AN ACT
SB 268
Relating to regulation of
persons in insurance business; creating new provisions; amending ORS 708A.005,
708A.120, 708A.200, 715.075, 716.594, 716.610, 731.062, 731.116, 731.136,
735.405, 735.410, 735.415, 735.420, 735.425, 735.435, 735.450, 735.460,
735.465, 735.470, 735.475, 735.480, 735.485, 735.490, 744.001, 744.002,
744.003, 744.008, 744.009, 744.011, 744.013, 744.014, 744.018, 744.022,
744.024, 744.026, 744.028, 744.031, 744.033, 744.037, 744.039, 744.061,
744.175, 744.225, 744.227, 744.300, 744.704, 744.800, 746.182, 746.600 and
750.055; repealing ORS 744.016, 744.051, 744.054, 744.057, 744.066, 744.069,
744.071, 744.075, 744.085, 744.115, 744.119, 744.123, 744.127, 744.145,
744.155, 744.165, 744.182 and 744.231; and declaring an emergency.
INSURANCE AGENTS
Be It Enacted by the People of the State of Oregon:
SECTION 1.
Sections 2 to 19 of this 2001 Act are
added to and made a part of ORS chapter 744.
SECTION 2.
As used in sections 2 to 19 of this 2001
Act:
(1) “Business entity”
has the meaning given that term in ORS 731.116.
(2) “Home state” means
any state, district or territory of the United States, in which an insurance
producer maintains the insurance producer’s principal place of residence or principal
place of business and is licensed to act as an insurance producer.
(3) “Insurance producer”
means a person required to be licensed under the laws of another state to sell,
solicit or negotiate insurance.
(4) “Limited class
credit insurance” includes credit life, credit disability, credit property,
credit unemployment, involuntary unemployment, mortgage life, mortgage
guaranty, mortgage disability, and guaranteed automobile protection insurance,
and any other form of insurance offered in connection with an extension of
credit that is limited to partially or wholly extinguishing the credit
obligation that the Director of the Department of Consumer and Business
Services determines should be designated a form of limited class credit
insurance.
(5) “Limited class
credit insurance agent” and “limited class credit insurance producer” mean a
person required to be licensed to sell, solicit or negotiate one or more forms
of limited class credit insurance coverage to individuals through a master, corporate,
group or individual policy.
(6) “Limited class
insurance” includes credit, mortgage, automobile dealer guaranteed automobile
protection and any other form of insurance designated by the director as a form
of limited class insurance.
(7) “Limited class
insurance agent” and “limited class insurance producer” mean a person required
to be licensed to sell, solicit or negotiate one or more forms of limited class
insurance coverage to individuals through a master, corporate, group or individual
policy.
(8) “Negotiate,” “sell”
and “solicit” have the meanings given those terms in ORS 731.062, except that
for an insurance producer, “negotiate” applies to a person engaged in
negotiation who obtains insurance from insurers for purchasers as well as to a
person engaged in negotiation who sells insurance.
(9) “Terminate” means to
cancel the relationship between an insurance agent and the insurer or to cancel
an agent’s authority to sell, solicit or negotiate insurance.
(10) “Uniform
Application” means the current version of the Uniform Application for resident
and nonresident insurance producer licensing, produced by the National
Association of Insurance Commissioners.
(11) “Uniform Business
Entity Application” means the current version of the Uniform Business Entity
Application for resident and nonresident business entities, produced by the
National Association of Insurance Commissioners.
SECTION 3.
A person shall not sell, solicit or
negotiate insurance in this state for any class or classes of insurance unless
the person is licensed as an agent for that class or those classes in
accordance with sections 2 to 19 of this 2001 Act.
SECTION 4.
(1) Sections 2 to 19 of this 2001 Act do
not require an insurer to obtain a license as an agent as required by section 3
of this 2001 Act. For purposes of this section, the term “insurer” does not
include an insurer’s officers, directors, employees, subsidiaries or
affiliates.
(2) A license as an
agent shall not be required of any of the following:
(a) An officer, director
or employee of an insurer, an agent or an insurance producer, if the officer,
director or employee does not receive any commission on or fee for policies
written or sold to insure risks residing, located or to be performed in this
state and:
(A) The officer’s,
director’s or employee’s activities are executive, administrative, managerial,
clerical or a combination of these, and are only indirectly related to the
sale, solicitation or negotiation of insurance;
(B) The officer’s,
director’s or employee’s function relates to underwriting, loss control,
inspection or the processing, adjusting, investigating or settling of a claim
on a contract of insurance; or
(C) The officer,
director or employee is acting in the capacity of an agency supervisor
assisting licensed agents or insurance producers when the person’s activities
are limited to providing technical advice and assistance to licensed agents or
insurance producers and do not include the sale, solicitation or negotiation of
insurance.
(b) A person who does either
of the following, when the person does not receive any commission or fee for
the service:
(A) Secures and
furnishes information for the purpose of group life insurance, group property
and casualty insurance, group annuities or group or blanket health insurance or
for the purpose of enrolling individuals under plans, issuing certificates
under plans or otherwise assisting in administrative plans; or
(B) Performs
administrative services related to mass-marketed property and casualty
insurance.
(c) An employer or an
association of employers or its officers, directors or employees, or the
trustees of an employee trust plan:
(A) To the extent that
the employers, associations, directors, officers, employees or trustees are
engaged in the administration or operation of a program of employee benefits
for the employer’s or association’s own employees or the employees of its subsidiaries
or affiliates;
(B) To the extent that
the program of employee benefits involves the use of insurance issued by an
insurer; and
(C) As long as the
employers, associations, officers, directors, employees or trustees are not in
any manner compensated, directly or indirectly, by the insurer issuing the
insurance.
(d) An employee of an
insurer or an organization employed by insurers who is engaging in the
inspection, rating or classification of risks, or in the supervision of the
training of agents or insurance producers and who is not individually engaged
in the sale, solicitation or negotiation of insurance.
(e) A person whose
activities in this state are limited to advertising without the intent to
solicit insurance in this state through communications in printed publications
or electronic mass media, the distribution of which is not limited to residents
of this state, but only if the person does not sell, solicit or negotiate
insurance that would insure risks residing, located or to be performed in this
state.
(f) A person who is not
a resident of this state who sells, solicits or negotiates a policy of
insurance for commercial property and casualty risks to an insured with risks
located in more than one state insured under that policy, but only if the
person is otherwise licensed as an insurance producer to sell, solicit or
negotiate that insurance in the state where the insured maintains its principal
place of business and the contract of insurance insures risks located in that
state.
(g) A salaried full-time
employee who counsels or advises the employer of the employee relative to the
insurance interests of the employer or of the subsidiaries or business
affiliates of the employer, but only if the employee does not sell or solicit
insurance or receive any commission.
(h) An attorney in fact
of an authorized reciprocal insurer, or the salaried representative of the
insurer or attorney who does not receive any commission.
(i) A person engaging in
the lawful transaction of reinsurance.
(j) Salaried employees
of title insurance agents or insurers, except for the individual or individuals
designated as exercising the powers conferred by a title insurance agent’s
license.
(k) Any agent or
representative of persons exempt from the Insurance Code under ORS 731.032 or
731.036, with respect to the exempted transactions.
(L) Any agent or
representative of a fraternal benefit society who devotes, or intends to
devote, less than 50 percent of the agent’s or representative’s time to the
solicitation and procurement of insurance policies for that society. Any person
who in the preceding calendar year has solicited and procured life insurance
policies on behalf of any fraternal benefit society for an amount of insurance
in excess of $50,000 or, in the case of any other class or classes of insurance
that the society might write, on the persons of more than 25 individuals, and
who has received or will receive a commission or other compensation therefor,
shall be presumed to be devoting, or intending to devote, 50 percent or more of
the person’s time to the solicitation and procurement of insurance policies for
that society.
(m) A person engaging in
the lawful transaction of home protection insurance if the person is a real
estate licensee as defined in ORS 696.010, and if the transaction of such
insurance by the person is subject to a written contract, to which the insurer
is a party, governing the person’s activities in the transaction.
(n) Salaried employees
of a financial institution or trust company, as those terms are defined in ORS
706.008, who, in the regular course of business with the customers of the
financial institution or trust company, present the customers with written
information about savings account annuities issued by an authorized insurer.
Any person who purchases such an annuity may rescind the transaction within 10
days after the issuance of the contract. For purposes of this paragraph,
“savings account annuities” means annuities purchased with the proceeds of a
savings account, certificate or share in a financial institution or trust
company.
(3) A person who
provides general insurance advice in connection with providing other
professional services such as legal services, trust services, tax and
accounting services, financial planning or investment advisory services is not
considered to be soliciting the sale of insurance for the purpose of the
definition of “agent” in ORS 731.062.
(4) Except as provided
in sections 7 and 9 of this 2001 Act and ORS 735.450, the provisions of this
chapter relating to agents do not apply to a surplus lines agent authorized
pursuant to ORS 735.450.
SECTION 5.
(1) An individual applying for a
resident agent license must pass a written examination unless the individual is
exempt from the prelicensing education and examination requirement as provided
in section 10 of this 2001 Act. The examination must test the knowledge of the
individual concerning the class or classes of insurance for which application
is made, the duties and responsibilities of an agent and the insurance statutes
and rules of this state. Except as provided in subsection (2) of this section,
the examination required by this section shall be developed and conducted by
the Director of the Department of Consumer and Business Services. An individual
may apply for a resident agent license only if the individual has established
in this state a residence or a place of business for acting as an agent.
(2) The director may
make arrangements, including contracting with a private testing service, for
developing and administering the examination and collecting applicable fees.
(3) Each individual
applying to take an examination shall pay fees as established by the director.
(4) An individual who
fails to appear for the examination as scheduled or fails to pass the
examination may reapply to take the examination according to requirements and
procedures established by the director by rule.
SECTION 6.
(1) An individual applying for a
resident agent license shall apply to the Director of the Department of
Consumer and Business Services on the Uniform Application and shall declare
that the statements made in the application are true, correct and complete to
the best of the individual’s knowledge and belief. Before approving the
application, the director must find that the individual:
(a) Is at least 18 years
of age;
(b) Has not committed an
act that is a ground for action on a license set forth in section 14 of this
2001 Act;
(c) When required by the
director, has completed a prelicensing course of study for the lines of
authority for which the person has applied;
(d) Has paid all
applicable fees; and
(e) Has successfully
passed the examination for the lines of authority for which the person has
applied.
(2) A business entity
acting as an agent is required to obtain an agent license. Application shall be
made on the Uniform Business Entity Application. Before approving the
application, the director must find that:
(a) The business entity
has paid all applicable fees; and
(b) The business entity
has designated a licensed agent responsible for the business entity’s
compliance with the insurance laws and rules of this state.
(3) The director may
require any documents necessary to verify the information contained in an
application.
(4) Each insurer that
sells, solicits or negotiates any form of limited class credit insurance shall
provide to each limited class credit insurance agent a program of instruction,
which is subject to review and approval by the director.
SECTION 7.
(1) Unless the Director of the
Department of Consumer and Business Services refuses to issue or renew a
license pursuant to section 14 of this 2001 Act, a nonresident person shall
receive a nonresident agent license if:
(a) The person is
currently licensed as a resident insurance producer and is in good standing in
the person’s home state;
(b) The person has
submitted the proper request for a nonresident agent license and has paid the
applicable fees;
(c) The person has
submitted or transmitted to the director the resident insurance producer
license application that the person submitted to the person’s home state, or in
lieu of that application, a completed Uniform Application;
(d) The person has filed
with the director, in writing, an appointment of the director to be the
attorney of the person upon whom all legal process in any action or proceeding
against the person may be served. In the appointment, the person must agree that
any lawful process against the person that is served upon the director shall be
of the same legal force and validity as if served upon the applicant, and that
the authority shall continue in force so long as any liability remains
outstanding in this state. An appointment under this paragraph becomes
effective on the date that the director issues the nonresident agent license to
the applicant; and
(e) The person’s home
state grants nonresident insurance producer licenses to residents of this state
on the same basis.
(2) The director may
verify the insurance producer’s licensing status through the Producer Database
maintained by the National Association of Insurance Commissioners, its
affiliates or subsidiaries.
(3) A nonresident agent
licensed in this state who moves from one state to another state or a resident
agent who moves from this state to another state shall file with the director a
change of address and provide certification from the new resident state not
later than the 30th day after the change of legal residence. No fee or license
application is required under this subsection.
(4) A person licensed as
a surplus lines insurance producer in the person’s home state shall receive a
nonresident surplus lines agent license pursuant to subsection (1) of this
section. Except as provided in subsection (1) of this section, nothing in this
section supersedes any provision of ORS 735.400 to 735.495.
(5) Notwithstanding any
other provision of sections 2 to 19 of this 2001 Act, the director shall issue
a nonresident limited class insurance agent license pursuant to subsection (1)
of this section to a person who is licensed as a limited class credit insurance
producer or as another type of limited class insurance producer under the laws
of the person’s home state that restrict the authority of the license to less
than the authority prescribed in section 8 of this 2001 Act for the classes of
life insurance, health insurance, property insurance or casualty insurance.
(6) A license for the
class of title insurance may not be issued to a nonresident agent.
SECTION 8.
(1) Unless the Director of the
Department of Consumer and Business Services refuses to issue or renew a
license pursuant to section 14 of this 2001 Act, a person who has met the
requirements of sections 5 and 6 of this 2001 Act, or section 7 of this 2001
Act, shall be issued an agent license. An agent may receive qualification for a
license in one or more of the following classes of insurance:
(a) Life insurance as
defined in ORS 731.170.
(b) Health insurance as
defined in ORS 731.162.
(c) Property insurance
as defined in ORS 731.182.
(d) Casualty insurance
as defined in ORS 731.158.
(e) Variable life
insurance, including variable annuities.
(f) Property and
casualty insurance coverage sold to individuals and families for primarily
noncommercial purposes.
(g) Limited class credit
insurance.
(h) Any form of
insurance designated by the director as a form of limited class insurance.
(i) Title insurance as
defined in ORS 731.190. A license for the class of title insurance may be
issued only to a resident agent.
(j) Any other class of
insurance permitted under the Insurance Code or rules adopted thereunder.
(2) For assistance in
performance of the director’s duties, the director may participate with the
National Association of Insurance Commissioners, or any affiliate or subsidiary
that the National Association of Insurance Commissioners oversees, in a
centralized producer licensing registry in which insurance agent and producer
licenses and appointments are centrally or simultaneously effected for all
states that require an insurance producer license. The director may adopt by
rule any uniform standards and procedures as are necessary to participate in
the registry, including the centralized collection of fees for licenses or
appointments that are processed through the registry.
(3) An agent may apply
to amend a license for the purpose of adding or deleting a class of insurance
on the license in the manner prescribed for license application in section 6 or
7 of this 2001 Act, or as otherwise prescribed by the director.
SECTION 9.
(1) Unless denied a license pursuant to
section 14 of this 2001 Act, a person who is currently licensed as a resident
insurance producer in a Canadian province, in Mexico or in a state that does
not grant nonresident producer licenses to residents of this state on the same
basis that this state grants nonresident agent licenses under section 7 of this
2001 Act shall receive a nonresident agent license if the insurance regulator
in the person’s place of residence grants nonresident insurance producer
licenses to residents of this state on the same basis and if the person meets
all of the following requirements:
(a) The person is in
good standing as a resident agent in the person’s place of residence in Canada,
Mexico or the person’s state of residence.
(b) The person has
submitted the proper request for a nonresident agent license and has paid the
applicable fees.
(c) The person has
submitted or transmitted to the Director of the Department of Consumer and
Business Services the resident agent license application that the person
submitted to the insurance regulator in the person’s place of residence, or in
lieu of that application, a completed Uniform Application.
(d) The person has taken
and passed a written examination specified by the director under this section
with respect to the authority to transact the class or classes of insurance for
which the applicant has applied. The requirement of an examination does not
apply to an applicant that is a business entity.
(e) The person has
submitted or transmitted to the director an appointment of the director to be
the attorney of the person upon whom all legal process in any action or
proceeding against the person may be served. In the appointment, the person
must agree that any lawful process against the person that is served upon the
director shall be of the same legal force and validity as if served upon the
person, and that the authority shall continue in force so long as any liability
remains outstanding in this state. An appointment under this paragraph becomes
effective on the date that the director issues the nonresident agent license to
the person.
(f) The person has
satisfied any other qualifications established by the director by rule or has
satisfied qualifications that the director establishes by rule in lieu of the
qualifications established in this subsection.
(2) A person who is
licensed by this state to sell, solicit or negotiate insurance as a nonresident
agent under this section may sell, solicit or negotiate any policy of insurance
upon domestic risks to the same extent and upon the same terms as provided by
the insurance regulator in the person’s place of residence for residents of
this state transacting a like business in a province of Canada, in Mexico or in
the person’s state of residence.
(3) The examination
requirement under subsection (1) of this section is subject to waiver if the
director has entered into a reciprocal agreement as provided in subsection (4)
of this section with the insurance regulator in the person’s place of residence.
(4) The director may
enter into a reciprocal agreement with the appropriate insurance regulator in a
province of Canada or in Mexico that waives any or all of the requirements for
issuance of a license under this section if:
(a) A written
examination is required of applicants for a resident agent license in the
jurisdiction of the insurance regulator;
(b) The insurance
regulator of the other jurisdiction certifies that the applicant holds a valid
license as a resident insurance producer in the other jurisdiction and either
passed the written examination or was the holder of a resident insurance producer
license prior to the time the written examination was first required; and
(c) In the other
jurisdiction, a resident of this state is privileged to procure an insurance
producer license upon conditions no less favorable than the conditions stated
in this section.
(5) The director shall
establish the form of the nonresident agent license issued under this section.
SECTION 10.
(1) An individual who applies for a
resident agent license in this state who is or was previously licensed as an
insurance producer for the same lines of authority in another state is not
required to complete any prelicensing education or examination. The exemption
under this subsection is available only if the individual is currently licensed
in the other state or if the application is received by the Director of the
Department of Consumer and Business Services not later than the 90th day after
the applicant’s previous license was terminated and if the other state issues a
certification that, at the time of termination, the applicant was in good
standing in that state or the state’s Producer Database maintained by the
National Association of Insurance Commissioners, its affiliates or subsidiaries
indicate that the applicant is or was licensed in good standing for the class
of insurance requested.
(2) A person licensed as
an insurance producer in another state who moves to this state must apply for a
resident agent license not later than the 90th day after the date on which the
person established legal residence in order to qualify for a resident agent
license pursuant to section 6 of this 2001 Act. Neither prelicensing education
nor an examination is required of a person to whom this subsection applies in
order to obtain a license in a class of insurance described in section 8 of
this 2001 Act if the person held a license in that class in the other state,
except when the director has determined otherwise by rule.
(3) An individual who
holds an industry designation described in this subsection is not required to
complete prelicensing education or the examination required in section 5 of
this 2001 Act if the director is satisfied, by examination or otherwise, that
the applicant is knowledgeable in the particulars of the applicable provisions
of the Insurance Code. This subsection applies to:
(a) An applicant for a
license authorizing the applicant to transact property or casualty insurance or
both, upon whom the American Institute for Chartered Property Casualty
Underwriters has conferred the Chartered Property Casualty Underwriter
(C.P.C.U.) designation.
(b) An applicant for a
license authorizing the applicant to transact life or health insurance, or
both, upon whom the American College has conferred the Chartered Life
Underwriter (C.L.U.) designation.
(4) The director may
recognize one or more industry designations as exempting an applicant from the
prelicensing education requirement or the examination required in section 5 of
this 2001 Act or both. For each industry designation that the director recognizes
and for the extent of the exemption to be given, the director shall consider
the content, quality and scope of the educational program required for the
designation as well as other factors determined by the director to be relevant.
(5) An individual is not
required to complete prelicensing education or the examination required in
section 5 or 9 of this 2001 Act for the following licenses:
(a) A license
authorizing the individual to transact a type of limited class insurance,
except as the director otherwise provides by rule.
(b) A license
authorizing the individual to transact title insurance.
SECTION 11.
(1) An agent shall notify the Director
of the Department of Consumer and Business Services prior to transacting
business under the agent license under any name other than the agent’s legal
name and prior to changing, deleting or adding an assumed business name in
connection with the agent’s business under the agent license.
(2) A resident agent
shall keep at the principal place of business of the agent the usual and
customary records pertaining to the business under the resident agent license.
All such records shall be kept available and open to the inspection of the
director during business hours. A resident agent shall keep records of
insurance transacted by the agent under the license for three years following
expiration of the policy unless the director designates another period.
(3) A nonresident agent
shall keep at the principal place of business of the agent the usual and
customary records pertaining to the business under the nonresident agent
license. All such records shall be kept available and open to the inspection of
the director during business hours. For the purpose of this subsection, if a
nonresident agent has a place of transacting insurance in this state, that
place shall be the principal place of business for the nonresident agent. A
nonresident agent shall keep records of insurance transacted by the agent under
the nonresident agent license for three years following expiration of the
policy unless the director designates another period.
(4) An agent shall
notify the director of any of the following changes not later than the 30th day
after the date of the change:
(a) A change of address
or telephone number of the principal place of business or any location at which
the agent transacts business under the license in this state.
(b) The opening or
closing of a location at which the agent transacts business under the license
in this state.
(c) A change of
residence. This paragraph applies only to a resident agent.
(5) Not later than the
30th day after the authority of an individual agent to act for an agent that is
a business entity has commenced or terminated, the business entity shall notify
the director of the commencement or termination. The director may establish by
rule a different period within which the business entity must notify the
director under this subsection.
SECTION 12.
(1) An agent license remains in effect
unless revoked or suspended as long as all applicable fees are paid by the due
date and, if the licensee is a resident individual agent, as long as the
licensee has met applicable continuing education requirements for resident
individual agents under subsection (4) of this section by the due date. The
renewal fee is due on the last day of the month in which the second anniversary
of the initial issuance date of the license occurs and on the second
anniversary following each renewal. The Director of the Department of Consumer
and Business Services may establish another renewal period for the purpose of
coordination with any national registration or licensing system.
(2) As a condition for
or in connection with the renewal of an agent license the director may require
the agent to file information with the director regarding use made of the
license during the previous year or two years, and especially showing whether the
license has been used principally for the writing of personal or controlled
insurance, as defined in ORS 746.065.
(3) The director may
require an agent, as a condition for renewal of the agent license, to fulfill
any or all of the requirements then applicable to the original issuance of the
license.
(4) The director by rule
may establish requirements for continuing education that each resident
individual agent must satisfy as a condition for renewing the resident agent
license. The hours of education so required shall not exceed 45 hours annually
during the first five years an individual is licensed, 24 hours annually during
the next five years an individual is licensed, and 12 hours annually for
individuals licensed for more than 10 years or for individuals who have
received the designation C.P.C.U., C.L.U. or comparable designation recognized
by the director. Continuing education shall not be required for:
(a) Any person to whom a
license is issued without examination pursuant to section 10 (4) of this 2001
Act;
(b) Any retired person
who is authorized to transact life insurance only, if the person is 58 years of
age or more, has 10 years’ experience as a licensed agent, will be servicing
existing policies only and requests an exemption from the requirement; or
(c) Any person whose
license is indorsed to authorize the person to act as an intermediary broker or
intermediary manager, or both, as described in ORS 744.800, but the exemption
applies solely for the purpose of maintaining the indorsement and does not affect
any continuing education requirement that otherwise applies.
(5) In connection with
establishing continuing education requirements under subsection (4) of this
section, the director may make arrangements, including contracting with a
private service, for establishing and operating a program and standards for
approving and registering continuing education programs and their providers.
(6) An individual agent
who allows the agent license to lapse may reinstate the same license within 24
months from the due date for renewal without having to take and pass a written
examination, but the agent must pay an amount equal to double the unpaid
renewal fee for any renewal fee paid after the due date and must complete any
continuing education requirements not satisfied to date.
(7) An individual agent
who is unable to comply with license renewal procedures due to military service
or another extenuating circumstance such as a long term medical disability may
request a waiver from compliance with those procedures. The agent may also
request a waiver of any examination requirement or any penalty imposed for
failure to comply with renewal procedures.
SECTION 13.
(1) The Director of the Department of
Consumer and Business Services may issue a temporary agent license for a period
not to exceed 180 days without requiring a written examination if the director
determines that the temporary license is necessary for the servicing of an
insurance business in the following cases:
(a) To the surviving
spouse or court-appointed personal representative of a licensed agent who dies
or becomes mentally or physically disabled to allow adequate time for the sale
of the insurance business owned by the agent, for the recovery or return of the
agent to the business, or to provide for the training and licensing of new
personnel to operate the agent’s business;
(b) To a member or
employee of a business entity licensed as an agent, upon the death or
disability of the individual designated in the business entity application or
the license;
(c) To the designee of a
licensed agent entering active service in the Armed Forces of the United
States; or
(d) In any other
circumstance in which the director determines that the public interest will
best be served by the issuance of the license.
(2) The director may by
order limit the authority of any temporary licensee in any way that the
director determines to be necessary to protect insureds and the public. The
director may require the temporary licensee to have a suitable sponsor who is a
licensed agent or insurer and who assumes responsibility for all acts of the
temporary licensee and may impose other similar requirements designed to
protect insureds and the public. The director may revoke a temporary license if
the interest of insureds or the public is endangered. A temporary license may
not continue after the owner or the personal representative disposes of the
business.
SECTION 14.
(1) The Director of the Department of
Consumer and Business Services may place a licensee on probation or suspend,
revoke or refuse to issue or renew an agent license and may take other actions
authorized by the Insurance Code in lieu thereof or in addition thereto, for
any one or more of the following causes:
(a) Providing incorrect,
misleading, incomplete or materially untrue information in the license
application.
(b) Violating any
insurance laws, or violating any rule, subpoena or order of the director or of
the insurance commissioner of another state or Mexico or Canada.
(c) Obtaining or
attempting to obtain a license through misrepresentation or fraud.
(d) Improperly
withholding, misappropriating or converting any moneys or properties received
in the course of doing insurance business.
(e) Intentionally
misrepresenting the terms of an actual or proposed insurance contract or
application for insurance.
(f) Having been
convicted of a felony, of a misdemeanor involving dishonesty or breach of
trust, or of an offense punishable by death or imprisonment under the laws of
the United States. The record of the conviction shall be conclusive evidence of
the conviction.
(g) Having admitted or
been found to have committed any unfair trade practice or fraud related to
insurance.
(h) Using fraudulent,
coercive or dishonest practices, or demonstrating incompetence,
untrustworthiness or financial irresponsibility in the conduct of business in
this state or elsewhere.
(i) Cancellation,
revocation, suspension or refusal to renew by any state of a license or other
evidence of authority to act as an adjuster or an insurance producer or
consultant. The record of the cancellation, revocation, suspension or refusal
to renew shall be conclusive evidence of the action taken.
(j) Cancellation,
revocation, suspension or refusal to renew by any state or federal agency, by a
Canadian province or by the government of Mexico of the authority to practice
law or to practice under any other regulatory authority if the cancellation,
revocation, suspension or refusal to renew was related to the business of an
adjuster or an insurance producer or consultant, or if dishonesty, fraud or
deception was involved. The record of the cancellation, revocation, suspension
or refusal to renew shall be conclusive evidence of the action taken.
(k) Forging another
person’s name to an application for insurance or to any document related to an
insurance transaction.
(L) Improperly using
notes or any other reference material to complete an examination for an
insurance license.
(m) Knowingly accepting
insurance business from an individual who is not licensed.
(n) Error by the
director in issuing or renewing a license.
(o) Failing to pay a
civil penalty assessed by the director that has become final by operation of
law or upon appeal.
(p) Failing to pay any
fee or charge to the director.
(q) Failing to comply
with continuing education requirements applicable to the license or any class
of insurance authorized under the license, unless the director has waived the
requirements.
(2) If the director
refuses to issue or renew an agent license, the director shall notify the
applicant or licensee and inform the applicant or licensee in writing of the
reason for the refusal to issue or renew and of the applicant’s or licensee’s
rights under ORS 183.310 to 183.550.
(3) The director may suspend,
revoke or refuse to issue or renew the agent license of a business entity if
the director determines that an individual licensee’s violation was known or
should have been known by one or more of the partners, officers or managers
acting on behalf of the partnership or corporation but the violation was not
reported to the director and corrective action was not taken.
SECTION 15.
(1) An insurer or agent may not pay a
commission, service fee, brokerage or other valuable consideration to a person
for selling, soliciting or negotiating insurance in this state if that person
is required to be licensed as an agent and is not so licensed.
(2) A person shall not
accept a commission, service fee, brokerage or other valuable consideration for
selling, soliciting or negotiating insurance in this state if that person is
required to be licensed as an agent and is not so licensed.
(3) Renewal or other
deferred commissions may be paid to a person for selling, soliciting or
negotiating insurance in this state if the person was required to be licensed
as an agent at the time of the sale, solicitation or negotiation and was then
so licensed.
(4) An insurer or agent
may pay or assign commissions, service fees, brokerages or other valuable
consideration to an insurance agency or to persons who do not sell, solicit or
negotiate insurance in this state, except when the payment or assignment would
violate ORS 746.045 or 746.055.
SECTION 16.
(1) An agent shall not act as an agent
of an insurer unless the agent is an appointed agent of that insurer.
(2) To appoint an agent,
the appointing insurer shall file, in a manner approved by the Director of the
Department of Consumer and Business Services, a notice of appointment not later
than the 15th day after the date the agency contract is executed or after the
agent submits the first insurance application to the insurer. An insurer may
also choose to appoint an agent to all or some insurers within the insurer’s
holding company system or group by the filing of a single notice of appointment.
(3) An agent may
represent as agent under one license as many insurers as may appoint the agent
in accordance with this section.
(4) Except as provided
in a group contract of insurance under subsection (5) of this section, any
person who solicits or procures an application for insurance shall in all
matters relating to the application for insurance and the policy issued in
consequence of the application be regarded as the agent of the insurer issuing
the policy and not the agent of the insured. Any provision in the application
and policy to the contrary is invalid and of no effect.
(5) A group contract of
insurance and the individual certificate issued pursuant to the group contract
may contain provisions stating whether the group policyholder acts as the agent
of the individual insured or as the agent of the insurer.
SECTION 17.
(1) An insurer or authorized
representative of the insurer who terminates the appointment, employment,
contract or other insurance business relationship with an agent shall notify
the Director of the Department of Consumer and Business Services not later than
the 30th day after the effective date of the termination, in the manner
prescribed by the director, if the reason for termination is one of the reasons
set forth in section 14 of this 2001 Act or if the insurer has knowledge that
the agent was found by a court, government body or self-regulatory organization
authorized by law to have engaged in any of the activities set forth in section
14 of this 2001 Act. Upon the written request of the director, the insurer
shall provide additional information, documents, records or other data
pertaining to the termination or activity of the agent.
(2) An insurer or
authorized representative of the insurer who terminates the appointment,
employment, contract or other insurance business relationship with an agent for
any reason not set forth in section 14 of this 2001 Act shall notify the
director not later than the 30th day after the effective date of the
termination, in the manner prescribed by the director. Upon the written request
of the director, the insurer shall provide additional information, documents,
records or other data pertaining to the termination or activity of the agent.
(3) An insurer or the
authorized representative of the insurer shall promptly notify the director in
a manner acceptable to the director if, upon further review or investigation,
the insurer discovers additional information that would have been reportable to
the director in accordance with subsection (1) of this section if the insurer
had then known of its existence.
(4) Not later than the
15th day after making a notification required by subsection (1), (2) or (3) of
this section, the insurer shall mail a copy of the notification to the agent at
the agent’s last known business address. If the agent is terminated for cause
for any of the reasons listed in section 14 of this 2001 Act, the insurer shall
provide a copy of the notification to the agent at the agent’s last known
business address by certified mail, return receipt requested, postage prepaid
or by overnight delivery using a nationally recognized carrier.
(5) Not later than the
30th day after the agent has received a notification under subsection (4) of
this section, the agent may file with the director written comments concerning
the substance of the notification. The agent shall, by the same means, simultaneously
send a copy of the comments to the reporting insurer. The comments shall become
a part of the director’s file and shall accompany every copy of a report
distributed or disclosed for any reason about the agent as allowed under
subsection (6) of this section.
(6) In the absence of
actual malice, an insurer, the authorized representative of the insurer, an
agent, the director or an organization of which the director is a member and
that compiles the information and makes it available to other insurance regulators
or regulatory or law enforcement agencies shall not be subject to civil
liability. In the absence of actual malice, a civil cause of action shall not
arise against any such entity or its agents or employees as a result of any
statement or information required by or provided pursuant to this section, or
any information relating to any statement that may be requested in writing by
the director from an insurer or agent, or relating to a statement by a
terminating insurer or agent to an insurer or agent, that is limited
exclusively to whether a termination for cause under subsection (1) of this
section was reported to the director. Immunity under this subsection is
available only if the propriety of any termination for cause under subsection
(1) of this section is certified in writing by an officer or authorized
representative of the insurer terminating the relationship.
(7) In any action
brought against a person who may have immunity under subsection (6) of this
section for making any statement required by this section or providing any
information relating to any statement that may be requested in writing by the
director, the party bringing the action must plead specifically in any
allegation that subsection (6) of this section does not apply because the
person making the statement or providing the information did so with actual
malice.
(8) Subsections (6) and
(7) of this section do not abrogate or modify any existing statutory or common
law privileges or immunities.
(9) The director may
take any administrative action authorized by the Insurance Code, including
suspension or revocation of a license or certificate of authority, against an
insurer, the authorized representative of an insurer or an agent who fails to
file notice as required by this section or who is found by a court of competent
jurisdiction to have filed notice with actual malice.
(10) Any information,
documents, records or other data in the control or possession of the director
that are furnished by an insurer or an agent, or an employee or agent thereof
acting on behalf of the insurer or agent, or that are obtained by the director
in an investigation pursuant to this section shall be confidential, shall not
be subject to subpoena and shall not be subject to discovery nor admissible in
evidence in any private civil action. The director, however, may use the
confidential information, documents, records or other data in administering
this section and in the furtherance of any other regulatory or legal action
brought as a part of the director’s duties. The information, documents, records
or other data referred to in this subsection are subject to the public officer
privilege described in ORS 40.270.
SECTION 18.
The Director of the Department of
Consumer and Business Services shall waive any requirement for a nonresident
agent license applicant with a valid resident insurance producer license from
the applicant’s home state, except the requirements imposed by section 7 of
this 2001 Act, if the applicant’s home state grants nonresident insurance
producer licenses to residents of this state on the same basis.
SECTION 19.
(1) An agent shall report to the
Director of the Department of Consumer and Business Services any administrative
action taken against the agent in another jurisdiction or by another
governmental agency in this state not later than the 30th day after the date of
the final disposition of the matter. This report shall include a copy of the
order, consent to order and other relevant legal documents.
(2) Not later than the
30th day after the initial pretrial hearing date, an agent shall report to the
director any criminal prosecution of the agent taken in any jurisdiction. The
report shall include a copy of the initial complaint filed, the order resulting
from the hearing and any other relevant legal documents.
SECTION 20.
ORS 731.062 is amended to read:
731.062. “Agent” means a person [authorized by an insurer to solicit applications for insurance or to
negotiate insurance on its behalf, and, if authorized so to do by the insurer,
to effect and countersign insurance policies.] required to be licensed under the laws of this state to sell, solicit
or negotiate insurance. For purposes of this definition:
(1) “Negotiate” means to
confer directly with or to offer advice directly to a purchaser or prospective
purchaser of a particular policy of insurance concerning any of the substantive
benefits, terms or conditions of the policy, if the person engaged in that act
sells insurance.
(2) “Sell” means to
exchange a policy of insurance by any means, for money or its equivalent, on
behalf of an insurer.
(3) “Solicit” means to
attempt to sell a policy of insurance or to ask or urge a person to apply for a
particular kind of insurance from a particular insurer.
SECTION 21.
ORS 731.116 is amended to read:
731.116. [“Person,”
as defined in ORS 174.100, includes individuals, corporations, associations,
firms, partnerships and joint stock companies.] “Person” means an individual or a business entity. For the purpose of
this definition, “business entity” means a corporation, association,
partnership, limited liability company, limited liability partnership or other
legal entity.
SECTION 22.
ORS 731.136 is amended to read:
731.136. When used in context signifying a jurisdiction
other than the State of Oregon, “state” means any state, district, territory,
commonwealth or possession of the United States of America[, and the Panama Canal Zone].
SECTION 23.
ORS 744.039 is amended to read:
744.039. (1) The Director of the Department of Consumer and
Business Services shall establish by rule the conditions under which a [licensee] person who is licensed [both]
as an agent and as an insurance
consultant may accept a commission or a fee, or both, in a transaction or in
related transactions. The director may establish different conditions for such
products as employee benefit plans, insurance for personal, family or household
purposes and insurance for commercial purposes, and for any other insurance
product as determined appropriate by the director. In developing rules under
this subsection, the director shall take into account the requirements and
characteristics of the different insurance products and the varying degrees of
trade practice regulation needed.
(2) Except as otherwise provided by rule, an agent who is not licensed as an insurance
consultant may receive only commission.
SECTION 24.
ORS 744.061 is amended to read:
744.061. Nothing in the Insurance Code shall be construed
to limit or prohibit the licensing of a banking institution, as defined in ORS
706.008, a corporation owned in whole or part by a banking institution under
ORS 708A.120, 716.588 or 716.594, or a corporation owned in whole or part by a
bank holding company, as defined in ORS 706.008, as an agent to transact one or
more of the classes of insurance described in [ORS 744.115] section 8 of
this 2001 Act, except for title insurance.
SECTION 24a.
ORS 744.175 is amended to read:
744.175. (1) An insurer may terminate an agency appointment
at any time as provided in this section. Termination shall be without prejudice
to the contract rights, if any, of the agent so terminated. The insurer shall
give written notice of the termination and the date thereof to the agent at
least 90 days prior to the effective date of the termination. The notice must
specify the reasons for the termination. The insurer shall deliver the notice
either in person or by mail at the address last provided by the agent to the
insurer. The agent shall not have a cause of action against the insurer as a
result of any statement in the notice unless the statement is false and the
insurer knew the statement was false when made. [The insurer shall also notify the Director of the Department of
Consumer and Business Services of the termination not later than the 30th day
after the effective date of the termination. The director may require of the
insurer reasonable proof that the insurer has given such notice to the agent.]
(2) An insurer may terminate an agency appointment without
giving the notice required by subsection (1) of this section on any of the
grounds specified in this subsection. [The
insurer shall notify the director of any termination under this subsection and
the date thereof not later than the 30th day after the effective date of the
termination and shall notify the agent when reasonably possible. The director
may require the insurer to give proof that the insurer has notified the agent.]
The following are grounds for termination under this subsection:
(a) The agent’s insurance license is denied, restricted,
revoked, suspended or canceled by any public authority;
(b) The agent’s business is sold, transferred or merged and
the insurer has not appointed the successor;
(c) The agent is insolvent or fails to remit balances to
the insurer in accordance with the agreement;
(d) The agent commits fraud or engages in intentional
misconduct;
(e) The insurer amends its certificate of authority in
order to discontinue a [line] class of insurance;
(f) The insurer ceases selling insurance in this state; or
(g) The insurer and agent mutually agree to terminate the
agency appointment.
(3) An agent may terminate an agency appointment at any
time, but the termination shall be without prejudice to the contract rights, if
any, of the appointing insurer. The agent shall give written notice of the
termination and the date thereof to the director not later than the 30th day
after the effective date of the termination, and to the insurer. The director
may require reasonable proof from the agent that the agent has given such
notice to the insurer.
SECTION 24b.
ORS 744.225 is amended to read:
744.225. (1) All premium funds received by [an] a
resident agent shall be accounted for and maintained in a trust account
separate from all other business and personal funds.
(2) Except as provided in subsection (3) of this section, [an] a
resident agent shall not commingle or otherwise combine premiums with any
other moneys.
(3) [An] A resident agent may commingle with
premium funds in the trust account required by subsection (1) of this section
any additional funds the agent deems prudent for the purpose of advancing
premiums, establishing reserves for the paying of return premiums, or for any
contingencies that may arise in the course of receiving and transmitting
premium or return premium funds.
(4) This section does not apply to:
(a) Any financial institution or trust company, as those
terms are defined in ORS 706.008, or any entity licensed under ORS chapter 725
or 726.
(b) Any class of agents that the Director of the Department of Consumer and Business Services designates by rule. The director may exempt a class of agent from this section if the director determines that the requirements of this section are unduly burdensome to the agents in relation to the public good served.
SECTION 24c.
ORS 744.227 is amended to read:
744.227. (1) In lieu of the trust account required by ORS
744.225, [an] a resident agent may keep a certificate of deposit from an
institution insured by the federal government or an instrumentality thereof if
the resident agent has an average
monthly balance of premium funds received and held for the last 12 months of at
least $2 million. [An] A resident agent who keeps a
certificate of deposit shall have satisfactory evidence of the certificate
available at all times for inspection by the Director of the Department of
Consumer and Business Services.
(2) A certificate of deposit authorized under subsection
(1) of this section shall be for an amount at least equal to the average
monthly balance of premium funds received and held by the resident agent for the last 12 months. Nothing in this subsection
requires that the required amount of the certificate of deposit be calculated,
or the amount changed, more often than once a month.
(3) The director may adopt rules specifying what
constitutes satisfactory evidence for purposes of subsection (1) of this
section.
(4) Authorization to use a certificate of deposit may be
revoked by the director at any time upon a determination that the resident agent has failed to comply
with the provisions of this section or rules adopted under subsection (3) of
this section. Upon revocation, the resident
agent shall comply immediately with the provisions of ORS 744.225.
SECTION 25.
ORS 744.039, 744.061, 744.175, 744.225,
744.227, 744.240 and 744.245 are added to and made a part of sections 2 to 19
of this 2001 Act.
ADJUSTERS AND
INSURANCE CONSULTANTS
SECTION 26.
ORS 744.001 is amended to read:
744.001. (1) ORS
744.001 to 744.009, 744.011, 744.013, 744.014, 744.018, 744.022 to 744.033 and
744.037 govern the licensing of adjusters and insurance consultants.
[(1)] (2) An applicant for a license as [agent,] an adjuster or an
insurance consultant shall apply for the license to the Director of the
Department of Consumer and Business Services. The applicant shall include the
following information:
(a) The applicant’s name, business address, residence
address, present occupation, occupation for the last 12 months, the portion of
time to be devoted to the insurance business, previous insurance experience and
the names of employers during the preceding five years. The applicant shall
include the business address of the principal place of business and the
business address of each additional location at which the applicant will
transact business under the license.
(b) All assumed business names and other names under which
the applicant will engage in business under the license.
(c) Whether the applicant has ever been convicted of or is
under indictment for a crime, whether the applicant has ever had a judgment
entered against the applicant for fraud, whether any insurer or agent claims
the applicant is indebted to it and the details of any such indebtedness, and
whether any license of the applicant to act in any occupational or professional
capacity has ever been refused, revoked or suspended in this or any other
state.
(d) The applicant’s fingerprints, if the applicant is applying for a resident license. An applicant
applying for a nonresident license shall provide the applicant’s fingerprints
only if the director so requests.
(e) The class or classes of insurance to be transacted
under the license. [If the application is
for a license as an agent, the application shall also include any subclasses of
a class of insurance to be transacted under the license.]
(f) Any other information that the director requires by
rule.
[(2)] (3) If the applicant for a license
under this section is a firm or corporation, the application shall show, in
addition, the names of all members, officers and directors. If the application
is a corporation, the application shall state the names of all stockholders who
own, directly or indirectly, more than 10 percent of any class of any equity
security of the corporation, and shall designate each individual who is to
exercise the powers to be conferred by the license upon the firm or
corporation.
[(3)] (4) Each application shall be
accompanied by the applicable fees established by the director.
SECTION 27.
ORS 744.002 is amended to read:
744.002. (1) The Director of the Department of Consumer and
Business Services may issue a license authorizing a person to act as an [insurance agent, an insurance] adjuster
or an insurance consultant. A person licensed to act in one capacity may also
be licensed to act in the other [capacities] capacity if the person meets the appropriate qualifications. For
purposes of this chapter, the capacity in which a person is licensed to act
constitutes a “license category” or a “category of insurance business.”
(2) A license issued under this section shall set forth
each license category in which the licensee may engage. For each license
category, the license shall also set forth the class or classes of insurance in
which the licensee may engage, as provided in:
[(a) ORS 744.115, for
the license category of agent.]
[(b)] (a) ORS 744.531, for the license
category of adjuster.
[(c)] (b) ORS 744.626, for the license
category of insurance consultant.
(3) The director may issue resident and nonresident
licenses under this section as follows:
(a) The director may issue a resident license to a person
if the person is a resident of this state or, if not a resident of this state,
the person has a place of transacting insurance in this state.
(b) The director may issue a nonresident license to a
person if the person is not a resident of this state.
(4) The director shall issue a license under this section:
(a) If the applicant has completed and submitted to the
director an application for the license and has submitted all applicable fees,
including any examination fees, as established by the director with the
application;
(b) If the director determines that no ground for denial of
the license exists under ORS 744.013; and
(c) If the director determines that the applicant has met
the applicable qualifications and requirements for each license category, and
for each class of insurance for which application is made.
SECTION 28.
ORS 744.003 is amended to read:
744.003. (1) The Director of the Department of Consumer and
Business Services may add a category of insurance business to [a] an
adjuster or insurance consultant license upon application by the licensee
for amendment of the license.
(2) The director may add a class or classes of insurance to
a license upon application by the licensee for amendment of the license.
(3) The director may require that applications under this
section be made in the same manner as applications for the initial license, or
the director may establish other application procedures.
SECTION 29.
ORS 744.008 is amended to read:
744.008. [A licensee]
An adjuster or insurance consultant
may renew a license subject to the following requirements:
(1) The licensee must pay the applicable fee established by
the Director of the Department of Consumer and Business Services.
(2) The licensee must satisfy all applicable continuing education requirements and all other applicable conditions and requirements specified by statute.
(3) If the licensee holds a nonresident license, the
licensee must submit proof to the director, with respect to each category of
insurance business and class of insurance set forth on the license, that the
licensee continues to hold a valid license or other evidence of authority
issued by the state of residence of the licensee for the same category of
insurance business.
(4) If the licensee is an insurance consultant, the
licensee must provide satisfactory evidence that the insurance required under
ORS 744.635 is in effect.
(5) The licensee must satisfy any other requirements
established by the director by rule.
SECTION 30.
ORS 744.009 is amended to read:
744.009. (1) The Director of the Department of Consumer and
Business Services may renew an expired license of [a person] an adjuster or
insurance consultant upon application if the license expired within two
years prior to the application and if:
(a) The license was not suspended or revoked by the
director, or not renewed, on any ground under ORS 744.013;
(b) The director is satisfied, by examination or otherwise, that the person is knowledgeable about the portions of the Insurance Code applicable to the license;
(c) The person pays [twice]
double the amount of the regular
renewal fee; and
(d) The person satisfies all requirements for renewal.
(2) A person who does not renew an expired license as provided in this section may obtain a license only if the person applies and qualifies for and is issued the license in the same manner as a person who initially applies for the license.
SECTION 31.
ORS 744.013 is amended to read:
744.013. (1) If the Director of the Department of Consumer
and Business Services finds with respect to [a licensee] an adjuster or
insurance consultant or an applicant for [a] an adjuster or insurance
consultant license that one or more of the grounds set forth in subsection
(2) of this section exist, the director may take the following disciplinary
actions:
(a) The director may refuse to renew or may suspend or
revoke a license issued under ORS 744.002 or the authority under a license to
engage in any category of insurance business or any class of insurance.
(b) The director may refuse to issue a license under ORS
744.002 or refuse to grant authority under a license to engage in any category
of insurance business or any class of insurance.
(2) The director may take any disciplinary action under
subsection (1) of this section on one or more of the following grounds:
(a) Incompetence or untrustworthiness of the applicant or [licensee] adjuster or insurance consultant.
(b) Falsification by the applicant or [licensee] adjuster or
insurance consultant of the application for the license or an amendment
thereto, or engagement in any dishonest act in relation to the application or
examination therefor.
(c) Violation of or noncompliance with any applicable
provision of the Insurance Code or any rule or order of the director.
(d) Misappropriation or conversion to the [licensee’s] adjuster’s or insurance consultant’s own use, or illegal
withholding, of money or property belonging to policyholders, insurers,
beneficiaries or others, and received by the [licensee] adjuster or
insurance consultant in the conduct of business under the license.
(e) Conviction, by final judgment, in any jurisdiction, of
an offense which if committed in this state, constitutes a felony, a misdemeanor involving [moral turpitude or a felony, or is] dishonesty or breach of trust, or an offense punishable by death or
imprisonment under the laws of the United States. The record of the conviction
shall be conclusive evidence of the conviction.
(f) Material misrepresentation of the terms of any
insurance policy or proposed insurance policy.
(g) Use of a fraudulent or dishonest practice by the [licensee] adjuster or insurance consultant in the conduct of business under
the license, or demonstration therein that the [licensee] adjuster or
insurance consultant is incompetent, untrustworthy or a source of injury
and loss to the public or others.
(h) Error by the director in issuing or renewing a license.
(i) Failure to pay a civil penalty assessed by the director
that has become final by operation of law or upon appeal.
(j) Failure to pay any fee or charge to the director.
(k) Use of the license principally to effect insurance on
property or against liability of the applicant or [licensee] adjuster or
insurance consultant, or to evade the provisions of ORS chapter 746.
(L) Cancellation, revocation, suspension or refusal to
renew by any state of a license or other evidence of authority to act as an
agent, adjuster or insurance consultant. The record of the cancellation,
revocation, suspension or refusal to renew shall be conclusive evidence of the
action taken.
(m) Cancellation, revocation, suspension or refusal to
renew by any state or federal agency of the authority to practice law or to
practice under any other regulatory authority if the cancellation, revocation,
suspension or refusal to renew was related to the business of an agent,
adjuster or insurance consultant or if dishonesty, fraud or deception was
involved. The record of the cancellation, revocation, suspension or refusal to
renew shall be conclusive evidence of the action taken.
(n) Failure to comply with continuing education
requirements applicable to the license or any category of insurance authorized
under the license, unless the director has waived the requirements.
(o) Dishonesty, fraud or misrepresentation not related to
the business of an agent, adjuster or insurance consultant.
(3) The director may refuse to issue or renew or may revoke
or suspend the license of a firm or corporation or may take any such action
with respect to any authority applied for by or granted to the firm or
corporation to engage under the license in any category of insurance business
or class of insurance if the director finds that any ground set forth in
subsection (2) of this section exists:
(a) With respect to any individual [licensee] adjuster or
insurance consultant employed by or under contract with the firm or
corporation.
(b) With respect to a director or officer of the firm or
corporation.
(c) With respect to any person who directly or indirectly
has the power to direct or cause to be directed the management, control or
activities of the [licensee] adjuster or insurance consultant.
SECTION 32.
ORS 744.014 is amended to read:
744.014. (1) The Director of the Department of Consumer and
Business Services may place a condition of probation on [a] an adjuster or insurance
consultant license or on a category of insurance business authorized by a
license or on a class of insurance if any ground for disciplinary action under
ORS 744.013 exists, as follows:
(a) When the license is initially issued.
(b) When the license is renewed, amended or reinstated, or
when a new license is issued for the purpose of adding a category of insurance
business or class of insurance.
(c) At any time during the effective period of the license.
(2) During a probationary period under this section, the
director may take any action authorized under ORS 744.013.
(3) A license applicant or licensee has the same right to a
hearing on the placing of a condition of probation as the license applicant or
licensee has with respect to any action taken by the director under ORS
744.013.
SECTION 33.
ORS 744.022 is amended to read:
744.022. (1) A firm or corporate [licensee] adjuster or
insurance consultant may engage in a category of insurance business or a
class of insurance authorized on its license only through an individual [licensee] adjuster or insurance consultant who is authorized to engage in
insurance business in that same category or class.
(2) An individual [licensee]
adjuster or insurance consultant who
is employed by or under contract with a firm or corporate [licensee] adjuster or
insurance consultant may engage in insurance business only to the extent
authorized by the license of the individual.
SECTION 34.
ORS 744.024 is amended to read:
744.024. (1) Each resident [licensee] adjuster or
insurance consultant shall maintain in this state a place of business in
which the licensee principally engages in insurance business under the license.
(2) The principal place of business under subsection (1) of
this section of [an agent and] an adjuster or insurance consultant must be
accessible to the public.
(3) [A licensee] An adjuster or insurance consultant
shall keep at the place of business of the [licensee]
adjuster or insurance consultant the
usual and customary records pertaining to the business under the license. All
such records as to any particular transactions shall be kept available and open
to the inspection of the Director of the Department of Consumer and Business
Services during business hours. [An agent
shall keep records of insurance transacted by the agent under the license for
three years following expiration of the policy.] An adjuster or insurance consultant shall keep records of a particular
transaction by the adjuster or
insurance consultant for three years following the conclusion of the
transaction.
(4) This section does not prohibit maintenance of a place
of business under a license in the licensee’s place of residence in this state.
SECTION 35.
ORS 744.026 is amended to read:
744.026. (1) A nonresident [licensee] adjuster or
insurance consultant shall keep at the principal place of business of the
licensee the usual and customary records pertaining to the business under the
nonresident license. All such records as to any particular transaction shall be
kept available and open to the inspection of the Director of the Department of
Consumer and Business Services during business hours. For the purpose of this
subsection, if a nonresident licensee has a place of transacting insurance in
this state, that place shall be the principal place of business for the licensee.
[(2) A nonresident
agent shall keep records of insurance transacted by the agent under the license
for three years following expiration of the policy.]
[(3)] (2) A nonresident adjuster or insurance consultant shall keep records of a particular
transaction by the nonresident adjuster
or insurance consultant for three years following conclusion of the
transaction.
SECTION 36.
ORS 744.028 is amended to read:
744.028. (1) Not later than the 30th day after [a change of] an adjuster or insurance consultant changes the address or
telephone number of the principal place of business or the residence of [a licensee] the adjuster or insurance consultant, or any other location at
which the licensee transacts business under the license, the licensee shall
notify the Director of the Department of Consumer and Business Services of the
change. The licensee also shall so notify the director not later than the 30th
day after the licensee opens or closes a location at which the licensee
transacts business under the license.
(2) Not later than the 30th day after a change in or
deletion or addition of an assumed business name under which a licensee
transacts business under a license as an [agent,]
adjuster or insurance consultant, the licensee shall notify the director of the
change.
SECTION 37.
ORS 744.031 is amended to read:
744.031. (1) Not later than the 30th day after the
authority of an individual [licensee]
adjuster or insurance consultant to
act for a firm or corporate [licensee]
adjuster or insurance consultant has
commenced or terminated, the firm or corporate [licensee] adjuster or
insurance consultant shall notify the Director of the Department of
Consumer and Business Services of the commencement or termination.
(2) A firm or corporate [licensee] adjuster or
insurance consultant shall notify the director annually of all changes in
its officers and directors during the immediately previous calendar year. If
the licensee is a corporation, the licensee shall include in the notice any
changes in its stockholders who own, directly or indirectly, more than 10
percent of any class of any equity security of the licensee.
(3) The director may establish by rule a different period
within which a firm or corporate [licensee]
adjuster or insurance consultant
must notify the director under subsection (1) or (2) of this section.
SECTION 38.
ORS 744.033 is amended to read:
744.033. Any application or notice to the Director of the
Department of Consumer and Business Services regarding the licensing of an adjuster or insurance consultant
under this chapter must be made [on a
form provided] in the manner
prescribed by the director.
SECTION 39.
ORS 744.300 is amended to read:
744.300. (1) A person shall not act as a managing general
agent with respect to risks located in this state for an authorized insurer
unless the person holds a license issued under [this chapter] section 8 of
this 2001 Act authorizing the person to [transact insurance] act
as an agent and indorsed to authorize the person to act as a managing general
agent.
(2) A person shall not act as a managing general agent
representing a domestic insurer with respect to risks located outside this
state unless the person holds a license issued under [this chapter] section 8 of
this 2001 Act authorizing the person to [transact insurance] act
as an agent and indorsed to authorize the person to act as a managing general
agent.
(3) For purposes of ORS 744.300 to 744.316, a person acts
as a managing general agent when the person:
(a) Negotiates and binds ceding reinsurance contracts on
behalf of an authorized insurer or manages all or part of the insurance
business of an authorized insurer, including the management of a separate
division, department or underwriting office, and acts as an agent for the
insurer, whether the person is known as a managing general agent, manager or
other similar term; and
(b) With or without the authority, either separately or
together with affiliates, produces, directly or indirectly, and underwrites an
amount of gross direct written premium equal to or more than five percent of
the policyholder surplus as reported in the last annual statement of the
insurer in any one quarter or year, together with either or both of the
following activities:
(A) Adjusting or paying claims in excess of an amount
determined by the Director of the Department of Consumer and Business Services.
(B) Negotiating reinsurance on behalf of the insurer.
(4) The provisions of [this
chapter] section 8 of this 2001 Act
governing application for amendment of a license apply to the indorsement of
the license of an agent for authority to act as a managing general agent,
except that an examination is not required for the indorsement.
(5) The provisions of this section are subject to
exemptions stated in ORS 744.301.
THIRD PARTY ADMINISTRATORS
SECTION 40.
ORS 744.704 is amended to read:
744.704. (1) The following persons are exempt from the
licensing requirement for third party administrators in ORS 744.702 and from
all other provisions of ORS 744.700 to 744.740 applicable to third party
administrators:
(a) A person licensed under ORS 744.002 as an adjuster,
whose activities are limited to adjustment of claims and whose activities do
not include the activities of a third party administrator.
(b) A person licensed [under
ORS 744.002] as an agent as required
by section 3 of this 2001 Act and authorized to transact life or health
insurance in this state, whose activities are limited exclusively to the sale
of insurance and whose activities do not include the activities of a third
party administrator.
(c) An employer acting as a third party administrator on
behalf of:
(A) Its employees;
(B) The employees of one or more subsidiary or affiliated
corporations of the employer; or
(C) The employees of one or more persons with a dealership,
franchise, distributorship or other similar arrangement with the employers.
(d) A union, or an affiliate thereof, acting as a third
party administrator on behalf of its members.
(e) An insurer that is authorized to transact insurance in
this state with respect to a policy issued and delivered in and pursuant to the
laws of this state or another state.
(f) A creditor acting on behalf of its debtors with respect
to insurance covering a debt between the creditor and its debtors.
(g) A trust and the trustees, agents and employees of the
trust, when acting pursuant to the trust, if the trust is established in
conformity with 29 U.S.C. 186.
(h) A trust exempt from taxation under section 501(a) of
the Internal Revenue Code, its trustees and employees acting pursuant to the
trust, or a voluntary employees beneficiary association described in section
501(c) of the Internal Revenue Code, its agents and employees and a custodian
and the custodian’s agents and employees acting pursuant to a custodian account
meeting the requirements of section 401(f) of the Internal Revenue Code.
(i) A financial institution that is subject to supervision
or examination by federal or state financial institution regulatory
authorities, or a mortgage lender, to the extent the financial institution or
mortgage lender collects and remits premiums to licensed agents or authorized
insurers in connection with loan payments.
(j) A company that issues credit cards and advances for and
collects premiums or charges from its credit card holders who have authorized
collection. The exemption under this paragraph applies only if the company does
not adjust or settle claims.
(k) A person who adjusts or settles claims in the normal
course of practice or employment as an attorney at law. The exemption under
this subsection applies only if the person does not collect charges or premiums
in connection with life insurance or health insurance coverage.
(L) A person who acts solely as an administrator of one or
more bona fide employee benefit plans established by an employer or an employee
organization, or both, for which the Insurance Code is preempted pursuant to
the Employee Retirement Income Security Act of 1974. A person to whom this
paragraph applies must comply with the requirements of ORS 744.714.
(m) The Oregon Medical Insurance Pool Board, established
under ORS 735.600 to 735.650, and the administering insurer or insurers for the
board, for services provided pursuant to ORS 735.600 to 735.650.
(n) An entity or association owned by or composed of like
employers who administer partially or fully self-insured plans for employees of
the employers or association members.
(o) A trust established by a cooperative body formed
between cities, counties, districts or other political subdivisions of this
state, or between any combination of such entities, and the trustees, agents
and employees acting pursuant to the trust.
(p) Any person designated by the Director of the Department
of Consumer and Business Services by rule.
(2) A third party administrator is not required to be
licensed as a third party administrator in this state if the following
conditions are met:
(a) The third party administrator has its principal place
of business in another state;
(b) The third party administrator is not soliciting
business as a third party administrator in this state; and
(c) In the case of any group policy or plan of insurance
serviced by the third party administrator, the lesser of five percent or 100
certificate holders reside in this state.
REINSURANCE INTERMEDIARIES
SECTION 41.
ORS 744.800 is amended to read:
744.800. (1) For purposes of this section:
(a) An intermediary broker is a person who solicits,
negotiates or places reinsurance cessions or retrocessions on behalf of a
ceding insurer without the authority or power to bind reinsurance on behalf of
the insurer.
(b) An intermediary manager is a person who has authority
to bind a reinsurer or who manages all or part of the assumed reinsurance
business of a reinsurer, including the management of a separate division,
department or underwriting office, and acts as an agent for the reinsurer,
regardless of the title or designation of the person.
(c) “Business
entity” has the meaning given that term in ORS 731.116.
(2) A person may act as an intermediary broker in this
state only as follows:
(a) If a person maintains an office in this state either in
the person’s own name or in the name of [a
firm or corporate agent] an agent
that is a business entity, the person must meet either of the following
requirements:
(A) If the person is an individual[, firm or corporation] or a
business entity, the person must hold a license issued under this chapter
authorizing the person to [transact
insurance] act as an agent and
indorsed with the designation of intermediary broker.
(B) If the person is an individual, the person must be
authorized to act as an intermediary broker as provided in subsection (4) of
this section under a license issued under this chapter to [a firm or corporate agent who] an
agent that is a business entity and holds a license as an intermediary
broker.
(b) If a person maintains an office in another state either
in the person’s own name or in the name of [a
firm or corporate agent] an agent
that is a business entity, the person must meet one of the following
requirements:
(A) If the person is an individual[, firm or corporation] or a
business entity, the person must hold a license issued under this chapter
authorizing the person to [transact
insurance] act as an agent and
indorsed with the designation of intermediary broker.
(B) If the person is an individual, the person must be
authorized to act as an intermediary broker as provided in subsection (4) of
this section under a license issued under this chapter to [a firm or corporate agent who] an
agent that is a business entity and holds a license as an intermediary
broker.
(C) If the person is an individual[, firm or corporation] or a
business entity, the person must hold a license as an intermediary broker
or intermediary manager issued by another state having a law substantially
similar to the requirements of this chapter that apply to intermediary brokers
and intermediary managers.
(3) A person may act as an intermediary manager only as
follows:
(a) A person may act as an intermediary manager for a
reinsurer domiciled in this state if the person meets either of the following
requirements:
(A) If the person is an individual[, firm or corporation] or a
business entity, the person must hold a license issued under this chapter
authorizing the person to [transact
insurance] act as an agent and
indorsed with the designation of intermediary manager.
(B) If the person is an individual, the person must be
authorized to act as an intermediary manager as provided in subsection (4) of
this section under a license issued under this chapter to [the firm or corporate agent who] an agent that is a business entity and holds a license as an
intermediary manager.
(b) A person may act as an intermediary manager in this
state, when the person maintains an office in this state either in the person’s
own name or in the name of [a firm or
corporate agent] an agent that is a
business entity, if the person meets either of the following requirements:
(A) If the person is an individual[, firm or corporation] or a
business entity, the person holds a license issued under this chapter
authorizing the person to [transact
insurance] act as an agent and
indorsed with the designation of intermediary manager.
(B) If the person is an individual, the person is
authorized to act as an intermediary manager as provided in subsection (4) of
this section under a license issued under this chapter to [a firm or corporate agent who] an
agent that is a business entity and holds a license as an intermediary
manager.
(c) A person may act as an intermediary manager in another
state for an authorized foreign or alien insurer transacting insurance in this
state if the person meets one of the following requirements:
(A) If the person is an individual[, firm or corporation] or a
business entity, the person must hold a license issued under this chapter
authorizing the person to [transact
insurance] act as an agent and
indorsed with the designation of intermediary manager.
(B) The person, if an individual, is authorized to act as
an intermediary manager as provided in subsection (4) of this section under a
license issued under this chapter to [a
firm or corporate agent who] an
agent that is a business entity and holds a license as an intermediary
manager.
(C) If the person is an individual[, firm or corporation] or a
business entity, the person must hold a license as an intermediary broker
or intermediary manager issued by another state having a law substantially
similar to the requirements of this chapter that apply to intermediary brokers
and intermediary managers.
(4) An individual may act as an intermediary broker or an
intermediary manager under the authority of the license of [a firm or corporate agent] an agent that is a business entity,
whether or not the individual holds a license as an agent, if the license of
the [firm or corporate agent] agent that is a business entity is
indorsed to authorize the [firm or
corporate agent] agent that is a
business entity to act as an intermediary broker or intermediary manager
and if:
(a) The individual is a member, [or employee of the firm or
is an] employee, officer or director of the [corporation] business entity;
and
(b) The individual is designated by the [firm or corporate agent] agent that is a business entity on [the] its license application [of
the firm or corporate agent] or an amendatory form or supplementary form
thereto as authorized to act as an intermediary broker or intermediary manager
under the authority of the license of the [firm
or corporate agent] agent that is a
business entity.
(5) In order to obtain and maintain the indorsement of
intermediary manager, a person must satisfy the requirements of ORS 744.818
regarding errors and omissions insurance.
(6) A person may obtain a license to [transact insurance] act as
a nonresident agent authorized to act in this state as an intermediary broker
or intermediary manager, or both[, if the
person resides in another state or a province of Canada and holds a currently
valid license issued by that state or province and authorizing the person to
act as an intermediary broker or an intermediary manager] as provided in section 7 of this 2001 Act.
[The licensing of such a person is
subject to the provisions of ORS 744.069 that apply to a person who resides in
another state or a province of Canada and is licensed in that state or province
as an agent or insurance broker.]
(7) For purposes of [ORS
744.165] section 16 of this 2001 Act:
(a) An intermediary broker is an agent of the ceding
insurer on whose behalf the intermediary broker acts, and not an agent of the
reinsurer.
(b) An intermediary manager is an agent of the reinsurer.
SECTION 42.
ORS 744.011 is amended to read:
744.011. (1) The expiration of a license or the voluntary
surrender of a license by a licensee under
this chapter shall not deprive the Director of the Department of Consumer
and Business Services of jurisdiction to proceed with any investigation of, or
any action or disciplinary proceedings against, the licensee or to revise or
render void an order suspending or revoking the license.
(2) As provided in this subsection, a person who has voluntarily surrendered a license may qualify for a license conferring the same authority as the surrendered license without having to take an examination that is otherwise required. In order to qualify without examination, the person must apply for the license within two years after the date on which the person surrendered the prior license. The person must apply and otherwise qualify for the license in the same manner as a person who initially applies for the license. If the person is required to satisfy continuing education requirements for renewal of the license, the person must show satisfaction of continuing education requirements for each renewal date occurring during the period following the surrender in which the person did not hold a license.
SECTION 43.
ORS 744.018 is amended to read:
744.018. With regard
to any license issued under this chapter:
(1) The Director of the Department of Consumer and Business
Services may reinstate a revoked license, any revoked category of insurance
business or any revoked class of insurance. The director may grant
reinstatement upon fulfillment by the former holder of the license of
conditions set by the director.
(2) The director may modify the suspension of a license, a
category of insurance business or a class of insurance and reinstate the
license, category or class:
(a) At a time certain; or
(b) When the person subject to the suspension fulfills
conditions set by the director for reinstatement.
SECTION 44.
ORS 744.037 is amended to read:
744.037. A fee paid in
connection with a license or a license application under this chapter is
not refundable unless the Director of the Department of Consumer and Business
Services provides otherwise by rule.
SURPLUS LINES INSURANCE
SECTION 44a.
ORS 735.405 is amended to read:
735.405. As used in ORS 735.400 to 735.495:
(1) “Admitted insurer” means an insurer authorized to do an
insurance business in this state.
(2) “Capital” means funds paid in for stock or other
evidence of ownership.
(3) “Eligible surplus lines insurer” means a nonadmitted
insurer with which a surplus lines licensee may place surplus lines insurance.
(4) “Export” means to place surplus lines insurance with a
nonadmitted insurer.
(5) “Insurance
producer” has the meaning given that term in section 2 of this 2001 Act.
[(5)] (6) “Kind of insurance” means one of
the types of insurance required to be reported in the annual statement which
must be filed with the Director of the Department of Consumer and Business
Services by authorized insurers.
[(6)] (7) “Nonadmitted insurer” means an
insurer not authorized to do an insurance business in this state. This
definition shall include insurance exchanges as authorized under the laws of
various states.
[(7)] (8) “Producing agent” means the
individual agent dealing directly with the party seeking insurance.
[(8)] (9) “Surplus” means funds over and
above liabilities and capital of the insurer for the protection of
policyholders.
[(9)] (10) “Surplus lines licensee” means an
agent licensed under ORS chapter 744 to place insurance on risks resident,
located or to be performed in this state with nonadmitted insurers eligible to
accept such insurance.
SECTION 44b.
ORS 735.410 is amended to read:
735.410. (1)
Insurance may be procured through a surplus lines licensee from a nonadmitted
insurer if:
[(1)] (a) The insurer is an eligible surplus
lines insurer;
[(2)] (b) A diligent search has first been made among the insurers who are
authorized to transact and are actually writing the particular kind and class
of insurance in this state, and it is determined that the full amount or
kind of insurance cannot be obtained from those
insurers [who are admitted to do business
in this state. Such full amount or kind of insurance may be procured from
eligible surplus lines insurers, provided that a diligent search is made among
the insurers who are admitted to transact and are actually writing the
particular kind and class of insurance in this state]; and
[(3)] (c) All other requirements of ORS
735.400 to 735.495 are met.
(2) Subsection (1)
of this section does not apply to a placement of surplus lines insurance
outside this state by a nonresident surplus lines licensee or by a nonresident
surplus lines insurance producer who is not licensed to transact surplus lines
insurance in this state when the insurance covers a risk with exposures both in
this state and outside this state, if both of the following conditions are met:
(a) If the nonresident
surplus lines licensee or insurance producer is licensed in the state as an
insurance producer to transact surplus lines policies in the state in which the
insurance is placed and is in good standing in that state; and
(b) If the surplus lines
policy complies with all of the requirements for placement of nonadmitted
insurance in the state in which the insurance is placed.
(3) The Director of the Department of Consumer and Business Services by rule may establish requirements applicable to the placement of surplus lines insurance outside this state by a nonresident surplus lines licensee or by a nonresident surplus lines insurance producer who is not licensed in this state, when the insurance covers a risk with exposures both in this state and outside this state. The rules may include such matters as the procurement of surplus lines insurance, eligibility of the insurer, the conditions under which surplus lines insurance may be obtained, the necessary evidence of insurance, filing requirements and other matters necessary for regulation of surplus lines insurance transactions that affect risk exposures in this state. The rules may not interfere with or hinder implementation of the federal Gramm-Leach-Bliley Act (P.L. 106-102) with respect to licensing reciprocity among the states.
SECTION 44c.
ORS 735.415 is amended to read:
735.415. (1) [No] A
surplus lines licensee [shall] may not place any coverage with a
nonadmitted insurer unless at the time of placement [such] the nonadmitted
insurer has done all of the following:
[(1)] (a) Established satisfactory evidence
of good repute and financial integrity.
[(2)] (b) Qualified under one of the
following [paragraphs] subparagraphs:
[(a)] (A) Has capital and surplus or its
equivalent under the laws of its domiciliary jurisdiction[, which] that equals either[:]
[(A)] the minimum
capital and surplus requirements under the laws of this state[;] or
[(B) $3 million upon
enactment, and $3.5 million three years after enactment, and $4.5 million five
years after enactment, and] $5 million,
[six years after enactment, whichever is
greater. After six years from enactment,] except that the requirements of this [subparagraph] paragraph
may be satisfied by an insurer possessing less than $5 million capital and
surplus upon an affirmative finding of acceptability by the Director of the
Department of Consumer and Business Services. The finding shall be based upon
such factors as quality of management, capital and surplus of any parent
company, company underwriting profit and investment income trends and company
record and reputation within the industry. In no event shall the director make
an affirmative finding of acceptability when the surplus lines insurer’s
capital and surplus is less than $3 million[;].
[(b)] (B) Except as otherwise provided in [paragraph (c) of this subsection] subparagraph (C) of this paragraph, an
alien insurer qualifies under this subsection if it maintains in the United
States an irrevocable trust fund in either a national bank or a member of the
Federal Reserve System, in an amount not less than $1.5 million for the
protection of all its policyholders in the United States and such trust fund
consists of cash, securities, irrevocable letters of credit, or of investments
of substantially the same character and quality as those which are eligible
investments for the capital and statutory reserves of admitted insurers
authorized to write like kinds of insurance in this state. Such trust fund,
which shall be included in any calculation of capital and surplus or its
equivalent, shall have an expiration date which at no time shall be less than
five years.[;]
[(c)] (C) In the case of a group of insurers
that includes incorporated and individual unincorporated underwriters,
maintains a trust fund of not less than $50 million as security to the full
amount thereof for all policyholders and creditors in the United States of each
member of the group, and such trust shall likewise comply with the terms and
conditions established in [paragraph (b)
of this subsection] subparagraph (B)
of this paragraph for alien insurers,
[provided, however,] except that the incorporated members of
the group shall not be engaged in any business other than underwriting as a
member of the group and shall be subject to the same level of solvency
regulation and control by the group’s domiciliary regulators as are the unincorporated
members[; or].
[(d)] (D) In the case of an insurance
exchange created by the laws of individual states, maintains capital and
surplus, or the substantial equivalent thereof, of not less than $15 million in
the aggregate. For insurance exchanges [which]
that maintain funds for the
protection of all insurance exchange policyholders, each individual syndicate
shall maintain minimum capital and surplus, or the substantial equivalent
thereof, of not less than $1.5 million. In the event the insurance exchange does
not maintain funds for the protection of all insurance exchange policyholders,
each individual syndicate shall meet the minimum capital and surplus
requirements of [paragraph (a) of this
subsection] subparagraph (A) of this
paragraph.
[(3)] (c) Provided to the director no more
than six months after the close of the period reported upon a certified copy of
its current annual statement [which] that is:
[(a)] (A) Filed with and approved by the
regulatory authority in the domicile of the nonadmitted insurer;
[(b)] (B) Certified by an accounting or
auditing firm licensed in the jurisdiction of the insurer’s domicile; or
[(c)] (C) In the case of an insurance
exchange, an aggregate combined statement of all underwriting syndicates
operating during the period reported.
(2) When a
nonresident surplus lines licensee or nonresident surplus lines insurance
producer who is not licensed to transact surplus lines insurance in this state
places surplus lines insurance outside this state that covers a risk with
exposures both in this state and outside this state, the licensee or insurance
producer is not subject to the requirements of subsection (1) of this section
if the nonadmitted insurer with which the coverage is placed:
(a) Meets the
requirements for nonadmitted placement of insurance in the state in which the
insurance is placed; or
(b) Is an authorized or admitted insurer in the state in which the insurance is placed.
SECTION 44d.
ORS 735.420 is amended to read:
735.420. (1) The Director of the Department of Consumer and
Business Services may declare a surplus lines insurer described in ORS 735.415 (1) ineligible if the director has reason
to believe that the surplus lines insurer:
(a) Is in unsound financial condition;
(b) Is no longer eligible under ORS 735.415;
(c) Has willfully violated the laws of this state; or
(d) Does not make reasonably prompt payment of just losses
and claims in this state or elsewhere.
(2) The director shall promptly mail notice of all such
declarations to each surplus lines licensee.
SECTION 45.
ORS 735.425 is amended to read:
735.425. (1) Within 90 days after the placing of any
surplus lines insurance in this state,
each surplus lines licensee shall file with the Director of the Department of
Consumer and Business Services:
(a) An affidavit
signed by the licensee, which shall be kept confidential, regarding the
insurance, including the following:
(A) The name and address of the insured;
(B) The identity of the insurer or insurers;
(C) A description of the subject and location of the risk;
(D) The amount of premium charged for the insurance; and
(E) Such other pertinent information as the director may
reasonably require.
(b) A statement on a standardized form furnished by the
director, as to the diligent efforts by the producing agent to place the
coverage with admitted insurers and the results thereof. The statement shall be signed by the producing agent and shall affirm
that the insured was expressly advised prior to placement of the insurance
that:
(A) The surplus lines insurer with whom the insurance was
to be placed is not licensed in this state and is not subject to its
supervision; and
(B) In the event of the insolvency of the surplus lines
insurer, losses will not be paid by the state insurance guaranty fund.
(2) The director may direct that filings required under subsection (1) of this section be made
to the Surplus Lines Association of Oregon.
The director may also require that such filings be made electronically but may
exempt a licensee from the requirement for good cause shown.
(3) A nonresident surplus lines licensee or nonresident insurance producer who places a surplus lines policy on a risk with exposures located both in this state and outside this state shall satisfy filing requirements established by the director by rule. The director shall ensure that the rules facilitate interstate regulation of surplus lines insurance transactions.
SECTION 45a.
ORS 735.435 is amended to read:
735.435. (1) Upon placing surplus lines insurance, the
surplus lines licensee shall promptly deliver to the insured or the producing
agent the policy, or if such policy is not then available, a certificate as
described in subsection (4) of this section, cover note, binder or other
evidence of insurance. The certificate, as described in subsection (4) of this
section, cover note, binder or other evidence of insurance shall be executed by
the surplus lines licensee and shall show the description and location of the
subject of the insurance, coverages including any material limitations other
than those in standard forms, a general description of the coverages of the
insurance, the premium and rate charged and taxes to be collected from the
insured, and the name and address of the insured and surplus lines insurer or
insurers and proportion of the entire risk assumed by each, and the name of the
surplus lines licensee and the licensee’s license number.
(2) No surplus lines licensee shall issue or deliver any
evidence of insurance or represent that insurance will be or has been written
by any eligible surplus lines insurer, unless the licensee has authority from
the insurer to cause the risk to be insured, or has received information from
the insurer in the regular course of business that such insurance has been
granted.
(3) If, after delivery of any such evidence of insurance,
there is any change in the identity of the insurers, or the proportion of the
risk assumed by any insurer, or any other material change in coverage as stated
in the surplus lines licensee’s original evidence of insurance, or in any other
material as to the insurance coverage so evidenced, the surplus lines licensee
shall promptly issue and deliver to the insured or the original producing agent
an appropriate substitute for, or indorsement of the original document,
accurately showing the current status of the coverage and the insurers
responsible thereunder.
(4) As soon as reasonably possible after the placement of
any such insurance the surplus lines licensee shall deliver a copy of the
policy or, if not available, a certificate of insurance to the insured or
producing agent to replace any evidence of insurance theretofore issued. Each
certificate or policy of insurance shall contain or have attached thereto a
complete record of all policy insuring agreements, conditions, exclusions,
clauses, indorsements or any other material facts that would regularly be
included in the policy.
(5) Any surplus lines licensee who fails to comply with the
requirements of this section shall be subject to the penalties provided.
(6) Every evidence of insurance negotiated, placed or
procured under the provisions of ORS 735.400 to 735.495 issued by the surplus
lines licensee shall bear the name of the licensee and the following legend in
bold type: “This is evidence of insurance procured and developed under the
Oregon surplus lines laws. It is NOT covered by the provisions of ORS 734.510
to 734.710 relating to the Oregon Insurance Guaranty Association. If the
insurer issuing this insurance becomes insolvent, the Oregon Insurance Guaranty
Association has no obligation to pay claims under this evidence of insurance.”
(7) The Director of
the Department of Consumer and Business Services by rule may establish
requirements relating to evidence of insurance and other applicable
requirements governing placement of insurance by a nonresident surplus lines
licensee outside this state that covers a risk with exposures located both in
this state and outside this state.
SECTION 46.
ORS 735.450 is amended to read:
735.450. (1) [Except
as provided in subsection (5) of this section,] A person shall not procure
any contract of surplus lines insurance with any nonadmitted insurer unless the
person is licensed under ORS chapter 744 as [a resident] an agent
authorized to transact [general lines
insurance] property insurance,
casualty insurance or both and is further authorized under the license to
transact surplus lines insurance. The
prohibition in this subsection does not apply to a nonresident surplus lines
licensee or to a nonresident surplus lines producer who is not a licensee in
this state if:
(a) The insurance
contract covers a risk with exposures both in this state and outside this
state;
(b) Procurement of the
insurance contract described in paragraph (a) of this subsection did not occur
in this state; and
(c) The licensee or
producer is licensed to transact surplus lines insurance in the state in which
the insurance contract described in paragraph (a) of this subsection was
procured.
(2) The Director of the Department of Consumer and Business
Services may amend the license of [a
resident general lines] an agent
authorized to transact property insurance,
casualty insurance or both to authorize the agent to transact insurance as
a surplus lines agent if the agent[:]
[(a)] has applied
under [ORS chapter 744] section 7 of this 2001 Act to have the
class of surplus lines insurance added to the agent license and has satisfied
all requirements therefor under [ORS
chapter 744;] sections 2 to 19 of
this 2001 Act. This subsection applies to resident and nonresident agents.
[(b) Has filed with
the director a bond in favor of this state in the penal sum of $50,000
aggregate liability, with corporate sureties approved by the director; and]
[(c) Has been a
licensed resident general lines agent, or the equivalent in another state, for
a total of at least five years immediately preceding the amendment to the
license.]
[(3) The bond
required by subsection (2) of this section shall be conditioned that the
surplus lines licensee will conduct business in accordance with the provisions
of ORS 735.400 to 735.495 and will promptly remit the taxes as provided by law.
The bond shall be maintained in force and unimpaired during the term of the
license. No bond shall be terminated unless at least 30 days’ prior written
notice is given to the licensee and director.]
[(4) Subject to ORS
744.004, corporations, including foreign corporations, shall be eligible to be
resident surplus lines licensees.]
[(5) The director may
amend the license of a nonresident general lines agent to authorize the agent
to transact insurance as a surplus lines agent solely for the purpose of complying
with the provisions of ORS 735.300 to 735.365, the Oregon Liability Risk
Retention Law.]
SECTION 47.
ORS 735.460 is amended to read:
735.460. (1) Each surplus lines licensee shall keep [in this state] a full and true record of
each surplus lines insurance contract placed by or through the licensee on each risk resident in this state as
required by section 11 of this 2001 Act, including a copy of the policy,
certificate, cover note or other evidence of insurance showing any of the
following items that are applicable:
(a) Amount of the insurance and perils insured;
(b) Brief description of the property insured and its
location;
(c) Gross premium charged;
(d) Any return premium paid;
(e) Rate of premium charged upon the several items of
property;
(f) Effective date of the contract and the terms thereof;
(g) Name and address of the insured;
(h) Name and address of the insurer;
(i) Amount of tax and other sums to be collected from the
insured; and
(j) Identity of the producing agent, any confirming
correspondence from the insurer or its representative and the application.
(2) The record of each contract shall be kept open at all reasonable times to examination by the Director of the Department of Consumer and Business Services without notice for a period not less than five years following termination of the contract.
SECTION 48.
ORS 735.465 is amended to read:
735.465. (1) On
or before the end of each month, each surplus lines licensee shall file with
the Director of the Department of Consumer and Business Services, [on forms] as prescribed by the director, a verified report [in duplicate] of all surplus lines
insurance transacted on risks resident
in this state during the preceding [month
showing] 90 days. The report need
not show transacted surplus lines insurance that was reported in an earlier
report. The report shall show:
[(1)] (a) Aggregate gross premiums written;
[(2)] (b) Aggregate return premiums; and
[(3)] (c) Amount of aggregate tax.
(2) The director may
direct that reports required under subsection (1) of this section be made to
the Surplus Lines Association of Oregon and that the Surplus Lines Association
of Oregon file a combined report thereof with the director. The director may
also require that reports required under subsection (1) of this section be made
electronically but may exempt a licensee from the requirement for good cause
shown.
(3) For the purpose of collecting taxes on insurance covering the Oregon portion of risks when the insurance is placed outside this state and covers a risk with exposures located both in this state and outside this state, the director may establish by rule requirements for filing reports on surplus lines insurance transacted outside this state on risks with exposures located both in this state and outside this state.
SECTION 48a.
ORS 735.470 is amended to read:
735.470. (1) The surplus lines licensee shall pay the
Director of the Department of Consumer and Business Services an amount equal to
the tax which would have been imposed under ORS 731.816 (1993 Edition) if that
section were in effect and operative, and the tax which is imposed by ORS
731.820, on authorized insurers for the premiums shown in the report required
by ORS 735.465. The tax shall be collected by the surplus lines licensee as
specified by the director, in addition to the full amount of the gross premium
charged by the insurer for the insurance. The tax on any portion of the premium
unearned at termination of insurance having been credited by the state to the
licensee shall be returned to the policyholder directly by the surplus lines
licensee or through the producing agent, if any. The surplus lines licensee is
prohibited from absorbing such tax and from rebating for any reason, any part
of such tax.
(2) The surplus lines tax is due quarterly on the 45th day
following the calendar quarter in which the premium is collected. The tax shall
be paid to and reported on forms prescribed by the director or upon the
director’s order paid to and reported on forms prescribed by the surplus lines
association.
(3) Notwithstanding subsection (2) of this section, if a
surplus lines license is terminated or nonrenewed for any reason, the taxes
described in this section are due on the 30th day after the termination or
nonrenewal.
(4) In applying ORS 731.816 (1993 Edition) for purposes of
this section, the rate shall be two percent rather than two and one-quarter
percent.
(5) The director by
rule shall establish procedures for payment of taxes on the Oregon portion of
risks covered by surplus lines insurance policies transacted outside this state
that cover risks with exposures both in this state and outside this state.
SECTION 48b.
ORS 735.475 is amended to read:
735.475. If the tax collectible by a surplus lines licensee
under ORS 735.400 to 735.495 is not paid within the time prescribed, the same
shall be recoverable in a suit brought by the Director of the Department of
Consumer and Business Services against the surplus lines licensee [and the surety on the bond filed under ORS
735.450].
SECTION 49.
ORS 735.480 is amended to read:
735.480. The Director of the Department of Consumer and
Business Services may suspend, revoke or refuse to renew the license of a
surplus lines licensee after notice and hearing as provided under the
applicable provision of this state’s laws upon any one or more of the following
grounds:
(1) Removal of the surplus lines licensee’s office from
this state, if the licensee is a
resident agent;
(2) Removal of the surplus lines licensee’s office accounts
and records [from this state] from the principal place of business of
the licensee under section 11 of this 2001 Act during the period during
which such accounts and records are required to be maintained under ORS
735.460;
(3) Closing of the surplus lines licensee’s office for a
period of more than 30 business days, unless permission is granted by the
director;
(4) Failure to make and file required reports;
(5) Failure to transmit required tax on surplus lines
premiums;
[(6) Failure to
maintain required bond;]
[(7)] (6) Violation of any provision of ORS
735.400 to 735.495; or
[(8)] (7) For any cause for which an
insurance license could be denied, revoked, suspended or renewal refused under
[ORS 744.013] section 14 of this 2001 Act.
SECTION 49a.
ORS 735.485 is amended to read:
735.485. (1) A surplus lines insurer may be sued upon any
cause of action arising in this state under any surplus lines insurance
contract made by it or evidence of insurance issued or delivered by the surplus
lines licensee pursuant to the procedure provided in ORS 735.490. Any surplus
lines policy issued by the surplus lines licensee shall contain a provision
stating the substance of this section and designating the person to whom
process shall be delivered.
(2) Each surplus lines insurer assuming surplus lines
insurance shall be considered thereby to have subjected itself to ORS 735.400
to 735.495.
(3) The remedies provided in this section are in addition
to any other methods provided by law for service of process upon insurers.
(4) A surplus lines
insurance contract covering risks with exposures both in this state and outside
this state that is placed outside this state by a nonresident surplus lines
licensee, and the surplus lines insurer of the contract, are not subject to the
provisions of subsection (2) of this section or ORS 735.490:
(a) If the nonresident
surplus lines licensee is currently licensed as an insurance producer
authorized to transact surplus lines insurance contracts in the state in which
the surplus lines insurance contract is placed and is in good standing in that
state; and
(b) If the surplus lines
insurance contract complies with all of the requirements for placement of
nonadmitted insurance in the state in which the surplus lines insurance
contract is placed.
(5) When a nonresident
surplus lines insurance producer who is not a surplus lines licensee in this
state transacts outside this state a surplus lines insurance contract covering
risks with exposures both in this state and outside this state, the producer
and the surplus lines insurer of the contract are subject to this section and
to ORS 735.490 or to rules adopted by the director in lieu thereof unless:
(a) The producer is
currently licensed to transact surplus lines policies in the state in which the
surplus lines insurance contract is placed and is in good standing in that
state; and
(b) The surplus lines insurance contract complies with all of the requirements for placement of nonadmitted insurance in the state in which the surplus lines insurance contract is placed.
SECTION 49b.
ORS 735.490 is amended to read:
735.490. (1) An insurer transacting insurance under the
provisions of ORS 735.400 to 735.495 may be sued upon any cause of action,
arising under any policy of insurance so issued and delivered by it, in the
courts for the county where the agent who registered or delivered such policy
resides or transacts business, by the service of summons and complaint made
upon such agent for such insurer.
(2) Any such agent served with summons and complaint in any
such cause shall forthwith mail the summons and complaint, or a true and
complete copy thereof, by registered or certified mail with proper postage
affixed and properly addressed, to the insurer being sued.
(3) The insurer shall have 40 days from the date of the
service of the summons and complaint upon such agent in which to plead, answer
or defend any such cause.
(4) Upon service of summons and complaint upon such agent
for such insurer, the court in which the action is begun shall be deemed to
have duly acquired personal jurisdiction of the defendant insurer so served.
(5) An insurer and
policyholder may agree to waive the provisions of subsections (1) to (4) of
this section governing service and venue with respect to a surplus lines
insurance contract for commercial property and casualty risk if the waiver is
specifically referred to in the contract or in an indorsement attached to the
contract.
SECTION 50.
ORS 746.600 is amended to read:
746.600. As used in ORS 746.600 to 746.690 and 750.055:
(1) “Adverse underwriting decision” means, except as
provided in subsection (2) of this section, any of the following actions with
respect to insurance transactions involving insurance coverage which is
individually underwritten:
(a) A declination of insurance coverage.
(b) A termination of insurance coverage.
(c) Failure of an agent to apply for insurance coverage
with a specific insurer which the agent represents and which is requested by an
applicant.
(d) In the case of life or health insurance coverage, an
offer to insure at higher than standard rates.
(e) In the case of other kinds of insurance coverage:
(A) Placement by an insurer or agent of a risk with a
residual market mechanism, an unauthorized insurer or an insurer which
specializes in substandard risks.
(B) The charging of a higher rate on the basis of
information which differs from that which the applicant or policyholder
furnished.
(2) “Adverse underwriting decision” does not include the
following actions, but the insurer or agent responsible for the occurrence of
the action shall nevertheless provide the applicant or policyholder with the
specific reason or reasons for the occurrence:
(a) The termination of an individual policy form on a class
or statewide basis.
(b) A declination of insurance coverage solely because the
coverage is not available on a class or statewide basis.
(c) The rescission of a policy.
(3) “Affiliate of” a specified person or “person affiliated
with” a specified person means a person who directly, or indirectly, through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the person specified.
(4) “Agent” means a person licensed by the Director of the
Department of Consumer and Business Services as [an] a resident or
nonresident insurance agent[, or a
person to whom the director has issued a nonresident broker’s permit].
(5) “Applicant” means a person who seeks to contract for
insurance coverage, other than a person seeking group insurance coverage which
is not individually underwritten.
(6) “Consumer report” means any written, oral or other
communication of information bearing on a natural person’s creditworthiness,
credit standing, credit capacity, character, general reputation, personal
characteristics or mode of living which is used or expected to be used in
connection with an insurance transaction.
(7) “Consumer reporting agency” means a person who:
(a) Regularly engages, in whole or in part, in assembling
or preparing consumer reports for a monetary fee;
(b) Obtains information primarily from sources other than
insurers; and
(c) Furnishes consumer reports to other persons.
(8) “Control” means, and the terms “controlled by” or
“under common control with” refer to, the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a person, whether through the ownership of voting securities, by contract other
than a commercial contract for goods or nonmanagement services, or otherwise,
unless the power of the person is the result of a corporate office held in, or
an official position held with, the controlled person.
(9) “Declination of insurance coverage” means a denial, in
whole or in part, by an insurer or agent of requested insurance coverage.
(10) “Individual” means a natural person who:
(a) In the case of life or health insurance, is a past,
present or proposed principal insured or certificate holder;
(b) In the case of other kinds of insurance, is a past,
present or proposed named insured or certificate holder;
(c) Is a past, present or proposed policyowner;
(d) Is a past or present applicant;
(e) Is a past or present claimant; or
(f) Derived, derives or is proposed to derive insurance
coverage under an insurance policy or certificate which is subject to ORS
746.600 to 746.690 and 750.055.
(11) “Institutional source” means a person or governmental
entity which provides information about an individual to an insurer, agent or
insurance-support organization, other than:
(a) An agent;
(b) The individual who is the subject of the information;
or
(c) A natural person acting in a personal capacity rather
than in a business or professional capacity.
(12) “Insurance-support organization” means, except as
provided in subsection (13) of this section, a person who regularly engages, in
whole or in part, in assembling or collecting information about natural persons
for the primary purpose of providing the information to an insurer or agent for
insurance transactions, including:
(a) The furnishing of consumer reports to an insurer or
agent for use in connection with insurance transactions; and
(b) The collection of personal information from insurers,
agents or other insurance-support organizations for the purpose of detecting or
preventing fraud, material misrepresentation or material nondisclosure in
connection with insurance underwriting or insurance claim activity.
(13) “Insurance-support organization” does not include
insurers, agents, governmental institutions, medical care institutions or
medical professionals.
(14) “Insurance transaction” means any transaction
involving insurance primarily for personal, family or household needs rather
than business or professional needs and which entails:
(a) The determination of an individual’s eligibility for an
insurance coverage, benefit or payment; or
(b) The servicing of an insurance application, policy or
certificate.
(15) “Insurer,” as defined in ORS 731.106, includes every
person engaged in the business of entering into policies of insurance.
(16) “Investigative consumer report” means a consumer
report, or portion of a consumer report, for which information about a natural
person’s character, general reputation, personal characteristics or mode of
living is obtained through personal interviews with the person’s neighbors,
friends, associates, acquaintances or others who may have knowledge concerning
such items of information.
(17) “Medical care institution” means a facility or
institution which is licensed to provide health care services to natural
persons, and includes but is not limited to health maintenance organizations,
home health agencies, hospitals, medical clinics, public health agencies,
rehabilitation agencies and skilled nursing facilities.
(18) “Medical professional” means a person licensed or
certified to provide health care services to natural persons, and includes but
is not limited to chiropractors, clinical dieticians, clinical psychologists,
dentists, naturopaths, nurses, occupational therapists, optometrists, pharmacists,
physical therapists, physicians, podiatrists, psychiatric social workers and
speech therapists.
(19) “Medical record information” means personal
information which:
(a) Relates to an individual’s physical or mental
condition, medical history or medical treatment; and
(b) Is obtained from a medical professional, a medical care
institution, the individual, or the individual’s spouse, parent or legal
guardian.
(20) “Personal information” means information which is
identifiable with an individual, which is gathered in connection with an
insurance transaction and from which information judgments can be made about
the individual’s character, habits, avocations, finances, occupations, general
reputation, credit, health or any other personal characteristics. “Personal
information” includes an individual’s name and address and “medical record
information” but does not include “privileged information” except for
privileged information which has been disclosed in violation of ORS 746.665.
(21) “Policyholder” means a person who:
(a) In the case of individual policies of life or health
insurance, is a current policyowner;
(b) In the case of individual policies of other kinds of
insurance, is currently a named insured; or
(c) In the case of group policies of insurance under which
coverage is individually underwritten, is a current certificate holder.
(22) “Pretext interview” means an interview wherein the
interviewer, in an attempt to obtain information about a natural person, does
one or more of the following:
(a) Pretends to be someone the interviewer is not.
(b) Pretends to represent a person the interviewer is not
in fact representing.
(c) Misrepresents the true purpose of the interview.
(d) Refuses upon request to identify the interviewer.
(23) “Privileged information” means information which is
identifiable with an individual and which:
(a) Relates to a claim for insurance benefits or a civil or
criminal proceeding involving the individual; and
(b) Is collected in connection with or in reasonable anticipation
of a claim for insurance benefits or a civil or criminal proceeding involving
the individual.
(24) “Residual market mechanism” means an association,
organization or other entity involved in the insuring of risks under ORS
735.005 to 735.145, 737.312 or other provisions of the Insurance Code relating
to insurance applicants who are unable to procure insurance through normal
insurance markets.
(25) “Termination of insurance coverage” or “termination of
an insurance policy” means either a cancellation or a nonrenewal of an
insurance policy, in whole or in part, for any reason other than the failure of
a premium to be paid as required by the policy.
SECTION 51.
ORS 708A.005 is amended to read:
708A.005. (1) Except as otherwise limited in the Bank Act
or the articles of incorporation of an institution, an institution shall have:
(a) Perpetual duration and succession in its corporate
name, unless a limited period of duration is stated in its articles of
incorporation;
(b) The power to do all things necessary or convenient to
carry out its business and affairs including, without limitation, the power to:
(A) Sue and be sued and complain and defend in its
corporate name;
(B) Have a corporate seal, which may be altered at will,
and use it or a facsimile thereof by impressing, affixing or reproducing it in
any other manner;
(C) Make contracts, incur liabilities, borrow money, issue
its notes, bonds and other obligations that may be convertible into other
securities of the institution or include the option to purchase other
securities of the institution;
(D) Conduct its business, locate offices and exercise the
powers granted by the Bank Act within or without this state;
(E) Elect or appoint directors, officers, employees and
agents of the institution;
(F) Make and amend bylaws not inconsistent with its
articles of incorporation or with the laws of this state for managing the
business and regulating the affairs of the institution;
(G) Make donations for the public welfare or for
charitable, scientific or educational purposes;
(H) Transact any business permitted by the Bank Act; and
(I) Pay pensions and establish pension plans, and share
option plans and benefit or incentive plans for any or all of its current or
former directors, officers, employees and agents;
(c) The powers granted to institutions by the Bank Act;
(d) The power to be licensed [under ORS 744.002] as an agent as
required by section 3 of this 2001 Act to transact one or more of the
classes of insurance described in [ORS
744.115] section 8 of this 2001 Act
except for title insurance; and
(e) All powers necessary or convenient to effect any or all
of the purposes for which the institution is organized or to perform any or all
of the acts expressly or impliedly authorized or required under the Bank Act.
(2) With respect to any exercise of the power granted under
subsection (1)(d) of this section, other than the licensing of the institution
to transact [livestock insurance,
mortgage insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary unemployment insurance,
credit insurance or lender’s property insurance, as these classes of insurance
are described in ORS 744.115] types
of limited class insurance, as that term is defined in section 2 of this 2001
Act, designated by the Director of the Department of Consumer and Business
Services:
(a) The conduct by the institution of insurance agency
activities shall be subject to the approval of the director [of the Department of Consumer and Business
Services]. The director shall base consideration for approval on the
condition of the institution, the adequacy of a formal business plan for the
insurance activities and the existence of satisfactory management for the
insurance activity.
(b) The director may revoke or restrict the ongoing
authority of the institution to engage in the insurance agency activity if the
condition of the institution substantially deteriorates or if the insurance
activities are adversely affecting the institution.
(c) If the insurance agency activity is conducted in a
branch or office in which the institution carries on its banking business, the
insurance agency activity shall be physically separated from those parts of the
premises in which the institution carries on the banking business.
(d) No person who acts on behalf of the institution [to transact insurance, as that term is
defined in ORS 731.146] as an agent,
as that term is defined in ORS 731.062, other than to transact [livestock insurance, mortgage insurance,
motor vehicle physical damage insurance, credit life insurance, credit health
insurance, credit involuntary unemployment insurance, credit insurance or
lender’s property insurance, as these classes of insurance are described in ORS
744.115] such types of limited class
insurance, shall in any manner engage on behalf of the institution in any
activities relating to the making of loans or to the granting of other credits
to the customers of the institution, including but not limited to serving as a
loan officer or as a member of a loan committee or other group charged with
approval of loans and other credits.
(e) Prior to selling any policy of insurance, the
institution shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
______________________________________________________________________________
______________ (Name of institution) is a licensed
insurance agent under Oregon law. You are not required to purchase any
insurance from it as a condition of obtaining any service from or engaging in
any other transaction with it. Before committing to purchase any policy of
insurance, you should shop for the coverage by carefully comparing information
obtained from two or more agents on prices, benefits, services, terms of
renewal and other policy features. You hereby acknowledge receipt of a copy of
this notice.
___________________ _____________
Customer’s signature Date
______________________________________________________________________________
(f) The institution shall file a written report with the
director no later than March 31 of each year disclosing the insurance
activities of the institution. The required contents of the report shall be
established by the director by rule. Reports filed with the director under this
paragraph shall be available for public inspection in the office of the
director.
(3) An institution licensed [to transact insurance] as an
agent, as that term is defined in ORS 731.062, shall not in any manner use
customer information obtained from another insurance agent to promote, develop
or solicit insurance business for the institution unless the other insurance
agent consents to such use of the customer information.
SECTION 52.
ORS 708A.120 is amended to read:
708A.120. (1) An institution shall not invest any of its assets in the capital stock of any other corporation, except:
(a) In the capital stock of the Federal Reserve Bank.
(b) In stock acquired or purchased to save a loss on a
preexisting debt. The stock shall be sold within two years of the date acquired
or purchased. The Director of the Department of Consumer and Business Services
may extend the time if the director finds that an extension will not be
detrimental to the public interest and will not contravene any other law.
(c) In the capital stock of any safe deposit company doing
an exclusive safe deposit business on premises owned or leased by the
institution upon 30 days’ advance notice to the director subject to the same
limitations applicable to a national bank.
(d) In the capital stock of agricultural and livestock
finance companies, subject to the same limitations applicable to national banks
and to the approval of the director.
(e) In the capital stock, eligible for purchase by national
banks, of small business investment companies, but the aggregate investment in
the stock shall not exceed two percent of the capital of the institution.
(f) In the common stock of any federally chartered
corporation that is chartered for the purpose of providing secondary markets
for the sale of mortgages by institutions.
(g) In the stock of the Federal Home Loan Bank.
(h) In the capital stock of a corporation exclusively
engaged in a trust business or a banker’s bank, subject to the same limitations
applicable to national banks.
(i) In the capital stock of bank service corporations as
provided in ORS 708A.130 to 708A.145.
(j) In the capital stock of a community development
corporation as provided in ORS 708A.150.
(k) If a trust company is not engaged in a banking business
and if the investment is first approved by the director, the trust company may
invest an amount not to exceed 20 percent of the capital of the trust company:
(A) In the capital stock of a subsidiary investment company
defined in the Investment Company Act of 1940, as amended; or
(B) In a company one of the purposes of which is to act as
a federal covered investment adviser or a state investment adviser, as defined
in ORS 59.015, with all the powers customarily exercised by a federal covered
investment adviser or a state investment adviser.
(L) In adjustable rate preferred stock of the Student Loan
Marketing Association established in 20 U.S.C. 1087-2, but the aggregate
investment in the stock shall not exceed 15 percent of the capital of the
institution.
(m) In the capital stock of a company acquired for the
purpose of strengthening the institution’s capital structure or the elimination
of undesirable assets as provided in ORS 708A.125.
(n) In the capital stock of banks and corporations engaged
in international or foreign banking or foreign banking in a dependency or
insular possession of the United States, as provided in ORS 708A.155.
(o) In the capital stock of a corporation created to
establish ATMs as provided in ORS 708A.160.
(2) An institution may invest its assets in shares of any
mutual fund, the assets of which are invested solely in obligations of the type
described in and limited under ORS 708A.115.
(3) An institution may, subject to the approval of the director,
acquire or continue to hold the fully paid stock of a corporation, one of the
purposes of which is to assist the institution in handling real estate, claims,
judgments or other assets or in holding title to the assets.
(4) An institution may acquire or continue to hold the
fully paid stock of a corporation the purpose of which is to permit the
institution to engage in any business in which a bank holding company or a
nonbank subsidiary of a bank holding company is authorized to engage. This
subsection does not apply unless the institution is the owner of at least 80
percent of the common stock of the subsidiary corporation, except qualifying
shares of directors.
(5) An institution may, subject to the approval of the
director and to rules promulgated by the director, acquire and continue to hold
at least 80 percent of the fully paid stock of a corporation engaged in any
business in which an institution is authorized to engage. Except as otherwise
permitted by statute or rule, the investment limitations applicable to the
institution apply to the subsidiary.
(6) An institution may, subject to the approval of the
director and under rules promulgated by the director, acquire and continue to
hold all the fully paid stock of a subsidiary corporation engaged in the
business of purchasing the stock of the institution for purposes of holding
that stock and making a market for that stock, if not more than 20 percent of
the net profit of the banking institution is disbursed to the subsidiary in any
one fiscal year. Except as otherwise permitted by statute or rule, the
investment limitations applicable to the institution apply to the subsidiary.
Acquisitions under this subsection shall not exceed 15 percent of the capital
of the institution.
(7) An institution may acquire and hold all or part of the
stock of a corporation that is or may thereafter be licensed [under ORS 744.002] as an agent as required by section 3 of this 2001 Act
to transact one or more of the classes of insurance described in [ORS 744.115] section 8 of this 2001 Act, except for title insurance, subject to
the following requirements:
(a) The acquisition and holding of such stock shall be
subject to the approval of the director. The director shall base consideration
for approval on the condition of the institution, the adequacy of a formal
business plan for the insurance activities, and the existence of satisfactory
management for the corporation.
(b) The director may revoke or restrict the ongoing
authority of the institution to hold stock in the corporation if the condition
of the institution substantially deteriorates or if the insurance activities
are adversely affecting the institution.
(c) If the corporation conducts the insurance agency
activity in a branch or office in which the institution carries on its banking
business, the insurance agency activity shall be physically separated from
those parts of the premises in which the institution carries on the banking
business.
(d) No person who acts on behalf of the corporation [to transact insurance, as that term is
defined in ORS 731.146] as an agent,
as that term is defined in ORS 731.062, shall while employed by the
corporation engage on behalf of the corporation in any activities relating to
the making of loans or to the granting of other credits to the customers of the
corporation, including but not limited to serving as a loan officer or as a
member of a loan committee or other group charged with approval of loans and
other credits.
(e) The name of the corporation and any assumed business
name used by it shall not be identical to that of the institution.
(f) Prior to selling any policy of insurance, the
corporation shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
______________________________________________________________________________
__________________ (Name of corporation licensed as an
agent) is owned by ______ (Name of institution). You are not required to
purchase any insurance from it as a condition of obtaining any service from or
engaging in any transaction with the institution. Before committing to purchase
any policy of insurance, you should shop for the coverage by carefully
comparing information obtained from two or more agents on prices, benefits, services,
terms of renewal and other policy features. You hereby acknowledge receipt of a
copy of this notice.
__________________ ___________
Customer’s signature Date
______________________________________________________________________________
(g) For each calendar year during which an institution owns
all or part of any corporation licensed [under
ORS 744.002] as an agent as required
by section 3 of this 2001 Act, the institution shall file a written report
with the director. The report shall be filed no later than March 31 of the
following year and shall disclose the insurance activities of the corporation.
The required contents of the report shall be established by the director by
rule. The reports filed with the director under this paragraph shall be
available for public inspection in the office of the director.
(h) The corporation shall not in any manner use customer
information obtained by the institution from another insurance agent to
promote, develop or solicit insurance business for the corporation unless the
other insurance agent consents to such use of the customer information.
(i) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185 to 746.211.
For the purpose of this paragraph, the term “lending institution” has the
meaning set forth in ORS 746.185.
(8) An institution may invest up to 15 percent of its
capital in the stock of the Oregon Capital Corporation authorized to be created
under ORS 284.750 to 284.795, 315.504, 317.084, 317.267 and 318.031.
SECTION 53.
ORS 708A.200 is amended to read:
708A.200. Nothing in ORS 708A.005, 708A.010, 715.075,
716.594, 716.610, [744.066, 744.115,]
746.195 and 746.211 and sections 5 and 6
of this 2001 Act shall be construed to permit a banking institution, a bank
holding company or any subsidiary of a banking institution or bank holding
company to act as insurer, as defined in ORS 731.106.
SECTION 54.
ORS 715.075 is amended to read:
715.075. A bank holding company may acquire and hold all or
part of the stock of a corporation [which]
that is or may thereafter be
licensed [under ORS 744.002] as an
agent as required by section 3 of this
2001 Act to transact one or more of the classes of insurance described in [ORS 744.115] section 8 of this 2001 Act, except for title insurance, subject to
the following requirements:
(1) The acquisition and holding of such stock shall be
subject to the approval of the Director of the Department of Consumer and
Business Services. The director shall base consideration for approval on the
condition of the bank holding company, the adequacy of a formal business plan
for the insurance activities and the existence of satisfactory management for
the corporation.
(2) The director may revoke or restrict the ongoing authority
of the bank holding company to hold stock in the corporation if the condition
of the bank holding company or of any bank owned by it substantially
deteriorates or if the insurance activities are adversely affecting the bank
holding company or any bank owned by it.
(3) If the corporation conducts the insurance agency
activity in any branch or office in which any bank owned by the bank holding
company carries on its banking business, the insurance agency activity shall be
physically separated from those parts of the premises in which the bank carries
on the banking business.
(4) No person who acts on behalf of the corporation [to transact insurance, as that term is
defined in ORS 731.146,] as an
agent, as that term is defined in ORS 731.062, shall while employed by the
corporation engage on behalf of the holding company or any bank owned by it in
any activities relating to the making of loans or the granting of other credits
to the customers of any bank owned by the holding company, including but not limited
to serving as a loan officer or as a member of a loan committee or any other
group charged with approval of loans and other credits.
(5) The name of the corporation and any assumed business
name used by it shall not be identical to that of any bank owned by the bank
holding company.
(6) Prior to selling any policy of insurance, the
corporation shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
______________________________________________________________________________
________________ (Name of corporation licensed as an agent)
is owned by ______ (Name of bank holding company) which also owns ________
(Name of institution or savings bank). You are not required to purchase any
insurance from it as a condition of obtaining any service from or engaging in
any transaction with the institution, savings bank or bank holding company.
Before committing to purchase any policy of insurance, you should shop for the
coverage by carefully comparing information obtained from two or more agents on
prices, benefits, services, terms of renewal and other policy features. You
hereby acknowledge receipt of a copy of this notice.
__________________ _________
Customer’s signature Date
______________________________________________________________________________
(7) For each calendar year during which a bank holding
company owns all or part of any corporation licensed [under ORS 744.002] as an agent
as required by section 3 of this 2001 Act, the bank holding company shall
file a written report with the director. The report shall be filed no later
than March 31 of the following year and shall disclose the insurance activities
of the corporation. The required contents of the report shall be established by
the director by rule. The reports filed with the director under this paragraph
shall be available for public inspection in the office of the director.
(8) The corporation shall not in any manner use customer
information obtained by the institution from another insurance agent to
promote, develop or solicit insurance business for the corporation unless the
other insurance agent consents to such use of the customer information.
(9) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185 to 746.211.
For the purpose of this subsection, the term “lending institution” has the
meaning set forth in ORS 746.185.
SECTION 55.
ORS 716.594 is amended to read:
716.594. An Oregon savings bank may acquire and hold all or
part of the stock of a corporation that is or may thereafter be licensed [under ORS 744.002] as an agent as required by section 3 of this 2001 Act
to transact one or more of the classes of insurance described in [ORS 744.115] section 8 of this 2001 Act except for title insurance, subject to
the following requirements:
(1) The acquisition and holding of such stock shall be
subject to the approval of the Director of the Department of Consumer and
Business Services. The director shall base consideration for approval on the
condition of the Oregon savings bank, the adequacy of a formal business plan
for the insurance activities and the existence of satisfactory management for
the corporation.
(2) The director may revoke or restrict the ongoing
authority of the Oregon savings bank to hold stock in the corporation if the
condition of the Oregon savings bank substantially deteriorates or if the
insurance activities are adversely affecting the Oregon savings bank.
(3) If the corporation conducts the insurance agency
activity in a branch or office in which the Oregon savings bank carries on its
banking business, the insurance agency activity shall be physically separated
from those parts of the premises in which the Oregon savings bank carries on the
banking business.
(4) No person who acts on behalf of the corporation [to transact insurance, as that term is
defined in ORS 731.146] as an agent,
as that term is defined in ORS 731.062, shall while employed by the
corporation engage on behalf of the corporation in any activities relating to
the making of loans or to the granting of other credits to the customers of the
corporation, including but not limited to serving as a loan officer or as a
member of a loan committee or other group charged with approval of loans and
other credits.
(5) The name of the corporation and any assumed business
name used by it shall not be identical to that of the Oregon savings bank.
(6) Prior to selling any policy of insurance, the
corporation shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
______________________________________________________________________________
NOTICE
_____________ (Name of corporation licensed as an agent) is
owned by ______ (Name of Oregon savings bank). You are not required to purchase
any insurance from it as a condition of obtaining any service from or engaging
in any transaction with the Oregon savings bank. Before committing to purchase
any policy of insurance, you should shop for the coverage by carefully
comparing information obtained from two or more agents on prices, benefits,
services, terms of renewal and other policy features. You hereby acknowledge
receipt of a copy of this notice.
___________________ _________
Customer’s signature Date
______________________________________________________________________________
(7) For each calendar year during which an Oregon savings
bank owns all or part of any corporation licensed [under ORS 744.002] as an agent
as required by section 3 of this 2001 Act, the Oregon savings bank shall
file a written report with the director. The report shall be filed no later
than March 31 of the following year and shall disclose the insurance activities
of the corporation. The required contents of the report shall be established by
the director by rule. The reports filed with the director under this subsection
shall be available for public inspection in the office of the director.
(8) The corporation shall not in any manner use customer
information obtained by the Oregon savings bank from another insurance agent to
promote, develop or solicit insurance business for the corporation unless the
other insurance agent consents to such use of the customer information.
(9) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185 to 746.211.
For the purpose of this subsection, the term “lending institution” has the
meaning set forth in ORS 746.185.
SECTION 56.
ORS 716.610 is amended to read:
716.610. A savings bank, subject to the restrictions and
limitations contained in this chapter, may:
(1) Receive time deposits and demand deposits of money
without restriction.
(2) Offer time and savings accounts and other kinds of
deposit accounts, including but not limited to automatic savings to checking
transfer accounts and negotiable order of withdrawal accounts, to individuals
and nonprofit corporations.
(3) Exercise by its board of directors or authorized
officers or agents, subject to law, all powers necessary to carry on the
business of savings banks.
(4) Pay depositors when requested by them, by drafts upon
deposits to the credit of the savings bank in any city in the United States,
and charge current rates of exchange for the drafts.
(5) Borrow money, and pledge securities to secure the money
borrowed, but any amount borrowed in excess of 20 percent of deposits shall
first be approved in writing by the Director of the Department of Consumer and
Business Services. The failure to obtain the approval of the director shall not
make an excess loan invalid as to the lender.
(6) Collect or protest promissory notes or bills of
exchange owned by the savings bank or held by it as collateral, and charge the
usual fees for the collection or protest.
(7) Sell gold or silver received in payment of interest or
principal of obligations owned by the savings bank, or from depositors in the
ordinary course of business.
(8) Become a member of the Federal Reserve Bank or the
Federal Home Loan Bank of the district in which the savings bank is located.
(9) Conduct a trust business and exercise all the powers of
a trust company as defined by ORS 709.150 upon compliance with the laws of this
state relating to the regulations of a trust business.
(10) Be licensed [under
ORS 744.002] as an agent as required
by section 3 of this 2001 Act to transact one or more of the classes of
insurance described in [ORS 744.115] section 8 of this 2001 Act except for
title insurance. With respect to the exercise of the power granted under this
subsection, other than the maintenance of any insurance license granted to a
savings bank prior to September 27, 1987, or the licensing of the savings bank
to transact [livestock insurance,
mortgage insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary unemployment insurance,
credit insurance or lender’s property insurance, as these classes of insurance
are described in ORS 744.115] types
of limited class insurance, as that term is defined in section 2 of this 2001
Act, designated by the Director of the Department of Consumer and Business
Services:
(a) The conduct by the savings bank of insurance agency
activities shall be subject to the approval of the director. The director shall
base consideration for approval on the condition of the savings bank, the
adequacy of a formal business plan for the insurance activities and the
existence of satisfactory management for the insurance activity.
(b) The director may revoke or restrict the ongoing
authority of the savings bank to engage in the insurance agency activity if the
condition of the savings bank substantially deteriorates or if the insurance
activities are adversely affecting the savings bank.
(c) If the insurance agency activity is conducted in a
branch or office in which the savings bank carries on its banking business, the
insurance agency activity shall be physically separated from those parts of the
premises in which the savings bank carries on the banking business.
(d) No person who acts on behalf of the savings bank [to transact insurance, as that term is
defined in ORS 731.146] as an agent,
as that term is defined in ORS 731.062, other than to transact [livestock insurance, mortgage insurance,
motor vehicle physical damage insurance, credit life insurance, credit health
insurance, credit involuntary unemployment insurance, credit insurance or
lender’s property insurance, as these classes of insurance are described in ORS
744.115] such types of limited class
insurance, or under a license granted to the savings bank prior to
September 27, 1987, shall in any manner engage on behalf of the savings bank in
any activities relating to the making of loans or to the granting of other
credits to the customers of the savings bank, including but not limited to
serving as a loan officer or as a member of a loan committee or other group
charged with approval of loans and other credits.
(e) Prior to selling any policy of insurance, the savings
bank shall give substantially the following notice in writing to the purchaser
in at least 10-point boldfaced type:
______________________________________________________________________________
_____________ (Name of savings bank) is a licensed
insurance agent under Oregon law. You are not required to purchase any
insurance from it as a condition of obtaining any service from or engaging in
any other transaction with it. Before committing to purchase any policy of
insurance, you should shop for the coverage by carefully comparing information
obtained from two or more agents on prices, benefits, services, terms of
renewal and other policy features. You hereby acknowledge receipt of a copy of
this notice.
__________________ _________
Customer’s signature Date
______________________________________________________________________________
(f) The savings bank shall file a written report with the
director no later than March 31 each year disclosing the insurance activities
of the savings bank. The required contents of the report shall be established by
the director by rule. The reports filed with the director under this paragraph
shall be available for public inspection in the office of the director.
(g) The savings bank shall not in any manner use customer information obtained from another insurance agent to promote, develop or solicit insurance business for the savings bank unless the other insurance agent consents to such use of the customer information.
SECTION 57.
ORS 746.182 is amended to read:
746.182. (1) Prior to selling any policy of insurance,
other than a policy for a class of insurance referred to in subsection (2) of
this section:
(a) Any agent that is an institution as defined in ORS
706.008, shall give the purchaser the notice required under ORS 708A.005
(2)(e);
(b) Any agent that is a corporation, all or part of the
stock of which is held by an institution, shall give the purchaser the notice
required under ORS 708A.120 (7)(f);
(c) Any agent that is a corporation, all or part of the
stock of which is held by a bank holding company as defined in ORS 706.008,
shall give the purchaser the notice required under ORS 715.075 (6);
(d) Any agent that is a corporation, all or part of the
stock of which is held by a savings bank, as defined by ORS 706.008, shall give
the purchaser the notice required under ORS 716.594 (6); and
(e) Any agent that is a savings bank, as defined in ORS
706.008, shall give the purchaser the notice required under ORS 716.610
(10)(e).
(2) The requirement under subsection (1) of this section
does not apply to any policy for [livestock
insurance, mortgage insurance, motor vehicle physical damage insurance, credit
life insurance, credit health insurance, credit involuntary unemployment
insurance, credit insurance or lender’s property insurance, as these classes of
insurance are described in ORS 744.115]
types of limited class insurance, as that term is defined in section 2 of this
2001 Act, designated by the Director of the Department of Consumer and Business
Services.
SECTION 58.
Section 59 of this 2001 Act is added to
and made a part of ORS chapter 731.
SECTION 59.
(1) A person who is prohibited by 18
U.S.C. 1033 from engaging or participating in the business of insurance because
of a conviction of a felony involving dishonesty or a breach of trust or
conviction of a crime under 18 U.S.C. 1033 may apply to the Director of the
Department of Consumer and Business Services for a written consent to engage or
participate in the business of insurance.
(2) The director shall
establish by rule a procedure and standards by which the director may issue a
written consent to engage or participate in the business of insurance to a
person convicted of a crime described in subsection (1) of this section.
(3) The director shall
not issue a license under the Insurance Code to an applicant who has been
convicted of a crime referred to in subsection (1) of this section unless the
director also issues a written consent.
(4) If a person issued a
license under the Insurance Code has been convicted of a crime referred to in
subsection (1) of this section or is subsequently the subject of such a
conviction, the director shall revoke, suspend or refuse to renew the license.
The person may apply to the director for a written consent as provided in
subsection (1) of this section.
APPLICABILITY; REPEALED STATUTES;
OPERATIVE AND EFFECTIVE DATES
SECTION 60.
ORS 750.055 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, 731.592, 731.594, 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 section 59 of this 2001 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, 743.522, 743.523, 743.524, 743.526, 743.527, 743.528,
743.529, 743.549 to 743.555, 743.556, 743.560, 743.600 to 743.610, 743.650 to
743.656, 743.693, 743.697, 743.699, 743.701, 743.704, 743.706 to 743.712,
743.721, 743.722, 743.726, 743.727, 743.728, 743.729, 743.804, 743.807,
743.808, 743.809, 743.814 to 743.839, 743.842, 743.845 and 743.847.
(f) The provisions of ORS chapter 744 relating to the
regulation of agents.
(g) ORS 746.005 to 746.140, 746.160, 746.180, 746.220 to
746.370 and 746.600 to 746.690.
(h) 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.
(i) ORS 735.600 to 735.650.
(j) ORS 743.680 to 743.689.
(k) ORS 744.700 to 744.740.
(L) ORS 743.730 to 743.773.
(m) 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 61.
ORS 744.016, 744.051, 744.054, 744.057,
744.066, 744.069, 744.071, 744.075, 744.085, 744.115, 744.119, 744.123,
744.127, 744.145, 744.155, 744.165, 744.182 and 744.231 are repealed.
SECTION 62.
(1) Sections 2 to 19 and 59 of this 2001
Act and the amendments to and repeal of statutes by sections 20 to 24c, 26 to
57, 60 and 61 of this 2001 Act become operative on January 1, 2002.
(2) The Director of the
Department of Consumer and Business Services may take any action before the
operative date of sections 2 to 19 and 59 of this 2001 Act and the amendments
to and repeal of statutes by sections 20 to 24c, 26 to 57, 60 and 61 of this
2001 Act that is necessary to enable the director to exercise, on and after the
operative date of sections 2 to 19 and 59 of this 2001 Act and the amendments
to and repeal of statutes by sections 20 to 24c, 26 to 57, 60 and 61 of this
2001 Act, all the duties, functions and powers conferred on the director by
sections 2 to 19 and 59 of this 2001 Act and the amendments to and repeal of
statutes by sections 20 to 24c, 26 to 57, 60 and 61 of this 2001 Act.
SECTION 63.
The unit captions used in this 2001 Act
are provided only for the convenience of the reader and do not become part of
the statutory law of this state or express any legislative intent in the
enactment of this 2001 Act.
SECTION 64.
This 2001 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2001 Act takes effect July 1, 2001.
Approved by the Governor May
24, 2001
Filed in the office of
Secretary of State May 24, 2001
Effective date July 1, 2001
__________