Chapter 735 — Chapter 735
172 sections in this chapter.
ORS 735.005 Definitions for ORS 735.005 to 735.145. As used in ORS 735.005 to 735.145, unless the context requires otherwise
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(1) “Association” means the Oregon FAIR Plan Association created by ORS 735.045. (2) “Board” means the board of directors of the association. (3) “Essential property insurance” means insurance against direct loss to property as defined and limited in standard fire policies and ex…
ORS 735.015 Purpose. The purpose of ORS 735.005 to 735.145 is
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(1) To assure stability in the property insurance market for certain property located in this state. (2) To assure the availability of essential property insurance to the owners of insurable property. (3) To encourage maximum use, in obtaining essential property insurance, of the…
ORS 735.025 Construction. ORS 735.005 to 735.145 shall be liberally construed to effect the purpose provided in ORS 735.015. [1971 c.321 §3]
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[Repealed or reserved.]
ORS 735.035 Application. ORS 735.005 to 735.145 apply only to essential property insurance on domestic risks. [1971 c.321 §4]
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[Repealed or reserved.]
ORS 735.045 Oregon FAIR Plan Association; insurers required to be members; plan of operation. There is hereby created the Oregon FAIR Plan 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 pursuant to ORS 735.085, and shall exercise its powers through its board of directors. [1971 c.321 §6]
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[Repealed or reserved.]
ORS 735.055 Association board of directors; appointment; compensation, expenses of members; quorum. (1) The board of directors of the Oregon FAIR Plan Association shall consist of five members selected by the member insurers, subject to the approval of the Director of the Department of Consumer and Business Services, and four persons selected by the Governor, one of whom shall be an insurance producer holding an appointment as an Oregon insurance producer of a member insurer. Of the other three persons appointed by the Governor, one shall be a resident of a county of over 400,000 population and none shall have been an employee or insurance producer of a member insurer. The term of each member 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
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(2) In making or approving selections to the board, the Director of the Department of Consumer and Business Services shall consider among other things whether member insurers are fairly represented. (3) A member of the board shall receive no compensation for services as a member.…
ORS 735.065 Required association functions; assessments. (1) The Oregon FAIR Plan Association shall
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(a) Have authority on behalf of its members to arrange for the issuance of property insurance policies by service insurers and to reinsure any of those policies in whole or in part and to cede such reinsurance, subject to the plan. (b) Assess member insurers the amounts necessary…
ORS 735.075 Discretionary association functions. The Oregon FAIR Plan Association may
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(1) With the approval of the Director of the Department of Consumer and Business Services, employ or retain such persons and designate such inspection bureaus and service insurers as are necessary to handle applications, inspect and insure property and perform the other duties of…
ORS 735.085 Plan of operation; submission to director; approval of plan; compliance with plan; rules. (1) The Oregon FAIR Plan Association shall submit to the Director of the Department of Consumer and Business Services, not later than September 7, 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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(2) If the association fails to submit a plan that receives the approval of the director as provided in subsection (1) of this section, or if the association after such approval fails to maintain a plan satisfactory to the director, the director shall by rule prescribe a plan of …
ORS 735.095 Contents of plan of operation. The plan shall
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(1) Establish procedures for the submission and processing of applications for insurance and the payment of claims for losses. (2) Establish procedures for record keeping, payment of other expenses and administration of all other financial affairs of the Oregon FAIR Plan Associat…
ORS 735.105 Regulation of association as insurer; financial report to director. The Oregon FAIR Plan Association is subject to regulation by the Director of the Department of Consumer and Business Services in the same manner as an insurer, to the extent determined by the director to be necessary to carry out the purpose of ORS 735.005 to 735.145. 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 calendar year. [1971 c.321 §12]
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[Repealed or reserved.]
ORS 735.115 Exemption of association from fees and taxes. Except for taxes levied on real or personal property, the Oregon FAIR Plan 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.321 §13]
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[Repealed or reserved.]
ORS 735.125 [1971 c.321 §14; repealed by 1979 c.818 §5]
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[Repealed or reserved.]
ORS 735.135 [1971 c.321 §15; repealed by 1979 c.818 §5]
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[Repealed or reserved.]
ORS 735.145 Immunity from legal action in carrying out duties. No person shall have a cause of action against the Oregon FAIR Plan Association or its employees or servicing facilities, any member of the board, or the Director of the Department of Consumer and Business Services or the employees of the director for any action taken by them in carrying out ORS 735.005 to 735.145. [1971 c.321 §16]
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CAPTIVE INSURERS
ORS 735.150 Definitions for ORS 735.150 to 735.190. As used in ORS 735.150 to 735.190
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(1)(a) “Affiliate” means a business entity that, because of common ownership, common control, common operation or common management, is in the same corporate system as a parent or a member organization. (b) For purposes of this subsection, “common ownership, common control, commo…
ORS 735.152 Application of laws. (1) The provisions of the Insurance Code cited in ORS 735.150 to 735.190 apply to captive insurers. In addition, the provisions of the Insurance Code set forth in ORS chapter 731 relating to administration of the insurance laws apply to captive insurers to the extent not inconsistent with the express provisions of ORS 735.150 to 735.190
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(2) In addition to the provisions of the Insurance Code set forth in subsection (1) of this section, ORS 705.137 and 705.139 apply to captive insurers. [2012 c.84 §3] Note: See note under 735.150.
ORS 735.154 Rules. The Director of the Department of Consumer and Business Services may adopt rules for the administration of ORS 735.150 to 735.190. [2012 c.84 §4]
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Note: See note under 735.150.
ORS 735.156 Confidentiality of documents and materials; public disclosure. All documents, materials and other information in the possession of the Department of Consumer and Business Services under ORS 735.150 to 735.190 are confidential and subject to public disclosure only as provided in ORS 705.137. [2012 c.84 §5]
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Note: See note under 735.150.
ORS 735.158 Certificate of authority; restriction on types of insurance; requirements for certification; requirements for corporations; fees; expiration and renewal of certificate. (1)(a) When permitted by its articles of incorporation or its charter and bylaws, a captive insurer may apply to the Director of the Department of Consumer and Business Services for a certificate of authority to transact any class of insurance
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(b) Notwithstanding paragraph (a) of this subsection: (A) A pure captive insurer may not insure a risk other than a risk of its parent or affiliate or a controlled unaffiliated business. (B) An association captive insurer may not insure a risk other than a risk of: (i) An affilia…
ORS 735.160 Business name. A captive insurer may assume a business name only if consistent with the provisions of ORS 731.430. [2012 c.84 §7]
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Note: See note under 735.150.
ORS 735.162 Capital and surplus requirements; form permitted; security for branch captive insurers; dividends and distributions. (1) To qualify for authority to transact insurance in this state, a captive insurer shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than
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(a) $250,000 for a pure captive insurer. (b) $750,000 for an association captive insurer incorporated as a stock insurer or as a mutual insurer. (c) $300,000,000 for a captive reinsurer. (2) In accordance with ORS 731.554 (6), for the protection of the public, the Director of the…
ORS 735.164 Incorporation of pure captive insurer and association captive insurer; application; fee; approval; alien captive insurer; application of corporation laws. (1) A pure captive insurer must be incorporated as a stock insurer with the capital of the pure captive insurer divided into shares and held by the shareholders of the pure captive insurer
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(2) An association captive insurer may be: (a) Incorporated as a stock insurer with the capital of the association captive insurer divided into shares and held by the shareholders of the association captive insurer; or (b) Incorporated as a mutual insurer without capital stock, w…
ORS 735.166 Investment requirements for association captive insurer. (1)(a) An association captive insurer must comply with the investment requirements of ORS 733.510 to 733.780
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(b) Notwithstanding paragraph (a) of this subsection, the Director of the Department of Consumer and Business Services may by rule approve the use of alternative reliable methods of valuation and rating for an association captive insurer. (2)(a) A pure captive insurer is not subj…
ORS 735.168 Allowable risks for captive insurer; risk distribution pool; annual actuarial opinion; rules. (1) A captive insurer may provide reinsurance on risks ceded by an affiliate of the insurer or a controlled unaffiliated business
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(2) A captive insurer may take credit for reserves on risks or portions of risks ceded to reinsurers if the credit is acceptable to the Director of the Department of Consumer and Business Services. (3) Subject to the prior written approval of the director, a captive insurer may p…
ORS 735.170 Rating organization. A captive insurer is not required to join a rating organization. [2012 c.84 §12]
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Note: See note under 735.150.
ORS 735.172 Reporting; contents; filing date; waiver of annual statement for alien captive insurer; rules. (1) A captive insurer is not required to make a report except as specified in this section
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(2)(a) Before March 1 of each year, or in accordance with rules adopted under subsection (6) of this section, a captive insurer shall submit to the Director of the Department of Consumer and Business Services a report of the financial condition of the captive insurer, verified by…
ORS 735.174 Examination; frequency; scope; payment of expenses. (1)(a) The Director of the Department of Consumer and Business Services shall examine the affairs of each captive insurer once in each three-year period
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(b) The three-year period described in paragraph (a) of this subsection is determined on the basis of three full annual accounting periods of operation. (c) The examination is to be made as of December 31 of the full three-year period or as of the last day of the month of an annu…
ORS 735.176 Compliance with sound actuarial principles. Notwithstanding the limits of risk set forth in ORS 731.504, any captive insurer for which the Director of the Department of Consumer and Business Services issues a certificate of authority under ORS 735.150 to 735.190 must comply with sound actuarial principles as determined by the director and must submit reports demonstrating such compliance to the director. [2012 c.84 §15]
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Note: See note under 735.150.
ORS 735.178 Suspension or revocation of certificate of authority. (1) The Director of the Department of Consumer and Business Services may suspend or revoke the certificate of authority issued to a captive insurer to transact insurance in this state if the captive insurer
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(a) Is insolvent or impaired as defined in ORS 734.014; (b) Fails to meet the requirements of ORS 735.150 to 735.190; (c) Refuses or fails to submit an annual report required by ORS 735.172 or any other report or statement required by law or by order of the director; (d) Fails to…
ORS 735.180 Branch captive insurer as pure captive insurer; rules. Except as otherwise provided in ORS 735.150 to 735.190, a branch captive insurer must be a pure captive insurer with respect to business operations in this state, unless otherwise permitted by rule of the Director of the Department of Consumer and Business Services. [2012 c.84 §17]
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Note: See note under 735.150.
ORS 735.182 Examination of branch captive insurer and alien captive insurer; payment of charges and expenses. (1) The Director of the Department of Consumer and Business Services shall examine only the branch operations of, and the insurance transacted by, a branch captive insurer in this state if the branch captive insurer
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(a) Provides annually to the director a certificate of compliance, or an equivalent, issued by or filed with the licensing authority of the jurisdiction in which the branch captive insurer is formed; and (b) Demonstrates to the satisfaction of the director that the branch captive…
ORS 735.184 Requirements for foreign captive insurer to provide insurance in this state. Notwithstanding ORS 731.022, a foreign captive insurer may provide insurance in this state if the foreign captive insurer meets both of the following conditions
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(1) The foreign captive insurer is domiciled in a state that regulates the foreign captive insurer as a captive insurer and the captive insurer is in good standing in that state. (2) All activities related to the placement of the insurance occurs in the domicile state and the ins…
ORS 735.186 Management of assets of captive reinsurer. At least 35 percent of the assets of a captive reinsurer must be managed by an asset manager domiciled in this state. [2012 c.84 §20]
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Note: See note under 735.150.
ORS 735.188 Application of captive reinsurer for certificate of authority. If permitted by its articles of incorporation or charter, and in accordance with ORS 735.158 and 735.190, a captive reinsurer may apply to the Director of the Department of Consumer and Business Services for a certificate of authority to transact reinsurance. [2012 c.84 §21]
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Note: See note under 735.150.
ORS 735.190 Incorporation of captive reinsurer. (1) A captive reinsurer must be incorporated as a stock insurer with its capital divided into shares and held by the captive reinsurer’s shareholders. In incorporating, a captive reinsurer must comply with the requirements of ORS 735.164
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(2) The capital stock of a captive reinsurer must be issued at par value or greater. (3) At least one member of the board of directors of a captive reinsurer incorporated in this state must be a resident of this state. [2012 c.84 §22] Note: See note under 735.150. MARKET ASSISTAN…
ORS 735.200 Legislative findings; purpose. (1) The Legislative Assembly finds that
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(a) Some businesses and service providers in Oregon have experienced major problems in both the availability and affordability of commercial liability insurance. Premiums for such insurance policies have recently grown as much as 500 percent and the availability of such insurance…
ORS 735.205 Definitions for ORS 735.200 to 735.260. As used in ORS 735.200 to 735.260
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(1) “Joint underwriting association” means a mechanism requiring casualty insurers doing business in Oregon to provide commercial liability insurance to certain businesses and service providers on either an assigned risk basis or through a joint underwriting pool underwritten to …
ORS 735.210 Formation of market assistance plans; rules. (1) After a public hearing, the Director of the Department of Consumer and Business Services may by rule require insurers authorized to write and writing commercial liability insurance in this state to form a market assistance plan to assist businesses and service providers unable to purchase specified classes of commercial liability insurance in adequate amounts from either the admitted or nonadmitted market
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(2) The market assistance plan shall operate under a plan of operations prepared by admitted insurers, eligible surplus line insurers and insurance producers, and approved by the director. [1987 c.774 §75; 2003 c.364 §90]
ORS 735.215 Findings prior to formation of joint underwriting association; hearing. (1) The Director of the Department of Consumer and Business Services may mandate the formation of a joint underwriting association under ORS 735.220 if after directing the formation of a market assistance plan and allowing it a reasonable time to alleviate insurance availability problems, the director finds that
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(a) There exist in Oregon certain businesses or service providers for which no commercial liability insurance is available; and (b) There is a need in Oregon for the goods or services provided by these businesses or service providers and the lack of available commercial liability…
ORS 735.220 Formation of joint underwriting association; funds. After finding under ORS 735.215 that there is a need in Oregon for a joint underwriting association, the Director of the Department of Consumer and Business Services may form and put into operation a temporary, nonprofit, nonexclusive joint underwriting association constituting a legal entity separate and distinct from its members for commercial liability insurance subject to the conditions and limitations contained in the Insurance Code. All funds and reserves of the association shall be separately held and invested. [1987 c.774 §77]
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[Repealed or reserved.]
ORS 735.225 Membership in joint underwriting association. The joint underwriting association established under ORS 735.220 shall be comprised of all insurers authorized to write and who are writing commercial liability insurance within this state on a direct basis, including the commercial liability portions of multiperil policies. Every such insurer shall remain a member of the association as a condition of its authority to continue to transact insurance in this state. [1987 c.774 §78]
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[Repealed or reserved.]
ORS 735.230 Rates; approval. The board of directors of the joint underwriting association shall engage the services of an independent actuarial firm to develop and recommend actuarially sound rates, rating plans, rating rules and classifications. The Director of the Department of Consumer and Business Services shall approve rates filed by the joint underwriting association in accordance with ORS 737.310. All rates approved for the joint underwriting association shall be actuarially sound and calculated to be self-supporting. [1987 c.774 §79]
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[Repealed or reserved.]
ORS 735.235 Board of directors. The joint underwriting association formed under ORS 735.220 shall be under the administrative control of a seven person board of directors appointed by the Governor. Two directors shall represent insurance carriers participating in the association; one director shall represent insurance producers; three directors shall represent the affected classes of insureds; and one director shall be a public member with no ties to the insurance industry. The board shall elect one of its members as chairperson. [1987 c.774 §80; 2003 c.364 §91]
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[Repealed or reserved.]
ORS 735.240 Annual statement. The joint underwriting association shall file an annual statement prepared by an independent certified public accountant containing a financial statement, a summary of its transactions and operations for the prior year and other information as prescribed by the Director of the Department of Consumer and Business Services by rule. [1987 c.774 §81]
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[Repealed or reserved.]
ORS 735.245 Conditions for policyholder surcharge. (1) Upon a determination of the board of directors that the joint underwriting association will be unable to pay its outstanding lawful obligations as they mature, the board shall certify the existence of this condition to the Director of the Department of Consumer and Business Services. A schedule for policyholder surcharges shall be submitted by the board at the time of certification
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(2) The surcharge schedule shall become final 30 days after certification unless the director finds, after a public hearing, that the surcharge amounts are unreasonable or unjustifiable. Such surcharges may be adjusted to take into consideration the past and prospective loss and …
ORS 735.250 Exemption from liability. There shall be no liability or cause of action against any member insurer, self-insurer, or its agents or employees, the joint underwriting association or its agents or employees, members of the board of directors, the Department of Consumer and Business Services or its representatives for any action taken by or statement made by them in performance of their powers and duties under ORS 735.210 to 735.260. [1987 c.774 §83]
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[Repealed or reserved.]
ORS 735.255 State not liable to pay debts of association. The state is not liable to pay any debts or obligations of any association formed under ORS 735.220 and no person may assert any claim against the state or any of its agencies for any act or omission of the association. [1987 c.774 §84]
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[Repealed or reserved.]
ORS 735.260 Rules. The Director of the Department of Consumer and Business Services may adopt all rules necessary to insure the efficient, equitable operation of the market assistance plan or the joint underwriting association, including but not limited to rules requiring or limiting certain policy provisions. [1987 c.774 §85]
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[Repealed or reserved.]
ORS 735.265 Liquor liability insurance risk and rate classifications; rules. If a market assistance plan is formed under ORS 735.210, or a joint underwriting association is formed under ORS 735.220, the Director of the Department of Consumer and Business Services shall by rule establish such liquor liability insurance risk and rate classifications as may be necessary to facilitate the availability and affordability of this commercial insurance product. Risk and rate classifications shall be established for all facets of the liquor industry including those who sell at wholesale or retail and the State of Oregon, as allowed by law. Risk classifications and rating plans shall be developed upon considerations including, but not limited to, the following factors
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(1) Past loss experience and prospective loss experience of different license types. (2) Past loss experience and prospective loss experience in different geographic areas. (3) Prior claims experience of the individual licensee. (4) Prior compliance with public safety and alcohol…