Opinion ID: 835369
Heading Depth: 2
Heading Rank: 1

Heading: Context: Required Deposits by Insurance Companies

Text: A brief discussion of the regulatory scheme for private workers' compensation insurers will establish the legal context for the factual details and procedural history of this case. Every workers' compensation insurer in Oregon (other than the State Accident Insurance Fund Corporation) must post certain deposits with DCBS. ORS 731.628. Those deposits, known as Schedule P deposits, are based on the premiums earned by the insurer and the insurer's loss experience in Oregon. Every workers' compensation insurer must make a deposit of at least $100,000. At the beginning of each calendar year, each insurer calculates its required Schedule P deposit based on a formula that includes the insurer's premium revenue and loss experience through the end of the last calendar year and, if necessary, makes an additional deposit. ORS 731.628(1)(b). The insurer must file the Schedule P form showing that calculation by March 1 of each year and make any additional required deposit by March 31. The deposits are intended to cover the insurer's obligations under the policies that it has written in Oregon. They are intended to ensure that, if the insurer becomes insolvent and is unable to pay claims, DCBS will be able to pay any claims brought under those policies. ORS 731.608(3). An insurer may reduce the amount otherwise required for its Schedule P deposit if it reinsures a portion of its liability with another insurer (the reinsurer) and the reinsurer makes a deposit with DCBS. ORS 731.628(1)(b). In that circumstance, the insurer may take a credit against its required deposit in the amount of the deposit that the reinsurer makes. ORS 731.628(3). As a result, the deposits made by an insurer and any reinsurers must add up to the total amount required by the formula set out in ORS 731.628(1)(b).