Chapter 735 — Chapter 735
172 sections in this chapter.
ORS 735.300 Purpose of ORS 735.300 to 735.365. The purpose of ORS 735.300 to 735.365 is to regulate the formation and operation of risk retention groups and purchasing groups in this state formed pursuant to the provisions of the federal Liability Risk Retention Act of 1986 (P.L. 99-563). [1987 c.774 §98; 1989 c.700 §10]
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[Repealed or reserved.]
ORS 735.305 Definitions for ORS 735.300 to 735.365. As used in ORS 735.300 to 735.365
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(1) “Director” means the Director of the Department of Consumer and Business Services of this state or the commissioner, director or superintendent of insurance in any other state. (2) “Completed operations liability” means liability arising out of the installation, maintenance o…
ORS 735.310 Qualifications for risk retention group; plan of operation; application; notification to National Association of Insurance Commissioners. (1) A risk retention group seeking to be organized in this state
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(a) Must be organized as a liability insurer in this state and authorized by a subsisting certificate of authority issued by the director to transact liability insurance in this state, as provided in ORS chapter 732; and (b) Except as otherwise provided in ORS 735.300 to 735.365,…
ORS 735.315 Foreign risk retention groups; conditions of doing business in Oregon; prohibited acts. Risk retention groups chartered in states other than this state and seeking to do business as a risk retention group in this state must observe and abide by the laws of this state as follows
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(1) Before transacting insurance in this state, a risk retention group shall submit to the director: (a) A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, its date of chartering, its principal…
ORS 735.320 Relationship to insurance guaranty fund and joint underwriting association. (1) No risk retention group shall be permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state. No risk retention group, or its insureds, shall receive any benefit from any such fund for claims arising out of the operations of the risk retention group
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(2) A risk retention group shall participate in this state’s joint underwriting associations and mandatory liability pools as provided by the Insurance Code. [1987 c.774 §102]
ORS 735.325 Exemption of purchasing groups from certain laws. Any purchasing group meeting the criteria established under the provisions of the federal Liability Risk Retention Act of 1986 (P.L. 99-563), shall be exempt from any law of this state relating to the creation of groups for the purchase of insurance or the prohibition of group purchasing, or any law that would discriminate against a purchasing group or its members. In addition, an insurer shall be exempt from any law of this state that prohibits providing or offering to provide advantages to a purchasing group or its members based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages or other matters. A purchasing group shall be subject to all other applicable laws of this state. [1987 c.774 §103]
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[Repealed or reserved.]
ORS 735.330 Purchasing groups; notice of intent to do business; registration; exceptions. (1) A purchasing group that intends to do business in this state shall furnish notice to the director, which shall
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(a) Identify the state in which the group is domiciled; (b) Specify the lines and classifications of liability insurance that the purchasing group intends to purchase; (c) Identify the insurer from which the group intends to purchase its insurance and the domicile of the insurer;…
ORS 735.335 Purchase of insurance by purchasing group. A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed insurance producer acting pursuant to the surplus lines laws and regulations of that state. [1987 c.774 §105; 2003 c.364 §93]
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[Repealed or reserved.]
ORS 735.340 Insurance Code enforcement authority subject to federal law. The director is authorized to make use of any of the powers established under the Insurance Code to enforce the laws of this state so long as those powers are not specifically preempted by the federal Product Liability Risk Retention Act of 1981, as amended by the Risk Retention Amendments of 1986. This includes, but is not limited to, the director’s administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders and impose penalties. With regard to any investigation, administrative proceedings or litigation, the director may rely on the procedural law and rules of the state. The injunctive authority of the director in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction. [1987 c.774 §106]
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[Repealed or reserved.]
ORS 735.345 Violation of 735.300 to 735.365; penalties. A risk retention group that violates any provision of ORS 735.300 to 735.365 is subject to criminal and civil penalties applicable to insurers generally, and to suspension or revocation of its certificate of authority to transact insurance. [1987 c.774 §107]
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[Repealed or reserved.]
ORS 735.350 Agent or broker; license. Any person acting or offering to act as an insurance producer for a risk retention group or purchasing group that solicits members, sells insurance coverage, purchases coverage for its members located within this state or otherwise does business in this state shall, before commencing any such activity, obtain a license as an insurance producer from the director under ORS chapter 744. [1987 c.774 §108; 1989 c.701 §71; 2003 c.364 §94]
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[Repealed or reserved.]
ORS 735.355 Court orders enforceable in Oregon. An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance or operating in any state or in all states or in any territory or possession of the United States, upon a finding that such a group is in a hazardous financial condition shall be enforceable in the courts of this state. [1987 c.774 §109]
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[Repealed or reserved.]
ORS 735.360 Rules. The director may adopt rules that the director determines are necessary for carrying out ORS 735.300 to 735.365. [1987 c.774 §110; 1989 c.700 §11]
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[Repealed or reserved.]
ORS 735.365 Short title. ORS 735.300 to 735.365 shall be known and may be cited as the Oregon Liability Risk Retention Law. [1987 c.774 §98a]
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SURPLUS LINES LAW
ORS 735.400 Purposes of ORS 735.400 to 735.495. ORS 735.400 to 735.495 shall be liberally construed and applied to promote its underlying purposes which include
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(1) Protecting persons seeking insurance in this state; (2) Permitting surplus lines insurance to be placed with reputable and financially sound nonadmitted insurers and exported from this state pursuant to ORS 735.400 to 735.495; (3) Establishing a system of regulation which wil…
ORS 735.405 Definitions for ORS 735.400 to 735.495. As used in ORS 735.400 to 735.495
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(1) “Admitted insurer” means an insurer authorized to do an insurance business in this state. (2) “Affiliated group” means any group of entities that, with respect to an insured, exercise control over the insured, are under the control of the insured, or are under common control …
ORS 735.406 Cost of living adjustment to net worth, revenues and expenses of exempt commercial purchasers. Beginning on January 1, 2015, and each fifth January 1 occurring thereafter, the amounts in ORS 735.405 (6)(c)(A), (B) and (D) shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor. [2011 c.660 §7; 2019 c.57 §33]
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[Repealed or reserved.]
ORS 735.410 Conditions for procuring insurance through nonadmitted insurer; rules. (1) Insurance may be procured through a surplus lines licensee from a nonadmitted insurer if
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(a) The insurer is an eligible surplus lines insurer; (b) A diligent search has first been made among the insurers who are authorized to transact and are actually writing the particular kind and class of insurance in this state, and it is determined that the full amount or kind o…
ORS 735.415 Qualifications for placement of coverage with nonadmitted insurer. (1) A surplus lines licensee may not place any coverage with a nonadmitted insurer unless at the time of placement the nonadmitted insurer has done all of the following
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(a) Obtained authorization to write the kind of insurance to be placed by the surplus lines licensee by the insurance supervisory official in the insurer’s domiciliary jurisdiction. (b) Qualified under one of the following subparagraphs: (A) Has capital and surplus or its equival…
ORS 735.417 Insured required to report and pay taxes on independently procured insurance covering Oregon home state risks. (1) Each insured in this state who obtains independently procured insurance, or continues or renews independently procured insurance on Oregon home state risks, other than insurance procured through a surplus lines licensee, shall file, within 30 days after the date the insurance was procured, continued or renewed, a written report with the Director of the Department of Consumer and Business Services showing
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(a) The name and address of the insurer; (b) The subject of the insurance; (c) The amount of premium currently charged; and (d) Additional pertinent information reasonably requested by the director. (2) The insured filing a report under subsection (1) of this section shall pay, a…
ORS 735.418 Director authorized to enter into interstate compact for premium tax allocation. For purposes of carrying out the Nonadmitted and Reinsurance Reform Act of 2010 (P.L. 111-203, Title V, Subtitle B), after receiving express legislative approval, the Director of the Department of Consumer and Business Services is authorized to enter into a compact or to otherwise establish procedures with other states to allocate among the states the premium taxes paid to an insured’s home state. [2011 c.660 §4]
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[Repealed or reserved.]
ORS 735.420 Declaration of ineligibility of surplus lines insurer. (1) The Director of the Department of Consumer and Business Services may declare a surplus lines insurer described in ORS 735.415 (1) ineligible if the director has reason to believe that the surplus lines insurer
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(a) Is in unsound financial condition; (b) Is no longer eligible under ORS 735.415; (c) Has willfully violated the laws of this state; or (d) Does not make reasonably prompt payment of just losses and claims in this state or elsewhere. (2) The director shall promptly mail notice …
ORS 735.425 Filing by licensee after placement of surplus lines insurance. (1) Within 90 days after the placing of any surplus lines insurance in this state on an Oregon home state risk, each surplus lines licensee shall file with the Director of the Department of Consumer and Business Services
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(a) A statement signed by the licensee regarding the insurance, which shall be kept confidential as provided in ORS 705.137, including the following: (A) The name and address of the insured; (B) The identity of the insurer or insurers; (C) A description of the subject and locatio…
ORS 735.430 Surplus Line Association of Oregon; fees. (1) The Surplus Line Association of Oregon is the advisory organization of surplus lines licensees to
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(a) Facilitate and encourage compliance by resident and nonresident surplus lines licensees with the laws of this state and the rules of the Director of the Department of Consumer and Business Services relative to surplus lines insurance; (b) Provide means for the examination, wh…
ORS 735.435 Evidence of insurance; contents; change; penalty; notice regarding Insurance Guaranty Association; rules. (1) Upon placing surplus lines insurance on an Oregon home state risk, the surplus lines licensee shall promptly deliver to the insured or the producing insurance producer the policy, or if such policy is not then available, a certificate as described in subsection (4) of this section, cover note or binder. The certificate, as described in subsection (4) of this section, cover note or binder shall be executed by the surplus lines licensee and shall show the description and location of the subject of the insurance, coverages including any material limitations other than those in standard forms, a general description of the coverages of the insurance, the premium and rate charged and taxes to be collected from the insured, and the name and address of the insured and surplus lines insurer or insurers and proportion of the entire risk assumed by each, and the name of the surplus lines licensee and the licensee’s license number
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(2) A surplus lines licensee may not issue or deliver any insurance policy or certificate of insurance or represent that insurance will be or has been written by any eligible surplus lines insurer, unless the licensee has authority from the insurer to cause the risk to be insured…
ORS 735.440 Validity of contracts. Insurance contracts procured under ORS 735.400 to 735.495 shall be valid and enforceable as to all parties. [1987 c.774 §125]
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[Repealed or reserved.]
ORS 735.445 Effect of payment of premium to surplus lines licensee. A payment of premium to a surplus lines licensee acting for a person other than the surplus lines licensee in negotiating, continuing or renewing any policy of insurance under ORS 735.400 to 735.495 shall be deemed to be payment to the insurer, whatever conditions or stipulations may be inserted in the policy or contract notwithstanding. [1987 c.774 §126]
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[Repealed or reserved.]
ORS 735.450 Requirements for license as surplus lines insurance licensee. A person may not procure any contract of surplus lines insurance with any nonadmitted insurer for an Oregon home state risk unless the person is licensed under ORS chapter 744 to transact surplus lines insurance. A person may obtain a license to transact surplus lines insurance only if the person is licensed as an insurance producer under ORS chapter 744 to transact property and casualty insurance. [1987 c.774 §127; 1989 c.288 §1; 1991 c.810 §26; 1995 c.639 §14; 2001 c.191 §46; 2003 c.364 §41; 2011 c.660 §14]
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[Repealed or reserved.]
ORS 735.455 Authority of licensee; rules. (1) A surplus lines licensee may originate surplus lines insurance on an Oregon home state risk or accept such insurance from any other insurance producer duly licensed as to the kinds of insurance involved on an Oregon home state risk, and the surplus lines licensee may compensate the insurance producer therefor
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(2) A surplus lines licensee may charge a producing insurance producer a fee or a combination of a fee and a commission when transacting surplus lines for the producing insurance producer if the surplus lines licensee has a written agreement with the producing insurance producer …
ORS 735.460 Records of licensee; examination. (1) Each surplus lines licensee shall keep a full and true record of each surplus lines insurance contract placed on an Oregon home state risk by or through the licensee as required by ORS 744.068, including a copy of the policy, certificate, cover note or other evidence of insurance showing any of the following items that are applicable
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(a) Amount of the insurance and perils insured; (b) Brief description of the property insured and its location; (c) Gross premium charged; (d) Any return premium paid; (e) Rate of premium charged upon the several items of property; (f) Effective date of the contract and the terms…
ORS 735.465 Monthly reports; rules. (1) On or before the end of each month, each surplus lines licensee shall file with the Director of the Department of Consumer and Business Services, as prescribed by the director, a verified report of all surplus lines insurance transacted on Oregon home state risks during the preceding 90 days. The report need not show transacted surplus lines insurance that was reported in an earlier report. The report shall show
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(a) Aggregate gross premiums written; (b) Aggregate return premiums; and (c) Amount of aggregate tax. (2) The director may direct that reports required under subsection (1) of this section be made to the Surplus Line Association of Oregon and that the Surplus Line Association of …
ORS 735.470 Premium tax; collection; payment; refund; rules. (1)(a) The surplus lines licensee shall pay the Director of the Department of Consumer and Business Services a surplus lines premium tax equal to two percent of the gross amount of premiums received on Oregon home state risks as shown in the report required by ORS 735.465
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(b) Notwithstanding ORS 731.820, the surplus lines licensee shall also pay to the director a tax equal to 0.3 percent of the premium or fees charged by the insurer or the insurer’s insurance producer and other intermediaries for the insurance, for the purpose of maintaining the D…
ORS 735.475 Suit to recover unpaid tax. If the tax collectible by a surplus lines licensee under ORS 735.400 to 735.495 is not paid within the time prescribed, the same shall be recoverable in a suit brought by the Director of the Department of Consumer and Business Services against the surplus lines licensee. [1987 c.774 §132; 1989 c.288 §3; 2001 c.191 §48b]
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[Repealed or reserved.]
ORS 735.480 Suspension or revocation of license; refusal to renew; grounds. The Director of the Department of Consumer and Business Services may suspend, revoke or refuse to renew the license of a surplus lines licensee after notice and hearing as provided under the applicable provision of this state’s laws upon any one or more of the following grounds
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(1) Removal of the surplus lines licensee’s office from this state, if the licensee is a resident insurance producer; (2) Removal of the surplus lines licensee’s office accounts and records from the principal place of business of the licensee under ORS 744.068 during the period d…
ORS 735.485 Actions against surplus lines insurer. (1) A surplus lines insurer may be sued upon any cause of action arising in this state under any surplus lines insurance contract on an Oregon home state risk made by it or evidence of insurance issued or delivered by the surplus lines licensee pursuant to the procedure provided in ORS 735.490. Any surplus lines policy issued by the surplus lines licensee shall contain a provision stating the substance of this section and designating the person to whom process shall be delivered
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(2) Each surplus lines insurer assuming surplus lines insurance shall be considered thereby to have subjected itself to ORS 735.400 to 735.495. (3) The remedies provided in this section are in addition to any other methods provided by law for service of process upon insurers. (4)…
ORS 735.490 Jurisdiction in action against insurer; service of summons and complaint; response. (1) An insurer transacting insurance on an Oregon home state risk under the provisions of ORS 735.400 to 735.495 may be sued upon any cause of action, arising under any policy of insurance so issued and delivered by it, in the courts for the county where the insurance producer who registered or delivered the policy resides or transacts business, by the service of summons and complaint made upon the insurance producer for the insurer
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(2) Any insurance producer served with summons and complaint in any such cause shall forthwith mail the summons and complaint, or a true and complete copy thereof, by registered or certified mail with proper postage affixed and properly addressed, to the insurer being sued. (3) T…
ORS 735.492 Application of certain Insurance Code provisions to surplus lines insurers. ORS 731.324, 731.328, 731.512 and 731.624 do not apply to surplus lines insurers. [2005 c.185 §17]
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[Repealed or reserved.]
ORS 735.495 Short title; severability. (1) ORS 735.400 to 735.495 shall be known and may be cited as “The Oregon Surplus Lines Law.”
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(2) If any provisions of ORS 735.400 to 735.495, or the application of such provision to any person or circumstance, is held invalid, the remainder of ORS 735.400 to 735.495 and the application of such provision to persons or circumstances other than those as to which it is held …
ORS 735.500 Requirements for certification as retainer medical practice; disclosures; rules. (1) As used in this section and ORS 735.510
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(a) “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. A person who is the owner of 10 percent or more ownership…
ORS 735.510 Notice to department of specified changes to practice. A certified retainer medical practice shall
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(1) Notify the Department of Consumer and Business Services immediately whenever: (a) The license of a provider who has provided services on behalf of the practice is denied, suspended, revoked or not renewed in this state or in any other jurisdiction; or (b) The authority of the…
ORS 735.515 Charges for services not covered by contract. (1) As used in this section
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(a) “Dental services contract” means a contract between an insurer and a provider or a group of providers to provide dental health services for enrollees. “Dental services contract” does not include a contract of employment or a contract creating legal entities and ownership ther…
ORS 735.520 Oregon Essential Workforce Health Care Program; supplemental payments to eligible employers; requirements for participation; rules. (1) As used in this section
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(a) “Eligible employer” means an operator of a facility that: (A) Is a participating provider in the state medical assistance program; (B) Elects to participate in the Oregon Essential Workforce Health Care Program; and (C) Meets other requirements prescribed by the Oregon Health…
ORS 735.530 Definitions for ORS 735.530 to 735.552. As used in ORS 735.530 to 735.552
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(1) “Claim” means a request from a pharmacy or pharmacist to be reimbursed for the cost of filling or refilling a prescription for a drug or for providing a medical supply or service. (2) “Enrollee” means an individual who has enrolled for coverage in a health benefit plan for wh…
ORS 735.532 License to transact business as pharmacy benefit manager; fees; rules. (1) A person may not transact business or purport to transact business in this state as a pharmacy benefit manager unless the person has a license to transact business as a pharmacy benefit manager issued by the Department of Consumer and Business Services
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(2) To obtain a license under this section, a person must: (a) Submit an application to the department on a form prescribed by the department by rule. (b) Pay a fee in an amount adopted by the department by rule. (3) A license to transact business as a pharmacy benefit manager mu…
ORS 735.533 Denial, suspension or revocation of license to transact business as pharmacy benefit manager; basis; complaint; rules. (1) In accordance with ORS chapter 183, the Department of Consumer and Business Services may deny an application for a license to transact business as a pharmacy benefit manager or deny an application for renewal of a license to transact business as a pharmacy benefit manager, and may suspend or revoke a license to transact business as a pharmacy benefit manager, if the department finds that an applicant or licensee
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(a) Falsified an application for a license or for the renewal of a license or engaged in any dishonest act in relation to the application; (b) Engaged in dishonesty, fraud or gross negligence in the conduct of business as a pharmacy benefit manager; (c) Engaged in conduct that re…
ORS 735.534 Claim reimbursement; maximum allowable costs; documentation; complaints; rules. (1) As used in this section
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(a) “Conflict of interest” means: (A) Present employment, ownership or control by a covered entity, pharmaceutical manufacturer, pharmacy benefit manager or health benefit plan as defined in ORS 743B.005; or (B) Third party employment, ownership or control by a covered entity, ph…
ORS 735.536 Requirements for pharmacy benefit manager’s reimbursement for cost of drugs; rules. (1) As used in this section, “out-of-pocket cost” means the amount paid by an enrollee under the enrollee’s coverage, including deductibles, copayments, coinsurance or other expenses as prescribed by the Department of Consumer and Business Services by rule
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(2) A pharmacy benefit manager licensed under ORS 735.532: (a) May not require a prescription to be filled or refilled by a mail order pharmacy as a condition for reimbursing the cost of the drug. (b) Except as provided in paragraph (c) of this subsection, may require a prescript…
ORS 735.537 Reports to department regarding payments received from manufacturers and disposition of payments from manufacturers. (1) As used in this section
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(a) “Administrative fee” means the administrative and service fees charged by pharmacy benefit managers to manufacturers and carriers that are typically a percentage of the list price of a prescription drug. (b) “Carrier” has the meaning given that term in ORS 743B.005. (c) “Manu…
ORS 735.538 Reports to department regarding manuals and contracts with pharmacy services administrative organizations. (1) As used in this section, “pharmacy services administrative organization” means an entity that
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(a) Contracts with a pharmacy to act as the pharmacy’s agent with respect to matters involving a pharmacy benefit manager, third party payer or other entity, including by negotiating, executing or administering contracts with the pharmacy benefit manager, third party payer or oth…
ORS 735.540 Definitions for ORS 735.540 to 735.552. As used in ORS 735.540 to 735.552
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(1) “Audit” means an on-site or remote review of the records of a pharmacy, or a request for records from a pharmacy for the purpose of an audit, by or on behalf of an entity. (2) “Clerical error” means a minor error: (a) In the keeping, recording or transcribing of records or do…