Chapter 732 — Chapter 732

ORS 732.005 Application of private corporation law; definitions. (1) Except where inconsistent with the express provisions of the Insurance Code, ORS chapter 60, shall, to the extent applicable, govern the powers, duties and relationships of domestic insurers

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ORS 732.010 [Repealed by 1967 c.359 §704]

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ORS 732.015 Permit to organize insurer required. No person shall organize or solicit or receive any money for the organization of a domestic insurer without a subsisting permit to organize an insurer issued by the Director of the Department of Consumer and Business Services pursuant to ORS 732.055. The director shall not require a fee for filing an application for such a permit in the case of the organization of a reciprocal insurer that exchanges policies of insurance covering only wet marine hull insurance for persons whose earned income, in whole or in part, is derived from taking and selling food resources living in an ocean, bay or river. [1967 c.359 §147; 1977 c.651 §4; 1989 c.413 §6; 1991 c.401 §3; 1993 c.709 §6]

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ORS 732.020 [Repealed by 1967 c.359 §704]

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ORS 732.025 Application for permit to organize stock insurer; rules. Any person or persons desiring to organize a domestic stock insurer shall, as prospective incorporators, first file an application with the Director of the Department of Consumer and Business Services for a permit to organize such an insurer. The applicants shall pay the applicable fee to the director at the time the application is filed. The application shall be on forms provided by the director, shall be signed by the applicants and verified. The form shall specify information with regard to the following

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ORS 732.030 [Amended by 1967 c.359 §661; renumbered 751.015]

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ORS 732.035 Application for permit to organize insurer without capital stock. Any one or more persons desiring to organize a domestic insurer without capital stock shall, as prospective organizers, first file an application with the Director of the Department of Consumer and Business Services for a permit to organize such an insurer. The provisions and requirements of ORS 732.025 shall govern such application; in addition, the application shall be accompanied by

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ORS 732.040 [Amended by 1967 c.359 §662; renumbered 751.025]

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ORS 732.045 Investigation of applications to organize insurers. Upon receipt of an application for a permit to organize an insurer, the Director of the Department of Consumer and Business Services shall make such investigation of the facts and conditions as the director deems necessary, including the holding of a public hearing on the application if the director considers it desirable or if requested by the applicant. [1967 c.359 §150]

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ORS 732.050 [Amended by 1967 c.359 §665; renumbered 751.055]

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ORS 732.055 Approval or disapproval of application for permit. (1) Within 90 days after the filing of the application for a permit to organize an insurer, the Director of the Department of Consumer and Business Services shall approve or disapprove the application

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ORS 732.060 [Amended by 1961 c.178 §1; 1967 c.359 §666; renumbered 751.065]

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ORS 732.065 Reporting of changes in information in application. Any changes in the information furnished in the application for a permit to organize an insurer shall be reported immediately to the Director of the Department of Consumer and Business Services by the persons to whom the permit was issued. [1967 c.359 §152]

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ORS 732.070 [Repealed by 1967 c.359 §704]

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ORS 732.075 Revoking or suspending permit to organize insurer. After notice to the applicant stating the grounds therefor, the Director of the Department of Consumer and Business Services may revoke or suspend a permit to organize an insurer for any ground for which the issuance of the permit could be denied. [1967 c.359 §153]

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ORS 732.080 [Repealed by 1967 c.359 §704]

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ORS 732.085 Incorporators. One or more natural persons of the age of 21 years or older or one or more financially responsible corporations may act as incorporators of a domestic insurer upon compliance with the provisions of the Insurance Code. [1967 c.359 §154]

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ORS 732.090 [Repealed by 1967 c.359 §704]

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ORS 732.095 Articles of incorporation. (1) To the extent not otherwise inconsistent with the Insurance Code, the articles of incorporation of a domestic insurer shall conform to ORS 60.047 and, in addition, shall contain the purpose or purposes for which the insurer is organized and the class or classes of insurance or reinsurance to be made. It shall be sufficient to state, either alone or with other purposes, that the purpose of the insurer is to make insurance and reinsurance of all classes for which an insurer may be authorized under the Insurance Code. By such statement, all such classes shall be within the purposes of the insurer, except for express limitations in the articles, if any

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ORS 732.100 [Amended by 1967 c.359 §667; renumbered 751.075]

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ORS 732.105 Filing articles of incorporation and surety bond, letter of credit or deposit. The incorporators shall file with the Director of the Department of Consumer and Business Services within six months of the issuance of the organization permit under ORS 732.055

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ORS 732.110 [Amended by 1967 c.359 §668; renumbered 751.085]

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ORS 732.115 Approval of articles, documents and bond, letter of credit or deposit; certificate of incorporation. (1) If the Director of the Department of Consumer and Business Services finds that the articles of incorporation and the bond, letter of credit or securities filed with the director conform to law and the sureties on any bond are acceptable, the director shall, when all fees established by the director have been paid

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ORS 732.120 [Amended by 1967 c.359 §669; renumbered 751.095]

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ORS 732.125 Registration of securities subsequent to issuance of organization permit and certificate of incorporation. If the proposed domestic insurer is to issue securities, it shall comply with the applicable provisions of ORS 59.005 to 59.505, 59.710 to 59.830, 59.991 and 59.995. However, the Director of the Department of Consumer and Business Services shall not allow the registration of securities of a proposed domestic insurer unless the organizers of such insurer have been issued an organization permit under ORS 732.055, and have received a certificate of incorporation under ORS 732.115. [1967 c.359 §158; 1987 c.414 §162]

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ORS 732.130 [Amended by 1967 c.359 §670; renumbered 751.105]

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ORS 732.135 Soliciting subscriptions and applications. No person shall solicit subscriptions for the capital stock of, or, in the case of an insurer without capital stock, applications for insurance in, any insurer in the process of organization unless the insurer has filed the insurer’s name and address with the Director of the Department of Consumer and Business Services. [1967 c.359 §159]

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ORS 732.140 [Amended by 1967 c.359 §671; renumbered 751.115]

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ORS 732.145 Stipulations required in subscriptions and applications; disposition of subscribed funds. (1) A subscription to the capital stock of an insurer in the process of organization must contain a stipulation that no sum shall be used for commission, promotion or organization expenses in excess of a stated percent of the amount paid upon the subscription. This stated amount may not exceed 15 percent

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ORS 732.150 [Amended by 1967 c.359 §672; renumbered 751.125]

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ORS 732.155 Organization to be completed within two years; policies to be issued within one year of certification. (1) If the Director of the Department of Consumer and Business Services finds that any domestic insurer has not completed its organization and qualified for a certificate of authority within two years from the date of filing its articles of incorporation, the director may order the application abandoned and close the files in which event its corporate powers shall expire and the director shall proceed as for an impaired insurer

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ORS 732.160 [Amended by 1967 c.359 §673; renumbered 751.135]

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ORS 732.165 Liability of directors and incorporators. The directors, incorporators, and organizers of any insurer organized under the Insurance Code and those entitled to participation in the profits of such insurer shall be jointly and severally liable for all debts or liabilities of such insurer until it has received a certificate of authority. [1967 c.359 §162]

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ORS 732.175 Liability for acting as corporate insurer without authority. Any person who assumes to act as a corporate insurer without a permit to organize and without the issuance of a certificate of incorporation by the Director of the Department of Consumer and Business Services or who assumes to transact insurance business without a certificate of authority to transact such business issued by the director shall be jointly and severally liable for all liabilities created while so acting. [1967 c.359 §163; 1981 c.633 §80; 1987 c.846 §5]

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ORS 732.205 General powers of insurers. Except as otherwise provided in the Insurance Code or the articles of incorporation of an insurer, a domestic insurer shall have

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ORS 732.210 Assertion of lack of capacity or power. The provision of ORS 60.084 shall not affect the right of any policyholder of a domestic insurer or the Director of the Department of Consumer and Business Services from asserting the lack of capacity or power of an insurer, by reason of any provision of the Insurance Code, to do any act or make any conveyance or transfer of real or personal property. [1967 c.359 §165; 1987 c.846 §7]

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ORS 732.215 Management contracts prohibited. No domestic insurer shall make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or other governing body. [1967 c.359 §166]

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ORS 732.220 Exclusive agency contracts. (1) No domestic insurer shall make any contract whereby any person is granted or is to enjoy in fact the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with and approved by the Director of the Department of Consumer and Business Services. The contract filed with the director shall be accompanied by such application for approval as the director by rule may consider reasonably appropriate to the purposes of this section. The contract shall be deemed approved unless disapproved by the director within 20 days after date of filing, subject to such reasonable extension of time as the director may require by notice given within such 20 days. Notice of any disapproval shall be delivered to the insurer in writing, stating the grounds therefor

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ORS 732.225 Impairment of required capitalization prohibited; rules. No domestic insurer shall reduce its combined capital and surplus by partial distribution of its assets, by payment in the form of a dividend to stockholders or otherwise, below

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ORS 732.230 Order to cure impairment; confidentiality of order. (1) Whenever the Director of the Department of Consumer and Business Services determines from any showing or statement made to the director or from any examination made by the director that the assets of a domestic insurer are less than its liabilities plus required capitalization, the director may proceed immediately under the provisions of ORS chapter 734 or the director may allow the insurer a period of time, not to exceed 90 days, in which to make good the amount of the impairment with cash or authorized investments

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ORS 732.235 Voluntary dissolution of insurer. (1) No insurer may be dissolved voluntarily until the Director of the Department of Consumer and Business Services has approved a plan for liquidation of the insurer’s assets and obligations. The preparation and approval of such plan shall follow the provisions of ORS 732.517 to 732.546

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ORS 732.240 Trusts of life insurance proceeds. (1) Any domestic insurer may hold in trust the proceeds of any life insurance policy issued by it. Such a trust shall be upon such terms and subject to such limitations as to revocation by the policyholder and control by the beneficiary thereunder as are agreed to in writing by the insurer and the policyholder

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ORS 732.245 Home office; records, assets; unlawful removal; rules. (1) Except as provided in subsection (4) of this section, every domestic insurer shall have and maintain the domestic insurer’s principal place of business and home office in this state, and shall keep within this state accurate and complete accounts and records of the domestic insurer’s assets, transactions, and affairs in accordance with the provisions of the Insurance Code

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ORS 732.250 Continuity of management in event of national emergency. (1) The specific purpose of this section is to facilitate the continued operation of all domestic insurers in the event a national emergency makes it impossible or impracticable for an insurer to conduct its business in strict accordance with applicable provisions of law, its bylaws or its charter

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ORS 732.305 Board of directors; qualifications. A domestic insurer may not have fewer than five directors. A director need not be a shareholder or member of the insurer unless the articles of incorporation so require, but a director must be 21 years of age or older. At least five or one-quarter of the directors, whichever is fewer, must be residents of this state. A majority of directors must be persons who are not salaried officers of the insurer. [1967 c.359 §174; 1997 c.771 §18; 2007 c.433 §1]

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ORS 732.310 [1967 c.359 §175; repealed by 1987 c.846 §19]

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ORS 732.315 [Formerly 738.200; repealed by 1983 c.24 §1]

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ORS 732.320 Supporting documents for expenditures. No domestic insurer shall make any disbursement of $100 or more unless the sum is evidenced by

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ORS 732.325 Certain transactions and compensation between insurers and directors, trustees, officers, agents or employees prohibited; other prohibited conduct. (1) Except as set forth in a statement of acquisition described in ORS 732.523 and, in the case of the issuance or sale of the insurer’s securities, as approved by a majority of the board of directors having no interest therein except as shareholders or directors or failing such majority by the shareholders, a director, trustee, officer, agent or employee, or spouse or relative thereof, shall not receive any fee, commission, compensation or other valuable consideration whatsoever, directly or indirectly, for aiding, promoting or assisting

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ORS 732.405 Authorized shares. No domestic insurer shall issue or have outstanding more than one class of shares, whether with or without par value. [1967 c.359 §179]

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