; or (c) In connection with a transaction in which the securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets. (18)(a) "Stranger-originated life insurance" means a practice or a plan to initiate a life insurance policy for the benefit of a third party investor who, at the time of policy origination, has no insurable interest in the insured. Such practices include but are not limited to cases in which life insurance is purchased with resources or guarantees from or through a person or entity who, at the time of policy inception, could not lawfully initiate the policy, and for which, at the time of policy inception, there is an arrangement or agreement, whether verbal or written, to directly or indirectly transfer the ownership of the policy or the policy benefits to a third party. (b) Trusts that are created to give the appearance of insurable interest, and are used to initiate policies for investors, are considered stranger-originated life insurance arrangements. (c) Stranger-originated life insurance arrangements do not include those practices set forth in subsection (8)(d) of this section. (19) "Terminally ill" means having an illness or sickness that can reasonably be expected to result in death in 24 months or less. [2009 c.711 2]
(1) A person shall not act as a life settlement provider unless the person holds a license of life settlement provider issued by the Director of the Department of Consumer and Business Services. (2) A life settlement provider may use the term "viatical settlement provider" to describe the business transacted under the license and may use the term "viatical settlement contract" instead of "life settlement contract." (3) A related provider trust must have a written agreement with a licensed life settlement provider under which the licensed life settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related to life settlement transactions available to the director as if those records and files were maintained directly by the licensed life settlement provider. [1995 c.342 3; 2009 c.711 3]
(1) A person shall not act as a life settlement broker unless the person holds a license of life settlement broker issued by the Director of the Department of Consumer and Business Services. (2) A life insurance producer who has been duly licensed as a resident insurance producer with a life line of authority in this state or the producers home state for at least one year and is licensed as a nonresident producer in this state meets the licensing requirements of this section and is permitted to operate as a life settlement broker in this state. (3) A life settlement broker may use the term "viatical settlement broker" to describe the business transacted under the license and may use the term "viatical settlement contract" instead of "life settlement contract." [1995 c.342 4; 2009 c.711 4]
A person shall not operate as a life settlement investment agent unless the person holds a license of life settlement investment agent issued by the Director of the Department of Consumer and Business Services or the person has obtained the appropriate license from the equivalent chief insurance regulatory official of the state of residence of the life settlement purchaser whom the agent is negotiating with on behalf of a life settlement provider. If there is more than one purchaser of a single policy and the purchasers are residents of different states, the life settlement investment agent must be licensed by the state in which the purchaser having the largest percentage ownership resides or, if the purchasers hold equal ownership, the state of residence of one purchaser agreed upon in writing by all purchasers. [2009 c.711 5]
(1) In order to obtain a license to transact business as a life settlement provider or as a life settlement broker, an applicant shall apply for the license on a form prescribed by the Director of the Department of Consumer and Business Services, with payment of any fee required for the application. (2) The director may request biographical, organizational, locational, financial, employment and any other information on the application form that the director determines to be relevant to the evaluation of applications and to the granting of the license. The director may also require a statement of the business plan or plan of operation of the applicant. The director may also require an applicant for a life settlement provider license to file with the application a copy of the life settlement contract that the applicant intends to use in business under the license. (3) If an applicant is a corporation, the corporation must be incorporated under the laws of this state or must be a foreign corporation authorized to transact business in this state. [1995 c.342 5]
(1) If the Director of the Department of Consumer and Business Services determines that an applicant has satisfied all requirements for the license for which application is made, the director shall issue the license to the applicant. The director may issue a license if the director determines that the applicant, as required to be set forth in the application for the license: (a) Has not engaged in conduct that would authorize the director to refuse to issue a license under ORS 744.338; (b) Is competent and trustworthy and intends to act in good faith in the capacity specified by the license applied for; (c) Has demonstrated evidence of financial responsibility in a format prescribed by the director through either a surety bond executed in an amount and in a manner prescribed by the director or a deposit of cash, certificates of deposit or securities or any combination thereof in an amount and manner prescribed by the director. The director shall accept as evidence of financial responsibility proof that financial instruments consistent with the requirements under this paragraph have been filed with at least one state in which the applicant is licensed as a life settlement provider, life settlement broker or life settlement investment agent; (d) Has a good business reputation and has had experience, training or education so as to be qualified in the business of the licensee; (e) If a life settlement provider or broker, has provided an antifraud plan under ORS 744.374 (10); and (f) If a life settlement provider, has provided a detailed plan of operation in a manner prescribed by the director. (2) The director may refuse to issue a license in the name of any firm, partnership or corporation if the director is not satisfied that any officer, employee, stockholder or partner thereof who may materially influence the conduct of the applicant meets the standards of this section. (3) The director may issue a license to a nonresident applicant only if the nonresident applicant files with the director in writing an appointment of the director to be the attorney of the applicant upon whom all legal process in any action or proceeding against the applicant may be served. In the appointment, the applicant shall agree that any lawful process against the applicant that is served upon the director shall be of the same legal force and validity as if served upon the applicant, and that the authority shall continue in force so long as any liability remains outstanding in this state. An appointment under this subsection becomes effective on the date that the director issues the license to the applicant. (4) If the director denies an application, the director shall so inform the applicant, stating the grounds for the denial. [1995 c.342 6; 2009 c.711 6]
(1) A license issued under ORS 744.328 expires on its expiration date unless it is renewed on or before its expiration date. (2) Unless the Director of the Department of Consumer and Business Services designates another date, a license expires on the last day of the month in which the second anniversary of the initial issuance date of the license occurs, and on the second anniversary following each renewal. (3) The director by rule may establish requirements for renewing licenses. [1995 c.342 7]
An individual may act as a life settlement provider under the authority of the license of a firm or corporate life settlement provider, whether or not the individual holds a license as a life settlement provider, if: (1) The individual is a member or employee of the firm or is an employee, officer or director of the corporation; and (2) The individual is designated by the firm or corporation on its license application or on an amendatory or supplementary form thereto as authorized to act as a life settlement provider under the authority of the license. [1995 c.342 8]
A licensee shall immediately notify the Director of the Department of Consumer and Business Services of any material change in ownership or control or in any other matter affecting the qualification of the licensee for the license in this state. [1995 c.342 9]
(1) The Director of the Department of Consumer and Business Services may suspend, revoke, refuse to issue or refuse to renew a license of a licensee if the director finds one or more of the following with respect to the licensee or applicant for a license: (a) Dishonesty, fraud or gross negligence in the conduct of business as a licensee, or the licensee or applicant is otherwise shown to be untrustworthy or incompetent to act as a licensee. (b) The life settlement provider demonstrates a pattern of unreasonable payments to policyholders or certificate holders. (c) Falsification by the applicant or licensee of an application for the license or renewal thereof, or misrepresentation or engagement in any other dishonest act in relation to the application. (d) Conduct resulting in a conviction of a felony under the laws of any state or of the United States, to the extent that such conduct may be considered under ORS 670.280. (e) Conviction of any crime, an essential element of which is dishonesty or fraud, under the laws of any state or of the United States. (f) Refusal to renew or cancellation, revocation or suspension of authority to transact insurance or business as a life settlement provider, life settlement broker or similar entity in another state. (g) Failure to pay a civil penalty imposed by final order of the director or to carry out terms of probation set by the director. (h) Refusal by a licensee to be examined or to produce accounts, records or files for examination, refusal by any officers to give information with respect to the affairs of the licensee or refusal to perform any other legal obligation as to the examination when required by the director. (i) Affiliation with or under the same general management or interlocking directorate or ownership as another life settlement provider or life settlement broker or an insurer, any of which unlawfully transacts business in this state. (j) Failure at any time to meet any qualification for which issuance of the license could have been refused had the failure then existed and been known to the director. (k) Violation of any rule or order of the director or any provision of the Insurance Code by a licensee or any officer, partner, member or key management personnel of the licensee. (2) The director may suspend or refuse to renew a license immediately and without hearing if the director determines that one or both of the following circumstances exist: (a) The licensee is insolvent. (b) The financial condition or business practices of the licensee otherwise pose an imminent threat to the public health, safety or welfare of the residents of this state. (3) A life settlement provider or life settlement broker holding a license that has not been renewed or has been revoked shall surrender the license to the director at the directors request. (4) The director may take any other administrative action authorized under the Insurance Code in addition to or in lieu of the actions authorized under this section. [1995 c.342 10; 2009 c.711 7]
(1) A life settlement contract must be in writing. A life settlement provider shall establish in the contract the terms under which the life settlement provider will pay compensation or anything of value in return for the policyholders or certificate holders assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy or certificate to the life settlement provider. (2) A life settlement provider shall not use a life settlement contract form or provide to an owner a disclosure statement form in this state unless the life settlement provider has filed the form with the Director of the Department of Consumer and Business Services and the director has approved the form. The director shall disapprove a life settlement contract form if, in the directors opinion, the contract or any provision of the contract is unreasonable, contrary to the interests of the public, otherwise misleading or unfair to the policyholder or certificate holder or in violation of any of the requirements of ORS 744.318 to 744.384, 744.991 and 744.992. (3) Each life settlement contract entered into in this state must contain a provision enabling the policyholder or certificate holder to rescind the contract not later than the 60th day after the date on which the contract is executed by all parties or not later than the 30th day after the policyholder or certificate holder receives the life settlement proceeds, whichever is the lesser period. In order to rescind such a contract, a policyholder or certificate holder who has received the proceeds must return them to the life settlement provider. [1995 c.342 11; 2009 c.711 8]
(1) Each life settlement provider shall file a report for the preceding calendar year with the Director of the Department of Consumer and Business Services on or before March 1 of each year, or within such extension of time therefor as the director may grant. The report shall be in the form and contain such information as the director prescribes and shall be verified as follows: (a) If the life settlement provider is a corporation, by at least two principal officers of the life settlement provider. (b) If the life settlement provider is a partnership, by two partners. (c) If the life settlement provider is neither a corporation nor a partnership, by its president and secretary. (2) For a policy settled within five years of policy issuance, a life settlement provider shall file with the director on or before March 1 of each year an annual statement containing such information as the director may prescribe by regulation. In addition to any other requirements, the annual statement must specify the total number and aggregate face amount and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year. The annual statement must also include the names of the insurance companies whose policies have been settled and the life settlement brokers that have settled the policies. The information must be limited to only those transactions for which the owner is a resident of this state. (3) Except as otherwise allowed or required by law, a life settlement provider, life settlement broker, life settlement investment agent, insurance company, insurance producer, information bureau, rating agency or company, or any other person with actual knowledge of an insureds identity, may not disclose the fact that the person is insured or the insureds financial or medical information to any other person unless the disclosure: (a) Is necessary to effect a life settlement between the owner and a life settlement provider and the owner and insured have provided prior written consent to the disclosure; (b) Is necessary to effect a life settlement purchase agreement between the life settlement purchaser and a life settlement provider and the owner and insured have provided prior written consent to the disclosure; (c) Is provided in response to an investigation or examination by the director or any other governmental officer or agency or pursuant to the requirements of ORS 744.346; (d) Is a term of or condition to the transfer of a policy by one life settlement provider to another life settlement provider; (e) Is necessary to permit a financing entity, related provider trust or special purpose entity to finance the purchase of policies by a life settlement provider and the owner and insured have provided prior written consent to the disclosure; (f) Is necessary to allow the life settlement provider or life settlement broker or their authorized representatives to make contacts for the purpose of determining health status; or (g) Is required to purchase stop loss coverage or financial guaranty insurance. [1995 c.342 12; 2009 c.711 9]
(1) The Director of the Department of Consumer and Business Services may examine the business and practices of any licensee or applicant for a license when the director determines an examination to be necessary. The director may order a licensee or applicant to produce any records, books, files or other information reasonably necessary to ascertain whether or not the licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant. (2)(a) A person required to be licensed under ORS 744.321 and 744.323 shall for five years retain copies of all: (A) Proposed, offered or executed contracts, purchase agreements, underwriting documents, policy forms and applications from the date of the proposal, offer or execution of the contract or purchase agreement, whichever is later; (B) Checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date of the transaction; and (C) Other records and documents related to the requirements under ORS 744.318 to 744.384, 744.991 and 744.992. (b) This section does not relieve a person of the obligation to produce these documents for the director after the retention period has expired if the person has retained the documents. (c) Records required to be retained by this section must be legible and complete and may be retained in paper, photograph, microprocess, magnetic, mechanical or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record. (3) The director at any time may require a licensee to fully disclose the identity of all stockholders, partners, officers and employees. (4) Names of, and individual identification data for, all policyholders and certificate holders who have entered life settlement contracts with life settlement providers are confidential as provided in ORS 705.137. [1995 c.342 13; 2001 c.377 15; 2009 c.711 10]
[1995 c.342 16; 2007 c.100 31; renumbered 744.382 in 2009]
(1) With an application for a life settlement, a life settlement provider or life settlement broker shall provide the owner with at least the following disclosures no later than the time the application for the life settlement contract is signed by all parties. The disclosures must be provided in a separate document that is signed by the owner and the life settlement provider or life settlement broker, and must provide the following information: (a) There are possible alternatives to life settlement contracts, including any accelerated death benefits or policy loans offered under the owners life insurance policy. (b) A life settlement broker represents exclusively the owner, and not the insurer or the life settlement provider, and owes a fiduciary duty to the owner, including a duty to act according to the owners instructions and in the best interest of the owner. (c) Some or all of the proceeds of the life settlement may be taxable under federal and state income tax, and assistance should be sought from a professional tax adviser. (d) Proceeds of the life settlement may be subject to the claims of creditors. (e) Receipt of proceeds from a life settlement contract may affect the owners eligibility for public assistance or other government benefits or entitlements, and advice should be obtained from appropriate agencies. Receipt of proceeds from a life settlement contract may reduce the owners risk of becoming impoverished and becoming dependent on public assistance or other government benefits or entitlements. (f) The owner has the right to rescind a life settlement contract before the earlier of 60 calendar days after the date upon which the life settlement contract is executed by all parties or 30 calendar days after the life settlement proceeds have been paid to the owner, as provided in ORS 744.364 (3). Rescission, if exercised by the owner, is effective only if both notice of the rescission is given, and the owner repays all proceeds and any premiums, loans and loan interest paid on account of the life settlement within the rescission period. If the insured dies during the rescission period, the life settlement contract shall be deemed to have been rescinded, subject to repayment by the owner or the owners estate of all life settlement proceeds and any premiums, loans and loan interest of the life settlement within 60 days of the insureds death. (g) Funds will be sent to the owner within three business days after the life settlement provider has received the insurer or group administrators written acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated. (h) Entering into a life settlement contract may prevent the owner from qualifying for new life insurance coverage in the future and may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the owner. Assistance should be sought from a financial adviser. (i) The following language: "All medical, financial or personal information solicited or obtained by a life settlement provider or life settlement broker about an insured, including the insureds identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the life settlement between the owner and the life settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years." (j) Following execution of a life contract, the insured may be contacted for the purpose of determining the insureds health status and to confirm the insureds residential or business street address and telephone number, or as otherwise provided in ORS 744.318 to 744.384, 744.991 and 744.992. This contact is limited to once every three months if the insured has a life expectancy of more than one year, and to no more than once per month if the insured has a life expectancy of one year or less. All such contacts shall be made only by a life settlement provider licensed in the state in which the owner resided at the time of the life settlement, or by the authorized representative of a duly licensed life settlement provider. (2) Prior to or concurrently with the disclosures required under subsection (1) of this section, the owner shall be given a brochure describing the process of life settlements. The Director of the Department of Consumer and Business Services shall develop and approve a form for the brochure. (3) A life settlement provider shall provide the owner with at least the following disclosures no later than the date the life settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the life settlement contract or in a separate document signed by the owner and provide the following information: (a) The affiliation, if any, between the life settlement provider and the issuer of the insurance policy to be settled; (b) The name, business address and telephone number of the life settlement provider; (c) Any affiliations or contractual arrangements between the life settlement provider and the life settlement purchaser; (d) If an insurance policy to be settled has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be settled, information about the possible loss of coverage on the other lives under the policy and the need to consult with the owners insurance producer or the insurer issuing the policy for advice on the proposed life settlement; (e) The dollar amount of the current death benefit payable to the life settlement provider under the policy or certificate. If known, disclosure of the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the extent to which the owners interest in those benefits will be transferred as a result of the life settlement contract; (f) If the funds will be escrowed with an independent third party during the transfer process, the name, business address and telephone number of the independent third party escrow agent, and the fact that the owner may inspect or receive copies of the relevant escrow or trust agreements or documents; (g) The name, business address and telephone number of the life settlement broker; (h) A full, complete and accurate description of all offers, counter-offers, acceptances and rejections relating to the proposed life settlement contract; (i) A written disclosure of any affiliations or contractual arrangements between the life settlement broker and any person making an offer in connection with the proposed life settlement contracts; (j) The amount and method of calculating the brokers compensation. Compensation includes anything of value paid or given to a life settlement broker for the placement of a policy; and (k) When any portion of the life settlement brokers compensation, as described in paragraph (j) of this subsection, is taken from a proposed life settlement offer, disclosure of the total amount of the life settlement offer and the percentage of the life settlement offer comprised by the life settlement brokers compensation. (4) If the life settlement provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall communicate in writing the change in ownership or beneficiary to the insured within 20 days after the change. (5) A life settlement provider or its life settlement investment agent shall provide the life settlement purchaser with at least the following disclosures prior to the date the life settlement purchase agreement is signed by all parties. The disclosures must be conspicuously displayed in any life purchase contract or in a separate document signed by the life settlement purchaser and life settlement provider or life settlement investment agent, and must make the following disclosures to the life settlement purchaser: (a) The purchaser shall receive no returns, such as dividends and interest, until the insured dies and a death claim payment is made. (b) The actual annual rate of return on a life settlement contract is dependent upon an accurate projection of the insureds life expectancy and the actual date of the insureds death. An annual guaranteed rate of return is not determinable. (c) The settled life insurance contract should not be considered a liquid purchase since it is impossible to predict the exact timing of its maturity and the funds probably are not available until the death of the insured. There is no established secondary market for resale of these products by the purchaser. (d) The purchaser may lose all benefits or may receive substantially reduced benefits if the insurer goes out of business during the term of the life investment. (e) The purchaser is responsible for payment of the insurance premium or other costs related to the policy, if required by the terms of the life purchase agreement. These payments may reduce the purchasers return. If a party other than the purchaser is responsible for the payment, the name and address of that party also shall be disclosed. (f)(A) The purchaser is responsible for payment of the insurance premiums or other costs related to the policy. (B) The amount of the premiums, if applicable. (g) The name, business address and telephone number of the independent third party providing escrow services and the relationship to the broker. (h) The amount of any trust fees or other expenses to be charged to the life settlement purchaser. (i) Whether the purchaser is entitled to a refund of all or part of the purchasers investment under the settlement contract if the policy is later determined to be null and void. (j)(A) Group policies may contain limitations or caps in the conversion rights, and additional premiums may have to be paid if the policy is converted. (B) The name of the party responsible for the payment of the additional premiums. (C) If a group policy is terminated and replaced by another group policy, there may be no right to convert the original coverage. (k) The risks associated with policy contestability, including but not limited to the risk that the purchaser will have no claim or only a partial claim to death benefits should the insurer rescind the policy within the contestability period. (L) Whether the purchaser will be the owner of the policy in addition to being the beneficiary and if the purchaser is the beneficiary only and not also the owner, the special risks associated with that status, including but not limited to the risk that the beneficiary may be changed or the premium may not be paid. (m) The experience and qualifications of the person who determines the life expectancy of the insured, the information this projection is based on and the relationship of the projection maker to the life settlement provider, if any. (6) Disclosure to a life settlement purchaser shall include distribution of a brochure describing the process of investment in life settlements, in a form to be developed and approved by the director. (7) A life settlement provider or its life settlement investment agent shall provide the life settlement purchaser with at least the following disclosures no later than at the time of the assignment, transfer or sale of all or a portion of an insurance policy. The disclosures must be contained in a document signed by the life settlement purchaser and life settlement provider or life settlement investment agent, and must make the following disclosures to the life settlement purchaser: (a) The life expectancy certifications obtained by the provider in the process of determining the price paid to the owner. (b) If premium payments or other costs related to the policy have been escrowed, the date when the escrowed funds will be depleted, whether the purchaser is responsible for payment of premiums thereafter and, if so, the amount of the premiums. (c) Whether or not premium payments or other costs related to the policy have been waived. If waived, whether or not the investor is responsible for payment of the premiums if the insurer that wrote the policy terminates the waiver after purchase, and the amount of those premiums. (d) The type of policy offered or sold, such as whole life, term life, universal life or a group policy certificate, any additional benefits contained in the policy and the current status of the policy. (e) If the policy is term insurance, the special risks associated with term insurance, including but not limited to the purchasers responsibility for additional premiums if the owner continues the term policy at the end of the current term. (f) If the policy is contestable. (g) If the insurer that wrote the policy has any additional rights that could negatively affect or extinguish the purchasers rights under the life settlement contract, what these rights are and under what conditions these rights are activated. (h) The name and address of the person responsible for monitoring the insureds condition. A description of how often the monitoring of the insureds condition is done, how the date of death is determined and how and when this information is transmitted to the purchaser. (8) The life settlement purchase agreement is voidable by the purchaser at any time within three days after the disclosures mandated by subsection (7) of this section are received by the purchaser. [2009 c.711 11]
[1995 c.342 18; 2009 c.711 20; renumbered 744.384 in 2009]
Prior to the initiation of a plan, transaction or series of transactions, a life settlement broker or life settlement provider shall fully disclose to an insurer the plan, transaction or series of transactions to which the life settlement broker or life settlement provider is a party, to originate, renew, continue or finance a life insurance policy with the insurer for the purpose of engaging in the business of life settlements at anytime prior to, or during the first five years after, issuance of the policy. [2009 c.711 12]
(1) With respect to each policy issued by an insurance company, the insurance company shall provide notice to the owner of an individual life insurance policy when the insured person under such a policy is 60 years of age or older and: (a) The life insurance company receives notice from such an owner of a request to surrender, in whole or in part, an individual policy; (b) The life insurance company receives notice from such an owner of a request to receive an accelerated death benefit under an individual policy; or (c) The life insurance company sends to such an owner all notices of lapse of an individual policy, other than a term policy. (2)(a) The notice must consist of the following statement in large, bold or otherwise conspicuous typeface calculated to draw the eye: "Life insurance is a critical part of a broader financial plan. There are many options available, and you have the right to shop around and seek advice from different financial advisers in order to find the option best suited to your needs." (b) The communication of the notice must also contain a statement advising the recipient that the recipient may contact the Division of Financial Regulation of the Department of Consumer and Business Services for more information, and must include an address or other location or manner by which the recipient may contact the Division of Financial Regulation. (c) The department shall adopt by rule the appropriate address or other location or manner of contact to be included in the required notice. (3)(a) The Director of the Department of Consumer and Business Services shall make available to the public information designed to educate the consumer about the consumers rights as an owner of a life insurance policy. The information must be written in lay terms and must advise the consumer: (A) That life insurance is a critical part of a broader financial plan, and that the consumer is encouraged, and has a right, to seek additional financial advice and opinions; (B) That possible alternatives to lapse exist; and (C) Of the definitions of common industry terms. (b) The information described in paragraph (a) of this subsection may include brief descriptions of common products available from licensees. These products must be discussed in general terms for informative purposes only, and not be identifiable to any specific licensee. [2009 c.711 22; 2017 c.17 59]
(1)(a) A life settlement provider entering into a life settlement contract shall first obtain: (A) If the owner is the insured, a written statement from a licensed physician, a naturopathic physician licensed under ORS chapter 685, a physician assistant licensed under ORS 677.505 to 677.525 or a nurse practitioner licensed under ORS 678.375 to 678.390 that the owner is of sound mind and under no constraint or undue influence to enter into a life settlement contract; and (B) A document in which the insured consents to the release of the insureds medical records to a licensed life settlement provider, life settlement broker and the insurance company that issued the life insurance policy covering the life of the insured. (b) Within 20 days after an owner executes documents necessary to transfer any rights under an insurance policy or, if the insured is terminally ill, within 20 days after an owner entering any agreement, option, promise or any other form of understanding, expressed or implied, to transfer the policy for value, the life settlement provider shall give written notice to the insurer that issued the insurance policy that the policy has or will become a settled policy. The notice must be accompanied by the documents required by paragraph (c) of this subsection. (c) The life settlement provider shall deliver a copy of the medical release required under paragraph (a)(B) of this subsection, a copy of the owners application for the life settlement contract, the notice required under paragraph (b) of this subsection and a request for verification of coverage to the insurer that issued the life policy that is the subject of the life transaction. The Director of the Department of Consumer and Business Services shall develop and approve a form for the request for verification. (d) The insurer shall respond to a request for verification of coverage submitted on an approved form by a life settlement provider or life settlement broker within 30 calendar days of the date the request is received and shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract or possible fraud. The insurer shall accept a request for verification of coverage made on a form approved by the director. The insurer shall accept an original or facsimile or electronic copy of such request and any accompanying authorization signed by the owner. Failure by the insurer to meet its obligations under this subsection is a violation of the Insurance Code. (e) Prior to or at the time of execution of the life settlement contract, the life settlement provider shall obtain a witnessed document in which the owner consents to the life settlement contract, represents that the owner has a full and complete understanding of the life settlement contract, that the owner has a full and complete understanding of the benefits of the life insurance policy, acknowledges that the owner is entering into the life settlement contract freely and voluntarily and, for persons with a terminal illness or chronic illness or condition, acknowledges that the insured has a terminal illness or chronic illness and that the terminal illness or chronic illness or condition was diagnosed after the life insurance policy was issued. (f) If a life settlement broker performs any of the activities required of the life settlement provider, the provider is deemed to have fulfilled the requirements of this section that were performed by the broker. (2) All medical information solicited or obtained by any licensee is privileged and confidential under ORS 705.137. (3)(a) All life settlement contracts entered into in this state must provide the owner with an absolute right to rescind the contract before the earlier of 60 calendar days after the date upon which the life settlement contract is executed by all parties or 30 calendar days after the life settlement proceeds have been sent to the owner under subsection (5) of this section. (b) The life settlement provider may condition rescission upon the owner both giving notice and repaying to the life settlement provider within the rescission period all proceeds of the settlement and any premiums, loans and loan interest paid by or on behalf of the life settlement provider in connection with or as a consequence of the life settlement. (c) If the insured dies during the rescission period, the life settlement contract is deemed to have been rescinded, subject to repayment within 60 calendar days of the death of the insured to the life settlement provider or purchaser of all life settlement proceeds and any premiums, loans and loan interest that have been paid by the life settlement provider or purchaser. (d) In the event of any rescission, if the life settlement provider has paid commissions or other compensation to a life settlement broker in connection with the rescinded transaction, the life settlement broker shall refund all such commissions and compensation to the life settlement provider within five business days following receipt of written demand from the life settlement provider. The demand must be accompanied by either the owners notice of rescission if rescinded at the election of the owner, or the notice of the death of the insured if rescinded by reason of the death of the insured within the applicable rescission period. (4) The life settlement purchaser shall have the right to rescind a life settlement contract within three days after the disclosures mandated by ORS 744.354 (7) are received by the purchaser. (5)(a) The life settlement provider shall instruct the owner to send the executed documents required to effect the change in ownership, assignment or change in beneficiary directly to an independent escrow agent selected by the provider. (b) Within three business days after the date the escrow agent receives the document, or from the date the life settlement provider receives the documents, if the owner erroneously provides the documents directly to the provider, the provider shall pay or transfer the proceeds of the life settlement into an escrow or trust account maintained in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation. (c) Upon payment of the settlement proceeds into the escrow account, the escrow agent shall deliver the original change in ownership, assignment or change in beneficiary forms to the life settlement provider or related provider trust or other designated representative of the life settlement provider. Upon the escrow agents receipt of the acknowledgment of the properly completed transfer of ownership, assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the settlement proceeds to the owner. (6) Failure to pay the owner the full contract amount for the life settlement contract within the time set forth under subsection (5) of this section renders the life settlement contract voidable by the owner until the time full payment is tendered to and accepted by the owner. Funds are deemed sent by a life settlement provider to an owner as of the date that the escrow agent either releases funds for wire transfer to the owner or places a check for delivery to the owner via the United States Postal Service or another nationally recognized delivery service. (7)(a) Contacts with the insured for the purpose of determining the health status of the insured by the life settlement provider or life settlement broker after the life settlement has occurred may be made only by the life settlement provider or broker licensed in this state or its authorized representatives and are limited to once every three months for insureds with a life expectancy of more than one year, and to no more than once per month for insureds with a life expectancy of one year or less. (b) The limitations set forth in this subsection do not apply to any contacts with an insured for reasons other than determining the insureds health status. [2009 c.711 13; 2014 c.45 77; 2017 c.356 98]
(1) A person may not enter into a life settlement contract at any time prior to the application or issuance of a policy that is the subject of a life settlement contract or within a five-year period commencing with the date of issuance of the insurance policy or certificate. However, this five-year restriction does not apply if the owner certifies to the life settlement provider that any one or more of the following conditions has been met within the five-year period: (a) The policy was issued upon the owners exercise of conversion rights arising out of a group or individual policy if the total of the time covered under the conversion policy plus the time covered under the prior policy is at least 60 months. The time covered under a group policy is calculated without regard to any change in insurance carriers, provided the coverage has been continuous and under the same group sponsorship; (b) The owner submits independent evidence to the life settlement provider that one or more of the following conditions have been met within the five-year period: (A) The owner or insured is terminally ill or chronically ill; (B) The owners spouse dies; (C) The owner divorces the owners spouse; (D) The owner retires from full-time employment; (E) The owner becomes physically or mentally disabled and a physician, naturopathic physician licensed under ORS chapter 685, physician assistant licensed under ORS 677.505 to 677.525 or nurse practitioner licensed under ORS 678.375 to 678.390 determines that the disability prevents the owner from maintaining full-time employment; or (F) A final order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor of the owner, adjudicating the owner bankrupt or insolvent, or approving a petition seeking reorganization of the owner or appointing a receiver, trustee or liquidator to all or a substantial part of the owners assets; or (c) The owner enters into a life settlement contract more than two years after the date of issuance of a policy and, with respect to the policy, at all times prior to the date that is two years after policy issuance, the following conditions are met: (A) Policy premiums have been funded exclusively with unencumbered assets, including an interest in the life insurance policy being financed only to the extent of its net cash surrender value, provided by, or full recourse liability incurred by, the insured or a person closely related to the insured by blood or law or a party having a lawful substantial economic interest in the continued life, health and bodily safety of the person insured, or a trust established primarily for the benefit of such parties; (B) There is no agreement or understanding with any other person to guarantee any such liability or to purchase or stand ready to purchase the policy, including through an assumption or forgiveness of the loan; and (C) Neither the insured nor the policy has been evaluated for settlement. (2) Copies of the independent evidence described in subsection (1)(b) of this section and documents required by ORS 744.364 (1) must be submitted to the insurer when the life settlement provider or other party entering into a life settlement contract with an owner submits a request to the insurer for verification of coverage. The copies must be accompanied by a letter of attestation from the life settlement provider that the copies are true and correct copies of the documents received by the life settlement provider. (3) If the life settlement provider submits to the insurer a copy of the owners or insureds certification described in and the documents required by ORS 744.364 (1) when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the life settlement provider, the copy conclusively establishes that the life settlement contract satisfies the requirements of this section and the insurer shall respond in a timely manner to the request. (4) An insurer may not, as a condition of responding to a request for verification of coverage or effecting the transfer of a policy pursuant to a life settlement contract, require that the owner, insured, life settlement provider or life settlement broker sign any forms, disclosures, consent or waiver form that has not been expressly approved by the Director of the Department of Consumer and Business Services for use in connection with life settlement contracts in this state. (5) Upon receipt of a properly completed request for a change of ownership or beneficiary of a policy, the insurer shall respond in writing within 30 calendar days with written acknowledgement confirming that the change has been effected or specifying the reasons why the requested change cannot be processed. The insurer may not unreasonably delay effecting change of ownership or beneficiary and may not otherwise seek to interfere with any life settlement contract lawfully entered into in this state. [2009 c.711 14; 2014 c.45 78; 2017 c.356 99]
(1) With respect to a life settlement contract or insurance policy, it is unlawful for a life settlement broker to knowingly solicit an offer from, effectuate a life settlement contract with or make a sale to a life settlement provider, financing entity or related provider trust that is controlling, controlled by or under common control with a life settlement broker, unless that relationship is disclosed to the owner. (2) With respect to a life settlement contract or insurance policy, it is unlawful for a life settlement broker to knowingly enter into a life settlement contract with an owner if, in connection with the life settlement contract, anything of value will be paid to a life settlement broker that is controlling, controlled by or under common control with a life settlement provider, financing entity or related provider trust that is involved in the settlement contract, unless that relationship is disclosed to the owner. (3) A person may not issue, solicit, market or otherwise promote the purchase of an insurance policy for the purpose of, or with an emphasis on, settling the policy. (4) A person may not enter into a premium finance arrangement under which the person receives any proceeds, fees or other consideration, directly or indirectly, from the proceeds of the policy, from the owner of the policy or from any other person with respect to the premium finance agreement, the life settlement contract or any other transaction related to the policy that are in addition to the amounts required to pay the principal, interest and service charges related to the policy premiums under the premium finance agreement or subsequent sale of the agreement. Any payments, charges, fees or other amounts in addition to the amounts required to pay the principal, interest and service charges related to policy premiums paid under the premium finance agreement must be remitted to the original owner of the policy or the original owners estate if the original owner is not living at the time of the determination of overpayment. (5) In the solicitation, application or issuance of a life insurance policy, a person may not employ any device, scheme or artifice in violation of ORS 743.040. (6) A life settlement provider may not enter into a life settlement contract unless the life settlement promotional, advertising and marketing materials, as may be prescribed by regulation, have been filed with the Director of the Department of Consumer and Business Services. (7) A life insurance producer, insurance company, life settlement broker, life settlement provider or life settlement investment agent may not make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy. (8) A person may not present, cause to be presented or prepare with the knowledge or belief that it will be presented to or by a life settlement provider, life settlement broker, life settlement purchaser, life settlement investment agent, financing entity, insurer, insurance producer or any other person, false material information, or conceal material information, as part of, in support of or concerning a fact material to one or more of the following: (a) An application for the issuance of a life settlement contract or insurance policy; (b) The underwriting of a life settlement contract or insurance policy; (c) A claim for payment or benefit pursuant to a life settlement contract or insurance policy; (d) Premiums paid on an insurance policy, or as a result of a life settlement purchase agreement; (e) Payments and changes in ownership or beneficiary made in accordance with the terms of a life settlement contract, life settlement purchase agreement or insurance policy; (f) The reinstatement or conversion of an insurance policy; (g) The solicitation, offer, effectuation or sale of a life settlement contract, insurance policy or life settlement purchase agreement; (h) The issuance of written evidence of a life settlement contract, life settlement purchase agreement or insurance; or (i) A financing transaction. (9) A person may not employ any plan, financial structure, device, scheme or artifice to defraud related to settled policies. (10) A person may not enter into any practice or plan that involves stranger-originated life insurance. (11) A person may not fail to disclose to the insurer when requested by the insurer that the prospective insured has undergone a life expectancy evaluation by any person or entity other than the insurer or its authorized representatives in connection with the issuance of the policy. (12) A person may not, and may not permit employees or agents to: (a) Remove, conceal, alter, destroy or sequester from the director the assets or records of a licensee or other person engaged in the business of life settlements; (b) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer or other person; (c) Transact the business of life settlements in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of life settlements; or (d) File with the director or the equivalent chief insurance regulatory official of another jurisdiction a document containing false information or otherwise conceal information about a material fact from the director. (13) A person may not embezzle, steal, misappropriate or convert moneys, funds, premiums, credits or other property of a life settlement provider, insurer, insured, owner, insurance policyowner or any other person engaged in the business of life settlements or insurance. (14) A person may not recklessly enter into, negotiate, broker or otherwise deal in a life settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy, for which the person or the persons intended to defraud the policys issuer, the life settlement provider or the owner. For the purposes of this subsection, "recklessly" means engaging in conduct in conscious and clearly unjustifiable disregard of a substantial likelihood of the existence of the relevant facts or risks, such disregard involving a gross deviation from acceptable standards of conduct. (15) A person may not facilitate the change of state of ownership of a policy or certificate or the state of residency of an owner to a state or jurisdiction that does not have a law similar to ORS 744.318 to 744.384, 744.991 and 744.992 for the express purposes of evading or avoiding the provisions of ORS 744.318 to 744.384, 744.991 and 744.992. (16) A person may not attempt to commit, assist, aid or abet in the commission of, or conspire to commit the acts or omissions specified in, this subsection. (17) A life settlement investment agent shall not have any contact, directly or indirectly, with the owner or insured under the policy or have knowledge of the identity of the owner or insured. [2009 c.711 15]
(1) This section applies to any advertising of life settlement contracts, life purchase agreements or related products or services intended for dissemination in this state, including Internet advertising viewed by persons located in this state. When disclosure requirements are established pursuant to federal regulation, this section is interpreted so as to minimize or eliminate conflict with federal regulation wherever possible. (2) Every licensee must establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its contracts, products and services. All advertisements, regardless of by whom written, created, designed or presented, is the responsibility of the licensees, as well as the individual who created or presented the advertisement. A system of control must include regular routine notification, at least once a year, to agents and others authorized by the licensee who disseminate advertisements, of the requirements of this section and the requirements adopted by the Director of the Department of Consumer and Business Services in the use of any advertisements not furnished by the licensee. (3) Advertisements must be truthful and not misleading in fact or by implication. The form and content of an advertisement of a life settlement contract or life settlement purchase agreement must be sufficiently complete and clear so as to avoid deception. It may not have the capacity or tendency to mislead or deceive. (4) An advertisement may not use the name or title of a life insurance company or a life insurance policy unless the named company or policy-holder consents to the usage in a form prescribed by the director. (5) An advertisement may not represent that premium payments will not be required to be paid on the life insurance policy that is the subject of a life settlement contract or life settlement purchase agreement in order to maintain that policy, unless that is the fact. (6) An advertisement may not state or imply that a life settlement contract or life settlement purchase agreement, benefit or service has been approved or endorsed by a group of individuals, society, association or other organization unless that is the fact and unless any relationship between an organization and the licensee is disclosed. If the entity making the endorsement or testimonial is owned, controlled or managed by the licensee, or receives any payment or other consideration from the licensee for making an endorsement or testimonial, that fact must be disclosed in the advertisement. (7) When an endorsement refers to benefits received under a life settlement contract or life settlement purchase agreement, all pertinent information must be retained for a period of five years after its use. (8) An advertisement may not contain statistical information unless it accurately reflects recent and relevant facts. The source of all statistics used in an advertisement must be identified. (9) An advertisement may not directly or indirectly create the impression that any division or agency of this state or of the United States government endorses, approves or favors: (a) Any licensee or its business practices or methods of operation; (b) The merits, desirability or advisability of any life settlement contract or life settlement purchase agreement; (c) Any life settlement contract or life settlement purchase agreement; or (d) Any life insurance policy or life insurance company. (10) The director may adopt rules to implement this section. [2009 c.711 16]
(1) A person may not knowingly or intentionally interfere with the enforcement of the provisions of ORS 744.318 to 744.384, 744.991 and 744.992 or investigations of suspected or actual violations of ORS 744.318 to 744.384, 744.991 and 744.992. (2) A person in the business of life settlements may not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of life settlements. (3) Life settlements contracts and purchase agreement forms and applications for life settlements, regardless of the form of transmission, must contain the following statement or a substantially similar statement: "Any person who knowingly presents false information in this application is guilty of a crime and may be subject to fines and confinement in prison." (4) The lack of a statement as required in subsection (3) of this section does not constitute a defense in any investigation or prosecution for an act violating any provision of ORS 744.318 to 744.384, 744.991 and 744.992. (5) Any person engaged in the business of life settlements having knowledge or a reasonable suspicion that a fraudulent life settlement act is being, will be or has been committed must provide to the Director of the Department of Consumer and Business Services information as required by, and in a manner prescribed by, the director. (6) Any other person having knowledge or a reasonable belief that a fraudulent life settlement act is being, will be or has been committed may provide to the director the information required by, and in a manner prescribed by, the director. (7)(a) No civil liability is imposed on and no cause of action arises from a persons furnishing information concerning suspected, anticipated or completed fraudulent life settlement acts or suspected or completed fraudulent insurance acts, if the information is provided to or received from: (A) The director or the directors employees, agents or representatives; (B) Federal, state or local law enforcement or regulatory officials or their employees, agents or representatives; (C) A person involved in the prevention and detection of fraudulent life settlement acts or that persons agents, employees or representatives; (D) The National Association of Insurance Commissioners, the Financial Industry Regulatory Authority or the North American Securities Administrators Association, or their employees, agents or representatives, or any other regulatory body overseeing life insurance, life settlements, securities or investment fraud; or (E) The life insurer that issued the life insurance policy covering the life of the insured. (b) Paragraph (a) of this subsection shall not apply to statements made with actual malice. In an action brought against a person for filing a report or furnishing other information concerning a fraudulent life settlement act, the party bringing the action must plead specifically any allegation that paragraph (a) of this subsection does not apply because the person filing the report or furnishing the information did so with actual malice. (c) A person furnishing information as identified in paragraph (a) of this subsection is entitled to an award of attorney fees and costs if the person is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of ORS 744.318 to 744.384, 744.991 and 744.992 and the party bringing the action was not substantially justified in doing so. For purposes of this paragraph, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated. However, such an award does not apply to a person furnishing information concerning the persons own fraudulent life settlement acts. (d) This section does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person described in paragraph (a) of this subsection. (8) The documents and evidence obtained by the director in an investigation of suspected or actual fraudulent life settlement acts are privileged and confidential under ORS 705.137. (9) This section does not: (a) Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine and prosecute suspected violations of law; (b) Prevent or prohibit a person from disclosing voluntarily information concerning life settlement fraud to a law enforcement or regulatory agency other than the Department of Consumer and Business Services; or (c) Limit the powers granted elsewhere by the laws of this state to the director or any other state department or agency to investigate and examine possible violations of law and to take appropriate action against wrongdoers. (10)(a) Life settlement providers and life settlement brokers must have in place antifraud initiatives reasonably calculated to detect, prosecute and prevent fraudulent life settlement acts. At the discretion of the director, the director may order, or a licensee may request and the director may grant, such modifications of the required initiatives described in paragraph (b) of this subsection as necessary to ensure an effective antifraud program. The modifications may be more or less restrictive than the required initiatives as long as the modifications may reasonably be expected to accomplish the purpose of this section. (b) Antifraud initiatives must include: (A) Fraud investigators, who may be life settlement provider or life settlement broker employees or independent contractors; and (B) An antifraud plan, which must be submitted to the director. The antifraud plan must include, but is not limited to: (i) A description of the procedures for detecting and investigating possible fraudulent life settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications; (ii) A description of the procedures for reporting possible fraudulent life settlement acts to the director; (iii) A description of the plan for antifraud education and training of underwriters and other personnel; and (iv) A description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for investigating and reporting possible fraudulent life settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications. (c) Antifraud plans submitted to the director are privileged and confidential under ORS 705.137. [2009 c.711 17]
(1) A licensee may not pay or offer to pay a finders fee, commission or other compensation to a person described in this subsection, in connection with a policy insuring the life of an individual with a terminal illness or condition. The prohibition under this subsection applies with respect to payments or offers of payment to: (a) The physician, naturopathic physician, attorney or accountant of the policyholder, of the certificate holder or of the insured individual when the individual is other than the policyholder or certificate holder. (b) Any person other than a physician, naturopathic physician, attorney or accountant described in paragraph (a) of this subsection, who provides medical, legal or financial planning services to the policyholder, to the certificate holder or to the insured individual when the individual is other than the policyholder or certificate holder. (c) Any person other than one described in paragraph (a) or (b) of this subsection who acts as an agent of the policyholder, certificate holder or insured individual. (2) A licensee may not solicit an investor who could influence the treatment of the illness or condition of the individual whose life would be the subject of a life settlement contract. (3) All information solicited or obtained from a policyholder or certificate holder by a licensee is subject to ORS 746.600 to 746.690. For purposes of this subsection, a licensee is considered an insurance-support organization within the meaning of ORS 746.600. (4) A licensee may not discriminate in the making of a life settlement contract on the basis of race, religion, creed, sex, sexual orientation, gender identity, national origin, marital status, age, familial status or occupation or discriminate between persons who have dependents and persons who do not have dependents. [Formerly 744.353; 2017 c.356 100; 2021 c.367 48]
The Director of the Department of Consumer and Business Services may adopt rules for the purpose of carrying out ORS 744.318 to 744.384, 744.991 and 744.992. In addition: (1) The director may establish standards for evaluating reasonableness of payments under life settlement contracts for persons who are terminally ill or chronically ill. The authority includes but is not limited to regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise or bequest of a benefit under a life insurance policy insuring the life of a person who is terminally ill or chronically ill. For the purpose of the standards, the director shall consider payments made in regional and national life settlement markets, to the extent such information is available, as well as model standards developed by the National Association of Insurance Commissioners. (2) The director may establish trade practice standards by rule for the purpose of regulating advertising and solicitation of life settlement contracts. (3) The director may adopt rules governing the relationship and responsibilities of both insurers and life settlement providers, life settlement brokers and life settlement investment agents during the settlement of a life insurance policy or certificate. (4) The director may adopt rules governing disclosure by a life settlement provider or broker to an insured of the tax implications and effect on life insurance capacity of a life settlement. (5) The director may adopt rules governing the confidentiality of an insureds personal financial or medical information provided to a life settlement broker, life settlement provider or life settlement investment agent. [Formerly 744.358]
[Amended by 1955 c.226 2; 1963 c.463 3; 1967 c.359 503; renumbered 743.672]
[Amended by 1967 c.359 504; renumbered 743.675]
[Amended by 1967 c.359 505; renumbered 743.678]
[Amended by 1967 c.359 506; renumbered 743.681]
As used in ORS 744.502 to 744.584: (1) "Adjuster" means a person that receives a fee, a commission or other compensation to investigate, negotiate or settle first party or third party losses that arise as claims under the terms of an insurance contract that insures a domestic risk. (2) "Business entity" means a corporation, limited liability company, partnership, limited liability partnership, association or other legal entity that is incorporated, organized or authorized to engage in business in this state. (3) "Catastrophe" means an event that the Governor declares as having resulted, in a particular district, county, region or area of this state, in: (a) A large number of injuries or deaths; (b) Extensive damage to or destruction of facilities that provide for and sustain human needs; (c) An overwhelming demand on state and local resources for meeting human needs, responding to injuries or deaths, repairing or reconstructing facilities or otherwise assisting victims of the event; (d) A severe, long-term effect on general economic activity within this state; or (e) A severe effect on state, local and private capabilities to respond to the event. (4) "Designated home state" means a state, district or territory of the United States that a nonresident applicant designates as a home state and in which the nonresident applicant is licensed as if the nonresident applicant was a resident adjuster despite not residing in or maintaining a principal place of business in the state, district or territory. (5) "Home state" means a state, district or territory of the United States in which an adjuster resides or a state, district or territory of the United States from which a person obtained a license to engage in business as an adjuster and in which the person maintains a principal place of business. (6) "Licensee" means a person that holds a valid and unexpired license to engage in business as an adjuster that the person obtained under ORS 744.521. (7) "Person" means an individual or a business entity. (8) "Resident" means a licensee that resides or maintains a principal place of business in this state. [2019 c.151 4]
Except as provided in ORS 744.515, a person may not engage in business as an adjuster unless the person has obtained a license to engage in business as an adjuster under ORS 744.521. [Formerly 736.485; 1983 c.76 10; 1987 c.774 139; 1989 c.413 14; 1989 c.701 43; 1991 c.810 12; 2019 c.151 24]
(1) As used in this section: (a) "Automated claims adjudication system" means a preprogrammed computer system that a licensee or licensed insurance producer, or a person under a licensees or licensed insurance producers supervision, uses to collect, enter data concerning, calculate and finally resolve a portable electronics insurance claim and that complies with all requirements of the Insurance Code. (b)(A) "Portable electronics insurance" means insurance that covers repairing or replacing a portable electronic device or accessories and services related to using a portable electronic device upon a loss, theft, mechanical failure, malfunction, damage or other peril. (B) "Portable electronics insurance" does not include: (i) A service contract, as described in ORS 646A.154, that is subject to the provisions of ORS 646A.150 to 646A.172; (ii) A warranty; (iii) A maintenance agreement, as defined in ORS 646A.152; or (iv) Insurance that covers a vendors or manufacturers obligations under a warranty. (2) The requirement under ORS 744.505 to obtain a license to engage in business as an adjuster does not apply: (a) To a licensed resident insurance producer or a person that an authorized insurer employs and authorizes in writing to adjust losses under the insurers policies that insure domestic risks; (b) For a period during which a person adjusts one loss before obtaining the license, if the person applies for the license within two days after beginning the adjustment and in all other respects complies with the provisions of this chapter that govern adjusters; (c) To a person that obtains and holds a temporary permit under ORS 744.555, if the person obtains the permit within five days after a deployment to adjust claims that arise from a declared catastrophe and the person performs only actions that are authorized under ORS 744.555; (d) To an average adjuster or adjuster of maritime losses when adjusting maritime losses; (e) To an individual who performs or provides repair or replacement services under home protection insurance; (f) To an individual who collects or provides claim information from or to an insured or claimant and who enters data into an automated claims adjudication system, if a licensee or an affiliate of a licensee employs the individual and does not supervise or allow an insurance producer to supervise more than 25 individuals who collect or provide claim information and enter data into an automated claims adjudication system; (g) To an insurance producer during a period in which the insurance producer supervises an individual described in paragraph (f) of this subsection; (h) To a person that provides, without compensation, an estimate, investigation or report by or on behalf of a principal; (i) To a person that provides to an insurer or an insured a valuation or estimate that is not connected to a claim; (j) To a person that provides, without compensation, an estimate for repairs that the person will perform, even if the person receives compensation for the repairs under the claim; or (k) To an attorney-at-law that renders services while performing duties as an attorney-at-law. [1967 c.359 560; 1971 c.231 33; 1981 c.247 19; 1983 c.76 11; 1989 c.701 44; 2003 c.364 122; 2011 c.408 1; 2019 c.151 25]
(1) An applicant for a license to engage in business as an adjuster shall submit to the Director of the Department of Consumer and Business Services, on a form, in a format and in the manner that the director specifies by rule, an application that: (a) Lists the applicants name, residence and business address, present occupation and occupation during the previous year and the names of the applicants employers for the previous five years; (b) Lists the street address of the applicants principal place of business and of all other locations in which the applicant will engage in business as an adjuster; (c) Lists any assumed business name under which the applicant intends to engage in business as an adjuster; (d) Discloses whether the applicant: (A) Is under indictment for, or has previously been convicted of, a crime; (B) Is or was subject to a judgment for fraud; (C) Owes a debt to any insurer or insurance producer, together with the nature and details of the indebtedness; and (D) Has had any occupational or professional license the applicant holds or held in this or another state suspended or revoked or has had a renewal of the license denied; (e) Includes the applicants fingerprints, unless the applicant submitted the applicants fingerprints to another state as part of a successful application for a license to engage in business as an adjuster in the other state; (f) Identifies the class or classes of insurance that the applicant intends to transact in this state; and (g) Includes any other information the director requires by rule. (2) An applicant that is a business entity, in addition to providing the information specified in subsection (1) of this section in an application for a license to engage in business as an adjuster, shall: (a) List the names and addresses of each director, member and officer, and any person that owns, directly or indirectly, more than 10 percent of any class of equity security of the business entity; and (b) Designate each individual who is responsible for ensuring that the business entity complies with the Insurance Code and all administrative rules that regulate insurance in this state and who will otherwise exercise the powers that the license confers on the licensee. (3) The applicant shall pay to the Director of the Department of Business Services as part of an application under this section a fee in an amount that the director specifies by rule. Unless the director by rule specifies otherwise, the fee is not refundable. [2019 c.151 5]
(1) The Director of the Department of Consumer and Business Services may issue a license for a person to engage in business as an adjuster in this state if the director finds that the person: (a) Submitted a complete and accurate application in accordance with ORS 744.518; (b) Paid all required fees to the director and to any other provider or entity the director specifies by rule; (c) Met the qualifications set forth in ORS 744.525 or 744.528, as appropriate; (d) Met the qualifications for each category of insurance business and class of insurance that the license will authorize the applicant to adjust; and (e) Has not engaged in conduct that would subject the person to discipline under ORS 744.584. (2)(a) The director may renew a license the director issues under this section if the licensee: (A) Pays all fees the director by rule requires for the renewal; (B) Demonstrates, if the licensee is an individual, that the licensee has satisfactorily completed a minimum of 24 hours of continuing education courses, including continuing education courses required for any other insurance license in this state, of which three hours must consist of instruction in ethics and three hours must consist of instruction in Oregon law or in continuing education subjects that the licensees home state requires; (C) Proves to the director that the licensee continues to hold a valid license or other evidence of an authorization to engage in each category of insurance business and class of insurance authorized in the license that the licensee intends to renew, if the licensee is not a resident; (D) Has not engaged in any conduct that would subject the licensee to discipline under ORS 744.584; and (E) Satisfies any other requirement the director by rule establishes for renewing a license under this subsection. (b) The director may renew a license that has expired within one year after the expiration date if: (A) The director did not revoke the former licensees license or did not refuse to renew the license for failing the condition stated in paragraph (a)(D) of this subsection; (B) The director determines, by examination or otherwise, that the former licensee knows the portions of the Insurance Code that apply to a licensee; (C) The former licensee pays double the amount of the fee the director has specified in accordance with paragraph (a)(A) of this subsection; and (D) The former licensee otherwise satisfies all applicable requirements for renewal. (c) A former licensee may renew a license that has expired during a period of suspension as provided in paragraph (b) of this subsection. (d) A person that does not renew a license as provided in paragraph (a) or (b) of this subsection may obtain a license only as provided in subsection (1) of this section. (3) The director may amend a license to add a category of insurance business or a class or classes of insurance if the licensee applies for the amendment in accordance with procedures the director specifies by rule. The director may require a licensee that applies for an amendment to the license to follow the application procedures set forth in ORS 744.518. (4) A license that the director issues or renews under this section shall specify whether the licensee is a resident or a nonresident and the class or classes of insurance, as described in ORS 744.531, under which the licensee may engage in business as an adjuster. (5)(a) A license that the director issues under subsection (1) of this section expires on the last day of the month in which the anniversary of the date on which the director issued the license occurs, unless the director specifies a different date by rule or order. (b) A license that the director renews as provided in subsection (2) of this section expires two years after the renewal date, unless the director specifies a different date by rule or order. (c) Adding a category of insurance business to a license under subsection (3) of this section does not change the expiration date for the license. (6) The director may reinstate a licensees license under the following circumstances: (a) If the director revoked the license, removed a category of insurance business or removed a class of insurance, the director may reinstate the license, category or class if the licensee satisfies all of the conditions that the director prescribes for reinstatement; and (b) If a licensee has voluntarily surrendered a license, the director may reinstate the license without requiring the former licensee to take an examination otherwise required for the license if the former licensee applies for the license as provided in ORS 744.518 within two years after surrendering the previous license and demonstrates that the former licensee has satisfied any continuing education requirements that would have applied had the former licensee renewed the previous license. (7) If the director has suspended a license, the director may modify or lift the suspension at a time certain or upon the licensees satisfying the conditions the director prescribes for modifying or lifting the suspension. [2019 c.151 6]
(1) The Director of the Department of Consumer and Business Services may issue, renew or amend a business entitys license to engage in business as an adjuster under ORS 744.521 only if the director finds that, for each category of insurance business or class of insurance in which the business entity engages or intends to engage, the business entity employs and acts through an individual who has obtained a license under ORS 744.521 that authorizes the individual to engage in the same category of insurance business or class of insurance. (2) An individual licensee that a business entity employs or engages by means of a contract may engage in business as an adjuster only to the extent permitted under the individual licensees license. [2019 c.151 7]
(1) An individual who applies for a license to engage in business as a resident adjuster must: (a) Establish a residence or place of business in which the applicant intends to transact insurance in this state before submitting an application; (b) Pass an examination that the Director of the Department of Consumer and Business Services by rule recognizes as adequately testing the applicants qualifications, competence and knowledge of the categories of insurance business and classes of insurance that the applicant intends to transact under a license and the applicants knowledge of an adjusters duties and responsibilities under the Insurance Code and other laws of this state; (c) Be trustworthy and reliable and have a good reputation, evidence of which the director will evaluate; and (d) Be 18 years of age or older at the time the applicant becomes a licensee. (2) A business entity that applies for a license to engage in business as a resident adjuster must: (a) Establish an office in this state that employs a licensee; and (b) Employ or act under the direction of owners or officers who are trustworthy and reliable and have good reputations, evidence of which the director will evaluate. (3) In addition to the requirements set forth in subsection (1) or (2) of this section, as appropriate, an applicant must satisfy any other requirement the director specifies by rule. (4) The director may agree or contract with another jurisdiction, regulatory body, private vendor or other person to administer any required examinations and to collect fingerprints, documentation and any fees that an applicant or licensee submits under ORS 744.518 or 744.521 and that the director by rule specifies that the jurisdiction, regulatory body, vendor or person may collect. [1967 c.359 561; 1971 c.231 34; 1973 c.827 81; 1983 c.76 12; 1989 c.701 45; 2019 c.151 26]
(1) The Director of the Department of Consumer and Business Services may issue a license to engage in business as an adjuster in this state to a person who resides in another state or a province of Canada and is licensed as an adjuster in the state or province or in a designated home state if the state, province or designated home state in which the person is licensed gives the same privilege to a resident adjuster. (2) An applicant for a license to engage in business as a nonresident adjuster must: (a) Apply for the license as provided in ORS 744.518; and (b) Pass an examination that the director by rule recognizes as adequately testing the applicants qualifications, competence and knowledge of the categories of insurance business and classes of insurance that the applicant intends to transact under a license and the applicants knowledge of an adjusters duties and responsibilities under the Insurance Code and other laws of this state, if the applicant is an individual and has not passed an examination with respect to a category of insurance business or class of insurance that the applicant intends to transact in this state. [1989 c.701 46; 1991 c.810 13; 2019 c.151 27]
The classes of insurance that the Director of the Department of Consumer and Business Services may authorize a licensee to transact under a license to engage in business as an adjuster are: (1) Property and casualty insurance. Under this class, in addition to property and casualty insurance, an adjuster may also adjust losses with respect to marine and transportation and surety insurance. (2) Health insurance, whether provided by an insurer or a health care service contractor, as defined in ORS 750.005. (3) Any class of insurance the director specifies by rule. [1989 c.701 47; 2003 c.802 170; 2019 c.151 28] Note: 744.531 was made a part of 744.502 to 744.584 by legislative action but was not added to ORS chapter 744. See Preface to Oregon Revised Statutes for further explanation.
(1) A nonresident adjuster may not engage in business as an adjuster in this state if the adjuster no longer holds a valid license as an adjuster in the state, province or designated home state in which the adjuster was licensed. If the adjusters license in the state, province or designated home state in which the adjuster was licensed is reinstated and has not expired, the adjuster may apply to the Director of the Department of Consumer and Business Services for reinstatement as a licensee. (2) A nonresident adjuster who establishes residence in this state may not transact business as an adjuster in this state under a nonresident license after the 90th day after the adjuster establishes the residence. An adjuster who is a resident may thereafter engage in business as an adjuster in this state only after becoming a resident licensee. (3) A nonresident adjuster who changes residence to another state or to a province shall notify the director not later than 30 days after the change. [1989 c.701 49; 1995 c.639 6; 2019 c.151 29]
An adjuster may adjust a loss claimed under an insurance policy issued by an unauthorized insurer other than a surplus line insurer. The adjuster shall notify the Director of the Department of Consumer and Business Services thereof not later than the 20th day after adjusting the loss. [1989 c.701 50]
(1)(a) To facilitate the settlement of claims under insurance policies when there is widespread property loss in this state arising out of a catastrophe, the Director of the Department of Consumer and Business Services may issue a temporary permit to engage in business as an adjuster in this state to any person authorized in another state to adjust losses claimed under insurance policies in the catastrophe area for or against an authorized insurer. A temporary permit the director issues under this section is effective for 90 days or for such additional time as the director determines is necessary. A person may engage in business as an adjuster under the permit in lieu of the license and fee requirements otherwise applicable. (b) The director may also issue a temporary permit to a person that is licensed or otherwise authorized to engage in business as an adjuster in the persons home state or designated home state and that an authorized insurer or insured sends to this state to investigate or adjust a particular loss claimed under an insurance policy. (2) A person may apply for a temporary permit by submitting an application to the director on a form, in a format and in the manner the director specifies by rule. The application, at a minimum, must list the applicants name and address and the state in which the applicant is licensed or otherwise authorized to engage in business as an adjuster. [Formerly 736.490; 1989 c.701 51; 2019 c.151 30]
No plan or arrangement shall be used with respect to credit life or credit health insurance whereby any person other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims, except that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer. [Formerly 741.455; 1989 c.701 52]
(1)(a) A licensee that is a resident shall maintain a principal place of business in this state in which the licensee engages in business as an adjuster. The principal place of business may be the licensees residence, but the principal place of business must be accessible to the public. (b) If a licensee that is not a resident has a place of business in this state in which the licensee transacts insurance, the place of business is the licensees principal place of business in this state. (2) A licensee shall keep at the licensees place of business all of the usual and customary records for the business in which the licensee engages and must make the records available to the Director of the Department of Consumer and Business Services for inspection during business hours. The licensee shall keep the records of each business transaction for three years after the conclusion of the transaction. [2019 c.151 8]
(1)(a) A licensee shall notify the Director of the Department of Consumer and Business Services not later than 30 days after: (A) The licensee opens or closes a place of business in this state or changes the location or contact information for the licensees residence or any of the licensees places of business in this state; (B) The licensee begins or stops using or changes an assumed business name under which the licensee engages in business as an adjuster; (C) A government agency or regulator in this or another state has taken a final action against the licensee; (D) The licensee receives notice of an initiation or prosecution of criminal charges against the licensee in any United States jurisdiction for any felony or a misdemeanor that involves fraud, dishonesty or a breach of trust; or (E) The licensees authority to act for a business entity begins or terminates. (b) In the notice a licensee submits under paragraph (a) of this subsection, the licensee shall: (A) Update any information that has changed from the time the licensee submitted an application for a license or submitted a previous notice under this section; and (B) Include any relevant documents that describe, support, are evidence of or otherwise illustrate the contents of the notice, including but not limited to copies of complaints, informations or indictments, motions, orders, consents and consent decrees, judgments and any other relevant records or legal documents. (2) Not later than December 31 of each year, a licensee that is a business entity shall notify the director of any change during the previous calendar year in the licensees directors, members or officers, or other persons that own, directly or indirectly, more than 10 percent of any class of equity security of the licensee. (3) The director by rule may establish a different period within which a licensee must notify the director under subsection (1) or (2) of this section. [2019 c.151 9]
(1) A licensee or an applicant for a license to engage in business as an adjuster may not: (a) Act in an incompetent or untrustworthy manner. (b) Falsify or act dishonestly with respect to an application for a license or an amendment to the license or with respect to an examination related to obtaining, renewing or reinstating a license. (c) Misappropriate, withhold illegally or convert to the applicants or licensees own use any money or property that belongs to or that the applicant or licensee receives from a policyholder, insurer, beneficiary or other person while the applicant or licensee engages in business as an adjuster or otherwise transacts insurance in this state. (d) Commit an offense that results in a conviction in any United States jurisdiction for any felony or a misdemeanor that involves fraud, dishonesty or a breach of trust. For the purpose of this paragraph, the record of a conviction is conclusive evidence of the conviction. (e) Materially misrepresent the terms of an insurance policy or proposed insurance policy. (f) Engage in a fraudulent or dishonest practice in the course of transacting insurance or cause injury or loss to the public because the applicant or licensee is incompetent or untrustworthy. (g) Fail to pay a fee or charge or a civil penalty that the Director of the Department of Consumer and Business Services has assessed and that has become final after appeal or by operation of law. (h) Effect insurance on the applicants or licensees property or against the applicants or licensees liability. (i) Commit an act that results in another jurisdictions canceling, suspending, revoking or refusing to renew a license or other evidence of authority to act as an adjuster, an insurance consultant or an insurance producer. For the purpose of this paragraph, the record of the cancellation, suspension, revocation or refusal is conclusive evidence of the cancellation, suspension, revocation or refusal. (j) Commit an act that results in a state or federal agency canceling, suspending, revoking or refusing to renew a license to practice law or a license that authorizes the applicant or licensee to engage in business under another regulatory authority if the cancellation, suspension, revocation or refusal related to the business of an adjuster, insurance consultant or insurance producer or if the act involved dishonesty, fraud or deception. For the purpose of this paragraph, the record of the cancellation, suspension, revocation or refusal is conclusive evidence of the cancellation, suspension, revocation or refusal. (k) Fail to comply with continuing education requirements that apply to the license or to a category of insurance business or class of insurance, unless the director has waived the requirements. (L) Act dishonestly, fraudulently or deceptively in a business that is not related to engaging in business as an adjuster, an insurance consultant or an insurance producer. (m) Fail to comply with an administrative or court order that imposes a child support obligation. (n) Fail to pay state income tax or to comply with an administrative or court order that directs the applicant or licensee to pay state income tax that remains unpaid. (o) Evade a provision of ORS chapter 746 or violate or fail to comply with an applicable provision of the Insurance Code. (2)(a) If a licensee or an applicant for a license to engage in business as an adjuster engages in an action or practice prohibited under subsection (1) of this section, the director by order or otherwise may: (A) Refuse to issue a license to an applicant to engage in business as an adjuster; (B) Suspend, revoke or refuse to renew a licensees license; (C) Suspend or revoke a licensees authority to transact a category of insurance business or class of insurance; or (D) Refuse to authorize an applicant or licensee to transact a category of insurance business or class of insurance. (b) Before taking a disciplinary action against a licensee under paragraph (a) of this subsection, the director shall notify the licensee and offer the licensee an opportunity for a hearing in accordance with ORS chapter 183. (3) The Director of the Department of Consumer and Business Services may take a disciplinary action described in subsection (2) of this section if the director finds that: (a) A director, member or officer of a licensee that is a business entity, or another person that directly or indirectly has the power to direct the management, control or activities of the business entity, engaged in an action prohibited under subsection (1) of this section; or (b) The Director of the Department of Consumer and Business Services erred in approving, issuing, renewing or reinstating a license under ORS 744.521. (4)(a) For a violation of a prohibition described in subsection (1) of this section and in lieu of taking a disciplinary action against a licensee under subsection (2) of this section, the director may set a period of probation with respect to a license to engage in business as an adjuster or with respect to an authorization to engage in any category of insurance business or class of insurance. In setting the probationary period, the director shall specify conditions that a licensee must meet in order to end the probationary period. (b) The director may set the probationary period to begin at the time the director issues, renews, amends or reinstates a license or adds a category of insurance business or class of insurance to the license. (c) Before setting a period of probation for a licensee under paragraph (a) of this subsection, the director shall notify the licensee and offer the licensee an opportunity for a hearing in accordance with ORS chapter 183. (d) During any probationary period, the director may take any disciplinary action described in subsection (2) of this section. [2019 c.151 10]
As used in ORS 744.602 to 744.665: (1) "Business entity" means a corporation, limited liability company, partnership, limited liability partnership, association or other legal entity that is incorporated, organized or authorized to engage in business in this state. (2) "Insurance consultant" means a person that meets the description in ORS 744.605 of a person that engages in business as an insurance consultant. (3) "Licensee" means a person that holds a valid and unexpired license to engage in business as an insurance consultant that the person obtained under ORS 744.614. (4) "Person" means an individual or a business entity. (5) "Resident" means a licensee that resides or maintains a principal place of business in this state. [2019 c.151 11]
(1) A person may not engage in business as an insurance consultant unless the person holds a valid license the Director of the Department of Consumer and Business Services issues under ORS 744.614 that authorizes the person to engage in business as an insurance consultant. For purposes of this section, a person engages in business as an insurance consultant if: (a) The person purports or offers to engage in any of the activities described in paragraph (b) of this subsection by using, in conjunction with the persons name, the title or designation of insurance planner, consultant, adviser or counselor, or financial and insurance planner, consultant, adviser or counselor, or any similar title or designation; or (b) The person, for compensation other than commission from the sale of insurance, engages, attempts to engage or offers to engage in any of the following activities: (A) Acting as a consultant regarding insurance. (B) Giving advice, counsel, opinion or service with respect to the benefits, advantages or disadvantages of insurance that may be issued in this state. (C) In any other manner providing information about insurance. (2) For the purposes of subsection (1)(b) of this section, compensation includes consideration paid for financial and other related services the person provides in connection with services referred to in subsection (1)(b) of this section. [1985 c.697 2; 1989 c.701 53; 1991 c.810 15; 1997 c.419 1; 2019 c.151 31]
The following persons are not insurance consultants for the purposes of this chapter, and the prohibition in ORS 744.605 does not apply to them: (1) Any attorney-at-law rendering services in the performance of duties of an attorney-at-law. (2) Any certified public accountant or public accountant rendering services in the performance of the duties of a certified public accountant or public accountant, as authorized by law. (3) Any person who, while conducting an educational seminar, performs any of the activities described in ORS 744.605 (1)(b). (4) Any financial institution, as defined in ORS 706.008, or consumer finance licensee under ORS chapter 725. (5) Any actuary who is a member of an organization determined by the Director of the Department of Consumer and Business Services as establishing standards for the actuarial profession. (6) A person who provides or offers or purports to provide any of the services described in ORS 744.605 only to an insurance producer or an authorized insurer. [1985 c.697 3; 1989 c.701 54; 1991 c.810 16; 1997 c.419 2; 1999 c.59 228; 2003 c.364 123]
(1) An applicant for a license to engage in business as an insurance consultant shall submit to the Director of the Department of Consumer and Business Services, on a form, in a format and in the manner that the director specifies by rule, an application that: (a) Lists the applicants name, residence and business address, previous experience transacting insurance, present occupation and occupation during the previous year and the names of the applicants employers for the previous five years; (b) Lists the street address of the applicants principal place of business and of all other locations in which the applicant will engage in business as an insurance consultant; (c) Lists any assumed business name under which the applicant intends to engage in business as an insurance consultant; (d) Specifies the portion of the applicants time that the applicant will devote to engaging in business as an insurance consultant; (e) Discloses whether the applicant: (A) Is under indictment for, or has previously been convicted of, a crime; (B) Is or was subject to a judgment for fraud; (C) Owes a debt to any insurer or insurance producer, together with the nature and details of the indebtedness; and (D) Has had any occupational or professional license the applicant holds or held in this or another state suspended or revoked or has had a renewal of the license denied; (f) Includes the applicants fingerprints, unless the applicant submitted the applicants fingerprints to another state as part of a successful application for a license to engage in business as an insurance consultant in the other state; (g) Identifies the class or classes of insurance that the applicant intends to transact in this state; and (h) Includes any other information the director requires by rule. (2) An applicant that is a business entity, in addition to providing the information specified in subsection (1) of this section in an application for a license to engage in business as an insurance consultant, shall: (a) List the names and addresses of each director, member and officer, and any person that owns, directly or indirectly, more than 10 percent of any class of equity security of the business entity; and (b) Designate each individual who is responsible for ensuring that the business entity complies with the Insurance Code and all administrative rules that regulate insurance in this state and who will otherwise exercise the powers that the license confers on the licensee. (3) The applicant shall pay to the Director of the Department of Consumer and Business Services as part of an application under this section a fee in an amount that the director specifies by rule. Unless the director by rule specifies otherwise, the fee is not refundable. [2019 c.151 12]
(1) The Director of the Department of Consumer and Business Services may issue a license for a person to engage in business as an insurance consultant in this state if the director finds that the person: (a) Submitted a complete and accurate application in accordance with ORS 744.611; (b) Paid all required fees to the director and to any other provider or entity the director specifies by rule; (c) Met the qualifications set forth in ORS 744.619 or 744.621, as appropriate; (d) Met the qualifications for each category of insurance business and class of insurance that the license will authorize the applicant to transact; and (e) Has not engaged in conduct that would subject the person to discipline under ORS 744.644. (2)(a) The director may renew a license the director issues under this section if the licensee: (A) Pays all fees the director by rule requires for the renewal; (B) Demonstrates, if the licensee is an individual, that the licensee has satisfactorily completed the number of continuing education hours in subjects that the director specifies by rule; (C) Proves to the director that the licensee continues to hold a valid license or other evidence of an authorization to engage in each category of insurance business and class of insurance authorized in the license that the licensee intends to renew, if the licensee is not a resident; (D) Provides satisfactory evidence that the licensee has in effect the insurance required under ORS 744.635; (E) Has not engaged in any conduct that would subject the licensee to discipline under ORS 744.644; and (F) Satisfies any other requirement the director by rule establishes for renewing a license under this subsection. (b) The director may renew a license that has expired within one year after the expiration date if: (A) The director did not revoke the former licensees license or did not refuse to renew the license for failing the condition stated in paragraph (a)(E) of this subsection; (B) The director determines, by examination or otherwise, that the former licensee knows the portions of the Insurance Code that apply to a licensee; (C) The former licensee pays double the amount of the fee the director has specified in accordance with paragraph (a)(A) of this subsection; and (D) The former licensee otherwise satisfies all applicable requirements for renewal. (c) A former licensee may renew a license that has expired during a period of suspension as provided in paragraph (b) of this subsection. (d) A person that does not renew a license as provided in paragraph (a) or (b) of this subsection may obtain a license only as provided in subsection (1) of this section. (3) The director may amend a license to add a category of insurance business or a class or classes of insurance if the licensee applies for the amendment in accordance with procedures the director specifies by rule. The director may require a licensee that applies for an amendment to the license to follow the application procedures set forth in ORS 744.611. (4) A license that the director issues or renews under this section shall specify whether the licensee is a resident or a nonresident and the class or classes of insurance, as described in ORS 744.626, under which the licensee may engage in business as an insurance consultant. (5)(a) A license that the director issues under subsection (1) of this section expires on the last day of the month in which the anniversary of the date on which the director issued the license occurs, unless the director specifies a different date by rule or order. (b) A license that the director renews as provided in subsection (2) of this section expires two years after the renewal date, unless the director specifies a different date by rule or order. (c) Adding a category of insurance business to a license under subsection (3) of this section does not change the expiration date for the license. (6) The director may reinstate a licensees license under the following circumstances: (a) If the director revoked the license, removed a category of insurance business or removed a class of insurance, the director may reinstate the license, category or class if the licensee satisfies all of the conditions that the director prescribes for reinstatement; and (b) If a licensee has voluntarily surrendered a license, the director may reinstate the license without requiring the former licensee to take an examination otherwise required for the license if the former licensee applies for the license as provided in ORS 744.611 within two years after surrendering the previous license and demonstrates that the former licensee has satisfied any continuing education requirements that would have applied had the former licensee renewed the previous license. (7) If the director has suspended a license, the director may modify or lift the suspension at a time certain or upon the licensees satisfying the conditions the director prescribes for modifying or lifting the suspension. [2019 c.151 13]
(1) The Director of the Department of Consumer and Business Services may issue, renew or amend a business entitys license to engage in business as an insurance consultant under ORS 744.614 only if the director finds that, for each category of insurance business or class of insurance in which the business entity engages or intends to engage, the business entity employs and acts through an individual who has obtained a license under ORS 744.614 that authorizes the individual to engage in the same category of insurance business or class of insurance. (2) An individual licensee that a business entity employs or engages by means of a contract may engage in business as an insurance consultant only to the extent permitted under the individual licensees license. [2019 c.151 14]
(1) An individual who applies for a license to engage in business as a resident insurance consultant must: (a) Establish a residence or place of business in which the applicant intends to transact insurance in this state before submitting an application; (b) Have at least five years experience in the insurance business that relates to the categories of insurance business or classes of insurance that the applicant intends to transact under the license or have equivalent education or qualifications that the Director of the Department of Consumer and Business Services specifies by rule; (c) Provide satisfactory evidence to the director that the applicant has procured and has in effect the insurance required under ORS 744.635; and (d) Pass an examination that the director by rule recognizes as adequately testing the applicants qualifications, competence and knowledge of the categories of insurance business and classes of insurance that the applicant intends to transact under a license and the applicants knowledge of an insurance consultants duties and responsibilities under the Insurance Code and other laws of this state. The requirement in this paragraph does not apply to an insurance producer who holds a license to transact the categories of insurance business or classes of insurance that the insurance producer intends to transact as an insurance consultant. (2) A business entity that applies for a license to engage in business as a resident insurance consultant must establish an office in this state that is managed by an individual who is licensed as an insurance consultant. (3) In addition to the requirements set forth in subsection (1) or (2) of this section, as appropriate, an applicant must satisfy any other requirement the director specifies by rule. (4) The director may agree or contract with another jurisdiction, regulatory body, private vendor or other person to administer any required examinations and to collect fingerprints, documentation and any fees that an applicant or licensee submits under ORS 744.611 or 744.614 and that the director by rule specifies that the jurisdiction, regulatory body, vendor or person may collect. [1985 c.697 5; 1989 c.701 57; 1991 c.810 17; 2003 c.364 124; 2019 c.151 32]
(1) The Director of the Department of Consumer and Business Services may issue a license to engage in business as an insurance consultant to a person who resides in another state or province of Canada and is licensed in that state or province as an insurance consultant or is registered under a regulatory program of the other state or province that the director determines is similar to the regulatory program for insurance consultants under this chapter, if the state or province in which the person resides gives the same privilege to a resident insurance consultant. (2) An applicant for a license to engage in business as a nonresident insurance consultant shall apply for the license as provided in ORS 744.611 and must: (a) Have at least five years experience in the insurance business that relates to the categories of insurance business or classes of insurance that the applicant intends to transact under the license or have equivalent education or qualifications that the director specifies by rule; (b) Provide satisfactory evidence to the director that the applicant has procured and has in effect the insurance required under ORS 744.635; and (c) Pass an examination that the director by rule recognizes as adequately testing the applicants qualifications, competence and knowledge of the categories of insurance business and classes of insurance that the applicant intends to transact under a license and the applicants knowledge of an insurance consultants duties and responsibilities under the Insurance Code and other laws of this state. The requirement in this paragraph does not apply to an insurance producer who holds a license to transact the categories of insurance business or classes of insurance that the insurance producer intends to transact as an insurance consultant. (3) In addition to the requirements set forth in subsection (2) of this section, an applicant must satisfy any other requirement the director specifies by rule. [1989 c.701 58; 1991 c.810 18; 2003 c.364 125; 2019 c.151 33]
The classes of insurance that the Director of the Department of Consumer and Business Services may authorize a licensee to transact under a license to engage in business as an insurance consultant are: (1) Life insurance. (2) Health insurance. (3) Property and casualty insurance. Under this class, in addition to property and casualty insurance, an insurance consultant may also engage in business as an insurance consultant with respect to marine and transportation and surety insurance. (4) Any class of insurance the director specifies by rule. [1989 c.701 62; 2003 c.802 171; 2019 c.151 34] Note: 744.626 was made a part of 744.602 to 744.665 by legislative action but was not added to ORS chapter 744. See Preface to Oregon Revised Statutes for further explanation.
(1) A nonresident insurance consultant may not engage in business as an insurance consultant in this state if the insurance consultant no longer holds a valid license as an insurance consultant in the state or province in which the insurance consultant resides. If the insurance consultants license in the state in which the insurance consultant resides is reinstated and has not expired, the insurance consultant may apply to the Director of the Department of Consumer and Business Services for reinstatement as a licensee. (2) A nonresident insurance consultant who establishes residence in this state may not engage in business as an insurance consultant in this state under a nonresident license after the 30th day after the insurance consultant establishes the residence. An insurance consultant who is a resident may thereafter engage in business as an insurance consultant in this state only after becoming a resident licensee. (3) A nonresident insurance consultant who changes residence to another state or to a province shall notify the director not later than 30 days after the change. [1989 c.701 61; 1995 c.639 7; 2019 c.151 35]
(1) An insurance consultant shall maintain with the Director of the Department of Consumer and Business Services a current certificate of errors and omissions insurance in an amount established by the director by rule from an insurer authorized to do business in this state or from any other insurer acceptable to the director according to standards established by rule. (2) If the director determines that errors and omissions insurance required under this section is not generally available at a reasonable cost, the director by rule may suspend the requirement of insurance, but must reimpose the requirement when the insurance becomes available once again. [1985 c.697 8; 1989 c.701 63; 1991 c.331 131; 1991 c.810 19]
(1)(a) A licensee that is a resident shall maintain a principal place of business in this state in which the licensee engages in business as an insurance consultant. The principal place of business may be the licensees residence, but the principal place of business must be accessible to the public. (b) If a licensee that is not a resident has a place of business in this state in which the licensee transacts insurance, the place of business is the licensees principal place of business in this state. (2) A licensee shall keep at the licensees place of business all of the usual and customary records for the business in which the licensee engages and must make the records available to the Director of the Department of Consumer and Business Services for inspection during business hours. The licensee shall keep the records of each business transaction for three years after the conclusion of the transaction. [2019 c.151 15]
(1)(a) A licensee shall notify the Director of the Department of Consumer and Business Services not later than 30 days after: (A) The licensee opens or closes a place of business in this state or changes the location or contact information for the licensees residence or any of the licensees places of business in this state; (B) The licensee begins or stops using or changes an assumed business name under which the licensee engages in business as an insurance consultant; (C) A government agency or regulator in this or another state has taken a final action against the licensee; (D) The licensee receives notice of an initiation or prosecution of criminal charges against the licensee in any United States jurisdiction for any felony or a misdemeanor that involves fraud, dishonesty or a breach of trust; or (E) The licensees authority to act for a business entity begins or terminates. (b) In the notice a licensee submits under paragraph (a) of this subsection, the licensee shall: (A) Update any information that has changed from the time the licensee submitted an application for a license or submitted a previous notice under this section; and (B) Include any relevant documents that describe, support, are evidence of or otherwise illustrate the contents of the notice, including but not limited to copies of complaints, informations or indictments, motions, orders, consents and consent decrees, judgments and any other relevant records or legal documents. (2) Not later than December 31 of each year, a licensee that is a business entity shall notify the director of any change during the previous calendar year in the licensees directors, members or officers, or other persons that own, directly or indirectly, more than 10 percent of any class of equity security of the licensee. (3) The director by rule may establish a different period within which a licensee must notify the director under subsection (1) or (2) of this section. [2019 c.151 16]
(1) A licensee or an applicant for a license to engage in business as an insurance consultant may not: (a) Act in an incompetent or untrustworthy manner. (b) Falsify or act dishonestly with respect to an application for a license or an amendment to the license or with respect to an examination related to obtaining, renewing or reinstating a license. (c) Misappropriate, withhold illegally or convert to the applicants or licensees own use any money or property that belongs to or that the applicant or licensee receives from a policyholder, insurer, beneficiary or other person while the applicant or licensee engages in business as an insurance consultant or otherwise transacts insurance in this state. (d) Commit an offense that results in a conviction in any United States jurisdiction for any felony or a misdemeanor that involves fraud, dishonesty or a breach of trust. For the purpose of this paragraph, the record of a conviction is conclusive evidence of the conviction. (e) Materially misrepresent the terms of an insurance policy or proposed insurance policy. (f) Engage in a fraudulent or dishonest practice in the course of transacting insurance or cause injury or loss to the public because the applicant or licensee is incompetent or untrustworthy. (g) Fail to pay a fee or charge or a civil penalty that the Director of the Department of Consumer and Business Services has assessed and that has become final after appeal or by operation of law. (h) Effect insurance on the applicant or licensees property or against the applicants or licensees liability. (i) Commit an act that results in another jurisdictions canceling, suspending, revoking or refusing to renew a license or other evidence of authority to act as an adjuster, an insurance consultant or an insurance producer. For the purpose of this paragraph, the record of the cancellation, suspension, revocation or refusal is conclusive evidence of the cancellation, suspension, revocation or refusal. (j) Commit an act that results in a state or federal agency canceling, suspending, revoking or refusing to renew a license to practice law or a license that authorizes the applicant or licensee to engage in business under another regulatory authority if the cancellation, suspension, revocation or refusal related to the business of an adjuster, insurance consultant or insurance producer or if the act involved dishonesty, fraud or deception. For the purpose of this paragraph, the record of the cancellation, suspension, revocation or refusal is conclusive evidence of the cancellation, suspension, revocation or refusal. (k) Fail to comply with continuing education requirements that apply to the license or to a category of insurance business or class of insurance, unless the director has waived the requirements. (L) Act dishonestly, fraudulently or deceptively in a business that is not related to engaging in business as an adjuster, an insurance consultant or an insurance producer. (m) Fail to comply with an administrative or court order that imposes a child support obligation. (n) Fail to pay state income tax or to comply with an administrative or court order that directs the applicant or licensee to pay state income tax that remains unpaid. (o) Evade a provision of ORS chapter 746 or violate or fail to comply with an applicable provision of the Insurance Code. (2)(a) If a licensee or an applicant for a license to engage in business as an insurance consultant engages in an action or practice prohibited under subsection (1) of this section, the director by order or otherwise may: (A) Refuse to issue a license to an applicant to engage in business as an insurance consultant; (B) Suspend, revoke or refuse to renew a licensees license; (C) Suspend or revoke a licensees authority to transact a category of insurance business or class of insurance; or (D) Refuse to authorize an applicant or licensee to transact a category of insurance business or class of insurance. (b) Before taking a disciplinary action against a licensee under paragraph (a) of this subsection, the director shall notify the licensee and offer the licensee an opportunity for a hearing in accordance with ORS chapter 183. (3) The Director of the Department of Consumer and Business Services may take a disciplinary action described in subsection (2) of this section if the director finds that: (a) A director, member or officer of a licensee that is a business entity, or another person that directly or indirectly has the power to direct the management, control or activities of the business entity, engaged in an action prohibited under subsection (1) of this section; or (b) The Director of the Department of Consumer and Business Services erred in approving, issuing, renewing or reinstating a license under ORS 744.614. (4)(a) For a violation of a prohibition described in subsection (1) of this section and in lieu of taking a disciplinary action against a licensee under subsection (2) of this section, the director may set a period of probation with respect to a license to engage in business as an insurance consultant or with respect to an authorization to engage in any category of insurance business or class of insurance. In setting the probationary period, the director shall specify conditions that a licensee must meet in order to end the probationary period. (b) The director may set the probationary period to begin at the time the director issues, renews, amends or reinstates a license or adds a category of insurance business or class of insurance to the license. (c) Before setting a period of probation for a licensee under paragraph (a) of this subsection, the director shall notify the licensee and offer the licensee an opportunity for a hearing in accordance with ORS chapter 183. (d) During any probationary period, the director may take any disciplinary action described in subsection (2) of this section. [2019 c.151 17]
(1) An insurance consultant shall furnish to each client and prospective client a written disclosure statement containing the following information: (a) A description of the nature of the work to be performed by the insurance consultant. (b) The applicable occupational and educational background of the insurance consultant. (c) The area or areas of insurance in which the insurance consultant has particular expertise. (d) The fee schedule and any other expenses that the insurance consultant charges, and whether fees may be negotiated. (e) The name of any person, other than clients, that the insurance consultant represents. (f) Whether the insurance consultant will receive any commission or obtain any other compensation for services provided the client in addition to fees and other expenses paid by the client. (g) Any other information required by the Director of the Department of Consumer and Business Services by rule. (2) An insurance consultant shall disclose information required under this subsection to each client in the course of providing insurance consultant services to the client and before the insurance consultant makes any final insurance recommendation to the client. The insurance consultant shall disclose at least the following information as applicable to the line of insurance for which the insurance consultant is providing services: (a) Other business activities of the insurance consultant relating to financial planning. (b) The method of investment analysis and comparison used. (c) Assumptions contributing to insurance recommendations for the client. (d) Any other information required by the director by rule. (3) The director may establish additional disclosure requirements for licensees who are licensed both as insurance producers and insurance consultants. (4) The director may design the form of disclosure statement to be used under subsection (1) of this section. [1985 c.697 11; 1991 c.810 20; 2003 c.364 126]
An insurance consultant may not give or receive or offer to give or receive a rebate of all or a part of any fee or other expenses charged for services or any earnings, profit, dividends or other benefit accruing to the insurance consultant from the services provided by the insurance consultant. [1985 c.697 12; 1991 c.810 23]
The Director of the Department of Consumer and Business Services by rule may establish requirements for continuing education that each insurance consultant must satisfy as a condition for continuation of the license. [1985 c.697 14]
As used in ORS 744.700 to 744.740: (1) "Affiliate" of, or person "affiliated" with, a specific person means any person who directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, a specified person. (2) "Control" has the meaning given that term in ORS 732.548. (3) "Insurer" includes a health care service contractor, a multiple employer welfare arrangement or any other person providing a plan of insurance subject to state insurance regulation. "Insurer" does not include a bona fide employee benefit plan established by an employer or an employee organization, or both, for which the insurance laws of this state are preempted pursuant to the Employee Retirement Income Security Act of 1974. (4) "Underwrite" or "underwriting" includes the acceptance of employer or individual applications for coverage of individuals in accordance with the written rules of the insurer, the overall planning and coordinating of an insurance program and the ability to procure bonds and excess insurance. [1991 c.812 2]
(1) Subject to ORS 744.704, a person shall not transact business or purport or offer to transact business as a third party administrator in this state unless the person holds a third party administrator license issued by the Director of the Department of Consumer and Business Services. (2) For purposes of ORS 744.700 to 744.740, a person transacts or purports or offers to transact business as a third party administrator when the person directly or indirectly solicits or effects coverage of, underwrites, collects charges or premiums from, or adjusts or settles claims on, residents of this state or residents of another state from offices in this state, in connection with life insurance or health insurance coverage. (3) Nothing in ORS 744.700 to 744.740 exempts a third party administrator from any other applicable licensing requirement when the third party administrator performs the functions of an insurance producer, adjuster or insurance consultant. [1991 c.812 3; 2003 c.364 127]
(1) The following persons are exempt from the licensing requirement for third party administrators in ORS 744.702 and from all other provisions of ORS 744.700 to 744.740 applicable to third party administrators: (a) A person licensed under ORS 744.521 to engage in business as an adjuster, whose activities are limited to adjustment of claims and whose activities do not include the activities of a third party administrator. (b) A person licensed as an insurance producer as required by ORS 744.053 and authorized to transact life or health insurance in this state, whose activities are limited exclusively to the sale of insurance and whose activities do not include the activities of a third party administrator. (c) An employer acting as a third party administrator on behalf of: (A) The employers employees; (B) The employees of one or more subsidiary or affiliated corporations of the employer; or (C) The employees of one or more persons with a dealership, franchise, distributorship or other similar arrangement with the employers. (d) A union, or an affiliate thereof, acting as a third party administrator on behalf of the unions or the affiliates members. (e) An insurer that is authorized to transact insurance in this state with respect to a policy issued and delivered in and pursuant to the laws of this state or another state. (f) A creditor acting on behalf of the creditors debtors with respect to insurance covering a debt between the creditor and the creditors debtors. (g) A trust and the trustees, agents and employees of the trust, when acting pursuant to the trust, if the trust is established in conformity with 29 U.S.C. 186. (h) A trust exempt from taxation under section 501(a) of the Internal Revenue Code, the trusts trustees and employees acting pursuant to the trust, or a voluntary employees beneficiary association described in section 501(c) of the Internal Revenue Code, the associations agents and employees and a custodian and the custodians agents and employees acting pursuant to a custodian account meeting the requirements of section 401(f) of the Internal Revenue Code. (i) A financial institution that is subject to supervision or examination by federal or state financial institution regulatory authorities, or a mortgage lender, to the extent the financial institution or mortgage lender collects and remits premiums to licensed insurance producers or authorized insurers in connection with loan payments. (j) A company that issues credit cards and advances for and collects premiums or charges from the companys credit card holders who have authorized collection. The exemption under this paragraph applies only if the company does not adjust or settle claims. (k) A person who adjusts or settles claims in the normal course of practice or employment as an attorney at law. The exemption under this subsection applies only if the person does not collect charges or premiums in connection with life insurance or health insurance coverage. (L) A person who acts solely as an administrator of one or more bona fide employee benefit plans established by an employer or an employee organization, or both, for which the Insurance Code is preempted pursuant to the Employee Retirement Income Security Act of 1974. A person to whom this paragraph applies must comply with the requirements of ORS 744.714. (m) An entity or association owned by or composed of like employers who administer partially or fully self-insured plans for employees of the employers or association members. (n) A trust established by a cooperative body formed between cities, counties, districts or other political subdivisions of this state, or between any combination of such entities, and the trustees, agents and employees acting pursuant to the trust. (o) Any person designated by the Director of the Department of Consumer and Business Services by rule. (2) A third party administrator is not required to be licensed as a third party administrator in this state if the following conditions are met: (a) The third party administrator has its principal place of business in another state; (b) The third party administrator is not soliciting business as a third party administrator in this state; and (c) In the case of any group policy or plan of insurance serviced by the third party administrator, the lesser of five percent or 100 certificate holders reside in this state. [1991 c.812 4; 2001 c.191 40; 2003 c.364 128; 2013 c.698 31; 2019 c.151 36]
(1) In order to obtain a license to transact business as a third party administrator, an applicant shall apply for the license on a form prescribed by the Director of the Department of Consumer and Business Services, with payment of any fee required for the application. (2) The director may request biographical, organizational, locational, financial, employment and any other information on the application form that the director determines to be relevant to the evaluation of applications and to the granting of the license, including satisfactory evidence that the insurance required under ORS 744.726 has been procured and is in effect. The director may also require a statement of the business plan of the applicant. [1991 c.812 5]
Upon request from a third party administrator, the Director of the Department of Consumer and Business Services may waive requirements established pursuant to ORS 744.706 for information to be included in or with the application if the third party administrator has a valid license or other document of authority as a third party administrator issued in a state having requirements for third party administrators that the director determines to be sufficiently similar to the requirements established under ORS 744.706 so that the filing of the information would serve little or no regulatory purpose. [1991 c.812 6]
(1) If the Director of the Department of Consumer and Business Services determines that an applicant has satisfied all requirements for a license as a third party administrator, the director shall issue the license to the applicant. The director shall not issue a license if the director determines that the third party administrator, or any individual responsible for the conduct of affairs of the third party administrator, as required to be set forth in the application for the license, is not competent, trustworthy, financially responsible or of good personal and business reputation, or has had a license or other document of authority to transact insurance as an insurer, insurance producer or third party administrator denied or revoked for cause by any state. (2) If the director denies an application, the director shall so inform the applicant, stating the grounds for the denial. [1991 c.812 7; 2003 c.364 129]
(1) A license of a third party administrator expires on its expiration date unless it is renewed on or before its expiration date. (2) Unless the Director of the Department of Consumer and Business Services designates another date, a license expires on the last day of the month in which the second anniversary of the initial issuance date of the license occurs, and on the second anniversary following each renewal. (3) The director by rule may establish requirements for renewing licenses of third party administrators. [1991 c.812 8]
A person who is exempt from the requirement of a license as a third party administrator under ORS 744.704 because the person acts solely as an administrator of one or more bona fide employee benefit plans established by an employer or an employee organization, or both, for which the Insurance Code is preempted pursuant to the Employee Retirement Income Security Act of 1974, shall register with the Director of the Department of Consumer and Business Services annually, verifying the status of the person as qualifying for the exemption. [1991 c.812 9]
A third party administrator shall immediately notify the Director of the Department of Consumer and Business Services of any material change in ownership or control or in any other matter affecting the qualification of the third party administrator for a license as a third party administrator in this state. [1991 c.812 10]
(1) The Director of the Department of Consumer and Business Services shall suspend, revoke or refuse to renew a license of a third party administrator if the director finds that the third party administrator: (a) Is in an unsound financial condition; (b) Is using such methods or practices in the conduct of business so as to render further transaction of business by the third party administrator in this state hazardous or injurious to insured persons or to the public; or (c) Has failed to pay any judgment rendered against the third party administrator in this state within 60 days after the judgment has become final. (2) The director may suspend, revoke, refuse to issue or refuse to renew a license of a third party administrator if the director finds one or more of the following with respect to a third party administrator or an applicant for a license therefor: (a) Falsification by the applicant or licensee of an application for the license or renewal thereof, or engagement in any dishonest act in relation to the application; (b) Dishonesty, fraud or gross negligence in the transaction of insurance or in the conduct of business as a third party administrator; (c) Conduct resulting in a conviction of a felony under the laws of any state or of the United States, to the extent that such conduct may be considered under ORS 670.280; (d) Conviction of any crime, an essential element of which is dishonesty or fraud, under the laws of any state or of the United States; (e) Refusal to renew or cancellation, revocation or suspension of authority to transact insurance or business as a third party administrator or similar entity in another state; (f) Failure to pay a civil penalty imposed by final order of the director or to carry out terms of probation set by the director; (g) Refusal to be examined or to produce accounts, records or files for examination, refusal by any officers to give information with respect to the affairs of the third party administrator or refusal to perform any other legal obligation as to the examination when required by the director; (h) Affiliation with or under the same general management or interlocking directorate or ownership as another administrator or insurer that unlawfully transacts business in this state; (i) Failure at any time to meet any qualification for which issuance of the license could have been refused had the failure then existed and been known to the director; or (j) Violation of any rule or order of the director or any provision of the Insurance Code. (3) The director may suspend or refuse to renew a license immediately and without hearing if the director determines that one or more of the following circumstances exist: (a) The third party administrator is insolvent; (b) A proceeding for receivership, conservatorship or rehabilitation or other delinquency proceeding regarding the third party administrator has been commenced in any state; or (c) The financial condition or business practices of the third party administrator otherwise pose an imminent threat to the public health, safety or welfare of the residents of this state. (4) A third party administrator holding a license that has not been renewed or has been revoked shall surrender the license to the director at the directors request. (5) The director may take any other administrative action authorized under the Insurance Code in addition to or in lieu of the actions authorized under this section. [1991 c.812 11]
(1) A third party administrator licensed under ORS 744.702 may transact business as a third party administrator only pursuant to a written agreement between the third party administrator and the insurer. The agreement shall contain all provisions required by this section. However, any provision that does not apply to the functions to be performed by the third party administrator need not be included. (2) An insurer and a third party administrator transacting business under an agreement required in subsection (1) of this section shall each retain the agreement with its records for the duration of the agreement and for five years following the date of its termination. (3) An agreement required by this section shall include at least the following, in addition to any other requirements of ORS 744.700 to 744.740: (a) A statement of duties that the third party administrator is expected to perform on behalf of the insurer and the lines, classes or types of insurance for which the third party administrator is to be authorized to administer; (b) Provisions with respect to underwriting or other standards pertaining to the business underwritten by the insurer. The agreement shall also state the responsibilities of the third party administrator for determining the benefits, premium rates, underwriting criteria and claims payment procedures, and for securing any reinsurance, subject to the responsibilities of the insurer established in ORS 744.740; (c) Provisions for the third party administrator to periodically render an accounting to the insurer detailing all transactions performed by the administrator pertaining to the business underwritten by the insurer; (d) Provisions governing withdrawals from the fiduciary account required under ORS 744.730, and provisions otherwise relating to the fiduciary account, addressing at least the following matters: (A) Remittance to an insurer entitled to the remittance; (B) Deposit in an account maintained in the name of the insurer; (C) Transfer to and deposit in a claims-paying account, with claims to be paid as provided in ORS 744.730; (D) Payment to a group policyholder for remittance to the insurer entitled to the remittance; (E) Payment to the third party administrator of its commission fees or charges; and (F) Remittance of return premiums to the person entitled to the return premium; and (e) Provisions establishing which disputes, if any, arising under the contract shall be decided by arbitration, mediation or other means of dispute resolution. (4) Upon written notice, the insurer or third party administrator may terminate the written agreement for cause as provided in the agreement. The insurer may suspend the underwriting authority of the third party administrator during any dispute regarding the cause for termination of the written agreement. The insurer must fulfill any lawful obligations with respect to policies affected by the agreement, regardless of any dispute between the insurer and the third party administrator. (5) A third party administrator shall make available for inspection to the Director of the Department of Consumer and Business Services copies of all contracts, and amendments thereto, with insurers or other persons using its services. [1991 c.812 12]
(1) When an insurer uses the services of a third party administrator: (a) Payment to the third party administrator of any premiums or charges for insurance by or on behalf of the insured party shall be considered to have been received by the insurer. (b) Payment of return premiums or claim payments forwarded by the insurer to the third party administrator shall not be considered to have been paid to the insured party or claimant until the payment is received by the insured party or claimant. (2) Nothing in this section limits any right of the insurer against the third party administrator resulting from failure by the third party administrator to make payments to the insurer, insured parties or claimants. [1991 c.812 13]
(1) Except as provided in subsection (4) of this section, a third party administrator shall maintain and make available to the insurer complete books and records of each transaction performed on behalf of the insurer. The books and records shall be maintained in accordance with prudent standards of insurance recordkeeping and must be maintained for a period of not less than five years from the date of their creation. (2) The Director of the Department of Consumer and Business Services shall have access to the books and records maintained under subsection (1) of this section for the purpose of examination, audit and inspection. Any document, material or other information in the possession or control of the director that is furnished by a third party administrator, an insurer, an agent or an employee or an agent acting on behalf of the third party administrator, insurer or insurance producer, or that is obtained by the director in an investigation, shall be confidential as provided in ORS 705.137. (3) An insurer that has entered into an agreement with a third party administrator shall own the records generated by the third party administrator pertaining to the insurer. However, the third party administrator has the right to continuing access to the books and records to permit the third party administrator to fulfill all of its contractual obligations to insured parties, claimants and the insurer. (4) If an insurer and third party administrator cancel their agreement, the third party administrator may agree in writing with the insurer to transfer all records to a successor third party administrator. If the agreement includes provisions to transfer the records, the third party administrator is no longer responsible for retaining the records for the five-year period. The successor third party administrator shall acknowledge in writing as part of its agreement with the insurer that it is responsible for retaining the records of the prior third party administrator as required in subsection (1) of this section. [1991 c.812 14; 2001 c.377 16; 2003 c.364 130]
(1) A third party administrator must maintain with the Director of the Department of Consumer and Business Services at all times a current certificate of errors and omissions insurance, in an amount established by the director by rule, from an insurer authorized to transact insurance in this state or from any other insurer acceptable to the director according to standards established by rule. The insurance must cover errors and omissions of and any violation of fiduciary responsibility by the third party administrator or its employees, or both. (2) If the director determines that insurance required under this section is not generally available at a reasonable cost, the director by rule may suspend the requirement of insurance, but must reimpose the requirement when the insurance becomes available. [1991 c.812 15]
A third party administrator may use only such advertising pertaining to the business underwritten by an insurer that the insurer has approved in advance of its use. [1991 c.812 16]
(1) A third party administrator shall hold in a fiduciary capacity all insurance charges or premiums collected by the third party administrator on behalf of or for an insurer, and all return premiums received from the insurer. The third party administrator shall immediately remit all charges, premiums or return premiums to the person entitled to them or shall deposit them promptly in a fiduciary account established and maintained by the third party administrator in a federally or state insured financial institution. The fiduciary account may be used only for deposits authorized under this subsection. (2) If the charges or premiums deposited in a fiduciary account have been collected on behalf of or for one or more insurers, a third party administrator shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each insurer. The third party administrator shall keep copies of all such records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to such deposits and withdrawals. (3) A third party administrator shall not pay any claim by withdrawals from a fiduciary account in which premiums or charges are deposited. (4) All claims by a third party administrator from funds collected on behalf of the insurer shall be paid only on drafts of and as authorized by the insurer. (5) A third party administrator that is an insurance producer licensed under this chapter need not comply with this section if the third party administrator is in compliance with ORS 744.083 or 744.084 with respect to the premiums, charges and return premiums referred to in this section. [1991 c.812 17; 2003 c.364 131]
(1) A third party administrator shall not enter into any agreement or understanding with an insurer the effect of which is to make the amount of the third party administrators commissions, fees or charges contingent upon savings effected in the adjustment, settlement and payment of losses covered by the obligations of the insurer. (2) This section does not prohibit: (a) A third party administrator from receiving performance-based compensation for providing hospital or other auditing services; or (b) A third party administrator from receiving compensation based on premiums or charges collected or on the number of claims processed. (3) The third party administrator shall disclose to the insurer all charges, fees and commissions received from all sources in connection with the provision of administrative services for the insurer, including any fees or commissions paid by insurers providing reinsurance. [1991 c.812 18]
(1) When an insurer uses the services of a third party administrator, the third party administrator shall provide to covered individuals a written notice approved by the insurer that advises them of the identity of and relationship among the third party administrator, the policyholder and the insurer. (2) When a third party administrator collects funds, the reason for collection of each item must be identified to the insured party and each item must be shown separately from any premium. Additional charges may not be made for services to the extent the services have been paid for by the insurer. [1991 c.812 19]
When the third party administrator receives policies, certificates, booklets, termination notices or other written communications from the insurer for delivery to insured parties or covered individuals, the third party administrator shall promptly make the delivery after receiving instructions from the insurer. [1991 c.812 20]
(1) Each third party administrator shall file an annual report for the preceding calendar year with the Director of the Department of Consumer and Business Services on or before March 1 of each year, or within such extension of time therefor as the director may grant. The report shall be in the form and contain such information as the director prescribes and shall be verified by at least two officers of the third party administrator if the third party administrator is a corporation, and by two partners if the third party administrator is a partnership. (2) The annual report shall include the complete names and addresses of all insurers with which the third party administrator had an agreement during the preceding fiscal year. [1991 c.812 21]
(1) An insurer who uses the services of a third party administrator is responsible for determining the benefits, premium rates, underwriting criteria and claims payment procedures applicable to the coverage and for securing any reinsurance. The rules pertaining to such matters must be provided in writing by the insurer to the third party administrator. (2) An insurer is solely responsible for providing competent administration of its programs. (3) When a third party administrator administers benefits for more than 100 certificate holders on behalf of an insurer, the insurer shall conduct a review of the operations of the third party administrator at least annually. [1991 c.812 22]
(1) For purposes of ORS 744.800 to 744.818: (a) A reinsurance intermediary broker is a person who solicits, negotiates or places reinsurance cessions or retrocessions on behalf of a ceding insurer without acting as a reinsurance intermediary manager on behalf of the insurer. (b) A reinsurance intermediary manager is a person who has authority to bind a reinsurer or who manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department or underwriting office, and acts as an insurance producer for the reinsurer, regardless of the title or designation of the person. (c) A reinsurance intermediary means a reinsurance intermediary broker or a reinsurance intermediary manager. (d) "Business entity" has the meaning given that term in ORS 731.116. (2) A person may act as a reinsurance intermediary broker in this state only as follows: (a) The person maintains an office in this state either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation, and the person is a licensed insurance producer or reinsurance intermediary in this state; or (b) The person maintains an office in another state either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation, and the person is a licensed insurance producer or reinsurance intermediary in this state or another state having laws substantially similar to ORS 744.800 to 744.818. (3) A person may act as a reinsurance intermediary manager only as follows: (a) A person may act as a reinsurance intermediary manager for a reinsurer domiciled in this state if the person is a licensed insurance producer or reinsurance intermediary in this state. (b) A person may act as a reinsurance intermediary manager in this state if the person maintains an office in this state either directly or as a member or employee of a firm or association, or as an officer, director or employee of a corporation, if the person is a licensed insurance producer or reinsurance intermediary in this state. (4) The Director of the Department of Consumer and Business Services may issue a reinsurance intermediary license to any person that has complied with the requirements of this section. A license issued to a firm or association authorizes all of the members of the firm or association and any designated employees of the firm or association to act as reinsurance intermediaries under the license. All such persons must be named in the license application and any supplements to the application. A license issued to a corporation authorizes all of the officers and any designated employees and directors of the corporation to act as reinsurance intermediaries on behalf of the corporation. All such persons must be named in the license application and any supplements to the application. (5) The director shall issue a resident reinsurance intermediary license to a person if the person holds an insurance producer license issued under ORS 744.062 and indorsed with the designation of reinsurance intermediary. (6) The director shall issue a nonresident reinsurance intermediary license to a person if: (a) The person is currently licensed in the persons home state as a resident reinsurance intermediary or insurance producer and is in good standing in the persons home state; (b) The person has submitted the proper request for a license and has paid the applicable fees; (c) The person has submitted or transmitted to the director the license application that the person submitted to the persons home state or, in lieu of that application, a completed application acceptable to the director; and (d) The persons home state awards nonresident reinsurance intermediary licenses to residents of this state on the same basis. (7) The director may refuse to issue a reinsurance intermediary license if, in the directors judgment: (a) The application, anyone named in the application or any member, principal, officer, director or controlling person of the applicant is not trustworthy; or (b) Any person described in paragraph (a) of this subsection has given cause for revocation or suspension of the license or has failed to comply with any requirement for issuance of the license. (8) In order to obtain and maintain the indorsement of reinsurance intermediary manager, a resident reinsurance intermediary must satisfy the requirements of ORS 744.818 regarding errors and omissions insurance. [1993 c.447 74; 2001 c.191 41; 2003 c.364 27]
(1) An officer or employee of a ceding insurer is not subject to the requirements of ORS 744.800 to 744.818 that apply to reinsurance intermediary brokers, with respect to the ceding insurer. (2) When engaged in a relationship described in this subsection, the following persons are not subject, with respect to the reinsurer in the relationship, to the requirements of ORS 744.800 to 744.818 that apply to reinsurance intermediary managers: (a) An employee of the reinsurer. (b) A United States manager of the United States branch of an alien reinsurer. (c) An underwriting manager who, pursuant to contract, manages all of the reinsurance operations of the reinsurer, is under common control with the reinsurer and subject to ORS 732.517 to 732.596, and whose compensation is not based on the volume of premiums written. (d) The manager of a group, association, pool or organization of insurers who engage in joint underwriting or joint reinsurance and who are subject to examination by the insurance regulatory official of the state in which the managers principal business office is located. (3) An attorney-at-law rendering services in the performance of duties of an attorney-at-law is not subject to the requirements of ORS 744.800 to 744.818 that apply to reinsurance intermediary brokers or reinsurance intermediary managers. [1993 c.447 75; 2003 c.364 28]
A reinsurance intermediary broker and the insurer it represents in the capacity of a reinsurance intermediary broker may enter one or more transactions between them only pursuant to a written authorization that specifies the responsibilities of each party. The authorization must at least provide that: (1) The insurer may terminate the authority of the reinsurance intermediary broker at any time. (2) The reinsurance intermediary broker must render to the insurer accounts accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by or owing to the reinsurance intermediary broker, and remit all funds due to the insurer not later than the 30th day following the date of receipt. (3) All funds collected for the account of the insurer must be held by the reinsurance intermediary broker in a fiduciary capacity in a qualified United States financial institution. For purposes of this subsection, a "qualified United States financial institution" is an institution that: (a) Is organized, or, in the case of a United States office of a foreign banking organization, is licensed, under the laws of the United States or any state thereof; (b) Is regulated, supervised and examined by authorities of the United States or of any state thereof having regulatory authority over banks and trust companies; and (c) Has been determined by the Director of the Department of Consumer and Business Services to meet standards of financial condition and standing that are necessary and appropriate for regulating the quality of financial institutions whose letters of credit will be acceptable to the director. The director may consider standards and classifications of institutions established by the Securities Valuation Office of the National Association of Insurance Commissioners for the purpose of making determinations under this paragraph. (4) The reinsurance intermediary broker must comply with ORS 744.806. (5) The reinsurance intermediary broker must comply with the written standards established by the insurer for the cession or retrocession of all risks. (6) The reinsurance intermediary broker must disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded. [1993 c.447 76; 2003 c.364 29]
(1) A reinsurance intermediary broker must keep a complete record for each transaction of a contract of reinsurance as provided in this subsection. For each contract of reinsurance transacted by the reinsurance intermediary broker that is limited to first party property coverages, the reinsurance intermediary broker must keep the record for not less than five years after expiration of the contract of reinsurance. For all other contracts of reinsurance transacted by the reinsurance intermediary broker, the reinsurance intermediary broker must keep the record for not less than 10 years after expiration of each contract of reinsurance. The record must show all of the following: (a) The type of contract, limits, underwriting restrictions, classes or risks and territory. (b) The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation. (c) Reporting and settlement requirements of balances. (d) The rate used to compute the reinsurance premium. (e) Names and addresses of assuming reinsurers. (f) Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary broker. (g) Related correspondence and memoranda. (h) Proof of placement. (i) Details regarding retrocessions handled by the reinsurance intermediary broker, including the identity of retrocessionaires and percentage of each contract assumed or ceded. (j) Financial records, including premium and loss accounts. (k) The following written evidence, when the reinsurance intermediary broker procures a reinsurance contract on behalf of an authorized ceding insurer: (A) When the contract is procured directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk. (B) When the contract is placed through a representative of the assuming reinsurer other than an employee, written evidence that the reinsurer has delegated binding authority to the representative. (2) The insurer must have access to and the right to copy and audit all accounts and records maintained by the reinsurance intermediary broker and related to its business. The reinsurance intermediary broker must maintain the accounts and records in a form usable by the insurer. [1993 c.447 77; 2003 c.364 30]
(1) An insurer may not engage the services of any person to act as a reinsurance intermediary broker on its behalf unless the person is licensed as a reinsurance intermediary broker as required by ORS 744.800. (2) An insurer may not employ an individual who is employed by a reinsurance intermediary broker with which it transacts business unless the reinsurance intermediary broker is under common control with the insurer and subject to ORS 732.517 to 732.596. (3) The insurer must annually obtain a copy of statements of the financial condition of each reinsurance intermediary broker with which it transacts business. [1993 c.447 78; 2003 c.364 31]
A reinsurance intermediary manager and the reinsurer it represents in that capacity may enter a transaction only pursuant to a written contract that specifies the responsibilities of each party and otherwise satisfies the requirements of this section. The contract must be approved by the board of directors of the reinsurer. Not later than the 30th day before the reinsurer assumes or cedes business through the reinsurance intermediary manager, a true copy of the approved contract must be filed with the Director of the Department of Consumer and Business Services for approval. The contract must at least provide that: (1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary manager, and the reinsurer may immediately suspend the authority of the reinsurance intermediary manager to assume or cede business during the pendency of any dispute regarding the cause for termination. (2) The reinsurance intermediary manager must render accounts to the reinsurer, accurately detailing all material transactions and including information necessary to support all commissions, charges and other fees received by or owing to the reinsurance intermediary manager and remit all funds due under the contract to the reinsurer on not less than a monthly basis. (3) All funds collected for the account of the reinsurer must be held by the reinsurance intermediary manager in a fiduciary capacity in a qualified United States financial institution as that term is described in ORS 744.804. The reinsurance intermediary manager may retain not more than three months estimated claims payments and allocated loss adjustment expenses. The reinsurance intermediary manager must maintain a separate bank account for each reinsurer that it represents. (4) A reinsurance intermediary manager must keep a complete record for each transaction of a contract of reinsurance as provided in this subsection. For each contract of reinsurance transacted by the reinsurance intermediary manager that is limited to first party property coverages, the reinsurance intermediary manager must keep the record for not less than five years after expiration of the contract of reinsurance. For all other contracts of reinsurance transacted by the reinsurance intermediary manager, the reinsurance intermediary manager must keep the record for not less than 10 years after expiration of each contract of reinsurance. The record must show all of the following: (a) The type of contract, limits, underwriting restrictions, classes or risks and territory. (b) The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks. (c) Reporting and settlement requirements of balances. (d) The rate used to compute the reinsurance premium. (e) Names and addresses of reinsurers. (f) The rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary manager. (g) Related correspondence and memoranda. (h) Proof of placement. (i) Specific information regarding retrocessions handled by the reinsurance intermediary manager, including the identity of retrocessionaires and percentage of each contract assumed or ceded. (j) Financial records, including premium and loss accounts. (k) The following written evidence, when the reinsurance intermediary manager places a reinsurance contract on behalf of a ceding insurer: (A) When the contract is procured directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or (B) When the contract is placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative. (5) The reinsurer must have access to and the right to copy all accounts and records maintained by the reinsurance intermediary manager that are related to its business. The reinsurance intermediary manager must maintain the accounts and records in a form usable by the reinsurer. (6) The contract cannot be assigned in whole or in part by the reinsurance intermediary manager. (7) The reinsurance intermediary manager must comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession of all risks. (8) The contract must set forth the rates, terms and purposes of commissions, charges and other fees that the reinsurance intermediary manager may levy against the reinsurer. (9) If the contract permits the reinsurance intermediary manager to settle claims on behalf of the reinsurer, all of the following provisions must apply: (a) All claims must be reported to the reinsurer in a timely manner. (b) A copy of the claim file must be sent to the reinsurer at its request or as soon as it becomes known that the claim: (A) Has the potential of exceeding the lesser of an amount determined by the director or the limit set by the reinsurer; (B) Involves a coverage dispute; (C) May exceed the claims settlement authority of the reinsurance intermediary manager; (D) Is open for more than six months; or (E) Is closed by payment of the lesser of an amount set by the director or an amount set by the reinsurer. (c) All claim files must be the joint property of the reinsurer and the reinsurance intermediary manager. However, upon an order of liquidation of the reinsurer, the files become the sole property of the reinsurer or its estate but the reinsurance intermediary manager shall have reasonable access to and the right to copy the files on a timely basis. (d) Any settlement authority granted to the reinsurance intermediary manager may be terminated for cause upon written notice by the reinsurer to the reinsurance intermediary manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination. (10) If the contract provides for a sharing of interim profits by the reinsurance intermediary manager, the interim profits must not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business, or a later period set by the director for specified lines of insurance, and not until the adequacy of loss reserves on remaining claims has been attested to by an actuary pursuant to ORS 744.814. (11) The reinsurance intermediary manager must annually provide the reinsurer with a statement of its financial condition that is prepared by an independent certified public accountant. (12) Periodically, but not less frequently than semiannually, the reinsurer shall conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary manager. (13) The reinsurance intermediary manager must disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such insurer pursuant to the contract. (14) Within the scope of the actual or apparent authority of the reinsurance intermediary manager, the acts of the reinsurance intermediary manager are considered to be the acts of the reinsurer on whose behalf it is acting. [1993 c.447 79; 2003 c.364 32]
A reinsurance intermediary manager may not do any of the following: (1) Cede retrocessions on behalf of the reinsurer that the reinsurance intermediary manager represents, except that the reinsurance intermediary manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for the retrocessions. The guidelines must include: (a) A list of reinsurers with which the automatic agreements are in effect; (b) For each such reinsurer, the coverages and amounts or percentages that may be reinsured; and (c) For each such reinsurer, the commission schedules. (2) Commit the reinsurer to participate in reinsurance syndicates. (3) Appoint an insurance producer, reinsurance intermediary broker or reinsurance intermediary manager without assuring that the insurance producer, reinsurance intermediary broker or reinsurance intermediary manager is lawfully licensed to transact the type of reinsurance for which the appointment is made. (4) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one percent of the combined capital and surplus of the reinsurer as of December 31 of the last complete calendar year. (5) Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, the reinsurance intermediary manager must promptly forward a report to the reinsurer. (6) Jointly employ an individual who is employed by the reinsurer, unless the reinsurance intermediary manager is under common control with the reinsurer subject to ORS 732.517 to 732.596. (7) Appoint a reinsurance subintermediary manager. [1993 c.447 80; 2003 c.364 33]
(1) A reinsurer may not engage the services of any person to act as a reinsurance intermediary manager on its behalf unless the person is licensed to act as a reinsurance intermediary manager as required by ORS 744.800. (2) A reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary manager that the reinsurer has engaged. Each statement must be prepared by an independent certified public accountant in a form acceptable to the Director of the Department of Consumer and Business Services. (3) If a reinsurance intermediary manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary who is in good standing of the American Academy of Actuaries, attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary manager. The opinion must be in addition to any other required loss reserve certification. (4) Binding authority for all retrocessional contracts or participation in reinsurance syndicates must rest with an officer of the reinsurer who is not affiliated with the reinsurance intermediary manager. (5) Not later than the 30th day after termination of a contract with a reinsurance intermediary manager, the reinsurer shall provide written notification of the termination to the director. (6) A reinsurer may not appoint to its board of directors any officer, director, employee, controlling shareholder or subproducer of its reinsurance intermediary manager. This subsection does not apply to relationships governed by ORS 732.517 to 732.596. [1993 c.447 81; 2003 c.364 34]
(1) The Director of the Department of Consumer and Business Services may examine any reinsurance intermediary broker and any reinsurance intermediary manager. The director shall have access to all books, bank accounts and records of a reinsurance intermediary broker or reinsurance intermediary manager being examined. All such books, bank accounts and records must be maintained in a form usable to the director. (2) A reinsurance intermediary manager may be examined as if the reinsurance intermediary manager were the reinsurer. [1993 c.447 82; 2003 c.364 35]
(1) A resident reinsurance intermediary acting as a reinsurance intermediary manager shall maintain with the Director of the Department of Consumer and Business Services a current certificate of errors and omissions insurance in an amount established by the director by rule from an insurer authorized to do business in this state or from any other insurer acceptable to the director according to standards established by rule. (2) If the director determines that errors and omissions insurance required under this section is not generally available at a reasonable cost, the director by rule may suspend the requirement of insurance, but must reimpose the requirement when the insurance becomes available once again. [1993 c.447 83; 2003 c.364 36]
If the Director of the Department of Consumer and Business Services finds that a reinsurance intermediary broker or a reinsurance intermediary manager has violated any provision of ORS 744.800 to 744.818, the director may order the reinsurance intermediary broker or reinsurance intermediary manager to reimburse the insurer, reinsurer, rehabilitator or liquidator for losses incurred by the insurer or reinsurer because of the violation. The director may take action under this section in addition to or instead of any other action that the director may take under the Insurance Code. [1993 c.447 83a; 2003 c.364 37]
As used in ORS 744.850 to 744.858: (1) "Limited license" means a license issued under ORS 744.852 that authorizes a rental company to offer or sell insurance as provided in ORS 744.854. (2) "Rental agreement" means a written agreement setting forth the terms and conditions governing use of a vehicle provided by a rental company for rent. (3) "Rental company" means a person or entity in the business of providing vehicles to the public under a rental agreement for a period of 90 days or less. (4) "Renter" means a person obtaining the use of a vehicle from a rental company for a period of 90 days or less. (5) "Vehicle" means an automobile, van, minivan, sports utility vehicle, cargo van, recreational vehicle, motorcycle, all-terrain vehicle, trailer, pickup truck or truck with a gross vehicle weight of less than 26,000 pounds that does not require a commercial driver license to operate. [1999 c.485 2; 2007 c.719 1] Note: 744.850 to 744.858 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 744 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) The Director of the Department of Consumer and Business Services shall adopt rules to specify information that rental companies must submit in applying for a limited license. (2) A rental company that intends to offer insurance as described in ORS 744.854 shall file a limited license application with the director in such form and containing such information as the director requires. (3) After receiving an application, the director may issue a limited license to the rental company if the director is satisfied that the application is complete. A limited license that the director issues to the rental company under this section is also a limited license for an employee or designated agent of the rental company to offer and sell insurance in accordance with ORS 744.854 for vehicles that the rental company rents. [1999 c.485 3; 2015 c.524 1] Note: See note under 744.850.
A limited license issued under ORS 744.852 authorizes a rental company to offer and sell the following kinds of insurance in connection with the rental of vehicles: (1) Personal accident insurance covering the risks of travel, including but not limited to accident and health insurance that provides coverage to renters and other occupants of the rental vehicle for accidental death or dismemberment and reimbursement for medical expenses resulting from an accident that occurs during the rental period. (2) Liability insurance that provides coverage to renters and other authorized drivers of the rental vehicle for liability arising from the operation of the rental vehicle. Liability insurance shall include uninsured and underinsured motorist coverage, insofar as required by state law or rule. (3) Personal effects insurance that provides coverage to renters and other vehicle occupants for loss of and damage to personal effects during the rental period. (4) Roadside assistance and emergency sickness insurance. [1999 c.485 4] Note: See note under 744.850.
(1) A rental company that obtains a limited license under ORS 744.852 may not offer or sell insurance pursuant to ORS 744.854 unless: (a) The rental agreement is for a period of 90 consecutive days or less. (b) At every location where rental agreements are executed, written material is available to prospective renters that: (A) Summarizes clearly and correctly the material terms of the coverage offered and identifies the insurer; (B) Discloses that the coverage that the rental company offers might duplicate coverage that a renters personal motor vehicle liability insurance policy, personal liability insurance policy or other source of coverage already provides; (C) States that purchasing the coverage offered is not required in order to rent a vehicle; and (D) Describes the process for filing a claim. (c) The rental company has filed the written material described in paragraph (b) of this subsection with the Director of the Department of Consumer and Business Services and the director has approved the written material. (d) The rental agreement separately discloses the price for the coverage purchased. (2) A rental company that obtains a limited license under ORS 744.852 must conduct a training program for the rental companys employees and designated agents concerning kinds of coverage the rental company offers. The rental company shall file the syllabus for the training program annually with the Director of the Department of Consumer and Business Services and obtain the directors approval. The rental company shall certify annually to the director that all of the rental companys employees and designated agents who are involved in selling or offering coverage to members of the public have completed or will complete the training program before making sales or offers. The rental company shall also certify annually to the director that the rental companys employees and designated agents will receive continuing education on a regular basis concerning the topics covered in the training program. The Department of Consumer and Business Services may audit the rental companys compliance with the rental companys certification to the director and with the training program syllabus the rental company filed. (3) A rental company that obtains a limited license under ORS 744.852 may not advertise, represent or otherwise hold the rental company or employees or designated agents of the rental company out as licensed insurers or insurance producers. (4) A rental company that obtains a limited license under ORS 744.852 may offer and sell insurance only in connection with and incidental to the rental of vehicles. (5) A rental company that obtains a limited license under ORS 744.852 shall designate an executive as the statewide filing officer for the rental company. [1999 c.485 5; 2003 c.364 132; 2015 c.524 2] Note: See note under 744.850.
(1) If a rental company issued a limited license under ORS 744.852 offers or sells insurance not authorized by ORS 744.854, or violates any provision of ORS 744.856, the Director of the Department of Consumer and Business Services may, after notice and hearing, revoke or suspend the limited license or may impose such other penalties as the director prescribes, including but not limited to suspension of transaction of insurance at specific rental locations where violations of ORS 744.854 or 744.856 have occurred. (2) All provisions of the Insurance Code apply to rental companies issued limited licenses under ORS 744.852 unless specifically rendered inapplicable by statute or by rule adopted by the director. (3) The director may adopt any rules necessary for the implementation of ORS 744.850 to 744.858, including rules establishing license fees to defray the cost to the Department of Consumer and Business Services of administering the limited licensure program. [1999 c.485 6] Note: See note under 744.850.
As used in ORS 744.860 to 744.870: (1) "Insurer" means an insurer, a surplus lines insurer or an insurance producer. (2) "Licensee" means an owner that receives a limited license to sell insurance in accordance with ORS 744.860 to 744.870. (3) "Occupant" has the meaning given that term in ORS 87.685. (4) "Owner" has the meaning given that term in ORS 87.685. (5) "Personal property" means movable property that is not affixed to land, examples of which are goods, merchandise, household items and furnishings, motor vehicles, watercraft and other vehicles, motorized or not. (6) "Self-service storage facility" has the meaning given that term in ORS 87.685. [2013 c.280 2]
(1)(a) An owner may not sell insurance to an occupant without applying for and receiving a limited license under this section. (b) An owner does not require a license under this section if the owner displays or makes available materials related to an insurers insurance coverage but does not sell the insurance or otherwise benefit from the insurers insurance sales. (2) An owner may apply to the Director of the Department of Consumer and Business Services for a limited license to sell insurance under the provisions of ORS 744.860 to 744.870. The owner shall apply for the limited license on a form with contents the director specifies by rule. (3)(a) An owner shall disclose in the application described in subsection (1) of this section the physical addresses for each of the self-service storage facilities at which the owner will sell insurance under the limited license and shall certify that the owner is an owner with respect to each of the self-service storage facilities. (b) A licensee may sell insurance at a self-service storage facility other than the self-service storage facilities the licensee disclosed in an application under this section if the licensee notifies the director 30 days before the licensee begins to sell insurance at the other self-service storage facility. (c) A licensee shall notify the director within 30 days after the licensee no longer sells insurance at a self-service storage facility. (d) The director may issue and permit the owner to retain a limited license to sell insurance on the condition that the owner sells insurance only at the self-service storage facilities the owner discloses in the application for the limited license or at a self-service storage facility with respect to which the owner gives the director a notice under paragraph (b) of this subsection. (4)(a) The director may issue a limited license to sell insurance to an owner if the director is satisfied that the owner has provided the information and made the disclosures the director requires under subsection (2) of this section. (b) A limited license that the director issues under this subsection authorizes a licensee to sell insurance at all of the self-service storage facilities the licensee disclosed in an application under subsection (2) of this section. A licensee does not need a separate limited license for each self-service storage facility. [2013 c.280 3]
(1) A licensee may sell insurance only: (a) Of the type described in subsection (2) of this section; (b) In connection with and incident to renting individual storage space to an occupant at a self-service storage facility; and (c) In accordance with the requirements set forth in subsection (3) of this section. (2) A licensee may sell insurance that covers an occupant only for personal property that is lost or damaged at the self-service storage facility where the licensee sold the insurance to the occupant. (3)(a) A licensee that offers to sell insurance to an occupant shall provide written material that the Director of the Department of Consumer and Business Services approves and that: (A) Summarizes the material terms of the insurance coverage, identifies the insurer, states the premium price and describes the benefits, exclusions and conditions of the insurance policy; (B) Discloses that the insurance may duplicate or overlap with coverage the occupant may have from other insurance policies, such as a renters policy, a homeowners policy, a vehicle policy, a watercraft policy or another source of property insurance; (C) States that renting individual storage space at the self-service storage facility does not require an occupant to purchase property insurance from the licensee or that, if renting individual storage space does require the occupant to have property insurance, that the occupant may satisfy the requirement by providing evidence that the occupant has coverage from another source of property insurance; (D) Describes the process for filing a claim under the terms of the insurance policy; and (E) Lists all costs to the occupant in connection with the insurance. (b) A licensee that completes a transaction with an occupant that purchases insurance from the licensee shall provide evidence to the occupant of the insurers coverage on a form that the insurer has approved. (4) A licensee may sell only insurance provided by an insurer that is authorized under the Insurance Code to transact, in this state, the line of insurance that the licensee sells. (5) A licensee may not advertise, represent or otherwise cause another person to understand or suppose that the licensee is a licensed insurer. [2013 c.280 4]
(1)(a) A licensee must provide a training program for the licensees employees or agents that sell insurance on the licensees behalf. The training program must instruct the employees or agents about the coverage the insurance provides and about the provisions of ORS 744.860 to 744.870. (b) The licensee each year shall submit to the Director of the Department of Consumer and Business Services for the directors approval an outline of, and copies of materials the licensee uses in, the training program. (c) A licensee each year shall certify to the director that the licensees employees or agents that sell insurance have completed or will complete the training program the licensee provides under paragraph (a) of this subsection before the employees or agents sell insurance. (d) An employee or agent that has completed the training program under paragraph (a) of this subsection is not required to undergo continuing education in the topics covered in the training program. (2) The director may audit the licensees compliance with the provisions of subsection (1) of this section. (3)(a) An employee or agent of a licensee may act on behalf and under the supervision of the licensee in matters within the scope of a license issued under ORS 744.862. (b) For purposes of ORS 744.860 to 744.870, the conduct of a licensees agent or employee who is acting within the scope of the employees or agents duties toward the licensee is the conduct of the licensee. [2013 c.280 5]
(1) The Director of the Department of Consumer and Business Services may suspend or revoke a limited license the director issued under ORS 744.862, or may impose another penalty the director prescribes by rule, if: (a) A licensee sells or offers to sell insurance other than insurance described in ORS 744.864; (b) An owner sells or offers to sell insurance to an occupant without obtaining a limited license in accordance with ORS 744.862; or (c) An owner or licensee violates another provision of ORS 744.860 to 744.870. (2) The director may suspend or revoke a limited license under this section with respect to all or a portion of the licensees self-service storage facilities. [2013 c.280 6]
ORS 744.860 to 744.870 do not prohibit: (1) An insurer from paying, or a licensee from receiving, a commission, fee or other compensation for selling the insurers insurance; or (2) A licensee or owner from paying an employee or agent of the licensee or owner a bonus, incentive payment or other compensation if the bonus, incentive payment or compensation does not depend on the employees or agents selling insurance. [2013 c.280 7]
The Director of the Department of Consumer and Business Services may adopt rules to implement and administer the provisions of ORS 744.860 to 744.870. [2013 c.280 8]
(1) Violation of ORS 744.369, in addition to any applicable prescribed denial, suspension or revocation of any license or civil forfeiture, shall be punishable upon conviction as for the crime of theft under ORS 164.015 to 164.135 or the crime of forgery or related offenses under ORS 165.002 to 165.070. (2) A person convicted of a violation of ORS 744.369 may be ordered to pay restitution to persons aggrieved by the violation of ORS 744.369. Restitution may be ordered in addition to a fine or imprisonment, but not in lieu of a fine or imprisonment. (3) Except for an act under ORS 744.369 (8) to (16), the penalties of this section shall not apply to an owner. [2009 c.711 19]
(1) A person who violates any provision of ORS 744.318 to 744.384, 744.991 and 744.992 is subject to civil penalties under ORS 731.988 and cease and desist orders under ORS 731.252. (2) If a person violates any provision of ORS 744.318 to 744.384, 744.991 and 744.992, the Director of the Department of Consumer and Business Services may seek an injunction in a court of competent jurisdiction and may apply for temporary and permanent orders that the director determines are necessary to restrain the person from committing the violation. (3) A person damaged by the acts of a person in violation of any provision of ORS 744.318 to 744.384, 744.991 and 744.992 may bring a civil action against the person committing the violation in a court of competent jurisdiction. Nothing in this subsection shall be construed to alter the provisions of ORS 743.168 or 743.171 relating to the period of incontestability of a policy of life insurance. (4) A violation of any provision of ORS 744.318 to 744.384, 744.991 and 744.992 attendant to the execution of a life settlement purchase agreement renders the life settlement purchase agreement voidable and subject to rescission by the life settlement purchaser, upon return of the policy received to the life settlement provider. Suit for rescission may be brought in a court of competent jurisdiction or where the alleged violator resides or has a principal place of business or where the alleged violation occurred. (5) Except for an act under ORS 744.369 (8) to (16), the enforcement provisions and penalties of this section do not apply to an owner. [2009 c.711 18]
(1) As used in this section: (a) "Adjuster" has the meaning given that term in ORS 744.502; (b) "Insurance consultant" has the meaning given that term in ORS 744.602; and (c) "Licensee" means a person that has obtained a license to engage in business as an adjuster, an insurance consultant or an insurance producer. (2) A license expiration or a licensees voluntary surrender of a license does not prevent the Director of the Department of Consumer and Business Services from investigating or initiating disciplinary proceedings against a licensee. The director may also at any time revise or vacate an order to suspend or revoke a license. [2019 c.151 18]
[Amended by 1967 c.359 38; renumbered 731.174]
[Amended by 1967 c.359 136; renumbered 731.824]
[Amended by 1967 c.359 137; renumbered 731.828]
Nothing in this chapter shall apply to wet marine and transportation insurance or prohibit any of the following practices: (1) In the case of life insurance policies, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the insurer and its policyholders; (2) In the case of industrial life insurance policies, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer, in an amount which fairly represents the saving in collection expense; (3) Readjustment of the rate of premium for a group life or health insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year, which may be made retroactive only for such policy year; (4) Extension of credit for payment of premiums without any service charge or interest by the insurer or insurance producer for a period of not more than 90 days after the end of the month in which the policy becomes effective; (5) Practices authorized pursuant to ORS 733.220 and 733.230; (6) The issuing of life or health insurance policies on a salary savings, bank draft, preauthorized check or payroll deduction plan or similar plan at a reduced rate reasonably related to the savings made by use of such plan; or (7) The issuing of life or health insurance policies at rates less than the usual premium rates for such policies, or using modifications of premium rates based on amount of insurance, if such issuance or modification does not result in reduction in premium rates in excess of savings in administration and issuance expenses reasonably attributable to such policies. [Formerly 736.825; 1983 c.740 254; 2003 c.364 133]
[Amended by 1961 c.256 1; 1967 c.359 507; renumbered 743.702]
(1) No person shall make or permit any unfair discrimination between individuals of the same class and equal expectation of life, or between risks of essentially the same degree of hazard, in the availability of insurance, in the application of rates for insurance, in the dividends or other benefits payable under insurance policies, or in any other terms or conditions of insurance policies. (2) Discrimination by an insurer in the application of its underwriting standards or rates based solely on an individuals physical disability is prohibited, unless such action is based on sound actuarial principles or is related to actual or reasonably anticipated experience. For purposes of this subsection, "physical disability" shall include, but not be limited to, blindness, deafness, hearing or speaking impairment or loss, or partial loss, of function of one or more of the upper or lower extremities. (3) Discrimination by an insurer in the application of its underwriting standards or rates based solely upon an insureds or applicants attaining or exceeding 65 years of age is prohibited, unless such discrimination is clearly based on sound actuarial principles or is related to actual or reasonably anticipated experience. (4)(a) An insurer may not, on the basis of the status of an insured or prospective insured as a victim of domestic violence or sexual violence, do any of the following: (A) Deny, cancel or refuse to issue or renew an insurance policy; (B) Demand or require a greater premium or payment; (C) Designate domestic violence or sexual violence, physical or mental injuries sustained as a result of domestic violence or sexual violence or treatment received for such injuries as a condition for which coverage will be denied or reduced; (D) Exclude or limit coverage for losses or deny a claim; or (E) Fix any lower rate for or discriminate in the fees or commissions of an insurance producer for writing or renewing a policy. (b) The fact that an insured or prospective insured is or has been a victim of domestic violence or sexual violence shall not be considered a permitted underwriting or rating criterion. (c) Nothing in this subsection prohibits an insurer from taking an action described in paragraph (a) of this subsection if the action is otherwise permissible by law and is taken in the same manner and to the same extent with respect to all insureds and prospective insureds without regard to whether the insured or prospective insured is a victim of domestic violence or sexual violence. (d) An insurer that complies in good faith with the requirements of this subsection shall not be subject to civil liability due to such compliance. (e) For purposes of this subsection, "domestic violence" means the occurrence of one or more of the following acts between family or household members: (A) Attempting to cause or intentionally or knowingly causing physical injury; (B) Intentionally or knowingly placing another in fear of imminent serious physical injury; or (C) Committing sexual abuse in any degree as defined in ORS 163.415, 163.425 and 163.427. (f) For purposes of this subsection, "sexual violence" means the commission of a sexual offense described in ORS 163.305 to 163.467, 163.427 or 163.525. (5) If the Director of the Department of Consumer and Business Services has reason to believe that an insurer in the application of its underwriting standards or rates is not complying with the requirements of this section, the director shall, unless the director has reason to believe the noncompliance is willful, give notice in writing to the insurer stating in what manner such noncompliance is alleged to exist and specifying a reasonable time, not less than 10 days after the date of mailing, in which the noncompliance may be corrected. (6)(a) If the director has reason to believe that noncompliance by an insurer with the requirements of this section is willful, or if, within the period prescribed by the director in the notice required by subsection (5) of this section, the insurer does not make the changes necessary to correct the noncompliance specified by the director or establish to the satisfaction of the director that such specified noncompliance does not exist, the director may hold a hearing in connection therewith. Not less than 10 days before the date of such hearing the director shall mail to the insurer written notice of the hearing, specifying the matters to be considered. (b) If, after the hearing, the director finds that the insurers application of its underwriting standards or rates violates the requirements of this section, the director may issue an order specifying in what respects such violation exists and stating when, within a reasonable period of time, further such application shall be prohibited. If the director finds that the violation was willful, the director may suspend or revoke the certificate of authority of the insurer. (7) Affiliated workers compensation insurers having reinsurance agreements which result in one carrier ceding 80 percent or more of its workers compensation premium to the other, while utilizing different workers compensation rate levels without objective evidence to support such differences, shall be presumed to be engaging in unfair discrimination. [1967 c.359 568; 1977 c.331 1; 1979 c.140 1; 1987 c.676 2; 1987 c.884 53; 1997 c.564 1; 1999 c.59 229; 2003 c.364 134; 2007 c.70 319; 2010 c.67 1; 2013 c.681 35]
(1) In cities of 300,000 or more, and except as provided in subsection (3) of this section, no insurer shall make or permit any unfair discrimination between risks of essentially the same degree of hazard in the issuance of burglary and theft or robbery insurance policies or casualty insurance policies which insure against liability to persons arising out of the use or control of real or personal property other than motor vehicles. (2) Property insured or persons insured against liability arising out of use or control of real or personal property other than motor vehicles, if comparable in other respects in exposures to the peril insured against, shall not be deemed to be of different hazard solely because of the geographic location of the property or the place of residence or business of the person to be insured. (3) Notwithstanding subsection (1) of this section an insurer may make or permit discrimination between risks of essentially the same degree of hazard in the issuance of insurance policies described in subsection (1) of this section if the insurer, at the time of the discrimination, insures a percentage of the similar risks at least equal to the ratio that its premiums for the respective line of business as reported in the annual statement required by ORS 731.574 for the second preceding calendar year bears to the total premium for the same line of business as reported by all insurers in the annual statements required by ORS 731.574 for the second preceding calendar year, within a square one mile on each side centered upon the location of the property, insurance in regard to which the insurer declines to issue. [1971 c.522 2; 1973 c.9 1]
Except as otherwise provided for in the Insurance Code, an individual may not, on the basis of actual or perceived race, color, national origin, sex, sexual orientation, gender identity, age or disability, be excluded from participation in, be denied the benefits of or otherwise be subjected to discrimination under any health benefit plan issued or delivered in this state. [2019 c.285 2] Note: 746.021 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 746 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
An insurer offering a policy or certificate of life insurance, health insurance or long term care insurance, as defined in ORS 743.652, may not, based solely on the status of an applicant for insurance or an insured as a living donor or a potential donor of a body part, organ or tissue: (1) Discriminate in the application of its underwriting standards or rates; (2) Decline to provide coverage or limit coverage; or (3) Prohibit an applicant for insurance or an insured from donating a body part, organ or tissue as a condition of receiving or continuing to receive coverage. [2019 c.265 3] Note: 746.023 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 746 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
No person shall sell, agree or offer to sell, or give or offer to give, directly or indirectly in any manner whatsoever, shares of stock, securities, bonds, special or advisory board contracts or agreements of any form or nature promising returns and profits as an inducement to insurance. No insurer engaging in or permitting its representatives to engage in such practices in this or any other state may be authorized to do business in this state. [Formerly 739.535]
[Amended by 1961 c.256 2; 1967 c.359 508; renumbered 743.705]
Except as otherwise expressly provided by the Insurance Code, no person shall permit, offer to make or make any contract of insurance, or agreement as to such contract, unless all agreements or understandings by way of inducement are plainly expressed in the policy issued thereon. [1967 c.359 570]
(1) A person may not personally or otherwise offer, promise, allow, give, set off, pay or receive, directly or indirectly, any rebate of or rebate of part of the premium payable on an insurance policy or the insurance producers commission on an insurance policy, or earnings, profit, dividends or other benefit founded, arising, accruing or to accrue on or from the policy, or any other valuable consideration or inducement to or for insurance on any domestic risk, which is not specified in the policy. (2) A premium discount or rebate is not prohibited by this section if the discount or rebate is: (a) Offered in connection with a program of health promotion or disease prevention, as described in 42 U.S.C. 300gg-4; (b) Paid for participation in a program to promote healthy behaviors under ORS 743.824; or (c) Offered in connection with a wellness program defined by the Department of Consumer and Business Services by rule. (3) This section does not prohibit giving, as a form of advertising, as a promotional program or as promotional material, a prize, goods, wares, merchandise, articles or property with an aggregate value of not more than $100 in a calendar year to a person other than a person to whom an insurer issues health insurance, as defined in ORS 731.162, or a health benefit plan, as defined in ORS 743B.005. [1967 c.359 571; 2003 c.364 135; 2013 c.681 35a; 2017 c.327 1]
With respect to title insurance, no commissions, rebates or discounts shall be paid, allowed or permitted to any person having an interest in or lien upon real property which is the subject of the title insurance involved, or to any person acting for or on behalf of a person with such an interest or lien. [Formerly 748.086]
(1) As used in this section, "personal or controlled insurance" means insurance covering an insurance producer or: (a) The spouse of the insurance producer, the employer of the insurance producer or the employers spouse, or any group of employees under a group policy issued to the employer of the insurance producer; (b) Any person related to the insurance producer, to the spouse of the insurance producer, to the employer of the insurance producer or to the employers spouse within the second degree by blood or marriage; (c) If the employer of the insurance producer is a corporation, any person directly or indirectly owning or controlling a majority of the voting stock or controlling interest in such corporation; (d) If the employer of the insurance producer is a partnership or association, any person owning any interest in such partnership or association; (e) If the insurance producer is a corporation, any person directly or indirectly owning or controlling a majority of the voting stock or controlling interest in the insurance producer, and any corporation which is likewise directly or indirectly controlled by the person who so directly or indirectly controls the insurance producer; or (f) If the insurance producer is a corporation, any corporation making consolidated returns for United States income tax purposes with any corporation described in paragraph (e) of this subsection. (2) If premiums on personal or controlled insurance transacted by an insurance producer payable in one calendar year exceed the premiums or with respect to life and health insurance twice the premiums, on other insurance transacted by the insurance producer payable in the same year, the receipt of commissions upon the excess is an unlawful rebate. (3) This section shall not apply to an individual licensee who: (a) Is licensed during all of such calendar year individually as an insurance producer; (b) During such calendar year conducts an individual insurance producer business, not being designated to exercise the powers conferred by an insurance producers license issued to any firm or corporation nor owning any interest in any firm or corporation transacting an insurance producer business; (c) Has been continuously licensed in some manner as an insurance producer, and has been active as such, for at least 25 years; and (d) Is at least 65 years of age at the beginning of such calendar year. (4) This section does not apply to the writing, issuing or soliciting by a seller of personal property of insurance covering the personal property sold by the seller on an installment contract whereunder the title to the property is reserved by the seller. (5) This section shall not apply to an insurance producer, whether an individual, firm or corporation, if: (a) The insurance producer is controlled or owned by a nonprofit professional association and offers professional liability and related business and personal umbrella or excess liability insurance exclusively to members of the association; and (b) The primary function of the association is other than marketing insurance. [1967 c.359 573; 1987 c.774 147; 1989 c.701 73; 2003 c.364 136]
(1) A person may not engage, directly or indirectly, in any action described in subsection (2) of this section in connection with: (a) The offer or sale of any insurance; or (b) Any inducement or attempted inducement of any insured or person with ownership rights under an issued life insurance policy to lapse, forfeit, surrender, assign, effect a loan against, retain, exchange or convert the policy. (2) Subsection (1) of this section applies to the following actions: (a) Making, issuing, circulating or causing to be made, issued or circulated, any estimate, illustration, circular or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages therein or the dividends or share of surplus to be received thereon; (b) Making any false or misleading representation as to the dividends or share of surplus previously paid on similar policies; (c) Making any false or misleading representation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates; (d) Using any name or title of any policy or class of policies misrepresenting the true nature thereof; (e) Employing any device, scheme or artifice to defraud; (f) Obtaining money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement, in light of the circumstances under which it was made, not misleading; (g) Engaging in any other transaction, practice or course of business that operates as a fraud or deceit upon the purchaser, insured or person with policy ownership rights; or (h) Materially misrepresenting the provider network of an insurer offering managed health insurance or preferred provider organization insurance as defined in ORS 743B.001, including its composition and the availability of its providers to enrollees in the plan. [1967 c.359 574; 2001 c.266 7]
[Amended by 1967 c.359 509; renumbered 743.708]
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: (1) Requiring persons who replace, or offer or propose to replace, existing life insurance, to leave with the policyholder written, signed and dated statements which fully and correctly compare the terms, conditions and benefits of an existing policy with the proposed policy; and (2) Limiting the commission or compensation payable to an insurance producer on account of a life insurance policy that provides a nonforfeiture value sold to replace an existing life insurance policy that provides a nonforfeiture value to the commission or compensation the insurance producer would have received if both the replaced and the replacement insurance policies had been carried by the insurer which issues the replacement policy. [1967 c.359 575; 1971 c.231 35; 2003 c.364 137]
No person shall make a false or fraudulent statement or representation on or relative to an application for insurance, or for the purpose of obtaining a fee, commission, money or benefit from an insurer or insurance producer. [Formerly 736.460; 2003 c.364 138]
No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of the insurance business, which is untrue, deceptive or misleading. [Formerly 736.608]
(1) An insurer or licensee who advertises in a language other than English is not required to provide an insurance policy in any language other than English so long as the advertisement states clearly that the policy that is purchased is available only in English. (2) Advertisements regarding an insurance policy in languages other than English may not be construed to modify the policy in the event of a dispute over the provisions of the policy. [1997 c.809 2; 2003 c.249 1] Note: 746.115 was added to and made a part of ORS chapter 746 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
No person shall willfully collect any sum as premium or charge for insurance which is not then provided, or is not in due course to be provided subject to acceptance of the risk by the insurer, under an insurance policy issued by an insurer in conformity to the Insurance Code. [1967 c.359 579]
(1) As used in this section: (a) "Health care service contractor" has the meaning given that term in ORS 750.005. (b) "Independent practice association" has the meaning given that term in ORS 743B.001. (2) An insurer or a health care service contractor that has a contract with an independent practice association to provide eye care services may not limit coverage of eye care services only to services provided by a physician if the eye care services are covered services and are within the lawful scope of practice of a licensed optometrist. [2005 c.442 2] Note: 746.125 was added to and made a part of ORS chapter 746 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) No insurer shall participate in any plan to offer or effect in this state, as an inducement to the purchase or rental by the public of any property or services, any insurance for which there is no separate charge to the insured. No person shall arrange the sale of any such insurance. (2) Subsection (1) of this section does not apply to: (a) Home protection insurance or other insurance offered as a guarantee of the performance of property and designed to protect the purchasers or users of such property; (b) Title insurance; or (c) Credit life or credit health insurance as defined in ORS 743.371. (3) The charge for any insurance incidental to the purchase or rental by the public of any property or services shall be in accordance with rates on file with the Director of the Department of Consumer and Business Services. [1967 c.359 580; 1969 c.336 16; 1981 c.247 20; 1993 c.265 9]
(1) If a person asks an applicant for insurance to take a genetic test in connection with an application for insurance, the use of the test shall be revealed to the applicant and the person shall obtain the specific authorization of the applicant using a form adopted by the Director of the Department of Consumer and Business Services by rule. (2) A person may not use favorable genetic information to induce the purchase of insurance. (3) A person may not use genetic information to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms and conditions of or otherwise affect any policy for hospital or medical expenses. (4) A person may not use genetic information about a blood relative to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms and conditions of or otherwise affect any policy of insurance. (5) For purposes of this section, "blood relative," "genetic information" and "genetic test" have the meanings given those terms in ORS 192.531. [1995 c.680 8; 2001 c.588 17]
(1) As used in this section: (a) "Emergency" has the meaning given that term in ORS 401.025. (b) "Private emergency responder" means a private hazardous materials response team, and individuals working under the direction of the private hazardous materials response team, that provides subject matter expertise or technical experience that may be called upon to participate in the response to an emergency. (2) When the insurer of a liable party is obligated to reimburse a private emergency responder for services provided in response to an emergency, the insurer shall reimburse the private emergency responder for the actual costs incurred for emergency response, including, but not limited to, costs associated with mobile laboratories, tools and equipment for handling hazardous materials and other specialized equipment. [2015 c.720 2] Note: 746.137 was added to and made a part of ORS chapter 746 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) Every insurer or insurance producer soliciting an offer to buy or selling life insurance in correlation with the sale of securities shall furnish the prospect with a clear and unambiguous written proposal prior to the signing of the application by the applicant. (2) The written proposal shall be dated and signed by the insurance producer, or by the insurer if no insurance producer is involved, and left with the prospect. The written proposal shall be on a form which has been filed with the Director of the Department of Consumer and Business Services. If a sale is made of both life insurance and securities, a duplicate copy of the written proposal left with the buyer shall be retained by the insurer for a period of not less than three years. (3) Each such proposal shall: (a) State the name of the insurer in which the life insurance is to be written; (b) State that the prospect has the right to purchase the life insurance only, the securities only or both the life insurance and the securities; (c) Contain no misrepresentations or false, deceptive or misleading words, figures or statements; (d) State all material facts without which the proposal would have the capacity or tendency to mislead or deceive; and (e) Set forth all matters pertaining to life insurance, including premium charges, separately from matters not pertaining to life insurance. (4) This section shall not be construed to affect the application of any other provision of law concerning or regulating securities. [Formerly 739.562; 2003 c.364 139]
(1) Notwithstanding ORS 737.600, but subject to all other rate filing requirements of ORS chapter 737, an insurer may combine for dividend purposes the experience of a group of employers covered for workers compensation insurance by the insurer, subject to applicable rules adopted by the Director of the Department of Consumer and Business Services, if: (a) All the employers in the group are members of an organization. (b) The employers in the group constitute at least 50 percent of the employers in the organization, unless the number of covered workers in the group exceeds 500, in which case the employers in the group must constitute at least 25 percent of the employers in the organization. (c) The grouping of employers is likely to substantially improve accident prevention, claims handling for the employers and reduce expenses. (2) This section does not apply to an organization of employers for which organization a workers compensation policy was lawfully issued before October 4, 1977. The policy required by ORS 656.419 shall contain for each employer covered thereby the information required by ORS 656.419 (2). When an employer becomes an insured member of the organization the insurer shall, within 30 days after the date insured membership commenced, file a notice thereof with the director. [1977 c.405 3; 1983 c.706 3; 1990 c.1 5; 2003 c.170 11; 2007 c.241 29]
An insurer or insurance producer offering workers compensation insurance in Oregon shall not quote projected net insurance premiums based upon figures that are discretionary or terms that are not guaranteed in the workers compensation insurance policy. [1999 c.868 3; 2003 c.364 140] Note: 746.147 was added to and made a part of ORS chapter 746 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) For property, inland marine, casualty or surety insurance, an insurer may combine for dividend purposes the experience of a group of persons or risks any of which are within this state, except for workers compensation insurance done in compliance with ORS 746.145 and subject to rules adopted by the Director of the Department of Consumer and Business Services. (2) The director shall make reasonable rules regarding such dividend groupings as an aid to the effectuation and enforcement of the Insurance Code. Such rules shall have as their purpose the prevention of misrepresentation, unfair discrimination and other unfair trade practices, and may among other things require that: (a) Such a grouping comprises substantially homogeneous risks. (b) The organization under the auspices of which such a grouping is made has been in existence for at least two years and was formed for purposes other than that of obtaining insurance. (c) A substantial improvement in loss prevention or claims handling will be a likely result of such a grouping. (d) Information regarding eligibility for participation in the grouping and the system for allocation of dividends among the participants be filed with the director. (3) An insurer shall not unfairly discriminate in the allocation of dividends among the participants in such a dividend grouping. (4) The system for allocation of dividends among the participants may provide for allocation at a fixed percentage of premiums, or may provide for variations in the percentage of premiums paid as dividends, or may provide for other variations in determining the amounts of dividends allocated to participants. The variations may be based on loss or expense factors or on other reasonable considerations, such as risk size, risk location or industry or trade hazard classification, that have a probable effect on losses or expenses. (5) Failure to apply in a consistent manner the dividend allocation system specified in an insurers dividend declaration shall be prima facie evidence of unfair discrimination. [1977 c.405 4; 1983 c.706 4; 1999 c.59 230]
ORS 746.145 and 746.150 do not apply to groupings or combinations of persons or risks by way of common ownership or common use and control as permitted under ORS 737.600. [1977 c.405 2]
Except as otherwise expressly provided by law, no person, either within or outside of this state, directly or indirectly, shall enter into any contract, understanding or combination with any insurer or manager, agent or representative thereof for the purpose of, nor shall any such persons or insurers, jointly or severally do any act or engage in any practice for the purpose of: (1) Controlling the rates to be charged, or the commissions or other compensations to be paid, for insuring any risk or class of risks in this state; (2) Discriminating against or differentiating from any insurer, manager or agent, by reason of the plan or method of transacting business or the affiliation or nonaffiliation with any board or association of insurers, managers, agents or representatives; or (3) Doing anything which is detrimental to free competition in the business or injurious to the insuring public. [Formerly 736.615]
(1) A depository institution may not: (a) Solicit the sale of insurance for the protection of real or personal property after a person indicates interest in securing a loan or credit extension, until the depository institution has agreed to make the loan or credit extension; (b) Refuse to accept a written binder issued by an insurance producer as proof that temporary insurance exists covering the real or personal property that is the subject matter of, or security for, a loan or extension of credit, and that a policy of insurance will be issued covering that property. A written binder issued by an insurance producer or insurer covering real or personal property that is the subject matter of, or security for, a loan or extension of credit shall be effective until a policy of insurance is issued in lieu thereof, including within its terms the identical insurance bound under the binder and the premium therefor, or until notice of the cancellation of the binder is received by the borrower and the depository institution extending credit or offering the loan. When a depository institution closes on a binder under ORS 742.043, the insurance producer or insurer issuing the binder shall be bound to provide a policy of insurance, equivalent in coverage to the coverage set forth in the binder, within 60 days from the date of the binder. The provisions of this paragraph do not apply when prohibited by federal or state statute or regulations; or (c) Use or disclose to any other insurance producer, other than the original insurance producer, the information relating to a policy of insurance furnished by a borrower unless the original insurance producer fails to deliver a policy of insurance within 60 days prior to expiration to the depository institution without first procuring the written consent of the borrower. (2) As used in this section, "depository institution" means a financial institution as that term is defined in ORS 706.008. [1977 c.742 4; 1987 c.916 10; 2003 c.363 12; 2003 c.364 144a]
(1) In a contract or loan agreement, or in a separate document accompanying the contract or loan agreement and signed by the mortgagor, borrower or purchaser, that provides for a loan or other financing secured by the mortgagors, borrowers or purchasers real or personal property and that authorizes the secured party to place insurance on the property when the mortgagor, borrower or purchaser fails to maintain the insurance as required by the contract or loan agreement or the separate document, a warning in substantially the following form shall be set forth in 10-point type: ______________________________________________________________________________ WARNING Unless you provide us with evidence of the insurance coverage as required by our contract or loan agreement, we may purchase insurance at your expense to protect our interest. This insurance may, but need not, also protect your interest. If the collateral becomes damaged, the coverage we purchase may not pay any claim you make or any claim made against you. You may later cancel this coverage by providing evidence that you have obtained property coverage elsewhere. You are responsible for the cost of any insurance purchased by us. The cost of this insurance may be added to your contract or loan balance. If the cost is added to your contract or loan balance, the interest rate on the underlying contract or loan will apply to this added amount. The effective date of coverage may be the date your prior coverage lapsed or the date you failed to provide proof of coverage. The coverage we purchase may be considerably more expensive than insurance you can obtain on your own and may not satisfy any need for property damage coverage or any mandatory liability insurance requirements imposed by applicable law. ______________________________________________________________________________ (2) Substantial compliance by a secured party with subsection (1) of this section constitutes a complete defense to any claim arising under the laws of this state challenging the secured partys placement of insurance on the real or personal property in which the secured party has a security interest, for the protection of the secured partys interest in the property. (3) Nothing contained in this section shall be construed to require any secured party to place or maintain insurance on real or personal property in which the secured party has a security interest, and the secured party shall not be liable to the mortgagor, borrower or purchaser or to any other party as a result of the failure of the secured party to place or maintain such insurance. (4) The failure of a secured party prior to January 1, 1996, to include in a contract or loan agreement, or in a separate document accompanying the contract or loan agreement, the notice set forth in subsection (1) of this section shall not be admissible in any court or arbitration proceeding or otherwise used to prove that a secured partys actions with respect to the placement or maintenance of insurance on real or personal property in which the secured party has a security interest are or were unlawful or otherwise improper. A secured party shall not be liable to the mortgagor, borrower or purchaser or to any other party for placing such insurance in accordance with the terms of an otherwise legal contract or loan agreement with the mortgagor, borrower or purchaser entered into prior to January 1, 1996. [1977 c.742 5; 1995 c.313 3; 2003 c.363 13]
As used in ORS 746.213 to 746.219: (1) "Affiliate" means any company that controls, is controlled by or is under common control with another company. (2) "Customer" means an individual who purchases, applies to purchase or is solicited to purchase insurance products primarily for personal, family or household purposes. (3) "Depository institution" means a financial institution as that term is defined in ORS 706.008. [2003 c.363 2] Note: 746.213 to 746.219 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 746 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) A depository institution or an affiliate of a depository institution that lends money or extends credit may not: (a) As a condition precedent to the lending of money or extension of credit, or any renewal thereof, require that the person to whom the money or credit is extended, or whose obligation a creditor is to acquire or finance, negotiate any policy or renewal thereof through a particular insurer or group of insurers or insurance producer or group of insurance producers. (b) Reject an insurance policy solely because the policy has been issued or underwritten by a person who is not associated with the depository institution or affiliate when insurance is required in connection with a loan or the extension of credit. (c) As a condition for extending credit or offering any product or service that is equivalent to an extension of credit, require that a customer obtain insurance from a depository institution or an affiliate of a depository institution, or from a particular insurer or insurance producer. This paragraph does not prohibit a depository institution or an affiliate of a depository institution from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance or that insurance is available from the depository institution or an affiliate of the depository institution. (d) Unreasonably reject an insurance policy furnished by the customer or borrower for the protection of the property securing the credit or loan. A rejection is not considered unreasonable if it is based on reasonable standards that are uniformly applied and that relate to the extent of coverage required and to the financial soundness and the services of an insurer. The standards may not discriminate against any particular type of insurer or call for rejection of an insurance policy because the policy contains coverage in addition to that required in the credit transaction. (e) Require that any customer, borrower, mortgagor, purchaser, insurer or insurance producer pay a separate charge in connection with the handling of any insurance policy required as security for a loan on real estate, or pay a separate charge to substitute the insurance policy of one insurer for that of another. A charge prohibited in this paragraph does not include the interest that may be charged on premium loans or premium advancements in accordance with the terms of the loan or credit document. This paragraph does not apply to charges that would be required when the depository institution or an affiliate of a depository institution is the licensed insurance producer providing the insurance. (f) Require any procedures or conditions of an insurer or insurance producer not customarily required of insurers or insurance producers affiliated or in any way connected with the depository institution. (g) Use an advertisement or other insurance promotional material that would cause a reasonable person to mistakenly believe that the federal government or the state is responsible for the insurance sales activity of, or stands behind the credit of, the depository institution or its affiliate. (h) Use an advertisement or other insurance promotional material that would cause a reasonable person to mistakenly believe that the federal government or the state guarantees any returns on insurance products or is a source of payment on any insurance obligation of or sold by the depository institution or its affiliate. (i) Act as an insurance producer unless properly licensed in accordance with ORS 744.062, 744.063 or 744.064. (j) Pay or receive any commission, brokerage fee or other compensation as an insurance producer, unless the depository institution or affiliate holds a valid insurance producer license for the applicable class of insurance. However, an unlicensed depository institution or affiliate may make a referral to a licensed insurance producer if the depository institution or affiliate does not negotiate, sell or solicit insurance. In the case of a referral of a customer, however, the unlicensed depository institution or affiliate may be compensated for the referral only if the compensation is a fixed dollar amount for each referral that does not depend on whether the customer purchases the insurance product from the licensed insurance producer. Any depository institution or affiliate that accepts deposits from the public in an area in which such transactions are routinely conducted in the depository institution may receive for each customer referral no more than a one-time, nominal fee of a fixed dollar amount for each referral that does not depend on whether the referral results in a transaction. (k) Solicit or sell insurance, other than credit insurance or flood insurance, unless the solicitation or sale is completed through documents separate from any credit transactions. (L) Except as provided in ORS 746.201, include the expense of insurance premiums, other than credit insurance premiums or flood insurance premiums, in the primary credit transaction without the express written consent of the customer. (m) Solicit or sell insurance unless the insurance sales activities of the depository institution or affiliate are, to the extent practicable, physically separated from areas where retail deposits are routinely accepted by depository institutions. (n) Solicit or sell insurance unless the depository institution or affiliate maintains separate and distinct books and records relating to the insurance transactions, including all files relating to and reflecting consumer complaints. (2) A depository institution or an affiliate of a depository institution that lends money or extends credit and that solicits insurance primarily for personal, family or household purposes shall disclose to the customer in writing that the insurance related to the credit extension may be purchased from an insurer or insurance producer of the customers choice, subject only to the depository institutions right to reject a given insurer or insurance producer as provided in subsection (1)(d) of this section. The disclosure shall inform the customer that the customers choice of insurer or insurance producer will not affect the credit decision or credit terms in any way, except that the depository institution may impose reasonable requirements concerning the creditworthiness of the insurer and the extent of coverage chosen as provided in subsection (1)(d) of this section. [2003 c.363 3; 2005 c.22 497] Note: See note under 746.213.
(1) A depository institution that sells insurance, and any person that sells insurance on behalf of a depository institution, or on the premises of a depository institution where the depository institution is engaged in the business of taking deposits or making loans, shall disclose to the customer in writing, when practicable and in a clear and conspicuous manner, prior to a sale, that the insurance: (a) Is not a deposit; (b) Is not insured by the Federal Deposit Insurance Corporation or any other federal government agency; (c) Is not guaranteed by the depository institution or an affiliate of the depository institution if applicable, or any person that is selling insurance if applicable; and (d) When appropriate, involves investment risk, including the possible loss of value. (2) The requirements of subsection (1) of this section apply: (a) To an affiliate of a depository institution only to the extent that it sells insurance on the premises of a depository institution where the depository institution is engaged in the business of taking deposits or making loans or on behalf of a depository institution. (b) When an individual purchases insurance primarily for personal, family or household purposes and only to the extent that the disclosure would be accurate. (3) For the purpose of subsection (1) of this section, a person is selling insurance on behalf of a depository institution, whether on the premises of the depository institution or at another location, if either one of the following applies: (a) The person represents to the customer that the sale of the insurance is by or on behalf of the depository institution; or (b) The depository institution refers a customer to the person that sells insurance and the depository institution has a contractual arrangement to receive commissions or fees derived from the sale of insurance resulting from the referral. [2003 c.363 4] Note: See note under 746.213.
(1) The Director of the Department of Consumer and Business Services may examine and investigate the insurance activities of any person that the director believes may be in violation of ORS 746.213, 746.215 or 746.217. Upon request and reasonable notice, a person shall make its insurance books and records available to the director and the directors staff for inspection. An affected person may submit to the director a complaint or material pertinent to the enforcement of ORS 746.213, 746.215 and 746.217. (2) Nothing in ORS 746.213, 746.215 or 746.217 prevents a depository institution or an affiliate of a depository institution that lends money or extends credit or other lender or seller from placing insurance on real or personal property in the event the customer, borrower, mortgagor or purchaser fails to provide insurance required under the terms of the loan or credit document. (3) ORS 746.213, 746.215 and 746.217 do not apply to credit-related insurance. [2003 c.363 5] Note: See note under 746.213.
When credit life insurance or credit health insurance, as defined in ORS 743.371, is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by the debtor or of procuring and furnishing the required coverage through any authorized insurer. [Formerly 739.615]
(1) An insurer or other person may not commit or perform any of the following unfair claim settlement practices: (a) Misrepresenting facts or policy provisions in settling claims; (b) Failing to acknowledge and act promptly upon communications relating to claims; (c) Failing to adopt and implement reasonable standards for the prompt investigation of claims; (d) Refusing to pay claims without conducting a reasonable investigation based on all available information; (e) Failing to affirm or deny coverage of claims within a reasonable time after completed proof of loss statements have been submitted; (f) Not attempting, in good faith, to promptly and equitably settle claims in which liability has become reasonably clear; (g) Compelling claimants to initiate litigation to recover amounts due by offering substantially less than amounts ultimately recovered in actions brought by such claimants; (h) Attempting to settle claims for less than the amount to which a reasonable person would believe a reasonable person was entitled after referring to written or printed advertising material accompanying or made part of an application; (i) Attempting to settle claims on the basis of an application altered without notice to or consent of the applicant; (j) Failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made; (k) Delaying investigation or payment of claims by requiring a claimant or the claimants physician, naturopathic physician, physician assistant or nurse practitioner to submit a preliminary claim report and then requiring subsequent submission of loss forms when both require essentially the same information; (L) Failing to promptly settle claims under one coverage of a policy where liability has become reasonably clear in order to influence settlements under other coverages of the policy; (m) Failing to promptly provide the proper explanation of the basis relied on in the insurance policy in relation to the facts or applicable law for the denial of a claim; or (n) Any of the practices described in ORS 746.233. (2) No insurer shall refuse, without just cause, to pay or settle claims arising under coverages provided by its policies with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by: (a) A substantial increase in the number of complaints against the insurer received by the Department of Consumer and Business Services; (b) A substantial increase in the number of lawsuits filed against the insurer or its insureds by claimants; or (c) Other relevant evidence. [1967 c.359 588a; 1973 c.281 1; 1989 c.594 1; 2014 c.45 79; 2015 c.59 6; 2017 c.356 101; 2019 c.284 10]
(1) As used in this section, "prior authorization" has the meaning given that term in ORS 743B.001. (2) An insurer offering a policy or certificate of health insurance may not, in making a determination on a health care provider or enrollees request for prior authorization of a health care item or service, perform any of the following unfair claim settlement practices: (a) Misrepresent facts of policy provisions; (b) Fail to acknowledge and act upon communications relating to the request; (c) Fail to adopt and implement reasonable standards for the prompt investigations of prior authorization requests; (d) Make a determination without conducting a reasonable investigation based on all available information; (e) Fail to act promptly, equitably and in good faith to approve the request for prior authorization that is medically necessary and covered under the terms of the policy; (f) Require a provider or enrollee to submit substantially identical information more than one time in the course of making the determination; or (g) If the request for prior authorization is denied, fail to promptly provide a complete and thorough explanation of the terms of the policy or certificate that the insurer relied upon and the factual or legal basis for the denial. (3) An insurer may not engage in a pattern or practice of refusing, without just cause, to approve requests for prior authorization of items or services covered under its policies and certificates as demonstrated by: (a) A substantial increase in the number of consumer complaints against the insurer received by the Department of Consumer and Business Services regarding denials of prior authorization; (b) A substantial number of lawsuits filed by: (A) A provider against the insurer or an insured based on the failure to approve a request for prior authorization for an item or service furnished by the provider; or (B) A provider or enrollee against the insurer based on the failure to approve a prior authorization request for an item or service; or (c) Other evidence that the department deems relevant. (4) The department may adopt rules necessary to carry out the provisions of this section. [2019 c.284 2] Note: 746.233 was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 746 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
No person shall engage in this state in any trade practice that, although not expressly defined and prohibited in the Insurance Code, is found by the Director of the Department of Consumer and Business Services to be an unfair or deceptive act or practice in the transaction of insurance that is injurious to the insurance-buying public. [1967 c.359 589; 1973 c.281 2]
(1) As used in this section, "employment driving record" and "nonemployment driving record" mean the employment driving record and nonemployment driving record described in ORS 802.200. (2) Except as provided in subsection (4) of this section, an insurer may not consider an individuals employment driving record or nonemployment driving record in determining rates for, or whether to issue or renew, a policy of personal insurance, as defined in ORS 746.600, that provides, for the individual, automobile liability coverage, uninsured motorist coverage, automobile medical payments coverage or automobile physical damage coverage on an individually owned passenger vehicle, including pickup and panel trucks and station wagons. An insurer may not cancel the policy or discriminate in regard to other terms or conditions of the policy based upon the individuals employment driving record or nonemployment driving record. (3) This section does not affect the enforcement of the motor vehicle laws. (4) An insurer may use the abstract of the individuals nonemployment driving record as authorized under ORS 746.265. [1973 c.113 2; 1979 c.662 2; 1983 c.338 969; 1987 c.5 6; 2015 c.76 1]
(1) Subject to subsection (2) of this section, an insurer may consider the abstract of an individuals nonemployment driving record under ORS 802.220 when evaluating the individuals application to obtain or renew personal insurance, as defined in ORS 746.600, that provides automobile liability coverage, uninsured motorist coverage, automobile medical payments coverage or automobile physical damage coverage on an individually owned passenger vehicle, including pickup and panel trucks and station wagons: (a) For the purpose of determining whether to issue or renew the individuals policy. (b) For the purpose of determining the rates of the individuals policy. (2) For the purposes specified in subsection (1) of this section, an insurer that issues or renews a policy described in subsection (1) of this section may not consider any: (a) Accident or conviction for violation of motor vehicle laws that occurred more than three years immediately preceding the application for the policy or for renewal of the policy; (b) Diversion agreements under ORS 813.220 that were entered into more than three years immediately preceding the application for the policy or for renewal of the policy; or (c) Suspension of driving privileges pursuant to ORS 809.280 (6) or (8) if the suspension is based on a nondriving offense. (3) Subsection (2) of this section does not apply if an insurer considers an individuals nonemployment driving record under ORS 802.220 for the purpose of providing a discount to the individual. [1987 c.5 5; 1989 c.853 1; 1991 c.860 7; 1999 c.59 231; 2001 c.327 1; 2011 c.355 25; 2015 c.76 2]
No person shall make or use in the offer or sale of a variable life insurance policy any illustrations of benefits payable that include projections of past investment experience into the future or predictions of future investment experience. This section is not intended to prohibit use of hypothetical assumed rates of investment return to illustrate possible levels of benefits. [1973 c.435 26]
As used in ORS 746.275 to 746.300: (1) "Adjuster" means a person authorized to do business under ORS 744.515 or 744.521. (2) "Motor vehicle liability insurance policy" means an insurance policy which provides automobile liability coverage, uninsured motorist coverage, automobile medical payments coverage or automobile physical damage coverage on motor vehicles, but does not include any insurance policy: (a) Covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards; or (b) Issued principally to cover personal or premises liability of an insured, even though such insurance may also provide some incidental coverage for liability arising out of the ownership, maintenance or use of a motor vehicle on the premises of such insured or on the ways immediately adjoining such premises. (3) "Motor vehicle body and frame repair shop" means a business or a division of a business organized for the purpose of effecting repairs to motor vehicles which have been physically damaged. [1977 c.785 1; 2019 c.151 41] Note: 746.275 to 746.300 and 746.991 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 746 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) An insurer may not require that a particular person make the repairs to the insureds motor vehicle as a condition for recovery by the insured under a motor vehicle liability insurance policy. (2) Prior to providing a recommendation that a particular person make repairs to the insureds motor vehicle, the person adjusting the claim on behalf of the insurer shall inform the insured of the rights conferred by subsection (1) of this section by communicating in a statement substantially similar to the following: ______________________________________________________________________________ OREGON LAW PROHIBITS US FROM REQUIRING YOU TO GET REPAIRS TO YOUR VEHICLE AT A PARTICULAR MOTOR VEHICLE REPAIR SHOP. YOU HAVE THE RIGHT TO SELECT THE MOTOR VEHICLE REPAIR SHOP OF YOUR CHOICE. ______________________________________________________________________________ (3) If an insured elects to have the motor vehicle repaired at a motor vehicle repair shop other than a shop recommended by the insurer, the insurer may not limit the cost of repairs necessary to return the motor vehicle to a preloss condition relative to safety, function and appearance other than as stated in the policy or as otherwise allowed by law. (4) If an insured accepts the insurers recommendation, the insurer shall provide, electronically or in printed form, a statement to the insured within three business days after the date of acceptance in substantially the following form: ______________________________________________________________________________ WE HAVE RECOMMENDED A MOTOR VEHICLE REPAIR SHOP. IF YOU AGREE TO USE OUR RECOMMENDED REPAIR SHOP, YOUR VEHICLE WILL RECEIVE REPAIRS RETURNING IT TO A PRELOSS CONDITION RELATIVE TO SAFETY, FUNCTION AND APPEARANCE AT NO ADDITIONAL COST TO YOU OTHER THAN AS STATED IN THE INSURANCE POLICY OR AS OTHERWISE ALLOWED BY LAW. ______________________________________________________________________________ [1977 c.785 2; 2007 c.506 1] Note: See note under 746.275.
A person operating a motor vehicle body and frame repair shop shall display in a conspicuous place in the shop a sign in bold face type in letters at least two inches high reading substantially as follows: ______________________________________________________________________________ PURSUANT TO OREGON INSURANCE LAW, AN INSURANCE COMPANY MAY NOT REQUIRE THAT REPAIRS BE MADE TO A MOTOR VEHICLE BY A PARTICULAR PERSON OR REPAIR SHOP. ______________________________________________________________________________ [1977 c.785 3] Note: See note under 746.275.
(1) Without the consent of the owner of the vehicle, an insurer may not require, directly or indirectly, that a motor vehicle body and frame repair shop supply or install any aftermarket crash part unless the part has been certified by an independent test facility to be at least equivalent to the part being replaced. (2) For purposes of this section, an aftermarket crash part is at least equivalent to the part being replaced if the aftermarket crash part is the same kind of part and is at least the same quality with respect to fit, finish, function and corrosion resistance. [1987 c.622 3] Note: See note under 746.275.
Any insurer which offers a motor vehicle insurance policy that provides coverage for repair of the vehicle shall make available to its insured a crash part warranty for crash parts not made by the original equipment manufacturer as described in ORS 746.292 when the insured requests one. [1987 c.622 4] Note: 746.289 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 746 or 746.275 to 746.300 or any other series by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) An adjuster establishing loss under a motor vehicle liability insurance policy shall advise the insured of the provisions of ORS 746.280. (2) Every motor vehicle liability insurance policy issued in this state after December 31, 1977, and any extension or renewal after that date of a policy issued before that date shall be accompanied by a statement in clear and conspicuous language approved by the director of: (a) The rights and responsibilities of the insured when a claim is submitted; and (b) The provisions of ORS 746.280. [1977 c.785 4] Note: See note under 746.275.
(1) All work done by a motor vehicle body and frame repair shop shall be recorded on an invoice and shall describe all service work done and parts supplied. If any used parts are supplied, the invoice shall clearly state that fact. If any component system installed is composed of new and used parts, such invoice shall clearly state that fact. One copy of the invoice shall be given to the customer and one copy shall be retained by the motor vehicle body and frame repair shop. (2) Before commencing repair work and upon the request of any customer, a motor vehicle body and frame repair shop shall make an estimate in writing of the parts and labor necessary for the repair work, and shall not charge for the work done or parts supplied in excess of the estimate without the consent of such customer. (3)(a) If crash parts to be used in the repair work are supplied by the original equipment manufacturer, the parts shall be accompanied by a warranty that guarantees the customer that the parts meet or exceed standards used in manufacturing the original equipment. (b) If crash parts to be used in the repair work are not supplied by the original equipment manufacturer, the estimate shall include a statement that says: ______________________________________________________________________________ This estimate has been prepared based on the use of a motor vehicle crash part not made by the original equipment manufacturer. The use of a motor vehicle crash part not made by the original equipment manufacturer may invalidate any remaining warranties of the original equipment manufacturer on that motor vehicle part. The person who prepared this estimate will provide a copy of the part warranty for crash parts not made by the original equipment manufacturer for comparison purposes. ______________________________________________________________________________ (4) No motor vehicle body and frame shop may: (a) Supply or install used parts, or any component system composed of new and used parts, when new parts or component systems are or were to be supplied or installed. (b) Supply or install, without the owners consent, any aftermarket crash part unless the part has been certified by an independent test facility to be at least equivalent to the part being replaced. For purposes of this paragraph, an aftermarket crash part is at least equivalent to the part being replaced if the aftermarket crash part is the same kind of part and is at least the same quality with respect to fit, finish, function and corrosion resistance. (c) Charge for repairs not actually performed, or add the cost of repairs not actually to be performed to any repair estimate. (d) Refuse any insurer, or its insured, or their agents or employees, reasonable access to any repair facility for the purpose of inspecting or reinspecting the damaged vehicle during usual business hours. (5) As used in ORS 746.287 and this section, "aftermarket crash part" means a motor vehicle replacement part, sheet metal or plastic, that constitutes the visible exterior of the vehicle, including an inner or outer panel, is generally repaired or replaced as the result of a collision and is not supplied by the original equipment manufacturer. [1977 c.785 5; 1987 c.622 1] Note: See note under 746.275.
Nothing in ORS 746.275 to 746.300 or 746.991 shall prohibit an insurer from establishing proof of loss requirements for motor vehicle liability insurance policies, investigating and determining the amount of an insureds loss through its agents or employees or negotiating with any person for the repair of such loss. [1977 c.785 6] Note: See note under 746.275.
An insured whose insurer violates ORS 746.280 or 746.290, or a customer whose motor vehicle body and frame repair shop violates ORS 746.292, may file an action to recover actual damages or $100, whichever is greater, for each violation. The court may award reasonable attorney fees to the prevailing party in an action under this section. [1977 c.785 7; 1981 c.897 102; 1995 c.618 129] Note: See note under 746.275.
The Director of the Department of Consumer and Business Services may adopt rules to carry out the provisions of ORS 746.275 to 746.300 and 746.991. [1987 c.622 5] Note: 746.305 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 746 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
[1989 c.947 4; renumbered 743.724 in 1991]
An insurer that violates ORS 819.014 or 819.018 shall be considered to have violated a provision of the Insurance Code. [1991 c.820 7] Note: 746.308 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 746 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
(1) No person shall in this state directly or indirectly with respect to domestic risks act as insurance producer for or otherwise transact insurance for any insurer not then authorized to transact such insurance in this state. (2) In the event of failure of any unauthorized insurer to pay any claim or loss within the provisions of such insurance policy, any insurance producer who assisted or in any manner aided in the procurement of such insurance policy knowing it to be procured through an unauthorized insurer shall be liable to the insured for the full amount of the claim or loss. (3) This section does not apply to: (a) Matters authorized to be done by the Director of the Department of Consumer and Business Services under ORS 746.320 to 746.360. (b) Insurance written under a surplus line license in compliance with ORS 735.400 to 735.495. (c) Any transaction with respect to reinsurance when transacted by an insurer duly authorized by its state of domicile to transact the class of insurance involved. (d) A licensed adjuster or attorney at law representing such an insurer from time to time in such occupational or professional capacity. [1967 c.359 591; 1969 c.336 17; 1987 c.774 140; 1991 c.810 27; 2003 c.364 145]
(1) When an unauthorized insurer does any of the acts specified in subsection (2) of this section in this state, by mail or otherwise, the doing of such acts shall constitute an appointment by such insurer of the Director of the Department of Consumer and Business Services, and the successor in office, as its lawful attorney upon whom all process may be served in any action begun by or on behalf of an insured or beneficiary and arising out of policies of insurance between the insurer and persons residing or authorized to do business in this state. Subject to subsection (4) of this section, the doing of any such act shall signify the insurers consent that service of process upon the director is of the same legal force and effect as personal service of process upon such insurer within this state. (2) The acts referred to in subsection (1) of this section are: (a) Issuing or delivering policies of insurance to persons residing or authorized to do business in this state. (b) Soliciting applications for policies of insurance from such persons. (c) Collecting premiums, membership fees, assessments or other considerations under policies of insurance from such persons. (d) Any other transaction of business arising out of policies of insurance with such persons. (3) Service of process upon the director shall be made by delivering to and leaving with the director, or with any clerk on duty in the office, two copies of such process. Immediately after service of process, the director shall send one of such copies to the defendant insurer at its principal office. The director shall keep a record of all processes served upon the director under this section. (4) Service of process in the manner provided in this section gives jurisdiction over the person of an insurer provided: (a) Notice of such service and a copy of the process are sent by registered mail or by certified mail with return receipt by the plaintiff, or the attorney of the plaintiff, to the defendant insurer at its principal office within 10 days after the date of service; and (b) The defendant insurers receipt, or receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed and an affidavit of the plaintiff, or the attorney of the plaintiff, showing compliance with this section are filed with the clerk of the court in which the action against such insurer is pending on or before the date on which such insurer is required to appear, or within such further time as the court may allow. (5) Nothing contained in this section shall limit or abridge the right to serve any process upon an insurer in any other manner then permitted by law. [Formerly 736.252; 1991 c.249 71]
Until the expiration of 30 days from the date of filing an affidavit of compliance under ORS 746.320, no plaintiff or complainant shall be entitled to a judgment by default in any action in which service of process is made in the manner provided in such section. [Formerly 736.254]
(1) Except as provided in subsection (3) of this section, before any unauthorized insurer may file or cause to be filed any motion or pleading in an action started against it by service of process in the manner provided in ORS 746.320, the defendant insurer shall either: (a) Procure a certificate of authority to transact insurance in this state; or (b) Deposit cash or securities or file a bond with good and sufficient sureties, approved by the court, with the clerk of the court in which such action is pending in an amount, fixed by the court, sufficient to secure the payment of any judgment which may be entered in such action. However, the court may in its discretion make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to such court that the insurer maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action. (2) The court may order such postponement as may be necessary to give such insurer reasonable opportunity to comply with subsection (1) of this section and to prepare its defense in such action. (3) Nothing in ORS 746.320 to 746.360 shall be construed to prevent a defendant unauthorized insurer from filing a motion to set aside service of process made in the manner provided in ORS 746.320 on the ground that such insurer has not done any of the acts described in subsection (2) of such section. [Formerly 736.256]
In any action against an unauthorized insurer in which service of process was made in the manner provided in ORS 746.320, the court may award reasonable attorney fees to the prevailing party. [Formerly 736.258; 1981 c.897 103; 1995 c.618 130]
ORS 746.320 to 746.360 do not apply to an action against an unauthorized insurer arising out of any policy of: (1) Reinsurance or wet marine and transportation insurance; (2) Insurance effected in compliance with ORS 735.400 to 735.495; (3) Insurance against legal liability arising out of ownership, operation or maintenance of any property having a permanent situs outside the state; or (4) Insurance against loss of or damage to any property having a permanent situs outside this state, where such policy contains a provision designating the Director of the Department of Consumer and Business Services or a bona fide resident of this state as the insurers lawful attorney upon whom all process may be served in any action begun by or on behalf of an insured or beneficiary and arising out of policies of insurance between the insurer and persons residing or authorized to do business in this state. [Formerly 736.260; 2005 c.185 6]
In order that the Director of the Department of Consumer and Business Services may effectively administer ORS 746.310 to 746.370, every person for or by whom insurance has been placed with an unauthorized insurer shall, upon the directors order, produce for examination all policies and other documents evidencing the insurance, and shall disclose to the director the amount of premiums paid or agreed to be paid for the insurance. [1967 c.359 597]
As used in ORS 746.405 to 746.530, unless the context requires otherwise: (1) "Premium finance agreement" means an agreement by which an insured or prospective insured promises to pay to a premium finance company or to its assignee the amount advanced or to be advanced under the agreement to an insurer or to an insurance producer in payment of premiums on an insurance policy together with a service charge. No mortgage, conditional sale contract or other security agreement covering property which authorizes the lienholder to pay or advance premiums for insurance with respect thereto shall be deemed to be a premium finance agreement. (2) "Premium finance company" means a person engaged in the business of entering into premium finance agreements with insureds or of acquiring such premium finance agreements from insurance producers or other premium finance companies. [1969 c.639 2; 2003 c.364 146]
In the manner provided in ORS 731.296, the Director of the Department of Consumer and Business Services may address inquiries to a premium finance company, and a premium finance company shall reply to such inquiries. [1993 c.265 11]
ORS 746.405 to 746.530 do not apply to: (1) Any insurer authorized to transact business in this state who finances insurance premiums on domestic risks with a service charge no greater than that provided in ORS 746.485 and 746.495; (2) Any bank, trust company, savings and loan association, credit union or other lending institution authorized to transact business in this state that does not possess or acquire any right, title or interest with respect to the insurance policy for which the premiums are financed other than in the proceeds thereof in the event of loss; (3) The inclusion of a charge for insurance in connection with an installment sale in accordance with ORS 83.010 to 83.820 and 83.990; or (4) Insurance producers financing only their own accounts and whose aggregate charge for financing does not exceed one and one-half percent per month on the outstanding balance. [1969 c.639 4; 1981 c.412 22; 2003 c.364 147]
(1) Every premium finance company shall maintain records of its premium finance transactions and the records shall be open to examination and investigation by the Director of the Department of Consumer and Business Services. The director may at any time require the company to bring such records as the director may direct to the directors office for examination. (2) Every premium finance company shall preserve its records of such premium finance transactions, including cards used in a card system, for at least three years after making the final entry in respect to any premium finance agreement. The preservation of records in photographic form shall constitute compliance with this requirement. [1969 c.639 8]
No insurer shall interfere in any way with the right of any person soliciting or procuring an application for its insurance policies to recommend to an insured any premium finance company. [1983 c.239 5]
(1) A premium finance agreement shall: (a) Be dated, signed by the insured or by any person authorized in writing to act in behalf of the insured, and the printed portion thereof shall be in at least eight-point type; (b) Contain the name and place of business of the insurance producer negotiating the related insurance policy, the name and residence or the place of business of the insured as specified by the insured, the name and place of business of the premium finance company to which payments are to be made, a description of the insurance policies involved and the amount of the premium therefor; and (c) Set forth the following items where applicable: (A) The total amount of the premiums. (B) The amount of the down payment. (C) The principal balance (the difference between items (A) and (B)). (D) The amount of the service charge. (E) The balance payable by the insured (sum of items (C) and (D)). (F) The number of payments required, the amount of each payment expressed in dollars, and the due date or period thereof. (2) The items set out in subsection (1)(c) of this section need not be stated in the sequence or order in which they appear in such paragraph, and additional items may be included to explain the computations made in determining the amount to be paid by the insured. (3) The premium finance company or the insurance producer shall deliver to the insured, or mail to the insured at the address shown in the agreement, a complete copy of the agreement. (4) A premium finance company shall give notice of its financing to the insurer not later than the 30th day after the date the premium financing agreement is received by the premium finance company. A notice given under this subsection shall be effective whether or not the insureds policy number is set forth in the notice. [1969 c.639 9; 1971 c.231 38; 1983 c.239 3; 2003 c.364 148]
(1) A premium finance company shall not charge, contract for, receive, or collect a service charge other than as permitted by ORS 746.405 to 746.530. (2) The service charge is to be computed on the balance of the premiums due (after subtracting the down payment made by the insured in accordance with the premium finance agreement) from the effective date of the insurance coverage, for which the premiums are being advanced, to and including the date when the final payment of the premium finance agreement is payable. (3) The service charge shall not exceed interest at a rate authorized under this subsection plus an additional charge of 10 percent of the amount financed or $50, whichever amount is less, per premium finance agreement. The additional charge need not be refunded upon cancellation or prepayment. The rate of interest charged by a premium finance company on the amount of financed premium shall not exceed the nominal annual rate of five percentage points in excess of the discount rate, and any surcharge thereon, on 90-day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve District which includes Oregon on the effective date of the insurance coverage or 18 percent, whichever is greater. (4) Any insured may prepay the premium finance agreement in full at any time before the due date of the final payment. In such event the unearned interest shall be refunded. The amount of any such refund shall be the total amount of interest due on the agreement less the interest earned to the installment date nearest the date of payment, computed by applying the actuarial method based on the annual percentage rate set forth on the premium finance agreement. [1969 c.639 10; 1971 c.231 39; 1983 c.239 1]
(1) A premium finance agreement may provide for the payment by the insured of a delinquency charge for any payment that is in default for a period of 10 days or more. Such charge may be made for each month or fraction thereof that the payment is in default. The amount of such charge may be a minimum of $1 and as a maximum shall be subject to the following limits: (a) For delinquent payments of less than $250, five percent of the payment or $5, whichever is less; or (b) For delinquent payments of $250 or more, two percent of the payment. (2) If a payment default results in the cancellation of any insurance policy listed in the agreement, the agreement may provide for the payment by the insured of a cancellation charge of $5, less any delinquency charges imposed in respect to the payment in default. [1969 c.639 11]
(1) When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance policy or policies listed in the agreement, the insurance policy or policies shall not be canceled by the premium finance company unless such cancellation is effectuated in accordance with this section. (2) Not less than 10 days written notice shall be mailed to the insured of the intent of the premium finance company to cancel the insurance policy unless the default is cured within such 10-day period. A copy of such notice shall also be mailed to the insurance producer indicated on the premium finance agreement. (3) After expiration of such 10-day period, the premium finance company may thereafter in the name of the insured cancel such insurance policy or policies by mailing to the insurer a notice of cancellation, and the insurance policy shall be canceled as if such notice of cancellation had been submitted by the insured, but without requiring the return of the insurance policy or policies. The premium finance company shall also mail a notice of cancellation to the insured at the last-known address of the insured and to the insurance producer indicated on the premium finance agreement. (4) All statutory, regulatory and contractual restrictions providing that the insurance policy may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under the provisions of this section. The insurer shall give the prescribed notice on behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the second business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation taking into consideration the number of days notice required to complete the cancellation. [1969 c.639 12; 1983 c.239 2; 2003 c.364 149]
(1) Whenever a financed insurance policy is canceled, the insurer who has been notified as provided in ORS 746.475 (4) shall return whatever gross unearned premiums are due under the insurance policy to the premium finance company for the account of the insured or insureds not later than the 30th day after the date of cancellation. If the insurer elects to return the premium through the insurance producer, the insurance producer shall transmit the unearned premium to the premium finance company within the 30-day period. The insurer, on written notice of any failure of the insurance producer to transmit the premium and not later than the 30th day after the notice, shall pay the amount of return premium directly to the premium finance company. (2) In calculating the gross unearned premium due under a financed insurance policy, the insurer shall use the prorate method of calculation. (3) In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund such excess to the insured provided that no such refund shall be required if it amounts to less than $1. [1969 c.639 13; 1983 c.239 7; 2003 c.364 150]
No filing of the premium finance agreement shall be necessary to perfect the validity of such agreement as a secured transaction as against creditors, subsequent purchasers, pledgees, encumbrancers, successors or assigns. [1969 c.639 14]
In any action to enforce any right created by ORS 746.405 to 746.530, the prevailing party may be awarded a reasonable amount, to be fixed by the court, as attorney fees. The amount may be taxed as part of the cost of the action and any appeal thereon. [1983 c.239 6]
As used in ORS 746.600 to 746.690: (1)(a) "Adverse underwriting decision" means any of the following actions with respect to insurance transactions involving insurance coverage that is individually underwritten: (A) A declination of insurance coverage. (B) A termination of insurance coverage. (C) Failure of an insurance producer to apply for insurance coverage with a specific insurer that the insurance producer represents and that is requested by an applicant. (D) In the case of life or health insurance coverage, an offer to insure at higher than standard rates. (E) In the case of insurance coverage other than life or health insurance coverage: (i) Placement by an insurer or insurance producer of a risk with a residual market mechanism, an unauthorized insurer or an insurer that specializes in substandard risks. (ii) The charging of a higher rate on the basis of information that differs from that which the applicant or policyholder furnished. (iii) An increase in any charge imposed by the insurer for any personal insurance in connection with the underwriting of insurance. For purposes of this sub-subparagraph, the imposition of a service fee is not a charge. (b) "Adverse underwriting decision" does not mean any of the following actions, but the insurer or insurance producer responsible for the occurrence of the action must nevertheless provide the applicant or policyholder with the specific reason or reasons for the occurrence: (A) The termination of an individual policy form on a class or statewide basis. (B) A declination of insurance coverage solely because the coverage is not available on a class or statewide basis. (C) The rescission of a policy. (2) "Affiliate of" a specified person or "person affiliated with" a specified person means a person who directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (3) "Applicant" means a person who seeks to contract for insurance coverage, other than a person seeking group insurance coverage that is not individually underwritten. (4) "Consumer" means an individual, or the personal representative of the individual, who seeks to obtain, obtains or has obtained one or more insurance products or services from a licensee that are to be used primarily for personal, family or household purposes, and about whom the licensee has personal information. (5) "Consumer report" means any written, oral or other communication of information bearing on a natural persons creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living that is used or expected to be used in connection with an insurance transaction. (6) "Consumer reporting agency" means a person that, for monetary fees or dues, or on a cooperative or nonprofit basis: (a) Regularly engages, in whole or in part, in assembling or preparing consumer reports; (b) Obtains information primarily from sources other than insurers; and (c) Furnishes consumer reports to other persons. (7) "Control" means, and the terms "controlled by" or "under common control with" refer to, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power of the person is the result of a corporate office held in, or an official position held with, the controlled person. (8) "Covered entity" means: (a) A health insurer; (b) A health care provider that transmits any health information in electronic form to carry out financial or administrative activities in connection with a transaction covered by ORS 746.607 or by rules adopted under ORS 746.608; or (c) A health care clearinghouse. (9) "Credit history" means any written or other communication of any information by a consumer reporting agency that: (a) Bears on a consumers creditworthiness, credit standing or credit capacity; and (b) Is used or expected to be used, or collected in whole or in part, as a factor in determining eligibility, premiums or rates for personal insurance. (10) "Customer" means a consumer who has a continuing relationship with a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes. (11) "Declination of insurance coverage" or "decline coverage" means a denial, in whole or in part, by an insurer or insurance producer of an application for requested insurance coverage. (12) "Health care" means care, services or supplies related to the health of an individual. (13) "Health care operations" includes but is not limited to: (a) Quality assessment, accreditation, auditing and improvement activities; (b) Case management and care coordination; (c) Reviewing the competence, qualifications or performance of health care providers or health insurers; (d) Underwriting activities; (e) Arranging for legal services; (f) Business planning; (g) Customer services; (h) Resolving internal grievances; (i) Creating deidentified information; and (j) Fundraising. (14) "Health care provider" includes but is not limited to: (a) A psychologist, occupational therapist, regulated social worker, professional counselor or marriage and family therapist licensed or otherwise authorized to practice under ORS chapter 675 or an employee of the psychologist, occupational therapist, regulated social worker, professional counselor or marriage and family therapist; (b) A physician or physician assistant licensed under ORS chapter 677, an acupuncturist licensed under ORS 677.759 or an employee of the physician, physician assistant or acupuncturist; (c) A nurse or nursing home administrator licensed under ORS chapter 678 or an employee of the nurse or nursing home administrator; (d) A dentist licensed under ORS chapter 679 or an employee of the dentist; (e) A dental hygienist or denturist licensed under ORS chapter 680 or an employee of the dental hygienist or denturist; (f) A speech-language pathologist or audiologist licensed under ORS chapter 681 or an employee of the speech-language pathologist or audiologist; (g) An emergency medical services provider licensed under ORS chapter 682; (h) An optometrist licensed under ORS chapter 683 or an employee of the optometrist; (i) A chiropractic physician licensed under ORS chapter 684 or an employee of the chiropractic physician; (j) A naturopathic physician licensed under ORS chapter 685 or an employee of the naturopathic physician; (k) A massage therapist licensed under ORS 687.011 to 687.250 or an employee of the massage therapist; (L) A direct entry midwife licensed under ORS 687.405 to 687.495 or an employee of the direct entry midwife; (m) A physical therapist licensed under ORS 688.010 to 688.201 or an employee of the physical therapist; (n) A medical imaging licensee under ORS 688.405 to 688.605 or an employee of the medical imaging licensee; (o) A respiratory care practitioner licensed under ORS 688.815 or an employee of the respiratory care practitioner; (p) A polysomnographic technologist licensed under ORS 688.819 or an employee of the polysomnographic technologist; (q) A pharmacist licensed under ORS chapter 689 or an employee of the pharmacist; (r) A dietitian licensed under ORS 691.405 to 691.485 or an employee of the dietitian; (s) A funeral service practitioner licensed under ORS chapter 692 or an employee of the funeral service practitioner; (t) A health care facility as defined in ORS 442.015; (u) A home health agency as defined in ORS 443.014; (v) A hospice program as defined in ORS 443.850; (w) A clinical laboratory as defined in ORS 438.010; (x) A pharmacy as defined in ORS 689.005; (y) A diabetes self-management program as defined in ORS 743.694; and (z) Any other person or entity that furnishes, bills for or is paid for health care in the normal course of business. (15) "Health information" means any oral or written information in any form or medium that: (a) Is created or received by a covered entity, a public health authority, a life insurer, a school, a university or a health care provider that is not a covered entity; and (b) Relates to: (A) The past, present or future physical or mental health or condition of an individual; (B) The provision of health care to an individual; or (C) The past, present or future payment for the provision of health care to an individual. (16) "Health insurer" means an insurer who offers: (a) A health benefit plan as defined in ORS 743B.005; (b) A short term health insurance policy, the duration of which does not exceed three months including renewals; (c) A student health insurance policy; (d) A Medicare supplemental policy; or (e) A dental only policy. (17) "Homeowner insurance" means insurance for residential property consisting of a combination of property insurance and casualty insurance that provides coverage for the risks of owning or occupying a dwelling and that is not intended to cover an owners interest in rental property or commercial exposures. (18) "Individual" means a natural person who: (a) In the case of life or health insurance, is a past, present or proposed principal insured or certificate holder; (b) In the case of other kinds of insurance, is a past, present or proposed named insured or certificate holder; (c) Is a past, present or proposed policyowner; (d) Is a past or present applicant; (e) Is a past or present claimant; or (f) Derived, derives or is proposed to derive insurance coverage under an insurance policy or certificate that is subject to ORS 746.600 to 746.690. (19) "Individually identifiable health information" means any oral or written health information that is: (a) Created or received by a covered entity or a health care provider that is not a covered entity; and (b) Identifiable to an individual, including demographic information that identifies the individual, or for which there is a reasonable basis to believe the information can be used to identify an individual, and that relates to: (A) The past, present or future physical or mental health or condition of an individual; (B) The provision of health care to an individual; or (C) The past, present or future payment for the provision of health care to an individual. (20) "Institutional source" means a person or governmental entity that provides information about an individual to an insurer, insurance producer or insurance-support organization, other than: (a) An insurance producer; (b) The individual who is the subject of the information; or (c) A natural person acting in a personal capacity rather than in a business or professional capacity. (21) "Insurance producer" or "producer" means a person licensed by the Director of the Department of Consumer and Business Services as a resident or nonresident insurance producer. (22) "Insurance score" means a number or rating that is derived from an algorithm, computer application, model or other process that is based in whole or in part on credit history. (23)(a) "Insurance-support organization" means a person who regularly engages, in whole or in part, in assembling or collecting information about natural persons for the primary purpose of providing the information to an insurer or insurance producer for insurance transactions, including: (A) The furnishing of consumer reports to an insurer or insurance producer for use in connection with insurance transactions; and (B) The collection of personal information from insurers, insurance producers or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation or material nondisclosure in connection with insurance underwriting or insurance claim activity. (b) "Insurance-support organization" does not mean insurers, insurance producers, governmental institutions or health care providers. (24) "Insurance transaction" means any transaction that involves insurance primarily for personal, family or household needs rather than business or professional needs and that entails: (a) The determination of an individuals eligibility for an insurance coverage, benefit or payment; or (b) The servicing of an insurance application, policy or certificate. (25) "Insurer" has the meaning given that term in ORS 731.106. (26) "Investigative consumer report" means a consumer report, or portion of a consumer report, for which information about a natural persons character, general reputation, personal characteristics or mode of living is obtained through personal interviews with the persons neighbors, friends, associates, acquaintances or others who may have knowledge concerning such items of information. (27) "Licensee" means an insurer, insurance producer or other person authorized or required to be authorized, or licensed or required to be licensed, pursuant to the Insurance Code. (28) "Loss history report" means a report provided by, or a database maintained by, an insurance-support organization or consumer reporting agency that contains information regarding the claims history of the individual property that is the subject of the application for a homeowner insurance policy or the consumer applying for a homeowner insurance policy. (29) "Nonaffiliated third party" means any person except: (a) An affiliate of a licensee; (b) A person that is employed jointly by a licensee and by a person that is not an affiliate of the licensee; and (c) As designated by the director by rule. (30) "Payment" includes but is not limited to: (a) Efforts to obtain premiums or reimbursement; (b) Determining eligibility or coverage; (c) Billing activities; (d) Claims management; (e) Reviewing health care to determine medical necessity; (f) Utilization review; and (g) Disclosures to consumer reporting agencies. (31)(a) "Personal financial information" means: (A) Information that is identifiable with an individual, gathered in connection with an insurance transaction from which judgments can be made about the individuals character, habits, avocations, finances, occupations, general reputation, credit or any other personal characteristics; or (B) An individuals name, address and policy number or similar form of access code for the individuals policy. (b) "Personal financial information" does not mean information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records, widely distributed media or disclosures to the public that are required by federal, state or local law. (32) "Personal information" means: (a) Personal financial information; (b) Individually identifiable health information; or (c) Protected health information. (33) "Personal insurance" means the following types of insurance products or services that are to be used primarily for personal, family or household purposes: (a) Private passenger automobile coverage; (b) Homeowner, mobile homeowners, manufactured homeowners, condominium owners and renters coverage; (c) Personal dwelling property coverage; (d) Personal liability and theft coverage, including excess personal liability and theft coverage; and (e) Personal inland marine coverage. (34) "Personal representative" includes but is not limited to: (a) A person appointed as a guardian under ORS 125.305, 419B.372, 419C.481 or 419C.555 with authority to make medical and health care decisions; (b) A person appointed as a health care representative under ORS 127.505 to 127.660 or 127.700 to 127.737 to make health care decisions or mental health treatment decisions; (c) A person appointed as a personal representative under ORS chapter 113; and (d) A person described in ORS 746.611. (35) "Policyholder" means a person who: (a) In the case of individual policies of life or health insurance, is a current policyowner; (b) In the case of individual policies of other kinds of insurance, is currently a named insured; or (c) In the case of group policies of insurance under which coverage is individually underwritten, is a current certificate holder. (36) "Pretext interview" means an interview wherein the interviewer, in an attempt to obtain personal information about a natural person, does one or more of the following: (a) Pretends to be someone the interviewer is not. (b) Pretends to represent a person the interviewer is not in fact representing. (c) Misrepresents the true purpose of the interview. (d) Refuses upon request to identify the interviewer. (37) "Privileged information" means information that is identifiable with an individual and that: (a) Relates to a claim for insurance benefits or a civil or criminal proceeding involving the individual; and (b) Is collected in connection with or in reasonable anticipation of a claim for insurance benefits or a civil or criminal proceeding involving the individual. (38)(a) "Protected health information" means individually identifiable health information that is transmitted or maintained in any form of electronic or other medium by a covered entity. (b) "Protected health information" does not mean individually identifiable health information in: (A) Education records covered by the federal Family Educational Rights and Privacy Act (20 U.S.C. 1232g); (B) Records described at 20 U.S.C. 1232g(a)(4)(B)(iv); or (C) Employment records held by a covered entity in its role as employer. (39) "Residual market mechanism" means an association, organization or other entity involved in the insuring of risks under ORS 735.005 to 735.145, 737.312 or other provisions of the Insurance Code relating to insurance applicants who are unable to procure insurance through normal insurance markets. (40) "Termination of insurance coverage" or "termination of an insurance policy" means either a cancellation or a nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure of a premium to be paid as required by the policy. (41) "Treatment" includes but is not limited to: (a) The provision, coordination or management of health care; and (b) Consultations and referrals between health care providers. [1981 c.649 4; 1987 c.490 50; 2001 c.191 50; 2001 c.377 25; 2003 c.87 6; 2003 c.364 151; 2003 c.590 2,4; 2003 c.599 5,7; 2003 c.788 1a; 2005 c.253 6,7; 2005 c.489 1,2; 2009 c.442 48; 2009 c.833 31; 2011 c.703 47; 2011 c.715 22; 2013 c.129 39; 2013 c.698 24; 2017 c.152 15]
The purpose of ORS 746.600 to 746.690 is to: (1) Establish standards for the collection, use and disclosure of personal information gathered in connection with insurance transactions by insurers, insurance producers or insurance-support organizations; (2) Maintain a balance between the need for personal information by those conducting the business of insurance and the publics need for fairness in insurance information practices, including the need to minimize intrusiveness; (3) Establish a regulatory mechanism to enable natural persons to ascertain what personal information is being or has been collected about them in connection with insurance transactions and to have access to this personal information for the purpose of verifying or disputing its accuracy; (4) Limit the disclosure of personal information collected in connection with insurance transactions; and (5) Enable insurance applicants and policyholders to obtain the reasons for any adverse underwriting decision. [1981 c.649 2; 1987 c.490 51; 2003 c.87 7; 2003 c.364 152]
ORS 746.607 and 746.608 establish standards for health insurers that are subject to the information privacy provisions of both the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the federal Gramm-Leach-Bliley Act (P.L. 106-102). These standards address: (1) Use and disclosure of personal information; (2) Access of individuals to personal information; (3) Notice of privacy practices for personal information; (4) Amendment of personal information; and (5) Accounting of disclosures of personal information. [2003 c.87 2]
Except as provided in ORS 743B.555, a health insurer: (1) May use or disclose personal information of an individual in a manner that is consistent with an authorization provided by the individual or a personal representative of the individual. (2) May use or disclose protected health information of an individual without obtaining an authorization from the individual or a personal representative of the individual: (a) For its own treatment, payment or health care operations; or (b) As otherwise permitted or required by state or federal law or by order of the court. (3) May disclose, subject to any requirements established by rule under ORS 746.608 and consistent with federal law, protected health information of an individual without obtaining an authorization from the individual or a personal representative of the individual: (a) To another covered entity for health care operations activities of the entity that receives the information if: (A) Each entity has or had a relationship with the individual who is the subject of the protected health information; and (B) The protected health information pertains to the relationship and the disclosure is for the purpose of: (i) Health care operations listed in ORS 746.600 (13)(a) or (b); or (ii) Health care fraud and abuse detection or compliance; (b) To another covered entity or any other health care provider for treatment activities of a health care provider; or (c) To another covered entity or any other health care provider for the payment activities of the entity that receives the information. (4) May use or disclose personal financial information of an individual: (a) To perform a business, professional or insurance function, subject to any requirements established by rule under ORS 746.608 for an authorization by an individual or a personal representative of an individual; or (b) Without obtaining an authorization by the individual or the personal representative of the individual as otherwise permitted or required by state or federal law or by order of the court. (5) May charge a reasonable, cost-based fee, provided that the fee includes only the cost of: (a) Copying personal information requested by an individual or a personal representative of the individual, including the cost of supplies for and labor of copying; (b) Postage, when an individual or a personal representative of the individual has requested that copies of personal information or an explanation or summary of protected health information be mailed; or (c) Preparing an explanation or summary of personal information if requested by an individual or a personal representative of the individual. (6) Shall provide adequate notice of the uses and disclosures of personal information that may be made by the health insurer and of the individuals rights and the health insurers legal duties with respect to personal information. (7) Shall permit an individual or a personal representative of an individual to request: (a) Access to inspect or obtain a copy of the individuals personal financial information or protected health information that is maintained in a designated record set about the individual; or (b) That the health insurer correct, amend or delete personal information. [2003 c.87 3; 2015 c.470 7]
(1) The Director of the Department of Consumer and Business Services shall adopt rules implementing ORS 746.607. In adopting rules under this section, the director shall consider the information privacy provisions of the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the federal Gramm-Leach-Bliley Act (P.L. 106-102). (2) The rules adopted under subsection (1) of this section shall include but are not limited to: (a) Permitted uses and disclosures of: (A) Personal financial information for business, professional or insurance purposes; and (B) Protected health information for treatment, payment and health care operations. (b) Requirements for notice of privacy practices for protected health information and notice of information practices for personal financial information. [2003 c.87 4]
ORS 746.620, 746.630, 746.640, 746.645 and 746.665 do not apply to health insurers. [2003 c.87 5]
(1) Except as otherwise provided in ORS 746.606, 746.607, 746.608 and 746.609, the obligations imposed by ORS 746.600 to 746.690 apply to those insurers, insurance producers and insurance-support organizations that: (a) In the case of life or health insurance: (A) Collect, receive or maintain personal information, in connection with insurance transactions, that pertains to natural persons who are residents of this state; or (B) Engage in insurance transactions with applicants, individuals or policyholders who are residents of this state. (b) In the case of other kinds of insurance: (A) Collect, receive or maintain personal information in connection with insurance transactions involving policies or certificates of insurance delivered, issued for delivery or renewed in this state; or (B) Engage in insurance transactions involving policies or certificates of insurance delivered, issued for delivery or renewed in this state. (2) The rights granted by ORS 746.600 to 746.690 extend to: (a) In the case of life or health insurance, the following persons who are residents of this state: (A) Natural persons who are the subject of personal information collected, received or maintained in connection with insurance transactions; and (B) Applicants, individuals or policyholders who engage in or seek to engage in insurance transactions. (b) In the case of other kinds of insurance, the following persons: (A) Natural persons who are the subject of personal information collected, received or maintained in connection with insurance transactions involving policies or certificates of insurance delivered, issued for delivery or renewed in this state; and (B) Applicants, individuals or policyholders who engage in or seek to engage in insurance transactions involving policies or certificates of insurance delivered, issued for delivery or renewed in this state. (3) For purposes of this section, a person is considered a resident of this state if the persons last-known mailing address, as shown in the records of the insurer, insurance producer or insurance-support organization, is located in this state. (4) Notwithstanding subsections (1) and (2) of this section, ORS 746.600 to 746.690 do not apply to personal information collected from the public records of a governmental authority and maintained by an insurer or its representatives for the purpose of insuring the title to real property located in this state. [1981 c.649 3; 1987 c.490 52; 2003 c.87 8; 2003 c.364 153]
If no person has been appointed as a personal representative under ORS chapter 113 or a person appointed as a personal representative under ORS chapter 113 has been discharged, the personal representative of a deceased individual shall be the first of the following persons, in the following order, who may be located upon reasonable effort by the covered entity and who is willing to serve as the personal representative: (1) A person appointed as guardian under ORS 125.305, 419B.372, 419C.481 or 419C.555 with authority to make medical and health care decisions at the time of the individuals death. (2) The individuals spouse. (3) An adult designated in writing by the persons listed in this section, if no person listed in this section objects to the designation. (4) A majority of the adult children of the individual who can be located. (5) Either parent of the individual or an individual acting in loco parentis to the individual. (6) A majority of the adult siblings of the individual who can be located. (7) Any adult relative or adult friend. [2005 c.253 5]
Nothing in ORS 746.607 may be construed to create a new private right of action against a health insurer. [2003 c.87 18a]
An insurer, insurance producer or insurance-support organization may not use or authorize the use of pretext interviews to obtain personal information in connection with an insurance transaction. However, a pretext interview may be undertaken to obtain information from a person or institution that does not have a generally recognized or statutorily recognized privileged relationship with the person about whom the information relates, for the purpose of investigating a claim where, based upon specific information available for review by the Director of the Department of Consumer and Business Services, there is a reasonable basis for suspecting criminal activity, fraud, material misrepresentation or material nondisclosure in connection with the claim. [1981 c.649 5; 2003 c.87 9; 2003 c.364 154]
(1) A licensee must provide a clear and conspicuous notice of personal information practices to individuals in connection with insurance transactions under the following circumstances and at the following times: (a) Except as provided in this paragraph, to a consumer who becomes a customer of the licensee, not later than the date that the licensee establishes a continuing relationship under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes. A licensee may provide the notice within a reasonable time after the date the licensee establishes a customer relationship if: (A) Establishing the customer relationship is not at the customers election; or (B) Providing notice not later than the date that the licensee establishes a customer relationship would substantially delay the customers transaction and the customer agrees to receive the notice at a later time. (b) To a consumer other than as described in paragraph (a) of this subsection, before the licensee discloses any personal information about the consumer pursuant to the requirements of ORS 746.665, unless the disclosure meets one or more of the conditions specified in ORS 746.665. (2)(a) Except as provided in paragraph (b) of this subsection, a licensee shall provide a clear and conspicuous notice to a customer that accurately reflects the licensees privacy policies and practices not less than annually during the continuation of the relationship described in subsection (1)(a) of this section. For the purpose of this subsection, a notice is given annually if the notice is given at least once in any period of 12 consecutive months during which the relationship exists. A licensee may define the period of 12 consecutive months, but the licensee must apply the period to the customer on a consistent basis. (b) A licensee need not provide the notice described in paragraph (a) of this subsection each year if the licensee provides personal information to an unaffiliated third party only in accordance with ORS 746.665 and does not change the policies and practices related to disclosing personal information about which the licensee last notified customers in accordance with this section. If the licensee changes the licensees privacy policies and practices, the licensee shall notify customers in accordance with this section. (3) The privacy notice required by subsections (1) and (2) of this section must be in writing and must be clear and conspicuous. The notice may be provided in electronic form if the recipient agrees. In addition to any other personal information the licensee wishes to provide, the notice must include the following items of personal information that apply to the licensee and to the individuals to whom the licensee sends the notice: (a) The categories of personal information that the licensee collects. (b) The categories of personal information that the licensee discloses. (c) The categories of affiliates and nonaffiliated third parties to whom the licensee discloses personal information other than persons to whom the licensee discloses information under ORS 746.665. (d) The categories of personal information about former customers of the licensee that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses personal information about the licensees former customers, other than persons to whom the licensee discloses personal information under ORS 746.665. (e) If a licensee discloses personal information to a nonaffiliated third party under ORS 746.665, a separate description of the categories of personal information the licensee discloses and the categories of nonaffiliated third parties with whom the licensee has contracted. (f) An explanation of the individuals right under ORS 746.630 to authorize disclosure of personal information, including the methods by which the individual may exercise that right. (g) Any disclosure that the licensee makes under section 603(d)(2)(A)(iii) of the federal Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)(iii)) regarding the ability to opt out of disclosures of personal information among affiliates. (h) The policies and practices of the licensee with respect to protecting the confidentiality and security of personal information. (i) Any disclosure that the licensee makes under subsection (4) of this section. (j) A description of the rights established under ORS 746.640 and 746.645 and the manner in which such rights may be exercised. (4) If a licensee discloses personal information as authorized under ORS 746.665, the licensee is not required to list those exceptions in the privacy notices required by this section. When describing the categories of parties to whom disclosure is made, the licensee shall state only that the licensee makes disclosures to other affiliated parties or nonaffiliated third parties, as applicable, as authorized by law. (5) In lieu of the notice required in subsection (3) of this section, the licensee may provide to a consumer an abbreviated notice, in writing or in electronic form if the consumer agrees, informing the consumer that: (a) Personal information may be collected from persons other than the consumer proposed for coverage; (b) Such information as well as other personal or privileged information subsequently collected by the licensee may in certain circumstances be disclosed to third parties without authorization; (c) A right of access and correction exists with respect to all personal information collected; and (d) The licensee shall provide the notice prescribed in subsection (3) of this section to the consumer upon request. (6) The Director of the Department of Consumer and Business Services by rule may apply the categories of consumer and customer as defined in ORS 746.600 for the purpose of establishing specific requirements for notice of personal information practices, authorization for disclosure of personal information, conditions for disclosure of personal information under this section and ORS 746.630 and 746.665, and exceptions. The director shall consider applicable definitions and terms used in the federal Gramm-Leach-Bliley Act (P.L. 106-102), applicable definitions and requirements used in the model "Privacy of Consumer Financial and Health Information Regulation" adopted by the National Association of Insurance Commissioners and other sources as may be needed so that the terms defined in ORS 746.600 and applicable to this section and ORS 746.630 and 746.665: (a) Facilitate compliance with requirements in federal law and the laws of other states that establish protections of nonpublic personal information; and (b) Establish separate and discrete requirements relating to the privacy notice and the contents and delivery of the privacy notice for customers and consumers, so that the requirements provide reasonable notice and facilitate compliance with requirements in federal law and in the laws of other states. (7) The director shall determine by rule: (a) When a privacy notice must be provided to a certificate holder or beneficiary of a group policy and to a third-party claimant. (b) When the obligation to provide annual notice ceases. (c) Requirements for revision of the notice by a licensee. (8) An insurance producer is not subject to the requirements of this section when the insurer on whose behalf the insurance producer acts otherwise complies with the requirements of this section and the insurance producer does not disclose any personal information to any person other than the insurer or its affiliate, or as otherwise authorized by law. (9) A licensee may provide a joint notice from the licensee and one or more of the licensees affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to the licensee and the other institutions. A licensee may also provide a notice on behalf of a financial institution. (10) The obligations imposed by this section upon a licensee may be satisfied by another licensee authorized to act on behalf of the first licensee. (11) For purposes of this section and ORS 746.630 and 746.665, an individual is not the consumer of a licensee solely because the individual is covered under a group life insurance policy issued by the licensee or is a participant or beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary, if: (a) The licensee provides to the policyholder the initial, annual and revised notices under this section; and (b) The licensee does not disclose to a nonaffiliated third party personal information about the individual other than as permitted by ORS 746.665. (12) When an individual becomes a consumer of a licensee under subsection (11) of this section, this section and ORS 746.630 and 746.665 apply to the licensee with respect to the individual. [1981 c.649 6; 2001 c.377 26; 2003 c.87 10; 2003 c.364 155; 2017 c.365 1]
An insurer or insurance producer shall clearly identify those questions that are designed to obtain personal information solely for marketing or research purposes from an individual in connection with an insurance transaction. [1981 c.649 7; 2003 c.87 11; 2003 c.364 156]
(1) Notwithstanding any other law of this state, a licensee or insurance-support organization may not use as its disclosure authorization form in connection with insurance transactions a form or statement that authorizes the disclosure of personal or privileged information about an individual to the licensee or insurance-support organization unless the form or statement is clear and conspicuous, and contains all of the following: (a) The identity of the individual who is the subject of the personal information. (b) A general description of the categories of personal information to be disclosed. (c) General descriptions of the parties to whom the licensee discloses personal information, the purpose of the disclosure and how the personal information may be used. (d) The signature of the individual who is the subject of the personal information or the individual who is legally empowered to grant authority and the date signed. (e) Notice of the length of time for which the authorization is valid, that the individual may revoke the authorization at any time and the procedure for making a revocation. (2) An authorization is not valid for more than 24 months. (3) An individual who is the subject of personal information may revoke an authorization provided pursuant to this section at any time, subject to the rights of any individual who acted in reliance on the authorization prior to notice of the revocation. (4) A licensee must retain the authorization of an individual or a copy thereof in the record of the individual who is the subject of the personal information. (5) A disclosure authorization obtained by an insurer, insurance producer or insurance-support organization from an individual prior to January 1, 1983, is considered to be in compliance with this section. [1981 c.649 8; 2001 c.377 27; 2003 c.87 12; 2003 c.364 157]
(1) Notwithstanding ORS 192.537 (3), a health insurer may retain genetic information of an individual without obtaining an authorization from the individual or a personal representative of the individual if the retention is for treatment, payment or health care operations by the insurer. (2) Notwithstanding ORS 192.539 (1), a health insurer may disclose genetic information of an individual without obtaining an authorization from the individual or a personal representative of the individual if the insurer discloses the genetic information in accordance with ORS 746.607 (3). (3) As used in this section, "retain genetic information" has the meaning given that term in ORS 192.531. (4) As used in this section, "health care operations" does not include underwriting activities. (5) Nothing in this section shall be construed to interfere with or limit the requirements of ORS 746.135. [2007 c.800 8]
(1) No insurer, insurance producer or insurance-support organization may prepare or request an investigative consumer report about an individual in connection with an insurance transaction involving an application for insurance, a policy renewal, a policy reinstatement or a change in insurance benefits unless the insurer or insurance producer informs the individual: (a) That the individual may request to be interviewed in connection with the preparation of the investigative consumer report; and (b) That upon a request pursuant to ORS 746.640, the individual is entitled to receive a copy of the investigative consumer report. (2) If an investigative consumer report is to be prepared by an insurer or insurance producer, the insurer or insurance producer shall institute reasonable procedures to conduct a personal interview requested by the individual. (3) If an investigative consumer report is to be prepared by an insurance-support organization, the insurer or insurance producer desiring the report shall inform the insurance-support organization whether a personal interview has been requested by the individual. The insurance-support organization shall institute reasonable procedures to conduct such requested interviews. [1981 c.649 9; 2003 c.364 158]
(1) If any individual, after proper identification, submits a written request to an insurer, insurance producer or insurance-support organization for access to recorded personal information about the individual that is reasonably described by the individual and reasonably locatable and retrievable by the insurer, insurance producer or insurance-support organization, the insurer, insurance producer or insurance-support organization within 30 business days from the date the request is received shall: (a) Inform the individual of the nature and substance of the recorded personal information in writing, by telephone or by other oral communication, whichever the insurer, insurance producer or insurance-support organization prefers; (b) Permit the individual to see and copy, in person, the recorded personal information or to obtain a copy of the recorded personal information by mail, whichever the individual prefers, unless the recorded personal information is in coded form, in which case an accurate translation in plain language shall be provided in writing; (c) Disclose to the individual the identity, if recorded, of the persons to whom the insurer, insurance producer or insurance-support organization has disclosed the recorded personal information within two years prior to the request, and if such identity is not recorded, the names of the insurers, insurance producers, insurance-support organizations and other persons to whom such information is normally disclosed; and (d) Provide the individual with a summary of the procedures by which the individual may request correction, amendment or deletion of recorded personal information. (2) Any personal information provided pursuant to this section must identify the source of the information if the source is an institutional source. (3) If an individual requests individually identifiable health information supplied by a health care provider, the insurer, insurance producer or insurance-support organization shall provide the information, including the identity of the health care provider either directly to the individual or to a health care provider designated by the individual and licensed to provide health care with respect to the condition to which the information relates, whichever the insurer, insurance producer or insurance-support organization prefers. If the insurer, insurance producer or insurance-support organization elects to disclose the information to a health care provider designated by the individual, the insurer, insurance producer or insurance-support organization shall notify the individual, at the time of the disclosure, that the insurer, insurance producer or insurance-support organization has provided the information to the health care provider. (4) Except for personal information provided under ORS 746.650, an insurer, insurance producer or insurance-support organization may charge a reasonable fee to cover the costs incurred in providing a copy of recorded personal information to an individual. (5) The obligations imposed by this section upon an insurer or insurance producer may be satisfied by another insurer or insurance producer authorized to act on its behalf. With respect to the copying and disclosure of recorded personal information pursuant to a request under this section, an insurer, insurance producer or insurance-support organization may make arrangements with an insurance-support organization or a consumer reporting agency to copy and disclose recorded personal information on its behalf. (6) The rights granted to individuals by this section shall extend to all natural persons to the extent personal information about them is collected and maintained by an insurer, insurance producer or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this subsection shall not extend to personal information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or a civil or criminal proceeding involving them. (7) For purposes of this section, the term "insurance-support organization" does not include "consumer reporting agency." [1981 c.649 10; 2003 c.87 13; 2003 c.364 159a]
(1) Within 30 business days from the date of receipt of a written request from an individual to correct, amend or delete any recorded personal information about the individual within its possession, an insurer, insurance producer or insurance-support organization shall either: (a) Correct, amend or delete the portion of the recorded personal information in dispute; or (b) Notify the individual of: (A) Its refusal to make the correction, amendment or deletion; (B) The reasons for the refusal; and (C) The individuals right to file a statement as provided in subsection (3) of this section. (2) If the insurer, insurance producer or insurance-support organization corrects, amends or deletes recorded personal information in accordance with subsection (1) of this section, the insurer, insurance producer or insurance-support organization shall so notify the individual in writing and furnish the correction, amendment or fact of deletion to: (a) Each person specifically designated by the individual who may have, within the preceding two years, received the recorded personal information; (b) Each insurance-support organization whose primary source of personal information is insurers, if the insurance-support organization has systematically received recorded personal information from the insurer within the preceding seven years. However, the correction, amendment or fact of deletion need not be furnished if the insurance-support organization no longer maintains recorded personal information about the individual; and (c) Each insurance-support organization that furnished the recorded personal information that has been corrected, amended or deleted. (3) Whenever an individual disagrees with an insurers, insurance producers or insurance-support organizations refusal to correct, amend or delete recorded personal information, the individual shall be permitted to file with the insurer, insurance producer or insurance-support organization: (a) A concise statement setting forth what the individual thinks is the correct, relevant or fair information; and (b) A concise statement of the reasons why the individual disagrees with the insurers, insurance producers or insurance-support organizations refusal to correct, amend or delete recorded personal information. (4) In the event an individual files either or both of the statements described in subsection (3) of this section, the insurer, insurance producer or insurance-support organization shall: (a) File the statements with the disputed personal information and provide a means by which anyone reviewing the disputed personal information will be made aware of the individuals statements and have access to them; (b) In any subsequent disclosure by the insurer, insurance producer or insurance-support organization of the recorded personal information that is the subject of the disagreement, clearly identify the matter or matters in dispute and provide the individuals statements along with the recorded personal information being disclosed; and (c) Furnish the statements to the persons and in the manner specified in subsection (2) of this section. (5) The rights granted to individuals by this section shall extend to all natural persons to the extent information about them is collected and maintained by an insurer, insurance producer or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this subsection shall not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or a civil or criminal proceeding involving them. (6) For purposes of this section, the term "insurance-support organization" does not include "consumer reporting agency." [1981 c.649 11; 2003 c.364 160]
Except as otherwise provided in ORS 743B.250, 743B.252, 743B.255 and 743B.422: (1) In the event of an adverse underwriting decision, the insurer or insurance producer responsible for the decision must: (a) Either provide the consumer proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing or advise the consumer that upon written request the consumer may receive the specific reason or reasons in writing; and (b) Provide the consumer proposed for coverage with a summary of the rights established under subsection (2) of this section and ORS 746.640 and 746.645. (2) Upon receipt of a written request within 90 business days from the date of the mailing of notice or other communication of an adverse underwriting decision to a consumer proposed for coverage, the insurer or insurance producer shall furnish to the consumer within 21 business days from the date of receipt of the written request: (a) The specific reason or reasons for the adverse underwriting decision, in writing, if this information was not initially furnished in writing pursuant to subsection (1) of this section; (b) The specific items of personal information and privileged information that support these reasons, subject to the following: (A) The insurer or insurance producer is not required to furnish specific items of privileged information if the insurer or insurance producer has a reasonable suspicion, based upon specific information available for review by the Director of the Department of Consumer and Business Services, that the consumer proposed for coverage has engaged in criminal activity, fraud, material misrepresentation or material nondisclosure; and (B) Specific items of individually identifiable health information supplied by a health care provider shall be disclosed either directly to the consumer about whom the information relates or to a health care provider designated by the consumer and licensed to provide health care with respect to the condition to which the information relates, whichever the insurer or insurance producer prefers; and (c) The names and addresses of the institutional sources that supplied the specific items of information described in paragraph (b) of this subsection. However, the identity of any health care provider must be disclosed either directly to the consumer or to the designated health care provider, whichever the insurer or insurance producer prefers. (3) The obligations imposed by this section upon an insurer or insurance producer may be satisfied by another insurer or insurance producer authorized to act on its behalf. (4) When an adverse underwriting decision results solely from an oral request or inquiry, the explanation of reasons and summary of rights required by subsection (1) of this section may be given orally. (5) Notwithstanding subsection (1) of this section, when an adverse underwriting decision is based in whole or in part on credit history or insurance score, the insurer or insurance producer responsible for the decision must provide the consumer proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing. The notice must include the following: (a) A summary of no more than four of the most significant credit reasons for the adverse underwriting decision, listed in decreasing order of importance, that clearly identifies the specific credit history or insurance score used to make the adverse underwriting decision. An insurer or insurance producer may not use "poor credit history" or a similar phrase as a reason for an adverse underwriting decision. (b) The name, address and telephone number, including a toll-free telephone number, of the consumer reporting agency that provided the information for the consumer report. (c) A statement that the consumer reporting agency used by the insurer or insurance producer to obtain the credit history of the consumer did not make the adverse underwriting decision and is unable to provide the consumer with specific reasons why the insurer or insurance producer made an adverse underwriting decision. (d) Information on the right of the consumer: (A) To obtain a free copy of the consumers consumer report from the consumer reporting agency described in paragraph (b) of this subsection, including the deadline, if any, for obtaining a copy; and (B) To dispute the accuracy or completeness of any information in a consumer report furnished by the consumer reporting agency. (6) Notwithstanding subsection (1) of this section, an insurer or insurance producer responsible for an adverse underwriting decision that is based in whole or in part on credit history or insurance score must provide the notice required by subsection (5) of this section only when the insurer or insurance producer makes the initial adverse underwriting decision regarding a consumer. (7) Notwithstanding subsection (1) of this section, when an adverse underwriting decision relating to homeowner insurance is based in whole or in part on a loss history report, the insurer or insurance producer responsible for the decision must provide the consumer proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing. The notice must include the following: (a) A description of a specific claim or claims that are the basis for the specific loss history report used to make the adverse underwriting decision. (b) The name, address and telephone number, including a toll-free telephone number, of the consumer reporting agency that provided the information for the loss history report. (c) A statement that the consumer reporting agency used by the insurer or insurance producer to obtain the loss history report of the consumer did not make the adverse underwriting decision and is unable to provide the consumer with specific reasons why the insurer or insurance producer made an adverse underwriting decision. (d) Information on the right of the consumer: (A) To obtain a free copy of the consumers loss history report from the consumer reporting agency described in paragraph (b) of this subsection, including the deadline, if any, for obtaining a copy; and (B) To dispute the accuracy or completeness of any information in a loss history report furnished by the consumer reporting agency. (8) When an adverse underwriting decision relating to homeowner insurance is based in part on credit history and in part on a loss history report, the insurer or insurance producer responsible for the adverse underwriting decision may provide the notices required by subsections (5) and (7) of this section in a single notice. [1981 c.649 12; 2003 c.87 15; 2003 c.364 161; 2003 c.788 2a; 2005 c.489 7; 2011 c.500 42]
No insurer, insurance producer or insurance-support organization may seek information in connection with an insurance transaction concerning any previous adverse underwriting decision experienced by an individual, or any previous insurance coverage obtained by an individual through a residual market mechanism, unless the inquiry also requests the reasons for any previous adverse underwriting decision or the reasons why insurance coverage was previously obtained through a residual market mechanism. [1981 c.649 13; 2003 c.364 162]
No insurer or insurance producer may base an adverse underwriting decision in whole or in part on: (1) The fact of a previous adverse underwriting decision or on the fact that an individual previously obtained insurance coverage through a residual market mechanism. However, an insurer or insurance producer may base an adverse underwriting decision on further information obtained from an insurer or insurance producer responsible for a previous adverse underwriting decision. (2) Personal information received from an insurance-support organization whose primary source of information is insurers. However, an insurer or insurance producer may base an adverse underwriting decision on further personal information obtained as the result of information received from such an insurance-support organization. [1981 c.649 14; 2003 c.364 163]
(1) An insurer that issues personal insurance policies in this state: (a) May not cancel or nonrenew personal insurance that has been in effect for more than 60 days based in whole or in part on a consumers credit history or insurance score. (b) May use a consumers credit history to decline coverage of personal insurance in the initial underwriting decision only in combination with other substantive underwriting factors. An offer of placement with an affiliate insurer does not constitute a declination of insurance coverage. (c) May not use the following types of credit history to decline coverage of personal insurance, calculate an insurance score or determine personal insurance premiums or rates: (A) The absence of credit history or the inability to determine the consumers credit history, if the insurer has received accurate and complete information from the consumer, unless the insurer does one of the following: (i) If the insurer presents information that the absence of credit history or the inability to determine the consumers credit history relates to the risk for the insurer, uses the absence of a credit history or inability to determine a consumers credit history as allowed by rules adopted by the Director of the Department of Consumer and Business Services; (ii) Treats the consumer as if the applicant or insured has neutral credit history, as defined by the insurer; or (iii) Excludes the use of credit information as a factor and uses only other underwriting criteria. (B) Credit inquiries not initiated by the consumer or inquiries requested by the consumer for the consumers own credit information. (C) Inquiries identified on a consumers credit report relating to insurance coverage. (D) Multiple lender inquiries identified as being from the home mortgage industry and made within 30 days of one another, unless only one inquiry is considered. (E) Multiple lender inquiries identified as being from the automobile lending industry and made within 30 days of one another, unless only one inquiry is considered. (F) The consumers total available line of credit. However, an insurer may consider the total amount of outstanding debt in relation to the total available line of credit. (d) May not rerate an existing policy or rerate a customer based on a customers credit history or the credit history component of a customers insurance score when the marital status of the customer changes due to death or divorce. (2)(a) If an insurer uses the consumers credit history or insurance score at any time in the rating of a personal insurance policy, the consumer may request, no more than once per insurer per policy line annually, that the insurer rerate the consumer according to the standards that the insurer would apply if the consumer were initially applying for the same insurance policy. (b) The insurer shall rerate the consumer within 30 days after receiving a request from the consumer. After rerating the consumer based upon the request, the insurer may not use credit information from rerating to increase the premium on any personal insurance policy the consumer holds. If the consumer qualifies for a more favorable rating category, the insurer shall reduce the premiums on all the personal insurance policies the consumer holds in the related policy line for which the consumers credit history and insurance score would entitle the consumer to lower premiums if the consumer were applying for a new policy. The effective date of any rate change is the date of the consumers request. (c) If a request to rerate a policy is received within 60 days prior to a renewal date, or if the difference between the current rate and the improved rate is less than $10, the insurer may provide the consumer with the difference between the current rate and the improved rate over the remainder of the current period as a credit upon renewal. If the policy is canceled or not renewed, the insurer shall refund the unearned premium. Any existing claim-related discounts or surcharges shall carry forward for each rerated policy. (3) If an insurer uses disputed credit history to determine eligibility for coverage of personal insurance and places a consumer with an affiliate that charges higher premiums or offers less favorable policy terms: (a) The insurer shall rerate the policy retroactive to the effective date of the current policy term; and (b) The policy, as reissued or rerated, shall provide the premiums and policy terms for which the consumer would have been eligible if accurate credit history had been used to determine eligibility. (4) If an insurer charges higher premiums due to disputed credit history, the insurer shall rerate the policy retroactive to the effective date of the current policy term. As rerated, the insurer shall charge the consumer the same premiums the consumer would have been charged if accurate credit history had been used to calculate an insurance score. (5) Subsections (3) and (4) of this section apply only if the consumer resolves the credit dispute under the process set forth in the federal Fair Credit Reporting Act (15 U.S.C. 1681) and notifies the insurer in writing that the dispute has been resolved. (6) Except as provided in subsections (2), (3) and (4) of this section, an insurer may only use rating factors other than credit history or insurance score to rerate the policy at renewal. [2003 c.788 4; 2005 c.464 1; 2009 c.422 1]
(1) An insurer may not use credit history to determine personal insurance eligibility, premiums or rates for coverage unless the insurer has filed the insurance scoring models used by the insurer with the Director of the Department of Consumer and Business Services. An insurance scoring model includes all attributes and factors used in the calculation of an insurance score. (2) Insurance scoring models filed with the director under subsection (1) of this section are confidential and not subject to disclosure under ORS 192.311 to 192.478. [2003 c.788 5]
(1) An insurer that issues personal insurance policies in this state may not cancel or nonrenew a policy of personal insurance based in whole or in part on a consumers credit history or insurance score. (2) If, prior to January 1, 2004, an insurer has assigned a consumer to a less favorable rating category for a policy of personal insurance based in whole or in part on the consumers credit history or insurance score, the consumer may request, no more than once annually, that the insurer rerate the consumer according to the standards that the insurer would apply to the consumer if the consumer were initially applying for the same personal insurance on or after January 1, 2004. (3) An insurer that receives a request under subsection (2) of this section may not consider that the consumer was assigned to a less favorable rate category when the insurer rerates the consumer. (4) If an insurer uses disputed credit history to determine eligibility for coverage of personal insurance and places a consumer with an affiliate that charges higher premiums or offers less favorable policy terms: (a) The insurer shall rerate the policy retroactive to the effective date of the current policy term; and (b) The policy, as reissued or rerated, shall provide the premiums and policy terms for which the consumer would have been eligible if accurate credit history had been used to determine eligibility. (5) If an insurer charges higher premiums due to disputed credit history, the insurer shall rerate the policy retroactive to the effective date of the current policy term. As rerated, the insurer shall charge the consumer the same premiums the consumer would have been charged if accurate credit history had been used to calculate an insurance score. (6) Subsections (4) and (5) of this section apply only if the consumer resolves the credit dispute under the process set forth in the federal Fair Credit Reporting Act (15 U.S.C. 1681) and notifies the insurer in writing that the dispute has been resolved. (7) Except as provided in subsections (2), (4) and (5) of this section, an insurer may only use rating factors other than credit history or insurance score to rerate the policy at renewal. [2003 c.788 7]
(1) A licensee or insurance-support organization may not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction unless the disclosure meets one or more of the following conditions: (a) Is with the written authorization of the individual, and: (A) If the authorization is submitted by another licensee or insurance-support organization, the authorization meets the requirements of ORS 746.630; or (B) If the authorization is submitted by a person other than a licensee or insurance-support organization, the authorization is: (i) Dated; (ii) Signed by the individual; and (iii) Obtained one year or less prior to the date a disclosure is sought pursuant to this subsection. (b) Is to a person other than a licensee or insurance-support organization, if the disclosure is reasonably necessary to enable the person to: (A) Perform a business, professional or insurance function for the disclosing licensee or insurance-support organization and the person agrees not to disclose the information further without the individuals written authorization unless the further disclosure: (i) Would otherwise be permitted by this section if made by a licensee or insurance-support organization; or (ii) Is reasonably necessary for the person to perform its function for the disclosing licensee or insurance-support organization; or (B) Provide information to the disclosing licensee or insurance-support organization for the purpose of: (i) Determining an individuals eligibility for an insurance benefit or payment; or (ii) Detecting or preventing criminal activity, fraud, material misrepresentation or material nondisclosure in connection with an insurance transaction. (c) Is to a licensee, insurance-support organization or self-insurer, if the information disclosed is limited to that which is reasonably necessary: (A) To detect or prevent criminal activity, fraud, material misrepresentation or material nondisclosure in connection with insurance transactions; or (B) For either the disclosing or receiving licensee or insurance-support organization to perform its function in connection with an insurance transaction involving the individual. (d) Is to a health care provider and discloses only such information as is reasonably necessary to accomplish one or more of the following purposes: (A) Verifying insurance coverage or benefits. (B) Informing an individual of a medical problem of which the individual may not be aware. (C) Conducting an operations or services audit. (e) Is to an insurance regulatory authority. (f) Is to a law enforcement or other governmental authority: (A) To protect the interests of the licensee or insurance-support organization in preventing or prosecuting the perpetration of fraud upon it; or (B) If the licensee or insurance-support organization reasonably believes that illegal activities have been conducted by the individual. (g) Is otherwise permitted or required by law. (h) Is in response to a facially valid administrative or judicial order, including a search warrant or subpoena. (i) Is made for the purpose of conducting actuarial or research studies, if: (A) No individual may be identified in any resulting actuarial or research report; (B) Materials allowing the individual to be identified are returned or destroyed as soon as they are no longer needed; and (C) The actuarial or research organization agrees not to disclose the information unless the disclosure would otherwise be permitted by this section if made by a licensee or insurance-support organization. (j) Is to a party or a representative of a party to a proposed or consummated sale, transfer, merger or consolidation of all or part of the business of the licensee or insurance-support organization, if: (A) Prior to the consummation of the sale, transfer, merger or consolidation only such information is disclosed as is reasonably necessary to enable the recipient to make business decisions about the purchase, transfer, merger or consolidation; and (B) The recipient agrees not to disclose the information unless the disclosure would otherwise be permitted by this section if made by a licensee or insurance-support organization. (k) Is to a nonaffiliated third party whose only use of the information will be in connection with the marketing of a product or service, if all of the following conditions are met: (A) No privileged information or personal information is disclosed, and no classification derived from such information may be disclosed. (B) The individual must have been given the notice described in ORS 746.620 and an opportunity to indicate that the individual does not want personal information disclosed for marketing purposes and must have given no indication that the individual does not want the information disclosed. The individual need not have been given the opportunity described in this subparagraph if the disclosure is made pursuant to a joint marketing agreement. As used in this subparagraph, "joint marketing agreement" means a formal written contract pursuant to which an insurer jointly offers, endorses or sponsors a financial product or service with a financial institution. When the opportunity is required, the statement that offers the opportunity must state that the insurer may disclose personal information to nonaffiliates and that the individual has a right to indicate that the individual does not want personal information disclosed for marketing purposes, and must describe the method for exercising that right. The statement must be in writing but may be in an electronic form if the individual agrees. The individual who is given the opportunity must be provided a reasonable time to exercise the opportunity. An individual may exercise the opportunity at any time. A statement by an individual barring disclosure of personal information remains effective until the individual who made the statement revokes the statement in writing or, if the individual agrees, in electronic form. (C) The person receiving the information must agree not to use it except in connection with the marketing of a product or service. (L) Is to an affiliate whose only use of the information will be in connection with an audit of the licensee or the marketing of a financial product or service, and the affiliate agrees not to disclose the information for any other purpose or to unaffiliated persons. This paragraph does not apply to the disclosure of individually identifiable health information for the purpose of marketing a financial product or service. (m) Is by a consumer reporting agency, and the disclosure is to a person other than a licensee. (n) Is to a group policyholder for the purpose of reporting claims experience or conducting an audit of the licensees operations or services, and the information disclosed is reasonably necessary for the group policyholder to conduct the review or audit. (o) Is to a professional peer review organization for the purpose of reviewing the service or conduct of a health care provider. (p) Is to a governmental authority for the purpose of determining the individuals eligibility for health benefits for which the governmental authority may be liable. (q) Is to a policyholder or certificate holder for the purpose of providing information regarding the status of an insurance transaction. (2) Personal or privileged information may be acquired by a group practice prepayment health care service contractor from providers which contract with the contractor and may be transferred among providers which contract with the contractor for the purpose of administering plans offered by the contractor. The information may not be disclosed otherwise by the contractor except in accordance with ORS 746.600 to 746.690. [1981 c.649 15; 1987 c.490 53; 2001 c.377 28; 2003 c.87 14]
Nothing in ORS 746.620, 746.630 or 746.665 may be construed to modify, limit or supersede the operation of the federal Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) and no inference may be drawn on the basis of ORS 746.620, 746.630 or 746.665 regarding whether personal information is transaction information or experience information under section 603 of the federal Fair Credit Reporting Act (15 U.S.C. 1681 et seq.). [2001 c.377 28c; 2003 c.87 16]
(1) The Director of the Department of Consumer and Business Services may examine and investigate into the affairs of any insurer or insurance producer transacting insurance in this state to determine whether it has been or is engaged in any conduct in violation of ORS 746.600 to 746.690. (2) The director may examine and investigate into the affairs of any insurance-support organization acting on behalf of an insurer or insurance producer which either transacts insurance in this state or transacts insurance outside this state which has an effect on a person residing in this state, in order to determine whether the insurance-support organization has been or is engaged in any conduct in violation of ORS 746.600 to 746.690. [1981 c.649 16; 1987 c.490 54; 2003 c.87 17; 2003 c.364 164]
For the purpose of ORS 746.600 to 746.690 and 750.055, an insurance-support organization transacting business outside this state which has an effect on a person residing in this state shall be considered to have appointed the Director of the Department of Consumer and Business Services to accept service of process on its behalf. Notice of such service shall be given forthwith by the director as provided for orders and notices under ORS 731.248 (3). [1981 c.649 17; 1987 c.490 55]
(1) A person whose rights granted under ORS 746.607 (7), 746.640, 746.645 or 746.650 are violated may apply to the circuit court for the county in which the person resides, or any other court of competent jurisdiction, for appropriate equitable relief if an insurer, insurance producer or insurance-support organization fails to comply with ORS 746.607 (7), 746.640, 746.645 or 746.650. (2) A licensee or insurance-support organization that discloses information in violation of ORS 746.665 or a health insurer that uses or discloses information in violation of ORS 746.607 (1) or (2) is liable for damages sustained by the individual about whom the information relates. However, an individual is not entitled to a monetary award that exceeds the actual damages sustained by the individual as a result of the violation of ORS 746.607 (1) or (2) or 746.665. (3) In any action brought pursuant to this section, the court may award the cost of the action and reasonable attorney fees to the prevailing party. (4) An action under this section must be brought within two years from the date the alleged violation is or should have been discovered. (5) Except as specifically provided in this section, there shall be no remedy or recovery available to individuals, in law or in equity, for occurrences constituting a violation of any provision of ORS 746.600 to 746.690. [1981 c.649 18; 1987 c.490 56; 1995 c.618 131; 2001 c.377 28a; 2003 c.87 18; 2003 c.364 165a]
No cause of action in the nature of defamation, invasion of privacy or negligence shall arise against any person for disclosing personal or privileged information in accordance with ORS 746.600 to 746.690 and 750.055, nor shall such a cause of action arise against any person for furnishing personal or privileged information to an insurer, insurance producer or insurance-support organization. However, this section shall provide no immunity for disclosing or furnishing false information with malice or willful intent to injure any person. [1981 c.649 19; 1987 c.490 57; 2003 c.364 166]
(1) When a consumer applies for a homeowner insurance policy, an insurer may not use: (a) A prior claim of the consumer or a claim relating to the property to be insured, when the date of loss of the claim is more than five years preceding the date of application, to determine whether to issue the policy or to determine rates or other terms and conditions of the policy. This paragraph does not apply when the insurer uses claim experience of the consumer or of the property to provide a discount to the consumer. (b) The first claim that the consumer made on a homeowner insurance policy within the five-year period immediately preceding the date of application to determine whether to issue the policy. (c) A prior claim relating to the property to be insured that occurred prior to purchase of the property by the consumer, when the consumer demonstrates to the insurers satisfaction that the risk associated with damage resulting from the accident or occurrence that gave rise to the prior claim has been mitigated, to determine whether to issue the policy or to determine rates or other terms and conditions of the policy. For purposes of this paragraph, a risk is mitigated if the consumer has fully restored the damaged property and has repaired, replaced, restored or eliminated the condition, system or use of the property that was the underlying cause of the loss. (2) When renewing a homeowner insurance policy, an insurer may not use: (a) A prior claim of the consumer or a claim relating to the property to be insured, when the date of loss of the claim is more than five years before the upcoming renewal date, to determine whether to renew the policy or to determine rates or other terms and conditions of the policy. This paragraph does not apply when the insurer uses claim experience of the consumer or of the property to provide a discount to the consumer at renewal. (b) The first claim of the consumer made within the five-year period immediately preceding the upcoming renewal date to determine whether to renew the policy. (3) An insurer or insurance producer may not use an inquiry made by any means by the consumer to the insurer or to an insurance producer regarding the terms, conditions or coverage of an insurance policy, including an inquiry about an actual loss or claim filing process, to determine whether to issue or renew a policy or to determine rates or other terms and conditions of a policy if the consumer is not making a claim as part of the inquiry. An insurer or insurance producer may verify whether the consumer is making a claim as part of the inquiry. If the consumer affirms that the inquiry is not a claim, the insurer or insurance producer may rely on the affirmation to rebut a later assertion to the contrary. This subsection does not apply to an inquiry by a consumer relating to the possibility of a third party claim against the consumer. The Director of the Department of Consumer and Business Services may adopt rules establishing procedures to implement this subsection. (4) This section does not prohibit an insurer from taking any underwriting or rating action that is: (a) Based on the known condition or use of the property; (b) Based on fraudulent acts of the consumer; or (c) Otherwise allowed by law. [2005 c.489 4]
(1) Except as provided in subsection (6) of this section, an insurer may cancel a homeowner insurance policy before the expiration of the policy only for one or more of the following reasons: (a) Nonpayment of premium; (b) Fraud or material misrepresentation affecting the policy or in the presentation of a claim under the policy; (c) Violation of any of the terms and conditions of the policy; (d) Substantial increase in the risk of loss after insurance coverage has been issued or renewed, including but not limited to an increase in exposure due to rules, legislation or court decision; or (e) Determination by the Director of the Department of Consumer and Business Services that the continuation of a line of insurance or class of business to which the policy belongs will jeopardize an insurers solvency or place the insurer in violation of the insurance laws of Oregon or any other state, whether because of a loss or decrease in reinsurance covering the risk or other reason determined by the director. (2) The insurer shall give the policyholder written notice of the cancellation, including the effective date of the cancellation and the reasons for the cancellation. (3) The insurer must mail or deliver a notice of cancellation to the policyholder at the address shown in the policy: (a) At least 10 days prior to the effective date of cancellation, if the cancellation is for the reason described in subsection (1)(a) or (b) of this section. (b) At least 30 days prior to the effective date of cancellation, if the cancellation is for the reason described in subsection (1)(c), (d) or (e) of this section. (4) An insurer shall mail or deliver to a policyholder, at the address shown in the policy, a notice of renewal or nonrenewal of a homeowner insurance policy at least 30 days prior to the expiration of the policy period. This subsection does not apply when the policy is in lapse status under the terms of the policy. (5) Proof of mailing notice of cancellation or nonrenewal to the policyholder at the address shown in the policy is sufficient proof of notice under this section. (6) This section does not apply to a homeowner insurance policy that has been in effect fewer than 60 days at the time the notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy. An insurer may not use the fact that a claim was filed on the policy within the 60-day period as a basis for canceling the policy within the 60-day period, for increasing the premium rate or for altering the terms of the policy during the current policy term. An insurer may, within the 60-day period, use any other information consistent with the insurers rating or underwriting program, including but not limited to, conditions or uses of the property discovered by the insurer, as a basis for cancellation or for offering to continue coverage at an increased rate or on different terms. At renewal of the policy, the insurer may treat a claim that occurred within the 60-day period the same as any other claim occurring during the policy period for the purposes of rating, nonrenewing and altering the terms of the policy. [2005 c.489 5]
(1) An insurer or insurance producer shall notify a consumer that the insurer or insurance producer will request a loss history report relating to the consumer or property to be insured before the insurer or insurance producer may obtain the report. The notice may be oral, in writing or in the same medium as the medium in which previous communication between the consumer and the insurer or insurance producer has been conducted. (2) An insurance producer may provide a single notice under subsection (1) of this section to a consumer if the insurance producer makes loss history inquiries of one or more insurers in response to a request by the consumer relating to a homeowner insurance policy. (3) An insurer that uses loss history reports for underwriting or rating homeowner insurance shall instruct the insurers insurance producers that an insurance producer must notify the consumer that the insurance producer has requested a loss history report before the insurance producer may obtain the report. (4) An insurer that uses a loss history report of a consumer when considering an application for a homeowner insurance policy shall notify the consumer during the application process that the consumer may request a free copy of the loss history report from the consumer reporting agency and a written statement describing the insurers use of the report. The notice to the applicant may be in writing or in the same medium as the medium in which the application is made. The written statement must contain the following explanations: (a) The ways in which the insurer uses loss history reports; (b) How often the insurer reviews a consumers loss history report; and (c) The procedures a consumer may use to obtain additional information. [2005 c.489 6]
No person shall knowingly and willfully obtain information about an individual from an insurer, insurance producer or insurance-support organization under false pretenses. [1981 c.649 20; 2003 c.364 167]
Violation of ORS 746.280 to 746.292 is a Class D violation. [1977 c.785 8; 1999 c.1051 221] Note: See note under 746.275.
[Amended by 1967 c.359 510; renumbered 743.732]
[1961 c.569 3; 1967 c.359 520; renumbered 743.762]
[1961 c.569 4; 1967 c.359 521; renumbered 743.765]
[1961 c.569 5; 1967 c.359 522; renumbered 743.768]
[Amended by 1967 c.359 511; renumbered 743.735]
[Amended by 1967 c.359 512; renumbered 743.738]
[Amended by 1967 c.359 513; renumbered 743.741]
[Amended by 1967 c.359 514; renumbered 743.744]
[Amended by 1967 c.359 515; renumbered 743.747]
[Amended by 1967 c.359 517; renumbered 743.753]
[Amended by 1967 c.359 518; renumbered 743.756]
[Amended by 1967 c.359 519; renumbered 743.759]
[Amended by 1955 c.465 7; 1967 c.359 108; renumbered 731.562]
[1955 c.465 2; 1967 c.359 94; renumbered 731.438]
[1955 c.465 5; 1967 c.359 572; renumbered 746.055]
As used in this chapter: (1) "Benefit contract" means the agreement for provision of benefits authorized by ORS 748.201, as that agreement is described in ORS 748.211 (1). (2) "Benefit member" means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract. (3) "Certificate" means the document issued as written evidence of the benefit contract. (4) "Impaired" means either: (a) For a society that does not write variable contracts, whenever its assets are less than its total liabilities; or (b) For a society that does write variable contracts, whenever its assets are less than its total liabilities, plus the required surplus for a mutual life insurer to write such contracts. (5) "Laws" means the societys articles of incorporation, constitution and bylaws, however designated. (6) "Lodge" means subordinate member units of the society, known as camps, courts, councils, branches or by any other designation. (7) "Premiums" means premiums, rates, dues or other required contributions by whatever name known, which are payable under the certificate. (8) "Rules" means all rules, regulations or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society. (9) "Society" means fraternal benefit society, unless otherwise indicated. [1987 c.490 2]
Any corporation, society, order, supreme lodge or voluntary association, without capital stock, conducted solely for the benefit of its members and their beneficiaries and not-for-profit, operated on a lodge system with ritualistic form of work, having a representative form of government and which provides benefits in accordance with this chapter is hereby declared to be a fraternal benefit society. [1987 c.490 3]
(1) A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated or admitted in accordance with its laws, rules and ritual. Subordinate lodges shall be required by the laws of the society to hold regular meetings at least once each month in furtherance of the purposes of the society. (2) A society may, at its option, organize and operate lodges for children under the minimum age for adult membership. Membership and initiation in local lodges shall not be required of the children, nor shall the children have a voice or vote in the management of the society. [1987 c.490 4]
A society has a representative form of government when: (1) It has a supreme governing body constituted as: (a) An assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the societys laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than two-thirds of the votes and not less than the number of votes required to amend the societys laws. The assembly shall be elected and shall meet at least once every four years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the societys laws; or (b) A board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the societys laws. A society may provide for election of the board by mail. Each term of a board member may not exceed four years. Vacancies on the board between elections may be filled in the manner prescribed by the societys laws. Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the societys laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society; (2) The officers of the society are elected either by the supreme governing body or by the board of directors; (3) Only benefit members are eligible for election to the supreme governing body and the board of directors; and (4) Each voting member has one vote. No vote may be cast by proxy. [1987 c.490 5]
(1) The purposes of a society, as specified in subsection (2) of this section, may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations. (2) A society shall operate for the benefit of members and their beneficiaries by: (a) Providing benefits as specified in ORS 748.201; and (b) Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members, which may also be extended to others. (3) Every society shall have the power to adopt laws and rules for the government of the society, the admission of its members and the management of its affairs. It shall have the power to change, alter, add to or amend such laws and rules and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society. [1987 c.490 6]
(1) A society shall specify in its laws or rules: (a) Eligibility standards for each and every class of membership, provided that, if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than 15 years of age and not greater than 21 years of age; (b) The process for admission to membership for each membership class; and (c) The rights and privileges of each membership class, provided that only benefit members shall have the right to vote on the management of the insurance affairs of the society. (2) A society may also admit social members who shall have no voice or vote in the management of the insurance affairs of the society. (3) Membership rights in the society are personal to the member and are not assignable. [1987 c.490 7]
(1) The principal office of any domestic society shall be located in this state. The meetings of its supreme governing body may be held in any state, district, province or territory in which the society has at least one lodge or in any other location as determined by the supreme governing body, and all business transacted at the meetings shall be as valid in all respects as if the meetings were held in this state. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in English. (2) A society may provide in its laws for an official publication in which any notice, report or statement required by law to be given to members, including notice of election, may be published. The required notices, reports or statements shall be printed conspicuously in the publication. If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy. (3) Not later than June 1 of each year, a synopsis of the societys annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, the synopsis may be published in the societys official publication. (4) A society may provide in its laws or rules for grievance or complaint procedures for members. [1987 c.490 8]
A domestic society organized on or after January 1, 1988, shall be formed as follows: (1) Seven or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make and sign articles of incorporation. The articles shall be acknowledged before some officer competent to take acknowledgment of deeds and shall state: (a) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing; (b) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. The purposes shall not include more liberal powers than are granted by this chapter; (c) The names and residences of the incorporators and the names, residences and official titles of all the officers, trustees, directors or other persons who are to have and exercise the general control of the management of the affairs and funds of the society until their successors are elected by the supreme governing body; and (d) A plan for the election of officers, trustees and directors by the supreme governing body. The election shall be held not later than one year from the date of issuance of the permanent certificate of authority. (2) The articles of incorporation, duly certified copies of the societys bylaws and rules, copies of all proposed forms of certificates, applications therefor and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the Director of the Department of Consumer and Business Services, who may require such further information as the director deems necessary. The bond with sureties approved by the director shall be in an amount, not less than $300,000 nor more than $1,500,000 as required by the director. All documents filed are to be in English. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the director shall so certify, retain and file the articles of incorporation and furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members as provided in this chapter. (3) No preliminary certificate of authority granted under the provisions of this section shall be valid after one year from its date or after any further period, not exceeding one year, as may be authorized by the director upon cause shown, unless the 500 applicants required have been secured and the organization has been completed as provided in this chapter. The articles of incorporation and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society has completed its organization and received a certificate of authority to do business as provided in this chapter. (4) Upon receipt of a preliminary certificate of authority from the director, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its tables of rates and shall issue to each applicant a receipt for the amount collected. No society shall incur any liability other than for the return of the advance premium, nor issue any certificate, nor pay, allow or offer or promise to pay or allow, any benefit to any person until: (a) Actual bona fide applications for benefits have been secured on not less than 500 applicants, and any necessary evidence of insurability has been furnished to and approved by the society; (b) At least 10 lodges have been established into which the 500 applicants have been admitted; (c) There has been submitted to the director, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the lodge of which each applicant is a member, amount of benefits to be granted and premiums therefor; and (d) It has been shown to the director, by sworn statement of the treasurer, or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate amount to at least $150,000. The advance premiums shall be held in trust during the period of organization and if the society has not qualified for a certificate of authority within one year, as provided in this chapter, the premiums shall be returned to the applicants. (5) The director may make any examination and require any further information that the director deems advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the director shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of the certificate. The director shall cause a record of the certificate of authority to be made. A certified copy of the record may be given in evidence with like effect as the original certificate of authority. (6) An incorporated society authorized to transact business in this state at the time this chapter becomes effective shall not be required to reincorporate. [1987 c.490 9]
(1) The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society. (2) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, the person in connection with or arising out of any action, suit or proceeding, whether civil, criminal, administrative or investigative, or threat of any action, suit or proceeding, in which the person may be involved by reason of the fact that the person is or was a director, officer, employee or agent of the society or of any firm, corporation or organization which the person served in any capacity at the request of the society. Except as provided in subsection (3) of this section, a person shall not be indemnified or reimbursed: (a) In relation to any matter in such action, suit or proceeding as to which the person shall finally be adjudged guilty of breach of a duty as a director, officer, employee or agent of the society; or (b) In relation to any matter in such action, suit or proceeding, or threat of such action, suit or proceeding, which has been made the subject of a compromise settlement. (3) A person described in subsection (2) of this section may be indemnified if: (a) The person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society; and (b) In a criminal action or proceeding, the person had no reasonable cause to believe that the conduct of the person was unlawful. (4) The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subsection (2) of this section may be made only by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, suit or proceeding, or by a court of competent jurisdiction. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contest, as to the person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement. The right of indemnification and reimbursement described in this section shall not be exclusive of other rights to which the person may be entitled as a matter of law and shall inure to the benefit of the persons heirs, executors and administrators. (5) A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the society, or who is or was serving at the request of the society as a director, officer, employee or agent of any other firm, corporation or organization against any liability asserted against the person and incurred by the person in any such capacity or arising out of the persons status as such, whether or not the society would have the power to indemnify the person against liability under this section. [1987 c.490 10]
The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws of the society. This provision shall be binding on the society and every member and beneficiary of a member. [1987 c.490 11]
(1) A domestic society may amend its laws in accordance with the provisions thereof by action of its supreme governing body at any regular or special meeting thereof or, if its laws so provide, by referendum. The referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum shall be adopted unless, within six months from the date of submission, a majority of the members voting have signified their consent to the amendment by one of the methods specified in this chapter. (2) No amendment to the laws of any domestic society shall take effect unless approved by the Director of the Department of Consumer and Business Services. The director shall approve the amendment if the director finds that it has been duly adopted and is not inconsistent with any requirement of the laws of this state or with the character, objects and purposes of the society. Unless the director shall disapprove any such amendment within 60 days after the filing, the amendment shall be considered approved. The approval or disapproval of the director shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. In case the director disapproves the amendment, the reasons shall be stated in the written notice. (3) Within 90 days from the approval by the director, all such amendments, or a synopsis thereof, shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments, or synopses thereof, stating facts which show that the amendments have been duly addressed and mailed, shall be prima facie evidence that the amendments, or synopsis thereof, have been furnished to the addressee. (4) Every foreign or alien society authorized to do business in this state shall file with the director a duly certified copy of all amendments of, or additions to, its laws within 90 days after the enactment of the amendments. (5) Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society, shall be prima facie evidence of the legal adoption thereof. [1987 c.490 12]
(1) A society may create, maintain and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by ORS 748.121 (2)(b). Such institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held or leased by the society for this purpose shall be reported in every annual statement. (2) No society shall own or operate funeral homes or undertaking establishments. [1987 c.490 13]
(1) A domestic society may consolidate or merge with any other society by complying with the provisions of this section. It shall file with the Director of the Department of Consumer and Business Services: (a) A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger; (b) A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition of the society on a date fixed by the director but not earlier than December 31, next preceding the date of the contract; (c) A certificate of the officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme governing body of each society, the vote being conducted at a regular or special meeting of each body, or, if the societys laws so permit, by mail; and (d) Evidence that at least 60 days prior to the action of the supreme governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official publication of each society. (2) If the director finds that the contract is in conformity with the provisions of this section, that the financial statements are correct and that the consolidation or merger is just and equitable to the members of each society, the director shall approve the contract and issue a certificate to that effect. Upon approval, the contract shall be in full force and effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory. In such event the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of such state or territory and a certificate of approval filed with the director of this state or, if the laws of such state or territory contain no such provision, then the consolidation or merger shall not become effective unless and until it has been approved by the director of insurance of such state or territory and a certificate of approval filed with the director of this state. (3) Upon the consolidation or merger becoming effective as provided in this chapter, all the rights, franchises and interests of the consolidated or merged societies in and to every species of property, real, personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein, vested under the laws of this state in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after consolidation or merger. (4) The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that the notice or document has been duly addressed and mailed, shall be prima facie evidence that the notice or document has been furnished the addressees. [1987 c.490 15]
(1) A fraternal benefit society must obtain and maintain a certificate of authority in the manner provided for insurers in the Insurance Code. (2) A certified copy or duplicate of the certificate of authority shall be prima facie evidence that the holder thereof is a fraternal benefit society within the meaning of this chapter. [1987 c.490 28; 1989 c.413 19; 1991 c.182 10]
No foreign or alien society shall transact business in this state without a certificate of authority issued by the Director of the Department of Consumer and Business Services. Any foreign or alien society desiring admission to this state shall comply substantially with the requirements and limitations of this chapter applicable to domestic societies. Any foreign or alien society may be authorized to transact business in this state upon a showing that its assets are invested in accordance with the provisions of this chapter and upon filing with the director: (1) A duly certified copy of its articles of incorporation; (2) A copy of its bylaws, certified by its secretary or corresponding officer; (3) A power of attorney to the director as required by the director; (4) A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the director, duly verified by an examination made by the supervising insurance official of its home state or other state, territory, province or country, satisfactory to the director; (5) Certification from the proper official of its home state, territory, province or country that the society is legally incorporated and licensed to transact business in the state, territory, province or country; (6) Copies of its certificate forms; and (7) Such other information as the director may deem necessary. [1987 c.490 30; 1991 c.182 11]
Any domestic fraternal benefit society may be converted and authorized as a mutual life insurance company by compliance with all the requirements of the insurance laws of this state for mutual life insurance companies. A plan of conversion shall be prepared in writing by the board of directors setting forth in full the terms and conditions of conversion. The affirmative vote of two-thirds of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of the plan, or if the society is organized under the direct election method pursuant to ORS 748.112 (1)(a), the plan of conversion shall be submitted by mail to the benefit members. The affirmative vote of two-thirds of the benefit members voting thereon shall be necessary for the approval of the plan. No conversion shall take effect unless approved by the Director of the Department of Consumer and Business Services who may give approval if the director finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society. [1987 c.490 16; 1991 c.182 12]
Insurance producers of societies shall be licensed in accordance with the provisions of ORS chapter 744 regulating the licensing, revocation, suspension or termination of license of resident and nonresident insurance producers. [1987 c.490 34; 1989 c.701 75; 2003 c.364 168]
(1) A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer, other than another fraternal benefit society, having the power to make reinsurance and authorized to do business in this state, or if not authorized, one which is approved by the Director of the Department of Consumer and Business Services, but no society may reinsure substantially all of its insurance in force without the written permission of the director. The society may take credit for the reserves on such ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed or otherwise becoming effective after January 1, 1988, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society. (2) Notwithstanding the limitation in subsection (1) of this section, a society may reinsure the risks of another society in a consolidation or merger approved by the director under ORS 748.148. [1987 c.490 14]
(1) A society may provide in any form the following contractual benefits: (a) Death benefits; (b) Endowment benefits; (c) Annuity benefits; (d) Temporary or permanent disability benefits; (e) Hospital, medical or nursing benefits; (f) Monument or tombstone benefits to the memory of deceased members; and (g) Such other benefits as authorized for life insurers and which are not inconsistent with this chapter, upon determination by the Director of the Department of Consumer and Business Services that the society is in compliance with all the requirements for a mutual life insurer to write such benefits. (2) A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits in subsection (1) of this section, consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person. [1987 c.490 17]
(1) The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract. (2) A society may make provision for the payment of funeral benefits to the extent of the portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member, provided the portion paid shall not exceed $1,000. (3) If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds shall be payable, the amount of the benefit, except to the extent that funeral benefits may be paid as provided in this chapter, shall be payable to the personal representative of the deceased insured, provided that if the owner of the certificate is other than the insured the proceeds shall be payable to that owner. [1987 c.490 18]
No money or other benefit, charity, relief or aid to be paid, provided or rendered by any society, shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society. [1987 c.490 19]
(1) Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided. The certificate, together with any riders or indorsements attached to it, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. The laws of the society need not be stated in full in the certificate, except as provided in this section. A copy of the application for insurance and declaration of insurability, if any, shall be indorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. Any waiver of this provision shall be void. (2) Any changes, additions or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate, shall bind the owner and the beneficiaries, and shall govern and control the benefit contract in all respects the same as though the changes, additions or amendments had been made prior to and were in force at the time of the application for insurance, except that no change, addition or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance. (3) Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application. (4) A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require that there be paid by the owner to the society the amount of the owners equitable proportion of the deficiency as ascertained by its board, and that if the payment is not made: (a) It shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or (b) In lieu of or in combination with paragraph (a) of this subsection, the owner may accept a proportionate reduction in benefits under the certificate. (5) The society may specify the manner of the election of the alternatives specified in subsection (4) of this section and which alternative is to be presumed if no election is made. (6) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions of the documents. (7) No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with and approved by the Director of the Department of Consumer and Business Services, and is subject to withdrawal of approval, in the manner provided for like policies issued by life and health insurers in this state. Every life, accident, health or disability insurance certificate and every annuity certificate issued on or after one year from January 1, 1988, shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life and health insurers in this state, except that a society may provide for a grace period for payment of premiums of one full month in its certificates. The certificates shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the societys laws or rules in force at the time of issuance of the certificate which, if violated, shall result in the termination or reduction of benefits payable under the certificate. In addition, except for contracts issued on a variable basis as authorized by ORS 748.409, the certificate shall contain a provision stating the substance of the societys laws required under subsections (4) and (5) of this section. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium. (8) Benefit contracts issued on the lives of persons below the societys minimum age for adult membership may provide for transfer of control or ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer, and may provide in all other respects for the regulation, government and control of the certificates and all rights, obligations and liabilities incident thereto and connected therewith. Ownership rights prior to the transfer shall be specified in the certificate. (9) A society may specify the terms and conditions on which benefit contracts may be assigned. [1987 c.490 20; 1991 c.182 13]
A fraternal benefit society may provide in its laws, in addition to other benefits provided, for the issuance of group benefit certificates if on the date when it enters upon business it has admitted assets which are greater than the sum of its accrued liabilities and reserves under all of its certificates when valued according to standards required for certificates issued after June 8, 1967. [1987 c.490 36]
(1) Group benefit certificates may provide for the payment of benefits in the event of the death, or death and disability, of: (a) Persons engaged in a common enterprise or employment. (b) The employees of any employer. (2) Group certificates may be issued with or without medical examination and without limitation as to age. (3) The society shall organize the persons or employees into a lodge or lodges with officers selected in the same manner as officers of other lodges and subject to the provisions of the laws of the society. (4) Not less than 50 persons may be admitted to membership under one group without medical examination. [1987 c.490 37]
If provided in the laws of the society, other persons may become members of a lodge organized under ORS 748.309 subsequent to its organization and may be initiated into and hold membership in the lodge. Individual benefit certificates may be issued to them. The lodges shall in all other respects be subject to the laws of the society. [1987 c.490 40]
(1) The monthly or other payments to be made to the society on or for any group benefit certificate may be made by the employer, or by the employer and employees jointly, or as provided in the contract. (2) When the payments are made by the employer and the employees jointly and the benefits under the group certificate are offered to all eligible employees of the employer, not less than 75 percent of the employees must be included under the group certificate. [1987 c.490 38]
(1) A group certificate, when issued in this state by any foreign or alien society, may contain, when issued, any provision required by the laws of the state or country under which the society is organized. (2) Group certificates issued in other states or countries by a domestic society may contain any provision required by the laws of the other state or country. [1987 c.490 39]
If any group certificate is canceled, discontinued or not renewed, or if any individual member of a group ceases to be a member of the group, the members of the group or any individual member who ceases to be a member of the group may be permitted to continue membership in the society for the same amount of protection at the required rate of monthly or other payment and in all other respects as provided in the laws of the society. [1987 c.490 41]
(1) For certificates issued prior to January 1, 1989, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall comply with the provisions of law applicable immediately prior to January 1, 1988. (2) For certificates issued on or after January 1, 1989, for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Mortality Table or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted may not be less than the corresponding amount ascertained in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits based upon the tables. [1987 c.490 21; 2005 c.22 498]
(1) Standards of valuation for certificates issued prior to January 1, 1989, shall be those provided by the laws applicable immediately prior to January 1, 1988. (2) The minimum standards of valuation for certificates issued on or after January 1, 1989, shall be based on the following tables: (a) For certificates of life insurance, the Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Mortality Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Ordinary Mortality Table or any more recent table made applicable to life insurers; or (b) For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits and for noncancelable accident and health benefits, the tables that are authorized for use by life insurers in this state. (3) The tables referred to in subsection (2) of this section shall be under valuation methods and standards, including interest assumptions, in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits. (4) The Director of the Department of Consumer and Business Services may accept other standards for valuation if the director finds that the reserves produced will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard prescribed in subsection (2) of this section. The director may vary the standards of mortality applicable to all benefit contracts on substandard lives or other extra hazardous lives by any society authorized to do business in this state. (5) Any society, with the consent of the director of insurance of the state of domicile of the society and under conditions the director may impose, may establish and maintain reserves on its certificates in excess of the reserves required, but the contractual rights of any benefit member shall not be affected. [1987 c.490 26; 2005 c.22 499]
(1) Every society transacting business in this state shall annually file with the Director of the Department of Consumer and Business Services on or before March 1, unless the time has been extended by the director, a true statement of its financial condition, transactions and affairs for the preceding calendar year and shall pay the applicable fee established by the director. The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefit societies and as supplemented by additional information required by the director. (2) As part of the annual statement required by subsection (1) of this section, on or before March 1, each society shall file with the director a valuation of its certificates in force on December 31 last preceding. The director may extend the time for filing the valuation for not more than two calendar months. The valuation shall be done in accordance with the standards specified in ORS 748.403. The valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society. [1987 c.490 27; 1991 c.182 14]
(1) All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights or become entitled to any apportionment on the surrender of any part, except as provided in the benefit contract. (2) A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society. (3) Pursuant to resolution of its supreme governing body a society may: (a) Establish and operate one or more separate accounts and issue contracts on a variable basis, subject to all the provisions of law regulating life insurers establishing accounts and issuing contracts; (b) To the extent the society deems it necessary in order to comply with any applicable federal or state laws, adopt special procedures for the conduct of the business and affairs of a separate account; (c) For persons having beneficial interest therein, provide special voting and other rights, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of certified public accounts and selection of a committee to manage the business and affairs of the account; and (d) Issue contracts on a variable basis to which ORS 748.211 (2) and (4) shall not apply. [1987 c.490 23]
A society shall invest its funds only in investments that are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations thereon. Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds. [1987 c.490 22]
Every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax, other than taxes on real estate and office equipment. [1987 c.490 24]
(1) The Director of the Department of Consumer and Business Services, or any person the director may appoint, may examine any domestic, foreign or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies. (2) The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the director. [1987 c.490 29]
(1) The Director of the Department of Consumer and Business Services shall notify the society of any deficiency or deficiencies, and state in writing the reasons for dissatisfaction, when the director, upon investigation, finds that a domestic society: (a) Has exceeded its powers; (b) Has failed to comply with any provisions of this chapter; (c) Is not fulfilling its contracts in good faith; (d) Has a membership of less than 400 after an existence of one year or more; (e) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business; or (f) Has become impaired. (2) The director shall at once issue a written notice to the society requiring that the deficiency or deficiencies be corrected. After notice, the society shall have 30 days in which to comply with the directors request for correction, and if the society fails to comply, the director shall notify the society of findings of noncompliance and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society. (3) If on the date named the society does not present good and sufficient reasons why it should not be enjoined or why the action should not be commenced, the director may present the facts relating thereto to the Attorney General who shall, if the Attorney General deems the circumstances warrant, commence an action to enjoin the society from transacting business or an action in quo warranto. (4) The court shall notify the officers of the society of a hearing. If after a full hearing it appears that the society should be enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. No society so enjoined shall have the authority to do business until: (a) The director finds that the violation complained of has been corrected; (b) The costs of the action have been paid by the society if the court finds that the society was in default as charged; (c) The court has dissolved its injunction; and (d) The director has reinstated the certificate of authority. (5) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, and the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed at once to close the affairs of the society and to distribute its funds to those entitled to them. (6) No action under this section shall be recognized in any court of this state unless the action is brought by the Attorney General on request of the director. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the director as the receiver. (7) The provisions of this section relating to hearing by the director, action by the Attorney General at the request of the director, hearing by the court, injunction and receivership shall be applicable to a society which voluntarily determines to discontinue business. [1987 c.490 31]
(1) The Director of the Department of Consumer and Business Services shall notify the society of any deficiency or deficiencies, and state in writing the reasons for dissatisfaction, when the director, upon investigation, finds that a foreign or alien society transacting or applying to transact business in this state: (a) Has exceeded its powers; (b) Has failed to comply with any of the provisions of this chapter; (c) Is not fulfilling its contracts in good faith; or (d) Is conducting its business fraudulently or in a manner hazardous to its members, creditors or the public. (2) The director shall at once issue a written notice to the society requiring that the deficiency or deficiencies be corrected. After notice, the society shall have 30 days in which to comply with the directors request for correction, and if the society fails to comply, the director shall notify the society of findings of noncompliance and require the society to show cause on a date named why its certificate of authority should not be suspended, revoked or refused. If on the named date the society does not present good and sufficient reason why its certificate of authority should not be suspended, revoked or refused, the director may suspend or refuse the certificate of authority until satisfactory evidence is furnished to the director that the suspension or refusal should be withdrawn or the director may revoke the certificate of authority of the society. (3) Nothing contained in this section shall be taken or construed as preventing any foreign or alien society from continuing in good faith all contracts made in this state during the time the foreign or alien society was legally authorized to transact business as provided in this chapter. [1987 c.490 32; 1991 c.182 15]
No application or petition for injunction against any domestic, foreign or alien society, or lodge thereof, shall be recognized in any court of this state unless made by the Attorney General upon request of the Director of the Department of Consumer and Business Services. [1987 c.490 33]
(1) Except as provided in subsection (2) of this section, this chapter does not affect or apply to: (a) Grand or subordinate lodges of orders, societies or associations that do business in this state and that provide benefits exclusively through local or subordinate lodges; (b) Orders, societies or associations that admit to membership only persons that are engaged in one or more crafts or hazardous occupations, in the same or similar lines of business, insuring only the members of the orders, societies or associations and the families of the members, and any societies that are auxiliary to the orders, societies or associations; (c) Domestic societies that limit membership to employees of a particular city or town, designated firm, business house or corporation and that provide for a death benefit of not more than $400 or disability benefits of not more than $350 to any person in any one year; (d) Domestic societies or associations with a purely religious, charitable or benevolent purpose that provide for a death benefit of not more than $400 or for disability benefits of not more than $350 to any one person in any one year; or (e) An association, including but not limited to a fraternal benefit society, that was organized before 1880, the members of which are or were members of the Armed Forces of the United States, and that has as a principal purpose providing insurance and other benefits to the associations members and the dependents and beneficiaries of the associations members. (2)(a) A society or association described in subsection (1)(c) or (d) of this section that provides for death or disability benefits for which benefit certificates are issued is not exempt from and shall comply with the provisions of this chapter. (b) A society or association described in subsection (1)(d) of this section that has more than 1,000 members is not exempt from and shall comply with the provisions of this chapter. (3) Except for an order, society or association that is described in subsection (1)(b) of this section, an order, society or association that, by the provisions of this section, is exempt from the requirements of this chapter may not give or allow, or promise to give or allow, to any person any compensation for procuring new members. (4) Every society that provides for benefits in case of death or disability that results solely from accident, and that does not obligate the society to pay natural death or sick benefits, has all of the privileges and is subject to all the applicable provisions and regulations of this chapter, except that the provisions relating to medical examination, valuations of benefit certificates and incontestability do not apply to the society. (5) The Director of the Department of Consumer and Business Services may require from any society or association, by examination or otherwise, any information that enables the director to determine whether the society or association is exempt from the provisions of this chapter. (6) An association that is exempt under subsection (1)(e) of this section shall prove to the directors satisfaction that the association is exempt from federal taxation under section 501(c) of the Internal Revenue Code. An association that is exempt under subsection (1)(e) of this section is subject to the following provisions: (a) On or before June 1 of each calendar year, the association shall file with the director a true and complete statement of the associations financial condition, transactions and business affairs for the preceding calendar year that is audited by an independent certified public accountant and accompanied by an actuarial opinion, as provided in ORS 733.304. For purposes of this paragraph, the director accepts and approves the statement and the opinion unless the director issues an order to disapprove the statement or opinion within 30 days after the association submits the statement and opinion. (b) The director may require the association to file a financial statement each quarter or at other intervals the director specifies in response to factors or trends that affect insurers that transact a particular class or classes of insurance or because of changes in the management or financial condition of the association. (c) The director may order the association to increase the associations capital or surplus to amounts the director deems sufficient to meet the associations liabilities, if the director has reason to believe that the association does not have sufficient capital or surplus based on eligible assets in accordance with ORS chapter 733. The director may order an association to cease and desist from assuming any additional liabilities in this state until the association complies with the directors order to increase the associations capital or surplus. (d) The association shall include with each life insurance policy or annuity that the association issues a notice in bold type or otherwise clear and conspicuous writing a notice that reads: ______________________________________________________________________________ This policy is issued by an association that does not have a certificate of authority from the insurance division of the Department of Consumer and Business Services. If the association that issued this policy becomes insolvent, members or claimants under this policy are not eligible for insurance guaranty fund protection under Oregon law (ORS 734.550). ______________________________________________________________________________ (7) Societies and associations that are exempt under the provisions of this section are also exempt from all other provisions of the insurance laws of this state, except as provided in ORS 731.042. [1987 c.490 44; 1991 c.182 16; 2003 c.802 176; 2015 c.460 1]
(1) Societies are governed by this chapter and are exempt from all other provisions of the insurance laws of this state unless expressly designated therein, or unless specifically made applicable by this chapter. (2) ORS 705.137, 705.139, 731.004 to 731.026, 731.036 to 731.136, 731.146 to 731.156, 731.162, 731.166, 731.170, 731.216 to 731.268, 731.296, 731.324, 731.328, 731.354, 731.356, 731.358, 731.378, 731.380, 731.381, 731.382, 731.385, 731.386, 731.390, 731.394, 731.396, 731.398, 731.402, 731.406, 731.410, 731.422 to 731.434, 731.446 to 731.454, 731.488, 731.504, 731.508, 731.509, 731.510, 731.511, 731.512, 731.592, 731.594, 731.730, 731.731, 731.735, 731.737, 731.750, 731.804, 731.844 to 731.992, 731.870, 732.245, 732.250, 732.320, 732.325, 733.010 to 733.050, 733.080, 733.140 to 733.210, 733.220, 733.510, 733.652 to 733.658, 733.730 to 733.750, 742.001, 742.003, 742.005, 742.007, 742.009, 742.013 to 742.021, 742.028, 742.038, 742.041, 742.046, 742.051, 742.150 to 742.162 and 744.700 to 744.740 and ORS chapters 734, 743, 743A and 743B apply to fraternal benefit societies to the extent not inconsistent with the express provisions of this chapter. (3) For the purposes of this subsection and subsection (2) of this section, fraternal benefit societies shall be deemed insurers, and benefit certificates issued by fraternal benefit societies shall be deemed policies. (4) Every society authorized to do business in this state shall be subject to the provisions of ORS chapter 746 relating to unfair trade practices. However, nothing in ORS chapter 746 shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society. [1987 c.490 25,35,45; 1987 c.739 4a; 1987 c.838 15a; 1989 c.255 12; 1989 c.474 3; 1989 c.1022 10; 1991 c.182 17; 1991 c.401 32; 1991 c.673 7; 1991 c.812 23; 1993 c.447 117; 1995 c.30 12; 1995 c.638 8; 1999 c.633 6; 2001 c.377 19; 2003 c.802 177; 2007 c.71 243; 2008 c.22 4; 2013 c.698 32]
Insurance issued or delivered by a fraternal benefit society against the risk of economic loss assumed under a less than fully insured employee health benefit plan is subject to ORS 742.065. Such insurance is subject to ORS 748.603 but is otherwise not subject to the provisions of ORS chapter 748. [1993 c.649 4]
(1) Any person who willfully makes a false or fraudulent statement in or relating to an application for membership, or for the purpose of obtaining money from or a benefit in any society, shall upon conviction be fined not less than $100 nor more than $500, imprisoned in the county jail for not less than 30 days nor more than one year, or both. (2) Any person who willfully makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter, or of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate, shall be guilty of perjury and shall be subject to the penalties prescribed by law. (3) Any person who solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in this state commits a Class C violation. (4) Any person guilty of a willful violation of, or neglect or refusal to comply with, the provisions of this chapter for which a penalty is not otherwise prescribed, commits a Class C violation. [1987 c.490 43; 1999 c.1051 222]
[Amended by 1967 c.359 99; renumbered 731.458]
[Amended by 1967 c.359 76; renumbered 731.366]
[Amended by 1967 c.359 77; renumbered 731.370]
[Amended by 1967 c.359 102; renumbered 731.470]
The purpose of this section and ORS 750.005, 750.025 and 750.045 is to encourage and guarantee the development of health care service contractors by licensing and regulating their operation to ensure that they provide high quality health care services through state licensed organizations meeting reasonable standards as to administration, services and financial soundness. [1985 c.747 64; 2015 c.515 27]
As used in ORS 750.005 to 750.095: (1) "Claims" means any amount incurred by the insurer covering contracted benefits. (2) "Complementary health services" means the following health care services: (a) Chiropractic as defined in ORS 684.010; (b) Naturopathic medicine as defined in ORS 685.010; (c) Massage therapy as defined in ORS 687.011; or (d) Acupuncture as defined in ORS 677.757. (3) "Doctor" means any person lawfully licensed or authorized by statute to render any health care services. (4) "Health care service contractor" means: (a) Any corporation that is sponsored by or otherwise intimately connected with a group of doctors licensed by this state, or by a group of hospitals licensed by this state, or both, under contracts with groups of doctors or hospitals that include conditions holding the subscriber harmless in the event of nonpayment by the health care service contract as provided in ORS 750.095, and that accepts prepayment for health care services; or (b) Any person referred to in ORS 750.035. (5) "Health care services" means the furnishing of medicine, medical or surgical treatment, nursing, hospital service, dental service, optometrical service, complementary health services or any or all of the enumerated services or any other necessary services of like character, whether or not contingent upon sickness or personal injury, as well as the furnishing to any person of any and all other services and goods for the purpose of preventing, alleviating, curing or healing human illness, physical disability or injury. (6) "Health maintenance organization" means any health care service contractor operated on a for-profit or not for-profit basis which: (a) Qualifies under Title XIII of the Public Health Service Act; or (b)(A) Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health care services: (i) Usual physician services; (ii) Hospitalization; (iii) Laboratory; (iv) X-ray; (v) Emergency and preventive services; and (vi) Out-of-area coverage; (B) Is compensated, except for copayments, for the provision of basic health care services listed in subparagraph (A) of this paragraph to enrolled participants on a predetermined periodic rate basis; (C) Provides physicians services primarily directly through physicians who are either employees or partners of such organization, or through arrangements with individual physicians or one or more groups of physicians organized on a group practice or individual practice basis; and (D) Employs the terms "health maintenance organization" or "HMO" in its name, contracts, literature or advertising media on or before July 13, 1985. [Formerly 742.010; 1973 c.515 5; 1979 c.799 1; 1985 c.747 65; 1989 c.783 4; 1991 c.958 3; 2003 c.33 1]
[Amended by 1957 c.301 1; 1961 c.116 1; 1967 c.359 548; renumbered 744.305]
(1) Except as provided in subsection (2) of this section, at least one-third of the group of persons vested with managing the affairs of a health care service contractor, as defined in ORS 750.005 (4)(a), must be representatives of the public who are not: (a) Practicing doctors; or (b) Employees or trustees of a participant hospital. (2)(a) Notwithstanding subsection (1) of this section, the group of persons vested with managing the affairs of a nonprofit private organization described in paragraph (b) of this subsection must have at least two representatives of the public who are not: (A) Practicing doctors, as defined in ORS 750.005; or (B) Employees or trustees of a participant hospital. (b) This subsection applies to a nonprofit private organization that is a health maintenance organization, as defined in ORS 442.015, that is controlled by a single nonprofit hospital or by a group of nonprofit hospitals under common ownership and that operates in a county with a population of 200,000 or more. [Formerly 742.015; 1983 c.804 1; 2003 c.33 6; 2017 c.479 19]
[Amended by 1961 c.116 2; 1967 c.359 549; renumbered 744.315]
(1) A health care service contractor which is a not-for-profit corporation, shall not distribute, upon liquidation or otherwise, any part of its income to its members, directors, trustees or officers except for the reasonable value of services rendered such contractor. (2) An organization that does not meet the definition of health maintenance organization in ORS 750.005 shall not hold itself out to the public to be a health maintenance organization. [Formerly 742.025; 1985 c.747 66]
(1) Notwithstanding any other provision of law, except as provided in subsection (2) of this section, any persons doing a hospital association business, as defined in ORS 742.010 (1959 Replacement Part) in compliance with ORS chapter 742 (1959 Replacement Part) on August 12, 1965, may continue such business in compliance with ORS chapter 742 (1959 Replacement Part). (2) Every person doing a hospital association business, as defined in ORS 742.010 (1959 Replacement Part), on August 12, 1965, shall comply with the provisions of ORS 750.045, 750.055, 750.085 and 750.095. [Formerly 742.035; 1989 c.783 5]
[Amended by 1967 c.359 552; renumbered 744.345]
(1) A health care service contractor that is a for-profit or not-for-profit corporation shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $2.5 million. (2) A health care service contractor that is a for-profit or not-for-profit corporation shall file a surety bond or such other bond or securities in the sum of $250,000 as are authorized by the Insurance Code as a guarantee of the due execution of the policies to be entered into by such contractor in accordance with ORS 750.005 to 750.095. In lieu of such bond or securities, a health care service contractor may file an irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 in the sum of $250,000. This subsection does not apply to a health care service contractor that has at least 75 percent of its assets invested in health care service facilities pursuant to ORS 733.700. (3) Subsections (1) and (2) of this section do not apply to a health care service contractor furnishing only complementary health services, dental service or optometrical service operated on a for-profit or not-for-profit basis if: (a) The services referred to in this subsection maintain capital or surplus, or any combination thereof, of not less than $1 million. (b) The services referred to in this subsection file a surety bond or other such bond or securities in the sum of $50,000 as are authorized by the Insurance Code as a guarantee of the due execution of the policies to be entered into by such contractor in accordance with ORS 750.005 to 750.095. (4) A health care service contractor that is a for-profit or not-for-profit corporation applying for its original certificate of authority in this state shall possess, when first so authorized, additional capital or surplus, or any combination thereof, of not less than $500,000. (5) For the protection of the public, the Director of the Department of Consumer and Business Services may require a health care service contractor to possess and maintain capital or surplus, or any combination thereof, in excess of the amount otherwise required under this section owing to the type, volume and nature of insurance business transacted by the health care service contractor, if the director determines that the greater amount is necessary for maintaining the health care service contractors solvency according to standards established by rule. In developing such standards, the director shall consider model standards adopted by the National Association of Insurance Commissioners or its successor organization. For the purpose of determining the reasonableness and adequacy of a health care service contractors capital and surplus, the director must consider at least the following factors, as applicable: (a) The size of the health care service contractor, as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria. (b) The number of lives insured. (c) The extent of the geographical dispersion of the lives insured by the health care service contractor. (d) The nature and extent of the reinsurance program of the health care service contractor. (e) The quality, diversification and liquidity of the investment portfolio of the health care service contractor. (f) The recent past and projected future trend in the size of the investment portfolio of the health care service contractor. (g) The combined capital and surplus maintained by comparable health care service contractors. (h) The adequacy of the reserves of the health care service contractor. (i) The quality and liquidity of investments in affiliates. The director may treat any such investment as a disallowed asset for purposes of determining the adequacy of combined capital and surplus whenever in the judgment of the director the investment so warrants. (j) The quality of the earnings of the health care service contractor and the extent to which the reported earnings include extraordinary items. [Formerly 742.050; 1975 c.273 1; 1977 c.402 1; 1985 c.747 67; 1991 c.331 132; 1991 c.958 4; 1997 c.631 552; 2001 c.318 6; 2003 c.33 2]
[Amended by 1961 c.116 3; 1967 c.359 553; renumbered 744.355]
(1) The following provisions apply to health care service contractors to the extent not inconsistent with the express provisions of ORS 750.005 to 750.095: (a) ORS 705.137, 705.138 and 705.139. (b) ORS 731.004 to 731.150, 731.162, 731.216 to 731.362, 731.382, 731.385, 731.386, 731.390, 731.398 to 731.430, 731.428, 731.450, 731.454, 731.485, as provided in subsection (2) of this section, ORS 731.488, 731.504, 731.508, 731.509, 731.510, 731.511, 731.512, 731.574 to 731.620, 731.640 to 731.652, 731.730, 731.731, 731.735, 731.737, 731.750, 731.752, 731.804, 731.808 and 731.844 to 731.992. (c) ORS 732.215, 732.220, 732.230, 732.245, 732.250, 732.320, 732.325 and 732.517 to 732.596, not including ORS 732.582. (d) ORS 733.010 to 733.050, 733.080, 733.140 to 733.170, 733.210, 733.510 to 733.680 and 733.695 to 733.780. (e) ORS 734.014 to 734.440. (f) ORS 742.001 to 742.009, 742.013, 742.016, 742.061, 742.065, 742.150 to 742.162 and 742.518 to 742.542. (g) ORS 743.004, 743.005, 743.007, 743.008, 743.010, 743.018, 743.020, 743.022, 743.023, 743.028, 743.029, 743.038, 743.040, 743.044, 743.050, 743.100 to 743.109, 743.402, 743.405, 743.406, 743.417, 743.472, 743.492, 743.495, 743.498, 743.522, 743.523, 743.524, 743.526, 743.535, 743.550, 743.650 to 743.656, 743.680 to 743.689, 743.788 and 743.790. (h) ORS 743A.010, 743A.012, 743A.014, 743A.020, 743A.034, 743A.036, 743A.040, 743A.044, 743A.048, 743A.051, 743A.052, 743A.058, 743A.060, 743A.062, 743A.063, 743A.064, 743A.065, 743A.066, 743A.068, 743A.070, 743A.080, 743A.082, 743A.084, 743A.088, 743A.090, 743A.100, 743A.104, 743A.105, 743A.108, 743A.110, 743A.124, 743A.140, 743A.141, 743A.148, 743A.150, 743A.160, 743A.168, 743A.170, 743A.175, 743A.185, 743A.188, 743A.190, 743A.192, 743A.250, 743A.252 and 743A.260 and section 2, chapter 771, Oregon Laws 2013. (i) ORS 743.025, 743B.001, 743B.003 to 743B.127, 743B.128, 743B.130, 743B.195, 743B.197, 743B.200, 743B.202, 743B.204, 743B.220, 743B.222, 743B.225, 743B.227, 743B.250, 743B.252, 743B.253, 743B.254, 743B.255, 743B.256, 743B.257, 743B.258, 743B.280 to 743B.285, 743B.287, 743B.300, 743B.310, 743B.320, 743B.323, 743B.330, 743B.340, 743B.341, 743B.342, 743B.343 to 743B.347, 743B.400, 743B.403, 743B.407, 743B.420, 743B.423, 743B.450, 743B.451, 743B.452, 743B.453, 743B.470, 743B.475, 743B.505, 743B.550, 743B.555, 743B.601, 743B.602 and 743B.800. (j) The following provisions of ORS chapter 744: (A) ORS 744.052 to 744.089, 744.091 and 744.093, relating to the regulation of insurance producers; (B) ORS 744.602 to 744.665, relating to the regulation of insurance consultants; and (C) ORS 744.700 to 744.740, relating to the regulation of third party administrators. (k) ORS 746.005 to 746.140, 746.160, 746.220 to 746.370, 746.600, 746.605, 746.607, 746.608, 746.610, 746.615, 746.625, 746.635, 746.650, 746.655, 746.660, 746.668, 746.670, 746.675, 746.680 and 746.690. (2) The following provisions of the Insurance Code apply to health care service contractors except in the case of group practice health maintenance organizations that are federally qualified pursuant to Title XIII of the Public Health Service Act: (a) ORS 731.485, if the group practice health maintenance organization wholly owns and operates an in-house drug outlet. (b) ORS 743A.024, unless the patient is referred by a physician, physician assistant or nurse practitioner associated with a group practice health maintenance organization. (3) For the purposes of this section, health care service contractors are insurers. (4) Any for-profit health care service contractor organized under the laws of any other state that is not governed by the insurance laws of the other state is subject to all requirements of ORS chapter 732. (5)(a) A health care service contractor is a domestic insurance company for the purpose of determining whether the health care service contractor is a debtor, as defined in 11 U.S.C. 109. (b) A health care service contractors classification as a domestic insurance company under paragraph (a) of this subsection does not subject the health care service contractor to ORS 734.510 to 734.710. (6) The Director of the Department of Consumer and Business Services may, after notice and hearing, adopt reasonable rules not inconsistent with this section and ORS 750.003, 750.005, 750.025 and 750.045 that are necessary for the proper administration of these provisions. [1967 c.359 659; 1969 c.336 18; 1971 c.231 41; 1973 c.143 5; 1973 c.515 6; 1973 c.613 4a; 1975 c.135 3; 1975 c.338 4a; 1975 c.689 4; 1975 c.784 13c; 1977 c.402 6; 1979 c.268 7; 1979 c.708 11; 1979 c.785 22a; 1979 c.797 3a; 1981 c.254 3; 1981 c.319 3; 1981 c.422 6; 1981 c.649 22; 1981 c.752 14; 1983 c.601 9; 1985 c.747 68; 1985 c.827 3; 1987 c.411 3; 1987 c.720 3; 1987 c.739 5; 1987 c.774 62; 1987 c.838 16; 1989 c.255 13; 1989 c.425 15; 1989 c.474 4; 1989 c.701 76; 1989 c.784 14; 1989 c.832 3; 1989 c.1022 11; 1991 c.182 18; 1991 c.401 33; 1991 c.673 8; 1991 c.812 24; 1991 c.875 3; 1991 c.916 19; 1993 c.391 3; 1993 c.447 118; 1993 c.649 14; 1995 c.30 13; 1995 c.506 3; 1995 c.623 3; 1995 c.638 9; 1995 c.669 3; 1995 c.672 8; 1997 c.343 22; 1997 c.496 4; 1997 c.573 4; 1997 c.759 5; 1999 c.428 4,5; 1999 c.633 7,8; 1999 c.749 3,4; 1999 c.987 22,23; 2001 c.191 60; 2001 c.266 16; 2001 c.377 20; 2001 c.742 4; 2001 c.747 6; 2003 c.87 19; 2003 c.91 5; 2003 c.137 7; 2003 c.263 3; 2003 c.363 14; 2003 c.364 169; 2003 c.748 3; 2003 c.802 172; 2005 c.22 500,501,502; 2005 c.255 4,5,6; 2005 c.418 5; 2007 c.128 2,3; 2007 c.182 8,9; 2007 c.313 5,6; 2007 c.504 3,4; 2007 c.566 3,4; 2007 c.872 3,4; 2008 c.22 5,6; 2009 c.274 3,4; 2009 c.383 3; 2009 c.384 3,4; 2009 c.423 3,4; 2009 c.503 3,4; 2009 c.553 3,4; 2009 c.630 3,4; 2009 c.807 5,6; 2011 c.130 7; 2011 c.312 3; 2011 c.500 43; 2011 c.660 26; 2011 c.716 13; 2012 c.21 3; 2013 c.682 3; 2013 c.698 33; 2013 c.771 8; 2014 c.25 5,6; 2014 c.45 80,81; 2015 c.59 7,8; 2015 c.100 5,6; 2015 c.224 5,6; 2015 c.362 9,10; 2015 c.470 8,9; 2015 c.515 28,29; 2017 c.206 8,9; 2017 c.417 4,5; 2017 c.479 20,21; 2018 c.7 9; 2019 c.13 68; 2019 c.151 37; 2019 c.441 4; 2021 c.97 84] Note: The amendments to 750.055 by section 21, chapter 771, Oregon Laws 2013, become operative January 2, 2030. See section 24, chapter 771, Oregon Laws 2013, as amended by section 6, chapter 674, Oregon Laws 2015, and section 2, chapter 650, Oregon Laws 2021. The text that is operative on and after January 2, 2030, including amendments by section 7, chapter 25, Oregon Laws 2014, section 82, chapter 45, Oregon Laws 2014, section 9, chapter 59, Oregon Laws 2015, section 7, chapter 100, Oregon Laws 2015, section 7, chapter 224, Oregon Laws 2015, section 11, chapter 362, Oregon Laws 2015, section 10, chapter 470, Oregon Laws 2015, section 30, chapter 515, Oregon Laws 2015, section 10, chapter 206, Oregon Laws 2017, section 6, chapter 417, Oregon Laws 2017, section 22, chapter 479, Oregon Laws 2017, section 10, chapter 7, Oregon Laws 2018, section 69, chapter 13, Oregon Laws 2019, section 38, chapter 151, Oregon Laws 2019, section 5, chapter 441, Oregon Laws 2019, and section 85, chapter 97, Oregon Laws 2021, is set forth for the users convenience. (1) The following provisions apply to health care service contractors to the extent not inconsistent with the express provisions of ORS 750.005 to 750.095: (a) ORS 705.137, 705.138 and 705.139. (b) ORS 731.004 to 731.150, 731.162, 731.216 to 731.362, 731.382, 731.385, 731.386, 731.390, 731.398 to 731.430, 731.428, 731.450, 731.454, 731.485, as provided in subsection (2) of this section, ORS 731.488, 731.504, 731.508, 731.509, 731.510, 731.511, 731.512, 731.574 to 731.620, 731.640 to 731.652, 731.730, 731.731, 731.735, 731.737, 731.750, 731.752, 731.804, 731.808 and 731.844 to 731.992. (c) ORS 732.215, 732.220, 732.230, 732.245, 732.250, 732.320, 732.325 and 732.517 to 732.596, not including ORS 732.582. (d) ORS 733.010 to 733.050, 733.080, 733.140 to 733.170, 733.210, 733.510 to 733.680 and 733.695 to 733.780. (e) ORS 734.014 to 734.440. (f) ORS 742.001 to 742.009, 742.013, 742.016, 742.061, 742.065, 742.150 to 742.162 and 742.518 to 742.542. (g) ORS 743.004, 743.005, 743.007, 743.008, 743.010, 743.018, 743.020, 743.022, 743.023, 743.028, 743.029, 743.038, 743.040, 743.044, 743.050, 743.100 to 743.109, 743.402, 743.405, 743.406, 743.417, 743.472, 743.492, 743.495, 743.498, 743.522, 743.523, 743.524, 743.526, 743.535, 743.550, 743.650 to 743.656, 743.680 to 743.689, 743.788 and 743.790. (h) ORS 743A.010, 743A.012, 743A.014, 743A.020, 743A.034, 743A.036, 743A.040, 743A.044, 743A.048, 743A.051, 743A.052, 743A.058, 743A.060, 743A.062, 743A.063, 743A.064, 743A.065, 743A.066, 743A.068, 743A.070, 743A.080, 743A.082, 743A.084, 743A.088, 743A.090, 743A.100, 743A.104, 743A.105, 743A.108, 743A.110, 743A.124, 743A.140, 743A.141, 743A.148, 743A.150, 743A.160, 743A.168, 743A.170, 743A.175, 743A.185, 743A.188, 743A.190, 743A.192, 743A.250, 743A.252 and 743A.260. (i) ORS 743.025, 743B.001, 743B.003 to 743B.127, 743B.128, 743B.130, 743B.195, 743B.197, 743B.200, 743B.202, 743B.204, 743B.220, 743B.222, 743B.225, 743B.227, 743B.250, 743B.252, 743B.253, 743B.254, 743B.255, 743B.256, 743B.257, 743B.258, 743B.280 to 743B.285, 743B.287, 743B.300, 743B.310, 743B.320, 743B.323, 743B.330, 743B.340, 743B.341, 743B.342, 743B.343 to 743B.347, 743B.400, 743B.403, 743B.407, 743B.420, 743B.423, 743B.450, 743B.451, 743B.452, 743B.453, 743B.470, 743B.475, 743B.505, 743B.550, 743B.555, 743B.601, 743B.602 and 743B.800. (j) The following provisions of ORS chapter 744: (A) ORS 744.052 to 744.089, 744.091 and 744.093, relating to the regulation of insurance producers; (B) ORS 744.602 to 744.665, relating to the regulation of insurance consultants; and (C) ORS 744.700 to 744.740, relating to the regulation of third party administrators. (k) ORS 746.005 to 746.140, 746.160, 746.220 to 746.370, 746.600, 746.605, 746.607, 746.608, 746.610, 746.615, 746.625, 746.635, 746.650, 746.655, 746.660, 746.668, 746.670, 746.675, 746.680 and 746.690. (2) The following provisions of the Insurance Code apply to health care service contractors except in the case of group practice health maintenance organizations that are federally qualified pursuant to Title XIII of the Public Health Service Act: (a) ORS 731.485, if the group practice health maintenance organization wholly owns and operates an in-house drug outlet. (b) ORS 743A.024, unless the patient is referred by a physician, physician assistant or nurse practitioner associated with a group practice health maintenance organization. (3) For the purposes of this section, health care service contractors are insurers. (4) Any for-profit health care service contractor organized under the laws of any other state that is not governed by the insurance laws of the other state is subject to all requirements of ORS chapter 732. (5)(a) A health care service contractor is a domestic insurance company for the purpose of determining whether the health care service contractor is a debtor, as defined in 11 U.S.C. 109. (b) A health care service contractors classification as a domestic insurance company under paragraph (a) of this subsection does not subject the health care service contractor to ORS 734.510 to 734.710. (6) The Director of the Department of Consumer and Business Services may, after notice and hearing, adopt reasonable rules not inconsistent with this section and ORS 750.003, 750.005, 750.025 and 750.045 that are necessary for the proper administration of these provisions.
ORS 743A.010 does not apply to group practice maintenance organizations that are federally qualified pursuant to Title XIII of the Public Health Service Act (42 U.S.C. 300e et seq.). [1981 c.422 2; 1981 c.891 3]
[Amended by 1967 c.359 555; renumbered 744.375]
Notwithstanding any provision of contract or agreement entered into by a corporation, association, society, firm, partnership or individual doing business as a hospital association or as a health care service contractor, whenever the contract or agreement provides for payment or reimbursement for a service that is within the lawful scope of practice of a licensed optometrist, the hospital association or health care service contractor shall provide payment or reimbursement for the service, whether the service is performed by a physician or a licensed optometrist. Unless the contract or agreement provides otherwise, there shall be no reimbursement for ophthalmic materials, lenses, spectacles, eyeglasses or appurtenances thereto. [1971 c.97 2; 2005 c.442 3]
[Amended by 1967 c.359 557; renumbered 744.396]
(1) If a final order of liquidation with a finding of insolvency has been entered with respect to a health care service contractor by a court of competent jurisdiction in the domicile of the health care service contractor, subscribers of the health care service contractor must be offered replacement coverage as provided in this section. (2) All insurers and health care service contractors that participated with the insolvent health care service contractor in the open enrollment process at the last regular open enrollment period for a group shall offer members of the group that are subscribers of the insolvent health care service contractor an open enrollment period that the Director of the Department of Consumer and Business Services establishes by rule, commencing on the date on which the final order of liquidation with a finding of insolvency was entered. Each of the insurers and health care service contractors shall offer the subscribers of the insolvent health care service contractor the same coverages and rates that the insurer or health care service contractor had offered to members of the group at the groups last regular open enrollment period. (3) If no other insurer or health care service contractor offered health insurance coverage to a group or groups whose members are enrolled with the insolvent health care service contractor, or if the other insurers and health care service contractors lack sufficient health care delivery resources to assure that health care services will be available and accessible to all of the group subscribers of the insolvent health care service contractor, the Director of the Department of Consumer and Business Services shall equitably allocate the contract or contracts for the group or groups among all health care service contractors that operate within a portion of the service area of the insolvent health care service contractor. The director shall take into consideration the health care delivery resources of each health care service contractor. Each health care service contractor to which a group or groups are so allocated shall offer to each such group the existing coverage of the health care service contractor, at rates determined by the health care service contractor in accordance with the health care service contractors existing rating methodology. Each health care service contractor to whom a group or groups are allocated may reevaluate the group or groups at the end of the contractual period or at the end of six months after the allocation, whichever occurs first, in order to determine the appropriate premium for each such group. (4) The director shall equitably allocate the nongroup subscribers of the insolvent health care service contractor that are unable to obtain other coverage among all health care service contractors that operate within a portion of the service area of the insolvent health care service contractor. The director shall take into consideration the health care delivery resources of each health care service contractor. Each health care service contractor to which nongroup subscribers are allocated shall offer the health care service contractors existing individual or conversion coverage to nongroup subscribers, at rates determined in accordance with the health care service contractors existing rating methodology. A health care service contractor that does not offer direct nongroup enrollment may aggregate all of the allocated nongroup subscribers into one group for rating and coverage purposes. [1989 c.783 2; 2017 c.479 23]
[Amended by 1967 c.359 558; renumbered 744.405]
(1) For the purpose of this section only, and only in the event of a finding of impairment by the Director of the Department of Consumer and Business Services or of a final order of liquidation, as described in ORS 750.085, any covered health care service furnished within the state by a provider to a subscriber of a health care service contractor shall be considered to have been furnished pursuant to a contract between the provider and the health care service contractor with whom the subscriber was enrolled when the services were furnished. (2) Each contract between a health care service contractor and a provider of health care services shall provide that if the health care service contractor fails to pay for covered health care services as set forth in the subscribers evidence of coverage or contract, the subscriber is not liable to the provider for any amounts owed by the health care service contractor. (3) If the contract between the contracting provider and the health care service contractor has not been reduced to writing or fails to contain the provisions required by subsection (2) of this section, the subscriber is not liable to the contracting provider for any amounts owed by the health care service contractor. (4) No contracting provider or agent, trustee or assignee of the contracting provider may maintain a civil action against a subscriber to collect any amounts owed by the health care service contractor for which the subscriber is not liable to the contracting provider under this section. (5) Nothing in this section impairs the right of a provider to charge, collect from, attempt to collect from or maintain a civil action against a subscriber for any of the following: (a) Deductible, copayment or coinsurance amounts. (b) Health care services not covered by the health care service contractor. (c) Health care services rendered after the termination of the contract between the health care service contractor and the provider, unless the health care services were rendered during the confinement in an inpatient facility and the confinement began prior to the date of termination or unless the provider has assumed post-termination treatment obligations under the contract. (6) Nothing in this section prohibits a subscriber from seeking noncovered health care services from a provider and accepting financial responsibility for these services. (7) No health care service contractor shall limit the right of a provider of health care services to contract with the patient for payment of services not within the scope of the coverage offered by the health care service contractor. [1989 c.783 3]
[Amended by 1967 c.359 556; renumbered 744.385]
As used in ORS 750.301 to 750.341, "multiple employer welfare arrangement" has the meaning given that term in section 3 of the federal Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1002. [1993 c.615 2] Note: 750.301 to 750.341 were added to and made a part of the Insurance Code by legislative action but were not added to ORS chapter 750 or any series therein. See Preface to Oregon Revised Statutes for further explanation.
(1) An association or group of employers shall not provide health benefits to employees of the association or employees of any of the employers through a multiple employer welfare arrangement in this state except as authorized by a subsisting certificate of multiple employer welfare arrangement issued by the Director of the Department of Consumer and Business Services. (2) Only health benefits may be transacted through a multiple employer welfare arrangement. Health benefits may include benefits for disablement only if the benefits for disablement do not exceed $2,000 each year for each person covered by the disablement benefit. (3) Life insurance or insurance for disablement other than benefits described in subsection (2) of this section, or both, may be provided through a multiple employer welfare arrangement only if the insurance benefits meet the following conditions: (a) The insurance benefits must be fully insured through an authorized insurer. (b) The insurance benefits must be ancillary to the health benefits being provided under subsection (2) of this section. (4) ORS 750.301 to 750.341 do not apply to a multiple employer welfare arrangement that is fully insured within the meaning of section 514(b)(6) of the federal Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1144(b)(6). [1993 c.615 3] Note: See note under 750.301.
An association or group of employers seeking to provide health benefits through a multiple employer welfare arrangement must apply for a certificate of multiple employer welfare arrangement on a form prescribed by the Director of the Department of Consumer and Business Services. The application must be completed and submitted to the director along with all of the following: (1) Copies of all articles, bylaws, agreements and other documents or instruments describing the rights and obligations of employers, employees and beneficiaries with respect to the multiple employer welfare arrangement. (2) A copy of the trust agreement of the multiple employer welfare arrangement. (3) Current financial statements of the multiple employer welfare arrangement on the basis of statutory accounting principles. (4) Proof of a bond for the purpose and in the form and amount required by ORS 750.318. (5) A statement showing in full detail the plan for offering health care benefits through the multiple employer welfare arrangement. The plan must show that the association or group of employers and the trust meet the requirements of ORS 750.307 and 750.309 and must show the procedure established for handling claims for benefits in the event of dissolution of the multiple employer welfare arrangement. (6) Copies of all contracts or other instruments proposed to be made, offered or sold through the multiple employer welfare arrangement to its member employers, together with a copy of its plan description and the proposed printed matter to be used in the solicitation of member employers. (7) Evidence that the multiple employer welfare arrangement has applications from five or more employers meeting the requirements of ORS 750.307 and will provide similar benefits for 200 or more participating employees. (8) Proof of adequate reserves according to the requirements of ORS 750.315. (9) Proof of deposit with the Department of Consumer and Business Services of the initial amount required under ORS 750.309 (4) as a guarantee of the due execution of the trust obligation. [1993 c.615 4; 1999 c.196 13] Note: See note under 750.301.
A trust carrying out a multiple employer welfare arrangement must be established and maintained by an association or group of employers meeting the following requirements: (1) The association or group must be composed of five or more employers that are in the same trade or industry, including employers in closely related businesses that provide support, services or supplies primarily to that trade or industry. (2) The association or group must be engaged in substantive activity for its members other than sponsorship of an employee welfare benefit plan. (3) At the time of application for a certificate of multiple employer welfare arrangement, the association or group must have applications for participation in the multiple employer welfare arrangement from five or more employers and show that it will provide similar benefits for 200 or more participating employees. (4) The association or group must have been in existence as an association or group described in subsection (1) of this section for a period of not less than two years prior to the date of application for the certificate of multiple employer welfare arrangement. (5) The association or group must establish and maintain an employee welfare benefit plan through the multiple employer welfare arrangement, and the plan must be controlled and sponsored directly by participating employers. (6) The association or group must show that the annual gross contributions of the employee welfare benefit plan will be not less than $50,000 for a plan that provides only vision benefits, $175,000 for a plan that provides only dental benefits, and $450,000 for any other plan. [1993 c.615 5] Note: See note under 750.301.
The following requirements apply to the trust carrying out a multiple employer welfare arrangement: (1) The trust must hold and maintain adequate facilities for purposes of the multiple employer welfare arrangement and either must have sufficient personnel to service the employee benefit plan or must contract with a third party administrator licensed under ORS chapter 744 as a third party administrator to provide such services. For purposes of satisfying the requirements of this subsection, the trust may use the premises, facilities and personnel of the association or group of employers and pay reasonable compensation to the association or group for such use. (2) The trust must hold and maintain an excess loss insurance policy issued to the board of trustees in the name of the multiple employer welfare arrangement by an insurer authorized to transact casualty or health insurance in Oregon. Except as provided in this subsection, the policy must insure the multiple employer welfare arrangement against its liabilities for health benefits with regard to any one participant in excess of 10 percent of the capital and surplus of the trust. A trust may demonstrate to the Director of the Department of Consumer and Business Services that the trust is capable of supporting an exposure exceeding 10 percent of the capital and surplus of the trust. The trust may make such a demonstration only by means of a certification by a qualified actuary that the capital and surplus of the trust is sufficient to support the increased exposure. In any event, such a trust shall not have any exposure exceeding 15 percent of the capital and surplus of the trust. For purposes of this subsection, "participant" refers individually to each person benefited as a separate subject under the plan operated by the multiple employer welfare arrangement. The following also apply to a policy required under this subsection: (a) The coverage must be evidenced by a binder or policy. (b) The excess loss insurance policy must contain a provision that it may not be terminated for any reason by any person unless the Director of the Department of Consumer and Business Services receives a written notice of termination from the insurer at least 30 days before the effective date of the termination. (c) If more than one policy is purchased, the expiration dates of all such policies must be the same. (3) The trust must possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $250,000 or an amount equal to 35 percent of incurred claims for the preceding 12-month period by the trust, whichever is greater. However, the required amount under this subsection may not be more than $500,000. (4) As a guarantee of the due execution of the trust obligation under the benefit plan or plans to be entered into by the trust in accordance with ORS 750.301 to 750.341, the trust must make and maintain a deposit with the Department of Consumer and Business Services as provided in this subsection. The deposit required under this subsection is in addition to the capital and surplus or other amount required to be possessed and maintained by the trust under subsection (3) of this section and may not be included in or counted toward the required capital and surplus or other amount. The following provisions apply to the deposit: (a) As a condition of obtaining a certificate of multiple employer welfare arrangement, a trust shall make an initial deposit in an amount that is the greater of $50,000 or the amount of the deposit required under paragraph (b) of this subsection. (b) The amount of the deposit to be maintained under this subsection shall be the lesser of $250,000 or a current required amount calculated by determining the average monthly amount of claims paid by the trust during the preceding 12-month period and multiplying the average monthly amount by three. The current required amount of the deposit shall be calculated as of March 31, June 30, September 30 and December 31 of each calendar year. (5) In lieu of the deposit required by subsection (4) of this section, a trust may file and maintain a surety bond or such other bond or cash or securities in the sum of $250,000 as are authorized by the Insurance Code. (6) A trust carrying out a multiple employer welfare arrangement that is established after January 1, 1993, shall maintain the deposit required under subsection (4) of this section during the first four calendar quarters described in subsection (4)(b) of this section following the issuance of its certificate of multiple employer welfare arrangement as provided in this subsection. At the beginning of the second, third and fourth calendar quarters after such a trust receives its certificate of multiple employer welfare arrangement, the current required amount of the deposit to be maintained by the trust shall be calculated by determining the average monthly amount of claims paid during the preceding quarter. Beginning with the fifth calendar quarter following the issuance of its certificate of multiple employer welfare arrangement, the trust shall maintain the deposit as provided in subsection (4) of this section. [1993 c.615 6; 1999 c.196 14] Note: See note under 750.301.
An association or group of employers may provide health benefits in this state through a multiple employer welfare arrangement established in another state if the association or group of employers first obtains a certificate of multiple employer welfare arrangement in this state. Such a multiple employer welfare arrangement is a foreign multiple employer welfare arrangement. If the state in which the principal place of business of the multiple employer welfare arrangement is located issues certificates or licenses authorizing multiple employer welfare arrangements to transact insurance or provide health benefits, the foreign multiple employer welfare arrangement must show in its application that it is authorized to transact insurance or provide health benefits in that state. [1993 c.615 7] Note: See note under 750.301.
(1) The Director of the Department of Consumer and Business Services shall issue a certificate of multiple employer welfare arrangement to a multiple employer welfare arrangement by and through its board of trustees if, upon completion of the application for the certificate and upon investigation and review of all information acquired by the director, the director does all of the following: (a) Approves the application for the certificate. (b) Determines that the person applying for the certificate satisfies the requirements in ORS 750.305, 750.307 and 750.309 for qualifying for and holding a certificate of multiple employer welfare arrangement and satisfies all other applicable requirements in the Insurance Code. (2) The director shall take all necessary action and shall either issue or refuse to issue a certificate within a reasonable time after the completion of the application for the certificate. [1993 c.615 8] Note: See note under 750.301.
(1) For purposes of carrying out a multiple employer welfare arrangement, a trust shall maintain adequate reserves. Reserves must be held in cash or obligations guaranteed by the United States or invested in a registered investment company and invested exclusively in cash or obligations guaranteed by the United States. Reserves must be calculated with proper actuarial calculations of all of the following: (a) Known claims, paid and outstanding. (b) A history of incurred but not reported claims. (c) Claims handling expenses. (d) Unearned contributions. (e) An estimate for bad debts. (f) A trend factor. (2) Each multiple employer welfare arrangement shall submit annually to the Director of the Department of Consumer and Business Services an opinion of a qualified actuary as provided in this subsection. The opinion shall determine the adequacy of reserves of the multiple employer welfare arrangement. The director by rule shall adopt requirements for the actuarial opinion and standards on which the opinion must be based. In adopting the standards, the director shall consider standards established by the National Association of Insurance Commissioners in its instructions for annual statements. The director by rule shall also define "qualified actuary" for purposes of this subsection by establishing qualifications required of an actuary for the purpose of giving the opinion. In establishing the definition, the director shall consider standards established from time to time by the American Academy of Actuaries. [1993 c.615 9; 1995 c.166 1] Note: See note under 750.301.
(1) The powers of a multiple employer welfare arrangement, except as otherwise provided, must be exercised by a board of trustees chosen to carry out the purposes of the trust agreement. At least 50 percent of the trustees shall be persons who are covered under the multiple employer welfare arrangement. A trustee may not be an owner, officer or employee of a third party administrator who is licensed pursuant to ORS 744.700 to 744.740 and provides services to a multiple employer welfare arrangement. (2) The trustees must give the attention and must exercise the vigilance, diligence, care and skill that prudent persons use in like or similar circumstances. Trustees are responsible for all operations of the multiple employer welfare arrangement and must take all necessary precautions to safeguard its assets. [1993 c.615 10] Note: See note under 750.301.
(1) The board of trustees of a trust carrying out a multiple employer welfare arrangement shall select officers as designated in the articles or bylaws and may appoint persons to act on behalf of the board as the board determines to be necessary for transacting the business of the multiple employer welfare arrangement. (2) Officers and persons appointed to act on behalf of the board have such authority and may perform such duties in the management of the property and affairs of the trust as may be delegated by the board of trustees. (3) The board of trustees by bond must secure the fidelity of all officers and persons appointed to act on behalf of the board who handle the funds of the trust. The amount of the bond shall be determined annually. The requirement of this subsection may be satisfied by either of the following, whichever is the greater amount: (a) By a bond in the amount required by the Director of the Department of Consumer and Business Services for an authorized insurer. To establish the amount, the director shall consider the formula established in the examiners handbook of the National Association of Insurance Commissioners. (b) By compliance with the bonding requirements set forth in the federal Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1002, applicable to all fiduciaries as defined therein. [1993 c.615 11] Note: See note under 750.301.
(1) The trust carrying out a multiple employer welfare arrangement may not pay any salary, compensation or emolument to any officer or trustee of the trust unless the payment is first authorized by a majority vote of the board of trustees. (2) The compensation of any trustee or officer may not be unreasonable and may not be calculated, directly or indirectly, as a percentage of contributions collected. [1993 c.615 12] Note: See note under 750.301.
(1) Benefit plans issued by a trust must provide for a charge or deposit payable in cash and, except as provided in this section, for an assessment against member employers for purposes of subsection (2) of this section at least equal to one months contribution by the employer. The assessment may be prefunded. A member employer may not be liable under this subsection for an amount greater than the charge or deposit required in the plan. (2) If at any time the capital and surplus of the trust are less than the requirement of ORS 750.309, the trust must immediately collect from member employers upon each plan a sufficient proportionate part of the amount assessable under subsection (1) of this section to restore the amount of capital and surplus required. An assessment of an employer under this subsection may not exceed the amount provided in the plan for an assessment for purposes of this subsection. (3) In addition to assessments that may be collected under subsection (2) of this section, in the event of liquidation of a multiple employer welfare arrangement trust, the Director of the Department of Consumer and Business Services, acting in the capacity of receiver, may assess member employers an amount necessary to pay outstanding claims and costs necessary to administer the liquidation proceedings. An assessment of an employer under this subsection may not exceed the amount of one months contribution by the employer. (4) A member employer of an association or group shall not be liable for any part of an assessment imposed under subsection (2) or (3) of this section in excess of the amount demanded within one year after the termination of the member employers participation in the plan. [1993 c.615 13; 2001 c.318 18] Note: See note under 750.301.
(1) A trust shall provide notice of the following in writing to each individual applying to be covered by a multiple employer welfare arrangement: (a) The fact that the multiple employer welfare arrangement is subject to less stringent solvency protection and regulation than are insurers holding certificates of authority. (b) The fact that in the event the trust does not pay medical expenses that are eligible for payment under the multiple employer welfare arrangement, the individuals covered through the multiple employer welfare arrangement may be liable for those expenses. (2) Each evidence of health benefits provided through a multiple employer welfare arrangement must state that the coverage is obtained through a multiple employer welfare arrangement and that the coverage is not subject to the provisions of ORS 734.750 to 734.890 relating to the Oregon Life and Health Insurance Guaranty Association, and that if the multiple employer welfare arrangement or the trust issuing the coverage becomes insolvent, the Oregon Life and Health Insurance Guaranty Association has no obligation to pay claims under the coverage. (3) The notice required under subsection (1) of this section and the statement required under subsection (2) of this section are subject to prior review and approval by the Director of the Department of Consumer and Business Services. [1993 c.615 14] Note: See note under 750.301.
(1) Each multiple employer welfare arrangement holding a certificate of multiple employer welfare arrangement must file an annual financial statement with the Director of the Department of Consumer and Business Services. The statement must conform to the requirements of ORS 731.574 applicable to annual statements filed by insurers. The director may request additional filings as the director determines necessary. (2) Each annual financial statement filed under subsection (1) of this section must be audited by a certified public accountant according to the requirements of ORS 731.488 and rules adopted thereunder. (3) An actuarial opinion regarding reserves for known claims and associated expenses and incurred but not reported claims and associated expenses must be included with the audited annual statement. (4) Not later than the 45th day after the end of each calendar quarter, each trust holding a certificate of multiple employer welfare arrangement must file with the director: (a) An unaudited financial statement, affirmed by an appropriate officer of the trust or a representative authorized by the trust to make such an affirmation. (b) A report certifying that the trust maintains reserves according to the requirements of ORS 750.315 that are sufficient to meet its contractual obligations, and that the trust maintains a policy for excess loss insurance issued by an insurer authorized to do business in this state. [1993 c.615 15] Note: See note under 750.301.
A multiple employer welfare arrangement and its board of trustees and each administrator, insurer or trustee related to the trust or multiple employer welfare arrangement are subject to investigation and examination in the same manner and to the same extent as an insurer under ORS 731.296 to 731.316. [1993 c.615 16] Note: See note under 750.301.
(1) A multiple employer welfare arrangement is subject to taxation to the same extent and in the same manner as an insurer transacting health insurance in this state. (2) For purposes of this section, contributions received by a trust for a multiple employer welfare arrangement shall be considered to be premiums received for insurance. [1993 c.615 17; 1995 c.786 11] Note: See note under 750.301.
[1973 c.97 7; 1989 c.331 26; renumbered 750.655 in 1989]
In addition to limitations and restrictions imposed by the federal Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1001 et seq., on trustees or officers in their capacity as fiduciaries, a trustee or officer of a trust carrying out a multiple employer welfare arrangement shall not do any of the following: (1) Receive directly or indirectly any payment for negotiating, procuring, recommending or aiding in: (a) Any purchase by or sale to the trust; or (b) Any loan from the trust. (2) Be pecuniarily interested, as principal, coprincipal, agent or beneficiary, in a purchase, sale or loan described in subsection (1) of this section. [1993 c.615 18] Note: See note under 750.301.
(1) The following provisions apply to trusts carrying out a multiple employer welfare arrangement: (a) ORS 705.137, 705.138 and 705.139. (b) ORS 731.004 to 731.150, 731.162, 731.216 to 731.268, 731.296 to 731.316, 731.324, 731.328, 731.378, 731.386, 731.390, 731.398, 731.406, 731.410, 731.414, 731.418 to 731.434, 731.454, 731.484, 731.486, 731.488, 731.512, 731.574 to 731.620, 731.640 to 731.652, 731.804, 731.808 and 731.844 to 731.992. (c) ORS 733.010 to 733.050, 733.140 to 733.170, 733.210, 733.510 to 733.680 and 733.695 to 733.780. (d) ORS 734.014 to 734.440. (e) ORS 742.001 to 742.009, 742.013, 742.016, 742.061 and 742.065. (f) ORS 743.004, 743.005, 743.007, 743.008, 743.010, 743.018, 743.020, 743.023, 743.028, 743.029, 743.053, 743.405, 743.406, 743.524, 743.526 and 743.535. (g) ORS 743A.010, 743A.012, 743A.014, 743A.020, 743A.024, 743A.034, 743A.036, 743A.040, 743A.048, 743A.051, 743A.052, 743A.058, 743A.060, 743A.062, 743A.063, 743A.064, 743A.065, 743A.066, 743A.068, 743A.070, 743A.080, 743A.082, 743A.084, 743A.088, 743A.090, 743A.100, 743A.104, 743A.105, 743A.108, 743A.110, 743A.124, 743A.140, 743A.141, 743A.148, 743A.150, 743A.160, 743A.168, 743A.170, 743A.175, 743A.180, 743A.185, 743A.188, 743A.190, 743A.192, 743A.250, 743A.252 and 743A.260. (h) ORS 743B.001, 743B.003 to 743B.127 (except 743B.125 to 743B.127), 743B.195, 743B.197, 743B.200, 743B.202, 743B.204, 743B.220, 743B.222, 743B.225, 743B.227, 743B.250, 743B.252, 743B.253, 743B.254, 743B.255, 743B.256, 743B.257, 743B.258, 743B.310, 743B.320, 743B.321, 743B.330, 743B.340, 743B.341, 743B.342, 743B.343, 743B.344, 743B.345, 743B.347, 743B.400, 743B.403, 743B.407, 743B.420, 743B.423, 743B.451, 743B.453, 743B.470, 743B.505, 743B.550, 743B.555 and 743B.601. (i) The following provisions of ORS chapter 744: (A) ORS 744.052 to 744.089, 744.091 and 744.093, relating to the regulation of insurance producers; (B) ORS 744.602 to 744.665, relating to the regulation of insurance consultants; and (C) ORS 744.700 to 744.740, relating to the regulation of third party administrators. (j) ORS 746.005 to 746.140, 746.160 and 746.220 to 746.370. (2) For the purposes of this section: (a) A trust carrying out a multiple employer welfare arrangement is an insurer. (b) References to certificates of authority are references to certificates of multiple employer welfare arrangement. (c) Contributions are premiums. (3) The provision of health benefits under ORS 750.301 to 750.341 is the transaction of health insurance. (4) The Department of Consumer and Business Services may adopt rules that are necessary to implement the provisions of ORS 750.301 to 750.341. [1993 c.615 19; 1995 c.506 4; 1995 c.603 30; 1995 c.669 4; 1995 c.672 9; 1997 c.343 23; 1997 c.496 5; 1997 c.759 6; 1999 c.428 7,8; 1999 c.429 3,4; 1999 c.633 9,10; 1999 c.749 6,7; 1999 c.987 25,26; 2001 c.266 17; 2001 c.742 5; 2003 c.87 25; 2003 c.91 6; 2003 c.137 8; 2003 c.263 4; 2003 c.363 15; 2003 c.364 170; 2003 c.446 3; 2003 c.748 4; 2005 c.418 6; 2007 c.182 10,11,12; 2007 c.313 7,8,9; 2007 c.504 5,6,7; 2007 c.566 5,6,7; 2007 c.872 5,6,7; 2008 c.22 7,8,9; 2009 c.274 5,6,7; 2009 c.383 4,5; 2009 c.384 5,6,7; 2009 c.423 5,6,7; 2009 c.503 5,6,7; 2009 c.549 12; 2009 c.553 5,6,7; 2009 c.630 5,6,7; 2009 c.703 2,3,4; 2009 c.807 7,8,9; 2011 c.130 8; 2011 c.312 4; 2011 c.500 44; 2011 c.660 27; 2011 c.716 14; 2012 c.21 4; 2013 c.682 4; 2014 c.25 8; 2015 c.59 10; 2015 c.100 8; 2015 c.224 8; 2015 c.362 12; 2015 c.470 11; 2017 c.206 11; 2019 c.151 39; 2021 c.97 86] Note: See note under 750.301.
The Director of the Department of Consumer and Business Services may initiate and carry out supervision and delinquency proceedings against a trust carrying out a multiple employer welfare arrangement in the same manner as provided with regard to insurers under ORS chapter 734. [1993 c.615 20] Note: See note under 750.301.
(1) A trust carrying out a multiple employer welfare arrangement may not be permitted to join or contribute financially to any insurance insolvency guaranty fund or similar mechanism in this state. Neither such a trust nor its insureds may receive any benefit from any such fund for claims arising out of the operations of the multiple employer welfare arrangement. (2) A trust carrying out a multiple employer welfare arrangement may not participate in any joint underwriting association or mandatory liability pool established under the laws of this state. [1993 c.615 21; 1995 c.603 39] Note: See note under 750.301.
An insurer who provides excess loss insurance under ORS 750.309 to a multiple employer welfare arrangement that is offering or providing health benefits in this state without a certificate of multiple employer welfare arrangement or to employers or employees participating in such a multiple employer welfare arrangement shall be liable for any unpaid claims of the multiple employer welfare arrangement. [1993 c.615 22] Note: See note under 750.301.
[1973 c.97 6; 1975 c.769 9; 1989 c.331 27; renumbered 750.705 in 1989]
A trust carrying out a multiple employer welfare arrangement shall not provide coverage to more than 20,000 lives unless the trust first obtains a certificate of authority as an insurer in this state. [1993 c.615 23] Note: See note under 750.301.
As used in ORS 750.505 to 750.715: (1)(a) "Administration fee" means a nominal fee that: (A) A legal access provider pays to an attorney; (B) Is not more than $6 per month for each of the legal access providers customers, or a greater amount that the Director of the Department of Consumer and Business Services specifies by rule; and (C) Covers overhead and administrative expenses that the attorney incurs in providing legal consultations or other legal services to a legal access providers customers. (b) "Administration fee" does not include fees, charges or other compensation that an attorney charges to the attorneys client for legal services or a reimbursement that a legal expense organization provides under a legal expense plan. (2) "Legal access provider" means a person that charges a fee to a customer for the purpose of providing the customer with access to legal consultations and other legal services and that pays an administration fee to an attorney. (3)(a) "Legal expense organization" or "organization" means a person or group of persons that provide or offer to provide a legal expense plan, including a person that acts as the legal expense plans administrator. (b) "Legal expense organization" or "organization" does not include a legal access provider. (4) "Legal expense plan" or "plan" means an agreement between an organization and a person or a group of persons under which the organization, in return for a specified payment as consideration, reimburses the person or group of persons as members of the plan for charges the person or group of persons incurs for legal services. (5) "Member" means a person who is eligible to receive legal services under a legal expense plan. (6) "Membership agreement" means written evidence of coverage of a member under a plan between an organization and members. (7) "Provider agreement" means a written contract or agreement between an organization and a providing attorney for rendering legal services to a member or group of persons. (8) "Providing attorney" means any attorney licensed and in good standing in this state who provides legal services in accordance with a membership agreement or a provider agreement. (9) "Sales or marketing representative" means a person who markets or solicits members for or on behalf of a plan. [1989 c.331 2; 2015 c.504 1]
A person shall not transact business as a legal expense organization or otherwise offer, provide, market or do business on behalf of a plan unless the person holds a valid certificate of registration as a legal expense organization. [1989 c.331 3]
ORS 750.505 to 750.715 do not apply to the following arrangements: (1) A retainer contract that an attorney or firm of attorneys makes with a specific individual, under the terms of which the attorney or firm bases fees on reasonable estimates of the nature and amount of services the attorney or firm will provide, and similar contracts that an attorney or firm of attorneys makes with a group of clients involved in the same or closely related legal matters. (2) Any two-party agreement for delivering specified legal services in return for a specified payment, including a fee for administering the agreement or services related to the agreement, under the terms of which an attorney or firm of attorneys arranges to provide legal services to a group of individuals who are all members of the same bona fide nonprofit membership organization, such as a church, trade group, credit union or association, or a group of individuals who are all employed by the same employer and the primary purpose of the nonprofit membership organization or the employer is other than providing legal services. An agreement is exempt from the application of ORS 750.505 to 750.715 under this subsection only if the agreement does not involve a third party such as a legal expense organization or sales or marketing representative in receiving any of the specified payments or in overseeing the delivery of the specified legal services. (3) A referral of a client to an attorney, to the extent that a nonprofit lawyer referral service or public corporation such as a state or local bar association provides the referral and does not charge for the referral. (4) Employee welfare benefit plans to the extent that Section 514 of the federal Employee Retirement Income Security Act of 1974, or successor legislation, preempts state regulation. (5) Legal assistance plans financed primarily by public funds, interest on lawyers trust accounts funds under the regulation of the Oregon State Bar or other public service funds. (6) Authorized insurers that offer legal expense insurance in this state. (7) A legal access provider that pays only an administration fee to an attorney and does not pay for or reimburse a customer of the legal access provider for legal services that the attorney provides to the customer. [1989 c.331 4; 2015 c.504 2]
An applicant for registration as a legal expense organization must do all of the following in order to obtain registration: (1) Apply for the registration under ORS 750.545. (2) File with the Director of the Department of Consumer and Business Services in writing the address, including street and number, and mailing address, if different, of the organizations initial registered office and the name of its initial registered agent at that office. (3) Meet the following qualifications: (a) The applicant must be financially responsible and the organization able to meet its obligations to its members. (b) The directors, officers or managers of the organization must be competent, trustworthy and experienced managerially, as determined by the director after investigation or upon receipt of reliable information. [1989 c.331 5]
(1) An applicant for a certificate of registration shall apply to the Director of the Department of Consumer and Business Services on a form prescribed by the director. The application shall be accompanied by the applicable fee established by the director. (2) An application shall include the following information: (a) The applicants name and the address of the principal office of the organization. (b) Whether the applicant or any of its directors, officers or managers has ever been convicted of or is under indictment for a crime, has ever had a judgment entered against it or any of them for fraud, and whether any license to act as an insurance producer or in any other occupational or professional capacity has ever been refused, revoked or suspended in this or any other state with respect to the applicant or any of its directors, officers or managers. (c) A statement of the financial condition of the applicant or of the organization. The statement must be in a form satisfactory to the director and verified by an official of the organization. (d) Any other information required by the director. [1989 c.331 6; 1991 c.67 203; 1991 c.401 11; 2003 c.364 171]
(1) If the Director of the Department of Consumer and Business Services determines that an applicant has satisfied all requirements of ORS 750.535 and 750.545, the director shall issue the certificate of registration to the applicant. (2) If the director denies a registration application, the director shall so inform the applicant, stating the grounds for the denial. [1989 c.331 7]
(1) A certificate of registration of a legal expense organization is effective for one year from the date of issue. (2) A legal expense organization may renew its certificate of registration by paying the applicable fee established by the Director of the Department of Consumer and Business Services. [1989 c.331 8; 1991 c.401 12]
(1) The Director of the Department of Consumer and Business Services may suspend, revoke, refuse to issue or refuse to renew a certificate of registration for any one or any combination of the following reasons: (a) Fraud or deceit in obtaining or applying for the certificate. (b) Dishonesty, fraud or gross negligence in the transaction of insurance. (c) Conduct resulting in a conviction of a felony under the laws of any state or of the United States, to the extent that such conduct may be considered under ORS 670.280. (d) Conviction of any crime, an essential element of which is dishonesty or fraud, under the laws of any state or of the United States. (e) Refusal to renew or cancellation, revocation or suspension of authority to transact insurance or business as a legal expense organization or similar entity in another state. (f) Failure to pay a civil penalty imposed by final order of the director. (2) An organization holding a certificate that has not been renewed or has been revoked shall surrender the certificate to the director at the directors request. (3) The director may suspend or refuse to renew a certificate immediately and without hearing pursuant to ORS 183.430 if the facts giving rise to such action demonstrate the organization to be a serious danger to the publics safety, or untrustworthy to maintain the certificate. (4) Except as provided in subsection (3) of this section, the director may suspend, revoke, refuse to renew or refuse to issue a certificate of registration only after giving an opportunity for a hearing pursuant to ORS chapter 183. [1989 c.331 9]
An organization shall not operate or offer a plan in this state unless the organization first enters into a written provider agreement with the providing attorney or attorneys. The following provisions apply to such an agreement: (1) A provider agreement shall not contain any provision that allows the providing attorney to seek payment from a member, other than any copayments and deductibles scheduled in the agreement, in the event of nonpayment by the organization for any services that have been performed under the plan by the providing attorney; and (2) A provider agreement shall contain a guarantee that the providing attorney will furnish plan services to plan members whether or not the providing attorney has been or will be paid under the plan. Provider agreements shall require providing attorneys to give plan members the full benefit of plan membership until the member leaves the plan or until the anniversary date of the date the plan member joined the plan, whichever comes first. [1989 c.331 10]
An organization must provide a membership agreement to each member of a group that is a party to a legal expense plan. Each membership agreement shall contain at least the following: (1) A listing and clear description of the legal services promised or for which expenses are to be reimbursed and a clear explanation of the limits of the services. (2) The copayments, deductibles or fees, if any, that the member is required to pay. (3) The name and address of the principal place of business of the legal expense organization offering the plan. (4) If the plan offers a limited choice of providing attorneys, a mechanism for providing the services of an alternate attorney in case representation by the designated providing attorney would be improper, unethical or impractical under the circumstances. (5) A provision for review for settling disagreements about the grounds for demanding an alternative attorney or any benefit. (6) All criteria by which a member may be denied renewal of membership. [1989 c.331 11]
(1) No provider agreement or membership agreement may contain provisions that are unfair, discriminatory or misleading, that encourage misrepresentation or misunderstandings of the agreement, that might endanger the solvency of the plan or legal expense organization or that are contrary to law. (2) For the duration of each written membership and provider agreement and for six years following its termination, a legal expense organization shall maintain at its principal administrative office adequate books and records of all transactions between the plan and the providing attorneys, and adequate books and records of all transactions between the plan and members thereof. The Director of the Department of Consumer and Business Services shall have reasonable access to the books and records so long as access does not violate or conflict with the attorney-client privilege recognized under the laws of the State of Oregon. [1989 c.331 13]
An organization shall deposit in an account that is maintained separately from operating funds an amount reasonably calculated to reimburse plan members for unearned premiums. The organization shall hold the amount in a fiduciary capacity. Records shall be kept of all deposits and receipts for a period of not less than six years. [1989 c.331 14]
Compensation paid to a providing attorney shall not be contingent on claims experience. This section does not prevent the compensation of a providing attorney from being based on membership fees collected or the number of claims paid or processed, nor does it prevent a providing attorney from sharing in a fund based on services performed. [1989 c.331 15]
(1) Each organization shall continuously maintain in this state a registered agent and registered office that may be, but need not be, the same as any of its places of business. (2) A registered agent shall be: (a) An individual who resides in this state and whose business office is identical to the registered office; (b) A domestic corporation or domestic nonprofit corporation whose business office is identical to the registered office; or (c) A foreign corporation or foreign nonprofit corporation authorized to transact business in this state whose business office is identical to the registered office. (3) The Director of the Department of Consumer and Business Services shall be an agent of an organization upon whom process may be served whenever the organization fails to appoint or maintain a registered agent in this state or whenever the registered agent of the organization cannot with reasonable diligence be found at the registered office. [1989 c.331 16; 2001 c.315 57]
(1) Each organization shall provide annually to the Director of the Department of Consumer and Business Services in as much detail as the director may require: (a) A verified financial statement detailing the legal expense organizations assets, liabilities, unearned premium reserve, loss records and such other items as the director may require so long as such reporting does not violate or conflict with the attorney-client privilege recognized under the laws of the State of Oregon; and (b) A list of the names and addresses of the organizations providing attorneys. (2) Every legal expense organization shall submit to the director the names of its sales and marketing representatives and their addresses not later than January 1 and July 1 of each year. [1989 c.331 17,18]
A legal expense organization shall file with the Director of the Department of Consumer and Business Services all schedules and tables of premium rates for legal service to be used on risks in this state, and shall file any amendments to or corrections of such schedules and tables. [Formerly 750.330]
An organization shall file with the Director of the Department of Consumer and Business Services a copy of the current membership agreement forms and the current provider agreement forms used by the organization, and a schedule of the rates charged its members. An organization shall file any material change in the provider agreement or membership agreement with the director prior to use. [1989 c.331 12]
(1) Except as otherwise provided in this section, no legal expense plan shall be issued, sold or offered for sale in this state unless the organization offering the plan is insured under an insurance contract that provides indemnification for the services under the plan, or reimbursement for services performed under a service contract, in the event of default of the organization. Any such insurance shall be issued only by an insurer authorized to do business in this state. (2) Instead of holding insurance under subsection (1) of this section, an organization offering an access plan described in subsection (5) of this section may post a bond or provide evidence of deposit pursuant to this subsection. The bond or other deposit is to be held in trust to the Director of the Department of Consumer and Business Services for the protection of members of the plan and other affected persons. The initial security bond or other deposit required for an access plan for at least the first full year of operation shall be in the amount of $10,000. The amount of deposit shall be adjusted annually and shall be in an amount equal to 10 percent of the gross written prepaid fees collected from plan members in the preceding calendar year, to a maximum of $50,000. The bond or other deposit is to be held in a bank authorized to do business in this state and insured by the Federal Deposit Insurance Corporation or in a savings and loan association insured by the Federal Deposit Insurance Corporation. (3) Instead of holding insurance under subsection (1) of this section, an organization offering a comprehensive plan described in subsection (5) of this section may post a bond or provide evidence of deposit pursuant to this subsection. The bond or other deposit is to be held in trust to the director for the protection of members of the plan and other affected persons. The initial security bond or other deposit required for a comprehensive plan for at least the first full year of operation shall be in the amount of $25,000. The amount of deposit shall be adjusted annually and shall be in an amount equal to 10 percent of the gross written prepaid fees collected from plan members in the preceding calendar year, to a maximum of $100,000. The bond or other deposit is to be held in a bank authorized to do business in this state and insured by the Federal Deposit Insurance Corporation or in a savings and loan association insured by the Federal Deposit Insurance Corporation. (4) Property used as security shall be held in trust and shall remain unencumbered, and shall have at all times a market value of at least 95 percent of the amount specified. Any bond issued in lieu of security shall be cancelable only upon 30 days advance written notice filed with the director. Securities or bonds deposited pursuant to this section shall be for the benefit of and subject to action thereon in the event of insolvency of the plan by any person sustaining actionable injury due to failure of the organization to faithfully perform its obligations to its members. (5) For purposes of this section: (a) "Access plan" means a plan that provides legal advice or consultation on legal matters that can be reasonably handled over the phone or by a limited review of routine legal documents. (b) "Comprehensive plan" means a plan that provides legal advice and consultation regarding more complex or time-consuming matters and may include advice and representation in and regarding administrative and civil or criminal judicial proceedings. [1989 c.331 19; 1999 c.107 18]
(1) ORS 750.505 to 750.715 do not affect the regulation of the practice of law. (2) Except as provided in ORS 750.505 to 750.715, legal expense plans are not subject to the Insurance Code. [1989 c.331 20]
(1) The following provisions of the Insurance Code apply to legal expense organizations to the extent not inconsistent with the express provisions of ORS 750.505 to 750.715: (a) ORS 731.004 to 731.026, 731.036 to 731.150, 731.158, 731.216 to 731.362, 731.385, 731.386, 731.398 to 731.430, 731.450, 731.454, 731.504, 731.508, 731.509, 731.510, 731.511, 731.512, 731.640 to 731.652, 731.730, 731.731, 731.735, 731.737, 731.804 and 731.844 to 731.992. (b) ORS 732.230, 732.245, 732.250, 732.320, 732.325 and 732.517 to 732.546. (c) ORS 733.010 to 733.050, 733.140 to 733.170, 733.210, 733.510 to 733.680 and 733.710 to 733.780. (d) ORS 737.205, 737.215, 737.225, 737.235 to 737.340 and 737.505. (e) ORS 742.001 to 742.009, 742.013 to 742.056 and 742.061. (f) ORS 746.005 to 746.045, 746.065, 746.075, 746.100 to 746.130, 746.160 and 746.230 to 746.370. (2) For the purposes of this section only, legal expense organizations shall be considered insurers. [Formerly 750.340; 1993 c.447 119; 1995 c.79 366; 2003 c.802 178; 2005 c.22 503]
The Director of the Department of Consumer and Business Services may make rules in order to carry out ORS 750.505 to 750.715. [1989 c.331 21]
[Amended by 1967 c.359 259; renumbered 734.030]
[Amended by 1967 c.359 275; renumbered 734.210]
[Amended by 1967 c.359 278; renumbered 734.240]
[Amended by 1967 c.359 280; renumbered 734.260]
[Amended by 1967 c.359 281; renumbered 734.270]
[Amended by 1967 c.359 285; renumbered 734.310]
[Amended by 1967 c.359 287; renumbered 734.330]
(1) For purposes of ORS 752.005 to 752.055, a "qualified member of a profession" means a person: (a) Who holds a current license, certificate or registration in a profession which is regulated or governed by a board established by the Legislative Assembly; (b) Whose principal office is in Oregon; (c) Who is engaged in the private practice of the profession; and (d) Who is not exempted by the commission from belonging to a professional liability fund managed by the commission. (2) For purposes of subsection (1) of this section, a person is not engaged in the private practice of a profession if the person is a full-time employee of a corporation other than a corporation incorporated under ORS chapter 58, the state, an agency or department thereof, a county, city, special district or any other public or municipal corporation or any instrumentality thereof. However, a person who practices a profession outside of the persons full-time employment is engaged in the private practice of the profession. (3) For the purposes of subsection (1) of this section, the principal office of a person is considered to be the location where the person engages in the private practice of a profession more than 50 percent of the time engaged in that practice. In the case of a person in a branch office outside Oregon, if the main office to which the branch office is connected is in Oregon, the principal office of the person is not considered to be in Oregon unless the person engages in the private practice of a profession in Oregon more than 50 percent of the time engaged in that practice. [1987 c.774 92]
(1) If the Director of the Department of Consumer and Business Services finds, after hearings, that qualified members of any profession are unable to obtain insurance for damages arising out of professional negligence or that such professional liability insurance is not available at a reasonable cost to such members, the director may determine that a professional liability fund is necessary. Any such fund shall be separate and distinct from the General Fund, and interest earned by the fund shall be credited to the fund. (2) The director may not make a determination to implement a professional liability fund if: (a) The lack of availability of insurance is due to legitimate insurance underwriting considerations, including past claims experience, licensing noncompliance or inadequate risk management; and (b) Actuarial studies show that private insurers are adequately setting rates for professional liability coverage, that a professional liability fund would not ultimately provide insureds lower premiums and that there is not an adequate number of potential insureds to fund a professional liability fund. (3) The director may contract for actuarial studies in order to make the determinations required by this section. [1987 c.774 89; 1989 c.966 68]
(1) After a determination of necessity by the director under ORS 752.015, the Governor may appoint a commission for each professional liability fund that the Director of the Department of Consumer and Business Services proposes to implement. (2) Each commission appointed pursuant to subsection (1) of this section shall consist of nine individuals appointed by the Governor, subject to confirmation by the Senate in the manner described in ORS 171.562 and 171.565. (3) Of the members of the commission, six shall be members of the profession and three shall be lay members. (4) The term of office of each member is three years but a member serves at the pleasure of the Governor. Before the expiration of the term of a member, the Governor shall appoint a successor whose term begins on July 1 next following. A member is eligible for reappointment. If there is a vacancy for any cause, the Governor shall make an appointment to become effective for the unexpired term upon confirmation by the Senate. [1987 c.774 90,91]
A professional liability fund commission appointed pursuant to ORS 752.025 shall establish a professional liability fund for qualified members of the appropriate profession. When a fund is established under this section: (1) The commission shall require all qualified members of the profession to carry professional liability insurance offered by the fund with primary liability limits of at least $200,000. (2) A professional liability fund established under this section shall pay, on behalf of qualified members of the profession, all sums as may be provided under the fund which any such member shall become legally obligated to pay as money damages because of any claim made against such member as a result of any act or omission of such member in rendering or failing to render professional services for others in the members professional capacity or caused by any other person for whose acts or omissions the member is legally responsible. (3) The commission shall have the authority: (a) To assess each person covered by the fund for contributions to the fund; (b) To establish definitions of coverage to be provided by the fund; (c) To employ legal counsel to represent the fund and to defend and control the defense of any person covered by the fund against whom a claim is made; (d) To employ any persons necessary for the proper administration of the fund; and (e) To contract with a local insurer to administer the fund. [1987 c.774 93]
(1) The Director of the Department of Consumer and Business Services shall adopt rules for the establishment of professional liability funds by the commissions described in ORS 752.025. Such rules shall include, but need not be limited to, rules requiring annual reports from the commissions. (2) The commissions shall report to the director annually on the operations of the fund. The reports shall contain any information required by the director. (3) A professional liability fund established under ORS 752.005 to 752.055 shall be subject to the rules of the director adopted under subsection (1) of this section. Such funds shall not be otherwise subject to the Insurance Code, and shall not participate in the Oregon Insurance Guaranty Association. [1987 c.774 93a]
ORS 752.005 to 752.055 shall be known and may be cited as "The Oregon Professional Liability Funds Law." [1987 c.774 93b]