Chapter 732 — Chapter 732

ORS 732.410 Right to acquire own shares. A domestic insurer shall have the right to purchase or otherwise acquire, hold, pledge, transfer or dispose of its own issued shares. An insurer may acquire any such shares by purchase, exchange or disposition of its assets only from earned surplus as defined by rule, that is not otherwise restricted or, with the prior written approval of the Director of the Department of Consumer and Business Services, from other of its surplus. [1967 c.359 §180; 1987 c.846 §8]

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ORS 732.415 Stock insurer’s proxies; regulation by director; rules. (1) A proxy may be authorized in writing to vote the shares of any stockholder, or where authorized of a policyholder, of a domestic stock insurer at any regular or special stockholders’ meeting

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ORS 732.420 “Equity security” defined; rules. As used in ORS 732.220 and 732.420 to 732.455, “equity security” means

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ORS 732.425 Application of insider trading regulation. The provisions of ORS 732.430, 732.435 and 732.440 do not apply to equity securities of a domestic stock insurer if

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ORS 732.430 Filing statement of security ownership with director; rules. Every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of any equity security of a domestic stock insurer, or who is a director or an officer of the insurer, shall file with the Director of the Department of Consumer and Business Services within 10 days after the person becomes a beneficial owner, director or officer, a statement, on a form prescribed by the director, of the amount of all equity securities of the insurer of which the person is the beneficial owner. If there is a change in the ownership by a person to whom this section applies, the person shall file with the director a statement, on a form prescribed by the director, indicating the person’s ownership and the changes in the person’s ownership. The person shall file the statement of change in ownership before the end of the second business day following the day on which the transaction was executed. If it is not feasible for the person to file the statement by the end of the second business day, the person shall file the statement according to rules adopted by the director. [Formerly 738.730; 2005 c.185 §9]

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ORS 732.435 Suit to recover insider profits; exempted transactions; rules. (1) For the purpose of preventing the unfair use of information which may have been obtained by a beneficial owner, director or officer as described in ORS 732.430 by reason of the beneficial owner, director or officer’s relationship to such insurer, any profit realized by the beneficial owner, director or officer from any purchase and sale, or any sale and purchase, of any equity security of such insurer within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the insurer, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. An action to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer, or by the owner of any security of the insurer in the name and in behalf of the insurer if the insurer shall fail or refuse to bring such action within 60 days after request or shall fail diligently to prosecute the same thereafter; but no such action shall be brought more than two years after the date such profit was realized

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ORS 732.440 Prohibited sales of securities. (1) No beneficial owner, director or officer, as described in ORS 732.430 directly or indirectly, shall sell any equity security of such insurer if the person selling the security or the person’s principal

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ORS 732.445 Establishing or maintaining primary or secondary market in securities; rules. (1) The provisions of ORS 732.435 do not apply to any purchase and sale, or sale and purchase, and the provisions of ORS 732.440 do not apply to any sale, of an equity security of a domestic stock insurer not then or theretofore held by the insurer in an investment account, by a security dealer in the ordinary course of the insurer’s business and incident to the establishment or maintenance by the insurer of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security

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ORS 732.450 Arbitrage transactions exempt; rules. The provisions of ORS 732.430, 732.435 and 732.440 do not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules as the Director of the Department of Consumer and Business Services may adopt in order to carry out the purposes of ORS 732.420 to 732.455. [Formerly 738.770]

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ORS 732.455 Rules. The Director of the Department of Consumer and Business Services shall have the power to make such rules as may be necessary for the execution of the functions vested in the director by ORS 732.420 to 732.455, and may for such purpose classify domestic stock insurers, securities, and other persons or matters within the director’s jurisdiction. No provision of ORS 732.430, 732.435 and 732.440 imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule of the director, notwithstanding that such rule may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason. [Formerly 738.780]

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ORS 732.460 Annual report to shareholders or members; rules. Every domestic stock insurer shall send to each shareholder within 90 days after the end of each fiscal year of such insurer and every domestic insurer without capital stock shall make available at its annual meeting an annual report of the organization, operation and activities of such insurer, its parent if any and its subsidiaries and affiliates if any, and financial statements showing the financial condition of the insurer at the end of such fiscal year and the results of its operations for such fiscal year. The annual report shall contain such other information and financial statements and shall be in such form as the Director of the Department of Consumer and Business Services may by rule prescribe. [1967 c.359 §190]

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ORS 732.465 Members of domestic mutual insurers. (1) A domestic mutual insurer shall be owned by and operated in the interest of its members

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ORS 732.470 Voting rights of members of mutual insurer. (1) Each member of a domestic mutual insurer is entitled to one vote on each matter coming before a meeting of the members and for each director to be elected regardless of the number of policies or amount of insurance and benefits held by such member

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ORS 732.475 Members’ meetings and procedures of domestic mutual and reciprocal insurers. The following provisions shall apply to and govern meetings of members of a domestic mutual insurer and, to the extent applicable, meetings of subscribers of a domestic reciprocal insurer

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ORS 732.480 Copy of bylaws of domestic mutual insurer to be provided to director; provisions of bylaws. A copy of the bylaws of a domestic mutual insurer, including any amendments, shall be provided to the Director of the Department of Consumer and Business Services. The bylaws of a mutual insurer may contain any provision for managing the business and regulating the affairs of the insurer that is not inconsistent with law or the articles of incorporation. The bylaws shall contain a provision that governs the involvement of the mutual insurer in a member’s communication with other members regarding the business and affairs of the insurer. The bylaws may contain a provision eliminating or limiting the personal liability of a member of the board of directors to the mutual insurer or its members for monetary damages for conduct as a director, provided that no such provision may eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective and no such provision may eliminate or limit the liability of a director for

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ORS 732.505 [Formerly 738.610; 1969 c.336 §7; 1983 c.498 §1; repealed by 1993 c.447 §122]

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ORS 732.510 [1967 c.359 §195; 1969 c.336 §8; 1983 c.498 §2; repealed by 1993 c.447 §122]

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ORS 732.515 [1967 c.359 §196; 1983 c.498 §3; repealed by 1993 c.447 §122]

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ORS 732.517 Purpose of ORS 732.517 to 732.546. The purpose of ORS 732.517 to 732.546 is that of regulating the control or ownership of an insurer or of an insurance holding company system. A further purpose of ORS 732.517 to 732.546 is that of promoting the public interest and the interests of policyholders and shareholders by facilitating, consistent with those interests, better use of management skills and services, diversification through acquisitions, free access to capital markets, sound tax planning and open competition. [1983 c.498 §5; 1993 c.447 §25]

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ORS 732.518 Definitions for ORS 732.517 to 732.546. As used in ORS 732.517 to 732.546

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ORS 732.520 [1967 c.359 §197; repealed by 1993 c.447 §122]

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ORS 732.521 Activities that are prohibited unless specified procedures followed; exceptions; notice of divestiture. (1) Unless a person first satisfies the provisions of ORS 732.517 to 732.546, the person may not engage in any of the following activities

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ORS 732.522 [1983 c.498 §6; repealed by 1993 c.447 §122]

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ORS 732.523 Procedure for acquiring controlling interest of capital stock; filing of statement; contents; request for hearing. (1) An acquiring party shall

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ORS 732.525 [1967 c.359 §198; 1983 c.498 §7; repealed by 1993 c.447 §122]

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ORS 732.526 Hearing on proposed activity; notice. (1) If a person has duly filed a written request for a hearing or if, within 10 days after an acquiring party has filed a completed statement under ORS 732.523, the Director of the Department of Consumer and Business Services finds that holding a hearing is necessary or advisable, the director shall cause a hearing to be held

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ORS 732.527 Approval of acquisition by chief insurance regulatory officials of two or more jurisdictions; hearing. (1) If the chief insurance regulatory officials of two or more jurisdictions must approve a proposal to acquire control of an insurer, a person that files a statement with the Director of the Department of Consumer and Business Services under ORS 732.523 may request a hearing on the acquisition in a single proceeding before all of the chief insurance regulatory officials who must approve the acquisition. The person that files the statement under ORS 732.523 shall file a copy of the statement with the National Association of Insurance Commissioners within five days after filing the statement with the director

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ORS 732.528 Approval of proposed activity; grounds for refusing approval. (1) The Director of the Department of Consumer and Business Services shall make a determination concerning the proposed activity described in ORS 732.521 (1) within a period that begins 60 days before the effective date of the activity. The director may refuse, after a public hearing, to approve a proposed activity if

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ORS 732.529 Procedures following approval by director of proposed activity. (1) Following approval of a proposed activity by the Director of the Department of Consumer and Business Services or pursuant to a court order or judgment, the proposed activity shall be submitted for approval to the members of a domestic mutual insurer, the subscribers of a domestic reciprocal insurer or the shareholders of a domestic stock insurer

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ORS 732.530 [1967 c.359 §199; repealed by 1993 c.447 §122]

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ORS 732.531 Acquisition of assets or insurance of mutual or reciprocal insurers. (1) If a statement filed under ORS 732.523 will result in the acquisition by a stock insurer of all or a significant portion of the assets of a domestic mutual insurer or domestic reciprocal insurer, or reinsurance in a stock insurer of all or a significant portion of the insurance in force of a domestic mutual insurer or domestic reciprocal insurer, the plan must provide for consideration to each eligible member of the domestic mutual insurer or each eligible subscriber of the domestic reciprocal insurer as provided in this section

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ORS 732.533 Statement of acquisition. Not later than the 30th day after consummation of an activity described in ORS 732.521 (1), the acquiring party shall submit to the Director of the Department of Consumer and Business Services a statement that the activity has been consummated. The statement must be made under the oath of the presiding officer of the board of directors of the acquiring party. [1993 c.447 §33]

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ORS 732.535 [1967 c.359 §200; 1983 c.498 §10; 1993 c.447 §30; renumbered 732.526 in 1993]

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ORS 732.536 Compliance with foreign or alien laws. (1) The action taken by any foreign or alien insurer or other party to the proposed activity described in ORS 732.521 (1) must be authorized by the laws of the state, country or province under which it is incorporated or organized, and each foreign or alien insurer or other party must satisfy and comply with any applicable laws thereof and with the provisions of its articles of incorporation and bylaws

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ORS 732.537 Application of ORS 732.527, 732.539, 732.542 and 732.544 to change of control of insurer; exemptions. (1) As used in subsection (3)(d) of this section, “market” means the direct written insurance premium for a line of business in this state that an insurer authorized to transact insurance in this state claims in the annual financial statement the insurer files under ORS 731.574

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ORS 732.538 Effect of merger or consolidation. (1) When a merger or consolidation becomes effective, the effect on the insurers and other parties to the merger or consolidation is as follows

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ORS 732.539 Notification of acquisition; confidentiality; order; rules; required information; waiting period. (1)(a) A person that proposes to acquire another person, or the person that would be subject to the acquisition, must notify the Director of the Department of Consumer and Business Services and wait for the period of time specified in subsection (3) of this section before completing the acquisition. The director shall treat a notice and information that a person submits in accordance with this section as confidential and as exempt from disclosure under ORS 192.311 to 192.478

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ORS 732.540 [1967 c.359 §201; 1979 c.562 §32; 1983 c.498 §11; 1993 c.447 §31; renumbered 732.528 in 1993]

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ORS 732.541 Jurisdiction over person obtaining or attempting to obtain control. The courts of this state are vested with jurisdiction over every person not resident, domiciled or authorized to do business in this state who is required to file a statement with the Director of the Department of Consumer and Business Services under ORS 732.523 and over all actions involving such a person arising out of violations of ORS 732.517 to 732.546. Each such person shall be considered to have appointed the director for the purpose of service of process. [Formerly 732.580]

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ORS 732.542 Monopoly or substantial diminishment of competition; director’s order; prima facie and substantial evidence; determination of scope and extent of market. (1) As used in this section

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ORS 732.543 [Formerly 732.590; renumbered 732.547 in 2013]

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ORS 732.544 Director’s order; effect; requirements for issuing; penalties. (1)(a) The Director of the Department of Consumer and Business Services may issue an order with the effect described in paragraph (b) of this subsection if the director determines that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly or if the director determines that a party to an acquisition has violated a provision of ORS 732.539. The director shall issue the order together with findings of fact and conclusions of law that support the order

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ORS 732.545 [1967 c.359 §202; 1973 c.515 §2; 1981 c.633 §81; 1983 c.498 §12; 1987 c.846 §10; repealed by 1993 c.447 §122]

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ORS 732.546 Severability. If any provision of ORS 732.517 to 732.546 or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of ORS 732.517 to 732.546 which can be given effect without the invalid provision or application, and to this end the provisions of ORS 732.517 to 732.546 are declared to be severable. [Formerly 732.595]

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ORS 732.547 Remedies for violation of ORS 732.517 to 732.546. (1) Whenever it appears to the Director of the Department of Consumer and Business Services that any person has committed or is about to commit a violation of any provision of ORS 732.517 to 732.546 or of any rule or order issued by the director under ORS 732.517 to 732.546, the director may apply to the Circuit Court for Marion County for an order enjoining the person, and any director, officer, employee or agent of the person, from the violation, and for such other equitable relief as the nature of the case and the interests of the policyholders, creditors and shareholders of any insurer or the public may require

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ORS 732.548 Definitions for ORS 732.517 to 732.596. As used in ORS 732.517 to 732.596

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ORS 732.549 Subsidiaries. (1) A domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged only in one or more of the kinds of business described in ORS 733.635

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ORS 732.550 [1967 c.359 §203; 1993 c.447 §32; renumbered 732.531 in 1993]

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ORS 732.551 Registration of insurer members of holding company systems. (1) Every authorized insurer that is a member of an insurance holding company system shall register with the Director of the Department of Consumer and Business Services as provided in this section. A foreign insurer need not register if the foreign insurer is subject to registration requirements and standards adopted by statute or rule in the jurisdiction of its domicile that are substantially similar to those contained in

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ORS 732.552 Registration statement; form; contents. (1) Every insurer that is subject to the registration requirements of ORS 732.551 shall file a registration statement on a form prescribed by the Director of the Department of Consumer and Business Services. The director shall consider and may prescribe as the registration statement form for this section the form that the National Association of Insurance Commissioners prescribes. The registration statement must list, describe, summarize or include, as appropriate and as the director specifies by rule

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