Chapter 733 — Chapter 733
88 sections in this chapter.
ORS 733.340 Exemptions. (1) Specific product forms or product lines of a domestic insurer that is licensed in and does business only in this state are exempt from the requirements of section 15, chapter 547, Oregon Laws 2015, if
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(a) The Director of the Department of Consumer and Business Services issues the exemption to the insurer in writing and does not subsequently revoke the exemption in writing; (b) The director identifies the specific product form or product line in the written exemption; and (c) T…
ORS 733.510 Investments of insurers; rules. (1) Funds of a domestic insurer shall be invested, reinvested and used in the manner and subject to the conditions, restrictions and limitations set forth in ORS 733.510 to 733.780
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(2) Investments of a foreign or alien insurer which would be authorized for a like domestic insurer shall be allowed as assets in any determination of its financial condition. Other investments of a foreign or alien insurer which are authorized by the laws of its domicile may be …
ORS 733.520 Current operating requirements exempted. Funds of an insurer necessary to satisfy normal current operating requirements are not subject to ORS 733.510 to 733.780. Normal current operating requirements include, but are not limited to, the acquisition of personal property necessary or convenient in the operation of the insurer’s business. [1967 c.359 §230]
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[Repealed or reserved.]
ORS 733.530 “Corporation,” “sovereign,” “political subdivision” defined. As used in ORS 733.510 to 733.780
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(1) “Corporation” means a corporation, joint stock association or business trust organized and existing under the laws of a sovereign. (2) “Sovereign” means the United States, or a state, or Canada or a province thereof. (3) “Political subdivision” means an incorporated county, c…
ORS 733.540 “Obligation” defined. As used in ORS 733.510 to 733.780, “obligation” means a bond, debenture, note, warrant, certificate or other evidence of indebtedness. [1967 c.359 §232]
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[Repealed or reserved.]
ORS 733.550 “Amply secured obligation” defined. As used in ORS 733.510 to 733.780, “amply secured obligation” means an obligation which is not in default and as to which no default is imminent, and which satisfies the requirements of one or more of the following subsections
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(1) An obligation of a sovereign or political subdivision thereof, if it is issued, assumed or guaranteed by the governmental unit involved and is payable either from: (a) Taxes levied or which may be levied by such governmental unit; or (b) Adequate special revenues pledged or o…
ORS 733.560 “Unencumbered” defined. As used in ORS 733.510 to 733.780, “unencumbered” means the nonexistence of any lien, burden or charge having priority over the lien securing the insurer’s investment. The following shall not be considered encumbrances on real property or leasehold interests therein
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(1) Reservations of mineral, oil or timber rights, easements, rights of way, sewer rights or rights of walls. (2) Liens for taxes or assessments not delinquent. (3) Building restrictions or other restrictive covenants common to the community. (4) Where the loan is secured by a li…
ORS 733.570 “Improved real property” defined. As used in ORS 733.510 to 733.780, “improved real property” means
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(1) Farmland used for tillage, crop or pasture; (2) Real estate on which permanent improvements, or improvements under construction or in process of construction, suitable for residence, institutional, commercial or industrial use, are situated; and (3) Real estate to be develope…
ORS 733.575 Prohibited use of funds as compensating balances. Except as provided in ORS 733.578, funds of an insurer shall not be used as compensating balances for loans to other persons, or otherwise pledged for the benefit of other persons. [1975 c.232 §2]
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[Repealed or reserved.]
ORS 733.578 Conditions necessary for investments used to provide compensating balances. Investments of an insurer of the kind described in ORS 733.650 (4) that are made for the purpose of providing compensating balances for other persons will not be prohibited by ORS 733.575 or 733.780 while the following conditions are met
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(1) The investment is made in the name of and remains the sole property of the insurer; (2) The investment is not subject to appropriation in any manner by any person, including the person for whom the compensating balance is being provided, the institution in which the deposit i…
ORS 733.580 Investment of required capitalization. (1) Funds of an insurer at least equal to its required capitalization shall be invested and kept invested as follows
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(a) In amply secured obligations of the United States, a state or a political subdivision of this state. (b) In loans secured by first liens upon improved, unencumbered real property (other than leaseholds) in this state where: (A) The lien does not exceed 50 percent of the appra…
ORS 733.590 Investment in obligations of sovereign, political subdivision thereof or corporation. Funds of an insurer may be invested in amply secured obligations of a sovereign, political subdivision thereof or corporation. Expressly included, but not by way of limitation, are obligations of the following federal agencies and authorities: Federal Home Loan Banks, Federal Land Banks, Home Owners Loan Corporation, Public Housing Authorities (to the extent that such obligations are secured by a pledge of annual contributions to be paid by the United States or an agency thereof), and Federal Intermediate Credit Banks. [Formerly 738.245]
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[Repealed or reserved.]
ORS 733.600 Investment in mortgage loans. (1) Funds of an insurer may be invested in
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(a) Loans secured by first liens upon improved, unencumbered real property (other than leaseholds) in the manner and subject to the same terms and conditions set forth in ORS 733.580 (1)(b), except that the property may be located within the boundaries of any sovereign; for loans…
ORS 733.610 Investment in real property. (1) Except as otherwise provided in ORS 733.580 and 733.600, an insurer may invest in real property only if used for the purposes or acquired in the manner and within the limits as follows
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(a) The insurer may invest in the land and the buildings thereon in which it has its principal office, and in such other real property as required for its convenient accommodation in the transaction of business. Such investments shall not exceed in the aggregate 10 percent of the…
ORS 733.620 Investment in stocks of corporation. (1) Funds of an insurer may be invested in stocks (including trust certificates) of solvent corporations organized and carrying on a business under the laws of a sovereign as follows
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(a) Preferred or guaranteed stocks if the corporation is not in default or arrears as to any preferred or guaranteed dividend and has continuously and regularly paid such dividends during the preceding three years or has paid cash dividends for five years on common stock. (b) Com…
ORS 733.630 Investment in securities or obligations of certain corporations. (1) Except as provided in this section, funds of an insurer may be invested in common stock, preferred stock, debt obligations and other securities of one or more corporations without regard to the provisions and limitations of ORS 733.590, 733.620, 733.770 and 733.780 (1)(a) if the corporation is engaged, or will be engaged, in the kind of business or activity that is related to the insurance business as described in ORS 733.635, provided that the insurer owns 80 percent or more of the shares of the corporation that have voting powers either alone or, with prior approval of the Director of the Department of Consumer and Business Services, in cooperation with one or more other persons
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(2) Except as provided in subsection (3) of this section, the amount of funds invested as described in subsection (1) of this section may not exceed the lesser of 10 percent of the insurer’s assets or 50 percent of the amount of the insurer’s combined capital and surplus. However…
ORS 733.635 Approved activities of corporations in which investments authorized. Investments authorized by ORS 733.630 may be made in corporations engaged, or which will be engaged, in one or more of the following insurance or ancillary businesses
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(1) Any kind of insurance business authorized by the jurisdiction in which it is incorporated. (2) Any kind of business primarily related to the insurance business carried on by the parent. (3) Acting as an insurance producer for its parent or for any of its parent’s insurer subs…
ORS 733.640 Lending funds; limitations on loans. (1) Funds of an insurer may be invested in loans secured by pledges of obligations and stocks eligible for investment under ORS 733.510 to 733.780. As of the date the loan is made, it shall not exceed in amount 80 percent of the market value of the collateral pledged. No such loan shall be made for the purpose of providing funds to purchase or carry stocks registered on a national securities exchange
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(2) Funds of an insurer may be invested in loans secured by personal property or fixtures if such loan is: (a) In connection with a loan on the security of real property or a leasehold as provided in ORS 733.580 or 733.600; (b) In an amount not exceeding 20 percent of the amount …
ORS 733.650 Investment of funds in certain obligations and other specified items. Funds of an insurer may be invested in the following
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(1) Obligations secured by a mortgage or deed of trust payment of which is guaranteed by a policy of mortgage insurance. (2) Obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development. (3) Bank and bankers’ acceptances and other bills o…
ORS 733.652 Investment of funds of separate accounts. Except as may be prescribed by the Director of the Department of Consumer and Business Services under ORS 733.220 (3) for reserves for guaranteed benefits and funds
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(1) Amounts allocated to a separate account and accumulations thereon may be invested and reinvested without regard to the requirements and limitations prescribed by ORS 733.510 to 733.780, except as expressly provided for separate accounts under such sections; and (2) The invest…
ORS 733.654 Limitation on amount of separate account investments; exceptions. An insurer shall not invest the funds of a separate account so as to have more than 10 percent of the market value of the assets of the account invested in or secured by the stocks, obligations or property of any one person or political subdivision, or invested in a single parcel of real property or any other single investment. This section does not apply to
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(1) Funds equaling 25 percent of the market value of the total assets in the separate account; (2) Investments in, or loans upon, the security of the general obligations of a sovereign; or (3) Investments in certificates of deposits insured by the Federal Deposit Insurance Corpor…
ORS 733.656 Limitation on securities owned or controlled by separate account investments. An insurer shall not invest the funds of a separate account so as to own or control, under the insurer’s general and separate accounts in the aggregate, more than 10 percent of the voting power outstanding of any issuer of securities. Securities held in separate accounts, the voting rights in which are exercisable only in accordance with instructions from persons having interests in such accounts, shall not be considered in applying this section. [1973 c.435 §11]
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[Repealed or reserved.]
ORS 733.658 Applicability of separate account investment limitations. The limitations provided in ORS 733.654 and 733.656 do not apply to the investment of separate account funds in the securities of an investment company registered under the federal Investment Company Act of 1940, as amended, if the investments of the investment company comply in substance with ORS 733.654 and 733.656. [1973 c.435 §12; 1997 c.249 §219]
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[Repealed or reserved.]
ORS 733.660 [1967 c.359 §244; repealed by 2001 c.318 §13]
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[Repealed or reserved.]
ORS 733.670 Investment of funds under “prudent investor” standard. (1) Funds of an insurer may be invested in a manner not expressly prohibited under ORS 732.325 and 733.780, provided such investments are made in the exercise of the judgment and care under the circumstances then prevailing which investors of prudence, discretion and intelligence exercise in the management of their own affairs not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital
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(2) Funds invested under this section shall not exceed the lesser of seven and one-half percent of the insurer’s assets or the excess of the insurer’s assets over all liabilities and required capitalization. (3) If the Director of the Department of Consumer and Business Services …
ORS 733.680 Acquisition and retention of personal property generally; purchases or loans for protection of investment property. (1) An insurer may acquire and retain personal property received as a dividend, gift or devise, or pursuant to a lawful plan of merger, consolidation or reorganization or bona fide agreement of bulk reinsurance, or in satisfaction or liquidation of an obligation, or in exchange or part payment for real or personal property previously owned or to protect or enhance such property
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(2) An insurer may make purchases or loan sums necessary to protect, preserve or enhance investment property, real or personal, which it is otherwise authorized to acquire or hold. (3) The Director of the Department of Consumer and Business Services shall allow as assets in any d…
ORS 733.685 Investment of funds by home protection insurer; rules. Funds of a home protection insurer may be invested in tangible personal property held by the insurer for the purpose of performing or providing repairs or replacements under its home protection policies. Funds so invested shall not exceed 25 percent of the assets of the insurer that are allowable in determining its financial condition under the Insurance Code, unless otherwise allowed under rules issued by the Director of the Department of Consumer and Business Services. [1981 c.247 §13]
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[Repealed or reserved.]
ORS 733.690 Investment of funds in title plant. Funds of a title insurer may be invested in its title plant. [1967 c.359 §247]
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[Repealed or reserved.]
ORS 733.695 Investment of funds in obligations that are not investment quality; rules. Funds of an insurer may be invested in obligations that are not investment grade as established by the Director of the Department of Consumer and Business Services by rule, but the funds that an insurer may invest under this section shall not exceed 20 percent of the insurer’s assets. [1989 c.425 §2b; 1993 c.447 §22]
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[Repealed or reserved.]
ORS 733.700 Investment of funds in health care service facilities. Funds of a health care service contractor may be invested in all real and personal property used exclusively by the contractor to provide authorized health care services. [1967 c.359 §248]
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[Repealed or reserved.]
ORS 733.710 Investments authorized by prior law; date of eligibility of investment. (1) An investment which was legal and proper immediately before June 8, 1967, shall be considered a proper investment and shall be subject to extension or renewal
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(2) Eligibility of an investment shall be determined as of the date of its acquisition. [Formerly 738.325]
ORS 733.720 Investments subject to additional limitations and requirements. Except as may be expressly provided to the contrary in ORS 733.510 to 733.780, all investments shall be subject to the qualifications, restrictions and limitations set forth in ORS 733.510 to 733.780. [Formerly 738.333]
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[Repealed or reserved.]
ORS 733.730 Approval by board of directors of investments and deposits. (1) Investments and sales or exchanges thereof, except for policy loans of an insurer issuing life insurance policies, shall be approved by the board of directors or a committee thereof charged with the duty of investing the funds of the insurer
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(2) Deposits shall be made in banks or banking institutions approved by the board of directors. [Formerly 738.335]
ORS 733.740 Record of investments required. As to each investment, an insurer shall make a written record in permanent form, signed by a person authorized by the board of directors or by a committee thereof charged with the duty of investing the funds. The record shall show the authorization and approval of the investment and in addition shall contain
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(1) In the case of mortgage loans: (a) The name of the borrower; (b) The location and legal description of the property; (c) A physical description and the appraised value of the security as determined by a competent and qualified appraiser; and (d) The amount of the loan, rate o…
ORS 733.750 Disposal of investments on order of director. After a hearing, the Director of the Department of Consumer and Business Services may by written order require the disposal of an investment which the director finds to be made or retained in violation of the Insurance Code, or of an investment which the director, for good cause, determines to be prejudicial to, and to impair the security of, the stockholders or policyholders of the insurer. [Formerly 738.355]
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[Repealed or reserved.]
ORS 733.760 Insurance required on buildings on property which is security for loan. On loans secured by liens upon real property or leasehold interests therein, the buildings and other improvements located on the premises shall be kept insured against loss or damage from fire in an amount not less than the unpaid balance of the obligation or the insurable value of the property, whichever is the lesser. The fire insurance policy or policies shall be payable to the insurer, or a trustee for its benefit, and continued in force until the loan is repaid or satisfied. Such policy or policies shall be held by the insurer or the trustee, unless the Director of the Department of Consumer and Business Services has determined that a different method of protecting the insurers against loss is satisfactory and has given prior approval of such method to the insurer. [1967 c.359 §254; 1969 c.336 §10]
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[Repealed or reserved.]
ORS 733.770 Limitations on investments in property of any one person or single parcel of real estate. (1) An insurer shall not have any combination of investments in or secured by the stocks, obligations, and property of one person, corporation or political subdivision in excess of 10 percent of the insurer’s assets, nor shall it invest more than 10 percent of its assets in a single parcel of real property or in any other single investment. This subsection does not apply to
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(a) Investments in, or loans upon, the security of the general obligations of a sovereign; (b) Policy loans by insurers issuing life insurance policies; (c) Investments by a title insurer in its title plant, or in real property not in excess of 50 percent of the insurer’s combine…
ORS 733.780 Prohibited investments. (1) An insurer shall not make investments
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(a) Which at the time of purchase or acquisition are not interest-bearing or dividend or income-paying, or are in default in any respect; or (b) From which the insurer is not entitled to receive for its exclusive account and benefit the interest, dividends or income. (2) Subsecti…