Chapter 0364

Chapter 364 Oregon Laws 2003

AN ACT

SB 253

Relating to insurance; creating new provisions; and amending ORS 59.840, 83.580, 86.720, 86.790, 433.045, 646.605, 657.085, 658.415, 696.523, 702.005, 703.411, 708A.005, 708A.120, 715.075, 716.594, 716.610, 731.028, 731.062, 731.146, 731.284, 731.288, 731.300, 731.365, 731.422, 731.426, 731.438, 731.484, 731.590, 731.737, 731.804, 731.812, 731.820, 731.840, 731.841, 731.854, 731.988, 732.810, 732.812, 733.635, 734.240, 734.370, 734.890, 735.055, 735.065, 735.210, 735.235, 735.315, 735.335, 735.350, 735.405, 735.425, 735.435, 735.450, 735.455, 735.460, 735.470, 735.480, 735.490, 735.610, 735.702, 737.350, 737.602, 742.009, 742.158, 742.200, 742.560, 742.700, 742.706, 743.013, 743.411, 743.420, 743.492, 743.655, 743.684, 743.730, 743.737, 743.745, 743.760, 743.769, 744.001, 744.013, 744.052, 744.053, 744.056, 744.058, 744.059, 744.061, 744.062, 744.063, 744.064, 744.067, 744.068, 744.072, 744.073, 744.074, 744.076, 744.077, 744.078, 744.079, 744.081, 744.082, 744.083, 744.084, 744.086, 744.087, 744.089, 744.300, 744.306, 744.313, 744.515, 744.609, 744.619, 744.621, 744.650, 744.702, 744.704, 744.710, 744.724, 744.730, 744.800, 744.802, 744.804, 744.806, 744.808, 744.810, 744.812, 744.814, 744.816, 744.818, 744.820, 744.856, 746.005, 746.015, 746.045, 746.065, 746.085, 746.100, 746.140, 746.147, 746.180, 746.182, 746.191, 746.195, 746.310, 746.405, 746.425, 746.475, 746.505, 746.515, 746.600, 746.605, 746.610, 746.615, 746.620, 746.625, 746.630, 746.635, 746.640, 746.645, 746.650, 746.655, 746.660, 746.670, 746.680, 746.685, 746.690, 748.181, 750.055, 750.333, 750.545, 806.180 and 806.190 and section 1, chapter 336, Oregon Laws 1995, and section 13, chapter 898, Oregon Laws 2001.

Be It Enacted by the People of the State of Oregon:

PRODUCER LICENSING

SECTION 1. ORS 731.062 is amended to read:

731.062. [“Agent”] “Insurance producer” means a person 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:

(a) Sells insurance; or

(b) Obtains insurance from insurers for purchasers.

(2) “Sell” means to exchange a policy of insurance by any means, for money or 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 2. ORS 744.052 is amended to read:

744.052. As used in ORS 744.052 to 744.089:

(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)] (3) “Limited class credit insurance” includes but is not limited to 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)] (4) “Limited class credit insurance [agent” and “limited class credit insurance] producer” [mean] means 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)] (5) “Limited class insurance” includes but is not limited to 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)] (6) “Limited class insurance [agent” and “limited class insurance] producer” [mean] means 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)] (7) “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)] (8) “Terminate” means to cancel the relationship between an insurance [agent] producer and the insurer or to [cancel an agent’s] revoke an insurance producer’s authority to sell, solicit or negotiate insurance.

[(10)] (9) “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)] (10) “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. ORS 744.053 is amended to read:

744.053. A person [shall] may not sell, solicit or negotiate insurance in this state for any class or classes of insurance unless the person is licensed as an [agent] insurance producer for that class or those classes in accordance with ORS 744.052 to 744.089.

SECTION 4. ORS 744.056 is amended to read:

744.056. (1) ORS 744.052 to 744.089 do not require an insurer to obtain a license as an [agent] insurance producer as required by ORS 744.053. 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] insurance producer [shall] is 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] producers or insurers, except for the individual or individuals designated as exercising the powers conferred by a title insurance [agent’s] producer’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”] “insurance producer” in ORS 731.062.

[(4) Except as provided in ORS 735.450, 744.063 and 744.064, the provisions of this chapter relating to agents do not apply to a surplus lines agent authorized pursuant to ORS 735.450.]

SECTION 5. ORS 744.058 is amended to read:

744.058. (1) An individual applying for a resident [agent] insurance producer license must pass a written examination unless the individual is exempt from the prelicensing education and examination requirement as provided in ORS 744.067. 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] insurance producer 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] insurance producer license only if the individual has established in this state a residence or a place of business for acting as an [agent] insurance producer.

(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. ORS 744.059 is amended to read:

744.059. (1) An individual applying for a resident [agent] insurance producer 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 ORS 744.074;

(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] insurance producer is required to obtain an [agent] insurance producer 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] insurance producer 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] producer a program of instruction, which is subject to review and approval by the director.

SECTION 7. 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 financial holding company or a bank holding company, as defined in ORS 706.008, as an [agent] insurance producer to transact one or more of the classes of insurance described in ORS 744.062, except for title insurance.

SECTION 8. ORS 744.062 is amended to read:

744.062. (1) Unless the Director of the Department of Consumer and Business Services refuses to issue or renew a license pursuant to ORS 744.074, a person who has met the requirements of ORS 744.058 and 744.059, or ORS 744.063, shall be issued an [agent] insurance producer license. An [agent] insurance producer 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.

(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] insurance producer.

(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] insurance producer 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 ORS 744.059 or 744.063, or as otherwise prescribed by the director.

SECTION 9. ORS 744.063 is amended to read:

744.063. (1) Unless the Director of the Department of Consumer and Business Services refuses to issue or renew a license pursuant to ORS 744.074, a nonresident person shall receive a nonresident [agent] insurance producer 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] insurance producer 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; and

[(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)] (d) 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] insurance producer licensed in this state who moves from one state to another state or a resident [agent] insurance producer 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] insurance producer 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 ORS 744.052 to 744.089, the director shall issue a nonresident limited class insurance [agent] producer 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 ORS 744.062 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] insurance producer.

(7) The director is the attorney in fact of a person to whom a license is issued under this section, and upon whom all legal process in any action or proceeding against the person may be served. Any legal process against the person that is served upon the director has the same legal force and validity as if served upon the person. The authority of the director under this subsection continues as long as any liability remains outstanding in this state. The director becomes the attorney in fact of the person on the date that the director issues the nonresident insurance producer license to the person.

SECTION 10. ORS 744.064 is amended to read:

744.064. (1) Unless denied a license pursuant to ORS 744.074, 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 insurance producer licenses to residents of this state on the same basis that this state grants nonresident [agent] insurance producer licenses under ORS 744.063 shall receive a nonresident [agent] insurance producer license if:

(a) The Director of the Department of Consumer and Business Services determines that the insurance regulator in the person’s place of residence grants nonresident insurance producer licenses to residents of this state on the same basis that the director grants nonresident insurance producer licenses to residents of the other jurisdiction or on the same basis that the insurance regulator grants insurance producer licenses to residents of the other jurisdiction, or on another basis that is reasonable and fair to licensees of this state; and [if]

(b) The person meets all of the following requirements:

[(a)] (A) The person is in good standing as a resident [agent] insurance producer in the person’s place of residence in Canada, Mexico or the person’s state of residence.

[(b)] (B) The person has submitted the proper request for a nonresident [agent] insurance producer license and has paid the applicable fees.

[(c)] (C) The person has submitted or transmitted to the Director of the Department of Consumer and Business Services the resident [agent] insurance producer 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)] (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)] (E) 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] insurance producer 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:

(a) 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.] determines that a written examination or other comparable requirement acceptable to the director is required of applicants for a resident insurance producer license in the other jurisdiction;

[(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 or meets the other comparable requirement acceptable to the director; 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] that the director determines to be reasonable and fair to licensees of this state.

[(5)] (4) The director shall establish the form of the nonresident [agent] insurance producer license issued under this section.

(5) A person licensed as a surplus lines insurance producer in the person’s home state is eligible for a nonresident surplus lines insurance producer license in the manner provided for nonresident insurance producer licenses in subsection (1) of this section. A person to whom a nonresident surplus lines insurance producer license is issued under this section is subject to ORS 735.400 to 735.495.

(6) The director is the attorney in fact of a person to whom a license is issued under this section, and upon whom all legal process in any action or proceeding against the person may be served. Any legal process against the person that is served upon the director has the same legal force and validity as if served upon the person. The authority of the director under this subsection continues as long as any liability remains outstanding in this state. The director becomes the attorney in fact of the person on the date that the director issues the nonresident insurance producer license to the person. This subsection does not apply to a person to whom a nonresident surplus lines insurance producer license is issued.

SECTION 11. ORS 744.067 is amended to read:

744.067. (1) An individual who applies for a resident [agent] insurance producer 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] insurance producer 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] insurance producer license pursuant to ORS 744.059. 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 ORS 744.062 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 ORS 744.058 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 ORS 744.058 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 ORS 744.058 or 744.064 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 12. ORS 744.068 is amended to read:

744.068. (1) An [agent] insurance producer shall notify the Director of the Department of Consumer and Business Services prior to transacting business under the [agent] insurance producer license under any name other than the [agent’s] insurance producer’s legal name and prior to changing, deleting or adding an assumed business name in connection with the [agent’s] insurance producer’s business under the [agent] insurance producer license.

(2) A resident [agent] insurance producer shall keep at the principal place of business of the [agent] insurance producer the usual and customary records pertaining to the business under the resident [agent] insurance producer license. All such records shall be kept available and open to the inspection of the director during business hours. A resident [agent] insurance producer shall keep records of insurance transacted by the [agent] insurance producer under the license for three years following expiration of the policy unless the director designates another period.

(3) A nonresident [agent] insurance producer shall keep at the principal place of business of the [agent] insurance producer the usual and customary records pertaining to the business under the nonresident [agent] insurance producer 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] insurance producer has a place of transacting insurance in this state, that place shall be the principal place of business for the nonresident [agent] insurance producer. A nonresident [agent] insurance producer shall keep records of insurance transacted by the [agent] insurance producer under the nonresident [agent] insurance producer license for three years following expiration of the policy unless the director designates another period.

(4) An [agent] insurance producer 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] insurance producer transacts business under the license in this state.

(b) The opening or closing of a location at which the [agent] insurance producer transacts business under the license in this state.

(5) Not later than the 30th day after the authority of an individual [agent] insurance producer to act for an [agent] insurance producer 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 13. ORS 744.072 is amended to read:

744.072. (1) An [agent] insurance producer 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] insurance producer, as long as the licensee has met applicable continuing education requirements for resident individual [agents] insurance producers 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] insurance producer license the director may require the [agent] insurance producer 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] insurance producer, as a condition for renewal of the [agent] insurance producer 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] insurance producer must satisfy as a condition for renewing the resident [agent] insurance producer 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 ORS 744.067 [(4)] (5);

(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] insurance producer, 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] a reinsurance intermediary broker or reinsurance 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] insurance producer who allows the [agent] insurance producer license to lapse may apply to the director to reinstate the same license within [24] 12 months from the due date for renewal without having to take and pass a written examination, but the [agent] insurance producer must pay an amount for the reinstatement that is 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, including the period for which the license was lapsed. A license reinstated under this subsection is effective upon the date that the director grants the reinstatement.

(7) An individual [agent] insurance producer 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] insurance producer may also request a waiver of any examination requirement or any penalty imposed for failure to comply with renewal procedures.

SECTION 14. ORS 744.073 is amended to read:

744.073. (1) The Director of the Department of Consumer and Business Services may issue a temporary [agent] insurance producer 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] insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the [agent] insurance producer, for the recovery or return of the [agent] insurance producer to the business, or to provide for the training and licensing of new personnel to operate the [agent’s] insurance producer’s business;

(b) To a member or employee of a business entity licensed as an [agent] insurance producer, 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] insurance producer 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] insurance producer 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 15. ORS 744.074 is amended to read:

744.074. (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] insurance producer 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.

(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] insurance producer 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] insurance producer 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 16. ORS 744.076 is amended to read:

744.076. (1) An insurer or [agent] insurance producer 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] insurance producer 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] insurance producer 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] insurance producer at the time of the sale, solicitation or negotiation and was then so licensed.

(4) An insurer or [agent] insurance producer 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 17. ORS 744.077 is amended to read:

744.077. (1) The Director of the Department of Consumer and Business Services shall establish by rule the conditions under which a person who is licensed as an [agent] insurance producer 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] insurance producer who is not licensed as an insurance consultant may receive only commission.

SECTION 17a. Section 17b of this 2003 Act is added to and made a part of ORS chapter 744.

SECTION 17b. (1) An insurer or insurance producer may charge a commission, a service fee or a combination of the two when transacting insurance in other than the following categories of insurance:

(a) Insurance that covers an individual’s person, property or liability;

(b) Life or health insurance for groups of fewer than 51 lives; or

(c) Insurance on a commercial or public entity paying combined annual premiums of less than $100,000 for the insurance.

(2) An insurer or insurance producer may charge a commission or service fee other than the commission or fee filed in accordance with ORS 737.205 only if the insurer or insurance producer has a written agreement with the prospective insured prior to the binding or issuance of an insurance policy. The Director of the Department of Consumer and Business Services may establish by rule minimum conditions for written agreements entered into under this subsection. An insurer or insurance producer who enters into a written agreement as provided in this subsection is not in violation of ORS 746.035 or 746.045.

SECTION 18. ORS 744.078 is amended to read:

744.078. (1) An [agent] insurance producer shall not act as an agent of an insurer unless:

(a) The [agent] insurance producer is an appointed agent of that insurer; or

(b) The insurance producer transacts insurance on behalf of another insurance producer who is an appointed agent of that insurer according to conditions and limitations established by the Director of the Department of Consumer and Business Services by rule.

(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.] Each insurer shall maintain a current list of insurance producers contractually authorized to accept applications on behalf of the insurer. Each insurer shall make the list available to the director upon request.

(3) An [agent] insurance producer may represent as agent under one insurance producer license as many insurers as may appoint the [agent] insurance producer 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 as an agent of the insurer 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 19. ORS 744.079 is amended to read:

744.079. (1) An insurer or authorized representative of the insurer who terminates the appointment, employment, contract or other insurance business relationship with an [agent] insurance producer 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 ORS 744.074 or if the insurer has knowledge that the [agent] insurance producer 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 ORS 744.074. 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] insurance producer.

[(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 ORS 744.074 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)] (2) 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)] (3) Not later than the 15th day after making a notification required by subsection (1)[,] or (2) [or (3)] of this section, the insurer shall mail a copy of the notification to the [agent] insurance producer at the [agent’s] insurance producer’s last known business address. If the [agent] insurance producer is terminated for cause for any of the reasons listed in ORS 744.074, the insurer shall provide a copy of the notification to the [agent] insurance producer at the [agent’s] insurance producer’s last known business address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.

[(5)] (4) Not later than the 30th day after the [agent] insurance producer has received a notification under subsection [(4)] (3) of this section, the [agent] insurance producer may file with the director written comments concerning the substance of the notification. The [agent] insurance producer 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] insurance producer as allowed under subsection [(6)] (5) of this section.

[(6)] (5) In the absence of actual malice, an insurer, the authorized representative of the insurer, an [agent] insurance producer, 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] insurance producer, or relating to a statement by a terminating insurer or [agent] insurance producer to an insurer or [agent] insurance producer, 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)] (6) In any action brought against a person who may have immunity under subsection [(6)] (5) 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)] (5) of this section does not apply because the person making the statement or providing the information did so with actual malice.

[(8)] (7) Subsections (5) and (6) [and (7)] of this section do not abrogate or modify any existing statutory or common law privileges or immunities.

[(9)] (8) 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] insurance producer 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)] (9) Any information, documents, records or other data in the control or possession of the director that are furnished by an insurer or an [agent] insurance producer, or an employee or agent thereof acting on behalf of the insurer or [agent] insurance producer, 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 20. ORS 744.081 is amended to read:

744.081. (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] insurance producer so terminated. The insurer shall give written notice of the termination and the date thereof to the [agent] insurance producer 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] insurance producer to the insurer. The [agent] insurance producer 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.

(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 following are grounds for termination under this subsection:

(a) The [agent’s] insurance producer’s insurance license is denied, restricted, revoked, suspended or canceled by any public authority;

(b) The [agent’s] insurance producer’s business is sold, transferred or merged and the insurer has not appointed the successor;

(c) The [agent] insurance producer is insolvent or fails to remit balances to the insurer in accordance with the agreement;

(d) The [agent] insurance producer commits fraud or engages in intentional misconduct;

(e) The insurer amends its certificate of authority in order to discontinue a class of insurance;

(f) The insurer ceases selling insurance in this state; or

(g) The insurer and [agent] insurance producer mutually agree to terminate the agency appointment.

(3) An [agent] insurance producer 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] insurance producer 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] insurance producer that the [agent] insurance producer has given such notice to the insurer.

SECTION 21. ORS 744.082 is amended to read:

744.082. The Director of the Department of Consumer and Business Services shall waive any requirement for a nonresident [agent] insurance producer license applicant with a valid resident insurance producer license from the applicant’s home state, except the requirements imposed by ORS 744.063, if the applicant’s home state grants nonresident insurance producer licenses to residents of this state on the same basis.

SECTION 22. ORS 744.083 is amended to read:

744.083. (1) All premium funds received by a resident [agent] insurance producer 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, a resident [agent] insurance producer [shall] may not commingle or otherwise combine premiums with any other moneys.

(3) A resident [agent] insurance producer may commingle with premium funds in the trust account required by subsection (1) of this section any additional funds the [agent] insurance producer 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] insurance producers that the Director of the Department of Consumer and Business Services designates by rule. The director may exempt a class of [agent] insurance producer from this section if the director determines that the requirements of this section are unduly burdensome to the [agents] insurance producers in relation to the public good served.

SECTION 23. ORS 744.084 is amended to read:

744.084. (1) In lieu of the trust account required by ORS 744.083, a resident [agent] insurance producer may keep a certificate of deposit from an institution insured by the federal government or an instrumentality thereof if the resident [agent] insurance producer has an average monthly balance of premium funds received and held for the last 12 months of at least $2 million. A resident [agent] insurance producer 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] insurance producer 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] insurance producer has failed to comply with the provisions of this section or rules adopted under subsection (3) of this section. Upon revocation, the resident [agent] insurance producer shall comply immediately with the provisions of ORS 744.083.

SECTION 24. ORS 744.086 is amended to read:

744.086. The Legislative Assembly finds that it is in the interest of the insurance-buying public that [agents] insurance producers authorized to transact title insurance be subject to the Insurance Code. It is declared to be the intent of the Legislative Assembly that the Insurance Code shall apply to such [agents] insurance producer only to the extent necessary for the regulation of title insurance ratemaking and unfair trade practices.

SECTION 25. ORS 744.087 is amended to read:

744.087. The Director of the Department of Consumer and Business Services may require the filing by an insurer of any compensation agreements for [agents] insurance producers who are appointed by the insurer as agents of the insurer under ORS 744.078. No such filing shall be deemed a “public record” as defined in ORS 192.410.

SECTION 26. ORS 744.089 is amended to read:

744.089. (1) An [agent] insurance producer shall report to the Director of the Department of Consumer and Business Services any administrative action taken against the [agent] insurance producer 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] insurance producer shall report to the director any criminal prosecution of the [agent] insurance producer 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 26a. Section 26b of this 2003 Act is added to and made a part of ORS chapter 744.

SECTION 26b. (1) As used in this section:

(a) “Retail insurance producer” means an insurance producer who directly solicits or sells an insurance policy to a prospective insured or directly negotiates an insurance policy with a prospective insured.

(b) “Wholesale insurance producer” means an insurance producer who solicits or sells an insurance policy to a prospective insured through a retail insurance producer or negotiates an insurance policy for a prospective insured with a retail insurance producer and does not solicit or sell directly to or negotiate directly with a prospective insured.

(2) A wholesale insurance producer who sells, solicits or negotiates a policy directly with a retail insurance producer and not on behalf of a prospective insured may charge the retail insurance producer a fee or a combination of a fee and a commission if the wholesale insurance producer has a written agreement with the retail insurance producer prior to the binding or issuance of the insurance policy. The charge must be commensurate with the services provided by the wholesale insurance producer.

(3) A retail insurance producer may charge a fee to a prospective insured when the retail insurance producer pays a fee or a combination of a fee and a commission to a wholesale insurance producer under subsection (2) of this section if the retail insurance producer has a written agreement with the prospective insured prior to the binding or issuance of the insurance policy. The fee may not exceed the amount of compensation paid by the retail insurance producer to the wholesale insurance producer.

(4) For the purpose of determining the charge under subsection (2) of this section, the retail insurance producer and wholesale insurance producer may agree to any allocation of the fee that the retail insurance producer charges the consumer under this section. The Director of the Department of Consumer and Business Services may establish by rule minimum conditions for written agreements entered into under this section. An insurer or insurance producer who enters into a written agreement as provided in this section is not in violation of ORS 746.035 or 746.045.

REINSURANCE INTERMEDIARIES

SECTION 27. ORS 744.800 is amended to read:

744.800. (1) For purposes of [this section] ORS 744.800 to 744.818:

(a) [An] A reinsurance 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] acting as a reinsurance intermediary manager on behalf of the insurer.

(b) [An] A reinsurance 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] insurance producer for the reinsurer, regardless of the title or designation of the person.

(c) A reinsurance intermediary means a reinsurance intermediary broker or a reinsurance intermediary manager.

[(c)] (d) “Business entity” has the meaning given that term in ORS 731.116.

(2) A person may act as [an] a reinsurance intermediary broker in this state only as follows:

(a) [If a] The person maintains an office in this state either [in the person’s own name or in the name of an agent that is a business entity, the person must meet either of the following requirements:] directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation, and the person is a licensed insurance producer or reinsurance intermediary in this state; or

(b) The person maintains an office in another state either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation, and the person is a licensed insurance producer or reinsurance intermediary in this state or another state having laws substantially similar to ORS 744.800 to 744.818.

[(A) If the person is an individual or a business entity, the person must hold a license issued under this chapter authorizing the person to 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 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 an agent that is a business entity, the person must meet one of the following requirements:]

[(C) If the person is an individual 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] a reinsurance intermediary manager only as follows:

(a) A person may act as [an] a reinsurance intermediary manager for a reinsurer domiciled in this state if the person [meets either of the following requirements:] is a licensed insurance producer or reinsurance intermediary in this state.

(b) A person may act as a reinsurance intermediary manager in this state if the person maintains an office in this state either directly or as a member or employee of a firm or association, or as an officer, director or employee of a corporation, if the person is a licensed insurance producer or reinsurance intermediary in this state.

[(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 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 an agent that is a business entity, if the person meets either of the following requirements:]

[(A) If the person is an individual or a business entity, the person holds a license issued under this chapter authorizing the person to 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 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:]

[(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 an agent that is a business entity and holds a license as an intermediary manager.]

(4) The Director of the Department of Consumer and Business Services may issue a reinsurance intermediary license to any person that has complied with the requirements of this section. A license issued to a firm or association authorizes all of the members of the firm or association and any designated employees of the firm or association to act as reinsurance intermediaries under the license. All such persons must be named in the license application and any supplements to the application. A license issued to a corporation authorizes all of the officers and any designated employees and directors of the corporation to act as reinsurance intermediaries on behalf of the corporation. All such persons must be named in the license application and any supplements to the application.

(5) The director shall issue a resident reinsurance intermediary license to a person if the person holds an insurance producer license issued under ORS 744.062 and indorsed with the designation of reinsurance intermediary.

(6) The director shall issue a nonresident reinsurance intermediary license to a person if:

(a) The person is currently licensed in the person’s home state as a resident reinsurance intermediary or insurance producer and is in good standing in the person’s home state;

(b) The person has submitted the proper request for a license and has paid the applicable fees;

(c) The person has submitted or transmitted to the director the license application that the person submitted to the person’s home state or, in lieu of that application, a completed application acceptable to the director; and

(d) The person’s home state awards nonresident reinsurance intermediary licenses to residents of this state on the same basis.

(7) The director may refuse to issue a reinsurance intermediary license if, in the director’s judgment:

(a) The application, anyone named in the application or any member, principal, officer, director or controlling person of the applicant is not trustworthy; or

(b) Any person described in paragraph (a) of this subsection has given cause for revocation or suspension of the license or has failed to comply with any requirement for issuance of the license.

[(4) An individual may act as an intermediary broker or an intermediary manager under the authority of the license of an agent that is a business entity, whether or not the individual holds a license as an agent, if the license of the agent that is a business entity is indorsed to authorize the agent that is a business entity to act as an intermediary broker or intermediary manager and if:]

[(a) The individual is a member, employee, officer or director of the business entity; and]

[(b) The individual is designated by the agent that is a business entity on its license application 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 agent that is a business entity.]

[(5)] (8) In order to obtain and maintain the indorsement of reinsurance intermediary manager, a [person] resident reinsurance intermediary must satisfy the requirements of ORS 744.818 regarding errors and omissions insurance.

[(6) A person may obtain a license to act as a nonresident agent authorized to act in this state as an intermediary broker or intermediary manager, or both as provided in ORS 744.063.]

[(7) For purposes of ORS 744.078:]

[(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 28. ORS 744.802 is amended to read:

744.802. (1) An officer or employee of a ceding insurer is not subject to the requirements of [this chapter] ORS 744.800 to 744.818 that apply to reinsurance intermediary brokers, with respect to the ceding insurer.

(2) When engaged in a relationship described in this subsection, the following persons are not subject, with respect to the reinsurer in the relationship, to the requirements of [this chapter] ORS 744.800 to 744.818 that apply to reinsurance intermediary managers:

(a) An employee of the reinsurer.

(b) A United States manager of the United States branch of an alien reinsurer.

(c) An underwriting manager who, pursuant to contract, manages all of the reinsurance operations of the reinsurer, is under common control with the reinsurer and subject to ORS 732.517 to 732.592, and whose compensation is not based on the volume of premiums written.

(d) The manager of a group, association, pool or organization of insurers who engage in joint underwriting or joint reinsurance and who are subject to examination by the insurance regulatory official of the state in which the manager’s principal business office is located.

(3) An attorney-at-law rendering services in the performance of duties of an attorney-at-law is not subject to the requirements of [this chapter] ORS 744.800 to 744.818 that apply to reinsurance intermediary brokers or reinsurance intermediary managers.

SECTION 29. ORS 744.804 is amended to read:

744.804. [An] A reinsurance intermediary broker and the insurer it represents in the capacity of [an] a reinsurance intermediary broker may enter one or more transactions between them only pursuant to a written authorization that specifies the responsibilities of each party. The authorization must at least provide that:

(1) The insurer may terminate the authority of the reinsurance intermediary broker at any time.

(2) The reinsurance intermediary broker must render to the insurer accounts accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by or owing to the reinsurance intermediary broker, and remit all funds due to the insurer not later than the 30th day following the date of receipt.

(3) All funds collected for the account of the insurer must be held by the reinsurance intermediary broker in a fiduciary capacity in a qualified United States financial institution. For purposes of this subsection, a “qualified United States financial institution” is an institution that:

(a) Is organized, or, in the case of a United States office of a foreign banking organization, is licensed, under the laws of the United States or any state thereof;

(b) Is regulated, supervised and examined by authorities of the United States or of any state thereof having regulatory authority over banks and trust companies; and

(c) Has been determined by the Director of the Department of Consumer and Business Services to meet standards of financial condition and standing that are necessary and appropriate for regulating the quality of financial institutions whose letters of credit will be acceptable to the director. The director may consider standards and classifications of institutions established by the Securities Valuation Office of the National Association of Insurance Commissioners for the purpose of making determinations under this paragraph.

(4) The reinsurance intermediary broker must comply with ORS 744.806.

(5) The reinsurance intermediary broker must comply with the written standards established by the insurer for the cession or retrocession of all risks.

(6) The reinsurance intermediary broker must disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.

SECTION 30. ORS 744.806 is amended to read:

744.806. (1) [An] A reinsurance intermediary broker must keep a complete record for each transaction of a contract of reinsurance as provided in this subsection. For each contract of reinsurance transacted by the reinsurance intermediary broker that is limited to first party property coverages, the reinsurance intermediary broker must keep the record for not less than five years after expiration of the contract of reinsurance. For all other contracts of reinsurance transacted by the reinsurance intermediary broker, the reinsurance intermediary broker must keep the record for not less than 10 years after expiration of each contract of reinsurance. The record must show all of the following:

(a) The type of contract, limits, underwriting restrictions, classes or risks and territory.

(b) The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation.

(d) The rate used to compute the reinsurance premium.

(e) Names and addresses of assuming reinsurers.

(f) Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary broker.

(g) Related correspondence and memoranda.

(h) Proof of placement.

(i) Details regarding retrocessions handled by the reinsurance intermediary broker, including the identity of retrocessionaires and percentage of each contract assumed or ceded.

(j) Financial records, including premium and loss accounts.

(k) The following written evidence, when the reinsurance intermediary broker procures a reinsurance contract on behalf of an authorized ceding insurer:

(A) When the contract is procured directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk.

(B) When the contract is placed through a representative of the assuming reinsurer other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.

(2) The insurer must have access to and the right to copy and audit all accounts and records maintained by the reinsurance intermediary broker and related to its business. The reinsurance intermediary broker must maintain the accounts and records in a form usable by the insurer.

SECTION 31. ORS 744.808 is amended to read:

744.808. (1) An insurer may not engage the services of any person to act as [an] a reinsurance intermediary broker on its behalf unless the person is licensed as [an] a reinsurance intermediary broker as required by ORS 744.800.

(2) An insurer may not employ an individual who is employed by [an] a reinsurance intermediary broker with which it transacts business unless the reinsurance intermediary broker is under common control with the insurer and subject to ORS 732.517 to 732.592.

(3) The insurer must annually obtain a copy of statements of the financial condition of each reinsurance intermediary broker with which it transacts business.

SECTION 32. ORS 744.810 is amended to read:

744.810. [An] A reinsurance intermediary manager and the reinsurer it represents in that capacity may enter a transaction only pursuant to a written contract that specifies the responsibilities of each party and otherwise satisfies the requirements of this section. The contract must be approved by the board of directors of the reinsurer. Not later than the 30th day before the reinsurer assumes or cedes business through the reinsurance intermediary manager, a true copy of the approved contract must be filed with the Director of the Department of Consumer and Business Services for approval. The contract must at least provide that:

(1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary manager, and the reinsurer may immediately suspend the authority of the reinsurance intermediary manager to assume or cede business during the pendency of any dispute regarding the cause for termination.

(2) The reinsurance intermediary manager must render accounts to the reinsurer, accurately detailing all material transactions and including information necessary to support all commissions, charges and other fees received by or owing to the reinsurance intermediary manager and remit all funds due under the contract to the reinsurer on not less than a monthly basis.

(3) All funds collected for the account of the reinsurer must be held by the reinsurance intermediary manager in a fiduciary capacity in a qualified United States financial institution as that term is described in ORS 744.804. The reinsurance intermediary manager may retain not more than three months’ estimated claims payments and allocated loss adjustment expenses. The reinsurance intermediary manager must maintain a separate bank account for each reinsurer that it represents.

(4) [An] A reinsurance intermediary manager must keep a complete record for each transaction of a contract of reinsurance as provided in this subsection. For each contract of reinsurance transacted by the reinsurance intermediary manager that is limited to first party property coverages, the reinsurance intermediary manager must keep the record for not less than five years after expiration of the contract of reinsurance. For all other contracts of reinsurance transacted by the reinsurance intermediary manager, the reinsurance intermediary manager must keep the record for not less than 10 years after expiration of each contract of reinsurance. The record must show all of the following:

(a) The type of contract, limits, underwriting restrictions, classes or risks and territory.

(b) The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks.

(d) The rate used to compute the reinsurance premium.

(e) Names and addresses of reinsurers.

(f) The rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary manager.

(g) Related correspondence and memoranda.

(h) Proof of placement.

(i) Specific information regarding retrocessions handled by the reinsurance intermediary manager, including the identity of retrocessionaires and percentage of each contract assumed or ceded.

(j) Financial records, including premium and loss accounts.

(k) The following written evidence, when the reinsurance intermediary manager places a reinsurance contract on behalf of a ceding insurer:

(A) When the contract is procured directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or

(B) When the contract is placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.

(5) The reinsurer must have access to and the right to copy all accounts and records maintained by the reinsurance intermediary manager that are related to its business. The reinsurance intermediary manager must maintain the accounts and records in a form usable by the reinsurer.

(6) The contract cannot be assigned in whole or in part by the reinsurance intermediary manager.

(7) The reinsurance intermediary manager must comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession of all risks.

(8) The contract must set forth the rates, terms and purposes of commissions, charges and other fees that the reinsurance intermediary manager may levy against the reinsurer.

(9) If the contract permits the reinsurance intermediary manager to settle claims on behalf of the reinsurer, all of the following provisions must apply:

(a) All claims must be reported to the reinsurer in a timely manner.

(b) A copy of the claim file must be sent to the reinsurer at its request or as soon as it becomes known that the claim:

(A) Has the potential of exceeding the lesser of an amount determined by the director or the limit set by the reinsurer;

(B) Involves a coverage dispute;

(D) Is open for more than six months; or

(E) Is closed by payment of the lesser of an amount set by the director or an amount set by the reinsurer.

(c) All claim files must be the joint property of the reinsurer and the reinsurance intermediary manager. However, upon an order of liquidation of the reinsurer, the files [shall] become the sole property of the reinsurer or its estate but the reinsurance intermediary manager shall have reasonable access to and the right to copy the files on a timely basis.

(d) Any settlement authority granted to the reinsurance intermediary manager may be terminated for cause upon written notice by the reinsurer to the reinsurance intermediary manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination.

(10) If the contract provides for a sharing of interim profits by the reinsurance intermediary manager, the interim profits must not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business, or a later period set by the director for specified lines of insurance, and not until the adequacy of loss reserves on remaining claims has been attested to by an actuary pursuant to ORS 744.814.

(11) The reinsurance intermediary manager must annually provide the reinsurer with a statement of its financial condition that is prepared by an independent certified public accountant.

(12) Periodically, but not less frequently than semiannually, the reinsurer shall conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary manager.

(13) The reinsurance intermediary manager must disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such insurer pursuant to the contract.

(14) Within the scope of the actual or apparent authority of the reinsurance intermediary manager, the acts of the reinsurance intermediary manager are considered to be the acts of the reinsurer on whose behalf it is acting.

SECTION 33. ORS 744.812 is amended to read:

744.812. [An] A reinsurance intermediary manager [shall] may not do any of the following:

(1) Cede retrocessions on behalf of the reinsurer that the reinsurance intermediary manager represents, except that the reinsurance intermediary manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for the retrocessions. The guidelines must include:

(a) A list of reinsurers with which the automatic agreements are in effect;

(b) For each such reinsurer, the coverages and amounts or percentages that may be reinsured; and

(2) Commit the reinsurer to participate in reinsurance syndicates.

(3) Appoint an [agent] insurance producer, reinsurance intermediary broker or reinsurance intermediary manager without assuring that the [agent] insurance producer, reinsurance intermediary broker or reinsurance intermediary manager is lawfully licensed to transact the type of reinsurance for which the appointment is made.

(4) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one percent of the combined capital and surplus of the reinsurer as of December 31 of the last complete calendar year.

(5) Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, the reinsurance intermediary manager must promptly forward a report to the reinsurer.

(6) Jointly employ an individual who is employed by the reinsurer, unless the reinsurance intermediary manager is under common control with the reinsurer subject to ORS 732.517 to 732.592.

(7) Appoint a reinsurance subintermediary manager.

SECTION 34. ORS 744.814 is amended to read:

744.814. (1) A reinsurer may not engage the services of any person to act as [an] a reinsurance intermediary manager on its behalf unless the person is licensed to act as [an] a reinsurance intermediary manager as required by ORS 744.800.

(2) A reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary manager that the reinsurer has engaged. Each statement must be prepared by an independent certified public accountant in a form acceptable to the Director of the Department of Consumer and Business Services.

(3) If [an] a reinsurance intermediary manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary who is in good standing of the American Academy of Actuaries, attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary manager. The opinion must be in addition to any other required loss reserve certification.

(4) Binding authority for all retrocessional contracts or participation in reinsurance syndicates must rest with an officer of the reinsurer who is not affiliated with the reinsurance intermediary manager.

(5) Not later than the 30th day after termination of a contract with [an] a reinsurance intermediary manager, the reinsurer shall provide written notification of the termination to the director.

(6) A reinsurer may not appoint to its board of directors any officer, director, employee, controlling shareholder or subproducer of its reinsurance intermediary manager. This subsection does not apply to relationships governed by ORS 732.517 to 732.592.

SECTION 35. ORS 744.816 is amended to read:

744.816. (1) The Director of the Department of Consumer and Business Services may examine any reinsurance intermediary broker and any reinsurance intermediary manager. The director shall have access to all books, bank accounts and records of [an] a reinsurance intermediary broker or reinsurance intermediary manager being examined. All such books, bank accounts and records must be maintained in a form usable to the director.

(2) [An] A reinsurance intermediary manager may be examined as if the reinsurance intermediary manager were the reinsurer.

SECTION 36. ORS 744.818 is amended to read:

744.818. (1) [In addition to the requirements for licensure of an agent, an] A resident reinsurance intermediary acting as a reinsurance intermediary manager shall maintain with the Director of the Department of Consumer and Business Services a current certificate of errors and omissions insurance in an amount established by the director by rule from an insurer authorized to do business in this state or from any other insurer acceptable to the director according to standards established by rule.

(2) If the director determines that errors and omissions insurance required under this section is not generally available at a reasonable cost, the director by rule may suspend the requirement of insurance, but must reimpose the requirement when the insurance becomes available once again.

SECTION 37. ORS 744.820 is amended to read:

744.820. If the Director of the Department of Consumer and Business Services finds that [an] a reinsurance intermediary broker or [an] a reinsurance intermediary manager has violated any provision of ORS 744.800 to 744.818, the director may order the reinsurance intermediary broker or reinsurance intermediary manager to reimburse the insurer, reinsurer, rehabilitator or liquidator for losses incurred by the insurer or reinsurer because of the violation. The director may take action under this section in addition to or instead of any other action that the director may take under the Insurance Code.

SURPLUS LINES

SECTION 38. 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 ORS 744.052.]

[(6)] (5) “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.

[(7)] (6) “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.

[(8)] (7) “Producing [agent] insurance producer” means the individual [agent] insurance producer dealing directly with the party seeking insurance.

[(9)] (8) “Surplus” means funds over and above liabilities and capital of the insurer for the protection of policyholders.

[(10)] (9) “Surplus lines licensee” means an [agent] insurance producer 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 39. 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 regarding the insurance, which shall be kept confidential as provided in ORS 705.137, including the following:

(A) The name and address of the insured;

(B) The identity of the insurer or insurers;

(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] insurance producer to place the coverage with admitted insurers and the results thereof. The statement shall be signed by the producing [agent] insurance producer 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 producing insurance producer not licensed to transact surplus lines insurance in this state 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 40. 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] insurance producer the policy, or if such policy is not then available, a certificate as described in subsection (4) of this section, cover note[,] or binder [or other evidence of insurance]. The certificate, as described in subsection (4) of this section, cover note[,] or 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 policy or certificate 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] an insurance policy or certificate 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 policy, 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] insurance producer 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] insurance producer to replace [any evidence of insurance] an insurance policy or certificate 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] Each insurance policy or certificate 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 was 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 policies and certificates 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 41. ORS 735.450 is amended to read:

735.450. (1) 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 an agent authorized to transact property insurance, casualty insurance or both and is further authorized under the license] to transact surplus lines insurance. A person may obtain a license to transact surplus lines insurance only if the person is licensed as an insurance producer under ORS chapter 744 to transact property and casualty insurance.

(2) The prohibition in [this subsection] subsection (1) of this section does not apply to a nonresident surplus lines licensee or to a nonresident surplus lines insurance 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 insurance 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 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 has applied under ORS 744.063 to have the class of surplus lines insurance added to the agent license and has satisfied all requirements therefor under ORS 744.052 to 744.089. This subsection applies to resident and nonresident agents.]

SECTION 42. ORS 735.455 is amended to read:

735.455. (1) A surplus lines licensee may originate surplus lines insurance or accept such insurance from any other [agent] insurance producer duly licensed as to the kinds of insurance involved, and the surplus lines licensee may compensate [such agent] the insurance producer therefor.

(2) A surplus lines licensee may charge a producing insurance producer a fee or a combination of a fee and a commission when transacting surplus lines for the producing insurance producer if the surplus lines licensee has a written agreement with the producing insurance producer prior to the binding or issuance of a surplus lines insurance policy. When a surplus lines licensee transacts surplus lines insurance directly for a prospective insured, the surplus lines licensee may charge the prospective insured a fee or a combination of a fee and a commission if the surplus lines licensee has a written agreement with the prospective insured prior to the binding or issuance of a surplus lines insurance policy.

(3) A producing insurance producer may charge a fee to a prospective insured when the producing insurance producer pays a fee or a combination of a fee and a commission to a surplus lines licensee under subsection (2) of this section if the producing insurance producer has a written agreement with the prospective insured prior to the binding or issuance of the surplus lines insurance policy. The fee may not exceed the amount of compensation paid by the producing insurance producer to the surplus lines licensee.

(4) For the purpose of determining the charge under subsection (2) of this section, the producing insurance producer and the surplus lines licensee may agree to any allocation of the fee that the producing insurance producer charges the prospective insured under this section.

(5) The fee or the fee and commission charged by a surplus lines licensee under subsection (2) of this section must be commensurate with the services provided by the surplus lines licensee. The Director of the Department of Consumer and Business Services may establish by rule minimum conditions for written agreements entered into under this section. An insurer or insurance producer who enters into a written agreement as provided in this section is not in violation of ORS 746.035 or 746.045.

SECTION 43. ORS 735.460 is amended to read:

735.460. (1) Each surplus lines licensee shall keep 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 ORS 744.068, 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;

(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] insurance producer, 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 44. 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] insurance producer, 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 45. 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] insurance producer;

(2) Removal of the surplus lines licensee’s office accounts and records from the principal place of business of the licensee under ORS 744.068 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) Violation of any provision of ORS 735.400 to 735.495; or

(7) For any cause for which an insurance license could be denied, revoked, suspended or renewal refused under ORS 744.074.

SECTION 46. 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] insurance producer who registered or delivered [such] the policy resides or transacts business, by the service of summons and complaint made upon [such agent] the insurance producer for [such] the insurer.

(2) Any [such agent] insurance producer 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] the insurance producer in which to plead, answer or defend any such cause.

(4) Upon service of summons and complaint upon [such agent] the insurance producer for [such] the 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.

RELATED AMENDMENTS

SECTION 47. ORS 59.840 is amended to read:

59.840. As used in ORS 59.840 to 59.980:

(1) “Director” means the Director of the Department of Consumer and Business Services.

(2) “Fraud,” “deceit” and “defraud” are not limited to common-law deceit.

(3) “License” means a license issued to a mortgage banker or mortgage broker under ORS 59.840 to 59.980.

(4)(a) “Loan originator” means an individual employed by or purporting to act as an agent or independent contractor for a mortgage banker or mortgage broker that is required to be licensed under ORS 59.840 to 59.980, with the expectation by the individual of compensation or gain that is determined by the amount borrowed or the terms and conditions agreed to by the mortgage loan borrower, and having primary job responsibilities that include negotiating with a borrower or potential borrower for the purpose of establishing the terms and conditions of a mortgage loan.

(b) “Loan originator” includes a person employed at a location outside this state whose primary job responsibilities include contacting or attempting to contact a borrower or potential borrower within this state through any medium or mode of communication for purposes of providing a mortgage loan within this state.

(c) “Loan originator” does not include an individual whose responsibilities are clerical or administrative functions, including but not limited to gathering information, requesting information, word processing, soliciting general interest in mortgage loans, sending correspondence and assembling files.

(d) “Loan originator” does not include an employee of a mortgage banker that is rated as good or better under the federal rating system in effect on May 1, 2001, for seller-servicers of Federal Housing Administration, Federal Home Loan Mortgage Corporation or Federal National Mortgage Association loans and that has an office within this state at which the mortgage banker maintains complete and current copies of all employment records and other records as required by the Director of the Department of Consumer and Business Services by order or rule, in a format acceptable to the director.

(e) “Loan originator” does not include an insurance [agent] producer licensed under ORS 744.052 to 744.089 or insurance consultant licensed under ORS 744.002.

(f) “Loan originator” does not include a person or group of persons exempted by rule or order of the director.

(5) “Mortgage banker”:

(a) Means any person who for compensation or in the expectation of compensation:

(A) Either directly or indirectly makes, negotiates or offers to make or negotiate a mortgage banking loan or a mortgage loan; and

(B) Services or sells a mortgage banking loan.

(b) Does not include:

(A) A financial institution, as defined in ORS 706.008.

(B) A financial holding company or a bank holding company, as defined in ORS 706.008, holding an institution described in subparagraph (A) of this paragraph; a savings and loan holding company as defined in section 408 of the National Housing Act, 12 U.S.C. 1730a (1982), holding an association described in subparagraph (A) of this paragraph; the subsidiaries and affiliates of the financial holding company, bank holding company or savings and loan holding company; or subsidiaries and affiliates of institutions described in subparagraph (A) of this paragraph, provided that the appropriate statutory regulatory authority is exercising control over or is regulating or supervising the persons listed in this subparagraph in their mortgage banking activities in accordance with the purposes of ORS 59.840 to 59.980.

(C) A person who makes a loan secured by an interest in real estate with the person’s own moneys, for the person’s own investment and who is not engaged in the business of making loans secured by an interest in real estate.

(D) An attorney licensed in this state who negotiates mortgage banking loans or mortgage loans in the ordinary course of business, unless the business of negotiating mortgage banking loans or mortgage loans constitutes substantially all of the attorney’s professional activity.

(E) A person who, as seller of real property, receives one or more mortgages or deeds of trust as security for a separate money obligation.

(F) An agency of any state or of the United States.

(G) A person who receives a mortgage or deed of trust on real property as security for an obligation payable on an installment or deferred payment basis and arising out of materials furnished or services rendered in the improvement of that real property or any lien created without the consent of the owner of the real property.

(H) A person who funds a mortgage banking loan or mortgage loan which has been originated and processed by a licensee or by an exempt person and who does not maintain a place of business in this state in connection with funding mortgage banking loans or mortgage loans, does not directly or indirectly solicit borrowers in this state for the purpose of making mortgage banking loans or mortgage loans and does not participate in the negotiation of mortgage banking loans or mortgage loans. For the purpose of this subparagraph, “negotiation of mortgage banking loans or mortgage loans” does not include setting the terms under which a person may buy or fund a mortgage banking loan or a mortgage loan originated by a licensee or exempt person.

(I) A nonprofit federally tax exempt corporation certified by the United States Small Business Administration and organized to promote economic development within this state whose primary activity consists of providing financing for business expansion.

(J) A licensee licensed under ORS chapter 725 or a mortgage broker.

(K) A retirement or pension fund.

(L) An insurer as defined in ORS 731.106.

(M) A court appointed fiduciary.

(N) Any other person designated by rule or order of the director.

(6) “Mortgage banking loan” means a loan, extension of credit or a retail sales contract that is funded exclusively from the mortgage banker’s own resources, which is directly or indirectly secured by a mortgage or deed of trust or any lien interest on real estate and which is created with the consent of the owner of the real property. For purposes of this subsection, “own resources” means any of the following:

(a) Cash, corporate capital, warehouse credit lines at financial institutions defined in ORS 706.008 or other sources that are liability items of the mortgage banker’s financial statements for which its assets are pledged;

(b) Correspondent contracts between the mortgage banker and a bank, savings bank, trust company, savings and loan association, credit union, profit sharing or pension trust, a licensee under ORS chapter 725 or an insurance company; or

(c) The mortgage banker’s affiliates’ cash, corporate capital, warehouse credit lines at financial institutions defined in ORS 706.008 or other sources that are liability items on the affiliates’ financial statements for which the affiliates’ assets are pledged. As used in this paragraph, “affiliates” means entities that, directly or indirectly, through one or more intermediaries controls, are controlled by or are under common control with the entity specified.

(7) “Mortgage broker”:

(a) Means a person who:

(A) Engages all or part of the time, for the account of others or for the person’s own account, in the business of selling real estate paper whether as issuer, agent or principal to persons other than persons enumerated in ORS 59.035 (4);

(B) Engages all or part of the time, for the account of others or for the person’s own account, in the business of accepting funds from one or more persons other than persons enumerated in ORS 59.035 (4) for investment in real estate paper; or

(C) For compensation, or in the expectation of compensation, either directly or indirectly makes, negotiates or offers to make or negotiate a mortgage loan.

(b) Does not include:

(A) A financial institution, as defined in ORS 706.008.

(B) A financial holding company or a bank holding company, as defined in ORS 706.008, holding an institution described in subparagraph (A) of this paragraph; a savings and loan holding company as defined in section 408 of the National Housing Act, 12 U.S.C. 1730a (1982), holding an association described in subparagraph (A) of this paragraph; the subsidiaries and affiliates of the financial holding company, bank holding company or savings and loan holding company; or subsidiaries and affiliates of institutions described in subparagraph (A) of this paragraph, provided that the appropriate statutory regulatory authority is exercising control over or is regulating or supervising the persons listed in this subparagraph in their mortgage brokering activities in accordance with the purposes of ORS 59.840 to 59.980.

(C) A person who purchases real property and issues an obligation to finance the transaction to the seller incidentally to the sale.

(D) A real estate licensee as defined in ORS 696.010 who performs services solely incidental to the practice of professional real estate activity as defined in ORS 696.010, unless the real estate licensee performs the functions of a mortgage banker or a mortgage broker as defined in this section.

(E) A person licensed under the provisions of ORS chapter 725 or a mortgage banker.

(F) A person who makes a loan secured by an interest in real estate with the person’s own moneys, for the person’s own investment and who is not engaged in the business of making loans secured by an interest in real estate.

(G) An attorney licensed in this state who negotiates mortgage loans in the ordinary course of business, unless the business of negotiating mortgage loans constitutes substantially all of the attorney’s professional activity.

(H) A person who, as seller of real property, receives one or more mortgages or deeds of trust as security for a separate money obligation.

(I) An agency of any state or of the United States.

(J) A person who receives a mortgage or deed of trust on real property as security for an obligation payable on an installment or deferred payment basis and arising out of materials furnished or services rendered in the improvement of that real property or any lien created without the consent of the owner of the real property.

(K) A person who funds a mortgage loan which has been originated and processed by a licensee or by an exempt person and who does not maintain a place of business in this state in connection with funding mortgage loans, does not directly or indirectly solicit borrowers in this state for the purpose of making mortgage loans and does not participate in the negotiation of mortgage loans. For the purpose of this subparagraph, “negotiation of mortgage loans” does not include setting the terms under which a person may buy or fund a mortgage loan originated by a licensee or exempt person.

(L) A nonprofit federally tax exempt corporation certified by the United States Small Business Administration and organized to promote economic development within this state whose primary activity consists of providing financing for business expansion.

(M) A person licensed under ORS 822.020 who provides services customarily associated with the retail sales of manufactured dwellings, including communication of generally available information regarding mortgage loans, unless:

(i) The person receives from a purchaser a fee or commission as a mortgage broker or mortgage banker that is disclosed in the sales contract, purchase agreement or applicable federal documents;

(ii) For the benefit of a potential purchaser, the person completes a loan application form or other document that is part of a mortgage banking loan and completes a good faith estimate under the federal Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.);

(iii) The person solicits or receives credit information from a prospective purchaser for the purpose of making credit decisions; or

(iv) The person negotiates with a potential purchaser the terms of a mortgage loan including but not limited to points, interest rates, length of loan or other loan conditions.

(N) Any other person designated by rule or order of the director.

(8) “Mortgage loan” means a loan, extension of credit or retail sales contract, other than a mortgage banking loan, secured by a mortgage or deed of trust or any lien interest on real estate that is created with the consent of the owner of the real estate.

(9) “Residential mortgage transaction” means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained in property upon which four or fewer residential dwelling units are planned or situated, including but not limited to individual units or condominiums and cooperatives. As used in this subsection, “residential dwelling unit” means an improvement designed for residential occupancy.

SECTION 48. ORS 83.580 is amended to read:

83.580. (1) The amount, if any, included for automobile insurance, shall not exceed the premiums chargeable in accordance with rate filings made by the insurer with the Director of the Department of Consumer and Business Services for such insurance.

(2) The amount, if any, included for life, health and accident or other insurance, other than automobile insurance, shall not exceed the premiums charged by the insurer.

(3) Except as provided in ORS 743.377, the motor vehicle dealer or financing agency, if an amount for automobile or other insurance on the motor vehicle is included in a retail installment contract, shall within 30 days after execution of the retail installment contract send or cause to be sent to the buyer a policy or policies or certificate of insurance, written by an insurance company authorized to do business in this state, clearly setting forth the amount of the premium, the kind or kinds of insurance and the scope of the coverage and all the terms, exceptions, limitations, restrictions and conditions of the contract or contracts of insurance. The buyer of a motor vehicle under a retail installment contract shall have the privilege of purchasing such insurance from an [agent] insurance producer of the selection of the buyer and of selecting an insurance company acceptable to the motor vehicle dealer; provided, however, that the inclusion of the insurance premium in the retail installment contract when the buyer selects the [agent] insurance producer or company, shall be optional with the motor vehicle dealer and in such case the motor vehicle dealer or financing agency shall have no obligation to send, or cause to be sent, to the buyer the policy or certificate of insurance.

(4) If an insurance policy or certificate that was obtained for an amount included in the retail installment contract is canceled, the unearned insurance premium refund received by the holder of the contract shall be credited to the last maturing installments of the retail installment contract except to the extent applied toward payment for similar insurance protecting the interests of the buyer or of the buyer and the holder of the contract.

SECTION 49. ORS 86.720 is amended to read:

86.720. (1) Within 30 days after performance of the obligation secured by the trust deed, the beneficiary shall deliver a written request to the trustee to reconvey the estate of real property described in the trust deed to the grantor. Within 30 days after the beneficiary delivers the written request to reconvey to the trustee, the trustee shall reconvey the estate of real property described in the trust deed to the grantor. In the event the obligation is performed and the beneficiary refuses to request reconveyance or the trustee refuses to reconvey the property, the beneficiary or trustee so refusing shall be liable as provided by ORS 86.140 in the case of refusal to execute a discharge or satisfaction of a mortgage on real property. The trustee may charge a reasonable fee for all services involved in the preparation, execution and recordation of any reconveyance executed pursuant to this section.

(2) If a full reconveyance of a trust deed has not been executed and recorded pursuant to the provisions of subsection (1) of this section within 60 calendar days of the date the obligation secured by the trust deed was fully satisfied, then:

(a) If the obligation was satisfied by a title insurance company or [agent] insurance producer or by payment through an escrow transacted by a title insurance company or [agent] insurance producer, upon the written request of the grantor or the grantor’s successor in interest, the tender of reasonable charges and the compliance with the notice requirements of subsection (3) of this section, the title insurance company or [agent] insurance producer shall prepare, execute and record a release of trust deed.

(b) Upon compliance with the notice requirements of subsection (3) of this section, any title insurance company or [agent] insurance producer may prepare, execute and record a release of trust deed.

(3) Prior to the issuance and recording of a release pursuant to this section, the title insurance company or [agent] insurance producer shall give notice of the intention to record a release of trust deed to the beneficiary of record and, if different, the party to whom the full satisfaction payment was made. The notice shall:

(a) Provide that the parties to whom the notice is sent shall have a period of 30 days from the date of mailing to send to the title insurance company or [agent] insurance producer their written objections to the execution and recording of the release of trust deed;

(b) Be sent by first class mail with postage prepaid, addressed to the named interested parties at their last-known addresses; and

(c) Identify the trust deed by the name of the original grantor and any successor in interest on whose behalf payment was made and by the recording reference.

(4) The release of trust deed shall recite on the first page that it has been executed and recorded pursuant to the provisions of this section. The release shall be properly acknowledged and shall set forth:

(a) The name of the beneficiary to whom the payment was made;

(b) The name of the original grantor of the trust deed and any successor in interest on whose behalf payment was made;

(d) A recital that the obligation secured by the trust deed has been paid in full;

(e) The date and amount of payment;

(f) The date of mailing of notice required by this section; and

(g) A recital that no written objections were received by the title insurance company or [agent] insurance producer.

(5) The release of trust deed executed pursuant to this section shall be entitled to recordation and, when recorded, shall be deemed to be the equivalent of a reconveyance of a trust deed.

(6) The title insurance company or [agent] insurance producer shall not record or cause to be recorded a release of trust deed when any of the following circumstances exist:

(a) The 30-day period following notice given under this section has not expired; or

(b) Written objection to such recordation has been received by the title insurance company or [agent] insurance producer from any of the parties to whom notice was sent.

(7) The trustee, title insurance company or [agent] insurance producer may charge a reasonable fee for all services involved in the preparation, execution, recordation and compliance with this section, to effect the release of trust deed.

(8) Subsection (2) of this section does not excuse the beneficiary or trustee from compliance with subsection (1) of this section.

(9) In addition to any other remedy provided by law, a title insurance company or [agent] insurance producer preparing, executing or recording a release of trust deed shall be liable to any party for damages that the party sustains by reason of the negligence or willful misconduct of the title insurance company or [agent] insurance producer in connection with the issuance, execution or recording of the release pursuant to this section. Except as provided in subsection (10) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.

(10) The court may not award attorney fees to a prevailing defendant under the provisions of subsection (9) of this section if the action under this section is maintained as a class action pursuant to ORCP 32.

(11) As used in this section, [“agent”] “insurance producer” means an authorized issuer of title insurance policies of a title insurance company who is licensed as an [agent] insurance producer for that purpose pursuant to ORS chapter 744.

(12) Subsections (2) to (11) of this section shall be applicable only to full reconveyances of the property described in the trust deed and not to reconveyances of parts or portions of the property.

(13) Subsections (1) to (12) of this section are applicable to all trust deeds, whether executed before, on or after November 4, 1993.

(14) A title insurance company or agent is not required to prepare, execute and record a release of trust deed under subsections (2) to (12) of this section if the obligation secured by the trust deed was satisfied prior to November 4, 1993.

SECTION 50. ORS 86.790 is amended to read:

86.790. (1) The trustee of a trust deed under ORS 86.705 to 86.795 shall not be required to comply with the provisions of ORS chapters 707 and 709 and shall be:

(a) Any attorney who is an active member of the Oregon State Bar;

(b) A financial institution or trust company, as defined in ORS 706.008, that is authorized to do business under the laws of Oregon or the United States;

(c) A title insurance company authorized to insure title to real property in this state, its subsidiaries, affiliates, [agents] insurance producers or branches;

(d) The United States or any agency thereof; or

(e) Escrow agents licensed under ORS 696.505 to 696.590.

(2) An attorney who is a trustee under subsection (1)(a) of this section may represent the beneficiary in addition to performing the duties of trustee.

(3) At any time after the trust deed is executed, the beneficiary may appoint in writing another qualified trustee. If the appointment of the successor trustee is recorded in the mortgage records of the county or counties in which the trust deed is recorded, the successor trustee shall be vested with all the powers of the original trustee.

(4) A trustee or successor trustee is a necessary and proper party to any proceeding to determine the validity of or enjoin any private or judicial proceeding to foreclose a trust deed, but a trustee or successor trustee is neither a necessary nor a proper party to any proceeding to determine title to the property subject to the trust deed, or to any proceeding to impose, enforce or foreclose any other lien on the subject property.

(5) Nothing in ORS 86.705 to 86.795 imposes a duty on the trustee or successor trustee to notify any person of any proceeding with respect to such person, except a proceeding initiated by the trustee or successor trustee.

(6) A trustee or the attorney for the trustee or any agent designated by the trustee or the attorney may announce and accept a bid from the beneficiary whether or not the beneficiary is present at the sale.

(7) The trustee or successor trustee shall have no fiduciary duty or fiduciary obligation to the grantor or other persons having an interest in the property subject to the trust deed. The trustee or successor trustee shall not be relieved of the duty to reconvey the property subject to the trust deed to the grantor upon request for reconveyance by the beneficiary.

SECTION 51. ORS 433.045 is amended to read:

433.045. (1) Except as provided in ORS 433.080, no person shall subject the blood of an individual to an HIV test without first obtaining informed consent as described in subsection (2) or (7) of this section.

(2) A physician licensed under ORS chapter 677 shall comply with the requirement of subsection (1) of this section through the procedure in ORS 677.097. Any other licensed health care provider or facility shall comply with the requirement of subsection (1) of this section through a procedure substantially similar to that specified in ORS 677.097. Any other person shall comply with this requirement through use of such forms, procedures and educational materials as the Department of Human Services shall specify.

(3) Regardless of the manner of receipt or the source of the information, including information received from the tested individual, no person shall disclose or be compelled to disclose the identity of any individual upon whom an HIV-related test is performed, or the results of such a test in a manner which permits identification of the subject of the test, except as required or permitted by federal law, the law of this state or any rule, including any Department of Human Services rule considered necessary for public health or health care purposes, or as authorized by the individual whose blood is tested.

(4) Any person who complies with the requirements of this section shall not be subject to an action for civil damages.

(5) An HIV test shall be considered diagnosis of venereal disease for purposes of ORS 109.610.

(6) As used in this section:

(a) “HIV test” means a test of an individual for the presence of human immunodeficiency virus (HIV), or for antibodies or antigens that result from HIV infection, or for any other substance specifically indicating infection with HIV.

(b) “Person” includes but is not limited to any health care provider, health care facility, clinical laboratory, blood or sperm bank, insurer, insurance [agent] producer, insurance-support organization, as defined in ORS 746.600, government agency, employer, research organization or agent of any of them. For purposes of subsection (3) of this section, “person” does not include an individual acting in a private capacity and not in an employment, occupational or professional capacity.

(7) Whenever an insurer, insurance [agent] producer or insurance support organization asks an applicant for insurance to take an HIV test in connection with an application for insurance, the use of such a test must be revealed to the applicant and the written consent thereof obtained. The consent form shall disclose the purpose of the test and the persons to whom the results may be disclosed.

SECTION 52. ORS 646.605 is amended to read:

646.605. As used in ORS 646.605 to 646.652:

(1) “Appropriate court” means the circuit court of a county:

(a) Where one or more of the defendants reside;

(b) Where one or more of the defendants maintain a principal place of business;

(d) With the defendant’s consent, where the prosecuting attorney maintains an office.

(2) “Documentary material” means the original or a copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording, wherever situate.

(3) “Examination” of documentary material shall include inspection, study, or copying of any such material, and taking testimony under oath or acknowledgment in respect of any such documentary material or copy thereof.

(4) “Person” means natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity except bodies or officers acting under statutory authority of this state or the United States.

(5) “Prosecuting attorney” means the Attorney General or the district attorney of any county in which a violation of ORS 646.605 to 646.652 is alleged to have occurred.

(6) “Real estate, goods or services” means those which are or may be obtained primarily for personal, family or household purposes, or which are or may be obtained for any purposes as a result of a telephone solicitation, and includes franchises, distributorships and other similar business opportunities, but does not include insurance. Real estate does not cover conduct covered by ORS chapter 90.

(7) “Telephone solicitation” means a solicitation where a person, in the course of the person’s business, vocation or occupation, uses a telephone or an automatic dialing-announcing device to initiate telephonic contact with a potential customer and the person is not one of the following:

(a) A person who is a broker-dealer or salesperson licensed under ORS 59.175, or a mortgage banker or mortgage broker licensed under ORS 59.850 when the solicitation is for a security qualified for sale pursuant to ORS 59.055;

(b) A person who is licensed or is otherwise authorized to engage in professional real estate activity pursuant to ORS chapter 696, when the solicitation involves professional real estate activity;

(c) A person licensed or exempt from licensure as a builder pursuant to ORS chapter 701, when the solicitation involves the construction, alteration, repair, improvement or demolition of a structure;

(d) A person licensed or otherwise authorized to sell insurance as an [agent] insurance producer pursuant to ORS chapter 744, when the solicitation involves insurance;

(e) A person soliciting the sale of a newspaper of general circulation, a magazine or membership in a book or record club who complies with ORS 646.611, when the solicitation involves newspapers, magazines or membership in a book or record club;

(f) A person soliciting without the intent to complete and who does not complete the sales presentation during the telephone solicitation and who only completes the sales presentation at a later face-to-face meeting between the solicitor and the prospective purchaser;

(g) A supervised financial institution or parent, subsidiary or affiliate thereof. As used in this paragraph, “supervised financial institution” means any financial institution or trust company, as those terms are defined in ORS 706.008, or any personal property broker, consumer finance lender, commercial finance lender or insurer that is subject to regulation by an official or agency of this state or of the United States;

(h) A person who is authorized to conduct prearrangement or preconstruction funeral or cemetery sales, pursuant to ORS chapter 692, when the solicitation involves prearrangement or preconstruction funeral or cemetery plans;

(i) A person who solicits the services provided by a cable television system licensed or franchised pursuant to state, local or federal law, when the solicitation involves cable television services;

(j) A person or affiliate of a person whose business is regulated by the Public Utility Commission of Oregon;

(k) A person who sells farm products as defined by ORS chapter 576 if the solicitation neither intends to nor actually results in a sale that costs the purchaser in excess of $100;

(L) An issuer or subsidiary of an issuer that has a class of securities that is subject to section 12 of the Securities Exchange Act of 1934 and that is either registered or exempt from registration under paragraph (A), (B), (C), (E), (F), (G) or (H) or subsection (g) of that section;

(m) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person’s employer when the solicitation involves answering services; or

(n) A telecommunications utility with access lines of 15,000 or less or a cooperative telephone association when the solicitation involves regulated goods or services.

(8) “Trade” and “commerce” mean advertising, offering or distributing, whether by sale, rental or otherwise, any real estate, goods or services, and includes any trade or commerce directly or indirectly affecting the people of this state.

(9) “Unconscionable tactics” include, but are not limited to, actions by which a person:

(a) Knowingly takes advantage of a customer’s physical infirmity, ignorance, illiteracy or inability to understand the language of the agreement;

(b) Knowingly permits a customer to enter into a transaction from which the customer will derive no material benefit; or

(c) Permits a customer to enter into a transaction with knowledge that there is no reasonable probability of payment of the attendant financial obligation in full by the customer when due.

(10) A willful violation occurs when the person committing the violation knew or should have known that the conduct of the person was a violation.

(11) A loan is made “in close connection with the sale of a manufactured dwelling” if:

(a) The lender directly or indirectly controls, is controlled by or is under common control with the seller, unless the relationship is remote and is not a factor in the transaction;

(b) The lender gives a commission, rebate or credit in any form to a seller who refers the borrower to the lender, other than payment of the proceeds of the loan jointly to the seller and the borrower;

(d) The seller directly and materially assists the borrower in obtaining the loan;

(e) The seller prepares documents that are given to the lender and used in connection with the loan; or

(f) The lender supplies documents to the seller used by the borrower in obtaining the loan.

SECTION 53. ORS 657.085 is amended to read:

657.085. “Employment” does not include service performed by any person as a newspaper advertising salesperson, real estate broker, principal real estate broker, insurance [agent, insurance solicitor] producer or securities salesperson or agent to the extent that the person is compensated by commission.

SECTION 54. ORS 658.415 is amended to read:

658.415. (1) No person shall act as a farm labor contractor unless the person has first been licensed by the Commissioner of the Bureau of Labor and Industries under ORS 658.405 to 658.503. Any person may file an application for a license to act as a farm labor contractor at any office of the Bureau of Labor and Industries. The application shall be sworn to by the applicant and shall be written on a form prescribed by the commissioner. The form shall include, but not be limited to, questions asking:

(a) The applicant’s name, Oregon address and all other temporary and permanent addresses the applicant uses or knows will be used in the future.

(b) Information on all motor vehicles to be used by the applicant in operations as a farm labor contractor including license number and state of licensure, vehicle number and the name and address of vehicle owner for all vehicles used.

(c) Whether or not the applicant was ever denied a license under ORS 658.405 to 658.503 within the preceding three years, or in this or any other jurisdiction had such a license denied, revoked or suspended within the preceding three years.

(d) The names and addresses of all persons financially interested, whether as partners, shareholders, associates or profit-sharers, in the applicant’s proposed operations as a farm labor contractor, together with the amount of their respective interests, and whether or not, to the best of the applicant’s knowledge, any of these persons was ever denied a license under ORS 658.405 to 658.503 within the preceding three years, or had such a license denied, revoked or suspended within the preceding three years in this or any other jurisdiction.

(2) Each applicant shall furnish satisfactory proof with the application of the existence of a policy of insurance in an amount adequate under rules issued by the commissioner for vehicles to be used to transport workers. For the purpose of this subsection the certificate of an insurance [agent] producer licensed in Oregon is satisfactory evidence of adequate insurance.

(3) Each applicant shall submit with the application and shall continually maintain thereafter, until excused, proof of financial ability to promptly pay the wages of employees and other obligations specified in this section. The proof required in this subsection shall be in the form of a corporate surety bond of a company licensed to do such business in Oregon, a cash deposit or a deposit the equivalent of cash. For the purposes of this subsection it shall be deemed sufficient compliance if the farm labor contractor procures a savings account at a bank or savings and loan institution in the name of the commissioner as trustee for the employees of the farm labor contractor and others as their interests may appear and delivers the evidence of the account and the ability to withdraw the funds to the commissioner under the terms of a bond approved by the commissioner. The amount of the bond and the security behind the bond, or the cash deposit, shall be based on the maximum number of employees the contractor employs at any time during the year. The bond or cash deposit shall be:

(a) $10,000 if the contractor employs no more than 20 employees; or

(b) $30,000, or such lesser sum as may be authorized by the commissioner under ORS 658.416, if the contractor employs 21 or more employees.

(4) In the event that a single business entity licensed as a farm labor contractor has more than one natural person who, as an owner or employee of the business entity, engages in activities that require the persons to be licensed individually as farm labor contractors, and each such person engages in such activities solely for that business entity, the commissioner may provide by rule for lower aggregate bonding requirements for the business entity and its owners and employees. If there is an unsatisfied final judgment of a court or decision of an administrative agency against a license applicant, the subject of which is any matter that would be covered by the bond or deposit referred to in subsection (3) of this section, the commissioner shall not issue a license to the applicant until the judgment or decision is satisfied. As a condition of licensing any such applicant, the commissioner may require the applicant to submit proof of financial ability required by subsection (3) of this section in an amount up to three times that ordinarily required of a license applicant.

(5) All corporate surety bonds filed under this section or ORS 658.419 shall be executed to cover liability for the period for which the license is issued. During the period for which it is executed, no bond may be canceled or otherwise terminated.

(6) Each application must be accompanied by the fee established under ORS 658.413.

(7) Any person who uses the services of a farm labor contractor who has failed to comply with any of the provisions of this section or ORS 658.419 shall:

(a) Be personally and jointly and severally liable to any employee so far as such employee has not been paid wages in full for the work done for that person.

(b) Be personally liable for all penalty wages that have occurred under ORS 652.150 for the wages due under this section.

(8) Any person who suffers any loss of wages from the employer of the person or any other loss specified in subsection (16) of this section shall have a right of action in the name of the person against the surety upon the bond or against the deposit with the commissioner. The right of action:

(a) Is assignable and must be included with an assignment of a wage claim, of any other appropriate claim, or of a judgment thereon.

(b) Shall not be included in any suit or action against the farm labor contractor but must be exercised independently after first procuring a judgment, decree, or other form of adequate proof of liability established by rule and procedure under subsection (14) of this section establishing the farm labor contractor’s liability for the claim.

(9) The surety company or the commissioner shall make prompt and periodic payments on the farm labor contractor’s liability up to the extent of the total sum of the bond or deposit. Payments shall be made in the following manner:

(a) Payment shall be made based upon priority of wage claims over advances made by the grower or producer of agricultural commodities or the owner or lessee of land intended to be used for the production of timber, for advances made to or on behalf of the farm labor contractor.

(b) Payment in full of all sums due to each person who presents adequate proof of the claim.

(c) If there are insufficient funds to pay in full the person next entitled to payment in full, such person shall be paid in part.

(10) A person may not bring any suit or action against the surety company or the commissioner on the bond or against the commissioner as the trustee for the beneficiaries of the farm labor contractor under any deposit made pursuant to this section or ORS 658.419 unless the person has first exhausted the procedures contained in subsections (8) and (12) of this section or in ORS 658.419 and contends that the surety company or the commissioner still has funds that are applicable to the person’s judgment or acknowledgment.

(11) The commissioner may not be prevented from accepting assignments of wage claims and enforcing liability against the surety on the bond or from applying the deposit to just wage claims filed with the commissioner.

(12) All claims against the bond or deposit shall be unenforceable unless request for payment of a judgment or other form of adequate proof of liability or a notice of the claim has been made by certified mail to the surety or the commissioner within six months from the end of the period for which the bond or deposit was executed and made.

(13) If the commissioner has received no notice as provided in subsection (12) of this section within six months after a farm labor contractor is no longer required to provide and maintain a surety bond or deposit, the commissioner shall terminate and surrender any bond or any deposit under the control of the commissioner to the person who is entitled thereto upon receiving appropriate proof of such entitlement.

(14) The commissioner shall adopt rules reasonably necessary for administration and enforcement of the provisions of this section and ORS 658.419.

(15) Every farm labor contractor required by this section or ORS 658.419 to furnish a surety bond or make a deposit in lieu thereof shall keep conspicuously posted upon the premises where employees working under the contractor are employed a notice, in both English and any other language used by the farm labor contractor to communicate with workers, specifying the contractor’s compliance with the requirements of this section and ORS 658.419 and specifying the name and Oregon address of the surety on the bond or a notice that a deposit in lieu of the bond has been made with the commissioner together with the address of the commissioner.

(16) The bond or deposit referred to in subsection (3) of this section shall be payable to the commissioner and shall be conditioned upon:

(a) Payment in full of all sums due on wage claims of employees.

(b) Payment by the farm labor contractor of all sums due to the grower or producer of agricultural commodities or the owner or lessee of land intended to be used for the production of timber for advances made to or on behalf of the farm labor contractor.

(17) No license shall be issued until the applicant executes a written statement that shall be subscribed and sworn to and that shall contain the following declaration:

______________________________________________________________________________

With regards to any action filed against me concerning my activities as a farm labor contractor, I appoint the Commissioner of the Bureau of Labor and Industries as my lawful agent to accept service of summons when I am not present in the jurisdiction in which such action is commenced or have in any other way become unavailable to accept service.

______________________________________________________________________________

(18) A person who cosigns with a farm labor contractor for a bond required by subsection (3) of this section or by ORS 658.419 is not personally or jointly and severally liable for unpaid wages above the amount of the bond solely because the person cosigned for the bond.

(19) The court may award reasonable attorney fees to the prevailing party in any action to enforce the provisions of this section or ORS 658.419.

SECTION 55. ORS 696.523 is amended to read:

696.523. The provisions of ORS 696.505 to 696.590 apply to those escrow activities of a title insurance company, or an [agent] insurance producer of a title insurance company which prepares abstracts or makes searches of title which are used as a basis for the insurance of titles by a title insurance company.

SECTION 56. ORS 702.005 is amended to read:

702.005. As used in ORS 702.005 to 702.063 and 702.991:

(1) “Agent contract” means a contract or agreement pursuant to which a person authorizes or empowers an athlete agent to negotiate or solicit on behalf of a person with one or more professional sports teams or organizations for the employment of the person:

(a) By one or more professional sports teams or organizations; or

(b) As a professional athlete.

(2)(a) “Athlete agent” means any person or an employee or representative of a person who:

(A) Directly or indirectly, recruits or solicits a student athlete to enter into an agent contract, endorsement contract or professional sports services contract; or

(B) For compensation offers, promises, attempts or negotiates to obtain employment or procures employment for a student athlete with a professional sports team or organization or as a professional athlete.

(b) “Athlete agent” does not include:

(A) A person licensed as an attorney or a dealer in securities, financial planner, insurance [agent] producer, real estate broker, principal real estate broker, sales agent, tax consultant or any other professional person when the person offers or provides the type of services customarily provided by that profession, except to the extent that the person acts as an athlete agent as defined in paragraph (a) of this subsection;

(B) A person acting solely on behalf of a professional sports team or organization; or

(3) “Educational institution” means any elementary school, secondary school, college, university or other educational institution.

(4) “Endorsement contract” means a contract or agreement pursuant to which a person is employed or receives remuneration for any value or utility that the person may have because of publicity, reputation, fame or following obtained because of athletic ability or performance.

(5) “Professional sports services contract” means any contract or agreement pursuant to which a person is employed or agrees to render services as a player for a professional sports team or organization or as a professional athlete.

(6)(a) “Student athlete” means an individual admitted to or enrolled in an educational institution who participates, or has informed the institution of an intention to participate, in a sports program that includes competition with other educational institutions. “Student athlete” includes a student who has entered into one or more valid agent contracts, endorsement contracts or professional sports services contracts that allow athlete agent representation for a specific sport, as long as that student is eligible to participate in other sports for which the student has no athlete agent representation.

(b) “Student athlete” does not include:

(A) A person who has entered into a valid agent contract, endorsement contract or professional sports services contract that covers all sports in which the student is eligible to participate; or

(B) A student of a college or university whose eligibility to participate in an intercollegiate sport has terminated.

SECTION 57. ORS 703.411 is amended to read:

703.411. ORS 703.401 to 703.490, 703.993 and 703.995 do not apply to:

(1) A person employed exclusively by one employer in connection with the affairs of that employer only;

(2) An officer or employee of the United States, or of this state, or a political subdivision of either, while the officer or employee is engaged in the performance of official duties;

(3) A person acting as a private security officer as defined in ORS 181.870;

(4) A person who is employed full-time as a peace officer, as defined in ORS 161.015, who receives compensation for private employment as an investigator, provided that services are performed for no more than one person or one client;

(5) A person that provides secured transportation and protection, from one place or point to another place or point, of money, currency, coins, bullion, securities, bonds, jewelry or other valuables;

(6) A person that places, leases, rents or sells an animal for the purpose of protecting property, or any person that is contracted to train an animal for the purpose of protecting property;

(7) A person engaged in the business of obtaining and furnishing information regarding the financial rating of persons;

(8) An attorney admitted to practice law in this state performing his or her duties as an attorney;

(9) A legal assistant or paralegal engaged in activity for which the person is employed by an attorney admitted to practice law in this state;

(10) Insurers, insurance adjusters[, insurance agents and insurance brokers] and insurance producers licensed in this state and performing duties in connection with insurance transacted by them;

(11) Any secured creditor engaged in the repossession of the creditor’s collateral and any lessor engaged in the repossession of leased property in which it claims an interest;

(12) An employee of a cattle association who is engaged in inspection of brands of livestock under the authority granted to that cattle association by the Packers and Stockyards Division of the United States Department of Agriculture;

(13) Common carriers by rail engaged in interstate commerce and regulated by state and federal authorities and transporting commodities essential to the national defense or to the general welfare and safety of the community;

(14) Any news media and the employees thereof when engaged in obtaining information for the purpose of disseminating news to the public;

(15) A legal process service company attempting to serve legal process; or

(16) A landlord or an agent of a landlord performing duties in connection with rental property transactions.

SECTION 58. 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;

(d) The power to be licensed as an [agent] insurance producer as required by ORS 744.053 to transact one or more of the classes of insurance described in ORS 744.062 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 types of limited class insurance, as that term is defined in ORS 744.052, designated by the Director of the Department of Consumer and Business Services:

(a) The conduct by the institution of insurance [agency] producer activities 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 insurance activity.

(b) The director may revoke or restrict the ongoing authority of the institution to engage in the insurance [agency] producer activity if the condition of the institution substantially deteriorates or if the insurance activities are adversely affecting the institution.

(c) If the insurance [agency] producer activity is conducted in a branch or office in which the institution carries on its banking business, the insurance [agency] producer 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 as an [agent] insurance producer, as that term is defined in ORS 731.062, other than to transact 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:

______________________________________________________________________________

NOTICE

______________ (Name of institution) is a licensed insurance [agent] producer 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] insurance producers 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 as an [agent] insurance producer, as that term is defined in ORS 731.062, shall not in any manner use customer information obtained from another insurance [agent] producer to promote, develop or solicit insurance business for the institution unless the other insurance [agent] producer consents to such use of the customer information.

SECTION 58a. If Senate Bill 235 becomes law, section 58 of this 2003 Act (amending ORS 708A.005) is repealed and ORS 708A.005, as amended by section 6, chapter 363, Oregon Laws 2003 (Enrolled Senate Bill 235), is amended to read: