69th OREGON LEGISLATIVE ASSEMBLY--1997 Regular Session

SA to A-Eng. HB 2222

LC 1289/HB 2222-A9

                      SENATE AMENDMENTS TO
                   A-ENGROSSED HOUSE BILL 2222

               By COMMITTEE ON RULES AND ELECTIONS

                             June 25

  On page 1 of the printed A-engrossed bill, line 2, delete ' and
163.165' and insert ', 163.165, 166.715, 731.028, 746.230,
748.603, 750.055 and 750.333'.
  On page 4, after line 13, insert:
  '  { +  SECTION 5. + }  { + As used in sections 5 to 7 of this
Act:
  ' (1) 'Insurance policy' has the meaning given the term '
policy' in ORS 731.122 and includes, but is not limited to:
  ' (a) Health insurance policies and contracts issued by health
care service contractors, health maintenance organizations,
multiple employer welfare arrangements and fraternal benefit
societies and certificates of coverage issued under group
insurance policies.
  ' (b) Workers' compensation and health benefit agreements and
coverages provided by self-insured employers.
  ' (2) 'Insurer' has the meaning given that term in ORS 731.106.
'Insurer' includes, but is not limited to:
  ' (a) A health care service contractor, as defined in ORS
750.005, including, but not limited to, a health maintenance
organization.
  ' (b) A multiple employer welfare arrangement, as defined in
ORS 750.301.
  ' (c) A legal entity that is self-insured and provides
insurance services to its employees.
  ' (d) A guaranty contract insurer as defined in ORS 656.005.
  ' (e) An employer authorized under ORS chapter 656 to
self-insure its workers' compensation risk.
  ' (f) A fraternal benefit society, as defined in ORS 748.106.
  ' (g) An agent as defined in ORS 731.062.
  ' (3) 'Material fact' means a fact that could affect the course
or outcome of any proceeding or transaction.
  ' (4) 'Practitioner' means a person who directly or indirectly
provides or claims to provide services for which payment is
claimed under an insurance policy. + }
  '  { +  SECTION 6. + }  { + (1) A person commits the crime of
insurance fraud if the person with the intent to defraud:
  ' (a) Presents information to an insurer in connection with any
of the transactions listed in subsection (2) of this section if
the information:
  ' (A) Contains a false or misleading representation concerning
a material fact; or
  ' (B) Conceals or fails to disclose a material fact in
connection with the information.
  ' (b) Presents information on behalf of an insurer in
connection with the solicitation for sale of any insurance policy
or purported insurance policy if the information:
  ' (A) Contains a false or misleading representation concerning
a material fact; or
  ' (B) Is in response to a specific request for information and
conceals or fails to disclose a material fact.
  ' (c) Solicits or accepts new or renewal insurance risks for an
insurer contrary to the notice to the person from the Director of
the Department of Consumer and Business Services under ORS
731.422 that the director has suspended, revoked or refused to
continue the certificate of authority of the insurer and has
suspended or revoked the authority of the person to represent the
insurer.
  ' (d) Removes the assets or records of assets, transactions or
affairs of an insurer from the home office of the insurer, a
place of business of the insurer or a place of safekeeping of the
insurer.
  ' (e) Destroys the assets or records of assets, transactions or
affairs of an insurer.
  ' (f) Withholds the assets or records of assets, transactions
or affairs of an insurer from the Director of the Department of
Consumer and Business Services unless the records are legally
privileged.
  ' (g) Diverts, misappropriates or converts the funds of an
insurer, insured, claimant or applicant for insurance in
connection with:
  ' (A) The business activities of an insurer;
  ' (B) The acquisition, formation, merger, affiliation or
dissolution of an insurer; or
  ' (C) Any transaction between the following persons for the
purpose of obtaining insurance or reinsurance, calculating
insurance premiums, submitting a claim or negotiating or
adjusting a claim:
  ' (i) An insurer, a self-insured entity or a person acting on
behalf of an insurer or self-insured entity; and
  ' (ii) An insured, claimant, applicant for insurance,
practitioner, other insurer or a person acting on behalf of an
insured, claimant, applicant for insurance, practitioner or other
insurer.
  ' (2) The transactions to which subsection (1)(a) of this
section applies are:
  ' (a) The application for, rating of or renewal of any
insurance policy;
  ' (b) The calculation of premium or the classification of risk;
  ' (c) A claim for payment of benefit pursuant to any insurance
policy or workers' compensation law; and
  ' (d) A payment made in accordance with the terms of any
insurance law, insurance policy or workers' compensation law.
  ' (3) As used in this section, 'presents' includes causing to
be presented and preparing with the knowledge or belief that the
material prepared will be presented.
  ' (4) In the absence of other conduct constituting insurance
fraud, insurance fraud does not include an attorney's conduct in
filing pleadings and prosecuting a civil action.
  ' (5)(a) Except as otherwise provided in paragraph (b) of this
subsection, insurance fraud is a Class C felony.
  ' (b) Insurance fraud is a Class B felony if the defendant
threatened or caused physical injury to a person while committing
the crime. + }
  '  { +  SECTION 7. + }  { + In addition to any other sentence
the court may impose upon conviction of insurance fraud, the
court may order the defendant to pay restitution in accordance
with ORS 137.106 up to the full amount of any financial loss or
damages sustained as a result of the insurance fraud. Financial
loss and damages include, but are not limited to:
  ' (1) Loss of earnings;
  ' (2) Out-of-pocket and other expenses;
  ' (3) Paid deductible amounts under an insurance policy;
  ' (4) Insurance proceeds or insurance claim payments; and
  ' (5) Costs reasonably attributed to investigations and
recovery efforts by owners, insurers, law enforcement and other
public authorities. + }
  '  { +  SECTION 8. + }  { + When a person who is required to be
licensed by the state to practice an occupation is convicted of
insurance fraud, the district attorney shall notify the
appropriate licensing agency in this state of the conviction and
may notify licensing agencies in other states in which the
practitioner is licensed. + }
  '  { +  SECTION 9. + }  { + Sections 10, 11 and 17 of this Act
are added to and made a part of the Insurance Code. + }
  '  { +  SECTION 10. + }  { + (1) Notwithstanding ORS 746.230
and 746.665, an insurer shall cooperate with any law enforcement
agency or other state or federal agency that is investigating or
prosecuting suspected insurance fraud. The insurer shall provide
any information requested by the agency unless the information is
subject to a legal privilege that would prohibit disclosure.
  ' (2) If an insurer has reason to believe that insurance fraud
has been, is being or is about to be committed, the insurer shall
notify the appropriate agency of that fact. The insurer is not
required to notify the agency if the information or any part of
the information upon which the reason to believe is based is
protected from disclosure by legal privilege.
  ' (3) An insurer providing information under this section may
request information in the possession or control of the agency
relating to the investigation. The agency may not provide an
insurer with information that is privileged or confidential.
Otherwise, the agency shall disclose requested information unless
disclosure would jeopardize an ongoing investigation or
prosecution. The agency may require that the insurer not disclose
the information to any other person.
  ' (4) A person who has reason to believe insurance fraud has
been, is being or is about to be committed or who collects,
reviews or analyzes information concerning insurance fraud may
furnish any unprivileged information in the person's possession
concerning insurance fraud to an insurer who requests the
information for the purpose of detecting, prosecuting or
preventing insurance fraud.
  ' (5) If an insurer or agency does not provide information as
required by this section, the insurer or agency is not eligible
for any compensation to which the insurer or agency would
otherwise be entitled from any award under section 7 of this 1997
Act. + }
  '  { +  SECTION 11. + }  { + Unless it is shown that the
person, including an insurer, acted with actual malice, a person
who discloses or provides information under section 10 of this
1997 Act has immunity from any liability, civil or criminal, that
might otherwise be incurred or imposed with respect to the
disclosure or provision of the information. A person has the same
immunity with respect to participating in any judicial proceeding
resulting from the disclosure or provision of information. + }
  '  { +  SECTION 12. + } ORS 166.715 is amended to read:
  ' 166.715. As used in ORS 166.715 to 166.735, unless the
context requires otherwise:
  ' (1) 'Documentary material' means any book, paper, document,
writing, drawing, graph, chart, photograph, phonograph record,
magnetic tape, computer printout, other data compilation from
which information can be obtained or from which information can
be translated into usable form, or other tangible item.
  ' (2) 'Enterprise' includes any individual, sole
proprietorship, partnership, corporation, business trust or other
profit or nonprofit legal entity, and includes any union,
association or group of individuals associated in fact although
not a legal entity, and both illicit and licit enterprises and
governmental and nongovernmental entities.
  ' (3) 'Investigative agency' means the Department of Justice or
any district attorney.
  ' (4) 'Pattern of racketeering activity' means engaging in at
least two incidents of racketeering activity that have the same
or similar intents, results, accomplices, victims or methods of
commission or otherwise are interrelated by distinguishing
characteristics, including a nexus to the same enterprise, and
are not isolated incidents, provided at least one of such
incidents occurred after November 1, 1981, and that the last of
such incidents occurred within five years after a prior incident
of racketeering activity.
  ' (5) 'Person' means any individual or entity capable of
holding a legal or beneficial interest in real or personal
property.
  ' (6) 'Racketeering activity' means to commit, to attempt to
commit, to conspire to commit, or to solicit, coerce or
intimidate another person to commit:
  ' (a) Any conduct that constitutes a crime, as defined in ORS
161.515, under any of the following provisions of the Oregon
Revised Statutes:
  ' (A) ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and
59.995, relating to securities;
  ' (B) ORS 162.015, 162.025 and 162.065 to 162.085, relating to
bribery and perjury;
  ' (C) ORS 162.235, 162.265 to 162.305, 162.325, 162.335,
162.355 and 162.365, relating to obstructing governmental
administration;
  ' (D) ORS 162.405 to 162.425, relating to abuse of public
office;
  ' (E) ORS 162.465, relating to interference with legislative
operation;
  ' (F) ORS 163.095 to 163.115, 163.118, 163.125 and 163.145,
relating to criminal homicide;
  ' (G) ORS 163.160 to 163.205, relating to assault and related
offenses;
  ' (H) ORS 163.225 and 163.235, relating to kidnapping;
  ' (I) ORS 163.275, relating to coercion;
  ' (J) ORS 163.670 to 163.695, relating to sexual conduct of
children;
  ' (K) ORS 164.015, 164.043, 164.045, 164.055, 164.057, 164.075
to 164.095, 164.125, 164.135, 164.140, 164.215, 164.225 and
164.245 to 164.270, relating to theft, burglary, criminal
trespass and related offenses;
  ' (L) ORS 164.315 to 164.335, relating to arson and related
offenses;
  ' (M) ORS 164.345 to 164.365, relating to criminal mischief;
  ' (N) ORS 164.395 to 164.415, relating to robbery;
  ' (O) ORS 164.865, 164.875 and 164.868 to 164.872, relating to
unlawful recording or labeling of a recording;
  ' (P) ORS 165.007 to 165.022, 165.032 to 165.042 and 165.055 to
165.070, relating to forgery and related offenses;
  ' (Q) ORS 165.080 to 165.109, relating to business and
commercial offenses;
  ' (R) ORS 165.485 to 165.515, 165.540 and 165.555, relating to
communication crimes;
  ' (S) ORS 166.180, 166.190, 166.220, 166.250, 166.270, 166.275,
166.410, 166.450 and 166.470, relating to firearms and other
weapons;
  ' (T) ORS 164.377 (2) to (4), as punishable under ORS 164.377
(5)(b), 167.007 to 167.017, 167.062 to 167.080, 167.087, 167.090,
167.122 to 167.137, 167.147, 167.164, 167.212, 167.355, 167.365
and 167.370, relating to prostitution, obscenity, gambling,
computer crimes involving the Oregon State Lottery, animal
fighting and related offenses;
  ' (U) ORS 171.990, relating to legislative witnesses;
  ' (V) ORS 260.575 and 260.665, relating to election offenses;
  ' (W) ORS 314.075, relating to income tax;
  ' (X) ORS chapter 323, relating to cigarette taxes;
  ' (Y) ORS 411.630, 411.675, 411.690 and 411.840, relating to
public assistance payments, and ORS 411.990 (2) and (3);
  ' (Z) ORS 462.140, 462.415 and 462.420 to 462.520, relating to
racing;
  ' (AA) ORS 463.995, relating to boxing and wrestling, as
defined in ORS 463.015;
  ' (BB) ORS 471.205, 471.305, 471.335 to 471.345, 471.360,
471.392 to 471.400, 471.405, 471.425, 471.445, 471.485, 471.490
and 471.675, relating to alcoholic liquor, and any of the
provisions of ORS chapter 471 relating to licenses issued under
the Liquor Control Act;
  ' (CC) ORS 475.005 to 475.285 and 475.940 to 475.995, relating
to controlled substances;
  ' (DD) ORS 480.070, 480.210, 480.215 and 480.235 to 480.265,
relating to explosives;
  ' (EE) ORS 819.010, 819.040, 822.100, 822.135 and 822.150,
relating to motor vehicles;
  ' (FF) ORS 658.452 or 658.991 (2) to (4), relating to farm
labor contractors;
  ' (GG) ORS chapter 706, relating to banking law administration;
  ' (HH) ORS chapter 708, relating to banks and trusts;
  ' (II) ORS chapter 714, relating to branch banking;
  ' (JJ) ORS chapter 716, relating to mutual savings banks;
  ' (KK) ORS chapter 723, relating to credit unions;
  ' (LL) ORS chapter 726, relating to pawnbrokers;
  ' (MM) ORS 166.382 and 166.384, relating to destructive
devices;
  ' (NN) ORS 165.074;
  ' (OO) ORS 59.840 to 59.965, relating to mortgage bankers and
mortgage brokers;   { - or - }
  ' (PP) ORS chapter 496, 497 or 498, relating to wildlife { + ;
  ' (QQ) ORS 165.692, relating to false claims for health care
payment; or
  ' (RR) Section 6 of this 1997 Act, relating to insurance
fraud + }.
  ' (b) Any conduct defined as 'racketeering activity' under 18
U.S.C. s1961 (1)(B), (C) and (D).
  ' (7) 'Unlawful debt' means any money or other thing of value
constituting principal or interest of a debt that is legally
unenforceable in the state in whole or in part because the debt
was incurred or contracted:
  ' (a) In violation of any one of the following:
  ' (A) ORS chapter 462, relating to racing;
  ' (B) ORS 167.117 to 167.164, relating to gambling; or
  ' (C) ORS 82.010 to 82.170, relating to interest and usury.
  ' (b) In gambling activity in violation of federal law or in
the business of lending money at a rate usurious under federal or
state law.
  '  { +  SECTION 12a. + } If House Bill 3357 becomes law,
section 12 of this Act (amending ORS 166.715) is repealed and ORS
166.715, as amended by section 1, chapter ___, Oregon Laws 1997
(Enrolled House Bill 3357), is amended to read:
  ' 166.715. As used in ORS 166.715 to 166.735, unless the
context requires otherwise:
  ' (1) 'Documentary material' means any book, paper, document,
writing, drawing, graph, chart, photograph, phonograph record,
magnetic tape, computer printout, other data compilation from
which information can be obtained or from which information can
be translated into usable form, or other tangible item.
  ' (2) 'Enterprise' includes any individual, sole
proprietorship, partnership, corporation, business trust or other
profit or nonprofit legal entity, and includes any union,
association or group of individuals associated in fact although
not a legal entity, and both illicit and licit enterprises and
governmental and nongovernmental entities.
  ' (3) 'Investigative agency' means the Department of Justice or
any district attorney.

  ' (4) 'Pattern of racketeering activity' means engaging in at
least two incidents of racketeering activity that have the same
or similar intents, results, accomplices, victims or methods of
commission or otherwise are interrelated by distinguishing
characteristics, including a nexus to the same enterprise, and
are not isolated incidents, provided at least one of such
incidents occurred after November 1, 1981, and that the last of
such incidents occurred within five years after a prior incident
of racketeering activity. Notwithstanding ORS 131.505 to 131.525
or 419A.190 or any other provision of law providing that a
previous prosecution is a bar to a subsequent prosecution,
conduct that constitutes an incident of racketeering activity may
be used to establish a pattern of racketeering activity without
regard to whether the conduct previously has been the subject of
a criminal prosecution or conviction or a juvenile court
adjudication, unless the prosecution resulted in an acquittal or
the adjudication resulted in entry of an order finding the youth
not to be within the jurisdiction of the juvenile court.
  ' (5) 'Person' means any individual or entity capable of
holding a legal or beneficial interest in real or personal
property.
  ' (6) 'Racketeering activity' includes conduct of a person
committed both before and after the person attains the age of 18
years, and means to commit, to attempt to commit, to conspire to
commit, or to solicit, coerce or intimidate another person to
commit:
  ' (a) Any conduct that constitutes a crime, as defined in ORS
161.515, under any of the following provisions of the Oregon
Revised Statutes:
  ' (A) ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and
59.995, relating to securities;
  ' (B) ORS 162.015, 162.025 and 162.065 to 162.085, relating to
bribery and perjury;
  ' (C) ORS 162.235, 162.265 to 162.305, 162.325, 162.335,
162.355 and 162.365, relating to obstructing governmental
administration;
  ' (D) ORS 162.405 to 162.425, relating to abuse of public
office;
  ' (E) ORS 162.465, relating to interference with legislative
operation;
  ' (F) ORS 163.095 to 163.115, 163.118, 163.125 and 163.145,
relating to criminal homicide;
  ' (G) ORS 163.160 to 163.205, relating to assault and related
offenses;
  ' (H) ORS 163.225 and 163.235, relating to kidnapping;
  ' (I) ORS 163.275, relating to coercion;
  ' (J) ORS 163.670 to 163.695, relating to sexual conduct of
children;
  ' (K) ORS 164.015, 164.043, 164.045, 164.055, 164.057, 164.075
to 164.095, 164.125, 164.135, 164.140, 164.215, 164.225 and
164.245 to 164.270, relating to theft, burglary, criminal
trespass and related offenses;
  ' (L) ORS 164.315 to 164.335, relating to arson and related
offenses;
  ' (M) ORS 164.345 to 164.365, relating to criminal mischief;
  ' (N) ORS 164.395 to 164.415, relating to robbery;
  ' (O) ORS 164.865, 164.875 and 164.868 to 164.872, relating to
unlawful recording or labeling of a recording;
  ' (P) ORS 165.007 to 165.022, 165.032 to 165.042 and 165.055 to
165.070, relating to forgery and related offenses;
  ' (Q) ORS 165.080 to 165.109, relating to business and
commercial offenses;
  ' (R) ORS 165.485 to 165.515, 165.540 and 165.555, relating to
communication crimes;


  ' (S) ORS 166.180, 166.190, 166.220, 166.250, 166.270, 166.275,
166.410, 166.450 and 166.470, relating to firearms and other
weapons;
  ' (T) ORS 164.377 (2) to (4), as punishable under ORS 164.377
(5)(b), 167.007 to 167.017, 167.062 to 167.080, 167.087, 167.090,
167.122 to 167.137, 167.147, 167.164, 167.212, 167.355, 167.365
and 167.370, relating to prostitution, obscenity, gambling,
computer crimes involving the Oregon State Lottery, animal
fighting and related offenses;
  ' (U) ORS 171.990, relating to legislative witnesses;
  ' (V) ORS 260.575 and 260.665, relating to election offenses;
  ' (W) ORS 314.075, relating to income tax;
  ' (X) ORS chapter 323, relating to cigarette taxes;
  ' (Y) ORS 411.630, 411.675, 411.690 and 411.840, relating to
public assistance payments, and ORS 411.990 (2) and (3);
  ' (Z) ORS 462.140, 462.415 and 462.420 to 462.520, relating to
racing;
  ' (AA) ORS 463.995, relating to boxing and wrestling, as
defined in ORS 463.015;
  ' (BB) ORS 471.205, 471.305, 471.335 to 471.345, 471.360,
471.392 to 471.400, 471.405, 471.425, 471.445, 471.485, 471.490
and 471.675, relating to alcoholic liquor, and any of the
provisions of ORS chapter 471 relating to licenses issued under
the Liquor Control Act;
  ' (CC) ORS 475.005 to 475.285 and 475.940 to 475.995, relating
to controlled substances;
  ' (DD) ORS 480.070, 480.210, 480.215 and 480.235 to 480.265,
relating to explosives;
  ' (EE) ORS 819.010, 819.040, 822.100, 822.135 and 822.150,
relating to motor vehicles;
  ' (FF) ORS 658.452 or 658.991 (2) to (4), relating to farm
labor contractors;
  ' (GG) ORS chapter 706, relating to banking law administration;
  ' (HH) ORS chapter 708, relating to banks and trusts;
  ' (II) ORS chapter 714, relating to branch banking;
  ' (JJ) ORS chapter 716, relating to mutual savings banks;
  ' (KK) ORS chapter 723, relating to credit unions;
  ' (LL) ORS chapter 726, relating to pawnbrokers;
  ' (MM) ORS 166.382 and 166.384, relating to destructive
devices;
  ' (NN) ORS 165.074;
  ' (OO) ORS 59.840 to 59.965, relating to mortgage bankers and
mortgage brokers;
  ' (PP) ORS chapter 496, 497 or 498, relating to wildlife;
  ' (QQ) ORS 163.355 to 163.427, relating to sexual offenses;
  ' (RR) ORS 166.015, relating to riot;
  ' (SS) ORS 166.155 and 166.165, relating to intimidation;
  ' (TT) ORS chapter 696, relating to real estate and escrow;
  ' (UU) ORS chapter 704, relating to outfitters and guides;
  ' (VV) ORS 165.692, relating to making a false claim for health
care payment;   { - or - }
  ' (WW) ORS 162.117, relating to public investment fraud { + ;
or + }
  '  { +  (XX) Section 6 of this 1997 Act, relating to insurance
fraud + }.
  ' (b) Any conduct defined as 'racketeering activity' under 18
U.S.C. s1961 (1)(B), (C), (D) and (E).
  ' (7) 'Unlawful debt' means any money or other thing of value
constituting principal or interest of a debt that is legally
unenforceable in the state in whole or in part because the debt
was incurred or contracted:
  ' (a) In violation of any one of the following:
  ' (A) ORS chapter 462, relating to racing;
  ' (B) ORS 167.117 to 167.164, relating to gambling; or
  ' (C) ORS 82.010 to 82.170, relating to interest and usury.

  ' (b) In gambling activity in violation of federal law or in
the business of lending money at a rate usurious under federal or
state law.
  ' (8) Notwithstanding contrary provisions in ORS 174.060, when
this section references a statute in the Oregon Revised Statutes
that is substantially different in the nature of its essential
provisions from what the statute was when this section was
enacted, the reference shall extend to and include amendments to
the statute.
  '  { +  SECTION 13. + } ORS 731.028 is amended to read:
  ' 731.028. The State Accident Insurance Fund Corporation is
subject as a domestic insurer to ORS 731.248, 731.252, 731.256,
731.258, 731.260, 731.296 to 731.316, 731.488, 731.574, 731.730,
731.731, 731.735, 731.737, 731.988, 731.992, 733.010 to 733.060,
733.140 to 733.170, 733.210, 737.205, 737.215, 737.225, 737.235
to 737.340, 737.505, 737.560, ORS chapters 742, 743 and 744, ORS
746.015, 746.075, 746.110, 746.145 to 746.155, 746.230 and
746.240  { +  and sections 10, 11 and 17 of this 1997 Act + } to
the extent that such provisions are not inconsistent with the
express provisions of ORS chapter 656. However:
  ' (1) The requirements of the Director of the Department of
Consumer and Business Services under ORS 733.010 to 733.060,
733.140 to 733.170 and 733.210 govern in the case of a conflict
between those requirements and the requirements of any accounting
system prescribed by the Oregon Department of Administrative
Services.
  ' (2) The filing requirements of ORS 737.205 to 737.340,
737.505 and 737.560 are in lieu of any similar filing
requirements prescribed by any other law of this state.
  ' (3) The requirements of ORS chapter 743 are applicable only
with respect to excess workers' compensation insurance furnished
by the corporation.
  ' (4) The provisions of ORS chapter 744 apply only with respect
to the regulation of agents.
  ' (5) For each year that the Secretary of State conducts an
audit of the State Accident Insurance Fund Corporation under ORS
297.210, the director may accept the audit and a copy of the
Secretary of State's audit report in lieu of the requirements of
ORS 731.488 if the director determines that the purposes of ORS
731.488 are adequately served by the Secretary of State's audit
and report. The Secretary of State shall file a copy of its audit
report of the State Accident Insurance Fund Corporation with the
director.
  '  { +  SECTION 14. + } ORS 748.603 is amended to read:
  ' 748.603. (1) Societies shall be governed by this chapter and
shall be exempt from all other provisions of the insurance laws
of this state unless expressly designated therein, or unless
specifically made applicable by this chapter.
  ' (2) ORS 731.004 to 731.026, 731.032 to 731.136, 731.146 to
731.156, 731.162, 731.166, 731.170, 731.216 to 731.268, 731.296,
731.324, 731.328, 731.354, 731.356, 731.358, 731.378, 731.380,
731.381, 731.382, 731.385, 731.386, 731.390, 731.394, 731.396,
731.398, 731.402, 731.406, 731.410, 731.422 to 731.434, 731.446
to 731.454, 731.488, 731.504, 731.508, 731.509, 731.510, 731.511,
731.512, 731.730, 731.731, 731.735, 731.737, 731.740, 731.750,
731.804, 731.844 to 731.992, 732.245, 732.250, 732.320, 732.325,
733.010 to 733.050, 733.080, 733.140 to 733.210, 733.220,
733.510, 733.652 to 733.658, 733.730 to 733.750, 735.600 to
735.650, 742.001, 742.003, 742.005, 742.007, 742.009, 742.013 to
742.021, 742.028, 742.038, 742.041, 742.046, 742.051, 742.150 to
742.162 and 744.700 to 744.740  { + and sections 10, 11 and 17 of
this 1997 Act + } and ORS chapters 734 and 743 shall apply to
fraternal benefit societies to the extent so applicable and not
inconsistent with the express provisions of this chapter.
  ' (3) For the purposes of this subsection and subsection (2) of
this section, fraternal benefit societies shall be deemed
insurers, and benefit certificates issued by fraternal benefit
societies shall be deemed policies.
  ' (4) Every society authorized to do business in this state
shall be subject to the provisions of ORS chapter 746 relating to
unfair trade practices. However, nothing in ORS chapter 746 shall
be construed as applying to or affecting the right of any society
to determine its eligibility requirements for membership, or be
construed as applying to or affecting the offering of benefits
exclusively to members or persons eligible for membership in the
society by a subsidiary corporation or affiliated organization of
the society.
  '  { +  SECTION 15. + } ORS 750.055, with editorial adjustments
to the series 743.600 to 743.622 and to the series ORS 743.730 to
743.745, is amended to read:
  ' 750.055. (1) The following provisions of the Insurance Code
shall apply to health care service contractors to the extent so
applicable and not inconsistent with the express provisions of
ORS 750.005 to 750.095:
  ' (a) ORS 731.004 to 731.150, 731.162, 731.216 to 731.362,
731.382, 731.385, 731.386, 731.390, 731.398 to 731.430, 731.450,
731.454, 731.488, 731.504, 731.508, 731.509, 731.510, 731.511,
731.512, 731.574 to 731.620, 731.640 to 731.652, 731.730,
731.731, 731.735, 731.737, 731.740, 731.750, 731.804 and 731.844
to 731.992  { +  and sections 10, 11 and 17 of this 1997 Act + }.
  ' (b) ORS 732.215, 732.220, 732.230, 732.245, 732.250, 732.320,
732.325 and 732.517 to 732.592, not including ORS 732.549 and
732.574 to 732.592.
  ' (c)(A) ORS 733.010 to 733.050, 733.080, 733.140 to 733.170,
733.210, 733.510 to 733.620, 733.635 to 733.680 and 733.695 to
733.780 apply to not-for-profit health care service contractors.
  ' (B) ORS chapter 733, not including ORS 733.630, applies to
for-profit health care service contractors.
  ' (d) ORS chapter 734.
  ' (e) ORS 742.001 to 742.009, 742.013, 742.061, 742.065,
742.150 to 742.162, 742.400, 742.520 to 742.540, 743.010,
743.013, 743.018 to 743.030, 743.050, 743.100 to 743.109,
743.402, 743.412, 743.472, 743.492, 743.495, 743.498, 743.523 to
743.527, 743.529, 743.549 to 743.555, 743.556, 743.560, 743.600
to 743.610, 743.650 to 743.656, 743.701, 743.704, 743.706 to
743.712, 743.721, 743.722, 743.727, 743.728, 743.729, 743.808,
743.809, 743.813 and 743.816.
  ' (f) ORS 743.522 and 743.528, except that individual policies
may be issued to the persons or families insured in lieu of
issuance of a single group policy as referred to in ORS 743.522.
An individual policy issued under this paragraph shall be
considered the statement of the essential features of the
insurance coverage required under ORS 743.528 (2).
  ' (g) The provisions of ORS chapter 744 relating to the
regulation of agents.
  ' (h) ORS 746.005 to 746.140, 746.160, 746.180, 746.220 to
746.370 and 746.600 to 746.690.
  ' (i) ORS 743.714, except in the case of group practice health
maintenance organizations that are federally qualified pursuant
to Title XIII of the Public Health Service Act unless the patient
is referred by a physician associated with a group practice
health maintenance organization.
  ' (j) ORS 735.600 to 735.650.
  ' (k) ORS 743.680 to 743.689.
  ' (L) ORS 744.700 to 744.740.
  ' (m) ORS 743.730 to 743.773.
  ' (n) ORS 731.485, except in the case of a group practice
health maintenance organization that is federally qualified
pursuant to Title XIII of the Public Health Service Act and that
wholly owns and operates an in-house drug outlet.
  ' (2) For the purposes of this section only, health care
service contractors shall be deemed insurers.
  ' (3) Any for-profit health care service contractor organized
under the laws of any other state which is not governed by the
insurance laws of such state, will be subject to all requirements
of ORS chapter 732.
  ' (4) The Director of the Department of Consumer and Business
Services may, after notice and hearing, adopt reasonable rules
not inconsistent with this section and ORS 750.003, 750.005,
750.025 and 750.045 that are deemed necessary for the proper
administration of these provisions.
  '  { +  SECTION 16. + } ORS 750.333, as amended by section 30,
chapter 603, Oregon Laws 1995, is amended to read:
  ' 750.333. (1) The following provisions of the Insurance Code
apply to trusts carrying out a multiple employer welfare
arrangement:
  ' (a) ORS 731.004 to 731.150, 731.162, 731.216 to 731.268,
731.296 to 731.316, 731.324, 731.328, 731.378, 731.386, 731.390,
731.398, 731.406, 731.410, 731.414, 731.418 to 731.434, 731.454,
731.484, 731.486, 731.488, 731.512, 731.574 to 731.620, 731.640
to 731.652, 731.804 to 731.992 { +  and sections 10, 11 and 17 of
this 1997 Act + }.
  ' (b) ORS 733.010 to 733.050, 733.140 to 733.170, 733.210,
733.510 to 733.680 and 733.695 to 733.780.
  ' (c) ORS chapter 734.
  ' (d) ORS 742.001 to 742.009, 742.013, 742.061 and 742.400.
  ' (e) ORS 743.028, 743.053, 743.524, 743.526, 743.527, 743.528,
743.529, 743.530, 743.560, 743.562, 743.600, 743.601, 743.602,
743.610, 743.730 to 743.773 (except 743.760 to 743.773), 743.808,
743.809, 743.813 and 743.816.
  ' (f) ORS 743.556, 743.701, 743.703, 743.704, 743.706, 743.707,
743.709, 743.710, 743.712, 743.713, 743.714, 743.717, 743.718,
743.719, 743.721, 743.722 and 743.724. Multiple employer welfare
arrangements to which ORS 743.730 to 743.773 apply are subject to
the sections referred to in this paragraph only as provided in
ORS 743.730 to 743.773.
  ' (g) Provisions of ORS chapter 744 relating to the regulation
of agents and insurance consultants, and ORS 744.700 to 744.740.
  ' (h) ORS 746.005 to 746.140, 746.160, 746.180 and 746.220 to
746.370.
  ' (2) For the purposes of this section:
  ' (a) A trust carrying out a multiple employer welfare
arrangement shall be considered an insurer.
  ' (b) References to certificates of authority shall be
considered references to certificates of multiple employer
welfare arrangement.
  ' (c) Contributions shall be considered premiums.
  ' (3) The provision of health benefits under ORS 750.301 to
750.341 shall be considered to be the transaction of health
insurance.
  '  { +  SECTION 17. + }  { + (1) Each printed insurance
application form provided and required by an insurer and each
printed insurance claim form provided and required by an insurer
or required by law as a condition for payment of a claim must
contain a statement to the effect that:
  ' (a) A person commits the crime of insurance fraud if the
person with the intent to defraud provides false, incomplete or
misleading information, or conceals or fails to disclose a
material fact, to an insurer; and
  ' (b) Penalties may include imprisonment or fines or both and
that insurance benefits may be denied.
  ' (2) It is not a defense to a prosecution under section 6 of
this 1997 Act that an application for insurance or an insurance
claim form did not have the statement required by subsection (1)
of this section. + }
  '  { +  SECTION 18. + }  { + Section 17 of this Act applies to
insurance applications and insurance claim forms provided by an
insurer on or after January 1, 1998. + }
  '  { +  SECTION 19. + } ORS 746.230 is amended to read:
  ' 746.230. (1) No insurer or other person shall commit or
perform any of the following unfair claim settlement practices:
  ' (a) Misrepresenting facts or policy provisions in settling
claims;
  ' (b) Failing to acknowledge and act promptly upon
communications relating to claims;
  ' (c) Failing to adopt and implement reasonable standards for
the prompt investigation of claims;
  ' (d) Refusing to pay claims without conducting a reasonable
investigation based on all available information;
  ' (e) Failing to affirm or deny coverage of claims within a
reasonable time after completed proof of loss statements have
been submitted;
  ' (f) Not attempting, in good faith, to promptly and equitably
settle claims in which liability has become reasonably clear;
  ' (g) Compelling claimants to initiate litigation to recover
amounts due by offering substantially less than amounts
ultimately recovered in actions brought by such claimants;
  ' (h) Attempting to settle claims for less than the amount to
which a reasonable person would believe a reasonable person was
entitled after referring to written or printed advertising
material accompanying or made part of an application;
  ' (i) Attempting to settle claims on the basis of an
application altered without notice to or consent of the
applicant;
  ' (j) Failing, after payment of a claim, to inform insureds or
beneficiaries, upon request by them, of the coverage under which
payment has been made;
  ' (k) Delaying investigation or payment of claims by requiring
a claimant or the physician of the claimant to submit a
preliminary claim report and then requiring subsequent submission
of loss forms when both require essentially the same information;
  ' (L) Failing to promptly settle claims under one coverage of a
policy where liability has become reasonably clear in order to
influence settlements under other coverages of the policy;
 { - or - }
  ' (m) Failing to promptly provide the proper explanation of the
basis relied on in the insurance policy in relation to the facts
or applicable law for the denial of a claim { + ; or
  ' (n) Threatening to present criminal charges to obtain an
advantage in settling a claim + }.
  ' (2) No insurer shall refuse, without just cause, to pay or
settle claims arising under coverages provided by its policies
with such frequency as to indicate a general business practice in
this state, which general business practice is evidenced by:
  ' (a) A substantial increase in the number of complaints
against the insurer received by the Department of Consumer and
Business Services;
  ' (b) A substantial increase in the number of lawsuits filed
against the insurer or its insureds by claimants; or
  ' (c) Other relevant evidence.
  ' (3)(a) No health maintenance organization, as defined in ORS
750.005, shall unreasonably withhold the granting of
participating provider status from a class of statutorily
authorized health care providers for services rendered within the
lawful scope of practice if the health care providers are
licensed as such and reimbursement is for services mandated by
statute.
  ' (b) Any health maintenance organization that fails to comply
with paragraph (a) of this subsection shall be subject to
discipline under ORS 746.015.
  ' (c) This subsection does not apply to group practice health
maintenance organizations that are federally qualified pursuant
to Title XIII of the Health Maintenance Organization Act.

  '  { +  SECTION 20. + }  { + The amendments to ORS 163.165 by
section 4 of this Act become operative on July 1, 1999. + } ' .
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