ORS Chapter 731 — Administration and General

ORS 731.554. Capital and surplus requirements. (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.