TITLE 56 INSURANCE · 731.190 “Title insurance.” “Title insur-ance” means insurance of owners of property or others having an interest therein or liens or encumbrances thereon,

TITLE 56

INSURANCE

Chapter 731. Administration and General Provisions732. Organization and Corporate Procedures of Domestic Insurers; Regulation

of Insurers Generally733. Accounting and Investments734. Rehabilitation, Liquidation and Conservation of Insurers735. Alternative Insurance737. Rates and Rating Organizations741. Oregon Health Insurance Exchange742. Insurance Policies Generally; Property and Casualty Policies743. Health and Life Insurance

743A. Health Insurance: Required Reimbursements744. Insurance Producers; Life Settlement Providers, Brokers and Contracts;

Adjusters; Consultants; Third Party Administrators; ReinsuranceIntermediaries; Rental Company Limited Licenses

746. Trade Practices748. Fraternal Benefit Societies750. Health Care Service Contractors; Multiple Employer Welfare

Arrangements; Legal Expense Organizations752. Professional Liability Funds

Chapter 731

2011 EDITION

Administration and General Provisions

SHORT TITLE; PURPOSE AND CONSTRUCTION

731.004 Short title731.008 Purpose of Insurance Code731.012 Effect of federal law731.016 Construction of Insurance Code

APPLICATION OF INSURANCE CODE731.022 Compliance with Insurance Code required731.026 Application of Insurance Code to partic-

ular insurers731.028 Applicability of certain Insurance Code

provisions to State Accident InsuranceFund Corporation

731.036 Persons completely exempt from applica-tion of Insurance Code

731.038 Application of Insurance Code to charita-ble organizations that issue charitable giftannuities

731.039 Requirements for certain educational in-stitutions or nonprofit corporations issu-ing charitable gift annuities

731.042 Certificate of exemption; application ofcertain Insurance Code provisions to ex-empt insurers

731.046 Exemption of policies from Securities Law

DEFINITIONS GENERALLY731.052 Insurance Code definitions731.056 “Action”731.066 “Authorized,” “unauthorized” insurer731.069 “Certificate,” “certificate holder”731.072 “Certificate of authority,” “license”731.074 “Commercial liability insurance”731.075 “Covered life”731.076 “Department,” “director”731.082 “Domestic,” “foreign,” “alien” insurer731.086 “Domestic risk”731.092 “Domicile”731.096 “Domicile of alien insurer”731.099 “Independently procured insurance”731.102 “Insurance”731.104 “Insurance producer”731.106 “Insurer”731.112 “Judgment”731.116 “Person”731.122 “Policy”731.126 “Reinsurance”731.132 “Required capitalization”

Title 56 Page 1 (2011 Edition)

INSURANCE

731.136 “State”731.142 “Stock,” “mutual” and “reciprocal” in-

surer731.144 “Surplus lines insurance”731.146 “Transact insurance”

CLASSES OF INSURANCE DEFINED731.150 Definitions of classes of insurance not

mutually exclusive731.154 “Annuity”731.156 “Variable life insurance”; “variable annu-

ity”731.158 “Casualty insurance”731.162 “Health insurance”731.164 “Home protection insurance,” “home pro-

tection insurer”731.166 “Industrial life insurance”731.170 “Life insurance”; includes annuities731.174 “Marine and transportation insurance”731.178 “Mortgage insurance”731.182 “Property insurance”731.186 “Surety insurance”731.190 “Title insurance”731.194 “Wet marine and transportation insur-

ance”

INSURANCE ADMINISTRATION731.216 Administrative power of director731.228 Prohibited interests and rewards731.232 Subpoena power731.236 General powers and duties731.240 Hearings in general731.244 Rules731.248 Orders731.252 Cease and desist orders731.256 Enforcement generally731.258 Enforcement of orders and decisions by

Attorney General; filing, enforcement andeffect of foreign decrees

731.260 False or misleading filings731.264 Complaints and investigations confiden-

tial; permitted disclosures; rules731.268 Use of reproductions and certified copies

as evidence; fee731.272 Director’s annual reports; notice of publi-

cation of report731.276 Recommendations for changes in Insur-

ance Code731.280 Publications authorized731.282 Authority to sell publications731.284 Distribution of insurance laws731.288 Recording complaints; director to consider

complaints before issuing licenses731.292 Disposition of fees, charges, taxes, penal-

ties and other moneys731.296 Director’s inquiries731.300 Examination of insurers; when required731.302 Appointment of examiners; retaining of

appraisers, actuaries and others; eviden-tiary status of facts and conclusions

731.304 Investigation of persons transacting in-surance

731.308 Procedure at examination or investi-gation; production of books and other re-cords

731.312 Report of examination; review by personexamined; hearing; confidentiality of cer-tain information and documents; permit-ted disclosures

731.314 Immunity for director, examiner and oth-ers

731.316 Expenses of examination of insurer731.324 Service of process on Secretary of State;

notice to unauthorized insurer731.328 Deposits by unauthorized insurers in ac-

tions or proceedings

AUTHORIZATION OF INSURERS AND GENERAL REQUIREMENTS

731.354 Certificate of authority required731.356 Unauthorized insurance transaction en-

forcement731.358 Requirements of domestic insurers gener-

ally731.362 Requirements of foreign or alien insurers

generally731.363 Authorized foreign insurer becoming do-

mestic insurer731.364 Domestic insurer transferring domicile to

another state731.365 Effect of transfer of domicile by domestic

or foreign insurer; notice to director bytransferring insurer

731.367 Transfer of domicile by unincorporatedauthorized foreign insurer

731.369 Requirements of reciprocal insurers gen-erally

731.370 Reciprocal insurer’s financial statement;service of process

731.371 Powers of reciprocal insurer regardingreal estate

731.374 Exemptions to certificate of authority re-quirement

731.378 Foreign and alien insurers exempt fromlaws governing admission of foreign andalien corporations

731.380 Authority of foreign and alien insurers totake, acquire, hold and enforce notes se-cured by mortgages; statement; fees

731.381 Exemption from taxes for foreign and al-ien insurers engaging in activities au-thorized by ORS 731.380

731.382 General eligibility for certificate of au-thority

731.385 Standards for determining whether con-tinued operation of insurer is hazardous;rules; order; hearing

731.386 Management of insurers731.390 Government insurers not to be authorized731.394 Combinations of insuring powers in one

insurer731.396 Certificate of authority and good financial

condition required to issue variable lifeinsurance or variable annuity policies

731.398 Amendment of certificate of authority731.402 Issuance or refusal of certificate of au-

thority731.406 What certificate evidences; ownership of

certificate


ADMINISTRATION AND GENERAL PROVISIONS

731.410 Continuance, expiration or reinstatementof certificate of authority

731.414 Suspension or revocation of certificate ofauthority; mandatory grounds

731.418 Grounds for suspension or revocation ofcertificate of authority

731.422 Order of suspension, revocation or re-fusal; effect upon insurance producers’authority

731.426 Duration of suspension; insurer’s obli-gations during suspension period; rein-statement

731.428 Written consent to engage or participatein business of insurance; rules

731.430 Name of insurer731.434 Registered office and agent731.438 Title plant requirement for title insurers;

posting of indexes; plant ownership andmaintenance

731.439 Satisfaction of requirements of ORS731.438 (1) by certain title plants

731.442 Prohibition on transacting life insurancebusiness on mutual assessment plan

731.446 Policyholder deposits731.450 Unrelated business prohibited; exceptions;

title insurer as escrow agent731.454 Domestic insurers not to transact busi-

ness in jurisdiction where not authorized731.458 Exchange of reciprocal or interinsurance

contracts731.462 Nonassessable policies of reciprocal in-

surer731.466 Power of attorney for reciprocal insurer731.470 Attorney for reciprocal insurer731.475 Records storage required of workers’

compensation insurers; examination andaudit of records

731.480 Workers’ compensation policies; condi-tions for issuing

731.482 Withdrawal from, failure to renew orcancellation of line by commercial liabil-ity insurer

731.484 Prohibition on certain sales related togroup health and group life insurance

731.485 Conditions under which insurer may limitinsured’s choice of drug outlets andpharmacies

731.486 Exemption from definition of “transactinsurance” for group life policies; mastergroup health insurance coverage; rules

731.488 Annual audit of insurer; rules

LIMIT OF RISK; REINSURANCE731.504 Limit of risk731.508 Approved reinsurance731.509 Legislative intent; criteria for allowing

credit for reinsurance731.510 Criteria for allowing reduction from li-

ability for reinsurance731.511 Criteria to be met by assuming insurer in

order to be accredited as reinsurer731.512 Withdrawal of insurer; reinsurance731.516 Mortgage insurance limitation; waiver of

limitation; rules; fees

CAPITAL AND SURPLUS731.554 Capital and surplus requirements

731.562 Title insurer capital and surplus require-ments

731.566 Reciprocal insurer surplus requirements731.570 Withdrawing advancements made to re-

ciprocal insurer731.574 Annual financial statement

REPORTS OF CRIMINAL CONDUCT731.590 “Insurer” defined for ORS 731.592 and

731.594731.592 Reporting criminal conduct involving in-

surance731.594 Immunity from civil liability

DEPOSITS731.604 Acceptance of deposits of insurers731.608 Purpose of deposit731.612 Rights of insurer regarding deposits731.616 Valuation of deposits; deficiencies731.620 Assignment of deposited securities731.624 Special deposits; foreign and alien in-

surers731.628 Deposit required of workers’ compensa-

tion insurers731.632 Deposit required of domestic reciprocal

insurers; exception731.636 Deposit or trusteed assets of alien insurer

required731.640 Eligible deposits; rules731.642 Contracts for security deposits731.644 Payment of losses out of deposits, gener-

ally731.648 Duration and release of deposit731.652 Proofs for release of deposit to insurers;

director’s responsibility

EXCHANGE OF INFORMATION BY REGULATORS

731.730 Insurer filings with National Associationof Insurance Commissioners

731.731 Immunity for certain persons dealing withinformation collected from filings underORS 731.730

731.735 Certain information confidential731.737 Immunity from liability for certain per-

sons filing reports or furnishing informa-tion about specified activities to specifiedpersons

CONFIDENTIALITY OF REPORTS731.750 Confidentiality of report of material ac-

quisitions or dispositions of assets, mate-rial nonrenewals, cancellations andrevisions of ceded reinsurance agreements

731.752 Confidentiality of report used for deter-mination of required amount of capital orsurplus; confidentiality of financial planof action and report of examination con-nected with plan

731.754 Permissible uses of reports and plans de-scribed in ORS 731.752

INSURANCE COMPLIANCE AUDITREPORTS

731.760 Definitions for ORS 731.760 to 731.770731.761 Privileged information731.762 Authority of director


INSURANCE

731.764 Waiver of privilege; permitted disclosures731.766 Petition for in camera hearing; hearing;

compelled disclosure731.768 Privilege; exceptions731.770 Other privileges or limitations pertaining

to audit document

ASSESSMENTS, FEES AND TAXES731.804 Assessments; rules; fees; how determined731.808 “Gross amount of premiums” defined731.812 Foreign and alien insurer’s report of Ore-

gon business731.820 Gross premium tax on fire insurance pre-

miums731.822 Prepayment of tax due731.824 Tax on underwriting profits of wet marine

and transportation insurers731.828 Computation of wet marine and transpor-

tation insurance tax731.836 Limitation on enforcement of insurer’s

tax obligations

731.840 Retaliatory or corporate excise tax in lieuof certain taxes; certain local taxes pro-hibited

731.841 Conditions under which local authority totax insurer is preempted

731.842 Adjustment of amount to be prepaid fortaxes; extension of time for payment; in-terest; penalty for late payment

731.844 No personal liability for paying invalid tax

RETALIATORY PROVISIONS731.854 Retaliatory tax731.859 Applicability of retaliatory provisions

MISCELLANEOUS731.870 State of emergency; effect upon insurance

policies; rules

PENALTIES731.988 Civil penalties731.992 Criminal penalty


ADMINISTRATION AND GENERAL PROVISIONS 731.036

SHORT TITLE; PURPOSE AND CONSTRUCTION

731.004 Short title. ORS chapters 731,732, 733, 734, 735, 737, 742, 743, 743A, 744,746, 748 and 750 may be cited as the Insur-ance Code. [1967 c.359 §1; 1973 c.97 §1; 1975 c.769 §1]

731.008 Purpose of Insurance Code.The Legislative Assembly declares that theInsurance Code is for the protection of theinsurance-buying public. [Formerly 736.003]

731.010 [Repealed by 1965 c.241 §3]

731.012 Effect of federal law. The In-surance Code shall regulate the business ofinsurance and every person engaged thereinin accordance with the intent of Congress asexpressed in the Act of March 9, 1945, asamended (Public Law 15, 79th Congress, 15U.S.C. 1011 to 1014) which states in part thatno Act of Congress shall be construed to in-validate, impair or supersede any law en-acted by any state for the purpose ofregulating the business of insurance, orwhich imposes a fee or tax upon such busi-ness, unless such Act specifically relates tothe business of insurance. [1967 c.359 §3]

731.016 Construction of InsuranceCode. The Insurance Code shall be liberallyconstrued and shall be administered and en-forced by the Director of the Department ofConsumer and Business Services to give ef-fect to the policy stated in ORS 731.008. [1967c.359 §4]

731.020 [Repealed by 1965 c.241 §3]

APPLICATION OF INSURANCE CODE731.022 Compliance with Insurance

Code required. No person shall transact in-surance in this state or relative to a domes-tic risk without complying with theapplicable provisions of the Insurance Code.[1967 c.359 §5]

731.026 Application of Insurance Codeto particular insurers. The Insurance Codeapplies to:

(1) A fraternal benefit society complyingwith ORS chapter 748, only as provided insuch chapter.

(2) A health care service contractorcomplying with ORS 750.005 to 750.095, onlyas provided in such sections.

(3) A legal expense organization comply-ing with ORS 750.505 to 750.715, only asprovided in such sections.

(4) A multiple employer welfare arrange-ment 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]

731.028 Applicability of certain Insur-ance Code provisions to State AccidentInsurance Fund Corporation. (1) The StateAccident Insurance Fund Corporation is sub-ject as a domestic insurer to ORS 731.248,731.252, 731.256, 731.258, 731.260, 731.296 to731.316, 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 to733.170, 733.210, 737.205, 737.215, 737.225,737.235 to 737.340, 737.505 and 737.560, ORSchapters 742, 743, 743A and 744 and ORS746.015, 746.075, 746.110, 746.145 to 746.155,746.230 and 746.240. However:

(a) The requirements of the Director ofthe Department of Consumer and BusinessServices under ORS 733.010 to 733.060,733.140 to 733.170 and 733.210 govern in thecase of a conflict between those require-ments and the requirements of any account-ing system prescribed by the OregonDepartment of Administrative Services.

(b) The filing requirements of ORS737.205 to 737.340, 737.505 and 737.560 are inlieu of any similar filing requirements pre-scribed by any other law of this state.

(c) The requirements of ORS chapters 743and 743A are applicable only with respect toexcess workers’ compensation insurance fur-nished by the corporation.

(d) The provisions of ORS chapter 744apply only with respect to the regulation ofinsurance producers.

(e) For each year that the Secretary ofState conducts an audit of the State AccidentInsurance Fund Corporation under ORS297.210, the director may accept the auditand a copy of the Secretary of State’s auditreport in lieu of the requirements of ORS731.488 if the director determines that thepurposes of ORS 731.488 are adequatelyserved by the Secretary of State’s audit andreport. The Secretary of State shall file acopy of its audit report of the State AccidentInsurance Fund Corporation with the direc-tor.

(2) The provisions of subsection (1) ofthis section govern in the case of a conflictbetween those provisions and the provisionsof ORS chapter 656 that apply only to theState 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]

731.030 [Repealed by 1965 c.241 §3]731.032 [1967 c.359 §7; 1971 c.69 §1; 1971 c.538 §1;

1979 c.848 §1; 1993 c.265 §3; repealed by 2003 c.802 §173]

731.036 Persons completely exemptfrom application of Insurance Code. Ex-cept as provided in ORS 743.061 or as specif-ically provided by law, the Insurance Codedoes not apply to any of the following to the


731.036 INSURANCE

extent of the subject matter of the ex-emption:

(1) A bail bondsman, other than a corpo-rate surety and its agents.

(2) A fraternal benefit society that hasmaintained lodges in this state and otherstates for 50 years prior to January 1, 1961,and for which a certificate of authority wasnot required on that date.

(3) A religious organization providing in-surance benefits only to its employees, if theorganization is in existence and exempt fromtaxation under section 501(c)(3) of the federalInternal Revenue Code on September 13,1975.

(4) Public bodies, as defined in ORS30.260, that either individually or jointly es-tablish a self-insurance program for tort li-ability in accordance with ORS 30.282.

(5) Public bodies, as defined in ORS30.260, that either individually or jointly es-tablish a self-insurance program for propertydamage in accordance with ORS 30.282.

(6) Cities, counties, school districts, com-munity college districts, community collegeservice districts or districts, as defined inORS 198.010 and 198.180, that either individ-ually or jointly insure for health insurancecoverage, excluding disability insurance,their employees or retired employees, ortheir dependents, or students engaged inschool activities, or combination of em-ployees and dependents, with or without em-ployee or student contributions, if all of thefollowing conditions are met:

(a) The individual or jointly self-insuredprogram meets the following minimum re-quirements:

(A) In the case of a school district, com-munity college district or community collegeservice district, the number of covered em-ployees and dependents and retired em-ployees and dependents aggregates at least500 individuals;

(B) In the case of an individual publicbody program other than a school district,community college district or communitycollege service district, the number of cov-ered employees and dependents and retiredemployees and dependents aggregates at least500 individuals; and

(C) In the case of a joint program of twoor more public bodies, the number of coveredemployees and dependents and retired em-ployees and dependents aggregates at least1,000 individuals;

(b) The individual or jointly self-insuredhealth insurance program includes all cover-ages and benefits required of group healthinsurance policies under ORS chapters 743and 743A;

(c) The individual or jointly self-insuredprogram must have program documents thatdefine program benefits and administration;

(d) Enrollees must be provided copies ofsummary plan descriptions including:

(A) Written general information aboutservices provided, access to services, chargesand scheduling applicable to each enrollee’scoverage;

(B) The program’s grievance and appealprocess; and

(C) Other group health plan enrolleerights, disclosure or written procedure re-quirements established under ORS chapters743 and 743A;

(e) The financial administration of an in-dividual or jointly self-insured program mustinclude the following requirements:

(A) Program contributions and reservesmust be held in separate accounts and usedfor the exclusive benefit of the program;

(B) The program must maintain adequatereserves. Reserves may be invested in accor-dance with the provisions of ORS chapter293. Reserve adequacy must be calculatedannually with proper actuarial calculationsincluding 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 lossin accordance with the provisions of ORS742.065 unless the program has receivedwritten approval for an alternative arrange-ment for protection against economic lossfrom the Director of the Department of Con-sumer and Business Services;

(f) The individual or jointly self-insuredprogram must have sufficient personnel toservice the employee benefit program ormust contract with a third party administra-tor licensed under ORS chapter 744 as athird party administrator to provide suchservices;

(g) The individual or jointly self-insuredprogram shall be subject to assessment inaccordance with ORS 735.614 and former en-rollees shall be eligible for portability cover-age in accordance with ORS 735.616;

(h) The public body, or the program ad-ministrator in the case of a joint insuranceprogram of two or more public bodies, fileswith the Director of the Department of Con-sumer and Business Services copies of alldocuments creating and governing the pro-



gram, all forms used to communicate thecoverage to beneficiaries, the schedule ofpayments established to support the programand, annually, a financial report showing thetotal incurred cost of the program for thepreceding year. A copy of the annual auditrequired by ORS 297.425 may be used to sat-isfy the financial report filing requirement;and

(i) Each public body in a joint insuranceprogram is liable only to its own employeesand no others for benefits under the programin the event, and to the extent, that no fur-ther funds, including funds from insurancepolicies obtained by the pool, are available inthe joint insurance pool.

(7) All ambulance services.(8) A person providing any of the services

described in this subsection. The exemptionunder this subsection does not apply to anauthorized insurer providing such servicesunder an insurance policy. This subsectionapplies to the following services:

(a) Towing service.(b) Emergency road service, which means

adjustment, repair or replacement of theequipment, tires or mechanical parts of amotor vehicle in order to permit the motorvehicle to be operated under its own power.

(c) Transportation and arrangements forthe transportation of human remains, includ-ing all necessary and appropriate prepara-tions for and actual transportation providedto return a decedent’s remains from thedecedent’s place of death to a location desig-nated by a person with valid legal authorityunder ORS 97.130.

(9)(a) A person described in this subsec-tion who, in an agreement to lease or to fi-nance the purchase of a motor vehicle,agrees to waive for no additional charge theamount specified in paragraph (b) of thissubsection upon total loss of the motor vehi-cle because of physical damage, theft orother occurrence, as specified in the agree-ment. The exemption established in this sub-section applies to the following persons:

(A) The seller of the motor vehicle, if thesale is made pursuant to a motor vehicle re-tail 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 portionthereof, between the amount received by theseller, lessor, lender or assignee, as applica-ble, that represents the actual cash value of

the motor vehicle at the date of loss, and theamount owed under the agreement.

(10) A self-insurance program for tort li-ability or property damage that is establishedby two or more affordable housing entitiesand that complies with the same require-ments that public bodies must meet underORS 30.282 (6). As used in this subsection:

(a) “Affordable housing” means housingprojects in which some of the dwelling unitsmay be purchased or rented, with or withoutgovernment assistance, on a basis that is af-fordable to individuals of low income.

(b) “Affordable housing entity” meansany of the following:

(A) A housing authority created underthe laws of this state or another jurisdictionand any agency or instrumentality of ahousing authority, including but not limitedto a legal entity created to conduct a self-insurance program for housing authoritiesthat complies with ORS 30.282 (6).

(B) A nonprofit corporation that is en-gaged in providing affordable housing.

(C) A partnership or limited liabilitycompany that is engaged in providing afford-able housing and that is affiliated with ahousing authority described in subparagraph(A) of this paragraph or a nonprofit corpo-ration described in subparagraph (B) of thisparagraph if the housing authority or non-profit corporation:

(i) Has, or has the right to acquire, a fi-nancial or ownership interest in the partner-ship or limited liability company;

(ii) Has the power to direct the manage-ment or policies of the partnership or limitedliability company;

(iii) Has entered into a contract to lease,manage or operate the affordable housingowned by the partnership or limited liabilitycompany; or

(iv) Has any other material relationshipwith the partnership or limited liability com-pany.

(11) A community-based health care ini-tiative approved by the Administrator of theOffice for Oregon Health Policy and Re-search under ORS 735.723 operating acommunity-based health care improvementprogram approved by the administrator.

(12) Except as provided in ORS 735.500and 735.510, a person certified by the De-partment of Consumer and Business Servicesto operate a retainer medical practice. [1967c.359 §8; 1975 c.314 §1; 1977 c.428 §4; 1981 c.891 §1; 1985c.811 §1; 1987 c.97 §1; 1987 c.288 §1; 1991 c.958 §2; 1993c.265 §4; 1995 c.79 §357; 1995 c.582 §1; 1995 c.629 §1; 1997c.795 §3; 1999 c.502 §4; 2003 c.342 §1; 2005 c.175 §1; 2007c.174 §1; 2007 c.826 §1; 2009 c.244 §1; 2009 c.470 §5; 2009c.867 §48; 2011 c.9 §90; 2011 c.130 §6; 2011 c.499 §4]


731.038 INSURANCE

731.038 Application of Insurance Codeto charitable organizations that issuecharitable gift annuities. (1) As used inthis section:

(a) “Charitable gift annuity” has themeaning given that term in section 501(m)(5)of the Internal Revenue Code, as amendedand in effect on January 1, 2006.

(b) “Charitable organization” means anorganization to which contributions may bemade that are charitable contributions undersection 170(c) of the Internal Revenue Code,as amended and in effect on January 1, 2006.

(2) The Insurance Code does not apply toa charitable organization that issues charita-ble gift annuities if, on the date that thecharitable organization issues the charitablegift annuity, the charitable organization:

(a) Has a minimum of $300,000 in net as-sets as shown by an annual audited financialstatement prepared by an independent certi-fied public accountant and kept on file by thecharitable organization;

(b) Except as provided in subsection (3)of this section, has been in continuous oper-ation for at least five years or is a successorto or an affiliate of a charitable organizationthat has been in continuous operation for atleast five years; and

(c) Maintains a separate and distincttrust fund as a reserve fund adequate to meetthe future payments under all outstandingannuity agreements. The amount in the re-serve fund must be an amount no less thanan amount computed on the basis of thetransfers to which it relates in accordancewith the standard of valuation based on cur-rent mortality tables and interest rate re-commended by a national organizationorganized for the purpose of providing edu-cational and other services to Americancharities regarding gift annuities and otherforms of planned gifts. The reserve fund mayinclude one or more single premium annui-ties that pay the entire amount of one ormore charitable gift annuities issued by thecharitable organization if each single pre-mium annuity is issued by an authorized in-surer that is also authorized to transactinsurance in the state in which the charita-ble organization has its principal office andin the state in which the single premium an-nuity is issued.

(3) The Insurance Code does not apply toan educational institution or nonprofit cor-poration that issued a charitable gift annuitybefore January 1, 2006, under a certificate ofauthority issued under ORS 731.704 (repealedin 2005).

(4) When a charitable organization thatis subject to subsection (2) of this sectionenters into an agreement for a charitable gift

annuity, the charitable organization shalldisclose in writing to the donor that thecharitable gift annuity is not issued by aninsurance company, is not subject to regu-lation by the State of Oregon and is not pro-tected by an insurance guaranty association.

(5) A charitable organization that is notsubject to subsection (2) of this section musthold a certificate of authority to issue chari-table gift annuities. [2005 c.31 §2]

Note: 731.038 was added to and made a part of theInsurance Code by legislative action but was not addedto ORS chapter 731 or any series therein. See Prefaceto Oregon Revised Statutes for further explanation.

731.039 Requirements for certain edu-cational institutions or nonprofit corpo-rations issuing charitable gift annuities.ORS 731.038 (2)(a) and (b) does not apply toan educational institution or nonprofit cor-poration that holds a certificate of authorityissued under ORS 731.704 (repealed in 2005)on the day before January 1, 2006. An edu-cational institution or nonprofit corporationsubject to this section shall keep on file anannual audited financial statement preparedby an independent certified public account-ant. [2005 c.31 §3]

Note: 731.039 was enacted into law by the Legisla-tive Assembly but was not added to or made a part ofORS chapter 731 or any series therein by legislativeaction. See Preface to Oregon Revised Statutes for fur-ther explanation.

731.040 [Repealed by 1965 c.241 §3]

731.042 Certificate of exemption; ap-plication of certain Insurance Code pro-visions to exempt insurers. (1) An exemptinsurer who holds a certificate of exemptionissued by the Director of the Department ofConsumer and Business Services before Jan-uary 1, 2003, may continue transacting in-surance.

(2) In order to continue a certificate ofexemption, an exempt insurer to whom sub-section (1) of this section applies must file itsannual statement and pay the fees estab-lished by the director by March 1 of eachyear.

(3) An exempt insurer shall be subject toORS 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 and746.110. [Formerly 736.020; 1979 c.870 §1; 1981 c.752§15; 1989 c.413 §2; 2003 c.802 §174; 2005 c.22 §485]

731.046 Exemption of policies fromSecurities Law. Any policy, other than avariable annuity policy, whose form has beenfiled with and approved by the Director ofthe Department of Consumer and BusinessServices is exempt from the application ofORS 59.005 to 59.451, 59.710 to 59.830, 59.991and 59.995, and the marketing of such policyis likewise exempt. [1967 c.359 §10; 2007 c.393 §2]

731.050 [Repealed by 1965 c.241 §3]



DEFINITIONS GENERALLY731.052 Insurance Code definitions.

Except where the context otherwise requires,the definitions given in the Insurance Codegovern its construction. [1967 c.359 §11]

731.056 “Action.” “Action” means anyaction, suit or legal proceeding. [1967 c.359 §12]

731.060 [Repealed by 1965 c.241 §3]731.062 [1967 c.359 §13; 1991 c.810 §1; 2001 c.191 §20;

2003 c.364 §1; renumbered 731.104 in 2003]

731.066 “Authorized,” “unauthorized”insurer. (1) An “authorized” insurer is oneauthorized by a subsisting certificate of au-thority to transact insurance in this state.

(2) An “unauthorized” insurer is one notso authorized. [1967 c.359 §14]

731.069 “Certificate,” “certificateholder.” (1) “Certificate” means a writtenstatement evidencing the coverage of a per-son insured under a group insurance policy.

(2) “Certificate holder” means an em-ployee or member of a group insured undera group insurance policy. [1981 c.752 §11]

731.070 [Repealed by 1965 c.241 §3]

731.072 “Certificate of authority,” “li-cense.” (1) A “certificate of authority” isone issued by the Director of the Departmentof Consumer and Business Services pursuantto the Insurance Code evidencing the au-thority of an insurer to transact insurance inthis state.

(2) A “license” is authority granted bythe director pursuant to the Insurance Codefor the licensee to engage in a business oroperation of insurance in this state otherthan as an insurer, and the certificate bywhich such authority is evidenced. [1967 c.359§15]

731.074 “Commercial liability insur-ance.” (1) “Commercial liability insurance”means insurance for a business, professional,nonprofit or governmental entity against le-gal, contractual or assumed liability fordeath, injury or disability of any human, orfor damage to property, arising out of actsor omissions in the course of the conduct ofthe entity.

(2) “Commercial liability insurance” doesnot include the following lines of insuranceor classes of business:

(a) Marine and transportation insurance;(b) Wet marine and transportation insur-

ance;(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 environmentalimpairment insurance;

(h) Aviation insurance; or(i) Commercial automobile insurance.(3) As used in this section, “commercial

automobile” means a four wheel passengeror station wagon type of vehicle used as apublic or private conveyance, including amotor vehicle of the utility, pickup, sedandelivery or panel truck type used for whole-sale or retail delivery, and a farm truck. [1987c.774 §32]

Note: 731.074 was added to and made a part of theInsurance Code but was not added to ORS chapter 731or any series therein by legislative action. See Prefaceto Oregon Revised Statutes for further explanation.

731.075 “Covered life.” “Covered life”means a subscriber, policyholder, certificateholder, spouse, dependent child or any otherindividual insured under an insurance policyor whose benefits are administered by a thirdparty administrator licensed under ORS744.702. [2009 c.595 §1194]


731.076 “Department,” “director.” (1)“Department” means the Department ofConsumer and Business Services.

(2) “Director” means the Director of theDepartment of Consumer and Business Ser-vices. [1967 c.359 §16; 1987 c.373 §76; 1993 c.744 §28]

731.080 [Repealed by 1965 c.241 §3]

731.082 “Domestic,” “foreign,” “alien”insurer. (1) “Domestic insurer” means aninsurer formed under the laws of this state.

(2) “Foreign insurer” means an insurerformed under the laws of a state other thanthis state.

(3) “Alien insurer” means an insurerformed under the laws of any country otherthan the United States of America or a statethereof. [1967 c.359 §17]

731.086 “Domestic risk.” “Domesticrisk” means a subject of insurance resident,located or to be performed in this state. [1967c.359 §18]

731.090 [Repealed by 1965 c.241 §3]

731.092 “Domicile.” The “domicile” ofan insurer means:

(1) As to insurers formed under the lawsof Canada or any province thereof, the prov-ince in which the insurer’s head office is lo-cated.

(2) As to other alien insurers, as providedin ORS 731.096.

(3) As to all other insurers, the state un-der the laws of which the insurer was formedor, if the insurer has been redomesticated to


731.096 INSURANCE

another state, the state to which it has beenredomesticated. [1967 c.359 §19; 1995 c.639 §13]

731.096 “Domicile of alien insurer.” (1)The domicile of an alien insurer, other thaninsurers formed under the laws of Canada ora province thereof, shall be that state desig-nated by the insurer in writing filed with theDirector of the Department of Consumer andBusiness Services at time of admission tothis state or before January 1, 1962, which-ever date is the later, and may be any oneof the following states:

(a) The state in which the insurer wasfirst authorized to transact insurance;

(b) The state in which is located theinsurer’s principal place of business in theUnited States; or

(c) The state in which is held the largestdeposit of assets of the insurer in trust forthe protection of its policyholders and credi-tors in the United States.

(2) If the insurer makes no such desig-nation its domicile shall be deemed to bethat state in which is located its principalplace of business in the United States.[Formerly 736.240]

731.099 “Independently procured in-surance.” “Independently procured insur-ance” means insurance procured directly byan insured from a nonadmitted insurer asdefined in ORS 735.405. [2011 c.660 §2]

Note: 731.099 was added to and made a part ofORS chapter 731 by legislative action but was not addedto any smaller series therein. See Preface to OregonRevised Statutes for further explanation.

731.100 [Repealed by 1965 c.241 §3]

731.102 “Insurance.” (1) “Insurance”means a contract whereby one undertakes toindemnify another or pay or allow a specifiedor ascertainable amount or benefit upon de-terminable risk contingencies.

(2) “Insurance” so defined includes annu-ities.

(3) “Insurance” so defined includes acontract under which one other than a man-ufacturer, builder, seller or lessor of thesubject property undertakes to perform orprovide, for a fixed term and consideration,repair or replacement service or indemni-fication therefor for the operational orstructural failure of specified real or per-sonal property or property components. In-surance does not include contracts with atelecommunications utility as defined in ORS759.005, for repair, replacement or mainte-nance of customer-owned inside wiring. [1967c.359 §21; 1981 c.247 §1; 1985 c.633 §5; 1987 c.447 §111]

731.104 “Insurance producer.” “Insur-ance producer” means a person required tobe licensed under the laws of this state tosell, solicit or negotiate insurance. For pur-poses of this definition:

(1) “Negotiate” means to confer directlywith or to offer advice directly to a pur-chaser or prospective purchaser of a partic-ular policy of insurance concerning any ofthe substantive benefits, terms or conditionsof the policy, if the person engaged in thatact:

(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 itsequivalent, on behalf of an insurer.

(3) “Solicit” means to attempt to sell apolicy of insurance or to ask or urge a per-son to apply for a particular kind of insur-ance from a particular insurer. [Formerly731.062]

731.106 “Insurer.” “Insurer” includesevery person engaged in the business of en-tering into policies of insurance. [1967 c.359§22]

731.110 [Repealed by 1965 c.241 §3]

731.112 “Judgment.” “Judgment” in-cludes a final order. [1967 c.359 §23; 2003 c.576§553]

731.116 “Person.” “Person” means anindividual or a business entity. For the pur-pose of this definition, “business entity”means a corporation, association, partner-ship, limited liability company, limited liabil-ity partnership or other legal entity. [1967c.359 §24; 1983 c.327 §12; 2001 c.191 §21]

731.120 [Repealed by 1965 c.241 §3]

731.122 “Policy.” “Policy” means thewritten contract or written agreement for oreffecting insurance, by whatever namecalled, and includes all clauses, riders, in-dorsements and papers which are a partthereof and annuities. [1967 c.359 §25]

731.126 “Reinsurance.” “Reinsurance”means a contract under which an originatinginsurer, called the “ceding” insurer, procuresinsurance for itself in another insurer, calledthe “assuming” insurer or the “reinsurer,”with respect to part or all of an insurancerisk of the originating insurer. [1967 c.359 §26]

731.130 [Repealed by 1965 c.241 §3]

731.132 “Required capitalization.” “Re-quired capitalization” means the minimumcombined paid-up capital and surplus re-quired by the Insurance Code of a stock in-surer, or the minimum surplus so requiredof an insurer without capital stock. [1967 c.359§27]

731.136 “State.” When used in contextsignifying a jurisdiction other than the Stateof Oregon, “state” means any state, district,territory, commonwealth or possession of theUnited States of America. [1967 c.359 §28; 2001c.191 §22]



731.140 [Repealed by 1965 c.241 §3]

731.142 “Stock,” “mutual” and “recip-rocal” insurer. (1) “Stock insurer” meansan incorporated insurer whose capital is di-vided into shares and owned by its stock-holders.

(2) “Mutual insurer” means an incorpo-rated insurer without capital stock and thegoverning body of which is elected by itspolicyholders. This definition does not ex-clude as a “mutual insurer” a foreign insurerfound by the Director of the Department ofConsumer and Business Services to be or-ganized on the mutual plan under the lawsof its domicile, but having temporary sharecapital or providing for election of theinsurer’s governing body on a reasonable ba-sis by policyholders and others.

(3) “Reciprocal insurer” means an unin-corporated aggregation of persons known as“subscribers,” operating individually and col-lectively through an attorney in fact commonto all such persons, interexchanging amongthemselves reciprocal agreements of indem-nity. [1967 c.359 §29]

731.144 “Surplus lines insurance.”“Surplus lines insurance” means any insur-ance on an Oregon home state risk, permit-ted to be placed through a surplus lineslicensee with a nonadmitted insurer eligibleto accept such insurance, other than rein-surance, wet marine and transportation in-surance, independently procured insurance,life insurance and health insurance and an-nuities. For purposes of this section, “homestate” has the meaning given that term inORS 735.405. [1987 c.774 §113; 1991 c.810 §24; 2011c.660 §20]

Note: 731.144 was added to and made a part ofORS chapter 731 but was not added to any smaller se-ries therein by legislative action. See Preface to OregonRevised Statutes for further explanation.

731.146 “Transact insurance.” (1)“Transact insurance” means one or more ofthe following acts effected by mail or other-wise:

(a) Making or proposing to make an in-surance contract.

(b) Taking or receiving any applicationfor insurance.

(c) Receiving or collecting any premium,commission, membership fee, assessment, dueor other consideration for any insurance orany part thereof.

(d) Issuing or delivering policies of in-surance.

(e) Directly or indirectly acting as an in-surance producer for, or otherwise repres-enting or aiding on behalf of another, anyperson in the solicitation, negotiation, pro-curement or effectuation of insurance or re-newals thereof, the dissemination of

information as to coverage or rates, the for-warding of applications, the delivering ofpolicies, the inspection of risks, the fixing ofrates, the investigation or adjustment ofclaims or losses, the transaction of matterssubsequent to effectuation of the policy andarising out of it, or in any other manner re-presenting or assisting a person with respectto insurance.

(f) Advertising locally or circularizingtherein without regard for the source of suchcircularization, whenever such advertising orcircularization is for the purpose of solicita-tion of insurance business.

(g) Doing any other kind of business spe-cifically recognized as constituting the doingof an insurance business within the meaningof the Insurance Code.

(h) Doing or proposing to do any insur-ance business in substance equivalent to anyof paragraphs (a) to (g) of this subsection ina manner designed to evade the provisionsof the Insurance Code.

(2) Subsection (1) of this section does notinclude, apply to or affect the following:

(a) Making investments within a state byan insurer not admitted or authorized to dobusiness within such state.

(b) Except as provided in ORS 743.015,doing or proposing to do any insurance busi-ness arising out of a policy of group life in-surance or a policy of blanket healthinsurance, if the master policy was validlyissued to cover a group organized primarilyfor purposes other than the procurement ofinsurance and was delivered in and pursuantto the laws of another state in which:

(A) The insurer was authorized to do aninsurance business;

(B) The policyholder is domiciled or oth-erwise has a bona fide situs; and

(C) With respect to a policy of blankethealth insurance, the policy was approved bythe director of such state.

(c) Except as provided in ORS 743.015,doing or proposing to do any insurance busi-ness arising out of a policy of group healthinsurance, if the master policy was validlyissued to cover an employer group other thanan association, trust or multiple employerwelfare arrangement and was delivered inand pursuant to the laws of another state inwhich:

(A) The insurer was authorized to do aninsurance business; and

(B) The policyholder is domiciled or oth-erwise has a bona fide situs.

(d) Investigating, settling, or litigatingclaims under policies lawfully written withina state, or liquidating assets and liabilities,


731.150 INSURANCE

all resulting from the insurer’s former au-thorized operations within such state.

(e) Transactions within a state under apolicy subsequent to its issuance if the policywas lawfully solicited, written and deliveredoutside the state and did not cover a subjectof insurance resident, located or to be per-formed in the state when issued.

(f) The continuation and servicing of lifeor health insurance policies remaining inforce on residents of a state if the insurerhas withdrawn from such state and is nottransacting new insurance therein.

(3) If mail is used, an act shall be deemedto take place at the point where the mattertransmitted by mail is delivered and takeseffect. [1967 c.359 §30; 1971 c.231 §10; 1989 c.784 §4;2003 c.364 §64; 2007 c.752 §1]

Note: The amendments to 731.146 by section 6,chapter 752, Oregon Laws 2007, become operative Janu-ary 2, 2014. See section 13, chapter 752, Oregon Laws2007, as amended by section 4, chapter 81, Oregon Laws2010, and section 10, chapter 500, Oregon Laws 2011. Thetext that is operative on and after January 2, 2014, isset forth for the user’s convenience.

731.146. (1) “Transact insurance” means one ormore of the following acts effected by mail or otherwise:

(a) Making or proposing to make an insurancecontract.

(b) Taking or receiving any application for insur-ance.

(c) Receiving or collecting any premium, commis-sion, membership fee, assessment, due or other consid-eration 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 onbehalf of another, any person in the solicitation, nego-tiation, procurement or effectuation of insurance or re-newals thereof, the dissemination of information as tocoverage or rates, the forwarding of applications, thedelivering of policies, the inspection of risks, the fixingof rates, the investigation or adjustment of claims orlosses, the transaction of matters subsequent toeffectuation of the policy and arising out of it, or in anyother manner representing or assisting a person withrespect to insurance.

(f) Advertising locally or circularizing thereinwithout regard for the source of such circularization,whenever such advertising or circularization is for thepurpose of solicitation of insurance business.

(g) Doing any other kind of business specificallyrecognized as constituting the doing of an insurancebusiness within the meaning of the Insurance Code.

(h) Doing or proposing to do any insurance busi-ness in substance equivalent to any of paragraphs (a)to (g) of this subsection in a manner designed to evadethe 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 in-surer not admitted or authorized to do business withinsuch state.

(b) Except as provided in ORS 743.015, doing orproposing to do any insurance business arising out ofa policy of group life insurance or group health insur-ance, or both, or a policy of blanket health insurance,if the master policy was validly issued to cover a grouporganized primarily for purposes other than the pro-

curement of insurance and was delivered in and pursu-ant to the laws of another state in which:

(A) The insurer was authorized to do an insurancebusiness;

(B) The policyholder is domiciled or otherwise hasa bona fide situs; and

(C) With respect to a policy of blanket health in-surance, the policy was approved by the director of suchstate.

(c) Investigating, settling, or litigating claims underpolicies lawfully written within a state, or liquidatingassets and liabilities, all resulting from the insurer’sformer authorized operations within such state.

(d) Transactions within a state under a policy sub-sequent to its issuance if the policy was lawfully solic-ited, written and delivered outside the state and did notcover a subject of insurance resident, located or to beperformed in the state when issued.

(e) The continuation and servicing of life or healthinsurance policies remaining in force on residents of astate if the insurer has withdrawn from such state andis not transacting new insurance therein.

(3) If mail is used, an act shall be deemed to takeplace at the point where the matter transmitted by mailis delivered and takes effect.

CLASSES OF INSURANCE DEFINED731.150 Definitions of classes of insur-

ance not mutually exclusive. It is intendedthat certain insurance coverages may comewithin the definitions of two or more classesof insurance as defined in the InsuranceCode, and the inclusion of such coveragewithin one definition shall not exclude it asto any other class of insurance within thedefinition of which such coverage is likewisereasonably includable. [1967 c.359 §32]

731.154 “Annuity.” (1) “Annuity” or“annuity policy” means any agreement tomake periodic payments, whether fixed orvariable in amount, where the making of allor some of such payments, or the amount ofany such payment, is dependent upon thecontinuance of human life, except paymentsmade pursuant to the settlement provisionsof a life insurance policy, and includes addi-tional benefits operating to safeguard thepolicy from lapse or to provide a special sur-render value or special benefit or annuity inthe event of total and permanent disabilityof the annuitant.

(2) “Annuity” does not include a charita-ble remainder annuity trust or a charitableremainder unitrust as defined in section664(d) of the Internal Revenue Code. [1967c.359 §33; 1993 c.377 §1]

731.156 “Variable life insurance”;“variable annuity.” “Variable lifeinsurance” and “variable annuity” meanthose forms of life insurance or annuity ben-efits, respectively, which vary according tothe investment experience of a separate ac-count or accounts maintained by the insurerwith respect to policies providing such bene-fits. For convenience, reference to “variable



life insurance” in the Insurance Code in-cludes variable life insurance and variableannuities as defined in this section, except ifthe inclusion of variable annuities obviouslyis inapplicable or if the context requires, orthe Insurance Code provides, otherwise. [1973c.435 §2]

731.158 “Casualty insurance.” “Casu-alty insurance” means:

(1) Insurance against legal, contractualor assumed liability for death, injury or dis-ability of any human, or for damage to prop-erty; and provision for medical, hospital,surgical and disability benefits to injuredpersons including insurance against the riskof economic loss assumed under a less thanfully insured employee health benefit planand funeral and death benefits to dependents,beneficiaries or personal representatives ofpersons killed, irrespective of legal liabilityof the insured, when issued as coverage forpersonal injury protection benefits under amotor vehicle liability policy or as an inci-dental coverage with or supplemental to li-ability insurance;

(2) Motor vehicle physical damage,burglary and theft, glass, boiler and machin-ery, credit and livestock insurance;

(3) Insurance of the obligations acceptedby, imposed upon or assumed by employersunder law for death, disablement or occupa-tional diseases of employees;

(4) Insurance which undertakes to per-form or provide repair or replacement serviceor indemnification therefor for the opera-tional or structural failure of specified realor personal property or property components;and

(5) Insurance against any other kind ofloss, damage or liability properly a subjectof insurance and not within any other classof insurance otherwise defined, if such in-surance is not disapproved by the Directorof the Department of Consumer and BusinessServices as being contrary to law or publicpolicy. [1967 c.359 §34; 1981 c.247 §2; 1993 c.649 §5; 2007c.241 §22]

731.162 “Health insurance.” “Healthinsurance” means insurance of humansagainst bodily injury, disablement or deathby accident or accidental means, or the ex-pense thereof, or against disablement or ex-pense resulting from sickness or childbirth,or against expense incurred in prevention ofsickness, in dental care or optometrical ser-vice, and every insurance appertainingthereto, including insurance against the riskof economic loss assumed under a less thanfully insured employee health benefit plan.“Health insurance” does not includeworkers’ compensation coverages. [1967 c.359§35; 1993 c.649 §6]

731.164 “Home protection insurance,”“home protection insurer.” (1)(a) “Homeprotection insurance” means that part ofcasualty insurance that includes only insur-ance which undertakes to perform or providerepair or replacement service or indemni-fication therefor for the operational orstructural failure of the insured home, com-ponents of the home or personal property re-lating to the home or its components, anddoes not include protection against conse-quential damage from the operational orstructural failure.

(b)(A) “Home protection insurance” doesnot include a home service agreement.

(B) As used in this paragraph, “homeservice agreement” means a contract oragreement for a specific limited duration to:

(i) Service, repair or replace in an exist-ing home the mechanical or appliance systemor the components that break down due tonormal wear and tear or inherent defects; or

(ii) Provide incidental service, repair orreplacement to cover leaks and failures inroofing systems.

(c) As used in this subsection, “home”means a single living unit or multiple livingunits, including manufactured dwellings,used primarily as residences.

(2) “Home protection insurer” means aninsurer under policies of home protection in-surance, other than an insurer transactingother forms of casualty insurance or anyform of reinsurance. [1981 c.247 §4; 2003 c.283 §1]

731.166 “Industrial life insurance.”“Industrial life insurance” means that formof life insurance written under policies offace amount of $2,500 or less, under whichpremiums are payable monthly or more oftenand the policy specifies it is an industrial lifeinsurance policy. [1967 c.359 §36]

731.170 “Life insurance”; includes an-nuities. (1) “Life insurance” means insur-ance on human lives and every insuranceappertaining thereto and includes the grant-ing of endowment benefits, additional bene-fits in event of death or dismemberment byaccident or accidental means, additionalbenefits in event of the insured’s or premiumpayer’s disability and optional modes ofsettlement of proceeds of life insurance in-cluding annuity benefits payable under sucha settlement provision. “Life insurance” doesnot include workers’ compensation cover-ages.

(2) For convenience, reference to “lifeinsurance” in the Insurance Code includeslife insurance as defined in subsection (1) ofthis section and annuities as defined in ORS731.154, except if the inclusion of annuitiesobviously is inapplicable or if the context


731.174 INSURANCE

requires, or the Insurance Code provides,otherwise. [1967 c.359 §37]

731.174 “Marine and transportationinsurance.” “Marine and transportation in-surance” includes:

(1) Insurance against any and all kindsof loss of or damage to:

(a) Vessels, craft, aircraft, cars, automo-biles and vehicles of every kind, as well asall goods, freights, cargoes, merchandise, ef-fects, disbursements, profits, moneys, bullion,precious stones, securities, choses in action,evidences of debt, valuable papers, bottomryand respondentia interests and all otherkinds of property and interests therein, inrespect to, appertaining to or in connectionwith any and all risks or perils of navigation,transit or transportation, including warrisks, on or under any seas or other waters,on land or in the air, or while being assem-bled, packed, crated, baled, compressed orsimilarly prepared for shipment or whileawaiting the same or during any delays,storage, transshipment, or reshipment inci-dent thereto, including marine builders’risks, and all personal property floater risksincluding bailees’ customers risks;

(b) Person or to property in connectionwith or appertaining to a marine, inland ma-rine, transit or transportation insurance, in-cluding liability for loss of or damage toeither, arising out of or in connection withthe construction, repair, operation, mainte-nance or use of the subject matter of suchinsurance (but not including life insuranceor surety bonds nor insurance against lossby reason of bodily injury to the personarising out of the ownership, maintenance oruse of automobiles);

(c) Precious stones, jewels, jewelry, gold,silver and other precious metals, whetherused in business or trade or otherwise andwhether the same is in course of transporta-tion or otherwise; and

(d) Bridges, tunnels and other instrumen-talities of transportation and communication(excluding buildings, their furniture and fur-nishings, fixed contents and supplies held instorage) unless fire, tornado, sprinklerleakage, hail, explosion, earthquake, riot andcivil commotion, or any of them, are the onlyhazards to be covered; piers, wharves, docks,and slips, excluding the risks of fire, tornado,sprinkler leakage, hail, explosion, earth-quake, riot and civil commotion or any ofthem; other aids to navigation and transpor-tation, including dry docks and marine rail-ways, against all risks.

(2) Marine protection and indemnity in-surance meaning insurance against, oragainst 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 ofany vessel, craft or instrumentality in use inocean or inland waterways, including liabil-ity of the insured for personal injury, illnessor death or for loss of or damage to theproperty of another person. [Formerly 745.005]

731.178 “Mortgage insurance.” “Mort-gage insurance” means insurance against fi-nancial loss by reason of:

(1) Nonpayment of principal, interest andother sums agreed to be paid under the termsof an obligation secured by a mortgage, deedof trust or other instrument constituting alien or charge on real or personal property;or

(2) Nonpayment of rent and other sumsagreed to be paid under the terms of a writ-ten lease for the possession, use or occu-pancy of real property, such insurance alsobeing referred to in the Insurance Code as“lease insurance.” [1967 c.359 §39; 1969 c.692 §1]

731.182 “Property insurance.” “Prop-erty insurance” means insurance on real orpersonal property of every kind and of everyinterest therein, whether on land, water orin the air, against loss or damage from anyand all hazard or cause, and against conse-quential loss from such loss or damage, otherthan noncontractual legal liability for loss ordamage. “Property insurance” does not in-clude title insurance. [1967 c.359 §40]

731.186 “Surety insurance.” “Surety in-surance” means insurance guaranteeing thefidelity of persons holding places of trust, theperformance of duties, contracts, bonds andundertakings, including the signing thereofas surety, and insuring the performance ofobligations of employers under workers’compensation laws by surety bond. [1967 c.359§41]

731.190 “Title insurance.” “Title insur-ance” means insurance of owners of propertyor others having an interest therein or liensor encumbrances thereon, against loss byencumbrance, defective titles, invalidity oradverse claim to title. [1967 c.359 §42]

731.194 “Wet marine and transporta-tion insurance.” “Wet marine and transpor-tation insurance” is that part of marine andtransportation insurance that includes only:

(1) Insurance upon vessels, crafts, hullsand of interests therein or with relationthereto;

(2) Insurance of marine builder’s risks,marine war risks and contracts referred to inORS 731.174 (2) or any replacement thereof;

(3) Insurance of freights and disburse-ments pertaining to a subject of insurancecoming within this section;



(4) Insurance of personal property andinterests therein, in course of exportationfrom or importation into any country, and incourse of transportation coastwise or on in-land waters, including transportation byland, water, or air from point of origin tofinal destination, in respect to, appertainingto or in connection with, any and all risksor perils of navigation, transit or transporta-tion, and while being prepared for and whileawaiting shipment, and during any delays,storage, transshipment or reshipment inci-dent thereto;

(5) Insurance on operations of railroadsengaged in transportation in interstate com-merce and their property used in such oper-ations; and

(6) Insurance of aircraft operated inscheduled interstate flight, or cargo of suchaircraft, or against this liability other thanworkers’ compensation and employers’ liabil-ity arising out of the ownership, maintenanceor use of such aircraft. [1967 c.359 §43; 1987 c.774§114]

731.204 [Formerly 736.495; repealed by 1987 c.373§85]


731.212 [1967 c.359 §46; repealed by 1987 c.373 §85]

INSURANCE ADMINISTRATION731.216 Administrative power of direc-

tor. The Director of the Department of Con-sumer and Business Services shall have thepower to:

(1) Contract for and procure, on a fee orpart-time basis, or both, such actuarial,technical or other professional services asmay be required for the discharge of duties.

(2) Obtain such other services as the di-rector considers necessary or desirable, in-cluding participation in organizations ofstate insurance supervisory officials and ap-pointment of advisory committees. A memberof an advisory committee so appointed shallreceive no compensation for services as amember, but, subject to any other applicablelaw regulating travel and other expenses ofstate officers, shall receive actual and neces-sary travel and other expenses incurred inthe performance of official duties.

(3) Establish within the Department ofConsumer and Business Services a workers’compensation rating bureau to provide ratinginformation that is based upon and relevantto activities conducted in this state, to ena-ble the director to carry out the provisionsof ORS chapter 737. In lieu of creating arating bureau within the department, the di-rector may contract with any rating organ-ization in other states if the director findsthat such a contract would provide the in-

formation required by this section. [Formerly736.503; 1987 c.373 §77; 1987 c.884 §50; 2003 c.14 §445]


731.224 [1967 c.359 §49; repealed by 1987 c.373 §85]

731.228 Prohibited interests and re-wards. (1) No officer or employee of the De-partment of Consumer and Business Servicesdelegated responsibilities in the enforcementof the Insurance Code shall:

(a) Be a director, officer, or employee ofor be financially interested in any personregulated by the department or office of thedepartment that is delegated responsibility inthe enforcement of the Insurance Code, ex-cept as a policyholder or claimant under aninsurance policy or by reason of rightsvested in commissions, fees, or retirementbenefits related to services performed priorto affiliation with the department; or

(b) Be engaged in any other business oroccupation interfering with or inconsistentwith the duties of the office or employment.

(2) No person shall directly or indirectlygive or pay, or offer to give or pay, to theDirector of the Department of Consumer andBusiness Services, or any officer or employeeof the department, and the director or suchofficer or employee shall not directly or in-directly solicit, receive or accept any fee,compensation, loan, gift or other thing ofvalue in addition to the compensation andexpense allowance provided by law, for:

(a) Any service rendered or to be ren-dered as such director, officer or employee,or in connection therewith;

(b) Services rendered or to be renderedin relation to legislation;

(c) Extra services rendered or to be ren-dered; or

(d) Any cause whatsoever related to anyperson regulated by the department or officeof the department that is delegated responsi-bility in the enforcement of the InsuranceCode.

(3) This section does not permit any con-duct, affiliation or interest that is otherwiseprohibited by public policy. [1967 c.359 §50; 1987c.373 §78]

731.232 Subpoena power. (1) For thepurpose of an investigation or proceedingunder the Insurance Code, the Director ofthe Department of Consumer and BusinessServices may administer oaths and affirma-tions, subpoena witnesses, compel their at-tendance, take evidence and require theproduction of books, papers, correspondence,memoranda, agreements or other documentsor records which the director considers rele-vant or material to the inquiry. Each witnesswho appears before the director under a


731.236 INSURANCE

subpoena shall receive the fees and mileageprovided for witnesses in ORS 44.415 (2).

(2) If a person fails to comply with asubpoena so issued or a party or witness re-fuses to testify on any matters, the judge ofthe circuit court for any county, on the ap-plication of the director, shall compel obedi-ence by proceedings for contempt as in thecase of disobedience of the requirements ofa subpoena issued from such court or a re-fusal to testify therein. [1967 c.359 §51; 1989 c.980§22]

731.236 General powers and duties. (1)The Director of the Department of Consumerand Business Services shall enforce the pro-visions of the Insurance Code for the publicgood, and shall execute the duties imposedby the code.

(2) The director has the powers and au-thority expressly conferred by or reasonablyimplied from the provisions of the InsuranceCode.

(3) The director may conduct such exam-inations and investigations of insurance mat-ters, in addition to examinations andinvestigations expressly authorized, as thedirector considers proper to determinewhether any person has violated any pro-vision of the Insurance Code or to secureinformation useful in the lawful administra-tion of any such provision. The cost of suchadditional examinations and investigationsshall be borne by the state.

(4) The director has such additional pow-ers and duties as may be provided by otherlaws of this state. [1967 c.359 §52]

731.240 Hearings in general. (1) TheDirector of the Department of Consumer andBusiness Services shall hold a hearing uponwritten demand for a hearing by a personaggrieved by any act, threatened act or fail-ure of the director to act. The demand muststate the grounds therefor.

(2) To the extent applicable and not in-consistent with subsection (1) of this section,the provisions of ORS chapter 183 shall gov-ern the hearing procedure and any judicialreview thereof. [1967 c.359 §53; 1991 c.401 §1]

731.244 Rules. In accordance with theapplicable provisions of ORS chapter 183, theDirector of the Department of Consumer andBusiness Services may make reasonable rulesnecessary for or as an aid to the effectuationof the Insurance Code. No such rule shallextend, modify or conflict with the InsuranceCode or the reasonable implications thereof.[1967 c.359 §54]

731.248 Orders. (1) Orders of the Direc-tor of the Department of Consumer andBusiness Services shall be effective onlywhen in writing and signed by the director

or by the authority of the director. Ordersshall be filed in the Department of Consumerand 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 pro-posed to be taken.

(3) Except as may be provided in the In-surance Code respecting particular proce-dures, an order or notice may be given bydelivery to the person to be ordered or noti-fied or by mailing it by certified or registeredmail, return receipt requested, postage pre-paid, addressed to the person at the resi-dence or principal place of business of theperson as last of record in the department.Notice so mailed shall be deemed to havebeen given when deposited in a letter depos-itory of a United States post office. [1967 c.359§55]

731.252 Cease and desist orders. (1)Whenever the Director of the Department ofConsumer and Business Services has reasonto believe that any person has been engagedor is engaging or is about to engage in anyviolation of the Insurance Code, the directormay issue an order, directed to such person,to discontinue or desist from such violationor threatened violation. The copy of the or-der forwarded to the person involved shallset forth a statement of the specific chargesand the fact that the person may request ahearing within 20 days of the date of mailing.Where a hearing is requested, the directorshall set a date for the hearing to be heldwithin 30 days after receipt of the request,and shall give the person involved writtennotice of the hearing date at least seven daysprior thereto. The person requesting thehearing must establish to the satisfaction ofthe director that such order should not becomplied with. The order shall become final20 days after the date of mailing unlesswithin such 20-day period the person towhom it is directed files with the director awritten request for a hearing. To the extentapplicable and not inconsistent with theforegoing, the provisions of ORS chapter 183shall govern the hearing procedure and anyjudicial review thereof. Where the hearinghas been requested, the director’s order shallbecome final at such time as the right tofurther hearing or review has expired orbeen exhausted.

(2) No order of the director under thissection or order of a court to enforce thesame shall in any way relieve or absolve anyperson affected by such order from any li-ability under any other laws of this state.



(3) The powers vested in the directorpursuant to this section are supplementaryand not in lieu of any other powers to sus-pend or revoke certificates of authority orlicenses or to enforce any penalties, fines orforfeitures, authorized by law with respect toany violation for which an order of discon-tinuance has been issued. [Formerly 736.835]

731.256 Enforcement generally. (1) TheDirector of the Department of Consumer andBusiness Services may institute such actionsor other lawful proceedings as the directormay deem necessary for the enforcement ofany provision of the Insurance Code or anyorder or action made or taken by the direc-tor in pursuance of law.

(2) If the director has reason to believethat any person has violated any provisionof the Insurance Code or other law applica-ble to insurance operations, for which crimi-nal prosecution is provided and in theopinion of the director would be in order, thedirector shall give the information relativethereto to the Attorney General or districtattorney having jurisdiction of any such vio-lation. The Attorney General or district at-torney promptly shall institute such actionor proceedings against such person as theinformation requires or justifies. [1967 c.359 §57]

731.258 Enforcement of orders and de-cisions by Attorney General; filing, en-forcement and effect of foreign decrees.(1) The Attorney General upon request of theDirector of the Department of Consumer andBusiness Services may proceed in the courtsof this state or any reciprocal state to en-force an order or decision in any court pro-ceeding or in any administrative proceedingbefore the director.

(2) As used in this section:(a) “Reciprocal state” means any state

the laws of which contain procedures sub-stantially similar to those specified in thissection for the enforcement of decrees or or-ders in equity issued by courts located inother states, against any insurer incorpo-rated or authorized to do business in suchstate.

(b) “Foreign decree” means any decreeor order in equity of a court located in a re-ciprocal state, including a court of theUnited States located therein, against anyinsurer incorporated or authorized to dobusiness in this state.

(c) “Qualified party” means a state regu-latory agency acting in its capacity to en-force the insurance laws of its state.

(3) The Director of the Department ofConsumer and Business Services of this stateshall determine which states qualify as re-ciprocal states and shall maintain at alltimes an up-to-date list of such states.

(4) A copy of any foreign decree authen-ticated in accordance with the statutes ofthis state may be filed in the office of theclerk of any circuit court of this state. Theclerk, upon verifying with the director thatthe decree or order qualifies as a foreign de-cree shall treat the foreign decree in thesame manner as a judgment of a circuitcourt of this state. A foreign decree so filedhas the same effect and shall be deemed asa judgment of a circuit court of this state,and is subject to the same procedures, de-fenses and proceedings for reopening, vacat-ing, or staying as a judgment of a circuitcourt of this state and may be enforced orsatisfied in like manner.

(5)(a) At the time of the filing of the for-eign decree, the Attorney General shall makeand file with the clerk of the court an affi-davit setting forth the name and last-knownpost-office address of the defendant.

(b) Promptly upon the filing of the for-eign decree and the affidavit, the clerk shallmail notice of the filing of the foreign decreeto the defendant at the address given and tothe director of this state and shall make anote of the mailing in the register of thecourt. In addition, the Attorney General maymail a notice of the filing of the foreign de-cree to the defendant and to the director ofthis state and may file proof of mailing withthe clerk. Lack of mailing notice of filing bythe clerk shall not affect the enforcementproceedings if proof of mailing by the Attor-ney General has been filed.

(c) No execution or other process for en-forcement of a foreign decree filed undersubsection (4) of this section shall issue until30 days after the date the decree is filed.

(6)(a) If the defendant shows the circuitcourt that an appeal from the foreign decreeis pending or will be taken, or that a stay ofexecution has been granted, the court shallstay enforcement of the foreign decree untilthe appeal is concluded, the time for appealexpires, or the stay of execution expires oris vacated, upon proof that the defendant hasfurnished the security for the satisfaction ofthe decree required by the state in which itwas rendered.

(b) If the defendant shows the circuitcourt any ground upon which enforcementof a judgment of any circuit court of thisstate would be stayed, the court shall stayenforcement of the foreign decree for an ap-propriate period, upon requiring the samesecurity for satisfaction of the decree whichis required in this state for a judgment. [1969c.336 §5; 2003 c.576 §219]

731.260 False or misleading filings. Noperson shall file or cause to be filed with theDirector of the Department of Consumer and


731.264 INSURANCE

Business Services any article, certificate, re-port, statement, application or any other in-formation required or permitted to be so filedunder the Insurance Code and known to suchperson to be false or misleading in any ma-terial respect. [Formerly 736.650]

731.264 Complaints and investigationsconfidential; permitted disclosures; rules.(1) A complaint made to the Director of theDepartment of Consumer and Business Ser-vices against any person regulated by theInsurance Code, and the record thereof, shallbe confidential and may not be disclosed ex-cept as provided in ORS 705.137. No suchcomplaint, or the record thereof, shall beused in any action, suit or proceeding exceptto the extent considered necessary by the di-rector in the prosecution of apparent vio-lations of the Insurance Code or other law.

(2) Data gathered pursuant to an investi-gation by the director of a complaint shallbe confidential, may not be disclosed exceptas provided in ORS 705.137 and may not beused in any action, suit or proceeding exceptto the extent considered necessary by the di-rector in the investigation or prosecution ofapparent violations of the Insurance Code orother law.

(3) Notwithstanding subsections (1) and(2) of this section, the director shall establishby rule a method for publishing an annualstatistical report containing the insurer’sname and the number, percentage, type anddisposition of complaints received by the De-partment of Consumer and Business Servicesagainst each insurer transacting insurancewithin this state. [1967 c.359 §59; 1971 c.231 §11;1987 c.481 §1; 1987 c.774 §149; 2001 c.377 §4]

731.268 Use of reproductions and cer-tified copies as evidence; fee. (1) Photo-graphs or microphotographs in the form offilm or prints of documents and records madeby the Director of the Department of Con-sumer and Business Services for the files ofthe director shall have the same force andeffect as the originals thereof, and duly cer-tified or authenticated reproductions of suchphotographs or microphotographs shall be asadmissible in evidence as are the originals.

(2) Upon request of any person and pay-ment of the applicable fee, the director shallfurnish a certified copy of any record in theoffice of the director which is then subjectto public inspection.

(3) Copies of original records or docu-ments in the office of the director certifiedby the director shall have the same force andeffect and be received in evidence in allcourts equally and in like manner as if theywere originals. [1967 c.359 §60]

731.272 Director’s annual reports; no-tice of publication of report. (1) The Di-rector of the Department of Consumer andBusiness Services shall prepare annually, assoon after March 1 as is consistent with fulland accurate preparation, a report of the of-ficial transactions of the director under theInsurance Code. The report shall include:

(a) In condensed form statements madeto the director by every insurer authorizedto do business in this state.

(b) A statement of all insurers authorizedto do business in this state as of the date ofthe report.

(c) A list of insurers whose business inthis state was terminated and the reason forthe termination. If the termination was a re-sult of liquidation or delinquency pro-ceedings brought against the insurer in thisor any other state, the report shall includethe amount of the insurer’s assets and liabil-ities so far as those amounts are known tothe director.

(d) A statement of the operating expensesof the Department of Consumer and BusinessServices under the Insurance Code, includingsalaries, transportation, communication,printing, office supplies, fixed charges andmiscellaneous expenses.

(e) A detailed statement of the moneys,fees and taxes received by the departmentunder the Insurance Code and from whatsource.

(f) Any other pertinent information andmatters as the director considers to be in thepublic interest.

(2) The director shall give notice of thepublication of the report to:

(a) The office of the Speaker of theHouse of Representatives;

(b) The office of the President of theSenate; and

(c) The chair or cochairs of the JointLegislative Committee on Ways and Meansif the Legislative Assembly is in session orof the Emergency Board if during the in-terim. [Formerly 736.520; 1987 c.373 §79; 2005 c.185 §8]

731.276 Recommendations for changesin Insurance Code. The Director of the De-partment of Consumer and Business Servicesshall continuously review the InsuranceCode and shall work with the Director of theOregon Health Authority to review thehealth insurance provisions of the InsuranceCode and may, from time to time, make rec-ommendations for changes therein. [1967 c.359§62; 2009 c.595 §1117]

731.280 Publications authorized. TheDirector of the Department of Consumer andBusiness Services shall publish:



(1) Pamphlet or booklet copies of the in-surance laws of this state;

(2) The director’s annual report;(3) Such copies of results of investi-

gations or examinations of insurers for pub-lic distribution as the director considers tobe in the public interest;

(4) Such compilations as the directorconsiders advisable from time to time of thegeneral orders of the director then in force;and

(5) Such other material as the directormay compile and consider relevant and suit-able for the effective administration of theInsurance Code. [1967 c.359 §63]

731.282 Authority to sell publications.The Director of the Department of Consumerand Business Services may sell, at a pricereasonably calculated to cover the costs ofpreparation, any of the copies, compilationsor materials described in ORS 731.280. [1971c.231 §2; 1982 s.s.1 c.17 §3]

731.284 Distribution of insurance laws.Copies of the insurance laws in pamphletform may be sold by the Director of the De-partment of Consumer and Business Servicesat a reasonable price. The director may dis-tribute free of charge one copy of such pam-phlet to each of the following:

(1) Authorized insurers and licensed rat-ing organizations;

(2) Insurance departments of other states;and

(3) Public agencies. However, the direc-tor may distribute such quantities to publicagencies as the director determines. [1967 c.359§64; 2003 c.364 §65]

731.288 Recording complaints; directorto consider complaints before issuing li-censes. The Department of Consumer andBusiness Services shall record each com-plaint the department receives, including thesubsequent disposition of the complaint. Therecord of a complaint shall be maintained fora period of not less than seven years. Therecords of complaints shall be indexed when-ever applicable both by the name of the in-surer and by the name of the insuranceproducer involved. The Director of the De-partment of Consumer and Business Servicesshall consider such complaints before issuingor continuing any certificate of authority orlicense of an insurer or insurance producernamed in such complaints. [Formerly 736.580;2003 c.364 §66; 2003 c.802 §168]

731.292 Disposition of fees, charges,taxes, penalties and other moneys. (1)Except as provided in subsections (2), (3) and(4) of this section, all fees, charges and othermoneys received by the Department of Con-sumer and Business Services or the Director

of the Department of Consumer and BusinessServices under the Insurance Code shall bedeposited in the fund created by ORS 705.145and are continuously appropriated to the de-partment for the payment of the expenses ofthe department in carrying out the InsuranceCode.

(2) All taxes and penalties paid pursuantto the Insurance Code shall be paid to thedirector and after deductions of refunds shallbe paid by the director to the State Treas-urer, at the end of every calendar month ormore often in the director’s discretion, fordeposit in the General Fund to becomeavailable for general governmental expenses.

(3) All premium taxes received by the di-rector pursuant to ORS 731.820 shall be paidby the director to the State Treasurer fordeposit in the State Fire Marshal Fund.

(4) Assessments received by the depart-ment under ORS 743.951 and 743.961 andpenalties received by the department underORS 743.990 and section 10, chapter 867, Or-egon Laws 2009, shall be paid into the StateTreasury and credited to the Health SystemFund established in section 1, chapter 867,Oregon Laws 2009, after deducting the fol-lowing amounts:

(a) Amounts needed to reimburse the de-partment for expenses in administering ORS743.951 to 743.965 and 743.990; and

(b) Amounts needed to reimburse theGeneral Fund for reductions in revenuecaused by the effect of ORS 743.961 on theretaliatory tax imposed under ORS 731.854and 731.859. [Formerly 736.525; 1981 c.652 §3; 1982s.s.1 c.17 §1; 1987 c.373 §80; 1991 c.67 §193; 2009 c.867 §13;2011 c.597 §296]

731.296 Director’s inquiries. The Direc-tor of the Department of Consumer andBusiness Services may address any properinquiries to any insurer, licensee or its offi-cers in relation to its activities or conditionor any other matter connected with itstransactions. Any such person so addressedshall promptly and truthfully reply to suchinquiries using the form of communicationrequested by the director. The reply shall beverified by an officer of such person, if thedirector so requires. A reply is subject to theprovisions of ORS 731.260. [Formerly 736.542;1975 c.298 §1]

731.300 Examination of insurers; whenrequired. (1) The Director of the Departmentof Consumer and Business Services shall ex-amine every authorized insurer, including anaudit of the financial affairs of such insurer,as often as the director determines an exam-ination to be necessary but at least onceeach five years. An examination shall beconducted for the purpose of determining thefinancial condition of the insurer, its abilityto fulfill its obligations and its manner of


731.302 INSURANCE

fulfillment, the nature of its operations andits compliance with the Insurance Code. Thedirector may also make such an examinationof any surplus lines insurance producer orany person holding the capital stock of anauthorized insurer or surplus lines insuranceproducer for the purpose of controlling themanagement thereof as a voting trustee orotherwise, or both.

(2) Instead of conducting an examinationof an authorized foreign or alien insurer, thedirector may accept an examination reporton the insurer that is prepared by the insur-ance department for the state of domicile orstate of entry of the insurer if:

(a) At the time of the examination theinsurance department of the state was ac-credited under the Financial RegulationStandards and Accreditation Program orsuccessor program of the National Associ-ation of Insurance Commissioners; or

(b) The examination was performed underthe supervision of an accredited insurancedepartment or with the participation of oneor more examiners who are employed bysuch an accredited insurance department andwho, after a review of the examination workpapers and report, state under oath that theexamination was performed in a mannerconsistent with the standards and proceduresrequired by their insurance department.

(3) Examination of an alien insurer shallbe limited to its insurance transactions, as-sets, trust deposits and affairs in the UnitedStates except as otherwise required by thedirector. [Formerly 736.545; 1979 c.870 §2; 1981 c.874§18; 1990 c.2 §46; 1993 c.447 §1; 2003 c.364 §67]

731.302 Appointment of examiners;retaining of appraisers, actuaries andothers; evidentiary status of facts andconclusions. (1) When the Director of theDepartment of Consumer and Business Ser-vices determines that an examination shouldbe conducted, the director shall appoint oneor more examiners to perform the examina-tion and instruct them as to the scope of theexamination. In conducting the examination,each examiner shall consider the guidelinesand procedures in the examiner handbook,or its successor publication, adopted by theNational Association of Insurance Commis-sioners. The director may prescribe the ex-aminer handbook or its successor publicationand employ other guidelines and proceduresthat the director determines to be appropri-ate.

(2) When making an examination, the di-rector may retain appraisers, independentactuaries, independent certified public ac-countants or other professionals and special-ists as needed. The cost of retaining suchprofessionals and specialists shall be borne

by the person that is the subject of the ex-amination.

(3) At any time during the course of anexamination, the director may take other ac-tion pursuant to the Insurance Code.

(4) Facts determined and conclusionsmade pursuant to an examination shall bepresumptive evidence of the relevant factsand conclusions in any judicial or adminis-trative action. [1993 c.447 §2]

731.304 Investigation of personstransacting insurance. The Director of theDepartment of Consumer and Business Ser-vices, whenever the director deems it advis-able in the interest of policyholders or forthe public good, shall investigate into the af-fairs of any person engaged in, proposing toengage in or claiming or advertising to en-gage in:

(1) Transacting insurance in this state;(2) Organizing or receiving subscriptions

for or disposing of the stock of or in anymanner taking part in the formation or busi-ness of an insurer; or

(3) Holding capital stock of one or moreinsurers for the purpose of controlling themanagement thereof as voting trustee orotherwise. [1967 c.359 §69]

731.308 Procedure at examination orinvestigation; production of books andother records. (1) Upon an examination orinvestigation the Director of the Departmentof Consumer and Business Services may ex-amine under oath all persons who may havematerial information regarding the propertyor business of the person being examined orinvestigated.

(2) Every person being examined or in-vestigated shall produce all books, records,accounts, papers, documents and computerand other recordings in its possession orcontrol relating to the matter under exam-ination or investigation, including, in thecase of an examination, the property, assets,business and affairs of the person.

(3) With regard to an examination, theofficers, directors and agents of the personbeing examined shall provide timely, conven-ient and free access at all reasonable hoursat the offices of the person being examinedto all books, records, accounts, papers, docu-ments and computer and other recordings.The officers, directors, employees and agentsof the person must facilitate the examina-tion. [Formerly 736.555; 1993 c.447 §3]

731.312 Report of examination; reviewby person examined; hearing; confiden-tiality of certain information and docu-ments; permitted disclosures. (1) Not laterthan the 60th day after completion of an ex-amination, the examiner in charge of the ex-



amination shall submit to the Director of theDepartment of Consumer and Business Ser-vices a full and true report of the examina-tion, verified by the oath of the examiner.The report shall comprise only facts appear-ing upon the books, papers, records, ac-counts, documents or computer and otherrecordings of the person, its agents or otherpersons being examined or facts ascertainedfrom testimony of individuals concerning theaffairs of such person, together with suchconclusions and recommendations as reason-ably may be warranted from such facts.

(2) The director shall make a copy of thereport submitted under subsection (1) of thissection available to the person who is thesubject of the examination and shall give theperson an opportunity to review and com-ment on the report. The director may requestadditional information or meet with the per-son for the purpose of resolving questions orobtaining additional information, and maydirect the examiner to consider the addi-tional information for inclusion in the report.

(3) Before the director files the examina-tion report as a final examination report ormakes the report or any matters relatingthereto public, the person being examinedshall have an opportunity for a hearing. Acopy of the report must be mailed by certi-fied mail to the person being examined. Theperson may request a hearing not later thanthe 30th day after the date on which the re-port was mailed. This subsection does notlimit the authority of the director to disclosea preliminary or final examination report asotherwise provided in this section.

(4) The director shall consider commentspresented at a hearing requested under sub-section (3) of this section and may direct theexaminer to consider the comments or directthat the comments be included in documen-tation relating to the report, although not aspart of the report itself. The director may filethe report as a final examination report atany time after consideration of the commentsor at any time after the period for requestinga hearing has passed if a hearing is not re-quested.

(5) A report filed as a final examinationreport is subject to public inspection. Thedirector, after filing any report, if the direc-tor considers it for the interest of the publicto do so, may publish any report or the resultof any examination as contained therein inone or more newspapers of the state withoutexpense to the person examined.

(6) All work papers, recorded informa-tion, documents and copies thereof that areproduced or obtained by or disclosed to thedirector or any other person in the courseof an examination or in the course of analy-sis by the director of the financial condition

or market conduct of an insurer are confi-dential and are exempt from public inspec-tion as provided in ORS 705.137. If thedirector, in the director’s sole discretion, de-termines that disclosure is necessary to pro-tect the public interest, the director maymake available work papers, recorded infor-mation, documents and copies thereofproduced by, obtained by or disclosed to thedirector or any other person in the courseof the examination.

(7) The director may disclose the contentof an examination report that has not yetotherwise been disclosed or may disclose anyof 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]

731.314 Immunity for director, exam-iner and others. (1) No cause of action mayarise and no liability may be imposed againstthe Director of the Department of Consumerand Business Services, an authorized repre-sentative of the director or any examinerappointed by the director for any statementsmade or conduct performed in good faithpursuant to an examination or investigation.

(2) No cause of action may arise and noliability may be imposed against any personfor communicating or delivering informationor data to the director or an authorized rep-resentative of the director or examiner pur-suant to an examination or investigation ifthe communication or delivery was per-formed in good faith and without fraudulentintent or an intent to deceive.

(3) This section does not abrogate ormodify in any way any common law or stat-utory privilege or immunity otherwise en-joyed by any person to which subsection (1)or (2) of this section applies.

(4) The court may award reasonable at-torney fees to the prevailing party in a causeof action arising out of activities of the di-rector or an examiner in carrying out an ex-amination or investigation. [1993 c.447 §5; 1995c.618 §127]

731.316 Expenses of examination ofinsurer. Any person examined under ORS731.300 shall pay to the Director of the De-partment of Consumer and Business Servicesthe just and legitimate costs of the examina-tion as determined by the director, includingactual necessary transportation and travelingexpenses. [Formerly 736.565; 1969 c.336 §6]

731.324 Service of process on Secre-tary of State; notice to unauthorized in-surer. (1) Any act set forth in ORS 731.146by an unauthorized insurer is equivalent toand shall constitute an irrevocable appoint-ment by such insurer, binding upon the in-surer, the executor of the insurer or


731.328 INSURANCE

administrator, or successor in interest if acorporation, of the Secretary of State or thesuccessor in office, to be the true and lawfulattorney of such insurer. All lawful processin any action in any court by the Directorof the Department of Consumer and BusinessServices or by the state and any notice, or-der, pleading or process in any proceedingbefore the director which arises out oftransacting insurance in this state by suchinsurer may be served upon the Secretary ofState or the successor in office. Transactinginsurance in this state by an unauthorizedinsurer shall be signification of its agreementthat lawful process in a court action and anynotice, order, pleading, or process in an ad-ministrative proceeding before the directorso served shall be of the same legal force andvalidity as personal service of process in thisstate upon such insurer.

(2) Service of process in such action shallbe made by delivering to and leaving withthe Secretary of State, or one of the assis-tants, two copies of the document served andby payment to the Secretary of State of thefee prescribed by law. Service upon the Sec-retary of State shall be service upon theprincipal.

(3) The Secretary of State shall forwardby certified mail one of the copies of suchprocess or such notice, order, pleading, orprocess in proceedings before the director tothe defendant in such court proceeding or towhom the notice, order, pleading, or processin such administrative proceeding is ad-dressed or directed at its last-known princi-pal place of business and shall keep a recordof all process so served on the defendant.Such record shall show the day and hour ofservice. Service is sufficient, provided:

(a) Notice of service and a copy of thecourt process or the notice, order, pleading,or process in the administrative proceedingare sent within 10 days thereafter by certi-fied mail by the plaintiff or the plaintiff’s at-torney in the court proceeding or by thedirector in the administrative proceeding tothe defendant at the last-known principalplace of business of the defendant.

(b) The defendant’s receipt or receipts is-sued by the post office with which the letteris certified or registered, showing the nameof the sender of the letter and the name andaddress of the person or insurer to whom theletter is addressed, and an affidavit of theplaintiff or the plaintiff’s attorney in courtproceeding or of the director in administra-tive proceeding, showing compliance there-with are filed with the clerk of the court inwhich such action is pending or with the di-rector in administrative proceedings, on orbefore the date the defendant in the court oradministrative proceeding is required to ap-

pear or respond thereto, or within such fur-ther time as the court or director may allow.

(4) No plaintiff shall be entitled to ajudgment or a determination by default inany court or administrative proceeding inwhich court process or notice, order, plead-ing, or process in proceedings before the di-rector is served under this section until theexpiration of 45 days after the date of filingof the affidavit of compliance.

(5) Nothing in this section shall limit oraffect the right to serve any process, notice,order, or demand upon any person or insurerin any other manner now or hereafter per-mitted by law. [1969 c.336 §3]

731.328 Deposits by unauthorized in-surers in actions or proceedings. (1) Be-fore an unauthorized insurer files or causesto be filed any pleading in any court actionor any notice, order, pleading, or process inan administrative proceeding before the Di-rector of the Department of Consumer andBusiness Services instituted against suchperson or insurer, by services made as pro-vided in ORS 731.324, such insurer shall de-posit with the clerk of the court in whichsuch action is pending, or with the directorin administrative proceedings before the di-rector, cash or securities. The insurer mayalso file with such clerk or director a bondwith good and sufficient sureties, to be ap-proved by the clerk or director, or an irrev-ocable letter of credit issued by an insuredinstitution, as defined in ORS 706.008, in anamount to be fixed by the court or directorsufficient to secure the payment of any finaljudgment which may be rendered in such ac-tion or administrative proceeding.

(2) The director, in any administrativeproceeding in which service is made as pro-vided in ORS 731.324, may order such post-ponement as may be necessary to afford thedefendant reasonable opportunity to complywith the provisions of subsection (1) of thissection and to defend such action.

(3) Nothing in subsection (1) of this sec-tion shall be construed to prevent an unau-thorized insurer from filing a motion toquash a writ or to set aside service thereofmade in the manner provided in ORS 731.324.[1969 c.336 §4; 1991 c.331 §126; 1997 c.631 §545]

AUTHORIZATION OF INSURERS AND GENERAL REQUIREMENTS731.354 Certificate of authority re-

quired. No person shall act as an insurerand no insurer shall directly or indirectlytransact insurance in this state except asauthorized by a subsisting certificate of au-thority issued to the insurer by the Directorof the Department of Consumer and BusinessServices. [1967 c.359 §73]



731.356 Unauthorized insurance trans-action enforcement. When the Director ofthe Department of Consumer and BusinessServices believes, from evidence satisfactoryto the director, that any insurer is violatingor about to violate the provisions of ORS731.354, the director may cause a complaintto be filed in the Circuit Court of MarionCounty to enjoin and restrain such insurerfrom continuing such violation. The courtshall have jurisdiction of the proceeding andshall have the power to make and enter anorder or judgment awarding such preliminaryor final injunctive relief as in its judgmentis proper. [1969 c.336 §2]

731.358 Requirements of domestic in-surers generally. Upon application a do-mestic insurer shall be granted a certificateof authority to transact any class of insur-ance permitted by the Insurance Code andprovided for in its articles of incorporationupon its compliance with all the laws of thisstate and the rules of the Department ofConsumer and Business Services relating tosuch insurers. [Formerly 736.085]

731.362 Requirements of foreign or al-ien insurers generally. (1) A foreign or al-ien insurer may be authorized to transactinsurance in this state when it has compliedwith the following requirements:

(a) It shall file with the Director of theDepartment of Consumer and Business Ser-vices a certified copy of its charter, articlesof incorporation or deed of settlement and astatement of its financial condition and busi-ness in all states in such form and detail asthe director may require, signed and swornto by at least two of its executive officers orthe United States manager.

(b) It shall satisfy the director that it isfully and legally organized under the laws ofits state or government to do the business itproposes to transact.

(c) It shall satisfy the director that it ispossessed of and will maintain at all timesits required capitalization.

(d) It shall make such deposits with theDepartment of Consumer and Business Ser-vices as are required by the provisions of theInsurance Code.

(2) Upon compliance with the require-ments of this section and all other require-ments imposed on such insurer by theInsurance Code, the director shall issue to ita certificate of authority. [Formerly 736.205; 1999c.196 §1]

731.363 Authorized foreign insurer be-coming domestic insurer. (1) An author-ized foreign insurer may become a domesticinsurer:

(a) By complying with all of the require-ments of law relating to the organization and

authorization of a domestic insurer of thesame type;

(b) By filing articles of incorporation thatare amended to comply with all of the re-quirements of law relating to the organiza-tion and authorization of a domestic insurerof the same type; and

(c) By designating its principal place ofbusiness at a place in this state.

(2) If the Director of the Department ofConsumer and Business Services determinesthat an authorized foreign insurer has com-plied with the requirements of subsection (1)of this section, the insurer is entitled to acertificate of authority to transact insurancein this state and shall be subject as a do-mestic insurer to the authority and jurisdic-tion of this state. [1995 c.639 §9; 1997 c.771 §24]

731.364 Domestic insurer transferringdomicile to another state. A domestic in-surer, upon the approval of the Director ofthe Department of Consumer and BusinessServices, may transfer its domicile to anyother state in which it is admitted to trans-act the business of insurance. Upon such atransfer the insurer ceases to be a domesticinsurer and may be authorized in this stateif qualified as a foreign insurer. The directorshall approve such a proposed transfer unlessthe director determines that the transfer isnot in the interest of the policyholders ofthis state. [1995 c.639 §10]

731.365 Effect of transfer of domicileby domestic or foreign insurer; notice todirector by transferring insurer. (1) Thecertificate of authority, insurance producerappointments and licenses, rates and otheritems allowed by the Director of the Depart-ment of Consumer and Business Servicespursuant to the discretion of the directorthat are in existence at the time an author-ized insurer transfers its domicile to this orany other state as provided in ORS 731.363or 731.367 or by merger, consolidation or anyother lawful method shall continue in fullforce and effect upon the transfer if the in-surer remains authorized to transact insur-ance in this state.

(2) All outstanding policies of a trans-ferring insurer shall remain in full force andeffect and need not be indorsed as to the newname of the insurer or its new location un-less so ordered by the director. A trans-ferring insurer shall file new policy formswith the director on or before the effectivedate of the transfer but may use existingpolicy forms with appropriate indorsementsif allowed by the director, according to anyconditions established by the director.

(3) Each transferring insurer shall notifythe director of the details of the proposedtransfer and shall file promptly any resulting


731.367 INSURANCE

amendments to corporate or other organiza-tional documents filed or required to be filedwith the director.

(4) This section applies to a domestic in-surer that transfers its domicile to anotherstate and to an authorized foreign insurerthat transfers its domicile either to this stateor to another state. [1995 c.639 §11; 1997 c.771 §25;2003 c.364 §68]

731.366 [Formerly 749.040; 1971 c.231 §42; 1977 c.651§1; 1993 c.709 §4; renumbered 731.369 in 1995]

731.367 Transfer of domicile by unin-corporated authorized foreign insurer. Anunincorporated authorized foreign insurertransfers its domicile to this state when theDirector of the Department of Consumer andBusiness Services determines that it hascomplied with all of the requirements of lawrelating to the organization and authori-zation of a domestic insurer of the same typeas provided in ORS 731.363. No merger, con-solidation or other method shall be requiredto effect a transfer of the domicile of theunincorporated insurer to this state and novote or approval of the policyholders, mem-bers or subscribers of the unincorporated in-surer shall be required. Any agreement ofindemnity, appointment or governance or anysimilar agreement shall continue in full forceafter the transfer if the unincorporated in-surer remains an authorized insurer. Thelaws of this state, however, shall govern allsuch agreements regardless of any other lawto the contrary, and such agreements shallbe considered to be modified to reflect thatthis state is the principal place of businessand domicile of the unincorporated insurer.[1995 c.639 §12]

731.369 Requirements of reciprocal in-surers generally. (1) A reciprocal insurer,through its attorney, shall file with the Di-rector of the Department of Consumer andBusiness Services a declaration, verified bythe oath of such attorney, setting forth:

(a) The name or title of the reciprocalinsurer.

(b) The location of the principal office ofthe reciprocal insurer.

(c) The class or classes of insurance tobe effected or exchanged.

(d) A copy of the form of power of attor-ney or instrument under which such insur-ance is to be effected or exchanged.

(e) A copy of the policy under or bywhich such contracts of insurance are ef-fected or exchanged among the subscribers.

(f) That applications have been made forinsurance in the amounts required by sub-section (2) of this section, and that such ap-plications will be concurrently effectivewhen the reciprocal insurer is authorized tocommence business by the director.

(g) If a foreign or alien reciprocal in-surer, that there has been deposited andshall be maintained at all times with theState Treasurer or other proper official ofthe state in which the insurer is domiciled$50,000 in cash or securities, as a generaldeposit for the benefit of subscribers wher-ever located. Where the laws of the homestate do not provide for the acceptance ofsuch a deposit, the deposit may be made witha bank or trust company in escrow subjectto the control of the insurance commissionerof the home state, and such deposit shall bereleased only upon the written order of suchinsurance commissioner. A certification fromthe insurance director or other proper stateofficial of the state in which the reciprocalinsurer is domiciled shall be attached to theapplication for the certificate of authority.

(2) The reciprocal insurer must havebona fide applications for insurance aggre-gating not less than $3 million upon at least200 risks, except in the case of wet marinehull insurance written by a domestic recip-rocal insurer for persons whose earned in-come, in whole or in part, is derived fromtaking and selling food resources living in anocean, bay or river, the applications mustcover at least 25 hulls and the insurancemust aggregate at least $125,000.

(3) The applicant shall furnish any otherrelevant information required by the direc-tor, except no reciprocal insurer shall be re-quired to furnish or file the names oraddresses of its policyholders or subscribers.[Formerly 731.366]

731.370 Reciprocal insurer’s financialstatement; service of process. (1) The ap-plication for a certificate of authority shallbe accompanied by a sworn statement of areciprocal insurer showing the financial con-dition of the insurer as of December 31 im-mediately preceding. The Director of theDepartment of Consumer and Business Ser-vices may require a supplemental statementto be furnished as of a later date.

(2) Concurrently with the filing of thedeclaration provided for by the terms of ORS731.369, the attorney shall file with the di-rector an instrument in writing executed forthe subscribers conditioned that upon the is-suance of certificate of authority, action maybe brought in the county in which the prop-erty insured thereunder is situated or wherethe injured person resides, and service ofprocess may be had as provided in ORS731.434 in all actions in this state arising outof policies issued by the reciprocal insurer,which service shall be valid and bindingupon all subscribers exchanging at any timereciprocal or interinsurance contractsthrough such attorney. Actions may bebrought against or defended in the name of



the reciprocal insurer adopted by the sub-scribers. [Formerly 749.050]

731.371 Powers of reciprocal insurerregarding real estate. Except where incon-sistent with other provisions of the Insur-ance Code, a reciprocal insurer in its ownname, as in the case of an individual, maypurchase, receive, own, hold, lease, mortgage,pledge or encumber by deed of trust or oth-erwise, manage and sell real estate for thepurposes and objects of the insurer including,but not limited to, investment for the pro-duction of income or for its accommodationin the convenient transaction of its business.Any contract, including but not limited to adeed, lease, mortgage, deed of trust, purchaseor sale agreement or any other contract tobe executed in the name of the insurer, maybe executed by the attorney in fact desig-nated by the insurer’s subscribers. [1991 c.401§35]


731.374 Exemptions to certificate ofauthority requirement. A certificate of au-thority is not required of an insurer with re-spect to the following:

(1) Transactions pursuant to surplus linescoverages lawfully written under the Insur-ance Code.

(2) Reinsurance, when transacted by aninsurer duly authorized by its state ofdomicile to transact the class of insuranceinvolved. [1967 c.359 §78]

731.378 Foreign and alien insurers ex-empt from laws governing admission offoreign and alien corporations. No foreignor alien insurer that has complied with therequirements of the Insurance Code shall besubject to any other provisions of the lawsof this state relating to admission or licens-ing of foreign or alien corporations. [Formerly736.220]

731.380 Authority of foreign and alieninsurers to take, acquire, hold and en-force notes secured by mortgages; state-ment; fees. (1) Subject to subsection (2) ofthis section, any foreign or alien insurer,without being authorized to transact busi-ness in this state, may take, acquire, holdand enforce notes secured by real estatemortgages or trust deeds and make commit-ments to purchase such notes. A foreign oralien insurer may foreclose the mortgagesand trust deeds in the courts of this state,acquire the mortgaged property, hold, ownand operate the property for a period not ex-ceeding five years and dispose of the prop-erty. The activities authorized under thissubsection by such a foreign or alien insurershall not constitute transacting business in

this state for the purposes of ORS chapter60.

(2) Before a foreign or alien insurer en-gages in any of the activities described insubsection (1) of this section, the foreign oralien insurer shall first file with the Depart-ment of Consumer and Business Services astatement signed by its president, secretary,treasurer or general manager that it consti-tutes the Director of the Department ofConsumer and Business Services its attorneyfor service of process, and shall pay an ini-tial filing fee of $200 and an annual licensefee of $200. The statement shall include theaddress of the principal place of business ofthe foreign or alien insurer.

(3) The director, upon receiving serviceof process as authorized by subsection (2) ofthis section, immediately shall forward byregistered mail or by certified mail with re-turn receipt all documents served upon thedirector to the principal place of business ofthe foreign or alien insurer.

(4) A foreign or alien insurer that indi-rectly engages in the activities described insubsection (1) of this section because of itsbeneficial interest in a pool of notes securedby real estate mortgages or trust deeds neednot comply with subsection (2) of this sec-tion. [1987 c.94 §118; 1991 c.249 §70]

731.381 Exemption from taxes for for-eign and alien insurers engaging in ac-tivities authorized by ORS 731.380.Engaging in the activities authorized by ORS731.380 by a foreign or alien insurer shall notsubject the foreign or alien insurer to anytax, license fee or charge, except as providedin ORS 731.380, for the privilege of doingbusiness within the State of Oregon or toany tax measured by net or gross income.However, if the foreign or alien insurer ac-quires any property given as security forsuch a mortgage or trust deed, all incomeaccruing to the foreign or alien insurersolely from the ownership, sale or other dis-posal of such property is subject to taxationin the same manner and on the same basisas income of corporations doing business inthis state. [1987 c.94 §119]

731.382 General eligibility for certif-icate of authority. To qualify for and holdauthority to transact insurance in this statean insurer must be an incorporated insurer,or a reciprocal insurer or an incorporatedfraternal benefit society. [1967 c.359 §80]

731.385 Standards for determiningwhether continued operation of insureris hazardous; rules; order; hearing. (1)The Director of the Department of Consumerand Business Services shall establish stan-dards by rule for determining whether thecontinued operation of an authorized insurer


731.386 INSURANCE

may be hazardous to the policyholders or tothe insurance-buying public generally, for thepurpose of carrying out ORS chapter 734 andother provisions of the Insurance Code thatauthorize the director to take action againstsuch an insurer. If the director makes sucha determination, the director may order theinsurer to take one or more of the followingactions:

(a) Reduce the total amount of presentand potential liability for policy benefits byreinsurance.

(b) Reduce, suspend or limit the volumeof business being accepted or renewed.

(c) Reduce general insurance and com-mission expenses by methods specified by thedirector.

(d) Increase the capital and surplus ofthe insurer.

(e) Suspend or limit the declaration andpayment of dividends by the insurer to itsstockholders or to its policyholders.

(f) Limit or withdraw from certain in-vestments or discontinue certain investmentpractices to the extent the director deter-mines such action to be necessary.

(2) The director may exercise authorityunder subsection (1) of this section in addi-tion to or instead of any other authority thatthe director may exercise under the Insur-ance Code.

(3) The director may issue an order underthis section with or without a hearing. Aninsurer subject to an order issued without ahearing may file a written request for ahearing to review the order. Such a requestshall not stay the effect of the order. Thehearing shall be held within 30 days after thefiling of the request. The director shall com-plete the review within 30 days after the re-cord for the hearing is closed, and shalldiscontinue the action taken under subsec-tion (1) of this section if the director deter-mines that none of the conditions giving riseto the action exists. [1993 c.447 §14]

731.386 Management of insurers. TheDirector of the Department of Consumer andBusiness Services shall not grant or continueauthority to transact insurance in this statefor any insurer:

(1) The management of which is found bythe director to be untrustworthy or so lack-ing in insurance experience as to make theproposed operation or the continued opera-tion hazardous to the insurance-buying pub-lic; or

(2) That the director has good reason tobelieve is affiliated directly or indirectlythrough ownership, control, reinsurancetransactions or other insurance or businessrelations, with any person whose business

operations are or have been marked to thedetriment of policyholders, stockholders, in-vestors, creditors or the public, by manipu-lation or dissipation of assets, manipulationof accounts or reinsurance, or by similarinjurious actions. [1967 c.359 §81; 1993 c.447 §15]

731.390 Government insurers not tobe authorized. No certificate of authoritymay be issued to any state, province or for-eign government nor to any instrumentality,political subdivision or agency thereof.[Formerly 736.080]

731.394 Combinations of insuring pow-ers in one insurer. An insurer that other-wise qualifies therefor may be authorized totransact any one class or combination ofclasses of insurance, except:

(1) A reciprocal insurer shall not trans-act life insurance or title insurance.

(2) A title insurer shall be a stock in-surer, and shall not transact any other classof insurance.

(3) A mortgage insurer shall be a stockinsurer, and shall not transact any otherclass of insurance. [1967 c.359 §83; 1969 c.692 §2]

731.396 Certificate of authority andgood financial condition required to issuevariable life insurance or variable annu-ity policies. No domestic, foreign or alieninsurer shall deliver or issue for delivery inthis state variable life insurance or variableannuity policies unless the insurer is au-thorized to transact life insurance in thisstate and the Director of the Department ofConsumer and Business Services is satisfiedthat its condition and method of operation inconnection with the issuance of such policieswill not render its operation hazardous to itspolicyholders or the public in this state. Inmaking the determination the director shallconsider, among other things:

(1) The history and financial condition ofthe insurer;

(2) The character, responsibility and fit-ness of the officers and directors of the in-surer; and

(3) The laws and rules under which theinsurer is authorized by its domicile to issuesuch policies. [1973 c.435 §4]

731.398 Amendment of certificate ofauthority. The Director of the Departmentof Consumer and Business Services at anytime may amend an insurer’s certificate ofauthority to accord with lawful changes inthe insurer’s charter or insuring powers.[1967 c.359 §84]

731.402 Issuance or refusal of certif-icate of authority. (1) The Director of theDepartment of Consumer and Business Ser-vices shall issue to an insurer a certificateof authority if upon completion of the appli-



cation for a certificate of authority by theinsurer the director finds, from the applica-tion and such other investigation and infor-mation the director may acquire, that theinsurer is fully qualified and entitled theretounder the Insurance Code.

(2) The director shall take all necessaryaction and shall either issue or refuse to is-sue a certificate of authority within a rea-sonable time after the completion of theapplication for such authority.

(3) The certificate of authority, if issued,shall specify the class or classes of insurancethe insurer is authorized to transact in thisstate. The director may issue authority lim-ited to particular subclasses of insurance ortypes of insurance coverages within thescope of a class of insurance. [1967 c.359 §85]

731.406 What certificate evidences;ownership of certificate. (1) An insurer’ssubsisting certificate of authority is evidenceof its authority to transact in this state theclass or classes of insurance specifiedtherein, either as direct insurer or as rein-surer or as both.

(2) Although issued to the insurer thecertificate of authority is at all times theproperty of this state. Upon any suspension,revocation or termination thereof the insurerpromptly shall deliver the certificate of au-thority to the Director of the Department ofConsumer and Business Services. [1967 c.359§86]

731.410 Continuance, expiration orreinstatement of certificate of authority.(1) A certificate of authority shall continuein force as long as the insurer is entitledthereto under the Insurance Code and untilsuspended or revoked by the Director of theDepartment of Consumer and Business Ser-vices, or terminated at the request of the in-surer; subject, however, to continuance ofthe certificate by the insurer each year by:

(a) Payment prior to April 1 of the con-tinuation fee established by the director;

(b) Due filing by the insurer of its annualstatement for the calendar year preceding;

(c) Due filing by the insurer of each an-nual statement supplement; and

(d) Payment by the insurer of premiumtaxes with respect to the preceding calendaryear as required by ORS 731.808 to 731.828.

(2) A certificate of authority that is notcontinued by the insurer under subsection (1)of this section expires on the 60th day afterthe date on which the payment or filing isdue.

(3) The director promptly shall notify theinsurer of impending expiration of its certif-icate of authority.

(4) The director, in the discretion of thedirector, upon the insurer’s request made notlater than the 90th day after expiration, mayreinstate a certificate of authority which theinsurer has permitted to expire, after the in-surer has cured all its failures which re-sulted in the expiration and has paid the feefor reinstatement established by the director.Otherwise the insurer shall be granted an-other certificate of authority only after filingapplication therefor and meeting all otherrequirements as for an original certificate ofauthority in this state. [1967 c.359 §87; 1989 c.413§3; 1995 c.639 §1]

731.414 Suspension or revocation ofcertificate of authority; mandatorygrounds. (1) The Director of the Departmentof Consumer and Business Services shall re-fuse to continue, or shall suspend or revoke,an insurer’s certificate of authority if:

(a) As a foreign insurer, it no longermeets the requirements for the authority; oras a domestic insurer, it has failed to curean impairment of required capitalizationwithin the time allowed therefor by the di-rector under ORS 732.230;

(b) The insurer knowingly exceeds itscharter powers or powers granted under itscertificate of authority; or

(c) As a foreign or alien insurer, its cer-tificate of authority to transact insurance issuspended or revoked by its domicile.

(2) Except in cases of impairment of re-quired capitalization or suspension or revo-cation by another domicile as referred to insubsection (1)(c) of this section, the directorshall refuse, suspend or revoke the certif-icate of authority only after a hearinggranted to the insurer, unless the insurerwaives such hearing in writing. [1967 c.359 §88]

731.418 Grounds for suspension or re-vocation of certificate of authority. (1)The Director of the Department of Consumerand Business Services may refuse to con-tinue or may suspend or revoke an insurer’scertificate of authority if the director findsafter a hearing that:

(a) The insurer has violated or failed tocomply with any lawful order of the director,or any provision of the Insurance Code otherthan those for which suspension or revoca-tion is mandatory.

(b) The insurer is in unsound condition,or in such condition or using such methodsand practices in the conduct of its business,as to render its further transaction of insur-ance in this state hazardous or injurious toits policyholders or to the public.

(c) The insurer has failed, after writtenrequest by the director, to remove or dis-charge an officer or director who has beenconvicted in any jurisdiction of an offense


731.422 INSURANCE

which, if committed in this state, constitutesa misdemeanor involving moral turpitude ora felony, or is punishable by death or im-prisonment under the laws of the UnitedStates, in any of which cases the record ofthe conviction shall be conclusive evidence.

(d) The insurer is affiliated with and un-der the same general management, inter-locking directorate or ownership as anotherinsurer that transacts direct insurance inthis state without having a certificate of au-thority therefor, except as permitted underthe Insurance Code.

(e) The insurer or an affiliate or holdingcompany of the insurer refuses to be exam-ined or any director, officer, employee orrepresentative of the insurer, affiliate orholding company refuses to submit to exam-ination relative to the affairs of the insurer,or to produce its accounts, records, and filesfor examination when required by the direc-tor or an examiner of the Department ofConsumer and Business Services, or refuseto perform any legal obligation relative tothe examination.

(f) The insurer has failed to pay any finaljudgment rendered against it in this stateupon any policy, bond, recognizance orundertaking issued or guaranteed by it,within 30 days after the judgment becamefinal, or within 30 days after time for takingan appeal has expired, or within 30 days af-ter dismissal of an appeal before final deter-mination, whichever date is the later.

(g) The insurer fails to comply with ORS742.534 (1).

(h) The insurer has failed to comply withORS 476.270 (1), (2) or (3) or 654.097 (1).

(2) Without advance notice or a hearingthereon, the director may suspend imme-diately the certificate of authority of any in-surer as to which proceedings forreceivership, conservatorship, rehabilitation,or other delinquency proceedings, have beencommenced in any state by the public insur-ance supervisory official of such state. [1967c.359 §89; 1971 c.321 §17; 1971 c.523 §10; 1975 c.585 §4;1981 c.701 §3; 1993 c.447 §7]

731.422 Order of suspension, revoca-tion or refusal; effect upon insuranceproducers’ authority. (1) All suspensionsor revocations of, or refusals to continue, aninsurer’s certificate of authority shall be byorder of the Director of the Department ofConsumer and Business Services order.

(2) Upon suspending, revoking or refus-ing to continue the insurer’s certificate ofauthority, the director forthwith shall givenotice thereof to the insurer’s insuranceproducers in this state of record in the De-partment of Consumer and Business Services,and likewise shall suspend or revoke the au-

thority of such insurance producers to rep-resent the insurer. The director also shallgive notice to the insurance supervisory au-thority in jurisdictions in which the insureris authorized, if a domestic insurer, or in itsdomicile if a foreign or alien insurer.

(3) In the discretion of the director, thedirector may publish notice of such suspen-sion, revocation or refusal in one or morenewspapers of general circulation in thisstate. [1967 c.359 §90; 2003 c.364 §69]

731.426 Duration of suspension;insurer’s obligations during suspensionperiod; reinstatement. (1) In an order sus-pending the certificate of authority of an in-surer, the Director of the Department ofConsumer and Business Services may providethat the suspension expires at the end of aspecified period or when the director deter-mines that the cause or causes of the sus-pension have terminated. During thesuspension the director may rescind orshorten the suspension by further order.

(2) During the suspension period the in-surer shall not solicit or write any newbusiness in this state, but shall file its an-nual statement and pay fees, licenses andtaxes as required under the Insurance Code,and may service its business already in forcein this state, as if the certificate of authorityhad continued in full force.

(3) Upon expiration of a specific suspen-sion period, if within such period the certif-icate of authority has not terminated, theinsurer’s certificate of authority automat-ically shall reinstate unless the director findsthat the cause or causes of the suspensionhave not terminated, or that the insurer isotherwise not in compliance with the re-quirements of the Insurance Code, and ofwhich the director shall give the insurer no-tice not less than 30 days in advance of theexpiration of the suspension period.

(4) When the director determines that asuspension should expire because the causeor causes have terminated, the director shallreinstate the certificate of authority of theinsurer unless the certificate of authorityhas expired within the suspension period.

(5) Upon reinstatement of the insurer’scertificate of authority, the authority of itsinsurance producers in this state to repre-sent the insurer shall likewise reinstate. Thedirector promptly shall notify the insurer andits insurance producers in this state of re-cord in the Department of Consumer andBusiness Services, of such reinstatement. Ifpursuant to ORS 731.422 the director haspublished notice of suspension, in like man-ner the director shall publish notice of thereinstatement. [1967 c.359 §91; 1989 c.700 §1; 2003c.364 §70]



731.428 Written consent to engage orparticipate in business of insurance;rules. (1) A person who is prohibited by 18U.S.C. 1033 from engaging or participating inthe business of insurance because of a con-viction of a felony involving dishonesty or abreach of trust or conviction of a crime un-der 18 U.S.C. 1033 may apply to the Directorof the Department of Consumer and BusinessServices for a written consent to engage orparticipate in the business of insurance.

(2) The director shall establish by rule aprocedure and standards by which the direc-tor may issue a written consent to engage orparticipate in the business of insurance to aperson convicted of a crime described insubsection (1) of this section.

(3) The director shall not issue a licenseunder the Insurance Code to an applicantwho has been convicted of a crime referredto in subsection (1) of this section unless thedirector also issues a written consent.

(4) If a person issued a license under theInsurance Code has been convicted of acrime referred to in subsection (1) of thissection or is subsequently the subject of sucha conviction, the director shall revoke, sus-pend or refuse to renew the license. Theperson may apply to the director for a writ-ten consent as provided in subsection (1) ofthis section. [2001 c.191 §59]


731.430 Name of insurer. (1) No insurershall be formed or authorized to transact in-surance in this state which has or will have,or which uses or will use as an assumedbusiness name, a name or principal identify-ing name factor:

(a) That is the same as or deceptivelysimilar to:

(A) Any other insurer so formed or au-thorized;

(B) Any name reserved or registered asauthorized by this section;

(C) Any name on file with the Secretaryof State pursuant to ORS chapter 60, 65 or648; or

(D) The name of any insurer that wasauthorized to transact insurance in this statewithin the preceding 10 years if insurancepolicies issued by such other insurer still areoutstanding in this state. With the consentof the insurer issuing such policies, the Di-rector of the Department of Consumer andBusiness Services may waive this provisionif the director finds that the waiver will notbe detrimental to the public; or

(b) That is deceptive or misleading as tothe type of organization of the insurer or

that does not indicate the insurer is trans-acting insurance.

(2) Any insurer doing business in thisstate may file and register with the directorin writing, in its articles of incorporation orotherwise, an assumed name that it will usein transacting insurance in this state. Suchname may not be a name prohibited by sub-section (1) of this section.

(3) Any person may reserve a name foruse as a corporate name or an assumedbusiness name in transacting insurance inthis state by filing in writing with the direc-tor a reservation of such name. Such namemay not be a name prohibited by subsection(1) of this section. Such reservation shall ex-pire six months after the date of filing un-less:

(a) If filed by an insurer, it is using suchname as an authorized insurer; or

(b) If filed by a noninsurer, it has filedwith the director a formal application for apermit to form an insurer in this state. If avalid reservation is on file, the director mayaccept the filing of a same or deceptivelysimilar name by another person which filingshall become effective, in the order of filing,at the expiration of the six-month provisionunless the original reservation does not ex-pire pursuant to this subsection.

(4) When an insurer is merged as pro-vided in the Insurance Code, the survivinginsurer may retain the use of the name fora period of five years after the effective dateof merger. If such name is retained, use ofthe same or deceptively similar name byother insurers shall be prohibited as specifiedunder this section during the five-year pe-riod. [1967 c.359 §92; 1987 c.414 §161a; 1987 c.846 §2;1993 c.447 §104]

731.434 Registered office and agent. (1)The provisions, procedures and requirementsof ORS chapter 60 relating to a registeredoffice, registered agent and to service ofprocess, notice and demand shall govern allinsurers transacting insurance in this state,whether authorized or unauthorized, exceptthat the Director of the Department of Con-sumer and Business Services shall be substi-tuted for the Secretary of State as the personwith whom all filings shall be made and uponwhom, in the circumstances specified bystatute, such service may be effected.

(2) This section shall not apply to in-surers for whom a certificate of authority isnot required under ORS 731.374. [1967 c.359 §93;1987 c.846 §3; 1995 c.79 §358]

731.438 Title plant requirement for ti-tle insurers; posting of indexes; plantownership and maintenance. (1) A titleinsurer, in order to receive and maintain acertificate of authority, shall own and main-


731.439 INSURANCE

tain at all times a title plant covering a pe-riod of at least the immediately preceding 50years except years before 1960 and consistingof a general index, adequate maps and cur-rently posted tract or geographic indexes forall the lands in the county in which title in-surance policies or other title services are tobe issued or provided. Either directly orthrough its insurance producer, a title in-surer also shall own and maintain for eachadditional county in which it shall be au-thorized to transact a title insurance busi-ness a comparable title plant or obtain froma person having a comparable title plant forsuch additional county or counties title in-surance showing the status of the title.

(2) The means by which tract or ge-ographic indexes may be currently posted forpurposes of subsection (1) of this section in-clude but are not limited to maintenance ofthe information on ledger sheets, separatecards or sheets of film, whether bound inbooks or contained in envelopes or storagefiles, or maintenance of the information onpunch cards, computer tape, disc or similarmachine compatible form. All title servicesby a title insurer must be provided in thisstate. The information upon which the titleservices are based must be maintained andmust be capable of reproduction in this stateat all times.

(3) Every title insurance transaction bya title insurer or insurance producer involv-ing the status of title of an Oregon title riskshall be based on one or more title plantswhich:

(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 producersas provided in subsections (4), (5) and (6) ofthis section.

(4) For any county with a population of500,000 or more, or any county with a popu-lation of 200,000 or more that is contiguousto a county with a population of 500,000 ormore, ownership and maintenance of a titleplant shall be as provided in this subsection:

(a) The title plant referred to in subsec-tion (1) of this section may be owned andmaintained on an exclusive basis or on ajoint basis as provided in paragraph (b) ofthis subsection.

(b) A title plant is owned and maintainedon a joint basis under this subsection if twoor more persons own and maintain a portionof the title plant as joint venturers, partners,shareholders or participants in another formof joint, several or common property owner-

ship recognized under the laws of this state.If ownership of a title plant is held by fewerthan four title insurers or insurance produc-ers, each share of ownership shall be at least25 percent. If ownership of a title plant isheld by four or more insurers or insuranceproducers, all shares shall be equal.

(5) A title insurer authorized to transacttitle insurance in this state and every insur-ance producer of such an authorized title in-surer shall own and maintain a title plant.

(6) In any county not described in sub-section (4) of this section, a title insurer orits insurance producers transacting title in-surance business shall solely own a titleplant for that county in conformance withsubsections (1) and (2) of this section andshall maintain a title plant for that countyon an exclusive basis or a joint basis in con-formance with subsections (1) and (2) of thissection. A title plant for a county is main-tained on a joint basis under this subsectionif a title insurer or insurance producer ob-tains current posting information for itstract or geographic indexes from one or moreother title insurers or insurance producersor from a provider that is wholly owned inequal shares by the title insurers or insur-ance producers utilizing the provider’s ser-vices. [Formerly 748.084; 1983 c.322 §1; 1999 c.183 §1;2003 c.364 §71]

731.439 Satisfaction of requirementsof ORS 731.438 (1) by certain title plants.A title plant that conforms on December 31,1999, with ORS 731.438 (1) and (2) (1997 Edi-tion) satisfies the requirements of ORS731.438 (1) as amended by section 1, chapter183, Oregon Laws 1999, if it also containsafter that date a general index, adequatemaps and currently posted tract or ge-ographic indexes for all lands in the county.[1999 c.183 §3]

731.442 Prohibition on transacting lifeinsurance business on mutual assessmentplan. An insurer may not transact a life in-surance business upon a mutual assessmentplan within this state. [Formerly 739.105; 2005c.185 §1]

731.446 Policyholder deposits. An in-surer may accept, from a holder of a life in-surance policy, deposits in addition tocurrent premium payments to provide a fundfor payment of future premiums or to makepossible the future acquisition of additionalinsurance, annuities or other benefits,whether the interest to be paid on such de-posits be fixed or variable. Such deposits, orany portion thereof, not used for the pur-poses described in this section shall be re-funded to the policyholder or, upon the deathof the policyholder, to designated benefici-aries. [1967 c.359 §96]



731.450 Unrelated business prohibited;exceptions; title insurer as escrow agent.Except as authorized by the federal Gramm-Leach-Bliley Act (P.L. 106-102), an insurermay not engage in any business except themaking of insurance or a kind of businessrelated to the insurance business. However,a foreign or alien insurer may engage, out-side this state, in any business permitted byits articles of incorporation and the laws ofthe state of its domicile; and a title insureralso may engage in business as an escrowagent; provided, however, that a title insurerengaging in business as an escrow agentshall be subject to the provisions of ORS696.505 to 696.590 in respect to its escrowactivities. [1967 c.359 §97; 1971 c.398 §5; 1977 c.351§13; 2001 c.377 §57]

731.454 Domestic insurers not totransact business in jurisdiction wherenot authorized. No domestic insurer, or anyof the representatives thereof, shall transactinsurance in any jurisdiction in which suchinsurer is not authorized in accordance withthe laws of such jurisdiction. [Formerly 736.645]

731.458 Exchange of reciprocal orinterinsurance contracts. (1) Individuals,partnerships and corporations of this state,hereby designated as subscribers, may ex-change reciprocal or interinsurance con-tracts with each other, or with individuals,partnerships and corporations of other statesand countries, providing indemnity amongthemselves from any loss which may be in-sured against under the Insurance Code, ex-cept life insurance and title insurance. Suchcontracts may be executed by an attorney,agent or other representative, hereby desig-nated as attorney, duly authorized and actingfor such subscribers. The attorney may be anindividual, firm or corporation organized un-der the laws of this state or any other stateor territory and having a principal office atthe place designated by the subscribers inthe power of attorney.

(2) Any corporation now or hereafter or-ganized under the laws of the state, in addi-tion to the rights, powers and franchisesspecified in its articles of incorporation, mayexchange insurance contracts of the kind andcharacter described in subsection (1) of thissection. The right to exchange such con-tracts is declared to be incidental to thepurpose for which such corporations are or-ganized and as much granted as the rightsand powers expressly conferred. [Formerly749.010]

731.462 Nonassessable policies of re-ciprocal insurer. A reciprocal insurer hav-ing a surplus of not less than $500,000 mayissue nonassessable policies. [1967 c.359 §100]

731.466 Power of attorney for recipro-cal insurer. (1) The rights and power of theattorney of a reciprocal insurer shall be asprovided in the power of attorney given it bythe 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 bepaid to the attorney.

(e) Except as to nonassessable policies, aprovision for a contingent several liability ofeach subscriber in a specified amount notless than one nor more than 10 times thepremium or premium deposit stated in thepolicy.

(3) The power of attorney may:(a) Provide for the right of substitution

of the attorney and revocation of the powerof attorney and rights thereunder;

(b) Impose such restrictions upon the ex-ercise of the power as are agreed upon bythe subscribers;

(c) Provide for the exercise of any rightreserved to the subscribers directly orthrough their advisory committee; and

(d) Contain other lawful provisions.(4) The terms of any power of attorney

or agreement collateral thereto shall be rea-sonable and equitable, and no such power oragreement or any amendment thereof, shallbe used or be effective in this state until ap-proved by the Director of the Department ofConsumer and Business Services. [1967 c.359§101; 1997 c.249 §217]

731.470 Attorney for reciprocal in-surer. (1) Any instrument required to beverified by the oath of the attorney for a re-ciprocal insurer may, in case of an incorpo-rated attorney, be verified by the oath of thepresident, vice president, secretary or otherexecutive officer of such corporation.

(2) The certificate of authority of a re-ciprocal insurer shall be issued to its attor-ney in the name of the insurer.

(3) The Director of the Department ofConsumer and Business Services may refuse,suspend or revoke the certificate of author-ity, in addition to other grounds therefor, forfailure of a reciprocal insurer’s attorney tocomply with any provision of the InsuranceCode.

(4) The attorney for an authorized foreignor alien reciprocal insurer shall not, by vir-tue of discharge of its duties as such attor-ney with respect to the insurer’s transactions


731.475 INSURANCE

in this state, be thereby deemed to be doingbusiness in this state within the meaning ofany laws of this state applying to foreignpersons. [Formerly 749.140]

731.475 Records storage required ofworkers’ compensation insurers; exam-ination and audit of records. (1) Every in-surer authorized to issue workers’compensation coverage to subject employersas required by ORS chapter 656 shall main-tain a place of business in this state wherethe insurer shall:

(a) Process, and keep complete recordsof, claims for compensation made to the in-surer under ORS chapter 656.

(b) Make available upon request completerecords, including all records submitted elec-tronically, of all workers’ compensation in-surance policies issued as required by ORSchapter 656.

(c) Keep records identifying the specificpersons covered by an employer electingcoverage pursuant to ORS 656.039.

(2) Claims records must be retained in,and may be removed from, this state or dis-posed of, in accordance with the rules of theDirector of the Department of Consumer andBusiness Services. The records must beavailable to the Department of Consumer andBusiness Services for examination and auditat all reasonable times upon notice by thedepartment to the insurer.

(3) In lieu of establishing a place of busi-ness in this state for the purpose required bythis section, an insurer may keep such re-cords in this state at places of business op-erated by service companies, if:

(a) Each service company is incorporatedin or authorized to do business in this state;

(b) The agreement entered into betweenthe insurer and the service company grantseach service company a power of attorney toact for the insurer in workers’ compensationcoverage and claims proceedings under ORSchapter 656; and

(c) The agreement entered into betweenthe insurer and each service company is ap-proved by the director.

(4) Notwithstanding subsection (3) of thissection, an insurer may not:

(a) Enter into a service agreement con-tract with one of its insureds unless the in-sured has service contracts with otherinsurers; or

(b) Have more than eight locations atany one time where claims are processed orrecords are maintained. [1975 c.585 §2; 1981 c.874§8; 1987 c.373 §80a; 1989 c.630 §1; 1991 c.67 §194; 2003c.170 §10; 2007 c.241 §23]

731.480 Workers’ compensation poli-cies; conditions for issuing. An insurershall not issue workers’ compensation insur-ance policies pursuant to ORS chapter 656unless it furnishes occupational safety andhealth loss control consultative services toits insured employers consistent with the re-quirements of ORS 654.097. [1975 c.585 §3; 1981c.874 §9; 1987 c.373 §80b; 1987 c.884 §61; 2007 c.241 §24]

731.482 Withdrawal from, failure torenew or cancellation of line by commer-cial liability insurer. (1) Except as providedin subsection (5) of this section, an insurancecompany selling commercial liability insur-ance and authorized to do business in Oregonmay not withdraw from, fail to renew orcancel any line of insurance or class of busi-ness without supplying appropriate writtenjustification to the Director of the Depart-ment of Consumer and Business Services.

(2) Justification for withdrawal, failure torenew or cancellation may include, but neednot be limited to:

(a) Insufficient premium income;(b) Loss experience or expectation of fu-

ture loss in the particular line of insuranceor class of business;

(c) Necessity for uncompetitive or uneco-nomic rate increases;

(d) Increased hazard in the risks assumedor material change in the line of insuranceor class of business that could not have beenreasonably contemplated by the insurancecompany at the time the company beganselling the line of insurance or class of busi-ness in Oregon; or

(e) Change in the availability or costs ofreinsurance.

(3) The director shall issue an order ap-proving or disapproving the withdrawal from,failure to renew or cancellation of a line ofinsurance or class of business.

(4) An order issued under this sectionshall include a provision requiring the in-surer to notify affected insureds at least 60days before the effective date of any with-drawal, failure to renew or cancellation ap-proved by the director.

(5) This section does not apply to a sur-plus lines insurer. [1987 c.774 §34]

731.484 Prohibition on certain salesrelated to group health and group life in-surance. (1) No insurer or insurance pro-ducer selling a policy of group life insuranceor group health insurance subject to an ex-emption in ORS 731.146 (2)(b) or (c) is au-thorized to sell membership in a group forthe purpose of qualifying an applicant who isan individual for the insurance.

(2) No insurer or insurance producerselling membership in a group is authorized



to offer a policy of group life insurance orgroup health insurance subject to an ex-emption in ORS 731.146 (2)(b) or (c) for thepurpose of selling membership in the group.[1989 c.784 §2; 2003 c.364 §72; 2007 c.752 §2]


731.484. (1) No insurer or insurance producer sell-ing a policy of group life insurance or group healthinsurance subject to the exemption in ORS 731.146 (2)(b)is authorized to sell membership in a group for thepurpose of qualifying an applicant who is an individualfor the insurance.

(2) No insurer or insurance producer selling mem-bership in a group is authorized to offer a policy ofgroup life insurance or group health insurance subjectto the exemption in ORS 731.146 (2)(b) for the purposeof selling membership in the group.

731.485 Conditions under which in-surer may limit insured’s choice of drugoutlets and pharmacies. (1) An insurermay limit the drug outlets or pharmacistsfrom which a person covered under a healthinsurance policy issued by the insurer is au-thorized by the insurer to obtain servicesonly if the insurer first provides an opportu-nity to drug outlets and pharmacists to offerto participate as a provider of services asprovided in this section. An insurer to whichthis section applies must provide notice ofthe opportunity by mailing a notice to theprofessional organization representing drugoutlets and pharmacists in the service areaof the insurer. The notice must be given atleast 10 days before the deadline for receiv-ing offers. The notice shall state the follow-ing:

(a) The date after which offers will notbe considered.

(b) The services to be provided under thepolicy.

(c) That each offer must contain a state-ment that the drug outlet or pharmacist is incompliance with the requirements of theState Board of Pharmacy.

(d) The name and address of the personor office designated for receipt of the offers.

(2) The services to which this sectionapplies are the services normally provided bydrug outlets and pharmacists, including butnot limited to prescription drugs.

(3) A professional organization that hasreceived notice pursuant to subsection (1) ofthis section shall take reasonable steps torelay the notice to each drug outlet regis-tered with the State Board of Pharmacy thatis in the relevant service area.

(4) The following apply to an offer sub-mitted by a drug outlet or pharmacist in re-

sponse 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 in-surer.

(5) An insurer to which this section ap-plies may select any drug outlet or pharma-cist of its choice on whatever basis theinsurer alone determines to be appropriate.Nothing in this section prohibits an insurerfrom contracting with one or more drug out-lets or pharmacists exclusively for servicesto be provided to its insureds. [1993 c.391 §2]

731.486 Exemption from definition of“transact insurance” for group life poli-cies; master group health insurance cov-erage; rules. (1) The exemption in ORS731.146 (2)(b) does not apply to an insurerthat offers coverage under a group life in-surance policy in this state unless the Di-rector of the Department of Consumer andBusiness Services determines that the ex-emption applies.

(2) The insurer shall submit evidence tothe director that the exemption applies.When a master policy for a policy of grouplife insurance is delivered or issued for de-livery outside this state to trustees of a fundfor two or more employers, for one or morelabor unions, for one or more employers andone or more labor unions or for an associ-ation, the insurer shall also submit evidenceshowing compliance with ORS 743.354.

(3) The director shall review the evidencesubmitted and may request additional evi-dence as needed.

(4) An insurer shall submit to the direc-tor any changes in the evidence submittedunder subsection (2) of this section.

(5) The director may order an insurer tocease offering a policy or coverage under apolicy if the director determines that the ex-emption under ORS 731.146 (2)(b) is nolonger satisfied.

(6) Coverage under a master group lifeinsurance policy delivered or issued for de-livery outside this state that does not qualifyfor the exemption in ORS 731.146 (2)(b) maybe offered in this state if the director deter-mines that the state in which the policy wasdelivered or issued for delivery has require-ments that are substantially similar to thoseestablished under ORS 743.360 and that thepolicy satisfies those requirements.

(7) Coverage under a master group healthinsurance policy that is delivered or issuedfor delivery outside this state to an associ-ation or trust may be offered in this state if


731.488 INSURANCE

the director determines that the associationor trust meets applicable standards underORS 743.522 (1)(b) or (c) or (2).

(8) This section does not apply to anymaster policy issued to a multistate employeror labor union.

(9) The director may adopt rules to carryout this section. [1989 c.784 §3; 2001 c.943 §1; 2005c.22 §486; 2007 c.752 §3]


731.486. (1) The exemption in ORS 731.146 (2)(b)does not apply to an insurer that offers coverage undera group health insurance policy or a group life insur-ance policy in this state unless the Director of the De-partment of Consumer and Business Services determinesthat the exemption applies.

(2) The insurer shall submit evidence to the direc-tor that the exemption applies. When a master policy isdelivered or issued for delivery outside this state totrustees of a fund for two or more employers, for oneor more labor unions, for one or more employers andone or more labor unions or for an association, the in-surer shall also submit evidence showing compliancewith:

(a) ORS 743.526, for a policy of group health in-surance; or

(b) ORS 743.354, for a policy of group life insur-ance.

(3) The director shall review the evidence submittedand may request additional evidence as needed.

(4) An insurer shall submit to the director anychanges in the evidence submitted under subsection (2)of this section.

(5) The director may order an insurer to cease of-fering a policy or coverage under a policy if the direc-tor determines that the exemption under ORS 731.146(2)(b) is no longer satisfied.

(6) Coverage under a master group life or healthinsurance policy delivered or issued for delivery outsidethis state that does not qualify for the exemption inORS 731.146 (2)(b) may be offered in this state if thedirector determines that the state in which the policywas delivered or issued for delivery has requirementsthat are substantially similar to those established underORS 743.360 or 743.522 (2) and that the policy satisfiesthose requirements.

(7) This section does not apply to any master policyissued to a multistate employer or labor union.

(8) The director may adopt rules to carry out thissection.

731.488 Annual audit of insurer; rules.(1) Each insurer shall have an annual auditconducted by an independent certified publicaccountant and shall file an audited financialreport annually with the Director of the De-partment of Consumer and Business Services.The annual audited financial report shalldisclose:

(a) The financial position of the insureras of the end of the most recent calendaryear; and

(b) The results of the insurer’s oper-ations, cash flows and changes in capital andsurplus for the year then ended.

(2) The director shall adopt rules withrespect to the following matters as neededfor carrying out the requirements of thissection:

(a) Required contents and format of theaudited financial report.

(b) Requirements for filing the report.(c) Requirements applicable to qualifica-

tions and designation of certified public ac-countants for purposes of audits under thissection. The requirements may include limi-tations on length of service for certifiedpublic accountants and may permit recogni-tion of accountants comparably qualified un-der the laws of another country.

(d) Requirements applicable to evaluationof the accounting procedures of an insurerand its system of internal control by a certi-fied public accountant.

(e) Standards governing the scope andpreparation of the audit.

(f) Requirements and procedures relatingto the reporting of the adverse financialcondition of an insurer by a certified publicaccountant.

(g) Requirements and procedures relatingto the reporting of significant deficiencies forinternal controls of an insurer.

(h) Exemptions.(i) Any other matter that the director

determines to be needed for preparation ofor inclusion in the financial report. [1991 c.401§15]

731.490 [1987 c.774 §52; repealed by 1997 c.131 §1]731.493 [1987 c.774 §53; repealed by 1997 c.131 §1]731.496 [1987 c.774 §54; repealed by 1997 c.131 §1]731.498 [1987 c.774 §58; repealed by 1997 c.131 §1]731.500 [1987 c.774 §59; repealed by 1997 c.131 §1]

LIMIT OF RISK; REINSURANCE731.504 Limit of risk. (1) No insurer

shall retain any risk on any one subject ofinsurance, whether a domestic risk or not, inan amount exceeding 10 percent of its sur-plus to policyholders, or in the case of titleinsurance, more than 50 percent of such sur-plus, except that an insurance company, in-cluding a reciprocal insurance company,comprised solely of 1,000 or more licensedOregon physicians organized for the purposeof insuring for professional liability mayconsider aggregate insurance as surplus topolicyholders for purposes of this section andshall not be allowed to retain the risk on anyone subject of insurance in excess of two andone-half percent of such aggregate insurance.



(2) For purposes of this section, aggre-gate insurance is insurance which providescoverage in the event that the total fund ofan insurance company, including a reciprocalinsurance company, which is available to payclaims for occurrences of any one year, isexhausted. Aggregate insurance shall be inan amount equal to at least five times theannual premium collected by the insurancecompany.

(3) A “subject of insurance” for the pur-poses of this section:

(a) As to insurance against fire and haz-ards other than windstorm, earthquake andother catastrophic hazards, includes allproperties insured by the same insurer thatcustomarily are considered by underwritersto be subject to loss or damage from thesame fire or the same occurrence of anyother hazard insured against;

(b) As to group life and health insurance,refers individually to each person benefitedunder the group policy as a separate subject;and

(c) As to mortgage insurance, includes allobligations secured by real property in asingle tract, or in multiple tracts not sepa-rated by at least one-half mile.

(4) Reinsurance ceded as authorized byORS 731.508 shall be deducted in determiningrisk retained. As to surety risks, deductionalso shall be made of the amount assumed byany established incorporated cosurety andthe value of any security deposited, pledged,or held subject to the surety’s consent andfor the surety’s protection.

(5) As to alien insurers, this section re-lates only to risks and surplus to policyhold-ers of the insurer’s United States branch.

(6) As used in this section, “surplus topolicyholders,” in addition to the insurer’scapital and surplus, includes any voluntaryreserves that are not required pursuant tolaw, includes the contingency reserve heldfor mortgage insurance as required by ORS733.100, and shall be determined from thelast sworn statement of the insurer on filewith the Director of the Department of Con-sumer and Business Services, or by the lastreport of examination of the insurer, which-ever is the more recent at time of assump-tion of risk.

(7) This section does not apply to wetmarine and transportation insurance or toany policy or type of coverage as to whichthe maximum possible loss to the insurer isnot readily ascertainable on issuance of thepolicy. [1967 c.359 §103; 1969 c.692 §3; 1975 c.796 §12]

731.508 Approved reinsurance. (1) Aninsurer may accept reinsurance only of suchrisks, and retain risk thereon within suchlimits, 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, aninsurer may reinsure risks with an insurerauthorized to transact such insurance in thisstate, or in any other solvent insurer ap-proved or accepted by the Director of theDepartment of Consumer and Business Ser-vices for the purpose of such reinsurance.The director shall not approve or accept anysuch reinsurance by a ceding domestic in-surer in an unauthorized insurer which thedirector finds for good cause would be con-trary to the interests of the policyholders orstockholders of such domestic insurer.

(3) Credit shall not be allowed, as an as-set or as a deduction from liability, to anyceding insurer for reinsurance unless the re-insurance contract provides, in substance,that in the event of the insolvency of theceding insurer, the reinsurance shall be pay-able under a contract or contracts reinsuredby the assuming insurer on the basis of re-ported claims allowed by the court hearingthe liquidation proceeding, withoutdiminution because of the insolvency of theceding insurer. Such payments shall be madedirectly to the ceding insurer or to itsdomiciliary liquidator except:

(a) When the contract or other writtenagreement specifically provides anotherpayee of the reinsurance in the event of theinsolvency of the ceding insurer; or

(b) When the assuming insurer, with theconsent of the direct insured or insureds, hasassumed the policy obligations of the cedinginsurer as direct obligations of the assuminginsurer to the payees under such policies andin substitution for the obligations of theceding insurer to such payees.

(4) For the purposes of subsection (3) ofthis section, the reinsurance agreement mayprovide that the domiciliary liquidator of aninsolvent ceding insurer shall, within a rea-sonable time after the claim is filed in theliquidation proceeding, give written notice tothe assuming insurer of the pendency of aclaim against the ceding insurer on the con-tract reinsured. During the pendency of theclaim, an assuming insurer may investigatethe claim and interpose, at its own expense,in the proceeding in which the claim is to beadjudicated any defenses that the assuminginsurer determines to be available to theceding insurer or its liquidator. The expensemay be filed as a claim against the insolventceding insurer to the extent of a proportion-ate share of the benefit that may accrue tothe ceding insurer solely as a result of thedefense undertaken by the assuming insurer.When two or more assuming insurers are in-volved in the same claim and a majority ininterest elect to interpose one or more de-fenses to the claim, the expense shall be ap-


731.509 INSURANCE

portioned in accordance with the terms ofthe reinsurance agreement as though the ex-pense had been incurred by the ceding in-surer.

(5) The director may disallow credit thatwould otherwise be allowed if the directordetermines that allowing credit would becontrary to accurate financial reporting orproper financial management, or may behazardous to policyholders of the insurer orthe insurance-buying public generally. Thedirector may make such a determination onlyaccording to standards established by the di-rector by rule. This subsection applies onlyto insurers who transact life insurance orhealth insurance, or both.

(6) Upon request of the director, a cedinginsurer promptly shall inform the director inwriting of the cancellation or any other ma-terial change of any of its reinsurance trea-ties or arrangements.

(7) This section does not apply to wetmarine and transportation insurance. [1967c.359 §104; 1993 c.447 §68; 1995 c.30 §9; 1995 c.638 §1; 2001c.318 §14]

731.509 Legislative intent; criteria forallowing credit for reinsurance. (1) Thepurpose of ORS 731.509, 731.510, 731.511,731.512 and 731.516 is to protect the interestsof insureds, claimants, ceding insurers, as-suming insurers and the public generally.The Legislative Assembly declares that itsintent is to ensure adequate regulation ofinsurers and reinsurers and adequate pro-tection for those to whom they owe obli-gations. In furtherance of that state interest,the Legislative Assembly mandates that uponthe insolvency of an alien insurer or rein-surer that provides security to fund itsUnited States obligations in accordance withORS 731.509, 731.510, 731.511, 731.512 and731.516, the assets representing the securityshall be maintained in the United States andclaims shall be filed with and valued by thestate insurance commissioner with regula-tory oversight, and the assets shall be dis-tributed in accordance with the insurancelaws of the state in which the trust isdomiciled that are applicable to the liqui-dation of domestic United States insurers.The Legislative Assembly declares that thelaws contained in ORS 731.509, 731.510,731.511, 731.512 and 731.516 are fundamentalto the business of insurance in accordancewith 15 U.S.C. 1011 and 1012.

(2) The Director of the Department ofConsumer and Business Services shall notallow credit for reinsurance to a domesticceding insurer as either an asset or a re-duction from liability on account of reinsur-ance ceded unless credit is allowed asprovided under ORS 731.508 and unless thereinsurer meets the requirements of:

(a) Subsection (3) of this section;(b) Subsection (4) of this section;(c) Subsections (5) and (8) of this section;(d) Subsections (6) and (8) of this section;

or(e) Subsection (7) of this section.(3) Credit shall be allowed when the re-

insurance is ceded to an authorized assuminginsurer that accepts reinsurance of risks, andretains risk thereon within such limits, asthe assuming insurer is otherwise authorizedto insure in this state as provided in ORS731.508.

(4) Credit shall be allowed when the re-insurance is ceded to an assuming insurerthat is accredited as a reinsurer in this stateas provided in ORS 731.511. The directorshall not allow credit to a domestic cedinginsurer if the accreditation of the assuminginsurer has been revoked by the director af-ter notice and opportunity for hearing.

(5) Credit shall be allowed when the re-insurance is ceded to a foreign assuming in-surer or a United States branch of an alienassuming insurer meeting all of the followingrequirements:

(a) The foreign assuming insurer must bedomiciled in a state employing standards re-garding credit for reinsurance that equal orexceed the standards applicable under thissection. The United States branch of an alienassuming insurer must be entered through astate employing such standards.

(b) The foreign assuming insurer orUnited States branch of an alien assuminginsurer must maintain a combined capitaland surplus in an amount not less than$20,000,000. The requirement of this para-graph does not apply to reinsurance cededand assumed pursuant to pooling arrange-ments among insurers in the same holdingcompany system.

(c) The foreign assuming insurer orUnited States branch of an alien assuminginsurer must submit to the authority of thedirector to examine its books and records.

(6) Credit shall be allowed when the re-insurance is ceded to an assuming insurerthat maintains a trust fund meeting the re-quirements of this subsection and addi-tionally complies with other requirements ofthis subsection. The trust fund must bemaintained in a qualified United States fi-nancial institution, as defined in ORS 731.510(1), for the payment of the valid claims of itsUnited States policyholders and ceding in-surers and their assigns and successors ininterest. The assuming insurer must reportannually to the director information sub-stantially the same as that required to bereported on the annual statement form by



ORS 731.574 by authorized insurers, in orderto enable the director to determine the suffi-ciency of the trust fund. The following re-quirements apply to such a trust fund:

(a) In the case of a single assuming in-surer, the trust fund must consist of funds intrust in an amount not less than the assum-ing insurer’s liabilities attributable to rein-surance ceded by United States cedinginsurers. In addition, the assuming insurermust maintain a trusteed surplus of not lessthan $20,000,000.

(b) In the case of a group including in-corporated and individual unincorporatedunderwriters:

(A) For reinsurance ceded under reinsur-ance agreements with an inception, amend-ment or renewal date on or after August 1,1995, the trust shall consist of a trusteed ac-count in an amount not less than the group’sseveral liabilities attributable to businessceded by United States domiciled ceding in-surers to any member of the group.

(B) For reinsurance ceded under reinsur-ance agreements with an inception date onor before July 31, 1995, and not amended orrenewed after that date, notwithstanding theother provisions of ORS 731.509, 731.510,731.511, 731.512 and 731.516, the trust shallconsist of a trusteed account in an amountnot less than the group’s several insuranceand reinsurance liabilities attributable tobusiness written in the United States.

(C) In addition to the trusts described insubparagraphs (A) and (B) of this paragraph,the group shall maintain in trust a trusteedsurplus of which $100,000,000 shall be heldjointly for the benefit of the United Statesdomiciled ceding insurers of any member ofthe group for all years of account.

(D) The incorporated members of thegroup shall not be engaged in any businessother than underwriting as a member of thegroup and shall be subject to the same levelof regulation and solvency control by thegroup’s domiciliary regulator as are the un-incorporated members.

(E) Within 90 days after the group’s fi-nancial statements are due to be filed withthe group’s domiciliary regulator, the groupshall provide to the director an annual certi-fication by the group’s domiciliary regulatorof the solvency of each underwriter memberor, if certification is unavailable, financialstatements of each underwriter member ofthe group prepared by independent certifiedpublic accountants.

(c) In the case of a group of incorporatedinsurers described in this paragraph, thetrust must be in an amount equal to thegroup’s several liabilities attributable tobusiness ceded by United States ceding in-

surers to any member of the group pursuantto reinsurance contracts issued in the nameof the group. This paragraph applies to agroup of incorporated insurers under com-mon administration that complies with theannual reporting requirements contained inthis subsection and that has continuouslytransacted an insurance business outside theUnited States for at least three years imme-diately prior to making application for ac-creditation. Such a group must have anaggregate policyholders’ surplus of$10,000,000,000 and must submit to the au-thority of this state to examine its books andrecords and bear the expense of the exam-ination. The group shall also maintain a jointtrusteed surplus of which $100,000,000 mustbe held jointly for the benefit of UnitedStates ceding insurers of any member of thegroup as additional security for any such li-abilities. Each member of the group shallmake available to the director an annualcertification of the member’s solvency by themember’s domiciliary regulator and its inde-pendent certified public accountant.

(d) The form of the trust and any amend-ment to the trust shall have been approvedby the insurance commissioner of the statein which the trust is domiciled or by the in-surance commissioner of another state who,pursuant to the terms of the trust instru-ment, has accepted principal regulatoryoversight of the trust.

(e) The form of the trust and any trustamendments also shall be filed with the in-surance commissioner of every state inwhich the ceding insurer beneficiaries of thetrust are domiciled. The trust instrumentmust provide that contested claims shall bevalid and enforceable upon the final order ofany court of competent jurisdiction in theUnited States. The trust must vest legal titleto its assets in its trustees for the benefit ofthe assuming insurer’s United States cedinginsurers and their assigns and successors ininterest. The trust and the assuming insurerare subject to examination as determined bythe director. The trust must remain in effectfor as long as the assuming insurer has out-standing obligations due under the reinsur-ance agreements subject to the trust.

(f) Not later than March 1 of each year,the trustees of each trust shall report to thedirector in writing the balance of the trustand listing the trust’s investments at thepreceding year end, and shall certify the dateof termination of the trust, if so planned, orcertify that the trust will not expire prior tothe following December 31.

(7) Credit shall be allowed when the re-insurance is ceded to an assuming insurernot meeting the requirements of subsection(3), (4), (5) or (6) of this section, but only as


731.510 INSURANCE

to the insurance of risks located in jurisdic-tions in which the reinsurance is required byapplicable law or regulation of that jurisdic-tion.

(8) If the assuming insurer is not author-ized to transact insurance in this state oraccredited as a reinsurer in this state, thedirector shall not allow the credit permittedby subsections (5) and (6) of this section un-less the assuming insurer agrees in the rein-surance agreement to the provisions statedin this subsection. This subsection is not in-tended to conflict with or override the obli-gation of the parties to a reinsuranceagreement to arbitrate their disputes, if suchan obligation is created in the agreement.The assuming insurer must agree in the re-insurance agreement:

(a) That in the event of the failure of theassuming insurer to perform its obligationsunder the terms of the reinsurance agree-ment, the assuming insurer, at the requestof the ceding insurer, shall submit to the ju-risdiction of any court of competent jurisdic-tion in any state of the United States, willcomply with all requirements necessary togive the court jurisdiction and will abide bythe final decision of the court or of any ap-pellate court in the event of an appeal; and

(b) To designate the director or a desig-nated attorney as its true and lawful attor-ney upon whom any lawful process in anyaction, suit or proceeding instituted by or onbehalf of the ceding company may be served.

(9) If the assuming insurer does not meetthe requirements of subsection (3), (4) or (5)of this section, the credit permitted by sub-section (6) of this section shall not be al-lowed unless the assuming insurer agrees inthe trust agreements to the following condi-tions:

(a) Notwithstanding any other provisionsin the trust instrument, if the trust fund isinadequate because it contains an amountless than the applicable amount required bysubsection (6)(a), (b) or (c) of this section, orif the grantor of the trust has been declaredinsolvent or placed into receivership, re-habilitation, liquidation or similar pro-ceedings under the laws of the grantor’sstate or country of domicile, the trustee shallcomply with an order of the insurance com-missioner with regulatory oversight over thetrust or with an order of a court of compe-tent jurisdiction directing the trustee totransfer to the insurance commissioner withregulatory oversight all the assets of thetrust fund.

(b) The assets shall be distributed by andclaims shall be filed with and valued by theinsurance commissioner with regulatoryoversight in accordance with the laws of the

state in which the trust is domiciled that areapplicable to the liquidation of domestic in-surance companies.

(c) If the insurance commissioner withregulatory oversight determines that the as-sets of the trust fund or any part thereof arenot necessary to satisfy the claims of theUnited States ceding insurers of the grantorof the trust, the assets or part thereof shallbe returned by the insurance commissioneraccording to the laws of that state and ac-cording to the terms of the trust agreementnot inconsistent with the laws of that state.

(d) The grantor shall waive any rightotherwise available to it under United Stateslaw that is inconsistent with this subsection.[1993 c.447 §65; 1995 c.99 §1; 2001 c.318 §15]

731.510 Criteria for allowing reductionfrom liability for reinsurance. (1) Subjectto the provisions of ORS 731.508 relating toallowance of credit for reinsurance, the Di-rector of the Department of Consumer andBusiness Services shall allow a reductionfrom liability for the reinsurance ceded by adomestic insurer to a reinsurer not meetingthe requirements of ORS 731.509 in anamount not exceeding the liabilities carriedby the ceding insurer, as provided in thissection. The reduction shall be in the amountof funds held by or on behalf of the cedinginsurer, including funds held in trust for theceding insurer, under a reinsurance contractwith the reinsurer as security for the pay-ment of obligations thereunder, if the secu-rity:

(a) Is held in the United States subjectto withdrawal solely by and under the exclu-sive control of the ceding insurer; or

(b) In the case of a trust, is held in aqualified United States financial institution.For purposes of this paragraph, a qualifiedUnited States financial institution is an in-stitution that:

(A) Is organized, or, in the case of aUnited States branch or agency office of aforeign banking organization, is licensed, un-der the laws of the United States or anystate thereof and has been granted authorityto operate with fiduciary powers; and

(B) Is regulated, supervised and examinedby federal or state authorities having regula-tory authority over banks and trust com-panies.

(2) The security for purposes of subsec-tion (1) of this section may be in any of thefollowing forms:

(a) Cash.(b) Securities listed by the Securities

Valuation Office of the National Associationof Insurance Commissioners and qualifyingas allowed assets.



(c) Clean, irrevocable, unconditional let-ters of credit, issued or confirmed by a qual-ified United States financial institution,effective not later than December 31 of theyear for which filing is being made, and inthe possession of, or in trust for, the cedingcompany on or before the filing date of itsannual statement. Letters of credit issued orconfirmed by an institution meeting applica-ble standards of issuer acceptability as of thedates of their issuance or confirmation shallcontinue to be acceptable as security, not-withstanding the subsequent failure of theissuing or confirming institution to meet ap-plicable standards of issuer acceptability,until their expiration, extension, renewal,modification or amendment, whichever oc-curs first. For purposes of this paragraph, aqualified United States financial institutionis an institution that:

(A) Is organized or, in the case of aUnited States office of a foreign banking or-ganization, is licensed, under the laws of theUnited States or any state thereof;

(B) Is regulated, supervised and examinedby United States federal or state authoritieshaving regulatory authority over banks andtrust companies; and

(C) Has been determined by the directorto meet such standards of financial conditionand standing as are considered necessary andappropriate to regulate the quality of finan-cial institutions whose letters of credit willbe acceptable to the director. For the pur-pose of making a determination under thissubparagraph, the director shall consider andmay accept determinations made by the Se-curities Valuation Office of the National As-sociation of Insurance Commissioners as towhether a financial institution meets itsstandards of financial conditions and stand-ing.

(d) Any other form of security acceptableto the director. [1993 c.447 §66; 2001 c.318 §16]

731.511 Criteria to be met by assuminginsurer in order to be accredited as rein-surer. (1) For purposes of allowing credit toa ceding domestic insurer under ORS 731.509when the reinsurance is ceded to an assum-ing insurer that is accredited as a reinsurerin this state, an insurer may be accreditedas a reinsurer in this state if the insurer:

(a) Files and maintains with the Directorof the Department of Consumer and BusinessServices evidence of its submission to thejurisdiction of this state;

(b) Submits to the authority of the direc-tor to examine its books and records;

(c) Is authorized or licensed to transactinsurance or reinsurance in at least onestate or, in the case of a United Statesbranch of an alien assuming insurer, is en-

tered through and authorized or licensed totransact insurance or reinsurance in at leastone state;

(d) Files annually with the director acopy of its annual statement filed with theinsurance department of its state of domicileand a copy of its most recent audited finan-cial statement; and

(e) Satisfies either of the following re-quirements:

(A) Maintains combined capital and sur-plus in an amount that is not less than$20,000,000. An application for accreditationby an insurer who maintains the amount ofcombined capital and surplus specified in thissubparagraph is considered to be approved ifthe application is not disapproved on or be-fore the 90th day after the application iscomplete and is filed with the director.

(B) Maintains combined capital and sur-plus in an amount less than $20,000,000. Aninsurer applying for accreditation who main-tains the amount of combined capital andsurplus specified in this subparagraph is notaccredited until the application for accredi-tation is approved by the director.

(2) An insurer that is accredited as a re-insurer in this state may accept reinsuranceonly of those risks and retain the riskthereon within such limits as the accreditedreinsurer is otherwise authorized to insuredirectly in a state in which the accreditedreinsurer is authorized or licensed to trans-act insurance.

(3) The director may revoke the accredi-tation of an assuming insurer if the directordetermines that the assuming insurer hasfailed to continue to meet any of the re-quirements of subsection (1) of this section.[1993 c.447 §67]

731.512 Withdrawal of insurer; rein-surance. (1) No insurer shall withdraw fromthis state until its direct liability to its pol-icyholders and obligees under all its insur-ance policies then in force in this state hasbeen assumed by another authorized insurerunder an agreement approved by the Direc-tor of the Department of Consumer andBusiness Services. In the case of a life in-surer, its liability pursuant to policies issuedin this state in settlement of proceeds underits policies shall likewise be so assumed.

(2) The director may waive this require-ment if the director finds upon examinationthat a withdrawing insurer then is fully sol-vent and that the protection to be given itspolicyholders in this state will not be im-paired by the waiver.

(3) The assuming insurer within a rea-sonable time shall replace the assumed in-surance policies with its own, or by


731.516 INSURANCE

indorsement thereon acknowledge its liabil-ity thereunder.

(4) This section is in addition to the re-quirements of ORS 732.517 to 732.546 and742.150 to 742.162. [1967 c.359 §105; 1995 c.30 §10]

731.516 Mortgage insurance limitation;waiver of limitation; rules; fees. (1) Asused in this section, “policyholders’position” means the aggregate amount ofmortgage insurance policies coveringamounts of insured obligations, divided bythe insurer’s surplus to policyholders as de-fined in ORS 731.504 (6).

(2) Except as provided in subsection (3)of this section, a mortgage insurer shall nothave outstanding at any time a policyholders’position greater than 25.

(3)(a) The Director of the Department ofConsumer and Business Services may waivethe requirement in subsection (2) of this sec-tion in response to the request of a mortgageinsurer if the director finds that the mort-gage insurer’s policyholders’ position is rea-sonable in relation to the mortgage insurer’saggregate insured risk and adequate to themortgage insurer’s financial needs.

(b) The request of the mortgage insurermust be made in writing at least 60 daysprior to the date the mortgage insurer ex-pects to exceed the policyholders’ positionallowed by subsection (2) of this section, andshall at a minimum address the factors setforth in subsection (4) of this section that thedirector may use in making a decision on thewaiver request.

(4) In determining whether a mortgageinsurer’s requested policyholders’ position isreasonable in relation to the mortgageinsurer’s aggregate insured risk and ade-quate to the mortgage insurer’s financialneeds, the director may consider the follow-ing factors:

(a) The size of the mortgage insurer asmeasured by its assets, capital and surplus,reserves, premium writings, insurance inforce and other appropriate criteria.

(b) The extent to which the mortgageinsurer’s business is diversified across time,geography, credit quality, origination anddistribution channels.

(c) The nature and extent of the mort-gage insurer’s reinsurance program.

(d) The quality, diversification andliquidity of the mortgage insurer’s assets andinvestment portfolio.

(e) The historical and projected trends inthe magnitude of the mortgage insurer’spolicyholders’ position.

(f) The policyholders’ position maintainedby other comparable mortgage insurers.

(g) The adequacy of the mortgageinsurer’s reserves.

(h) The quality and liquidity of invest-ments in affiliates of the mortgage insurer.The director may treat any such investmentas a nonadmitted asset for purposes of deter-mining the adequacy of the mortgageinsurer’s policyholders’ position.

(i) The quality of the mortgage insurer’searnings and the extent to which the re-ported earnings of the mortgage insurer in-clude extraordinary items.

(j) An independent actuary’s opinion asto the reasonableness and adequacy of themortgage insurer’s historical and projectedpolicyholders’ position.

(k) The capital contributions that havebeen invested or are available for future in-vestment in the mortgage insurer.

(L) The historical and projected trends inthe components of the mortgage insurer’saggregate insured risk including, but notlimited to, the quality and type of the risksincluded in the aggregate insured risk.

(m) Any other factors the director be-lieves are relevant in making a decision onthe request.

(5) The director may retain accountants,actuaries or other experts to assist the di-rector in the review of the mortgageinsurer’s request submitted under subsection(3) of this section.

(6) Any waiver granted by the directorunder subsection (3) of this section is:

(a) In effect for a specified period of time,not to exceed two years. The mortgage in-surer may request an extension of the waiverfor a period not exceeding two additionalyears, and the director shall review the ex-tension request based upon the factors setforth in subsection (4) of this section.

(b) Subject to any terms and conditionsthat the director considers necessary to re-store the mortgage insurer’s policyholders’position to 25 or lower as required by sub-section (2) of this section.

(7) The director may adopt rules to carryout the provisions of this section.

(8) The director shall charge a fee for awaiver request under this section designed toreimburse the Department of Consumer andBusiness Services for all costs incurred bythe department in reviewing the waiver re-quest. [1969 c.692 §5; 1977 c.600 §1; 2010 c.46 §1]



CAPITAL AND SURPLUS731.554 Capital and surplus require-

ments. (1) Except as provided in subsections(2) to (6) of this section and ORS 731.562 and731.566, to qualify for authority to transactinsurance in this state an insurer shall pos-sess and thereafter maintain capital or sur-plus, or any combination thereof, of not lessthan $2.5 million.

(2) An insurer transacting any workers’compensation insurance business shall pos-sess and thereafter maintain capital or sur-plus, or any combination thereof, of not lessthan $5 million.

(3) An insurer transacting mortgage in-surance shall possess and thereafter main-tain capital or surplus, or any combinationthereof, of not less than $4 million.

(4) A home protection insurer shall pos-sess and thereafter maintain capital or sur-plus, or any combination thereof, of not lessthan 10 percent of the aggregate of premiumscharged on its policies currently in force, butthe required amount shall not be less than$250,000 or more than $1 million.

(5) A domestic insurer applying for itsoriginal certificate of authority in this stateshall possess, when first so authorized, addi-tional capital or surplus, or any combinationthereof, of not less than $500,000. However,the additional amount in the case of a homeprotection insurer shall be not less than$10,000.

(6) For the protection of the public, theDirector of the Department of Consumer andBusiness Services may require an insurer topossess and maintain capital or surplus, orany combination thereof, in excess of theamount otherwise required under this sec-tion, ORS 731.562 or 731.566, owing to thetype, volume and nature of insurance busi-ness transacted by the insurer, if the directordetermines that the greater amount is neces-sary for maintaining the insurer’s solvencyaccording to standards established by rule. Indeveloping such standards, the director shallconsider model standards adopted by the Na-tional Association of Insurance Commission-ers. For the purpose of determining thereasonableness and adequacy of an insurer’scapital and surplus, the director must con-sider at least the following factors, as appli-cable:

(a) The size of the insurer, as measuredby its assets, capital and surplus, reserves,premium writings, insurance in force andother appropriate criteria.

(b) The extent to which the business ofthe insurer is diversified among the severallines of insurance.

(c) The number and size of risks insuredin each line of business.

(d) The extent of the geographicaldispersion of the insured risks of the insurer.

(e) The nature and extent of the reinsur-ance program of the insurer.

(f) The quality, diversification andliquidity of the investment portfolio of theinsurer.

(g) The recent past and projected futuretrend in the size of the investment portfolioof the insurer.

(h) The combined capital and surplusmaintained by other comparable insurers.

(i) The adequacy of the reserves of theinsurer.

(j) The quality and liquidity of invest-ments in affiliates. The director may treatany such investment as a disallowed asset forpurposes of determining the adequacy ofcombined capital and surplus whenever inthe judgment of the director the investmentso warrants.

(k) The quality of the earnings of the in-surer and the extent to which the reportedearnings include extraordinary items. [1967c.359 §106; 1969 c.335 §1; 1969 c.692 §6; 1981 c.247 §5; 1987c.483 §1; 1993 c.447 §9; 2001 c.318 §1]

731.558 [1967 c.359 §107; repealed by 1993 c.447 §122]

731.562 Title insurer capital and sur-plus requirements. To qualify for authorityto transact title insurance in this state, aninsurer shall possess and thereafter maintaincapital or surplus, or any combinationthereof, of not less than $2.5 million.[Formerly 748.010; 1987 c.483 §2; 2001 c.318 §2]

731.566 Reciprocal insurer surplus re-quirements. To qualify for authority totransact insurance in this state, a reciprocalinsurer shall possess and thereafter maintaina surplus of not less than $2.5 million, andany reciprocal insurer that exchanges poli-cies of insurance covering workers’ compen-sation insurance shall possess and thereaftermaintain a surplus of not less than $5million. [1967 c.359 §109; 1975 c.274 §1; 1977 c.651 §2;1987 c.483 §3; 1993 c.709 §3; 2001 c.318 §3]

731.568 [1993 c.709 §2; repealed by 2001 c.318 §4]

731.570 Withdrawing advancementsmade to reciprocal insurer. No advance-ment made by the subscribers or the attorneyof a reciprocal insurer shall be withdrawn orrefunded except out of the surplus of the in-surer in excess of its required capitalization,and then only upon the written consent ofthe Director of the Department of Consumerand Business Services. [1967 c.359 §110]

731.574 Annual financial statement. (1)Except as provided in subsection (4) of thissection, every authorized insurer shall filewith the Director of the Department of Con-sumer and Business Services, on or beforeMarch 1 of each year, a financial statement


731.590 INSURANCE

for the year ending December 31 immediatelypreceding. This statement shall be on a formprescribed by the director. The statementshall contain such detailed exhibit of thecondition and transactions of the insurer, insuch form and otherwise, as the directorprescribes. The director shall consider andmay prescribe the annual statement blank orother form established by the National Asso-ciation of Insurance Commissioners, includ-ing instructions prepared by the NationalAssociation of Insurance Commissioners forcompleting the blank or other form. If thedirector prescribes the blank or other formestablished by the National Association ofInsurance Commissioners, including the in-structions, an insurer submitting the annualstatement blank or form established by theNational Association of Insurance Commis-sioners must complete the blank or form ac-cording to the instructions. The director mayrequire the filing of information in additionto the information required in the annualstatement. The director may also require ad-ditional filings as the director determinesnecessary.

(2) The financial statement filed by aninsurer under subsection (1) of this sectionshall be verified by the oaths of the presidentand secretary of the insurer or, in their ab-sence, by two other principal officers. Thestatement of an alien company shall embraceonly its condition and transactions in theUnited States, unless the director requiresotherwise, and shall be verified by the oathof its resident manager or principal repre-sentatives in the United States. Facsimilesignatures are acceptable and shall have thesame force as original signatures.

(3) The director may grant an extensionof time for filing the annual statement.

(4) A home protection insurer may adopta fiscal year other than the calendar year forits financial statements filed with the direc-tor under subsection (1) of this section bydeclaring the fiscal year in its application fora certificate of authority. An adopted fiscalyear may not be changed without the con-sent of the insurance supervisory official ofthe insurer’s domicile. The financial state-ment of a home protection insurer on otherthan the calendar year basis shall be filedwith the director on or before the first dayof the third month which follows the end ofthe fiscal year.

(5) An insurer, subject to requirementsset forth in rules made by the director, maypublish financial statements, or informationbased on financial statements, prepared on abasis that is in accordance with require-ments of a competent authority and differsfrom the basis of the statements required tobe filed with the director.

(6) It is the intention of the LegislativeAssembly that the director consider and fol-low the accounting, reporting and otherstandards, practices and procedures estab-lished by the National Association of Insur-ance Commissioners in order to:

(a) Strengthen and improve regulation ofinsurer solvency by the Department of Con-sumer and Business Services;

(b) Promote uniform and consistent regu-lation of insurance by this state and theother states;

(c) Reduce regulatory costs owing to un-necessary differences in the laws of the vari-ous states; and

(d) Obtain and maintain accreditation ofthis state’s insurance regulatory program bythe National Association of Insurance Com-missioners. [Formerly 736.120; 1975 c.231 §1; 1981c.247 §6; 1993 c.447 §12]

REPORTS OF CRIMINAL CONDUCT731.590 “Insurer” defined for ORS

731.592 and 731.594. As used in ORS 731.592and 731.594, “insurer” includes, but is notlimited to:

(1) An insurer, as defined in ORS 731.106.(2) A health care service contractor, as

defined in ORS 750.005, including, but notlimited to, a health maintenance organiza-tion.

(3) A multiple employer welfare arrange-ment, as defined in ORS 750.301.

(4) A legal entity that is self-insured andprovides 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’ com-pensation risk.

(7) A fraternal benefit society, as de-scribed in ORS 748.106.

(8) An insurance producer, as defined inORS 731.104. [1999 c.633 §2; 2003 c.364 §73; 2007 c.241§25]

Note: 731.590 to 731.594 were added to and made apart of the Insurance Code by legislative action butwere not added to ORS chapter 731 or any seriestherein. See Preface to Oregon Revised Statutes forfurther explanation.

731.592 Reporting criminal conductinvolving insurance. (1) NotwithstandingORS 746.665, an insurer shall cooperate withany law enforcement agency or other stateor federal agency that is investigating orprosecuting suspected criminal conduct in-volving insurance. The insurer shall provideany information requested by the agency un-less the information is subject to a legalprivilege that would prohibit disclosure.



(2) If an insurer has reason to believethat criminal conduct involving insurancehas been, is being or is about to be commit-ted, the insurer shall notify the appropriateagency of that fact. The insurer is not re-quired to notify the agency if the informationor any part of the information upon whichthe belief is based is protected from disclo-sure by legal privilege.

(3) An insurer providing information un-der this section may request information re-lating to the investigation that is in thepossession or control of the agency. Theagency may not provide an insurer with in-formation that is privileged or confidential.Otherwise, the agency shall disclose re-quested information unless disclosure wouldjeopardize an ongoing investigation or prose-cution. The agency may require that the in-surer not disclose the information to anyother person.

(4) A person who has reason to believecriminal conduct involving insurance hasbeen, is being or is about to be committed,or who collects, reviews or analyzes infor-mation concerning suspected criminal con-duct involving insurance, may furnish anyunprivileged information in the person’s pos-session concerning the suspected criminalconduct to an insurer who requests the in-formation for the purpose of detecting, pros-ecuting or preventing criminal conductinvolving insurance.

(5) If an insurer or agency does not pro-vide information as required by this sectionand the suspected criminal conduct results ina conviction, the insurer or agency is not el-igible for any compensation to which the in-surer or agency might otherwise be entitledfrom any award under ORS 137.106. [1999 c.633§3]

Note: See note under 731.590.

731.594 Immunity from civil liability.Unless it is shown that the person, includingan insurer, acted with actual malice, a per-son who discloses or provides informationunder ORS 731.592 has immunity from anycivil liability that might otherwise be in-curred or imposed with respect to the disclo-sure or provision of the information. Aperson has the same immunity with respectto participating in any judicial proceedingresulting from the disclosure or provision ofinformation. [1999 c.633 §4]

Note: See note under 731.590.

DEPOSITS731.604 Acceptance of deposits of in-

surers. The following deposits of insurersshall be accepted and held by the Depart-ment of Consumer and Business Services forthe purposes for which such deposits are

made and are subject to the applicable pro-visions of the Insurance Code:

(1) Deposits required or permitted underthe Insurance Code.

(2) Deposits of domestic insurers madepursuant to the laws of other jurisdictions.[1967 c.359 §112; 1999 c.196 §2]

731.608 Purpose of deposit. (1) Exceptas provided in subsection (2) of this section,deposits made in this state under ORS731.624 shall be held for the faithful per-formance by the insurer of all insurance ob-ligations, including claims for unearnedpremiums, with respect to domestic riskspertaining to the particular class of insur-ance for which the deposit was made. How-ever, there shall be excluded from each suchobligation the same amount as is excluded indetermining the obligation of the Oregon In-surance Guaranty Association under ORS734.510 to 734.710.

(2) If at any time a deposit made underORS 731.624 by a particular insurer is insuf-ficient to perform the insurance obligationsupon the faithful performance of which thedeposit was conditioned, then any other de-posit made under ORS 731.624 by that in-surer shall be so used to the extent that suchother deposit is not used to perform the in-surance obligations upon the faithful per-formance of which such other deposit wasconditioned.

(3) Deposits made by insurers and rein-surers in this state under ORS 731.628 shallbe held for the payment of compensationbenefits to workers employed by insured em-ployers other than those insured with theState Accident Insurance Fund Corporationto whom the insurer has issued a workers’compensation insurance policy under ORSchapter 656. Deposits made by insurers andreinsurers under ORS 731.628 also shall beheld to reimburse the Department of Con-sumer and Business Services, subject to ap-proval by the Director of the Department ofConsumer and Business Services, for costsincurred by the department in processingworkers’ compensation claims of insurerswhich have been placed in liquidation, re-ceivership, rehabilitation or other such sta-tus for the orderly conservation ordistribution of assets, pursuant to the lawsof this state or any other state.

(4) A deposit made in this state by a do-mestic insurer transacting insurance in an-other jurisdiction, and as required by thelaws of such jurisdiction, shall be held forthe purpose or purposes required by suchlaws.

(5) Deposits of foreign and alien insurersrequired pursuant to ORS 731.854 shall beheld for such purposes as are required by


731.612 INSURANCE

such law, and as specified by the director’sorder by which the deposit is required.

(6) Deposits of domestic reciprocal in-surers required pursuant to ORS 731.632shall be held for the benefit of subscriberswherever 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]

731.612 Rights of insurer regardingdeposits. While the insurer remains unim-paired and is in compliance with the Insur-ance Code it may:

(1) Demand, receive, sue for and recoverthe income from the assets deposited;

(2) Exchange and substitute for the de-posited assets, or any part thereof, other eli-gible assets of equivalent or greater value;and

(3) At any reasonable time inspect suchdeposit. [1967 c.359 §114]

731.616 Valuation of deposits; defi-ciencies. (1) For the purpose of determiningthe sufficiency of its deposit in this state theassets of the insurer on deposit shall be val-ued at current market value.

(2) If assets deposited by an insurer aresubject to material fluctuations in marketvalue, the Director of the Department ofConsumer and Business Services, in the dis-cretion of the director, may require the in-surer to deposit and maintain on depositadditional assets in such amount as reason-ably is necessary to assure that the depositat all times will have a market value of notless than the amount specified under or pur-suant to the law by which the deposit is re-quired.

(3) If for any reason the current marketvalue of such assets falls below the amountof deposit required of the insurer, the insurershall promptly deposit other or additionalassets eligible for deposit in an amount suf-ficient to cure the deficiency. The insurerhas 30 days in which to cure the deficiencyafter notice thereof from the director. [1967c.359 §115]

731.620 Assignment of deposited secu-rities. (1) The insurer shall assign in trustto the Director of the Department of Con-sumer and Business Services and successorsin office all securities being depositedthrough the director under the InsuranceCode that are not negotiable by delivery; or,in lieu of such assignment, the insurer maygive the director an irrevocable power of at-torney authorizing the director to transferthe securities or any part thereof for anypurpose within the scope of the InsuranceCode.

(2) Upon release to the insurer, or otherperson entitled thereto, of any such security

the director shall reassign the security tosuch insurer or person; or, in the case ofpower of attorney given pursuant to subsec-tion (1) of this section, the director shall de-liver the power of attorney, together withthe securities covered thereby, to the insureror person entitled thereto. [1967 c.359 §116; 1979c.870 §3; 1987 c.158 §154]

731.624 Special deposits; foreign andalien insurers. Every insurer, before trans-acting insurance in this state, shall make thefollowing deposits with the Department ofConsumer and Business Services:

(1) Foreign or alien insurers transactingsurety insurance in this state, $250,000.

(2) Foreign or alien insurers transactingtitle insurance in this state, $100,000.

(3) Foreign or alien insurers transactinghome protection insurance in this state,$100,000.

(4) Foreign or alien insurers transactingmortgage guaranty insurance in this state,$500,000. [1967 c.359 §117; 1981 c.247 §7; 1987 c.483§4; 1999 c.196 §3]

731.628 Deposit required of workers’compensation insurers. (1) In addition toany other requirement therefor under theInsurance Code, each insurer other than theState Accident Insurance Fund Corporationthat issues workers’ compensation insurancepolicies to employers under ORS chapter 656shall deposit with the Department of Con-sumer and Business Services an amount thatis the greater of the following amounts:

(a) $100,000.(b) An amount equal to the sum de-

scribed in this paragraph less credits for ap-proved reinsurance that the insurer may takeunder subsection (2) of this section. The sumunder this paragraph is the sum of the fol-lowing, computed as of December 31 nextpreceding in respect to workers’ compensa-tion insurance policies written subject toORS chapter 656:

(A) The aggregate of the present valuesat four percent interest of the determinedand estimated future loss and loss-expensepayments upon claims incurred more thanthree years next preceding the date of com-putation.

(B) The aggregate of the amounts com-puted under this subparagraph for each ofthe three years next preceding the date ofcomputation. The amount for each year shallbe 65 percent of the earned premiums for theyear less all loss and loss-expense paymentsmade upon claims incurred in the corre-sponding year, except that the amount forany year shall not be less than the presentvalue at four percent interest of the deter-mined and estimated future loss and loss-



expense payments upon claims incurred inthat year.

(2) Before an insurer may take a creditfor reinsurance under subsection (1)(b) ofthis section, the reinsurer must deposit withthe department an amount equal to thecredit to be taken.

(3) An insurer may be allowed the creditreferred to in subsection (1)(b) of this sectiononly when the reinsurer has deposited withthe department an amount equal to thecredit. [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]

731.632 Deposit required of domesticreciprocal insurers; exception. Every do-mestic reciprocal insurer shall deposit withthe Department of Consumer and BusinessServices $50,000, except such an insurerwhich exchanges policies of insurance cover-ing only wet marine hull insurance for per-sons whose earned income, in whole or inpart, is derived from taking and selling foodresources living in an ocean, bay or river.[1967 c.359 §119; 1977 c.651 §3; 1993 c.709 §5; 1999 c.196§5]

731.636 Deposit or trusteed assets ofalien insurer required. (1) Except as pro-vided in subsection (3) of this section, everyalien insurer, before transacting insurance inthis state as an authorized insurer, shall de-posit with the Department of Consumer andBusiness Services the sum of the followingamounts:

(a) The amount of its outstanding liabil-ities arising out of its insurance transactionsin 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 Di-rector of the Department of Consumer andBusiness Services that it maintains in theUnited States, by way of trust deposits withpublic depositories or with trust institutionsacceptable to the director, assets at leastequal to the deposit otherwise required bythis section. [1967 c.359 §120; 1999 c.196 §6]

731.640 Eligible deposits; rules. (1) De-posits which are required or permitted underthe Insurance Code shall consist only of thefollowing:

(a) Cash.(b) Amply secured obligations of the

United States, a state or a political subdivi-sion thereof.

(c) Certificates of deposit or other in-vestments described in ORS 733.650 (4). TheDirector of the Department of Consumer and

Business Services may promulgate rules tolimit such investments.

(d) A surety bond, approved by the direc-tor, executed by an authorized surety insurerthat is not under common ownership, man-agement or control with the person makingthe deposit. This paragraph does not apply todeposits made by surety insurers or toworkers’ compensation deposits made underORS 731.628.

(e) Amply secured obligations of a corpo-ration rated by the National Association ofInsurance Commissioners as Class 1. Thisparagraph applies only to that portion of thetotal deposit that exceeds $50 million. Thedirector may adopt rules to require periodicreview of the secured obligations of a corpo-ration allowed under this paragraph.

(2) Deposits of domestic insurers madepursuant to the laws of other jurisdictionsshall consist of cash or securities as requiredor permitted by the laws of such jurisdic-tions. [1967 c.359 §121; 1973 c.450 §1; 1981 c.854 §61;1999 c.196 §6a; 2003 c.123 §1]

731.642 Contracts for security depos-its. The Director of the Department of Con-sumer and Business Services, in performingduties under ORS 731.604 to 731.652 and af-ter consultation with the State Treasurer,may enter into contracts with banks quali-fied to act as trust companies and as deposi-tories of state funds to hold and servicesecurities deposited by insurers with the De-partment of Consumer and Business Services.The insurers whose securities are held andserviced by the banks shall pay for the costof such contracts. [1969 c.143 §2; 1999 c.196 §7; 2001c.104 §288]

731.644 Payment of losses out of de-posits, generally. (1) Except as otherwiseprovided in the Insurance Code, no judgmentcreditor or other claimant of an insurer shallhave the right to levy upon any of the assetsor securities of the insurer held on depositin this state.

(2) As to deposits made in this state pur-suant to ORS 731.854, levy thereupon shallbe permitted only if expressly so provided inthe order of the Director of the Departmentof Consumer and Business Services underwhich the deposit is required. [1967 c.359 §122]

731.648 Duration and release of de-posit. (1) Every deposit made in this stateby an insurer pursuant to the InsuranceCode shall be so held as long as there isoutstanding any liability of the insurer as towhich the deposit was required, except asfollows:

(a) If the deposit was required under ORS731.854, the deposit shall be held for so longas the basis of such retaliation exists.


731.652 INSURANCE

(b) If the deposit was required of a rein-surer under ORS 731.628, the deposit shallbe held as long as there is outstanding anyliability of the reinsurer with respect towhich the deposit was made.

(2) No surety insurer shall be permittedto withdraw its deposit for a period of threeyears after discontinuing business within thisstate.

(3) The Director of the Department ofConsumer and Business Services shall re-lease a deposit:

(a) To the insurer upon extinguishmentby reinsurance or otherwise of all liabilityof the insurer for the security of which thedeposit is held. If extinguishment is by rein-surance, the assuming insurer shall be oneauthorized to transact such insurance in thisstate.

(b) To the insurer, while unimpaired, tothe extent such deposit is in excess of theamount required.

(c) To the surviving corporation or tosuch person as it may designate for the pur-pose, upon effectuation of a merger of thedepositing insurer, if the surviving insurer isauthorized to transact insurance in thisstate.

(4) The director shall release a deposit byan insurer upon order of a court of compe-tent jurisdiction, to the receiver, conserva-tor, rehabilitator, or liquidator of theinsurer, or to any other properly designatedofficial or officials who succeed to the man-agement and control of the insurer’s assetspursuant to delinquency proceedings broughtagainst the insurer. The director shall re-lease a deposit by a reinsurer under ORS731.628 upon order of a court of competentjurisdiction, to the receiver, conservator,rehabilitator, or liquidator of the ceding in-surer, or to any other properly designatedofficial or officials who succeed to the man-agement and control of the insurer’s assetspursuant to delinquency proceedings broughtagainst the ceding insurer. [1967 c.359 §123; 1989c.700 §4; 1993 c.447 §106; 1999 c.196 §8]

731.652 Proofs for release of deposit toinsurers; director’s responsibility. (1) Be-fore releasing any deposit or portion thereofto the insurer, as provided in ORS 731.648,the Director of the Department of Consumerand Business Services shall require the in-surer to file with the director a writtenstatement in such form and with such verifi-cation as the director deems advisable set-ting forth the facts upon which it bases itsentitlement to such release.

(2) If release of the deposit is claimed bythe insurer upon the ground that all its li-abilities, as to which the deposit was held,have been assumed by another insurer au-

thorized to transact insurance in this state,the insurer shall file with the director a copyof the contract or agreement of such rein-surance duly attested under the oath of anofficer of each of the insurers that are par-ties thereto.

(3) If release of the deposit is claimed bya domestic insurer upon the ground that allits liabilities, as to which the deposit washeld, have been terminated other than by re-insurance, the director shall make an exam-ination of the affairs of the insurer fordetermination of the actuality of such termi-nation.

(4) Upon being satisfied by such state-ment and reinsurance contract, or examina-tion of the insurer if required undersubsection (3) of this section, or by suchother examination of the affairs of the in-surer as the director deems advisable tomake, that the insurer is entitled to the re-lease of its deposit or portion thereof as pro-vided in ORS 731.648, the director shallrelease the deposit or excess portion thereofto the insurer or its authorized represen-tative.

(5) If the director willfully fails faithfullyto keep, deposit, account for or surrenderany such assets or securities depositedthrough the director in the manner as au-thorized or required under the InsuranceCode, the director shall be liable thereforupon the director’s official bond, and suitmay be brought upon the bond by any personinjured by such failure. The director shallnot, however, have any liability as to anyassets or securities of an insurer released bythe director in good faith pursuant to theauthority vested in the director under theInsurance Code. [1967 c.359 §124; 1999 c.196 §9]

731.704 [Formerly 128.820; 1971 c.425 §2; 1975 c.699§1; 1983 c.740 §253; 1989 c.326 §1; 1989 c.413 §4; 1991 c.189§1; 1991 c.190 §1; 1993 c.53 §1; 1997 c.735 §1; repealed by2005 c.31 §4]

731.708 [Formerly 128.830; 1995 c.639 §2a; repealedby 2005 c.31 §4]

731.712 [1967 c.359 §127; 1971 c.425 §3; 1989 c.784 §15;repealed by 2005 c.31 §4]

731.716 [Formerly 128.850; 1971 c.425 §4; repealed by2005 c.31 §4]

731.720 [Formerly 128.860; 1971 c.425 §5; 1993 c.377§2; 1995 c.639 §2; 1997 c.131 §2; repealed by 2005 c.31 §4]

731.724 [Formerly 128.880; 1971 c.425 §6; repealed by2005 c.31 §4]

EXCHANGE OF INFORMATION BY REGULATORS

731.730 Insurer filings with NationalAssociation of Insurance Commissioners.(1) Every authorized insurer shall file withthe National Association of Insurance Com-missioners, on or before March 1 of eachyear, a copy of its annual statement blank,along with additional filings required by the



Director of the Department of Consumer andBusiness Services for the preceding year. Theinformation filed with the National Associ-ation of Insurance Commissioners must be inthe same format and scope as that requiredby the director and must include the signedjurat page and the actuarial certification.Each amendment and each addendum to theannual statement filing subsequently filedwith the director must also be filed with theNational Association of Insurance Commis-sioners.

(2) A foreign insurer that is domiciled ina state having a law substantially similar tothe provisions of subsection (1) of this sec-tion is considered to be in compliance withthis section.

(3) An insurer making a filing undersubsection (1) of this section must pay theNational Association of Insurance Commis-sioners the fee established by the NationalAssociation of Insurance Commissioners forfiling, reviewing or processing the informa-tion. [1993 c.447 §100]

731.731 Immunity for certain personsdealing with information collected fromfilings under ORS 731.730. Except in thecase of malfeasance in office or willful orwanton neglect of duty or authority, thereshall be no liability on the part of, and nocause of action of any nature shall ariseagainst, any of the following persons by vir-tue of their collection, review, analysis ordissemination of the data and informationcollected from the filings required by ORS731.730:

(1) Members of the National Associationof Insurance Commissioners and the deleg-ates and authorized committees, subcommit-tees and task forces of the NationalAssociation of Insurance Commissioners.

(2) Employees of the National Associ-ation of Insurance Commissioners.

(3) The Director of the Department ofConsumer and Business Services or any rep-resentative of the director.

(4) The insurance regulatory official ofanother state or any representative of suchan official. [1993 c.447 §101]

731.735 Certain information confiden-tial. All financial analysis ratios and exam-ination synopses concerning insurers thatare submitted to the Director of the Depart-ment of Consumer and Business Services bythe Insurance Regulatory Information Sys-tem of the National Association of InsuranceCommissioners are confidential as providedin ORS 705.137. [1993 c.447 §102; 2001 c.377 §6]

731.737 Immunity from liability forcertain persons filing reports or furnish-ing information about specified activitiesto specified persons. (1) A person or otherentity described in this subsection actingwithout malice, fraudulent intent or badfaith is not subject to civil liability, and nocause of action of any nature may existagainst such a person or entity, when theperson is performing authorized functions,including publication or dissemination of in-formation, regarding any activity describedin subsection (3) of this section. This subsec-tion applies to the following persons and en-tities:

(a) Law enforcement officials and theiragents and employees.

(b) The National Association of Insur-ance Commissioners, the Department ofConsumer and Business Services, a federalor state governmental agency established todetect and prevent activities described insubsection (3) of this section and any otherorganization established for the same pur-pose, and agents, employees or designees ofany such person or entity.

(2) A person acting without malice,fraudulent intent or bad faith is not subjectto liability by virtue of filing reports or fur-nishing information regarding any activitydescribed in subsection (3) of this sectionwith or to any person or other entity de-scribed in subsection (1) of this section.

(3) The activities referred to in subsec-tions (1) and (2) of this section include butare not limited to the following, whether anyactivity is suspected or anticipated or hasoccurred:

(a) Acts or omissions by a person whopresents a statement described in this para-graph to or by an insurer or an insuranceproducer, causes such a statement to be pre-sented to or by an insurer or an insuranceproducer, or prepares such a statement withknowledge or belief that it will be presentedto or by an insurer or an insurance producer.This paragraph applies to any statement thatthe person knows to contain false informa-tion as part of, in support of or concerningany fact relating to the following, or con-ceals relevant information relating to thefollowing:

(A) An application for the issuance ofinsurance.

(B) The rating of insurance.(C) A claim for payment or benefit pur-

suant to any insurance.(D) Premiums paid on insurance.(E) Payments made in accordance with

the terms of insurance coverage.


731.750 INSURANCE

(F) An application for a certificate of au-thority.

(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 insol-vent insurer or other person subject to regu-lation under the Insurance Code.

(c) Removal or an attempt to remove as-sets or any record of assets, transactions andaffairs from the home office or other placeof business of the insurer or other personsubject to regulation under the InsuranceCode, or from the place of safekeeping ofsuch a person, or who conceals or attemptsto conceal the assets or record from the Di-rector of the Department of Consumer andBusiness Services.

(d) Diversion, an attempt to divert or aconspiracy to divert funds of an insurer orother person subject to regulation under theInsurance Code, or of any other person, inconnection with:

(A) The transaction of insurance.(B) The conduct of business activities by

an insurer or other person subject to regu-lation under the Insurance Code.

(C) The formation, acquisition or dissol-ution of an insurer or other person subjectto regulation under the Insurance Code.

(4) This section does not abrogate ormodify in any way any common law or stat-utory privilege or immunity otherwise en-joyed by a person or entity made immunefrom liability under this section.

(5) The court may award reasonable at-torney fees to the prevailing party in anytort action against a person who claims im-munity under the provisions of this section.[1993 c.447 §103; 1995 c.618 §128; 2003 c.364 §74]

731.740 [1995 c.638 §5a; repealed by 2001 c.377 §59]

CONFIDENTIALITY OF REPORTS731.750 Confidentiality of report of

material acquisitions or dispositions ofassets, material nonrenewals, cancella-tions and revisions of ceded reinsuranceagreements. (1) A report filed with the Di-rector of the Department of Consumer andBusiness Services according to requirementsestablished by rule for disclosure of materialacquisitions or dispositions of assets and dis-closure of material nonrenewals, cancella-tions and revisions of ceded reinsuranceagreements shall be confidential as providedin ORS 705.137.

(2) The director may direct the insurer tofurnish copies of a report described in sub-section (1) of this section to the NationalAssociation of Insurance Commissioners.

(3) The director may disclose or use areport as considered necessary by the direc-tor in the administration of the InsuranceCode or other law.

(4) Information contained in documentsdescribed in subsections (1) to (3) of thissection that is also contained in financialstatements of insurers filed under ORS731.574 or in final examination reports filedunder ORS 731.312 is not confidential underthis section. [1995 c.638 §3; 2001 c.377 §7]

731.752 Confidentiality of report usedfor determination of required amount ofcapital or surplus; confidentiality of fi-nancial plan of action and report of ex-amination connected with plan. (1) Areport filed with the Director of the Depart-ment of Consumer and Business Services ac-cording to requirements established by rulefor the purpose of determining the amountof capital or surplus, or any combinationthereof, that should be possessed and main-tained by an insurer under ORS 731.554 orby a health care service contractor underORS 750.045, or under the laws of anotherstate establishing similar requirements, shallbe confidential and shall not be disclosed ex-cept as provided in ORS 705.137.

(2) A financial plan of action stating cor-rective actions to be taken by an insurer orhealth care service contractor in response toa determination of inadequate capital or sur-plus, or any combination thereof, that is filedby the insurer or health care service con-tractor with the director according to re-quirements established by rule shall beconfidential and shall not be disclosed exceptas provided in ORS 705.137.

(3) The results or report of any examina-tion or analysis of an insurer or health careservice contractor performed by the directorin connection with a financial plan describedin subsection (2) of this section and any cor-rective order issued by the director pursuantto such an examination or analysis shall beconfidential and shall not be disclosed exceptas provided in ORS 705.137.

(4) Information contained in documentsdescribed in subsections (1) to (3) of thissection that is also contained in financialstatements of insurers or health care servicecontractors filed under ORS 731.574 or infinal examination reports filed under ORS731.312 is not confidential under this section.[1995 c.638 §4; 2001 c.318 §19; 2001 c.377 §8]

731.754 Permissible uses of reportsand plans described in ORS 731.752. (1)The Director of the Department of Consumerand Business Services may use the followingonly for the purpose of monitoring thesolvency of insurers and health care servicecontractors and the need for possible correc-



tive action with respect to insurers andhealth care service contractors:

(a) Reports and financial plans of actionthat are made confidential under ORS731.752; and

(b) Instructions adopted and amended bythe National Association of Insurance Com-missioners for use by insurers and healthcare service contractors in preparing reportsand financial plans of action referred to inparagraph (a) of this subsection.

(2) The director may not use reports, fi-nancial plans of action and instructions re-ferred to in subsection (1) of this section forratemaking, for reviewing rate filings or ina rate proceeding related thereto, or to cal-culate or derive any elements of an appro-priate premium level or rate of return forany line of insurance that an insurer, ahealth care service contractor or an affiliateis authorized to transact. Such reports andfinancial plans of action also shall not be in-troduced as evidence in a rate proceeding.

(3) This section does not restrict the au-thority of the director to use information in-cluded in reports, financial plans orinstructions referred to in subsection (1) ofthis section that is available from othersources. [1995 c.638 §5; 2001 c.318 §20]

INSURANCE COMPLIANCE AUDITREPORTS

731.760 Definitions for ORS 731.760 to731.770. As used in ORS 731.760 to 731.770:

(1) “Insurance compliance audit” meansa voluntary internal evaluation, review, as-sessment, audit or investigation that isundertaken to identify or prevent noncompli-ance with, or promote compliance with, laws,regulations, orders or industry or profes-sional standards, and that is conducted by oron behalf of an insurer regulated under theInsurance Code.

(2) “Insurance compliance self-evaluativeaudit document” means a document preparedas a result of or in connection with an in-surance compliance audit. “Insurance com-pliance self-evaluative audit document”includes, but is not limited to:

(a) A written response to the findings ofan insurance compliance audit.

(b) Field notes and records of observa-tions, findings, opinions, suggestions, conclu-sions, drafts, memoranda, drawings,photographs, exhibits, computer-generated orelectronically recorded information, phonerecords, maps, charts, graphs and surveys,provided this supporting information is col-lected or developed solely for the purpose ofan insurance compliance audit.

(c) An insurance compliance audit reportprepared by an auditor, who may be an em-ployee of the insurer or an independent con-tractor, which may include the scope of theaudit, the information gained in the auditand conclusions and recommendations, withexhibits and appendices.

(d) Memoranda and documents analyzingportions or all of the insurance complianceaudit report and discussing potential imple-mentation issues.

(e) An implementation plan that ad-dresses correcting past noncompliance, im-proving current compliance and preventingfuture noncompliance.

(f) Analytic data generated in the courseof conducting the insurance compliance au-dit, not including any analytic data that ex-ists independently of the audit or existedbefore the audit was conducted. [2001 c.329 §2]

731.761 Privileged information. (1) Ex-cept as provided in ORS 731.760 to 731.770,an insurance compliance self-evaluative auditdocument is privileged information and is notdiscoverable, or admissible as evidence, inany civil, criminal or administrative pro-ceeding.

(2) Except as provided in ORS 731.760 to731.770, any person who performs or directsthe performance of an insurance complianceaudit, any officer, employee or agent of aninsurer who is involved with an insurancecompliance audit and any consultant who ishired for the purpose of performing an in-surance compliance audit may not be exam-ined in any civil, criminal or administrativeproceeding about the insurance complianceaudit or any insurance compliance self-evaluative audit document. [2001 c.329 §3]

731.762 Authority of director. (1) ORS731.761 does not limit the authority of theDirector of the Department of Consumer andBusiness Services to acquire any insurancecompliance self-evaluative audit document orto examine any person in connection withthe document. If the director determines thatthe actions of an insurer are egregious, thedirector may introduce and use the documentin any administrative proceeding or civil ac-tion under the Insurance Code. The directormay require that an insurer submit an in-surance compliance self-evaluative audit doc-ument for the purpose of an examination orinvestigation conducted under this chapter.An insurer may also voluntarily submit aninsurance compliance self-evaluative auditdocument to the director.

(2) Any insurance compliance self-evaluative audit document submitted to thedirector under this section and in the pos-session of the director remains the property


731.764 INSURANCE

of the insurer and is not subject to disclosureor production under ORS 192.410 to 192.505.

(3)(a) The director shall consider thecorrective action taken by an insurer toeliminate problems identified in the insur-ance compliance self-evaluative audit docu-ment as a mitigating factor whendetermining a civil penalty or other actionagainst the insurer.

(b) The director may, in the director’ssole discretion, decline to impose a civilpenalty or take other action against an in-surer based on information obtained from aninsurance compliance self-evaluative auditdocument if the insurer has taken reasonablecorrective action to eliminate the problemsidentified in the document.

(4) Disclosure of an insurance complianceself-evaluative audit document to a govern-mental agency, whether voluntarily or pur-suant to compulsion of law, does notconstitute a waiver of the privilege set forthin ORS 731.761 for any other purpose.

(5) The director may not be compelled toproduce an insurance compliance self-evaluative audit document. [2001 c.329 §4]

731.764 Waiver of privilege; permitteddisclosures. (1) The privilege set forth inORS 731.761 does not apply to the extentthat the privilege is expressly waived by theinsurer that prepared or caused to be pre-pared the insurance compliance self-evaluative audit document.

(2) The privilege set forth in ORS 731.761does not apply in any civil, criminal or ad-ministrative proceeding commenced by theAttorney General relating to Medicaid fraud,without regard to whether the proceeding isbrought on behalf of the state, a state agencyor a federal agency. An insurer may requestan in camera review of any document orother evidence to be released or used underthis subsection and may request that appro-priate protective orders be entered governingrelease and use of the material.

(3) In any civil proceeding a court of re-cord may, after an in camera review, requiredisclosure of material for which the privilegeset forth in ORS 731.761 is asserted if thecourt determines that the material is notsubject to the privilege, or that the privilegeis asserted for a fraudulent purpose, includ-ing but not limited to an assertion of theprivilege for an insurance compliance auditthat was conducted for the purpose of con-cealing a violation of any federal, state orlocal law or rule. Nothing in this subsectionshall be construed to limit the authority ofthe Director of the Department of Consumerand Business Services to acquire, examineand use insurance compliance self-evaluativeaudit documents under ORS 731.762.

(4) In a criminal proceeding, a court ofrecord may, after an in camera review, re-quire disclosure of material for which theprivilege set forth in ORS 731.761 is assertedif the court determines that:

(a) The privilege is asserted for a fraudu-lent purpose, including but not limited to anassertion of the privilege for an insurancecompliance audit that was conducted for thepurpose of concealing a violation of any fed-eral, state or local law or rule;

(b) The material is not subject to theprivilege; or

(c) The material contains evidence rele-vant to commission of a criminal offense,and:

(A) A district attorney or the AttorneyGeneral has a compelling need for the infor-mation;

(B) The information is not otherwiseavailable; or

(C) The district attorney or AttorneyGeneral is unable to obtain the substantialequivalent of the information by any othermeans without incurring unreasonable costand delay. [2001 c.329 §5]

731.766 Petition for in camera hearing;hearing; compelled disclosure. (1) Within30 days after a district attorney or the At-torney General serves on an insurer a writ-ten request by certified mail for disclosureof an insurance compliance self-evaluativeaudit document, the insurer that prepared orcaused the document to be prepared may filein circuit court a petition requesting an incamera hearing on whether the insurancecompliance self-evaluative audit document orportions of the document are privileged un-der ORS 731.761 or subject to disclosure.Failure by the insurer to file a petitionwaives the privilege only with respect to thespecific request.

(2) A petition filed by an insurer underthis section must contain the following in-formation:

(a) The date of the insurance complianceself-evaluative audit document.

(b) The identity of the person that con-ducted the audit.

(c) The general nature of the activitiescovered by the insurance compliance audit.

(d) An identification of the portions ofthe insurance compliance self-evaluative au-dit document for which the privilege is beingasserted.

(3) Within 45 days after the filing of apetition by an insurer under this section, thecourt shall schedule an in camera hearing todetermine whether the insurance complianceself-evaluative audit document or portions of



the document are privileged under ORS731.761.

(4) The court, after an in camera reviewpursuant to this section, may require disclo-sure of material for which the privilege es-tablished by ORS 731.761 is asserted if thecourt determines that any of the conditionsset forth in ORS 731.764 are met. Uponmaking such a determination, the court maycompel the disclosure of only those portionsof an insurance compliance self-evaluativeaudit document relevant to issues in disputein the underlying proceeding. Any disclosurethat is compelled by the court will not beconsidered to be a public document or bedeemed to be a waiver of the privilege forany other civil, criminal or administrativeproceeding. A party unsuccessfully opposingdisclosure may apply to the court for an ap-propriate order protecting the document fromfurther disclosure.

(5) An insurer asserting the privilege es-tablished under ORS 731.761 has the burdenof establishing that the privilege applies. Ifthe insurer establishes that the privilege ap-plies, a party seeking disclosure under ORS731.764 has the burden of proving the ele-ments set forth in ORS 731.764. [2001 c.329 §6]

731.768 Privilege; exceptions. The priv-ilege established under ORS 731.761 does notapply to any of the following:

(1) Documents, communications, data, re-ports or other information expressly requiredto be collected, developed, maintained or re-ported to a regulatory agency under the In-surance Code or other state or federal law;

(2) Information obtained by observationor monitoring by any regulatory agency; or

(3) Information obtained from a sourceother than the insurance compliance audit.[2001 c.329 §7]

731.770 Other privileges or limitationspertaining to audit document. Nothing inORS 731.760 to 731.770, or in the release ofany insurance compliance self-evaluative au-dit document under ORS 731.760 to 731.770,shall limit, waive or abrogate the scope ornature of any statutory or common law priv-ilege or other limitation on admissibility ofevidence including, but not limited to, thework product doctrine, the lawyer-clientprivilege under ORS 40.225 or the subsequentremedial measures exclusion provided byORS 40.185. [2001 c.329 §8]

ASSESSMENTS, FEES AND TAXES731.804 Assessments; rules; fees; how

determined. (1) Except as otherwise pro-vided in this section, each authorized insurerdoing business in this state shall pay assess-ments that the Director of the Departmentof Consumer and Business Services deter-

mines are necessary to support thelegislatively authorized budget of the De-partment of Consumer and Business Serviceswith respect to functions of the departmentunder the Insurance Code. The directorshall determine the assessments according toone or more percentage rates established bythe director by rule. The director shall spec-ify in the rule when assessments shall bemade and payments shall be due. Thepremium-weighted average of the percentagerates may not exceed nine-hundredths of onepercent of the gross amount of premiums re-ceived by an insurer or the insurer’s insur-ance producers from and under the insurer’spolicies covering direct domestic risks, afterdeducting the amount of return premiumspaid and the amount of dividend paymentsmade to policyholders with respect to suchpolicies. In the case of reciprocal insurers,the amount of savings paid or credited to theaccounts of subscribers shall be deductedfrom the gross amount of premiums. In es-tablishing the percentage rate or rates, thedirector shall use the most recent premiumdata approved by the director. In establishingthe amounts to be collected under this sub-section, the director shall take into consid-eration the expenses of the department foradministering the Insurance Code and thefees collected under subsection (2) of thissection. When the director establishes twoor more percentage rates:

(a) Each rate shall be based on such ex-penses of the department ascribed by the di-rector to the line of insurance for which therate is established.

(b) Each rate shall be applied to thegross amount of premium received by an in-surer or its insurance producers for the ap-plicable line of insurance as provided in thissubsection.

(2) The director may collect fees for spe-cific services provided by the departmentunder the Insurance Code according to aschedule of fees established by the directorby rule. The director may collect such feesin advance. In establishing the schedule forfees, the director shall take into consider-ation the cost of each service for which a feeis imposed.

(3) Establishment and amendment of theschedule of fees under subsection (2) of thissection are subject to prior approval of theOregon Department of Administrative Ser-vices and a report to the Emergency Boardprior to adopting the fees and shall be withinthe budget authorized by the Legislative As-sembly as that budget may be modified bythe Emergency Board.

(4) The director may not collect an as-sessment under subsection (1) of this sectionfrom any of the following persons:


731.808 INSURANCE

(a) A fraternal benefit society complyingwith ORS chapter 748.

(b) Any person or class of persons desig-nated by the director by rule.

(5) The director may not collect an as-sessment under subsection (1) of this sectionwith respect to premiums received from anyof the following policies:

(a) Workers’ compensation insurance pol-icies.

(b) Wet marine and transportation insur-ance policies.

(c) Any category of policies designated bythe 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]

731.808 “Gross amount of premiums”defined. As used in ORS 731.804, 731.812 and731.820, “gross amount of premiums” meansthe consideration paid by insureds to an in-surer for policies of insurance, and includesall premiums, assessments, dues and fees re-ceived or derived, or obligations takentherefor, by whatever term known. [1967 c.359§132; 1989 c.413 §5]

731.812 Foreign and alien insurer’s re-port of Oregon business. Every foreign oralien insurer, in its annual statement to theDirector of the Department of Consumer andBusiness Services, shall set forth the grossamount of premiums received by it or its in-surance producers, return premiums paid,dividend payments made to policyholders,savings paid or credited to the accounts ofsubscribers in the case of a reciprocal in-surer, and insurance benefit payments topolicyholders, from and under its policiescovering direct domestic risks in the preced-ing calendar year. [1967 c.359 §133; 2003 c.364 §76]

731.816 [1967 c.359 §134; 1971 c.560 §1; 1989 c.700 §5;repealed by 1995 c.786 §1]

731.820 Gross premium tax on fire in-surance premiums. (1)(a) For the purposeof maintaining the office of State Fire Mar-shal and paying the expenses incidentthereto, every insurer transacting insurancecovering the peril of fire shall pay a tax tothe Director of the Department of Consumerand Business Services, on or before April 1of each year, equal to one percent of thegross amount of premiums received by it orits insurance producers from such business,from and under its policies covering directdomestic risks in the preceding calendar yearafter deducting the amount of return premi-ums paid and the amount of dividend pay-ments made to policyholders or, in the caseof a reciprocal insurer, the amount ofsavings paid or credited to the accounts ofsubscribers, with respect to such policies.

(b) For the purpose of paragraph (a) ofthis subsection the following portions of theamounts required to be reported by line ofbusiness in the annual financial statementrequired by ORS 731.574 shall be consideredpremiums for insurance covering the peril offire:

(A) Fire, 100 percent.(B) Homeowners and farm owners multi-

ple peril, 65 percent.(C) Commercial multiple peril, 50 per-

cent.(D) Inland marine, 20 percent.(E) Automobile physical damage, eight

percent.(F) Aircraft physical damage, eight per-

cent.(2) If an insurer ceases to do business or

collect premiums on direct domestic risks, itthereupon shall make a report to the directorof its premiums subject to taxation as pro-vided in subsection (1) of this section andcollected or due as of the date when itceased to do business or collect premiums ondirect domestic risks, and not theretofore re-ported, and shall forthwith pay to the direc-tor the tax thereon.

(3) If the director, during the period inwhich the director under ORS 731.836 maycollect taxes owing under this section, findsthe amount of such taxes paid by an insurerto have been incorrect, the director shallcharge or credit the insurer with the differ-ence between the correct amount of tax andthe amount actually paid. [1967 c.359 §135; 1967c.453 §4; 1971 c.231 §15; 1975 c.275 §1; 1983 c.130 §1; 1989c.700 §6; 2003 c.364 §77]

731.822 Prepayment of tax due. (1) Ev-ery insurer with a tax obligation under sec-tion 2, chapter 786, Oregon Laws 1995, ORS731.820 or ORS 731.854 and 731.859 shallmake prepayment of the tax obligations un-der section 2, chapter 786, Oregon Laws1995, ORS 731.820, 731.854 and 731.859 forthe current calendar year’s business, if thesum of the tax obligations under section 2,chapter 786, Oregon Laws 1995, ORS 731.820,731.854 and 731.859 for the preceding calen-dar year’s business is $400 or more.

(2) The Director of the Department ofConsumer and Business Services shall creditthe prepayment toward the appropriate taxobligations of the insurer for the currentcalendar year under section 2, chapter 786,Oregon Laws 1995, or ORS 731.820 or ORS731.854 and 731.859.

(3) The amounts of the prepayments shallbe percentages of the insurer’s tax obligationbased on the preceding calendar year’s busi-ness adjusted, if necessary, to reflect the de-clining percentages set forth in section 2 (3),



chapter 786, Oregon Laws 1995, applicablefor the current year, and shall be paid to thedirector by the due dates and in the follow-ing amounts:

(a) On or before June 15, 45 percent;(b) On or before September 15, 25 per-

cent; and(c) On or before December 15, 25 percent.(4) The effect of transferring policies of

insurance from one insurer to another in-surer is to transfer the tax prepayment obli-gation with respect to such policies.

(5) On or before June 1 of each year, thedirector shall notify each insurer required tomake prepayments in that year of theamount of each prepayment, and shall pro-vide remittance forms to be used by the in-surer. However, an insurer’s responsibility tomake prepayments is not affected by failureof the director to send, or the insurer to re-ceive, the notice or forms. [1980 c.10 §2; 1995c.786 §5]

731.824 Tax on underwriting profits ofwet marine and transportation insurers.(1) Wet marine and transportation insurancewritten by foreign or alien insurers withinthis state shall be taxed only on that pro-portion of the total underwriting profit ofsuch insurer from such insurance writtenwithin the United States that the gross pre-miums of the insurer from such insurancewritten within this state bear to the grosspremiums of such insurer from such insur-ance written within the United States.

(2) The “underwriting profit,” for pur-poses of this section, is arrived at by deduct-ing from the net earned premiums on suchinsurance policies written within the UnitedStates during the calendar year:

(a) The losses incurred, and(b) Expenses incurred, including all

taxes, state and federal, in connection withsuch net earned premiums.

(3) The amount of “net earnedpremiums” on such insurance policies writ-ten during the calendar year is the sum ofparagraphs (a) and (b) less paragraph (c) ofthis subsection.

(a) Gross premiums on such insurancepolicies written during the calendar year,less any and all return premiums, any andall premiums on policies not taken and anyand all premiums paid for such reinsurance.

(b) Unearned premiums on such out-standing marine business at the end of thepreceding calendar year.

(c) Unearned premiums on such out-standing marine business at the end of thecurrent calendar year.

(4) “Losses incurred,” as used in thissection, means gross losses incurred duringthe calendar year under such policies writtenwithin the United States, less reinsuranceclaims collected or collectible and salvagesor recoveries collectible from any source ap-plicable to the such losses.

(5) “Expenses incurred” includes:(a) Specific expenses incurred on such

earned wet marine and transportation insur-ance premiums, consisting of all commis-sions, agency expenses, taxes, licenses, fees,loss-adjustment expenses, and all other ex-penses incurred directly and specifically inconnection with such premiums, less recov-eries or reimbursements on account of or inconnection with such commissions or otherexpenses collected or collectible because ofreinsurance or from any other source.

(b) General expenses incurred on suchearned premiums, consisting of that propor-tion of general or overhead expenses, suchas salaries of officers and employees, printingand stationery, all taxes of this state and ofthe United States, except as otherwise pro-vided herein, and all other expenses notchargeable specifically to a particular classof insurance, which the net premiums ofsuch insurance written bear to the total netpremiums written by such insurer from allclasses of insurance written by it during thecurrent calendar year. However, in arrivingat the “underwriting profit” for purposes oftaxation under this section there shall notbe deducted in respect to expenses incurred,as defined and specified in paragraphs (a) and(b) of this subsection, amounts which, in theaggregate, exceed 40 percent of the grosspremiums on such insurance policies.[Formerly 745.145]

731.828 Computation of wet marineand transportation insurance tax. (1)Each insurer transacting wet marine andtransportation insurance in this state shallfile annually on or before June 15 with theDirector of the Department of Consumer andBusiness Services and in the form prescribedby the director, a report of all the itemspertaining to its insurance business as enu-merated and prescribed in ORS 731.824.

(2) Each insurer that has been writingsuch insurance in this state for three yearsshall furnish the director a statement of allof the items referred to in subsection (1) ofthis section, in the form prescribed by thedirector, for each of the preceding three cal-endar years. An insurer that has not beenwriting such insurance for three years shallfurnish to the director a statement of allsuch items for each of the calendar yearsduring which it has written such insurance.


731.836 INSURANCE

(3) On or before June 15 of each year, ifthe insurer has transacted such insurancefor three years, the insurer shall:

(a) Ascertain the average annual under-writing profit, as provided in ORS 731.824,derived by the insurer from such insurancebusiness written within the United Statesduring the last preceding three calendaryears.

(b) Ascertain the proportion which theaverage annual premiums of the insurer fromsuch insurance written by it in this stateduring the last preceding three calendaryears bears to the average total of such wetmarine and transportation insurance premi-ums of the insurer during the same threeyears.

(c) Pay five percent on this proportion ofthe average annual underwriting profit of theinsurer from such insurance to the directoras a tax upon such insurance written by itin this state during the current calendaryear.

(4) The insurer each year shall computethe tax, according to the method described inthis section, upon the average annual under-writing profit of such insurer from such in-surance during the preceding three years,including the current calendar year. At theexpiration of each current calendar year, theprofit or loss on such insurance business ofthat year is to be added or deducted, and theprofit or loss upon such insurance businessof the first calendar year of the precedingthree-year period is to be dropped so that thecomputation of underwriting profit for pur-poses of taxation under this section will al-ways be on a three-year average.

(5) An insurer that has not been writingwet marine and transportation insurance inthis state for three years shall, until it hastransacted such business in this state forthat number of years, be taxed on the basisof its annual underwriting profit on such in-surance written within the United States forthe current calendar year, subject, however,to an adjustment in the tax as soon as theinsurer, in accordance with the provisions ofthis section, is enabled to compute the taxon the three-year basis.

(6) In the case of mutual insurers the in-surer shall not include in the underwritingprofit, when computing the tax prescribed bythis section, the amounts refunded by suchinsurers on account of premiums previouslypaid by their policyholders.

(7) If the director, during the period inwhich the director under ORS 731.836 maycollect taxes owing under this section, findsthe amount of such taxes paid by an insurerto have been incorrect, the director shallcharge or credit the insurer with the differ-

ence between the correct amount of tax andthe amount actually paid.

(8) If an insurer ceases to transact wetmarine and transportation insurance in thestate, it shall thereupon make report to thedirector of the items pertaining to such in-surance business, as enumerated and de-scribed in this section, to the date of itsceasing to transact such insurance and nottheretofore reported, and forthwith pay tothe director the taxes computed according tothis section and the annual authorizationfees thereon. [Formerly 745.150; 1969 c.158 §1; 1975c.250 §1; 1989 c.700 §7]

731.832 [Formerly 736.175; 1987 c.373 §82; repealedby 1995 c.786 §4]

731.836 Limitation on enforcement ofinsurer’s tax obligations. The Director ofthe Department of Consumer and BusinessServices shall commence an action for therecovery of taxes payable under ORS 731.820,731.824, 731.828 and 731.859 not later thanthe later of the following:

(1) Five years after the date such taxeswere payable to the director under suchsections; or

(2) Three years after the date on whichthe report of examination by the domiciliarystate of the insurer, disclosing that suchtaxes were owing by the insurer under suchsections, was filed with the director. [1967c.359 §139; 1969 c.158 §4; 1989 c.700 §8]

731.840 Retaliatory or corporate excisetax in lieu of certain taxes; certain localtaxes prohibited. (1) The retaliatory taximposed upon a foreign or alien insurer un-der ORS 731.854 and 731.859, or the corpo-rate excise tax imposed upon a foreign oralien insurer under ORS chapter 317, is inlieu of all other state taxes upon premiums,taxes upon income, franchise or other taxesmeasured by income that might otherwise beimposed upon the foreign or alien insurerexcept the fire insurance premiums tax im-posed under ORS 731.820, the tax imposedupon wet marine and transportation insurersunder ORS 731.824 and 731.828, and the as-sessment imposed under ORS 743.961. How-ever, all real and personal property, if any,of the insurer shall be listed, assessed andtaxed the same as real and personal propertyof like character of noninsurers. Nothing inthis subsection shall be construed to pre-clude the imposition of the assessments im-posed under ORS 656.612 upon a foreign oralien insurer.

(2) Subsection (1) of this section appliesto a reciprocal insurer and its attorney in itscapacity as such.

(3) Subsection (1) of this section appliesto foreign or alien title insurers and to for-eign or alien wet marine and transportation



insurers issuing policies and subject to taxesreferred to in ORS 731.824 and 731.828.

(4) The State of Oregon hereby preemptsthe field of regulating or of imposing excise,privilege, franchise, income, license, permit,registration, and similar taxes, licenses andfees upon insurers and their insurance pro-ducers and other representatives as such,and:

(a) No county, city, district, or otherpolitical subdivision or agency in this stateshall so regulate, or shall levy upon insurers,or upon their insurance producers and rep-resentatives as such, any such tax, licenseor fee; except that whenever a county, city,district or other political subdivision leviesor imposes generally on a nondiscriminatorybasis throughout the jurisdiction of the tax-ing authority a payroll, excise or income tax,as otherwise provided by law, such tax maybe levied or imposed upon domestic insurers;and

(b) No county, city, district, politicalsubdivision or agency in this state shall re-quire of any insurer, insurance producer orrepresentative, duly authorized or licensedas such under the Insurance Code, any addi-tional authorization, license, or permit of anykind for conducting therein transactionsotherwise lawful under the authority or li-cense 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]

731.841 Conditions under which localauthority to tax insurer is preempted. If,on account of the provisions of section 2,chapter 786, Oregon Laws 1995, and theamendments to ORS 731.840 by section 6,chapter 786, Oregon Laws 1995, the amend-ments to ORS 750.329 by section 11, chapter786, Oregon Laws 1995, the amendments toORS 317.010 by section 12, chapter 786, Ore-gon Laws 1995, and the amendments to ORS317.080 by section 13, chapter 786, OregonLaws 1995, any insurer authorized to trans-act business in Oregon on January 1, 1997,is subject to the local taxes, licenses and feesdescribed in ORS 731.840 (4)(a) as of January1, 1997, and was not so subject before Janu-ary 1, 1997, the authority of the local gov-ernment to impose those taxes is preemptedby the State of Oregon and no county, city,district or other political subdivision oragency in this state shall levy or imposeupon such insurer, or upon its insuranceproducers or representatives, any excise,privilege, franchise, income, license, permit,registration or similar tax, license or fee.[1995 c.786 §20; 2003 c.364 §79]


731.842 Adjustment of amount to beprepaid for taxes; extension of time forpayment; interest; penalty for late pay-ment. (1) The Director of the Department ofConsumer and Business Services may grant,for good cause shown, a request for an ad-justment of the amount of the prepaymentdue under ORS 731.822 or an extension oftime for payment of taxes under ORS 731.808to 731.828 and 731.859. The extension shallbe requested no later than the due date andmay not exceed 30 days or one month,whichever is longer, except that an extensionof time for payments under ORS 731.822 maynot exceed 10 days.

(2) Interest at the rate of two-thirds ofone percent per month or fraction of a monthshall accrue on any such tax payment notmade by the due date (determined withoutregard to extensions).

(3) A penalty of 10 percent of the taxamount shall be imposed upon any late pay-ment of any such tax, except for a paymentmade within an extension period as providedin subsection (1) of this section or when thedirector believes extenuating circumstancesjustify waiver of the penalty. [1975 c.230 §2; 1980c.10 §4; 1995 c.786 §7]

731.844 No personal liability for payinginvalid tax. No personal liability shall ariseagainst any director, trustee, officer or agentof any insurer on account of any taxes orfees paid pursuant to any statute, law or or-dinance, even though such statute, law orordinance is subsequently declared or held tobe invalid. [1967 c.359 §141]

RETALIATORY PROVISIONS731.854 Retaliatory tax. (1) When by or

pursuant to the laws of any other state orforeign country any taxes, licenses and otherfees, in the aggregate, and any fines, penal-ties, deposit requirements or other materialobligations, prohibitions or restrictions areor would be imposed upon insurers domiciledin this state, or upon the insurance produc-ers or representatives of such insurers,which are in excess of such taxes, licensesand other fees, in the aggregate, or whichare in excess of the fines, penalties, depositrequirements or other obligations, prohibi-tions, or restrictions directly imposed uponsimilar insurers, or upon the insurance pro-ducers or representatives of such insurers,of such other state or country under thestatutes of this state, so long as such lawsof such other state or country continue inforce or are so applied, the same taxes, li-censes and other fees, in the aggregate, orfines, penalties or deposit requirements orother material obligations, prohibitions, orrestrictions of whatever kind shall be im-posed by the Director of the Department of


731.859 INSURANCE

Consumer and Business Services upon theinsurers, or upon the insurance producers orrepresentatives of such insurers, of suchother state or country doing business orseeking to do business in this state. Any tax,license or other fee or other obligation im-posed by any city, county, or other politicalsubdivision or agency of such other state orcountry on insurers domiciled in this stateor their insurance producers or represen-tatives shall be deemed to be imposed bysuch state or country within the meaning ofthis subsection.

(2) Foreign reciprocal or interinsuranceexchanges filing a consolidated return forpurposes of ORS chapter 317 shall prepareand file a separate individual retaliatory taxcalculation. The excise tax for the consol-idated group shall be allocated for retaliatorytax purposes among the individual foreigninsurers writing Oregon premiums. The allo-cation, after excluding the domestic share asdetermined by the Director of the Depart-ment of Consumer and Business Services byrule, shall be in the proportion that the pre-miums written in Oregon by a foreign in-surer of the group bears to the totalpremiums written in Oregon by all foreigninsurers in the group writing premiums inOregon.

(3) This section does not apply as to per-sonal income taxes, nor as to local advalorem taxes on real or personal propertynor as to special purpose obligations or as-sessments heretofore imposed by anotherstate in connection with particular classesof insurance, other than property insurance;except that deductions, from premium taxesor other taxes otherwise payable, allowed onaccount of real estate or personal propertytaxes paid shall be taken into considerationby the director in determining the proprietyand extent of retaliatory action under thissection.

(4) For the purpose of applying this sec-tion to an alien insurer, its domicile shall bedetermined in accordance with ORS 731.092and 731.096.

(5) For the purpose of applying this sec-tion to foreign and alien insurers, the fol-lowing specifically shall be treated as taxesimposed by this state:

(a) The corporate excise tax imposed un-der ORS chapter 317.

(b) The assessments imposed under ORS731.804 made to support the legislatively au-thorized budget of the Department of Con-sumer and Business Services with respect tothe functions of the department under theInsurance Code.

(c) The assessments paid by insurers onbehalf of their insureds under ORS 656.612.[Formerly 736.237; 1995 c.786 §7a; 2003 c.364 §80]

731.858 [Formerly 736.245; repealed by 1969 c.158 §2(731.859 enacted in lieu of 731.858)]

731.859 Applicability of retaliatoryprovisions. (1) On or before April 1 of eachyear, each foreign or alien insurer shall:

(a) Determine and report to the Directorof the Department of Consumer and BusinessServices whether the provisions of the lawsof any state or country require the imposi-tion of the burdens specified by ORS 731.854;

(b) Compute the amount owing underORS 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 maycollect taxes owing under this section, findsthe amount of such taxes paid by an insurerto have been incorrect, the director shallcharge or credit the insurer with the differ-ence between the correct amount of tax andthe amount actually paid. [1969 c.158 §3 (enactedin lieu of 731.858); 1989 c.700 §9]

MISCELLANEOUS731.870 State of emergency; effect

upon insurance policies; rules. (1) Whenthe Governor declares a state of emergencyunder ORS 401.165, the Director of the De-partment of Consumer and Business Servicesmay issue an order that addresses any or allof the following matters related to insurancepolicies issued in this state:

(a) Reporting requirements for claims;(b) Grace periods for payment of insur-

ance premiums and performance of other du-ties by insureds; and

(c) Temporary postponement of cancella-tions and nonrenewals.

(2) An order by the director under sub-section (1) of this section may remain effec-tive for not more than 30 days unless thedirector extends the termination date for theorder for an additional period of not morethan 30 days or for subsequent additionalperiods of not more than 30 days. The direc-tor may extend the order if, in the director’sjudgment, the circumstances warrant an ex-tension. The order must specify, by line ofinsurance:

(a) The geographic areas in which theorder applies, which must be within but maybe less extensive than the geographic areaspecified in the Governor’s proclamation ofa state of emergency and must be specifiedaccording to an appropriate means of deline-ation, such as United States Postal ServiceZIP codes or other appropriate means; and



(b) The date on which the order becomeseffective and the date on which the orderterminates.

(3) The director shall adopt rules thatestablish general criteria for orders issuedunder this section and may adopt emergencyrules applicable to a specific proclamation ofa state of emergency by the Governor.

(4) The rulemaking authority set forth inthis section does not limit or affect the rule-making authority otherwise granted to thedirector by law. [2008 c.22 §2]


PENALTIES731.988 Civil penalties. (1) Any person

who violates any provision of the InsuranceCode, any lawful rule or final order of theDirector of the Department of Consumer andBusiness Services or any judgment made byany court upon application of the director,shall forfeit and pay to the General Fund ofthe State Treasury a civil penalty in anamount determined by the director of notmore than $10,000 for each offense. In thecase of individual insurance producers,adjusters or insurance consultants, the civilpenalty shall be not more than $1,000 foreach offense. Each violation shall be deemeda separate offense.

(2) In addition to the civil penalty setforth in subsection (1) of this section, anyperson who violates any provision of the In-surance Code, any lawful rule or final orderof the director or any judgment made by anycourt upon application of the director, maybe required to forfeit and pay to the GeneralFund of the State Treasury a civil penalty in

an amount determined by the director butnot to exceed the amount by which suchperson profited in any transaction which vi-olates any such provision, rule, order orjudgment.

(3) In addition to the civil penalties setforth in subsections (1) and (2) of this sec-tion, any insurer that is required to make areport under ORS 742.400 and that fails todo so within the specified time may be re-quired to pay to the General Fund of theState Treasury a civil penalty in an amountdetermined by the director but not to exceed$10,000.

(4) A civil penalty imposed under thissection may be recovered either as providedin subsection (5) of this section or in an ac-tion brought in the name of the State of Or-egon in any court of appropriate jurisdiction.

(5) Civil penalties under this sectionshall be imposed and enforced in the mannerprovided by ORS 183.745.

(6) The provisions of this section are inaddition to and not in lieu of any other en-forcement provisions contained in the Insur-ance 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; 1993c.265 §6; 1997 c.131 §5; 2003 c.364 §81; 2003 c.576 §220]

731.990 [Repealed by 1965 c.241 §3]

731.992 Criminal penalty. (1) Violationof ORS 731.260 is a Class A misdemeanor.

(2) Violation of any provision of the In-surance Code for which a greater penalty isnot otherwise provided by the InsuranceCode or by other applicable laws of thisstate, in addition to any applicable prescribeddenial, suspension or revocation of any cer-tificate or license or any civil forfeiture, isa Class A misdemeanor. [1967 c.359 §145; 1987c.158 §154a; 2011 c.597 §297]


INSURANCE
