Chapter 734 — Chapter 734

ORS 734.360 Preference of claims. Except as provided in ORS 734.310 for secured claims, the claims to be paid in full in delinquency proceedings prior to the payment of any other claims, and the order of payment, shall be

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ORS 734.370 Offsets. No offsets shall be allowed in cases of mutual debts or mutual credits between the insurer and another person in connection with any domestic delinquency proceeding under this chapter, except for cases of policy loans and cases of reinsurance and except for insurance producers’ balances, excluding unearned return commissions. [1967 c.359 §291; 1989 c.425 §14; 2003 c.364 §86]

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ORS 734.380 Allowance of certain claims. (1) A contingent claim against an insurer or a claim based upon a cause of action or suit against an insured of an insurer shall be filed, presented and reported in the same manner and within the same time limitations as provided in this chapter for a noncontingent claim. Such claims shall be allowed to share in a distribution of assets in the same manner as noncontingent claims of the same class and priority, provided that before any such sharing and distribution

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ORS 734.385 Rights and obligations of Federal Home Loan Bank in connection with delinquency proceeding against insurer. (1) As used in this section

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ORS 734.390 Time to file claims. (1) If upon the granting of an order of liquidation under this chapter, or at any time thereafter during the liquidation proceeding, the insurer shall not be clearly solvent, the court shall, after such notice and hearing as it considers proper, make an order declaring the insurer to be insolvent. Thereupon, regardless of any prior notice which may have been given to creditors, the Director of the Department of Consumer and Business Services shall notify all persons who may have claims against the insurer and who have not filed proper proofs thereof, to present the same to the director, at a place specified in the notice, within four months from the date of the entry of such insolvency order or within such longer time as the court shall prescribe. The last day for filing of proofs of claims shall be specified in the notice. The notice shall be given in a manner determined by the court

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ORS 734.400 Report for assessment; domestic mutual and reciprocal insurers. Within three years from the date an order of rehabilitation or liquidation of a domestic mutual insurer or a domestic reciprocal insurer was filed in the office of the clerk of the court by which such order was made, the Director of the Department of Consumer and Business Services may make a report to the court setting forth

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ORS 734.410 Levy of assessment; domestic mutual and reciprocal insurers. (1) Upon the basis of the report provided for in ORS 734.400, including any amendments thereof, the court, ex parte, may levy one or more assessments against all persons who, as shown by the records of the insurer, were members (in the case of a mutual insurer) or subscribers (in the case of a reciprocal insurer) at any time within one year prior to the commencement of the delinquency proceeding

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ORS 734.420 Order to pay assessment. After levy of assessment as provided in ORS 734.410 and upon the filing of a further detailed report by the Director of the Department of Consumer and Business Services, the court shall issue an order directing each member (in the case of a mutual insurer) or each subscriber (in the case of a reciprocal insurer) if the member or subscriber shall not pay the amount assessed against the member or subscriber to the director on or before a day to be specified in the order, to show cause why the member or subscriber should not be held liable to pay such assessment together with costs as set forth in ORS 734.440, and why the director should not have judgment therefor. [1967 c.359 §296]

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ORS 734.430 Publication and transmittal of assessment order. The Director of the Department of Consumer and Business Services shall cause a notice of the assessment order issued under ORS 734.420, which shall set forth a brief summary of the contents of such order, to be

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ORS 734.440 Judgment upon assessment. (1) On the return day of the order to show cause specified in the assessment order issued under ORS 734.420, if the member or subscriber does not appear and serve verified objections upon the Director of the Department of Consumer and Business Services, the court shall make an order adjudging that such member or subscriber is liable for the amount of the assessment against the member or subscriber, together with $10 costs, and that the director may have judgment against the member or subscriber therefor

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ORS 734.510 Definitions for ORS 734.510 to 734.710. As used in ORS 734.510 to 734.710, unless the context requires otherwise

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ORS 734.520 Purpose. The purpose of ORS 734.510 to 734.710 is to provide for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, to provide an association to assess the cost of such protection among insurers and to assist in the liquidation of insurers as provided in this chapter. [1971 c.616 §2]

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ORS 734.530 Construction. ORS 734.510 to 734.710 shall be liberally construed to effect the purposes provided in ORS 734.520. [1971 c.616 §3]

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ORS 734.540 Application. ORS 734.510 to 734.710 apply to all kinds of direct insurance except life, health, title, surety, credit, mortgage guaranty, home protection insurance, wet marine and transportation insurance, insurance against the risk of economic loss assumed under a less than fully insured employee health benefit plan, whether issued or delivered as health or casualty insurance, and any insurance that a state or the federal government provides or guarantees. [1971 c.616 §4; 1977 c.600 §2; 1981 c.247 §14; 1993 c.649 §7; 2025 c.20 §4]

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ORS 734.550 Oregon Insurance Guaranty Association; all insurers required to be members; formation of operating plan. There is created the Oregon Insurance Guaranty Association. Each insurer that is a member insurer shall become and remain a member of the association as a condition of its authority to transact insurance in this state. The association shall perform its functions in accordance with a plan of operation established under ORS 734.590, and shall exercise its powers through its board of directors. [1971 c.616 §6]

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ORS 734.555 Application to association of certain laws governing corporations; exception. The provisions, procedures and requirements of ORS chapter 60 relating to a registered office, registered agent and to service of process, notice and demand shall govern the Oregon Insurance Guaranty Association, except that the Director of the Department of Consumer and Business Services shall be substituted for the Secretary of State as the person with whom all filings shall be made and upon whom, in the circumstances specified by statute, such service may be effected. [1977 c.600 §6; 1987 c.846 §12]

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ORS 734.560 Association board of directors; terms; vacancies; compensation and expenses; quorum. (1) The board of directors of the Oregon Insurance Guaranty Association shall consist of nine members selected by the member insurers, subject to the approval of the Director of the Department of Consumer and Business Services. The term of each member of the board shall be as specified in the plan, but in no event for longer than four years. A vacancy on the board shall be filled for the remainder of the unexpired term in the same manner as for the initial selection. If the initial selection of members is not made within 60 days after September 9, 1971, the director may select the initial members

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ORS 734.570 Duties and functions of association. The Oregon Insurance Guaranty Association

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ORS 734.575 Refunds from association deposited in General Fund. Any sums acquired by refund from the Oregon Insurance Guaranty Association that have previously been written off by contributing insurers and offset against corporate excise taxes or fire insurance gross premiums taxes, and are not then needed for purposes of ORS 734.510 to 734.710, shall be paid by the association to the Director of the Department of Consumer and Business Services and deposited with the State Treasurer for credit to the General Fund of this state. [1977 c.793 §3; 1985 c.686 §1; 1995 c.786 §8; 2003 c.568 §4]

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ORS 734.577 [1987 c.582 §1; 1991 c.67 §196; 2003 c.14 §448; repealed by 2005 c.755 §59]

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ORS 734.579 Recoupment assessments; rules. (1) Each member insurer subject to an Oregon Insurance Guaranty Association assessment pursuant to ORS 734.570 (3) shall recoup the amount of the assessment through a recoupment assessment imposed on net direct written premiums. The member insurer shall fix the amount of the recoupment assessment at an amount sufficient to reimburse the member insurer for the amount of Oregon Insurance Guaranty Association assessments paid by the member insurer

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ORS 734.580 Discretionary functions of association. The Oregon Insurance Guaranty Association may

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ORS 734.590 Plan of operation; submission to director; rules. (1) The Oregon Insurance Guaranty Association shall submit to the Director of the Department of Consumer and Business Services not later than 90 days after September 9, 1971, a plan of operation, and may thereafter submit such amendments thereto as will provide for the reasonable and equitable exercise of the duties and powers of the association. The plan of operation, and any amendments thereto, shall become effective upon approval in writing by the director

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ORS 734.600 Contents of plan of operation. A plan of operation shall

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ORS 734.610 Notification to association of insurer insolvency; furnishing association with premium information. The Director of the Department of Consumer and Business Services shall

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ORS 734.620 Notification of insolvency to insured persons; revocation of designation of servicing facility. The Director of the Department of Consumer and Business Services may

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ORS 734.630 Assignment of claim rights; filing statements of paid claims; effect of claim settlements. (1) Any person who recovers on a covered claim under ORS 734.510 to 734.710 thereby assigns the rights of the person under the insurance policy to the Oregon Insurance Guaranty Association to the extent of such recovery. Every person who seeks the protection of ORS 734.510 to 734.710 shall cooperate with the association to the same extent such person would have been required to cooperate with the insolvent insurer. The association shall have no cause of action against the insureds of an insolvent insurer for any sums paid, except for those causes of action the insolvent insurer would have had if such sums had been paid by the insolvent insurer. If an insolvent insurer operates on the assessment plan, the payment of claims by the association does not reduce the liability of the insured to the receiver for unpaid assessments

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ORS 734.635 Disbursing assets of insolvent insurer to association; court approval; notice to other states. (1) Not later than 120 days from the date the order of liquidation of a member insurer is filed in the office of the clerk of the court by which the order was made, that insurer’s receiver shall make application to the court for approval of a proposal to disburse the insurer’s marshalled assets to the Oregon Insurance Guaranty Association from time to time as those assets become available

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ORS 734.640 Exhaustion of coverage under policy before making claim against association; priority of claims. (1)(a) A person need not exhaust any right available under an insolvent member insurer’s policy, but if the person has a claim under an insurance policy that arises from the same facts, injury or loss from which a covered claim against the association arises, whether or not the insolvent member insurer issued the policy, the person must first exhaust all coverage under the policy, including the right to a defense, before the association must pay the covered claim. The association’s payment obligation must be reduced by the full applicable limits set forth in the other insurance policy and the association must receive a full credit for the limits. If the policy does not set forth applicable limits, the claim against the association must be reduced by the amount of the total recovery

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ORS 734.645 Liability of Oregon Insurance Guaranty Association when member insurer is subject to liquidation after assuming sole responsibility for insurance policy that other member issued; exception. (1) Notwithstanding any other provision of ORS 734.510 to 734.710, if an insurer assumes sole responsibility for an insurance policy that a member insurer issued and the insurer that assumes responsibility for the insurance policy is subject to liquidation, the Oregon Insurance Guaranty Association is subject under ORS 734.510 to 734.710 to a claim that arises from the insurance policy even if

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ORS 734.650 Notifying director of impaired insurers; examination; reports on impaired insurers. (1) Whenever the board obtains any information indicating that any member insurer is impaired or in a financial condition hazardous to the policyholders or the public, the board shall so notify the Director of the Department of Consumer and Business Services

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ORS 734.660 Regulation of association as insurer. The Oregon Insurance Guaranty Association is subject to regulation by the Director of the Department of Consumer and Business Services in the same manner as an insurer. Not later than March 30 of each year, the board shall submit to the director, in a form approved by the director, a financial report for the preceding year. [1971 c.616 §18]

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ORS 734.670 Exemption of association from payment of fees and taxes. Except for taxes levied on real or personal property, the Oregon Insurance Guaranty Association shall be exempt from the payment of all fees and taxes levied by this state or by any city, county, district or other political subdivision of this state. [1971 c.616 §19]

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ORS 734.680 [1971 c.616 §20; repealed by 1977 c.793 §11]

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ORS 734.690 Immunity from legal action. No person shall have a cause of action against any member insurer, the Oregon Insurance Guaranty Association or its employees or servicing facilities, any member of the board, or the Director of the Department of Consumer and Business Services or employees of the director for any action taken by them in carrying out ORS 734.510 to 734.710. [1971 c.616 §21]

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ORS 734.695 Liability of insured of insolvent insurer. (1) The insured of an insolvent insurer is not personally liable for amounts due any reinsurer, insurer, insurance pool or underwriting association as subrogation recoveries or otherwise up to the applicable limits of liability provided by the insurance policy issued by the insolvent insurer

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ORS 734.700 Defense of claims on default of insolvent insurer. (1) Any pending proceeding in which an insolvent insurer is a party or is obligated to defend a party in any court of this state shall be stayed for 60 days after the date a receiver is appointed by the court to permit the Oregon Insurance Guaranty Association time to prepare a defense in such proceedings

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ORS 734.710 Administration of delinquency proceeding claims and expenses; application of ORS 734.014, 734.026 and 734.110 to 734.440 to insurers. (1) In any delinquency proceeding involving a member insurer, the claims and expenses of the insurer shall be administered as provided in ORS 734.510 to 734.710

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ORS 734.750 Short title. ORS 734.750 to 734.890 may be cited as the Oregon Life and Health Insurance Guaranty Association Act. [1975 c.251 §2]

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ORS 734.760 Definitions for ORS 734.750 to 734.890. As used in ORS 734.750 to 734.890, unless the context requires otherwise

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ORS 734.770 Purpose. The purpose of ORS 734.750 to 734.890 is to protect the persons specified in ORS 734.790, subject to certain limitations, against failure in the performance of contractual obligations, under life and health insurance policies and annuity contracts specified in ORS 734.790, because of the impairment or insolvency of the insurer issuing such policies or contracts. To provide this protection

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ORS 734.780 Construction. ORS 734.750 to 734.890 shall be liberally construed to effect the purpose provided in ORS 734.770. [1975 c.251 §5]

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ORS 734.790 Application. (1) ORS 734.750 to 734.890 provide coverage for policies and contracts specified in subsection (2) of this section to the following persons who are not provided coverage under the laws of another state

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ORS 734.800 Oregon Life and Health Insurance Guaranty Association; required members; required accounts. (1) There is created a nonprofit legal entity to be known as the Oregon Life and Health Insurance Guaranty Association. All member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under the plan of operation established and approved under ORS 734.820, and shall exercise its powers through a board of directors established under ORS 734.805. For purposes of administration and assessment, the association shall maintain three accounts

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ORS 734.805 Association board of directors; terms; selection; vacancies; compensation and expenses. (1) The board of directors of the Oregon Life and Health Insurance Guaranty Association shall consist of not less than five nor more than nine members who represent member insurers, serving terms as established in the plan of operation. The members of the board shall be selected by member insurers, subject to the approval of the Director of the Department of Consumer and Business Services. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the Director of the Department of Consumer and Business Services. To select the initial board of directors, and initially organize the association, the Director of the Department of Consumer and Business Services shall give notice to all member insurers of the time and place of the organizational meeting. In determining voting rights at the organizational meeting each member insurer shall be entitled to one vote in person or by proxy. If the board of directors is not selected within 60 days after notice of the organizational meeting, the Director of the Department of Consumer and Business Services may appoint the initial members

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ORS 734.810 Duties and powers of association; termination of obligations; limit of obligations. (1) If a member insurer is an impaired insurer, the Oregon Life and Health Insurance Guaranty Association, in its discretion and subject to any conditions imposed by the association and approved by the Director of the Department of Consumer and Business Services, other than those that impair the contractual obligations of the impaired insurer, may

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ORS 734.815 Assessment of members; classes of assessments; amounts; refunds. (1) For the purpose of providing the funds necessary to carry out the powers and duties of the Oregon Life and Health Insurance Guaranty Association, the board of directors shall assess the member insurers, separately for each account, at such time and for such amounts as the board finds necessary. The board shall collect the assessments after 30 days’ written notice to the member insurers before payment is due

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ORS 734.820 Plan of operation; submission of amendments to director; rules; contents of plan. (1)(a) The Oregon Life and Health Insurance Guaranty Association shall maintain on file with the Director of the Department of Consumer and Business Services a plan of operation and shall submit any amendments thereto necessary or suitable to ensure the fair, reasonable and equitable administration of the association. Amendments to the plan shall become effective upon approval in writing by the director

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ORS 734.825 Powers and duties of director. In addition to the duties and powers enumerated elsewhere in ORS 734.750 to 734.820 and 734.830 to 734.890

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ORS 734.830 Notifying director of impaired insurers; examination; reports on impaired insurers. To aid in the detection and prevention of insurer impairments and insolvencies

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