OAR Chapter 836 — Department of Consumer and Business Services, Insurance Regulation

Division 1 GENERAL DEFINITIONS

Or. Admin. R. 836-001-0001 Statutory Authority; Purpose

OAR 836-001-0001 and 836-001-0005, are adopted pursuant to the general rulemaking authority of the Insurance Commissioner in ORS 731.244.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 731.052 et seq. & 731.244
IC 5-1984, f. 10-15-84, ef. 11-1-84
IC 65, f. & ef. 4-20-76

Or. Admin. R. 836-001-0005 Insurance Code Definitions Adopted

The definitions given in the Oregon Insurance Code govern the meaning of terms used in administrative rules adopted by the Insurance Commissioner, except where the context otherwise requires.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 731.052 et seq. & 731.244
IC 65, f. & ef. 4-20-76

Division 5 PROCEDURAL RULES

Or. Admin. R. 836-005-0105 Notice to Interested Persons of Rulemaking

Except when acting in an emergency to adopt a temporary rule in accordance with ORS 183.335(5), the director of the Department of Consumer and Business Services will give prior notice of the proposed adoption, amendment, or repeal of an administrative rule by the Division of Financial Regulation:

(1) By causing notice of the proposed action to be published once, in the Secretary of State's Bulletin referred to in ORS 183.360, at least 21 days prior to the effective date of the rule.

(2) By mailing copies of the notice to persons on the director’s mailing list established by the Division of Financial Regulation pursuant to ORS 183.335(7), at least 28 days prior to the effective date of the rule.

(3) By mailing or delivering copies of the notice to the Associated Press, the Daily Journal of Commerce and the Business Journal.

(4) By mailing copies of the notice to organizations and publications that may provide notice to persons who may have an interest, such as the following, depending on the subject matter of the proposal:

(a) Authorized insurers;

(b) Independent Insurance Agents of Oregon;

(d) National Association of Independent Insurers;

(e) American Insurance Association;

(f) Alliance of American Insurers;

(g) American Council of Life Insurers;

(h) America’s Health Insurance Plans;

(i) Professional Insurance Agents of Oregon/Idaho;

(j) Oregon Association of Health Underwriters;

(k) Reinsurance Association of America;

(L) Insurance Information Institute;

(m) National Council on Compensation Insurance; and

(n) Insurance Services Office.

History

Statutory/Other Authority: ORS 183.341
Statutes/Other Implemented: ORS 183.341
ID 7-2024, minor correction filed 07/22/2024, effective 07/22/2024
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1996, f. 2-28-96, cert. ef. 3-1-96
IC 5-1982, f. 1-29-82, ef. 2-1-82
IC 63, f. & ef. 12-5-75

Or. Admin. R. 836-005-0107 Model Rules of Procedure Governing Rulemaking

The Model Rules of Procedure, OAR 137-001-0005 to 137-005-0070, in effect on January 31, 2012, as promulgated by the Attorney General of the State of Oregon under the Administrative Procedures Act, are adopted as the rules of procedure for the Division of Financial Regulation.

[ED. NOTE: The full text of the Attorney General’s Model Rules of Procedures is available from the Office of the Attorney General or the Insurance Division.]

History

Statutory/Other Authority: ORS 183.341
Statutes/Other Implemented: ORS 183.025, 183.090 & 183.310 - 183.550
ID 8-2024, minor correction filed 07/22/2024, effective 07/22/2024
ID 7-2012, f. & cert. ef. 3-27-12
ID 8-2006, f. & cert. ef. 4-27-06
ID 3-2004, f. & cert. ef. 5-7-04
ID 3-2002, f. & cert. ef. 1-24-02
ID 10-2000, f. & cert. ef. 11-3-00
ID 7-1998, f. & cert. ef. 4-15-98
ID 8-1995, f. & cert. ef. 12-8-95
ID 2-1994, f. & cert. ef. 3-23-94
ID 3-1992, f. & cert. ef. 2-13-92
ID 19-1990, f. & cert. ef. 12-13-90
IC 16-1988, f. & cert. ef. 10-12-88
IC 3-1986, f. & ef. 3-5-86
IC 7-1983, f. & ef. 9-28-83
IC 2-1981, f. & ef. 11-20-81

Or. Admin. R. 836-005-0112 Persons Represented by Authorized Representative

(1) A party or limited party participating in a contested case hearing in which an insured appears under ORS 737.505 may be represented by authorized representative of the party or limited party.

(2) On or before the first appearance in a contested case by an authorized representative, the authorized representative must provide the presiding officer a letter from the party or limited party that authorizes the representative to appear on behalf of the party or limited party.

(3) The presiding officer may limit an authorized representative’s presentation of evidence, examination and cross-examination of witnesses or presentation of factual arguments to ensure the orderly and timely development of the hearing record. The presiding officer may not allow an authorized representative to present any legal argument.

(4) As used in this rule:

(a) Authorized representative means a member of a partnership that is a party or limited party in the contested case, an authorized officer or regular employee of a corporation, association or organized group that is a party or limited party in the contested case, or an authorized officer or employee of a governmental authority other than a state agency, that is a party or limited party in the contested case;

(b) Legal argument includes any argument on:

(A) The jurisdiction of the Department to hear the contested case;

(B) The constitutionality of a statute or rule or the application of a constitutional requirements; or

(A) The application of the facts to the statutes or rules that directly apply to the issues in the contested case;

(B) Comparison of prior actions of the Department;

(D) The admissibility of evidence or the correctness of procedures being followed.

(5) When an authorized representative represents a party of limited party in a hearing, the presiding officer shall advise the representative of the manner in which objections may be made and the manner in which matters may be preserved for appeal. The advice is of a procedural nature and does not change applicable law on waiver or applicable law on the duty to make timely objection. When an objection may involve a legal argument, the presiding officer shall provide reasonable opportunity for the authorized for the authorized representative to consult legal counsel and shall permit the legal counsel to file written legal argument within a reasonable time after conclusion of the hearing.

History

Statutory/Other Authority: ORS 821
Statutes/Other Implemented: ORS 183.457(1)(d) & 183.457(2)(b)
IC 6-1988, f. & cert. ef. 3-30-88

Or. Admin. R. 836-005-0400 Annual Complaint Report

The Director shall publish an annual statistical report on complaints against insurers as required under ORS 731.264, according to the method established in this rule. Each report shall contain the number, percentage, type and disposition of complaints against each insurer that were closed by the Department of Consumer and Business Services during the reporting period. The report shall be based on the records of the Department of Consumer and Business Services. The report shall be structured as a cross tabulation of complaints closed during the reporting period, by complaint type and disposition, against each insurer with respect to whom one or more complaints were closed during the period for which the report is made.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 731.264(3)
ID 19-2006, f. & cert. ef. 9-26-06
ID 11-1989, f. & cert. ef. 11-20-89
ID 3-1989(Temp), f. & cert. ef. 2-28-89

Division 6 TAXATION

Or. Admin. R. 836-006-0010 Payment of Transition and Retaliatory Taxes

(1) An insurer shall pay to the Director on April 1 of each year the amount of retaliatory tax due and payable under ORS 731.854, on the basis of the corporate excise tax obligation of the insurer that is owed or is estimated to be owed by the insurer for the preceding year ending December 31.

(2) If a foreign insurer is unable to determine the full amount of the tax that is due and payable under ORS 731.854 for the preceding year ending December 31 when the tax is due on April 1, the insurer shall pay to the Director on April 1 the amount it estimates to be due and payable under ORS 731.854. A foreign insurer shall pay the amount owing or estimated to be owing regardless of whether its domiciliary state has granted an extension or delay for filing or paying the taxes owing in the domiciliary state.

(3) When a foreign insurer files with its domiciliary state a final return that determines the amount of taxes owing to that state for a particular year, the insurer shall also file with the Director an amended return showing the amount of taxes owing to the State of Oregon or due as a credit to the insurer. The foreign insurer shall pay any additional tax shown to be due on the final return together with interest as required by the Insurance Code on the taxes owing to the State of Oregon.

(4) If a foreign insurer amends its return filed with its domiciliary state or files an amended Oregon excise tax return so as to change the amount of the tax due and payable under ORS 731.854, the insurer shall pay any additional tax owing to this state or shall be credited with any excess previously paid.

(5) An insurer shall pay taxes and other amounts due under this rule in accordance with forms prescribed by the Director.

(6) For purposes of this rule, "foreign insurer" also includes any alien insurer, and "state" includes a country other than the United States.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.854 & Ch. 786(2) & OL 1995
ID 19-2006, f. & cert. ef. 9-26-06
ID 13-1997, f. & cert. ef. 10-14-97

Or. Admin. R. 836-006-0021 Allocation of Consolidated Excise Tax for Purpose of Offsetting Retaliatory Taxes

(1) When the excise tax owing by a consolidated group pursuant to ORS 317.710 and 317.715 is determined, the share of the excise tax attributable to the member domestic insurer shall be established as provided in this rule for the purpose of allocating shares of the tax to member foreign insurers in order to calculate retaliatory taxes owing under 731.854.

(2) The consolidated group excise tax shall be allocated to the domestic insurer in the proportion that the domestic insurer’s Oregon direct premiums written, wages and commissions, and real estate income bear to the total Oregon direct premiums written, wages and commissions, and real estate income for the consolidated group.

History

Statutory/Other Authority: ORS 731.244 & 731.854
Statutes/Other Implemented: ORS 731.854 & 731.859
ID 15-1998, f. & cert. ef. 9-25-98

Division 7 ENFORCEMENT

Or. Admin. R. 836-007-0001 Actions by Director for Restitution or Other Equitable Relief

(1) As used in this rule:

(a) “Actual damages” means reasonably foreseeable losses.

(b) “Consumer” means an insured under a policy that is the subject of the enforcement action.

(c) “Equitable relief” means injunctive relief, specific performance of a contract provision or specific performance of a provision of the Insurance Code or rules implementing the Insurance Code or applicable federal law.

(2) The Director of the Department of Consumer and Business Services:

(a) May seek restitution of actual damages or other equitable relief on a consumer’s behalf only when the director takes an action against an insurer under ORS 731.256(1).

(b) Will not seek relief under subsection (a) of this section for any consumer who is entitled to a remedy under ORS Chapter 656; and

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.256
ID 10-2014, f. & cert. ef. 6-20-14
ID 8-2013(Temp), f. & cert. ef. 12-31-13 thru 6-20-14

Division 9 FEES AND CHARGES

Or. Admin. R. 836-009-0001 Purpose

The purpose of rules in OAR chapter 836, division 9 is to establish assessments, fees and charges for administering the regulatory program of the Division of Financial Regulation, Department of Consumer and Business Services.

History

Statutory/Other Authority: ORS 183.335, 293.445 & 731.804
Statutes/Other Implemented: ORS 183.335(7) & 731.804(1)-(2)
ID 9-2024, minor correction filed 07/22/2024, effective 07/22/2024
ID 7-1993, f. & cert. ef. 9-3-93
IC 4-1983, f. 6-27-83, ef. 7-1-83

Or. Admin. R. 836-009-0007 Fees

(1) The following fees apply to certificates of authority:

(a) The fee for application for a certificate of authority to transact insurance as an insurer is $2,500. The fee for application as a domestic insurer must be paid when application for a permit to organize as a domestic insurer is made. Otherwise, the fee must be paid when the application for the certificate is made;

(b) The fee for annual continuation of a certificate of authority issued under subsection (a) of this section is $1,500;

(c) The fee for obtaining a certificate of authority to transact insurance as a captive insurer for the year the director first issues a certificate is $5,000. The fee for a domestic insurer must be paid when application for a permit to organize as a domestic insurer is made. Otherwise, the fee must be paid when the application for the certificate is made;

(d) The fee for annual renewal of a certificate of authority for a captive insurer issued under subsection (d) of this section is $5,000;

(e) The fee for reinstatement of a certificate of authority is $100.

(2) The fees in this section apply to examinations for licenses for insurance producers, adjusters and insurance consultants. The fees may be charged by the examination vendor under contract with the Department of Consumer and Business Services and are as follows:

(a) Examination fees:

(A) Insurance producer, property and casualty insurance or life and health insurance — $55;

(B) Insurance producer, property insurance only, casualty insurance only, personal lines insurance only, life insurance only or health insurance only — $45;

(D) Adjuster, general lines insurance or life and health insurance — $45;

(E) Adjuster, health insurance or any single other line designated by rule — $45;

(F) Consultant, life and health insurance or general lines insurance — $55;

(G) Consultant, life insurance only, health insurance only or any other single line designated by rule — $45;

(b) Reexamination fees, to be charged when the applicant retakes an examination:

(A) Insurance producer, property and casualty insurance or life and health insurance — $55

(B) Insurance producer, property insurance only, casualty insurance only, personal lines insurance only, life insurance only or health insurance only — $45;

(D) Adjuster, general lines insurance or life and health insurance — $45;

(E) Adjuster, health insurance or any single other line designated by rule — $45;

(F) Consultant, life and health insurance or general lines insurance — $55;

(G) Consultant, life insurance only, health insurance only or any other single line designated by rule — $45;

(A) Surety is included in the casualty insurance line and marine and transportation insurance may be included in the property insurance line or the casualty insurance line; and

(B) The personal lines line is a subcategory of the casualty insurance line. Consequently, a person who holds a license that is endorsed to transact casualty insurance need not obtain a separate endorsement to transact personal lines insurance.

(3) The following fees apply to application for licenses for insurance producers, adjusters and insurance consultants:

(a) Resident insurance producer — $40;

(b) Nonresident insurance producer — $40;

(d) Insurance consultant — $40.

(4) The following fees apply to issuance of licenses for insurance producers, adjusters and insurance consultants:

(a) Resident insurance producer — $60;

(b) Nonresident insurance producer — $60;

(d) Insurance consultant — $60;

(e) In addition, the actual cost of any criminal records check under 836-072-0010. The amount charged will not exceed the actual cost of acquiring and furnishing criminal offender information as authorized by ORS 181.534(9)(g).

(5) The examination fee under section (2) of this rule must be paid to the examination vendor. The application fee under section (3) of this rule and the license issuance fee under section (4) of this rule must be paid at the same time. There is no refund of the application and examination fees. Refund of the license issuance fee is governed by section (14) of this rule.

(6) The fees established in this section apply to the renewal of licenses for insurance producers, adjusters and insurance consultants. A license expires biennially in the month of the individual’s birthday anniversary. The fees are as follows:

(a) Resident insurance producer — $60;

(b) Nonresident insurance producer — $60;

(d) Insurance consultant — $60.

(7) The applicable fee under sections (3) and (4) of this rule shall be paid for each category of insurance business appearing on a license.

(8) The following fees apply to certificates of registration for legal expense organizations:

(a) Application for a certificate of registration — $350;

(b) Renewal of certificate of registration — $350. The fee under this subsection shall be paid annually.

(9) Annual registration of a foreign risk retention group — $350. The fee under this section shall be paid at the time of initial registration and annually thereafter.

(10) Annual registration of a purchasing group — $100. The fee under this section shall be paid at the time of initial registration and annually thereafter.

(11) The license for a rating organization — $180. The fee under this section shall be paid at the time of initial licensing and triennially thereafter.

(12) The fee for filing a statement by an acquiring party under ORS 732.521 for the purpose of acquiring a controlling interest in an insurer (a "Form A" filing as prescribed in OAR 836-027-0100) is $50 per hour of Division staff time spent on reviewing the statement, with a minimum fee of $5,000.

(13) The Fire Marshal shall pay $50,000 each year for services provided by the Department in the collection of gross premium taxes on insurance covering the peril of fire under ORS 731.820.

(14) Fees paid as required under this rule are not refundable except as provided in this section. If the director determines that an amount paid exceeds the amount legally due and payable to the Department and the amount of the overpayment is less than $20, the Department shall refund the amount only upon receipt of a written request from the payer or the representative of the payer. A fee paid for a license under section (4) of this rule is refundable if the license applicant fails the examination or if the license is otherwise not issued to the applicant.

(15) The amendments to section (2)(a), (b) and (d) of this rule that were filed in ID 15-2002 with the Secretary of State on June 26, 2002 to become effective on July 1, 2002, are re-adopted with the operative date of July 1, 2002, and those same amendments to section (2)(a) and (b) of this rule are repealed effective July 1, 2003.

History

Statutory/Other Authority: ORS 181.534, 293.445, 731.244, 744.037 & 731.804
Statutes/Other Implemented: ORS 181.534, 731.804, 744.001, 744.002, 744.004, 744.007, 744.058, 744.062, 744.063, 744.064, 744.072, 744.528, 744.531, 744.535, 744.619 & 744.621
ID 15-2026, amend filed 08/21/2026, effective 09/01/2026
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12
ID 23-2010, f. 12-30-10, cert. ef. 1-1-11
ID 2-2010, f. 1-8-10, cert. ef. 2-1-10
ID 7-2008, f. 5-20-08, cert. ef. 6-2-08
ID 11-2007(Temp), f. & cert. ef. 12-11-07 thru 6-1-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 8-2003, f. 12-12-03, cert. ef. 12-19-03
ID 4-2003(Temp), f. 6-30-03, cert. ef. 7-1-03 thru 12-19-03
ID 15-2002, f. 6-26-02, cert. ef. 7-1-02
ID 13-2001, f. 11-16-01, cert. ef. 1-1-02
ID 14-2000, f. 12-27-00, cert. ef. 1-1-01
ID 6-1999, f. 12-13-99, cert. ef. 1-1-00
ID 16-1997, f. 11-25-97, cert. ef. 1-1-98
ID 7-1993, f. & cert. ef. 9-3-93
ID 8-1991, f. & cert. ef. 10-21-91
ID 4-1991, f. & cert. ef. 4-25-91
ID 21-1990, f. & cert. ef. 12-18-90
ID 14-1989, f. 12-12-89, cert. ef. 1-1-90
ID 6-1989(Temp), f. & cert. ef. 7-3-89

Or. Admin. R. 836-009-0008 Mailing List Fee

The fee for inclusion of each entry on the Division of Financial Regulation mailing list established under ORS 183.335 for giving notice of rulemaking is $35. The fee shall be paid annually. The fee established under this rule does not apply to any federal, state or local governmental entity.

History

Statutory/Other Authority: ORS 183 & 731
Statutes/Other Implemented: ORS 183.335(7) & 731.804(2)
ID 10-2024, minor correction filed 07/22/2024, effective 07/22/2024
ID 21-1990, f. & cert. ef. 12-18-90

Or. Admin. R. 836-009-0011 Assessments Against Insurers

(1) The percentage rates for assessments authorized under ORS 731.804 against authorized insurers shall be established as provided in this rule. An authorized insurer shall pay an assessment on each line of insurance transacted by the insurer in this state that is subject to assessment under 731.804. This rule provides for establishment of a percentage rate for each of the following lines of insurance:

(a) Life insurance;

(b) Health insurance;

(c) Property and casualty insurance. For purposes of this rule, this line includes title insurance but does not include workers' compensation insurance.

(2) For each line of insurance in section (1) of this rule, the percentage rate for the assessment against each authorized insurer transacting the line of insurance shall be the rate established by dividing the amount of revenue needed to cover expenses to be incurred by the Department in administering the Insurance Code for a fiscal year with respect to the line of insurance by the gross amount of premiums received by all insurers or their agents from and under their policies covering direct domestic risks for that line of insurance, after deductions specified in ORS 731.804. The following is the formula for calculating the assessment rate for each line:

Total Amount to be derived from

Assessment with respect to the line = Assessment

Total assessable premium from the line, rate (0.xxxx%) for all insurers

(3) For a specific insurer:

(a) The assessment billed with respect to a line of insurance shall be determined by finding 0.xxxx% of the insurer's assessable premium for the line for the appropriate calendar year;

(b) The finance charge of charges imposed by the insurer shall be assessed at the lowest assessment rate established pursuant to this rule.

(4) The Director shall determine the amount of revenue needed by considering the legislatively approved expenditures for administration of the Insurance Code and the timing of cash revenues and expenditures, and subtracting there from other available revenue sources.

(5) The amount of premiums for all lines of insurance to be assessed against an insurer under sections (1) to (3) of this rule shall not exceed nine hundredths of one percent of the gross amount of premiums received by an insurer or its agents from and under its policies covering direct domestic risks, after deductions specified under ORS 731.804.

(6) Assessments under this rule shall be imposed and collected annually unless the Director determines that additional amounts need to be assessed and collected in order to support the legislatively authorized budget of the Department with respect to its functions under the Insurance Code or in order to support changes in the budget authorized by the Emergency Board. The additional amounts shall be assessed as provided in sections (1) to (3) of this rule, except that the numerator shall be the additional amounts so needed.

(7) The Director shall assess an insurer only if the insurer is authorized to transact insurance at the time of billing.

(8) Billings of annual assessments shall be issued not later than October 1 of each year.

(9) An insurer must pay each assessment imposed under this rule not later than the 30th day after the date of the billing of the assessment by the Department. An insurer shall pay interest at nine percent per annum on any assessment that is not paid when due.

(10) When the Director determines that an assessment or a part thereof paid by an insurer is in excess of the amount legally due and payable to the Department, if the amount of the refund owed by the Department is less than $50, the Department shall pay the refund only upon receipt of a written request from the insurer that paid the assessment. The written request must be received by the Department not later than three years from the date the assessment was paid to the Department.

(11) The Director shall not bill an assessment or an adjustment to an assessment of $25 or less.

History

Statutory/Other Authority: ORS 293, 731.244 & 731.804
Statutes/Other Implemented: ORS 731.804(1)
ID 6-2007, f. & cert. ef. 9-14-07
ID 6-2006, f. & cert. ef. 4-14-06
ID 8-1991, f. & cert. ef. 10-21-91
ID 8-1989, f. & cert. ef. 8-11-89

Or. Admin. R. 836-009-0015 Refunds

Except as provided by rule for fees and assessments under ORS 731.804, when the Director determines that the Department has received moneys in excess of the amount legally due and payable to the Department under the Insurance Code or that the Department in carrying out its functions under the Insurance Code has received moneys to which it has no legal interest, if the amount of the refund owed by the Department is less than $10, the Department shall pay the refund only upon receipt of a written request from the person who paid the money or the legal representative thereof. The written request must be received by the Department not later than three years from the date the moneys were paid to the Department.

History

Statutory/Other Authority: ORS 293 & 731
Statutes/Other Implemented: ORS 293.445(4)
ID 8-1989, f. & cert. ef. 8-11-89

Division 10 GENERAL PROVISIONS

Or. Admin. R. 836-010-0000 Statutory Authority and Implementation

(1) OAR 836-010-0000, 836-010-0011 and 836-010-0021 are adopted under the authority of ORS 731.244 and 731.296, to aid in giving effect to provisions of ORS Chapters 737, 742 and 743 relating to the filing of rates and policy forms with the Director. The requirements of OAR 836-010-0000, 836-010-0011 and 836-010-0021 are in addition to any other requirements established by statute or by rule or bulletin of the Department.

(2) OAR 836-010-0000, 836-010-0011, and 836-010-0021 apply to all filings submitted or resubmitted to the Director on or after May 1, 2002.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.296, 737.205, 737.207, 742.001, 743.015 & 743.018
ID 20-2011, f. 12-16-11, cert. ef. 1-1-12
ID 8-2010, f. 3-31-10, cert. ef. 4-1-10
ID 20-2002, f. 10-11-02, cert. ef. 10-12-02
ID 11-2002(Temp), f. & cert. ef. 4-18-02 thru 10-11-02
ID 11-1998, f. & cert. ef. 8-10-98
Reverted to ID 9-1994, f. 7-1-94, cert. ef. 7-15-94
ID 20-1997(Temp), f. 12-29-97, cert. ef. 12-30-97 thru 6-11-98
ID 9-1994, f. 7-1-94, cert. ef. 7-15-94

Or. Admin. R. 836-010-0011 Filing, Review of Rates and Forms

(1) Except as provided in this section, this rule applies to filings of all insurers, including health care service contractors as defined in ORS 750.005, multiple employer welfare arrangements as governed by 750.301 to 750.431 and fraternal benefit societies as governed by ORS Chapter 748. This rule does not apply to:

(a) Purchasing group insurance filings.

(b) Negotiated forms as described in ORS 742.003, but only if each of the negotiated forms is issued only to one policyholder, the insurer has determined that the forms comply with benefits and coverages mandated by statute and the forms have a company-assigned form number.

(2) An insurer must follow the applicable standards set forth on the website of the Division of Financial Regulation (DFR) at dfr.oregon.gov, when making rate and form filings, except that if the insurer files electronically on the System for Electronic Rates and Forms Filing, (SERFF), the insurer must comply with the Oregon standards set forth in SERFF.

(3) An insurer must submit a completed certificate of compliance as provided on the Division of Financial Regulation (DFR) website with each filing of a new or revised rate and each filing of a new or amended form. The insurer must use the certificate of compliance furnished on the DFR website at dfr.oregon.gov/rates-forms/Documents/3894.pdf. The certificate of compliance must certify compliance with the applicable filing requirements and product standards set forth on the DFR website at dfr.oregon.gov or on the SERFF system for Oregon, if filed electronically. The certificate must be accompanied by the applicable product standards form. A certificate of compliance must be completed and signed by:

(a) An officer of the insurer who is authorized by the insurer to do so; and

(b) Signed by the filer who is specifically designated by the insurer to prepare and make the filing.

(4) An insurer filing changes to a form or forms that were previously approved must highlight or otherwise visually call attention to the changes in new or revised forms and must submit a letter explaining the changes.

(5) A filing received for prior approval by the department that does not contain a certificate of compliance and does not comply with the standards referenced in this rule is incomplete and will be returned to the insurer as disapproved.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 731.296
Statutes/Other Implemented: ORS 731.296, 737.205, 737.207, 742.001, 732.820, 743.015, 743.018 & 743.825
ID 8-2017, f. & cert. ef. 9-11-17
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 20-2011, f. 12-16-11, cert. ef. 1-1-12
ID 8-2010, f. 3-31-10, cert. ef. 4-1-10
ID 20-2002, f. 10-11-02, cert. ef. 10-12-02
ID 11-2002(Temp), f. & cert. ef. 4-18-02 thru 10-11-02
ID 3-2001, f. 3-19-01, cert. ef. 5-1-01
ID 6-2000, f. & cert. ef. 7-19-00
ID 11-1998, f. & cert. ef. 8-10-98
Reverted to ID 11-1996, f. 6-28-96, cert. ef. 7-1-96
ID 20-1997(Temp), f. 12-29-97, cert. ef. 12-30-97 thru 6-11-98
ID 11-1996, f. 6-28-96, cert. ef. 7-1-96
ID 9-1994, f. 7-1-94, cert. ef. 7-15-94

Or. Admin. R. 836-010-0013 Additional Filing Requirements for Transitional Health Benefit Plans

(1) Under section 5, chapter 80, Oregon Laws 2014, a transitional health benefit plan must comply with the Insurance Code as of December 31, 2013.

(2) In addition to the requirements of OAR 836-010-0000, 836-010-0011, and 836-010-0021 when submitting a filing for a rate change to a transitional health benefit plan, the insurer shall comply with the guidance for the applicable plan year as provided in Exhibits 1, 2 and 3 of this rule.

(3) The additional filing requirements set forth in this section apply only to 2015, 2016 and 2017 transitional plans.

[ED. NOTE: Exhibits referenced are available from the agency]

History

Statutory/Other Authority: ORS 731.244 & 743.018
Statutes/Other Implemented: 2014 OL Ch. 80 & Sec. 5 (Enrolled SB 1582)
Reverted to ID 4-2016, f. & cert. ef. 4-8-16
ID 6-2016(Temp), f. & cert. ef. 4-28-16 thru 9-30-16
ID 4-2016, f. & cert. ef. 4-8-16
ID 17-2014, f. & cert. ef. 10-6-14
ID 8-2014(Temp), f. & cert. ef. 4-24-14 thru 10-20-14

Or. Admin. R. 836-010-0014 Notice and Procedural Requirements for Expanded Transitional Health Benefit Plans

Text in ORMS

History

Suspended by ID 12-2015, f. & cert. ef. 10-16-15
ID 11-2015(Temp), f. & cert. ef. 10-12-15 thru 3-18-16
ID 10-2015(Temp), f. & cert. ef. 9-23-15 thru 3-18-16
Reverted to Suspended by ID 12-2015, f. & cert. ef. 10-16-15
Sunset on 09-28-2017

Or. Admin. R. 836-010-0021 Required Actuarial Data

(1) An insurer shall file with the Director, on or before March 15 of each year, geographic average rates for small employer, portability and individual health benefit plans for a rating period. The supporting actuarial data must be submitted with the certificate of compliance. The geographic average rates must demonstrate compliance with the applicable provisions of:

(a) ORS 743.737, governing small employer premium rates;

(b) ORS 743.760, governing portability premiums rates; and

(2) Except as provided in this section, supporting actuarial data shall accompany every filing of property or casualty insurance rates submitted on a file and use basis under ORS 737.205 and prior approved rates under ORS 737.207. The data shall be in sufficient detail to justify the rate level change and shall demonstrate compliance with ORS 737.310 governing the making of rates. This section does not apply to:

(a) Title insurance filings;

(b) Workers’ compensation insurance filings;

(d) Home protection insurance filings;

(e) Filings for mortgage insurance, which is the insurance against financial loss by reason of nonpayment of sums agreed to be paid, as defined in ORS 731.178, rather than a life insurance product offering payment of a mortgage in the event of death or disability; and

(f) Purchasing group insurance filings.

(3) A rate filing for commercial liability insurance received by the Department that is subject to ORS 737.207 and does not comply with the requirement of section (2) of this rule is in noncompliance with the requirements and standards of ORS Chapter 737.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.296, 737.205, 737.207, 743.015 & 743.018
ID 20-2002, f. 10-11-02, cert. ef. 10-12-02
ID 11-2002(Temp), f. & cert. ef. 4-18-02 thru 10-11-02
ID 13-2000(Temp), f. & cert. ef. 12-21-00 thru 6-9-01
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 11-1998, f. & cert. ef. 8-10-98
ID 20-1997(Temp), f. 12-29-97, cert. ef. 12-30-97 thru 6-11-98
ID 9-1994, f. 7-1-94, cert. ef. 7-15-94

Or. Admin. R. 836-010-0026 Prohibition on the Use of Discretionary Clauses

(1)(a) As used in this rule, “discretionary clause” means a policy provision that purports to bind the claimant, or to grant deference to the insurer, in proceedings subsequent to the insurer’s decision, denial or interpretation of terms, coverage or eligibility for benefits. “Discretionary clause” includes a policy provision that provides any of the following:

(A) An insured or other claimant may not appeal a denial of a claim;

(B) The insurer's decision to deny coverage is binding upon a policyholder or other claimant or is otherwise entitled to deference upon appeal or review;

(C) On appeal or review the insurer's decision-making power as to coverage is binding or otherwise entitled to deference;

(D) The insurer's interpretation of the terms of a policy is binding upon a policyholder or other claimant or is otherwise entitled to deference;

(E) On appeal the insurer's interpretation of the terms of a policy is binding or is otherwise entitled to deference;

(F) A legal standard of review on appeal that gives deference to the original claim decision, or gives rise to such legal standard of review; or

(G) The insurer has sole discretion to determine whether a claim is compensable or its interpretation of the provisions of the policy is entitled to deference in a subsequent proceeding.

(b) Nothing in this section prohibits a carrier from including a provision in a contract that informs an insured that as part of its routine operations the carrier applies the terms of its contracts for making decisions, including making determination regarding eligibility, receipt of benefits and claims or explaining its policies, procedures and processes.

(2) A policy, contract or agreement offered or issued in this state by an insurer to provide, deliver, arrange for, pay for or reimburse claim costs may not contain a discretionary clause or other language purporting to reserve discretion to the insurer to interpret the terms of the contract, or to provide standards of interpretation or review that are inconsistent with the laws of this state.

(3) This rule does not prevent a policy provision that addresses alternative dispute resolution as allowed by law.

(4) This rule is self-executing. The rule applies to policies, contracts and agreements issued or renewed on or after the date the rule is adopted. If a policy, contract or agreement is renewed and contains a provision rendered void and unenforceable by this rule, the parties to the policy, contract or agreement and the courts shall treat that provision as void and unenforceable.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.008, 742.003 & 742.005
ID 2-2015, f. & cert. ef. 3-12-15

Or. Admin. R. 836-010-0051 Requirements for Electronic Reporting or Response

(1) As used in this rule:

(a) “Administrator” means the individual responsible for a person’s electronic account activation and maintenance.

(b) “Contact” means the individual responsible for electronic account administration, an electronic report or electronic response.

(A) Name;

(B) Title;

(D) Electronic mail address; and

(E) Mailing address.

(d) “Maintenance” means ensuring accurate and current company and contact information, providing and updating user access and performing other activities necessary for user submission of reports or responses and timely communication with the Division of Financial Regulation.

(e) “User” means an individual with rights to access the person’s electronic account.

(2) This rule establishes requirements for submitting information or responses through the reporting system of the Division of Financial Regulation according to the instructions set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov.

(3) A person required to submit information to the Division of Financial Regulation or to respond electronically to a request from the Division of Financial Regulation must activate and maintain an account through the reporting system of the Division of Financial Regulation.

(4) A person subject to section (3) of this rule must:

(a) Designate at least one administrator;

(b) Designate at least one contact for account administration and for each electronic report or response; and

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.296
ID 5-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-010-0130 Statutory Authority; Purpose; Applicability

(1) OAR 836-010-0130 to 836-010-0145 are adopted pursuant to the general rulemaking authority of the Commissioner in ORS 731.244 to aid in the effectuation and enforcement of 731.438.

(2) The purpose of OAR 836-010-0130 to 836-010-0145 is to prescribe title plant standards for title insurers.

(3) OAR 836-010-0130 to 836-010-0145 applies to all authorized title insurers.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 731.438
IC 1-1978, f. 3-27-78, ef. 4-1-78

Or. Admin. R. 836-010-0135 Definitions

As used in OAR 836-010-0130 to 836-010-0145, unless the context requires otherwise:

(1) "Adequate Maps" means:

(a) A map record of all recorded plats in the county covered by the title plant;

(b) Maps based on a complete set of government surveys showing all surveyed sections, government lots and donation land claims within the county covered by the title plant;

(c) Maps of such a scale that they are readily workable. In an area where the majority of the parcels are of less than one sixteenth of a section, maps shall be of a scale no smaller than 400 feet to the inch. A full section of land shall not be represented in a scale smaller than 2,000 feet to the inch; and

(d) Maps showing all public streets, roads, highways, and railroad rights of way of record which can be accurately located by a reasonable search of the records.

(2) "General Index" means a complete compilation of matters affecting real property, which: do not describe, or cannot solely be assigned to, a specific real property account, and which may be found by a search of the proper records within the county covered by the title plant.

(a) Subject to subsection (b), a general index must include:

(A) Unsatisfied Judgments and tax liens having lien effect;

(B) Conservatorships, guardianships, and estates of deceased persons arising during the preceding ten-year period;

(D) Powers of attorney recorded during the preceding ten-year period.

(b) The general index is not required to include matters that may be accessed electronically through the Oregon Judicial Case Information Network (OJCIN) or other similar database run by the State of Oregon Judicial Department, provided that the title plant maintains a subscription which allows it to readily access those matters.

(3) "Tract or Geographic Index" means a record of documents and proceedings which affect real property in the county covered by the title plant. Such an index may consist of summaries or replicas, and must meet the following requirements:

(a) Tract or geographic indexes relating to recorded plats are maintained separately, and may be referred to by name or by number, with accounts segregated to the block or in the absence of blocks to the smallest unit designated on the applicable recorded plat;

(b) Tract or geographic indexes which relate to ownership in all unplatted areas of the county, except land in national forest reserves, national parks and unpatented lands, are maintained in accounts segregated into section subdivisions and government lots. In the event ownership of parcels does not conform to section subdivisions or government lots, such parcels are assigned arbitrary reference numbers or symbols which correspond to like numbers or symbols shown on the arbitrary maps of the area, except if there are 30 or fewer ownership accounts in a quarter section that do not conform to section subdivisions or government lots or are not in a recorded plat then those ownership accounts can be filed under the designation of that particular quarter section without being assigned arbitrary reference numbers or symbols; and

(c) Tract or geographic indexes may be maintained on ledger sheets, separate cards, sheets of film, or any other form or system, whether manual, mechanical, electronic or otherwise, or any combination of such forms or systems. The index ledger sheets, cards, sheets, or film may be bound in books or contained in envelopes or storage files or may be maintained or stored electronically. The segregated account contains a reference to deeds, contracts, suits, liens, unsatisfied mortgages, and other matters of record imparting constructive notice that specifically describe the real property that is subject to the account.

(4) "Currently posted" means postings or entries are made within 15 working days of recording or entry.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 731.438
ID 12-2016, f. 12-29-16, cert. ef. 1-9-17
IC 1-1978, f. 3-27-78, ef. 4-1-78

Or. Admin. R. 836-010-0140 Title Plant Standards

(1) The title plant shall maintain "adequate maps" as defined in OAR 836-010-0135, that will enable a person working the title plant to locate a tract of land which is the subject of a title search with reference to the government survey system.

(2) The title plant shall maintain a "general index," as defined in OAR 836-010-0135, in either alphabetical or phonetical order, so that any record pertaining to any person by name may be readily located.

(3) The title plant shall maintain a "currently posted" "tract or geographic index" and “general index” as defined in OAR 836-010-0135.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 731.438
ID 12-2016, f. 12-29-16, cert. ef. 1-9-17
IC 1-1978, f. 3-27-78, ef. 4-1-78

Or. Admin. R. 836-010-0150 Marriage of Same-Gender Couple Validly Performed

(1) This rule is adopted under the general rulemaking authority of the Director of the Department of Consumer and Business Services in ORS 731.244 to comply with the United States Supreme Court decision in United States v. Windsor, 570 U.S. 12 (2013) and Geiger v. Kitzhaber, No. 6: 13-cv-01834-MC (D. Or. May 19, 2014).

(2) Any person or entity subject to regulation by the Department of Consumer and Business Services under the Insurance Code, must consider the marriage of a same-sex couple validly performed the same as the person or entity considers any other marriage validly performed.

(3) This rule applies to any action or activity related to the transaction of insurance in Oregon.

(4) Any privilege, immunity, right or benefit granted under the Insurance Code to an individual because the individual is or was married to an individual of the opposite sex, is granted on equivalent terms, substantive and procedural, to an individual who is or was a partner in a marriage of a same-sex couple validly performed.

History

Statutory/Other Authority: SCOTUS Decision in United States v. Windsor, 570 U.S. 12 (2013); Letter of Advice from Oregon Attorney General dated October 16, 2013; Geiger v. Kitzhaber, No. 6: 13-cv-01834-MC (D. Or. May 19, 2014). & ORS 731.244
Statutes/Other Implemented: ORS 731.008, 731.016 & 731.236
ID 11-2014, f. & cert. ef. 7-17-14

Or. Admin. R. 836-010-0155 Gender Specific Contract Language

(1) As used in this rule, “provider” includes but is not limited to:

(a) A physician as defined in ORS 677.010.

(b) A physician group, independent practice association, physician-controlled organization, hospital organization or other provider organization that contracts with a provider for the purpose of facilitating the provider’s participation in a provider network contract.

(c) A person licensed or certified by the laws of this state to administer medical services or mental health services in the ordinary course of business or practice of a profession. A person grandfathered under the provisions of Section 3, chapter 674, Oregon Laws 2015 (Enrolled Senate Bill 696) shall be considered licensed or certified under this section.

(2) An individual’s attending provider determines whether a sex-specific recommended preventive service that is required to be covered without cost sharing under section 2713 of the Public Health Service Act and its implementing regulations is medically appropriate for a particular individual. When an attending provider determines that a recommended service is medically appropriate for an individual and the individual satisfies the criteria for the service or treatment, the insurer must provide coverage for the recommended service regardless of sex assigned at birth, gender identity, or gender of the individual otherwise recorded by the insurer.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743A.066, 743A.080, 743A.100, 743A.104, 743A.105, 743A.108 & 743A.110 and 743A.120
ID 5-2016, f. & cert. ef. 4-26-16

Division 11 ANNUAL STATEMENTS AND REPORTS BY INSURERS

Or. Admin. R. 836-011-0000 Annual Statement Blank and Instructions

(1) For the purpose of complying with ORS 731.574, every authorized insurer, including every health care service contractor and multiple employer welfare arrangement, shall file its financial statement required by ORS 731.574 on the annual statement blank prescribed by the director and approved for the reporting year by the National Association of Insurance Commissioners, for the type or types of insurance transacted by the insurer, and on the quarterly statement blank prescribed by the director and approved for the reporting year by the National Association of Insurance Commissioners, for the type or types of insurance transacted by the insurer.

(2) Every authorized insurer, including every health care service contractor and multiple employer welfare arrangement, shall complete its annual statement blank and quarterly statement blank under section (1) of this rule for the reporting years according to the applicable instructions prescribed by the director and published for that year by the National Association of Insurance Commissioners, for completing the blank, as required by ORS 731.574.

(3) Every authorized insurer, including every health care service contractor, shall file each annual statement supplement for the reporting year, as required by the applicable instructions prescribed by the director and published for that year by the National Association of Insurance Commissioners, and shall complete the supplement according to those instructions.

(4) The applicable instructions prescribed by the director and published by the National Association of Insurance Commissioners, referred to in this rule, are available for inspection at the Department of Consumer and Business Services. Any person interested in inspecting those instructions should contact the department at web.inscomp@dcbs.oregon.gov.

(5) Additional instructions for the filing of financial statements and reports by type of insurance are posted under annual statement instructions on the department’s Division of Financial Regulation website at dfr.oregon.gov. Every authorized insurer, including every health care service contractor and multiple employer welfare arrangement, shall comply with such instructions as applicable.

(6) The director’s decision to prescribe the use of forms and instructions for the filing of financial statements for applicable reporting years shall be posted under annual statement instructions on the department’s Division of Financial Regulation website at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, ORS 731.574 & ORS 733.210
Statutes/Other Implemented: ORS 731.574 & ORS 733.210
ID 8-2021, amend filed 12/13/2021, effective 01/01/2022
ID 8-2020, amend filed 12/17/2020, effective 01/01/2021
ID 11-2019, amend filed 12/19/2019, effective 01/01/2020
ID 36-2018, amend filed 12/19/2018, effective 01/01/2019
ID 14-2017, amend filed 12/20/2017, effective 12/20/2017
ID 6-2017, f. & cert. ef. 4-27-17
ID 5-2017, f. & cert. ef. 4-20-17
ID 2-2017(Temp), f. & cert. ef. 1-31-17 thru 7-1-17
ID 2-2016, f. & cert. ef. 2-3-16
ID 1-2015, f. & cert. ef. 3-10-15
ID 3-2014, f. & cert. ef. 2-14-14
ID 2-2013, f. & cert. ef. 2-6-13
ID 2-2012, f. & cert. ef. 2-7-12
ID 22-2010, f. 12-30-10, cert. ef. 1-1-11
ID 11-2009, f. & cert. ef. 12-9-09
ID 1-2009, f. & cert. ef. 1-29-09
ID 9-2007, f. & cert. ef. 11-8-07
ID 1-2006, f. & cert. ef. 1-23-06
ID 6-2003, f. & cert. ef. 12-3-03
ID 4-2002, f. & cert. ef. 1-30-02
ID 1-2001, f. & cert. ef. 2-7-01
ID 5-1999, f. & cert. ef. 11-18-99
ID 16-1998, f. & cert. ef. 11-10-98
ID 11-1997, f. & cert. ef. 10-9-97
ID 16 -1996, f. & cert. ef. 12-16-96
ID 4-1996, f. 2-28-96, cert. ef. 3-1-96
ID 7-1995, f. & cert. ef. 11-15-95, Renumbered from 836-013-0000
ID 10-1994, f. & cert. ef. 12-14-94
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-011-0015 Property and Casualty Actuarial Opinion of Reserves and Supporting Documentation

(1) Each authorized insurer transacting property or casualty insurance in this state, unless otherwise exempted by the domiciliary commissioner, shall submit annually to the Director of the Department of Consumer and Business Services the opinion of an appointed actuary as provided in this section. The opinion shall be entitled “Statement of Actuarial Opinion” and shall be filed in accordance with the annual statement instructions adopted pursuant to OAR 836-011-0000.

(2)(a) Every property and casualty insurer domiciled in this state that is required to submit a Statement of Actuarial Opinion under section (1) of this rule shall annually submit an actuarial opinion summary, written by the insurer’s appointed actuary. The actuarial opinion summary shall be filed in accordance with the annual statement instructions adopted pursuant to OAR 836-011-0000 and shall be considered as a document supporting the actuarial opinion required under section (1) of this rule.

(b) An insurer authorized to transact insurance in this state but not domiciled in this state shall provide the actuarial opinion summary upon request.

(3)(a) Every property and casualty insurer domiciled in this state that is required to submit a Statement of Actuarial Opinion under section (1) of this rule shall prepare an actuarial report and underlying work papers. The actuarial report and underlying work papers shall be prepared to support each actuarial opinion and shall be in accordance with the annual statement instructions adopted pursuant to OAR 836-011-0000.

(b) If an insurer fails to provide a supporting actuarial report or work papers at the request of the director or if the director determines that the supporting actuarial report or work papers provided by the insurer is otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and prepare any supporting actuarial report or work papers required by the director. Before the director engages a qualified actuary under this subsection, the director shall first identify the supporting actuarial report or work papers the insurer has failed to provide or the reason the report or work papers are unacceptable and allow the insurer a reasonable time to remedy the deficiency.

(4) Except in cases of fraud or willful misconduct, an appointed actuary shall not be liable for damages to any person other than the insurer or the director for any act, error, omission, decision or conduct with respect to the actuary’s opinion.

(5) The Statement of Actuarial Opinion shall be provided with the annual statement in accordance with the appropriate property and casualty annual statement instructions adopted pursuant to OAR 836-011-0000 and shall be treated as a public document.

(6) Documents, material or other information in the possession or control of the department that are considered an actuarial report, work papers or an actuarial opinion summary provided in support of a Statement of Actuarial Opinion, and any other material provided by the insurer to the director in connection with an actuarial report, work papers or actuarial opinion summary, is confidential as provided in ORS 705.137.

History

Statutory/Other Authority: ORS 731.244, 731.574 & 733.210
Statutes/Other Implemented: ORS 731.574 & 733.210
ID 17-2010, f. & cert. ef. 9-14-10

Or. Admin. R. 836-011-0020 Definitions

As used in OAR 836-011-0020 to 836-011-0024:

(1) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in ORS 732.548.

(2) “Insurer” has the meaning given that term in ORS 731.106 but does not include an agency, authority or instrumentality of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or another state or political subdivision of another state.

(3) “Senior Management” means any corporate officer responsible for reporting information to the board of directors at regular intervals or providing this information to shareholders or regulators and shall include, for example and without limitation, the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Operations Officer (“COO”), Chief Procurement Officer (“CPO”), Chief Legal Officer (“CLO”), Chief Information Officer (“CIO”), Chief Technology Officer (“CTO”), Chief Revenue Officer (“CRO”), Chief Visionary Officer (“CVO”), or any other “C” level executive.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: 2017 Oregon Laws, Chapter 479, Section 5 (Enrolled Senate Bill 97)
ID 10-2017, adopt filed 11/22/2017, effective 01/01/2018

Or. Admin. R. 836-011-0022 Filing Procedures

(1) An insurer, or the insurance group of which the insurer is a member, required to file a CGAD by the Corporate Governance Annual Disclosure Model Act shall no later than June 1 of each calendar year, submit to the director a CGAD that contains the information described in 836-011-0024 of these regulations.

(2) The CGAD must include a signature of the insurer’s or insurance group’s chief executive officer or corporate secretary attesting to the best of that individual’s belief and knowledge that the insurer or insurance group has implemented the corporate governance practices and that a copy of the CGAD has been provided to the insurer’s or insurance group’s Board of Directors (hereafter “Board”) or the appropriate committee thereof.

(3) The insurer or insurance group shall have discretion regarding the appropriate format for providing the information required by these regulations and is permitted to customize the CGAD to provide the most relevant information necessary to permit the director to gain an understanding of the corporate governance structure, policies and practices utilized by the insurer or insurance group.

(4) For purposes of completing the CGAD, the insurer or insurance group may choose to provide information on governance activities that occur at the ultimate controlling parent level, an intermediate holding company level and/or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the CGAD disclosures at the level at which the insurer’s or insurance group’s risk appetite is determined, or at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting.

(5) Notwithstanding Subsection (1) of this Section, and as outlined in Section 3 of the Corporate Governance Annual Disclosure Model Act, if the CGAD is completed at the insurance group level, then it must be filed with the lead state of the group as determined by the procedures the director adopts by rule after considering the procedures outlined in a Financial Analysis Handbook that the NAIC has adopted. In these instances, a copy of the CGAD must also be provided to the chief regulatory official of any state in which the insurance group has a domestic insurer, upon request.

(6) An insurer or insurance group may comply with this section by referencing other existing documents (e.g. ORSA Summary Report, Holding Company Form B or F Filings, Securities and Exchange Commission (SEC) Proxy Statements, foreign regulatory reporting requirements, etc.) if the documents provide information that is comparable to the information described in Section 5. The insurer or insurance group shall clearly reference the location of the relevant information within the CGAD and attach the referenced documents if it is not already filed or available to the regulator.

(7) Each year following the initial filing of the CGAD, the insurer or insurance group shall file an amended version of the previously filed CGAD indicating where changes have been made. If no changes were made in the information or activities reported by the insurer or insurance group, the filing should so state.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: 2017 Oregon Laws, Chapter 479, Section 5 (Enrolled Senate Bill 97)
ID 10-2017, adopt filed 11/22/2017, effective 01/01/2018

Or. Admin. R. 836-011-0024 Contents of Corporate Governance Annual Disclosure

(1) The insurer or insurance group shall be as descriptive as possible in completing the CGAD, with inclusion of attachments or example documents that are used in the governance process, since these may provide a means to demonstrate the strengths of their governance framework and practices.

(2) The CGAD shall describe the insurer’s or insurance group’s corporate governance framework and structure including consideration of the following.

(a) The Board and various committees thereof ultimately responsible for overseeing the insurer or insurance group and the level(s) at which that oversight occurs (e.g. ultimate control level, intermediate holding company, legal entity, etc.). The insurer or insurance group shall describe and discuss the rationale for the current Board size and structure; and

(b) The duties of the Board and each of its significant committees and how they are governed (e.g. bylaws, charters, informal mandates, etc.), as well as how the Board’s leadership is structured, including a discussion of the roles of Chief Executive Officer (CEO) and Chairman of the Board within the organization.

(3) The insurer or insurance group shall describe the policies and practices of the most senior governing entity and significant committees thereof, including a discussion of the following factors.

(a) How the qualifications, expertise and experience of each Board member meet the needs of the insurer or insurance group.

(b) How an appropriate amount of independence is maintained on the Board and its significant committees.

(c) The number of meetings held by the Board and its significant committees over the past year as well as information on director attendance.

(d) How the insurer or insurance group identifies, nominates, and elects members to the Board and its committees. The discussion should include, for example:

(A) Whether a nomination committee is in place to identify and select individuals for consideration.

(B) Whether term limits are placed on directors.

(D) Whether a Board diversity policy is in place and if so, how it functions.

(e) The processes in place for the Board to evaluate its performance and the performance of its committees, as well as any recent measures taken to improve performance (including any Board or committee training programs that have been put in place).

(4) The insurer or insurance group shall describe the policies and practices for directing Senior Management, including a description of the following factors:

(a) Any processes or practices (i.e. suitability standards) to determine whether officers and key persons in control functions have the appropriate background, experience and integrity to fulfill their prospective roles, including:

(A) Identification of the specific positions for which suitability standards have been developed and a description of the standards employed.

(B) Any changes in an officer’s or key person’s suitability as outlined by the insurer’s or insurance group’s standards and procedures to monitor and evaluate such changes.

(b) The insurer’s or insurance group’s code of business conduct and ethics, the discussion of which considers, for example:

(A) Compliance with laws, rules and regulations; and

(B) Proactive reporting of any illegal or unethical behavior.

(c) The insurer’s or insurance group’s processes for performance evaluation, compensation and corrective action to ensure effective senior management throughout the organization, including a description of the general objectives of significant compensation programs and what the programs are designed to reward. The description shall include sufficient detail to allow the director to understand how the organization ensures that compensation programs do not encourage and/or reward excessive risk taking. Elements to be discussed may include, for example:

(A) The Board’s role in overseeing management compensation programs and practices.

(B) The various elements of compensation awarded in the insurer’s or insurance group’s compensation programs and how the insurer or insurance group determines and calculates the amount of each element of compensation paid;

(D) Whether compensation programs include risk adjustments and how those adjustments are incorporated into the programs for employees at different levels.

(E) Any claw back provisions built into the programs to recover awards or payments if the performance measures upon which they are based are restated or otherwise adjusted.

(F) Any other factors relevant in understanding how the insurer or insurance group monitors its compensation policies to determine whether its risk management objectives are met by incentivizing its employees.

(d) The insurer’s or insurance group’s plans for CEO and Senior Management succession.

(5) The insurer or insurance group shall describe the processes by which the Board, its committees and Senior Management ensure an appropriate amount of oversight to the critical risk areas impacting the insurer’s business activities, including a discussion of:

(a) How oversight and management responsibilities are delegated between the Board, its committees and Senior Management.

(b) How the Board is kept informed of the insurer’s strategic plans, the associated risks and steps that Senior Management is taking to monitor and manage those risks.

(c) How reporting responsibilities are organized for each critical risk area. The description should allow the director to understand the frequency at which information on each critical risk area is reported to and reviewed by Senior Management and the Board. This description may include, for example, the following critical risk areas of the insurer:

(A) Risk management processes (An ORSA Summary Report filer may refer to its ORSA Summary Report pursuant to ORS 732.662).

(B) Actuarial function

(D) Reinsurance decision-making processes

(E) Business strategy/finance decision-making processes

(F) Compliance function

(G) Financial reporting/internal auditing; and

(H) Market conduct decision-making processes.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: 2017 Oregon Laws, Chapter 479, Section 5 (Enrolled Senate Bill 97)
ID 10-2017, adopt filed 11/22/2017, effective 01/01/2018

Or. Admin. R. 836-011-0030 Own Risk and Solvency Assessment

(1) For the purpose of complying with ORS 732.650 to 732.672, every insurer, or insurance group of which the insurer is a member, shall use a process that is comparable to the process described in the December 2017 edition of the NAIC Own Risk and Solvency Assessment (ORSA) Guidance Manual.

(2) Every insurer required to submit an “Own Risk” and “Solvency Assessment" summary report or combination of reports without waiting for a request from the director of the Department of Consumer and Business Services shall submit this information to the director each year in accordance with the schedule established by the director and the insurer.

(3) The NAIC Own Risk and Solvency Assessment (ORSA) Guidance Manual referred to in this rule is available for inspection at the Department of Consumer and Business Services.

History

Statutory/Other Authority: ORS 731.244, ORS 732.650 & 732.662
Statutes/Other Implemented: ORS 732.650 & 732.662
ID 11-2019, amend filed 12/19/2019, effective 01/01/2020
ID 11-2016, f. & cert. ef. 12-21-16

Or. Admin. R. 836-011-0050 Requirements for Segregation of Premium Received for Coverage Not Eligible for Federal Subsidies

(1) As used in this rule, "health insurer" means any insurer, fraternal benefit society, health maintenance organization or health care service contractor authorized to transact health insurance in Oregon and offering health benefit plans through the Oregon Health Insurance Exchange.

(2) All domestic, foreign or alien health insurers must:

(a) Submit an annual assurance statement attesting that the insurer complies with the requirement of Section 1303 of the Affordable Care Act; and

(b) If the health benefit plan provides coverage of services that are not eligible for federal funds furnished in the form of premium tax credits or cost-sharing reductions, the health insurer also must comply with sections (3) to (11) of this rule.

(3) In addition to submitting an annual assurance statement, a health insurer that offers a health benefit plan that provides coverage of services that are not eligible for federal funds furnished in the form of premium tax credits or cost-sharing reductions must obtain the prior written approval of the director of the Department of Consumer and Business Services of the health insurer’s accounting practice methodology for segregating premium allocated to a termination of pregnancy benefit. This requirement applies only to qualified insurers certified through the Oregon Health Insurance Exchange Corporation, for qualified health plans issued on the Oregon Health Insurance Exchange.

(4) The accounting methodology required under section (3) of this rule must:

(a) Describe the accounting practices the insurer will use to ensure segregation of federal funds for premium and claims for nonexcepted termination of pregnancy benefits from other premium received from an enrollee who receives a premium tax benefit or cost-sharing subsidy pursuant to enrollment through the Oregon Health Insurance Exchange;

(b) Allocate the two types of premium to separate accounts (allocation accounts);

(c) Ensure that claims for the nonexcepted termination of pregnancy benefit are not paid from an allocation account into which federal funds are placed; and

(d) Ensure strict separation of funds between the allocation accounts, and include at least one allocation account solely for the deposit of private premium dollars used to pay for abortion coverage, and a second allocation account to process premium dollars paid for all other covered benefits.

(5) This rule does not require an insurer to conduct two separate premium transactions with enrollees. For purposes of approval by the director, the segregation of premium may occur solely as an accounting transaction.

(6) A health insurer must submit its proposed methodology to the director in writing more than thirty days before the proposed effective date for implementing the methodology. The insurer may not implement the methodology until the director approves the plan in writing. For good cause, the director may reduce the time period.

(7) A health insurer may not implement any changes or amendments to its accounting methodology prior to receiving the director's written approval.

(8) Instructions as to how and where an insurer must send its request for approval of its segregation of premium accounting plan may be found on the Oregon Division of Financial Regulation website at dfr.oregon.gov.

(9) An insurer submitting a proposed accounting methodology under this rule must include the following information:

(a) The proposed effective date and the date of the first filed financial statement in which the proposed segregated account will be reported;

(b) A description of accounting systems for processing premium payments for products on the Oregon Health Insurance Exchange that includes termination of pregnancy benefits, including:

(A) The financial accounting systems, including documentation and internal controls, to ensure the appropriate segregation of payments received for coverage of nonexcepted termination of pregnancy benefits from those received for coverage of all other services, which may be supported by federal premium tax credits and cost-sharing reduction payments;

(B) The financial accounting systems, including accounting documentation and internal controls, that ensure that all expenditures for nonexcepted termination of pregnancy benefits are reimbursed from the appropriate allocation account; and

(C) An explanation of how the insurer's systems, including accounting documentation and internal controls meet the requirements for segregation accounts under the law.

(10) After an accounting methodology for segregating premium has been approved, an insurer must file with its annual statement filed with the director on or before March 1st of each year all of the following:

(a) Certification that the insurer is certified as a qualified insurer through the exchange.

(b) An annual supplemental information schedule containing a reconciliation of all segregated account activity (beginning balance + receipts - disbursements = ending balance) for the year. The annual supplemental information schedule shall be electronically filed with the director in PDF format in compliance with the form and instructions contained on the Oregon Division of Financial Regulation website.

(c) The annual supplemental information schedule shall contain an affirmation of the insurer's chief executive officer and chief financial officer (or equivalent position and title) that the financial accounting systems, including accounting documentation and internal controls, of the segregated account covered by the annual supplemental information schedule meet the requirements for segregated accounts under the P.L. 111-148 (111th Congress, 2010).

(d) In addition to all other requirements of opinions, the annual audit of insurers conducted by independent certified public accountants and filed in accordance with OAR 836-011-0120 shall include an opinion on whether the supplementary information contained in the annual supplemental information schedule is fairly stated, and, if the segregated accounts financial accounting systems, including documentation and internal controls, comply with the requirements of the P.L. 111-148 (111th Congress, 2010). The certified public accountant’s report must be filed with the insurer’s annual audited financial statement filed with the director.

(e) A statement of the amount of premium segregated for each product offered on the Oregon Health Insurance Exchange, calculated as if the coverage were included for the entire population of enrollees. The amount of premium must not be less than one dollar per enrollee, per month.

(f) The number of enrollees, by plan for the benefit year, for whom premium was segregated pursuant to this rule, P.L. 111-148 (111th Congress, 2010), at Section 1303 (b)(2)(B) and (C), and 45 C.F.R. Sec. 156.280.

(11) The director may periodically audit insurers and each product subject to this rule to verify compliance. The director will retain working papers and periodic audit reports for a period of not less than three years, and may make the reports available to the Oregon Health Insurance Exchange Corporation or the U.S. Department of Health and Human Services upon request.

History

Statutory/Other Authority: ORS 731.244 & 743.758
Statutes/Other Implemented: ORS 743.758
ID 11-2024, minor correction filed 07/22/2024, effective 07/22/2024
ID 4-2014, f. & cert. ef. 2-14-14
ID 5-2013(Temp), f. & cert ef. 11-5-13 thru 4-30-14

Or. Admin. R. 836-011-0100 Authority; Purpose; Scope

(1) OAR 836-011-0100 to 836-011-0230 are adopted by the Director pursuant to ORS 731.488. The purpose of OAR 836-011-0100 to 836-011-0230 is to improve the Director's surveillance of the financial condition of insurers by requiring the following:

(a) An annual audit of financial statements reporting the financial position and the results of operations of insurers by independent certified public accountants;

(b) Communication of Internal Control Related Matters Noted in an Audit; and

(2) OAR 836-011-0100 to 836-011-0230 apply to every authorized insurer, subject to exemptions in 836-011-0130.

(3) OAR 836-011-0100 to 836-011-0230 do not limit the Director's authority to order, conduct or perform examinations of insurers under the Insurance Code.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0110 Definitions

As used in OAR 836-011-0100 to 836-011-0230:

(1) “Accountant” or “independent certified public accountant” means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in each state in which the accountant or accounting firm is licensed to practice. For a Canadian or British insurer, the term means a Canadian-chartered or a British-chartered accountant.

(2) An “affiliate” of, or a person “affiliated” with, a specific person, is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

(3) “Audit committee” means a committee or equivalent body established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the Internal audit function of an insurer or group of insurers (if applicable), and external audits of financial statements of the insurer or group of insurers. The audit committee of an entity that controls a group of insurers may be considered to be the audit committee for one or more of the controlled insurers solely for the purposes of OAR 836-011-0100 to 836-011-0230 at the election of the controlling person. 836-011-0223(6) governs the exercise of this election. If an audit committee is not designated by the insurer, the insurer’s entire board of directors constitutes the audit committee.

(4) “Audited financial report” means a report that includes the items specified in OAR 836-011-0140.

(5) “Group of insurers” means those authorized insurers included in the reporting requirements of ORS 732.517 to 732.592, or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over the financial reporting.

(6) “Internal audit function” means a person or persons that provide independent, objective and reasonable assurance designed to add value and improve an organization’s operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

(7) “Indemnification” means an agreement of indemnity or a release from liability when the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives.

(8) “Independent board member” has the same meaning given the term in OAR 836-011-0223(4).

(9) “Internal control over financial reporting” means a process effected by an entity’s board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, i.e., those items specified in OAR 836-011-0140(2) and (3), except for 836-011-0140(2)(a), and includes those policies and procedures that:

(a) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

(b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, i.e., those items specified in OAR 836-011-0140(2) and (3), except for 836-011-0140(2)(a), and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and

(c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements, i.e., those items specified in OAR 836-011-0140(2) and (3), except for 836-011-0140(2)(a).

(10) SEC” means the United States Securities and Exchange Commission.

(11) “Section 404” means Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC’s rules and regulations promulgated thereunder.

(12) “Section 404 Report” means management’s report on “internal control over financial reporting” as defined by the SEC and the related attestation report of the independent certified public accountant as described in section (1) of this rule.

(13) “SOX Compliant Entity” means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (Section 10A(i) of the Securities Exchange Act of 1934); (ii) the Audit committee independent requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act of 1934); and (iii) the Internal control over financial reporting requirements of Section 404 (Item 308 of SEC Regulation S-K).

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 14-2017, amend filed 12/20/2017, effective 12/20/2017
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0120 Filing and Extensions for Filing of Annual Audited Financial Reports

(1) All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the Director on or before June 1 for the year ended December 31 immediately preceding. The Director may require an insurer to file an audited financial report earlier than June 1 with advance notice of 90 days to the insurer.

(2) Extensions of the June 1 filing date may be granted by the Director for 30-day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting an extension and determination by the Director of good cause for an extension. The request for extension must be submitted in writing not less than 10 days prior to the due date in sufficient detail to permit the Director to make an informed decision with respect to the requested extension.

(3) If an extension is granted in accordance with section (2) of this rule, a similar extension of 30 days is granted to the filing of Management’s Report of Internal Control over Financial Reporting.

(4) Every insurer required to file an annual audited financial report pursuant to OAR 836-011-0100 to 836-011-0230 shall designate a group of individuals as constituting its audit committee, as defined in 836-011-0110. The audit committee of an entity that controls an insurer may be designated as the insurer’s audit committee for purposes of 836-011-0100 to 836-011-0230 at the election of the controlling person.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0130 Exemptions

(1) The following authorized insurers are exempt from the requirements of OAR 836-011-0100 to 836-011-0230:

(a) An insurer having direct premiums written in this state of less than $1,000,000 in any calendar year and having fewer than 1,000 policyholders or certificate holders of directly written policies nationwide at the end of the same calendar year is exempt from OAR 836-011-0100 to 836-011-0230 for the year unless the Director determines with respect to the insurer that compliance is necessary for the Director to carry out statutory responsibilities. The exemption under this subsection does not apply to any insurer that has assumed premiums pursuant to contracts or treaties of reinsurance, or both, of $1,000,000 or more.

(b) A foreign or alien insurer that has filed the audited financial report in another state pursuant to the other State's requirement of audited financial reports, if the Director determines that the other state's requirements are substantially similar to the requirements of OAR 836-011-0100 to 836-011-0230 and if the foreign or alien insurer does both of the following:

(A) Files with the Director a copy of the Audited Financial Report, the Communication of Internal Control Related Matters Noted in an Audit and the Accountant's Letter of Qualifications that are filed with the other state, in accordance with the filing dates specified in OAR 836-011-0120, 836-011-0200, and 836-011-0210. In lieu of the requirements of this paragraph, a Canadian insurer may file accountants' reports as filed with the Office of the Superintendent of Financial Institutions, Canada.

(B) Files with the Director a copy of any Notification of Adverse Financial Condition Report filed with the other state. The copy must be filed with the Director within the time specified in OAR 836-011-0190.

(c) An insurer to whom the Director has granted an exemption under section (2) of this rule, during the period in which the exemption is effective.

(d) A foreign or alien insurer required to file Management’s Report of Internal Control over Financial Reporting in another state is exempt from filing the Report in this state if the other state has substantially similar reporting requirements and the Report is filed with the insurance commissioner of the other state within the time specified.

(2) Upon written application of any insurer, the Director may grant an exemption from compliance with one or more provisions of OAR 836-011-0100 to 836-011-0230 if the Director finds upon review of the application that compliance would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for a specified period or periods. Not later than the 10th day after denial of an insurer's written request for an exemption under this section, the insurer may request in writing a hearing on its application for an exemption.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0140 Contents of Annual Audited Financial Report

(1) An annual audited financial report required under OAR 836-011-0120 must report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed or otherwise permitted by the Department of Insurance of the state of domicile.

(2) The annual audited financial report shall include the following:

(a) A report of an independent certified public accountant;

(b) A balance sheet reporting admitted assets, liabilities and capital and surplus;

(d) A statement of cash flow;

(e) A statement of changes in capital and surplus; and

(f) Notes to financial statements. The notes shall be those required by the appropriate National Association of Insurance Commissioners (NAIC) Annual Statement Instructions and the NAIC Accounting Practices and Procedures Manual. The notes shall include a reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to ORS 731.574, with a written description of the nature of the differences.

(3) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Director. The financial statement shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31. However, in the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0150 Designation of Independent Certified Public Accountant

(1) Each insurer required by OAR 836-011-0120 to file an annual audited financial report, within 60 days after becoming subject to the requirement, must register with the Director in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in OAR 836-011-0120 and 836-011-0150. An insurer not retaining an independent certified public accountant on July 1, 2008 shall register the name and address of its retained independent certified public accountant not less than six months before the date on which the first audited financial report is to be filed.

(2) An insurer shall obtain a letter from the accountant retained by the insurer stating that the accountant is aware of the provisions of the Insurance Code and the rules of the Insurance Department of the state of domicile that relate to accounting and financial matters and affirming that the accountant will express the opinion of the accountant on the financial statements in terms of their conformity with the statutory accounting practices prescribed or otherwise permitted by that Department, specifying exceptions that the accountant believes appropriate. The insurer shall file a copy of the letter with the Director.

(3) If the accountant who was the certified public accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall so notify the Director not later than the fifth business day after the dismissal or resignation. The insurer shall also do the following:

(a) Notify the Director in a separate letter, not later than the 10th business day after the date of the notice of dismissal or resignation, whether in the 24 months preceding the engagement there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure that, if not resolved to the satisfaction of the former accountant, would have caused the former accountant to make reference to the subject matter of the disagreement in connection with the accountant's opinion. The disagreements required to be reported in response to this subsection include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction, and are those disagreements that occur at the decision making level, between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report.

(b) Request the former accountant, in writing, to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for which the accountant does not agree.

(c) Furnish the Director the letter received from the former accountant under subsection (b) of this section together with a response by the insurer to that letter.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0160 Qualifications of Independent Certified Public Accountant

(1) The Director shall not recognize any person as a qualified independent certified public accountant for the purposes of OAR 836-011-0100 to 836-011-0230 if the person:

(a) Is not in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which the person is licensed to practice as a certified public accountant or, if the insurer is a Canadian or British insurer, the person is not a chartered accountant; or

(b) Has either directly or indirectly entered into an agreement of indemnity or a release from liability (collectively referred to as indemnification) with respect to the audit of the insurer.

(2) Except as otherwise provided in this rule, the Director shall recognize an independent certified public accountant as qualified as long as the certified public accountant conforms to the standards of the certified public accountant profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants and the rules and the Code of Professional Conduct of the Oregon State Board of Accountancy, or a similar code of conduct of the state board regulating the practice of accountancy in the state in which the accountant is licensed to practice.

(3) A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. In the event of a delinquency proceeding commenced against the insurer under ORS 734.130, however, the mediation or arbitration provisions shall operate at the option of the statutory successor.

(4) The lead or coordinating audit partner having primary responsibility for the audit may not act in that capacity for more than five consecutive years. The partner or other person is disqualified from acting in that or a similar capacity for the same insurer or its insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may apply to the Director for relief from the rotation requirement of this section on the basis of unusual circumstances. An insurer must apply for relief at least 30 days before the end of the calendar year. The Director may consider the following factors in determining whether the relief should be granted:

(a) The number of partners, the expertise of the partners or the number of insurance clients in the currently registered firm;

(b) The premium volume of the insurer;

(5) An insurer to which relief from the rotation requirements under section (4) of this rule has been granted shall file with its annual statement filing the Director’s approval for relief with the states that it is licensed in or doing business in, and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

(6) The Director shall not recognize an individual as an independent certified public accountant, or accept an annual audited financial report required by OAR 836-011-0100 to 836-011-0230 that is prepared in whole or part by an individual, if the individual:

(a) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961-1968, or any dishonest conduct or practices under federal or state law;

(b) Has been found to have violated the insurance laws of this state with respect to any previous reports submitted under OAR 836-011-0100 to 836-011-0230; or

(c) Has demonstrated a pattern or practice of failing to detect or disclose material information in any report filed under OAR 836-011-0100 to 836-011-0230.

(7) The Director may hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing the accountant's opinion on the financial statements in the annual audited financial report made pursuant to OAR 836-011-0100 to 836-011-0230 and require the insurer to replace the accountant with another accountant who is qualified with respect to the insurer as provided in 836-011-0100 to 836-011-0230.

(8) The Director may not recognize an accountant as a qualified independent certified public accountant or accept an annual audited financial report prepared in whole or in part by the accountant if the accountant provides to an insurer, contemporaneously with the audit, the following non-audit services:

(a) Bookkeeping or other services related to the accounting records or financial statements of the insurer;

(b) Financial information systems design and implementation;

(d) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer’s financial statements. An accountant’s actuary may also issue an actuarial opinion or certification (“opinion”) on an insurer’s reserves if the following conditions have been met:

(A) Neither the accountant nor the accountant’s actuary has performed any management functions or made any management decisions;

(B) The insurer has competent personnel (or engages a third party actuary) to estimate the reserves for which management takes responsibility; and

(C) The accountant’s actuary tests the reasonableness of the reserves after the insurer’s management has determined the amount of the reserves;

(e) Internal audit outsourcing services;

(f) Management functions or human resources;

(g) Broker or dealer, investment adviser or investment banking services;

(h) Legal services or expert services unrelated to the audit; or

(i) Any other services that the Director has determined by rule to be impermissible.

(9) In general, the principles of independence with respect to services provided by a qualified independent certified public accountant are largely predicated on three basic principles, violations of which would impair the accountant’s independence. The principles are that the accountant cannot function in the role of management, cannot audit the accountant’s own work, and cannot serve in an advocacy role for the insurer.

(10) An insurer having direct written and assumed premiums of less than $100,000,000 in any calendar year may request an exemption from section (8) of this rule. The insurer shall file with the Director a written statement discussing the reasons why the insurer should be exempt from these provisions. If the Director finds, upon review of this statement, that compliance with section (8) of this rule would constitute a financial or organizational hardship upon the insurer, the Director may grant an exemption.

(11) A qualified independent certified public accountant who performs the audit may engage in other non-audit services, including tax services, that are not described in section (8) of this rule and that do not conflict with section (9) of this rule only if the activity is approved in advance by the audit committee in accordance with section (12) of this rule.

(12) All auditing services and non-audit services provided to an insurer by a qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. The preapproval requirement is waived with respect to non-audit services if the insurer is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity or:

(a) The aggregate amount of all such non-audit services provided to the insurer constitutes not more than five percent of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided;

(b) The services were not recognized by the insurer at the time of the engagement to be non-audit services; and

(c) The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.

(13) The audit committee may delegate to one or more designated members of the Audit committee the authority to grant the preapprovals required by section (12) of this rule. The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.

(14)(a) The Director may not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer or any person serving in an equivalent position for that insurer was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due. This section applies only to partners and senior managers involved in the audit. An insurer may apply to the Director for relief from the requirement of this subsection on the basis of unusual circumstances.

(b) The insurer shall file with its annual statement filing the approval for relief from subsection (a) of this section with the states that it is licensed in or doing business in and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 17-2002, f. & cert. ef. 7-11-02
Reverted to ID 4-1992, f. & cert. ef. 3-26-92
ID 2-2002(Temp), f. & cert. ef. 1-15-01 thru 7-5-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0170 Consolidated or Combined Audits

An insurer may apply in writing to the Director for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurers that uses a pooling or one hundred percent reinsurance agreement affecting the solvency and integrity of the insurer's reserves and if the insurer cedes all of its direct and assumed business to the pool. In such a case, a columnar consolidating or combining worksheet shall be filed with the report as follows:

(1) Amounts shown on the consolidated or combined audited financial report shall be shown on the worksheet.

(2) Amounts for each insurer subject to this rule shall be stated separately.

(3) Noninsurance operations may be shown on the worksheet on a combined or individual basis.

(4) Explanations of consolidating and eliminating entries shall be included.

(5) A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488(2)(a)
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0180 Scope of Audit and Report of Independent Certified Public Accountant

Financial statements furnished pursuant to OAR 836-011-0140 shall be audited by an independent certified public accountant. The audit of the insurer's financial statements must be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 319 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant shall obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to 836-011-0227, the independent certified public accountant shall consider (as that term is defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement) the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall also be given to other procedures illustrated in the Financial Condition Examiner's Handbook promulgated by the National Association of Insurance Commissioners as the certified public accountant determines to be necessary.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0190 Notification of Adverse Financial Condition

(1) An insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report in writing to the board of directors or its audit committee any determination by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the Director as of the date of the balance sheet currently under audit or that the insurer does not meet the minimum capital and surplus requirement of the Oregon Insurance Code as of that date. The insurer shall require the independent certified public accountant to submit the report not later than the fifth business day after the independent certified public accountant makes such a determination. An insurer that has received a report under this section shall forward a copy of the report to the Director not later than the fifth business day after receiving the report and shall provide the independent certified public accountant with evidence that the report was furnished to the Director. If the independent certified public accountant does not receive the evidence within the required period, the independent certified public accountant shall furnish to the Director a copy of its report not later than the fifth business day after the end of the period within which the insurer was required to submit the report.

(2) An independent certified public accountant shall not be liable to any person for any statement made in connection with the requirements of section (1) of this rule if the statement is made in good faith and in compliance with section (1) of this rule.

(3) If the accountant, after the date of the audited financial report filed pursuant to OAR 836-011-0100 to 836-011-0230, becomes aware of facts that might have affected the report, the Director notes the obligation of the accountant to act as prescribed in Volume 1, Section AU 561 of the Professional Standards of the American Institute of Certified Public Accountants (AICPA).

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0200 Communication of Internal Control Related Matters Noted in an Audit

(1) In addition to the annual audited financial report, each insurer shall furnish the Director with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit. The communication must be prepared by the accountant not later than the 60th day after the filing of the annual audited financial report and shall contain a description of any unremediated material weakness (as the term material weakness is defined by Statement on Auditing Standard 60, Communication of Internal Control Related Matters Noted in an Audit, or its replacement) as of December 31 immediately preceding (so as to coincide with the audited financial report required by OAR 836-011-0120(1)) in the insurer’s internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication must so state.

(2) The insurer shall submit with the report required under section (1) of this rule a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant's report.

(3) The insurer shall maintain information about significant deficiencies communicated by the independent certified public accountant. The information must be made available to the examiner conducting a financial condition examination for review and kept in such a manner as to remain confidential.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0210 Accountant’s Letter of Qualifications

(1) An accountant shall furnish the insurer, in connection with and for inclusion in the filing of the annual audited financial report, a letter stating:

(a) That the accountant is independent with respect to the insurer and conforms to the standards of the accounting profession as contained in the Code of Professional Ethics and pronouncements of the American Institute of Certified Public Accountants (AICPA) and the Rules of Professional Conduct of the Oregon State Board of Accountancy, or a similar code of conduct of the state board regulating the practice of accountancy in the state in which the accountant is licensed to practice.

(b) The background and experience in general, and the experience in audits of insurers, of the staff assigned to the engagement and whether each is an independent certified public accountant.

(c) That the accountant understands that the annual audited financial report and the opinion of the accountant thereon must be filed in compliance with OAR 836-011-0100 to 836-011-0230 and that the Director will rely on the information contained in the report and opinion in the monitoring and regulation of the financial position of insurers.

(d) That the accountant consents to the requirements of OAR 836-011-220 and that the accountant agrees to make the workpapers described in 836-011-0220 available for review by the Director, or the Director's designee or appointed agent.

(e) A representation that the accountant is currently licensed by an appropriate state licensing authority and is a member in good standing in the American Institute of Certified Public Accountants.

(f) A representation that the accountant is in compliance with OAR 836-011-0160.

(2) This rule does not prohibit an independent certified public accountant from using such staff as the accountant determines appropriate when use of the staff is consistent with the standards prescribed by generally accepted auditing standards.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0220 Definition, Availability and Maintenance of Independent Certified Public Accountants Workpapers

(1) For the purpose of this rule, workpapers are the records kept by an independent certified public accountant of the procedures followed, the tests performed, the information obtained and the conclusions reached pertinent to the accountant’s audit of the financial statements of an insurer. Accordingly, workpapers may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of the accountant’s audit of the financial statements of an insurer and which support the accountant’s opinion.

(2) An insurer that is required to file an audited financial report pursuant to OAR 836-011-0100 to 836-011-0230 shall require the accountant to make available for review by Department of Consumer and Business Service examiners, all workpapers prepared in the conduct of the accountant’s audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the Department or at any other reasonable place designated by the Director. The insurer shall require that the accountant retain the audit workpapers and communications until the Department has filed a report on examination covering the period of the audit but no longer than seven years from the date of the audit report.

(3) In the conduct of a periodic review by the Department examiners, it shall be agreed that photocopies of pertinent audit workpapers may be made and retained by the Department. Any such review by the Department examiners is an investigation and all working papers and communications obtained during the course of such an investigation must be given the same confidentiality as other examination workpapers generated by the Department.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0223 Requirements for Audit Committee

(1) This rule does not apply to an authorized foreign or alien insurer or to an insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity.

(2) The audit committee shall be directly responsible for the appointment, compensation and oversight of the work of an accountant, including resolution of disagreements between management and the accountant regarding financial reporting, for the purpose of preparing or issuing the audited financial report or related work pursuant to OAR 836-011-0100 to 836-011-0230. Each accountant shall report directly to the audit committee.

(3) The Audit committee of an insurer or group of insurers shall be responsible for overseeing the insurer’s Internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by OAR 836-011-0224.

(4) Each member of the audit committee must be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to section (7) of this rule.

(5) To be considered independent for purposes of this rule, a member of the audit committee may not accept any consulting, advisory or other compensatory fee from the entity or be an affiliated person of the entity or any subsidiary thereof, other than in the member’s capacity as a member of the audit committee, the board of directors or any other board committee. However, if a law requires board participation by an otherwise non-independent member, that law prevails and the member may participate in the audit committee and be designated as independent for audit committee purposes, unless the member is an officer or employee of the insurer or one of its affiliates.

(6) If a member of the audit committee ceases to be independent for a reason outside the member’s reasonable control, that person, with notice by the responsible entity to the Director, may remain an audit committee member of the responsible entity until the earlier of the date of the next annual meeting of the responsible entity or one year from the occurrence of the event that caused the member to be no longer independent.

(7) To exercise the election of the controlling person to designate the audit committee for purposes of OAR 836-011-0100 to 836-011-0230, the ultimate controlling person shall provide written notice to the Director. The notice must be provided in a timely manner prior to the issuance of the statutory audit report and must include a description of the basis for the election. The insurer may change the election by notifying the Director. The notice to the Director must include a description of the basis for the change. The election remains in effect for perpetuity, until rescinded.

(8) The audit committee shall require the accountant that performs for an insurer any audit required by OAR 836-011-0100 to 836-011-0230 to timely report to the Audit committee in accordance with the requirements of SAS 61, Communication with Audit Committees , or its replacement, including:

(a) All significant accounting policies and material permitted practices;

(b) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment referred by the accountant; and

(c) Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences.

(9) If an insurer is a member of an insurance holding company system, the reports required by section (8) of this rule may be provided to the audit committee on an aggregate basis for insurers in the holding company system, but only if any substantial differences among insurers in the system are identified to the Audit committee.

(10) The proportion of independent audit committee members shall meet or exceed the following criteria:

(11) (Note A) The Director is authorized by state law to require an entity’s board to enact improvements to the independence of the audit committee membership if the insurer is in a RBC action level event, meets one or more of the standards of an insurer determined to be in hazardous financial condition or otherwise exhibits qualities of a troubled insurer.

(12) (Note B) All insurers with less than $500,000,000 in prior year direct written and assumed premiums are encouraged to structure their audit committees with at least a supermajority of independent Audit committee members.

(13) (Note C) Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from non-affiliates for the reporting entities.

(14) An insurer with direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $500,000,000 may apply to the Director for a waiver from the requirements of this rule on the basis of hardship. The insurer shall file, with its annual statement filing, the approval for relief from this rule with the states that it is licensed or authorized in or doing business in and with the NAIC. If a nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 14-2017, amend filed 12/20/2017, effective 12/20/2017
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08

Or. Admin. R. 836-011-0224 Internal Audit Function Requirements

(1) An insurer is exempt from these requirements if:

(a) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; and

(b) If the insurer is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000.

(2) The insurer or group of insurers shall establish an Internal audit function providing independent, objective and reasonable assurance to the Audit committee and insurer management regarding the insurer’s governance, risk management and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.

(3) In order to ensure that internal auditors remain objective, the Internal audit function must be organizationally independent. Specifically, the Internal audit function will not defer ultimate judgment on audit matters to others, and shall appoint an individual to head the Internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.

(4) The head of the Internal audit function shall report to the Audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the Internal audit function’s independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.

(5) If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the Internal audit function requirements set forth in this rule at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.

History

Statutory/Other Authority: ORS 731.244 & ORS 731.488
Statutes/Other Implemented: ORS 731.488
ID 14-2017, adopt filed 12/20/2017, effective 12/20/2017

Or. Admin. R. 836-011-0225 Conduct of Insurer in Connection with the Preparation of Required Reports and Documents

(1) A director or officer of an insurer may not directly or indirectly:

(a) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under OAR 836-011-0100 to 836-011-0230; or

(b) Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under OAR 836-011-0100 to 836-011-0230.

(2) An officer or director of an insurer, or any other person acting under the direction thereof, may not directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any accountant engaged in the performance of an audit pursuant to OAR 836-011-0100 to 836-011-0230 if that person knew or should have known that the action, if successful, could result in rendering the insurer’s financial statements materially misleading.

(3) For purposes of section (2) of this rule, actions that, “if successful, could result in rendering the insurer’s financial statements materially misleading” include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an accountant:

(a) To issue or reissue a report on an insurer’s financial statements that is not warranted in the circumstances, due to material violations of statutory accounting principles prescribed by the Director, generally accepted auditing standards, or other professional or regulatory standards;

(b) Not to perform audit, review or other procedures required by generally accepted auditing standards or other professional standards;

(d) Not to communicate matters to an insurer’s audit committee.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08

Or. Admin. R. 836-011-0227 Management’s Report of Internal Control over Financial Reporting

(1) Each insurer required to file an audited financial report pursuant to OAR 836-011-0100 to 836-011-0230 that has annual direct written and assumed premiums of $500,000,000 or more, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, shall prepare a report of the insurer’s or group of insurers’ internal control over financial reporting. The insurer shall file the report with the Director, along with the Communication of Internal Control Related Matters Noted in an Audit, as described in 836-011-0200. The Management’s Report of Internal Control over Financial Reporting shall be as of December 31 immediately preceding.

(2) Notwithstanding the premium threshold in section (1) of this rule, the Director may require an insurer to file a Management’s Report of Internal Control over Financial Reporting if the insurer is in any RBC level event or meets any one or more of the standards of an insurer determined to be in hazardous financial condition as defined in ORS 731.385.

(3) An insurer or a group of insurers described in this section may file its or its parent’s Section 404 Report and an addendum in satisfaction of this rule, but only if the internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements (those items included in OAR 836-011-0140(2) and (3), except for 836-011-0140(2)(a), were included in the scope of the Section 404 Report. This section applies to an insurer or a group of insurers that is:

(a) Directly subject to Section 404;

(b) Part of a holding company system whose parent is directly subject to Section 404;

(d) A member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant Entity.

(4) An addendum provided by an insurer or group of insurers under section (3) of this rule must be a positive statement by management that there are no material processes with respect to the preparation of the insurer’s or group of insurers’ audited statutory financial statements (those items included in OAR 836-011-0140(2) and (3), except for 836-011-0140(2)(a)) excluded from the Section 404 Report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements and those internal controls were not included in the scope of the Section 404 Report, the insurer or group of insurers may file either (i) a report under this rule, or (ii) the Section 404 Report and a report under this rule for those internal controls that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements not covered by the Section 404 Report.

(5) A Management’s Report of Internal Control over Financial Reporting must include:

(a) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;

(b) A statement that management has established internal control over financial reporting and an assertion, to the best of management’s knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;

(c) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;

(d) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;

(e) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding;

(f) A statement regarding the inherent limitations of internal control systems; and

(g) Signatures of the chief executive officer and the chief financial officer (or equivalent position and title).

(6) For a Management’s Report of Internal Control over Financial Reporting under section (5) of this rule, management may not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its Internal control over financial reporting

(7) Management shall document and make available upon financial condition examination the basis upon which its assertions, required in section (5) of this rule, are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities. In addition:

(a) Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation.

(b) Management’s Report on Internal Control over Financial Reporting, required by section (1) of this rule, and any documentation provided in support thereof during the course of a financial condition examination, shall be kept confidential by the Department.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08

Or. Admin. R. 836-011-0230 Canadian and British Companies

In the case of Canadian and British insurers, the annual audited financial report is the annual statement of total business on the form filed by such companies with their domiciliary supervision authority and audited by an independent chartered accountant. For such insurers, the letter required under OAR 836-011-0150 shall state that the accountant is aware of the requirements relating to the annual audited statement filed with the Director under OAR 836-011-0120 and shall affirm that the opinion expressed conforms to those requirements.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488(2)(b) - 731.488(2)(c)
ID 22-2002, f. & cert. ef. 11-27-02
ID 4-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-011-0235 Effective Dates

(1) The requirements of OAR 836-011-0160(4) as amended effective July 1, 2008 apply to audits of the year beginning January 1, 2010 and thereafter.

(2) The requirements of OAR 836-011-0223 first apply beginning January 1, 2010. An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members, as opposed to a supermajority, because the total written and assumed premium is below the threshold and subsequently becomes subject to one of the independence requirements due to changes in premium has one year following the year the threshold is exceeded, but not earlier than January 1, 2010, to comply with the independence requirements. Likewise, an insurer that becomes subject to one of the independence requirements as a result of a business combination shall have one calendar year following the date of acquisition or combination to comply with the independence requirements.

(3) The requirements of OAR 836-011-0100 to 836-011-0230 as amended effective July 1, 2008, except for 836-011-0223, are effective beginning with the reporting period ending December 31, 2010 and each year thereafter. An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements shall have two years following the year the threshold is exceeded, but not earlier than December 31, 2010, to file a report. Likewise, an insurer acquired in a business combination shall have two calendar years following the date of acquisition or combination to comply with the reporting requirements.

History

Statutory/Other Authority: ORS 731.244 & 731.488
Statutes/Other Implemented: ORS 731.488
ID 11-2008, f. & cert. ef. 7-29-08
ID 9-2008, f. 6-30-08, cert. ef. 7-1-08

Or. Admin. R. 836-011-0250 Authority; Purpose; Scope

(1) OAR 836-011-0250 to 836-011-0260 are adopted by the Director of the Department of Consumer and Business Services pursuant to ORS 731.244. The purpose of OAR 836-011-0250 to 836-011-0260 is to improve the Director's ability to determine whether a self-insurance program satisfies the financial requirements of ORS 30.282 and 731.036 to be exempt from the Insurance Code and to clarify the components of the annual financial statement required under ORS 30.282 and 731.036, including the timeline for providing the annual financial statement to the program participants and to the director.

(2) OAR 836-011-0250 to 836-011-0260 apply to every public body that establishes a self-insurance program that is exempt from the Insurance Code under ORS 30.282 and 731.036.

(3) OAR 836-011-0250 to 836-011-0260 do not limit the Director's authority to order, conduct or perform examinations of self insurance programs to determine whether the program complies with applicable criteria for exemption from the Insurance Code.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 30.282 & 731.036
ID 1-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-011-0253 Definitions

As used in OAR 836-011-0250 to 836-011-0260:

(1) “Annual contributions” means total contributions paid by program participants less any premium collected from participants to procure insurance of any kind.

(2) “Annual financial statement” means the financial report required under ORS 731.036 or the annual independently audited financial statement provided to program participants under ORS 30.282. The report described in this rule must comply with all applicable Government Accounting Standards Board requirements.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 30.282 & 731.036
ID 1-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-011-0255 Reserve Adequacy

In order to demonstrate that a self-insurance program complies with the reserve adequacy provisions contained in ORS 30.282(6)(d) or 731.036(4), (5) or (6), the demonstration of compliance must be accompanied and supported by the written actuarial report issued by a qualified actuary. As used in this rule, “qualified actuary” means:

(1) For property or casualty insurance, a person who is either:

(a) A member in good standing of the Casualty Actuarial Society; or

(b) A member in good standing of the American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries.

(2) For health insurance, a person who is a member in good standing of the American Academy of Actuaries, or a person recognized by the American Academy of Actuaries as qualified for such actuarial valuation.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 30.282 & 731.036
ID 13-2011, f. & cert. ef. 9-21-11
ID 1-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-011-0258 Unallocated Reserve Account

In order to demonstrate compliance with the requirement to maintain an unallocated reserve account as set forth in ORS 30.282(6)(e)in which total assets exceed total liabilities by the greater of 25 percent of annual contributions or $250,000, total liabilities must include all liabilities identified by a qualified actuary including but not necessarily limited to the items listed in ORS 30.282(6)(d).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 30.282 & 731.036
ID 1-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-011-0260 Distribution of Annual Financial Statement

A public body or the administrator of a self-insurance program must make the annual financial statement available to program participants and to the director not later than six months after the close of the program’s fiscal year.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 30.282 & 731.036
ID 1-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-011-0300 Statutory Authority; Statutes Implemented

(1) OAR 836-011-0300 to 836-011-0390 apply to insurers that are subject to the capital and surplus requirements of ORS 731.554 and insurers that are subject to the capital and surplus requirements of 731.566.

(2) OAR 836-011-0300 to 836-011-0390 are adopted pursuant to the authority of ORS 731.244, 731.554, 731.574 and 733.210 for the purpose of implementing 731.554 and 731.574.

History

Statutory/Other Authority: ORS 731.244, ORS 731.554 & ORS 733.210
Statutes/Other Implemented: ORS 731.554 & ORS 731.574
ID 14-2011, f. & cert. ef. 10-31-11
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0305 Definitions

As used in OAR 836-011-0300 to 836-011-0390:

(1) "Adjusted RBC report" means a risk-based capital (RBC) report that has been adjusted by the director in accordance with OAR 836-011-0310(5).

(2) "Corrective order" means an order issued by the director specifying corrective actions that the director has determined are required.

(3) "NAIC" means the National Association of Insurance Commissioners.

(4) "Life or health insurer" means an insurer transacting life insurance or health insurance or both or an insurer authorized to transact property and casualty insurance but writing only health insurance.

(5) "Property and casualty insurer" means an insurer transacting property and casualty insurance, or either, but does not include an insurer transacting only monoline mortgage guaranty insurance, financial guaranty insurance or title insurance, or an insurer authorized to transact property and casualty insurance but writing only health insurance.

(6) "Negative trend" means, with respect to a life or health insurer, negative trend over a period of time, as determined in accordance with the "trend test calculation" included in the RBC instructions.

(7) "RBC instructions" means the RBC report, including risk-based capital instructions adopted by the NAIC, as such RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC and identified by the Department of Consumer and Business Services to be applicable to the RBC report period. RBC instructions may be obtained by contacting the Division of Financial Regulation of the Department of Consumer and Business Services using the contact information provided on the Division of Financial Regulation website at dfr.oregon.gov.

(8) "RBC level" means an insurer's company action level RBC, regulatory action level RBC, authorized control level RBC, or mandatory control level RBC, defined as follows:

(a) "Company action level RBC" means, with respect to any insurer, the product of 2.0 and its authorized control level RBC;

(b) "Regulatory action level RBC" means the product of 1.5 and its authorized control level RBC;

(c) "Authorized control level RBC" means the number determined under the risk-based capital formula in accordance with the RBC instructions; and

(d) "Mandatory control level RBC" means the product of .70 and the authorized control level RBC.

(9) "RBC plan" means a comprehensive financial plan containing the elements specified in OAR 836-011-0320(2). If the director rejects the RBC plan and it is revised by the insurer with or without the director's recommendation, the plan shall be called the "revised RBC plan."

(10) "RBC report" means the report required in OAR 836-011-0310.

(11) "Total adjusted capital" means the sum of:

(a) An insurer's statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under ORS 731.574; and

(b) Such other items, if any, as the RBC instructions may provide.

History

Statutory/Other Authority: ORS 731.244, ORS 733.210 & ORS 731.554
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 6-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 14-2011, f. & cert. ef. 10-31-11
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0310 RBC Reports

(1) Each domestic insurer shall, on or prior to each March 1 (the "filing date"), prepare and submit to the Director a report of its RBC levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, each domestic insurer shall file its RBC report:

(a) With the NAIC in accordance with the RBC instructions; and

(b) With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC report not later than the later of:

(A) 15 days from the receipt of notice to file its RBC report with that state; or

(B) The filing date.

(2) A life or health insurer's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account (and may adjust for the covariance between) the following, determined in each case by applying the factors in the manner set forth in the RBC instructions:

(a) The risk with respect to the insurer's assets;

(b) The risk of adverse insurance experience with respect to the insurer's liabilities and obligations;

(d) All other business risks and such other relevant risks as are set forth in the RBC instructions.

(3) A property and casualty insurer's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account (and may adjust for the covariance between) the following, determined in each case by applying the factors in the manner set forth in the RBC instructions:

(a) Asset risk;

(b) Credit risk;

(d) All other business risks and such other relevant risks as are set forth in the RBC instructions.

(4) An excess of capital over the amount produced by the risk-based capital requirements contained in OAR 836-011-0300 to 836-011-0390 and the formulas, schedules and instructions referenced in 836-011-0300 to 836-011-0390 is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the RBC levels required by 836-011-0300 to 836-011-0390. additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in 836-011-0300 to 836-011-0390.

(5) If a domestic insurer files an RBC report that in the judgment of the Director is inaccurate, the Director shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is an "adjusted RBC report" for purposes of OAR 836-011-0300 to 836-011-0390.

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 14-2011, f. & cert. ef. 10-31-11
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0320 Company Action Level Event

(1) “Company action level event” means any of the following events:

(a) The filing of an RBC report by an insurer indicating that:

(A) The insurer’s total adjusted capital is greater than or equal to its regulatory action level RBC but less than its company action level RBC;

(B) If a life or health insurer, the insurer has total adjusted capital that is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and has a negative trend; or

(C) If a property and casualty insurer, the insurer has total adjusted capital that is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the property and casualty RBC instructions.

(b) The notification by the Director to the insurer of an adjusted RBC report that indicates an event in subsection (a) of this section, if the insurer does not challenge the adjusted RBC report under OAR 836-011-0360; or

(c) If, pursuant to OAR 836-011-0360, an insurer challenges an adjusted RBC report that indicates the event in subsection (a) of this section, the notification by the Director to the insurer that the Director has, after a hearing, rejected the insurer’s challenge.

(2) In the event of a company action level event, the insurer shall prepare and submit to the Director an RBC plan that shall:

(a) Identify the conditions contributing to the company action level event;

(b) Contain proposals of corrective actions that the insurer intends to take and would be expected to result in the elimination of the company action level event;

(c) Provide projections of the insurer’s financial results in the current year and at least the four succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and surplus. The projections for both new and renewal business must include separate projections for each major line of business and separately identify each significant income, expense and benefit component, if the Director so requires;

(d) Identify the key assumptions affecting the insurer’s projections and the sensitivity of the projections to the assumptions; and

(e) Identify the quality of and problems associated with the insurer’s business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risks, mix of business and use of reinsurance, if any, in each case.

(3) The insurer shall submit the RBC Plan:

(a) Not later than the 45th day after the company action level event; or

(b) If the insurer challenges an adjusted RBC report pursuant to OAR 836-011-0360, not later than the 45th day after the Director’s notification to the insurer that the Director has, after a hearing, rejected the insurer’s challenge.

(4) Not later than the 60th day after an insurer has submitted an RBC plan to the Director, the Director shall notify the insurer whether the RBC plan shall be implemented or is unsatisfactory, in the judgment of the Director. If the Director determines the RBC plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination and may set forth proposed revisions that will render the RBC plan satisfactory, in the judgment of the Director. Upon notification from the Director, the insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the Director, and shall submit the revised RBC plan to the Director:

(a) Not later than the 45th day after the notification from the Director; or

(b) If the insurer challenges the notification from the Director under OAR 836-011-0360, not later than the 45th day after a notification to the insurer that the Director has, after a hearing, rejected the insurer’s challenge.

(5) In the event of a notification by the Director to an insurer that the insurer’s RBC plan or revised RBC plan is unsatisfactory, the Director at the Director’s discretion, subject to the insurer’s right to a hearing under OAR 836-011-0360, may specify in the notification that the notification constitutes a regulatory action level event.

(6) A domestic insurer that files an RBC plan or revised RBC plan with the Director shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state in which the insurer is authorized to transact insurance if such a state has an RBC provision substantially similar to ORS 731.752, and the insurance commissioner of that state has notified the insurer of its request for the filing in writing. The insurer shall file the copy in that state not later than the later of the following:

(a) The 15th day after receipt of the notice to file a copy of its RBC plan or revised RBC plan with the state; or

(b) The date on which the RBC plan or revised RBC plan is filed under section (3) or (4) of this rule, as applicable.

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 14-2017, amend filed 12/20/2017, effective 12/20/2017
ID 14-2011, f. & cert. ef. 10-31-11
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0330 Regulatory Action Level Event

(1) “Regulatory action level event” means, with respect to an insurer, any of the following events:

(a) The filing of an RBC report by the insurer that indicates the insurer’s total adjusted capital is greater than or equal to its authorized control level RBC but less than its regulatory action level RBC;

(b) Notification by the Director to the insurer of an adjusted RBC report that indicates the event in subsection (a) of this section (1), if the insurer does not challenge the adjusted RBC report under OAR 836-011-0360;

(c) If, pursuant to OAR 836-011-0360, the insurer challenges an adjusted RBC report that indicates the event in subsection (a) of this section (1), notification by the Director to the insurer that the Director has, after a hearing, rejected the insurer’s challenge;

(d) Failure of the insurer to file an RBC report by the filing date, unless the insurer has provided an explanation for the failure that is satisfactory to the Director and has cured the failure not later than the 10th day after the filing date;

(e) Failure of the insurer to submit an RBC plan to the Director within the time period established in OAR 836-011-0320(3);

(f) Notification by the Director to the insurer that:

(A) The RBC plan or revised RBC plan submitted by the insurer is unsatisfactory, in the judgment of the Director; and

(B) Such notification constitutes a regulatory action level event with respect to the insurer, if the insurer has not challenged the determination under OAR 836-011-0360;

(g) If, pursuant to OAR 836-011-0360, the insurer challenges a determination by the Director under subsection (f) of this section, the notification by the Director to the insurer that the Director has, after a hearing, rejected the challenge;

(h) Notification by the Director to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan, but only if the failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC plan or revised RBC plan and the Director has so stated in the notification, and if the insurer has not challenged the determination under OAR 836-011-0360; or

(i) If, pursuant to OAR 836-011-0360, the insurer challenges a determination by the Director under subsection (h) of this section (1), the notification by the Director to the insurer that the Director has, after a hearing, rejected the challenge.

(2) In the event of a regulatory action level event, the Director shall:

(a) Require the insurer to prepare and submit an RBC plan or, if applicable, a revised RBC plan;

(b) Perform such examination or analysis of the assets, liabilities and operations of the insurer as the Director determines to be necessary, including a review of its RBC plan or revised RBC plan; and

(c) Subsequent to the examination or analysis, issue a corrective order specifying the corrective actions that the Director determines to be required.

(3) In determining corrective actions, the Director may take into account the factors that the Director determines to be relevant with respect to the insurer, based upon the Director’s examination or analysis of the assets, liabilities and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:

(a) Not later than the 45th day after the occurrence of the regulatory action level event;

(b) If the insurer challenges an adjusted RBC report pursuant to OAR 836-011-0360 and the challenge is not frivolous in the judgment of the Director, not later than the 45th day after the notification to the insurer that the Director has, after a hearing, rejected the insurer’s challenge; or

(c) If the insurer challenges a revised RBC plan pursuant to OAR 836-011-0360 and the challenge is not frivolous in the judgment of the Director, not later than the 45th day after the notification to the insurer that the Director has, after a hearing, rejected the insurer’s challenge.

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.216, 731.554 & 731.574
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0340 Authorized Control Level Event

(1) “Authorized control level event” means any of the following events:

(a) The filing of an RBC report by the insurer indicating that the insurer’s total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;

(b) Notification by the Director to the insurer of an adjusted RBC report indicating the event in subsection (a) of this section, if the insurer does not challenge the adjusted RBC report under OAR 836-011-0360;

(c) If, pursuant to OAR 836-011-0360, the insurer challenges an adjusted RBC report that indicates the event in subsection (a) of this section, notification by the Director to the insurer that the Director has, after a hearing, rejected the insurer’s challenge;

(d) The failure of the insurer to respond to a corrective order, in a manner satisfactory to the Director, if the insurer has not challenged the corrective order under OAR 836-011-0360; or

(e) If the insurer has challenged a corrective order under OAR 836-011-0360 and the Director has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond to the corrective order in a manner satisfactory to the Director subsequent to rejection or modification by the Director.

(2) In the event of an authorized control level event with respect to an insurer, the Director shall:

(a) Take such actions as are required under OAR 836-011-0330 regarding an insurer with respect to which an regulatory action level event has occurred; or

(b) If the Director determines it to be in the best interests of the policyholders and creditors of the insurer and of the public, take actions necessary to cause the insurer to be placed under regulatory control under ORS 734.059 to 734.440. If the Director takes such actions, the authorized control level event is sufficient grounds for the Director to take action under 734.150(1) or (4) or 734.170, and the Director shall have the rights, powers and duties with respect to the insurer as are set forth in 734.059 to 734.440.

History

Statutory/Other Authority: 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0350 Mandatory Control Level Event

(1) “Mandatory control level event” means any of the following events:

(a) The filing of an RBC report indicating that the insurer’s total adjusted capital is less than its mandatory control level RBC;

(b) Notification by the Director to the insurer of an adjusted RBC report that indicates the event in subsection (a) of this section, if the insurer does not challenge the adjusted RBC report under OAR 836-011-0360; or

(2) In the event of a mandatory control level event:

(a) With respect to an insurer transacting life insurance, the Director shall take actions necessary to place the insurer under regulatory control under ORS 734.059 to 734.440. In that event, the mandatory control level event is sufficient grounds for the Director to take action under 734.150(1) or (4) or 734.170, and the Director shall have the rights, powers and duties with respect to the insurer as are set forth in 734.059 to 734.440. Notwithstanding the provisions of this subsection, the Director may forego action for not more than 90 days after the mandatory control level event if the Director finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period.

(b) With respect to an insurer transacting property and casualty insurance, the Director shall take actions necessary to place the insurer under regulatory control under ORS 734.059 to 734.440, or, in the case of an insurer that is writing no business and that is running off its existing business, may allow the insurer to continue its run-off under the supervision of the Director. In either event, the mandatory control level event is sufficient grounds for the Director to take action under 734.150(1) or (4) or 734.170, and the Director shall have the rights, powers and duties with respect to the insurer as are set forth in 734.059 to 734.440. Notwithstanding the provisions of this subsection, the Director, may forego action for not more than 90 days after the mandatory control level event if the Director finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90 day period.

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0360 Hearings

An insurer may request a hearing, as provided in ORS 731.240, for the purpose of challenging any determination or action by the Director in connection with any event described in this rule. The insurer shall notify the Director of its request for a hearing not later than the fifth day after notification by the Director under any of the events described in this rule. Upon receipt of the insurer’s request for a hearing, the Director shall set a date for the hearing. The date shall be not less than 10 nor more than 30 days after the date of the insurer’s request. The events to which the opportunity for a hearing under this rule relates are as follows:

(1) Notification to an insurer by the Director of an adjusted RBC report;

(2) Notification to an insurer by the Director that the insurer’s RBC plan or revised RBC plan is unsatisfactory, and such notification constitutes a regulatory action level event with respect to the insurer;

(3) Notification to any insurer by the Director that the insurer has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or

(4) Notification to an insurer by the Director of a corrective order with respect to the insurer.

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.240, 731.554 & 731.574
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0380 Supplemental Provisions; Exemption

(1) 836-011-0300 to 836-011-0390 are supplemental to any other provisions of the laws of this state, and do not preclude or limit any other powers or duties of the Director under such laws, including, but not limited to, OAR 836-011-0100 to 836-011-0120.

(2) OAR 836-011-0300 to 836-011-0390 do not apply to any domestic insurer transacting property and casualty insurance that:

(a) Writes direct business only in this state;

(b) Writes direct annual premiums of $2 million or less; and

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 14-2011, f. & cert. ef. 10-31-11
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0390 Foreign Insurers

(1) A foreign insurer shall, upon the written request of the Director, submit to the Director an RBC report as of the end of the calendar year just ended on the later of:

(a) The date by which an RBC report would be required to be filed by a domestic insurer under OAR 836-011-0300 to 836-011-0390; or

(b) The 15th day after the request is received by the foreign insurer.

(2) A foreign insurer shall, at the written request of the Director, promptly submit to the Director a copy of any RBC plan that is filed with the insurance commissioner of any other state.

(3) In the event of a company action level event, regulatory action level event or authorized control level event with respect to any foreign insurer as determined under the statute or rule governing risk based capital reporting applicable in the state of domicile of the insurer (or, if no such statute or rule is in force in that state, under the provisions of OAR 836-011-0300 to 836-011-0390), if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC plan in the manner specified under that state's statute or rule governing risk-based capital reporting (or, if no such statute or rule is in force in that state, under 836-011-0320), the Director may require the foreign insurer to file an RBC plan with the Director. In such event, the failure of the foreign insurer to file an RBC plan with the Director shall be grounds to order the insurer to cease and desist from writing new insurance business in this state.

(4) In the event of a mandatory control level event with respect to any foreign insurer, if a domiciliary receiver has not been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the Director may apply for an order under ORS 734.190 with respect to the conservation of property of foreign insurers found in this state, and the occurrence of the mandatory control level event shall be considered adequate grounds for the application under 734.150(1) or (4).

History

Statutory/Other Authority: ORS 731.244, 731.554 & 733.210
Statutes/Other Implemented: ORS 731.554 & 731.574
ID 14-2011, f. & cert. ef. 10-31-11
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0430 Scope and Authority

(1) OAR 836-011-0430 to 836-011-0460 apply to all domestic insurers and to all domestic health care service contractors under ORS 750.055 and multiple employer welfare arrangements under 750.333. For purposes of OAR 836-011-0430 to 836-011-0460, “insurer” includes health care service contractors and multiple employer welfare arrangements.

(2) OAR 836-011-0430 to 836-011-0460 are adopted under the authority of ORS 731.244, 731.574 and 733.210.

History

Statutory/Other Authority: ORS 731.244 & 731.574
Statutes/Other Implemented: ORS 731.574 & 733.210
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0440 Report

(1) Every domestic insurer shall file a report with the Director of the Department of Consumer and Business Services disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the Director for review, approval or information purposes pursuant to other provisions of the Insurance Code, laws, rules or other requirements.

(2) The report required in section (1) of this rule is due not later than the 15th day after the end of the calendar month in which any of the transactions described in section (1) of this rule occurs.

(3) One complete copy of the report, including any exhibits or other attachments, shall be filed with:

(a) The insurance department of the insurer’s state of domicile; and

(b) The National Association of Insurance Commissioners.

History

Statutory/Other Authority: ORS 731.244 & 731.574
Statutes/Other Implemented: ORS 731.574 & 733.210
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0450 Acquisitions and Dispositions of Assets

(1) Materiality. No acquisitions or dispositions of assets need be reported pursuant to OAR 836-011-0440 if the acquisitions or dispositions are not material. For purposes of 836-011-0430 to 836-011-0460, a material acquisition (or the aggregate of any series of related acquisitions during any 30-day period) or disposition (or the aggregate of any series of related dispositions during any 30-day period) is one that is non-recurring and not in the ordinary course of business and involves more than five percent of the reporting insurer’s total allowed assets as reported in its most recent statutory statement filed with the insurance department of the insurer’s state of domicile.

(2) Scope. OAR 836-011-0430 to 836-011-0460 apply to the following asset acquisitions and asset dispositions:

(a) Asset acquisitions subject to OAR 836-011-0430 to 836-011-0460 include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.

(b) Asset dispositions subject to OAR 836-011-0430 to 836-011-0460 include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction or other disposition.

(3) Information to be reported:

(a) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:

(A) Date of the transaction;

(B) Manner of acquisition or disposition;

(D) Nature and amount of the consideration given or received;

(E) Purpose of, or reason for, the transaction;

(F) Manner by which the amount of consideration was determined;

(G) Gain or loss recognized or realized as a result of the transaction; and

(H) Name or names of the person or persons from whom the assets were acquired or to whom they were disposed.

(b) An insurer is required to report material acquisitions and dispositions on a non-consolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer’s capital and surplus.

History

Statutory/Other Authority: ORS 731.244 & 731.574
Statutes/Other Implemented: ORS 731.574 & 733.210
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0460 Nonrenewals, Cancellations or Revisions of Ceded Reinsurance Agreements

(1) Materiality and scope:

(a) No nonrenewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to OAR 836-011-0440 if the nonrenewals, cancellations or revisions are not material. For purposes of 836-011-0430 to 836-011-0460, a material nonrenewal, cancellation or revision is one that affects:

(A) As respects property and casualty business, including accident and health business written by a property and casualty insurer:

(i) More than fifty percent of the insurer’s total ceded written premium; or

(ii) More than fifty percent of the insurer’s total ceded indemnity and loss adjustment reserves.

(B) As respects life, annuity, and accident and health business: more than fifty percent of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer’s most recent annual statement;

(C) As respects either property and casualty business or life, annuity, and accident and health business, either of the following events shall constitute a material revision that must be reported:

(i) An authorized reinsurer representing more than ten percent of a total cession is replaced by one or more unauthorized reinsurers; or

(ii) Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than ten percent of a total cession.

(b) However, no filing shall be required if:

(A) As respects property and casualty business, including accident and health business written by a property and casualty insurer: the insurer’s total ceded written premium represents, on an annualized basis, less than ten percent of its total written premium for direct and assumed business; or

(B) As respects life, annuity, and accident and health business: the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent of the statutory reserve requirement prior to any cession.

(2) Information to be reported:

(a) The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of a ceded reinsurance agreement:

(A) Effective date of the nonrenewal, cancellation or revision;

(B) The description of the transaction with an identification of the initiator thereof;

(D) If applicable, the identity of the replacement reinsurers.

(b) Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a non-consolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer’s capital and surplus.

History

Statutory/Other Authority: ORS 731.244 & 731.574
Statutes/Other Implemented: ORS 731.574 & 733.210
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-011-0500 Application; Statutory Authority; Statutes Implemented

(1) OAR 836-011-0500 to 836-011-0550 apply to health care service contractors.

(2) OAR 836-011-0500 to 836-011-0550 are adopted pursuant to the authority of ORS 731.244 and 750.045 for the purpose of implementing ORS 731.574, 733.210 and 750.045.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0505 Definitions

As used in OAR 836-011-0500 to 836-011-0550:

(1) "Adjusted RBC report" means an RBC report that has been adjusted by the Director in accordance with OAR 836-011-0510(4).

(2) "Corrective order" means an order issued by the Director specifying corrective actions that the Director has determined are required.

(3) "Domestic health care service contractor" means a health care service contractor domiciled in this state.

(4) "Foreign health care service contractor" means a health care service contractor that is authorized to transact business in this state as a health care service contractor but is not domiciled in this state.

(5) "NAIC" means the National Association of Insurance Commissioners.

(6) "RBC instructions" means the RBC report including risk-based capital instructions adopted by the NAIC, as the RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

(7) "RBC level" means a health care service contractor’s Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC or Mandatory Control Level RBC, defined as follows:

(a) "Company Action Level RBC" means, with respect to any health care service contractor, the product of 2.0 and its Authorized Control Level RBC;

(b) "Regulatory Action Level RBC" means the product of 1.5 and its Authorized Control Level RBC;

(c) "Authorized Control Level RBC" means the number determined under the risk-based capital formula in accordance with the RBC Instructions;

(d) "Mandatory Control Level RBC" means the product of .70 and the Authorized Control Level RBC.

(8) "RBC plan" means a comprehensive financial plan containing the elements specified in OAR 836-011-0515(2). If the Director rejects the RBC plan and it is revised by the health care service contractor with or without the Director’s recommendation, the plan shall be called the "revised RBC plan."

(9) "RBC report" means the report required in OAR 836-011-0510.

(10) "Total adjusted capital" means the sum of:

(a) A health care service contractor’s statutory capital and surplus (i.e. net worth) as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under ORS 731.574; and

(b) Such other items, if any, as the RBC instructions may provide.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0510 RBC Reports

(1) A domestic health care service contractor shall, on or prior to each March 1 (the "filing date"), prepare and submit to the Director a report of its RBC levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, a domestic health care service contractor shall file its RBC report:

(a) With the NAIC in accordance with the RBC instructions; and

(b) With the insurance commissioner in any state in which the health care service contractor is authorized to do business, if the insurance commissioner has notified the health care service contractor of its request in writing, in which case the health care service contractor shall file its RBC report not later than the later of:

(A) 15 days from the receipt of notice to file its RBC report with that state; or

(B) The filing date.

(2) A health care service contractor’s RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take the following into account (and may adjust for the covariance between) determined in each case by applying the factors in the manner set forth in the RBC instructions:

(a) Asset risk;

(b) Credit risk;

(d) All other business risks and such other relevant risks as are set forth in the RBC instructions.

(3) An excess of capital (i.e. net worth) over the amount produced by the risk-based capital requirements contained in OAR 836-011-0500 to 836-011-0550 and the formulas, schedules and instructions referenced in 836-011-0500 to 836-011-0550 is desirable in the business of a health care service contractor. Accordingly, health care service contractors should seek to maintain capital above the RBC levels required by 836-011-0500 to 836-011-0550. Additional capital is used and useful in the insurance business and helps to secure a health care service contractor against various risks inherent in, or affecting, the business of a health care service contractor and not accounted for or only partially measured by the risk-based capital requirements contained in 836-011-0500 to 836-011-0550.

(4) If a domestic health care service contractor files an RBC report that in the judgment of the Director is inaccurate, then the Director shall adjust the RBC report to correct the inaccuracy and shall notify the health care service contractor of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is referred to as an "adjusted RBC report."

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0515 Company Action Level Event

(1) "Company Action Level Event" means any of the following events:

(a)(A) The filing of an RBC report by a health care service contractor that indicates that the health care service contractor's total adjusted capital is greater than or equal to its Regulatory Action Level RBC but less than its Company Action Level RBC; or

(B) If a health care service contractor has total adjusted capital that is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the Health RBC instructions;

(b) Notification by the Director to the health care service contractor of an adjusted RBC report that indicates an event in subsection (a) of this subsection, if the health care service contractor does not challenge the adjusted RBC report under OAR 836-011-0535; or

(c) If, pursuant to OAR 836-011-0535, a health care service contractor challenges an adjusted RBC report that indicates the event in subsection (a) of this section, the notification by the Director to the health care service contractor that the Director has, after a hearing, rejected the health care service contractor's challenge.

(2) In the event of a Company Action Level Event, the health care service contractor shall prepare and submit to the Director an RBC plan that shall:

(a) Identify the conditions that contribute to the Company Action Level Event;

(b) Contain proposals of corrective actions that the health care service contractor intends to take and that would be expected to result in the elimination of the Company Action Level Event;

(c) Provide projections of the health care service contractor's financial results in the current year and at least the two succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheets, operating income, net income, capital and surplus, and RBC levels. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense and benefit component;

(d) Identify the key assumptions impacting the health care service contractor's projections and the sensitivity of the projections to the assumptions; and

(e) Identify the quality of, and problems associated with, the health care service contractor's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.

(3) The RBC plan shall be submitted

(a) Within 45 days of the Company Action Level Event; or

(b) If the health care service contractor challenges an adjusted RBC report pursuant to OAR 836-011-0535, within 45 days after notification to the health care service contractor that the Director has, after a hearing, rejected the health care service contractor's challenge.

(4) Within 60 days after the submission by a health care service contractor of an RBC plan to the Director, the Director shall notify the health care service contractor whether the RBC plan shall be implemented or is, in the judgment of the Director, unsatisfactory. If the Director determines the RBC plan is unsatisfactory, the notification to the health care service contractor shall set forth the reasons for the determination and may set forth proposed revisions that will render the RBC plan satisfactory, in the judgment of the Director. Upon notification from the Director, the health care service contractor shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the Director, and shall submit the revised RBC plan to the Director:

(a) Within 45 days after the notification from the Director; or

(b) If the health care service contractor challenges the notification from the Director under OAR 836-011-0535, within 45 days after a notification to the health care service contractor that the Director has, after a hearing, rejected the health care service contractor's challenge.

(5) In the event of a notification by the Director to a health care service contractor that the health care service contractor's RBC plan or revised RBC plan is unsatisfactory, the Director may at the Director's discretion, subject to the health care service contractor's right to a hearing under OAR 836-011-0535, specify in the notification that the notification constitutes a Regulatory Action Level Event.

(6) Every domestic health care service contractor that files an RBC plan or revised RBC plan with the Director shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state in which the health care service contractor is authorized to do business if:

(a) The state has an RBC provision substantially similar to ORS 731.752; and

(b) The insurance commissioner of that state has notified the health care service contractor of its request for the filing in writing, in which case the health care service contractor shall file a copy of the RBC plan or revised RBC plan in that state no later than the later of:

(A) Fifteen days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or

(B) The date on which the RBC plan or revised RBC plan is filed under sections (3) and (4) of this rule.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 21-2010, f. & cert. ef. 12-15-10
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0520 Regulatory Action Level Event

(1) "Regulatory Action Level Event" means, with respect to a health care service contractor, any of the following events:

(a) The filing of an RBC report by the health care service contractor that indicates that the health care service contractor’s total adjusted capital is greater than or equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC;

(b) Notification by the Director to a health care service contractor of an adjusted RBC report that indicates the event in subsection (a) of this section, if the health care service contractor does not challenge the adjusted RBC report under OAR 836-011-0535;

(c) If, pursuant to OAR 836-011-0535, the health care service contractor challenges an adjusted RBC report that indicates the event in subsection (a) of this section, the notification by the Director to the health care service contractor that the Director has, after a hearing, rejected the health care service contractor’s challenge;

(d) The failure of the health care service contractor to file an RBC report by the filing date, unless the health care service contractor has provided an explanation for the failure that is satisfactory to the Director and has cured the failure within ten days after the filing date;

(e) The failure of the health care service contractor to submit an RBC plan to the Director within the time period set forth in OAR 836-011-0515;

(f) Notification by the Director to the health care service contractor that:

(A) The RBC plan or revised RBC plan submitted by the health care service contractor is, in the judgment of the Director, unsatisfactory; and

(B) Notification constitutes a Regulatory Action Level Event with respect to the health care service contractor, if the health care service contractor has not challenged the determination under OAR 836-011-0535;

(g) If, pursuant to OAR 836-011-0535, the health care service contractor challenges a determination by the Director under subsection (f) of this section, the notification by the Director to the health care service contractor that the Director has, after a hearing, rejected the challenge;

(h) Notification by the Director to the health care service contractor that the health care service contractor has failed to adhere to its RBC plan or revised RBC plan, but only if the failure has a substantial adverse effect on the ability of the health care service contractor to eliminate the Company Action Level Event in accordance with its RBC plan or revised RBC plan and the Director has so stated in the notification, if the health care service contractor has not challenged the determination under OAR 836-011-0535; or

(i) If, pursuant to OAR 836-011-0535, the health care service contractor challenges a determination by the Director under subsection (h) of this section, the notification by the Director to the health care service contractor that the Director has, after a hearing, rejected the challenge.

(2) In the event of a Regulatory Action Level Event the Director shall:

(a) Require the health care service contractor to prepare and submit an RBC plan or, if applicable, a revised RBC plan;

(b) Perform such examination or analysis as the Director deems necessary of the assets, liabilities and operations of the health care service contractor including a review of its RBC plan or revised RBC plan; and

(c) Subsequent to the examination or analysis, issue an order specifying such corrective actions as the Director shall determine are required (a "corrective order").

(3) In determining corrective actions, the Director may take into account factors the Director deems relevant with respect to the health care service contractor based upon the Director’s examination or analysis of the assets, liabilities and operations of the health care service contractor, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:

(a) Within 45 days after the occurrence of the Regulatory Action Level Event;

(b) If the health care service contractor challenges an adjusted RBC report pursuant to OAR 836-011-0535 and the challenge is not frivolous in the judgment of the Director within 45 days after the notification to the health care service contractor that the Director has, after a hearing, rejected the health care service contractor’s challenge; or

(c) If the health care service contractor challenges a revised RBC plan pursuant to OAR 836-011-0535 and the challenge is not frivolous in the judgment of the Director, within 45 days after the notification to the health care service contractor that the care service contractor has, after a hearing, rejected the health care service contractor’s challenge.

(4) The Director may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the Director to review the health care service contractor’s RBC plan or revised RBC plan, examine or analyze the assets, liabilities and operations (including contractual relationships) of the health care service contractor and formulate the corrective order with respect to the health care service contractor. The fees, costs and expenses relating to consultants shall be borne by the affected health care service contractor or such other party as directed by the Director.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0525 Authorized Control Level Event

(1) "Authorized Control Level Event" means any of the following events:

(a) The filing of an RBC report by the health care service contractor that indicates that the health care service contractor’s total adjusted capital is greater than or equal to its Mandatory Control Level RBC but less than its Authorized Control Level RBC;

(b) The notification by the Director to the health care service contractor of an adjusted RBC report that indicates the event in subsection (a) of this section, if the health care service contractor does not challenge the adjusted RBC report under OAR 836-011-0535;

(c) If, pursuant to OAR 836-011-0535, the health care service contractor challenges an adjusted RBC report that indicates the event in subsection (a) of this section, notification by the Director to the health care service contractor that the Director has, after a hearing, rejected the health care service contractor’s challenge;

(d) The failure of the health care service contractor to respond, in a manner satisfactory to the Director, to a corrective order (if the health care service contractor has not challenged the corrective order under OAR 836-011-0535); or

(e) If the health care service contractor has challenged a corrective order under OAR 836-011-0535 and the Director has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health care service contractor to respond, in a manner satisfactory to the Director, to the corrective order subsequent to rejection or modification by the Director.

(2) In the event of an Authorized Control Level Event with respect to a health care service contractor, the Director shall:

(a) Take such actions as are required under OAR 836-011-0520 regarding a health care service contractor with respect to which an Regulatory Action Level Event has occurred; or

(b) If the Director deems it to be in the best interests of the policyholders and creditors of the health care service contractor and of the public, take such actions as are necessary to cause the health care service contractor to be placed under regulatory control under ORS 734.059 to 734.440. In the event the Director takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the Director to take action under 734.059 to 734.440, and the Director shall have the rights, powers and duties with respect to the health care service contractor as are set forth in 734.059 to 744.440. In the event the Director takes actions under this subsection pursuant to an adjusted RBC report, the health care service contractor shall be entitled to such protections as are afforded to health care service contractors under the provisions of 734.059 to 734.440.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0530 Mandatory Control Level Event

(1) "Mandatory Control Level Event" means any of the following events:

(a) The filing of an RBC report that indicates that the health care service contractor’s total adjusted capital is less than its Mandatory Control Level RBC;

(b) Notification by the Director to the health care service contractor of an adjusted RBC report that indicates the event in subsection (a) of this section, if the health care service contractor does not challenge the adjusted RBC report under OAR 836-011-0535; or

(2) In the event of a Mandatory Control Level Event, the Director shall take such actions as are necessary to place the health care service contractor under regulatory control under ORS 734.059 to 734.440. In that event, the Mandatory Control Level Event shall be deemed sufficient grounds for the Director to take action under 734.059 to 734.440, and the Director shall have the rights, powers and duties with respect to the health care service contractor as are set forth in 734.059 to 734.440. If the Director takes actions pursuant to an adjusted RBC report, the health care service contractor shall be entitled to the protections of 734.059 to 734.440. Notwithstanding the provisions of this rule, the Director may forego action for up to 90 days after the Mandatory Control Level Event if the Director finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90 day period.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0535 Hearings

Upon the occurrence of any of the following events, a health care service contractor may request a hearing, as provided in ORS 731.240, for the purpose of challenging any determination or action by the Director in connection with any event described in this rule. The health care service contractor shall notify the Director of its request for a hearing not later than the fifth day after notification by the Director under any of the events described in this rule. Upon receipt of the health care service contractor’s request for a hearing, the Director shall set a date for the hearing. The date shall be not less than 10 nor more than 30 days after the date of the health care service contractor’s request. The events to which the opportunity for a hearing under this rule relates are as follows:

(1) Notification to a health care service contractor by the Director of an adjusted RBC report;

(2) Notification to a health care service contractor by the Director that:

(a) The health care service contractor’s RBC plan or revised RBC plan is unsatisfactory; and

(b) Notification constitutes a Regulatory Action Level Event with respect to the health care service contractor;

(3) Notification to a health care service contractor by the Director that the health care service contractor has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the health care service contractor to eliminate the Company Action Level Event with respect to the health care service contractor in accordance with its RBC plan or revised RBC plan; or

(4) Notification to a health care service contractor by the Director of a corrective order with respect to the health care service contractor.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0540 Supplemental Provisions; Rules; Exemption

(1) OAR 836-011-0500 to 836-011-0550 are supplemental to any other provisions of the laws of this state, and shall not preclude or limit any other powers or duties of the Director under such laws, including, but not limited to, ORS 734.059 to 734.440 and OAR 836-011-0100 to 836-011-0120.

(2) The Director may exempt from the application of OAR 836-011-0500 to 836-011-0550 a domestic health care service contractor that:

(a) Writes direct business only in this state;

(b) Assumes no reinsurance in excess of five percent of direct premium written; and

(d) Is a limited health care service contractor that covers less than 500 lives.

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0545 Foreign Health Care Service Contractors

(1) A foreign health care service contractor shall, upon the written request of the Director, submit to the Director an RBC report as of the end of the calendar year just ended the later of:

(a) The date an RBC report would be required to be filed by a domestic health care service contractor under OAR 836-011-0500 to 836-011-0550; or

(b) The 15th day after the request is received by the foreign health care service contractor.

(2) A foreign health care service contractor shall, at the written request of the Director, promptly submit to the Director a copy of any RBC plan that is filed with the insurance commissioner of any other state.

(3) In the event of a Company Action Level Event, Regulatory Action Level Event or Authorized Control Level Event with respect to a foreign health care service contractor as determined under the RBC statute or other law applicable in the state of domicile of the health care service contractor (or, if no RBC statute or other law is in force in that state, under the provisions of OAR 836-011-0500 to 836-011-0550), if the insurance commissioner of the state of domicile of the foreign health care service contractor fails to require the foreign health care service contractor to file an RBC plan in the manner specified under that state’s RBC statute or other law (or, if no RBC statute or other law is in force in that state, under OAR 836-011-0515), the Director may require the foreign health care service contractor to file an RBC plan with the Director. In such event, the failure of the foreign health care service contractor to file an RBC plan with the Director shall be grounds to order the health care service contractor to cease and desist from writing new insurance business in this state.

(4) In the event of a Mandatory Control Level Event with respect to a foreign health care service contractor, if no domiciliary receiver has been appointed with respect to the foreign health care service contractor under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign health organization, the Director may apply for an order under ORS 734.190 with respect to the liquidation of property of foreign health care service contractors found in this state, and the occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application under 734.150(1) or (4).

History

Statutory/Other Authority: ORS 731.244 & 750.045
Statutes/Other Implemented: ORS 731.574, 733.210 & 750.045
ID 22-2002, f. & cert. ef. 11-27-02

Or. Admin. R. 836-011-0600 Report on Services Provided by Expanded Practice Dental Hygienists

(1) As used in this rule:

(a) “Expanded practice dental hygienist” has the meaning given in ORS 679.010.

(b) “Health insurer” includes:

(A) An insurer authorized to transact health insurance in Oregon;

(B) A health care service contractor as defined in ORS 750.005;

(D) A coordinated care organization as defined in ORS 414.025, or a dental care organization or governed by the Oregon Health Authority;

(E) A third party administrator licensed under ORS 744.702; and

(F) Federally qualified health centers governed by the United States Department of Health and Human Services.

(2) A health insurer authorized to transact health insurance that provides coverage for dental services in Oregon shall, by August 1 of every even-numbered year, report to the Department of Consumer and Business Services information pertaining to reimbursement for those dental services provided by Expanded Practice Dental Hygienists (EPDH) to Oregon residents for the 24-month period ending June 30 of the reporting year. For each dental service provided during the period under review the information shall include:

(a) The Current Dental Terminology code denoting the type of service provided;

(b) The provider’s National Provider Identifier number; and

(c) The following information, which the department will aggregate prior to providing the information to the Board of Dentistry:

(A) The amount billed by the EPDH to the insurer for the service provided;

(B) The amount allowed for the service under the insurance plan;

(C) The amount of benefit paid by the insurer for the dental service (i.e. the amount of the benefit subtracting any deductible, copay, coinsurance or other cost-sharing);

(D) The amount owed by the insured for the service (i.e. deductible, copay, coinsurance or other cost-sharing);

(E) The amount of excluded charges owed by the insured; and

(F) The amount of excluded charges, if any, that the provider is not allowed to collect from the insured due to their provider agreement with the insurer.

(3) A health insurer subject to this rule shall provide the report required in section (2) of this rule electronically, as requested by the Director.

History

Statutory/Other Authority: ORS 731.244 & 680.210
Statutes/Other Implemented: ORS 680.210 (Sec. 11 & 12, Ch.716 & OL 2011)
ID 5-2012, f. & cert. ef. 2-16-12

Division 12 CREDIT FOR REINSURANCE

Or. Admin. R. 836-012-0000 Director's Authority

(1) OAR 836-012-0000 to 836-012-0110 are adopted pursuant to ORS 731.508 to 731.514, and general rulemaking authority under ORS 731.244.

(2) OAR 836-012-0000 to 836-012-0110 are adopted for the purpose of establishing standards and procedural requirements that the director determines to be necessary and appropriate in the public interest for carrying out ORS 731.508 to 731.514, relating to credit for reinsurance, for the protection of the insurance-buying public and the ceding insurers in this state.

(3) Form AR-1, Certificate of Assuming Insurer, Exhibit 1 to this rule, is adopted for purposes of OAR 836-012-0000 to 836-012-0110, when the use of the form is required by such rules.

(4) Form ACR-1, Certificate of Assuming Certified Reinsurer, Exhibit 2 to this rule, is adopted for purposes of OAR 836-012-0000 to 836-012-0110, when the use of the form is required by such rules.

(5) Form CR-F, Certificate For Property/Casualty Reinsurers, Exhibit 3 to this rule, is adopted for purposes of OAR 836-012-0000 to 836-012-0110, when the use of the form is required by such rules.

(6) Form CR-S, Certificate For Life/Health Reinsurers, Exhibit 4 to this rule, is adopted for purposes of OAR 836-012-0000 to 836-012-0110, when the use of the form is required by such rules.

(7) Form RJ-1, Certificate of Reinsurer Domiciled in Reciprocal Jurisdiction, Exhibit 5 to this rule, is adopted for purposes of OAR 836-012-0000 to 836-012-0110, when the use of the form is required by such rules.

(8) If any provision of this regulation, or the application of the provision to any person or circumstance, is held invalid, the remainder of the regulation, and the application of the provision to persons or circumstances other than those to which it is held invalid, shall not be affected.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: Or Laws 2021, ch 204, sec 2, ORS 731.508 - 731.514 & ORS 731.244
Statutes/Other Implemented: Or Laws 2021, ch 204, sec 2 & ORS 731.508 - 731.514
ID 11-2021, amend filed 12/15/2021, effective 01/01/2022
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0006 Definitions

As used in OAR 836-012-0000 to 836-012-0110, “statutory financial statement” means quarterly, annual or other financial statements required by state law.

History

Statutory/Other Authority: 731.244 & ORS 731.508 - 731.511
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, adopt filed 12/19/2019, effective 01/01/2020

Or. Admin. R. 836-012-0011 Credit for Reinsurance — Reinsurer Authorized in this State

Pursuant to ORS 731.509(4), the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that was authorized in this state as of any date on which statutory financial statement credit for reinsurance is claimed.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0021 Credit for Reinsurance — Accredited Reinsurers

(1) Pursuant to ORS 731.509(4) and ORS 731.511, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this state as of the date on which statutory financial statement credit for reinsurance is claimed. An accredited reinsurer must:

(a) File a properly executed Form AR-1 (Exhibit 1, OAR 836-012-0000) as evidence of its submission to this state’s jurisdiction and to this state’s authority to examine its books and records;

(b) File with the director a certified copy of a certificate of authority or other acceptable evidence that it is licensed to transact insurance or reinsurance in at least one state, or, in the case of a U.S. branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;

(c) File annually with the director a copy of its annual statement filed with the insurance department of its state of domicile or, in the case of an alien assuming insurer, with the state through which it is entered and in which it is licensed to transact insurance or reinsurance, and a copy of its most recent audited financial statement; and

(d) Maintain a surplus as regards policyholders in an amount not less than $20,000,000 or obtain the director’s affirmative approval upon a finding by the director that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers.

(2) If the director determines that the assuming insurer has failed to meet or maintain any of these qualifications, the director may upon written notice and opportunity for hearing pursuant to ORS chapter 183, suspend or revoke the accreditation. Credit shall not be allowed a domestic ceding insurer under this section if the assuming insurer’s accreditation has been revoked by the director, or if the reinsurance was ceded while the assuming insurer’s accreditation was under suspension by the director.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0031 Credit for Reinsurance — Reinsurer Domiciled and Licensed in Another State

(1) Pursuant to ORS 731.509(6), the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that as of any date on which statutory financial statement credit for reinsurance is claimed:

(a) Is domiciled in a state employing standards regarding credit for reinsurance that equal or exceed those applicable under ORS 731.509 to 731.511 and OAR 836-012-0000 to 836-012-0110 or, in the case of a U.S. branch of an alien assuming insurer, is entered through a state employing such standards;

(b) Maintains capital and surplus in an amount not less than $20,000,000; and

(c) Files a properly executed Form AR-1 (Exhibit 1, OAR 836-012-0000) with the director as evidence of its submission to this state's authority to examine its books and records.

(2) The provisions of this section relating to surplus as regards policyholders do not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. As used in this section, “substantially similar” standards means credit for reinsurance standards that the director determines equal or exceed the standards of the Act and this regulation.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0041 Credit for Reinsurance — Reinsurers Maintaining Trust Funds

(1) Pursuant to ORS 731.509(7), the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer which, as of any date on which statutory financial statement credit for reinsurance is claimed, and thereafter for so long as credit for reinsurance is claimed, maintains a trust fund in an amount prescribed in this rule in a qualified U.S. financial institution as defined in ORS 731.510(1), for the payment of the valid claims of its U.S. domiciled ceding insurers and their assigns and successors in interest. The assuming insurer shall report annually to the director substantially the same information as that required to be reported on the National Association of Insurance Commissioners annual statement form by authorized insurers, to enable the director to determine the sufficiency of the trust fund.

(2) The following requirements apply to the following categories of assuming insurer:

(a) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. domiciled insurers, and in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000, except as provided in paragraph (b) of this subsection.

(b) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of U.S. ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers covered by the trust.

(c)(A)The trust fund for a group including incorporated and individual unincorporated underwriters shall consist of:

(i) For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after January 1, 1993, funds in trust in an amount not less than the respective underwriters’ several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any underwriter of the group;

(ii) For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this regulation, funds in trust in an amount not less than the respective underwriters’ several insurance and reinsurance liabilities attributable to business written in the United States; and

(iii) In addition to these trusts, the group shall maintain a trusteed surplus of which $100,000,000 shall be held jointly for the benefit of the U.S. domiciled ceding insurers of any member of the group for all the years of account.

(B) The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group’s domiciliary regulator as are the unincorporated members. The group shall, within 90 days after its financial statements are due to be filed with the group’s domiciliary regulator, provide to the director:

(i) An annual certification by the group’s domiciliary regulator of the solvency of each underwriter member of the group; or

(ii) If a certification is unavailable, a financial statement prepared by independent public accountants, of each underwriter member of the group.

(d)(A) The trust fund for a group of incorporated insurers under common administration, whose members possess aggregate policyholders surplus of $10,000,000,000, calculated and reported in substantially the same manner as prescribed by the annual statement instructions and the 2019 version of the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners,and which has continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation, shall:

(i) Consist of funds in trust in an amount not less than the assuming insurers' several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any members of the group pursuant to reinsurance contracts issued in the name of such group;

(ii) Maintain a joint trusteed surplus of which $100,000,000 shall be held jointly for the benefit of U.S. ceding insurers of any member of the group; and

(iii) File a properly executed Form AR-1 (Exhibit 1, OAR 836-012-0000) as evidence of the submission to this state's authority to examine the books and records of any of its members and shall certify that any member examined will bear the expense of any such examination.

(B) Within 90 days after the statements are due to be filed with the group’s domiciliary regulator, the group shall file with the director an annual certification of each underwriter member’s solvency by the member’s domiciliary regulators, and financial statements, prepared by independent public accountants, of each underwriter member of the group.

(3)(a) Credit for reinsurance shall not be granted unless the form of the trust and any amendments to the trust have been approved by either the commissioner of the state where the trust is domiciled or the commissioner of another state who, pursuant to the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust. The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that:

(A) Contested claims shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied 30 days after entry of the final order of any court of competent jurisdiction in the United States;

(B) Legal title to the assets of the trust shall be vested in the trustee for the benefit of the grantor's U.S. ceding insurers, their assigns and successors in interest;

(D) The trust shall remain in effect for as long as the assuming insurer, or any member or former member of a group of insurers, has outstanding obligations under reinsurance agreements subject to the trust; and

(E) Not later than March 1 of each year, the trustees of the trust shall submit to the director in writing a report setting forth the balance in the trust and listing the trust's investments at the preceding year end, and shall certify the date of termination of the trust, if so planned, or certify that the trust shall not expire prior to the next following December 31.

(b)(A) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by this subsection or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight over the trust or other designated receiver all of the assets of the trust fund.

(B) The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight over the trust in accordance with the laws of the state in which the trust is domiciled applicable to the liquidation of domestic insurance companies.

(C) If the commissioner with regulatory oversight over the trust determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the U.S. beneficiaries of the trust, the commissioner with regulatory oversight over the trust shall return the assets, or any part thereof, to the trustee for distribution in accordance with the trust agreement.

(D) The grantor shall waive any right otherwise available to it under U.S. law that is inconsistent with this provision.

(4) For purposes of this rule, the term "liabilities" means the assuming insurer’s gross liabilities attributable to reinsurance ceded by U. S. domiciled insurers excluding liabilities that are not otherwise secured by acceptable means, and, shall include:

(a) For business ceded by domestic insurers authorized to write accident and health insurance and property and casualty insurance:

(A) Losses and allocated loss expenses paid by the ceding insurer, recoverable from the assuming insurer;

(B) Reserves for losses reported and outstanding;

(D) Reserves for allocated loss expenses; and

(E) Unearned premiums.

(b) For business ceded by domestic insurers authorized to write life, health and annuity insurance:

(A) Aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums;

(B) Aggregate reserves for accident and health policies;

(D) Liabilities for policy and contract claims.

(5) Assets deposited in trusts established pursuant to ORS 731.509 and this rule shall be valued according to their current fair market value and shall consist only of cash in U.S. dollars, certificates of deposit issued by a U.S. financial institution as defined in ORS 731.510(2)(c), clean, irrevocable, unconditional and "evergreen" letters of credit issued or confirmed by a qualified U.S. financial institution as defined in 731.510(2)(c), and investments of the type specified in this section, but investments in or issued by an entity controlling, controlled by or under common control with either the grantor or beneficiary of the trust shall not exceed five percent of total investments. No more than 20 percent of the total of the investments in the trust may be foreign investments authorized under subsections (a)(E), (c), (f)(B) or (g) of this section, and no more than 10 percent of the total of the investments in the trust may be securities denominated in foreign currencies. For purposes of applying the preceding sentence, a depository receipt denominated in U.S. dollars and representing rights conferred by a foreign security shall be classified as a foreign investment denominated in a foreign currency. The assets of a trust established to satisfy the requirements of 731.509 shall be invested only as follows:

(a) Government obligations that are not in default as to principal or interest, that are valid and legally authorized and that are issued, assumed or guaranteed by:

(A) The United States or by any agency or instrumentality of the United States;

(B) A state of the United States;

(D) An agency or instrumentality of a governmental unit referred to in paragraphs (B) and (C) of this subsection if the obligations are by law (statutory of otherwise) payable, as to both principal and interest, from taxes levied or by law required to be levied or from adequate special revenues pledged or otherwise appropriated or by law required to be provided for making these payments, but shall not be obligations eligible for investment under this subsection if payable solely out of special assessments on properties benefited by local improvements; or

(E) The government of any other country that is a member of the Organization for Economic Cooperation and Development and whose government obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC.

(b) Obligations that are issued in the United States, or that are dollar denominated and issued in a non-U.S. market, by a solvent U.S. institution (other than an insurance company) or that are assumed or guaranteed by a solvent U.S. institution (other than an insurance company) and that are not in default as to principal or interest if the obligations:

(A) Are rated A or higher (or the equivalent) by a securities rating agency recognized by the Securities Valuation Office of the NAIC, or if not so rated, are similar in structure and other material respects to other obligations of the same institution that are so rated;

(B) Are insured by at least one authorized insurer (other than the investing insurer or a parent, subsidiary or affiliate of the investing insurer) licensed to insure obligations in this state and, after considering the insurance, are rated AAA (or the equivalent) by a securities rating agency recognized by the Securities Valuation Office of the NAIC; or

(c) Obligations issued, assumed or guaranteed by a solvent non-U.S. institution chartered in a country that is a member of the Organization for Economic Cooperation and Development or obligations of U.S. corporations issued in a non-U.S. currency, provided that in either case the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC;

(d) An investment made pursuant to the provisions of subsections (a), (b) or (c) of this section shall be subject to the following additional limitations:

(A) An investment in or loan upon the obligations of an institution other than an institution that issues mortgage-related securities shall not exceed five percent of the assets of the trust;

(B) An investment in any one mortgage-related security shall not exceed five percent of the assets of the trust;

(C) The aggregate total investment in mortgage-related securities shall not exceed 25 percent of the assets of the trust; and

(D) Preferred or guaranteed shares issued or guaranteed by a solvent U.S. institution are permissible investments if all of the institution’s obligations are eligible as investments under paragraph (A) or (C) of subsection (b) of this section, but shall not exceed two percent of the assets of the trust.

(e) As used in this rule:

(A) "Mortgage-related security" means an obligation that is rated AA or higher (or the equivalent) by a securities rating agency recognized by the Securities Valuation Office of the NAIC and that either:

(i) Represents ownership of one or more promissory notes or certificates of interest or participation in the notes (including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates or participation), that:

(I) Are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C.A. Section 5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and

(II) Were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to 12 U.S.C.A. Sections 1709 and 1715-b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the Secretary of Housing and Urban Development pursuant to 12 U.S.C.A. Section 1703; or

(ii) Is secured by one or more promissory notes or certificates of deposit or participations in the notes (with or without recourse to the insurer of the notes) and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of sub-subparagraphs (i)(I) and (i)(II) of this paragraph.

(B) "Promissory note," when used in connection with a manufactured home, also includes a loan, advance or credit sale as evidenced by a retail installment sales contract or other instrument.

(f) Equity interests are subject to the following provisions:

(A) Investments in common shares or partnership interests of a solvent U.S. institution are permissible if:

(i) Its obligations and preferred shares, if any, are eligible as investments under this section; and

(ii) The equity interests of the institution (except an insurance company) are registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a to 78kk or otherwise registered pursuant to that Act, and if otherwise registered, price quotations for them are furnished through a nationwide automated quotations system approved by the Financial Industry Regulatory Authority (FINRA) or successor organization. A trust shall not invest in equity interests under this paragraph an amount exceeding one percent of the assets of the trust even though the equity interests are not so registered and are not issued by an insurance company.

(B) Investments in common shares of a solvent institution organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development, if:

(i) All its obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC;

(ii) The equity interests of the institution are registered on a securities exchange regulated by the government of a country that is a member of the Organization for Economic Cooperation and Development; and

(iii) An investment in or loan upon any one institution’s outstanding equity interests shall not exceed one percent of the assets of the trust. The cost of an investment in equity interests made pursuant to this subsection, when added to the aggregate cost of other investments in equity interests then held pursuant to this subsection, shall not exceed 10 percent of the assets in the trust;

(g) Obligations issued, assumed or guaranteed by a multinational development bank, provided the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC.

(h) Investment companies are subject to the following provisions:

(A) Securities of an investment company registered pursuant to the Investment Company Act of 1940, 15 U.S.C. § 802, are permissible investments if the investment company:

(i) Invests at least 90 percent of its assets in the types of securities that qualify as an investment under subsection (a), (b) or (c) of this section or invests in securities that are determined by the director to be substantively similar to the types of securities set forth in subsection (a), (b) or (c) of this section; or

(ii) Invests at least 90 percent of its assets in the types of equity interests that qualify as an investment under subsection (f)(A) of this section.

(B) Investments made by a trust in investment companies under this subsection shall not exceed the following limitations:

(i) An investment in an investment company qualifying under paragraph (A)(i) of this subsection shall not exceed 10 percent of the assets in the trust and the aggregate amount of investment in qualifying investment companies shall not exceed 25 percent of the assets in the trust; and

(ii) Investments in an investment company qualifying under paragraph (A)(ii) of this subsection shall not exceed five percent of the assets in the trust and the aggregate amount of investment in qualifying investment companies shall be included when calculating the permissible aggregate value of equity interests pursuant to subsection (f)(A) of this section.

(i) Letters of credit are subject to the following provisions:

(A) In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.

(B) The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where the draw would be required shall be considered to be negligence or willful misconduct, or both.

(6) A specific security provided to a ceding insurer by an assuming insurer pursuant to OAR 836-012-0060 shall be applied, until exhausted, to the payment of liabilities of the assuming insurer to the ceding insurer holding the specific security prior to, and as a condition precedent for, presentation of a claim by the ceding insurer for payment by a trustee of a trust established by the assuming insurer pursuant to this section.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 7-1995, f. & cert. ef. 11-15-95
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0046 Credit for Reinsurance – Certified Reinsurers

(1) Pursuant to ORS 731.511, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that has been certified as a reinsurer in this state at all times for which statutory financial statement credit for reinsurance is claimed under this rule. The credit allowed shall be based upon the security held by or on behalf of the ceding insurer in accordance with a rating assigned to the certified reinsurer by the director. The security shall be in a form consistent with ORS 731.510 and 731.511 and OAR 836-012-0070, 836-012-0080, or 836-012-0090. The amount of security required in order for full credit to be allowed shall correspond with the following requirements:

(a) Ratings Security Required

(b) Affiliated reinsurance transactions shall receive the same opportunity for reduced security requirements as all other reinsurance transactions.

(c) The director shall require the certified reinsurer to post 100 percent, for the benefit of the ceding insurer or its estate, security upon the entry of an order of rehabilitation, liquidation or conservation against the ceding insurer.

(d) In order to facilitate the prompt payment of claims, a certified reinsurer shall not be required to post security for catastrophe recoverables for a period of one year from the date of the first instance of a liability reserve entry by the ceding company as a result of a loss from a catastrophic occurrence as recognized by the director. The one year deferral period is contingent upon the certified reinsurer continuing to pay claims in a timely manner. Reinsurance recoverables for only the following lines of business as reported on the NAIC annual financial statement related specifically to the catastrophic occurrence will be included in the deferral:

(A) Line 1: Fire

(B) Line 2: Allied Lines

(D) Line 4: Homeowners multiple peril

(E) Line 5: Commercial multiple peril

(F) Line 9: Inland Marine

(G) Line 12: Earthquake

(H) Line 21: Auto physical damage

(e) Credit for reinsurance under this rule shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer. Any reinsurance contract entered into prior to the effective date of the certification of the assuming insurer that is subsequently amended after the effective date of the certification of the assuming insurer, or a new reinsurance contract, covering any risk for which collateral was provided previously, shall only be subject to this rule with respect to losses incurred and reserves reported from and after the effective date of the amendment or new contract.

(f) Nothing in this rule shall prohibit the parties to a reinsurance agreement from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers under this rule.

(2) Certification Procedure.

(a) The director shall post notice on the Division of Financial Regulation's website promptly upon receipt of any application for certification, including instructions on how members of the public may respond to the application. The director may not take final action on the application until at least 30 days after posting the notice required by this subsection.

(b) The director shall issue written notice to an assuming insurer that has made application and been approved as a certified reinsurer. Included in such notice shall be the rating assigned the certified reinsurer in accordance with section (1) of this rule. The director shall publish a list of all certified reinsurers and their ratings.

(A) The assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the director pursuant to section (3) of this rule;

(B) The assuming insurer must maintain capital and surplus, or its equivalent, of no less than $250,000,000 calculated in accordance with paragraph (d)(H) of this section. This requirement may also be satisfied by an association including incorporated and individual unincorporated underwriters having minimum capital and surplus equivalents (net of liabilities) of at least $250,000,000 and a central fund containing a balance of at least $250,000,000; and

(C) The assuming insurer must maintain financial strength ratings from two or more rating agencies deemed acceptable by the director. These ratings shall be based on interactive communication between the rating agency and the assuming insurer and shall not be based solely on publicly available information. These financial strength ratings will be one factor used by the director in determining the rating that is assigned to the assuming insurer. Acceptable rating agencies include the following:

(i) Standard & Poor’s;

(ii) Moody’s Investors Service;

(iii) Fitch Ratings;

(iv) A.M. Best Company; or

(v) Any other nationally recognized statistical rating organization.

(D) The certified reinsurer must comply with any other requirements reasonably imposed by the director.

(d) Each certified reinsurer shall be rated on a legal entity basis, with due consideration being given to the group rating where appropriate, except that an association including incorporated and individual unincorporated underwriters that has been approved to do business as a single certified reinsurer may be evaluated on the basis of its group rating. Factors that may be considered as part of the evaluation process include, but are not limited, to the following:

(A) The certified reinsurer’s financial strength rating from an acceptable rating agency. The maximum rating that a certified reinsurer may be assigned will correspond to its financial strength rating as outlined in the table below. The director shall use the lowest financial strength rating received from an approved rating agency in establishing the maximum rating of a certified reinsurer. A failure to obtain or maintain at least two financial strength ratings from acceptable rating agencies will result in loss of eligibility for certification;

(B) The business practices of the certified reinsurer in dealing with its ceding insurers, including its record of compliance with reinsurance contractual terms and obligations;

(C) For certified reinsurers domiciled in the United States, a review of the most recent applicable NAIC Annual Statement Blank, either Schedule F (for property/casualty reinsurers) or Schedule S (for life and health reinsurers);

(D) For certified reinsurers not domiciled in the United States, a review annually of Form CR-F for property/casualty reinsurers (Exhibit 3, OAR 836-012-0000) or Form CR-S for life/health reinsurers (Exhibit 4, OAR 836-012-0000);

(E) The reputation of the certified reinsurer for prompt payment of claims under reinsurance agreements, based on an analysis of ceding insurers’ Schedule F reporting of overdue reinsurance recoverables, including the proportion of obligations that are more than 90 days past due or are in dispute, with specific attention given to obligations payable to companies that are in administrative supervision or receivership;

(F) Regulatory actions against the certified reinsurer;

(G) The report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in paragraph (H) below;

(H) For certified reinsurers not domiciled in the United States, audited financial statements, regulatory filings, and actuarial opinion (as filed with the non-U.S. jurisdiction supervisor, with a translation into English). Upon the initial application for certification, the director will consider audited financial statements for the last two years filed with its non-U.S. jurisdiction supervisor;

(I) The liquidation priority of obligations to a ceding insurer in the certified reinsurer’s domiciliary jurisdiction in the context of an insolvency proceeding;

(J) A certified reinsurer’s participation in any solvent scheme of arrangement, or similar procedure, which involves U.S. ceding insurers. The director shall receive prior notice from a certified reinsurer that proposes participation by the certified reinsurer in a solvent scheme of arrangement; and

(K) Any other information deemed relevant by the director.

(e) Based on the analysis conducted under paragraph (d)(E) of a certified reinsurer’s reputation for prompt payment of claims, the director may make appropriate adjustments in the security the certified reinsurer is required to post to protect its liabilities to U.S. ceding insurers, provided that the director shall, at a minimum, increase the security the certified reinsurer is required to post by one rating level under paragraph (d)(A) if the director finds that:

(A) More than 15 percent of the certified reinsurer’s ceding insurance clients have overdue reinsurance recoverables on paid losses of 90 days or more which are not in dispute and which exceed $100,000 for each cedent; or

(B) The aggregate amount of reinsurance recoverables on paid losses which are not in dispute that are overdue by 90 days or more exceeds $50,000,000.

(f) The assuming insurer must submit a properly executed Form ACR-1 (Exhibit 2, OAR 836-012-0000) as evidence of its submission to the jurisdiction of this state, appointment of the director as an agent for service of process in this state, and agreement to provide security for 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers if it resists enforcement of a final U.S. judgment. The director shall not certify any assuming insurer that is domiciled in a jurisdiction that the director has determined does not adequately and promptly enforce final U.S. judgments or arbitration awards.

(g) The certified reinsurer must agree to meet applicable information filing requirements as determined by the director, both with respect to an initial application for certification and on an ongoing basis. All information submitted by certified reinsurers which are not otherwise public information subject to disclosure shall be exempted from disclosure under ORS chapter 192 and shall be withheld from public disclosure. The applicable information filing requirements are, as follows:

(A) Notification within 10 days of any regulatory actions taken against the certified reinsurer, any change in the provisions of its domiciliary license or any change in rating by an approved rating agency, including a statement describing such changes and the reasons therefore;

(B) Annually, Form CR-F or CR-S, as applicable;

(C) Annually, the report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in paragraph (D) below;

(D) Annually, the most recent audited financial statements, regulatory filings, and actuarial opinion (as filed with the certified reinsurer’s supervisor, with a translation into English). Upon the initial certification, audited financial statements for the last two years filed with the certified reinsurer’s supervisor;

(E) At least annually, an updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from U.S. domestic ceding insurers;

(F) A certification from the certified reinsurer’s domestic regulator that the certified reinsurer is in good standing and maintains capital in excess of the jurisdiction’s highest regulatory action level; and

(G) Any other information that the director may require.

(h) Change in Rating or Revocation of Certification.

(A) In the case of a downgrade by a rating agency or other disqualifying circumstance, the director shall upon written notice assign a new rating to the certified reinsurer in accordance with the requirements of paragraph (d)(A).

(B) The director shall have the authority to suspend, revoke, or otherwise modify a certified reinsurer’s certification at any time if the certified reinsurer fails to meet its obligations or security requirements under this section, or if other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the director to reconsider the certified reinsurer’s ability or willingness to meet its contractual obligations.

(C) If the rating of a certified reinsurer is upgraded by the director, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the director shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating. If the rating of a certified reinsurer is downgraded by the director, the director shall require the certified reinsurer to meet the security requirements applicable to its new rating for all business it has assumed as a certified reinsurer.

(D) Upon revocation of the certification of a certified reinsurer by the director, the assuming insurer shall be required to post security in accordance with OAR 836-012-0060 in order for the ceding insurer to continue to take credit for reinsurance ceded to the assuming insurer. If funds continue to be held in trust in accordance with OAR 836-012-0041, the director may allow additional credit equal to the ceding insurer’s pro rata share of such funds, discounted to reflect the risk of uncollectibility and anticipated expenses of trust administration. Notwithstanding the change of a certified reinsurer’s rating or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer may not be denied credit for reinsurance for a period of three months for all reinsurance ceded to that certified reinsurer, unless the reinsurance is found by the director to be at high risk of uncollectibility.

(3) Qualified Jurisdictions.

(a) If, upon conducting an evaluation under this rule with respect to the reinsurance supervisory system of any non-U.S. assuming insurer, the director determines that the jurisdiction qualifies to be recognized as a qualified jurisdiction, the director shall publish notice and evidence of such recognition in an appropriate manner. The director may establish a procedure to withdraw recognition of those jurisdictions that are no longer qualified.

(b) In order to determine whether the domiciliary jurisdiction of a non-U.S. assuming insurer is eligible to be recognized as a qualified jurisdiction, the director shall evaluate the reinsurance supervisory system of the non-U.S. jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal recognition afforded by the non-U.S. jurisdiction to reinsurers licensed and domiciled in the United States. The director shall determine the appropriate approach for evaluating the qualifications of such jurisdictions, and create and publish a list of jurisdictions whose reinsurers may be approved by the director as eligible for certification. A qualified jurisdiction must agree to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled within that jurisdiction. Additional factors to be considered in determining whether to recognize a qualified jurisdiction, in the discretion of the director, include but are not limited to the following:

(A) The framework under which the assuming insurer is regulated;

(B) The structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance;

(D) The form and substance of financial reports required to be filed or made publicly available by reinsurers in the domiciliary jurisdiction and the accounting principles used;

(E) The domiciliary regulator’s willingness to cooperate with U.S. regulators in general and the director in particular;

(F) The history of performance by assuming insurers in the domiciliary jurisdiction;

(G) Any documented evidence of substantial problems with the enforcement of final U.S. judgments in the domiciliary jurisdiction. A jurisdiction will not be considered to be a qualified jurisdiction if the director has determined that it does not adequately and promptly enforce final U.S. judgments or arbitration awards;

(H) Any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the International Association of Insurance Supervisors or successor organization; and

(I) Any other matters deemed relevant by the director.

(c) The director shall consider the list of qualified jurisdictions published through the NAIC committee process in determining qualified jurisdictions. If the director approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the director shall provide thoroughly documented justification with respect to the criteria provided under paragraphs (b)(A) to (I) of this section.

(d) U.S. jurisdictions that meet the requirements for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions.

(e) If a certified reinsurer’s domiciliary jurisdiction ceases to be a qualified jurisdiction, the director has the discretion to suspend the reinsurer’s certification indefinitely, in lieu of revocation, subject to ORS chapter 183.

(4) Recognition of Certification Issued by an NAIC Accredited Jurisdiction.

(a) If an applicant for certification has been certified as a reinsurer in an NAIC accredited jurisdiction, the director has the discretion to defer to that jurisdiction’s certification, and to defer to the rating assigned by that jurisdiction, if the assuming insurer submits a properly executed Form ACR-1 and such additional information as the director requires. The assuming insurer shall be considered to be a certified reinsurer in this state.

(b) Any change in the certified reinsurer’s status or rating in the other jurisdiction shall apply automatically in this state as of the date it takes effect in the other jurisdiction. The certified reinsurer shall notify the commissioner of any change in its status or rating within 10 days after receiving notice of the change.

(c) The director may withdraw recognition of the other jurisdiction’s rating at any time and assign a new rating in accordance with section (2)(h).

(d) The director may withdraw recognition of the other jurisdiction’s certification at any time, with written notice to the certified reinsurer. Unless the director suspends or revokes the certified reinsurer’s certification in accordance with section (2)(h), the certified reinsurer’s certification shall remain in good standing in this state for a period of three months, which shall be extended if additional time is necessary to consider the assuming insurer’s application for certification in this state.

(5) In addition to the clauses required under OAR 836-012-0110, reinsurance contracts entered into or renewed under this rule shall include a proper funding clause, which requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of any financial statement penalty on the ceding insurer under this section for reinsurance ceded to the certified reinsurer.

(6) The director shall comply with all reporting and notification requirements that may be established by the NAIC with respect to certified reinsurers and qualified jurisdictions.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.514 & Or Laws 2021, ch 204, sec 2
Statutes/Other Implemented: ORS 731.508 - 731.514 & Or Laws 2021, ch 204, sec 2
ID 11-2021, amend filed 12/15/2021, effective 01/01/2022
ID 13-2019, adopt filed 12/19/2019, effective 01/01/2020

Or. Admin. R. 836-012-0048 Credit for Reinsurance – Reciprocal Jurisdictions

(1) Pursuant to Oregon Laws 2021, chapter 204, section 2, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head office or is domiciled in, a Reciprocal Jurisdiction, and which meets the other requirements of this rule.

(2) A “Reciprocal Jurisdiction” is a jurisdiction, as designated by the director pursuant to section (4), that meets one of the following:

(a) A non-U.S. jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union. For purposes of this section, a “covered agreement” is an agreement entered into pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. §§ 313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;

(b) A U.S. jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or

(c) A qualified jurisdiction, as determined by the director pursuant to ORS 731.511(5) and OAR 836-012-0046(3), which is not otherwise described in subsection (a) or (b) above and which the director determines meets all of the following additional requirements:

(A) Provides that an insurer which has its head office or is domiciled in such qualified jurisdiction shall receive credit for reinsurance ceded to a U.S.-domiciled assuming insurer in the same manner as credit for reinsurance is received for reinsurance assumed by insurers domiciled in such qualified jurisdiction;

(B) Does not require a U.S.-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with any ceding insurer subject to regulation by the non-U.S. jurisdiction or as a condition to allow the ceding insurer to recognize credit for such reinsurance;

(C) Recognizes the U.S. state regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority, in such qualified jurisdiction, that insurers and insurance groups that are domiciled or maintain their headquarters in this state or another jurisdiction accredited by the NAIC shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the director or the commissioner of the domiciliary state and will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and

(D) Provides written confirmation by a competent regulatory authority in such qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the director in accordance with a memorandum of understanding or similar document between the director and such qualified jurisdiction, including but not limited to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC.

(3) Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting each of the conditions set forth below.

(a) The assuming insurer must be licensed to transact reinsurance by, and have its head office or be domiciled in, a Reciprocal Jurisdiction.

(b) The assuming insurer must have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the Reciprocal Jurisdiction, and confirmed as set forth in section (3)(g) according to the methodology of its domiciliary jurisdiction, in the following amounts:

(A) No less than $250,000,000; or

(B) If the assuming insurer is an association, including incorporated and individual unincorporated underwriters:

(i) Minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least $250,000,000; and

(ii) A central fund containing a balance of the equivalent of at least $250,000,000.

(c) The assuming insurer must have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:

(A) If the assuming insurer has its head office or is domiciled in a Reciprocal Jurisdiction as defined in section (2)(a), the ratio specified in the applicable covered agreement;

(B) If the assuming insurer is domiciled in a Reciprocal Jurisdiction as defined in section (2)(b), a risk-based capital (RBC) ratio of three hundred percent (300%) of the authorized control level, calculated in accordance with the formula developed by the NAIC; or

(C) If the assuming insurer is domiciled in a Reciprocal Jurisdiction as defined in section (2)(c), after consultation with the Reciprocal Jurisdiction and considering any recommendations published through the NAIC Committee Process, such solvency or capital ratio as the director determines to be an effective measure of solvency.

(d) The assuming insurer must agree to and provide adequate assurance, in the form of a properly executed Form RJ-1 (Exhibit 5, OAR 836-012-0000), of its agreement to the following:

(A) The assuming insurer must agree to provide prompt written notice and explanation to the director if it falls below the minimum requirements set forth in subsections (b) or (c) of this section, or if any regulatory action is taken against it for serious noncompliance with applicable law.

(B) The assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process.

(i) The director may also require that such consent be provided and included in each reinsurance agreement under the director’s jurisdiction.

(ii) Nothing in this provision shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws.

(C) The assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer, that have been declared enforceable in the territory where the judgment was obtained.

(D) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to one hundred percent (100%) of the assuming insurer’s liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its estate, if applicable.

(E) The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement, which involves this state’s ceding insurers, and agrees to notify the ceding insurer and the director and to provide one hundred percent (100%) security to the ceding insurer consistent with the terms of the scheme, should the assuming insurer enter into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provisions of ORS 731.510 and 731.511 and OAR 836-012-0070, 836-012-0080 or 836-012-0090. For purposes of this rule, the term “solvent scheme of arrangement” means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer’s home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor, or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis, and which may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer’s home jurisdiction.

(F) The assuming insurer must agree in writing to meet the applicable information filing requirements as set forth in subsection (e) of this section.

(e) The assuming insurer or its legal successor must provide, if requested by the director, on behalf of itself and any legal predecessors, the following documentation to the director:

(A) For the two years preceding entry into the reinsurance agreement and on an annual basis thereafter, the assuming insurer’s annual audited financial statements, in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, as applicable, including the external audit report;

(B) For the two years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer’s supervisor;

(C) Prior to entry into the reinsurance agreement and not more than semi-annually thereafter, an updated list of all disputed and overdue reinsurance claims outstanding for 90 days or more, regarding reinsurance assumed from ceding insurers domiciled in the United States; and

(D) Prior to entry into the reinsurance agreement and not more than semi-annually thereafter, information regarding the assuming insurer’s assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set forth in subsection (f) of this section.

(f) The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements. The lack of prompt payment will be evidenced if any of the following criteria is met:

(A) More than fifteen percent (15%) of the reinsurance recoverables from the assuming insurer are overdue and in dispute as reported to the director;

(B) More than fifteen percent (15%) of the assuming insurer’s ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of 90 days or more which are not in dispute and which exceed for each ceding insurer $100,000, or as otherwise specified in a covered agreement; or

(C) The aggregate amount of reinsurance recoverable on paid losses which are not in dispute, but are overdue by 90 days or more, exceeds $50,000,000, or as otherwise specified in a covered agreement.

(g) The assuming insurer’s supervisory authority must confirm to the director on an annual basis that the assuming insurer complies with the requirements set forth in subsections (b) and (c) of this section.

(h) Nothing in this provision precludes an assuming insurer from providing the director with information on a voluntary basis.

(4) The director shall timely create and publish a list of Reciprocal Jurisdictions.

(a) A list of Reciprocal Jurisdictions is published through the NAIC Committee Process. The director’s list shall include any Reciprocal Jurisdiction as defined under section (2)(a) and (b), and shall consider any other Reciprocal Jurisdiction included on the NAIC list. The director may approve a jurisdiction that does not appear on the NAIC list of Reciprocal Jurisdictions as provided by applicable law, regulation, or in accordance with criteria published through the NAIC Committee Process.

(b) The director may remove a jurisdiction from the list of Reciprocal Jurisdictions upon a determination that the jurisdiction no longer meets one or more of the requirements of a Reciprocal Jurisdiction, as provided by applicable law, regulation, or in accordance with a process published through the NAIC Committee Process, except that the director shall not remove from the list a Reciprocal Jurisdiction as defined under section (2)(a) and (b). Upon removal of a Reciprocal Jurisdiction from this list credit for reinsurance ceded to an assuming insurer domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to ORS 731.509 to 731.514 and Oregon Laws 2021, chapter 204, section 2.

(5) The director shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this rule and to which cessions shall be granted credit in accordance with this rule.

(a) If an NAIC accredited jurisdiction has determined that the conditions set forth in section (3) have been met, the director has the discretion to defer to that jurisdiction’s determination, and add such assuming insurer to the list of assuming insurers to which cessions shall be granted credit in accordance with this section. The director may accept financial documentation filed with another NAIC accredited jurisdiction or with the NAIC in satisfaction of the requirements of section (3).

(b) When requesting that the director defer to another NAIC accredited jurisdiction’s determination, an assuming insurer must submit a properly executed Form RJ-1 and additional information as the director may require. A state that has received such a request will notify other states through the NAIC Committee Process and provide relevant information with respect to the determination of eligibility.

(6) If the director determines that an assuming insurer no longer meets one or more of the requirements under this rule, the director may revoke or suspend the eligibility of the assuming insurer for recognition under this rule.

(a) While an assuming insurer’s eligibility is suspended, no reinsurance agreement issued, amended or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer’s obligations under the contract are secured in accordance with OAR 836-012-0060.

(b) If an assuming insurer’s eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer’s obligations under the contract are secured in a form acceptable to the director and consistent with the provisions of OAR 836-012-0060.

(7) Before denying statement credit or imposing a requirement to post security with respect to this rule or adopting any similar requirement that will have substantially the same regulatory impact as security, the director shall:

(a) Communicate with the ceding insurer, the assuming insurer, and the assuming insurer’s supervisory authority that the assuming insurer no longer satisfies one of the conditions listed in section (3);

(b) Provide the assuming insurer with 30 days from the initial communication to submit a plan to remedy the defect, and 90 days from the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection;

(c) After the expiration of 90 days or less, as set out in subsection (b), if the director determines that no or insufficient action was taken by the assuming insurer, the director may impose any of the requirements as set out in this section; and

(d) Provide a written explanation to the assuming insurer of any of the requirements set out in this section.

(8) If subject to a legal process of rehabilitation, liquidation or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding liabilities.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.514 & Or Laws 2021, ch 204, sec 2
Statutes/Other Implemented: ORS 731.508 - 731.514 & Or Laws 2021, ch 204, sec 2
ID 11-2021, adopt filed 12/15/2021, effective 01/01/2022

Or. Admin. R. 836-012-0051 Credit for Reinsurance Required by Law

Pursuant to ORS 731.511, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of ORS 731.509(4), (5), (6) or (7), or other appropriate provisions contained in ORS 731.510 to 731.511, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by the applicable law or regulation of that jurisdiction. As used in this rule, "jurisdiction" means any state, district or territory of the United States and any lawful national government.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0060 Asset or Reduction from Liability for Reinsurance Ceded to an Unauthorized Assuming Insurer Not Meeting the Requirements of OAR 836-012-0011 to 836-012-0051

(1) Pursuant to ORS 731.510, the director shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of ORS 731.509 in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the exclusive benefit of the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations under the reinsurance contract. The security must be held in the United States subject to withdrawal solely by and under the exclusive control of the ceding insurer or, in the case of a trust, held in a qualified U.S. financial institution as defined in ORS 731.510(1). The security may be in the form of any of the following:

(a) Cash;

(b) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as allowed assets;

(c) Clean, irrevocable, unconditional and "evergreen" letters of credit issued or confirmed by a qualified U.S. institution, as defined in ORS 731.510(2), effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification or amendment, whichever first occurs; or

(d) Any other form of security acceptable to the director.

(2) An allowed asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer pursuant to section (1) of this rule shall be allowed only when the requirements of OAR 836-012-0100 and the applicable provisions of OAR 836-012-0070, 836-012-0080 and 836-012-0090 are met.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0070 Trust Agreements Qualified under OAR 836-012-0060

(1) As used in this rule:

(a) "Beneficiary" includes any successor by operation of law of the named beneficiary, including without limitation any liquidator, rehabilitator, receiver or conservator.

(b) "Grantor" means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unauthorized or unlicensed unaccredited assuming insurer.

(A) Reinsured losses and allocated loss expenses paid by the ceding insurer, but not recovered from the assuming insurer;

(B) Reserves for reinsured losses reported and outstanding;

(D) Reserves for allocated reinsured loss expenses and unearned premiums.

(2) The following are required conditions applicable to the trust agreement:

(a) The trust agreement shall be entered into between the beneficiary, the grantor and a trustee that must be a qualified U.S. financial institution as defined in ORS 731.510(1).

(b) The trust agreement shall create a trust account into which assets must be deposited.

(d) The trust agreement shall provide that:

(A) The beneficiary shall have the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;

(B) No other statement or document is required to be presented in order to withdraw assets, except that the beneficiary may be required to acknowledge receipt of withdrawn assets;

(D) It shall not contain references to any other agreements or documents except as provided for under subsection (k) of this section.

(e) The trust agreement shall be established for the sole benefit of the beneficiary.

(f) The trust agreement shall require the trustee to:

(A) Receive assets and hold all assets in a safe place;

(B) Determine that all assets are in such form that the beneficiary, or the trustee upon direction by the beneficiary, may whenever necessary negotiate any such assets, without consent or signature from the grantor or any other person or entity;

(C) Furnish to the grantor and the beneficiary a statement of all assets in the trust account upon its inception and at intervals no less frequent than the end of each calendar quarter;

(D) Notify the grantor and the beneficiary within 10 days of any deposits to or withdrawals from the trust account;

(E) Upon written demand of the beneficiary, immediately take all steps necessary to transfer absolutely and unequivocally all right, title and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and

(F) Allow no substitutions or withdrawals of assets from the trust account, except on written instructions from the beneficiary, except that the trustee may, without the consent of but with notice to the beneficiary, upon call or maturity of any trust asset, withdraw such asset upon condition that the proceeds are paid into the trust account.

(g) The trust agreement shall provide that at least 30 days but not more than 45 days prior to termination of the trust account, written notification of termination shall be delivered by the trustee to the beneficiary.

(h) The trust agreement shall be made subject to and governed by the laws of the state in which the trust is domiciled.

(i) The trust agreement shall prohibit invasion of the trust corpus for the purpose of paying commission to or reimbursing the expenses of the trustee. In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.

(j) The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances in which such a draw would be required shall be deemed to be negligence or willful misconduct, or both.

(k) Notwithstanding other provisions of OAR 836-012-0000 to 836-012-0110, when a trust agreement is established in conjunction with a reinsurance agreement covering risks other than life, annuities and accident and health, when it is customary practice to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:

(A) To pay or reimburse the ceding insurer for the assuming insurer's share under the specific reinsurance agreement regarding any losses and allocated loss expenses paid by the ceding insurer, but not recovered from the assuming insurer, or for unearned premiums due to the ceding insurer if not otherwise paid by the assuming insurer;

(B) To pay the assuming insurer any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the assuming insurer's obligations under the specific reinsurance agreement; or

(C) When the ceding insurer has received notification of termination of the trust account and if the assuming insurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged 10 days prior to the termination date, to withdraw amounts equal to the obligations and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified U.S. financial institution as defined in ORS 731.510(1), apart from its general assets, in trust for such uses and purposes specified in paragraphs (A) and (B) of this subsection as may remain executory after such withdrawal and for any period after the termination date.

(l) Notwithstanding other provisions of OAR 836-012-0000 to 836-012-0110, when a trust agreement is established to meet the requirements of OAR 836-012-0060 in conjunction with a reinsurance agreement covering life, annuities or accident and health risks, if it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:

(A) To pay or reimburse the ceding insurer for:

(i) The assuming insurer’s share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of the policies; and

(ii) The assuming insurer’s share under the specific reinsurance agreement of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurer, under the terms and provisions of the policies reinsured under the reinsurance agreement.

(B) To pay to the assuming insurer amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or

(C) Where the ceding insurer has received notification of termination of the trust and when the assuming insurer’s entire obligations under the specific reinsurance agreement remain unliquidated and undischarged 10 days prior to the termination date, to withdraw amounts equal to the assuming insurer’s share of liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer, and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified U.S. financial institution apart from its general assets, in trust for the uses and purposes specified in paragraphs (A) and (B) of this subsection as may remain executory after withdrawal and for any period after the termination date.

(m) Either the reinsurance agreement or the trust agreement must stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in U.S. dollars, certificates of deposit issued by a U.S. bank and payable in U.S. dollars, and investments permitted by the Insurance Code or any combination of the above, provided investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5 percent of total investments. The agreement may further specify the types of investments to be deposited. If the reinsurance agreement covers life, annuities or accident and health risks, then the provisions required by this paragraph must be included in the reinsurance agreement.

(3) The following are permitted conditions applicable to the trust agreement:

(a) The trust agreement may provide that the trustee may resign upon delivery of a written notice of resignation, effective not less than 90 days after the beneficiary and grantor receive the notice, and that the trustee may be removed by the grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective not less than 90 days after the trustee and the beneficiary receive the notice, except that such a resignation or removal shall not be effective until a successor trustee has been duly appointed and approved by the beneficiary and the grantor and all assets in the trust have been duly transferred to the new trustee.

(b) The grantor may have the full and unqualified right to vote any shares of stock in the trust account and to receive from time to time payments of any dividends or interest upon any shares of stock or obligations included in the trust account. Any such interest or dividends shall be either forwarded promptly upon receipt to the grantor or deposited in a separate account established in the grantor's name.

(c) The trustee may be given authority to invest and accept substitutions of any funds in the account, except that an investment or substitution shall not be made without prior approval of the beneficiary, unless the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in current fair market value to the assets withdrawn and that are consistent with the restrictions in section (4)(a)(B) of this rule.

(d) The trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets are to be transferred. Such a transfer may be conditioned upon the trustee receiving other specified assets prior to or simultaneously with the transfer.

(e) The trust agreement may provide that, upon termination of the trust account, all assets not previously withdrawn by the beneficiary shall be delivered to the grantor with written approval by the beneficiary.

(4) The following are additional conditions applicable to reinsurance agreements:

(a) A reinsurance agreement may contain provisions that:

(A) Require the assuming insurer to enter into a trust agreement and to establish a trust account for the benefit of the ceding insurer, and specify what the agreement is to cover;

(B) Require the assuming insurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may whenever necessary negotiate these assets without consent or signature from the assuming insurer or any other entity;

(C) Require that all settlements of account between the ceding insurer and the assuming insurer be made in cash or its equivalent; and

(D) Stipulate that the assuming insurer and the ceding insurer agree that the assets in the trust account, established pursuant to the provisions of the reinsurance agreement, may be withdrawn by the ceding insurer at any time, notwithstanding any other provisions in the reinsurance agreement, and shall be used and applied by the ceding insurer or its successors in interest by operation of law, including without limitation any liquidator, rehabilitator, receiver or conservator of such insurer, without diminution because of insolvency on the part of the ceding insurer or the assuming insurer, only for the following purposes:

(i) To pay or reimburse the ceding insurer for:

(I) The assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement because of cancellations of such policies;

(II) The assuming insurer’s share of surrenders and benefits or losses paid by the ceding insurer pursuant to the provisions of the policies reinsured under the reinsurance agreement; and

(III) Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.

(ii) To make payment to the assuming insurer of amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.

(b) The reinsurance agreement may also contain provisions that:

(A) Give the assuming insurer the right to seek the ceding insurer’s approval, which the ceding insurer shall not unnecessarily or arbitrarily withhold, to withdraw from the trust account all or any part of the trust assets and transfer those assets to the assuming insurer. The right to seek approval under this paragraph must be subject to one of the following requirements:

(i) The assuming insurer shall, at the time of withdrawal, replace the withdrawn assets with other qualified assets having a current fair market value equal to the market value of the assets withdrawn so as to maintain at all times the deposit in the required amount; or

(ii) After withdrawal and transfer, the current fair market value of the trust account is no less than 102 percent of the required amount.

(B) Provide for:

(i) The return of any amount withdrawn in excess of the actual amounts required for section (4)(a)(E) of this rule; and

(ii) Interest payments at a rate not in excess of the prime rate of interest on such amounts.

(i) Interest at a rate different from that provided in section (4)(b)(B);

(ii) Court or arbitration costs;

(iii) Attorney fees; and

(iv) Any other reasonable expenses.

(c) Financial reporting. A trust agreement may be used to reduce any liability for reinsurance ceded to an unauthorized assuming insurer in financial statements required to be filed with this department in compliance with the provisions of OAR 836-012-0000 to 836-012-0110 when established on or before the date of filing of the financial statement of the ceding insurer. Further, the reduction for the existence of an acceptable trust account may be up to the current fair market value of acceptable assets available to be withdrawn from the trust account at that time, but such reduction shall be no greater than the specific obligations under the reinsurance agreement that the trust account was established to secure.

(d) Existing agreements. Notwithstanding the effective date of OAR 836-012-0000 to 836-012-0110, any trust agreement or underlying reinsurance agreement in existence prior to January 1, 2003, will continue to be acceptable until January 1, 2003, at which time the agreements must be in full compliance with OAR 836-012-0000 to 836-012-0110 for the trust agreement to be acceptable.

(e) The failure of any trust agreement to specifically identify the beneficiary as defined in section (1) of this rule shall not be construed to affect any actions or rights that the director may take or possess pursuant to the provisions of the laws of this state.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0080 Letters of Credit Qualified under OAR 836-012-0060

(1) A letter of credit for purposes of OAR 836-012-0060 must be clean, irrevocable, unconditional and issued or confirmed by a qualified U.S. financial institution as defined in ORS 731.510(2). The letter of credit shall contain an issue date and date of expiration and shall stipulate that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds and that no other document need be presented. The letter of credit shall also indicate that it is not subject to any condition or qualifications outside of the letter of credit. In addition, the letter of credit itself shall not contain reference to any other agreements, documents or entities, except as provided in section (9)(a) of this rule. As used in this rule, "beneficiary" means the domestic insurer for whose benefit the letter of credit has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court-appointed domiciliary receiver (including conservator, rehabilitator or liquidator).

(2) The heading of the letter of credit may include a boxed section containing the name of the applicant and other appropriate notations to provide a reference for the letter of credit. The boxed section shall be clearly marked to indicate that such information is for internal identification purposes only.

(3) The letter of credit shall contain a statement to the effect that the obligation of the qualified U.S. financial institution under the letter of credit is in no way contingent upon reimbursement with respect thereto.

(4) The term of the letter of credit shall be for at least one year and shall contain an "evergreen clause" that prevents the expiration of the letter of credit without due notice from the issuer. The "evergreen clause" shall provide for a period of not less than 30 days' notice prior to expiration date or nonrenewal.

(5) The letter of credit shall state whether it is subject to and governed by the laws of this state or the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 600) or International Standby Practices of the International Chamber of Commerce Publication 590 (ISP98), or any successor publication, and all drafts drawn thereunder shall be presentable at an office in the United States of a qualified U.S. financial institution.

(6) If the letter of credit is made subject to the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 500), or any successor publication, the letter of credit shall specifically address and provide for an extension of time to draw against the letter of credit in the event that one or more of the occurrences specified in Article 17 of Publication 600, or any successor publication, occur.

(7) If the letter of credit is issued by a financial institution authorized to issue letters of credit, other than a qualified U.S. financial institution as described in section (7) of this rule, the following additional requirements must be met:

(a) The issuing financial institution shall formally designate the confirming qualified U.S. financial institution as its agent for the receipt and payment of the drafts; and

(b) The "evergreen clause" shall provide for 30 days' notice prior to expiration date for nonrenewal.

(8) The following apply to reinsurance agreement provisions:

(a) The reinsurance agreement in conjunction with which the letter of credit is obtained may contain provisions described in this subsection. All of the provisions of this subsection must be applied without diminution because of insolvency on the part of the ceding insurer or assuming insurer. The provisions are as follows:

(A) A provision requiring the assuming insurer to provide letters of credit to the ceding insurer and specify what they are to cover.

(B) A provision stipulating that the assuming insurer and ceding insurer agree that the letter of credit provided by the assuming insurer pursuant to the provisions of the reinsurance agreement may be drawn upon at any time, notwithstanding any other provisions in the agreement, and must be used by the ceding insurer or its successors in interest only for one or more of the following reasons:

(i) To pay or reimburse the ceding insurer for:

(I) The assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurers, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of such policies;

(II) The assuming insurer's share, under the specific reinsurance agreement, of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurers, under the terms and provisions of the policies reinsured under the reinsurance agreement; and

(III) Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.

(ii) Where the letter of credit will expire without renewal or be reduced or replaced by a letter of credit for a reduced amount and where the assuming insurer’s entire obligations under the reinsurance agreement remain unliquidated and undischarged 10 days prior to the termination date, to withdraw amounts equal to the assuming insurer’s share of the liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer and exceed the amount of any reduced or replacement letter of credit, and deposit those amount in a separate account in the name of the ceding insurer in a qualified U.S. financial institution apart from its general assets, in trust for such uses and purposes specified in subparagraph (H) of this paragraph as may remain after withdrawal and for any period after the termination date.

(b) Nothing contained in subsection (a) of this section shall preclude the ceding insurer and assuming insurer from providing for:

(A) An interest payment, at a rate not in excess of the prime rate of interest, on the amounts held pursuant to subsection (a)(B) of this section; or

(B) The return of any amounts drawn down on the letters of credit in excess of the actual amounts required for the above or any amounts that are subsequently determined not to be due.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0090 Other Security

A ceding insurer may take credit for unencumbered funds withheld by the ceding insurer in the United States subject to withdrawal solely by the ceding insurer and under its exclusive control.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0100 Reinsurance Contract

Credit shall not be granted, nor an asset or reduction from liability allowed, to a ceding insurer for reinsurance effected with assuming insurers meeting the requirements of OAR 836-012-0011, 836-012-0021, 836-012-0031, 836-012-0041 or 836-012-0060 or otherwise in compliance with ORS 731.509 after the adoption of OAR 836-012-0000 to 836-012-0110, unless the reinsurance agreement:

(1) Includes a proper insolvency clause, which stipulates that reinsurance is payable directly to the liquidator or successor without diminution regardless of the status of the ceding company pursuant to ORS 731.508;

(2) Includes a provision pursuant to ORS 731.509(10), whereby the assuming insurer, if an unauthorized assuming insurer, has submitted to the jurisdiction of an alternative dispute resolution panel or court of competent jurisdiction within the United States, has agreed to comply with all requirements necessary to give such court or panel jurisdiction, has designated an agent upon whom service of process may be effected and has agreed to abide by the final decision of the court or panel; and

(3) Includes a proper reinsurance intermediary clause, if applicable, which stipulates that the credit risk for the intermediary is carried by the assuming insurer.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 22-2002, f. & cert. ef. 11-27-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0110 Contracts Affected

All new and renewal reinsurance transactions entered into on and after January 1, 2019, shall conform to the requirements of ORS 731.509 to 731.511 and OAR 836-012-0000 to 836-012-0110 if credit is to be given to the ceding insurer for such reinsurance.

History

Statutory/Other Authority: ORS 731.508 - 731.511 & 731.244
Statutes/Other Implemented: ORS 731.508 - 731.511 & Or Laws 2019, ch 151
ID 13-2019, amend filed 12/19/2019, effective 01/01/2020
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0200 Authority

This regulation is adopted and promulgated by the director of the Department of Consumer and Business Services pursuant to ORS 731.244.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0210 Definitions

As used in OAR 836-012-0200 to 836-012-0270:

(1) “Actuarial Method” means the methodology used to determine the Required Level of Primary Security, as described in OAR 836-012-0250.

(2) “Covered Policies” means the following policies (unless such policies were issued prior to January 1, 2015, and ceded as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in OAR 836-012-0240 had that section then been in effect):

(a) Life insurance policies with guaranteed nonlevel gross premiums and/or guaranteed nonlevel benefits (other than flexible premium universal life insurance policies); and

(b) Flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period.

(3) “Non-Covered Policies” means any policy that is not a Covered Policy.

(4) “Required Level of Primary Security” means the dollar amount determined by applying the Actuarial Method to the risks ceded with respect to Covered Policies, but not more than the total reserve ceded.

(5) “Primary Security” means the following forms of security:

(a) Cash;

(b) Securities meeting the requirements of OAR 836-012-0060 (1)(b), but excluding any synthetic letter of credit, contingent note, credit-linked note or other similar security that operates in a manner similar to a letter of credit, and excluding any securities issued by the ceding insurer or any of its affiliates; and

(A) Commercial loans in good standing of CM3 quality and higher;

(B) Policy Loans; and

(C) Derivatives acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty.

(6) “Other Security” means any security acceptable to the director other than security meeting the definition of Primary Security.

(7) “Valuation Manual” means the valuation manual described in OAR 836-031-0605.

(8) “Director” means the director of the Department of Consumer and Business Services.

(9) “NAIC” means the National Association of Insurance Commissioners.

(10) “This rule” means OAR 836-012-0200 to 836-012-0270.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0220 Purpose and Intent

The purpose and intent of this rule is to establish uniform, national standards governing reserve financing arrangements pertaining to life insurance policies containing guaranteed nonlevel gross premiums, guaranteed nonlevel benefits and universal life insurance policies with secondary guarantees; and to ensure that, with respect to each such financing arrangement, funds consisting of Primary Security and Other Security, are held by or on behalf of ceding insurers in the forms and amounts required herein. In general, reinsurance ceded for reserve financing purposes has one or more of the following characteristics: some or all of the assets used to secure the reinsurance treaty or to capitalize the reinsurer (1) are issued by the ceding insurer or its affiliates; or (2) are not unconditionally available to satisfy the general account obligations of the ceding insurer; or (3) create a reimbursement, indemnification or other similar obligation on the part of the ceding insurer or any if its affiliates (other than a payment obligation under a derivative contract acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty).

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0230 Applicability

This rule applies to reinsurance treaties that cede liabilities pertaining to Covered Policies issued by any life insurance company domiciled in this state. This rule and OAR 836-012-0046 shall both apply to such reinsurance treaties; provided, that in the event of a direct conflict between the provisions of this rule and OAR 836-012-0046, the provisions of this rule shall apply, but only to the extent of the conflict.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0240 Exemptions from OAR 836-012-0200 to 836-012-0270

OAR 836-012-0200 to 836-012-0270 do not apply to the following:

(1) Reinsurance of:

(a) Policies that satisfy the criteria for exemption set forth OAR 836-031-0770 (7); and which are issued before the later of:

(A) January 1, 2023, and

(B) The date on which the ceding insurer begins to apply the provisions of VM-20 from the Valuation Manual to establish the ceded policies’ statutory reserves, but in no event later than January 1, 2020;

(b) Portions of policies that satisfy the criteria for exemption set forth in OAR 836-031-0770 (5) and which are issued before the later of:

(A) January 1, 2023, and

(A) Secondary guarantee period, if any, is 5 years or less;

(B) Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the Commissioners Standard Ordinary (CSO) valuation tables and valuation interest rate applicable to the issue year of the policy; and

(C) The initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period;

(d) Credit life insurance;

(e) Any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts; or

(f) Any group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year.

(2) Reinsurance ceded to an assuming insurer that meets the applicable requirements of OAR 836-012-0041; or

(3) Reinsurance ceded to an assuming insurer that meets the applicable requirements of OAR 836-012-0031, and that, in addition:

(a) Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual, without any departures from NAIC statutory accounting practices and procedures pertaining to the admissibility or valuation of assets or liabilities that increase the assuming insurer’s reported surplus and are material enough that they need to be disclosed in the financial statement of the assuming insurer pursuant to Statement of Statutory Accounting Principles No. 1; and

(b) Is not in a company action level event, regulatory action level event, authorized control level event, or mandatory control level event (as those terms are defined in OAR 836-011-0320 to 836-011-0350) when its risk-based capital is calculated in accordance with the life risk-based capital report including overview and instructions for companies, without deviation; or

(4) Reinsurance ceded to an assuming insurer that meets the applicable requirements of OAR 836-012-0031, and that, in addition:

(a) Is not an affiliate, as that term is defined in ORS 732.548 (1), of:

(A) The insurer ceding the business to the assuming insurer; or

(B) Any insurer that directly or indirectly ceded the business to that ceding insurer;

(b) Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual;

(A) Licensed or accredited in at least 10 states (including its state of domicile), and

(B) Not licensed in any state as a captive, special purpose vehicle, special purpose financial captive, special purpose life reinsurance company, limited purpose subsidiary, or any other similar licensing regime; and

(d) Is not, or would not be, below 500 percent of the Authorized Control Level RBC (as that term is defined in OAR 836-011-0305) when its risk-based capital is calculated in accordance with the life risk-based capital report including overview and instructions for companies without deviation, and without recognition of any departures from NAIC statutory accounting practices and procedures pertaining to the admission or valuation of assets or liabilities that increase the assuming insurer’s reported surplus; or

(5) Reinsurance ceded to an assuming insurer that meets the following requirements:

(a) The conditions set forth in ORS 731.520 (1); or

(b) Is certified in this state as described in ORS 731.510 (4) and ORS 731.511; or

(c) Maintains at least $250,000,000 in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments adopted by the NAIC, excluding the impact of any permitted or prescribed practices; and is

(A) Licensed in at least 26 states; or

(B) Licensed in at least 10 states, and licensed or accredited in a total of at least 35 states;

(6) Reinsurance not otherwise exempt under OAR 836-012-0240 (1) to 836-012-0240 (5) if the director determines under all the facts and circumstances that all of the following apply:

(a) The risks are clearly outside of the intent and purpose of this rule (as described in OAR 836-012-0220);

(b) The risks are included within the scope of this rule only as a technicality; and

(c) The application of this rule to those risks is not necessary to provide appropriate protection to policyholders. The director shall publicly disclose any decision made pursuant to OAR 836-012-0240 (6) to exempt a reinsurance treaty from this rule, as well as the general basis therefor (including a summary description of the treaty).

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0250 The Actuarial Method

(1) The Actuarial Method to establish the Required Level of Primary Security for each reinsurance treaty subject to this regulation shall be VM-20, applied on a treaty-by-treaty basis, including all relevant definitions, from the Valuation Manual applied as follows:

(a) For Covered Policies described in OAR 836-012-0210 (2)(a), the Actuarial Method is the greater of the deterministic reserve or the net premium reserve (as those terms are defined in the Valuation Manual) regardless of whether the criteria for exemption testing can be met. However, if the Covered Policies do not meet the requirements of the stochastic reserve exclusion test in the Valuation Manual, then the Actuarial Method is the greatest of the deterministic reserve, the stochastic reserve, or the net premium reserve. In addition, if such Covered Policies are reinsured in a reinsurance treaty that also contains Covered Policies described in OAR 836-012-0210 (2)(b), the ceding insurer may elect to instead use OAR 836-012-0250 (1)(b) below as the Actuarial Method for the entire reinsurance agreement. Whether OAR 836-012-0250 (1)(a) or OAR 836-012-0250 (1)(b) is used, the Actuarial Method must comply with any requirements or restrictions that the Valuation Manual imposes when aggregating these policy types for purposes of principle-based reserve calculations.

(b) For Covered Policies described in OAR 836-012-0210 (2)(b), the Actuarial Method is the greatest of the deterministic reserve, the stochastic reserve, or the net premium reserve (as those terms are defined in the Valuation Manual) regardless of whether the criteria for exemption testing can be met.

(c) Except as provided in OAR 836-012-0250 (1)(d), the Actuarial Method is to be applied on a gross basis to all risks with respect to the Covered Policies as originally issued or assumed by the ceding insurer.

(d) If the reinsurance treaty cedes less than 100 percent of the risk with respect to the Covered Policies then the Required Level of Primary Security may be reduced as follows:

(A) If a reinsurance treaty cedes only a quota share of some or all of the risks pertaining to the Covered Policies, the Required Level of Primary Security, as well as any adjustment under OAR 836-012-0250 (1)(d)(C), may be reduced to a pro rata portion in accordance with the percentage of the risk ceded;

(B) If the reinsurance treaty in a non-exempt arrangement cedes only the risks pertaining to a secondary guarantee, the Required Level of Primary Security may be reduced by an amount determined by applying the Actuarial Method on a gross basis to all risks, other than risks related to the secondary guarantee, pertaining to the Covered Policies, except that for Covered Policies for which the ceding insurer did not elect to apply the provisions of VM-20 to establish statutory reserves, the Required Level of Primary Security may be reduced by the statutory reserve retained by the ceding insurer on those Covered Policies, where the retained reserve of those Covered Policies should be reflective of any reduction pursuant to the cession of mortality risk on a yearly renewable term basis in an exempt arrangement;

(C) If a portion of the Covered Policy risk is ceded to another reinsurer on a yearly renewable term basis in an exempt arrangement, the Required Level of Primary Security may be reduced by the amount resulting by applying the Actuarial Method including the reinsurance section of VM-20 to the portion of the Covered Policy risks ceded in the exempt arrangement, except that for Covered Policies issued prior to January 1, 2017, this adjustment is not to exceed [Cx divided by (2 multiplied by the number of reinsurance premiums per year)] where Cx is calculated using the same mortality table used in calculating the net premium reserve; and

(D) For any other treaty ceding a portion of risk to a different reinsurer, including but not limited to stop loss, excess of loss and other non-proportional reinsurance treaties, there will be no reduction in the Required Level of Primary Security. It is possible for any combination of OAR 836-012-0250 (1)(d)(A), (B), (C), and (D) to apply. Such adjustments to the Required Level of Primary Security will be done in the sequence that accurately reflects the portion of the risk ceded via the treaty. The ceding insurer should document the rationale and steps taken to accomplish the adjustments to the Required Level of Primary Security due to the cession of less than 100 percent of the risk. The adjustments for other reinsurance will be made only with respect to reinsurance treaties entered into directly by the ceding insurer. The ceding insurer will make no adjustment as a result of a retrocession treaty entered into by the assuming insurers.

(e) In no event will the Required Level of Primary Security resulting from application of the Actuarial Method exceed the amount of statutory reserves ceded.

(f) If the ceding insurer cedes risks with respect to Covered Policies, including any riders, in more than one reinsurance treaty subject to this rule, in no event will the aggregate Required Level of Primary Security for those reinsurance treaties be less than the Required Level of Primary Security calculated using the Actuarial Method as if all risks ceded in those treaties were ceded in a single treaty subject to this rule;

(g) If a reinsurance treaty subject to this rule cedes risk on both Covered and Non-Covered Policies, credit for the ceded reserves shall be determined as follows:

(A) The Actuarial Method shall be used to determine the Required Level of Primary Security for the Covered Policies, and OAR 836-012-0260 shall be used to determine the reinsurance credit for the Covered Policy reserves; and

(B) Credit for the Non-Covered Policy reserves shall be granted only to the extent that security, in addition to the security held to satisfy the requirements OAR 836-012-0250 (1)(g)(A), is held by or on behalf of the ceding insurer in accordance with OAR 836-012-0031 and OAR 836-012-0060. Any Primary Security used to meet the requirements of this Subparagraph may not be used to satisfy the Required Level of Primary Security for the Covered Policies.

(2) For the purposes of both calculating the Required Level of Primary Security pursuant to the Actuarial Method and determining the amount of Primary Security and Other Security, as applicable, held by or on behalf of the ceding insurer, the following shall apply:

(a) For assets, including any such assets held in trust, that would be admitted under the NAIC Accounting Practices and Procedures Manual if they were held by the ceding insurer, the valuations are to be determined according to statutory accounting procedures as if such assets were held in the ceding insurer’s general account and without taking into consideration the effect of any prescribed or permitted practices; and

(b) For all other assets, the valuations are to be those that were assigned to the assets for the purpose of determining the amount of reserve credit taken.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0260 Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation

(1) Subject to the exemptions described in OAR 836-012-0240 and the provisions of OAR 836-012-0260 (2), credit for reinsurance shall be allowed with respect to ceded liabilities pertaining to Covered Policies pursuant to OAR 836-012-0031 if, and only if, in addition to all other requirements imposed by law or regulation, the following requirements are met on a treaty-by treaty basis:

(a) The ceding insurer’s statutory policy reserves with respect to the Covered Policies are established in full and in accordance with the applicable requirements of ORS 733.302 and related regulations and actuarial guidelines, and credit claimed for any reinsurance treaty subject to this rule does not exceed the proportionate share of those reserves ceded under the contract; and

(b) The ceding insurer determines the Required Level of Primary Security with respect to each reinsurance treaty subject to this rule and provides support for its calculation as determined to be acceptable to the director; and

(c) Funds consisting of Primary Security, in an amount at least equal to the Required Level of Primary Security, are held by or on behalf of the ceding insurer, as security under the reinsurance treaty within the meaning of OAR 836-012-0060, on a funds withheld, trust, or modified coinsurance basis; and

(d) Funds consisting of Other Security, in an amount at least equal to any portion of the statutory reserves as to which Primary Security is not held pursuant to OAR 836-012-0260 (1)(c), are held by or on behalf of the ceding insurer as security under the reinsurance treaty within the meaning of OAR 836-012-0060; and

(e) Any trust used to satisfy the requirements of OAR 836-012-0260 shall comply with all of the conditions and qualifications of OAR 836-012-0070, except that:

(A) Funds consisting of Primary Security or Other Security held in trust shall for the purposes identified in OAR 836-012-0250 (2), be valued according to the valuation rules set forth in OAR 836-012-0250 (2) as applicable; and

(B) There are no affiliate investment limitations with respect to any security held in such trust if such security is not needed to satisfy the requirements of OAR 836-012-0260 (1)(c); and

(C) The reinsurance treaty must prohibit withdrawals or substitutions of trust assets that would leave the fair market value of the Primary Security within the trust (when aggregated with Primary Security outside the trust that is held by or on behalf of the ceding insurer in the manner required by OAR 836-012-0260 (1)(c)) below 102 percent of the level required by OAR 836-012-0260 (1)(c) at the time of the withdrawal or substitution; and

(D) The determination of reserve credit under OAR 836-012-0070 (4)(c) shall be determined according to the valuation rules set forth in OAR 836-012-0250 (2), as applicable; and

(f) The reinsurance treaty has been approved by the director.

(2) Requirements at Inception Date and on an On-going Basis; Remediation

(a) The requirements of OAR 836-012-0260 (1) must be satisfied as of the date that risks under Covered Policies are ceded (if such date is on or after January 1, 2023) and on an ongoing basis thereafter. Under no circumstances shall a ceding insurer take or consent to any action or series of actions that would result in a deficiency under OAR 836-012-0260 (1)(c) or OAR 836-012-0260 (1)(d) with respect to any reinsurance treaty under which Covered Policies have been ceded, and in the event that a ceding insurer becomes aware at any time that such a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as expeditiously as possible.

(b) Prior to the due date of each Annual Statement, each life insurance company that has ceded reinsurance within the scope of this rule shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which Covered Policies have been ceded, whether as of the end of the immediately preceding calendar quarter (the valuation date) the requirements of OAR 836-012-0260 (1)(c) and OAR 836-012-0260 (1)(d) were satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of Primary Security actually held pursuant to OAR 836-012-0260 (1)(c), unless either:

(A) The requirements of OAR 836-012-0260 (1)(c) and OAR 836-012-0260 (1)(d) were fully satisfied as of the valuation date as to such reinsurance treaty; or

(B) Any deficiency has been eliminated before the due date of the Annual Statement to which the valuation date relates through the addition of Primary Security and/or Other Security, as the case may be, in such amount and in such form as would have caused the requirements of OAR 836-012-0260 (1)(c) and OAR 836-012-0260 (1)(d) to be fully satisfied as of the valuation date.

(c) Nothing in OAR 836-012-0260 (2)(b) shall be construed to allow a ceding company to maintain any deficiency under OAR 836-012-0260 (1)(c) and OAR 836-012-0260 (1)(d) for any period of time longer than is reasonably necessary to eliminate it.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0270 Prohibition against Avoidance

No insurer that has Covered Policies as to which this rule applies shall take any action or series of actions, or enter into any transaction or arrangement or series of transactions or arrangements if the purpose of such action, transaction or arrangement or series thereof is to avoid the requirements of this rule, or to circumvent its purpose and intent, as set forth in OAR 836-012-0220.

History

Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514
Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514
ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023

Or. Admin. R. 836-012-0300 Authority; Statement of Purpose; Director’s Authority

(1) OAR 836-012-0300 to 836-012-0332 are adopted pursuant to the authority of ORS 731.244 and 731.508 for the purpose of implementing ORS 731.508(6).

(2) OAR 836-012-0300 to 836-012-0332 apply to each domestic insurer transacting life insurance, health insurance or both, to each domestic health care service contractor, and to each other authorized insurer or health care service contractor transacting life insurance, health insurance or both who is not subject to substantially similar rules or regulations in its domiciliary state. 836-012-0300 to 836-012-0332 do not apply with respect to assumption reinsurance, yearly renewable term reinsurance or certain nonproportional reinsurance such as stop loss or catastrophic reinsurance.

(3) The Director recognizes that authorized insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to surplus. It is improper for an authorized insurer, however, in the capacity of ceding insurer, to enter into reinsurance agreements for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business being reinsured. In substance and effect, the expected potential liability to the ceding insurer in agreements that do not transfer all of the significant risks remains basically unchanged by the reinsurance transaction, notwithstanding certain risk elements in the reinsurance agreement, such as catastrophic mortality or extraordinary survival.

History

Statutory/Other Authority: ORS 731.244 & 731.508
Statutes/Other Implemented: ORS 731.508(6)
ID 4-2010, f. & cert. ef. 2-5-10
ID 7-1995, f. & cert. ef. 11-15-95
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0310 Accounting Requirements

(1) An insurer that is subject to OAR 836-012-0300 to 836-012-332 shall not, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the Director if by the terms of the reinsurance agreement, in substance or effect, one or more of the following conditions exist:

(a) Renewal expense allowances provided or to be provided to the ceding insurer by the reinsurer in any accounting period are not sufficient to cover anticipated allocable renewal expenses of the ceding insurer on the portion of the business reinsured, unless a liability is established for the present value of the shortfall (using assumptions equal to the applicable statutory reserve basis on the business reinsured). Those expenses include commissions, premium taxes and direct expenses, including but not limited to expenses for billing, valuation, claims and maintenance expected by the ceding insurer at the time the business is reinsured;

(b) The ceding insurer is required to reimburse the reinsurer for negative experience under the reinsurance agreement, except that neither offsetting experience refunds against current and prior years' losses under the agreement nor payment by the ceding insurer of an amount equal to current and prior years' losses under the agreement upon voluntary termination of in-force reinsurance by the ceding insurer shall be considered such a reimbursement to the reinsurer for negative experience. Voluntary termination does not include situations in which termination occurs because of unreasonable provisions that allow the reinsurer to reduce its risk under the agreement. An example of such a provision is the right of the reinsurer to increase reinsurance premiums or risk and expense charges to excessive levels, forcing the ceding insurer to prematurely terminate the reinsurance treaty;

(c) The ceding insurer can be deprived of surplus or assets at the reinsurer's option or automatically upon the occurrence of some event, such as the insolvency of the ceding insurer, except that termination of the reinsurance agreement by the reinsurer for non-payment of reinsurance premiums or other amounts due, such as modified coinsurance reserve adjustments, interest and adjustments on funds withheld and tax reimbursements, shall not be considered to be such a deprivation of surplus or assets;

(d) The ceding insurer, at specific points in time scheduled in the agreement, must terminate or automatically recapture all or part of the reinsurance ceded;

(e) The reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than from income realized from the reinsured policies. For example, it is improper for a ceding insurer to pay reinsurance premiums or other fees or charges to a reinsurer that are greater than the direct premiums collected by the ceding insurer;

(f) The treaty does not transfer all of the significant risk inherent in the business being reinsured. The following table in this subsection identifies, for a representative sampling of products or type of business, the risks that are considered to be significant. For products not specifically included, the risks determined to be significant must be consistent with this table. The risk categories are as follows:

(A) Morbidity;

(B) Mortality;

(C) Lapse, which is the risk that a policy will voluntarily terminate prior to the recoupment of a statutory surplus strain experienced at issue of the policy;

(D) Credit Quality (C1), which is the risk that invested assets supporting the reinsured business will decrease in value. The main hazards are that assets will default or that there will be a decrease in earning power. Credit quality excludes market value declines due to changes in interest rate;

(E) Reinvestment (C3), which is the risk that interest rates will fall and funds reinvested (coupon payments or monies received upon asset maturity or call) will therefore earn less than expected. If asset durations are less than liability durations, the mismatch will increase;

(F) Disintermediation (C3), which is the risk that interest rates rise and policy loans and surrenders increase or maturing contracts do not renew at anticipated rates of renewal. If asset durations are greater than the liability durations, the mismatch will increase. Policyholders will move their funds into new products offering higher rates. The insurer may have to sell assets at a loss to provide for these withdrawals.

For purposes of the following chart: + - Significant 0 - Insignificant

RISK CATEGORY A B C D E F

Health Insurance - other than long + 0 + 0 0 0

term care insurance and long term

disability insurance

Health Insurance - long term care + 0 + + + 0

insurance and long term disability

insurance

Immediate Annuities 0 + 0 + + 0

Single Premium Deferred Annuities 0 0 + + + +

Flexible Premium Deferred Annuities 0 0 + + + +

Guaranteed Interest Contracts 0 0 0 + + +

Other Annuity Deposit Business 0 0 + + + +

Single Premium Whole Life 0 + + + + +

Traditional Non-Par Permanent 0 + + + + +

Traditional Non-Par Term 0 + + 0 0 0

Traditional Par Permanent 0 + + + + +

Traditional Par Term 0 + + 0 0 0

Adjustable Premium Permanent 0 + + + + +

Indeterminate Premium Permanent 0 + + + + +

Universal Life Flexible Premium 0 + + + + +

Universal Life Fixed Premium 0 + + + + +

dump-in premiums allowed

(g)(A) The credit quality, reinvestment or disintermediation risk is significant for the business reinsured and the ceding insurer does not (other than for the classes of business excepted in paragraph (B) of this subsection (g) either transfer the underlying assets to the reinsurer or legally segregate such assets in a trust or escrow account or otherwise establish a mechanism satisfactory to the Director that legally segregates, by contract or contract provision, the underlying assets;

(B) Notwithstanding the requirements of paragraph (A) of this subsection (g), the assets supporting the reserves for the following classes of business and any classes of business that do not have a significant credit quality, reinvestment or disintermediation risk may be held by the ceding insurer without segregation of such assets:

(i) Health Insurance — long term care insurance and long term disability insurance;

(ii) Traditional Non-Par Permanent;

(iii) Traditional Par Permanent;

(iv) Adjustable Premium Permanent;

(v) Indeterminate Premium Permanent; and

(vi) Universal Life Fixed Premium, (no dump-in premiums allowed).

(C) For assets that are not legally segregated, the associated formula for determining the reserve interest rate adjustment must reflect the ceding insurer's investment earnings and incorporates all realized and unrealized gains and losses reflected in the statutory statement. The following is an acceptable formula:

Rate = 2 (I + CG)

X + Y - I - CG

When: I is the net investment income;

CG is capital gains less capital losses;

X is the current year cash and invested assets plus   investment income due and accrued less borrowed   money; and

Y is the same as X but for the prior year.

(h) Settlements are made less frequently than quarterly or payments due from the reinsurer are not made in cash within 90 days of the settlement date;

(i) The ceding insurer is required to make representations or warranties not reasonably related to the business being reinsured;

(j) The ceding insurer is required to make representations or warranties about future performance of the business being reinsured; or

(k) The reinsurance agreement is entered into for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business reinsured and, in substance or effect, the expected potential liability to the ceding insurer remains basically unchanged.

(2) Notwithstanding section (1) of this rule, with the prior approval of the Director, an insurer that is subject to OAR 836-012-0300 to 836-012-332 may take such reserve credit or establish such asset as the Director determines to be consistent with the Insurance Code or rules adopted thereunder, including actuarial interpretations or standards adopted by the Director.

(3)(a) An agreement entered into on or after November 9, 1995, that involves the reinsurance of business issued prior to the effective date of the agreement, along with any subsequent amendments thereto, shall be filed by the ceding insurer with the Director not later than the 30th day after its date of execution. Each filing must include data detailing the financial effect of the transaction. The ceding insurer's actuary who signs the financial statement actuarial opinion with respect to valuation of reserves shall consider OAR 836-012-0300 to 836-012-332 and any applicable actuarial standards of practice when determining the proper credit in financial statements filed with the Director. The actuary shall maintain adequate documentation and be prepared upon request to describe the actuarial work performed for inclusion in the financial statements and to demonstrate that such work conforms to OAR 836-012-0300 to 836-012-0332.

(b) Any increase in surplus net of federal income tax resulting from arrangements described in subsection (a) of this section shall be identified separately on the insurer's statutory financial statement as a surplus item (aggregate write-ins for gains and losses in surplus in the Capital and Surplus Account) and recognition of the surplus increase as income must be reflected on a net of tax basis in the "Reinsurance ceded" line, as earnings emerge from the business reinsured. The following example applies to this subsection:

(A) On the last day of calendar year N, company XYZ pays a $20 million initial commission and expense allowance to company ABC for reinsuring an existing block of business. Assuming a 34% tax rate, the net increase in surplus at inception is $13.2 million ($20 million - $6.8 million) that is reported on the "Aggregate write-ins for gains and losses in surplus" line in the Capital and Surplus account. $6.8 million (34% of $20 million) is reported as income on the "Commissions and expense allowances on reinsurance ceded" line of the Summary of Operations;

(B) At the end of year N+1 the business has earned $4 million. ABC has paid $.5 million in profit and risk charges in arrears for the year and has received a $1 million experience refund. Company ABC's annual statement would report $1.65 million (66% of ($4 million - $1 million - $.5 million) up to a maximum of $13.2 million) on the "Commissions and expense allowance on reinsurance ceded" line of the Summary of Operations, and -$1.65 million on the "Aggregate write-ins for gains and losses in surplus" line of the Capital and Surplus account. The experience refund would be reported separately as a miscellaneous income item in the Summary of Operations.

History

Statutory/Other Authority: ORS 731.244 & 731.508
Statutes/Other Implemented: ORS 731.508(6)
ID 4-2010, f. & cert. ef. 2-5-10
ID 7-1995, f. & cert. ef. 11-15-95
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0320 Written Agreements

(1) A reinsurance agreement or amendment to any agreement shall not be used to reduce any liability or to establish any asset in any financial statement filed with the Director unless the agreement or amendment or a letter of intent has been duly executed by both parties no later than the “as of date” of the financial statement.

(2) In the case of a letter of intent, a reinsurance agreement or an amendment to a reinsurance agreement must be executed within a reasonable period of time, not exceeding 90 days from the execution date of the letter of intent, in order for credit to be granted for the reinsurance ceded.

(3) The reinsurance agreement must contain provisions providing that:

(a) The agreement constitutes the entire agreement between the parties with respect to the business being reinsured thereunder and that there are no understandings between the parties other than as expressed in the agreement; and

(b) Any change or modification to the agreement is void unless made by amendment to the agreement and signed by both parties.

History

Statutory/Other Authority: ORS 731.244 & 731.508
Statutes/Other Implemented: ORS 731.508(6)
ID 7-1995, f. & cert. ef. 11-15-95
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-012-0332 Existing Agreements

For purposes of an insurer’s statutory financial statement filings, each insurer subject to OAR 836-012-0300 to 836-012-331 shall reduce to zero any reserve credits or assets established with respect to reinsurance agreements entered into prior to November 9, 1995 that, under the provisions of OAR 836-012-0300 to 836-012-331 as amended, would not be entitled to recognition of the reserve credits or assets.

History

Statutory/Other Authority: ORS 731.244 & 731.508
Statutes/Other Implemented: ORS 731.508(6)
ID 4-2010, f. & cert. ef. 2-5-10

Division 13 ANNUAL STATEMENT; DIRECTOR’S AUTHORITY

Or. Admin. R. 836-013-0100 Authority

(1) OAR 836-013-0100 to 836-013-0120 are adopted pursuant to ORS 731.244, 731.296 and 731.385.

(2) OAR 836-013-0100 to 836-013-0120 set forth the standards that the Director may use for identifying insurers who are in such condition as to render the continuance of their business hazardous to the public or to holders of their policies or certificates of insurance.

(3) OAR 836-013-0100 to 836-013-0120 are not a limitation on the regulatory powers of the Director.

History

Statutory/Other Authority: ORS 731.244, 731.296 & 731.385
Statutes/Other Implemented: ORS 731.296 & 731.385
ID 14-2010, f. & cert. ef. 8-19-10
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-013-0110 Standards

The Director may consider the following standards, either singly or in combination of two or more, to determine whether the continued operation of any insurer transacting insurance in this state might be determined to be hazardous to the policyholders, its creditors or the general public:

(1) Adverse findings reported in financial condition and market conduct examination reports, audit reports, and actuarial opinions, reports or summaries.

(2) The National Association of Insurance Commissioners Insurance Regulatory Information System and its other financial analysis solvency tools and reports.

(3) Whether the insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer with respect to such reserves and related actuarial items including but not limited the investment earnings on such assets, and the considerations anticipated to be received and retained under such policies and contracts.

(4) The ability of an assuming reinsurer to perform and whether the insurer's reinsurance program provides sufficient protection for the insurer's remaining capital and surplus after taking into account the insurer's cash flow and the classes of business written as well as the financial condition of the assuming reinsurer.

(5) Whether the insurer's operating loss in the last 12-month period or any shorter period of time, including but not limited to net capital gain or loss, change in non-admitted assets and cash dividends paid to shareholders, is greater than 50 percent of the insurer's remaining capital and surplus in excess of the minimum required.

(6) Whether the insurer’s operating loss in the last 12-month period or any shorter period of time, excluding net capital gains, is greater than 20 percent of the insurer’s remaining surplus as regards policyholders in excess of the minimum required.

(7) Whether a reinsurer or obligor, or any entity within the insurer’s insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations and which, in the opinion of the director may affect the solvency of the insurer.

(8) Contingent liabilities, pledges or guaranties that either individually or collectively involve a total amount that in the opinion of the Director may affect the solvency of the insurer.

(9) Whether any "controlling person" of an insurer is delinquent in the transmitting to, or payment of, net premiums to the insurer.

(10) The age and collectibility of receivables.

(11) Whether the management of an insurer, including officers, directors or any other person who directly or indirectly controls the operation of the insurer, fails to possess and demonstrate the competence, fitness and reputation determined by the Director to be necessary to serve the insurer in such position.

(12) Whether management of an insurer has failed to respond to inquiries relating to the condition of the insurer or has furnished false and misleading information concerning an inquiry.

(13) Whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the director.

(14) Whether management of an insurer either has filed a false or misleading sworn financial statement or has released a false or misleading financial statement to lending institutions or to the general public, or has made a false or misleading entry, or has omitted an entry of material amount in the books of the insurer.

(15) Whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner.

(16) Whether the insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems, or both.

(17) Whether management has established reserves that do not comply with minimum standards established by state insurance laws, regulations, statutory accounting standards, sound actuarial principles and standards of practice.

(18) Whether management persistently engages in material under reserving that results in adverse development.

(19) Whether transactions among affiliates, subsidiaries or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the insurer’s ability to meet its outstanding obligations as they mature.

(20) Any other finding determined by the director to be hazardous to the insurer’s policyholders, creditors or general public.

History

Statutory/Other Authority: ORS 731.244 & 731.385
Statutes/Other Implemented: ORS 731.385
ID 14-2010, f. & cert. ef. 8-19-10
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-013-0120 Director’s Authority

(1) For the purposes of making a determination of the financial condition of an insurer under OAR 836-013-0100 to 836-013-0120, the Director may do one or more of the following:

(a) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding;

(b) Make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates;

(c) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; or

(d) Increase the insurer's liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next 12-month period.

(2) An order of the Director under ORS 731.385 regarding a foreign insurer may be limited to the extent provided by statute.

(3) In addition to the requirements the director may impose under ORS 731.385, if the director determines that the continued operation of the insurer licensed to transact business in this state may be hazardous to the policyholders or the general public, the director may require the insurer to:

(a) File reports in a form acceptable to the director concerning the market value of the insurer’s assets;

(b) Document the adequacy of premium rates in relation to the risks insured;

(d) Correct corporate governance practice deficiencies, and adopt and utilize the governance practices acceptable to the director; or

(e) Provide a business plan to the director in order to continue to transact business in this state.

(4) Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, the director may include as a requirement under section (3) of this rule, any rate adjustment for any non-life insurance product written by the insurer that the director considers necessary to improve the financial condition of the insurer.

History

Statutory/Other Authority: ORS 731.244 & 731.296. 731.385
Statutes/Other Implemented: ORS 731.296 & 731.385
ID 14-2010, f. & cert. ef. 8-19-10
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-1993, f. & cert. ef. 9-23-93

Division 14 ALTERNATIVE INSURANCE ORGANIZATIONS

Or. Admin. R. 836-014-0001 Purpose, Authority and Effective Date

(1) OAR 836-014-0001 to 836-014-0045 are adopted to carry out the purpose of ORS 750.505 to 750.715, that of regulating the operation of legal expense organizations in this state.

(2) OAR 836-014-0001 to 836-014-0045 are adopted pursuant to the general rule-making authority of the Director under ORS 731.244 and the specific authority in 750.715.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.505 & 750.715 et seq.
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0005 Applicability and Scope

(1) Except as otherwise specifically provided in section (2) of this rule, OAR 836-014-0001 to 836-014-0045 apply to:

(a) All legal expense organizations doing business in this state;

(b) All legal expense plans and membership agreements of legal expense organizations delivered or issued for delivery in this state on or after January 1, 1990;

(2) OAR 836-014-0001 to 836-014-0045 do not apply to arrangements specified in ORS 750.525.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.505 & 750.715 et seq.
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0010 Required Capitalization

A legal expense organization shall possess and thereafter maintain capital or surplus, or any combination thereof, of not less than $25,000 or an amount equal to 25 percent of the gross written prepaid fees collected from plan members in the preceding calendar year, whichever is greater, but in no case shall the required amount be more than $300,000.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.535(3)(a)
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0015 Annual Financial Statement

A legal expense organization shall file with the Director an annual financial statement, using the form prescribed by the Director, not later than March 1 following the calendar year to which the statement applies. The statement shall be:

(1) Provided on a statutory accounting basis pursuant to the provisions of ORS chapter 733 applicable to organizations under ORS 750.705.

(2) Verified as to the financial condition of the legal expense organization as of the end of the preceding calendar year:

(a) If the organization is a corporation, by two executive officers;

(b) If the organization is a partnership, by two partners;

(d) If the organization is an association, by two executive officers;

(e) If the organization is an entity other than one to which subsection (a), (b), (c) or (d) of this section applies, by two executive officers.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.645(1)(a)
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0020 Deposits

(1) A deposit under ORS 750.685 shall be with a bank qualified under 731.642 to act as a trust company and as a depository of state funds to hold and service securities by insurers with the state, or with any other depository bank as defined in 295.005.

(2) For compliance with ORS 750.685, a deposit trust agreement shall have the prior approval of the Director for adequate safeguards providing:

(a) Retention of deposits so long as there is outstanding any liability of the legal expense organization as to which the deposit was required;

(b) Release of deposit only upon written directions of the Director.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.685(2) - 750.685(3)
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0025 Bond

A legal expense organization posting a bond under ORS 750.685 shall use the form prescribed by the Director.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.685(2) - 750.685(3)
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0030 Sales Representatives

Every legal expense organization shall submit to the Director, on the form prescribed by the Director, the names and addresses of its sales and marketing representatives transacting business in this state. The notification must be submitted not later than January 1 and July 1 of each year.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.645(2)
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0035 Registration of Legal Expense Organization

A legal expense organization may not transact business in this state unless the organization holds a valid certificate of registration. An organization may apply for registration with the Director by submitting to the Director the following documents:

(1) A completed registration application. The registration application must be on the form prescribed by the Director.

(2) A statement designating a registered agent and a registered office. The statement must be on the form prescribed by the Director. The requirement under this section is in addition to the filing requirements of other law regarding designation of a registered office and registered agent in the State of Oregon for service of process, notice and demand.

(3) A list of its sales and marketing representatives. The names of the sales and marketing representatives must be submitted on the form prescribed by the Director in OAR 836-014-0030.

(4) A Financial Statement. The statement must follow the form prescribed by the Director in OAR 836-014-0015 and comply with 836-014-0015, except for the filing date.

(5) Copies of the following forms and related schedules used or to be used by the organization:

(a) The provider agreement forms used or to be used in this state;

(b) The membership agreement forms delivered or issued or to be delivered or issued in this state;

(d) The schedule of rates charged or to be charged members in this state for each type of agreement or plan.

(6) A marketing plan for conducting legal expense plan business in this state. The plan must include the following:

(a) The geographical area in which business is intended to be done in the first five years;

(b) The types of plans intended to be written in the first five years, including specification whether and to what extend indemnity rather than service benefits are to be provided;

(d) Data affirmatively demonstrating the anticipated income and expenses of the organization in the first five years, including, without limitation, the projected expenditures for legal services and the projected source of funds to make up any anticipated deficits. Except as provided in this subsection, the data must b documented and verified by an actuary or a person who has the background for the practice of actuarial science. If, however, the applicant legal expense organization provides or will provide service rather than indemnity benefits, the documentation and verification may be made instead by an executive employee of the applicant who has at least four years of experience in the design, pricing and administration of legal expense or similar plans. The executive employee must also document and certify in the application that the applicant has provider agreements in force, subject to issuance of a certificate of registration, adequate to provide the covered legal services throughout the geographic area in which business is intended to be done. The Director may require the applicant to furnish, in support of its application, publicly available data regarding the costs and benefits of comparable plans in this state and elsewhere.

(7) Evidence of the deposit or surety bond required by ORS 750.685 and in accordance with OAR 836-014-0020 or 836-014-0025.

(8) A statement of the incorporators, directors and officers, which provides the names of all incorporators and proposed directors and officers of the legal service organization, and all of their addresses and occupations for the preceding five years.

(9) A certified copy of the articles and by-laws, partnership agreement, or the association agreement and association by-laws.

(10) A copy of all contracts with principals including a copy of all agreements relating to the legal service organization to which any incorporator or proposed director or officer is a party.

(11) A statement of the amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement and compensation of incorporators or other persons.

(12) A statement of compensation of all principals and all corporate officers and directors, or partners, or other principal as it relates to the applicant's operation as a legal service organization.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.515, 750.535 & 750.545
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0040 Amendments to Registration

(1) A legal service organization shall amend its registration in this state when any of the following events occur:

(a) The organization changes its principal place of business;

(b) The insurance or surety bond required for compliance with ORS 750.685 is cancelled or replaced;

(2) When a legal expense organization changes its principal place of business, the organization shall include the following in the amended registration:

(a) The street address, including city and state;

(b) The mailing address, if different;

(3) If an organization changes its registered office or agent, the organization must file a statement of the change with the Director on the form prescribed by the Director.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.535 & 750.575
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0042 Renewal of Legal Expense Organization Registration

In order for an organization to renew its certificate of registration, the organization must apply for renewal by submitting a completed renewal application. The renewal application must be on the form prescribed by the Director. If mailed, the renewal application must be postmarked by the United States Postal Service not later than the expiration date of the registration.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.515 & 750.565(2)
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0045 Unfair Trade Practice

Failure of a legal service organization to comply with OAR 836-014-0001 to 836-014-0045 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731 & 750
Statutes/Other Implemented: ORS 750.240 & 750.325(3)
ID 4-1990, f. & cert. ef. 1-24-90

Or. Admin. R. 836-014-0100 Actuarial Certification; Guidelines

(1) The actuarial opinion required by ORS 750.315 and 750.325 to be submitted annually must meet the requirements of this rule. The annual statement of a multiple employer welfare arrangement must include a certification prepared according to the requirements of this rule. Attached to page 1 of the annual statement must be the statement of a qualified actuary setting forth the opinion of the actuary relating to loss reserves, provision for experience rating refunds and any other actuarial items.

(2) An applicant for a certificate of multiple employer welfare arrangement must submit an actuarial opinion meeting the requirements of this rule in order to satisfy ORS 750.305(8) which requires proof of adequate reserves according to the requirements of 750.315 to be submitted to the Director along with the application for the certificate of multiple employer welfare arrangement and other supporting materials. The actuarial opinion must be the statement of a qualified actuary setting forth the opinion of the actuary relating to loss reserves, provision for experience rating refunds and any other actuarial items.

(3) For purposes of this rule, a qualified actuary means a member in good standing of the American Academy of Actuaries, or a person recognized by the American Academy of Actuaries as qualified for such an actuarial valuation, or a person who otherwise has demonstrated competency in such an actuarial evaluation to the satisfaction of the Director.

(4) The statement of the actuary’s opinion must consist of a paragraph identifying the actuary, a scope paragraph identifying the subjects on which an opinion is to be expressed and describing the scope of the actuary’s work as provided in sections (7) to (9) of this rule, and an opinion paragraph expressing the opinion of the actuary with respect to such subjects as provided in sections (10) to (12) of this rule. The actuary may include one or more additional paragraphs in individual cases if the actuary considers it necessary to state a qualification of opinion or to explain some aspect of the annual statement that is not already sufficiently explained in the annual statement.

(5) The opening paragraph of the statement of opinion must generally indicate the relationship of the actuary to the multiple employer welfare arrangement as follows:

(a) For an actuary who is an employee of the multiple employer welfare arrangement, the opening paragraph of the opinion must contain a sentence such as:

“I, (name and title of actuary), am an officer (employee) of the trust carrying on the business of (name of multiple welfare arrangement) and a member of the American Academy of Actuaries”;

(b) For a consulting actuary, the opening paragraph of the statement of opinion must contain a sentence such as:

“I, (name and title of consultant), am associated with the firm of (name of firm). I am a member of the American Academy of Actuaries and have been retained by the trust carrying on the business of (name of the multiple employer welfare arrangement) with regard to loss reserves, actuarial liabilities and related items”;

(c) For a person other than a member of the American Academy of Actuaries, the opening paragraph of the opinion must contain a sentence such as:

(A)

“I, (name and title), am an officer (employee) of the trust carrying on the business of (name of the multiple employer welfare arrangement) and I (SELECT ONE:) (have competency in actuarial valuations for organizations of this kind) — or — (am recognized by the American Academy of Actuaries as qualified to perform actuarial valuations for organizations of this kind)”; or

(B)

“I, (name and title of consultant), am associated with the firm of (name of firm). I (SELECT ONE:) (have competency in actuarial valuations for organizations of this kind) — or — (am recognized by the American Academy of Actuaries as qualified to perform actuarial valuations for organizations of this kind) and have been retained by the trust carrying on the business of (name of multiple employer welfare arrangement) with regard to the valuation.”

(6) Sections (7) to (11) and (13) are examples, for illustrative purposes, of language that in typical circumstances would be included in the remainder of the statement of opinion. The illustrative language must be modified as needed to meet the circumstances of a particular case. The actuary must in any case use language that clearly expresses the professional judgment of the actuary.

(7) The scope paragraph:

(a) Must contain a sentence such as the following:

“I have examined the assumptions and methods used in determining loss reserves, actuarial liabilities and related items listed below, as shown in the annual statement of the organization as prepared for filing with state regulatory officials as of December 31, 19__.”

(b) Must list those items and amounts with respect to which the actuary is expressing an opinion. The list must include but need not be limited to:

(A) Claims unpaid. Anticipated salvage and subrogation included as a reduction to Loss Reserves as reported in Underwriting and Investment Exhibit, and on Page 3 — Liabilities, Surplus and Special Funds, Line 1 $________;

(B) Other actuarial liabilities. (Opinion, under this Item, with respect to actuarial liabilities, if any); and

(C) Premium items, such as receivables, due and unpaid, unearned, and paid in advance as they may relate to actuarial items.

(8) If the actuary has examined the underlying records or summaries, or both, the scope paragraph must also include a sentence such as the following:

“My examination included such review of the assumptions and methods used and of the underlying basic records or summaries, or both, and such tests and calculations as I considered necessary.”

(9) If the actuary has not examined the underlying records or summaries, or both, but has relied upon those prepared by the trust carrying on the business of the multiple employer welfare arrangement, the scope paragraph must include a sentence such as one of the following:

(a)

“I relied upon underlying records or summaries, or both, prepared by the responsible officers or employees of the organizations. In other respects, my examination included such review of the assumptions and methods used and such tests of the calculations as I considered necessary”;

(b)

“I relied upon (name of firm) for the accuracy of the underlying records or summaries, or both. In other respects, my examination included such review of the underlying assumptions and methods used and such tests of the calculations as I considered necessary.”

(10) The opinion paragraph must include a sentence the covers at least the points listed in the following illustration:

“In my opinion, the amounts carried in the balance sheet on account of the items identified above:

“Are in accordance with accepted actuarial standards consistently applied and are fairly stated in accordance with sound actuarial principles,

“Are based on actuarial assumptions relevant to contract provisions and appropriate to the purpose for which the statement was prepared,

“Meet the requirements of the laws of (state of domicile),

“Make a good and sufficient provision for all unpaid claims and other actuarial liabilities of the organization under the terms of its contracts and agreements,

“Are computed on the basis of assumptions consistent with those used in computing the corresponding items in the annual statement of the preceding year-end,

“Include appropriate provision for all actuarial items that ought to be established.”

(11) If there has been any material change in the assumptions or methods, or both, from those previously employed, that change must be described in the statement of opinion by inserting a phrase such as:

“A material change in assumptions (or methods, or both) was made during the past year but the change accords with accepted actuarial standards.”

A brief description of the change must follow. The adoption of new coverages requiring underlying assumptions that differ from assumptions used for prior coverages is not a change in assumption for purposes of this section.

(12) If the actuary is unable to form an opinion, the actuary must refuse to issue a statement of opinion. If the opinion is adverse of qualified, the actuary must issue an adverse or qualified opinion explicitly stating the reason or reasons for the opinion.

(13) If the actuary does not express an opinion as to the accuracy and completeness of underlying listings or summaries used in the evaluation of the actuary, there should be included on or attached to page 1 of the statement blank the statement of an officer or trustee of the trust or an accounting firm that prepared the underlying data similar to the following:

“I (name of officer or trustee of trust), (title of officer or trustee), of (name and address of trust), (or accounting firm), hereby affirm that the listing and summaries of data prepared for and submitted to (name of actuary) were prepared under my direction and, to the best of my knowledge and believe, are accurate and complete.”

History

Statutory/Other Authority: ORS 750.305, 750.315 & 75.0325
Statutes/Other Implemented: ORS 750.315(2)
ID 3-1994, f. & cert. ef. 4-1-94
ID 11-1993(Temp), f. & cert. ef. 11-17-93

Or. Admin. R. 836-014-0200 Statutory Authority and Implementation

(1) OAR 836-014-0200 to 836-014-0330 are adopted under the authority of ORS 731.244, 731.804, 744.331, 744.358 and 746.240 and section 20, chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973) for the purpose of implementing 744.326, 744.328, 744.331, 744.341 and 744.358 and sections 2, 5, 11 to 19 and 22, chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973).

(2) OAR 836-014-0205, 836-014-0226, 836-014-0263, 836-014-0285 and 836-014-0325, and the amendments to 836-014-0200 to 836-014-0325 are operative on and after the date that they are filed with the Secretary of State.

History

Statutory/Other Authority: ORS 731.244, 744.331 & 744.358
Statutes/Other Implemented: ORS 744.326, 744.328, 744.331, 744.341, 744.358, Sec. 2, 5, 11–19 & 22, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0205 Definitions

(1) In addition to the definitions set forth in section 2, chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973), as used in OAR 835-014-0200 to 836-014-0330:

(2) “Terminally ill” means having an illness or sickness that can reasonably be expected to result in death in 24 months or less, including but not limited to one or more of the following:

(a) A medical condition that will result in a drastically limited life span not exceeding 24 months.

(b) A medical condition that has required or requires extraordinary medical intervention, such as a major organ transplant or continuous artificial life support, without which the insured person would die.

(c) Any condition that usually requires continuous confinement in a nursing home, convalescent center or other care facility, if the insured person is expected to remain there for the rest of the insured person's life.

(d) A medical condition that in the absence of extensive or extraordinary medical treatment will result in a drastically limited life span. Such medical conditions include but are not limited to the following:

(A) Coronary artery disease resulting in an acute infarction or requiring surgery;

(B) Permanent neurological deficit resulting from cerebral vascular accident;

(D) Acquired Immune Deficiency Syndrome.

History

Statutory/Other Authority: ORS 731.244, 744.331 & 744.358
Statutes/Other Implemented: ORS 744.326, 744.328, 744.331, 744.341 & 744.358
ID 1-2010, f. & cert. ef. 1-5-10

Or. Admin. R. 836-014-0210 License Fees

(1) The fee for filing an application for a license to transact business as a life settlement provider is $400.

(2) The fee for annual renewal of a license to transact business as a life settlement provider is $200.

(3) The fee for filing an application for a license to transact business as a life settlement broker is $45.

(4) The fee for biennial renewal of a license to transact business as a life settlement broker is $45.

(5) The fee for filing an application for a license to transact business as a life settlement investment agent is $45.

(6) The fee for biennial renewal of a license to transact business as a life settlement investment agent is $45.

History

Statutory/Other Authority: ORS 731.244, 731.804, 744.331 & 744.358
Statutes/Other Implemented: ORS 744.326, 744.328, Sec. 5, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0220 Life Settlement Provider License Requirements

(1) Any person, other than the owner of a life insurance policy, that enters into or effectuates a life settlement contract with an owner who is a resident of Oregon must obtain a life settlement provider license from the Department of Consumer and Business Services.

(2) In order for an applicant to qualify for authority to transact business as a life settlement provider the person must do all of the following:

(a) Demonstrate evidence of financial responsibility as follows:

(A) The applicant's assets must exceed its liabilities by an amount of not less than $150,000;

(B) The applicant must file with the Department of Consumer and Business Services a surety bond in the sum of $100,000 that meets the requirements of ORS 731.640; or

(C) The applicant must deposit with the Department of Consumer and Business Services the sum of $100,000 in cash, certificates of deposit or securities, or any combination of cash, certificates of deposit or securities.

(b) Submit a detailed plan of operation with the application that includes a description of the method for retaining records as required under ORS 744.346.

(c) Provide an anti-fraud plan that includes initiatives reasonably calculated to detect, prosecute and prevent fraudulent life settlement acts. The anti-fraud plan must include but need not be limited to:

(A) A provision for use of fraud investigators;

(B) A description of the procedures for detecting and investigating possible fraudulent life settlement acts and procedures to resolve material inconsistencies between medical records and insurance applications;

(D) A plan for anti-fraud education and training of the provider’s staff and employees; and

(E) A description or organizational chart of the personnel responsible for implementing and maintaining the integrity of the anti-fraud plan.

(d) Demonstrate that procedures are in place to prevent any person convicted of a felony involving dishonesty or breach of trust to participate in the life settlement operations of the applicant.

(3) As a condition of maintaining a license to act as a life settlement provider, a life settlement provider must do all of the following:

(a)(A) At all times maintain assets that exceed its liabilities by an amount of not less than $150,000; or

(B) At all times maintain with the Department of Consumer and Business Services a surety bond or the deposit of cash, certificates of deposit or securities. The surety bond, cash or securities must meet the requirements of ORS 731.640 and must be in the sum of $100,000.

(b) Pay the annual provider renewal fee as specified in OAR 836-014-0210; and

(c) Submit to the Department of Consumer and Business Services a completed license renewal application on the form prescribed by the Department, not later than the 30th day after the anniversary date of the life settlement provider’s license.

(4) A bond filed or deposit made in this state under this rule shall be held for the faithful performance by the life settlement provider of all transactions of the provider subject to ORS 744.319 to 744.358.

(5) A life settlement provider license does not eliminate the need to obtain a securities license from the Department if a life settlement provider conducts life settlement transactions in a manner that would be considered an offer, sale, transfer or delivery of a security under the Oregon Securities Law.

History

Statutory/Other Authority: ORS 731.244 & 744.358
Statutes/Other Implemented: ORS 744.328
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1996, f. & cert. ef. 11-1-96
ID 6-1996(Temp), f. & cert. ef. 5-8-96
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0226 Life Settlement Investment Agent Licensing Requirements

(1) In order for an applicant to qualify to transact business as a life settlement investment agent, the person must pay the appropriate application fee under OAR 836-014-0210 and either:

(a) Demonstrate that the person has completed to the director’s satisfaction an examination of the Financial Industry Regulatory Authority (FINRA) that is Series 6 or Series 7; or

(b) Operates under the appropriate license from the equivalent chief insurance official of the state of residence of the life settlement purchaser whom the agent is negotiating with on behalf of a life settlement provider. If there is more than one purchaser of a single policy and the purchasers are residents of different states, the life settlement investment agent must be licensed by the state in which the purchaser having the largest percentage ownership resides, or if the purchasers hold equal ownership, the state of residence of one purchaser agreed upon in writing by all purchasers.

(2) A life settlement investment agent license does not eliminate the need to obtain a securities license from the Department if a life settlement investment agent conducts life settlement transactions in a manner that would be considered an offer, sale, transfer or delivery of a security under the Oregon Securities Law.

History

Statutory/Other Authority: ORS 731.244, 744.331 & 744.358
Statutes/Other Implemented: Sec. 5, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10

Or. Admin. R. 836-014-0230 Renewal Requirements

(1) A licensee applying for renewal must do the following, as applicable:

(a) Submit a completed renewal application, on a form provided by the Director; and

(b) Submit the renewal fee.

(2) If a renewal application is submitted by mail, the renewal application must be postmarked by the United States Postal Service not later than the license expiration date.

(3) The Director may allow a licensee not more than 30 days to submit missing information on the renewal application form, if the fee has been submitted on or before the expiration date.

(4) The Director may request on the renewal application any information requested on the original application for a license.

History

Statutory/Other Authority: ORS 744.331
Statutes/Other Implemented: ORS 744.331
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0240 Filing Requirements, Life Settlement Contracts and Disclosure Statement Forms; Promotional, Advertising and Marketing Materials

(1) An applicant for a license as a life settlement provider or life settlement broker must file with the Director a copy of each life settlement contract form and disclosure statement form that the applicant intends to use in business under the license.

(2) A life settlement provider or life settlement broker must file with the Director, prior to use in this state, any amendment to a previously-filed life settlement contract form or disclosure statement form and any new life settlement contract form or disclosure statement form.

(3) Contract forms and amendments thereto and disclosure statement forms and amendments thereto are subject to approval prior to use in this state, as provided in ORS 744.341.

(4) Each form of life settlement contract filed with the Director must contain all of the following:

(a) A life settlement contract, completed in John Doe fashion;

(b) A copy of a policyholder's or certificate holder's application, completed in John Doe fashion; and

(c) A copy of the disclosure statement form that will be provided to a policyholder or certificate holder as required by section 11, chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973) and 836-014-0280.

(5) A life settlement contract form or a disclosure statement form is subject to disapproval by the Director:

(a) If the Director finds it does not comply with the law;

(b) If the Director finds it contains any provision or has any description of its contents, title, heading or other indication of its provisions, that is unintelligible, uncertain, ambiguous or abstruse, or likely to mislead a person to whom the contract is offered or with whom the contract is made;

(c) If, in the Director's judgment, its use would be prejudicial to the interest of the persons with whom the life settlement provider contracts; or

(d) If the Director finds it contains provisions that are unjust, unfair or inequitable.

(6) A life settlement provider must file with the Director, prior to use in this state, any promotional, advertising and marketing materials related to a life settlement contract used in this state.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.326, 744.341, Sec. 11 & 15, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0250 Contents of Life Settlement Contracts

(1) In addition to the requirements of ORS 744.341, each life settlement contract must be in writing, in a type size of not less than 12 points, and written in clear, understandable and straightforward wording.

(2) A life settlement contract may not contain any limitation or restriction on the use of the proceeds by the policyholder or certificate holder.

(3) Each life settlement contract shall specify any effect that entering into the contract will have upon the continuation or continued availability of supplemental benefits or riders that are or may be attached to the life insurance policy that is the subject of the life settlement contract, including assignment of the responsibility for the continued payment of premiums. The contract must require the provider to pay the premium on supplemental benefits and riders added to the policy before the life settlement contract was entered, when so elected according to OAR 836-014-0260, and must require the provider to notify the former policyholder or certificate holder of any option that may arise to select any supplemental benefits or riders. The benefits and riders considered shall include, but need not be limited to, the following:

(a) Guaranteed insurability options;

(b) Accidental death benefits, or accidental death and dismemberment benefits;

(d) Family, spousal or children's riders or benefits.

(4) The life settlement contract must provide for rescission by the policyholder or certificate holder entering the life settlement contract as set forth in ORS 744.341. The rescission provision must appear on the first page of the contract. The rescission period specified in 744.341 may not be less than 60 days after the date on which the contract is executed by all parties or less than 30 days after the date on which the policyholder or certificate holder receives the life settlement proceeds, whichever is the lesser period. The rescission provision must also provide that if the insured dies during the period of time for rescission:

(a) The contract is rescinded effective on the date of application; and

(b) The provider will return the amount by which the insurance proceeds according to the terms of the policy exceed the compensation paid by the provider pursuant to the life settlement contract and any premiums paid by the provider on the policy so that all parties, including any beneficiaries, are returned to their original positions under the insurance policy.

(5) A life settlement contract must provide a method for giving notice of rescission, including but not limited to the address or addresses to which the rescission notice must be sent, and a telephone number that the insured may call for information.

(6) All life settlement contracts, purchase agreement forms and applications for life settlements must contain the following statement or a substantially similar statement approved by the Director: “Any person who knowingly presents false information in this application is guilty of a crime and may be subject to fines and confinement in prison.”

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.341
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1997, f. & cert. ef. 10-17-97
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0260 Rights and Duties of Parties to Life Settlement Contract

(1) A policyholder or certificate holder who has entered a life settlement contract has the right to retain additional benefits or optional riders that were part of the life insurance policy, including but not limited to disability income, accidental death and dismemberment and spouse, children and family riders, but not including term riders. Any premiums payable on the insurance policy or certificate that is the subject of the life settlement contract, including premiums payable for additional benefits retained at the option of the policyholder or certificate holder, shall be paid by the life settlement provider when due, for the remaining duration of the life that is the subject of the life settlement contract.

(2) Except as provided in this section (2), any additional benefit or optional rider that the policyholder or certificate holder elects not to continue must be terminated when the life settlement takes place. A waiver of premium provision may be continued by the life settlement provider.

(3) The life settlement provider does not have the right to any cash surrender value unless all additional benefits retained by the policyholder or certificate holder, whether by rider or endorsement, are in a paid-up status and will be unaffected by any change in cash surrender value.

(4) The life settlement provider shall make the payment of proceeds of a life settlement to an escrow agent as required in Section 13, chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973) by means of wire transfer or by cashier's check.

(5) Any policyholder or certificate holder who enters into a life settlement contract has the right to rescind the contract not later than the 60th day after the date on which the contract is executed by all parties or not later than the 30th day after the date the policyholder or certificate holder receives the life settlement proceeds, whichever is the lesser period. Not later than the date on which the life settlement proceeds are paid to the policyholder or certificate holder, the life settlement provider must give the policyholder or certificate holder a written statement of the date on which the rescission period expires. The statement must include a notice to the policyholder or certificate holder that a rescission is not complete until the full payment, including any premiums paid by the life settlement provider, is returned to the life settlement provider and that the full payment must be returned not later than the 30th day after the date specified for expiration of the rescission period.

(6) If the statement required in section (5) of this rule is given by mail, it shall be considered to be given when deposited in the United States mail, first class postage prepaid.

(7) If notice of rescission is given by mail, it shall be considered to be given when deposited in the United States mail, first class postage prepaid.

(8) A life settlement broker represents exclusively the owner, and not the insurer or the life settlement provider, and owes a fiduciary duty to the owner, including a duty to act according to the owner’s instructions and in the best interest of the owner.

(9) The life settlement investment agent does not have the right to have any contact with the owner or insured under a policy or to any knowledge of the identity of the owner or insured.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.341, Sec. 11, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1997, f. & cert. ef. 10-17-97
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0263 Request to Insurer for Verification of Coverage

(1) The life settlement provider or broker shall submit in writing a request for verification of coverage from the insurer on the status of the life insurance policy or certificate of a policyholder. The request shall be in the form illustrated on the Division of Financial Regulation website, or a similar form approved by the director and shall be accompanied by an instruction executed by the policyholder or certificate holder authorizing the insurer to release the specified information referred to in this section to the life settlement provider or to the life settlement broker.

(2) A life settlement provider or broker who submits a request under section (1) of this rule must state in the request that the provider or broker is licensed as a life settlement provider in this state and must disclose its license number.

History

Statutory/Other Authority: ORS 731.244, 744.331 & 744.358
Statutes/Other Implemented: ORS 744.326, 744.328, 744.331, 744.341, 744.358 & Or Laws 2009, ch 711, sec 13
ID 12-2024, minor correction filed 07/23/2024, effective 07/23/2024
ID 1-2010, f. & cert. ef. 1-5-10

Or. Admin. R. 836-014-0265 Response by Insurer

(1) An insurer shall provide information requested by a life settlement provider or life settlement broker on the status of the life insurance policy or certificate of a policyholder or certificate holder within 30 calendar days after the insurer receives the request for verification of coverage.

(2) Nothing in this rule prohibits a certificate holder from assigning rights or benefits under the certificate to a licensed life settlement provider if assignment is allowed in the group policy, or from converting the coverage to an individual life insurance policy as provided by law and any applicable terms of the group policy.

History

Statutory/Other Authority: ORS 731.244 & 744.358
Statutes/Other Implemented: ORS 744.358
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1997, f. & cert. ef. 10-17-97

Or. Admin. R. 836-014-0270 Standards for Evaluation of Reasonable Payments; Definition of “Terminal Illness or Condition”

(1) If the insured is terminally ill or chronically ill, payments under life settlement contracts must be fair and equitable and may not in any event be less than the following: Insured's Life Expectancy — Minimum Percentage of Face Value Less Outstanding Loans Received by Policyholder or Certificate Holder

(a) Less than six months — 85 percent;

(b) At least six but less than 12 months — 80 percent;

(d) At least 18 but less than 24 months — 70 percent;

(2) If the insured is chronically ill, payments under life settlement contracts must be fair and equitable and may not in any event be less than the following: Insured's Life Expectancy — Minimum Percentage of Face Value Less Outstanding Loans Received by Policyholder or Certificate Holder

(a) At least 24 but less than 36 months — 60 percent;

(b) 36 months or more – The insured must receive at least the greater of:

(A) 50 percent;

(B) The cash surrender value; or

(3) If the insured is not terminally ill or chronically ill, the owner must receive a reasonable return for entering into a life settlement agreement. The life settlement contract shall not provide a payment to the insured that is unreasonable or unjust. In determining whether a payment is unreasonable or unjust, the Director may consider the following factors:

(a) The face amount being purchased;

(b) Any policy loan in effect on the policy being purchased;

(d) The age of the insured at the time of purchase;

(e) The future premiums that must be paid to minimally keep the policy in force;

(f) The cash surrender value or accelerated death benefit available from the policy;

(g) The method for allocating internal costs relating directly to the acquisition of this policy;

(h) The payment of any commission, fee or other expense to a life settlement broker or any other external party;

(i) If known, any future interest payments due for funds borrowed to purchase this policy;

(j) The applicable rating at the time of purchase of the insurance company that issued the policy by a rating service generally recognized by the insurance industry, regulators and consumer groups;

(k) Whether the policy is within the contestable period; and

(l) Other factors that the Director considers relevant.

(4) A payment may be reduced by the minimum premium required under sections (1) or (2) of this rule to keep the contract in force for the duration of the remaining life expectancy of the life that is the subject of the life settlement contract. The minimum premium includes any premiums payable for additional benefits retained at the option of the policyholder or certificate holder. Other than this allowable reduction in payment, there shall be no other retention for expenses or broker's fees that would reduce payments below the minimum levels established in sections (1) or (2) of this rule.

(5) The estimated life expectancy of an insured person must be determined according to sound actuarial principles or other sound methodology acceptable to the director.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.338 & 744.358
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1997, f. & cert. ef. 10-17-97
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0280 Disclosure Required

(1) With an application for a life settlement, a life settlement provider or life settlement broker shall disclose the information specified in section 11, chapter 711, 2009 Oregon Laws (Enrolled Senate Bill 973) in a disclosure statement in a form approved by the director. The statement must be in not less than 12 point type. An example of the form of the disclosure statement will be displayed on the Division of Financial Regulation website and the director may update names, telephone numbers and similar information from time to time as necessary. A life settlement broker shall disclose to the insured in writing any relationship required to be disclosed to an owner under section 15, chapter 711, Oregon Laws 2009 prior to effectuating a life settlement contract. The form of the disclosure statement shall be approved by the director.

(2) For each life settlement contract entered into by a life settlement provider, the provider must keep a copy of the disclosure statement in the provider's file on the contract, along with an affidavit signed by the provider showing the date the statement was delivered to and signed by the policyholder or insured and the life settlement provider or life settlement broker and attesting to the provider's belief that the policyholder or insured had an opportunity to read and understand the statement. The provider must also send a copy of the statement and the signed affidavit to the life settlement broker.

(3) The disclosures required under section (1) of this rule must be provided in a separate document that is signed by the owner or insured and the life settlement provider or life settlement broker, and must provide the following information:

(a) All information required by section 11(1), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973);

(b) The brochure required by section 11(2), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973); and

(c) An explanation of the ability of the life settlement provider and the life settlement broker to contact the insured for the purpose of determining the health status of the insured after the life settlement occurs, and the frequency at which those contacts may occur.

(4) No later than the date the life settlement contract is signed by all parties, a life settlement provider shall provide the owner and insured with at least the disclosures required under section 11(3), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973). The disclosures shall be conspicuously displayed in the life settlement contract or in a separate document signed by the owner or insured.

(5) If the life settlement provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall communicate in writing the change in ownership or beneficiary to the insured within 20 days after the change. Any subsequent life settlement purchaser that transfers ownership or changes the beneficiary shall notify the person identified by the life settlement provider under section 11(7)(h), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973) in order that the life settlement provider may again notify the insured of the subsequent change in ownership or beneficiary.

(6) Prior to the date the life settlement purchase agreement is signed by all parties, a life settlement provider or its life settlement investment agent shall provide the life settlement purchaser with at least the following disclosures. The disclosures must be conspicuously displayed in any life purchase contract or in a separate document signed by the life settlement purchaser and life settlement provider or life settlement investment agent, and must include the following:

(a) The disclosures required by section 11(5), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973); and

(b) A brochure describing the process of investment in life settlements in a form approved by the director. The director shall review the form to determine whether the form is sufficiently similar to the brochure as illustrated on the Division of Financial Regulation website.

(7) No later than at the time of the assignment, transfer or sale of all or a portion of an insurance policy, a life settlement provider or its life settlement investment agent shall provide the life settlement purchaser with at least the disclosures required by section 11(7), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973).

(8) A life settlement broker shall retain for five years a copy of a disclosure statement given to a person under section (3) of this rule that is signed by the person, in the broker's files.

(9) A life settlement broker to whom a copy of a disclosure statement and signed affidavit is sent by the life settlement provider must retain for five years the copies in the broker's files on the contract.

(10) A life settlement provider shall not enter a life settlement contract affecting a life insurance policy issued by an insurer with which the life settlement provider is affiliated or of which the life settlement provider is a subsidiary, unless the relationship between the insurer and the life settlement provider is fully disclosed, in writing, to the policyholder or certificate holder.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: Or Laws 2009, ch 711, secs 10, 11, 15
ID 13-2024, minor correction filed 07/23/2024, effective 07/23/2024
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1997, f. & cert. ef. 10-17-97
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0285 Disclosures to Insurer

Before initiating a plan, transaction or series of transactions, a life settlement broker or life settlement provider shall fully disclose to an insurer the plan, transaction or series of transactions to which the life settlement broker or life settlement provider is a party, to originate, renew, continue or finance a life insurance policy with the insurer for the purpose of engaging in the business of life settlements at anytime prior to, or during the first five years after, issuance of the policy.

History

Statutory/Other Authority: ORS 731.244, 744.331 & 744.358
Statutes/Other Implemented: ORS 744.326, 744.328, 744.331, 744.341, 744.358, section 12, chapter 711 & Oregon Laws 2009
ID 1-2010, f. & cert. ef. 1-5-10

Or. Admin. R. 836-014-0290 Contacts by Life Settlement Provider or Broker

(1) After a life settlement provider has entered into a life settlement contract, neither the life settlement provider nor the life settlement broker may make contact with the insured:

(a) More frequently than once every three months if the insured has a life expectancy of more than one year; and

(b) More frequently than twice each month if the insured has a life expectancy of one year or less.

(2) The life settlement provider shall explain the procedure for contacts authorized in section (1) of this rule to the insured when the life settlement contract is entered into.

(3) The limitation in this rule on contacts by a life settlement provider or life settlement broker does not apply to contacts initiated by the policyholder, certificate holder or insured, to contacts required to inform the insured of any transfer of ownership under OAR 836-014-0280(5) or for keeping the life insurance policy in force.

(4) The disclosure statement required under OAR 836-014-0280 must include a clear description of the permitted contacts with an insured allowed under section (1) of this rule including an explanation of the purpose of such subsequent contacts.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.358, Sec. 11, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 14-1997, f. & cert. ef. 10-17-97
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0300 Advertising Standards

(1) Advertising related to life settlement contracts, life settlement purchase agreements or related products or services must be truthful and not misleading by fact or implication.

(2) If a life settlement provider or broker mentions the speed with which the life settlement will occur, the advertising must disclose the average time from completed application to the date of offer and from acceptance of the offer to receipt of the funds by the policyholder or certificate holder during the past six months.

(3) If advertising of a life settlement contract mentions the dollar amounts available to policyholders and certificate holders, the advertising must disclose the average purchase price with regard to a particular life expectancy as a percent of face value paid to policyholders and certificate holders contracting with the life settlement provider or broker during the past six months and must disclose factors that go into determining the specific amounts charged.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.358
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0310 Reporting Requirements

(1) On or before March 1 of each year, a life settlement provider shall file an annual statement with the director. The information provided in the statement shall be limited to those transactions for which the owner is a resident of Oregon. The statement shall include at a minimum:

(a) Total number and aggregate face amount and life settlement proceeds of policies settled during the immediately preceding calendar year;

(b) A breakdown of the information by policy issue year;

(d) The life settlement brokers who have settled the policies.

(2) For each policy for which a life settlement contract has been entered into during the preceding calendar year or that was entered into prior to the preceding calendar year and for which deaths had not yet been reported as of the beginning of the preceding year:

(a) The date the life settlement contract was entered into;

(b) The life expectancy of the insured at the time of the contract;

(d) The amount paid by the life settlement provider for purposes of making a life settlement on the policy and the percentage that amount represents of the face amount;

(e) If the insured has died:

(A) The date of death; and

(B) The total insurance premiums paid by the life settlement provider to maintain the policy in force; and

(f) The amount of commission paid by the life settlement provider to the life settlement broker.

(3) The annual statement required under section (1) of this rule also shall include a breakdown, by disease category, of applications, received, accepted and rejected during the preceding calendar year.

History

Statutory/Other Authority: ORS 744.342 & 744.358
Statutes/Other Implemented: ORS 744.342
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0320 Requirements for Brokers

(1) A life settlement broker may not seek or obtain any compensation from the policyholder or certificate holder without the written agreement of the policyholder or certificate holder obtained before the broker performs any services in connection with the life settlement.

(2)(a) Unless convicted of a felony as described in section 17(2), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973), a life insurance producer meets the licensing requirements of this section and is permitted to operate as a life settlement broker in this state if the producer has been duly licensed:

(A) As a resident insurance producer with a life line of authority in this state for at least one year; or

(B) In the producer’s home state for at least one year and is licensed as a nonresident producer in this state.

(b) A life insurance producer qualified to operate as a life settlement broker under this section must:

(A) Not later than 30 days from the date the producer first acts as a life settlement broker, submit an application for a life settlement broker license;

(B) Have in place an anti-fraud plan as required by section 17(10), chapter 711, Oregon Laws 2009 (Enrolled Senate Bill 973); and

(3) A life settlement broker may not also be licensed as a life settlement investment agent.

(4) The anti-fraud plan required under this rule must include initiative reasonably calculated to detect, prosecute and prevent fraudulent life settlement acts. The anti-fraud plan must include but need not be limited to:

(a) A provision for use of fraud investigators;

(b) A description of the procedures for detecting and investigating possible fraudulent life settlement acts and procedures to resolve material inconsistencies between medical records and insurance applications;

(d) A plan for anti-fraud education and training of the broker’s staff and employees; and

(e) A description or organizational chart of the personnel responsible for implementing and maintaining the integrity of the anti-fraud plan.

(f) A demonstration that procedures are in place to prevent any person convicted of a felony involving dishonesty or breach of trust to participate in the life settlement operations of the applicant.

History

Statutory/Other Authority: ORS 744.358
Statutes/Other Implemented: ORS 744.358, 744.323, Sec. 17, Ch. 711 & OL 2009
ID 1-2010, f. & cert. ef. 1-5-10
ID 15-2006, f. & cert. ef. 7-27-06
ID 3-1996, f. & cert. ef. 2-26-96

Or. Admin. R. 836-014-0325 Disclosures Required by Life Insurers

(1) With respect to each policy issued by an insurance company, the insurance company shall provide notice to the owner of an individual life insurance policy when the insured person under such a policy is 60 years of age or older, and:

(a) The life insurance company receives notice from such an owner of a request to surrender, in whole or in part, an individual policy;

(b) The life insurance company receives notice from such an owner of a request to receive an accelerated death benefit under an individual policy; or

(c) The life insurance company sends to such an owner all notices of lapse of an individual policy, other than a term policy.

(2)(a) The notice must consist of the following statement in large, bold or otherwise conspicuous typeface calculated to draw the eye: “Life insurance is a critical part of a broader financial plan. There are many options available, and you have the right to shop suited to your needs.” The notice may include the contact information for the Department of Consumer and Business Services as suggested in Exhibit 1 to this rule or in a form similar to the notice in Exhibit 1 to this rule. The director may update the names, telephone numbers, website information and similar information in Exhibit 1 from time to time as necessary.

(b) If the notice does not include the contact information for the department, the communication of the notice must also contain a statement advising the recipient that the recipient may contact the Division of Financial Regulation of the Department of Consumer and Business Services for more information. The insurer shall direct the recipient of the communication to either contact the Division of Financial Regulation Consumer Advocacy Unit at its toll free telephone number or visit the division’s website at the website address currently provided by the division as Exhibit 1 to this rule as may be updated from time to time on the division website.

History

Statutory/Other Authority: ORS 731.244, 744.331 & 744.358
Statutes/Other Implemented: ORS 744.326, 744.328, 744.331, 744.341, 744.358, Sec. 22, Ch. 711 & OL 2009
ID 16-2024, minor correction filed 08/06/2024, effective 08/06/2024
ID 1-2010, f. & cert. ef. 1-5-10

Or. Admin. R. 836-014-0330 Unfair Trade Practices

(1) Violation of any provision of OAR 836-014-0270, 836-014-0280, 836-014-0290, 836-014-0300 or 836-014-0310 is an unfair trade practice for purposes of ORS 746.240.

(2) The provisions of OAR 836-014-0200 to 836-014-0330 are in addition to applicable provisions of ORS Chapter 746, governing trade practices.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240
ID 3-1996, f. & cert. ef. 2-26-96

Division 20 ADVERTISEMENTS OF HEALTH INSURANCE

Or. Admin. R. 836-020-0200 Purpose and Authority

The purpose of this rule is to assure truthful and adequate disclosure of all material and relevant information in the advertising of health insurance. This purpose is intended to be accomplished by the establishment of minimum standards and guidelines of conduct for such advertising. This rule is promulgated under the provisions of ORS 731.244, 742.009 and 746.075.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009 & 746.075
ID 15-1996, f. & cert. ef. 11-12-96
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0205 Applicability

(1) This rule applies to all health insurance advertisements intended for presentation, distribution, or dissemination in this state.

(2) Every insurer shall establish and maintain a system of control over the content, form, and method of presentation, distribution, and dissemination of all such advertisements of its policies. All such advertisements, regardless of by whom written, created, designed, presented, distributed, or disseminated, shall be the responsibility of the insurer whose policies are advertised.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0210 Definitions

(1) Definitions given in the Insurance Code and in this rule govern the construction of this rule.

(2) "Advertisement" includes:

(a) Written, oral, and pictorial material used in direct mail, newspapers, magazines, radio scripts, TV scripts, billboards, and other similar mediums for reaching the public;

(b) Written, oral, and pictorial material intended for individual presentation to the public, including, but not limited to, circulars, leaflets, booklets, depictions, illustrations; and

(c) Written, oral, and pictorial material prepared for any other use by insurance producers or other representatives of an insurer.

(3) "Policy" includes any certificate of insurance or statement of coverage.

(4) "Insurer" includes fraternal benefit societies and health care service contractors.

(5) "Health Insurance" does not include incidental coverages issued with or supplemental to liability insurance, or coverages included within the Insurance Code definition of life insurance.

(6) "Exception" means any policy provision whereby coverage for a specified hazard is entirely eliminated. An "exception" is a statement of a risk not assumed under the policy.

(7) "Reduction" means any policy provision which reduces the amount of the policy benefit. Under the terms of a "reduction", a risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period that is less than would otherwise be the case had the reduction provision not been used.

(8) "Limitation" means any policy provision which restricts coverage under the policy, other than an "exception" or a "reduction".

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0215 Method of Disclosure of Required Information

All information required to be disclosed by this rule shall be set out conspicuously, and in close conjunction with the statements to which the information relates or under appropriate captions of sufficient prominence that the information is not minimized, rendered obscure, presented in an ambiguous fashion or so intermingled with the content of the advertisement as to be confusing or misleading.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0220 Form and Content of Advertisements

(1) The form and content of an advertisement shall be sufficiently complete and clear to avoid deception or the capacity or tendency to mislead or deceive. Whether an advertisement has a capacity or tendency to mislead or deceive will be determined by the Insurance Commissioner from the overall impression that the advertisement may reasonably be expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.

(2) Advertisements shall be truthful and not misleading in fact or in implication. Words or phrases, the meaning of which is clear only by implication or by familiarity with insurance terminology, shall not be used.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0225 Advertisements of Benefits Payable, Losses Covered, or Premiums Payable

(1) Deceptive Words, Phrases, or Illustrations Prohibited:

(a) No advertisement shall omit particular information or use particular words, phrases, statements, references, or illustrations if the omission of such information or use of such words, phrases, statements, references, or illustrations has the capacity, tendency, or effect of misleading or deceiving prospective purchasers as to the nature or extent of any policy benefit payable, loss covered, or premium payable. The fact that the offered policy is made available to a prospective insured for inspection prior to consummation of sale, or that an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements;

(b) No advertisement shall use words or phrases such as “all,” “full,” “complete,” “comprehensive,” “unlimited,” “up to,” “as high as,” “this policy will help pay your hospital and surgical bills,” “this policy will help fill some of the gaps that Medicare and your present insurance leave out,” “this policy will help to replace your income” (when used in reference to loss-of-time benefits), or similar words or phrases, in a manner which exaggerates any benefit beyond the terms of the policy;

(c) No advertisement shall contain descriptions of a policy limitation, exception, or reduction worded in a positive manner to imply that it is a benefit. Examples of this are describing a waiting period as a “benefit builder,” or stating that “even pre-existing conditions are covered after two years.” Words and phrases used in an advertisement to describe policy limitations, exceptions, or reductions shall fairly and accurately describe the negative features of the limitation, exception, or reduction;

(d) No advertisement of a benefit for which payment is conditional upon confinement in a hospital or similar facility shall use words or phrases such as “tax free,” “extra cash,” “extra income,” “extra pay,” or substantially similar words or phrases in a manner which has the capacity, tendency, or effect of misleading prospective purchasers into believing that the policy advertised will in some way enable them to make a profit from being hospitalized. This rule does not prohibit the use of complete and accurate terminology explaining the federal Internal Revenue Service rules applicable to the taxation of various types of health insurance benefits. It is noted that such rules provide that premiums paid for and benefits received from hospital indemnity policies are subject to the same rule as loss-of-time premiums and benefits, and are not afforded the same favorable tax treatment as expense-incurred hospital, medical, and surgical benefit coverages;

(e) No advertisement of a hospital or similar facility confinement benefit shall advertise that the amount of the benefit is payable on a monthly or weekly basis when, in fact, the amount of the benefit payable is on a daily pro rata basis relating to the number of days of confinement. When the policy contains a limit on the number of days of coverage provided, the limit must appear in the advertisement;

(f) No advertisement of a policy covering only one or more specified diseases shall imply coverage beyond the terms of the policy. Several synonymous terms shall not be used to refer to any one disease so as to imply broader coverage than is the fact;

(g) An advertisement for a policy providing benefits for specified illnesses only, such as cancer, or for specified accidents only, such as automobile accidents, shall clearly and conspicuously in prominent type state the limited nature of the policy;

(h) An advertisement of an insurance policy sold by direct mail shall not imply that, because “no insurance agent will call and no commission will be paid to agents,” it is a “low cost plan,” or use similar phrases. A statement that “no agent will call” is not of itself misleading.

(2) Limitations, Exceptions, and Reductions:

(a) When an advertisement refers to a dollar amount of a benefit, a period of time for which a benefit is payable, the cost of the policy or of a specific policy benefit, or the loss for which such benefit is payable, it shall also disclose the limitations, exceptions, and reductions affecting the basic provisions of the policy without which disclosure the advertisement would have the capacity or tendency to mislead or deceive;

(b) When a policy contains a waiting elimination, probationary or similar time period between the effective date of the policy and the effective date of coverage under the policy, or a time period between the date a loss occurs and the date benefits begin to accrue for such loss, an advertisement to which the preceding paragraph is applicable shall disclose the existence of such periods;

(c) An advertisement shall not use the words “only,” “just,” “merely,” “minimum,” or similar words or phrases to describe the applicability of any exceptions and reductions. An example is: “This policy is subject to the following minimum exceptions and reductions:.”

(3) Pre-Existing Conditions:

(a) An advertisement to which section (2) of this rule is applicable shall disclose in negative terms the extent to which any loss is not covered if the cause of the loss is traceable to a condition existing prior to the effective date of the policy. No use of the term “pre-existing condition” shall be made without an appropriate definition or description;

(b) When a policy does not cover losses resulting from pre-existing conditions, no advertisement of the policy shall state or imply that the applicant’s physical condition or medical history will not affect the issuance of the policy or payment of claim thereunder. This paragraph prohibits the use of the phrase “no medical examination required” and phrases of similar import, but does not prohibit explaining “automatic issue”;

(c) When an advertisement contains an application form to be completed by the applicant and returned by mail for a direct response insurance coverage, the application form shall contain a question or statement, immediately preceding the blank space for the applicant’s signature, which reflects the pre-existing condition provisions of the policy. The question or statement shall be substantially as follows:

(A) (Question) “Do you understand that this policy will not pay benefits during the first ______ year(s) after the issue date for a disease or physical condition which you now have or have had in the past?”

(B) (Statement) “I understand that this policy will not pay benefits for any loss incurred during the first year(s) after the issue date on account of a disease or physical condition which I now have or have had in the past.”

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0230 Necessity for Disclosing Policy Provisions Relating to Renewal, Cancellation, and Termination

When an advertisement refers to a dollar amount of a benefit, a period of time for which a benefit is payable, the cost of the policy or of a specific policy benefit, or the loss for which such benefit is payable, it shall also disclose the provisions relating to renewal, cancellation, and termination and any modification of benefits or losses covered or increase in premiums because of age or other reasons, in a manner which shall not minimize or render obscure the qualifying conditions.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0235 Testimonials or Endorsements by Third Parties

(1) Testimonials used in advertisements must be genuine, represent the current opinion of the author, be applicable to the policy advertised and be accurately reproduced. The insurer in using a testimonial makes as its own all of the statements contained therein, and the entire advertisement including such testimonial is subject to all the provisions of this rule.

(2) If the person making a testimonial, an endorsement, or an appraisal has a financial interest in the insurer or a related entity, as a stockholder, director, officer, employee or otherwise, this fact shall be disclosed in the advertisement. If a person is compensated for making a testimonial, endorsement or appraisal, this fact shall be disclosed in the advertisement by the phrase “paid endorsement” or its equivalent. This subsection does not require disclosure of payment of “union scale” for TV or radio performances. The payment of substantial amounts, directly or indirectly, for travel or entertainment or similar expenditures for filming or recording of TV or radio advertisements requires disclosure.

(3) An advertisement shall not state or imply that the insurer or the policy has been approved or endorsed by any individual, group of individuals, society, association or other person, unless such is the fact and unless any proprietary relationship between such person and the insurer is disclosed. If the person making the endorsement or testimonial has been formed by the insurer, or is owned or controlled by the insurer or the persons who own or control the insurer, this fact shall be disclosed in the advertisement.

(4) When a testimonial refers to benefits received under a policy, the specific claim data, including claim number, date of loss and other pertinent information, shall be retained by the insurer for inspection for a period of four years or until the filing of the next regular report of examination of the insurer, whichever is the longer period of time.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0240 Use of Statistics

(1) An advertisement stating the dollar amount of claims paid, the number of persons insured or similar statistical information relating to an insurer or policy shall not use irrelevant facts, and must accurately reflect all of the relevant facts. Such an advertisement shall not imply that the statistics are derived from the advertised policy unless such is the fact. When the statistics are applicable to other policies or plans, the advertisement shall specifically so state.

(2) An advertisement shall not represent or imply that claim settlements by the insurer are “liberal” or “generous” or use words of similar import, or represent or imply that claim settlements are or will be beyond the actual terms of the policy. No unusual amount paid for a unique claim under an advertised policy shall be used.

(3) The source of any statistics used in an advertisement shall be identified in the advertisement.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0245 Identification of Plan or Number of Policies

(1) When a choice of the amount of benefits is referred to, an advertisement shall disclose that the amount of benefits depends on the plan selected and that the premium will vary with the amount of benefits selected.

(2) When an advertisement refers to various benefits which may be contained in two or more policies other than group master policies, the advertisement shall disclose that such benefits are provided only through a combination of such policies.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0250 Disparaging Comparisons and Statements

An advertisement shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits, or comparisons of non-comparable policies, of other insurers, shall not disparage other insurers or their policies, services or business methods, and shall not disparage or unfairly characterize other methods of marketing insurance.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0255 Licensed Jurisdictions and Status of Insurer

(1) An advertisement which is intended to be seen or heard beyond the limits of the jurisdictions in which the insurer is licensed shall not imply licensing beyond those limits.

(2) An advertisement shall not create the impression directly or indirectly that the insurer, its financial condition or status, the payment of its claims, or the merits, desirability or advisability of its policy forms or kinds or plans of insurance are approved, endorsed or accredited by this state or the federal government or any agency or official of either.

(3) If an advertisement states either that the insurer or the policy being offered is approved or licensed by this state or its Insurance Commissioner, it must also qualify the statement with words: “This does not constitute a recommendation or endorsement of (this company) (this policy)” or equivalent words.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0260 Identity of Insurer and Policy

(1) The name of the actual insurer and, except for general invitations to inquire about details of individual policies, the form number or numbers of the policy advertised shall be clearly identified in all advertisements.

(2) No advertisement shall use any material, envelope, or combination of words or symbols which, by content, phraseology, shape, color, or other characteristics, is similar to material, envelopes, or combinations of words or symbols used by an agency of the federal government or this state, or which is otherwise of such a nature as to tend to confuse or mislead prospective insureds into believing that the solicitation is connected with an agency of the federal or a state government.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0265 Group or Quasi-Group Implication

An advertisement of a particular policy shall not state or imply that prospective insureds become group or quasi-group members covered under a group policy and as such enjoy special rates or underwriting privileges, unless such is the fact.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0270 Introductory, Initial, or Special Offers

(1)(a) An advertisement shall not directly or by implication represent that a policy or combination of policies is an introductory, initial, or special offer, that applicants will receive substantial advantages not available at a later date, or that the offer is available only to a specified group of individuals, unless such is the fact. An advertisement shall not contain phrases describing an enrollment period as “special” or “limited,” or similar words or phrases, if the insurer uses such enrollment periods as its usual method of marketing health insurance;

(b) An enrollment period during which a particular insurance coverage may be purchased on an individual basis shall not be offered unless there has been a lapse of not less than three months between the close of the immediately preceding enrollment period for the same coverage and the opening of the new enrollment period. The advertisement shall indicate the date by which the applicant must mail the application, which shall be not less than ten days and not more than forty days from the date that such enrollment period is advertised in this state for the first time. This requirement applies to all advertising media used by the insurer. It does not apply to solicitations of employees or members of a group or association who are eligible under the Insurance Code for group, blanket, or franchise health insurance. All affiliated insurers in a group of insurers under common management or control are considered as one insurer for the purpose of this paragraph. “A particular insurance coverage” refers for the purpose of this paragraph to an insurance policy which provides substantially different benefits than those contained in any other policy of the insurer. Different terms of renewability, an increase or decrease in the dollar amount of benefits or an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another policy shall not be considered sufficient to constitute a different coverage which is eligible for concurrent or overlapping enrollment periods.

(2) An advertisement shall not offer a policy which utilizes a reduced initial premium rate in a manner which overemphasizes the availability and the amount of the initial reduced premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, the advertisement shall not display the amount of the reduced initial premium either more frequently or more prominently than the renewal premium, and both the initial reduced premium and the renewal premium shall be stated in a juxtaposition in each portion of the advertisement where the initial reduced premium appears.

(3) An advertisement shall not offer special awards such as a “safe driver’s award.”

(4)(a) If benefits are less for a particular age group, the reduced benefits for that group must be prominently set out in a separate section of an advertisement in such a manner that it would normally come to the attention of a casual reader;

(b) An advertisement for a policy covering accidental injury only must prominently state that illness or disease is not covered;

(c) An insurer soliciting business from customers, employees, or members of a particular company, employer, union, or other person must display the name of the insurer as prominently as that of the company, employer, union, or such other person, and must clearly indicate that there is no affiliation between the insurer and such person unless some significant affiliation does in fact exist.

(5)(a) An advertisement of an individual policy which provides for a direct response by including an application or enrollment form shall contain a “policy summary” setting out the essential features of the policy that will be issued upon acceptance of an application by the insurer;

(b) The policy summary shall be prominently displayed and readily distinguishable from all other portions of the advertisement. The policy summary shall explain the essential features of the policy in simple, concise, and readily understandable language, as in the following example:

POLICY SUMMARY

(or other descriptive title)

-A- This policy provides $16.27 daily hospital benefits.

-B- This policy is guaranteed renewable to age 65.

-C- The insurance company can change the premium.

-D- Pre-existing conditions are not covered for the first two years.

-E- Benefits are payable from the first day of accidents and the eighth day of sickness.

-F- Benefits are reduced at age 65.

-G- This policy does not cover mental illness, alcoholism, or drug addiction.

-H- (Other significant policy provisions).

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
ID 2-1987, f. & ef. 3-3-87
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0275 Statements About an Insurer

An advertisement shall not contain statements which are untrue in fact, or misleading by implication, with respect to the assets, corporate structure, financial standing, age, or relative position of the insurer in the insurance business. An advertisement shall not contain a recommendation by any commercial rating system unless it clearly indicates the purpose of the recommendation and the limitations of the scope and extent of the recommendation.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0280 Enforcement Procedures

(1) Advertising File. Each insurer shall maintain at its home or principal office a complete file containing every advertisement prepared for its individual policies, and typical advertisements prepared for its blanket, franchise and group policies, for dissemination after the effective date of this rule in this or any other state, whether or not licensed in such other state. A notation shall be attached to each advertisement which shall indicate the manner and extent of distribution and the form number of any individual policy advertised. This file shall be available at all times for inspection by the Insurance Commissioner. Advertisements shall be maintained in the file for a period of four years or until the filing of the next regular report of examination of the insurer, whichever is the longer period of time.

(2) Statement of Compliance. Each insurer subject to this rule must file with its annual statement a statement of compliance executed by an authorized officer of the insurer. The officer shall state that, to the best of his knowledge, information and belief, the advertisements disseminated by the insurer during the preceding calendar year complied, or were made to comply, in all respects with this rule.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0285 Prior Approval

No advertising which includes an application or enrollment form may be used without its prior approval by the Insurance Commissioner.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0290 Severability

If any portion of this rule, or the applicability of this rule to any person or circumstance, is held invalid by a court, the remainder of the rule or the applicability of the rule to other persons or circumstances shall not be affected thereby.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0295 Effective Date

This rule shall be effective March 15, 1973.

History

Statutory/Other Authority: ORS 731, 743 & 746
Statutes/Other Implemented: ORS 742.009 & 746.075
IC 53, f. 3-5-73, ef. 3-15-73

Or. Admin. R. 836-020-0300 Statutory Authority

(1) OAR 836-020-0300 to 836-020-0305 are adopted by the Director of the Department of Insurance and Finance pursuant to the requirements of ORS 742.009, 743.010, and 743.013 (Section 2, Chapter 474, Oregon Laws 1989).

(2) OAR 836-020-0300 to 836-020-0305 apply to solicitations of health insurance occurring on or after September 1, 1990.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 742.009, 743.010 & 743.013
ID 12-1990, f. 6-12-90, cert. ef. 9-1-90

Or. Admin. R. 836-020-0305 Disclosure; Application for Coverage

(1) When an insurance producer or representative of an insurer accepts an application for individual health insurance coverage other than coverage described in section (2) of this rule, the insurance producer or representative shall provide the applicant the documents required under this section. In the case of direct response solicitations of such individual health insurance coverage, the documents required under this section must be provided in conjunction with any application form. The following are the documents required to be provided under this section:

(a) A completed disclosure statement in the form shown in Exhibit 1 to this rule;

(b) An outline of coverage in the form shown for the applicable coverage in Exhibit 2 to this rule. If the offered policy provides coverage other than a coverage described in an outline of coverage in Exhibit 2 to this rule, the insurance producer or representative or the direct response insurer must deliver an outline that has first been approved by the Director under section (6) of this rule.

(2) When an insurance producer or representative of an insurer accepts an application for individual accidental death and dismemberment insurance, accident only insurance or hospital indemnity insurance, the insurance producer or representative shall provide the applicant the documents required under this section. In the case of direct response solicitations of such insurance, the documents required under this section must be provided in conjunction with any application form. The following are the documents required to be provided under this section:

(a) A completed disclosure statement in the form shown in Exhibit 3 to this rule;

(b) An outline of coverage in the form shown for the applicable coverage in Exhibit 2 to this rule. If the offered policy provides coverage other than a coverage described in an outline of coverage in Exhibit 2 to this rule, the insurance producer, representative or insurer must deliver an outline that has first been approved by the Director under section (5) of this rule.

(3) When an insurance producer or representative of an insurer accepts an application for group health insurance coverage, including group accidental death and dismemberment insurance, accident only insurance or hospital indemnity insurance, the insurance producer or representative shall provide to the applicant an outline of coverage in the form shown for the applicable coverage in Exhibit 2 to this rule. In the case of direct response solicitations, the outline must be provided in conjunction with any application form. If the offered policy provides coverage other than a coverage described in an outline of coverage in Exhibit 2 to this rule, the outline must first be approved by the Director under section (5) of this rule.

(4) For purposes of sections (1) to (3) of this rule, the following forms shall be used for the following coverages:

(a) Exhibit 2, form A, shall be used for comprehensive major medical expense coverage;

(b) Exhibit 2, form B, shall be used for hospital confinement indemnity coverage;

(c) Exhibit 2, form C, shall be used for accidental death and dismemberment only coverage and for accident only coverage;

(d) Exhibit 2, form D, shall be used for specified illness or specified accident coverage;

(e) Exhibit 2, form E, shall be used for limited benefit health coverage;

(f) Exhibit 2, form F, shall be used for basic hospital and medical-surgical expense coverage.

(5) An insurance producer or representative of an insurer may use a form or material other than the statements set forth in Exhibits 1 and 3 to this rule or the outlines set forth in Exhibit 2 to this rule only if the form or material is first approved by the Director for the purpose of disclosure under this rule. Forms and other material submitted under this section are subject to the standards for advertising under OAR 836-020-0220 and 836-020-0225.

(6) When an insurance producer or representative of an insurer provides an applicant the applicable information required under section (1), (2) or (3) of this rule, or a form or material approved under section (5) of this rule, the insurance producer or representative shall obtain from the applicant an acknowledgement that the applicable information required under this rule was provided. In the case of direct response solicitations, the insurer or its representative or agent shall maintain proof that the documents required under this rule have been mailed to the applicant.

(7) This rule applies to all solicitations for health insurance, whether for initial, replacement or added coverage, except for solicitations for the following:

(a) Renewal of a health insurance policy, unless the application is to be used for the purpose of underwriting the policyholder;

(b) Medicare supplement insurance policies;

(d) Disability income insurance policies, as exempted from these rules under ORS 743.013;

(e) Accidental death and dismemberment insurance coverage and accident only insurance coverage when sold as a rider to a life insurance policy;

(f) Any individual policy issued under a conversion privilege in an insurance policy or contract.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 742.009, 743.010 & 743.013
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 12-1990, f. 6-12-90, cert. ef. 9-1-90

Or. Admin. R. 836-020-0770 Authority, Purpose and Effective Date of OAR 836-020-0770 to 836-020-0806

(1) OAR 836-020-0770 to 836-020-0806 are adopted by the Director of the Department of Consumer and Business Services pursuant to the authority of ORS 731.244 and 743.552, for the purpose of implementing 743.552.

(2) The purpose of OAR 836-020-0770 to 836-020-0806 is to:

(a) Establish a uniform order of benefit determination under which plans pay claims;

(b) Reduce duplication of benefits by permitting a reduction of the benefits to be paid by plans that, as provided in OAR 836-020-0770 to 836-020-0806, do not have to pay their benefits first; and

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: ORS 743.552
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 3-2007, f. & cert. ef. 2-12-07
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0775 Definitions

As used in OAR 836-020-0770 to 836-020-0806:

(1) "Allowable expense," except as otherwise provided in this rule or as otherwise used in a statute, is defined and its use is governed by the following:

(a) The term means any health care expense, including coinsurance or copayments and without reduction for any applicable deductible, that is covered in full or in part by any of the plans covering the person.

(b) If a plan is advised by a covered person that all plans covering the person are high-deductible health plans and the person intends to contribute to a health savings account established in accordance with Section 223 of the Internal Revenue Code of 1986, the primary high-deductible health plan's deductible is not an allowable expense, except for any health care expense incurred that may not be subject to the deductible as described in section 223(c)(2)(C) of the Internal Revenue Code of 1986.

(d) Any expense that a provider by law or in accordance with a contractual agreement is prohibited from charging a covered person is not an allowable expense.

(e) The following are examples of expenses that are not allowable expenses:

(A) If a person is confined in a private hospital room, the difference between the cost of a semi-private room in the hospital and the private room is not an allowable expense, unless one of the plans provides coverage for private hospital room expenses.

(B) If a person is covered by two or more plans that compute their benefit payments on the basis of usual and customary fees or relative value schedule reimbursement or other similar reimbursement methodology, any amount charged by the provider in excess of the highest reimbursement amount for a specified benefit is not an allowable expense.

(C) If a person is covered by two or more plans that provide benefits or services on the basis of negotiated fees, any amount in excess of the highest of the negotiated fees is not an allowable expense.

(D) If a person is covered by one plan that calculates its benefits or services on the basis of usual and customary fees or relative value schedule reimbursement or other similar reimbursement methodology and another plan that provides its benefits or services on the basis of negotiated fees, the primary plan's payment arrangement shall be the allowable expense for all plans. However, if the provider has contracted with the secondary plan to provide the benefit or service for a specific negotiated fee or payment amount that is different than the primary plan's payment arrangement and if the provider's contract permits, that negotiated fee or payment shall be the allowable expense used by the secondary plan to determine its benefits.

(f) The definition of "allowable expense" may exclude certain types of coverage or benefits such as dental care, vision care, prescription drug or hearing aids. A plan that limits the application of COB to certain coverages or benefits may limit the definition of allowable expense in its contract to expenses that are similar to the expenses that it provides. When COB is restricted to specific coverages or benefits in a contract, the definition of allowable expense shall include similar expenses to which COB applies.

(g) When a plan provides benefits in the form of services, the reasonable cash value of each service is considered an allowable expense and a benefit paid.

(h) The amount of the reduction may be excluded from allowable expense when a covered person's benefits are reduced under a primary plan:

(A) Because the covered person does not comply with the plan provisions concerning second surgical opinions or precertification of admissions or services; or

(B) Because the covered person has a lower benefit for the reason that the covered person did not use a preferred provider.

(2) "Birthday" refers only to month and day in a calendar year and does not include the year in which the individual is born.

(3) "Claim" means a request that benefits of a plan be provided or paid. The benefits claimed may be in the form of:

(a) Services, including supplies;

(b) Payment for all or a portion of the expenses incurred;

(d) An indemnification.

(4) "Closed panel plan" means a plan that provides health benefits to covered persons primarily in the form of services through a panel of providers that have contracted with or are employed by the plan, and that excludes benefits for services provided by other providers, except in cases of emergency or referral by a panel member.

(5) "Consolidated Omnibus Budget Reconciliation Act of 1985" or "COBRA" means coverage provided under a right of continuation pursuant to federal law.

(6) "Coordination of benefits" or "COB" means a provision establishing an order in which plans pay their claims, and permitting secondary plans to reduce their benefits so that the combined benefits of all plans do not exceed total allowable expenses.

(7) "Custodial parent" means:

(a) The parent awarded custody of a child by a court decree; or

(b) In the absence of a court decree, the parent with whom the child resides more than one half of the calendar year without regard to any temporary visitation.

(8) "Group-type contract:"

(a) Means a contract that is not available to the general public and is obtained and maintained only because of membership in or a connection with a particular organization or group, including blanket coverage; and.

(b) Does not include an individually underwritten and issued guaranteed renewable policy even if the policy is purchased through payroll deduction at a premium savings to the insured since the insured would have the right to maintain or renew the policy independently of continued employment with the employer.

(9) "High-deductible health plan" has the meaning given the term under section 223 of the Internal Revenue Code of 1986, as amended by the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(10) "Hospital indemnity benefits:"

(a) Means benefits not related to expenses incurred; and

(b) "Hospital indemnity benefits" does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.

(11) "Plan" is defined and its use is governed by the following:

(a) “Plan” means a form of coverage with which coordination is allowed. Separate parts of a plan for members of a group that are provided through alternative contracts that are intended to be part of a coordinated package of benefits are considered one plan and there is no COB among the separate parts of the plan.

(b) If a plan coordinates benefits, its contract shall state the types of coverage that will be considered in applying the COB provision of that contract. Whether the contract uses the term "plan" or some other term such as "program," the contractual definition may be no broader than the definition of "plan" in this subsection. The definition of "plan" in the model COB provision in Appendix A (Exhibit 1 to OAR 836-020-0780) is an example.

(A) Group and individual insurance contracts and subscriber contracts;

(B) Uninsured arrangements of group or group-type coverage;

(D) Group-type contracts;

(E) The medical care components of group long-term care contracts, such as skilled nursing care; and

(F) Medicare or other governmental benefits, as permitted by law, except as provided in subsection (d)(H) of this section. That part of the definition of plan may be limited to the hospital, medical and surgical benefits of the governmental program;and

(G) Group and individual insurance contracts and subscriber contracts that pay or reimburse for the cost of dental care.

(d) "Plan" does not include:

(A) Independent, noncoordinated hospital indemnity coverage benefits or other fixed indemnity coverage;

(B) Accident only coverage;

(D) School accident-type coverages that cover students for accidents only, including athletic injuries, either on a twenty-four-hour basis or on a "to and from school" basis;

(E) Benefits provided in group long-term care insurance policies for non-medical services, including for example, personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;

(F) Medicare supplement policies;

(G) A state plan under Medicaid; or

(H) A governmental plan, that by law provides benefits that are in excess of those of any private insurance plan or other non-governmental plan.

(12) "Primary plan" means a plan whose benefits for a person's health care coverage must be determined without taking the existence of any other plan into consideration. A plan is a primary plan if:

(a) The plan has no order of benefit determination rules or its rules differ from those permitted by OAR 836-020-0770 to 836-020-0806; or

(b) All plans that cover the person use the order of benefit determination rules required by OAR 836-020-0770 to 836-020-0806, and under those rules the plan determines its benefits first.

(13) "Secondary plan" means a plan that is not a primary plan.

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: ORS 743.552
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0780 Use of Model COB Contract Provision

(1) Appendix A (Exhibit 1 to this rule) contains a model COB provision for use in contracts. The use of this model COB provision is subject to OAR 836-020-0785(1), (2) and (3).

(2) Appendix B (Exhibit 2 to this rule) is a plain language description of the COB process that explains to the covered person how health plans will implement coordination of benefits. It is not intended to replace or change the provisions that are set forth in the contract. Its purpose is to explain the process by which the two or more plans will pay for or provide benefits.

(3) The COB provision contained in Appendix A and the plain language explanation in Appendix B do not have to use the specific words and format shown in Appendix A or Appendix B. Changes may be made to fit the language and style of the rest of the contract or to reflect differences among plans that provide services, that pay benefits for expenses incurred and that indemnify. No substantive changes are permitted.

(4) A COB provision may not be used that permits a plan to reduce its benefits on the basis that:

(a) Another plan exists and the covered person did not enroll in that plan;

(b) A person is eligible or could have been covered under another plan, including Part B of Medicare; or

(c) A person has elected an option under another plan providing a lower level of benefits than another option that could have been elected.

(5) A plan may not contain a provision that its benefits are "always excess" or "always secondary" except in accordance with the rules permitted by OAR 836-020-0770 to 836-020-0806.

(6) Under the terms of a closed panel plan, benefits are not payable if the covered person does not use the services of a closed panel provider. In most instances, COB does not occur if a covered person is enrolled in two or more closed panel plans and obtains services from a provider in one of the closed panel plans because the other closed panel plan (the one whose providers were not used) has no liability. However, COB may occur during the plan year when the covered person receives emergency services that would have been covered by both plans. Then the secondary plan shall use OAR 836-020-0790 to determine the amount it should pay for the benefit.

(7) A plan may not use a COB provision, or any other provision that allows it to reduce its benefits with respect to any other coverage its insured may have, that does not meet the definition of plan in OAR 836-020-0775.

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.475
Statutes/Other Implemented: ORS 743B.475
ID 13-2023, amend filed 06/22/2023, effective 07/01/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0785 Rules for Coordination of Benefits

When a person is covered by two or more plans, the rules for determining the order of benefit payments are as follows:

(1)(a) The primary plan shall pay or provide its benefits as if the secondary plan or plans did not exist.

(b) If the primary plan is a closed panel plan and the secondary plan is not a closed panel plan, the secondary plan shall pay or provide benefits as if it were the primary plan when a covered person uses a non-panel provider, except for emergency services or authorized referrals that are paid or provided by the primary plan.

(c) When multiple contracts providing coordinated coverage are treated as a single plan under OAR 836-020-0770 to 836-020-0806, this rule applies only to the plan as a whole, and coordination among the component contracts is governed by the terms of the contracts. If more than one carrier pays or provides benefits under the plan, the carrier designated as primary within the plan shall be responsible for the plan's compliance with 836-020-0770 to 836-020-0806.

(d) If a person is covered by more than one secondary plan, the order of benefit determination rules of OAR 836-020-0770 to 836-020-0806 decide the order in which secondary plans benefits are determined in relation to each other. Each secondary plan shall take into consideration the benefits of the primary plan or plans and the benefits of any other plan that, under the rules of 836-020-0770 to 836-020-0806, has its benefits determined before those of that secondary plan.

(2)(a) Except as provided in subsection (b) of this section, a plan that does not contain order of benefit determination provisions that are consistent with OAR 836-020-0770 to 836-020-0806 is always the primary plan unless the provisions of both plans, regardless of the provisions of this subsection, state that the complying plan is primary.

(b) Coverage that is obtained by virtue of membership in a group and designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by the contract holder. Examples of these types of situations are major medical coverages that are superimposed over base plan hospital and surgical benefits, and insurance type coverages that are written in connection with a closed panel plan to provide out-of-network benefits.

(3) A plan may take into consideration the benefits paid or provided by another plan only when, under the rules of OAR 836-020-0770 to 836-020-0806, it is secondary to that other plan.

(4) Order of benefit determination: Each plan must determine its order of benefits using the first of the following rules that applies:

(a) Rule regarding non-dependent or dependent:

(A) Subject to paragraph (B) of this subsection, the plan that covers the person other than as a dependent, for example as an employee, member, subscriber or retiree, is the primary plan and the plan that covers the person as a dependent is the secondary plan.

(B)(i) If the person is a Medicare beneficiary, and, as a result of the provisions of Title XVIII of the Social Security Act and implementing regulations, Medicare is:

(I) Secondary to the plan covering the person as a dependent; and

(II) Primary to the plan covering the person as other than a dependent (e.g. a retired employee);

(C) Then the order of benefits is reversed so that the plan covering the person as an employee, member, subscriber or retiree is the secondary plan and the other plan covering the person as a dependent is the primary plan.

(b) Rule regarding dependent child covered under more than one plan. Unless there is a court decree stating otherwise, plans covering a dependent child shall determine the order of benefits as follows:

(A) For a dependent child whose parents are married or are living together, whether or not they have ever been married:

(i) The plan of the parent whose birthday falls earlier in the calendar year is the primary plan; or

(ii) If both parents have the same birthday, the plan that has covered the parent longest is the primary plan.

(B) For a dependent child whose parents are divorced or separated or are not living together, whether or not they have ever been married:

(i) If a court decree states that one of the parents is responsible for the dependent child's health care expenses or health care coverage and the plan of that parent has actual knowledge of those terms, that plan is primary. If the parent with responsibility has no health care coverage for the dependent child's health care expenses, but that parent's spouse does, that parent's spouse's plan is the primary plan. This subparagraph does not apply with respect to any plan year during which benefits are paid or provided before the entity has actual knowledge of the court decree provision;

(ii) If a court decree states that both parents are responsible for the dependent child's health care expenses or health care coverage, the provisions of paragraph (A) of this subsection determines the order of benefits;

(iii) If a court decree states that the parents have joint custody without specifying that one parent has responsibility for the health care expenses or health care coverage of the dependent child, the provisions of paragraph (A) of this subsection determines the order of benefits; or

(iv) If there is no court decree allocating responsibility for the child's health care expenses or health care coverage, the order of benefits for the child are as follows:

(I) The plan covering the custodial parent;

(II) The plan covering the custodial parent's spouse;

(III) The plan covering the non-custodial parent; and then

(IV) The plan covering the non-custodial parent's spouse.

(C) For a dependent child covered under more than one plan of individuals who are not the parents of the child, the order of benefits shall be determined, as applicable, under paragraph (A) or (B) of this subsection as if those individuals were parents of the child.

(D) For a dependent child:

(i) Who has coverage under either or both parents’ plans and who also has coverage as a dependent under a spouse’s plan, the rule in subsection (e) of this section applies.

(ii) In the event the dependent child’s coverage under the spouse’s plan began on the same date as the dependent child’s coverage under either or both parents’ plans, the order of benefits shall be determined by applying the birthday rule in paragraph (A) of this subsection to the dependent child’s parent and the dependent’s spouse.

(A) The plan that covers a person as an active employee that is, an employee who is neither laid off nor retired or as a dependent of an active employee is the primary plan. The plan covering that same person as a retired or laid-off employee or as a dependent of a retired or laid-off employee is the secondary plan.

(B) If the other plan does not have this rule, and as a result, the plans do not agree on the order of benefits, this rule is ignored.

(d) Rule regarding COBRA or state continuation coverage:

(A) If a person whose coverage is provided pursuant to COBRA or under a right of continuation pursuant to state or other federal law is covered under another plan, the plan covering the person as an employee, member, subscriber or retiree or covering the person as a dependent of an employee, member, subscriber or retiree is the primary plan and the plan covering that same person pursuant to COBRA or under a right of continuation pursuant to state or other federal law is the secondary plan.

(B) If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored.

(e) Rule regarding longer or shorter length of coverage:

(A) If the preceding rules in this section do not determine the order of benefits, the plan that covered the person for the longer period of time is the primary plan and the plan that covered the person for the shorter period of time is the secondary plan.

(B) To determine the length of time a person has been covered under a plan, two successive plans shall be treated as one if the covered person was eligible under the second plan within 24 hours after coverage under the first plan ended.

(i) A change in the amount or scope of a plan's benefits;

(ii) A change in the entity that pays, provides or administers the plan's benefits; or

(iii) A change from one type of plan to another, such as from a single employer plan to a multiple employer plan.

(D) The person's length of time covered under a plan is measured from the person's first date of coverage under that plan. If that date is not readily available for a group plan, the date the person first became a member of the group shall be used as the date from which to determine the length of time the person's coverage under the present plan has been in force.

(f) If none of the preceding rules of this section determines the order of benefits, the allowable expenses shall be shared equally between the plans.

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: ORS 743.552
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0791 Procedure to be Followed by Secondary Plan to Calculate Benefits and Pay a Claim

(1) In determining the amount to be paid by the secondary plan on a claim, should the plan wish to coordinate benefits, the secondary plan shall calculate the benefits it would have paid on the claim in the absence of other health care coverage and apply that calculated amount to any allowable expense under its plan that is unpaid by the primary plan.

(2) The secondary plan may reduce its payment by the amount so that, when combined with the amount paid by the primary plan, the total benefits paid or provided by all plans for the claim do not exceed 100 percent of the total allowable expense for that claim.

(3) In addition, the secondary plan shall credit to its plan deductible any amounts it would have credited to its deductible in the absence of other health care coverage.

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: 743.549 & 743.552
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0796 Notice to Covered Persons

A plan shall, in its explanation of benefits provided to covered persons, include the following language: “If you are covered by more than one health benefit plan, you should file all your claims with each plan.”

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: 743.549 & 743.552
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0801 Miscellaneous Provisions

(1) A secondary plan that provides benefits in the form of services may recover the reasonable cash value of the services from the primary plan to the extent that benefits for the services are covered by the primary plan and have not already been paid or provided by the primary plan. Nothing in this section may be interpreted to require a plan to reimburse a covered person in cash for the value of services provided by a plan that provides benefits in the form of services.

(2)(a) A plan with order of benefit determination rules that comply with OAR 836-020-0770 to 836-020-0805 (complying plan) may coordinate its benefits with a plan that is “excess” or “always secondary” or that uses order of benefit determination rules that are inconsistent with those contained in 836-020-0770 to 836-020-0805 (non-complying plan) on the following basis:

(A) If the complying plan is the primary plan, it shall pay or provide its benefits first;

(B) If the complying plan is the secondary plan, it shall pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the complying plan were the secondary plan. In such a situation, the payment shall be the limit of the complying plan’s liability; and

(C) If the non-complying plan does not provide the information needed by the complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan shall assume that the benefits of the non-complying plan are identical to its own, and shall pay its benefits accordingly. If, within two years of payment, the complying plan receives information as to the actual benefits of the non-complying plan, it shall adjust payments accordingly.

(b) If the non-complying plan reduces its benefits so that the covered person receives less in benefits than the covered person would have received had the complying plan paid or provided its benefits as the secondary plan and the non-complying plan paid or provided its benefits as the primary plan, and governing state law allows the right of subrogation set forth in subsection (c) of this section, then the complying plan shall advance to the covered person or on behalf of the covered person an amount equal to the difference.

(c) The complying plan may not advance more than the complying plan would have paid had it been the primary plan less any amount it previously paid for the same expense or service. In consideration of the advance, the complying plan shall be subrogated to all rights of the covered person against the non-complying plan. The advance by the complying plan shall also be without prejudice to any claim it may have against a non-complying plan in the absence of subrogation.

(3) COB differs from subrogation. Provisions for one may be included in health care benefits contracts without compelling the inclusion or exclusion of the other.

(4) If the plans cannot agree on the order of benefits within 30 calendar days after the plans have received all of the information needed to pay the claim, the plans shall immediately pay the claim in equal shares and determine their relative liabilities following payment, except that no plan shall be required to pay more than it would have paid had it been the primary plan.

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: 743.549 & 743.552
ID 14-2006, f. & cert. ef. 7-20-06

Or. Admin. R. 836-020-0806 Effective Date for Existing Contracts

(1) The amendments to OAR 836-020-0770, 836-020-0775 and 836-020-0785 apply to a contract that provides health care benefits and that was issued before January 1, 2015 must comply with the amendments to OAR 836-020-0770, 836-020-0775 and 836-020-0806 that are effective on January 1, 2014 by:

(a) The next anniversary date or renewal date of the contract; or

(b) The expiration of any applicable collectively bargained contract pursuant to which it was written.

(2) A question of the order of benefits between a contract operating under OAR 836-020-0770, 836-020-0775 and 836-020-0785 as amended effective January 1, 2014 for contracts issued or renewed on or after January 1, 2015 and a contract operating under the provisions of OAR 836-020-0770, 836-020-0775 and 836-020-0785 for contracts issued or renewed prior to January 1, 2015 is governed by the version of the rules in effect prior to amendment of the rules effective on January 1, 2014.

History

Statutory/Other Authority: ORS 731.244 & 743.552
Statutes/Other Implemented: ORS 743.552
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 14-2006, f. & cert. ef. 7-20-06

Division 24 DOMESTIC INSURERS; ORGANIZATION; CORPORATE PROCEDURES

Or. Admin. R. 836-024-0003 Statutory Authority; Purpose

OAR 836-024-0003 to 836-024-0055 are authorized by ORS 732.415(4). These rules are adopted to carry out the purposes of 732.415, to prevent fraud or deception in connection with the solicitation of proxies, consents, and other authorizations, and to protect the insurance-buying public in accordance with the purpose of the Insurance Code.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0004 Application of OAR 836-024-0003 to 836-024-0055

(1) A domestic stock insurer that has a class of equity securities held of record by 300 or more persons, or any director, officer or employee of that insurer, or any other person, may not solicit or permit the use of the name of a holder of any of the equity securities to solicit, by mail or otherwise, any proxy, consent or authorization in respect to any class of equity securities contrary to any provision of OAR 836-024-0003 to 836-024-0055 or Schedules A and B. OAR 836-024-0003 to 836-024-0055 do not apply, however, to:

(a) A domestic stock insurer if 95 percent or more of its equity securities is owned or controlled by a parent or an affiliated insurer and the remaining securities are held of record by fewer than 500 persons; or

(b) A domestic stock insurer, with respect to a class of securities, if the insurer files with the federal Securities and Exchange Commission forms of proxies, consents and authorizations complying with the requirements of the Securities and Exchange Act of 1934, as amended, and its applicable regulations, with respect to that class of securities.

(2) If proxies, consents or authorizations relating to a class of equity securities of a domestic stock insurer subject to section (1) of this rule are not solicited by or on behalf of the management of the insurer from the holders of record of the securities according to OAR 836-024-0003 to 836-024-0055 and its schedules, the insurer shall:

(a) File with the Director a written information statement containing the information specified in Schedule C; and

(b) Transmit the written information statement referred to in subsection (a) of this section to every security holder who is entitled to vote on a matter to be acted upon at any meeting of the security holders, and from whom a proxy is not solicited.

(3) Exhibits A, B and C are incorporated into this rule as Exhibits 1, 2 and 3.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 732.415
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0006 Definitions

As used in OAR 836-024-0003 to 836-024-0055, unless the context otherwise requires:

(1) An “affiliate” of, or a person affiliated with, a specified person is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(2) “Associate,” when used to indicate a relationship with any person, means:

(a) A corporation or organization of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, but does not include the issuer or a majority-owned subsidiary of the issuer;

(b) A trust or other estate in which the person has a substantial beneficial interest or as to which the person served as trustee or in a similar fiduciary capacity; and

(c) A relative or spouse of that person, or any relative of the spouse, who has the same home as the person or who is a director or officer of the issuer or any of its parents or subsidiaries.

(3) “Beneficial owner” includes a person who, directly or indirectly, through a contract, arrangement, understanding, relationship or otherwise, has or shares:

(a) Voting power, including the power to vote, or the power to direct voting of, a security; or

(b) Investment power that includes the power to dispose of, or to direct the disposition of, the new security.

(4) “Control,” and including the terms “controlling,” “controlled by” and “under common control with,” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by ORS 732.568 that control does not exist in fact. The Director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

(5) “Issuer” means the issuer of the securities regarding which a proxy is solicited.

(6) “Last fiscal year” of the issuer means the last fiscal year of the issuer ending prior to the date of the meeting for which proxies are to be solicited.

(7) “Officer” means the president, secretary, treasurer, any vice president in charge of a principal business function, such as sales, administration or finance, and any other person who performs similar policy-making functions for the issuer.

(8) A “parent” of a specified person is an affiliate controlling the person directly or indirectly through one or more intermediaries.

(9) A “person” includes a government or a political subdivision thereof, and applies to a trust only when the interest or interests of the beneficiary or beneficiaries are evidenced by a security.

(10) “Proxy statement” means the statement required by OAR 836-024-0026, regardless of whether the statement is contained in a single document.

(11) "Schedule A" means the schedule incorporated in Exhibit 1, OAR 836-024-0004.

(12) "Schedule B" means the schedule incorporated in Exhibit 2, OAR 836-024-0004.

(13) "Schedule C" means the schedule incorporated in Exhibit 3, OAR 836-024-0004.

(14) "Solicit" and "Solicitation" include:

(a) A request for a proxy, whether or not accompanied by or included in a form of proxy;

(b) A request to execute or not to execute, or to revoke, a proxy; and

(c) The furnishing of a form of proxy or other communication to security holders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy.

(15) "Solicit" and "Solicitation" do not apply to the security holder, the performance by the issuer of acts required by OAR 836-024-0038 or the performance by any person of ministerial acts on behalf of a person soliciting a proxy.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0008 Solicitations to which OAR 836-024-0003 to 836-024-0055 Apply

OAR 836-024-0041 applies to every solicitation that is subject to 836-024-0004. 836-024-0006 to 836-024-0039 and 836-024-0046 apply to every solicitation that is subject to 836-024-0004 except the following:

(1) A solicitation not made on behalf of the issuer, when the total number of persons solicited is not more than ten.

(2) A solicitation by a person regarding securities carried in the name of the person or in the name of the person’s nominee other than as voting trustee, or held in the person’s custody, if the person does all of the following:

(a) Receives no commission or remuneration for the solicitation, directly or indirectly, other than reimbursement of reasonable expenses.

(b) Furnishes promptly to the solicited person a copy of all soliciting material relating to the same subject matter or meeting that is received from all persons. The persons who furnish the soliciting material shall furnish copies of that soliciting material for distribution to the solicited persons and shall, upon request, pay the reasonable expenses incurred in forwarding the material.

(A) Impartially instruct the solicited person to forward a proxy to the person, if any, to whom the solicited person desires to give a proxy; or

(B) Impartially request instructions from the solicited person regarding the authority to be conferred by the proxy and state that a proxy will be given if no instructions are received by a certain date.

(3) A solicitation by a person relating to securities of which the person is the beneficial owner.

(4) A solicitation through a newspaper advertisement that informs security holders of a source from which they may obtain copies of a proxy statement, form of proxy and any other soliciting material, and does no more than:

(a) Name the issuer;

(b) State the reason for the advertisement; and

(5) Any solicitation that the Director finds for good cause should be exempted from all or part of OAR 836-024-0003 to 836-024-0055.

History

Statutory/Other Authority: ORS 731.244 & 732.415
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0026 Information to Be Furnished to Security Holders

(1) A solicitation subject to OAR 836-024-0003 to 836-024-0055 may not be made unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the information specified in Schedule A.

(2) If the solicitation is made on behalf of the issuer and relates to an annual meeting of security holders at which directors are to be elected, each proxy statement furnished pursuant to section (1) of this rule shall be accompanied or preceded by an annual report to security holders that is subject to the following:

(a) The report must contain financial statements for the last two fiscal years, in comparative columnar form and prepared on a consistent basis, that in the opinion of the management will adequately reflect the financial position of the issuer at the end of each year and the results of its operations for each year. Consolidated financial statements of the issuer and its subsidiaries must be included in the report if they are necessary to reflect the financial position and results of operations of the issuer and its subsidiaries, but in that case the individual statements of the issuer may be omitted. The Director may permit the omission of financial statements for the earlier of the two fiscal years, upon the request of the issuer, upon a showing of good cause.

(b) The financial statements for the last two fiscal years required by subsection (a) of this section must be prepared in a manner acceptable to the Director.

(c) The report must include a summary of the issuer’s operations, or the operations of the issuer and its subsidiaries consolidated, or both as appropriate, in comparative columnar form, for each of the last five fiscal years of the issuer (or the life of the issuer and its predecessors, if less than five years).

(d) The report must contain a brief description of the business or businesses done by the issuer and its subsidiaries during the most recent fiscal year that, in the opinion of management, will indicate the general nature and scope of the business of the issuer and its subsidiaries.

(e) The report must identify each of the issuer’s directors and officers and must indicate the principal occupation or employment of each person and the name and principal business of any organization by which the person is so employed.

(f) The report must identify the principal market in which securities of any class entitled to vote at the meeting are traded, stating the range of bid and asked quotations for each quarterly period during the issuer’s two most recent fiscal years, and must set forth each dividend paid during the two-year period.

(g) Subject to the requirements of this section:

(A) The report may be in any form that management considers to be suitable; and

(B) The information required by subsections (c) to (f) of this section may be presented in an appendix or other separate section of the report, but only if the attention of security holders is called to the presentation.

(h) Solicitations made on behalf of the management before the financial statements are available are not subject to this section if solicitation is being made at the time in opposition to the management and if the management’s proxy statement includes an undertaking in bold face type to furnish the annual report, at least 20 days before the date of the meeting, to all persons being solicited.

(3) Two copies of each report sent to the security holders pursuant to this rule shall be mailed to the Director not later than the date on which the report is first sent or given to security holders, or the date on which preliminary copies of solicitation material are filed with the Director pursuant to OAR 836-024-0036(1), whichever date is later.

(4) If the issuer knows that consents or authorizations, or securities of any class entitled to vote at a meeting with respect to which the issuer intends to solicit proxies, are held of record by a broker, dealer, bank or voting trustee, or their nominees, the issuer shall inquire of the record holder at least ten days prior to the record date for the meeting of security holders whether other persons are the beneficial owners of the securities. If other persons are beneficial owners, the issuer shall also inquire of the record holder the number of copies of the proxy and other soliciting material and, in the case of an annual meeting at which directors are to be elected, the number of copies of the annual report to security holders, needed for supplying these materials to beneficial owners.

(5) The issuer shall supply the record holder in a timely manner with the additional copies of the annual report determined to be needed in section (4) of this rule, and assembled in a form and at a place reasonably requested by the record holder, in order to address and send one copy to each beneficial owner of the securities and shall pay the record holder’s reasonable mailing expenses upon request.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0031 Requirements as to Proxy

(1) The form of proxy shall:

(a) Indicate in bold-face type whether the proxy is solicited on behalf of the issuer’s board of directors, and if not, by whom it is solicited;

(b) Provide a specifically designed blank space for dating the proxy; and

(c) Identify clearly and impartially each matter or group of related matters intended to be acted upon, whether proposed by the issuer or by security holders.

(2) The form of proxy need not refer to proposals as to which discretionary authority is conferred pursuant to section (5) of this rule.

(3) A proxy must provide means for the person solicited to specify by ballot a choice between approval or disapproval of, or abstention with respect to, each matter or group of related matters referred to in the proxy, other than elections to office. A proxy may confer discretionary authority with respect to matters as to which a choice is not so specified if the form of proxy states in bold-face type how it is intended to vote the shares represented by the proxy in each case.

(4) A form of proxy that provides both for elections to office and for action on other specified matters must clearly provide means, by a box or otherwise, by which the security holder may withhold authority to vote for elections to office. A form of proxy that is executed by the security holder in a manner that does not withhold authority to vote for elections to office shall be considered a grant of such authority, if the form of proxy so states in boldface type.

(5) A proxy may confer discretionary authority to vote with respect to any of the following matters:

(a) Matters that, within a reasonable time before the solicitation, the persons making the solicitation do not know are to be presented at the meeting, if a specific statement to that effect is made in the proxy statement or form of proxy;

(b) Approval of the minutes of the prior meeting if the approval does not amount to ratification of the action taken at that meeting;

(c) The election of any person to any office for which a bona fide nominee is named in the proxy statement and the nominee is unable to serve or for good cause will not serve;

(d) Any proposal omitted from the proxy statement and the form of proxy pursuant to OAR 836-024-0039 and 836-024-0041; and

(e) Matters incident to the conduct of the meeting.

(6) A proxy may not confer authority to vote in either of the following instances:

(a) For the election of any person to any office for which a bona fide nominee is not named in the proxy statement. A person is not a bona fide nominee and may not be named as such unless the person has consented to being named in the proxy statement and to serve if elected.

(b) At any annual meeting other than the next annual meeting (or any adjournment thereof) to be held after the date on which the proxy statement and form of proxy are first sent or given to security holders.

(7) The proxy statement or form of proxy shall provide, subject to reasonable specified conditions:

(a) That the securities represented by the proxy will be voted; and

(b) That when the person solicited has specified a choice, by means of ballot provided pursuant to section (3) of this rule, with respect to any matter to be acted upon, the vote will be in accordance with specifications so made.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0033 Presentation of Information in Proxy Statement

(1) The information included in the proxy statement shall be clearly presented. The statements made must be divided into groups according to subject matter. The various groups of statements must be preceded by appropriate headings.

(2) All proxy statements shall disclose, under an appropriate caption, the date by which proposals of security holders intended to be presented at the next annual meeting must be received by the issuer for inclusion in the issuer’s proxy statement and form of proxy relating to that meeting. The date must be calculated according to OAR 836-024-0039(2). If the date of the next annual meeting is subsequently advanced by more than 30 calendar days or delayed by more than 90 calendar days from the date of the annual meeting to which the proxy statement relates, the issuer in a timely manner shall inform security holders of the change and the date by which proposals of security holders must be received, by any means reasonably calculated to inform the security holders.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0036 Material Required to Be Filed

(1) Two preliminary copies of the proxy statement and form of proxy, and any other soliciting material to be furnished to security holders with the proxy, or the information pursuant to Schedule C, shall be filed with the Director at least ten days prior to the date final copies of the material are first sent or given to security holders, or a shorter period prior to that date that the Director authorizes upon a showing of good cause.

(2) Two preliminary copies of any additional soliciting material relating to the same meeting or subject matter to be furnished to security holders after the proxy statements shall be filed with the Director at least two days (exclusive of Saturdays, Sundays, or holidays) prior to the date copies of the material are first sent or given to security holders, or a shorter period prior to that date that the Director authorizes upon a showing of good cause.

(3) Two definitive copies of the proxy statement, form of proxy and all other soliciting material, or the information statement, in the form in which the material is furnished to security holders, shall be filed with, or mailed for filing to, the Director not later than the date the material is first sent or given to a security holder.

(4) Copies of replies to inquiries from security holders requesting further information and copies of communications that do no more than request that the proxy form previously solicited be signed and returned need not be filed pursuant to this rule.

(5) Notwithstanding the provisions of sections (1) and (2) of this rule and of OAR 836-024-0055(1), copies of soliciting material in the form of speeches, press releases and radio or television scripts may, but need not, be filed with the Director prior to use or publication. Definitive copies, however, shall be filed with or mailed for filing to the Director as required by section (3) of this rule not later than the date the material is used or published. Sections (1) and (2) of this rule and 836-024-0055(1) apply, however, to any reprints or reproductions of all or any part of such material.

(6) If a proxy statement, form of proxy or other material filed pursuant to this rule is amended or revised, one of the copies of the amendment or revision shall be marked to clearly show the changes.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0038 Mailing Communications for Security Holders

(1) If the management of the issuer has made or intends to make any solicitation subject to OAR 836-024-0003 to 836-024-0055, the issuer shall perform any act described in this rule that is requested in writing with respect to the same subject matter or meeting by any security holder who is, or by security holders who are, entitled to vote at least one percent of the votes entitled to be voted on the matter. The requesting security holder or security holders shall pay the reasonable expenses incurred by the issuer in performing the act or acts requested.

(2) The issuer shall mail or otherwise furnish to a security holder, as promptly as practicable after the receipt of the request:

(a) A statement of the approximate number of record owners and, to the extent known to the issuer, the approximate number of beneficial owners of any class of securities, any of whom have been or are to be solicited on behalf of the management, or any group of whom that is designated by the security holder; and

(b) An estimate of the cost of mailing a specified proxy statement, form of proxy or other communication to the owners.

(3) The issuer shall mail copies of any proxy statement, form of proxy or other communication furnished by the security holder to the security owners specified in section (2) of this rule and designated by the security holder. The issuer shall mail the material furnished by the security holder with reasonable promptness after receiving the material to be mailed, envelopes or other containers therefor, and postage or payment for postage. The issuer need not, however, mail any material before the first day that solicitation is made on behalf of the issuer. The issuer is not responsible for the proxy statement, form of proxy or other communication.

(4) Instead of performing the acts specified in section (3) of this rule, the issuer may furnish promptly to a security holder a reasonably current list of the names and addresses of the record owners and, to the extent known to the issuer, the beneficial owners designated by the security holder and a schedule of the handling and mailing costs if the schedule has been supplied to the issuer.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0039 Proposals of Security Holders

(1) As used in this rule, “proponent” means a holder or holders of an issuer’s securities.

(2) An issuer shall set forth a proposal for action in its proxy statement if the proponent notifies the issuer as provided in this section and if the proponent is entitled at the time of the notice to vote at least one percent of the votes entitled to be voted on the proposal. The proponent must notify the issuer in writing not less than 90 days before the issuer’s annual meeting of the proponent’s intention to present a proposal for action at an upcoming meeting of the issuer’s security holders. The issuer shall identify the proposal in the issuer’s form of proxy and provide for specifying approval or disapproval of the proposal. The proxy statement shall also include the name and address of the proponent.

(3) If the issuer opposes a proposal received from a proponent, the issuer shall also include in its proxy statement, at the request of the proponent, a statement of the proponent not exceeding 200 words in support of the proposal.

(4) The issuer may omit a proposal and any supporting statement from its proxy statement and form of proxy under any of the following circumstances:

(a) The proponent has submitted more than one proposal in connection with a particular meeting.

(b) The proposal is more than 300 words in length.

(d) The proposal relates to the enforcement of a personal claim or the redress of a personal grievance against the issuer, its management or any other person.

(e) The proposal deals with a matter not significantly related to the issuer’s business, a matter beyond the issuer’s power to effectuate, a matter relating to the conduct of the ordinary business operations of the issuer or an election to office.

(f) The proposal is counter to a proposal to be submitted by the issuer at the meeting, the proposal has been rendered moot or the proposal relates to specific amounts of cash or stock dividends.

(g) The proposal is substantially duplicative of a proposal that was previously submitted to the issuer by another proponent and will be included in the management’s proxy material for the meeting.

(h) Substantially the same proposal has previously been submitted to security holders in the issuer’s proxy statement and form of proxy relating to any annual or special meeting of security holders held within the preceding five years and received less than five percent of the total number of votes cast at the time of the proposal’s most recent submission.

(5) If the issuer intends to omit a proposal from its proxy statement or forms of proxy or both, the issuer shall notify the proponent in writing of its intention at least ten days before the issuer’s preliminary proxy material is filed pursuant to OAR 836-024-0036.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0041 False or Misleading Statements

A proxy statement, form of proxy, notice of meeting, information statement, and any other communication, written or oral, that is subject to OAR 836-024-0003 to 836-024-0055 may not contain any statement that:

(1) At the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact; or

(2) Omits any material fact that is necessary in order to make the statements in the communication not false or misleading, or that is necessary to correct any statement in an earlier communication with respect to the same meeting or subject matter that has become false or misleading.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0046 Prohibition of Certain Solicitations

A person making a solicitation may not solicit any undated or postdated proxy, or any proxy that provides it will be considered to be dated as of any date subsequent to the date on which it is signed by the security holder.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0051 Special Provisions Applicable to Election Contests; Definition

OAR 836-024-0051 to 836-024-0055 apply to a solicitation by any person or group for the purpose of opposing a solicitation by another person or group regarding the election or removal of directors at an annual or special meeting of security holders. As used in 836-024-0051 to 836-024-0055, unless the context requires otherwise:

(1) "Participant" and "participant in a solicitation" include:

(a) The issuer;

(b) A director of the issuer, and a nominee for whose election as a director proxies are solicited; and

(c) Any other person, acting alone or with one or more other persons, committees or groups, in organizing, directing, or financing the solicitation.

(2) "Participant" and "participant in a solicitation" do not include:

(a) A bank, broker, or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of securities and who is not otherwise a participant;

(b) A person or organization retained or employed by a participant to solicit security holders, or a person who merely transmits proxy-soliciting material or performs ministerial or clerical duties;

(c) A person employed in the capacity of attorney or accountant, or advertising, public relations or financial adviser, and whose activities are limited to the performance of duties in the course of such employment;

(d) A person regularly employed as an officer or employee of the issuer or any of its subsidiaries or affiliates, who is not otherwise a participant; or

(e) An officer or director of, or a person regularly employed by, any other participant, if the officer, director, or employee is not otherwise a participant.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0053 Filings Required in an Election Contest

(1) A solicitation may not be made by a person other than the issuer unless a statement in duplicate containing the information specified by Schedule B and a copy of any material proposed to be distributed to security holders in furtherance of the solicitation is filed with the Director by or on behalf of each participant in the solicitation. The statement and material must be filed with the Director at least five business days prior to the solicitation or a shorter period authorized by the Director upon a showing of good cause.

(2) Within five business days after a solicitation subject to this rule is made by the issuer, or within a longer period that the Director authorizes on a showing of good cause, a statement in duplicate containing the information specified by Schedule B shall be filed with the Director by or on behalf of each participant in the solicitation, other than the issuer, and by or on behalf of each management nominee for director.

(3) If a solicitation on behalf of the issuer or another person has been made, or if proxy material is ready for distribution, prior to a solicitation subject to this rule in opposition, a statement in duplicate containing the information specified in Schedule B shall be filed with the Director, by or on behalf of each participant in the prior solicitation, other than the issuer, as soon as it is reasonably practicable after the commencement of the solicitation in opposition.

(4) If, subsequent to the filing of the statements required by sections (1) to (3) of this rule, additional persons become participants in a solicitation subject to this rule, a statement in duplicate containing the information specified by Schedule B shall be filed with the Director by or on behalf of each such person within three business days after the person becomes a participant, or within a longer period that the Director authorizes upon a showing of good cause.

(5) If any material change occurs in the facts reported in a statement filed by or on behalf of a participant, an appropriate amendment to the statement shall be filed promptly with the Director.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0054 Counter Solicitations Prior to Furnishing Required Written Proxy Statement

Notwithstanding the provisions of OAR 836-024-0026(1), a solicitation subject to 836-024-0051 to 836-024-0055 may be made prior to furnishing security holders with a written proxy statement containing the information specified in Schedule A with respect to the solicitation, if:

(1) The statements required by OAR 836-024-0053 are filed by or on behalf of each participant in the solicitation.

(2) A form of proxy is not furnished to security holders prior to the time the proxy statement required by OAR 836-024-0026(1) is furnished to such persons. This section does not apply, however, if a proxy statement meeting the requirements of Schedule A has been furnished to security holders.

(3) Statements containing at least the information specified by OAR 836-024-0053(2) and (3), or an appropriate summary of the information, are included in each communication sent or given to security holders in connection with the solicitation.

(4) A written proxy statement containing the information specified in Schedule A with respect to a solicitation is sent or given to security holders at the earliest practicable date.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0055 Filing Requirements for Preliminary Solicitation Material

(1) Two copies of any soliciting material proposed to be sent or given to security holders prior to the furnishing of the proxy statement required by OAR 836-024-0026(1) shall be filed with the Director in preliminary form at least five business days prior to the date definitive copies of the material are first sent or given to the persons unless on a showing of good cause the Director reduces the five-day period.

(2) Notwithstanding the provisions of OAR 836-024-0026(2) and (3), two copies of any portion of the annual report referred to in 836-024-0026(2) that comments upon or refers to a solicitation subject to 836-024-0051 to 836-024-0055, or to a participant in a solicitation, other than the solicitation by the management, shall be filed with the Director as proxy material subject to 836-024-0051 to 836-024-0055. The annual report portion to which this section applies must be filed with the Director, in preliminary form, at least five business days prior to the date copies of the report are first sent or given to security holders.

History

Statutory/Other Authority: ORS 731 & 732
Statutes/Other Implemented: ORS 732.415(4)
ID 16-2006, f. & cert. ef. 8-7-06
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-024-0100 Statutory authority; purpose

(1) OAR 836-024-0100 to 836-024-0220 are adopted under the authority of ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 and 732.455, for the purpose of implementing 732.420 to 732.455.

(2) OAR 836-024-0100 to 836-024-0220 apply to domestic stock insurers.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0105 Definitions

As used in OAR 836-024-0100 to 836-024-0220:

(1) “Class” means all securities of an insurer that are of substantially similar character and in which the holders enjoy substantially similar rights and privileges.

(2) “Equity security” as defined in ORS 732.420 also includes any voting trust certificate or certificate of deposit for an equity security.

(3) “Officer” means a president, vice president, treasurer, actuary, secretary, controller and any other person who performs functions for the insurer corresponding to functions performed by those officers.

History

Statutory/Other Authority: ORS 731.244, 732.420 & 732.455
Statutes/Other Implemented: ORS 732.420, 732.425, 732.430, 732.435 & 732.440
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0110 Securities “Held of Record” for Purpose of ORS 732.425

(1) To determine for the purpose of ORS 732.425 whether the equity securities of an insurer are held of record by 100 or more persons, securities are considered to be “held of record” by each person who is identified as the owner of the securities on records of security holders maintained by or on behalf of the insurer, subject to the following:

(a) If the records of security holders have not been maintained in accordance with accepted practice, any additional person who would be identified as an owner on the records if the records had been maintained in accordance with accepted practice shall be included as a holder of record.

(b) Securities identified as held of record by a corporation, a partnership, a trust (regardless of whether the trustees are named) or other organization shall be included as held of record by one person.

(c) Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians or other fiduciary with respect to a single trust, estate or account shall be included as held of record by one person.

(d) Securities held by two or more persons as co-owners shall be included as held by one person.

(e) Each outstanding unrecorded or bearer certificate shall be included as held of record by a separate person, except to the extent that the insurer can establish that, if the securities were recorded, they would be held of record under this rule by a lesser number of persons.

(f) Securities recorded in substantially similar names may be included as held of record by one person when the insurer has reason to believe that, because of the address or other indication, the names represent the same person.

(2) Section (1) of this rule does not apply in either of the following circumstances. Instead:

(a) Securities that, to the knowledge of the insurer, are held subject to a voting trust, deposit agreement or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts or similar evidences of interest in the securities, except that the insurer may rely in good faith on information received in response to its request from a nonaffiliated issuer of the certificates or evidences of interest.

(b) If the insurer knows or has reason to know that the form of holding securities of record is used primarily to circumvent ORS 732.420 to 732.455, the insurer shall consider the beneficial owners of the securities to be the record owners.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0115 Filing of Statements

(1) A person who is required by ORS 732.430 to file a statement of beneficial ownership of equity securities shall file the initial statement on Form 3, which is prescribed in Exhibit 1 to this rule. A person who is required by ORS 732.430 to file a statement of change in beneficial ownership shall file the statement of change on Form 4, which is prescribed in Exhibit 2 to this rule.

(2) A director or officer who is required to file a statement of change on Form 4 shall include in the first statement of change the information required by Form 4 with respect to all changes in the beneficial ownership of equity securities of the insurer that occurred within six months prior to the date of the changes that required the filing of the statement, when a change occurs in the director’s or officer’s beneficial ownership of equity securities:

(a) Within six months after the director or officer became a director or officer of the insurer; or

(b) Within six months after a statement relating to the equity securities of the insurer has been filed with the Director, pursuant to ORS 732.430.

(3) A person who has ceased to be a director or officer of an insurer that has equity securities for which a statement is filed under ORS 732.430, or who is a director or officer of an insurer when the insurer ceased to have any equity securities for which a statement is filed under ORS 732.430, shall file a statement on Form 4 with respect to any change in the person’s beneficial ownership of equity securities of the insurer if the change occurs:

(a) On or after the date on which the person ceased to be a director or officer or the date on which the insurer ceased to have any such equity securities, as the case may be; and

(b) Within six months after any change in the beneficial ownership of the securities prior to the date in subsection (a) of this section.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0120 Ownership of more than 10 percent of an equity security

(1) When it is to be determined for the purpose of ORS 732.430 whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of any equity security, the class of the equity security consists of the total amount of the class outstanding, except for any securities of the class held by or for the account of the insurer or subsidiary of the insurer. To determine the percentage ownership of voting trust certificates or certificates of deposit for equity securities, however, the class of voting trust certificates or certificates of deposit consists of the amount of voting trust certificates or certificates of deposit issuable with respect to the total amount of outstanding equity securities of the class that may be deposited under the voting trust agreement or deposit agreement in question, regardless of whether all of the outstanding securities have been so deposited. For the purpose of this rule, a person acting in good faith may rely on the information contained in the latest Annual Statement filed with the Director of the Department of Consumer and Business Services with respect to the amount of securities of a class outstanding or in the case of voting trust certificates or certificates of deposit the amount issuable.

(2) When it is to be determined for the purpose of ORS 732.430 whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of equity securities, the person is considered to be the beneficial owner of securities of any class that the person has a right to acquire through the exercise of presently exercisable options, warrants or rights or through the conversion of presently convertible securities. A security that is subject to such an option, warrant, right or conversion privilege held by a person is considered to be outstanding for the purpose of computing, in accordance with section (1) of this rule, the percentage of outstanding securities of the class owned by the person. The security, however, is not considered to be outstanding for the purpose of computing the percentage of the class owned by another person.

(3) Section (2) of this rule does not relieve any person of a duty to comply with ORS 732.430 with respect to any equity securities consisting of options, warrants, rights or convertible securities that are otherwise subject as a class under 732.430.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0125 Disclaimer of Beneficial Ownership

A person who files a statement may declare expressly in the statement that the filing may not be construed as an admission that the person is the beneficial owner for the purpose of ORS 732.420 to 732.455 of any equity securities covered by the statement.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0130 Exemptions from ORS 732.430 and 732.435

(1) Securities held by the following persons are exempt from ORS 732.430 and 732.435 for 12 months following the date of the person’s appointment and qualification:

(a) An executor or administrator of the estate of a decedent;

(b) A guardian or committee for an incompetent; and

(c) A receiver, trustee in bankruptcy, assignor for the benefit of creditors, conservator, liquidating agent or other similar person authorized by law to administer the estate or assets of other persons.

(2) After the 12-month period following the appointment of a person to whom section (1) of this rule applies:

(a) The person shall file a statement under ORS 732.430 with respect to the securities held by the estates that the person administers; and

(b) The person is liable for profits realized from trading in the securities pursuant to ORS 732.435 only when the estate being administered is a beneficial owner of more than ten percent of any class of equity security of an insurer subject to 732.430 and 732.435.

(3) Securities reacquired by or for the account of an insurer and held by it for its account are exempt from ORS 732.430 and 732.435 while they are held by the insurer.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0135 Exemptions from ORS 732.420 to 732.455 of Securities Purchased or Sold by Odd-lot Dealers

Securities purchased or sold by an odd-lot dealer are exempt from ORS 732.420 to 732.455 with respect to participation by the odd-lot dealer when the securities are purchased or sold:

(1) In odd lots that are reasonably necessary to carry on odd-lot transactions; or

(2) In round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0140 Certain Transactions Subject to ORS 732.430

Acquisition or disposition of the privilege of a transferable option, put, call, spread or straddle is a change in the beneficial ownership of the security to which the privilege relates. A person who acquires or disposes of such a privilege shall file a statement relating to the acquisition or disposition. This rule does not exempt a person, however, from filing the statements required when the option, put, call, spread or straddle is exercised.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0145 Ownership of Securities Held in Trust

(1) Beneficial ownership of a security for the purpose of ORS 732.430 includes any of the following:

(a) Ownership of securities as a trustee when either the trustee or members of the immediate family of the trustee have a vested interest in the income or corpus of the trust;

(b) Ownership of a vested beneficial interest in a trust; and

(c) Ownership of securities as a settlor of a trust in which the settlor has the power to revoke the trust without obtaining the consent of all the beneficiaries.

(2) Except as provided in section (4) of this rule, the following are exempt from the filing requirement in ORS 732.430:

(a) A person who has beneficial ownership of securities solely as a settlor or beneficiary of a trust, when less than 20 percent in market value of the securities having a readily ascertainable market value held by the trust, determined as of the end of the preceding fiscal year of the trust, consists of equity securities for which reports would otherwise be required.

(b) A person who has an obligation that would otherwise be imposed solely by reason of ownership as settlor or beneficiary of securities held in trust, when the ownership, acquisition or disposition of the securities by the trust is made without prior approval by the settlor or beneficiary.

(3) An exemption under section (2) of this rule is not acquired or lost solely because of changes in the value of the trust assets during a fiscal year or during any time that there is no transaction by the trust in the securities otherwise subject to the reporting requirements of ORS 732.430.

(4) If ten percent of a class of an equity security of an insurer is held in trust, the trust and its trustee are considered to be a person that must file reports required by ORS 732.430.

(5) A trust is not required to file more than one report of holdings or of a transaction in securities held by a trust, regardless of the number of officers, directors or 10 percent stockholders that are trustees, settlors or beneficiaries of a trust, if the filed report discloses the name of all trustees, settlers and beneficiaries who are officers, directors or ten percent stockholders. A person having an interest only as a beneficiary of a trust is not required to file a report as long as the person relies in good faith upon an understanding that the trustee of the trust will file whatever reports might otherwise be required of the beneficiary.

(6) As used in this rule, the “immediate family” of a trustee means:

(a) A son or daughter of the trustee, or a descendant of either;

(b) A stepson or stepdaughter of the trustee;

(d) A stepfather or stepmother of the trustee; or

(e) A spouse of the trustee.

(7) For the purpose of determining whether any of the relations described in section (6) of this rule exists, a legally adopted child of a person is considered to be a child of the person by blood.

(8) For the purpose of determining under ORS 732.430 whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of any equity security, the interest of that person in the remainder of a trust shall be excluded from the computation.

(9) A person is not required to file a report under ORS 732.430 with respect to the person’s indirect interest in portfolio securities held by either of the following, regardless of whether the person is otherwise subject to the requirement of filing reports under ORS 732.430:

(a) A pension or retirement plan holding securities of an insurer whose employees generally are the beneficiaries of the plan.

(b) A business trust with more than 25 beneficiaries.

(10) This rule does not impose any duties or liabilities relating to the reporting of a transaction or holding prior to the effective date of the transaction or holding.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0150 Exemption for Small Transactions

(1) An acquisition of securities is exempt from ORS 732.430 when the person effecting the acquisition:

(a) Does not effect any disposition of securities of the same class, other than by gift, within six months of the acquisition; and

(b) Does not participate in acquisitions or in dispositions of securities of the same class having a total market value in excess of $3,000 for any six-month period during which the acquisition occurs.

(2) An acquisition or disposition of securities by way of gift, when the total amount of the gifts does not exceed $3,000 in market value for any six-month period, is exempt from ORS 732.430 and may be excluded from the computations under section (1)(b) of this rule.

(3) A person effecting a transaction exempted by section (1) or (2) of this rule shall include in the first report filed after the transaction a statement showing acquisitions and dispositions of the person for each six-month period or portion thereof that has elapsed since the last filing.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0155 Exemption from ORS 732.435 That Need not be Reported Under ORS 732.430

A transaction that has been or is exempted from the requirements of ORS 732.430 is also exempted from 732.435 to the extent that the transaction would otherwise be subject to 732.435.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0160 Exemption from ORS 732.435 of Certain Transactions Effected in Connection with a Distribution

(1) If the following conditions apply, a transaction of purchase and sale, or sale and purchase, of a security that is effected in connection with the distribution of a substantial block of securities is exempt from ORS 732.435 because the transaction is not included within the purpose of 732.435:

(a) The person effecting the transaction is engaged in the business of distributing securities and is participating in good faith, in the ordinary course of business, in distribution of the block of securities;

(b) The security involved in the transaction is:

(A) A part of a block of securities and is acquired by the person effecting the transaction, with a view to its distribution, from the insurer or other person on whose behalf the securities are distributed or from a person who participates in good faith in the distribution of the block of securities; or

(B) A security purchased in good faith by or for the account of the person effecting the transaction for the purpose of stabilizing the market price of securities of the class being distributed or to cover an over-allotment or other short position created in connection with the distribution; and

(c) Other persons who are not subject to ORS 732.435 participate in the distribution of the block of securities on terms at least as favorable as those on which the person is participating and to an extent at least equal to the aggregate participation of all persons exempted from ORS 732.435 by this rule. The performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing the functions, however, does not preclude an exemption that would otherwise apply under this rule.

(2) Exemption of a transaction under this rule with respect to participation in the transaction by one person does not render the transaction exempt with respect to participation by any other person unless the other person also meets the conditions of this rule.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0165 Exemption from ORS 732.435 of Acquisitions of Shares of Stock and Stock Options under Certain Stock Bonus, Stock Option or Similar plans

When a director or officer of an insurer issuing stock or a stock option acquires shares of the insurer’s stock pursuant to a stock bonus, profit sharing, retirement, incentive, thrift, savings or similar plan, other than stock acquired upon the exercise of an option, warrant or right, or acquires a qualified or restricted stock option through an employee stock purchase plan, the acquisition is exempt from ORS 732.435 if the plan meets the following conditions:

(1) The plan has been approved, directly or indirectly, by the affirmative votes of the holders of a majority of the securities of the insurer present, or represented, and entitled to vote at a meeting held according to Oregon law or by the written consent of the holders of a majority of the securities of the insurer entitled to vote. For the purpose of this section, “insurer” includes a predecessor corporation if the plan or obligations to participate in the plan were assumed by the insurer in connection with the succession. If, however, the vote or written consent was not solicited substantially in accordance with OAR 836-024-0003 to 836-024-0055 at the time of the vote or written consent, the following shall apply:

(a) The insurer shall furnish in writing to the holders of record of the securities entitled to vote for the plan substantially the same information concerning the plan that would be required by OAR 836-024-0003 to 836-024-0055 at the time the information is furnished, if proxies to be voted with respect to the approval or disapproval of the plan were being solicited, on or prior to the date of the first annual meeting of security holders held subsequent to the later of the date on which ORS 732.420 to 732.455 first applies to the insurer, or the date of the acquisition of an equity security for which an exemption is claimed.

(b) The written information required in subsection (a) of this section may be furnished by mail to the last known address of the security holders of record within 30 days prior to the date of mailing. Four copies of the written information must be filed with or mailed for filing to the Director of the Department of Consumer and Business Services not later than the date on which it is first sent or given to security holders of the insurer.

(2) If a person is authorized to exercise discretion in the selection of any director or officer of the insurer to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan, or in the determination of the number or maximum number of shares of stock that may be allocated to a director or officer or that may be covered by qualified, restricted or employee stock purchase plan stock options granted to the director or officer, the discretion may be exercised only as follows:

(a) With respect to the participation of directors:

(A) By the board of directors of the insurer, but a majority of the members of the board and a majority of the directors acting in the matter must be disinterested persons;

(B) By, or only in accordance with the recommendations of, a committee of three or more persons who have full authority to act in the matter, but only if all of the members of the committee are disinterested persons; or

(i) Specifies the number or maximum number of shares of stock that directors may acquire or that may be subject to qualified, restricted or employee stock purchase plan stock options granted to directors and the terms upon which, and the times at which, or the periods within which the stock may be acquired or the options may be acquired and exercised; or

(ii) Sets forth, by formula or otherwise, effective and determinable limitations with respect to acquisition or purchase based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages of shares outstanding from time to time, or similar factors.

(b) With respect to the participation of officers who are not directors:

(A) By the board of directors of the insurer or a committee of three or more directors; or

(B) By, or only in accordance with the recommendations of, a committee of three or more persons having full authority to act in the matter, but only if all of the members of the committee are disinterested persons.

(c) For the purpose of this section, a director or committee member is a disinterested person only if the person, at the time discretion is exercised, is not eligible and has not at any time within one year prior to the exercise of discretion been eligible for selection as a person:

(A) To whom stock may be allocated; or

(B) To whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan or any other plan of the insurer or any of its affiliates entitling the participants to acquire stock or qualified, restricted or employee stock purchase plan stock options of the insurer or any of its affiliates.

(d) This section does not apply with respect to any option granted, or other equity security acquired, prior to the date that ORS 732.430, 732.435 and 732.440 first become applicable with respect to any class of equity securities of any insurer.

(3) As to each participant or as to all participants, the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock that may be allocated, or that may be subject to qualified, restricted or employee stock purchase plan stock options granted pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date, and may be determined either by fixed or maximum dollar amounts or fixed or maximum numbers of shares or by formulas based upon earning of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors that will result in an effective and determinable limitation. The limitations may be subject to any provision for adjustment of the plan or of stock allocable or options outstanding thereunder to prevent dilution or enlargement of rights.

(4) All terms used in this rule have the same meaning as the terms have in ORS 732.420 to 732.455 and in OAR 836-024-0105. In addition, the following definitions apply to this rule:

(a) The term “plan” includes any plan, whether or not set forth in any formal written document or documents and whether or not approved in its entirety at one time.

(b) The definitions of the terms “qualified stock option” and “employee stock purchase plan” that are set forth in sections 422 and 423 of the Internal Revenue Code of 1954, as amended, apply to those terms as they are used in this rule. For the purpose of this rule, however, an option that meets all of the conditions of sections 422 and 423 of the Internal Revenue Code of 1954, as amended, other than the date of issuance, shall be considered to be a “restricted stock option.”

(A) The making of any election to receive under any plan an award of compensation in the forma of stock or credits for stock, except that an election must be made prior to the making of the award and the election must be irrevocable until at least six months after termination of employment;

(B) The subsequent crediting of the stock;

(C) The making of any election as to a time for delivery of the stock after termination of employment, but only if the election is made at least six months prior to delivery.

(D) The fulfillment of any condition to the absolute right to receive stock; or

(E) The acceptance of certificates for shares of stock.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0170 Exemption from ORS 732.435 of Certain Transactions in Which Securities are Received by Redeeming other Securities

An acquisition of an equity security, other than a convertible security or right to purchase a security, by a director or officer of the insurer issuing the security, is exempt from ORS 732.435 if all of the following conditions are met:

(1) The equity security is acquired by way of redemption of another security of an insurer, substantially all of whose assets other than cash or government bonds consist of securities of the insurer issuing the equity security, and the equity security:

(a) Represented substantially and in practical effect a stated or readily ascertainable amount of equity security;

(b) Had a value that was substantially determined by the value of the equity security; and

(c) Conferred upon the holder the right to receive the equity security without the payment of any consideration other than the security redeemed.

(2) The director or officer did not acquire any security of the same class as the security redeemed within six months prior to the redemption or does not acquire any such security within six months after the redemption.

(3) The insurer issuing the equity security acquired has recognized the applicability of section (1) of this rule by appropriate corporate action.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0175 Exemption of long Term Profits Incident to Sales Within Six Months of the Exercise of an Option

(1) As provided in section (2) of this rule, the Director exempts as not comprehended within the purposes of ORS 732.435 any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security in which the purchase is made pursuant to the exercise of an option or similar right that was:

(a) Acquired more than six months before its exercise; or

(b) Acquired pursuant to the terms of an employment contract entered into more than six months before its exercise.

(2) Regarding any transaction described in section (1) of this rule, the profits inuring to the insurer may not exceed the difference between the proceeds of sale and the lowest market price of any security of the same class within six months before or after the date of sale. Nothing in this rule may be considered to enlarge the amount of profit that would inure to the insurer in the absence of this rule.

(3) The Director exempts as not comprehended within the purposes of ORS 732.435 the disposition of a security purchased in a transaction specified in section (1) of this rule pursuant to a plan or agreement described in this section when the terms of the plan or agreement are binding upon all stockholders of the insurer, except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings. This section applies to a plan or agreement:

(a) For merger or consolidation or reclassification of the insurer’s securities; or

(b) For the exchange of the insurer’s securities for the securities of another person that has acquired its assets, or that is in control, as defined in section 368(c) of the Internal Revenue Code of 1954, of a person that has acquired its assets.

(4) The exemptions under this rule do not apply to any transaction made unlawful by ORS 732.440 or rules adopted under that statute.

(5) The person claiming an exemption under this section bears the burden of establishing market price of the security.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0180 Exemption from ORS 732.435 of Certain Acquisitions and Dispositions of Securities Pursuant to Merger or Consolidation

(1) The Director exempts as not comprehended within the purposes of ORS 732.435 the following transactions:

(a) The acquisition of a security of an insurer pursuant to a merger or consolidation in exchange for a security of a company that, prior to the merger or consolidation:

(A) Owned 85 percent or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company; or

(B) Held more than 85 percent of the combined assets of the companies undergoing merger or consolidation, computed according to their book values prior to the merger or consolidation as determined by reference to their most available financial statements for a 12-month period prior to the merger or consolidation.

(b) The disposition of a security of an insurer, pursuant to a merger or consolidation of an insurer that, prior to the merger or consolidation:

(A) Owned 85 percent or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company; or

(B) Held over 85 percent of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to merger or consolidation as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.

(2) A merger for the purpose of this rule includes the sale or purchase of substantially all the assets of one insurer by another in exchange for stock that is then distributed to the security holders of the insurer that sold its assets.

(3) Notwithstanding sections (1) and (2) of this rule, except for a purchase or sale exempted by this rule, the exemption under this rule is unavailable to a officer, director or stockholder to the extent of the purchase and sale if the officer, director or stockholder purchases a security in a company involved in the merger or consolidation or sells a security in another company involved in the merger or consolidation within a period of less than six months during which the merger or consolidation took place.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0185 Exemption from ORS 732.435 of Transactions Involving the Deposit or Withdrawal of Equity Securities Under a Voting Trust or Deposit Agreement

(1) If substantially all of the assets held under a voting trust or deposit agreement immediately after the deposit of a security under the voting trust or deposit agreement or immediately prior to the withdrawal of a security under the voting trust or deposit agreement consisted of equity securities of the same class as the security deposited or withdrawn, the following transactions are exempt from ORS 732.435:

(a) The acquisition or disposition of an equity security involved in the deposit of the security under the voting trust or deposit agreement, and the acquisition or disposition of the certificate representing the equity security; and

(b) The acquisition or disposition of an equity security involved in the withdrawal of an equity security from the voting trust or deposit agreement, and the acquisition or disposition of the certificate representing the equity security.

(2) Unless a purchase or sale of an equity security described in this section is included in a transaction involved in a deposit or withdrawal that is exempt either under section (1) of this rule or under another provision of OAR 836-024-0100 to 836-024-0220 that implements ORS 732.435, the exemption in section (1) of this rule does not apply to the extent that the purchase or sale has occurred within a period of less than six months before or after a transaction described in section (1) of this rule, including the date of the transaction itself. This section applies to the following:

(a) A purchase of an equity security of the class deposited and a sale of any certificate representing an equity security of such class; or

(b) A sale of an equity security of the class deposited and a purchase of any certificate representing an equity security of the class.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0190 Exemption from ORS 732.435 of Certain Transactions Involving the Conversion of Equity Securities

(1) An acquisition or disposition of an equity security involved in the conversion of an equity security is exempt from ORS 732.435 if the converted equity security, either immediately or after a stated period of time, is convertible by its terms or pursuant to the terms of the insurer’s articles of incorporation or other governing instrument into another equity security of the same insurer.

(2) Unless an acquisition or disposition described in section (1) of this rule is included in a transaction involved in the conversion or in a transaction exempted by any other provision of OAR 836-024-0100 to 836-024-0220 that implements ORS 732.435, the exemption established in subsection (1) of this rule does not apply if either of the following has occurred within a period of less than six months before or after the conversion, including the date of the conversion. This section applies to the following:

(a) A purchase of any equity security of the class convertible, including any acquisition of or change in a conversion privilege and a sale of any equity security of the class issuable upon conversion; or

(b) A sale of any equity security of the class convertible and any purchase of any equity security issuable upon conversion.

(3) For the purpose of this rule:

(a) An equity security is not considered to be acquired or disposed of upon conversion of an equity security if the terms of the converted equity security require the payment or entail the receipt of cash or other property in connection with the conversion, other than equity securities involved in the conversion, equal in value at the time of conversion to more than 15 percent of the value of the equity security issued upon conversion.

(b) An equity security is considered to be convertible if it is convertible at the option of the holder or of some other person or by operation of the terms of the security or the governing instruments.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0200 Exemption from ORS 732.435 of Certain Transactions Involving the Sale of Subscription Rights

(1) Any sale of a subscription right to acquire any subject security of the same insurer is exempt from ORS 732.435, as provided in this rule, as not comprehended within the purpose of that statute, if:

(a) The subscription right is acquired, directly or indirectly, from the insurer without the payment of consideration;

(b) The subscription right by its terms expires within 45 days after issuance of the subscription;

(c) The subscription right by its terms is issued on a pro rata basis to all holders of the beneficiary security of the insurer; and

(d) A registration statement under the securities Act of 1933 is in effect as to each subject security, or the applicable terms of any exemption from registration have been met with respect to each subject security.

(2) As used in this rule:

(a) ”Beneficiary security” means a security registered pursuant to section 12 of the federal Securities Exchange Act, to the holders of which a subscription right is granted.

(b) “Subject security” means a security that is the subject of a subscription right.

(c) “Subscription right” means any warrant or certificate evidencing a right to subscribe to or otherwise acquire an equity security.

(3) If a person purchases subscription rights for cash or other consideration, then a sale by the person of subscription rights otherwise exempted by this rule is not exempted to the extent of the purchases within the six-month period preceding or following the sale.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0205 Exemption of Certain Securities from ORS 732.440

A security is exempt from ORS 732.440 to the extent necessary to render lawful under that statute the broker’s execution of an order for an account in which the broker has no direct or indirect interest.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0210 Exemption from ORS 732.440 of Certain Transactions Effected in Connection with a Distribution

A security is exempt from the operation of ORS 732.440 to the extent necessary to render lawful under that section any sale made by or on behalf of a dealer in connection with a distribution of a substantial block of securities, if the following conditions are met:

(1) The sale is represented by an over-allotment in which the dealer is participating as a member of an underwriting group, or the dealer or a person acting on the dealer’s behalf intends in good faith to offset the sale with a security to be acquired by or on behalf of the dealer as a participant in an underwriting, selling or soliciting dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders or some other class of persons; and

(2) Other persons to whom ORS 732.440 does not apply participate in the distribution of the block of securities on terms at least as favorable as those under which the dealer is participating and to an extent at least equal to the aggregate participation of persons exempted from 732.440 by this rule. The performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing the functions does not preclude an exemption that would otherwise be available under this rule.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0215 Exemption from ORS 732.440 of Sales of Securities to be Acquired

(1) When a person is entitled, as an incident to ownership of an issued security and without the payment of consideration, to receive another security “when issued” or “when distributed,” the security to be acquired is exempt from ORS 732.440 if:

(a) The sale is made subject to the same conditions as those attaching to the right of acquisition;

(b) The person exercises reasonable diligence to deliver the security to the purchaser promptly after the person’s right of acquisition matures; and

(2) This rule does not exempt transactions involving both a sale of a security “when issued” or “when distributed” and a sale of the security by virtue of which the seller expects to receive the “when issued” or “when-distributed” security, if the two transactions combined result in a sale of more units than the aggregate of those owned by the seller plus those to be received by the seller pursuant to the right of acquisition.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Or. Admin. R. 836-024-0220 Arbitrage Transactions under ORS 732.450

A director or officer of an insurer may not effect any foreign or domestic arbitrage transaction in any equity security of the insurer unless the director or officer includes the transaction in the statements required by ORS 732.430 and accounts to the insurer for the profits arising from the transaction as provided by 732.435. ORS 732.440 does not apply to such an arbitrage transaction. ORS 732.420 to 743.455 do not apply to any bona fide foreign or domestic arbitrage transaction insofar as it is effected by any person other than a director or officer of the insurer.

History

Statutory/Other Authority: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 & 732.455
Statutes/Other Implemented: ORS 732.420 - 732.455
ID 16-2006, f. & cert. ef. 8-7-06

Division 27 DOMESTIC INSURERS; ORGANIZATION; CORPORATE PROCEDURES

Or. Admin. R. 836-027-0001 Statutory Authority and Purpose of OAR 836-027-0005 to 836-027-0180

OAR 836-027-0005 to 836-027-0180 are adopted pursuant to authority in ORS 732.572. They are adopted to carry out 732.517 to 732.592. The information required by OAR 836-027-0005 to 836-027-0180 is declared to be necessary and appropriate in the public interest and for the protection of the policyholders in this state.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0005 Definitions

(1) Unless the context otherwise requires, as used in OAR 836-027-0005 to 836-027-0180:

(a) "Executive officer" means chief executive officer, chief operating officer, chief financial officer, treasurer, secretary, controller and any other individual performing functions corresponding to those performed by the foregoing officers under whatever title.

(b) "Foreign insurer" includes an alien insurer except where specifically noted otherwise.

(d) "Form B" means the form prescribed by OAR 836-027-0010.

(e) "Form C" means the form prescribed by OAR 836-027-0012.

(f) "Form D" means the form prescribed by OAR 836-027-0160.

(g) "Form E" means the form prescribed by OAR 836-027-0125.

(h) "Form F" means the form prescribed by OAR 836-027-0140.

(i) “Group capital calculation” means a calculation made in accordance with instructions that the National Association of Insurance Commissioners publishes for the purpose of specifying the method of calculation. The director shall prescribe, on a periodic basis, the instructions published by the National Association of Insurance Commissioners. The director’s decision to prescribe the instructions for the method of calculation shall be posted on the department’s Division of Financial Regulation website at dfr.oregon.gov.

(j) "Ultimate controlling person" means the person who is not controlled by any other person.

(2) Unless the context requires otherwise, other terms used in OAR 836-027-0005 to 836-027-0180 are used as defined in ORS 732.548.

(3) As required by Oregon Laws 2025, chapter 174, section 1, the “NAIC liquidity stress test framework” means a method for testing an insurer’s liquidity that the National Association of Insurance Commissioners describes in a publication by the association that includes instructions and reporting templates and that identifies scope criteria that apply to a specific data year. The director shall prescribe, on a periodic basis, the method as described in a publication by the National Association of Insurance Commissioners. The director’s decision to prescribe the method shall be posted on the department’s Division of Financial Regulation website at dfr.oregon.gov.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 12-2025, amend filed 11/20/2025, effective 01/01/2026
ID 3-2016, f. & cert. ef. 3-3-16
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0010 Registration of Insurers — Statement Filing

(1) An insurer required to file an annual registration statement pursuant to ORS 732.517 to 732.592 shall:

(a) Furnish the required information on Form B. Form B is set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov; and

(b) Include a statement that the insurer’s board of directors oversees corporate governance and internal controls.

(2) An amendment to Form B:

(a) Shall be filed within fifteen (15) days after the end of any month in which there is a material change to the information provided in the annual registration statement; and

(b) Shall be filed in the Form B format with only those items which are being amended reported.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 9-2020, amend filed 12/17/2020, effective 01/01/2021
ID 3-2016, f. & cert. ef. 3-3-16
Reverted to ID 1-2014, f. & cert. ef. 1-8-14
ID 6-2015(Temp), f. & cert. ef. 9-2-15 thru 2-26-16
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 15-1996, f. & cert. ef. 11-12-96
ID 13-1993, f. & cert. ef. 12-1-93
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0012 Summary of Registration — Statement Filing.

An insurer required to file an annual registration statement pursuant to ORS 732.517 to 732.592 is also required to furnish information required on Form C. Form C is set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov. An insurer shall file a copy of Form C in each state in which the insurer is authorized to do business, if requested by the Insurance Commissioner of that state.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 7-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 3-2016, f. & cert. ef. 3-3-16
Reverted to ID 15-1996, f. & cert. ef. 11-12-96
ID 6-2015(Temp), f. & cert. ef. 9-2-15 thru 2-26-16
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0020 Alternative and Consolidated Registrations

(1) An authorized insurer may file a registration statement, Form B, on behalf of an affiliated insurer or insurers that are required to register under ORS 732.551. A registration statement may include information not required by 732.517 to 732.592 regarding any insurer in the insurance holding company system even if the insurer is not an authorized insurer. In lieu of filing a registration statement on Form B, the authorized insurer may file a copy of the registration statement or similar report that it is required to file in its state of domicile, if:

(a) The statement or report contains information substantially similar to that required to be furnished on Form B; and

(b) The filing insurer is the principal insurer in the insurance holding company system.

(2) The question of whether the filing insurer is the principal insurer in the insurance holding company system is a question of fact, and an insurer filing a registration statement or report in lieu of Form B on behalf of an affiliated insurer shall set forth a brief statement of facts that will substantiate the filing insurer’s claim that it, in fact, is the principal insurer in the insurance holding company system.

(3) With the prior approval of the Director, an unauthorized insurer may follow any of the procedures that could be followed by an authorized insurer under section (1) of this rule.

(4) An insurer may take advantage of the provisions of ORS 732.562 and 732.564 without obtaining the prior approval of the Director. The Director reserves the right, however, to require individual filings if the Director considers such filings necessary in the interest of clarity, ease of administration or the public good.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 732.517 - 732.592 & 732.551
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0025 Disclaimers and Termination of Registration

(1) A disclaimer of affiliation or a request for termination of registration claiming that a person does not, or will not upon the taking of some proposed action, control another person (referred to as the “subject” in this section) shall contain:

(a) The number of authorized, issued and outstanding voting securities of the subject;

(b) With respect to the person whose control is denied and all affiliates of such person, the number and percentage of shares of the subject’s voting securities that are held of record or known to be beneficially owned, and the number of such shares concerning which there is a right to acquire, directly or indirectly;

(c) All material relationships and bases for affiliation between the subject and the person whose control is denied and all affiliates of such person; and

(d) A statement explaining why such person should not be considered to control the subject.

(2) A request for termination of registration shall be considered granted unless the Director, within ten days after the Director receives the request, notifies the registrant otherwise.

History

Statutory/Other Authority: ORS 731 & 732.705
Statutes/Other Implemented: ORS 732.558 & 732.568
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0030 Forms; General Requirements

(1) Forms A, B, C, D, E and F are intended to be guides in the preparation of the statements required by ORS 732.517 to 732.592, including but not limited to the registration provisions thereof. The forms are not intended to be blank forms that are to be filled in. The statements filed shall contain the numbers and captions of all items, but the text of the items may be omitted if the answers to the items are prepared so as to indicate clearly the scope and coverage of the items. All instructions, whether appearing under the items of the form or elsewhere, are to be omitted. Unless expressly provided otherwise, if any item is inapplicable or the answer to any item is in the negative, an appropriate statement to that effect shall be made.

(2) One complete copy of each statement, including exhibits and all other papers and documents filed as a part of the statement, shall be filed with the director of the Department of Consumer and Business Services by personal delivery or mail. A copy of Form C shall be filed in each state in which an insurer is authorized to do business if the commissioner of that state has notified the insurer of its request in writing. An insurer who has been so notified shall file the form not later than the 30th day after the date of receipt of the notice. At least one of the copies shall be manually signed and certified in the manner prescribed on the form. Unsigned copies shall be conformed. If the signature of any person is affixed pursuant to a power of attorney or other similar authority, a copy of such power of attorney or other authority shall also be filed with the statement.

(3) If an applicant requests a hearing on a consolidated basis under ORS 732.527, in addition to filing the Form A with the director, the applicant must file electronically a copy of Form A with the National Association of Insurance Commissioners.

(4) Statements must be prepared on paper 8-1/2" X 11" in size and bound along the left edge or securely fastened at the top left corner. Exhibits and financial statements, unless specifically prepared for the filing, may be submitted in their original size. All copies of any statement, financial statements or exhibits shall be clear, easily readable, and suitable for photocopying. Debits in credit categories and credits in debit categories shall be designated so as to be clearly distinguishable as such on photocopies. Statements shall be in the English language and monetary values shall be stated in United States currency. If any exhibit or other paper or document filed with the statement is in a foreign language, it shall be accompanied by a translation into the English language and any monetary value shown in a foreign currency shall be converted into United States currency.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 11-2019, amend filed 12/19/2019, effective 01/01/2020
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 19-2006, f. & cert. ef. 9-26-06
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0035 Forms; Incorporation by Reference, Summaries, and Omissions

(1) Information required by any item of Form A, B, D, E or F may be incorporated by reference in answer or partial answer to any other item. Information contained in any financial statement, annual report, proxy statement, statement filed with a governmental authority or any other document may be incorporated by reference in answer or partial answer to any item of Form A, B, D, E or F if the document or paper is filed as an exhibit to the statement. Excerpts of documents may be attached as exhibits if the documents are extensive. Documents currently on file with the Director that were filed within three years need not be filed as exhibits. References to information contained in exhibits or in documents already on file shall clearly identify the material and shall specifically indicate that such material is to be incorporated by reference in answer to the item. Matter shall not be incorporated by reference in any case in which the incorporation would render the statement incomplete, unclear, or confusing.

(2) If an item requires a summary or outline of the provisions of any document, only a brief statement of the pertinent provisions of the document shall be made. The summary or outline may in addition incorporate by reference particular parts of any exhibit or document currently on file with the Director that was filed within three years and may be qualified in its entirety by such reference. If two or more documents required to be filed as exhibits are substantially identical in all material respects except as to the parties thereto, the dates of execution or other details, a copy of only one of such documents need be filed, but it shall have attached a schedule identifying the omitted documents and setting forth the material details in which such documents differ from the documents of which a copy is filed.

History

Statutory/Other Authority: ORS 731 & 732.705
Statutes/Other Implemented: ORS 732.523, 732.552 & 732.574
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0040 Forms; Information Unknown or Unavailable and Extension of Time to Furnish

(1) Required information need be given only insofar as it is known or reasonably available to the person filing the statement. If any required information is unknown and not reasonably available to the person filing, either because obtaining it would involve unreasonable effort or expense, or because it rests peculiarly within the knowledge of another person not affiliated with the person filing, the information may be omitted. However, the person filing shall:

(a) Give such information on the subject as the person possesses or can acquire without unreasonable effort or expense, together with the sources thereof; and

(b) Include a statement either showing that unreasonable effort or expense would be involved or indicating the absence of any affiliation with the person within whose knowledge the information rests and stating the result of a request made to such person for the information.

(2) If it is impractical to furnish any required information, document, or report at the time it is required to be filed, an application may be filed with the Director:

(a) Identifying the information, document, or report in question;

(b) Stating why the filing thereof at the time required is impractical; and

(3) An application submitted under section (2) of this rule shall be considered granted unless the Director, within 30 days after receipt thereof, enters an order denying the application.

History

Statutory/Other Authority: ORS 731 & 732.705
Statutes/Other Implemented: ORS 732.523, 732.552 & 732.574
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0045 Forms; Additional Information and Exhibits

In addition to the information expressly required to be included in Forms A, B, C, D, E and F there shall be included further material information, if any, as may be necessary to make the information contained in the form not misleading. The person filing may also file exhibits in addition to those expressly required by the statement. Such exhibits shall be marked to indicate clearly the subject matters to which they refer.

History

Statutory/Other Authority: ORS 731 & 732.705
Statutes/Other Implemented: ORS 732.523, 732.552, 732.553 & 732.574
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 8-1993, f. & cert. ef. 9-23-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0050 Instructions; Amendments

A change to Form A, B, C, D, E and F shall include on the top of the cover page the phrase: "Change No. _____ to" and shall indicate the date of the change and not the date of the original filing.

History

Statutory/Other Authority: ORS 731 & 732.705
Statutes/Other Implemented: ORS 732.523, 732.552, 732.554 & 732.574
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 8-1993, f. & cert. ef. 9-24-93
IC 68, f. & ef. 6-22-76

Or. Admin. R. 836-027-0070 Subsidiaries of Domestic Insurers

The authority to invest in subsidiaries under ORS 733.630 is in addition to any authority to invest in subsidiaries that may be contained in any other provision of the Insurance Code.

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 733.510 & 733.630
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0100 Acquisition of Control — Statement Filing

A person required to file a statement pursuant to ORS 732.517 to 732.592 shall furnish the required information on Form A, which is incorporated in and made a part of this rule as Exhibit 1. The person also shall furnish the required information on Form E, which is described in OAR 836-027-0125. Form E is set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 8-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 3-2016, f. & cert. ef. 3-3-16
Reverted to ID 1-2014, f. & cert. ef. 1-8-14
ID 6-2015(Temp), f. & cert. ef. 9-2-15 thru 2-26-16
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0110 Amendments to Form A

An applicant who has filed a statement pursuant to ORS 732.517 to 732.592 shall promptly advise the Director of any changes in the information so furnished on Form A arising subsequent to the date upon which the information was furnished but prior to disposition of the application by the Director.

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0120 Acquisition of Certain Persons Considered to Be Insurers

(1) If the person being acquired is considered to be a “domestic insurer” solely because of the definition of “domestic insurer” in ORS 732.518, the name of the domestic insurer on the cover page shall be indicated as follows: “ABC Insurance Company, a subsidiary of XYZ Holding Company.”

(2) When a person who is considered to be a “domestic insurer” solely because of the definition of “domestic insurer” in ORS 732.518, is being acquired, references to “the insurer” contained in Form A shall refer to both the domestic subsidiary insurer and the person being acquired.

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0125 Pre-Acquisition Notification

(1) If a domestic insurer, including any person controlling a domestic insurer, is proposing a merger or acquisition under ORS 732.523, the person must file a pre-acquisition notification form, Form E, as required under ORS 732.589. Form E is set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov.

(2) If a non-domiciliary insurer licensed to do business in this state is proposing a merger or acquisition pursuant to ORS 732.527, 732.587, 732.589, 732.542 and 732.544, that person shall file a pre-acquisition notification form, Form E. A pre-acquisition notification form need not be filed if the acquisition is beyond the scope of ORS 732.587, 732.589, 732.542 and 732.544.

(3) In addition to the information required by Form E, the director may require an opinion from an economist as to the competitive impact of the proposed acquisition.

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 9-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 3-2016, f. & cert. ef. 3-3-16
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14

Or. Admin. R. 836-027-0130 Information to Be Included in Statement Required by ORS 732.517 to 732.592

The statement to be filed with the Director pursuant to ORS 732.517 to 732.592 shall include the following information, to be set forth in Form A:

(1) If any acquiring party required to file a statement is an individual, the principal occupation of the person and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past 10 years; and

(2) If any acquiring party required to file a statement is not an individual, a report of the nature of its business operations during the past five years or for such lesser period as the acquiring party and any predecessors of the acquiring party have been in existence, an informative description of the business intended to be done by the acquiring party and its subsidiaries, and a list of all individuals who are or who have been selected to become directors or executive officers of the acquiring party or who perform or will perform functions appropriate to the positions. The list shall include for each individual the information required by section (1) of this rule.

(3) The number of shares of any security that each acquiring party required to file a statement proposes to acquire in connection with the acquisition, the terms of any proposed offer or agreement relating to the acquisition and a statement as to the method by which the fairness of the proposal was determined.

(4) The amount of each class of any security of the type to be acquired in connection with the acquisition that is beneficially owned or concerning which there is a right to acquire beneficial ownership by any acquiring party.

(5) A full description of any contracts, arrangements or understandings with respect to any security of the type to be acquired in connection with the acquisition in which any acquiring party required to file a statement is involved, including, without limitation, those involving transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits or the giving or withholding of proxies. The description shall identify the persons with whom the contracts, arrangements or understandings have been entered.

(6) A description of the purchase of any security of the type to be acquired in connection with the acquisition during the 12 calendar months preceding the filing of the statement, by any acquiring party required to file a statement, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid for the security.

(7) A description of any recommendation to purchase any security of the type to be acquired in connection with the acquisition made by any acquiring party required to file a statement, or by anyone based upon interviews or at the suggestion of any acquiring party required to file a statement, during the 12 calendar months preceding the filing of the statement.

(8) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities of the type to be acquired in connection with the acquisition and, if distributed, copies of additional soliciting material relating thereto.

(9) A description of the terms of any agreement, contract or understanding made with or proposed to be made with any broker-dealer as to solicitation for tender of securities of the type to be acquired in connection with the acquisition, including the amount of any fees, commissions or other compensation to be paid to any broker-dealer in connection with the agreement, contract or understanding.

History

Statutory/Other Authority: ORS 732.523 & 732.572
Statutes/Other Implemented: ORS 732.574 & 732.517 - 732.592
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0140 Enterprise Risk Report

The ultimate controlling person of an insurer required to file an enterprise risk report under ORS 732.569 shall furnish the required information on Form F. Form F is set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 732.705
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 12-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 3-2016, f. & cert. ef. 3-3-16
ID 1-2014, f. & cert. ef. 1-8-14
ID 7-2013, f. 12-26-13, cert. ef. 1-1-14

Or. Admin. R. 836-027-0150 Group Capital Calculation

(1) Where an insurance holding company system has previously filed the annual group capital calculation at least once, the chief insurance regulatory official, as described in ORS 732.569(1), has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the chief insurance regulatory official makes a determination based upon that filing that the insurance holding company system meets all of the following criteria:

(a) Has annual direct written and unaffiliated assumed premium (including international direct and assumed premium), but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1,000,000,000;

(b) Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories;

(c) Has no banking, depository or other financial entity that is subject to an identified regulatory capital framework within its holding company structure;

(d) The holding company system attests that there are no material changes in the transactions between insurers and non-insurers in the group that have occurred since the last filing of the annual group capital calculation; and

(e) The non-insurers within the holding company system do not pose a material financial risk to the insurer’s ability to honor policyholder obligations.

(2) Where an insurance holding company system has previously filed the annual group capital calculation at least once, the chief insurance regulatory official has the discretion to accept in lieu of the group capital calculation a limited group capital filing if:

(a) The insurance holding company system has annual direct written and unaffiliated assumed premium (including international direct and assumed premium), but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1,000,000,000; and

(b) All of the following additional criteria are met:

(A) Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories;

(B) Does not include a banking, depository or other financial entity that is subject to an identified regulatory capital framework; and

(C) The holding company system attests that there are no material changes in transactions between insurers and non-insurers in the group that have occurred since the last filing of the report to the lead state commissioner and the non-insurers within the holding company system do not pose a material financial risk to the insurers ability to honor policyholder obligations.

(3) For an insurance holding company that has previously met an exemption with respect to the group capital calculation pursuant to sections (1) or (2) of this rule, the chief insurance regulatory official may require at any time the ultimate controlling person to file an annual group capital calculation, completed in accordance with the NAIC group capital calculation instructions, if any of the following criteria are met:

(a) Any insurer within the insurance holding company system is in a risk-based capital action level event as set forth in ORS 731.554 and OAR 836-011-0300 to 836-011-0360 or a similar standard for a non-U.S. insurer; or

(b) Any insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in ORS 731.385 and OAR 836-013-0100 to 836-013-0120; or

(c) Any insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer as determined by the chief insurance regulatory official based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests.

(4) A non-U.S. jurisdiction is considered to “recognize and accept” the group capital calculation if it satisfies the following criteria:

(a) With respect to ORS 732.569(2)(b)(D):

(A) The non-U.S. jurisdiction recognizes the U.S. state regulatory approach to group supervision and group capital, by providing confirmation by a competent regulatory authority, in such jurisdiction, that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC Accreditation Program shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the lead state and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the non-U.S. jurisdiction; or

(B) Where no U.S. insurance groups operate in the non-U.S. jurisdiction, that non-U.S. jurisdiction indicates formally in writing to the lead state with a copy to the International Association of Insurance Supervisors that the group capital calculation is an acceptable international capital standard. This will serve as the documentation otherwise required in paragraph (4)(a)(A) of this rule.

(b) The non-U.S. jurisdiction provides confirmation by a competent regulatory authority in such jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the chief insurance regulatory official in accordance with a memorandum of understanding or similar document between the official and such jurisdiction, including but not limited to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC. The chief insurance regulatory official shall determine, in consultation with the NAIC Committee Process, if the requirements of the information sharing agreements are in force.

(5) A list of non-U.S. jurisdictions that “recognize and accept” the group capital calculation will be published through the NAIC Committee Process:

(a) A list of jurisdictions that “recognize and accept” the group capital calculation pursuant to ORS 732.569(2)(b)(D), is published through the NAIC Committee Process to assist the chief insurance regulatory official in determining which insurers shall file an annual group capital calculation. The list will clarify those situations in which a jurisdiction is exempted from filing under ORS 732.569(2)(b)(D). To assist with a determination under ORS 732.569(3), the list will also identify whether a jurisdiction that is exempted under either ORS 732.569(2)(b)(C) or ORS 732.569(2)(b)(D) requires a group capital filing for any U.S. based insurance group’s operations in that non-U.S. jurisdiction.

(b) For a non-U.S. jurisdiction where no U.S. insurance groups operate, the confirmation provided to meet the requirement of paragraph (4)(a)(B) of this rule will serve as support for recommendation to be published as a jurisdiction that “recognizes and accepts” the group capital calculation through the NAIC Committee Process.

(c) If the chief insurance regulatory official makes a determination pursuant to ORS 732.569(2)(b)(D) that differs from the list set forth in subsection (5)(a), the chief insurance regulatory official shall provide thoroughly documented justification to the NAIC and other states.

(d) Upon determination by the chief insurance regulatory official that a non-U.S. jurisdiction no longer meets one or more of the requirements to “recognize and accept” the group capital calculation, the chief insurance regulatory official may provide a recommendation to the NAIC that the non-U.S. jurisdiction be removed from the list of jurisdictions that “recognize and accepts” the group capital calculation.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 12-2025, adopt filed 11/20/2025, effective 01/01/2026

Or. Admin. R. 836-027-0160 Transactions Subject to Prior Notice — Notice Filing

(1) An insurer required to give notice of a proposed transaction pursuant to ORS 732.574 shall furnish the required information on Form D. Form D is set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov.

(2) Agreements for cost sharing services and management services shall at a minimum and as applicable:

(a) Identify the person providing services and the nature of such services;

(b) Set forth the methods to allocate costs;

(c) Require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the Accounting Practices and Procedures Manual;

(d) Prohibit advancement of funds by the insurer to the affiliate except to pay for services defined in the agreement;

(e) State that the insurer will maintain oversight for functions provided to the insurer by the affiliate and that the insurer will monitor services annually for quality assurance;

(f) Define records and data of the insurer to include all records and data developed or maintained under or related to the agreement that are otherwise the property of the insurer, in whatever form maintained, including, but not limited to, claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records or similar records within the possession, custody or control of the affiliate;

(g) Specify that all records and data of the insurer are and remain the property of the insurer, and:

(A) Are subject to the control of the insurer;

(B) Are identifiable; and

(C) Are segregated from all other persons’ records and data or are readily capable of segregation at no additional cost to the insurer;

(h) State that all funds and invested assets of the insurer are the exclusive property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer;

(i) Include standards for termination of the agreement with and without cause;

(j) Include provisions for indemnification of the insurer in the event of gross negligence or willful misconduct on the part of the affiliate providing the services and for any actions by the affiliate that violate provisions of the agreement required in subsections (k) to (o) of this section;

(k) Specify that, if the insurer is placed in supervision, seizure, conservatorship, or receivership pursuant to ORS chapter 734:

(A) All of the rights of the insurer under the agreement extend to the receiver or the director to the extent permitted by ORS chapter 734;

(B) All records and data of the insurer shall be identifiable, and segregated from all other persons’ records and data or readily capable of segregation at no additional cost to the receiver or the director;

(C) A complete set of records and data of the insurer will immediately be made available to the receiver or the director, shall be made available in a usable format and shall be turned over to the receiver or the director immediately upon the receiver or the director’s request, and the cost to transfer the data to the receiver or the director shall be fair and reasonable; and

(D) The affiliated persons will make available all employees essential to the operations of the insurer and the services associated therewith for the immediate continued performance of the essential services ordered or directed by the receiver or director;

(l) Specify that the affiliate has no automatic right to terminate the agreement if the insurer is placed into supervision, seizure, conservatorship or receivership pursuant to ORS chapter 734;

(m) Specify that the affiliate will provide the essential services for a minimum period of time, specified in the agreement, after termination of the agreement, if the insurer is placed into supervision, seizure, conservatorship or receivership pursuant to ORS chapter 734, as ordered or directed by the receiver or director. Performance of the essential services will continue to be provided without regard to pre-receivership unpaid fees, so long as the affiliate continues to receive timely payment for post-receivership services rendered, and unless released by the receiver, director or supervising court;

(n) Specify that the affiliate will continue to maintain any systems, programs, or other infrastructure notwithstanding supervision, seizure, conservatorship or receivership pursuant to ORS chapter 734, and will make them available to the receiver or director as ordered or directed by the receiver or director for so long as the affiliate continues to receive timely payment for post-receivership services rendered, and unless released by the receiver, director or supervising court; and

(o) Specify that, in furtherance of the cooperation between the receiver and the affected guaranty association(s) and subject to the receiver’s authority over the insurer, if the insurer is placed into supervision, seizure, conservatorship or receivership pursuant to ORS chapter 734, and portions of the insurer’s policies or contracts are eligible for coverage by one or more guaranty associations, the affiliate's commitments under subsections (k) to (n) of this section will extend to such guaranty association(s).

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 12-2025, amend filed 11/20/2025, effective 01/01/2026
ID 9-2020, amend filed 12/17/2020, effective 01/01/2021
ID 3-2016, f. & cert. ef. 3-3-16
Reverted to ID 15-1996, f. & cert. ef. 11-12-96
ID 6-2015(Temp), f. & cert. ef. 9-2-15 thru 2-26-16
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0170 Extraordinary Dividends and Other Distributions

(1) Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders shall include the following:

(a) The amount of the proposed dividend;

(b) The date established for payment of the dividend;

(c) A statement as to whether the dividend is to be in cash or other property and, if in property, a description thereof, its cost, and its fair market value together with an explanation of the basis for valuation;

(d) A copy of the calculations determining that the proposed dividend is extraordinary. The work paper must include the following information:

(A) The amounts, dates and form of payment of all dividends or distributions, including regular dividends but excluding distributions of the insurer’s own securities, paid within the period of 12 consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the last preceding year;

(B) Total capital and surplus as of the 31st day of December immediately preceding;

(C) If the insurer transacts life insurance, the net gain from operations of the insurer after dividends to policyholders and federal income taxes and before realized capital gains or losses, for the 12-month period ending the 31st day of December immediately preceding;

(D) If the insurer does not transact life insurance, the net income for the 12-month period ending the 31st day of December immediately preceding and the two preceding 12-months periods; and

(E) If the insurer does not transact life insurance, the dividends paid to stockholders excluding distributions of the insurer’s own securities in the preceding two calendar years.

(e) A balance sheet and statement of income for the period intervening from the last annual statement filed with the Director and the end of the month preceding the month in which the request for dividend approval is submitted; and

(f) A brief statement as to the effect of the proposed dividend upon the insurer’s capital and surplus and the reasonableness of combined capital and surplus in relation to the insurer’s outstanding liabilities and the adequacy of surplus relative to the insurer’s financial needs.

(2) Subject to ORS 732.576, each registered insurer shall report to the Director all dividends and other distributions to shareholders within five business days following the declaration thereof, including the same information required by section (1)(d)(A) to (E) of this rule.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 732.517 - 732.592
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0180 Adequacy of Surplus

The factors set forth in ORS 731.554, as referred to in 732.582, for the purpose of determining the reasonableness and adequacy of the insurer’s capital and surplus, are not intended to be an exhaustive list. In determining the adequacy and reasonableness of an insurer’s capital and surplus, no single factor is necessarily controlling. Instead, the Director shall consider the net effect of all of such factors and also other factors bearing on the financial condition of the insurer. In comparing the capital and surplus maintained by other insurers, the Director shall consider the extent to which each of such factors varies from insurer to insurer. In determining the quality and liquidity of investments in subsidiaries, the Director shall consider the individual subsidiary and may discount or disallow its valuation to the extent that the individual investments so warrant.

History

Statutory/Other Authority: ORS 732.572
Statutes/Other Implemented: ORS 731.554 & 732.517 - 732.592
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-027-0200 Custodial Arrangements

(1) This rule is adopted pursuant to the rulemaking authority in ORS 731.244 and 732.245 for the purpose of implementing 732.245.

(2) As used in this rule:

(a) “Agent” means:

(A) A national bank;

(B) A state bank; or

(b) "Bank" has the meaning given that term in ORS 706.008;

(c) “Clearing corporation” means a corporation as defined in Article 8 of the Uniform Commercial Code (published by the American Law Institute and the National Conference of Commissioners on Uniform State Laws, 2003), that is organized for the purpose of effecting transactions in securities by computerized book-entry, except those securities issued under the laws of a foreign country;

(d) "Custodian" means a bank or trust company licensed by the United States or by any state thereof and regularly examined by its licensing authority;

(e) “National bank” has the meaning given that term in ORS 706.008;

(f) "Securities" has the meaning given "security" in ORS 59.015;

(g) "Securities depository" means a company that provides securities clearance or settlement services for member banks and other member institutions and that is regulated by the Securities and Exchange Commission, a Federal Reserve Bank and the appropriate banking authorities in its state of domicile;

(h) “State bank” has the meaning given that term in ORS 706.008; and

(i) "Trust company" means a trust company as that term is defined in ORS 706.008 or a company that is authorized under the laws of a state other than Oregon to transact trust business, and includes the trust department of a bank.

(3) A domestic insurer may enter into a custodial or safekeeping arrangement with a custodian for the purpose of holding securities owned by the insurer, either in or outside this state, as provided in this section and section (4) of this rule. Such an arrangement must be made by written agreement between the domestic insurer and the custodian, must meet the requirements and standards of section (4) of this rule and must provide that the securities be held by the custodian or its agent.

(4) A custodial or safekeeping arrangement to which section (3) of this rule applies must account for and safeguard the securities of the domestic insurer, must facilitate examination of the insurer and the records of the insurer's custody account maintained by the custodian and must be in accordance with the following standards established in the Examiners Handbook, published by the National Association of Insurance Commissioners:

(a) The custodian must agree to indemnify the insurer for any loss of the insurer's securities as a result of the negligence or dishonesty of the officers or employees of the custodian, or burglary, robbery, holdup, theft or mysterious disappearance, including loss by damage or destruction;

(b) The custodian must agree that, in the event of a loss of the insurer's securities for which the custodian is obligated to indemnify the insurer, the custodian shall promptly replace the securities or the value of any loss of rights or privileges resulting from the loss of the securities;

(c) The insurer's securities or a certified listing of the insurer's securities through a securities depository or a Federal Reserve book entry system shall be subject to inquiry and examination by the director of the Department of Consumer and Business Services, either at the custodian's premises or elsewhere, as provided by ORS 731.296 and 731.308;

(d) The national bank, state bank or trust company as custodian shall not be liable for any failure to take any action required to be taken under this rule in the event and to the extent that the taking of such action is prevented or delayed by war (whether declared or not and including a war in progress), revolution, insurrection, riot, civil commotion, act of God, accident, fire, explosions, stoppage of labor, strikes or other differences with employees, laws, regulations, orders or other acts of any governmental authority, or any other cause whatever beyond its reasonable control;

(e) In the event that the custodian gains entry in a clearing corporation through an agent, there shall be a written agreement between the custodian and the agent that the agent shall be subjected to the same liability for loss of securities as the custodian. If the agent is governed by laws that differ from laws regulating the custodian, the director may accept a standard of liability applicable to the agent that is different from the standard liability;

(f) The custodian must agree to provide written notification to the director, within three business days of receipt by the custodian of the insurer’s written notice of termination or withdrawal, if the custodial agreement has been terminated or if 100 percent of the account assets in any one custody account have been withdrawn;

(g) The custodian must agree that during regular business hours, and upon reasonable notice, an officer or employee of the insurer, an independent accountant selected by the insurer or a representative of an appropriate regulatory body, or any combination thereof, shall be entitled to examine, on the premises of the custodian, its records relating to securities, if the custodian is given written instructions to that effect from an authorized officer of the insurer;

(h) The custodian and its agents, upon reasonable request, must agree to send all reports that they receive from a clearing corporation or the Federal Reserve book-entry system that the clearing corporation or the Federal Reserve permits to be redistributed and reports prepared by the custodian's outside auditors, to the insurer on the custodian’s or agent’s respective systems of internal control;

(i) To the extent that certain information maintained by the custodian is relied upon by the insurer in preparation of its annual statement and supporting schedules, the custodian must agree to maintain records sufficient to determine and verify such information;

(j) The custodian must agree to provide, upon written request from a regulator or an authorized officer of the insurer, the appropriate affidavits, with respect to the insurer's securities held by the custodian;

(k) The custodian must agree to secure and maintain insurance protection in an adequate amount; and

(l) The custodian that is a foreign bank, or a U.S. custodian's foreign agent, or a foreign clearing corporation must agree to only hold foreign securities or securities required by the foreign country in order for the insurer to do business in that country. A U.S. custodian must hold all other securities.

(m) The custodial agreement shall be authorized by a resolution of the board of directors or an authorized committee of the insurance company.

(n) The custodial agreement shall state that certificated securities of the insurance company shall be held separate from all other securities or in a fungible bulk. Those securities held in a fungible bulk shall be separately identified on the custodian’s official records as being owned by the insurance company. Existing agreements must comply within 12 months of the effective date of this rule, or renewal of the agreement, whichever is sooner.

(5) A domestic insurer may enter into a custodial or safekeeping arrangement directly with a securities depository for the purpose of holding securities owned by the insurer, either in or outside this state, as provided in this section. Such an arrangement must be made by written agreement between the domestic insurer and the securities depository and must provide that the securities be held by the securities depository.

(6) A domestic insurer must obtain the approval of the director for any material change to a custodial or safekeeping arrangement established under ORS 732.245. A change is material for purposes of this section:

(a) When the arrangement is with a custodian, if the purpose or effect of the change is to revise or omit any standard set forth in section (4) of this rule;

(b) When the arrangement is with a securities depository, if the purpose or effect of the change is to reduce the safety of the securities.

History

Statutory/Other Authority: ORS 731.244 & ORS 732.245
Statutes/Other Implemented: ORS 732.245 & ORS 731.574(6)
ID 9-2019, amend filed 11/25/2019, effective 01/01/2020
ID 3-2006, f. & cert. ef. 2-13-06
ID 18-1998, f. & cert. ef. 11-20-98

Or. Admin. R. 836-027-0300 Statutory Authority; Purpose

(1) OAR 836-027-0300 to 836-027-0360 are adopted pursuant to the authority of ORS 731.244 and 733.510 for the purpose of implementing 733.510.

(2) OAR 836-027-0300 to 836-027-0360 establish requirements and limitations relating to securities lending transactions by domestic insurers.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Or. Admin. R. 836-027-0310 Definitions

As used in OAR 836-027-0300 to 836-027-0360:

(1) “Acceptable collateral” means, as to securities lending transactions, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by the government of the United States or any agency of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. “Acceptable collateral” also means, with respect to lending foreign securities, sovereign debt rated 1 by the Securities Valuation Office of the National Association of Insurance Commissioners or any successor office established by the National Association of Insurance Commissioners.

(2) “Equivalent securities” means, in a securities lending transaction, securities that are identical to the loaned securities in all features including the amount of the loaned securities, except as to certificate number if held in physical form. In addition, for purposes of this definition, when a different security is exchanged for a loaned security by recapitalization, merger, consolidation or other corporate action, the different security is considered to be the loaned security.

(3) “Securities lending transaction” means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Or. Admin. R. 836-027-0320 Authorization by Board of Directors

Before a domestic insurer enters into a securities lending transaction, the board of directors of the domestic insurer must adopt a written plan that specifies the guidelines and objectives to be followed with respect to securities lending transactions, including the following:

(1) An assessment that securities lending transactions, including the guidelines relating thereto, are appropriate for the business conducted by the insurer and are consistent with ORS 733.510(4).

(2) An assessment of the insurer’s technical investment and administrative capabilities and expertise to engage in securities lending transactions.

(3) A description of how cash received will be invested or used for general corporate purposes of the insurer.

(4) Operational procedures to manage securities lending transactions and borrower default risk and the use of acceptable collateral in a manner that reflects the liquidity needs of securities lending transactions.

(5) The extent to which the domestic insurer may engage in securities lending transactions.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Or. Admin. R. 836-027-0330 Agreement with Borrower

Except as provided in OAR 836-027-0340, a domestic insurer shall enter into a written agreement with each borrower in a securities lending transaction. The written agreement between the insurer and the borrower must contain the following provisions:

(1) All loans must terminate not more than one year from the date of origination or upon the earlier demand of the insurer. The insurer must have the right to terminate the loan in a maximum of the normal settlement time for the loaned security.

(2) At the termination of the loan, the borrower must be obligated to return equivalent securities.

(3) The insurer must be entitled to receive from the borrower all distributions made by the issuer of the loaned securities during the duration of the loan, including cash dividends, stock dividends, stock splits and interest distributions of any kind declared, granted or made by the issuer, or any affiliate thereof, and rights to purchase or subscribe for additional securities.

(4) At the inception of the loan, the borrower must provide acceptable collateral. If the acceptable collateral is in the form of cash or cash equivalents, it must be in an amount specified in this section. If the acceptable collateral is in the form of a letter of credit, it must be an irrevocable letter of credit drawn on a bank acceptable to the insurer and in an amount specified in this section. If the acceptable collateral is in the form of direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation or in the form of sovereign debt rated 1 by the Securities Valuation Office of the National Association of Insurance Commissioners or any successor office established by the National Association of Insurance Commissioners, such securities must have a market value in an amount specified in this section. For purposes of this section:

(a) Except as provided in subsection (b) of this section, the amount or market value of the collateral must be determined as of the transaction date and must be at least equal to 102 percent of the market value of the loaned securities at that date; and

(b) In the event that foreign securities are loaned and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign securities, the amount or market value of the collateral must be at least equal to 105 percent of the market value of the loaned securities at that date.

(5) If the amount or market value of the collateral provided by the borrower at any time is less than the applicable amount or market value specified in section (4) of this rule, the borrower must immediately provide additional collateral as follows:

(a) If the amount or market value of the collateral to which section (4)(a) of this rule applies should become less than 100 percent of the market value of the loaned securities at the close of any business day, the borrower must immediately provide additional collateral to increase the amount or market value of the collateral up to an amount at least equal to 102 percent of the market value of the loaned securities;

(b) If the amount or market value of the collateral to which section (4)(b) of this rule applies should become less than 102 percent of the market value of the loaned securities at the close of any business day, the borrower must immediately provide additional collateral to increase the amount or market value of the collateral up to an amount at least equal to 105 percent of the market value of the loaned securities; and

(c) In any transaction in which the borrower and the insurer agree on a designated percentage that is greater than the applicable amount or market value specified in section (4) of this rule, if the amount or market value of the collateral provided by the borrower should become an amount less than such designated percentage of the market value of the loaned securities at the close of any business day, the borrower must immediately provide additional collateral to increase the amount or market value of the collateral up to an amount at least equal to the designated percentage of the market value of the loaned securities.

(6) If the collateral is an irrevocable letter of credit, a replacement letter of credit replacing the existing letter of credit must be in the possession of the insurer a minimum of the normal settlement time for the security loaned plus four business days before the expiration date of the existing letter of credit. If a replacement letter of credit is not in the possession of the insurer by the required time, the insurer must perfect its rights under the existing letter of credit. The release of a letter of credit by the insurer before its expiration date must be conditioned upon the actual return of the loaned securities to the insurer.

(7) The insurer must have and exercise the right to use the collateral to purchase securities of the same issue in the principal market where the securities are traded should the borrower fail to return the loaned securities as required or requested. The agreement between the insurer and the borrower must detail how to handle excess collateral, or a deficiency, after such purchase.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Or. Admin. R. 836-027-0340 Agreement with Agent as Alternative to Written Agreement

As an alternative to a written agreement between a domestic insurer and the borrower described in OAR 836-027-0330, the insurer may enter into an agreement with an agent acting on behalf of the insurer, if the agent is a qualified business entity and if the agreement:

(1) Requires the agent to enter into separate agreements with each borrower that are consistent with the requirements of OAR 836-027-0330; and

(2) Prohibits securities lending transactions pursuant to the agreement with the agent or its affiliates.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Or. Admin. R. 836-027-0350 Limitation

A domestic insurer shall not enter into a securities lending transaction if, as a result of and after giving effect to the transaction:

(1) The aggregate amount of securities then loaned to any one borrower would exceed five percent of its admitted assets; or

(2) The aggregate amount of all securities then loaned to all borrowers would exceed 40 percent of its admitted assets.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Or. Admin. R. 836-027-0360 Type of Borrower, Investment of Collateral, Valuation and Reporting

In a securities lending transaction, a domestic insurer shall comply with the following requirements:

(1) The borrower must be a registered securities broker or a bank or trust company or registered as a primary dealer of government securities with the Federal Reserve System. For purposes of this rule:

(a) “Bank or trust company” means any bank or trust company that is organized under the laws of the United States or any state thereof and is regularly examined pursuant to such laws; and

(b) “Registered securities broker” means a securities broker registered under the federal Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).

(2) For so long as a securities lending transaction remains outstanding, the insurer, its agent or custodian shall maintain, as to acceptable collateral received in the transaction, either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company or other securities depositories approved by the Director:

(a) Possession of the acceptable collateral;

(b) A perfected security interest in the acceptable collateral; or

(c) In the case of a jurisdiction outside the United States, title to, or rights of a secured creditor to, the acceptable collateral.

(3) If the insurer has investment discretion concerning the collateral, the collateral may be invested only in assets with a maturity date no later than one year from date of purchase, and that, if held directly by the insurer, would qualified as admitted assets pursuant to ORS Chapter 733.

(4) Each securities lending transaction and investment of the collateral must comply with ORS 733.730 and 733.740.

(5) The valuation procedures as prescribed in the “Valuations of Securities” manual of the National Association of Insurance Commissioners shall be used to value loaned securities in any financial statements filed by the insurer with the Director.

(6) In any financial statements filed by the insurer with the Director, the securities lending transaction shall be reported as designated by the Director in accordance with Statement of Statutory Accounting Principles No. 18. An insurer shall file with its annual statement a supporting schedule that reports such transactions as required by the annual statement filing instructions.

(7) In situations in which the securities are held outside the State of Oregon, the securities must be held by a bank or trust company in accordance with OAR 836-027-0200.

(8) The insurer shall maintain within this state original copies of all agreements to lend securities and any attachments, amendments or exhibits thereto. A current inventory of all loaned securities containing the identity of and location of all collateral shall be maintained within the State of Oregon. In addition, adequate records shall be maintained within the State of Oregon to verify the insurer’s activities in loaned securities and the possession of the necessary collateral.

History

Statutory/Other Authority: ORS 731.244 & 733.510
Statutes/Other Implemented: ORS 733.510
ID 4-2000, f. & cert. ef. 5-11-00

Division 28 PURCHASING GROUPS AND RISK RETENTION GROUPS

Or. Admin. R. 836-028-0005 Statutory Authority, Purpose

OAR 836-028-0005 to 836-028-0045 are adopted pursuant to ORS 731.244 and 735.360 in order to carry out the Oregon Liability Risk Retention Law and to protect the insurance-buying public.

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.300 - 735.365
ID 19-1988, f. & cert. ef. 12-6-88
IC 7-1988, f. & cert. ef. 4-14-88

Or. Admin. R. 836-028-0008 Unfair Trade Practice

Failure of a purchasing group to comply with OAR 836-028-0013 or 836-028-0020 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731, 731 & 746
Statutes/Other Implemented: ORS 746.240
ID 19-1988, f. & cert. ef. 12-6-88
IC 7-1988, f. & cert. ef. 4-14-88

Or. Admin. R. 836-028-0010 Registration of Purchasing Groups; Forms

Before doing business in this state, a purchasing group shall notify and register with the Director by completing and submitting to the Director the following documents:

(1) A registration. The registration must be made on the form prescribed by the Director.

(2) An appointment of the Director as the agent for service of legal documents for the purchasing group. The appointment must be made on the form prescribed by the Director.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.330
ID 19-2006, f. & cert. ef. 9-26-06
ID 19-1988, f. & cert. ef. 12-6-88
IC 7-1988, f. & cert. ef. 4-14-88

Or. Admin. R. 836-028-0013 Permitted Insurers

A purchasing group may not purchase insurance from a risk retention group or an insurer for members of the purchasing group in this state:

(1) Unless the risk retention group is registered in this state.

(2) Unless the insurer is authorized to transact insurance in this state or is an eligible nonadmitted insurer under ORS 735.415.

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.335
ID 19-1988, f. & cert. ef. 12-6-88

Or. Admin. R. 836-028-0016 Amendments to Registration by Purchasing Group

(1) A purchasing group shall amend its registration in this state when the purchasing group changes any of the following.

(a) The principal place of business of the purchasing group;

(b) The insurer or risk retention group from whom coverage is purchased;

(2) When a purchasing group changes its principal place of business, the purchasing group shall include the following in the amended registration:

(a) The street address, including city and state;

(b) The mailing address, if different;

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.330(1)(e)
IC 7-1988, f. & cert. ef. 4-14-88

Or. Admin. R. 836-028-0020 Use of Insurance Producers by Purchasing Groups

A purchasing group shall employ an insurance producer to procure insurance for its members in Oregon. Such an insurance producer:

(1) Must hold a current insurance producer’s license issued by the Division of Financial Regulation, in order to transact insurance in Oregon; or

(2) Must hold a current surplus line licensee's license issued under the Oregon Surplus Lines Law, in order to place business with a surplus lines insurer.

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.350
ID 15-2024, minor correction filed 08/06/2024, effective 08/06/2024
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 19-1988, f. & cert. ef. 12-6-88

Or. Admin. R. 836-028-0035 Registration of Foreign Risk Retention Groups; Forms

Before doing business in this state, a risk retention group chartered in a state other than this state shall submit to the Director the following documents:

(1) A registration. The registration must be made on the form prescribed by the Director.

(2) A plan of operation or feasibility study, certified by the state of domicile or incorporation.

(3) A copy of the most recent financial statement of the risk retention group, certified by the state of domicile or incorporation, with evidence that the financial statement was certified by an independent certified public account.

(4) A statement of opinion on loss and loss adjustment expense reserves, certified by a member of the American Academy of Actuaries or by a loss reserve specialist qualified under criteria established by the National Association of Insurance Commissioners as of the effective date of this rule.

(5) A copy of the most recent examination report conducted by the Insurance Department of the state of domicile or incorporation.

(6) An appointment of the Director as the agent for services of legal documents for the risk retention group. The appointment must be made on the form prescribed by the Director.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.315
ID 19-2006, f. & cert. ef. 9-26-06
IC 7-1988, f. & cert. ef. 4-14-88

Or. Admin. R. 836-028-0040 Amendments to Registration by Foreign Retention Groups

When a foreign risk retention group changes its principal place of business, the group shall amend its registration in this state to show, with respect to the new principal place of business:

(1) The street address, including city and state;

(2) The mailing address, if different;

(3) The telephone number.

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.315(2)(d)
IC 7-1988, f. & cert. ef. 4-14-88

Or. Admin. R. 836-028-0045 Financial Statement of Foreign Risk Retention Group; Audit

(1) Not later than the date on which the financial statement of a foreign risk retention group doing business in this state is due in its state of domicile, the group shall submit a copy of that financial statement to the Director.

(2) When an audit or examination is performed with respect to a foreign risk retention group doing business in this state, the group shall file a copy of the report of the audit or examination with the Director.

History

Statutory/Other Authority: ORS 731, 735 & 746
Statutes/Other Implemented: ORS 735.315(2)(a) - 735.315(c)
IC 7-1988, f. & cert. ef. 4-14-88

Division 29 CAPTIVE INSURERS

Or. Admin. R. 836-029-0000 Authority

OAR 836-029-0000 to 836-029-0120 are adopted under the general rulemaking authority of the Director of the Department of Consumer and Business Services under ORS 731.244 and the specific authority granted by Section 4, chapter 84, Oregon Laws 2012..

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0005 Purpose and Scope

The purpose of these rules is to set forth the financial, reporting, record-keeping and other requirements the Director of the Department of Consumer and Business Services considers necessary for the regulation of captive insurers, under sections 2 to 22, chapter 84, Oregon Laws 2012.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0010 Definitions

As used in OAR 836-029-0000 to 836-029-0120:

(1) “GAAP” means generally accepted accounting principles.

(2) "Work Papers" or "working papers" include but are not limited to schedules, analyses, reconciliations, abstracts, memoranda, narratives, flow charts, copies of captive insurer records or other documents prepared or obtained by the independent certified public accountant and the accountant's employees in the conduct of their audit of a captive insurer.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0015 Annual Reporting Requirements

(1) Not later than March 1, a captive insurer authorized in this state shall file an annual report of its financial condition as of the immediately preceding December 31 with the director of the Department of Consumer and Business Services. The report shall be verified by oath of two of its executive officers and shall be prepared using GAAP. The annual report may be filed electronically in accordance with directions from the director.

(2) An association captive insurer shall comply with the requirements of section 13, chapter 84, Oregon Laws 2012 when filing an annual report on the captive insurer’s financial condition.

(3) All captive insurers must use the "Captive Insurer Annual Statement Form” as set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

(4) The annual report required under section (1) of this rule must be accompanied by a management discussion and analysis that provides details of the captive’s financial condition, changes in financial condition and results of operations. The Management Discussion and analysis shall be prepared in accordance with annual statement instructions set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov and applicable to the required filing period as set forth in OAR 836-011-0000.

(5) The director may require a captive insurer to provide information applicable to its holding company systems covering activities for the preceding year.

(6) Upon request, the director may grant an extension of time for filing a report or document required under this rule.

History

Statutory/Other Authority: ORS 731.244, Sec. 4 (Enrolled SB 1547) & Or Laws 2012, ch 84
Statutes/Other Implemented: Or Laws 2012, ch 84 & Sec. 2-22 (Enrolled SB 1547)
ID 11-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0020 Risk Limitation

The Director of the Department of Consumer and Business Services may:

(1) Limit the net amount of risk a captive insurer retains for a single risk after considering the impact of the retention on the captive insurer's capital and surplus; or

(2) Prescribe and demand additional capital and surplus of any captive insurer if the director determines that the captive insurer is not adequately capitalized for the type, volume and nature of the risk that is being covered by the captive insurer.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0025 Annual Audit

(1) All captive insurers shall have an annual audit by an independent certified public accountant, approved by the Director of the Department of Consumer and Business Services, and shall file an audited financial report with the director on or before June 30 for the preceding year. Financial statements furnished under this section shall be prepared in accordance with generally accepted auditing standards as determined by the AICPA. At the discretion of the director, the requirement of an audit may be waived.

(2) The annual audit report shall be filed not later than June 30 and shall be considered part of the captive insurer's annual report of financial condition except with respect to the date by which it must be filed with the director. The director may grant an extension of time for filing the annual audit.

(3) The annual audit shall include all of the following:

(a) Opinion of an Independent Certified Public Accountant. The opinion of the independent certified public accountant shall:

(A) Cover all years presented; and

(B) Be addressed to the captive insurer on stationery of the accountant showing the address of issuance, shall bear original manual signatures and shall be dated.

(b) Internal Controls Letter.

(A) In accordance with AU Section 319 of the Professional Standards of the AICPA, Considerations of Internal Controls in a Financial Statement Audit, the independent certified public accountant shall obtain an understanding of internal controls sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to 836-029-0030, the independent certified public accountant shall consider (as that term is defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement) the most recently available report in planning and performing the audit of the financial statements.

(B) Based on such understanding, the accountant shall include a letter about the internal controls of the captive insurer relating to the methods and procedures used in the securing of assets and the reliability of the financial records, including but not limited to, controls as the system of authorization and approval and the separation of duties. The review shall be conducted in accordance with generally accepted auditing standards and procedures.

(c) Accountant's Letter of Qualifications. For a captive insurer that has an annual direct written premium of $500 million or more, the accountant shall furnish the captive insurer, for inclusion in the filing of the audited annual report, a letter stating:

(A) That the accountant is independent with respect to the captive insurer and conforms to the standards of the profession as contained in the Code of Professional Ethics and pronouncements of the AICPA and pronouncements of the Financial Accounting Standards Board;

(B) The general background and experience of the staff engaged in the audit, including their experience in auditing captive or other insurance companies;

(C) That the accountant understands that the audited annual report and the accountant’s opinions on the audited annual report will be filed in compliance with this rule.

(D) That the accountant consents to the requirements of OAR 836-029-0055;

(E) That the accountant consents and agrees to make the work papers available for review by the director and any designee or agent of the director; and

(F) That the accountant is properly licensed by an appropriate state licensing authority.

(d) Financial Statements. The financial statements required shall include all of the following:

(A) Balance sheet;

(B) Statement of gain or loss from operations;

(D) Statement of cash flow;

(E) Statement of changes in capital paid up, gross paid in and contributed surplus and unassigned funds (surplus); and

(F) Notes to financial statements required by GAAP including:

(i) A reconciliation of differences, if any, between the audited financial report and the statement or form filed with the director;

(ii) A summary of ownership and relationship of the captive insurer and all affiliated corporations or companies insured by the captive;

(iii) A narrative explanation of all material transactions with the captive insurer. For purposes of this provision, no transaction shall be deemed material unless it involves three percent or more of a captive insurer's admitted assets as of the immediately preceding December 31; and

(iv) A reconciliation of differences between capital paid up, gross paid in and contributed surplus and unassigned funds (surplus) prepared on a GAAP and Statutory Accounting basis.

(e) Certification of Loss Reserves and Loss Expense Reserves of the Captive Insurer's Opining Actuary. The annual audit shall include an actuarial opinion as to the reasonableness of the captive insurer's loss reserves and loss expense reserves.

(A) The individual who certifies as to the reasonableness of reserves shall be approved by the director and shall be a Fellow or Associate of the Casualty Actuarial Society and a member in good standing of the American Academy of Actuaries, for property and casualty companies.

(B) The director may waive the requirement under this section to include an actuarial opinion as to the reasonableness of the captive insurer's loss reserves and loss expense reserves.

(4) As used in this rule, “AICPA” means American Institute of Certified Public Accountants.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0030 Management’s Report of Internal Control over Financial Reporting

(1) Each insurer required to file an audited financial report pursuant to OAR 836-029-0015 that has annual direct written and assumed premiums of $500,000,000 or more, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, shall prepare a report of the insurer’s or group of insurers’ internal control over financial reporting. The insurer shall file the report with the director, along with the Communication of Internal Control Related Matters Noted in an Audit, as described in 836-029-0035. The Management’s Report of Internal Control over Financial Reporting shall be as of December 31 immediately preceding.

(2) A Management’s Report of Internal Control over Financial Reporting must include:

(a) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;

(c) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;

(d) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;

(e) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding;

(f) A statement regarding the inherent limitations of internal control systems; and

(g) Signatures of the chief executive officer and the chief financial officer (or equivalent position and title).

(3) For a Management’s Report of Internal Control over Financial Reporting under section (2) of this rule, management may not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its Internal control over financial reporting

(4) Management shall document and make available upon financial condition examination the basis upon which its assertions, required in section (2) of this rule, are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities. In addition:

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0035 Communication of Internal Control Related Matters Noted in an Audit

(1) In addition to the annual audited financial report, each captive insurer that has annual direct written premium of $500,000,000 or more shall furnish the director with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit. The communication must be prepared by the accountant not later than the 60th day after the filing of the annual audited financial report and shall contain a description of any unremediated material weakness (as the term material weakness is defined by Statement on Auditing Standard 60, Communication of Internal Control Related Matters Noted in an Audit, or its replacement) as of December 31 immediately preceding (so as to coincide with the audited financial report required by OAR 836-029-0025 in the captive insurer’s internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication must so state.

(2) The captive insurer shall submit with the report required under section (1) of this rule a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant's report.

(3) The captive insurer shall maintain information about significant deficiencies communicated by the independent certified public accountant. The information must be made available to the examiner conducting a financial condition examination for review and kept in such a manner as to remain confidential.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0040 Designation of Service Providers

(1) A certified public accountant retained to conduct the independent annual audit must be selected from the list of approved certified public accounting firms or individual certified public accountants maintained by the Director of the Department of Consumer and Business Services.

(2) A captive insurer that terminates the appointment of an independent certified public accountant retained to conduct the annual audit required in this rule shall report the name and address of the certified public accountant in writing to the director within ninety days after the appointment is terminated and shall within the same period report the name and address of the certified public accountant that is subsequently retained.

(3) A captive manager hired to manage a captive insurer must be selected from the list of approved captive managers maintained by the Director of the Department of Consumer and Business Services.

(4) A captive insurer that terminates the appointment of a captive manager hired to manage a captive insurer shall report the name and address of the captive manager in writing to the director within ninety days after the appointment is terminated and shall within the same period report the name and address of the captive manager that is subsequently retained.

(5) An actuary hired to opine on the reserves of a captive insurer must be selected from the list of approved actuaries maintained by the Director of the Department of Consumer and Business Services.

(6) A captive insurer that terminates the appointment of an actuary hired to opine on the reserves of a captive insurer shall report the name and address of the actuary in writing to the director within ninety days after the appointment is terminated and shall within the same period report the name and address of the actuary that is subsequently retained.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0045 Notification of Material Misstatement of Financial Condition

A captive insurer shall require its certified public accountant to immediately notify an officer and all members of the board of directors of the captive insurer in writing of any determination by the independent certified public accountant that the captive insurer has materially misstated its financial condition in its report to the Director of the Department of Consumer and Business Services. The captive insurer shall furnish the notification to the director within five working days after receiving the notification from its certified public accountant.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0050 Additional Deposit Requirement

(1) Whenever the Director of the Department of Consumer and Business Services determines that the financial condition of a captive insurer warrants additional security, the director may require the captive insurer to deposit with the director, in trust for the captive insurer, cash, securities approved by the director, or an irrevocable letter of credit issued by a bank chartered by the State of Oregon or a member bank of the Federal Reserve System with the director.

(2) The director shall return the deposit or letter of credit of a captive insurer if the captive insurer ceases to do any business only after being satisfied that all obligations of the captive insurer have been discharged.

(3) With the approval of the director a captive insurer may receive interest or dividends from the deposit or exchange the deposits for others of equal value.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0055 Availability and Maintenance of Working Papers of the Independent Certified Public Accountant

Availability and Maintenance of Working Papers of the Independent Certified Public Accountant

(1) Each captive insurer shall require its independent certified public accountant to make all work papers prepared in the conduct of the audit of the captive insurer available for review by the Director of the Department of Consumer and Business Services or his appointed agent. The captive insurer shall require that the accountant retain the audit work papers for a period of not less than five years after the end of the report period.

(2) The review by the director shall be considered an official investigation by the director and all working papers obtained during the course of such investigation shall be confidential business papers and shall be classified as business confidential protected records. The captive insurer shall require that the independent certified public accountant provide photocopies to the department of any of the working papers that the department considers relevant. The department may retain any photocopies of working papers.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0060 Documentation Required to be Held in Oregon by Licensed Captives

(1) Any captive insurer authorized by the Director of the Department of Consumer and Business Services, shall maintain and make ready for inspection and examination by the director, or the director's agent, any and all documents pertaining to the formation, operation, management, finances, insurance and reinsurance of the captive insurer.

(2) Original documents may be kept in the offices of the captive insurer's captive manager, the captive insurer's parent or the captive insurer itself. Accurate and complete copies shall be held in an office located in Oregon designated by the captive insurer and approved by the director as part of the application process.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0065 Reinsurance

(1) Any captive insurer authorized to do business in this state may take credit for reserves on risks ceded to a reinsurer subject to the following limitations:

(a) No credit shall be allowed for reinsurance where the reinsurance contract does not result in the transfer of the risk or liability to the reinsurer.

(b) No credit shall be allowed, as an asset or a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding insurer under the contract reinsured without diminution because of the insolvency of the ceding insurer.

(2) Reinsurance under this section shall be effected through a written agreement of reinsurance setting forth the terms, provisions and conditions governing such reinsurance.

(3) A captive insurer shall file with the Director of the Department of Consumer and Business Services complete copies of all reinsurance treaties and contracts for prior approval by the director. Any amendments to reinsurance agreements must be submitted to the director for prior approval.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0070 Service Providers

A person may not act in or from this state, as a service provider, including but not limited to as a captive insurance manager, producer, actuary or certified public accountant, for a captive insurer without the authorization of the Director of the Department of Consumer and Business Services. Application for such authorization must be on a form prescribed by the director. The application shall include information regarding the service provider’s character, reputation and experience, relative to captive insurer. Any person who solicits business entities to form a captive insurer must be licensed as a producer under ORS 744.052 to 744.089.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0075 Directors

(1) Every captive insurer shall report any change in its executive officers or directors to the Director of the Department of Consumer and Business Services within thirty days after a change is made and include in its report, a biographical affidavit of any new executive officer or director.

(2) No director, officer or employee of a captive insurer shall, except on behalf of the captive insurer, accept, or be the beneficiary of, any fee, brokerage, gift or other emolument because of any investment, loan, deposit, purchase, sale, payment or exchange made by or for the captive insurer. The person may receive only reasonable compensation for necessary services rendered to the captive insurer in the person’s usual private, professional or business capacity.

(3) Any profit or gain received by or on behalf of any person in violation of this section shall inure to and be recoverable by the captive insurer.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0080 Conflict of Interest

(1) Each captive insurer licensed in Oregon shall adopt a conflict of interest statement for officers, directors and key employees. The statement shall disclose that the individual has no outside commitments, personal or otherwise, that would divert the person from the duty to further the interests of the captive insurer the person represents but this shall not preclude a person from being a director or officer in more than one insurance captive insurer.

(2) Each officer, director and key employee shall file a yearly disclosure with the board of directors.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0085 Acquisition of Control of or Merger with Domestic Captive insurer

The acquisition of control of, or merger of, a domestic captive insurer shall be regulated in accordance with section 9, chapter 84, Oregon Laws 2012. However, the Director of the Department of Consumer and Business Services may waive or modify the requirements for public notice and hearing when the director concludes the public hearing is not necessary due to limited public interest in the change of control.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0090 Suspension or Revocation

(1) The Director of the Department of Consumer and Business Services may by order suspend or revoke the license of a captive insurer or place the captive insurer on probation on the following grounds:

(a) The captive insurer has not commenced business according to its plan of operation within two years of being authorized;

(b) The captive insurer has ceased to carry on insurance business in or from within Oregon;

(d) The captive insurer uses methods that render the operation of the captive insurer detrimental to the public or the policyholders of the captive insurer according to standards set forth in OAR 836-029-0095 or

(e) Any reason provided in section 16, chapter 84, Oregon Laws 2012.

(2) Before the director takes any action set forth under section 16, chapter 84, Oregon Laws 2012 the director shall give the captive insurer notice in writing of the grounds on which the director proposes to act, and shall provide an opportunity for hearing on the proposed action in accordance with the provision applicable to a contested case proceeding in ORS 183.310 to 183.490.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0095 Standards

The director may consider the following standards, either singly or in combination of two or more, to determine whether the continued operation of any captive insurer transacting insurance in this state might be determined to be hazardous to the policyholders, its creditors or the general public:

(1) Adverse findings reported in financial condition and audit reports, and actuarial opinions, reports or summaries.

(2) Whether the captive insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the captive insurer, when considered in light of the assets held by the captive insurer with respect to such reserves and related actuarial items including but not limited the investment earnings on such assets, and the considerations anticipated to be received and retained under such policies and contracts.

(3) The ability of an assuming reinsurer to perform and whether the captive insurer's reinsurance program provides sufficient protection for the captive insurer's remaining capital and surplus after taking into account the captive insurer's cash flow and the classes of business written as well as the financial condition of the assuming reinsurer.

(4) Whether the captive insurer's operating loss in the last 12-month period or any shorter period of time, including but not limited to net capital gain or loss, change in non-admitted assets and cash dividends paid to shareholders, is greater than 50 percent of the captive insurer's remaining capital and surplus in excess of the minimum required.

(5) Whether the captive insurer’s operating loss in the last 12-month period or any shorter period of time, excluding net capital gains, is greater than 20 percent of the captive insurer’s remaining surplus as regards policyholders in excess of the minimum required.

(6) Whether a reinsurer or obligor, or any entity within the captive insurer’s insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations and which, in the opinion of the director may affect the solvency of the captive insurer.

(7) Contingent liabilities, pledges or guaranties that either individually or collectively involve a total amount that in the opinion of the director may affect the solvency of the captive insurer.

(8) Whether any "controlling person" of a captive insurer is delinquent in the transmitting to, or payment of, net premiums to the captive insurer.

(9) The age and collectability of receivables.

(10) Whether the management of a captive insurer, including officers, directors or any other person who directly or indirectly controls the operation of the captive insurer, fails to possess and demonstrate the competence, fitness and reputation determined by the director to be necessary to serve the captive insurer in such position.

(11) Whether management of a captive insurer has failed to respond to inquiries relating to the condition of the captive insurer or has furnished false and misleading information concerning an inquiry.

(12) Whether the captive insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the director.

(13) Whether management of an captive insurer either has filed a false or misleading sworn financial statement or has released a false or misleading financial statement to lending institutions or to the general public, or has made a false or misleading entry, or has omitted an entry of material amount in the books of the captive insurer.

(14) Whether the captive insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner.

(15) Whether the captive insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems, or both.

(16) Whether management has established reserves that do not comply with minimum standards established by state insurance laws, regulations, statutory accounting standards, sound actuarial principles and standards of practice.

(17) Whether management persistently engages in material under reserving that results in adverse development.

(18) Whether transactions among affiliates, subsidiaries or controlling persons for which the captive insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the captive insurer’s ability to meet its outstanding obligations as they mature.

(19) Any other finding determined by the director to be hazardous to the captive insurer’s policyholders, creditors or general public.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0100 Director's Authority

(1) For the purposes of making a determination of the financial condition of a captive insurer under OAR 836-029-0090 to 836-029-0100, the director may do one or more of the following:

(a) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding;

(b) Make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates;

(d) Increase the captive insurer's liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the captive insurer will be called upon to meet the obligation undertaken within the next 12-month period.

(2) An order of the director under ORS 731.385 regarding a foreign captive insurer may be limited to the extent provided by statute.

(3) In addition to the requirements the director may impose under ORS 731.385, if the director determines that the continued operation of the captive insurer licensed to transact business in this state may be hazardous to the policyholders or the general public, the director may require the captive insurer to:

(a) File reports in a form acceptable to the director concerning the market value of the captive insurer’s assets;

(b) Document the adequacy of premium rates in relation to the risks insured;

(d) Correct corporate governance practice deficiencies, and adopt and utilize the governance practices acceptable to the director; or

(e) Provide a business plan to the director in order to continue to transact business in this state.

(4) Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, the director may include as a requirement under section (3) of this rule, any rate adjustment for any non-life insurance product written by the captive insurer that the director considers necessary to improve the financial condition of the captive insurer.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0105 Change of Information in Initial Application

(1) Any material change in a captive insurer's business plan that is filed with the Director of the Department of Consumer and Business Services at the time of initial application and any subsequent amendment of the plan requires prior approval of the director.

(2) Any change in any other information filed with the initial application must be filed with the director within sixty days after the change, but does not require prior approval.

(3) The captive insurer shall immediately notify the director upon making changes in board members or officers of the captive insurer.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0110 Application

(1) In order to form a domestic captive insurer a person shall apply to the director of the Department of Consumer and Business Services for a permit to organize using the form, “Application for Permit to Organize Captive Insurer With or Without Capital Stock” as set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov. The written application for permit to organize, including all required attachments and information, must be submitted to the department in accordance with instructions provided with the application.

(2) In order to be authorized to transact insurance as a captive insurer a person shall apply to the director for authority to conduct a captive insurance using the form, "Application to Form a Captive insurer" as set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov. The application materials must:

(a) Include one complete copy of the application including forms, attachments, exhibits and all other papers and documents filed as a part thereof, accompanied by the appropriate filing fee filed in writing or online with the director. The written application, including all required attachments and information, must be submitted to the department in accordance with instructions provided with the application.

(b) Be signed in the manner prescribed in the application. If the signature of any person is affixed pursuant to a power of attorney or other similar authority, a copy of the power of attorney or other authority must also be filed with the application.

(c) Include with the application a business plan with supporting data and all other information required by the application.

(d) Include a feasibility study demonstrating the feasibility of the business plan of the captive insurer. The department may test the feasibility of the study by examining the captive insurer's corporate records, if any, including but not limited to the insurer’s charter, bylaws and minute books, verification of capital and surplus, verification of principal place of business, determination of assets and liabilities, and any other factor the director considers necessary.

History

Statutory/Other Authority: ORS 731.244, Sec. 4 (Enrolled SB 1547) & Or Laws 2012, ch 84
Statutes/Other Implemented: Or Laws 2012, ch 84 & Sec. 2-22 (Enrolled SB 1547)
ID 10-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0115 Fees

(1) At the time an applicant submits an application under OAR 836-029-0110 for a permit to organize a captive insurer or for a certificate of authority to operate as a captive insurer the applicant shall pay to the Director of the Department of Consumer and Business Services a nonrefundable fee as set forth in 836-009-0007 for processing the initial application for a permit to organize or for a certificate of authority.

(2) In addition, each captive insurer that is authorized by the director shall pay prior to April 1 an annual continuation fee, without proration, for the year following the year during which the certificate of authority was originally issued and each year thereafter in the amount established in OAR 836-009-0007.

History

Statutory/Other Authority: ORS 731.244, 2012 OL Ch. 84 & Sec. 4 (Enrolled SB 1547)
Statutes/Other Implemented: 2012 OL Ch. 84 & Sec. 2-22 (Enrolled SB 1547)
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Or. Admin. R. 836-029-0120 Authorized Forms

(1) The following forms must be used for any applicant applying for a certificate of authority as a new captive insurer:

(a) "Application for Permit to Organize Captive Insurer With or Without Capital Stock;”

(b) “Application to Form a Captive insurer;"

(d) "Oregon Division of Financial Regulation Captive Insurer Reinsurance Exhibit;"

(e) "Oregon Approved Irrevocable Letter of Credit" if applicable;

(f) "Statement of Economic Benefit to the State of Oregon;" and

(g) "Appointment of a Registered Resident Agent as Attorney to Accept Service of Process."

(2) Except for a captive insurance producer applying to be licensed as a producer pursuant to ORS 744.052 to 744.089, the following forms must be used when applying to become an approved captive insurer service provider:

(a) "Application for Placement on Approved Captive Insurer Management Firm List;"

(b) "Application to Certify Loss and Expense for Captive insurers Captive Actuary Application;"

(d) “Application for Authorization as Producer for Captive insurers.”

(3) All captive insurers must use the "Captive Insurer Annual Statement Form."

(4) The forms required in sections (1) to (3) of this section are set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, Sec. 4 (Enrolled SB 1547) & Or Laws 2012, ch 84
Statutes/Other Implemented: Or Laws 2012, ch 84 & Sec. 2-22 (Enrolled SB 1547)
ID 29-2024, minor correction filed 08/16/2024, effective 08/16/2024
ID 4-2023, minor correction filed 05/19/2023, effective 05/19/2023
ID 17-2012, f. & cert. ef. 11-7-12
ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12

Division 31 ACCOUNTING AND INVESTMENTS (ORS CHAPTER 733); REHABILITATION AND LIQUIDATION OF INSURERS (ORS CHAPTER 734)

Or. Admin. R. 836-031-0200 Scope, Authority; Statutes Implemented; Application

(1) OAR 836-031-0200 to 836-031-0300 apply to all individual and group health insurance coverages except credit insurance and establish minimum standards for the following three categories of health insurance reserves:

(a) Claim reserves, under OAR 836-031-0230;

(b) Premium reserves, under OAR 836-031-0240; and

(2) OAR 836-031-0200 to 836-031-0300 are adopted pursuant to the authority of ORS 731.244 and 733.080 for the purpose of implementing 733.080.

(3) Reserving requirements under OAR 836-031-0200 to 836-031-0300 must be incorporated in the annual statement of an insurer for the year ending December 31, 1995, and for each year thereafter.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0210 Definitions, Application and Explanation of Technical Terms Used

As used in OAR 836-031-0200 to 836-031-0300, the following terms have the following definitions and applications and are explained as follows:

(1) “Annual claim cost” means the net annual cost per unit of benefit before the addition of claim settlement expenses, other policy expenses or a margin for profit or contingencies.

(2) “Date of disablement” means the earliest date on which the insured is considered as being disabled under the definition of disability in the contract, based on a doctor’s evaluation or other evidence. Normally this date will coincide with the start of any elimination period.

(3) “Elimination period” means a number of days, weeks or months specified in a policy, starting at the beginning of each period of loss, during which no benefits are payable.

(4) “Gross premium” means the amount of premium charged by the insurer and includes the net premium (based only on claim-cost) for the risk, together with any loading for expenses, profit or contingencies.

(5) “Group insurance” includes blanket insurance and any other forms of group insurance, and franchise insurance.

(6) “Level premium” means a premium calculated to remain unchanged throughout either the lifetime of the policy or some shorter projected period of years. The premium need not be guaranteed. If the premium is not guaranteed, although it is calculated to remain level, it may be changed if any of the assumptions on which it was based is revised at a later time.

(7) “Long-term care insurance” has the meaning given that term in ORS 743.652.

(8) “Modal premium” means the premium paid according to the billing frequency selected in the contract, which could be annual, semi-annual quarterly, monthly or weekly.

(9) “Negative reserve” means a negative value of the terminal reserve, which occurs when the values of the benefits are decreasing with advancing age or duration.

(10) “Preliminary term reserve method” means the method of valuation in which the valuation net premium for each year falling within the preliminary term period is exactly sufficient to cover the expected incurred claims of that year, so that the terminal reserves will be zero at the end of the year. At the end of the preliminary term period, a new constant valuation net premium (or stream of changing valuation premiums) becomes applicable such that the present value of all such premiums is equal to the present value of all claims expected to be incurred following the end of the preliminary term period.

(11) “Reserve” includes all items of benefit liability, whether in the nature of incurred claim liability or in the nature of contract liability relating to future periods of coverage, and whether the liability is accrued or unaccrued.

(12) “Terminal reserve” means the reserve at the end of a contract year equal to the present value of benefits expected to be incurred after that contract year minus the present value of future valuation net premiums.

(13) “Unearned premium reserve” means the reserve that values that portion of the premium paid or due to the insurer that is applicable to the period of coverage extending beyond the valuation date.

(14) “Valuation net modal premium” means the modal fraction of the valuation net annual premium that corresponds to the gross modal premium in effect on any contract to which contract reserves apply. Thus if the mode of payment in effect is quarterly, the valuation net modal premium is the quarterly equivalent of the valuation net annual premium.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0220 Principles Governing Reserves

(1) When an insurer determines that health insurance reserves meeting the minimum standards specified in OAR 836-031-0200 to 836-031-0300 are inadequate, increased reserves shall be held and shall be considered the minimum reserves for that insurer.

(2) With respect to any block of contracts, or with respect to an insurer’s health insurance business as a whole, a prospective gross premium valuation is the ultimate test of reserve adequacy as of a given valuation date. Such a gross premium valuation must take into account, for all contracts in force, including those in a claims status or in a continuation of benefits status on the valuation date, the present value as of the valuation date of the following:

(a) All expected benefits unpaid;

(b) All expected expenses unpaid; and

(3) A gross premium valuation described in section (2) of this rule is to be performed whenever a significant doubt exists as to reserve adequacy with respect to any major block of contracts, or with respect to the insurer’s health insurance business as a whole. In the event inadequacy is found to exist, immediate loss recognition shall be made and the reserves restored to adequacy. Adequate reserves (inclusive of claim, premium and contract reserves, if any) by this standard shall be held with respect to all contracts, regardless of whether contract reserves are required for such contracts under OAR 836-031-0200 to 836-031-0300.

(4) Whenever minimum reserves as defined in OAR 836-031-0200 to 836-031-0300 exceed reserve requirements as determined by a prospective gross premium valuation, such minimum reserves remain the minimum requirement under OAR 836-031-0200 to 836-031-0300.

(5) Adequacy of an insurer’s health insurance reserves is determined on the basis of all three categories of reserves, including claim reserves, premium reserves and contract reserves, combined.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0230 Claim Reserves

(1) The following provisions apply to claim reserves generally:

(a) An insurer must maintain claim reserves for all incurred but unpaid claims on all health insurance policies;

(b) An insurer must maintain appropriate claim expense reserves with respect to the estimated expense of settlement of all incurred but unpaid claims; and

(c) An insurer must test all such reserves for prior valuation years for adequacy and reasonableness using claim runoff schedules in accordance with the statutory financial statement, including consideration of any residual unpaid liability.

(2) The following minimum standards apply to claim reserves for disability income insurance:

(a) Interest. The maximum interest rate for claim reserves is specified in OAR 836-031-0280;

(b) Morbidity. Minimum standards with respect to morbidity are those specified in OAR 836-031-0270 except that at the option of the insurer:

(A) For claims with a duration from date of disablement of less than two years, reserves may be based on the experience of the insurer, if such experience is considered credible, or upon other assumptions that to place a sound value on the liabilities; and

(B) For group disability income claims with a duration from date of disablement of more than two years but less than five years, reserves may, with the approval of the Director, be based on the experience of the insurer. The request for such approval of a plan of modification to the reserve basis must include:

(i) An analysis of the credibility of the experience;

(ii) A description of how the experience of the insurer is proposed to be used in setting reserves;

(iii) A description and quantification of the margins to be included;

(iv) A summary of the financial impact that the proposed plan of modification would have had on the last filed annual statement of the insurer;

(v) A copy of the approval of the proposed plan of modification by the commissioner of the state of domicile; and

(vi) Any other information requested by the Director; and

(c) Duration of disablement. For contracts with an elimination period, the duration of disablement must be measured as dating from the time that benefits would have begun to accrue had there been no elimination period.

(3) The following minimum standards apply to claim reserves for all other benefits:

(a) Interest. The maximum interest rate for claim reserves is specified in OAR 836-031-0280;

(b) Morbidity or other contingency. The reserve must be based on the experience of the insurer, if such experience is considered credible, or upon other assumptions that place a sound value on the liabilities.

(4) Any generally accepted or reasonable actuarial method or combination of methods may be used to estimate all claim liabilities. The methods used for estimating liabilities generally may be aggregate methods, or various reserve items may be separately valued. Approximations based on groupings and averages may also be employed. Adequacy of the claim reserves, however, shall be determined in the aggregate.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0240 Premium Reserves

(1) The following provisions apply to premium reserves generally:

(a) An insurer must maintain unearned premium reserves for all contracts with respect to the period of coverage beyond the date of valuation for which premiums, other than premiums paid in advance, have been paid;

(b) If premiums due and unpaid are carried as an asset, an insurer must treat such premiums as premiums in force, subject to unearned premium reserve determination for which premiums, other than premiums paid in advance, have been paid. An insurer must carry the value of unpaid commissions, premium taxes and the cost of collection associated with due and unpaid premiums as an offsetting liability;

(c) The gross premiums paid in advance for a period of coverage commencing after the next premium due date that follows the date of valuation may be appropriately discounted to the valuation date and shall be held either as a separate liability or as an addition to the unearned premium reserve that would otherwise be required as a minimum.

(2) The following are minimum standards for unearned premium reserves:

(a) The minimum unearned premium reserve with respect to any contract is the pro rata unearned modal premium that applies to the premium period beyond the valuation date. Such premium must be determined on the basis of:

(A) The valuation net modal premium on the contract reserve basis applying to the contract; or

(B) The gross modal premium for the contract if no contract reserve applies.

(b) Notwithstanding subsection (a) of this section, the sum of the unearned premium and contract reserves for all contracts of the insurer subject to contract reserve requirements shall not be less than the gross modal unearned premium reserve on all such contracts as of the date of valuation. Such sum shall never be less than the expected claims for the period beyond the valuation date represented by such unearned premium reserve, to the extent not provided for elsewhere.

(3) An insurer may employ suitable approximations and estimates, including but not limited to groupings, averages and aggregate estimation in computing premium reserves. Such approximations or estimates must be tested periodically to determine their continuing adequacy and reliability.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0250 Contract Reserves

(1) The following provisions apply to contract reserves generally:

(a) Unless otherwise specified in subsection (b) of this section (1), an insurer must maintain contract reserves for:

(A) All individual and group contracts with which level premiums are used; or

(B) All individual and group contracts with respect to which, owing to the gross premium pricing structure at issue, the value of the future benefits at any time exceeds the value of future valuation net premiums at that time.The values specified in this paragraph (B) of this subsection shall be determined on the basis specified in section (2) of this rule.

(b) Contracts that cannot be continued after one year from issue do not require a contract reserve;

(d) The methods and procedures for contract reserves must be consistent with those for claim reserves for any contract, or else appropriate adjustment must be made when necessary to assure provision for the aggregate liability. The definition of the date of incurral must be the same in both determinations.

(2) The following are minimum standards for contract reserves:

(a) Morbidity or other contingency. Minimum standards with respect to morbidity are those set forth in OAR 836-031-0270. Valuation net premiums used under each contract must have a structure consistent with the gross premium structure at issue of the contract as this relates to advancing age of insured, contract duration and period for which gross premiums have been calculated. Contracts for which tabular morbidity standards are not specified in 836-031-0270 shall be valued using tables established for reserve purposes by a qualified actuary and acceptable to the Director;

(b) Interest. The maximum interest rate is specified in OAR 836-031-0280;

(c) Termination rates. Termination rates used in the computation of reserves shall be on the basis of a mortality table as specified in OAR 836-031-0290, except provided in this subsection. When a morbidity standard specified in 836-031-0270 is on an aggregate basis, the morbidity standard may be adjusted to reflect the effect of insurer underwriting by policy duration. The adjustments must be appropriate to the underwriting and are subject to prior approval by the Director. Total termination rates that exceed the specified mortality table rates may be used for the following benefits, but the total termination rates used may still not exceed the lesser of 80 percent of the total termination rate used in the calculation of the gross premiums or eight percent. The specified benefits are as follows:

(A) Contracts for which premium rates are not guaranteed;

(B) For return of premium; or

(d) Reserve method:

(A) For insurance, excepting long-term care insurance and return of premium or other deferred cash benefits, the minimum reserve is the reserve calculated on the two-year full preliminary term reserve method; that is, under which the terminal reserve is zero at the first and also the second contract anniversary;

(B) For long-term care insurance, the minimum reserve is the reserve calculated on the one-year full preliminary term reserve method; and

(i) On the one year preliminary term reserve method if such benefits are provided at any time before the 20th anniversary;

(ii) On the two year preliminary term reserve method if such benefits are provided only on or after the 20th anniversary;

(iii) The preliminary term reserve method may be applied only in relation to the date of issue of a contract. Reserve adjustments introduced later, as a result of rate increases, revisions in assumptions (e.g., projected inflation rates) or for other reasons, are to be applied immediately as of the effective date of adoption of the adjusted basis.

(e) Negative reserves. Negative reserves on any benefit may be offset against positive reserves for other benefits in the same contract, but the total contract reserve with respect to all benefits combined may not be less than zero.

(3) The following provisions apply with regard to alternative valuation methods and assumptions generally:

(a) If the contract reserve on all contracts to which an alternative method or basis is applied is not less in the aggregate than the amount determined according to the applicable standards specified in sections (1) and (2) of this rule, an insurer may use any reasonable assumptions as to interest rates, termination and mortality rates, and rates of morbidity or other contingency; and

(b) Subject to subsection (a) of this section, an insurer may employ methods other than the methods stated in sections (1) and (2) of this rule in determining a sound value of its liabilities under such contracts. The methods may include but are not limited to the following:

(A) The net level premium method;

(B) The one-year full preliminary term reserve method;

(D) The use of approximations such as those involving age groupings, groupings of several years of issue, average amounts of indemnity, grouping of similar contract forms;

(E) The computation of the reserve for one contract benefit as a percentage of, or by other relation to, the aggregate contract reserves exclusive of the benefit or benefits so valued; and

(F) The use of a composite annual claim cost for all or any combination of the benefits included in the contracts valued.

(4) The following apply with regard to tests for adequacy and reasonableness of contract reserves:

(a) Annually, an insurer shall make an appropriate review of the prospective contract liabilities of the insurer on contracts valued by tabular reserves to determine the continuing adequacy and reasonableness of the tabular reserves, giving consideration to future gross premiums. Subject to the minimum standards of section (2) of this rule, the insurer shall make appropriate increments to such tabular reserves if such tests indicate that the basis of such reserves is no longer adequate.

(b) In the event an insurer has a contract or a group of related similar contracts for which future gross premiums will be restricted by contract, insurance department regulations or for other reasons, such that the future gross premiums reduced by expenses for administration, commissions, and taxes will be insufficient to cover future claims, the insurer shall establish contract reserves for such shortfall in the aggregate.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0260 Reinsurance

Increases to or credits against reserves held that arise because of reinsurance assumed or reinsurance ceded must be determined in a manner consistent with OAR 836-031-0200 to 836-031-0300 and also with all applicable provisions of the reinsurance contracts that affect the liabilities of the insurer.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0270 Specific Standards for Morbidity

The following standards apply to morbidity:

(1) Minimum morbidity standards for valuation of specified benefits provided in individual health insurance policies are as follows:

(a) For disability income benefits due to accident or sickness:

(A) Contract reserves:

(i) Contracts issued on or after January 1, 1965 and prior to January 1, 1987: The 1964 Commissioners Disability Table (64 CDT) or, at the option of the insurer, a more recent table approved by the Director;

(ii) Contracts issued on or after January 1, 1995 and prior to January 1, 2017: the 1985 Commissioners Individual Disability Tables A (85CIDA) or the 1985 Commissioners Individual Disability Tables B (85CIDB). Each insurer shall elect, with respect to all individual contracts issued in any one statement year, whether it will use Tables A or Tables B as the minimum standard. An insurer may, however, elect to use the other tables with respect to any subsequent statement year;

(iii) Contracts issued during 1987 through 1994: Optional use of either the 1964 Table or the 1985 Tables as provided in paragraph (ii) of this subsection;

(iv) Contracts issued on or after January 1, 2017 and prior to January 1, 2020: the 1985 Tables as provided in paragraph (ii) of this subsection or, at the election of the insurer, the 2013 Individual Disability Income (IDI) Valuation Table (with modifiers as described in Actuarial Guideline L); and,

(v) Contracts issued on or after January 1, 2020: the 2013 IDI Valuation Table (with modifiers as described in Actuarial Guideline L).

(B) Claim reserves: The minimum morbidity standard in effect for contract reserves on currently issued contracts, as of the date the claim is incurred: provided, however, an insurer may make a one-time election to apply the minimum standard then in effect to all open claims.

(b) For hospital benefits, surgical benefits and maternity benefits (scheduled benefits or fixed time period benefits only):

(A) Contract reserves:

(i) Contracts issued on or after January 1, 1955, and before January 1, 1982: The 1956 Intercompany Hospital-Surgical Tables; and

(ii) Contracts issued on or after January 1, 1982: the 1974 Medical Expense Tables, Table A, Transactions of the Society of Actuaries, Volume XXX, pg. 63. Refer to the paper (in the same volume, pg. 9) to which this table is appended, including its discussions, for methods of adjustment for benefits not directly valued in Table A: Development of the 1974 Medical Expense Benefits, Houghton and Wolf.

(B) Claim reserves: No specific standard. See subsection (e) of this section.

(A) Contract reserves:

(i) Contracts issued on or after January 1, 1986 and prior to January 1, 2018: the 1985 NAIC Cancer Claim Cost Tables (1985 CCCT);

(ii) Contracts issued on or after January 1, 2018 and prior to January 1, 2019: the 1985 CCCT or, at the election of the insurer, the 2016 Cancer Claim Cost Valuation Tables (2016 CCCVT); and,

(iii) Contracts issued on or after January 1, 2019: the 2016 CCCVT.

(B) Claim reserves: No specific standard. See subsection (e) of this section.

(d) Accidental death benefits:

(A) Contract reserves: Contracts issued on or after January 1, 1965: the 1959 Accidental Death Benefits Table.

(B) Claim reserves: Actual amount incurred.

(e) Other individual contract benefits:

(A) Contract reserves: For all other individual contract benefits, morbidity assumptions are to be determined by using tables established for reserve purposes by a qualified actuary and acceptable to the Director;

(B) Claim reserves: For all benefits other than disability, claim reserves are to be determined by using tables established for reserve purposes by a qualified actuary and acceptable to the Director.

(2) Minimum morbidity standards for valuation of specified benefits for group health insurance policies are as follows:

(a) For disability income benefits due to accident or sickness:

(A) Contract reserves:

(i) Contracts issued prior to January 1, 1995: Use of the 87CGDT is optional;

(ii) Contracts issued on or after January 1, 1995 and prior to October 1, 2014: the 1987 Commissioners Group Disability Income Table (87CGDT);

(iii) Contracts issued on or after October 1, 2014 and prior to January 1, 2017: the 87CGDT or, at the election of the insurer, the 2012 Group Long-Term Disability (GLTD) Valuation Table (with consideration of Actuarial Guideline XLVII); and

(iv) Contracts issued on or after January 1, 2017: the 2012 GLTD Valuation Table (with consideration of Actuarial Guideline XLVII).

(B) Claim reserves: The minimum morbidity standard in effect for contract reserves on currently issued contracts, as of the date the claim is incurred; provided, however, an insurer may make a one-time election to apply the minimum standard then in effect to all open claims.

(b) Other group contract benefits:

(A) Contract reserves: For all other group contract benefits, morbidity assumptions are to be determined by using tables established for reserve purposes by a qualified actuary and acceptable to the Director;

(B) Claim reserves: For all benefits other than disability, claim reserves are to be determined by using tables established for reserve purposes by a qualified actuary and acceptable to the Director.

History

Statutory/Other Authority: ORS 731.244 & ORS 733.080
Statutes/Other Implemented: ORS 733.080
ID 35-2018, amend filed 12/19/2018, effective 12/19/2018
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0280 Specific Standards for Interest

(1) For contract reserves, the maximum interest rate is the maximum rate permitted by law in the valuation of whole life insurance issued on the same date as the health insurance contract.

(2) For claim reserves on policies that require contract reserves, the maximum interest rate is the maximum rate permitted by law in the valuation of whole life insurance issued on the same date as the claim incurral date.

(3) For claim reserves on policies not requiring contract reserves, the maximum interest rate is the maximum rate permitted by law in the valuation of single premium immediate annuities issued on the same date as the claim incurral date, reduced by one hundred basis points.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0290 Specific Standards for Mortality

(1) Except as provided in section (2) of this rule, the mortality basis used shall be according to any table (but without use of selection factors) permitted by law for the valuation of whole life insurance issued on the same date as the health insurance contract.

(2) Other mortality tables adopted by the NAIC and also adopted by the Director may be used in the calculation of the minimum reserves if appropriate for the type of benefits and if approved by the Director. The request for such approval must include the proposed mortality table and the reason that the standard specified in section (1) of this rule is inappropriate.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0300 Reserves for Waiver of Premium

(1) Waiver of premium reserves involves several special considerations. First, the disability valuation tables promulgated by the NAIC are based on exposures that include contracts on premium waiver as in-force contracts. Hence, contract reserves based on these tables are not reserves on active lives but rather are reserves on contracts in force. This is true for the 1964 CDT and for both the 1985 CIDA and CIDB tables.

(2) Reserves using any of the tables described in section (1) of this rule shall value reserves on the following basis:

(a) Claim reserves must include reserves for premiums expected to be waived, valuing as a minimum the valuation net premium being waived;

(b) Premium reserves must include contracts on premium waiver as in-force contracts, valuing as a minimum the unearned modal valuation net premium being waived; and

(c) Contract reserves must include recognition of the waiver of premium benefit in addition to other contract benefits provided for, valuing as a minimum the valuation net premium to be waived.

History

Statutory/Other Authority: ORS 731.244 & 733.080
Statutes/Other Implemented: ORS 733.080
ID 7-1995, f. & cert. ef. 11-15-95

Or. Admin. R. 836-031-0400 Allowed Assets

For the purpose of applying investment limitations and prohibitions in ORS Chapter 733 that are based upon percentages, the allowed assets of an insurer shall be those allowed assets described in 733.010 that are shown in the financial statement filed by the insurer for the period immediately preceding the period for which the most recent financial statement was filed.

History

Statutory/Other Authority: ORS 731.244, 733.010 & 733.695
Statutes/Other Implemented: ORS 733.010 & 733.510 - 733.780
ID 5-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-031-0410 Title Insurance Unearned Premium Reserve

(1) For the purpose of implementing ORS 733.090(2), the amount of the unearned premium reserve shall be determined as follows for each foreign or alien title insurer relating to policies insuring titles to real property in this state and for each domestic title insurer relating to all of its policies insuring titles to real property:

(a) Three percent of all gross premiums on title insurance policies issued by it during the preceding 15 years and prior to January 1, 2002; plus

(b) A percentage of all gross premiums on title insurance policies issued by it during the current calendar year as determined from section (2) of this rule; less

(c) Percentage portions of reserve additions for each calendar year following January 1, 2002 and preceding the current calendar year, as specified by the Director.

(2) The percentage of premium for reserve additions in subsection (b) of section (1) of this rule shall be as follows:

(a) Three percent for calendar year 2002.

(b) Four percent for calendar year 2003.

(d) Six percent for calendar year 2005.

(e) Six and one-half percent for calendar year 2006.

(f) Seven percent for calendar year 2007 and for each calendar year thereafter.

(3) The portion of the unearned premium reserve of a foreign insurer relating to its policies insuring real property located elsewhere shall be not less than the amounts prescribed or permitted by the laws of the insurer's domicile.

(4) This rule applies to all reporting periods beginning on and after January 1, 2002.

History

Statutory/Other Authority: ORS 731.244 & 733.090
Statutes/Other Implemented: ORS 733.090
ID 7-2005, f. & cert. ef. 4-21-05
ID 13-2002, f. & cert. ef. 5-14-02

Or. Admin. R. 836-031-0600 Purpose

The purpose of OAR 836-031-0600 to 836-031-0690 is to prescribe:

(1) Requirements for statements of actuarial opinion to be submitted in accordance with ORS 733.304 and for memoranda in support thereof;

(2) Rules applicable to the appointment of an appointed actuary.

(3) Guidance as to the meaning of “adequacy of reserves.”

History

Statutory/Other Authority: ORS 731.244 & 733.304
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0605 Valuation Manual

(1) For the purpose of complying with Oregon Laws 2015, chapter 547, insurers shall use the Valuation Manual established by the National Association of Insurance Commissioners when establishing reserves using a principle-based valuation. The operative date of the Valuation Manual, as specified under Oregon Laws 2015, chapter 547, section 16(2) is January 1, 2017. The Valuation Manual referred to in this rule is available for inspection at the Department of Consumer and Business Services.

(2) The director shall specify the effective date of any amendments to the Valuation Manual by decision posted under insurer financial regulation on the department’s Division of Financial Regulation website at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, Or Laws 2015, ch 547, sec 16 & ORS 733.210
Statutes/Other Implemented: Or Laws 2015, ch 547
ID 8-2021, amend filed 12/13/2021, effective 01/01/2022
ID 11-2019, amend filed 12/19/2019, effective 01/01/2020
ID 1-2019, amend filed 01/04/2019, effective 01/04/2019
ID 37-2018, amend filed 12/19/2018, effective 01/01/2019
ID 13-2017, amend filed 12/14/2017, effective 12/14/2017
ID 11-2016, f. & cert. ef. 12-21-16

Or. Admin. R. 836-031-0610 Authority

OAR 836-031-0600 to 836-031-0690 are adopted pursuant to ORS 733.300 to 733.322 generally and 733.304 specifically.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.304
ID 19-2006, f. & cert. ef. 9-26-06
ID 4-1993, f. 7-27-93, cert. ef. 7-30-93
ID 1-1993(Temp), f. & cert. ef. 2-4-93
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0620 Scope

(1) OAR 836-031-0600 to 836-031-0690 apply to all life insurers transacting insurance in this state and to all life insurers that are authorized to reinsure life insurance, annuities or health insurance business in this state OAR 836-031-0600 to 836-031-0690 shall be applied in a manner that allows the appointed actuary to utilize his or her professional judgment in performing the asset analysis and developing the actuarial opinion and supporting memoranda, consistent with relevant actuarial standards and practices. However, the director may specify specific methods of actuarial analysis and actuarial assumptions when, in the director’s judgment, these specifications are necessary for an acceptable opinion to be rendered relative to the adequacy of reserves and related items.

(2) OAR 836-031-0600 to 836-031-0690 shall be applicable to all annual statements filed with the office of the director after the effective date of this change to OAR 836-031-0600 to 836-031-0690. A statement of opinion on the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with 836-031-0670 and a memorandum in support thereof in accordance with 836-031-0680 are required each year.

History

Statutory/Other Authority: ORS 731.244 & 733.304
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0630 Definitions

As used in OAR 836-031-0600 to 836-031-0690:

(1) "Actuarial Opinion" means the opinion of an appointed actuary regarding the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with 836-031-0670 and with currently accepted actuarial standards;

(2) "Actuarial Standards Board" is the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice.

(3) "Annual Statement" means that statement required by ORS 731.574 of the Insurance Code to be filed by the company with the Director annually.

(4) "Appointed Actuary" means any individual who is appointed or retained in accordance with the requirements set forth in OAR 836-031-0640(3) to provide the actuarial opinion and supporting memorandum as required by ORS 733.304.

(5) "Asset Adequacy Analysis" means an analysis that meets the standards and other requirements referred to in OAR 836-031-0640(4).

(6) "Company" means a life insurance company or reinsurer subject to the provisions of OAR 836-031-0600 to 836-031-0690.

(7) "Qualified Actuary" means any individual who meets the requirements set forth in OAR 836-031-0640(2).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 4-1993, f. 7-27-93, cert. ef. 7-30-93
ID 1-1993(Temp), f. & cert. ef. 2-4-93
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0640 General Requirements

(1) The following provisions apply to submission of the statement of actuarial opinions:

(a) There is to be included on or attached to page 1 of the annual statement for each year beginning with 1992 the statement of an appointed actuary, entitled "Statement of Actuarial Opinion," setting forth an opinion relating to reserves and related actuarial items held in support of policies and contracts, in accordance with OAR 836-031-0670.

(b) Upon written request by the company, the Director may grant an extension of the date for submission of the statement of actuarial opinion.

(2) For purposes of OAR 836-031-0600 to 836-031-0690, a "qualified actuary" is an individual who:

(a) Is a member in good standing of the American Academy of Actuaries;

(b) Is qualified to sign statements of actuarial opinion for life and health insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements;

(d) Has not been found by the Director, or if so found has subsequently been reinstated as a qualified actuary, following appropriate notice and hearing to have:

(A) Violated any provision of, or any obligation imposed by, the Insurance Code or other law in the course of the qualified actuary's dealings as a qualified actuary;

(B) Been found guilty of fraudulent or dishonest practices;

(D) Submitted to the Director during the past five years, pursuant to OAR 836-031-0600 to 836-031-0690, an actuarial opinion or memorandum that the Director rejected because it did not meet the provisions of 836-031-0600 to 836-031-0690, including standards set by the Actuarial Standards Board; or

(E) Resigned or been removed as an actuary within the past five years as a result of acts or omissions indicated in any adverse report on examination or as a result of failure to adhere to generally acceptable actuarial standards; and

(e) Has not failed to notify the Director of any action taken by any insurance regulator of any other state similar to that under subsection (d) of this section.

(3) For purposes of OAR 836-031-0600 to 836-031-0690, an "appointed actuary" is a qualified actuary who is appointed or retained to prepare the statement of actuarial opinion required by 836-031-0600 to 836-031-0690, either directly by or by the authority of the board of directors through an executive officer of the company other than the qualified actuary. The company shall give the Director timely written notice of the name, title (and, in the case of a consulting actuary, the name of the firm) and manner of appointment or retention of each person appointed or retained by the company as an appointed actuary and shall state in the notice that the person meets the requirements set forth in section (2) of this rule. Once notice is furnished, no further notice is required with respect to this person if the company gives the Director timely written notice in the event the actuary ceases to be appointed or retained as an appointed actuary or to meet the requirements set forth in section (2) of this rule. If any person appointed or retained as an appointed actuary replaces a previously appointed actuary, the notice shall so state and give the reasons for replacement.

(4) This section establishes standards for asset adequacy analysis. The asset adequacy analysis required by OAR 836-031-0600 to 836-031-0690:

(a) Shall conform to the Standards of Practice as promulgated from time to time by the Actuarial Standards Board and acceptable to the Director, and on any additional standards under OAR 836-031-0600 to 836-031-0690, which standards are to form the basis of the statement of actuarial opinion in accordance with OAR 836-0331-0600 to 836-031-0690; and

(b) Shall be based on methods of analysis as are deemed appropriate for such purposes by the Actuarial Standards Board and acceptable to the Director.

(5) The following apply to liabilities to be covered:

(a) Under authority of ORS 733.304, the statement of actuarial opinion shall apply to all in force business on the statement date whether directly issued or assumed regardless of when or where issued, e.g., reserves of Exhibits 8, 9, and 10, and claim liabilities in Exhibit 11, Part I and equivalent items in the separate account statement or statements;

(b) If the appointed actuary determines as the result of asset adequacy analysis that a reserve should be held in addition to the aggregate reserve held by the company and calculated in accordance with methods set forth in ORS 733.312, 733.314, 733.320, and 733.322, the company shall establish such additional reserve;

(c) Additional reserves established under subsection (b) of this section and deemed not necessary in subsequent years may be released. Any amount released shall be disclosed in the actuarial opinion for the applicable year. The release of such reserves is not to be deemed an adoption of a lower standard of valuation.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 733.304
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0670 Statement of Actuarial Opinion Based On an Asset Adequacy Analysis

(1) General Description. The statement of actuarial opinion submitted in accordance with this rule must consist of:

(a) A paragraph identifying the appointed actuary and the qualifications of the qualified actuary, as provided in subsection (2)(a) of this rule;

(b) A scope paragraph identifying the subjects on which an opinion is to be expressed and describing the scope of the appointed actuary's work, including a tabulation delineating the reserves and related actuarial items that have been analyzed for asset adequacy and the method of analysis, as provided in subsection (2)(b) of this rule, and identifying the reserves and related actuarial items covered by the opinion that have not been so analyzed;

(c) A reliance paragraph describing those areas, if any, where the appointed actuary has deferred to other experts in developing data, procedures or assumptions, (e.g., anticipated cash flows from currently owned assets, including variation in cash flows according to economic scenarios, as provided in subsection (2)(c) of this rule, supported by a statement of each such expert in the form prescribed by section (5) of this rule;

(d) An opinion paragraph expressing the appointed actuary's opinion with respect to the adequacy of the supporting assets to mature the liabilities, as provided in subsection (2)(f) of this rule; and

(e) One or more additional paragraphs, to be included in individual company cases as follows:

(A) If the appointed actuary considers it necessary to state a qualification of the appointed actuary's opinion;

(B) If the appointed actuary must disclose an inconsistency in the method of analysis or basis of asset allocation used at the prior opinion date with that used for the appointed actuary's opinion;

(C) If the appointed actuary must disclose whether additional reserves of the prior opinion date are released as of this opinion date, and the extent of the release; and

(D) If the appointed actuary chooses to add a paragraph briefly describing the assumptions forming the basis for the actuarial opinion.

(2) Recommended Language. The following paragraphs must be included in the statement of actuarial opinion in accordance with this section. The following provisions of this section are those that in typical circumstances would be included in a statement of actuarial opinion. The language may be modified as needed to meet the circumstances of a particular case, but the appointed actuary must use language that clearly expresses the professional judgment of the appointed actuary. However, in any event, the opinion must retain all pertinent aspects of the language provided in this section. The following provisions apply:

(a) The opening paragraph must indicate generally the appointed actuary's relationship to the company and qualifications of the appointed actuary to sign the opinion, as follows:

(A) For a company actuary, the opening paragraph of the actuarial opinion must include a statement such as:

"I, (name), am (title) of (insurance company name) and a member of the American Academy of Actuaries. I was appointed by, or by the authority of, the Board of Directors of the insurer to render this opinion as stated in the letter to the director dated (insert date). I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies."

(B) For a consulting actuary, the opening paragraph must include a statement such as:

"I, (name), a member of the American Academy of Actuaries, am associated with the firm of (name of consulting form). I have been appointed by, or by the authority of, the Board of Directors of (name of company) to render this opinion as stated in the letter to the Commissioner dated (insert date). I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies."

(b) The scope paragraph must include a statement such as:

"I have examined the actuarial assumptions and actuarial methods used in determining reserves and related actuarial items listed below, as shown in the annual statement of the company, as prepared for filing with state regulatory officials, as of December 31, 20( ). Tabulated below are those reserves and related actuarial items that have been subjected to asset adequacy analysis." See Table 1 (Reserves and Liabilities).

(c) If the appointed actuary has relied on other experts to develop certain portions of the analysis, the reliance paragraph must include a statement such as the following:

“I have relied on (name), (title) for (e.g., “anticipated cash flows from currently owned assets, including variations in cash flows according to economic scenarios” or “certain critical aspects of the analysis performed in conjunction with forming my opinion.”), as certified in the attached statement. I have reviewed the information relied upon for reasonableness.”

Such a statement of reliance on other experts must be accompanied by a statement by each of such experts on the form prescribed in section (5) of this rule.

(d) If the appointed actuary has examined the underlying asset and liability records, the reliance paragraph must include a statement such as:

"My examination included such review of the actuarial assumptions and actuarial methods and of the underlying basic asset and liability records and such tests of the actuarial calculations as I considered necessary. I also reconciled the underlying basic asset and liability records to (exhibits and schedules listed as applicable) of the company’s current annual statement."

(e) If the appointed actuary has not examined the underlying records, but has relied upon data (e.g., listings and summaries of policies in force or asset records) prepared by the company, the reliance paragraph must include a statement such as:

“In forming my opinion on (specify types of reserves) I relied upon data prepared by (name and title of company officer certifying in force records or other data) as certified in the attached statements. I evaluated that data for reasonableness and consistency. I also reconciled that data to (exhibits and schedules to be listed as applicable) of the company’s current annual statement. In other respects, my examination included review of the actuarial assumptions and actuarial methods used and tests of the calculations I considered necessary.”

Such a section shall be accompanied by a statement by each person relied upon, in the form prescribed by section (5) of this rule.

(f) The opinion paragraph must include a statement such as:

"In my opinion, the reserves and related actuarial values concerning the statement items identified above:

(i) Are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles;

(ii) Are based on actuarial assumptions that produce reserves at least as great as those called for in any contract provision as to reserve basis and method, and are in accordance with all other contract provisions;

(iii) Meet the requirements of the Insurance Law and regulation of the state of (state of domicile) and are at least as great as the minimum aggregate amounts required by the state in which this statement is filed;

(iv) Are computed on the basis of assumptions consistent with those used in computing the corresponding items in the annual statement of the preceding year-end (with any exceptions noted below);

(v) Include provision for all actuarial reserves and related statement items that ought to be established.

The reserves and related items, when considered in light of the assets held by the company with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on the assets, and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision, according to currently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the company. At the discretion of the director, this language may be omitted for an opinion filed on behalf of a company doing business only in Oregon and in no other state.

The actuarial methods, considerations and analyses used in forming my opinion conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis of this statement of opinion.

This opinion is updated annually as required by statute. To the best of my knowledge, there have been no material changes from the applicable date of the annual statement to the date of the rendering of this opinion that should be considered in reviewing this opinion; or

The following material change or changes that occurred between the date of the statement for which this opinion is applicable and the date of this opinion should be considered in reviewing this opinion: (Describe the change or changes.)

The appointed actuary must choose one of the above two paragraphs, whichever is applicable.

The impact of unanticipated events subsequent to the date of this opinion is beyond the scope of this opinion. The analysis of asset adequacy portion of this opinion should be viewed recognizing that the company's future experience may not follow all the assumptions used in the analysis.

Signature of Appointed Actuary

Address of Appointed Actuary

Telephone Number of Appointed Actuary

Date"

(3) Assumptions for New Issues. The adoption, for new issues or new claims or other new liabilities, of an actuarial assumption that differs from a corresponding assumption used for prior new issues or new claims or other new liabilities is not a change in actuarial assumptions within the meaning of this rule.

(4) Adverse Opinions. If the appointed actuary is unable to form an opinion, the appointed actuary must refuse to issue a statement of actuarial opinion. If the appointed actuary's opinion is adverse or qualified, the appointed actuary must issue an adverse or qualified actuarial opinion explicitly stating the reason or reasons for the opinion. Such a statement must follow the scope paragraph and precede the opinion paragraph.

(5) Reliance on Information Furnished by Other Persons. If the appointed actuary relies on the certification of others on matters concerning the accuracy or completeness of any data underlying the actuarial opinion, or the appropriateness of any other information used by the appointed actuary in forming the actuarial opinion, the actuarial opinion should so indicate the persons the actuary is relying upon and a precise identification of the items subject to reliance. In addition, the persons on whom the appointed actuary relies shall provide a certification that precisely identifies the items on which the person is providing information and a statement as to the accuracy, completeness or reasonableness, as applicable, of the items. This certification shall include the signature, title, company, address and telephone number of the person rendering the certification, as well as the date on which it is signed.

(6) Alternate Option

(a) The Standard Valuation Law gives the director broad authority to accept the valuation of a foreign insurer when that valuation meets the requirements applicable to a company domiciled in this state in the aggregate. As an alternative to the requirements of subsection B(6)(c), the director may make one or more of the following additional approaches available to the opining actuary:

(A) A statement that the reserves “meet the requirements of the insurance laws and regulations of the State of (state of domicile) and the formal written standards and conditions of this state for filing an opinion based on the law of the state of domicile.” If the director chooses to allow this alternative, a formal written list of standards and conditions shall be made available. If a company chooses to use this alternative, the standards and conditions in effect on July 1 of a calendar year shall apply to statements for that calendar year, and they shall remain in effect until they are revised or revoked. If no list is available, this alternative is not available.

(B) A statement that the reserves “meet the requirements of the insurance laws and regulations of the State of (state of domicile) and I have verified that the company’s request to file an opinion based on the law of the state of domicile has been approved and that any conditions required by the director for approval of that request have been met.” If the director chooses to allow this alternative, a formal written statement of such allowance shall be issued no later than March 31 of the year it is first effective. It shall remain valid until rescinded or modified by the director. Such rescission or modifications shall be issued no later than March 31 of the year they are first effective. Subsequent to that statement being issued, if a company chooses to use this alternative, the company shall file a request to do so, along with justification for its use, no later than April 30 of the year of the opinion to be filed. The request shall be deemed approved on October 1 of that year if the director has not denied the request by that date.

(C) A statement that the reserves “meet the requirements of the insurance laws and regulations of the State of (state of domicile) and I have submitted the required comparison as specified by this state.”

(i) If the director chooses to allow this alternative, a formal written list of products (to be added to the table in Item (ii) below) for which the required comparison shall be provided will be published. If a company chooses to use this alternative, the list in effect on July 1 of a calendar year shall apply to statements for that calendar year, and it shall remain in effect until it is revised or revoked. If no list is available, this alternative is not available.

(ii) If a company desires to use this alternative, the appointed actuary shall provide a comparison of the gross nationwide reserves held to the gross nationwide reserves that would be held under NAIC codification standards. Gross nationwide reserves are the total reserves calculated for the total company in force business directly sold and assumed, indifferent to the state in which the risk resides, without reduction for reinsurance ceded. The information provided shall be at least:

Product Type

Death Benefit or Account Value

Reserves Held

Codification Reserves

Codification Standard

(iii) The information listed shall include all products identified by either the state of filing or any other states subscribing to this alternative

(iv) If there is no codification standard for the type of product or risk in force or if the codification standard does not directly address the type of product or risk in force, the appointed actuary shall provide detailed disclosure of the specific method and assumptions used in determining the reserves held.

(v) The comparison provided by the company is to be kept confidential to the same extent and under the same conditions as the actuarial memorandum.

(b) Notwithstanding the above, the director may reject an opinion based on the laws and regulations of the state of domicile and require an opinion based on the laws of this state. If a company is unable to provide the opinion within 60 days of the request or such other period of time determined by the director after consultation with the company, the director may contract an independent actuary at the company’s expense to prepare and file the opinion.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 4-1993, f. 7-27-93, cert. ef. 7-30-93
ID 1-1993(Temp), f. & cert. ef. 2-4-93
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0680 Description of Actuarial Memorandum Including an Asset Adequacy Analysis and Regulatory Asset Adequacy Summary

(1) General provisions. The following general provisions apply to actuarial memoranda that include an asset adequacy analysis:

(a) In accordance with ORS 733.304 (Standard Valuation Law), the appointed actuary shall prepare a memorandum to the Company describing the analysis done in support of the appointed actuary's opinion regarding the reserves under an opinion pursuant to OAR 836-0310-670. The memorandum must be made available for examination by the Director upon request of the Director but shall be returned to the company after such examination and not be filed with the Department;

(b) In preparing the memorandum, the appointed actuary may rely on, and include as a part of the appointed actuary's own memorandum, memoranda prepared and signed by other actuaries who are qualified within the meaning of OAR 836-031-0640(2), with respect to the areas covered in such memoranda, and so state in their memoranda;

(c) If the Director requests a memorandum and no such memorandum exists or if the Director finds that the analysis described in the memorandum fails to meet the standards of the Actuarial Standards Board or the standards and requirements of OAR 836-031-0600 to 836-031-0690, the Director may designate a qualified actuary to review the opinion and prepare such supporting memorandum as is required for review. The reasonable and necessary expense of the independent review shall be paid by the company but shall be directed and controlled by the Director;

(d) The reviewing actuary shall have the same status as an examiner for purposes of obtaining data from the company and the work papers and documentation of the reviewing actuary shall be retained by the Director. However, any information provided by the company to the reviewing actuary and included in the work papers shall be considered as material provided by the company to the Director and shall be kept confidential to the same extent as is prescribed by law with respect to other material provided by the company to the Director pursuant to the Standard Valuation Law. The reviewing actuary shall not be an employee of a consulting firm involved with the preparation of any prior memorandum or opinion for the insurer pursuant to OAR 836-031-0600 to 836-031-0690 for any one of the current year or the preceding three years.

(e) In accordance with ORS 733.304, the appointed actuary shall prepare a regulatory asset adequacy issues summary, the contents of which are specified in section (3) of this rule. All companies domiciled in Oregon shall submit the regulatory asset adequacy issues summary no later than March 15 of the year following the year for which a statement of actuarial opinion based on asset adequacy is required. For all other companies, the memorandum must be made available for examination by the Director upon request of the Director. The regulatory asset adequacy issues summary is to be kept confidential to the same extent and under the same conditions as the actuarial memorandum.

(2) Provisions relating to the Memorandum Section Documenting Asset Adequacy Analysis. When an actuarial opinion under OAR 836-031-0670 is provided, the memorandum shall demonstrate that the analysis has been done in accordance with standards for asset adequacy referred to in 836-031-0640(4) and any additional standards under OAR 836-031-0600 to 836-031-0690. It must specify:

(a) For reserves:

(A) Product descriptions, including market description, underwriting and other aspects of a risk profile and the specific risks the appointed actuary deems significant;

(B) Source of liability in force;

(D) Investment reserves;

(E) Reinsurance arrangements;

(F) Identification of any explicit or implied guarantees made by the general account in support of benefits provided through a separate account or under a separate account policy or contract and the methods used by the appointed actuary to provide for the guarantees in the asset adequacy analysis; and

(G) Documentation of the following assumptions, sufficient for an actuary reviewing the actuarial memorandum to form the following conclusion as to the reasonableness of the assumptions in the context of asset adequacy testing:

(i) Base and excess lapse rates;

(ii) Interest crediting rate strategy;

(iii) Mortality;

(iv) Policyholder dividend strategy;

(v) Competitor or market interest rate;

(vi) Annuitization rates;

(vii) Commission and expenses; and

(viii) Morbidity.

(b) For assets:

(A) Portfolio descriptions, including a risk profile disclosing the quality, distribution and types of assets;

(B) Investment and disinvestment assumptions;

(D) Asset valuation bases;

(E) Documentation of assumptions sufficient for an actuary reviewing the actuarial memorandum to form a conclusion as to the reasonableness of the assumption, made for:

(i) Default costs;

(ii) Bond call function;

(iii) Mortgage prepayment function;

(iv) Determining market value for assets sold due to disinvestment strategy; and

(v) Determining yield on assets acquired through the investment strategy.

(A) Methodology;

(B) Rationale for inclusion and exclusion of different blocks of business and how pertinent risks were analyzed;

(C) Rational for degree of rigor in analyzing different blocks of business (include in the rationale the level of “materiality” that was used in determining how rigorously to analyze different blocks of business);

(D) Criteria for determining asset adequacy (include in the criteria the precise basis for determining if assets are adequate to cover reserves under “moderately adverse conditions” or other conditions as specified in relevant actuarial standards of practice); and

(E) Whether the impact of federal income taxes was considered and the method of treating reinsurance in the asset adequacy analysis;

(d) A summary of material changes in methods, procedures or assumptions from prior year’s asset adequacy analysis.

(e) Summary of results; and

(f) Conclusion or conclusions.

(3) Details of the Regulatory Asset Adequacy Issues Summary. The regulatory asset adequacy issues summary shall:

(a) Include all of the following:

(A) Descriptions of the scenarios tested, including whether those scenarios are stochastic or deterministic, and the sensitivity testing done relative to those scenarios. If negative ending surplus results under certain tests in the aggregate, the actuary should describe those tests and the amount of additional reserve as of the valuation date, which, if held, would eliminate the negative aggregate surplus values. Ending surplus values shall be determined by either extending the projection period until the in-force and associated assets and liabilities at the end of the projection period are immaterial or by adjusting the surplus amount at the end of the projection period by an amount that appropriately estimates the value that can reasonably be expected to arise from the assets and liabilities remaining in force.

(B) The extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis.

(C) The amount of reserves and the identity of the product lines that had been subjected to asset adequacy analysis in the prior opinion but were not subject to analysis for the current opinion.

(D) Comments on any interim results that may be of significant concern to the appointed actuary. For example, the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods.

(E) The methods used by the actuary to recognize the impact of reinsurance on the company’s cash flows, including both assets and liabilities, under each of the scenarios tested.

(F) Whether the actuary has been satisfied that all options whether explicit or embedded, in any asset or liability, including but not limited to those affecting cash flows embedded in fixed income securities, and equity-like features in any investments have been appropriately considered in the asset adequacy analysis.

(b) Contain the name of the company for which the regulatory asset adequacy issues summary is being supplied and shall be signed and dated by the appointed actuary rendering the actuarial opinion.

(4) Conformity to Standards of Practice. The memorandum must include the following statement:

"Actuarial methods, considerations and analyses used in the preparation of this memorandum conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis for this memorandum."

History

Statutory/Other Authority: ORS 731.244 & 733.304
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0690 Additional Considerations for Analysis

(1) Use of Assets Supporting the Interest Maintenance Reserve and the Asset Valuation Reserve. An appropriate allocation of assets in the amount of the Interest Maintenance Reserve (IMR), whether positive or negative, must be used in any asset adequacy analysis. Analysis of risks regarding asset default may include an appropriate allocation of assets supporting the Asset Valuation Reserve (AVR); these AVR assets may not be applied for any other risks with respect to reserve adequacy. Analysis of these and other risks may include assets supporting other mandatory or voluntary reserves available to the extent not used for risk analysis and reserve support. The amount of the assets used for the AVR shall be disclosed in the Table of Reserves and Liabilities of the opinion and in the memorandum. The method used for selecting particular assets or allocated portions of assets shall be disclosed in the memorandum.

(2) Documentation. The appointed actuary shall retain on file, for at least seven years, sufficient documentation so that it will be possible to determine the procedures followed, the analyses performed, the bases for assumptions and the results obtained.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.304
ID 5-2011, f. & cert. ef. 2-23-11
ID 4-1993, f. 7-27-93, cert. ef. 7-30-93
ID 1-1993(Temp), f. & cert. ef. 2-4-93
ID 10-1992, f. & cert. ef. 5-27-92

Or. Admin. R. 836-031-0750 Purpose, Authority and Applicability

(1) The purpose of OAR 836-031-0750 to 836-031-0775 is to provide:

(a) Tables of select mortality factors and rules for their use;

(b) A minimum standard for the valuation of plans with nonlevel premiums or benefits; and

(2) The method for calculating basic reserves defined in OAR 836-031-0750 to 836-031-0775 constitutes the Commissioners’ Reserve Valuation Method for policies to which 836-031-0750 to 836-031-0775 apply.

(3) OAR 836-031-0750 to 836-031-0775 are adopted under the rulemaking authority of ORS 731.244 for the purpose of implementing 733.030.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.030, 733.210 & 733.300 - 733.322
ID 7-1999, f. 12-29-99, cert. ef. 1-1-00

Or. Admin. R. 836-031-0755 Applicability

OAR 836-031-0750 to 836-031-0775 apply to all life insurance policies, with or without nonforfeiture values, issued on or after January 1, 2000, subject to OAR 836-051-0106 and the following exceptions and conditions:

(1) The following exceptions apply:

(a) OAR 836-031-0750 to 836-031-0775 do not apply to any individual life insurance policy issued on or after January 1, 2000, if the policy is issued in accordance with and as a result of the exercise of a reentry provision contained in the original life insurance policy of the same or greater face amount, issued before the effective date of this regulation, that guarantees the premium rates of the new policy. OAR 836-031-0750 to 836-031-0775 also do not apply to subsequent policies issued as a result of the exercise of such a provision, or a derivation of the provision, in the new policy.

(b) OAR 836-031-0750 to 836-031-0775 do not apply to any universal life policy that meets all the following requirements:

(A) Secondary guarantee period, if any, is five years or less;

(B) Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on CSO valuation tables as defined in OAR 836-031-0760 and the applicable valuation interest rate; and

(C) The initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period.

(c) OAR 836-031-0750 to 836-031-0775 do not apply to any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.

(d) OAR 836-031-0750 to 836-031-0775 do not apply to any variable universal life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.

(e) OAR 836-031-0750 to 836-031-0775 do not apply to a group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year.

(2) The following conditions apply:

(a) Calculation of the minimum valuation standard for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits (other than universal life policies), or both, shall be in accordance with the provisions of OAR 836-031-0770.

(b) Calculation of the minimum valuation standard for flexible premium and fixed premium universal life insurance policies, that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period shall be in accordance with the provisions of OAR 836-031-0775.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.030, 733.210 & 733.300 - 733.322
ID 9-2003, f. 12-26-03, cert. ef. 1-1-04
ID 7-1999, f. 12-29-99, cert. ef. 1-1-00

Or. Admin. R. 836-031-0760 Definitions

As used in OAR 836-031-0750 to 836-031-0775:

(1) "Basic reserves" means reserves calculated in accordance with ORS 733.306.

(2) "Contract segmentation method" means the method of dividing the period from issue to mandatory expiration of a policy into successive segments, with the length of each segment being defined as the period from the end of the prior segment (from policy inception, for the first segment) to the end of the latest policy year as determined in this section. All calculations are made using the 1980 CSO valuation tables, as defined in section (6) of this rule, (or any other valuation mortality table adopted by the National Association of Insurance Commissioners (NAIC) after January 1, 2000, and adopted by rule by the Director of the Department of Consumer and Business Services for this purpose), and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in OAR 836-031-0765(2). [Example not included. See ED. NOTE.]

(3) "Deficiency reserves" means the excess, if greater than zero, of minimum reserves calculated in accordance with ORS 733.320 over basic reserves.

(4) "Guaranteed gross premiums" means the premiums under a policy of life insurance that are guaranteed and determined at issue.

(5) "Maximum valuation interest rates" means the interest rates defined in ORS 733.310 (Computation of Minimum Standard by Calendar Year of Issue) that are to be used in determining the minimum standard for the valuation of life insurance policies.

(6) "1980 CSO Valuation tables" means the Commissioners' 1980 Standard Ordinary Mortality Table (1980 CSO Table) without ten-year selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law, and variations of the 1980 CSO Table approved by the NAIC, such as the smoker and nonsmoker versions approved in December 1983.

(7) "Scheduled gross premium" means the smallest illustrated gross premium at issue for other than universal life insurance policies. For universal life insurance policies, scheduled gross premium means the smallest specified premium described in OAR 836-031-0775(1)(c), if any, or else the minimum premium described in 836-031-0775(1)(d).

(8)(a) "Segmented reserves" means reserves, calculated using segments produced by the contract segmentation method, equal to the present value of all future guaranteed benefits less the present value of all future net premiums to the mandatory expiration of a policy, where the net premiums within each segment are a uniform percentage of the respective guaranteed gross premiums within the segment. The uniform percentage for each segment is such that, at the beginning of the segment, the present value of the net premiums within the segment equals:

(A) The present value of the death benefits within the segment; plus

(B) The present value of any unusual guaranteed cash value (according to OAR 836-031-0770(4)) occurring at the end of the segment; less

(D) For the first segment only, the excess of subparagraph (i) over subparagraph (ii), as follows:

(i) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for in the first segment after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary within the first segment on which a premium falls due. However, the net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy.

(ii) A net one year term premium for the benefits provided for in the first policy year.

(b) The length of each segment is determined by the "contract segmentation method," as defined in this section.

(c) The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the sum of the lengths of all segments of the policy.

(d) For both basic reserves and deficiency reserves computed by the segmented method, present values shall include future benefits and net premiums in the current segment and in all subsequent segments.

(9) "Tabular cost of insurance" means the net single premium at the beginning of a policy year for one-year term insurance in the amount of the guaranteed death benefit in that policy year.

(10) "Ten-year select factors" means the select factors adopted with the 1980 amendments to the NAIC Standard Valuation Law.

(11)(a) "Unitary reserves" means the present value of all future guaranteed benefits less the present value of all future modified net premiums, where:

(A) Guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy; and

(B) Modified net premiums are a uniform percentage of the respective guaranteed gross premiums, where the uniform percentage is such that, at issue, the present value of the net premiums equals the present value of all death benefits and pure endowments, plus the excess of subparagraph (i) over subparagraph (ii), as follows:

(i) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy.

(ii) A net one year term premium for the benefits provided for in the first policy year.

(b) The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the length from issue to the mandatory expiration of the policy.

(12) "Universal life insurance policy" means any individual life insurance policy under the provisions of which separately identified interest credits (other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts) and mortality or expense charges are made to the policy.

[ED. NOTE: Examples referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.030, 733.210 & 733.300 - 733.322
ID 9-2003, f. 12-26-03, cert. ef. 1-1-04
ID 7-1999, f. 12-29-99, cert. ef. 1-1-00

Or. Admin. R. 836-031-0765 General Calculation Requirements for Basic Reserves and Premium Deficiency Reserves

(1) At the election of the insurer for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using the 1980 CSO valuation tables with select mortality factors (or any other valuation mortality table adopted by the NAIC after January 1, 2000, and adopted by the Director of the Department of Consumer and Business Services by rule for this purpose). If select mortality factors are elected, they may be:

(a) The ten-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;

(b) The select mortality factors in the Appendix; or

(c) Any other table of select mortality factors adopted by the NAIC after January 1, 2000, and adopted by the Director of the Department of Consumer and Business Services by rule for the purpose of calculating basic reserves.

(2) Deficiency reserves, if any, are calculated for each policy as the excess, if greater than zero, of the quantity A over the basic reserve. The quantity A is obtained by recalculating the basic reserve for the policy using guaranteed gross premiums instead of net premiums when the guaranteed gross premiums are less than the corresponding net premiums. At the election of the company for any one or more specified plans of insurance, the quantity A and the corresponding net premiums used in the determination of quantity A may be based upon the 1980 CSO valuation tables with select mortality factors (or any other valuation mortality table adopted by the NAIC after January 1, 2000, and adopted by the Director of the Department of Consumer and Business Services by rule for this purpose). If select mortality factors are elected, they may be:

(a) The ten-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;

(b) The select mortality factors in the Appendix of this regulation;

(c) For durations in the first segment, X percent of the select mortality factors in the Appendix , subject to the following:

(A) X may vary by policy year, policy form, underwriting classification, issue age, or any other policy factor expected to affect mortality experience;

(B) X is such that, when using the valuation interest rate used for basic reserves, subparagraph (i) is greater than or equal to subparagraph (ii);

(i) The actuarial present value of future death benefits, calculated using the mortality rates resulting from the application of X;

(ii) The actuarial present value of future death benefits calculated using anticipated mortality experience without recognition of mortality improvement beyond the valuation date;

(C) X is such that the mortality rates resulting from the application of X are at least as great as the anticipated mortality experience, without recognition of mortality improvement beyond the valuation date, in each of the first five years after the valuation date;

(D) The appointed actuary shall increase X at any valuation date where it is necessary to continue to meet all the requirements of this subsection;

(E) The appointed actuary may decrease X at any valuation date as long as X continues to meet all the requirements of this subsection; and

(F) The appointed actuary shall specifically take into account the adverse effect on expected mortality and lapsation of any anticipated or actual increase in gross premiums.

(G) If X is less than 100 percent at any duration for any policy, the following requirements shall be met:

(i) The appointed actuary shall annually prepare an actuarial opinion and memorandum for the company in conformance with the requirements of OAR 836-031-0670;

(ii) The appointed actuary shall disclose, in the Regulatory Asset Adequacy Issues Summary, the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods; and

(iii) The appointed actuary shall annually opine for all policies subject to OAR 836-031-0750 to 836-031-0775 as to whether the mortality rates resulting from the application of X meet the requirements of this subsection. This opinion shall be supported by an actuarial report, subject to appropriate Actuarial Standards of Practice promulgated by the Actuarial Standards Board of the American Academy of Actuaries. The X factors shall reflect anticipated future mortality, without recognition of mortality improvement beyond the valuation date, taking into account relevant emerging experience.

(d) Any other table of select mortality factors adopted by the NAIC after January 1, 2000, and adopted by the Director of the Department of Consumer and Business Services by rule for the purpose of calculating deficiency reserves.

(3) This section applies to both basic reserves and deficiency reserves. Any set of select mortality factors may be used only for the first segment. However, if the first segment is less than ten years, the appropriate ten-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law may be used thereafter through the tenth policy year from the date of issue.

(4) In determining basic reserves or deficiency reserves, guaranteed gross premiums without policy fees may be used where the calculation involves the guaranteed gross premium but only if the policy fee is a level dollar amount after the first policy year. In determining deficiency reserves, policy fees may be included in guaranteed gross premiums, even if not included in the actual calculation of basic reserves.

(5) Reserves for policies that have changes to guaranteed gross premiums, guaranteed benefits, guaranteed charges, or guaranteed credits that are unilaterally made by the insurer after issue and that are effective for more than one year after the date of the change shall be the greatest of the following:

(a) Reserves calculated ignoring the guarantee;

(b) Reserves assuming the guarantee was made at issue; and

(6) The Director of the Department of Consumer and Business Services may require that the insurer document the extent of the adequacy of reserves for specified blocks, including but not limited to policies issued prior to January 1, 2000. This documentation may include a demonstration of the extent to which aggregation with other non-specified blocks of business is relied upon in the formation of the appointed actuary opinion pursuant to and consistent with the requirements of OAR 836-031-0670.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.030, 733.210 & 733.300 - 733.322
ID 1-2013, f. & cert. ef. 2-6-13
ID 7-1999, f. 12-29-99, cert. ef. 1-1-00

Or. Admin. R. 836-031-0770 Calculation of Minimum Valuation Standard for Policies with Guaranteed Nonlevel Gross Premiums or Guaranteed Nonlevel Benefits (Other than Universal Life Policies)

(1) Basic Reserves. Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both the segmented reserves and the unitary reserves for any policy shall use the same valuation mortality table and selection factors. At the option of the insurer, in calculating segmented reserves and net premiums, either of the adjustments described as follows may be made:

(a) Treat the unitary reserve, if greater than zero, applicable at the end of each segment as a pure endowment and subtract the unitary reserve, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment; or

(b) Treat the guaranteed cash surrender value, if greater than zero, applicable at the end of each segment as a pure endowment; and subtract the guaranteed cash surrender value, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.

(2) Deficiency Reserves:

(a) The deficiency reserve at any duration shall be calculated:

(A) On a unitary basis if the corresponding basic reserve determined by section (1) of this rule is unitary;

(B) On a segmented basis if the corresponding basic reserve determined by section (1) of this rule is segmented; or

(C) On the segmented basis if the corresponding basic reserve determined by section (1) of this rule is equal to both the segmented reserve and the unitary reserve.

(b) This subsection applies to any policy for which the guaranteed gross premium at any duration is less than the corresponding modified net premium calculated by the method used in determining the basic reserves, but using the minimum valuation standards of mortality (specified in OAR 836-031-0565(2)) and rate of interest.

(c) Deficiency reserves, if any, shall be calculated for each policy as the excess if greater than zero, for the current and all remaining periods, of the quantity A over the basic reserve, where A is obtained as indicated in OAR 836-031-0565(2).

(d) For deficiency reserves determined on a segmented basis, the quantity A is determined using segment lengths equal to those determined for segmented basic reserves.

(3) Minimum Value. Basic reserves may not be less than the tabular cost of insurance for the balance of the policy year, if mean reserves are used. Basic reserves may not be less than the tabular cost of insurance for the balance of the current modal period or to the paid-to date, if later, but not beyond the next policy anniversary, if mid-terminal reserves are used. The tabular cost of insurance shall use the same valuation mortality table and interest rates as that used for the calculation of the segmented reserves. However, if select mortality factors are used, they shall be the ten-year select factors incorporated into the 1980 amendments of the NAIC Standard Valuation Law. In no case may total reserves (including basic reserves, deficiency reserves and any reserves held for supplemental benefits that would expire upon contract termination) be less than the amount that the policyowner would receive (including the cash surrender value of the supplemental benefits, if any, referred to above), exclusive of any deduction for policy loans, upon termination of the policy.

(4) Unusual Pattern of Guaranteed Cash Surrender Values:

(a) For any policy with an unusual pattern of guaranteed cash surrender values, the reserves actually held prior to the first unusual guaranteed cash surrender value shall not be less than the reserves calculated by treating the first unusual guaranteed cash surrender value as a pure endowment and treating the policy as an n year policy providing term insurance plus a pure endowment equal to the unusual cash surrender value, where n is the number of years from the date of issue to the date the unusual cash surrender value is scheduled.

(b) The reserves actually held subsequent to any unusual guaranteed cash surrender value shall not be less than the reserves calculated by treating the policy as an n year policy providing term insurance plus a pure endowment equal to the next unusual guaranteed cash surrender value, and treating any unusual guaranteed cash surrender value at the end of the prior segment as a net single premium, when:

(A) n is the number of years from the date of the last unusual guaranteed cash surrender value prior to the valuation date to the earlier of:

(i) The date of the next unusual guaranteed cash surrender value, if any, that is scheduled after the valuation date; or

(ii) The mandatory expiration date of the policy; and

(B) The net premium for a given year during the n year period is equal to the product of the net to gross ratio and the respective gross premium; and

(i) The present value, at the beginning of the n year period, of death benefits payable during the n year period plus the present value, at the beginning of the n year period, of the next unusual guaranteed cash surrender value, if any, minus the amount of the last unusual guaranteed cash surrender value, if any, scheduled at the beginning of the n year period.

(ii) The present value, at the beginning of the n year period, of the scheduled gross premiums payable during the n year period.

(c) For purposes of this subsection, a policy is considered to have an unusual pattern of guaranteed cash surrender values if any future guaranteed cash surrender value exceeds the prior year’s guaranteed cash surrender value by more than the sum of:

(A) 110 percent of the scheduled gross premium for that year;

(B) 110 percent of one year’s accrued interest on the sum of the prior year’s guaranteed cash surrender value and the scheduled gross premium using the nonforfeiture interest rate used for calculating policy guaranteed cash surrender values; and

(5) This section creates an optional exemption for yearly renewable term reinsurance. At the option of the insurer, the following approach for reserves on yearly renewable term reinsurance may be used:

(a) Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.

(b) Basic reserves shall never be less than the tabular cost of insurance for the appropriate period, as defined in section (3) of this rule.

(A) For each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium.

(B) Deficiency reserves shall never be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with paragraph (A) of this subsection.

(d) For purposes of this section, the calculations use the maximum valuation interest rate and the 1980 CSO mortality tables with or without ten-year select mortality factors, or any other table adopted after January 1, 2000, and adopted by the Director of the Department of Consumer and Business Services by rule for this purpose.

(e) A reinsurance agreement shall be considered yearly renewable term reinsurance for purposes of this subsection if only the mortality risk is reinsured.

(f) If the assuming insurer chooses the optional exemption described in this section, the ceding insurer’s reinsurance reserve credit shall be limited to the amount of reserve held by the assuming insurer for the affected policies.

(6) This section creates an optional exemption for attained-age-based yearly renewable term life insurance policies. At the option of the insurer, the following approach for reserves for attained-age-based yearly renewable term life insurance policies may be used:

(a) Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.

(b) Basic reserves shall never be less than the tabular cost of insurance for the appropriate period, as defined in section (3) of this rule.

(A) For each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium.

(B) Deficiency reserves shall never be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with paragraph (A) of this subsection.

(d) For purposes of this subsection, the calculations use the maximum valuation interest rate and the 1980 CSO valuation tables with or without ten-year select mortality factors, or any other table adopted after January 1, 2000, by the NAIC and adopted by the Director of the Department of Consumer and Business Services by rule for this purpose.

(e) A policy shall be considered an attained-age-based yearly renewable term life insurance policy for purposes of this subsection if:

(A) The premium rates (on both the initial current premium scale and the guaranteed maximum premium scale) are based upon the attained age of the insured such that the rate for any given policy at a given attained age of the insured is independent of the year the policy was issued; and

(B) The premium rates (on both the initial current premium scale and the guaranteed maximum premium scale) are the same as the premium rates for policies covering all insureds of the same sex, risk class, plan of insurance and attained age.

(f) For policies that become attained-age-based yearly renewable term policies after an initial period of coverage, the approach of this section may be used after the initial period if:

(A) The initial period is constant for all insureds of the same sex, risk class and plan of insurance, or the initial period runs to a common attained age for all insureds of the same sex, risk class and plan of insurance; and

(B) After the initial period of coverage, the policy meets the conditions of subsection (e) of this section.

(g) If the election under this section is made, the approach in this section shall be applied in determining reserves for all attained-age-based yearly renewable term life insurance policies issued on or after January 1, 2000.

(7) This section creates an exemption from Unitary Reserves for Certain n-Year Renewable Term Life Insurance Policies. Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if the following conditions are met:

(a) The policy consists of a series of n-year periods, including the first period and all renewal periods, where n is the same for each period, except that for the final renewal period, n may be truncated or extended to reach the expiry age, provided that this final renewal period is less than 10 years and less than twice the size of the earlier n-year periods, and for each period, the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are level;

(b) The guaranteed gross premiums in all n-year periods are not less than the corresponding net premiums based upon the 1980 CSO Table with or without the ten-year select mortality factors; and

(8) This section creates an exemption from Unitary Reserves for Certain Juvenile Policies. Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if the following conditions are met, based upon the initial current premium scale at issue:

(a) At issue, the insured is age 24 or younger;

(b) Until the insured reaches the end of the juvenile period, which shall occur at or before age 25, the gross premiums and death benefits are level, and there are no cash surrender values; and

(c) After the end of the juvenile period, gross premiums are level for the remainder of the premium paying period, and death benefits are level for the remainder of the life of the policy.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.030, 733.210 & 733.300 - 733.322
ID 7-1999, f. 12-29-99, cert. ef. 1-1-00

Or. Admin. R. 836-031-0775 Calculation of Minimum Valuation Standard for Flexible Premium and Fixed Premium Universal Life Insurance Policies that Contain Provisions Resulting in the Ability of a Policyowner to Keep a Policy in Force Over a Secondary Guarantee Period

(1) The following standards apply for purposes of this rule:

(a) Policies with a secondary guarantee include:

(A) A policy with a guarantee that the policy will remain in force at the original schedule of benefits, subject only to the payment of specified premiums;

(B) A policy in which the minimum premium at any duration is less than the corresponding one year valuation premium, calculated using the maximum valuation interest rate and the 1980 CSO valuation tables with or without ten-year select mortality factors, or any other table adopted after January 1, 2000, by the NAIC and adopted by the Director of the Department of Consumer and Business Services by rule for this purpose; or

(b) A secondary guarantee period is the period for which the policy is guaranteed to remain in force subject only to a secondary guarantee. When a policy contains more than one secondary guarantee, the minimum reserve shall be the greatest of the respective minimum reserves at that valuation date of each unexpired secondary guarantee, ignoring all other secondary guarantees. Secondary guarantees that are unilaterally changed by the insurer after issue shall be considered to have been made at issue. Reserves described in sections (2) and (3) of this rule shall be recalculated from issue to reflect these changes.

(c) Specified premiums mean the premiums specified in the policy, the payment of which guarantees that the policy will remain in force at the original schedule of benefits, but which otherwise would be insufficient to keep the policy in force in the absence of the guarantee if maximum mortality and expense charges and minimum interest credits were made and any applicable surrender charges were assessed.

(d) For purposes of this rule, the minimum premium for any policy year is the premium that, when paid into a policy with a zero account value at the beginning of the policy year, produces a zero account value at the end of the policy year. The minimum premium calculation shall use the policy cost factors (including mortality charges, loads and expense charges) and the interest crediting rate, which are all guaranteed at issue.

(e) The one-year valuation premium means the net one-year premium based upon the original schedule of benefits for a given policy year. The one-year valuation premiums for all policy years are calculated at issue. The select mortality factors defined in OAR 836-031-0765(2)(b), (c) and (d) may not be used to calculate the one-year valuation premiums.

(f) The one-year valuation premium should reflect the frequency of fund processing, as well as the distribution of deaths assumption employed in the calculation of the monthly mortality charges to the fund.

(2) Basic reserves for the secondary guarantees shall be the segmented reserves for the secondary guarantee period. In calculating the segments and the segmented reserves, the gross premiums shall be set equal to the specified premiums, if any, or otherwise to the minimum premiums, that keep the policy in force and the segments will be determined according to the contract segmentation method as defined in OAR 836-031-0760(2).

(3) Deficiency reserves, if any, for the secondary guarantees shall be calculated for the secondary guarantee period in the same manner as described in OAR 836-031-0770(2) with gross premiums set equal to the specified premiums, if any, or otherwise to the minimum premiums that keep the policy in force.

(4) The minimum reserves during the secondary guarantee period are the greater of:

(a) The basic reserves for the secondary guarantee plus the deficiency reserve, if any, for the secondary guarantees; or

(b) The minimum reserves required by other rules governing universal life plans.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.030, 733.210 & 733.300 - 733.322
ID 7-1999, f. 12-29-99, cert. ef. 1-1-00

Or. Admin. R. 836-031-0800 Purpose, authority

(1) The purpose of OAR 836-031-0800 to 836-031-0815 is to recognize, permit and prescribe the use of mortality tables that reflect differences in mortality between preferred and standard lives in determining minimum reserve liabilities in accordance with ORS 733.306 and OAR 836-031-0765.

(2) OAR 836-031-0800 to 836-031-0815 are adopted pursuant to the authority of ORS 731.244 and 733.306, for the purpose of implementing 733.306.

History

Statutory/Other Authority: ORS 731.244 & 733.306
Statutes/Other Implemented: ORS 733.306
ID 2-2007, f. & cert. ef. 2-12-07

Or. Admin. R. 836-031-0805 Definitions

(1) “2001 CSO Mortality Table” means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002) and supplemented by the 2001 CSO Preferred Class Structure Mortality Table defined in section (2) of this rule. Unless the context indicates otherwise, the “2001 CSO Mortality Table” includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables. Mortality tables in the 2001 CSO Mortality Table include the following:

(a) “2001 CSO Mortality Table (F)” means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table;

(b) “2001 CSO Mortality Table (M)” means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table;

(c) “Composite mortality tables” means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers;

(d) “Smoker and nonsmoker mortality tables” means mortality tables with separate rates of mortality for smokers and nonsmokers.

(2) “2001 CSO Preferred Class Structure Mortality Table” means mortality tables with separate rates of mortality for super preferred nonsmokers, preferred nonsmokers, residual standard nonsmokers, preferred smokers, and residual standard smoker splits of the 2001 CSO Nonsmoker and Smoker Tables, as adopted by the NAIC at the September, 2006 national meeting and published in the NAIC Proceedings, 3rd Quarter 2006. Unless the context indicates otherwise, the “2001 CSO Preferred Class Structure Mortality Table” includes both the ultimate form of that table and the select and ultimate form of that table. It includes both the smoker and nonsmoker mortality tables. It includes both the male and female mortality tables and the gender composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality table.

(3) “Statistical agent” means an entity with proven systems for protecting the confidentiality of individual insured and insurer information; demonstrated resources for the history of ongoing electronic communications and data transfer ensuring data integrity with insurers that are its members or subscribers; and a history of and means for aggregation of data and accurate promulgation of the experience modifications in a timely manner.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 733.306
Statutes/Other Implemented: ORS 733.306
ID 2-2007, f. & cert. ef. 2-12-07

Or. Admin. R. 836-031-0810 2001 CSO Preferred Class Structure Table

(1) At the election of the insurer, for each calendar year of issue, for any one or more specified plans of insurance and subject to satisfying the conditions stated in OAR 836-031-0800 to 836-031-0815, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO Smoker or Nonsmoker Mortality Table as the minimum valuation standard for policies issued on or after January 1, 2007. For policies issued on or after January 1, 2004 (the date of adoption of OAR 836-051-0106, Life Insurance Valuation and Nonforfeiture Standards), and prior to January 1, 2007, the 2001 CSO Preferred Class Structure Mortality Tables may be substituted with the consent of the director and subject to the conditions of OAR 836-031-0815. In determining whether to consent to the substitution, the director may rely on the consent of the Insurance Commissioner of the company’s state of domicile. No such election may be made until the insurer demonstrates at least 20 percent of the business to be valued on this table is in one or more of the preferred classes. A table from the 2001 CSO Preferred Class Structure Mortality Table used in place of a 2001 CSO Mortality Table, pursuant to the requirements of OAR 836-031-0800 to 836-031-0815, will be treated as part of the 2001 CSO Mortality Table only for purposes of reserve valuation pursuant to the requirements of the NAIC model regulation "Recognition of the 2001 CSO Mortality Table For Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits Model Regulation."

(2) Tables referenced in this rule are available from the Division of Financial Regulation of the Department of Consumer and Business Services.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 733.306
Statutes/Other Implemented: ORS 733.306
ID 18-2024, minor correction filed 08/06/2024, effective 08/06/2024
ID 17-2011, f. & cert. ef. 10-31-11
ID 2-2007, f. & cert. ef. 2-12-07

Or. Admin. R. 836-031-0815 Conditions

(1) For each plan of insurance with separate rates for preferred and standard nonsmoker lives, an insurer may use the super preferred nonsmoker, preferred nonsmoker, and residual standard nonsmoker tables to substitute for the nonsmoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time of election and annually thereafter, except for business valued under the residual standard nonsmoker table, the appointed actuary shall certify that:

(a) The present value of death benefits over the next ten years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class;

(b) The present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class.

(2) For each plan of insurance with separate rates for preferred and standard smoker lives, an insurer may use the preferred smoker and residual standard smoker tables to substitute for the smoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time of election and annually thereafter, for business valued under the preferred smoker table, the appointed actuary shall certify that:

(a) The present value of death benefits over the next ten years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the preferred smoker valuation basic table corresponding to the valuation table being used for that class;

(3) Unless exempted by the director, each authorized insurer using the 2001 CSO Preferred Class structure Table shall annually file with the director, with the NAIC or with a statistical agent designated by the NAIC and acceptable to the director, statistical reports showing mortality an such other information ask the director may deem necessary or expedient for the administration of the provisions of OAR 836-031-0800 to 836-031-0815. The form of the reports shall be established by the director or the director may require the use of a form established by the NAIC or by a statistical agent designated by the NAIC and acceptable to the director.

(4)(a) The use of the 2001 CSO Preferred Class Structure Table for the valuation of policies issued prior to January 1, 2007 is not permitted in any statutory financial statement in which a company reports, with respect to any policy or portion of a policy coinsured, either of the following:

(A) In cases where the mode of payment of the reinsurance premium is less frequent than the mode of payment of the policy premium, a reserve credit that exceeds, by more than the amount specified in the paragraph as Y, the gross reserve calculated before reinsurance. Y is the amount of the gross reinsurance premium that:

(i) Provides coverage for the period from the next policy premium due date to the earlier of the end of the policy year and the next reinsurance premium due date; and

(ii) Would be refunded to the ceding entity upon the termination of the policy.

(B) In cases where the mode of payment of the reinsurance premium is more frequent than the mode of payment of the policy premium, a reserve credit that is less than the gross reserve, calculated before reinsurance, by an amount that is less than the amount specified in this paragraph as Z. Z is the amount of the gross reinsurance premium that the ceding entity would need to pay the assuming company to provide reinsurance coverage from the period of the next reinsurance premium due date to the next policy premium due date minus any liability established for the proportionate amount not remitted to the reinsurer.

(b) A company may estimate and adjust its accounting on an aggregate basis in order to meet the conditions to use the 2001 CSO Preferred Class Structure Table. For purposes of this condition, but the reserve credit and the gross reserve before reinsurance:

(A) For the mean reserve method defined as the mean reserve minus the deferred premium asset; and

(B) For the mid-terminal reserve method which includes the unearned premium reserve.

(5) Tables referenced in this rule are available from the Division of Financial Regulation of the Department of Consumer and Business Services.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 733.306
Statutes/Other Implemented: ORS 733.306
ID 17-2024, minor correction filed 08/06/2024, effective 08/06/2024
ID 17-2011, f. & cert. ef. 10-31-11
ID 2-2007, f. & cert. ef. 2-12-07

Or. Admin. R. 836-031-0855 Recoupment of Assessments by Oregon Insurance Guaranty Association

(1) This rule is adopted under the authority of ORS 731.244 and 734.579, for the purpose of implementing 734.579, relating to the recoupment by insurers of assessments made by the Oregon Insurance Guaranty Association under 734.570. For the purpose of this rule:

(a) “OIGA assessment” means the assessment imposed on an insurer by the Oregon Insurance Guaranty Association.

(b) “Recoupment assessment” means the assessment charged by the insurer to its policyholders.

(2) An insurer shall recoup an OIGA assessment from its policyholders on premiums written or renewed on or after the recoupment start date as provided in section (6) of this rule. The recoupment assessment shall be imposed on a pro-rata basis of net direct written premiums. For the purpose of this section, “net direct written premiums” are gross premiums, including policy and membership fees, less return premiums and premiums on policies not taken, as reported in column 1 of the Oregon State Page, Exhibit of Premium and Losses. An insurer may state the recoupment assessment to be charged to each policyholder in terms of a rate instead of a dollar amount and shall adjust the notice in section (5) of this rule as appropriate.

(3) An insurer may state the amount or rate of the recoupment assessment in the premium statement on the declaration page or other page of an insurance policy that serves as a declaration page rather than on the premium billing statement if the premium billing statement clearly informs the policyholder that the recoupment assessment is so located on the declaration page or other page. For the purpose of this section, the premium billing statement is the statement transmitted by the insurer to the policyholder that informs the policyholder of the premium due.

(4) If an insurer does not issue a premium billing statement, the insurer must state the amount or rate of the recoupment assessment on the declaration page, on a balance due notice or on a rate quote.

(5) An insurer shall include the following notice on or with the statement of recoupment assessment at the first time each year in which a recoupment assessment is made: Most insurers doing business in Oregon participate in the Oregon Insurance Guaranty Association. In the event an insurer fails, the Association settles unpaid claims on behalf of consumers. Oregon law requires that policies be surcharged directly to recover the costs of handling those claims. If your policy is surcharged, the term (Note: each insurer must insert here the descriptive term it uses to designate the surcharge) along with an indicated dollar amount will be displayed with the statement of your surcharge.

(6) An insurer shall begin recoupment of an OIGA assessment on a date that is on or after January 1 of the year following the year in which the OIGA assessment was imposed but not later than April 1 of that year and shall continue the recoupment assessment for the 12-month period following that date. On and after the date on which an insurer’s recoupment period begins, the insurer must state the amount or rate of the recoupment billed to the policyholder. An insurer shall make a good faith effort to fully collect the OIGA assessment during that period and may adjust the amount or rate of a recoupment assessment in the course of the period as needed to make the recoupment more accurate or to add any additional recoupment assessment required by subsequent OIGA assessments against the insurer. Any such adjustment shall apply to all policies from which a recoupment assessment is collected on and after the date of the adjustment.

(7) The minimum threshold below which a recoupment assessment need not be made is the amount at which the cost of recouping the OIGA assessment exceeds the amount to be recouped. When an insurer decides not to recoup an amount under this section, the insurer shall record the amount not recouped as an expense on the income statement of the insurer. An insurer may not later recoup any amount so recorded.

(8) Not later than June 1 of each year in which a 12-month recoupment assessment period established by an insurer under section (6) of this section is completed, the insurer shall submit to the Director, on a form prescribed by the Director, the annual certification required by ORS 734.579, indicating the total recoupment assessed and recovered during that recoupment period.

(9) If the amount of recoupment assessments collected by an insurer within the 12-month period beginning on the date on which the insurer began the recoupment exceeds the total amount of the OIGA assessment against the insurer, the insurer shall do one of the following:

(a) Pay back the excess.

(b) Subject to section (10) of this rule, carry over the amount of the excess to a date that is not later than June 1 of the year following the year in which the insurer submits the annual certification under section (8) of this rule for the recoupment period to which the excess applies.

(10) Not later than June 1 of the year to which an insurer has carried over an amount of excess under section (9)(b) of this rule, the insurer must dispose of the excess carried over according to one of the following methods:

(a) By applying the excess to reduce any new recoupment assessment arising during the carry-over period.

(b) By returning the excess to its current policyholders.

(c) Except as provided in this subsection, by transferring the excess to the Oregon Insurance Guaranty Association, which shall hold all amounts so received for the purpose of paying covered claims arising under subsequent insurer insolvencies. If the amount of the excess divided by the number of policies from which recoupment assessments were collected is $10 or more, the insurer instead shall dispose of the excess according to the method in subsection (a) or (b) of this section.

(11) If the amount of recoupment assessments collected by an insurer within the 12-month period beginning on the date on which the insurer began the recoupment is less than the total amount of the assessment against the insurer, the insurer shall carry over the amount of the insufficiency to the next 12-month period in which the insurer imposes a new recoupment assessment. The amount carried over shall be applied to increase the new recoupment assessment. If the insurer determines, however, that the cost of recouping the remaining amount exceeds the amount of the insufficiency, the insurer need not carry over the insufficiency. The insurer instead shall record the amount not recouped as an expense on the income statement of the insurer. An insurer may not later recoup any amount so recorded.

(12) An insurer may take all or any part of a recoupment charge owing from a policyholder from the first payment of premium by the policyholder.

History

Statutory/Other Authority: ORS 731.244 & 734.579
Statutes/Other Implemented: 734.579
ID 12-2006, f. & cert. ef. 6-26-06
ID 4-2004, f. 5-14-04, cert. ef. 5-15-04
ID 5-2003(Temp), f. & cert. ef. 11-26-03 thru 5-15-04

Division 33 INVESTMENTS (ORS 733.510 TO 733.780)

Or. Admin. R. 836-033-0105 Statutory Authority; Purpose

OAR 836-033-0110 is adopted pursuant to ORS 733.550(3), which grants the Commissioner authority to prescribe standards to be applied to determine if obligations invested in by an insurer are “amply secured obligations” under the statutes regulating investments of insurers. The purpose of the section is to prescribe such standards.

History

Statutory/Other Authority: ORS 733
Statutes/Other Implemented: ORS 733.550(3)
IC 66, f. & ef. 6-4-76

Or. Admin. R. 836-033-0110 “Amply Secured Obligations” Defined

In addition to those obligations referred to in ORS 733.550(1) and (2), an “amply secured obligation” is one that is eligible for amortization within the requirements adopted by the Subcommittee on Valuation of Securities of the National Association of Insurance Commissioners and published in “Valuations of Securities as of December 31, 1975.” An obligation that meets the requirements adopted by the Subcommittee on Valuation of Securities and set out in its most recent publication on “Valuation of Securities” will be considered within the requirements of this section.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 733
Statutes/Other Implemented: ORS 733.550(3)
IC 66, f. & ef. 6-4-76

Or. Admin. R. 836-033-0120 Purpose and Authority; Definition

(1) OAR 836-033-0120 and 836-033-0130 implement ORS 733.695 by establishing which obligations are not of investment grade and regulating the acts and practices of insurers with respect to the concentration of such obligations.

(2) For purposes of this rule and OAR 836-033-0130, “obligation” has the meaning given that term in ORS 733.540.

History

Statutory/Other Authority: ORS 731.244, 733.010 & 733.695
Statutes/Other Implemented: ORS 733.695
ID 5-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-033-0130 Investments in Medium Grade and Lower Grade Obligations

(1) An insurer may acquire or hold obligations that are not investment grade only as provided in this rule. For purposes of this rule, an obligation is not investment grade if the obligation is either of the following:

(a) A “medium grade obligation,” which means an obligation that is rated three by the Securities Valuation Office of the National Association of Insurance Commissioners;

(b) A “lower grade obligation,” which means an obligation that is rated four, five or six by the Securities Valuation Office of the National Association of Insurance Commissioners.

(2) An insurer shall not acquire, directly or indirectly, any medium grade or lower grade obligation of any person if, after given effect to the acquisition, the aggregate amount of all medium grade and lower grade obligations then held by the insurer would exceed 20 percent of its allowed assets. For purposes of this section, the aggregate amount of medium grade and lower grade obligations shall be the aggregate value of the obligations as set forth in the most recent financial statement required by and filed with the Director.

(3) In addition to the prohibition in section (2) of this rule on the aggregate amount of medium grade and lower grade obligations, an insurer shall not acquire or hold:

(a) More than ten percent of its allowed assets in obligations rated four, five or six by the Securities Valuation Office of the National Association of Insurance Commissioners;

(b) More than three percent of its allowed assets in obligations rated five or six by the Securities Valuation Office of the National Association of Insurance Commissioners;

(c) More than one percent of its allowed assets in obligations rated six by the Securities Valuation Office of the National Asociation of Insurance Commissioners.

(4) Attaining the limit of any one category under section (3) of this rule does not preclude an insurer from acquiring or holding obligations in other categories, subject to the specific and multi-category limits of this rule.

(5) The following prohibitions apply to investments in lower grade obligations and medium grade obligations issued, guaranteed or insured by any one person:

(a) An insurer shall not acquire or hold more than an aggregate of one percent of its allowed assets in medium grade obligations issued, guaranteed or insured by any one person;

(b) An insurer shall not acquire or hold more than one-half of one percent of its allowed assets in lower grade obligations issued, guaranteed or insured by any one person;

(c) In addition to the prohibitions in subsections (a) and (b) of this section, an insurer shall not acquire or hold more than one percent of its allowed assets in any medium or lower grade obligations issued, guaranteed or insured by any one person.

(6) This rule does not prohibit an insurer from doing any of the following:

(a) Acquiring any obligation that the insurer committed prior to the effective date of this rule to acquire if the insurer would have been permitted to acquire the obligation when the insurer made the commitment;

(b) Acquiring an obligation as a result of a restructuring of a medium or lower grade obligation already held.

(7) An insurer may acquire a medium or lower grade obligation of a person in which the insurer already has one or more medium or lower grade obligations if the obligation is acquired in order to protect an investment previously made in the obligations of the person. All such acquired obligations, however, shall not exceed one-half of one percent of the insurer’s allowed assets.

(8) The board of directors of a domestic insurer that acquires, hold or invests, directly or indirectly, more than two percent of its allowed assets in medium grade and lower grade obligations shall adopt a written plan for the making of such investments. The plan shall contain guidelines with respect to the quality of the issues invested in as well as diversification standards. The diversification standards shall at least include standards regarding the issuer, industry, duration, liquidity and geographic location.

(9) An insurer shall not acquire any lower grade or medium grade obligation that in whole or in part exceed the applicable limitation established in this rule. The requirement under this section does not apply to the acquisition of an obligation to which section (6) of this rule applies.

(10) On and after January 1, 1995, an insurer shall not claim as an allowed asset any portion of lower grade or medium grade obligations acquired by the insurer prior to the effective date of this rule or as authorized by subsection (6)(a) of this rule that exceed the applicable limitation established in this rule, except with the consent of the Director.

(11) If an obligation held by an insurer is of investment grade when acquired but subsequently becomes a medium grade or lower grade obligation, and that event causes the obligations of the insurer to exceed an applicable limit established under this rule, the insurer shall not count the excess as an allowed asset. An insurer shall not hold any excess ascribable to deterioration of an obligation as described in this section longer than a continuous period of three years during which the obligation is a medium or lower grade obligation, except with the consent of the Director.

(12) A foreign or alien insurer is subject to this rule as provided in ORS 733.510(2).

History

Statutory/Other Authority: ORS 731.244, 733.010 & 733.695
Statutes/Other Implemented: ORS 733.695
ID 5-1992, f. & cert. ef. 3-26-92

Division 42 RATES AND RATEMAKING

Or. Admin. R. 836-042-0001 Statutory Authority; Purpose and Effective Date

(1) OAR 836-042-0001 to 836-042-0035 are adopted pursuant to the general rulemaking authority of the Director in ORS 731.244.

(2) The purpose and applicability of OAR 836-042-0001 to 836-042-0035 is to effectuate orderly administration of the 1981 amendments to ORS 737.205, 737.225, 737.265 and 737.320 requiring insurers to file their own workers' compensation insurance rates, rating plans, and rating systems and prohibiting rating organizations from filing workers' compensation insurance rating provisions for expenses, taxes, or profit.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.205(1) - (2), 737.225(1), 737.265, 737.310(1) & 737.320(3)
ID 19-2006, f. & cert. ef. 9-26-06
IC 4-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0005 Definitions

As used in OAR 836-042-0001 to 836-042-0035, unless the context requires otherwise:

(1) “Anniversary rating date” means the month and day that rates, rating plans and rating systems are initially applied to a policy in effect and each annual anniversary thereafter, unless a different date is established by the rating organization of which the insurer is a member.

(2) “Classification” means a grouping of insurance risks according to a classification system used by an insurer.

(3) “Classification System” means a schedule of classifications and a rule or set of rules used by an insurer for determining the classifications applicable to an insured.

(4) “Insurer” means any insurer authorized to write workers’ compensation insurance or the State Accident Insurance Fund Corporation.

(5) “Loss Cost” means a provision for claim payment

(6) “Premium” means the contractual consideration charged to an insured for insurance for a specified period of time regardless of the timing of actual charges.

(7) “Provision for Claim Payment” means an estimate expressed per unit of exposure basis for the monetary amount ultimately to be needed to pay workers’ compensation insurance claims, excluding all loss adjustment or claim management expenses, other operating expenses, assessments, taxes, and profit or contingency allowances.

(8) “Rate” means a monetary amount applied to the units of exposure basis assigned to a classification and used by an insurer to determine the premium for an insured.

(9) “Rating Plan” means a rule or set of rules used by an insurer to calculate premium for an insured, and the parameter values used in such calculation, after application of classification premium rates to units of exposure.

(10) “Rating System” means a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system, and other rules used by an insurer for determining contractual consideration for an insured.

(11) “Standard Premium at Company Rates” means Oregon premium determined on the basis of premium rates approved for an insurer and any applicable experience rating modification but does not include expense constants or additional premium charged to achieve minimum premium.

(12) “Workers’ Compensation Insurance” means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656, similar laws of the United States, or agreements between states.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.205(1)-(2), 737.225(1), 737.265 & 737.320(3)
ID 15-1992, f. & cert. ef. 11-16-92
IC 4-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0015 Workers’ Compensation Filings — Procedural Rules for Insurers and Rating Organizations

(1) Every workers' compensation insurer shall file with the Director copies of the workers' compensation insurance premium rates to be used by it. An insurer may satisfy this requirement by authorizing the Director to accept on its behalf the provisions for claims payment filed by a rating organization in accordance with section (4) of this rule, to the extent the insurer uses the classification system of the rating organization, and by specifying the factors by which every such provision shall be multiplied to make allowances for expenses, taxes or profit and a rule for rounding each such provision after multiplication.

(2) Workers' compensation insurance premium rates based on loss costs of a licensed rating organization filed by an insurer must include the information listed on the Division of Financial Regulation (DFR) website or be accompanied by the NAIC Loss Cost Data Entry Document and the NAIC Loss Cost Filing Document for Workers' Compensation.

(3) Every filing of workers' compensation insurance premium rates, rating plans or rating systems by an insurer and every filing of workers' compensation insurance rating plans, rating systems or provisions for claim payment by a rating organization must be submitted to the Director for review prior to becoming effective.

(4) The effective date of a workers' compensation insurance filing required by section (3) of this rule to be submitted to the Director for review shall be the date specified therein but not earlier than the 30th day after the date the filing is received by the Director, or the 30th day after the date of receipt of supporting information, whichever is later. If the Director has reviewed the filing prior to expiration of the waiting period, the Director may authorize an effective date prior to the expiration of the waiting period but not earlier than the date such written application and any required supporting information is received. The 30 day period may be extended to 60 days if the Director gives written notice within such waiting period to the insurer or rating organization which made the filing that the extended period is needed for consideration of such filing. A filing subject to this section shall be deemed to meet the requirements of ORS Chapter 737 unless disapproved by the Director within the waiting period or extension thereof.

(5) An insurer may authorize the Director to accept on its behalf the workers' compensation insurance rating plans or rating systems filed by a licensed rating organization of which it is a member when such filings have been approved by the Director and to the extent such plans or systems are complete and usable without addition of allowances for expenses, taxes or profit. When such plans and systems are not complete and usable, an insurer may file for review by the Director supplementary systems or values providing allowances for expenses, taxes or profit to be used in conjunction with such workers' compensation insurance rating plans and rating systems. An insurer may so adopt the rating plans and rating systems of a rating organization on part of the classifications of risks insured by it and may make its own filings as to other classifications.

(6)(a) Nothing in this rule should be construed to require any insurer to adopt any rating plan or rating system filed by a rating organization and approved by the Director nor to prohibit any insurer from filing any workers' compensation insurance rating plan or rating system which supplements or differs from any rating plans or rating systems filed by a rating organization; and

(b) Notwithstanding subsection (a) of this section, workers' compensation insurers shall adopt the experience rating plan established by the rating organization, or an alternative plan designed to promote worker safety approved by the Director, to be applied on a uniform basis.

(7) A licensed rating organization may assist any member with filing workers' compensation insurance premium rates, rating plans or rating systems following instructions from such member as to the provisions for expenses, taxes and profit appropriate for its use.

(8)Section (6) of this rule, as amended effective July 28, 1998, applies to actions taken by insurers under that section on and after June 24, 1998.

[ED. NOTE: Exhibits referenced are available from the agency.]

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.205(1) & (2), ORS 737.225(1), ORS 737.265(2) & ORS 737.320(2) & (3)
ID 9-2017, amend filed 10/23/2017, effective 01/01/2018
ID 10-2006, f. & cert. ef. 6-9-06
ID 9-1998, f. & cert. ef. 7-28-98
Reverted to ID 15-1992, f. & cert. ef. 11-16-92
ID 19-1997(Temp), f. 12-23-97, cert. ef. 1-1-98 thru 6-22-98
ID 15-1992, f. & cert. ef. 11-16-92
IC 4-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0020 Insurers Must Demonstrate Statistical Reporting Ability

(1) Any insurer filing a workers’ compensation insurance exposure base, classification or classification system, must demonstrate how statistical experience data will be converted for purposes of statistical reporting in accordance with the uniform statistical plan prescribed by OAR 836-042-0045.

(2) Any filing by an insurer of a workers’ compensation insurance exposure base, classification or classification system which does not meet the requirements of section (1) of this rule shall be determined not to satisfy the requirements of ORS Chapter 737 and shall be disapproved.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.325(1)-(2), 737.325(4) & 737.230
IC 4-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0025 Workers’ Compensation Filings Standards for Unfair Discrimination

(1) Except for revisions solely attributable to legislative enactments, changes in administrative rules or orders, or approved by the Director to prevent an impairment, or applying to state agencies, workers’ compensation insurance rates, rating plans, rating systems or provisions for claim payment are unfairly discriminatory if either:

(a) Revision of a rate, rating plan or rating system is filed to become effective within six months of the effective date of a corresponding rate, rating plan or rating system previously established pursuant to OAR 836-042-0015 by the filing insurer; or

(b) The rating system does not contain rules specifying that a revision of a rate, rating plan or system shall not apply to an insured until an anniversary rating date at least 11 months and 16 days subsequent to the earlier of the preceding anniversary rating date or the preceding policy effective date established for an insured unless approved by the Director to apply to all policies in force on a common date; or

(c) Premium rates are based on provisions for claim payment filed by a licensed rating organization which are not the provisions most recently approved or premium rates are determined by multiplying superseded provisions by a factor; or

(d) Provisions for claim payment to be used by an insurer as a basis for premium rates are revised to be effective on a date other than the date of a revision approved for a licensed rating organization.

(2) Workers’ compensation insurance rating plans or rating systems are presumed to be unfairly discriminatory, unless demonstrated otherwise, if either:

(a) A rating plan or rating system which produces only credit modifications to an insured’s premiums is offered at the option of the insurer; or

(b) An insurer has filed two or more schedules of premium rates without providing a clear rule for deciding which schedule is to be applied to an insured.

(3) Premiums are unfairly discriminatory if differentials between insureds fail to reasonably reflect the differences in expected losses and expenses to the insurer attributable to the insureds. Workers’ compensation insurance rates, rating plans or rating systems are not unfairly discriminatory when different premiums result or different rates apply to insureds if:

(a) Differences in loss exposures, expense factors or investment income opportunity to an insurer can be attributed to the insureds; and

(b) The differences are reasonably reflected by the rates, rating plan or rating system.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.310
ID 3-2025, amend filed 06/25/2025, effective 07/01/2025
ID 15-1996, f. & cert. ef. 11-12-96
ID 15-1992, f. & cert. ef. 11-16-92
IC 14-1982, f. 12-17-82, ef. 12-29-82
IC 12-1982(Temp), f. 6-29-82, ef. 7-1-82
IC 4-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0035 Workers’ Compensation Policy Forms Filings by Insurers

Workers’ compensation insurance must be written using policy forms filed by the rating organization of which the insurer is a member except that if the insurer files a rating plan or rating system requiring a policy provision or endorsement for which the rating organization has made no usable filing then the insurer may file its own policy forms needed to implement its rating plans or systems. Such policy form filings are subject to ORS Chapter 742.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.265(2) & ORS 737.320(3)
ID 9-2017, amend filed 10/23/2017, effective 01/01/2018
IC 4-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0040 Statutory Authority; Purpose and Effective Date

Statutory Authority; Purpose and Effective Date

(1) OAR 836-042-0040 through 836-042-0045 are adopted by the director pursuant to the requirements of ORS 737.225(4).

(2) The purpose and applicability of these rules is to prescribe a uniform statistical plan for workers' compensation insurance statistics as required by ORS 737.225(4).

(3) OAR 836-042-0040 through 836-042-0045 apply to all reporting of workers' compensation insurance statistics, as therein defined and prescribed provided that nothing contained herein shall restrict the reporting of statistical, financial, or accounting data necessary to fulfill the requirements of ORS Chapter 737.

History

Statutory/Other Authority: ORS 731.244 & 737.225
Statutes/Other Implemented: ORS 737.225
ID 15-2012, f. 8-9-12, cert. ef. 1-1-13
IC 3-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0043 Definition

As used in OAR 836-042-0040 through 836-042-0045, unless the context requires otherwise: "Workers' compensation insurance" means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656, similar laws of the United States, or agreements between states.

History

Statutory/Other Authority: ORS 731.244 & 737.225
Statutes/Other Implemented: ORS 737.225
ID 15-2012, f. 8-9-12, cert. ef. 1-1-13
IC 3-1982, f. 1-27-82, ef. 7-1-82

Or. Admin. R. 836-042-0045 Workers’ Compensation Statistical Plan

(1) The Statistical Plan for Workers' Compensation and Employers' Liability Insurance, 2008 Edition, filed by the National Council on Compensation Insurance and approved by the director to become effective January 1, 2009, and revisions approved by the director to become effective on or before July 1, 2025, is prescribed as the statistical plan for workers' compensation and employers' liability insurance.

(2) Manuals or guides referenced within the statistical plan designated in section (1) of this rule are not prescribed by this rule.

History

Statutory/Other Authority: ORS 737.225
Statutes/Other Implemented: ORS 737.265 & 737.320
ID 3-2025, amend filed 06/25/2025, effective 07/01/2025
ID 50-2023, amend filed 10/20/2023, effective 11/01/2023
ID 5-2022, amend filed 08/29/2022, effective 09/01/2022
ID 7-2021, amend filed 12/07/2021, effective 12/14/2021
ID 5-2021, temporary amend filed 06/18/2021, effective 06/18/2021 through 12/14/2021
ID 7-2020, amend filed 10/23/2020, effective 10/24/2020
ID 6-2020, temporary amend filed 08/14/2020, effective 08/14/2020 through 10/24/2020
ID 4-2020, temporary amend filed 04/30/2020, effective 05/01/2020 through 10/24/2020
ID 9-2017, amend filed 10/23/2017, effective 01/01/2018
ID 16-2014, f. & cert. ef. 10-1-14
ID 15-2012, f. 8-9-12, cert. ef. 1-1-13
ID 20-2008, f. 12-30-08, cert. ef. 1-1-09
ID 13-2008(Temp), f. 8-14-08, cert. ef. 9-1-08 thru 1-1-09
ID 3-2008, f. & cert. ef. 4-7-08
ID 10-2006, f. & cert. ef. 6-9-06
ID 5-2005, f. & cert. ef. 4-7-05
ID 7-2003, f. 12-3-03 cert. ef. 1-1-04
ID 15-2001, f, 12-19-01, cert. ef. 1-1-02
ID 2-1998, f. & cert. ef. 2-6-98
IC 4-1984, f. 9-28-84, cert. ef. 10-1-84
IC 5-1983, f. 6-30-83, cert. ef. 7-1-83
IC 2-1983, f. 3-16-83, cert. ef. 4-1-83
IC 10-1982, f. 6-23-82, cert. ef. 7-1-82
IC 3-1982, f. 1-27-82, cert. ef. 7-1-82

Or. Admin. R. 836-042-0050 Statutory Authority; Purpose and Applicability

(1) OAR 836-042-0050 to 836-042-0060 are adopted pursuant to the general rulemaking authority of the Director in ORS 731.244 and the specific authority of 737.310, which authorizes the Director to prescribe by rule the conditions under which a division of payroll between different classifications is permitted for purposes of calculating workers’ compensation insurance premiums.

(2) The purpose and applicability of OAR 836-042-0050 to 836-042-0060 is to improve parity in the workers’ compensation insurance market by prescribing a uniform set of rules for division of a single employee’s payroll between assigned classifications and a necessary clarification of the definition of payroll to effectuate these rules.

(3) OAR 836-042-0050 to 836-042-0060 apply to all workers’ compensation insurance policies written by any insurer.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.310
ID 12-1998, f. & cert. ef. 9-14-98
ID 15-1996, f. & cert. ef. 11-12-96
IC 2-1982, f. & ef. 1-15-82
IC 1-1981(Temp), f. & ef. 11-2-81

Or. Admin. R. 836-042-0055 Definitions, Payroll Inclusions and Exclusions

(1) As used in OAR 836-042-0050 to 836-042-0060, unless the context requires otherwise:

(a) “Classification” means a grouping of insurance risks according to a classification system used by an insurer.

(b) “Classification System” means a schedule of classifications and a rule or set of rules used by an insurer for determining the classification applicable to risks insured by it.

(c) “Insurer” means any insurer authorized to write workers’ compensation insurance, and the State Accident Insurance Fund Corporation.

(d) “Interchange of labor” means an employee or employees who at different times perform duties described by two or more classifications assigned to an employer according to the classification system used by the insurer.

(e) “Overtime Work,” unless more extensively defined within the rating system used by the insurer, means work beyond the time worked on a regular basis in a day or a week and work on days not worked on a regular basis such as Sundays or holidays but does not include time or days worked on a regular basis according to the contract of employment, whether or not any increased rate of pay is applied.

(f) “Payroll” means money or substitutes for money that are payable to workers for their services and that are specified or defined by the rating system used by the insurer, except that payroll may not include vacation pay, incremental pay recorded for overtime work, and payments excluded as provided in section (2) of this rule.

(g) “Workers’ compensation insurance” means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656, similar laws of the United States, or agreements between states.

(2) An insurer shall include a payment in or exclude a payment from the workers’ compensation premium basis of an employer as follows:

(a) An unanticipated bonus payment to an individual employee shall be excluded. A bonus payment is otherwise subject to inclusion in the premium basis if the payment is anticipated. A bonus payment is unanticipated or anticipated as follows:

(A) A bonus payment is unanticipated if all of the following conditions are met:

(i) The payment is paid as an arbitrary and gratuitous disbursement; and

(ii) The payment is not part of an oral or written employment agreement.

(B) A bonus payment is anticipated if made under one or more of the following circumstances:

(i) The payment is made to any one employee more frequently than twice in a policy period;

(ii) The payment is made to offset a pay cut or reduction in wages;

(iii) The payment is made in lieu of a raise in wages;

(iv) The payment is made to corporate officers who are directors with a substantial ownership in the corporation, as “substantial ownership” is defined in OAR 436-050-0050(2)(g);

(v) The payment is made to limited liability company members who have a substantial ownership interest in the company;

(vi) The payment is related to meeting or exceeding preestablished production goals; or

(vii) The payment is related to absenteeism or attendance.

(b) A safety bonus shall be excluded from or included in the premium basis as follows:

(A) A safety bonus shall be excluded if all of the following conditions apply with respect to the payment:

(i) The payment is anticipated;

(ii) The payment is distributed in accordance with a written plan; and

(iii) The payment is tied strictly to safe working practices.

(B) A safety bonus shall be included if the safety bonus is paid to offset pay cuts or a reduction of wages.

(c) A profit sharing payment shall be excluded from the premium basis if all of the following conditions apply with respect to the payment:

(A) The payment is anticipated;

(B) The payment is distributed from net realized profits; and

(C) The payment is distributed in accordance with a written plan that creates a legal obligation for the employer to disburse funds in accordance with the plan.

History

Statutory/Other Authority: ORS 731.244 & 737.310
Statutes/Other Implemented: ORS 737.310
ID 12-1998, f. & cert. ef. 9-14-98
ID 17-1996, f. & cert. ef. 12-16-96
IC 2-1982, f. & ef. 1-15-82
IC 1-1981(Temp), f. & ef. 11-2-81

Or. Admin. R. 836-042-0060 Conditions for Division of Payroll of Individual Employees

(1) When there is an interchange of labor, the payroll of an individual employee shall be divided and allocated among the classification or classifications that may be properly assigned to the employer, provided verifiable payroll records maintained by the employer disclose a specific allocation for each such individual employee, in accordance with the standards for rebilling set forth in OAR 836-043-0190 and this rule.

(2) This rule does not apply to a single employee whose duties vary within exposure areas normally anticipated by the scope of a single classification or who spends only a limited amount of time, on an infrequent or irregular basis, in a classification exposure that is not a normal job function for that employee. As used in this section, “infrequent or irregular” means that the time spent in the classification exposure is limited, is not anticipated in the normal duties of the employee and occurs only randomly.

(3) When verifiable payroll records are required with respect to a single employee and the employer does not maintain them as required in this rule, the entire payroll of the employee shall be assigned to the highest rated classification exposure in accordance with the standards for rebilling set forth in OAR 836-043-0190.

(4) For purposes of this rule, payroll records of an employee are verifiable if they have the following characteristics:

(a) The records must establish a time basis, and the time basis must be hourly or a part thereof, daily or part thereof, weekly or part thereof, monthly or part thereof or yearly or part thereof;

(b) For each salaried employee, the records must also include time records in which the salary is converted to an hourly, daily, weekly, monthly or yearly rate and then multiplied by the time spent by the employee in each classification exposure;

(c) The records must include a description of duties performed by the employee, to enable the insurer to determine correct classification assignment. Records requiring additional explanation or interpretation are not considered to be verifiable; and

(d) The records must be supported by original entries from other records, including but not limited to time cards, calendars, planners or daily logs prepared by the employee or the employee’s direct supervisor or manager. Estimated ratios or percentages do not comply with the requirement of this subsection and are not acceptable for verification. Verifiable records must be summarized in the insured employer’s accounting records.

(5) The payroll of any individual employee used by an insurer to compute workers’ compensation insurance premium must be determined in a manner consistent with the definition of “overtime work” and “payroll” in sections (5) and (6) of OAR 836-042-0055.

(6) The amendments to this rule that are effective July 27, 1995, apply to policies issued on or after July 1, 1991, except that the amendments do not apply with respect to any policy that is or has been subject to judicial review on the issue of division of payroll.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.310(10)
ID 1-1999, f. & cert. ef. 2-19-99
ID 2-1996, f. & cert. ef. 1-26-96
Reverted to IC 2-1982, f. & ef. 1-15-82
ID 5-1995(Temp), f. 7-26-95, cert. ef. 7-27-95
IC 2-1982, f. & ef. 1-15-82
IC 1-1981(Temp), f. & ef. 11-2-81

Or. Admin. R. 836-042-0070 Statutory Authority and Purpose

OAR 836-042-0070 to 836-042-0090 are adopted pursuant to the general rulemaking authority of the Director of the Department of Consumer and Business Services in ORS 731.244 to specify for insurers offering large deductible provisions of workers’ compensation insurance policies requirements for rates, rating plans, and rating systems which may be approved according to ORS Chapter 737.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737, 737.310 & 741.001 - 742.007
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-042-0075 Definitions

As used in OAR 836-042-0070 to 836-042-0090:

(a) “Insurer” means any insurer authorized to write workers’ compensation insurance and includes the State Accident Insurance Fund Corporation.

(2) “Director” means the Director of the Department of Consumer and Business Services.

(3) “Large Deductible” means a provision in a workers’ compensation policy, or added by endorsement thereto, which allows a policy holder to be financially responsible for claims incurred under the policy up to a percentage of premium, a stated amount per claim, or other limit specified in the provision in exchange for a prospective premium reduction.

(4) “Workers’ Compensation Insurance” means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapters 654 and 656, similar laws of the United States, or agreements between states.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737, 737.310 & 741.001 - 742.007
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-042-0080 Rate Filing Requirements and Standards

An insurer that issues a policy for worker's compensation insurance including a large deductible provision must use a provision which satisfies requirements of OAR 836-054-0210 and has been approved by the Director and must file rating plans for determining premium credits or rating modifications with the Director according to ORS 737.320 and OAR 836-042-0001 to 836-042-0045 and which satisfy these additional requirements:

(1) Such rating plans must be based on actuarial assumptions and methods similar to and not circumventing the design of retrospective rating plans approved by the Director.

(2) A deductible credit or rating modification must be the final rating step so that the insurer may distinguish the amount of credit or modification premium and the policy premium prior to the credit or modification. An insurer may compute premium discounts based on premium amounts after deductible credits if the insurer can demonstrate that greater premium equity is achieved and that data distinguishing the various premium elements will be maintained.

(3) Such rating plans may not contain provisions which cannot be approved under the unfair discrimination provisions of OAR 836-042-0025.

(4) A deductible credit or rating modification must recognize expenses which vary with net earned premium after such credits or modifications

(5) Prospective experience rating plans based on prior claims experience must use losses valued on a gross basis prior to deductible provisions.

(6) Large deductible rating plans may not be applied to rating groups approved under OAR 836-042-0201 to 836-042-0225.

(7) Minimum eligibility for a large deductible provision must be not less than $500,000 estimated country-wide annual premium prior to large deductible credits or premium credits based on premium size. The minimum deductible limit per claim for each injury or illness may not be less than $75,000. An aggregate limit for deductible amounts for all claims may be specified but may not be less than the deductible limit per claim.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737, 737.310 & 742.001 - 742.007
ID 11-2010, f. 5-4-10, cert. ef. 7-1-10
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-042-0085 Statistical Data Maintenance and Reporting Requirements

An insurer that issues a policy for worker's compensation insurance including a large deductible provision must:

(1) Maintain policy premium data distinguishing credit or modification premium for large deductible provisions;

(2) Report policy unit statistical data with losses valued on a gross basis prior to deductible provisions; and

(3) Separately report financial experience data to a licensed rating organization including premium prior to credits or modifications for large deductible provisions and loss valued on a gross basis prior to deductible provisions.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737, 737.310 & 741.001 - 742.007
ID 10-2009, f. & cert. ef. 11-13-09
ID 5-2005, f. & cert. ef. 4-7-05
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-042-0090 Trade Practices Found Injurious to the Insurance-Buying Public

(1) Failure of an insurer to comply with OAR 836-042-0080, 836-042-0085 or 836-054-0210 constitutes an unfair trade practice under ORS 746.240.

(2) Failure of an insurer to delete a large deductible provision following discovery that an insured employer has on three or more occasions during the policy period known of a workers’ compensation insurance claim for five (5) days or longer but has not reported the claim to the insurer or has on any occasion within the policy period made direct payment of claim costs constitutes an unfair trade practice under ORS 746.240.

(3) Failure of an insurer to include amounts of premium credits or modifications for large deductible provisions in the base for the assessment imposed by the Director pursuant to ORS 656.612 and to pay the assessment on those amounts constitutes an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-042-0100 Statutory Authority and Purpose

OAR 836-042-0100 to 836-042-0115 are adopted under the Director’s authority in ORS 737.325(1) to modify filing requirements for insurers offering to classes of risks Large Risk Alternative Rating Plans which include workers’ compensation.

History

Statutory/Other Authority: ORS 731.244 & 737.325(1)
Statutes/Other Implemented: ORS 737, 737.310, 737.320 & 737.325(1)
ID 11-2010, f. 5-4-10, cert. ef. 7-1-10

Or. Admin. R. 836-042-0105 Definitions

As used in OAR 836-042-0100 to 836-042-0115:

(1) “Affiliate Insurer” means an insurer that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the insurer specified where control is defined by ORS 732.548(2).

(2) “Director” means the Director of the Department of Consumer and Business Services.

(3) “Eligible Employer” means:

(a) An employer defined by ORS 656.005(13) with:

(A) An insurer estimated annual countrywide Workers’ Compensation standard premium in excess of $500,000; or

(B) An insurer estimated annual countrywide premium in excess of $750,000 in combination with General Liability, Automobile Liability, Hospital Professional Liability, Crime and Glass, and Workers’ Compensation provided Workers’ Compensation countrywide standard premium is in excess of $500,000.

(b) Eligible Employer does not include:

(A) Rating groups approved under OAR 836-042-0201 to 836-042-0225; and

(B) Employers obtaining Workers’ Compensation insurance from the Oregon Workers’ Compensation Insurance Plan under OAR 836-043-0001 to 836-043-0091.

(4) “Insurer” means the State Accident Insurance Fund Corporation or an insurer authorized under ORS Chapter 731 to transact workers’ compensation insurance in this state. “Insurer” includes affiliate insurers for General Liability, Automobile Liability, Hospital Professional Liability, Crime and Glass.

(5) “Large Risk Alternative Rating Plan” means optional retrospective or large deductible rating as mutually agreed upon by insurer and eligible employer.

(6) “Rating Plan” means a rule or set of rules used by an insurer to calculate premium for an eligible employer.

(7) “Workers’ Compensation Standard Premium” means premium determined by authorized rates including any experience rating modification, any applicable schedule rating, employer’s liability increased limits, waiver premium, claim and merit rating, supplemental disease, atomic energy exposure, nonratable catastrophe loadings, aircraft seat surcharge, loss constants and minimum premiums, but does not include premium discounts, coal mine disease charge, employee leasing client processing fees, expense constant, USL&H expense constant, terrorism premiums, catastrophe premiums, and large deductible credits.

History

Statutory/Other Authority: ORS 731.244 & 737.325(1)
Statutes/Other Implemented: ORS 737, 737.310, 737.320 & 737.325(1)
ID 11-2010, f. 5-4-10, cert. ef. 7-1-10

Or. Admin. R. 836-042-0110 Rate Filing Requirements

The Director may approve retrospective rating plans and large deductible rating plans as mutually agreed upon between insurer and eligible employer under the following conditions:

(1) The rating plan is filed with director according to ORS 737.205, 737.310, and 737.320 containing rules indicating the manner in which the rate is promulgated and how the resultant premium is derived;

(2) The rating plans which include large deductible options must comply with OAR 836-042-0070 to 836-042-0090 and 836-054-0201 to 836-054-0210;

(3) The insurer demonstrates rating plan compliance with all workers’ compensation financial and statistical reporting as required by OAR 836-042-0040 to 836-042-0045;

(4) The use of the Large Risk Alternative Rating Plans is an independent option and is not a substitute for, nor incompatible with, Manual Rating, Experience Rating, Loss Rating, rating under Loss Reimbursement or Deductible Plans, or any individual-risk rating rule permitted by Oregon law; and

(5) The insurer maintains documentation supporting the eligible employer’s Large Risk Alternative Rating Plan sufficient for examination under ORS 737.235.

History

Statutory/Other Authority: ORS 731.244 & 737.325(1)
Statutes/Other Implemented: ORS 737, 737.205, 737.310, 737.320 & 737.325(1)
ID 11-2010, f. 5-4-10, cert. ef. 7-1-10

Or. Admin. R. 836-042-0115 Trade Practices Found Injurious to the Insurance Buying Public

Failure of an insurer to comply with OAR 836-042-0110 constitutes an unfair claims practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 737.325(1)
Statutes/Other Implemented: ORS 746.240
ID 11-2010, f. 5-4-10, cert. ef. 7-1-10

Or. Admin. R. 836-042-0201 Statutory Authority; Purpose; Effective Date

(1) OAR 836-042-0201 to 836-042-0225 are adopted under the general rulemaking authority of the Insurance Commissioner in ORS 731.244 and the specific authority relating to workers’ compensation insurance rating groups in ORS 737.316.

(2) The purpose of OAR 836-042-0201 to 836-042-0225 is to provide an orderly procedure for insurers to combine the workers’ compensation insurance experience of a group of employers for rating purposes.

(3) OAR 836-042-0201 to 836-042-0225 become effective October 14, 1983.

History

Statutory/Other Authority: ORS 731.244 & 737.316
Statutes/Other Implemented: ORS 737.316
ID 15-1996, f. & cert. ef. 11-12-96
ID 10-1993, f. 10-1-93, cert. ef. 10-2-93
Reverted to IC 2-1984, f. 1-18-84, ef. 2-1-84
Suspended by ID 2-1993(Temp), f. & cert. ef. 4-1-93
ID 18-1992(Temp), f. 12-21-92, cert. ef. 1-2-93
IC 2-1984, f. 1-18-84, ef. 2-1-84

Or. Admin. R. 836-042-0205 Definitions

As used in OAR 836-042-0201 to 836-042-0225 unless the context requires otherwise:

(1) “Anniversary Rating Date” means the month and day that a rating plan is initially applied to a policy and each annual anniversary thereafter, unless a different date is established by the rating organization to which the insurer belongs.

(2) “Combined Experience” means the sum of workers’ compensation insurance premium, claims, and payroll or other exposure measures used by an insurer to rate individual members of a group of employers. Data from all members of the group are included in the sum without further modification or adjustment.

(3) “Experience Rating” means any prospective modification of workers’ compensation insurance premium based on previous workers’ compensation experience data for an individual employer or a group of employers.

(4) “Group Anniversary Rating Date” means the month and day the combined experience of a group of employers is initially used to rate individual members of the group and each annual anniversary thereafter, unless a different date is established with the approval of the Insurance Commissioner.

(5) “Insurer” means any person authorized to write workers’ compensation insurance in this state and includes the State Accident Insurance Fund Corporation.

(6) “Modification Factor” means the numerical result of an experience rating calculation. Insurance premiums are multiplied by this number to adjust for past experience of an employer or a group of employers.

(7) “Premium” means the contractual amount charged to an insured for insurance for a specific period of time, regardless of the timing of actual charges.

(8) “Premium Discounting” means the modification of workers’ compensation insurance premium according to a rating plan used by an insurer based solely upon a gradation of expense provisions according to the amount of premium.

(9) “Rating Plan” means any set of rules and values filed with the Insurance Commissioner and used by an insurer to calculate premiums.

(10) “Retrospective Rating” means adjustment of workers’ compensation insurance premium for the policies of a group of employers after the policies have expired using the combined experience from those policies according to the insurer’s rating plan.

(11) “Workers’ Compensation Insurance” means insurance covering the obligations of an employer arising from workers’ illness or injury, whether an obligation is imposed by ORS Chapter 656, similar laws of the United States, or agreements between states.

History

Statutory/Other Authority: ORS 731.244 & 737.316
Statutes/Other Implemented: ORS 737.316
ID 10-1993, f. 10-1-93, cert. ef. 10-2-93
Reverted to IC 2-1984, f. 1-18-84, ef. 2-1-84
ID 18-1992(Temp), f. 12-21-92, cert. ef. 1-2-93
IC 2-1984, f. 1-18-84, ef. 2-1-84

Or. Admin. R. 836-042-0210 Rating Plans for which Employers May Be Combined; Retrospective Rating Deposit Required; When Group Rating May Be Applied

(1) An insurer may use the combined experience of a group of employers for experience rating, retrospective rating, or premium discounting of workers’ compensation insurance premiums for the employers in the group. An insurer may also apply other factors approved by the Insurance Commissioner which are not adequately reflected in experience rating, retrospective rating, or premium discounting and which satisfy the requirements of section (6) of this rule.

(2) If the combined experience of a group of employers is used for experience rating, a modification factor to supplement the modification factors of individual employers shall be calculated and distributed by a licensed rating organization according to the Experience Rating Plan of the National Council on Compensation Insurance filed with the Insurance Commissioner. Limitations or other data adjustments shall be applied only to the experience data of individual group members. The rating organization shall provide such service to an insurer upon request and may charge a reasonable fee.

(3) The premiums of a group of employers may be combined for premium discounting if the group can reasonably justify the combination by showing savings in acquisition, premium collection, policy issuance or other insurance administrative expenses or insurance services provided by an organization of which employers in the group are members.

(4) The premiums of a group of employers may be combined for retrospective rating either to enhance volume and reduce insurance charges or to realize expense savings as would be allowed for premium discounting.

(5) Rating modifications based on the combined experience of a group of employers shall apply to individual members of the group as of the individual member’s first anniversary rating date on or after the group anniversary rating date.

(6) An insurer may file a group rating plan for applying factors not adequately recognized and reflected by experience rating, retrospective rating, or premium discounting. The effective date of a proposed plan shall be the date specified in the filing, but not sooner than 30 days after the filing is received by the Insurance Commissioner. The Commissioner may approve an earlier effective date not preceding the date the filing was received. If, within the 30-day period, the Commissioner finds the proposal does not meet the standards and requirements of ORS Chapter 737 and this section, the Commissioner shall notify the insurer that the proposal has been disapproved, stating the basis for such action, and the proposal shall not become effective. If, following the 30-day period, the commissioner finds the proposal does not satisfy the requirements and standards of ORS Chapter 737, the commissioner may proceed according to ORS 737.336(2), 737.215, and 737.045 to disapprove the plan. The Commissioner shall not approve a plan for applying rating factors unless:

(a) All factors can be objectively evaluated and are consistently and uniformly applied and evidence thereof maintained by the insurer;

(b) Premium modifications for each factor are supported by actuarial evidence;

(c) The insurer captures and maintains statistical data demonstrating the rating equity of applying premium modifications; and

(d) The application of a rating factor does not inappropriately duplicate the recognition of experience used in other rating factors.

History

Statutory/Other Authority: ORS 731.244 & 737.316
Statutes/Other Implemented: ORS 737.316
ID 10-1993, f. 10-1-93, cert. ef. 10-2-93
Reverted to IC 2-1984, f. 1-18-84, ef. 2-1-84
Suspended by ID 2-1993(Temp), f. & cert. ef. 4-1-93
ID 18-1992(Temp), f. 12-21-92, cert. ef. 1-2-93
IC 2-1984, f. 1-18-84, ef. 2-1-84

Or. Admin. R. 836-042-0215 Consent to Group Rating Required Before Policy Issuance; Provision Required in Consent Form; Contents of Consent Form

(1) An insurer intending to combine the experience of a group of employers for rating purposes may not issue a policy to a member of the group unless it has secured a signed consent to group rating from each group member.

(2) The form used by the insurer to secure consent to group rating must be approved by the Director. The form must include the following wording, or substantially equivalent wording approved by the Director: “The premium you must pay for this insurance will be determined in part by the consolidated experience of all members of the group in which you participate."

(3) The consent to group rating form must include the following:

(a) Name and address of the group member;

(b) Name, title and signature of the person giving consent;

(d) Specific description of how the combined experience of the group will be used for rating the group member; and

(e) The period covered by policies to be used for deriving the combined experience of group members.

History

Statutory/Other Authority: ORS 731.244 & 737.316
Statutes/Other Implemented: ORS 737.316
ID 3-1999, f. & cert. ef. 3-25-99
ID 10-1993, f. 10-1-93, cert. ef. 10-2-93
Reverted to IC 2-1984, f. 1-18-84, ef. 2-1-84
Suspended by ID 2-1993(Temp), f. & cert. ef. 4-1-93
ID 18-1992(Temp), f. 12-21-92, cert. ef. 1-2-93
IC 2-1984, f. 1-18-84, ef. 2-1-84

Or. Admin. R. 836-042-0220 Filing Requirements and Procedural Rules

(1) Before issuing any policies to group members that are to be rated by the combined experience of the group:

(a) The insurer must file the following with the Director for each group:

(A) The name and nature of the organization to which employers in the group belong;

(B) A copy of documentation forming the organization;

(D) The number of covered workers employed by employers that have signed consent-to-group-rating forms;

(E) An explanation of how the grouping of employers is likely to improve accident prevention and claims handling and reduce expenses;

(F) A specific description of how the combined experience of the group will be used for rating group members; and

(G) The initial group anniversary rating date; and

(b) The insurer must maintain a listing of employers in the organization that have signed consent-to-group-rating forms and make the listing available to the Director upon request.

(2) If the combined experience of a group of employers is used for experience rating, the following standards govern a group established under this rule:

(a) The supplemental modification factor shall be calculated 90 days in advance of the group anniversary rating date using the experience of employers that participated in the group during the experience rating base period. The experience to be combined is the experience of the individual employers for the policy year or years that they participated in the group plan. The employers participating in the group during the base period that also are participating at the time of the supplemental rating calculation must be at least 50 percent of the current participants.

(b) A group must meet at least one of the following conditions at the time of the supplemental rating calculation:

(A) Total annual standard premium prior to the supplemental modification of $250,000 or greater; or

(B) At least 50 participating employers.

(c) The insurer of an organization or another insurer may request approval from the Director under section (1) of this rule to form a new group that will be experience-rated if the organization is composed of a group of employers that satisfies all requirements of ORS 737.316, if the employers are participants in an existing group that is experience-rated based on the combined experience of participants in the existing group and if the employers have signed consent to group rating forms for the formation of a new group. Formation of a group under this subsection is subject to the requirements of subsection (e) of this section.

(d) An insurer may request approval from the Director under section (1) of this rule to form a new group that will be experience-rated if the organization to which the members of the new group belong is composed of a group of employers that satisfies all requirements of ORS 737.316, if the organization has been in existence for one or more years, if more than 50 percent of the members have been members of the organization for one or more years, and if the employers have signed forms giving consent to group rating for the formation of a new group. Formation of a group under this subsection is subject to the requirements of subsection (e) of this section.

(e) The requirements for formation of a new group as provided in subsection (c) or (d) of this section include the following:

(A) The group experience rating supplemental modification factors shall be calculated as follows:

(i) The supplemental modification factor that applies on the new group's initial anniversary rating date shall use all the experience during the experience rating base period of each employer who has signed a consent to group rating form for the formation of the new group.

(ii) The supplemental modification factor that applies on the new group's second anniversary rating date shall use all the experience during the experience rating base period of each employer who has signed a consent to group rating form for the formation of the new group and each employer who began participating in the group effective prior to the time of the second supplemental modification factor calculation.

(iii) The supplemental modification factors that apply on the new group's third and fourth anniversary rating dates shall use all the experience during the experience rating base period of the employers participating in the group at the time of the supplemental modification factor calculation and the experience for the policy years during the experience rating base period that each employer participated in the new group for those employers who previously participated in the group but are not participants at the time of the calculation.

(B) The supplemental modification factor shall be calculated 90 days in advance of the group anniversary rating date, and for the second and subsequent supplemental rating calculations the employers participating in the group during the base period which also are participating at the time of the supplemental rating calculation must be at least 50 percent of the current participants.

(C) Notwithstanding paragraphs (A) and (B) of this subsection, for a new group formed in accordance with subsection (c) or (d) of this section, the supplemental modification factors effective on the new group's initial anniversary rating date and on the new group's second anniversary rating date shall not be less than the simple average of the current supplemental modification factors for all approved experience rating groups as verified by the licensed rating organization during the previous four calendar quarters.

(f) From one group rating anniversary to the next, a supplemental experience modification factor for a group shall not increase by more than the greater of 0.01 or 50 percent of the difference between the factor and 1.00, or decrease by more than the greater of 0.05 or 50 percent of the difference between the factor and 1.00. This limitation does not apply if the supplemental modification factor calculated for a group before this limitation is 1.00 or greater for three consecutive group rating anniversaries or if supplemental experience rating factors are not applied to a group for a period of one or more years.

(3) If the combined experience of a group of employers is used for premium discounting, the discount must be determined from the actual premium of all participating employers.

(4) The effective date of a proposal by an insurer to combine the experience of a group of employers shall be the date specified in the filing required under section (1) of this rule, but not sooner than 30 days after the filing is received by the Director. The Director may approve an earlier effective date, upon written request by the insurer, but the date shall not precede the date the filing was received. If, within the 30-day period, the Director finds the proposal does not meet the standards and requirements of ORS Chapter 737, the Director shall notify the insurer that the proposal has been disapproved, stating the basis for such action, and the proposal shall not become effective. If, following the 30-day period, the Director finds the grouping proposal does not satisfy the requirements and standards of ORS Chapter 737, the Director may proceed according to 737.336(2), 737.215, and 737.045 to disapprove the group rating.

(5) Forty-five days before each group anniversary rating date after the initial effective date:

(a) The insurer must file with the Director for review according to the preceding paragraph the following information for each grouping of employers:

(A) The number of employers in the organization;

(B) The number of covered workers employed by employers participating in the group; and

(b) The insurer must maintain a listing of employers participating in the group and make the list available to the Director upon request.

History

Statutory/Other Authority: ORS 731.244 & 737.316
Statutes/Other Implemented: ORS 737.316
ID 10-2009, f. & cert. ef. 11-13-09
ID 3-1999, f. & cert. ef. 3-25-99
ID 10-1993, f. 10-1-93, cert. ef. 10-2-93
Reverted to ID 3-1991, f. & cert. ef. 4-18-91
Suspended by ID 2-1993(Temp), f. & cert. ef. 4-1-93
ID 18-1992(Temp), f. 12-21-92, cert. ef. 1-2-93
ID 3-1991, f. & cert. ef. 4-18-91
Reverted to IC 2-1984, f. 1-18-84, ef. 2-1-84
ID 15-1990(Temp), f. & cert. ef. 7-3-90
IC 2-1984, f. 1-18-84, ef. 2-1-84

Or. Admin. R. 836-042-0225 Criteria for Grouping; Criteria for Substantially Similar Occupations Within Organization; Open Enrollment Required

An insurer may combine for rating purposes the experience of a group of employers which it covers for workers’ compensation insurance only if:

(1) All employers in the group are members with full rights and privileges of the organization;

(2) The group satisfies all requirements of ORS 737.316.

History

Statutory/Other Authority: ORS 731.244 & 737.316
Statutes/Other Implemented: ORS 737.316
ID 3-1991, f. & cert. ef. 4-18-91
Reverted to IC 2-1984, f. 1-18-84, ef. 2-1-84
ID 15-1990(Temp), f. & cert. ef. 7-3-90
IC 2-1984, f. 1-18-84, ef. 2-1-84

Or. Admin. R. 836-042-0300 Statutory Authority; Purpose; Applicability; Effective Date

(1) OAR 836-42-300 to 836-042-0322 are adopted under the specific authority of the Insurance Commissioner in ORS 737.600, to make rules needed to allow mass marketing plans in personal lines casualty and property insurance.

(2) The purpose of these rules is to prevent abuses in connection with the sale of personal lines property-casualty insurance in this state under mass marketing plans, while preserving for consumers the potential benefits of this form of marketing. The rules also are to provide for an orderly procedure to carry out the provisions of ORS 737.600.

(3) OAR 836-042-0300 to 836-042-0322 apply only to insurance policies issued or renewed in this state after October 14, 1983, and is in addition to, and not instead of, other applicable requirements of the Insurance Code and Division rules. The requirements of OAR 836-042-0300 to 836-042-0322 do not apply to methods of marketing other than mass marketing plans.

(4) OAR 836-042-0300 to 836-042-0322 becomes effective October 14, 1983.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 737.600
Statutes/Other Implemented: ORS 737.600
ID 15-1996, f. & cert. ef. 11-12-96
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0302 Definitions

As used in OAR 836-042-0300 to 836-042-0322 unless the context requires otherwise:

(1) “Mass marketing plan” means a method of selling property-casualty personal lines insurance to members of a particular association which has agreed to or otherwise endorsed the sale of the insurance to its members.

(2) “Personal lines” means property and casualty insurance policies for personal, family or household purposes, and not for commercial or business purposes.

(3) “Property-casualty insurance” means insurance to which ORS 731.158 and 731.182 apply.

History

Statutory/Other Authority: ORS 731.244 & 737.600
Statutes/Other Implemented: ORS 737.600
ID 15-1996, f. & cert. ef. 11-12-96
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0304 Fictitious Arrangement Prohibited

(1) No insurer shall sell insurance under a mass marketing plan to members of any association without the approval of the Commissioner.

(2) The Commissioner will not approve any mass marketing plan unless it meets the requirements of ORS 737.600(3)(d).

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0306 Premium Rates

Premium rates under a mass marketing plan shall comply with the standards in the Insurance Code and shall not be excessive, inadequate, or unfairly discriminatory. Rates will not be deemed unfairly discriminatory when premiums differ between policy holders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as the rates reflect the differences with reasonable accuracy. Rates will not be deemed unfairly discriminatory if they are averaged broadly among persons insured under a mass marketing plan.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0308 Statistics

An insurer selling insurance under mass marketing plans shall maintain separate relevant statistics as to loss and expense experience.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0310 Producers

A person shall not act as an insurance producer in connection with a mass marketing plan for any kind of insurance unless such person is licensed as an insurance producer to transact casualty insurance.

History

Statutory/Other Authority: ORS 731 & 744
Statutes/Other Implemented: ORS 737.600(3)(d)
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1990, f. & cert. ef. 1-19-90
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0312 Compulsory Participation Prohibited

No insurer shall sell insurance under a mass marketing plan if purchase under the plan is a condition of employment or of membership in any association, or if any employee or member would be subject to any penalty for non-participation.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0314 Tie-In Sales Prohibited

No insurer shall sell insurance under a mass marketing plan if:

(1) The purchase of insurance under the plan is contingent upon the purchase of any other insurance, product, or service; or

(2) The purchase or price of any other insurance, product, or service is contingent upon the purchase of insurance available under the plan. This provision does not prohibit the reasonable requirement of safety devices, such as heat detectors, lightning rods, theft prevention equipment and the like.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0316 Disclosure Required

Every insurer or insurance producer selling insurance under a mass marketing plan shall make full and fair disclosure to prospective insureds prior to sale of all features of the plan, whether favorable or unfavorable, including but not limited to premium rates, benefits, duration of coverage, policyholder services, conversion privileges available, and the financial interests in the plan, if any, of the association.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0318 Underwriting Standards

No insurer shall use substantially more restrictive underwriting standards for individual risk selection in a mass marketing plan than the standards used by the insurer for individual risk selection in the sale in this state of the same kind of insurance under other plans. If the insurer does not sell the same kind of insurance in this state under other plans, its underwriting standards for individual risk selection in mass marketing plans shall not be substantially more restrictive than those standards used by its principal affiliate, if any.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0320 Cancellation and Non-Renewal

(1) For purposes of Sections 742.562 and 742.566 of the Insurance Code, limiting the cancellation and non-renewal of insurance policies, the failure of an association, to remit premiums when due for any reason (including but not limited to interruption or termination of employment or membership) shall not be regarded as “non-payment of premium” by any insured under a plan providing for remittance of premium by such association, unless the insured has been given written notice of the failure to remit and has not paid the premium by ten days after such notice, or the due date of the premium remittance under the mass marketing plan, whichever is later.

(2) Every mass marketing plan shall provide that an insured may maintain the policy in force in the same amount, for 60 days after termination of employment or membership or discontinuance of the plan. The member would pay the premium applicable to the class of risk to which the member would belong as an individual. The option to maintain the insurance in force must be exercised within 30 days following the date of termination. Any notice of cancellation or non-renewal of a policy under a mass marketing plan shall include a notice to the insured member that the insurer will allow the association, a reasonable opportunity to consult with the insurer and to present facts in opposition to cancellation or non-renewal.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0322 Compulsory Facilities

An insurer or insurance producer selling insurance under a mass marketing plan shall help any members who apply for but are denied insurance under the plan to obtain insurance through some other appropriate insurance plan, such as the assigned risk plan or the FAIR Plan.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 737.600(3)(d)
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
IC 8-1983, f. & ef. 11-10-83

Or. Admin. R. 836-042-0400 Statutory Authority; Purpose; Applicability; Effective Date

(1) OAR 836-042-0400 to 836-042-0430 are adopted under the authority of ORS 737.600.

(2) OAR 836-042-0430 is adopted to enable the Department to:

(a) Regulate the sale of casualty insurance in this state on commercial risks under group policies as authorized under ORS 737.600(3)(f); and

(b) Regulate the sale of all forms of insurance subject to ORS 737.035 to day care facilities under group policies as authorized under 737.600(3)(g).

(3) OAR 836-042-0400 to 836-042-0430 become effective on adoption.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600
ID 19-2006, f. & cert. ef. 9-26-06
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0405 Definitions

As used in OAR 836-042-0400 to 836-042-0430:

(1) “Casualty Insurance” as defined in ORS 731.158 and as used in 836-042-0400 to 836-042-0430 means liability or casualty insurance as used in 737.600(3)(f).

(2) “Rating System” means a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system and other rules used by an insurer for determining contractual consideration for an insured.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600(3)(f)–(g)
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0410 Commercial Risks; Prohibition; Requirements; Filing

(1) An insurer may not sell casualty insurance on commercial risks under a group policy to members of a group unless:

(a) The insurer has satisfied the filing requirements of this rule with respect to that policy; and

(b) The Director has approved the policy as meeting the requirements of ORS 737.600(3)(f).

(2) An insurer shall file the following with the Director with respect to each group policy of casualty insurance that the insurer proposes to sell:

(a) The name of the group and the common element among its members;

(b) The name of each member;

(d) A specific explanation of the means by which the policy provides for reduced or returned premiums for members of the group;

(e) A specific description of the rating system to be used for rating group members.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600(3)(f)
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0415 Day Care Facilities; Prohibition; Requirements; Filing

(1) An insurer may not sell insurance under a group policy to members of a group of day care facilities unless:

(a) The insurer has satisfied the filing requirements of this rule with respect to that policy; and

(b) The Director has approved the policy as meeting the requirements of OAR 836-042-0400 to 836-042-0430.

(2) An insurer shall file the following with the Director with respect to each group policy for day care facilities that the insurer proposes to sell:

(a) The name of the group;

(b) The name of each day care facility in the group;

(d) A copy or a specific explanation of the risk management plan for the group;

(e) A specific explanation of the means by which the policy provides for reduced or returned premiums for members of the group;

(f) A specific description of the rating system to be used for rating group members.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600(3)(g)
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0420 Anniversary Filings

Not later than the 45th day before each anniversary of the effective date of each policy of insurance issued to a group under OAR 836-042-0400 to 836-042-0430, the insurer must file with the Director a statement whether premiums have been reduced or returned to the members in the group policy during the prior year.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600(3)(f)
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0425 Statistics

(1) An insurer selling casualty insurance on commercial risks to groups shall maintain separate relevant statistics as to loss and expense experiences of the groups insured.

(2) An insurer selling insurance under group policies to members of groups of day care facilities certified under ORS 418.805 to 418.885 shall maintain separate relevant statistics as to loss and expense experiences of the groups insured. If the insurer also sells insurance under group policies to members of groups of days are facilities not required to be certified under 418.805 to 418.885, the insurer shall maintain similar statistics for the groups of such day care facilities but shall maintain those statistics separate from the statistics for groups of certified day care facilities.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600(3)(f)–(g)
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0430 Disclosure Required for Day Care Facilities

Every insurer selling insurance under a group policy for day care facilities shall make full and fair disclosure to prospective insureds, prior to sale, of all features of the plan, whether favorable or unfavorable, including but not limited to pricing and policyholder services.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.600(3)(g)
ID 7-1987, f. & ef. 12-11-87

Or. Admin. R. 836-042-0501 Statutory Authority; Purpose; Applicability; Effective Date

(1) OAR 836-042-0501 to 836-042-0520 are adopted pursuant to:

(a) The general rulemaking authority of the Director in ORS 731.244 as an aid to the effectuation of 737.320(6) which enables the Director to require that filed rates, rating plans and rating systems be submitted to the Director for review prior to becoming effective; and

(b) The specific authority of the Director under ORS 737.207 to specify the markets of commercial liability insurance in which insurers and rating organizations must submit rate filings before they become effective if the average annual rate level increase or decrease for each market exceeds 15 percent.

(2) The purpose of OAR 836-042-0501 to 836-042-0520 is to moderate the sharp cyclical swings in the availability and affordability of commercial liability insurance. Such moderation is accomplished by requiring that insurers and rating organizations submit to the Director their filings of rates, rating plans and rating systems for a specified commercial liability insurance market for review before such filings become effective, if the average annual rate level increase or decrease for that market exceeds 15 percent.

(3) OAR 836-042-0501 to 836-042-0520 apply to all commercial liability insurance filings.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.207 & 737.320
ID 15-1996, f. & cert. ef. 11-12-96
ID 14-1988, f. & cert. ef. 8-24-88
ID 4-1988(Temp), f. & cert. ef. 2-26-88
IC 7-1986, f. 11-7-86, ef. 11-10-86
IC 4-1986(Temp), f. & ef. 4-21-86

Or. Admin. R. 836-042-0505 Definitions

As used in OAR 836-042-0501 to 836-042-0520, unless the context requires otherwise:

(1) “Anniversary Rating Date” means the month and day that rates, rating plans and rating systems are initially applied to a policy in effect and each annual anniversary thereafter.

(2) “Annual Rate” means the total limits base rate per unit exposure.

(3) “Classification” means a grouping of insurance risks according to a classification system used by an insurer.

(4) “Classification System” means a schedule of classifications and a rule or set of rules used by an insurer for determining the classification applicable to an insured.

(5) “Commercial Liability Insurance” has the meaning set forth in ORS 731.074.

(6) “Premium” means the contracted consideration charged to an insured for insurance for a specific period of time regardless of the timing of actual charges.

(7) “Rating Plan” means a rule or set if rules used by an insurer to calculate premium for an insured, and the parameter values used in such calculation, after application of total limits base rates to units of exposure.

(8) “Rating System” means a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system and other rules used by an insurer for determining contractual consideration for insured.

(9) “Total Limits Base Rate” means a monetary amount applied to the units of exposure basis assigned to a classification and used by an insurer to determine the total limits premium for an insured, prior to any adjustment or adjustments resulting from the application of any rating plan.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.207(2) & 737.320(6)
ID 14-1988, f. & cert. ef. 8-24-88
ID 4-1988(Temp), f. & cert. ef. 2-26-88
IC 7-1986, f. 11-7-86, ef. 11-10-86
IC 4-1986(Temp), f. & ef. 4-21-86

Or. Admin. R. 836-042-0510 Rates, Rating Plans System — Prior Review

(1) An insurer or rating organization shall submit to the Director its filing of rates, rating plans and rating systems for a commercial liability insurance market specified in OAR 836-042-0512 prior to the effective date of the rates, rating plans and rating system if the average annual total limits rate level increase or decrease for such market exceeds 15 percent because of changes in any:

(a) Total limits base rates;

(b) Rating basis;

(d) Manual rules;

(e) Territorial definitions; or

(f) Combination of such rating system components, described in this section, or the compounding series of such changes applied at a date other than the anniversary rating date of a policy.

(2) Nothing in this rule applies to annual rate increases or decreases from:

(a) Change in hazard of the insured’s operation;

(b) Change in magnitude of the exposure basis for the insured, (such as changes in payroll or sales, or other matters); or

(c) Application in parameter values provided for in a rating plan approved by the Director, including those approved prior to August 24, 1988.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.207(2) & 737.320(6)
ID 14-1988, f. & cert. ef. 8-24-88
ID 4-1988(Temp), f. & cert. ef. 2-26-88
IC 7-1986, f. 11-7-86, ef. 11-10-86
IC 4-1986(Temp), f. & ef. 4-21-86

Or. Admin. R. 836-042-0512 Specified Commercial Liability Markets

The conditions for a prior review in OAR 836-042-0510 apply to:

(1) Average annual rate level increases greater than 15 percent for the following commercial liability markets:

(a) Products liability;

(b) Medical professional liability;

(d) Liquor law liability;

(e) Child care liability;

(f) Directors and officers liability;

(g) Recreational liability;

(h) Non-profit philanthropic and civic activity liability;

(i) Commercial automobile long haul trucking liability;

(j) Municipal liability;

(k) Public official liability.

(2) Average annual rate level decreases greater than 15 percent for all commercial liability markets except for commercial automobile policies and package insurance policies (such as commercial multi-peril and business owners policies).

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.207(1) - 737.207(2) & 737.320(6)
ID 14-1988, f. & cert. ef. 8-24-88
ID 4-1988(Temp), f. & cert. ef. 2-26-88

Or. Admin. R. 836-042-0515 Commercial Liability Filings — Procedural Rules for Insurers and Rating Organizations

(1) Each filing of a commercial casualty insurance premium rate, rating plan or rating system that is certified by a member of the American Academy of Actuaries or by an executive officer of the entity making the filing as not being subject to OAR 836-042-0510(1) shall become effective on the date specified in the filing but not earlier than the date the filing is received by the Director.

(2) Each filing of commercial liability insurance rate, rating plan or rating system that does not satisfy the condition of section (1) of this rule and the requirements of OAR 836-042-0520 and each filing subject to 836-042-0510(1) must be submitted to the Director for review prior to becoming effective.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.207(3) & 737.320(6)
ID 14-1988, f. & cert. ef. 8-24-88
ID 4-1988(Temp), f. & cert. ef. 2-26-88
IC 1-1986, f. & ef. 1-21-87
IC 7-1986, f. 11-7-86, ef. 11-10-86
IC 4-1986(Temp), f. & ef. 4-21-86

Or. Admin. R. 836-042-0520 Supporting Data

Supporting actuarial data shall accompany every filing of a commercial liability insurance rate, rating plan and rating system. The data shall be in sufficient detail to:

(1) Demonstrate compliance with ORS 737.207; and

(2) Demonstrate the statistical significance of differences or correlations relevant to rating plan definitions and rate differentials.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.207(4) & 737.320(6)
ID 14-1988, f. & cert. ef. 8-24-88
ID 4-1988(Temp), f. & cert. ef. 2-26-88
IC 7-1986, f. 11-7-86, ef. 11-10-86
IC 4-1986(Temp), f. & ef. 4-21-86

Division 43 WORKERS’ COMPENSATION INSURANCE RATING SYSTEM AND AUDIT PROCEDURES

Or. Admin. R. 836-043-0001 Statutory Authority; Purpose;

(1) OAR 836-043-0001 to 836-043-0091 are adopted by the Insurance Commissioner pursuant to the authority and requirements of ORS 656.427, 656.730 and 731.244 for the purpose of implementing ORS 656.427, 656.730, and 737.265, and may be cited as the Oregon Workers’ Compensation Insurance Plan (the “Plan” or “WCIP”).

(2) The Oregon Workers’ Compensation Insurance Plan provides for the equitable apportionment among workers’ compensation insurers of employers who are in good faith entitled to workers’ compensation insurance, but who are unable to procure such insurance in a regular manner.

(3) The Plan applies to all authorized workers’ compensation insurers and the State Accident Insurance Fund Corporation, their agents and the Plan Administrator.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
ID 4-1994, f. & cert. ef. 4-19-94
ID 13-1992, f. & cert. ef. 8-12-92
ID 1-1991, f. & cert. ef. 2-19-91
Reverted to ID 7-1990, f. 4-30-90, cert. ef. 5-1-90
ID 18-1990(Temp), f. & cert. ef. 8-6-90
ID 7-1990, f. 4-30-90, cert. ef. 5-1-90
ID 10-1989(Temp), f. & cert. ef. 11-3-89
IC 1-1982, f. 1-15-82, ef. 7-1-82
IC 1-1980, f. & ef. 1-15-80
IC 1-1979(Temp), f. & ef. 10-12-79

Or. Admin. R. 836-043-0005 Definitions for the Workers’ Compensation Insurance Plan

As used in OAR 836-043-0001 to 836-043-0091:

(1) "Affiliated insurer" or "affiliate" means an insurer that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another insurer specified, and is required to participate in the Plan pursuant to OAR 836-043-0009. For purposes of this definition, "control" means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an insurer, whether through the ownership of voting securities, by contract or otherwise. Control is deemed to exist if any person or business enterprise, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies, representing ten percent or more of the voting securities of any other insurer.

(2) “Application” means the form approved for use in the assigned risk market by the Plan Administrator for the purpose of securing workers compensation insurance under the Plan, which contains the required information as described in NCCI’s Assigned Risk Supplement to the Basic Manual for Workers’ Compensation and Employers Liability Insurance.

(3) “Assigned risk market” means a state insurance plan that provides employers unable to secure coverage in the voluntary market with a means for insuring their operations through a designated insurance carrier.

(4) “Assigned Carrier Performance Standards” means the minimum level of performance for servicing carriers writing coverage on behalf of the Plan. The purpose of the Assigned Carrier Performance Standards is to provide policy issuance and service level requirements that servicing carriers must adhere to in order to provide assigned risk market policyholders with uniform service while reducing the overall loss ratio.

(5) “Board” means the Board of Directors or governing entity of the reinsurance organization selected by the Director to implement the assigned risk plan under ORS 656.730.

(6) “Bona Fide Premium Dispute” means a disagreement relating to a workers’ compensation premium established under OAR 836-043-0071(1).

(7) "Client" means any person to whom workers are provided under contract and for a fee on a leased basis.

(8) “Common management interest” means an interest that exists when one or more individuals are or were owners or officers of, or performs or performed management functions for, two or more entities, or for a succession of entities.

(9) "Employer" means any business organization or enterprise that has a statutory right to maintain workers' compensation insurance in Oregon. “Employer” includes:

(a) Any business organization or enterprise that is affiliated at any time as a result of common management or ownership; or

(b) A client business of a worker leasing company as established in ORS 656.850.

(10) “Governing state” means the state that generates the largest amount of payroll.

(11) “Insured” means the employer designated in the information page of a policy to which this Plan is applied and issued by a servicing carrier.

(12) “Insurance Commissioner” means the Director of the Department of Consumer and Business Services or the person appointed by the director to serve as Insurance Commissioner under ORS 705.115.

(13) "Insurer" means the State Accident Insurance Fund Corporation or a person licensed under ORS chapter 731 for workers’ compensation that satisfies its participation obligation by subscribing to the organizing principles. By subscribing to the organizing principles, an insurer shares in the results of the reinsurance pooling mechanisms on a pro-rata basis of their net premiums written within the state. The insurer may be assessed or receive disbursements depending upon the reinsurance pooling mechanism’s operating results.

(14) "National Council on Compensation Insurance, Inc." and "NCCI" mean a rating organization that is licensed in Oregon to make and file rates, rating values, classifications and rating plans for workers' compensation insurance, and is an organization that authorized workers' compensation insurers may be members for the purpose of satisfying ORS 737.560.

(15) "Net premiums written" means the gross direct premiums charged less all premiums (except dividends and savings refunded under participating policies) returned to insureds for all workers' compensation and occupational disease insurance, exclusive of premiums for employers subject to the Plan, and for employers written under the National Defense Projects Rating Plan and under excess policies.

(16) “Organizing principles” means the agreement and principles of the reinsurance organization, approved by the Director, that govern the management of and participation in the Plan. A carrier participating in the Plan subscribes to the organizing principles. “Organizing principles” may include any of the following, as applicable:

(a) The National Pool reinsurance mechanism that is filed with and approved by the Insurance Commissioner and that is authorized under the Plan to provide reinsurance to the servicing carriers on employers assigned to them under the Plan.

(b) The Bylaws of the National Workers’ Compensation Reinsurance Association NFP (NWCRA or Association), whose member insurers participate in the Reinsurance Agreement(s) authorized under this Plan to provide reinsurance to the servicing carriers on employers assigned to them under this Plan. The Bylaws are the agreement subscribed to by insurers selecting Option 2 — Subscription to organizing principles as their means of satisfying their participation in the Plan.

(c) The agreement or management rules of any reinsurance organization selected by the Director to implement Oregon’s assigned risk plan.

(17) "Plan" means the Oregon Workers' Compensation Insurance Plan.

(18) "Plan Administrator" means the organization designated in OAR 836-043-0017, and its agents.

(19) “Producer” means a person who is licensed as an insurance producer under ORS 744.052 to 744.089, whose privileges under this Plan have not been suspended or revoked, designated by the employer or applicant applying under this Plan to secure and maintain workers’ compensation and employers liability insurance on behalf of the employer. For purposes of this Plan, the producer is considered to be acting on behalf of the insured or employer applying for coverage under this Plan and not as a producer of the Plan Administrator or of any servicing carrier for Plan business.

(20) “Reasonable offer of voluntary coverage” means any offer for voluntary coverage where the total estimated annual premium is less than or equal to the assigned risk total estimated annual premium including any applicable assigned risk surcharges or pricing programs for all comparable coverage. Subject to the Plan Administrator’s discretion, “reasonable offer of coverage” does not include:

(a) An offer that does not provide all of the required coverage (e.g., carrier cannot provide federal coverage or limits of liability);

(b) An offer that includes a deductible or deposit that is a financial burden to the employer as determined by the producer or employer; or

(21) “Regulatory authority” means the commissioner, director or superintendent of a state’s insurance regulatory agency, or a properly appointed designee of the commissioner, director or superintendent.

(22) “Reinsurance Agreement” means a contractual arrangement among association members providing a quota share reinsurance facility for workers’ compensation insurance in a number of states and for which administrative services are provided by the National Council on Compensation Insurance, Inc. in its capacity as administrator as designated under the organizing principles.

(23) “Reinsurance Organization” means the entity selected by the Director to implement Oregon’s workers compensation assigned risk plan under ORS 656.730. “Reinsurance Organization” may include:

(a) The National Workers’ Compensation Reinsurance Association, a nonprofit corporation whose members provide for contractual quota share reinsurance through reinsurance agreements among themselves as workers’ compensation insurers, which affords the insurers an option for complying with state insurance plan requirements by sharing in the experience of certain policies written pursuant to such insurance plans;

(b) The National Workers’ Compensation Reinsurance Pool, a contractual reinsurance mechanism among participating workers’ compensation insurers, that affords insurers in certain states an option for complying with state insurance plan requirements by sharing in the experience arising out of certain policies written pursuant to such insurance plans; or

(24) "Servicing carrier" means an insurer, including the State Accident Insurance Fund Corporation, approved by the Insurance Commissioner that has been assigned to provide coverage to an eligible employer who has applied for workers' compensation insurance pursuant to the Plan.

(25) “State” means any state of the United States and the District of Columbia.

(26) "Undisputed premium obligation" means a workers' compensation insurance premium obligation that is not the subject of a bona fide dispute pursuant to ORS 737.318 or 737.505 or by a judicial action, and for which there is no written payment plan in effect between an insurer and employer.

(27) "Workers' compensation insurance" means:

(a) Statutory workers' compensation and occupational disease liability insurance, including insurance for liability under the Longshore and Harbor Workers' Compensation Act, as amended, and the Federal Coal Mine Health and Safety Act of 1969, as amended;

(b) Employers liability insurance written in connection with a workers' compensation insurance policy; and

(28) "Workers' Compensation Rating System Review and Advisory Committee" means the committee established pursuant to OAR 836-043-0200 to hear employer grievances pursuant to ORS 737.505.

NOTE: The Bylaws and the National Pool reinsurance mechanism (Articles of Agreement) are attached to this rule as Exhibit 4.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
ID 4-1994, f. & cert. ef. 4-19-94
ID 13-1992, f. & cert. ef. 8-12-92
ID 1-1991, f. & cert. ef. 2-19-91
Reverted to ID 7-1990, f. 4-30-90, cert. ef. 5-1-90
ID 18-1990(Temp), f. & cert. ef. 8-6-90
ID 7-1990, f. 4-30-90, cert. ef. 5-1-90
ID 10-1989(Temp), f. & cert. ef. 11-3-89
IC 1-1982, f. 1-15-82, ef. 7-1-82
IC 1-1980, f. & ef. 1-15-80
IC 1-1979(Temp), f. & ef. 10-12-79

Or. Admin. R. 836-043-0009 Participation by Insurers and Insurance Producers

(1) All insurers authorized to transact workers' compensation insurance in Oregon are required to participate in the Plan and subscribe to the organizing principles for Oregon.

(2) Failure of an insurer to comply with the Plan is grounds for revocation of the insurer's certificate of authority to transact workers' compensation insurance.

(3) Each insurance producer who is authorized to transact the class of property and casualty insurance is authorized to transact workers' compensation insurance offered by the Plan. The Director of the Department of Consumer and Business Services may terminate a producer's authority under this section for cause.

(4) An insurer may terminate participation in this Plan as of the close of the calendar year in which its authority to write workers’ compensation is terminated. With respect to all policies in force on the effective date of an insurer’s termination, the liability of the terminating insurer will cease on the succeeding anniversary date of each such policy. Termination of participation does not discharge or otherwise affect liabilities incurred prior to the anniversary date of such policies, and the insurer will be charged or credited in due course with the insurer’s proper share of all expenses, losses, and profits allocable thereof.

(5) All insurers participating in the Plan through the Reinsurance Agreements provided for in the organizing principles shall share in the writings, expenses, servicing allowance and losses. Each insurer’s participation in the Plan shall:

(a) Be in the proportion that the total net premiums of all members participating in the Plan in Oregon during the preceding calendar years bear to the aggregate direct premiums written in Oregon during the preceding calendar years by all insurers participating through the Reinsurance Agreements;

(b) Except as provided in OAR 836-043-0017(2)(k), exclude that portion of the premiums attributable to the operation of the Plan; and

(c) Be determined on the basis of the direct premiums as reported in the most recent annual reports filed with the regulatory authority.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0016
ID 4-1994, f. & cert. ef. 4-19-94

Or. Admin. R. 836-043-0017 Plan Administrator

(1) The Plan Administrator is a rating organization for workers' compensation insurance in Oregon that is designated as the plan administrator by the Director. The National Council on Compensation Inc. is designated as the Plan Administrator. The Plan Administrator shall continue to serve from the effective date of the Plan unless the Plan Administrator resigns. The Plan Administrator must give advance written notice of its resignation to the Director at least one year in advance of the effective date of resignation.

(2) The Plan Administrator has the following duties and responsibilities in addition to any others set forth in the Plan and the organizing principles:

(a) Determining the methodology and formula for making assignments to servicing carriers pursuant to OAR 836-043-0060 and securing the necessary information in order to make the assignments;

(b) Developing and implementing assigned risk operating rules and forms approved by the Director to the extent necessary to carry out the purposes of the Plan;

(d) Establishing written Assigned Carrier Performance Standards for servicing carriers, subject to approval by the Insurance Commissioner, including, but not limited to:

(A) Verification of ongoing Plan eligibility of the employer;

(B) Issuance of policies and endorsements;

(D) Maintenance of premiums on policies, consistent with manual rules, rates, rating plans, and classifications;

(E) Completion and billing of final audits;

(F) Collection of premium;

(G) Claim services, including investigation, disability management and medical cost control;

(H) Loss control services and safety information to encourage employers to make safety a part of their business;

(I) Payment of producer fees;

(J) Issuance of renewal proposals and non-renewal notices;

(K) Assurance of insured and insurer compliance with all terms and conditions of the policy contract;

(L) Resolution of complaints and response to insured and insurance producer inquiries; and

(M) Reporting financial and statistical data;

(e) Monitoring servicing carrier performance and enforcing Assigned Carrier Performance Standards and incentives;

(f) Administering the dispute resolution mechanism as provided in OAR 836-043-0070;

(g) Developing and implementing assigned risk operating rules and forms to the extent necessary to carry out the purposes of the Plan;

(h) Informing the Insurance Commissioner of any insurer that is not participating in this Plan;

(i) Monitoring the performance and operation of the Plan and initiating amendments thereto as appropriate;

(j) Determining the expenses for operation of the Plan, including but not limited to the Plan Administrator’s fees or legal expenses associated with Plan matters, and assess each insurer participating in the Plan for those expenses on an equitable basis as determined by the Plan Administrator and approved by the Director; and

(k) Developing and administering a take-out credit program as provided in OAR 836-043-0076.

(3) The Plan Administrator shall also publish and make available to all affected insurers and producers, upon request and at no charge, both the necessary information for placement in the Plan and the listings of all employers that have been placed into the Plan. The listings shall include each employer's name, address, policy expiration date, latest experience modification, if applicable, the Simplified Assigned Risk Adjustment Program factor and the governing class code.

(4) The Plan Administrator shall monitor compliance by servicing carriers with occupational safety and health consultative service requirements of ORS 731.480. The Plan Administrator shall file with the Insurance Commissioner by May 1 of each year a report regarding such compliance for the preceding calendar year. The Plan Administrator shall also determine the expenses for operation of the Plan, not including the Plan Administrator's expenses incurred in connection with responsibilities it has under the Articles, and shall assess each insurer participating in the Plan for those expenses on an equitable basis as determined by the Plan Administrator.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0030
ID 4-1994, f. & cert. ef. 4-19-94

Or. Admin. R. 836-043-0021 Servicing Carriers

(1) The Plan Administrator shall establish written requirements that insurers must meet in order to be eligible to act as a servicing carrier. The Plan Administrator shall provide the written requirements to the board for review and acceptance. From among those insurers that are eligible and have applied to act as a servicing carrier, and subject to approval by the Insurance Commissioner, the Plan Administrator shall select a sufficient number of servicing carriers that are needed to handle the assignments made pursuant to the Plan. The Plan Administrator may confer with the board in regard to the number of servicing carriers needed to handle the assignments made pursuant to this Plan. Subject to approval by the Insurance Commissioner, the Plan Administrator may terminate the servicing carrier status of any insurer that fails to meet the servicing carrier requirements on a continuing basis.

(2) In order to be a servicing carrier, an insurer must meet all of the following eligibility criteria:

(a) Be licensed to write workers’ compensation and employers liability insurance in Oregon or be the State Accident Insurance Fund Corporation.

(b) Be writing or be an affiliated insurer of a carrier that is currently licensed and actively writing voluntary workers’ compensation and employers liability insurance premium in Oregon and that has been licensed and writing in Oregon for each of the five calendar years immediately preceding the first effective year of the proposed contract, or be licensed and actively writing workers’ compensation and employers liability insurance in Oregon for a minimum of the most recent three calendar years immediately preceding the first effective year of the proposed contract and active as a workers’ compensation servicing carrier in any other national workers’ compensation reinsurance organization in another state for a minimum of five calendar years immediately preceding the first effective year of the proposed contract.

(c) Be assigned and maintain at a minimum an “A-” rating as published by A.M. Best, except that such "A-" A.M. Best rating is not applicable to the State Accident Insurance Fund Corporation.

(d) Maintain the necessary staff and facilities to comply with the procedures, Assigned Carrier Performance Standards, financial reporting requirements, and Plan requirements.

(e) Comply with all applicable statutory and regulatory requirements, including but not limited to, statutes, regulations, codes, rules, acts, directives, bulletins, announcements and circulars.

(f) Be either precertified in writing by the Plan Administrator or have achieved and maintained and not be subject to a revocation of precertification or certification status as determined by the Plan Administrator under the applicable precertification or certification program established by the Plan Administrator.

(g) Comply with all mandatory electronic processing and reporting requirements of the Plan Administrator that are currently in effect.

(h) Comply with all federal and state laws and regulations, which relate to the policies applicable to the servicing carrier.

(3) Each servicing carrier shall provide a report to the Plan Administrator in such a format and for such a period as determined by the Plan Administrator, but not less than semiannually. This report, among other things, shall provide information on the servicing carrier's operations related to Plan business in the following areas: underwriting, auditing, claims, loss control, premium collection and customer service. A summary of such reports shall be provided to the Insurance Commissioner.

(4) The Plan Administrator shall establish written procedures for measuring servicing carrier performance. In recognition of the interests of the participating companies who have subscribed to the organizing principles, the Plan Administrator shall provide a copy of such written Assigned Carrier Performance Standards to the board for review and acceptance. Servicing carriers shall manage losses in compliance with the performance standards established hereunder. The Plan Administrator, with the approval of the Insurance Commissioner, shall also establish the compensation for servicing carriers, which shall take into consideration, among other things, provisions for:

(a) Rewarding servicing carriers for positive action targeted at reducing losses and costs;

(b) Disincentives for inefficiencies and service below the minimum Assigned Carrier Performance Standards; and

(5) The Plan Administrator shall monitor and review servicing carrier performance by:

(a) Reviewing the operations reports;

(b) Requiring and reviewing self-audits;

(d) Reviewing any other information available that relates to the servicing carrier.

(6) The Plan Administrator shall require servicing carriers to maintain desired performance levels and shall take appropriate remedial action where necessary including, but not limited to, establishment and administration of a progressive discipline program which may lead to terminating an insurer's servicing carrier status.

(7) Termination of an insurer's servicing carrier status is subject to Insurance Commissioner approval.

(8) Any formal action taken by the Plan Administrator under this rule shall be the exclusive remedy and in lieu of any other penalty or sanction that may apply under the Plan.

(9) Any action taken by the Plan Administrator under this provision is subject to review under OAR 836-043-0070.

(10) In order to fulfill its responsibilities under this Plan, the Plan Administrator shall have the right, itself or through authorized representatives, at all reasonable times during regular business hours, to audit and inspect the books and records of any servicing carrier with respect to any policies, claims, or related documents coming within the purview of the Plan, the organizing principles or the Reinsurance Agreement. Upon request, the Plan Administrator shall make available to the Insurance Commissioner and the board a formal written report on the Plan Administrator’s monitoring and enforcement activities related to servicing carriers.

History

Statutory/Other Authority: 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0040
ID 4-1994, f. & cert. ef. 4-19-94

Or. Admin. R. 836-043-0024 Right to Apply

(1) An employer who is eligible for workers’ compensation insurance as set forth in this rule may apply to the Plan Administrator for workers' compensation insurance under the Plan as provided in this rule if the employer is unable to obtain a reasonable offer of voluntary coverage. The employer must apply on the forms and according to the directions prescribed in Exhibits 1, 2, and 3 to this rule.

(2) For purposes of section (1) of this rule, the offer of a rating plan approved by the Insurance Commissioner is considered an offer of voluntary coverage or insurance. Any dispute arising from the application or interpretation of this rule is subject to the dispute resolution procedure provided in OAR 836-043-0070. As used in this section, “reasonable rating plan” means any rating program approved for use in a state by the regulatory authority.

(3) An employer seeking coverage under the Plan or a representative of the employer must:

(a) Within 60 days before applying for coverage under the Plan, apply for workers’ compensation insurance and receive a declination from at least one insurer licensed to write and actively writing workers’ compensation insurance in Oregon. The declination must be from the insurer providing workers’ compensation insurance to the employer at the time of application, if any. Proof of cancellation or nonrenewal from the insurer shall be considered to be the required declination.

(b) Maintain a record of all insurer declinations for the policy period in force. The employer must provide this information to the Plan Administrator or servicing carrier upon request. The information must include:

(A) Insurer name;

(B) Person contacted at insurer;

(D) Date of declination.

(4) For purposes of section (1) of this rule, an employer is presumed to be eligible in the absence of clear and convincing evidence to the contrary. An employer is not eligible if any of the following circumstances exists at the time of application or thereafter:

(a) A self-insured employer knows and is aware of pending bankruptcy proceedings, insolvency, cessation of operations or conditions that will probably result in occupational disease or cumulative injury claims from exposures incurred while the employer was self-insured.

(b) The employer, while insurance issued under the Plan is in force:

(A) Knowingly refuses to meet reasonable health, safety or loss control requirements;

(B) Does not allow any insurer or the servicing carrier reasonable access to its records for audit or inspection under the policy; or

(c) The employer has an outstanding workers' compensation insurance premium obligation or other monetary policy obligation including but not limited to an obligation under a deductible program, on previous workers' compensation insurance that is not subject to a bona fide dispute.

(d) The employer, a representative of the employer, or the producer knowingly fails to comply with Plan procedures, or knowingly makes a material misrepresentation on the application by express statement, omission or otherwise, including but not limited to:

(A) Estimated payroll;

(B) Offers of workers' compensation insurance;

(D) Name of business;

(E) Management or ownership of business;

(F) Previous insurance history;

(G) Avoidance of an experience rating modification;

(H) An outstanding workers' compensation insurance premium obligation or other monetary policy obligation of the employer;

(I) Noncompliance with any applicable state licensing or registration requirement;

(J) Fails to accept any reasonable offer of voluntary coverage; or

(K) Other evidence exists that shows the employer is not entitled to insurance

(5) An eligible employer may submit a completed application for assigned risk coverage through the Plan by any method approved by the Plan Administrator, including:

(a) Online — Through ncci.com ;

(b) Mail — The U.S. Postal Service or private overnight delivery service; or

(6) The Plan Administrator shall conditionally bind coverage of a worker leasing company applicant for an initial worker leasing company license under OAR 436-050-0440 pending issuance of the license by the Director.

(7) An eligible employer or the representative of the employer must submit the total initial or deposit premium by a method approved by the Plan Administrator including:

(a) Electronic fund transfer;

(b) Credit card; or

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 1-2003, f. & cert. ef. 1-17-03
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0028 Application by Electronic Transmission or Telephone

(1) An application made by electronic transmission or telephone must be completed in full and must be signed. The signature may be submitted by facsimile transmission. The effective date of coverage shall be determined in accordance with OAR 836-043-0044.

(2) An employer or the representative of an employer may apply for assigned risk coverage electronically by accessing NCCI’s online application service. Upon receipt of an application submitted electronically, the Plan Administrator shall review the information to determine whether the employer is eligible. If the employer is eligible and the application is complete and accurate, the Plan Administrator shall calculate electronically the initial or deposit premium amount and request the employer to submit the amount to continue the application process. The amount of the initial or deposit premium shall be determined in accordance with rules set forth in Exhibit 3 to OAR 836-043-0024.

(3) The employer or its agent must submit the total required initial premium to the Plan Administrator by credit card or electronic funds transfer. A portion of the deposit premium may be satisfied with an authorized surety's financial guaranty bond as provided in OAR 836-043-0034.

(4)(a) The employer or the representative of the employer may contact the Plan Administrator by telephone to apply for assigned risk coverage. If the information provided by telephone is complete, accurate, and the employer is deemed eligible for coverage, the Plan Administrator shall:

(A) Advise the employer of the total estimated annual premium and required initial or deposit premium required to bind coverage; and

(B) Fax the employer a copy of the completed applications as set forth in Exhibits 1 and 2 of OAR 836-043-0024 for review and signature.

(b) For a application made by telephone, the employer or the representative of the employer shall submit the total required initial or deposit premium by electronic funds transfer in accordance with rules set forth in Exhibit 3 to OAR 836-0043-0028.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0032 Nonelectronic Application

(1) An employer or the representative of an employer may submit a signed and completed application as set forth in Exhibits 1 and 2 of OAR 836-043-0024 by United States mail or a private overnight mail delivery service. The application must be sent to the Plan Administrator and must include the initial or deposit premium as calculated by the employer or its agent. The application may include a requested date for the coverage to become effective. A portion of the deposit premium may be satisfied with an authorized surety's financial guaranty bond as provided in OAR 836-043-0034.

(2) The employer or its agent shall refer to Exhibit 3 to OAR 836-043-0024 of the application for the applicable deposit or initial premium rules.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0034 Surety Bonds

For all submission options under OAR 836-043-0028 or 836-043-0032, the employer submitting an application may satisfy a portion of the deposit premium with an authorized surety’s financial guaranty bond, but the cash portion of the deposit premium must be no less than either the minimum premium or 25 percent of the total estimated annual premium, whichever is greater. The employer may select any minimum deposit percentage listed in the NCCI Plan Oregon State Instructions page (Exhibit 3 to 836-042-0024) and post a bond for the premium difference between that percentage and the minimum deposit percentage otherwise applicable.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09

Or. Admin. R. 836-043-0041 Application Review

(1) Upon receiving an application submitted under OAR 836-043-0028 or 836-043-0032, the Plan Administrator shall review the application for completeness and determine whether the employer is eligible for coverage under the Plan.

(2) The Plan Administrator may request additional information to establish eligibility, to assign appropriate classification codes, to calculate applicable premiums and to otherwise appropriately process the application. The additional information may include:

(a) Tax documentation;

(b) Ownership information, including a request to complete and sign a change of ownership form;

(c) Contracts, including worker leasing company arrangements, temporary employment agency contract or franchise agreements;

(d) Supplemental worker leasing company applications;

(e) Additional information regarding short-term policies requests, such as verification of annualized payroll;

(f) Proof of declination of voluntary coverage;

(g) Prior policy information including claims and audits, corporate charters, Dun & Bradstreet, Inc. reports, signed financial statements and signed letters of explanation; and

(h) Any other information that the Plan Administrator considers necessary to process the application.

(3) The employer or its agent shall provide information and documentation requested by the Plan Administrator or provide an acceptable explanation for failure to provide the requested items not later than the second business day after the request or upon the mutually agreed-upon date.

(4) The Plan Administrator may return an incomplete application to the employer or its agent for completion or, with notice to the employer or its agent, the Plan Administrator may retain the application pending receipt of further information. The Plan Administrator may reject an application and the previously established effective date if the employer fails to comply in a timely manner with a request from the Plan Administrator.

(5) An employer or a representative of an employer may resubmit a complete application to the Plan Administrator for an application review and establishment of a new effective date in accordance with 836-043-0044.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0044 Binding Coverage

(1) The Plan Administrator may issue binders to eligible employers in accordance with the provisions of this Plan. The servicing carrier shall provide coverage under any binder issued by the Plan Administrator, subject to the provisions of the Plan, any applicable policy terms or conditions, and any applicable laws, rules, or regulations. The Plan Administrator shall send copies of the binder to the employer’s representative, if any, the servicing carrier to which the Plan Administrator assigned the employer and the Director of the Department of Consumer and Business Services.

(2) The Plan Administrator shall issue a binder for an employer when the Plan Administrator determines all of the following occur:

(a) The employer is eligible for coverage;

(b) The Plan Administrator has received an application that is complete and signed by an officer, owner or other designee with power of attorney and includes any additional information within the established time frame; and

(3) After the Plan Administrator binds coverage, the Plan Administrator shall provide the servicing carrier with the following:

(a) A copy of the binder;

(b) The initial or deposit premium;

(d) Copies of any provided election or rejection forms;

(e) Other forms submitted during the application review process; and

(f) Any information to assist the servicing carrier in providing the proper coverage and correct rates including but not limited to experience rating modification worksheet data, NCCI’s Inspection and Classification Report, and change of ownership information form if applicable.

(4) Upon receipt of the assignment package, the servicing carrier shall review the documents to ensure that all documentation needed to properly issue the policy is attached. Based on the separate review of the servicing carrier , the servicing carrier may request additional information or premium from the employer. The servicing carrier must receive all additional requested information or premium before the servicing carrier issues a policy.

(5) The servicing carrier shall issue the policy in accordance with Plan rules, state law and the Assigned Carrier Performance Standards.

(6) The binder or verification page remains in effect until cancelled or until the servicing carrier issues a policy in accordance with the Assigned Carrier Performance Standards or state law. If the Plan Administrator does not issue a binder, coverage does not exist.

(7)(a) The employer or the representative of the employer may request an effective date no later than sixty days after the date of application. However, such requested effective date must be the later of the following:

(A) The established effective date as outlined in the tables set forth in subsection (8) of this rule;

(B) The date of expiration of existing coverage; or

(b) To secure a requested effective date, the employer or the representative of the employer shall:

(A) Submit to the Plan Administrator a signed and completed application as described in Exhibits 1 and 2 to OAR 836-043-0024 using one of the submission methods described in OAR 836-043-0024(5).

(B) For an application submitted by U.S. Postal Service or private overnight delivery service, at a minimum, include in the application submission the required critical threshold elements as defined in NCCI’s Assigned Risk Supplement to the Basic Manual.

(C) If submitting an application via mail or an overnight delivery service, include the appropriate initial or deposit premium. The Plan Administrator will consider the receipt of the application at the specified mailing address receipt.

(8) The earliest effective date for coverage is dependent on the method used to submit the application and shall be determined in accordance with the following tables: [Table not included. See ED. NOTE.]

(9) If the Plan Administrator fails to issue a binder to an eligible employer by the 14th day after receiving a completed application and the total initial or deposit premium, coverage is bound at 12:01 a.m. on the later of the dates specified in section (8) of this rule.

(10) A binder issued to a worker leasing company applicant in compliance with requirements for an initial worker leasing company license under OAR 436-050-0440 is extended as provided in this section until the Director of the Department of Consumer and Business Services either licenses or refuses to license the applicant, as follows:

(a) The binder is conditional upon the subsequent initial worker leasing company licensing by the Director. The binder does not obligate the Plan to provide coverage to the worker leasing company for its clients until the worker leasing company is licensed by the Director of the Department of Consumer and Business Services.

(b) Upon the conditional binding of the applicant worker leasing company, the Plan Administrator shall send the binder to those entities listed in section (1) of this rule, except for the servicing carrier.

(c) Upon the initial licensing of a worker leasing company applicant by the Director of the Department of Consumer and Business Services, and receipt of proof of licensing, the Plan Administrator shall assign an unconditional binder to a servicing carrier and send an unconditional binder to all entities listed in section (1) of this rule.

(d) Upon the refusal to license a worker leasing company applicant by the Director of the Department of Consumer and Business Services, and upon receipt of proof of refusal, the Plan Administrator shall send notice to all entities listed in section (1) of this rule that the conditional binder has been rescinded and the applicant was not covered.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 1-2003, f. & cert. ef. 1-17-03
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0046 Rates and Forms, Policy Term, Additional Coverages and Other Provisions

(1) An insurer issuing a policy to an employer to which the Plan applies shall write the policy according to the classifications, forms including but not limited to policy endorsements, change of ownership forms, supplemental leasing forms, and rates and rating plans including retrospective rating plans authorized for use in the assigned risk market by the Plan Administrator and approved by the Insurance Commissioner as required in ORS 737.265(2).

(2) The policy information page and all endorsements must be properly identified as a Plan or AR (Assigned Risk) policy, and policy information submitted on hard copy must show the Plan or AR indicator with the policy number on the Information Page. The Policy Information Page and all endorsements must be submitted to the Plan Administrator or its designee within the time frame and in the format established by the Plan Administrator.

(3) The servicing carrier shall issue a policy and proof of coverage as required by ORS 656.419, for a term of at least one year, unless insurance for a shorter term has been requested. A short-term policy may be obtained only once within a 12-month period unless otherwise agreed by the servicing carrier.

(4) The servicing carrier may make additional coverages described in the Supplement to the Plan available to an employer.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.419, 656.427, 656.730 & 737.265
ID 6-2009, f. & cert. ef. 8-14-09
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0048 Additional States’ Coverage

Except as shown on the binder or verification page, all assignments under the plan are to be made on an intrastate basis. An employer seeking insurance for operations in one or more states other than the state listed in the Policy Information Page may request its servicing carrier to furnish insurance in the additional states in accordance with OAR 836-043-0050 and the Interstate Assignments section of the Plan. A Plan policy that affords coverage on operations in more than one state shall clearly indicate the premium developed for each state separately.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0050 Interstate Assignments

(1) Any employer assigned under this Plan and desiring workers' compensation insurance for operations for physical locations in states other than that covered by the Plan may request its servicing carrier to furnish such insurance in such additional states. If the servicing carrier is licensed in those additional states and will write workers’ compensation insurance on a voluntary basis, the servicing carrier must do so on a voluntary basis and in accordance with the law, rates, rules, classifications, and regulations applicable to the voluntary workers' compensation market in those states.

(2) If the servicing carrier does not wish to provide the insurance on a voluntary basis, the servicing carrier may provide assigned risk coverage in such additional states subject to the following:

(a) Workers' compensation insurance may be provided only in accordance with OAR 836-043-0001 to 836-043-0091 in those states that have a Workers' Compensation Insurance Plan that is similar to this Plan and that allows employers applying for coverage under those Plans to obtain coverage for operations in Oregon;

(b) A servicing carrier providing such insurance shall collect all premiums due based on the exposure for the physical operations in those other states. The effective date of such insurance in such additional states shall be the day after premium is received; however, in the event coverage in such additional states is on an "if any" basis, the effective date of such coverage shall be the day following receipt of an acceptable request for such insurance by the servicing carrier. A copy of the policy Information Page and all endorsements, properly identified as a Plan or AR (Assigned Risk) policy, shall be submitted to the appropriate Plan Administrator having jurisdiction in the state where the coverage is effected;

(c) The rates, rating plans, classifications, and policy forms used to provide coverage in such additional states shall be those that are:

(A) Applicable to the assigned risk market;

(B) On file and have been approved by the regulators in those additional states; and

(d) The servicing carrier must be a signatory to an agreement providing reinsurance for workers’ compensation insurance policies issued to assigned risk market employers under the organizing principles in each state where the coverage shall be provided; and

(e) A servicing carrier unwilling or unable to provide insurance for an employer in additional states shall refer the employer to the Plan Administrator or appropriate administrative organization for the states where coverage is needed for instructions and applications.

(3)(a) An employer who applies for workers' compensation insurance under another state's workers' compensation insurance plan may purchase coverage for operations in Oregon without meeting the application requirements of this Plan, provided:

(A) The employer qualifies for such insurance under the other state's Plan;

(B) The employer is in good faith entitled to insurance under this Plan;

(D) That Plan also provides for interstate assignments; and

(E) The payroll for the employer's operation in Oregon is not greater than the payroll in the other state;

(b) The rates, rating plans, classifications and policy forms used to provide coverage in Oregon shall be those that are applicable to assigned risk market risks in Oregon and are on file and have been approved by the Insurance Commissioner and authorized for use in the assigned risk market by the Plan Administrator;

(c) The administrator of the other Plan is authorized to assign employers with operations in Oregon to the other Plan's servicing carriers, subject to the following conditions:

(A) The servicing carrier must be a signatory to the organizing principles in Oregon. In addition, if the payroll for the employer's operation in Oregon is greater than $250,000, the servicing carrier must also be a servicing carrier in Oregon. If there is no eligible servicing carrier in Oregon that is also an insurer in the state of assignment, then the Plan Administrator may remove the payroll limitation or may require the employer to submit a separate application for coverage in Oregon; and

(B) The other state's Plan must give the Plan Administrator in Oregon similar authority to make interstate assignments.

(d) With regard to interstate assignments and policies, this Plan shall have jurisdiction over all disputes resulting from the application of rules, programs, and procedures that are specific to Oregon. Disputes regarding application requirements shall be under the jurisdiction of the state's Plan where the application was filed.

(4) This section is not applicable for unknown or unanticipated operations or exposures for which coverage may be available under the Residual Market Limited Other States Coverage Endorsement.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
ID 4-1994, f. & cert. ef. 4-19-94

Or. Admin. R. 836-043-0053 Premium Obligations

(1)(a) The Plan Administrator shall not knowingly make an assignment unless the employer has met all undisputed workers' compensation premium obligations on any previous workers’ compensation insurance including but not limited to obligations to:

(A) Any servicing carrie;

(B) A direct assignment carrier; or

(b) After policy issuance, if an employer does not meet all undisputed workers' compensation insurance premium obligations under the current policy or previous assigned risk or voluntary policies, the employer's present servicing carrier retains the right to cancel a policy currently in force under the plan in accordance with ORS 656.427.

(2) When an employer with a prior undisputed workers' compensation premium obligation is a client of a worker leasing company as established in ORS 656.850 that is insured by the Plan, the servicing carrier may instruct the worker leasing company to issue a client cancellation notice to the Director of the Department of Consumer and Business Services with a copy to the client and a copy to the servicing carrier. Such a cancellation is effective on the 30th day after receipt of notice by the Director of the Department of Consumer and Business Services unless the client pays the prior premium debt or obtains coverage in the voluntary insurance market before the 30th day. When a worker leasing company fails to issue the requested client cancellation notice within 20 days of the request, the servicing carrier may cancel the worker leasing company policy.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0056 Insurer Cancellation and Nonrenewal of Workers’ Compensation Insurance Policies or Surety Bonds

The following provisions of this rule govern when an insurer cancels or fails to renew a workers’ compensation insurance policy or surety bond:

(1) An insurer canceling coverage under ORS 656.427 for an employer who has an undisputed premium obligation not more than 30 days past due shall take the following actions:

(a) At the time the insurer gives notice of the cancellation, the insurer shall notify the employer of the right to placement in the Plan if eligible under OAR 836-043-0043;

(b) Provide the employer, not later than the tenth day after the employer's contact for Plan coverage, an accurately filled-in "Request for Coverage" form, using the form prescribed in Exhibits 1 and 2 to OAR 836-043-0024; and

(c) The insurer shall date stamp the request for coverage identifying the insurer's name and forward the form to the Plan administrator with payment, not later than the fifth day after receiving the signed request form from the employer.

(2) An employer or its agent desiring Plan coverage, whose coverage is being cancelled or nonrenewed under ORS 656.427 and who does not have an undisputed premium obligation more than 30 days past due, shall:

(a) Give notice to the canceling or nonrenewing insurer, prior to the termination of coverage, that the employer intends to become an insured employer under the Plan; and

(b) Verify coverage elections and other information provided in the Request for Coverage form (Exhibits 1 and 2 to OAR 836-043-0024), and sign the request form and return the form with the deposit premium check to the canceling or nonrenewing insurer before the end of coverage or not later than the tenth day after the insurer issues the Request for Coverage form, if later.

(3) The Plan Administrator shall process the Request for Coverage form received with a deposit premium prior to the coverage ending date in the manner provided for a Plan application, except that the Plan Administrator shall bind coverage under the Plan for Request for Coverage upon the date of receipt of the form (Exhibits 1 and 2 to OAR 836-043-0024) by the canceling or nonrenewing insurer in accordance with this rule or the ending date of previous coverage, if later.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.419, 656.427, 656.730 & 737.265
ID 6-2009, f. & cert. ef. 8-14-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0060 Assignment Formula

(1) This rule describes the mechanism used to provide for the random and equitable distribution of employers under the Plan to servicing carriers. The Plan Administrator may override the random assignment process to ensure the availability of requested Plan coverages to the employer.

(2)(a) A servicing carrier is responsible for providing services on behalf of those insurers that have elected to meet their Plan participation requirements by subscribing to the organizing principles. The Plan Administrator shall determine the allocable percentage of the servicing carrier through an objective selection process. However, the combined allocable percentages for all servicing carriers must be equal to the combined net voluntary premiums written for all signatories to the organizing principles as compared to the total net premiums of all insurers participating in the Plan in Oregon. An approved servicing carrier may receive assignments for any risk eligible for coverage under the Plan.

(b) When assigning an employer to an insurer, the Plan Administrator shall consider the employer’s prior Plan coverage, special requirements, including but not limited to additional states or federal coverage, and premium size.

(c) Any carrier authorized by the U.S. Department of Labor to provide coverage under the U.S. Longshore and Harbor Workers’ Compensation Act (USL&HW) and extension acts is eligible to receive assignments requesting the same coverage in the assigned risk market. A carrier with USL&HW authorization is also eligible for assignments requesting Maritime, Program I or II. The Plan Administrator shall determine request for assignments under the USL&HW Act, Maritime, or extension acts coverage in accordance with the assignment methodology established by the Plan Administrator.

(d) A servicing carrier that has previously reported voluntary or assigned risk premium writing in any state, that is subject to the Federal Coal Mine Health and Safety Act or that has previously accepted assignments in any state for operations that are subject to the Federal Coal Mine Health and Safety Act, will receive assignments requesting such coverage in accordance with the assignment methodology established by the Plan Administrator.

(3) If an employer has prior assigned risk coverage, the Plan Administrator shall reassign the employer to the original servicing carrier as long as the carrier can provide the coverage requested by the employer. Circumstances may require the suspension of this criterion, such as when the suspension is warranted, in order to ensure that all servicing carriers achieve their allocable percentage of Plan business. The Plan Administrator shall provide a report of such suspensions to the regulatory authority upon request.

(4) The Plan Administrator shall identify those servicing carriers eligible to receive an assignment based on the following requirements of the employer and the capabilities of carriers:

(a) The Plan Administrator shall select a servicing carrier that is able to provide coverage in the additional states requested by the employer in accordance with Interstate Assignments section of the Plan.

(b) The Plan Administrator shall select a servicing carrier that is able to provide authorized additional coverage requested by the employer. The following coverages require assignment to a servicing carrier with special capabilities as indicated:

(A) For coverage under the USL&HW Act and its extension acts, including the Outer Continental Shelf Lands Act, Defense Base Act, and Nonappropriated Fund Instrumentalities Act, the Plan Administrator shall select a carrier authorized by the U.S. Department of Labor to provide these coverages.

(B) For Maritime coverage, the Plan Administrator shall select a carrier authorized by the Department of Labor to provide United States Longshore and Harbor Workers’ Compensation Act coverage.

(C) For coal mine risks, the Plan Administrator shall select a carrier experienced in servicing coal mine risks, either through writing coal mine policies in the voluntary market or through prior servicing of assigned risk market coal mine risks.

(c) Under special circumstances, the Plan Administrator may establish a minimum or maximum number of assignments or premium in order to ensure equitable assignments. These numbers may vary and are based on the amount of business remaining to be assigned and the number of weeks remaining in the calendar year.

(d) A servicing carrier that meets or exceeds its maximum weekly number of risks is not considered eligible. Each employer is assigned to an eligible servicing carrier according to the following algorithm, considering all servicing carriers in the aggregate:

(A) Each servicing carrier’s quota premium is calculated by multiplying total premium in the Plan at the time of the assignment by the carrier’s quota percent. A servicing carrier’s quota percent may be adjusted to allow for a more even distribution of assignments over a period of time.

(B) Each servicing carrier’s remaining business to be assigned is calculated by subtracting its premium in force at the time of the assignment from its adjusted quota premium. In order to allow the flexibility of slightly larger assignments in the carrier assignment process, an adjustment is made to each carrier’s quota premium. This adjustment consists of applying an “over-quota limit” of five percent or $5,000, whichever is greater, up to a maximum of $200,000. The Plan Administrator may lower this limit if circumstances warrant, such as when required to ensure that all servicing carriers achieve their allocable percentage of Plan business.

(C) Based on the difference between the percentage of a servicing carrier’s premium in force and its quota premium, a range of numbers proportional in size to the percentage difference is assigned to each carrier. A random number is generated, and the assignment is made to the servicing carrier whose range encompasses the random number. Issuance and Continuation of Policy A policy must be issued, renewed or reinstated without a lapse in coverage when premium is received by the carrier or postmarked by the United States Postal Service prior to the policy effective date or cancellation date.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0062 Issuance and Continuation of Policy

(1) A policy must be issued, renewed or reinstated without a lapse in coverage when premium, including an interim premium audit or installment payment, is received by the carrier or postmarked by the United States Postal Service prior to the policy effective date or cancellation date.

(2) The following table establishes reinstatement provisions for a policy that is cancelled or renewed: [Table not included. See ED. NOTE.]

(3) A servicing carrier may impose additional requirements if necessary to effect the reinstatement of a policy. Effective or reinstatement dates for a lapse in coverage shall be determined in the same manner provided in OAR 836-043-0044.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0064 Renewal, Nonrenewal

(1) A servicing carrier shall send a renewal or nonrenewal notice of impending expiration of coverage to the insured, the representative of the insured and the Plan Administrator at least 45 days before the expiration date of insurance. Upon receipt of the required premium, the servicing carrier shall issue the policy in accordance with Oregon statutes and rules and furnish a copy of such policy and all endorsements, properly identified as a Plan or AR (Assigned Risk) policy, to the Plan Administrator or its designee within the time and in the format established by the Plan Administrator.

(2) The servicing carrier shall apply the deposit premium paid by an employer in the Plan against the deposit required for a renewal policy, if any. If the servicing carrier assigned the renewal policy is different from the previous servicing carrier, then the previous servicing carrier shall promptly bill the employer for the final billing period, including any audit adjustments. If the final billing is not paid on or before the 30th day after the billing, the renewal servicing carrier may immediately issue a cancellation notice.

(3) A servicing carrier may refuse to renew a policy if the servicing carrier is unable to supply a required type of coverage, including but not limited to longshore, coal mine, maritime or additional state exposures.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0066 Reassignment

(1) An employer may submit to the Plan Administrator a written request for reassignment to a different carrier, if available. The employer must submit the request in writing to the Plan Administrator not later than the 30th day and not earlier than the 60th day prior to the expiration of the current policy unless the Plan Administrator approves another request period or at the request of the regulatory authority. The employer must provide the Plan Administrator with an acceptable reason for the request with appropriate documentation. Acceptable reasons for an employer to request reassignment include:

(a) Documented poor servicing carrier service such as failure to provide timely issuance of statements, policies, and endorsements, or services not provided under the policy;

(b) Documented refusal of or inability of a servicing carrier to supply a required type of coverage including but not limited to longshore, coal mine, maritime or additional state exposures;

(c) Documented failure of a servicing carrier to return premium due to the insured, where there is no valid bona fide premium dispute;

(d) Based on the servicing carrier’s A.M. Best Rating or financial size category, if appropriate documentation is provided to and approved by the Plan Administrator; or

(e) Any other substantial documented reason subject to approval of the Plan Administrator

(2) The request for reassignment is subject to approval by the Plan Administrator. If the Plan Administrator approves the reassignment request, the employer shall submit a new application as provided in OAR 836-043-0028 or 836-043-0032 along with the appropriate initial or deposit premium to the Plan Administrator and must be otherwise eligible for continued coverage through the Plan. The reassignment shall be made on a random basis.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0068 Cancellation

(1) The servicing carrier may cancel a policy after its issuance, with the approval of the Insurance Commissioner, for any of the reasons stated in this section. The servicing carrier must first provide an opportunity for cure and must file the reasons for cancellation with the Insurance Commissioner for necessary approval before issuance of the cancellation notice and inform the Plan Administrator of the reason for the cancellation. A proposed cancellation shall be deemed approved unless disapproved by the Insurance Commissioner on or before the 15th day after the servicing carrier filed the reasons for cancellation. A servicing carrier may initiate cancellation when the employer:

(a) Has failed to comply with reasonable health, safety or audit requirements;

(b) Has violated any of the terms and conditions under which the insurance was issued;

(d) Refuses to allow the servicing carrier or NCCI reasonable access to its facilities or its files and records for audit or inspection;

(e) Refuses to disclose to the servicing carrier the full nature and scope of the employer’s exposure;

(f) Has had the employer’s worker leasing company license denied, revoked or suspended; or

(g) The employer does not properly report changes in ownership.

(2) The servicing carrier may cancel a policy without the approval of the Insurance Commissioner when cancellation is for any of the following reasons:

(a) Nonpayment of Plan premium, except that a servicing carrier must provide a minimum of 10 days' notice of additional premium owed prior to the obligation becoming past due;

(b) Failure to complete, submit and pay a payroll report due the insurer, if the insurer has given the employer the following notice:

Important Notice: This Policy is subject to periodic payroll reporting. Reports will be sent to you in accordance with the section entitled "Reporting Frequency" on the Information Page of your policy. Your failure to complete, submit and pay these reports to the insurance company when due may result in cancellation of your policy.

(d) The employer properly reported changes in ownership.

(3) An insured employer whose coverage is canceled as provided in this rule must reestablish eligibility or must demonstrate entitlement to the Plan Administrator before any further assignment can be made under the Plan.

(4) If an employer fails or refuses to file any report of payroll required by the servicing carrier, the servicing carrier may estimate the payroll and make demand for premiums due thereon. If the required report and the premium due thereon are not received within ten days of actual notice of demand, the employer shall be considered in default of premium payment.

(5) The servicing carrier shall keep the Plan Administrator fully informed of any cancellation and of any reestablishment of eligibility or of compliance by the employer. Any employer whose coverage is cancelled must reestablish eligibility or demonstrate eligibility for coverage under this Plan to the Plan Administrator before the Plan Administrator may make any further assignment under the Plan.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 3-2008, f. & cert. ef. 4-7-08
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0071 Dispute Resolution Procedures

(1)(a) A bona fide premium dispute is established when the employer or its representative provides:

(A) Written notice to the Plan Administrator that includes all of the following:

(i) All documentation relevant to the dispute, including written notice to the insurer or the servicing carrier detailing the specific areas of dispute;

(ii) Description of the attempts to reconcile the differences; and

(iii) A specific request for a review of all documentation, appropriate action to resolve the areas of dispute and if necessary, a hearing before the appropriate administrative or regulatory body having jurisdiction over assigned risk related appeals.

(B) An estimate of the premium the employer believes to be correct, with an explanation of the premium calculation.

(C) Verification of payment of the undisputed portion of the premium provided to the servicing carrier or insurer, and the Plan Administrator.

(b) If the premium in dispute is in litigation, the employer shall provide documentation to the Plan Administrator.

(c) The Plan Administrator shall notify the servicing carrier when a bona fide premium dispute is confirmed. Upon notification, the servicing carrier shall act according to the Plan Administrator’s direction pending the resolution of the dispute. The Plan Administrator may direct the servicing carrier to:

(A) Suspend collection activity;

(B) Suspend cancellation if a dispute exists prior to the effective date of cancellation; or

(2) Any assigned risk policyholder and the producer of an assigned risk policyholder affected by the actions of their servicing carrier or NCCI shall follow the procedures set forth in ORS 731.240, 737.340 or 737.505 to review, resolve or request a hearing on any grievance.

(a) An individual employer dispute is subject to ORS 731.240, 737.340 or 737.505 as applicable and the conditions outlined in the Bona Fide Premium Dispute and Undisputed Premium Obligation. The intervention of the Plan Administrator in a dispute is limited to matters involving:

(A) Experience rating modification factors;

(B) Application of rules contained in NCCI manuals;

(D) Classification assignments;

(E) Assigned risk pricing programs; or

(F) A dispute involving other matters arising under the Plan.

(b) Upon receipt of all necessary information regarding the dispute, the Plan Administrator shall review the matter and provide a written decision within 30 days.

(3)(a) When an employer dispute concerns any of the above matters, other than the application of NCCI’s rating plan rules, or involves more than one state, the Plan Administrator shall determine the appropriate jurisdiction for the dispute to be heard, based upon the following factors:

(A) Governing state which shall be the state generating the greatest payroll;

(B) The state covered by the servicing carrier with the greatest exposure insured;

(D) In accordance with the following jurisdiction table: [Table not included. See ED. NOTE.]

(b) When a dispute concerns the application of NCCI’s rules for interstate rated risks, the Plan Administrator shall determine the appropriate jurisdiction for the dispute to be heard.

(c) Unless state-specific rules apply, the ruling of the state appeals mechanism (as determined by the Plan Administrator to have jurisdiction over the dispute) will apply to all assigned risk policies whether written by one or more servicing carriers.

(4) Upon receipt of all necessary information regarding the dispute, the Plan Administrator shall review disputes relating to the calculation or payment of producer fees and producer of record changes and provide a written decision within 30 days.

(5)(a) Any Plan participant who has a dispute with respect to any aspect of the Plan or Reinsurance Agreement including any dispute arising out of the organizing principles must first seek a review of the matter under this section by providing the following to the Plan Administrator:

(A) Written documentation detailing specific areas of the dispute;

(B) Specific request for a review of all documentation; and

(b) The Plan Administrator may request additional information necessary to make a decision. All disputes submitted to the Plan Administrator are governed as follows:

(A) For disputes relating to the general operation of the Plan, including but not limited to, performance standards for servicing carrier performance, compensation and incentives and application assignment determination, the Plan Administrator shall review the matter and provide a written decision within 30 days of receipt of all necessary information regarding the dispute.

(B) Within 30 days after the Plan Administrator makes a decision and at the expense of the party, a party affected by the decision may submit a written request for binding arbitration or the party may seek a de novo review by the Insurance Commissioner.

(C) For any de novo review, the Insurance Commissioner shall follow the procedures provided in ORS 183.310 to 183.540 and 737.360 for review of a contested case.

(D) For a dispute relating to the servicing carrier selection process, refer to the Bid Protest Procedures contained in the applicable servicing carrier Request for Proposal (RFP).

(6)(a) Within 30 days after receipt of all necessary information regarding a dispute that arises under the organizing principles or a Reinsurance Agreement, the Plan Administrator or the administrator of the Reinsurance Agreement shall review the matter and provide a detailed written decision. Any party affected by the decision may request the board to review the decision by submitting a written request for review within 30 days after the date of the decision by the Reinsurance Administrator under the organizing principles. The board may:

(A) Consider the matter and render its written decision pursuant to the procedures set forth in the organizing principles, or

(B) Waive its decision and offer the aggrieved party the option of appealing directly to the Insurance Commissioner or submitting the dispute to arbitration in accordance with the terms and conditions established by the board.

(b) Any party affected by a decision of the board may seek a de novo review by the Insurance Commissioner by submitting a written request for review, within 30 days after the date of the board decision.

(c) If the dispute relates to the expulsion of a participating company under the organizing principles by the board or the noncontinuation of the reinsurance afforded under the organizing principles, the party may take the appeal directly to the Insurance Commissioner pursuant to ORS 737.360 without first complying with the procedures contained in this rule. The Insurance Commissioner has exclusive jurisdiction over all such disputes. For a review under this paragraph, the Insurance Commissioner shall follow the procedures provided in ORS 183.310 to 183.540 and 737.360 applicable to review of a contested case.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.527, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09

Or. Admin. R. 836-043-0072 Voluntary Coverage

Notwithstanding OAR 836-043-0089, an insurer that wishes to insure an employer as voluntary business may do so at any time. If a servicing carrier wishes to insure voluntarily one of its plan accounts, the servicing carrier must provide written notice to both the Plan Administrator and the agent of the employer of its intent at least 30 days in advance of the effective date of the servicing carrier’s voluntary coverage. If the insurer is not the servicing carrier, the servicing carrier shall cancel its policy pro rata and the assignment shall automatically terminate as of the later of the effective date of the voluntary insurer’s policy or the date the voluntary insurer provides written notice to the servicing carrier of its coverage.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0076 Takeout Credit

The Plan Administrator shall establish a take-out credit program. The take-out credit program shall operate in accordance with the following guidelines:

(1) Each insurer participating in the Plan who removes an employer insured through the Plan is eligible for a take-out credit application against the premium used to calculate the Plan participation base of the enrolled insurer. An insurer shall contact the take-out credit administrator to enroll in the program. Any insurer licensed in Oregon and writing workers’ compensation insurance coverage is eligible to enroll in the take-out credit program.

(2) An insurer may not receive credit for any policy removed from the Plan within one calendar year after the insurer or its affiliate wrote the policy in the voluntary market. An insurer who does not enroll in the program cannot receive take-out credit.

(3) An insurer, other than the last voluntary insurer of record, may remove a policy without any restriction on the length of time the policy resided in the assigned risk market.

(4) For the purpose of the take-out credit program, the requirements of this rule apply to an insurer's affiliates as well as to the insurer.

(5) The kind and amount of coverage to be offered a voluntary employer shall not be less than those afforded by the policy being replaced unless the kinds and amounts of coverage are refused by the employer.

(6) The granting of credits is subject to the following provisions:

(a) An insurer who removes an employer from the assigned risk market is eligible for a take-out credit application equal to the annual premium from the voluntary policy times a credit factor from the following schedule: Total Premium — $5,000 or Less — Total Premium — Greater than $5,000:

(A) First Year — 3:1 — 1:1;

(B) Second Year — 3:1 — 1:1;

(b) Credits received under this rule are not subject to a maximum limit, except that the credits shall not reduce the participation base of an insurer below zero.

(c) An insurer shall receive a credit against the premium used to calculate its Plan participation base for the amount of verifiable annual premium reported in its Exhibit of Premiums and Losses (Statutory Page 14) of its Annual Statement for the respective calendar year. The reported premium must be stated on the same financial basis as the premiums that are reported for use in determining each insurer's Plan participation base and are subject to subsequent adjustments and audits. The definition of "net premiums written" in the Plan shall govern the description of premium used to calculate the Plan participation base. As audit premiums, retrospective adjustments and other items are developed, an insurer shall receive a credit against its participation base for the amount of the premium adjustment in the calendar year in which the adjustment is reported in the direct earned premium for Oregon entry in the Annual Statement. Regardless of when an adjustment was made or reported in the direct earned premium for Oregon entry, the adjustment shall be allowed if related to the first, second or third year of voluntary coverage by the insurer.

(d) If an insurer keeps an employer out of the assigned risk market for three consecutive years, the insurer shall receive credit for each of the three consecutive years. If the insurer does not write the insurance for three years, it shall receive credit only for the consecutive period of time that it covered the employer in the voluntary market. An insurer shall not receive any credit for an employer returned to the Plan within one calendar year of removal.

(e) An insurer must submit a request for credit annually during the three year period in order to qualify for the credit.

(f) Each year, the Plan Administrator shall perform a systematic search of policies submitted as voluntary that were previously assigned risk policies to determine their eligibility for take-out credit.

(g) The Plan Administrator shall provide enrolled insurers with a detailed Take-Out Credit Policy Report of eligible policies. The Plan Administrator shall provide the Take-Out Credit Policy Report to insurers in electronic format.

(h) Each insurer shall review and modify the Take-Out Credit Policy Report to ensure all eligible policies are included in the calculation of the credit.

(i) The Plan Administrator shall review any modifications to the Take-Out Credit Policy Report to ensure agreement. The Plan Administrator may eliminate any policy that is inaccurately reported or those modifications that the Plan Administrator cannot research for concurrence.

(j) Upon review and approval of the policies on the Take-Out Credit Policy Report, the enrolled insurer need only send an electronic reply of concurrence that indicates the official request of the insurer to receive the credit.

(k) The Plan Administrator shall grant credit only to enrolled insurers that provide electronic concurrence with the Take-Out Credit Policy Report.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0079 Notification of Outstanding Premium

A servicing carrier or its representative shall furnish information regarding outstanding assigned risk and voluntary workers' compensation insurance premium or other workers' compensation monetary policy obligations identified by the servicing carrier or its representative to the Plan Administrator or its designee in accordance with the appropriate Assigned Carrier Performance Standards or other state market conduct or regulatory requirements. A servicing carrier shall report to the Plan Administrator within five business days of the servicing carrier’s determination all instances of noncompliance and of any compliance by the employer.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0082 Policyholder Services

A servicing carrier shall provide all of the following to each policyholder or a representative of the insured and its producer:

(1) Access to audit, loss control and safety services.

(2) Prompt, professional handling of claims, including investigation, resolution and communication.

(3) Fair and prompt responses to complaints and disputes.

(4) Access to appropriate information regarding the classification of the business and the factors influencing the policy premium.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0087 Producer Changes and Compensation

(1) The servicing carrier must pay a fee to the licensed agency on all new and renewal policies after the policy is issued. The servicing carrier shall pay the producer as premium is collected. The servicing carrier must process and mail fee payments within 30 days after the date the policy is issued or 30 days after the receipt of premium. The carrier may withhold payments until an accumulative total of $25 per agency is reached. However, the servicing carrier must pay the agency their fees upon request regardless of the amount or if the withholding time period exceeds six months. The fee payment also may be applied to return fees that the agency may owe to the servicing carrier from other assigned risk policies for that agency. The servicing carrier may not pay a producer fee on premium not actually collected.

(2) The producer fee paid by the servicing carrier shall be in accordance with the producer fee percentage scales and shall be paid at the rate filed by the Plan Administrator with the Director.

(3) It is the responsibility of the servicing carrier to determine whether the producer is properly licensed in the appropriate jurisdictions for payment of producer fees. If the producer listed on the application is not properly licensed, or if the employer designates a representative other than a licensed producer, the servicing carrier shall accept the assignment but the producer fee will not be paid. For all other purposes, the producer shall be treated as the producer of record.

(4) The employer may request a change to the licensed producer. The employer shall provide written notice to the servicing carrier, generally in the form of a “producer of record” letter. The request must be made prior to the date of renewal, or with the consent of the servicing carrier at another agreed upon time.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09

Or. Admin. R. 836-043-0089 Confidentiality of Information

The servicing carrier shall keep in confidence and must not, except as directed by the insured or the producer of record, or as otherwise may be required by law or the Insurance Commissioner, disclose to any third party, or use for the benefit of itself or any third party, such detailed information as it may obtain by virtue of its position as the servicing carrier. Such information may be used solely for the evaluation, underwriting, and insuring of coverage under this Plan and not for any other purpose. The servicing carrier may not use any information the servicing carrier obtains in its capacity as the servicing carrier to request, encourage, or solicit employers it insures under this Plan to use the services of any specific insurance producer, agency, insurer or group of insurers, including but not limited to direct writers affiliated with the servicing carrier, for purposes of providing voluntary workers’ compensation insurance or other lines of insurance to such employer.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96

Or. Admin. R. 836-043-0091 Self-Funded Plan

It is essential for maintaining the viability of the Plan to establish and maintain rates at a level that will permit the Plan to operate with no more than a reasonable subsidy required from voluntary insured employers. The NCCI shall maintain necessary ratemaking data in order to permit the actuarial determination of rates and rating plans appropriate for the business insured through the Plan. Each servicing carrier shall report its experience on business written under the Plan to the NCCI in a format prescribed by the NCCI. It is the responsibility of the NCCI to monitor both rate adequacy and Plan results. The NCCI shall notify the Insurance Commissioner if excessive losses are indicated to enable the Insurance Commissioner to take corrective action.

History

Statutory/Other Authority: ORS 656.427, 656.730 & 731.244
Statutes/Other Implemented: ORS 656.427, 656.730 & 737.265
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0080
ID 4-1994, f. & cert. ef. 4-19-94

Or. Admin. R. 836-043-0101 Statutory Authority; Purpose; Applicability

(1) OAR 836-043-0101 to 836-043-0170 are adopted by the Director of the Department of Consumer and Business Services pursuant to the requirements of ORS 737.318.

(2) OAR 836-043-0101 to 836-043-0170 establish a premium audit program system for workers' compensation insurance for the following purposes:

(a) Achieving equitable premium charges to insureds and collecting credible ratemaking data;

(b) Prescribing minimum standards for an efficient premium audit program that ensures an adequate proportion of an insurer's earned premium is audited and focuses on operations where accurate reporting may be difficult or where misreportings are more likely;

(d) Establishing a continuing test audit program of all insurers;

(e) Providing an appeal process pursuant to ORS 737.318(3)(d) and 737.505(4) to (5) for insureds to request a hearing to dispute the results of an audit, as described in a final premium audit billing issued by an insurer to an insured.

(3) OAR 836-043-0101 to 836-043-0170 apply to all authorized workers' compensation insurers, the State Accident Insurance Fund Corporation, Oregon insureds, and the National Council on Compensation Insurance.

History

Statutory/Other Authority: ORS 731.244, 737.310 & 737.318
Statutes/Other Implemented: ORS 737.235, 737.318 & 737.505
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0105 Definitions

As used in OAR 836-043-0101 to 836-043-0170, unless the context requires otherwise:

(1) "Audit" means a process of verification of information used to determine the premium for a workers’ compensation insurance policy that is performed in one of the following formats:

(a) "Desk audit" means an audit performed by an insurer at a site, other than the insured’s principal place of business, mutually agreed to by the insurer and the insured. A desk audit does not consist of an examination of a payroll report submitted by the insured to the insurer in lieu of an audit.

(b) "Field audit" means an audit performed by an insurer at the insured's principal place of business, work site, or other site mutually agreed to by the insurer and the insured.

(2) "Bureau" means the licensed rating organization of this state for workers' compensation insurance.

(3) "Classification" means a grouping of insurance risks according to a classification system used by an insurer.

(4) "Classification System" means a schedule of classifications and a rule or set of rules used by an insurer for determining the classifications applicable to an insured.

(5) "Committee" means the Oregon Workers' Compensation Rating System Review and Advisory Committee established by OAR 836-043-0200 to 836-043-0240.

(6) "Insured" means an employer who has been issued a workers' compensation insurance policy by an insurer.

(7) "Insurer" means any insurer authorized to write workers' compensation insurance in this state or the State Accident Insurance Fund Corporation.

(8) "Payroll" or "remuneration" means money or substitutes for money payable to workers for their services, which are specified or defined by the rating system used by the insurer subject to the limitations imposed in the definition of "payroll" in ORS 656.005.

(9) "Payroll report" means a report of an insured's payroll by class code used by an insurer to determine the premium for an insurance policy.

(10) "Premium" means the contractual consideration charged to an insured for an insurance policy for a specified period of time, regardless of the timing of actual charges.

(11) "Rate" means a monetary amount applied to the exposure units for a classification to determine the premium for an insurance policy.

(12) "Rating Plan" means a rule or set of rules used by an insurer to calculate premium for an insurance policy, including all rating plan factors applied, after application of classification premium rates to exposure units.

(13) "Rating System" means a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system and other rules used by an insurer for determining contractual consideration for an insurance policy.

(14) "Standard Premium" means the premium determined by application of approved rates, including experience rating modifications and other charges in accordance with the statistical plan as defined in OAR 836-042-0045.

(15) "Workers' Compensation Insurance" means insurance providing coverage for the obligations of an employer arising from illness or insurance to workers whether such obligation is imposed by ORS Chapter 656, similar laws of the United States or agreement between states.

History

Statutory/Other Authority: ORS 731.244, 737.310 & 737.318
Statutes/Other Implemented: ORS 737.235, 737.318 & 737.505
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0110 Insurer Premium Audit Program

(1) The rates, rating plans and rating systems filed with and approved by the director of the Department of Consumer and Business Services shall govern the audited payroll and the adjustment of premiums, subject to the provisions of this rule.

(2) For the purpose of determining the premium for an insurance policy producing an annual standard premium of $10,000 or more, the insurer must perform a field audit of the insured at least once annually, except as provided in this section. For as long as the insurer continues to provide coverage to an insured, when the insurer finds that the audit premium difference is less than five percent for each of two consecutive policy years for which the insurer provided coverage, the insurer need audit only every third renewal policy subsequent to the policy most recently audited. If the insurer finds at any audit that the audit premium difference is five percent or greater, the insurer must again audit the insured's policy at least annually until the insurer finds an audit premium difference of less than five percent for each of two consecutive policy years. For each policy year for which a policy is not audited, the insurer shall obtain a payroll report from the insured. For purposes of this section, the basis for the audit premium difference for an insured will be the audited standard premium as defined in each insurer's approved rating system.

(3) An insurer shall perform a field audit of at least five percent of all policies that are issued by the insurer and produce an annual standard premium of less than $10,000 but more than $1,000. In each year when a field audit of such a policy is not performed, the insurer shall perform a desk audit or obtain a payroll report from the insured. If neither a field or desk audit is performed nor a payroll report is obtained, the insurer shall give satisfactory reason to the director.

(4) When an insurer performs an initial or revised audit, the insurer shall send to the insured a written final premium audit billing, as described in this rule and in OAR 836-043-0170.

(5) A final premium audit billing must include the following wording, or substantially equivalent wording approved by the director, that is prominently displayed and in not less than 12-point type:

Who may request a hearing?

If the insured is a sole proprietor, then the insured or an attorney for the insured may request a hearing.
If the insured is a partnership, then an attorney for the partnership or any member of the partnership may request a hearing.
If the insured is a corporation, association or organized group, then an attorney for the corporation, association or organized group or an authorized officer or authorized employee of the corporation, association or organized group may request a hearing.
If the insured is a governmental authority other than a state agency, then an attorney for the governmental agency or an authorized officer or authorized employee of the governmental authority may request a hearing. Please state in your request the date you received this final premium audit billing. You must send the request for a hearing using at least one of the following methods:

By delivery:

By mail:

By e-mail:

DCBS.PremiumAudit@DCBS.oregon.gov.

By fax:

503-378-4351.

Assistance is available on the Division of Financial Regulation's web page, at DFR.oregon.gov/rates-forms/workers-comp and by e-mail, at DCBS.PremiumAudit@DCBS.oregon.gov. If the Division of Financial Regulation timely receives your request for a hearing, the Division of Financial Regulation will send or make available to you a petition form. In the petition, you must explain why you believe the billing is incorrect and describe the actions you want the director to take to correct the matter. The completed petition, along with a complete copy of the final premium audit billing, must be received by the Division of Financial Regulation not later than the 60th day after the date the Division of Financial Regulation received your request for a hearing. You are entitled to a hearing only if the Division of Financial Regulation timely receives your request for a hearing and completed petition and determines that the director has jurisdiction over the matter. You may send a copy of your request for hearing to your insurer so that you may attempt to resolve the dispute with your insurer prior to a hearing. However, please remember:

The 60-day period for initiating your request continues to run even though you may be negotiating with your insurer.
Your request must be received by the Division of Financial Regulation not later than the 60th day after you received this billing. You may wish to consult with an attorney about your case.

History

Statutory/Other Authority: ORS 737.318, 731.244 & 737.310
Statutes/Other Implemented: ORS 737.318 & 737.505
ID 39-2024, minor correction filed 12/09/2024, effective 12/09/2024
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-2007, f. & cert. ef. 1-17-07
ID 1-2000, f. & cert. ef. 2-10-00
ID 17-1997, f. 11-25-97, cert. ef. 11-26-97
ID 6-1997(Temp), f. & cert. ef. 5-30-97
ID 9-1990, f. 5-10-90, cert. ef. 6-1-90
ID 4-1989, f. & cert. ef. 2-28-89
ID 15-1988(Temp), f. & cert. ef. 9-2-88
ID 13-1988(Temp), f. & cert. ef. 7-27-88
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0115 Insurer Audit Procedure Guide

Each insurer shall develop audit procedures that include all of the features described in this rule or, in place thereof, more comprehensive alternative procedures that will consistently achieve minimum standards as measured by the Oregon Test Audit Program under OAR 836-043-0125. The features are as follows:

(1) The auditor shall perform a pre-audit review to ensure that the insurer provided or made available to the auditor all relevant information and materials, as listed in this section.

(a) The bureau Basic Manual;

(b) Bureau bulletins, "Scopes Manual" on classifications or similar classifications and committee minutes pertinent to classifications and auditing procedures;

(d) Bureau Inspection & Classification Reports that provide a description of operations and summary of employees by classification;

(e) Bureau Experience Rating Modification Worksheets that provide payroll classifications and claims allocation history;

(f) Claims data in sufficient detail to verify classification assignments;

(g) Pertinent correspondence;

(h) Prior year's audit file if renewed, or copies of interim payroll reports, if on an interim reporting basis.

(2) The auditor must contact a principal or designated representative of the insured who is familiar with the insured's operation, in order to ensure that the insured is properly classified under Basic Manual rules.

(3) Audit practices require the following:

(a) Examining payrolls from the most complete and accurate records;

(b) Determining proper payroll classifications, substantiated by a written description of the insured's operations;

(c) Making sufficient test checks to establish the audit’s accuracy and compliance with Basic Manual rules when using summary type records as the payroll source;

(d) Reconciling the total payroll with records not used in the original tabulation; and

(e) Providing guidance on recordkeeping practices to aid in future audits, including, but not limited to, maintenance of verifiable payroll records.

(4) An insurer shall give particular attention to the following factors and circumstances:

(a) Type of entity. With respect to the type of entity being insured, the insurer shall include factors and circumstances as follows:

(A) If the entity is a corporation, limited liability company, limited liability partnership, partnership, or other entity described in ORS 656.027, the name, title, classification assignment and total remuneration for each executive officer, member, or partner must be shown separately. All other officers of the corporation, members of the limited liability company, or partners must also be listed. The insurer shall designate whether each officer, member, or partner is a subject employee under ORS Chapter 656;

(B) Listings of covered corporate officers, limited liability company members, partners, and proprietors must include a brief description of each person’s duties. The auditor must verify the stipulated maximum and minimum remuneration with respect to non-subject corporate officers who have elected coverage or are covered as provided under ORS 656.027, and assumed wage for non-subject sole proprietors, partners, and limited liability company members who have elected coverage or are covered as provided under 656.027.

(b) Sources and reconciliation. The insurer shall indicate the source record used to conduct the audit and the record used for reconciliation purposes. The most commonly used records include, but are not limited to, time records, payroll journal, individual earnings records, prepared summary, check book, cash book, petty cash book, general ledger, confidential ledger, bank statements, job cost records and tax returns (Federal, Social Security/State Unemployment). The auditor must be able to reconcile the audit product with the source record and be certain that appropriate records have been examined to verify the inclusion of all payroll. When summary type records are used as the audit source, sufficient sampling of the original payroll records must be made to ensure the inclusion of all payroll. The insurer must be sure that the auditor is able to check and list the dates (and amounts if readily available) of the opening and closing payroll period or periods (e.g., weekly and semi-monthly) in order to establish proper continuity from prior audits and for subsequent audits. This is also necessary for the purpose of proper audit review.

(c) Remuneration. The insurer shall investigate all possible sources of earnings, including those for uninsured contract employment.

(d) Overtime. The insurer shall indicate whether overtime was paid and, if so, whether the records are maintained in such manner as to permit the exclusion of overtime remuneration from total payroll, as allowed by Basic Manual rules. If overtime was paid but not properly recorded in the insured's records, the auditor shall provide the insured with guidance for maintaining overtime remuneration records to allow for credit on subsequent audits. This action shall be documented on the auditor's worksheet.

(e) Out of state operation. The insurer shall determine if the insured uses Oregon subject workers to perform work outside Oregon. Payroll for Oregon subject workers performing work outside Oregon must be included in the premium, based on protection provided through the extra-territorial provisions of Oregon law.

(f) Clerical employees, salesmen and drivers. The insurer shall:

(A) Verify the proper use of Classifications 8810 — Clerical Office Employees NOC, 8742 — Salespersons or Collectors — Outside, and 7380 — Drivers, Chauffeurs, Messengers, and Their Helpers NOC — Commercial;

(B) Show clerical, outside sales and drivers payroll analysis on work sheets, either for the entire audit period or for a sample period.

(g) Classifications. The insurer shall determine the proper classifications. The insurer shall explain if the classifications assigned to the insured at audit differ from those shown on the insured’s policy information page or bureau Inspection Report. Final premium charges are subject to ORS 737.310. The insurer shall obtain a detailed description of the insured’s operations from the person or persons in the insured's organization best able to answer inquiries regarding the following:

(A) The service or product;

(B) The raw materials used;

(D) How the product is marketed.

(h) Additional classification information. The insurer shall examine the insured’s first reports of occupational injury or illness as an additional source of classification information when classification issues require additional inquiry. The insurer’s review may include electronic or paper documentation.

(i) Location. The insurer shall document any changes in the insured’s locations. The insurer shall review payroll to assure that all locations have been included in the audit.

(j) Rate splits. The insurer shall determine if rate changes or normal anniversary rating dates require payrolls to be split;

(k) New construction or alteration. The insurer shall determine if structural alterations or new construction work on the insured's premises has been conducted by employees of the insured during the audit period. Payroll for these activities must be separately rated.

(l) New operations. The insurer shall identify any new operations, acquisitions or changes in operations.

(m) Longshore and Harbor Workers’ Compensation Act operations. The insurer shall determine if the insured is engaged in operations subject to the Longshore and Harbor Workers' Compensation Act and if such operations are covered under the policy as evidenced by endorsement.

(n) Division of payroll. The insurer shall determine if the insured’s records support a division of payroll between different classifications due to an interchange of labor, as provided for by OAR 836-042-0050 to 836-042-0060.

(5) If the director meets with the insurer under OAR 836-043-0155 to obtain a detailed explanation of remedial measures undertaken by the insurer, the director may request a copy of the insurer's audit review program. If the director determines that the insurer's program is inadequate, the director may prescribe an audit review program for use by the insurer during the period in which the insurer must take remedial measures.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 737.310 & 737.318
Statutes/Other Implemented: ORS 737.318 & 656.027
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 12-1998, f. & cert. ef. 9-14-98
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0120 Minimum Standards of Insured Education Program

(1) At or before policy issuance, an insurer shall make available to the insured information covering the matters identified in this section. This information may be delivered via electronic means, as provided for under ORS Chapter 84.

(a) Which workers are subject to the Workers' Compensation Law for whom premiums must be paid;

(b) What remuneration is subject to premium charges;

(d) The requirements for verifiable records, as established in OAR 836-042-0060;

(e) The existence and nature of premium audits and the appeal process afforded insureds by ORS 737.505;

(f) The insured’s responsibility to notify the insurer of changes in the business structure and operations; and

(g) The classification notice requirements prescribed by OAR 836-043-0175 to 836-043-0185.

(2) When the insurer becomes aware of changes in the insured’s business that affect the reporting of payroll or other exposure basis, the insurer shall provide additional appropriate instruction to the insured.

(3) When changes in statute, rules or rating system occur that affect reporting of payroll or other exposure basis, the insurer shall provide notification of such changes to insureds as soon as reasonably possible.

History

Statutory/Other Authority: ORS 731.244, 737.310 & 737.318
Statutes/Other Implemented: ORS 737.318
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-1999, f. & cert. ef. 2-19-99
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0125 Purpose

A Test Audit Program shall be conducted by the bureau to carry out ORS 737.318. To perform this function, the bureau shall maintain the test audit staff for examining pertinent records of a number of Oregon insureds and insurers established according to the schedule in Exhibit 1 of OAR 836-043-0130, or another appropriate audit level, as determined by the director. The purposes of the test audit program are as follows:

(1) To check the accuracy and reliability of each insurer's audits, verify the classifications assigned, and assure that the premiums charged are based upon filed rates, rating plans and rating systems on file with and approved by the director;

(2) To establish minimum auditing standards and to develop a program for monitoring insurer performance toward the achievement of established standards; and

(3) To improve audit proficiency through the evaluation of insurer auditing practices.

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 18-1997, f. 11-25-97, cert. ef. 11-26-97
ID 7-1997(Temp), f. & cert. ef. 5-30-97
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0130 Selection of Risks for Test Audit

(1) All insurers or insurer groups shall be test audited on a continuous basis. Each quarter, the bureau shall send a list of policies selected for test audit to each insurer's Oregon policy issuing office or other office designated by the insurer.

(2) The number of policies to be selected for each insurer shall be determined based on the schedule provided in Exhibit 1, using the insurer's current policy premium distribution, the error rate from the insurer's previous test audits, and the statewide error rate. The policy premium distribution shall be based on estimated annual standard premium reported by the insurer for policies subject to selection. For each insurer, the error rate shall be the number of policies found to have audit errors divided by the total number of policies test audited during the latest six quarters for the audit types specified in Exhibit 1. The weighted average error rate shall be calculated according to the formula shown in Exhibit 1. The weighted average error rate for the insurer shall be used to determine the policy sample rates in Exhibit 1. The director may order additional focused audits in addition to the required test audits described in Exhibit 1. When ordering additional focused audits, the director shall describe risk factors that required additional review.

(3) The quarterly list of policies selected for test audit shall be randomly drawn from an insurer’s entire book of workers’ compensation business, subject to a maximum premium of $500,000 from the most recent available estimated annual standard premium reported by the insurer and the requirements of section (2) of this rule. The list shall indicate, for each insurer or insurer group, the insured, the policy number, the issuing office (if available) and the policy dates. This list shall only include policies with expiration dates not less than 90 days prior to the date of selection. Unless otherwise requested by the director, this list shall exclude:

(a) Wrap-up policies approved under ORS 737.602 or Sections 1 and 2, Chapter 336, Oregon Laws 1995;

(b) Policies for risks that have been test audited within the five-year period prior to the date of selection;

(d) Self-insured groups.

(4) Within 45 days after receipt of the selection list, each issuing office shall provide the bureau the following audit material on those risks for which it is responsible:

(a) If an audit is performed, a non-returnable copy of the auditor's work sheets and the premium invoice;

(b) Correspondence pertinent to proper completion of the audit;

(c) If the insured’s payroll report has been utilized, a copy of the insured’s payroll report and the premium invoice; and

(d) A list of all compensable indemnity claims. The claim listing should also reflect each compensable medical-only claim with reported loss amounts of $5,000 or more. The bureau must receive at least the name of the injured employee and the date of accident, although the following information must also be submitted if available; job title, nature of injury, Basic Manual classification to which claim is assigned, claim file number and a brief description of what the employee was doing when the accident occurred.

(5) At least 10 days before the test auditor's planned date of call, the auditor must inform the insured in writing of the planned date of call.

(6) The written notice required by section (5) of this rule must include certain information. An example of acceptable written notice is located on the Department of Consumer and Business Services, Division of Financial Regulation website at dfr.oregon.gov. The notice must include the following information:

(a) Identification of the insurer, the insured, the policy number, and the policy period being audited;

(b) The scheduled date and time of the test audit;

(d) Identification of the bureau responsible for conducting the test audit;

(e) Explanation of the bureau’s authority under the policy to examine the insured’s records;

(f) Explanation of the types or specific records the insured must make available to the auditor; and

(g) Contact information for the auditor.

(7) The bureau shall complete the test audits within six months of receipt of the insurer’s audit information. The director may request the bureau to provide a quarterly report of test audits that are not completed in a timely manner.

(8) The following must be obtained from bureau files:

(a) A policy data sheet providing all necessary information shown on the insurer's policy; and

(b) A copy of the latest bureau inspection.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 12-1998, f. & cert. ef. 9-14-98
ID 18-1997, f. 11-25-97, cert. ef. 11-26-97
ID 7-1997(Temp), f. & cert. ef. 5-30-97
ID 11-1994, f. 12-19-94, cert. ef. 1-1-95
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0135 Test Audits

(1) An analysis of test audit results shall be completed on each test audit.

(2) The test auditor shall interview the insured or an authorized representative of the insured in order to solicit the insured's cooperation and also to obtain all factual data necessary for proper completion of the test audit.

(3) If a current inspection is in the file, the test auditor shall verify data contained in that report.

(4) Each test audit may be performed on site or as a virtual audit and shall contain the following:

(a) A reconciliation of payroll subject to premium charge, which must be made with the independent control records of the State Unemployment Insurance quarterly reports and FICA quarterly report;

(b) A review of the cash disbursements journal to develop the remuneration paid to contract labor and casual labor;

(d) A review of time cards to verify proper treatment of overtime remuneration;

(e) A review of original entry records to verify proper application of the "division of single employee's payroll" rules (OAR 836-042-0050 to 836-042-0060);

(f) A list of the name, duties, and earnings of all persons assigned to the "standard exceptions" classifications. When size of the risk makes the listing impractical, spot checks must be made;

(g) A list of the name, title, duties, and earnings of all covered executive officers, partners or individuals;

(h) A summary, by classification, of all chargeable payrolls;

(i) A summary of the differences between the test audit and the insurer audit.

(5) Examples of the templates and forms described in this rule are located on the Department of Consumer and Business Services, Division of Financial Regulation website at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0145 Disposition of Test Audits

(1) The bureau shall submit individual results of each test audit to the office or offices designated by the insurer as soon as the bureau audit is completed.

(2) For audits that do not result in a significant premium difference, defined as in excess of $500 in premium or in excess of two percent of the total standard premium, whichever is greater, the bureau shall provide the insurer with the policy numbers and the named insureds for all test audits closed without change.

(3) For audits that result in a significant premium difference, the bureau shall provide the insurer with a report explaining the difference and the effect of such difference upon the total premium. An example of this report template is located on the Department of Consumer and Business Services, Division of Financial Regulation website at dfr.oregon.gov.

(4) Results of test audits of individual insurers shall be confidential data under ORS 731.312.

(5) Immediately upon receipt of the bureau's report, the insurer shall determine whether it agrees with the bureau's findings, auditing the insured if necessary. If the insurer agrees with the bureau's findings, the insurer shall file the corrected information on the original or, if necessary, on a revised unit statistical report. When the net premium difference is not sufficient to qualify as an "error" but a single difference is sufficiently large to qualify as an error prior to any offsetting premium amounts, the insurer shall be advised of such differences by an "advisory" notice. Also, when individual claims have been assigned to an incorrect classification an "advisory" notice shall also be submitted to the insurer. Upon receipt of the "advisory" notice, the insurer shall report such payrolls or losses on the initial or, if necessary, a "C" (corrected) Unit Statistical Report. All test audit differences must be closed within sixty days of notification unless the insurer requests an extension and the request is approved by the bureau.

(6) When classifications utilized by the insurer are found to be in error, the bureau shall take the normal appropriate action to secure compliance.

(7) Findings resulting from test audits shall not be utilized in any action by an insurer to enforce premium collections.

(8) If there is disagreement with the bureau's findings, the insurer shall communicate with the designated contact at the National Council on Compensation Insurance office to resolve areas of contention.

(9) When an insurer is unable to resolve test audit differences with the bureau staff, the insurer may present an appeal to the committee.

(10) When an insurer is unable to resolve test audit differences with the committee, the insurer may present an appeal to the director for final determination.

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 11-1994, f. 12-19-94, cert. ef. 1-1-95
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0150 Summary of Test Audit Results

(1) Test audit results shall be summarized quarterly for the individual insurer or insurer group, as well as for the industry as a whole. The summary must include all prior quarters up to but not exceeding a total of six quarters. The summary must reflect separately the results of field audits, desk audits, non-productive audits, and payroll reports. An example of this report template is located on the Department of Consumer and Business Services, Division of Financial Regulation website at dfr.oregon.gov.

(2) The summary of test audit results must be reported quarterly to the insurer's home office to the attention of the designated contact. If the insurer’s home office is located outside Oregon, a copy of the summary results must also be forwarded to the Oregon branch or division office that reports directly to the home office. It shall be the insurer's responsibility to keep the bureau advised of the responsible contact to whom the summary results should be directed.

(3) The bureau shall maintain sufficient records to permit accurate reporting to the insurer and the director.

(4) Copies of all summary reports shall be made available to the director upon completion. Individual insurer reports shall be made available to the director upon request.

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 11-1994, f. 12-19-94, cert. ef. 1-1-95
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0155 Test Audit Standards

(1) An insurer meets the test audit performance standard when the number of premium differences for field audits and desk audits in excess of $500 or two percent of the insured's standard premium, whichever is greater, does not exceed the maximum allowable number of errors shown in the Test Audit Performance Standards in Exhibit 2.

(2) An insurer that fails to meet the test audit performance standards for six consecutive quarters shall meet with the director or the director’s designated representative to provide a detailed explanation of the remedial measures the insurer is taking to restore overall audit proficiency to an acceptable level.

(3) If an insurer fails to meet the test audit performance standards after implementing the remedial measures required in section (2) of this rule, the director may impose a penalty, including possible suspension of the insurer's certificate of authority.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 18-1997, f. 11-25-97, cert. ef. 11-26-97
ID 7-1997(Temp), f. & cert. ef. 5-30-97
ID 11-1994, f. 12-19-94, cert. ef. 1-1-95
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0165 Monitoring Audit Program System

The director may examine every insurer for the purpose of determining its compliance with:

(1) The statistical reporting requirements of OAR 836-042-0045;

(2) The premium audit program requirements of OAR 836-043-0110 and 836-043-0115; and

(3) The minimum standards of insured education programs of OAR 836-043-0120.

History

Statutory/Other Authority: ORS 731.244 & ORS 737.318
Statutes/Other Implemented: ORS 737.318 & ORS 737.235
ID 5-2019, amend filed 04/19/2019, effective 07/01/2019
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0170 Premium Audit Hearings

(1) This rule establishes the procedure for an insured to request a hearing to dispute the results of an audit, as described in a final premium audit billing issued by an insurer to the insured, pursuant to ORS 737.318(3)(d) and 737.505(4) to (5). If an insured wants to request a hearing, then the insured must send a written request for a hearing to the Division of Financial Regulation. The Division of Financial Regulation must receive the request not later than the 60th day after the insured received the final premium audit billing. For the purpose of determining the date of receipt of a final premium audit billing sent to the insured by mail when the receipt date is unknown to the insured, the date of receipt shall be presumed to be three days after the postmark date, or three days after the date of mailing, if the postmark is illegible or unavailable.

(2) If the Division of Financial Regulation timely receives the insured’s request for a hearing, the Division of Financial Regulation will send or make available to the insured a petition form. In the petition, the insured must explain why it believes the billing is incorrect and describe the actions the insured wants the director to take to correct the matter. The petition, along with a complete copy of the final premium audit billing, must be received by the Division of Financial Regulation not later than the 60th day after the date the Division of Financial Regulation received the insured’s request for a hearing.

(3) For the purposes of computing time periods specified in sections (1) and (2) of this rule, ORS 174.120 and 174.125 shall govern.

(4) If the Division of Financial Regulation determines that the insured is entitled to a hearing, the Division of Financial Regulation shall notify the insured and the insurer, and also the bureau if the statements in the petition of the insured address the use of the bureau rating system, that the insured is entitled to a hearing and the Division of Financial Regulation has requested the Office of Administrative Hearings to schedule and, if necessary, conduct a hearing. The Division of Financial Regulation shall forward the insured’s request for a hearing and petition to the insurer, and, if helpful to decide the matter, the bureau.

(5) An insured may request the director to stay the collection effort of an insurer on a final premium audit billing during the pendency of an insured’s request for a hearing, pursuant to ORS 737.505(5). The application must allege and show good cause as required in 737.505 by providing an explanation of the alleged errors for which the insured is requesting relief. The stay must apply only to the disputed amount. The director shall not decide whether to grant or deny the insured’s request for a stay until after the Division of Financial Regulation has timely received the insured’s request for a hearing and completed petition and determined that the insured is entitled to a hearing. The director may delegate to the Office of Administrative Hearings the authority to grant or deny the insured’s request for a stay.

(6) Subject to the exception provided in section (7) of this rule, for purposes of ORS 737.318(3)(d) and 737.505(4) to (5), OAR 836-043-0110 and this rule, the final premium audit billing of an insured is the first document issued by the insurer to the insured after the insurer’s initial or revised audit of the insured that contains all of the elements specified in this section. Failure by the insurer to include any of the elements renders the billing incomplete as a final premium audit billing for purposes of ORS 737.318 and 737.505 and renders the debt uncollectible until all elements are included. An invoice issued by an insurer based on a payroll report without having performed an audit is not considered a final premium audit billing. The elements are as follows:

(a) The results of the audit;

(b) If the final premium audit billing is based on an initial audit, the amount of the difference between the estimated standard premium reported by the insured for the entire policy period and the final standard premium calculated after the policy period is over, pursuant to the audit;

(c) If the final premium audit billing is based on a revised audit, the amount of the difference between the final standard premium calculated after the policy period is over, pursuant to the initial audit, and the final standard premium, calculated pursuant to the revised audit;

(d) If the final premium audit billing is based in whole or in part on a determination by the insurer that one or more persons are employees rather than independent contractors, then the name of each person, a description of the positions or tasks of each named person, and the basis for the determination;

(e) The notice required by ORS 737.318(3)(d) and OAR 836-043-0110; and

(f) The front page of the billing bears the title “Final Premium Audit Billing.”

(7) If, after performing an audit of an insured, the insurer issues both a statement of the insured’s account and a letter to the insured that explains the audit and states the amount of the difference, the statement of account and the letter together are considered to be the final premium audit billing and:

(a) The insurer may provide the notification required in ORS 737.318 and OAR 836-043-0110 either in the statement of account or in the letter; and

(b) If the statement of account and the letter are received separately, the 60-day period within which the director must receive the request for a hearing begins upon receipt by the insured of the later-received document.

(8) Unless otherwise provided by statute or rule, the director shall dismiss an insured’s request for a hearing if:

(a) The director does not receive the insured’s written request for a hearing within the required timeframe.

(b) The director does not receive the insured’s completed petition within the required timeframe.

(c) The audit results in changes that affect a future policy period, but does not result in changes to the policy period audited.

(d) The director does not have jurisdiction in the matter, including, but not limited to, the following circumstances:

(A) The billing only addresses changes to the workers’ compensation insurance coverage for an insured’s employees who are not Oregon subject workers.

(B) The billing is based on an estimate of compensation paid by the insured to its employees who are Oregon subject workers and not on actual audit results.

(C) The billing is based on the assignment of an experience rating modification by the bureau, in accordance with the experience rating plan adopted under OAR 836-042-0015.

History

Statutory/Other Authority: ORS 737.318 & 731.244
Statutes/Other Implemented: ORS 737.318 & 737.505
ID 40-2024, minor correction filed 12/09/2024, effective 12/09/2024
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 1-2000, f. & cert. ef. 2-10-00
ID 13-1998, f. & cert. ef. 9-23-98
ID 9-1990, f. 5-10-90, cert. ef. 6-1-90
ID 4-1989, f. & cert. ef. 2-28-89
ID 15-1988(Temp), f. & cert. ef. 9-2-88
ID 13-1988(Temp), f. & cert. ef. 7-27-88
ID 1-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0175 Statutory Authority; Purpose; Applicability

(1) OAR 836-043-0175 to 836-043-0185 are adopted by the Director of the Department of Consumer and Business Services pursuant to the provisions of ORS 737.310.

(2) The purpose of these rules is to prescribe minimum standards for notice by insurers to insureds regarding approved rate classifications.

(3) These rules apply to all authorized workers' compensation insurers and the State Accident Insurance Fund Corporation.

History

Statutory/Other Authority: ORS 731.244 & 737.310
Statutes/Other Implemented: ORS 737.310
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 2-1992, f. 2-6-92, cert. ef. 2-15-92
ID 2-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0180 Definitions

As used in OAR 836-043-0175 to 836-043-0185 unless the context requires otherwise:

(1) "Bureau" means the licensed rating organization of this state for workers' compensation insurance.

(2) "Classification" means a grouping of insurance risks according to a classification system used by an insurer.

(3) "Classification System" means a schedule of classifications and a rule or set of rules used by an insurer for determining the classifications applicable to an insured.

(4) "Insurer" means any insurer authorized to transact workers' compensation insurance or the State Accident Insurance Fund Corporation.

(5) "Reclassification" means an addition or removal of a classification by an insurer to a policy for an insured when the previous classification is improper or inadequate.

(6) "Workers' Compensation Insurance" means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656, similar laws of the United States or agreement between states.

History

Statutory/Other Authority: ORS 731.244 & 737.310
Statutes/Other Implemented: ORS 737.310
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 2-1992, f. 2-6-92, cert. ef. 2-15-92
ID 2-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0185 Insurer Classification Notice

(1) When an insurer issues a workers' compensation insurance policy to an insured for the first time, an insurer shall provide each insured a written rate classification notice describing the work activities of each classification assigned. This information may be delivered via electronic means, as provided for under ORS Chapter 84.

(2) The rate classification notice shall include the following information:

(a) The complete description for each classification assigned as contained in the insurers' classification system filed with and approved by the director;

(b) An adequate description of work activities for such classification as reviewed by the director;

(c) One or more publications that include basic ratemaking and classification information and necessary records and reporting procedures for the division of payroll of an individual employee among classifications assigned as provided for under OAR 836-042-0060;

(d) An amendatory endorsement to the policy for reclassification assignments during the policy year as provided for under ORS 737.310(13).

(3) When an insurer provides the written rate classification notice required under ORS 737.310 (12) and (13), the notice must be given in the manner prescribed by section (2) of this rule.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 737.310(12) & 737.310(13)
Statutes/Other Implemented: ORS 737.310(12)
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
ID 2-1992, f. 2-6-92, cert. ef. 2-15-92
ID 2-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-043-0200 Statutory Authority; Purpose; Applicability

(1) OAR 836-043-0200 to 836-043-0240 are adopted by the Director pursuant to 731.244, 737.310(13) and 737.526(1) to aid in the effectuation of insurer filings under 737.205, the review of workers’ compensation insurance filings under 737.320 and the hearing process under 737.505 for persons aggrieved by the application of the rating system.

(2) The purpose of these rules is to establish an Oregon Workers’ Compensation Rating System Review and Advisory Committee by which the authorized workers’ compensation rating organization for this state may:

(a) Exchange information and experience data with its members and the Director;

(b) Consult and cooperate with its members and the Director with respect to National Council on Compensation Insurance filings and to application of workers’ compensation rating system; and

(3) These rules apply to all authorized workers’ compensation insurers, the State Accident Insurance Fund Corporation and the National Council on Compensation Insurance.

History

Statutory/Other Authority: ORS 731.244, 737.310(13) & 737.526(1)
Statutes/Other Implemented: ORS 737.310(13) & 737.526
ID 11-1992, f. 6-9-92, cert. ef. 6-15-92

Or. Admin. R. 836-043-0210 Definitions

As used in; OAR 836-043-0200 to 836-043-0240, unless the context requires otherwise:

(1) “Aggrieved Person” means any person adversely affected by application of a rating system or by any decision of the Committee.

(2) “Classification” means a grouping of insurance risks according to a classification system used by an insurer.

(3) “Classification System” means a schedule of classifications and a rule or set of rules used by an insurer for determining the classification applicable to an insured.

(4) “Committee” means the Oregon Workers’ Compensation Rating System Review and Advisory Committee established by OAR 836-043-0200 to 836-043-0240.

(5) “Experience Rating” means modification of workers’ compensation insurance premium according to the Experience Rating Plan Manual of the National Council on Compensation Insurance filed with the Director.

(6) “Hearing” or “Hearings” means an informal and reasonable means whereby any person aggrieved by the application of NCCI’s rating system or an authorized representative of the person may be heard by the Oregon Workers’ Compensation Rating System Review and Advisory Committee to review the manner in which such rating system has been applied in connection with the insurance afforded the person. This hearing does not constitute a contested case hearing within the meaning of ORS 183.310.

(7) “Insured” means an employer who has been issued a workers’ compensation insurance policy by an insurer. An insured may designate, in writing, a representative to present their appeal before the Committee. The Small Business Ombudsman of the Department of Insurance and Finance may be a representative.

(8) “Insurer” means any insurer authorized to transact workers’ compensation insurance and includes the State Accident Insurance Fund Corporation.

(9) “Member” means a member of the Oregon Workers’ Compensation Rating System Review and Advisory Committee of the Director of the Department of Insurance and Finance.

(10) “National Council on Compensation Insurance” or “NCCI” is the rating organization that has been licensed by the Director for workers’ compensation insurance, of which organization authorized workers’ compensation insurers must be members pursuant to ORS 737.560.

(11) “Northwestern Division” or “NWD” is a branch of the National Council on Compensation Insurance providing related services for Oregon.

(12) “Premium” means the contractual consideration charged to an insured for insurance for a specific period of time regardless of the timing of actual charges.

(13) “Rate” means a monetary amount applied to the units of exposure basis assigned to a classification and used by an insurer to determine the premium for an insured, prior to any adjustment or adjustments resulting from the application of any rating plan.

(14) “Rating Plan” means a rule or set of rules used by an insurer to calculate premium for an insured, and the parameter values used in such calculation, after application of classification premium rates to units of exposure.

(15) “Rating System” means a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system and other rules used by an insurer for determining contractual consideration for an insured.

(16) “Retrospective Rating” means a method of adjustment of workers’ compensation insurance premium according to the insurer’s rating plan for the policy of an insured based on losses incurred during the period covered by the policy.

(17) “Workers’ Compensation Insurance” means insurance providing an employer coverage from the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656 of this state, similar laws of the United States, or agreements between states.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 737.310(13) & 737.526(1)
Statutes/Other Implemented: ORS 737.310(13) & 737.526
ID 11-1992, f. 6-9-92, cert. ef. 6-15-92

Or. Admin. R. 836-043-0220 Committee Participation

(1) The Committee shall consist of seven voting and one nonvoting member as follows:

(a) Five voting members shall be insurers, one of which shall be the State Accident Insurance Fund Corporation. No two insurers that share common ownership or management so as to meet the definition of a controlled group under Sections 851(c)(3) or 1563(a) of the Internal Revenue Code shall serve together on the Committee;

(b) One voting member shall be an Oregon Workers’ Compensation insured;

(d) The nonvoting member shall be the Director or the Director’s designee.

(2) The Committee officers are as follows:

(a) Chairperson shall be the Director, or Director’s designee;

(b) First Vice-chairperson and Second Vice-chairperson shall be elected by insurer voting members for annual terms provided that one of the vice-chairpersons be the State Accident Insurance Fund Corporation.

(3) Committee members shall be selected as follows:

(a) The Director shall appoint the insured member and public body members;

(b) The Director shall appoint the insurer members as follows:

(A) NCCI shall compile a list of nominees which the Director is to consider when making such appointments. The Director, however, is not required to appoint any of the nominees presented by NCCI;

(B) The list of nominees complied by NCCI shall contain no fewer than seven candidates, one of which shall be the State Accident Insurance Fund Corporation;

(C) The nominees presented by NCCI shall possess expertise in the application of the Oregon workers’ compensation rating system;

(D) The nominees presented by NCCI shall, to the extent possible, represent on a written premium basis a balance between stock and non-stock insurers;

(E) NCCI shall provide the list of nominees to the Director 30 days prior to the date the Director is required to make the appointments;

(F) When an appointment is made, the Director will immediately notify NCCI regarding the identity of the insured member and public body members;

(G) In the event the Director fails to make any such appointment, the members serving on the Committee for the term immediately preceding shall continue to serve until such time as a new appointment is made.

(c) Each member appointed by the Director shall furnish to the Director, and to the NCCI the names, addresses, and telephone and facsimile numbers of the individuals which it has selected to serve as its representative and alternate on the Committee.

(4) Each insurer member’s term on the Committee shall be for three years. The insurer members shall serve staggered terms. For the first term, two insurer members shall be selected for one year terms, two shall be selected for two year terms, and one shall be selected for a three year term.

(5) The insured member and public body members shall each serve for a one year term.

(6) Vacancies on the Committee shall be filled for the remainder of the unexpired term pursuant to section (3) of this rule. Newly appointed members shall be from the same class as the retiring member.

(7) Members shall be reimbursed by NCCI for the reasonable expenses connected with the Committee functions, including, but not limited to, travel expenses, food and lodging. Such reimburse-ment may be provided as a per diem allowance. Members shall receive no other compensation for their participation.

History

Statutory/Other Authority: ORS 731.244, 737.310(13) & 737.526(1)
Statutes/Other Implemented: ORS 737.310(13) & 737.526
ID 11-1992, f. 6-9-92, cert. ef. 6-15-92

Or. Admin. R. 836-043-0230 Committee Operating Rules

(1) The term of each Committee shall commence on June 1 and expire on May 31 of the following year.

(2) The Committee shall meet either in person or by teleconference at the beginning of each term for purposes of electing the First Vice-chairperson and Second Vice-chairperson. The Chairperson shall be responsible for organizing the agenda of each meeting and each hearing, and for the conduct of each hearing. The First Vice-chairperson shall be responsible for arranging facilities, providing notice as required, and arranging for administrative support services. The Chairperson or Vice-chairperson, may delegate any of its administrative functions to other Committee officers.

(3) The Committee shall meet as needed and in accordance with the provisions of state law.

(a) Upon receipt of a grievance to the Recording Secretary, the Committee shall schedule a hearing to be convened within 90 days;

(b) Written notice of hearing shall be provided to the appellant, the insurer and the NWD within 20 days after receipt of the grievance, but not less than ten days prior to the hearing;

(c) The written notice of hearing shall contain notice of discovery rights pursuant to ORS 737.505(1) and notice of the right to be represented by counsel or have other advisors present;

(d) Hearings shall not be held unless a quorum is present either in person or by teleconference. A quorum shall consist of a simple majority. The decision of the Committee shall be by majority vote of those voting members present at the hearing;

(e) If a member has a conflict of interest with respect to a hearing scheduled before the Committee, the member shall declare such conflict of interest and either abstain from voting, or obtain the agreement of the aggrieved party that such abstention is not required. A conflict of interest shall exist when:

(A) A member has a familial relationship with the aggrieved party; or

(B) An insured member is a direct competitor of the aggrieved party; or

(C) An insured member is a part of an affiliated group, any member of which is a direct competitor of the aggrieved party; or

(D) A member is associated with the aggrieved party and comes within the definition of a controlled group as specified in Section 851(c)(3) of the Internal Revenue Code; or

(E) A member has any other material conflicting interest which could call into question that member’s ability to render an unbiased decision.

(f) A conflict of interest may be waived if, after full disclosure of the facts raising such a conflict, all parties to the appeal agree to such waiver;

(g) The NCCI representative(s) on the Committee shall not be deemed to have a conflict of interest with respect to any appeal brought before the Committee based solely upon such representa-tives’ affiliation with NCCI.

(4) Each decision shall be provided in writing and shall state the reason(s) for the decision. The decision shall be sent within 30 days of the hearing to all parties and to the Director:

(a) The votes of each member shall not be recorded on the decision;

(b) This decision shall be prepared by the First Vice-chairman of the Committee;

(c) This decision shall provide conspicuous notice of the appeal rights to a de novo administrative law contested case hearing before the Director pursuant to ORS 737.505(3). The NCCI shall have the right to appeal this decision at such a contested case hearing.

(5) Review of decisions of the Committee shall be accorded pursuant to ORS 737.505.

(6) Except for executive sessions held to discuss appropriate issues, all Committee meetings shall be open to any NCCI member or subscriber, insured and the general public. Executive Sessions are open to any NCCI member.

History

Statutory/Other Authority: ORS 731.244, 737.310(13) & 737.526(1)
Statutes/Other Implemented: ORS 737.310(13) & 737.526
ID 11-1992, f. 6-9-92, cert. ef. 6-15-92

Or. Admin. R. 836-043-0240 Committee Activities

The subject matter jurisdiction of the Committee shall include but not be limited to the following:

(1) Any insured or insurer grievance regarding the application of any part of the NCCI rating system adopted by the insurer, including but not limited to:

(a) A classification;

(b) Classification system;

(d) Rating plans including the retrospective rating plans, component parts and tables.

(2) Except for voluntary market advisory loss cost and assigned risk plan advisory rate filings, proposed filings of the NCCI for subsequent submission to Director.

(3) The calling for an analysis of any special or ordinary statistical data reports from the NCCI or its members.

(4) Special surveys or projects dealing with the rating system as may be initiated by the Director.

History

Statutory/Other Authority: ORS 731.244, 737.310(13) & 737.526(1)
Statutes/Other Implemented: ORS 737.310(13) & 737.526
ID 11-1992, f. 6-9-92, cert. ef. 6-15-92

Or. Admin. R. 836-043-0300 Qualifications for Workers’ Compensation Rating Oganizations

(1) Prior to operating in Oregon, a worker’s compensation rating organization shall apply to the Director for a license. The Director shall act on the application within 60 days of the application. Prior to approving any applicant’s license, the Director shall determine that the organization meets the qualifications and requirements of ORS 737.355(1).

(2) The rating organization shall include with its application the following documents:

(a) Copies of its articles of incorporation;

(b) Bylaws;

(d) A description of its operation;

(e) Copies of its last three quarterly financial statements;

(f) A copy of its two most recent annual report;

(g) Copies of its Securities and Exchange Commission filings, if any.

(3) The rating organization’s application shall demonstrate to the Director’s satisfaction:

(a) The level of professional staffing that the rating organization will dedicate to serving insurers within Oregon, including the number of actuaries, statisticians and economists, the number of years of experience of each professional staff member and the professional designations of its staff;

(b) The capacity and quality of the rating organization’s electronic data processing system dedicated to the workers’ compensation rating system in Oregon;

(d) The rating organization’s availability to its clients in Oregon.

History

Statutory/Other Authority: ORS 731.244 & 737.355
Statutes/Other Implemented: ORS 737.355
ID 3-2000, f. & cert. ef. 3-29-00

Or. Admin. R. 836-043-0310 Exchange of Data Among Workers’ Compensation Rating Organizations

(1) Not later than the 25th day of each month, each licensed workers’ compensation rating organization shall report to the statistical agent all edited data reported by its member insurers under OAR 836-042-0045 during the prior month that the rating organization finds useable for experience rating.

(2) The data to be reported by each rating organization under section (1) of this rule includes all financial data by policy year, accident year and calendar year.

History

Statutory/Other Authority: ORS 731.244 & 737.355
Statutes/Other Implemented: ORS 737.355
ID 3-2000, f. & cert. ef. 3-29-00

Or. Admin. R. 836-043-0320 Competitive Selection Process; Designation of a Workers’ Compensation Statistical Agent

(1) When the Director licenses more than one workers’ compensation rating organization, the Director shall notify each licensed rating organization of the Director’s intent to begin a competitive process for selecting a statistical agent for gathering workers’ compensation insurance data. Only a licensed workers’ compensation rating organization may apply for designation as the statistical agent.

(2) The notification required in section (1) of this rule shall describe the competitive process and establish a deadline for applications and related submissions.

(3) Upon receipt of notice of the Director’s intent to begin a selection process, and licensed rating organization may, in writing to the Director, waive its right to pursue selection as the designated statistical agent.

(4) Each applicant for designation as the statistical agent must submit the following with its proposal:

(a) A compilation plan that provides for:

(A) A flow of required data to the state;

(B) A flow of statewide compiled data to all rating organizations and their member insurers, and interested agents and insured employers; and

(C) A flow of individual insured employer data necessary for employerexperience rating and other individual employer rating of the insured employers of each rating organization’s members to each rating organization and their member insurers, and the authorized agents of the insured employers and the insured employers;

(b) A plan for assuring timeliness, oversight and quality control of data received from the rating organizations;

(c) A description of the level of professional staffing the applicant will dedicate as statistical agent to serving the State of Oregon and rating organizations;

(d) A description of the capacity and quality of the applicant’s electronic data processing system dedicated to the workers’ compensation rating system in Oregon;

(e) A description of the applicant’s availability to rating organizations in Oregon and its ability to assist them with their operations;

(f) A waiver of all intellectual property rights in compilations of Oregon data required to be prepared by the statistical agent; and

(g) A statement of fees that the applicant will charge rating organizations for statistical agent services with adequate itemization of the components of the fees to demonstrate they are reasonable and not excessive for the services provided

(5) The Director, upon completing a review of all applications with supporting material and such other information as the Director may require, shall designate one rating organization to serve as the statistical agent for a period of three years.

(6) The Director may extend the designation of the current statistical agent pending the competitive selection process. In the event the current statistical agent is unable or unwilling to continue, the Director may designate a temporary statistical agent pending the completion of the competitive selection process.

(7) The statistical agent may establish and assess reasonable fees against all licensed rating organizations. The statistical agent must first demonstrate to the Director that the fees will minimize costs to rating organizations without compromising data quality controls and its performance of other statutory responsibilities.

History

Statutory/Other Authority: ORS 731.244 & 737.225
Statutes/Other Implemented: ORS 737.225
ID 3-2000, f. & cert. ef. 3-29-00

Division 50 GENERAL PROVISIONS

Or. Admin. R. 836-050-0000 Purpose, Statutory Authority and Implementation

OAR 836-050-0000 to 836-050-0020 are adopted under the authority of ORS 731.244, 742.156 and 742.158, for the purpose of implementing 742.156 and 742.158, relating to assumption reinsurance.

History

Statutory/Other Authority: ORS 731.244, 742.156 & 742.158
Statutes/Other Implemented: ORS 742.156 & 742.158
ID 15-2006, f. & cert. ef. 7-27-06
ID 4-1996, f. & cert. ef. 2-28-96

Or. Admin. R. 836-050-0010 Notice of Transfer

(1) An insurer transferring obligations or risks through an assumption reinsurance agreement subject to ORS 742.150, shall provide or cause to be provided to each policyholder or certificate holder a notice of transfer by first-class mail, addressed to the last-known address of the policyholder or certificate holder or to the address to which premium notices or other policy documents are sent. For insurance business on which premiums are collected on a weekly or monthly basis by an insurance producer of the insurer, the notice of transfer must be sent by personal delivery with acknowledged receipt. Notice of transfer must also be sent to the transferring insurer's insurance producer or brokers of record on the affected policies.

(2) The notice of transfer must state or provide:

(a) The date the transfer and novation of the policyholder's policy or certificate holder's certificate are proposed to take place;

(b) The names, addresses and telephone numbers of the assuming insurer and the transferring insurer;

(d) The procedures and time limit for consenting to or rejecting the transfer and novation;

(e) A summary of any effect that consenting to or rejecting the transfer and novation will have on the policyholder's or certificate holder's rights;

(f) A statement that the assuming insurer is authorized to transact the type of insurance being assumed in the state in which the policyholder or certificate holder resides, or is otherwise authorized under ORS 742.150 to 742.162 to assume such insurance;

(g) The name and address of the representative of the transferring insurer to whom the policyholder or certificate holder should send its written statement of acceptance or rejection of the transfer and novation;

(h) The address and phone number of the insurance regulatory office of the state in which the policyholder or certificate holder resides so that the policyholder or certificate holder may write or call the office for further information regarding the financial information of the assuming insurer;

(i) A statement that the insurer will furnish to the policyholder or certificate holder, upon request, financial data for both insurers, including at a minimum the data described in section (3) of this rule; and

(j) An explanation of the reason for the transfer.

(3) The transferring insurer shall promptly furnish the following financial data for both insurers in response to a request for financial data by a policyholder or certificate holder or by an agent or broker of record of the transferring insurer with respect to the affected policies:

(a) Ratings for the previous year from two nationally recognized insurance rating services acceptable to the Director, including the rating service's explanation of the meaning of the ratings, and if ratings are unavailable for the year, the insurer shall so disclose;

(b) If the rating of either insurer furnished under subsection (a) of this section changed during the previous year, ratings for the year preceding from two nationally recognized insurance rating services acceptable to the Director, including the rating service's explanation of the meaning of the ratings, and if ratings are unavailable for the year preceding, the insurer shall so disclose;

(c) A balance sheet as of December 31 for the previous year if available and as of the date of the most recent quarterly statement; and

(d) A copy of the Management's Discussion and Analysis that was filed as a supplement to the previous year's annual statement.

(4) Notice in the form identical or substantially similar to Exhibit 1 to this rule is considered to comply with the requirements of section (2) of this rule.

(5) The notice of transfer shall include a pre-addressed, postage-paid response card that a policyholder or certificate holder may return as its written statement of acceptance or rejection of the transfer and novation.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & Sec. 5 & 6, Ch. 30 & OL 1995
Statutes/Other Implemented: ORS 742.156 & 742.158
ID 15-2006, f. & cert. ef. 7-27-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 4-1996, f. & cert. ef. 2-28-96

Or. Admin. R. 836-050-0020 Notice of Rejection

A policyholder or certificate holder who elects to reject the transfer and novation of the policy under an assumption reinsurance agreement to which ORS 742.150 applied must give notice indicating rejection to the transferring insurer on a pre-addressed, postage-paid response card provided by the transferring insurer in the notice of transfer as required in OAR 836-050-0010 and Exhibit 1 to that rule, or in another written notice by the policyholder or certificate holder.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 742.156 & 742.158
Statutes/Other Implemented: ORS 742.156 & 742.158
ID 15-2006, f. & cert. ef. 7-27-06
ID 4-1996, f. & cert. ef. 2-28-96

Or. Admin. R. 836-050-0105 Statutory Authority; Purpose; Applicability

(1) OAR 836-050-0105 to 836-050-0120 are adopted by the Director pursuant to ORS 743.028.

(2) The purpose of OAR 836-050-0105 to 836-050-0120 is to prescribe, as required by ORS 743.028, uniform health insurance claims forms that must be accepted by all insurers transacting health insurance in this state and by all state agencies that require health insurance claim forms for their records.

(3) OAR 836-050-0105 to 836-050-0120 do not apply to claims for vision care or drugs, or to benefits paid on other than an expense-incurred basis.

(4) “Insurer” as used in OAR 836-050-0105 to 836-050-0120 includes health care service contractors and state agencies that require health insurance claim forms for their records.

History

Statutory/Other Authority: ORS 731.244 & 743.028
Statutes/Other Implemented: ORS 743.028
ID 1-1995, f. 4-26-95, cert. ef. 8-1-95
IC 75, f. & ef. 5-27-77
IC 73, f. 2-25-77, ef. 3-1-77

Or. Admin. R. 836-050-0110 Uniform Claim Forms

(1) An insurer shall accept a properly completed claim submitted on the applicable uniform form prescribed by the exhibits to this rule, or on the substantially identical respective form approved by the American Medical Association’s Council on Medical Services or the American Dental Association’s Council on Dental Care Programs, as follows:

(a) Exhibit 1 — For claims other than dental care claims;

(b) Exhibit 2 — For dental care claims.

(2) If the information entered on the form is incomplete, the insurer may return the form to the provider for completion to the extent necessary.

(3) If additional information is essential to the insurer’s proper handling of the claim, it may seek such information by letter, investigative inquiry, or other reasonable means of communication. These inquiries shall be kept to a minimum and shall not seek information duplicating what already is known to the insurer.

(4) An insurer may, at its option, accept a claim form different from the uniform form prescribed by this rule.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 743.028
Statutes/Other Implemented: ORS 743.028
ID 1-1995, f. 4-26-95, cert. ef. 8-1-95
IC 75, f. & ef. 5-27-77
IC 73, f. 2-25-77, ef. 3-1-77

Or. Admin. R. 836-050-0115 Permitted Modifications to Uniform Forms

(1) An insurer may add to the face of the form its own identification and similar information, including insurer name and logo and policy identification by color coding or otherwise. The captions may be supplemented by instructions that merely facilitate the completion of the form.

(2) An insurer may add to the back of the form or, for Exhibit 2, to any blank area on the face of the form, an item whose purpose is the certification of the status of the patient as a person in the insured group or as a member of the family or dependent of a person in the insured group. In the case of a claim form required by a state agency, the back of the form may also contain such provider certification and acknowledgment language as is required or permitted by law.

(3) No alteration may be made to the format of the face of the form. No addition to the form may impose any additional requirement on any person, except for the certification item permitted by section (2) of this rule.

(4) An insurer may screen the portions of the uniform claim form that it does not require to be completed, if the screening is done in such a way as to leave these portions usable by others.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 743.028
Statutes/Other Implemented: ORS 743.028
IC 75, f. & ef. 5-27-77
IC 73, f. 2-25-77, ef. 3-1-77

Or. Admin. R. 836-050-0120 Effective Date; Temporary Provisions

(1) Except as provided in sections (2) and (3) of this rule, OAR 836-050-0105 and 836-050-0110 as amended are effective August 1, 1995, for claims other than dental care claims and for dental care claims.

(2) For claims other than dental care claims, an insurer shall accept until January 1, 1996, a properly completed claim submitted on either the Exhibit 1 form of OAR 836-050-0110 in effect on July 31, 1995, or the Exhibit 1 form of OAR 836-050-0110 effective as of August 1, 1995.

(3) For dental care claims, insurers shall accept until January 1, 1996, a properly completed claim submitted on either the Exhibit 2 form of OAR 836-050-0110 in effect on July 31, 1995, or the Exhibit 2 form of 836-050-0110 effective as of August 1, 1995.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 743.028
Statutes/Other Implemented: ORS 743.028
ID 1-1995, f. 4-26-95, cert. ef. 8-1-95
IC 75, f. & ef. 5-27-77
IC 73, f. 2-25-77, ef. 3-1-77

Or. Admin. R. 836-050-0150 Advance Payments

(1) The notice required by ORS 12.155 shall contain the following:

(a) The time and location of the occurrence in regard to which the advance payment is made.

(b) A statement to the effect that the amount of any advance payment will be credited against any judgment entered in favor of the payee.

(c) The following words: "The period of limitation for commencement of an action for damages as set by Chapter 12 of Oregon Revised Statutes will expire on _____", or such other similar words as the Director of the Department of Consumer and Business Services approves.

(d) The signature of a person authorized to act for the insurer.

(e) The date on which notice is transmitted to the party entitled to the advance payment.

(2) The type size used in the portion of the notice described in section (1)(c) of this rule shall not be smaller than the type used for other typed or printed material required by this rule and shall not be arranged or displayed in such a way as to obscure the content of the notice.

History

Statutory/Other Authority: ORS 12.155 & 731.244
Statutes/Other Implemented: ORS 12.155
ID 22-2002, f.& cert. ef. 11-27-02, Renumbered from 836-020-0900
ID 15-1996, f. & cert. ef. 11-12-96, Renumbered from 836-020-0060
IC 48, f. 8-18-71, cert. ef. 9-1-71

Or. Admin. R. 836-050-0200 Purpose, Scope and Definitions

(1) OAR 836-050-0200 to 836-050-0215 provide for equitable coverage under life and health insurance policies for conditions relating to HIV-infection, including AIDS and ARC. OAR 836-050-0200 to 836-050-0215 apply to all health insurance policies, including those of fraternal benefit societies and health care service contractors, issued or delivered for issue in Oregon. OAR 836-050-0200, 836-050-0205, 836-050-0207, and 836-050-0210 apply to all life insurance policies, including those of fraternal benefit societies, issued or delivered for issue in Oregon.

(2) For purposes of OAR 836-050-0200 to 836-050-0215:

(a) “AIDS” means Acquired Immunodeficiency Syndrome;

(b) “ARC” means AIDS Related Complex;

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 742.003, 742.005 & 746.240
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert ef. 11-9-88

Or. Admin. R. 836-050-0205 Authority

OAR 836-050-0200 to 836-050-0215 are adopted by the Director pursuant to the general rulemaking authority of the Director under ORS 731.244, for the purpose of carrying out the responsibilities of the Director under 731.008 and 731.016, regarding the protection of the insurance-buying public, under 742.003 and 742.005, regarding approval of forms, and under 746.240, regarding definition of unfair practices in the transaction of insurance.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 742.005 & 746.240
ID 2-1999, f. & cert. ef. 3-25-99
ID 12-1997, f. & cert. ef. 10-13-97
Reverted to ID 10-1988, f. & cert. ef. 6-10-88
ID 1-1997(Temp), f. & cert. ef. 2-24-97
ID 6-1987(Temp), f. & cert. ef. 11-9-88
ID 10-1988, f. & cert. ef. 6-10-88

Or. Admin. R. 836-050-0207 Unfair Trade Practices

Failure of an insurer to comply with OAR 836-050-0210 and 836-050-0215 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 742.005 & 746.240
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0210 General Exclusions

(1) All health insurance policies, other than those providing coverage only for specified diseases, shall cover HIV infection, including AIDS and ARC, as they would any other serious medical condition.

(2) All life insurance policies, other than those providing coverage for specific causes of death only, shall cover death from AIDS or ARC as they would death from any other cause.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 742.005 & 746.240
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0215 Pre-existing Condition Exclusions; Health Insurance

With respect to health insurance policies:

(1) Asymptomatic HIV infection shall not be considered a preexisting condition with respect to subsequent claims related to AIDS or ARC. “Asymptomatic HIV infection” is that which is identified solely through use of a test for a virus or antibodies to the virus.

(2) The period of exclusion for HIV infection claims, when physical symptoms were present before the coverage date, shall be no longer than that for other pre-existing diseases.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 742.005 & 746.240
ID 12-1997, f. & cert. ef. 10-13-97
Reverted to ID 10-1988, f. & cert. ef. 6-10-88
ID 1-1997(Temp), f. & cert. ef. 2-24-97
ID 6-1987(Temp), f. & cert. ef. 11-9-88
ID 10-1988, f. & cert. ef. 6-10-88

Or. Admin. R. 836-050-0230 Purpose, Scope and Definitions

(1) OAR 836-050-0230 to 836-050-0255 provide for fair standards of underwriting for risks relating to HIV infection and apply to all transactions of life and health insurance subject to the Oregon Insurance Code. Such transactions include the underwriting of applicants for coverage under individual and group life and health insurance, as well as the setting of group underwriting standards. OAR 836-050-0230 to 836-050-0255 apply to all insurers, including health care service contractors and fraternal benefit societies, and all insurance producers and insurance support organizations, that are engaged in the transaction of life and health insurance under the Oregon Insurance Code.

(2) For purposes of OAR 836-050-0230 to 836-050-0255:

(a) "AIDS" means Acquired Immunodeficiency Syndrome;

(b) "ARC" means AIDS Related Complex;

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.005 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0235 Rulemaking Authority

OAR 836-050-0230 to 836-050-0255 are adopted by the Director pursuant to the general rulemaking authority of the Director under ORS 731.244, for the purpose of carrying out the responsibilities of the Director under 731.008 and 731.016, regarding the protection of the insurance-buying public, under 742.003 and 742.005, regarding approval of forms, and under 746.240, regarding definition of unfair practices in the transaction of insurance; and for the purpose of assuring compliance by insurers with the requirements of 433.045.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.005 & 746.240
ID 12-1997, f. & cert. ef. 10-13-97
Reverted to ID 18-1988, f. & cert. ef. 10-31-88
ID 1-1997(Temp), f. & cert. ef. 2-24-97
ID 6-1987(Temp), f. & cert. ef. 11-9-88
ID 18-1988, f. & cert. ef. 10-31-88
ID 10-1988, f. & cert. ef. 6-10-88
ID 5-1988(Temp), f. & cert. ef. 2-26-88

Or. Admin. R. 836-050-0237 Unfair Trade Practices

Failure of an insurer to comply with any provision of OAR 836-050-0240 or 836-050-0245, or the requirement in 836-050-0250(2)(a) that testing for HIV infection be done only with the informed consent of the applicant for insurance, is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.005 & 746.240
ID 18-1988, f. & cert. ef. 10-31-88
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0240 General Principles

(1) No inquiry in an application for health or life insurance coverage, in an investigation conducted by an insurer, insurance producer or insurance support organization in connection with an application for such coverage, shall be directed toward determining the applicant's sexual orientation.

(2) Sexual orientation shall not be used in the underwriting process or in the determination of insurability.

(3) Insurance support organization shall be directed by insurers not to investigate, directly or indirectly, the sexual orientation of an applicant or a beneficiary.

(4) Testing for or asking medical questions about HIV infection, including ARC and AIDS, is prohibited when not done in conjunction with testing for or asking medical questions about other health conditions. However, testing for HIV infection alone is permissible if the applicant has answered affirmatively that the applicant has tested positive in any HIV antibody test or has been diagnosed as having HIV infection, including AIDS or ARC.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.005 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0245 Medical and Lifestyle Application Questions and Underwriting Standards

(1) No question shall be used that is designed to establish the sexual orientation of the applicant.

(2) The following provisions govern medical questions relating to HIV infection:

(a) Questions relating to the applicant’s having or having been diagnosed as having HIV infection, including AIDS or ARC, are permissible if the questions are factual and designed to establish the existence of the condition. For example, insurer shall not ask such questions as “do you believe you may have…?”, or “have you had any indications of…?”, but insurers may ask “have you been diagnosed or treated for…?”;

(b) Questions relating to HIV infection, including AIDS and ARC, may be asked, but only if questions related to other high risk medical conditions are also asked. The questions must be presented and asked, and the answers used, in the same manner as other questions and their answers relating to other high risk medical conditions. Additional questions may be asked in a supplement but the supplement must be used in conjunction with medical questions on the application form.

(3) Questions relating to medical and other factual matters that are intended to reveal the possible existence of a medical condition are permissible if they are not used to establish the sexual orientation of the applicant and if the applicant is given opportunity to provide a detailed explanation for any affirmative answers given in the application. For example, insurers may ask such questions as, “Have you had chronic cough, significant weight loss, chronic fatigue, diarrhea, enlarged glands…?” Such questions must pertain to a finite period of time preceding completion of the application, not to exceed ten years. The finite period does not apply to questions concerning prior diagnosis, treatment or testing.

(4) Questions relating to the applicant’s having, or having been diagnosed as having, or having been advised to seek treatment for, a sexually transmitted disease are permissible.

(5) Neither the marital status, the “living arrangements,” the occupation, the gender, the medical history, the beneficiary designation nor the zip code or other territorial classification of an applicant may be used to establish, or aid in establishing, the applicant’s sexual orientation.

(6) For purposes of rating an applicant for health and life insurance, an insurer may impose territorial rates, but only if the rates are based on sound actuarial principles and are related to actual or reasonably anticipated experience.

(7) No adverse underwriting decision shall be based on information that the applicant has demonstrated AIDS, ARC or other HIV infection-related concerns by seeking counseling from health care professionals. This section does not apply to an applicant seeking treatment or diagnosis.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.005 & 746.240
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0250 Testing for HIV Infection

(1) An insurer may not rate or deny coverage on the basis of test results unless the rating or denial is based on a test protocol consisting of two positive ELISA tests confirmed by a Western Blot test or another test or test series that the state epidemiologist finds to be no less accurate. This testing series may be performed on blood samples, or on oral specimens or urine obtained and tested according to approval by the federal Food and Drug Administration. If the result of a Western Blot test is indeterminate, the insurer may postpone action on the application not longer than six months after the date of that Western Blot test in order to retest the applicant for conclusive Western Blot test results. The insurer may rate or deny coverage only if retesting produces the positive testing result or if the applicant declines the retesting or fails to respond to a request for retesting by the insurer.

(2) The following provisions apply to all testing for HIV infection and consent therefor:

(a) Testing may be done only with the informed consent of the applicant. Any test that helps an insurer determine the presence of HIV infection and is performed in conjunction with an insurance application shall have a signed consent by the applicant regarding the specific types of tests involved. This consent shall require the applicant to designate the person to whom final positive test results are to be reported. The applicant may designate a named physician, the county health department or the applicant directly. An insurer may obtain the consent of the applicant at any time in the underwriting process prior to obtaining a sample or specimen.

(b) The consent form must be submitted to the Director for approval before use. A consent form may not be used unless the Director has approved the form as complying with OAR 836-050-0230 to 836-050-0255.

(c) An insurer shall disclose to the applicant when soliciting consent that the test is used for determining insurability.

(d) A copy of an informational brochure containing the information in Exhibit 1 shall be given to the applicant prior to or at the time of consent. [Exhibit not included. See ED. NOTE.] The consent form and informational brochure may be combined in one form.

(e) A consent form signed by an applicant is valid for six months following the date that the consent form was signed. The consent form must so state. If after six months the test is not performed or retesting is needed, a new signed consent form must be obtained.

(3) All final positive HIV results shall be directly or indirectly disclosed to the applicant as provided in this section. Information about the results that an insurer acquires through required tests other than from a physician shall be disclosed to the applicant through the physician or county health department named by the applicant for that purpose, so that the physician or county health department may give further explanation of the results to the applicant. Such information may be disclosed directly to the applicant only if the applicant requested disclosure in the consent form and if the insurer, after receipt of positive HIV results confirmed through the protocol in section (1) of this rule, has given the applicant another opportunity to designate a physician or county health department. Direct disclosure to the applicant of final positive HIV results shall include a notice that gives the Oregon AIDS Hotline numbers for securing local assistance and advises the applicant to call the Oregon AIDS Hotline or consult a physician.

(4) An insurer may report only positive test results determined under section (1) of this rule to the person or person designated in the consent form and to affiliates, reinsurers, employees and contractors of the insurer in relation to the underwriting of the insurance application. For positive test results as defined in section (1) of this section, an insurer may also make a report of a nonspecific abnormality determined by the testing of blood, oral specimen or urine to the Medical Information Bureau. An insurer may not make a report to the Medical Information Bureau when positive or inconclusive results occur only with respect to preliminary tests, even when the applicant fails to follow up with the required protocol.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.005 & 746.240
ID 2-1999, f. & cert. ef. 3-25-99
ID 12-1997, f. & cert. ef. 10-13-97
Reverted to ID 18-1988, f. & cert. ef. 10-31-88
ID 1-1997(Temp), f. & cert. ef. 2-24-97
ID 6-1987(Temp), f. & cert. ef. 11-9-88
ID 18-1988, f. & cert. ef. 10-31-88
ID 10-1988, f. & cert. ef. 6-10-88
ID 5-1988(Temp), f. & cert. ef. 2-26-88

Or. Admin. R. 836-050-0255 Inquiries Regarding Past Test Results

Insurers may ask whether an applicant has tested positive in any HIV antibody test, subject to the following restrictions:

(1) General questions asking only whether the applicant has taken such a test, regardless of outcome, are prohibited.

(2) Except as provided in this section, an insurer may not rate or deny coverage based merely on an affirmative response on the application to a questions about past test results. Before rating or denying coverage, the insurer must confirm a positive result to the full test protocol described in OAR 836-050-0250 through medical records or current retesting unless:

(a) The applicant fails to respond to a request by the insurer for the medical records or for retesting; or

(b) The insurer is informed that the applicant declines such further testing.

History

Statutory/Other Authority: ORS 433, 731, 743 & 746
Statutes/Other Implemented: ORS 433.045(7), 742.00 & 746.240
ID 10-1988, f. & cert. ef. 6-10-88
ID 6-1987(Temp), f. & cert. ef. 11-9-88

Or. Admin. R. 836-050-0275 Credit Unions as Associations; Group Life Insurance

A credit union organized under ORS Chapter 723, a credit union authorized to conduct business as a credit union in this state under 723.042 or a federal credit union the principal office of which is located in Oregon is considered to be maintained primarily for purposes other than the procurement of insurance. Such a credit union may qualify as an association for the purposes of being the policyholder of a group life insurance policy if:

(1) The credit union is authorized to provide insurance to its members under the laws under which the credit union is organized; and

(2) The Director determines that the credit union otherwise satisfies the requirements of ORS 743.351(1).

History

Statutory/Other Authority: ORS 731 & 743
Statutes/Other Implemented: ORS 743.303 & 743.351
ID 7-1994, f. & cert. ef. 6-3-94
ID 17-1990, f. & cert. ef. 7-25-90

Or. Admin. R. 836-050-0280 Credit Unions as Association; Group Health Insurance

A credit union organized under ORS Chapter 723, a credit union authorized to conduct business as a credit union in this state under 723.042 or a federal credit union the principal office of which is located in Oregon is considered to have a constitution and bylaws and to be maintained primarily for purposes other than the procurement of insurance. Such a credit union may qualify as an association for the purposes of being the policyholder of a group health insurance policy if:

(1) The credit union is authorized to be such a policyholder under the laws under which the credit union is organized; and

(2) The Director determines that the credit union otherwise satisfies the requirements of ORS 743.522(2).

History

Statutory/Other Authority: ORS 731 & 743
Statutes/Other Implemented: ORS 743.522 & 743.524
ID 7-1994, f. & cert. ef. 6-3-94
ID 17-1990, f. & cert. ef. 7-25-90

Or. Admin. R. 836-050-0300 Purpose, Authority, Application

(1) OAR 836-050-0300 and 836-050-0305 are adopted to implement section 2, chapter 22, Oregon Laws 2008 (Enrolled HB 3605), which requires the Director to adopt rules establishing general criteria for orders that the Director is authorized to issue when the Governor declares a state of emergency under ORS 401.055.

(2) OAR 836-050-0300 and 836-050-0305 apply to a state of emergency declared by the Governor when the conditions leading to the declaration substantially interfere with the public’s ability to carry on its normal business affairs.

History

Statutory/Other Authority: ORS 731.244 & 2008 OL Ch. 22 & Sec. 2
Statutes/Other Implemented: 2008 OL Ch. 22 & Sec. 2
ID 12-2008, f. & cert. ef. 7-29-08
ID 10-2008, f. & cert. ef. 6-30-08

Or. Admin. R. 836-050-0305 Criteria for orders

(1) An order issued pursuant to section 2, chapter 22, Oregon Laws 2008 (Enrolled HB 3605):

(a) Must include the items required in that section to be specified by line of insurance; and

(b) Must make a statement of general findings that refers to the specific declaration of a state of emergency upon which the order is based, describes the need for the order and declares the harm to be prevented or mitigated by the order.

(2) If the Director determines that an order under this rule must address reporting requirements for claims, the Director shall consider to what extent the circumstances of the declared state of emergency prevent policyholders from using normal methods of reporting claims and shall determine what methods of reporting remain available to consumers in the affected areas. The Director shall prepare the order accordingly. The Director may direct insurers to accept alternative methods of reporting as may be available to policyholders and may extend the reporting period as appropriate, subject to limitations of section 2, chapter 22, Oregon Laws 2008.

(3) If the Director determines that an order under this rule must address grace periods for payment of insurance premiums and performance of other duties by insureds, the Director shall consider the extent to which the circumstances of the declared state of emergency prevent the payment and performance and shall prepare the order accordingly. The Director may direct insurers to extend the grace periods as appropriate, subject to limitations of section 2, chapter 2, Oregon Laws 2008.

(4) If the Director determines that an order under this rule must temporarily postpone policy cancellations and nonrenewals, the Director shall consider the extent to which the declared state of emergency prevents communication of notices of cancellation or nonrenewal from policyholders to their insurers and the extent to which communication is prevented from insurers to their policyholders. The Director shall prepare the order accordingly. The Director may direct insurers to accept alternative methods of communication of the notices and may postpone cancellations and nonrenewals as appropriate, subject to limitations of section 2, chapter 22, Oregon Laws 2008. An order including a temporary postponement under this section must include the following:

(a) The period for which an extension of policy coverage will apply and the method for determining premium for the extended term of coverage, and whether notices of cancellation or nonrenewals must be withdrawn and reissued;

(b) When and how an insurer that was unable to cancel or nonrenew a policy owing to an order may cancel or nonrenew the policy following the period to which the order applies, and the date on which the cancellation or nonrenewal may become effective; and

(c) That an insurer may not cancel or nonrenew a policy solely because of a claim resulting from the circumstances on which the emergency order is based, except that the Director may allow cancellation or nonrenewal of a policy under specific fact circumstances, including but not limited to fraud or material misrepresentation affecting the policy or in the presentation of a claim under the policy, upon application by an insurer.

(5) An order of the Director under this rule must establish at least the following matters, as appropriate:

(a) Whether the order applies to authorized insurers only or to other insurers as well;

(b) The classes and categories of insurance policies to which the order applies, whether by specific inclusion or exclusion;

(d) Whether an insurer who receives a claim from an insured owing premium may offset the premium due from any claim payment made under the policy;

(e) Whether a free look period in a variable life insurance policy or variable annuity contact is extended by the order; and

(f) Procedures to be followed by premium finance companies with respect to cancellation of policies, including notice, proof of notice and treatment of refunds.

(6) An extension of time by the Director under this rule does not relieve a policyholder who has a claim resulting from the state of emergency from compliance with the policyholder’s obligations to provide information and cooperate in the claim adjustment process relative to the claim.

History

Statutory/Other Authority: ORS 731.244 & 2008 OL Ch. 22 & Sec. 2
Statutes/Other Implemented: 2008 OL Ch. 22 & Sec. 2
ID 12-2008, f. & cert. ef. 7-29-08
ID 10-2008, f. & cert. ef. 6-30-08

Division 51 LIFE, INDIVIDUAL AND GROUP; ANNUITIES

Or. Admin. R. 836-051-0005 Statutory Authority; Purpose; Applicability

(1) OAR 836-051-0005 to 836-051-0020 are adopted by the Director pursuant to general rulemaking authority in ORS 731.244, and specific authority in 742.009 to issue rules requiring disclosures to prospective insurance purchasers.

(2) The purpose of OAR 836-051-0005 to 836-051-0020 is to require insurers that are not electing to illustrate life insurance policies under 836-051-0500 to 836-051-0600 to deliver to prospective buyers of life insurance guaranteed policy information that will improve the buyer's ability to select the most appropriate plan of life insurance for the buyer's needs, improve the buyer's understanding of the basic features of the policy that has been purchased or that is under consideration and improve the buyer's ability to evaluate the relative costs of similar plans of life insurance. OAR 836-051-0005 to 836-051-0020 do not prohibit the use of additional material that is not in violation of these or other rules of the Director or provisions of the Insurance Code.

(3) OAR 836-051-0005 to 836-051-0020 apply to all transactions of life insurance in this state except with respect to:

(a) Annuities;

(b) Credit life insurance;

(d) Life insurance policies issued in connection with employee benefit plans as defined by Section 3(3) of the federal Employee Retirement Income Security Act of 1974 (ERISA) as amended from time to time; and

(e) Life insurance policies that comply with OAR 836-051-0500 to 836-051-0600.

History

Statutory/Other Authority: ORS 731.244 & 742.009
Statutes/Other Implemented: ORS 742.009
ID 19-2006, f. & cert. ef. 9-26-06
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97
ID 15-1996, f. & cert. ef. 11-12-96
IC 3-1978, f. & ef. 6-9-78

Or. Admin. R. 836-051-0010 Definitions

As used in OAR 836-051-0005 to 836-051-0020:

(1) "Buyer's Guide" means a document that contains, and is limited to, the wording contained in Exhibit 1 or other wording approved by the Director.

(2) "Cash Dividend" means the currently illustrated dividend that can be applied toward payment of the gross premium.

(3) "Equivalent Level Annual Dividend" means the amount calculated by the following steps:

(a) Accumulate the annual cash dividends at five percent interest, compounded annually, to the ends of the 10th and 20th policy years;

(b) Divide each accumulation of step (a) by an interest factor that converts it into the equivalent level annual amount that, if paid at the beginning of each year, would accumulate to the value in step (a) over the respective period. If the period is 10 years, the factor is 13.207 and if the period is 20 years, the factor is 34.719;

(c) Divide the results of step (b) by the number of thousands of the Equivalent Level Death Benefit to arrive at the Equivalent Level Annual Dividend for each of the respective periods.

(4) "Equivalent Level Death Benefit" of a policy or term life insurance rider means the amount calculated by the following steps:

(a) Accumulate the guaranteed amount, that does not depend on the cause of death, payable upon death at the beginning of each policy year for 10 and 20 years at five percent interest, com-pounded annually, to the ends of the 10th and 20th policy years respectively;

(5) "Generic Name" means a short title that is descriptive of the premium and benefit patterns of a policy or a rider.

(6) "Life Insurance Net Payment Cost Index" means the amount calculated in the same manner as the Life Insurance Surrender Cost Index except that the cash surrender value and any terminal dividend are set at zero.

(7) "Life Insurance Surrender Cost Index" means the amount calculated by the following steps:

(a) Determine the guaranteed cash surrender value, if any, available at the ends of the 10th and 20th policy years;

(b) For participating policies, add to the respective amount determined in step (a) the accumulation of the annual Cash Dividends at five percent interest, compounded annually, to the end of the period selected, and the respective terminal dividend, if any, payable upon surrender;

(c) Divide the result of step (b), or step (a) for guaranteed cost policies, by an interest factor that converts it into the equivalent level annual amount that, if paid at the beginning of each year, would accumulate to the value in step (b), or step (a) for guaranteed cost policies, over the period selected. If the period is 10 years, the factor is 13.207 and if the period is 20 years, the factor is 34.719;

(d) Determine the equivalent level annual premium for each of the respective periods in step (a) by accumulating each annual premium payable for the basic policy or rider at five percent interest, compounded annually, to the end of the respective period and dividing the result by the respective period factor stated in step (c). (For a level premium plan, the result of this step equals the annual premium.);

(e) Subtract the result of step (c) from the result of step (d);

(f) Divide the result of step (e) by the number of thousands of the Equivalent Level Death Benefit to arrive at the Life Insurance Surrender Cost Index.

(8) "Policy Summary" means a written statement describing the elements of the policy, including but not limited to items in subsections (a) to (k) of this section. The Policy Summary is a separate document. All information must be set out in such a manner as not to minimize or obscure any portion. Any amounts that remain level for two or more years of the policy may be represented by a single number if it is clearly indicated which amounts are applicable for each policy year. If more than one insured is covered under the policy or a rider, guaranteed death benefits shall be displayed separately for each insured, or for each class of insureds if death benefits do not differ within the class. Zero amounts shall be expressed rather than being represented by a blank space:

(a) A prominently placed title as follows: STATEMENT OF POLICY COST AND BENEFIT INFORMATION;

(b) The name and address of the insurance producer or, if no insurance producer is involved, a statement of the procedure to be followed in order to receive responses to inquiries regarding the Policy Summary;

(c) The full name and home office or administrative office address of the insurer in which the life insurance policy is to be or has been written;

(d) The Generic Name of the basic policy and each policy rider;

(e) The following amounts, where applicable, on a total basis rather than on a per thousand or a per unit basis, for the first five policy years and representative policy years thereafter sufficient to clearly illustrate the premium and benefit patterns, including, but not necessarily limited to, the years for which Life Insurance Net Payment or Surrender Cost Indexes are displayed and at least one age from 60 through 65 or policy maturity, whichever is earlier:

(A) Annual premium for the basic policy;

(B) Annual premium for each optional rider;

(C) Guaranteed amount payable upon death at the beginning of the policy year, without regard to the cause of death other than suicide and other specific exclusions, that is provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately;

(D) Total guaranteed cash surrender values at the end of the year, with values shown separately for the basic policy and each optional rider;

(E) Cash Dividends payable at the end of the year, with values shown separately for the basic policy and each optional rider. (Dividends need not be displayed beyond the 20th policy year.);

(F) Guaranteed endowment amounts payable under the policy that are not included under guaranteed cash surrender values above.

(f) If the policy contains a loan provision, the effective policy loan interest rate and the annual percentage interest rate applied in advance or in arrears, whichever is specified. If the policy loan interest rate is variable, the Policy Summary shall include the maximum effective and annual percentage rates;

(g) Life Insurance Net Payment and Surrender Cost Indexes for 10 and 20 years but in no case beyond the premium-paying period. Separate Indexes shall be displayed for the basic policy and for each optional term life insurance rider. The Indexes need not be included for optional riders that are limited to such benefits as accidental death benefits, disability waiver of premium, preliminary term life insurance coverage of less than 12 months and guaranteed insurability benefits, nor for a basic policy or optional rider covering more than one life;

(h) The Equivalent Level Annual Dividend, in the case of participating policies and participating optional term life insurance riders, under the same circumstances and for the same durations for which Life Insurance Net Payment and Surrender Cost Indexes are displayed;

(i) A statement, in the case of a Policy Summary that shows dividends, that dividends are based on the insurer's current dividend scale and are not guaranteed, and a statement in close proximity to the Equivalent Level Annual Dividend as follows: "An explanation of the intended use of the Equivalent Level Annual Dividend is included in the Life Insurance Buyer's Guide";

(j) A statement in close proximity to the Life Insurance Net Cost and Surrender Cost Indexes as follows: "An explanation of the intended use of these Indexes is provided in the Life Insurance Buyer's Guide";

(k) The date on which the Policy Summary is prepared.

History

Statutory/Other Authority: ORS 731 & 743
Statutes/Other Implemented: ORS 742.009(2)
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
IC 3-1978, f. & ef. 6-9-78

Or. Admin. R. 836-051-0015 Disclosure Requirements

(1) An insurer shall provide to each prospective buyer of life insurance a Buyer's Guide and a Policy Summary prior to accepting the applicant's initial premium or premium deposit, except that if the policy for which application is made contains an unconditional refund provision effective for at least ten days or if the Policy Summary contains such an unconditional refund provision, the Buyer's Guide and Policy Summary must be delivered with the policy or prior to delivery of the policy.

(2) An insurer shall provide a Buyer's Guide and a Policy Summary to any prospective buyer upon request of the prospective buyer.

(3) In the case of policies for which the Equivalent Level Death Benefit does not exceed $5,000, the Policy Summary need include only the information described in the items in OAR 836-051-0010(8)(b), (c), (d), (e)(A), (e)(B), (e)(C), (f), (g), (j), and (k).

History

Statutory/Other Authority: ORS 731 & 743
Statutes/Other Implemented: ORS 742.009(2)
ID 19-2006, f. & cert. ef. 9-26-06
IC 3-1978, f. & ef. 6-9-78

Or. Admin. R. 836-051-0020 General Requirements

(1) An insurer shall maintain at its home office or principal office a complete file containing one copy of each document authorized by the insurer for use pursuant to OAR 836-051-0005 to 836-051-0020. Each such document shall be retained in the file for at least three years following the date of its last authorized use.

(2) An insurance producer shall inform a prospective buyer, prior to the beginning a life insurance sales presentation, that the insurance producer is acting as a life insurance producer, and shall inform the prospective buyer of the full name of the insurer that the insurance producer is representing to the buyer. In sales situations in which an insurance producer is not involved, the insurer shall identify its full name.

(3) Such terms as "financial planner," "investment advisor," "financial consultant," or "financial counseling" shall not be used in such a way as to imply that the insurance producer is generally engaged in an advisory business in which compensation is unrelated to sales, unless such is actually the case.

(4) Any reference to policy dividends must include a statement that dividends are not guaranteed.

(5) A presentation that does not recognize through the use of appropriate interest adjustments the time value of money shall not be used for comparing the cost of two or more life insurance policies. Such a presentation may be used for the purpose of demonstrating the cash-flow pattern of a policy if it is accompanied by a statement disclosing that the presentation does not recognize that a dollar in the future has less value than a dollar today because of interest.

(6) A presentation of benefits shall not display guaranteed and non-guaranteed benefits as a single sum unless they are also shown separately in close proximity to the single sum.

(7) A statement regarding the use of the Life Insurance Net Cost and Surrender Cost Indexes shall include a explanation to the effect that the Indexes are useful only for the comparison of the relative costs of two or more similar policies.

(8) A statement of a Life Insurance Net Cost or Surrender Cost Index that reflects dividends, and an Equivalent Level Annual Dividend, shall be accompanied by a statement that it is based on the insurer's current dividend scale and is not guaranteed.

(9) For the purposes of OAR 836-051-0005 to 836-051-0020, the annual premium for a basic policy or optional rider for which the insurer reserves the right to change the premium shall be the maximum annual premium.

History

Statutory/Other Authority: ORS 731 & 743
Statutes/Other Implemented: ORS 742.009(2)
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
IC 3-1978, f. & ef. 6-9-78

Or. Admin. R. 836-051-0030 Purpose and Applicability

(1) The purpose of OAR 836-051-0030 to 836-051-0040 is to establish rules that ensure meaningful information is provided to the purchasers of small face amount policies.

(2) OAR 836-051-0030 to 836-051-0040 apply to insurance policies and certificates issued on or after July 1, 2011.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 743.218, 746.100, 746.110 & 746.240
ID 6-2011, f. & cert. ef. 2-23-11

Or. Admin. R. 836-051-0032 Definition

"Small face amount policy" means a life insurance policy or certificate with an initial face amount of $15,000 or less.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 743.218, 746.100, 746.110 & 746.240
ID 6-2011, f. & cert. ef. 2-23-11

Or. Admin. R. 836-051-0034 Exemptions

OAR 836-051-0030 to 836-051-0040 apply to all group and individual life insurance policies and certificates except:

(1) Variable life insurance;

(2) Individual and group annuity contracts;

(3) Credit life insurance;

(4) Group or individual policies of life insurance issued to members of an employer group or other permitted group where:

(a) Every plan of coverage was selected by the employer or other group representative;

(b) Some portion of the premium is paid by the group or through payroll deduction; and

(5) Policies and certificates where an illustration has been provided pursuant to the requirements of OAR 836-051-0500 to 836-051-0600.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 743.218, 746.100, 746.110 & 746.240
ID 6-2011, f. & cert. ef. 2-23-11

Or. Admin. R. 836-051-0036 Disclosure Requirements

(1) An insurer issuing a small face amount policy, where over the term of the policy the cumulative policy premiums paid may exceed the face amount of the policy, shall clearly and prominently disclose, on or before policy delivery, the length of time until the cumulative policy premiums paid may exceed the face amount of the policy.

(2) If an insurer is required to provide a disclosure under section (1) of this rule, the insurer shall clearly and prominently disclose, on or before policy delivery, available premium payment plans.

(3) Cumulative premiums shall include premiums paid for riders. However, the face amount shall not include the benefit attributable to the riders.

(4) Each policy subject to the disclosure requirements of this section shall contain a provision that allows the policyholder to cancel the policy within 10 days following the delivery of the policy with full premium refund to the consumer and with no charge or penalty. The free-look period shall be clearly and prominently disclosed to the consumer.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 743.218, 746.100, 746.110 & 746.240
ID 6-2011, f. & cert. ef. 2-23-11

Or. Admin. R. 836-051-0038 Insurer Duties

The insurer and its producers shall provide additional information to any policyholder or certificate holder who asks questions about the disclosure statement.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 743.218, 746.100, 746.110 & 746.240
ID 6-2011, f. & cert. ef. 2-23-11

Or. Admin. R. 836-051-0040 Trade Practice Regulation

Violation of any provision of OAR 836-051-0030 to 836-051-0040 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 743.218, 746.100, 746.110 & 746.240
ID 6-2011, f. & cert. ef. 2-23-11

Or. Admin. R. 836-051-0101 Statutory Authority; Purpose; Applicability; and Effective Date

(1) OAR 836-051-0101 to 836-051-0115 are adopted pursuant to the general rulemaking authority of the Director in ORS 731.244, and specific authority of 733.306 and 743.215 for approving mortality tables adopted by the National Association of Insurance Commissioners for use in determining minimum valuation and nonforfeiture standards.

(2) OAR 836-051-0101 to 836-051-0115 apply to policies of ordinary life insurance issued on the standard basis.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 9-2003, f. 12-26-03, cert. ef. 1-1-04
ID 15-1997, f. & cert. ef. 10-29-97
ID 15-1996, f. & cert. ef. 11-12-96
IC 5-1985, f. & ef. 11-20-85

Or. Admin. R. 836-051-0106 Life Insurance Valuation and Nonforfeiture Standards

(1) The following definitions apply in this rule:

(a) "2001 CSO Mortality Table" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and the age-last-birthday bases of the mortality tables.

(b) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.

(c) "2001 CSO Mortality Table (M)" means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.

(d) "Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

(e) "Smoker and nonsmoker mortality tables" means mortality tables with separate rates of mortality for smokers and nonsmokers.

(2) Except as provided in OAR 836-051-0750 to 836-051-0775, the 2001 CSO Mortality Table may be used as follows:

(a) At the election of the insurer for any one or more specified plans of insurance and subject to the conditions stated in this rule, the 2001 CSO Mortality Table may be used as the minimum standard for policies issued on or after January 1, 2004 and before January 1, 2009 and to which ORS 733.306 and 743.215, and OAR 836-031-0765(1) and (2), are applicable. If the insurer elects to use the 2001 CSO Mortality Table, it shall do so for both valuation and nonforfeiture purposes.

(b) Subject to the conditions stated in this rule, the 2001 CSO Mortality Table shall be used in determining minimum standards for policies issued on and after January 1, 2009, to which ORS 733.306 and 743.215, and OAR 836-031-0765(1) and (2), are applicable.

(3) Conditions governing use of tables are as follows:

(a) For each plan of insurance with separate rates for smokers and nonsmokers an insurer may use:

(A) Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;

(B) Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by ORS 733.312 and 733.322 and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or

(C) Smoker and nonsmoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

(b) For plans of insurance without separate rates for smokers and nonsmokers the composite mortality tables shall be used.

(c) For the purpose of determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, the 2001 CSO Mortality Table may, at the option of the insurer for each plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of section 4 of this rule, ORS 733.306 and 743.215 and OAR 836-031-0770 relative to use of the select and ultimate form.

(d) When the 2001 CSO Mortality Table is the minimum reserve standard for any plan for an insurer, the actuarial opinion in the annual statement filed with the Director shall be based on an asset adequacy analysis as specified in OAR 836-031-0670. The Director may exempt an insurer from this requirement if it only does business in this state and in no other state.

(4) The 2001 CSO Mortality Table applies to OAR 836-031-0750 to 836-031-0775 as follows:

(a) The 2001 CSO Mortality Table may be used in applying OAR 836-031-0750 to 836-031-0775 in the following manner, subject to the transition dates for use of the 2001 CSO Mortality Table in section (2) of this rule:

(A) OAR 836-031-0755(1)(b)(B): The net level reserve premium is based on the ultimate mortality rates in the 2001 CSO Mortality Table.

(B) OAR 836-031-0760(2): All calculations are made using the 2001 CSO Mortality Rate, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in OAR 836-031-0770(1)(d). The value of "qx+k+t-1" is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.

(D) OAR 836-031-0765(2): The 2001 CSO Mortality Table is the minimum standard for deficiency reserves. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in OAR 836-031-0765(2)(c). In demonstrating compliance with these conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table, unless the combination is explicitly required by rule or necessary to be in compliance with relevant Actuarial Standards of Practice.

(E) OAR 836-031-0770(3): The valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO Mortality Table.

(F) OAR 836-031-0770(5)(d): The calculations specified in OAR 836-031-0770(5) shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(G) OAR 836-031-0770(6)(d): The calculations specified in OAR 836-031-0770(6) shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(H) OAR 836-031-0770(7)(b): The calculations specified in OAR 836-031-0770(7) shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(I) OAR 836-031-0775(1)(a)(B): The one-year valuation premium shall be calculated using the ultimate mortality rates in the 2001 CSO Mortality Table.

(b) Nothing in this section shall be construed to expand the applicability of OAR 836-031-0750 to 836-031-0775 to include life insurance policies exempted under 836-031-0755(1).

(5) The following provisions apply to an insurer's use of Gender-Blended Tables

(a) For any ordinary life insurance policy delivered or issued for delivery in this state on and after January 1, 2004, that utilizes the same premium rates and charges for male and female lives or is issued in circumstances where applicable law does not permit distinctions on the basis of gender, a mortality table that is a blend of the 2001 CSO Mortality Table (M) and the 2001 CSO Mortality Table (F) may, at the option of the insurer for each plan of insurance, be substituted for the 2001 CSO Mortality Table for use in determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits. No change in minimum valuation standards is implied by this section of this rule.

(b) The insurer may choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002.

(c) It shall not, in and of itself, be a violation of ORS 746.015 for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.

[ED. NOTE: Table referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 17-2008, f. & cert. ef. 12-9-08
ID 9-2003, f. 12-26-03, cert. ef. 1-1-04

Or. Admin. R. 836-051-0110 Life Insurance Nonforfeiture Standards for Men and Women

(1) Use of the blended tables procedure described in section (2) of this rule shall be limited to situations in which sex neutral benefits are required to comply with the decision of the United States Supreme Courts in Arizona Governing Committee v. Norris, 463 U.S. 1073, 103 S. Ct. 3492, 77 1. Ed 2d 1236 (1983).

(2) In situations of section (1) of this rule, insurers may use the blended tables described in NAIC Proposed Procedures for Permitting Same Minimum Nonforfeiture Standards for Men and Women Insureds Under 1980 CSO and 1980 CET Mortality Tables, NAIC Proceedings, 1984 Volume I, pp. 426–428, as amended in Section 4 by NAIC Proceedings, 1984 Volume 1, p. 395. These procedures establish the method by which select factors are to be obtained for blended 1980 CSO Mortality Tables as described in NAIC Proceedings, 1984 Volume I, p. 457.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 733 & 743
Statutes/Other Implemented: ORS 733.306(1)-(2) & 733.306(4)-(6)
IC 5-1985, f. & ef. 11-20-85

Or. Admin. R. 836-051-0115 Smoker/Nonsmoker Mortality Tables

Insurers may use the tables as described in Proposed NAIC Model Rule Permitting Smoker/Nonsmoker Mortality Rates for Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits. NAIC Proceedings, 1984 Volume I, pp. 458–460. Nothing in this rule permits a company which has elected use of 1980 CSO for all new forms to revert to 1958 CSO for a subsequent form.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 733 & 743
Statutes/Other Implemented: ORS 733.306(1)-(2) & 733.306(4)-(6)
IC 5-1985, f. & ef. 11-20-85

Or. Admin. R. 836-051-0150 Individual Deferred Annuities Surrender Charge

Statutory Authority; Purpose; Applicability

(1) OAR 836-051-0150 to 836-051-0156 are adopted pursuant to the authority granted to the Director of the Department of Consumer and Business Services in section 2, chapter 85, Oregon Laws 2015 to adopt rules to regulate the penalties, fees or other charges that an insurer imposes for a withdrawal, before maturity or after the owner or annuitant dies, from an individual deferred annuity policy.

(2) OAR 836-051-0150 to 836-051-0156 apply to individual deferred non-variable annuity policies and to the fixed accounts of individual deferred variable annuity policies.

(3) OAR 836-051-0150 to 836-051-0156 apply to contracts entered into on and after July 1, 2017. New contracts submitted for approval to the Department of Consumer and Business Services for effective dates on or after January 1, 2016 must comply with section 2, chapter 85, Oregon Laws 2015.

History

Statutory/Other Authority: Sec. 2 & Ch. 85 OL 2015
Statutes/Other Implemented: Sec. 2 & Ch. 85 OL 2015
ID 17-2015, f. 12-29-15, cert. ef. 1-1-16

Or. Admin. R. 836-051-0153 Limitations on Surrender Charge Scales

(1) For contracts where surrender charge scales are measured from the date of each premium payment an insurer must demonstrate compliance with minimum value either by:

(a) Treating each premium payment as a separate single premium contract, in which case the maturity date for each single premium shall be the later of the tenth anniversary of the payment, or the annuitant’s 70th birthday; or

(b) Treating the entire contract as a single contract providing for flexible premiums.

(2) If minimum value compliance is demonstrated as described in section (1)(a) of this rule, the retrospective test minimum values must be the greater of those based on the contract being treated either as:

(a) Each premium considered as a single premium contract, in which case the values for all such “contracts” will be summed; or

(b) A single contract providing for flexible premiums.

(3) An insurer may not impose a surrender charge on or after annuitization or on or after the maturity date.

History

Statutory/Other Authority: Sec. 2 & Ch. 85 OL 2015
Statutes/Other Implemented: Sec. 2 & Ch. 85 OL 2015
ID 17-2015, f. 12-29-15, cert. ef. 1-1-16

Or. Admin. R. 836-051-0156 Fair Surrender Charges

An insurer shall treat funds withdrawn from a contract, when such funds are subject to surrender charges, as withdrawn on a first-in-first-out basis unless the insurer allows an alternative method that is more beneficial to the contract holder.

History

Statutory/Other Authority: Sec. 2 & Ch. 85 OL 2015
Statutes/Other Implemented: Sec. 2 & Ch. 85 OL 2015
ID 17-2015, f. 12-29-15, cert. ef. 1-1-16

Or. Admin. R. 836-051-0200 Authority; Effective Date

OAR 836-051-0200 to 836-051-0250 are adopted by the Director of the Department of Consumer and Business Services pursuant to ORS 733.308.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 15-1997, f. & cert. ef. 10-29-97

Or. Admin. R. 836-051-0210 Purpose

The purpose of OAR 836-051-0200 to 836-051-0250 is to recognize the following mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts:

(1) The 1983 Table "a".

(2) The 1983 Group Annuity Mortality (1983 GAM) Table.

(3) The Annuity 2000 Mortality Table.

(4) The 2012 Individual Annuity Reserving (2012 IAR) Table.

(5) The 1994 Group Annuity Reserving (1994 GAR) Table.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 20-2014, f. 12-16-14, cert. ef. 1-1-15
ID 15-1997, f. & cert. ef. 10-29-97

Or. Admin. R. 836-051-0220 Definitions

For the purpose of OAR 836-051-0200 to 836-051-0250, the following terms have the following meanings:

(1) "1983 Table 'a'" means that mortality table developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation and adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners. (See 1982 Proceedings of the NAIC II, page 454.)

(2) "1983 GAM Table" means that mortality table developed by the Society of Actuaries Committee on Annuities and adopted as a recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners. (See 1984 Proceedings of the NAIC I, pages 414 to 415.)

(3) "1994 GAR Table" means that mortality table developed by the Society of Actuaries Group Annuity Valuation Table Task Force and shown on pages 866-867 of Volume XLVII of the Transactions of the Society of Actuaries (1995).

(4) “2012 IAR Table” means that Generational mortality table developed by the Society of Actuaries Committee on Life Insurance Research and containing rates, qx 2012+n, derived from a combination of the 2012 IAM Period Table and Projection Scale G2, using the methodology stated in Section 5.

(5) “2012 Individual Annuity Mortality Period Life (2012 IAM Period) Table” means the Period table containing loaded mortality rates for calendar year 2012. This table contains rates, qx 2012, developed by the Society of Actuaries Committee on Life Insurance Research and is shown in Appendices 1-2.

(6) "Annuity 2000 Mortality Table" means that mortality table developed by the Society of Actuaries Committee on Life Insurance Research and shown on page 240 of Volume XLVII of the Transactions of the Society of Actuaries (1995).

(7) “Generational mortality table” means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a Period table and a projection scale containing rates of mortality improvement.

(8) “Period table” means a table of mortality rates applicable to a given calendar year (the Period).

(9) “Projection Scale G2 (Scale G2)” is a table of annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012. This table was developed by the Society of Actuaries Committee on Life Insurance Research and is shown in Appendices 3-4.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 20-2014, f. 12-16-14, cert. ef. 1-1-15
ID 15-1997, f. & cert. ef. 10-29-97

Or. Admin. R. 836-051-0230 Individual Annuity or Pure Endowment Contracts

(1) Except as provided in sections (2) and (3) of this rule, the 1983 Table "a" is recognized and approved as an individual annuity mortality table for valuation and, at the option of the insurer, may be used for purposes of determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after October 4, 1977.

(2) Except as provided in section (3) of this rule, either the 1983 Table "a" or the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1998.

(3) Except as provided in section (4) of this rule, the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1999.

(4) Except as provided in section (5) of this rule, the 2012 IAR Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015.

(5) The 1983 Table "a" without projection is to be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after January 1, 1998, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from:

(a) Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions;

(b) Settlements involving similar actions such as workers' compensation claims; or

(c) Settlements of long term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 20-2014, f. 12-16-14, cert. ef. 1-1-15
ID 15-1997, f. & cert. ef. 10-29-97

Or. Admin. R. 836-051-0235 Application of the 2012 IAR Mortality Table

(1) In using the 2012 IAR Mortality Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows: q*x 2012+n = qx2012 (1 – G2x)n. The resulting qx 2012+n shall be rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. Also, the rounding shall occur according to the formula above, starting at the 2012 period table rate.

(2) For example, for a male age 30, qx 2012= 0.741. qx 2013= 0.741 * (1 – 0.010) ^{1 = 0.73359, which is rounded to 0.734. qx 2014= 0.741 * (1 – 0.010)} 2 = 0.7262541, which is rounded to 0.726.

(3) A method leading to incorrect rounding would be to calculate qx 2014 as qx 2013 * (1 – 0.010), or 0.734 * 0.99 = 0.727.

(4) It is incorrect to use the already rounded qx 2013 to calculate qx 2014.

History

Statutory/Other Authority: ORS 731.244, ORS 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 20-2014, f. 12-16-14, cert. ef. 1-1-15

Or. Admin. R. 836-051-0240 Group Annuity or Pure Endowment Contracts

(1) Except as provided in sections (1) and (2) of this rule, the 1983 GAM Table, the 1983 Table “a” and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the insurer, any one of these tables may be used for purposes of valuation for an annuity or pure endowment purchased on or after October 4, 1977, under a group annuity or pure endowment contract.

(2) Except as provided in section (3) of this rule, either the 1983 GAM Table or the 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1998.

(3) The 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 2000, under a group annuity or pure endowment contract.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 15-1997, f. & cert. ef. 10-29-97

Or. Admin. R. 836-051-0250 Application of the 1994 GAR Table

In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows: q*x 1994+n = qx1994 (1 - AAx)n where the qx1994 and AAxs are as specified in the 1994 GAR Table.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.215
Statutes/Other Implemented: ORS 733.306
ID 15-1997, f. & cert. ef. 10-29-97

Or. Admin. R. 836-051-0300 Statutory Authority; Effective Date; Applicability

(1) OAR 836-051-0300 to 836-051-0380 are adopted pursuant to ORS 743.154.

(2) OAR 836-051-0300 to 836-051-0380 become effective on June 1, 1992.

(3) No life insurance policy, certificate or rider containing an accelerated benefit provision may be delivered or issued for delivery in this state on or after June 1, 1992, unless the provision complies with OAR 836-051-0300 to 836-051-0380.

(4) OAR 836-051-0300 to 836-051-0380 apply to individual and group life insurance policies and to riders and certificates issued thereunder. OAR 836-051-0300 to 836-051-0380 apply to all accelerated benefits provisions of life insurance policies except for provisions for advance payment of life insurance proceeds under 836-052-0500 to 836-052-0645.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 1-1996, f. & cert. ef. 1-12-96
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0310 Acknowledgement of Concurrence for Payout from Assignee or Beneficiary

Prior to payment of an accelerated benefit, an insurer shall obtain a signed acknowledgement of concurrence for payout as follows:

(1) From an assignee, when the amount of benefit that is accelerated exceeds the unassigned portion of the death benefit, unless the assignee is the insurer.

(2) From an irrevocable beneficiary, if there is an irrevocable beneficiary.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0320 Payment Options; Filing of Claims; Remaining Benefits

(1) An insurer shall include among payment options for the accelerated benefit an option that allows the policy owner or certificate holder to take the benefit as a lump sum. The insurer shall not make the benefit available as an annuity contingent upon the life of the insured.

(2) An insurer shall not impose any restriction on the use of the proceeds.

(3) If any death benefit remains after payment of an accelerated benefit, any accidental death benefit that is part of the policy shall not be affected by the payment of the accelerated benefit. Any other benefits in force at the time of acceleration shall not be affected by the payment of the accelerated benefit if premiums continue to be paid for those benefits.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.154
ID 15-1996, f. & cert. ef. 11-12-96
ID 12-1993, f. & cert. ef. 11-19-93
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0330 Disclosure

(1) An accelerated benefit provision shall include “accelerated benefit” or “accelerated death benefit” as part of the descriptive title. The policy, certificate or rider schedule must:

(a) Include one of the following:

(A) Any premium or cost of insurance charge designated for the accelerated benefit;

(B) The interest rate if fixed; or

(b) Disclose any administrative expense charge associated with the exercise of the accelerated benefit.

(2) When a life insurance policy or certificate containing an accelerated benefit provision is applied for or delivered, or when an accelerated benefit rider to a life insurance policy is applied for, delivered or added, the insurer shall give or cause to be given a summary of coverage described in this section to the applicant for the policy, certificate or rider. The description must include all of the following:

(a) A brief summary of the accelerated benefit and definitions of the conditions or occurrences triggering payment of the benefit;

(b) An explanation of any effect of the payment of an accelerated benefit on the cash value, accumulation account, death benefit, premium payments, any loans or liens.

(c) Disclosure of the basis for payment, whether a premium, cost of insurance charge, lien assessment or present value calculation;

(d) A statement that receipt of the accelerated benefit may be taxable and that assistance should be sought from a personal tax advisor.

(3) When an accelerated benefit option is exercised, the insurer shall provide the following to the policy holder or certificate holder and any irrevocable beneficiary:

(a) An illustration that:

(A) Numerically demonstrates any effect the payment of the benefit will have on the cash value, accumulation account, death benefit, premium payments, any loans or liens;

(B) Separately illustrates the loaned amount from the accelerated risk amount if the acceleration is based on a lien and the interest accrued on the two portions are not at the same rate; and

(C) Includes a statement that receipt of accelerated benefit payments may adversely affect the recipient’s eligibility for Medicaid or other government benefits or entitlements, that benefits may be taxable and that assistance should be sought from a personal tax advisor.

(b) An amended schedule page showing any new, reduced in-force face amount and the continuing premium requirements to keep the remaining coverage in force.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 12-1993, f. & cert. ef. 11-19-93
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0340 Exercise of the Accelerated Benefit

(1) For conditions of eligibility resulting from accident, an accelerated benefit provision must be exercisable on or after the issue date of the accelerated benefit provision.

(2) For conditions of eligibility resulting from illness, an accelerated benefit provision must be exercisable not later than the 30th day after the issued date of the accelerated benefit provision.

(3) For the purpose of defining the qualifying event described in ORS 743.154(2)(c), an insurer shall not require a period of continuous confinement that is greater than 180 days.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0350 Waiver of Premium

(1) An insurer may offer a waiver of premium as part of the accelerated benefit provision in the absence of a regular waiver of premium provision.

(2) When an accelerated benefit is included in an individual term policy or an individually-paid group certificate, the accelerated benefit provision must include a waiver of premium provision for any remaining face amount.

(3) A term rider shall not be affected by the payment of the accelerated benefit if premiums continue to be paid for the rider.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 1-1996, f. & cert. ef. 1-12-96
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0360 Discrimination

In the payment of accelerated benefits, an insurer shall not unfairly discriminate among insureds with differing qualifying events covered under the policy or among insureds with similar qualifying events covered under the policy. An insurer shall not apply further conditions on the payment of the accelerated benefits other than those conditions specified in the policy or rider. An insurer who provides that its accelerated benefit provision is exercisable in the event of a medical condition to which ORS 743.154(2)(d) applies shall not limit exercise of the benefit to specific medical conditions.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0370 Minimum Benefit Standards

(1) For purposes of this rule, accelerated benefits consist of:

(a) The risk portion of the accelerated benefit, determined by deducting the cash values in the contract from the total accelerated benefit amount; and

(b) The portion of the accelerated benefit equal to the cash value in the policy at the time of acceleration. Any amount included in the accelerated benefit that is accessible through another policy provision is subject to that policy provision if more favorable to the policy holder or certificate holder. Such an amount must be separately identified.

(2) An insurer may require a premium charge or cost of insurance charge for the accelerated benefit provision. Such a charge shall be based on sound actuarial principles. In the case of group insurance, the additional cost may also be included in the experience rating.

(3) The following provisions apply to deferred financing options relating to an accelerated benefit provision:

(a) An insurer may pay a present value of the face amount or portion of the face amount being accelerated. The calculation must be based on any applicable actuarial discount appropriate to the policy design. The interest rate or interest rate methodology used in the calculation must be based on sound actuarial principles and disclosed in the contract and actuarial memorandum;

(b) An insurer may accrue an interest charge on the amount of the accelerated benefit as part of a lien against the death proceeds. The interest rate or interest rate methodology used in the calculation must be based on sound actuarial principles and disclosed in the contract and actuarial memorandum;

(c) For purposes of subsections (a) and (b) of this section, the maximum interest rate used on the risk portion must not be greater than the greater of:

(A) The current yield on 90-day treasury bills; or

(B) The current maximum statutory adjustable policy loan interest rate. If a policy, certificate or rider does not have a loan provision, the maximum rate shall not be greater than the fixed statutory policy loan interest rate.

(d) For purposes of subsections (a) and (b) of this section, the interest rate used on the portion that is equal in amount to the cash value of the contract at the time of the benefit acceleration must not be more than the policy or certificate loan interest rate stated in the policy, certificate or rider.

(4) When an accelerated benefit is payable, not more than a pro rata reduction may be made in the cash value based on the percentage of death benefits accelerated to produce the accelerated benefit payment.

(5) An insurer may consider the payment of accelerated benefits, any administrative expense charges, any future premiums and any accrued interest to be a lien against the death benefit of the policy, certificate or rider and may restrict the access to the cash value to any excess of the cash value over the sum of any other outstanding loans and the lien. Future access to additional policy loans may also be limited to any excess of the cash value over the sum of the lien any any other outstanding policy loans.

(6) When payment of an accelerated benefit results in a pro rata reduction in the cash value, the insurer may not apply the payment toward repaying an amount greater than a pro rata portion of any outstanding policy loans.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 12-1993, f. & cert. ef. 11-19-93
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0380 Actuarial Disclosure and Reserves

(1) An insurer shall submit an actuarial memorandum with each filing that describes the accelerated benefit, the risks, the expected costs, the development of premiums, the bases used to calculate benefits payable and the calculation of statutory reserves.

(2) When an accelerated benefit is included as part of a policy, certificate or rider, an insurer shall determine reserves in accordance with the Standard Valuation Law. The actuary must follow both actuarial standards and certification for good and sufficient reserves. Reserves in the aggregate must be sufficient to cover:

(a) Policies upon which no claim has yet arisen; and

(b) Policies upon which an accelerated claim has arisen.

(3) Policy liens and policy loans, including accrued interest, represent assets of the insurer for statutory reporting purposes. For any policy on which the policy lien exceeds the policy’s statutory reserve liability, the excess must be held as a non-admitted asset.

History

Statutory/Other Authority: ORS 731.244 & 743.154
Statutes/Other Implemented: ORS 743.154
ID 8-1992, f. 5-26-92, cert. ef. 6-1-92

Or. Admin. R. 836-051-0500 Purpose; Authority

(1) The purpose of OAR 836-051-0500 to 836-051-0600 is to provide rules for life insurance policy illustrations that will protect consumers and foster consumer education. OAR 836-051-0500 to 836-051-0600 provide illustration formats, prescribe standards to be followed when illustrations are used and specify the disclosures that are required in connection with illustrations. The goals of 836-051-0500 to 836-051-0600 are to ensure that illustrations do not mislead purchasers of life insurance and to make illustrations more understandable.

(2) Insurers shall, as far as possible, eliminate the use of footnotes and caveats and define terms used in the illustration in language that would be understood by a typical person within the segment of the public to which the illustration is directed.

(3) OAR 836-051-0500 to 836-051-0600 are adopted pursuant to ORS 731.244 and 746.240 for the purpose of implementing 746.075, 746.085, 746.100, 746.110, and 746.240.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0510 Applicability and Scope

(1) OAR 836-051-0500 to 836-051-0600 apply to all group life insurance policies and certificates and all individual life insurance policies except:

(a) Variable life insurance;

(b) Individual and group annuity contracts;

(d) Life insurance policies with an illustrated death benefit that does not exceed $10,000 on any individual; and

(e) Group term life insurance policies.

(2) OAR 836-051-0500 to 836-051-0600 apply to life insurance policies described in section (1) of this section that are sold on or after July 1, 1997. An insurer may conform its policies to the provisions of OAR 836-051-0500 to 836-051-0600 prior to that date.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0520 Definitions

For the purposes of OAR 836-051-0500 to 836-051-0600:

(1) “Actuarial Standards Board” means the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice.

(2) “Contract premium” means the gross premium that is required to be paid under a fixed premium policy, including the premium for a rider for which benefits are shown in the illustration.

(3) “Currently payable scale” means a scale of non-guaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next 95 days.

(4) “Disciplined current scale” means a scale of non-guaranteed elements constituting a limit on illustrations currently being illustrated by an insurer, that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer. Further guidance in determining the disciplined current scale as contained in standards established by the Actuarial Standards Board may be relied upon if the standards:

(a) Are consistent with all provisions of OAR 836-051-0500 to 836-051-0600;

(b) Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred;

(c) Do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and

(d) Do not permit assumed expenses to be less than minimum assumed expenses.

(5) “Generic name” means a short title descriptive of the policy being illustrated, such as “whole life,” “term life” or “flexible premium adjustable life.”

(6) “Guaranteed elements” and “non-guaranteed elements” have the following meanings:

(a) “Guaranteed elements” means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and determined at issue;

(b) “Non-guaranteed elements” means the premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.

(7) “Illustrated scale” means a scale of non-guaranteed elements currently being illustrated that is not more favorable to the policy owner than the lesser of:

(a) The disciplined current scale; or

(b) The currently payable scale.

(8) “Illustration” means a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years and that is one of the following three types:

(a) “Basic illustration” means a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and non-guaranteed elements;

(b) “Supplemental illustration” means an illustration furnished in addition to a basic illustration that meets the applicable requirements of OAR 836-051-0500 to 836-051-0600, and that may be presented in a format differing from the basic illustration, but may depict only a scale of non-guaranteed elements that is permitted in a basic illustration;

(c) “In force illustration” means an illustration furnished at any time after the policy that the illustration depicts has been in force for one year or more.

(9) “Illustration actuary” means an actuary meeting the requirements of OAR 836-051-0580 who certifies to illustrations based on the standard of practice promulgated by the Actuarial Standards Board.

(10) “Lapse-supported illustration” means an illustration of a policy form failing the test of self-supporting as described in OAR 836-051-0500 to 836-051-0600, under a modified persistency rate assumption using persistency rates underlying the disciplined current scale for the first five years and 100 percent policy persistency thereafter.

(11) “Minimum assumed expenses” means the minimum expenses that may be used in the calculation of the disciplined current scale for a policy form. An insurer may choose to designate each year the method of determining assumed expenses for all policy forms from the following:

(a) Fully allocated expenses;

(b) Marginal expenses, except that marginal expenses may be used only if greater than a generally recognized expense table, and if no generally recognized expense table is approved, fully allocated expenses must be used; and

(c) A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the Director.

(12) “Non-term group life” means a group policy or individual policies of life insurance issued to members of an employer group or other permitted group when:

(a) Every plan of coverage was selected by the employer or other group representative;

(b) Some portion of the premium is paid by the group or through payroll deduction; and

(13) “Policy owner” means the owner named in the policy or the certificate holder in the case of a group policy.

(14) “Premium outlay” means the amount of premium assumed to be paid by the policy owner or other premium payer out-of-pocket.

(15) “Self-supporting illustration” means an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the fifteenth policy anniversary or the twentieth policy anniversary for second-or-later-to-die policies (or upon policy expiration if sooner), the accumulated value of all policy cash flows equals or exceeds the total policy owner value available. For this purpose, policy owner value must include cash surrender values and any other illustrated benefit amounts available at the policy owner’s election.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0530 Policies to Be Illustrated

(1) An insurer shall identify each life insurance policy form filed with the Director on or after July 1, 1997, that will be marketed with an illustration. For informational purposes, the insurer shall file with the policy form filing a sample illustration in John Doe format to match a John Doe policy. Approval of a policy form filing will not be given until the Director has received the informational sample illustration. The insurer shall also identify in writing each policy form being actively marketed on July 1, 1997, with which an illustration is being or will be used. Any decision to market with an illustration or not may be changed by notice to the Director.

(2) If an insurer does not identify a policy form as one to be marketed with an illustration, any use of an illustration for any policy using that form prior to the first policy anniversary is prohibited.

(3) If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with OAR 836-051-0500 to 836-051-0600 is required, except that a basic illustration need not be provided to individual members of a group or to individuals insured under multiple lives coverage issued to a single applicant unless the coverage is marketed to these individuals. The illustration furnished an applicant for a group life insurance policy or policies issued to a single applicant on multiple lives may be either an individual or composite illustration representative of the coverage on the lives of members of the group or the multiple lives covered.

(4) Potential enrollees of non-term group life insurance subject to OAR 836-051-0500 to 836-051-0600 shall be furnished a quotation as described in this section with the enrollment materials. The quotation shall show potential policy values for sample ages and policy years on a guaranteed and non-guaranteed basis appropriate to the group and the coverage. This quotation shall not be considered an illustration for purposes of 836-051-0500 to 836-051-0600, but all information provided shall be consistent with the illustrated scale. A basic illustration shall be provided at delivery of the certificate to enrollees for non-term group life who enroll for more than the minimum premium necessary to provide pure death benefit protection. In addition, the insurer shall make a basic illustration available to any non-term group life enrollee who requests it.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0540 General Rules and Prohibitions

(1) An illustration used in the sale of a life insurance policy shall satisfy the applicable requirements of OAR 836-051-0500 to 836-051-0600, be clearly labeled "life insurance illustration" and contain the following basic information:

(a) Name of insurer;

(b) Name and business address of the insurance producer, if any;

(c) Name, age and sex of proposed insured, except when a composite illustration is permitted under OAR 836-051-0500 to 836-051-0600;

(d) Underwriting or rating classification upon which the illustration is based;

(e) Generic name of policy, the insurer product name, if different, and form number;

(f) Initial death benefit; and

(g) Dividend option election or application of non-guaranteed elements, if applicable.

(2) When using an illustration in the sale of a life insurance policy, neither an insurer nor its insurance producer shall:

(a) Represent the policy as anything other than a life insurance policy;

(b) Use or describe non-guaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;

(d) Use an illustration that does not comply with the requirements of OAR 836-051-0500 to 836-051-0600;

(e) Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;

(f) Provide an applicant with an incomplete illustration;

(g) Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact;

(h) Use the term "vanish" or "vanishing premium," or a similar term that implies the policy becomes paid up, to describe a plan for using non-guaranteed elements to pay a portion of future premiums;

(i) Except for policies that can never develop nonforfeiture values, use an illustration that is "lapse-supported"; or

(j) Use an illustration that is not "self-supporting."

(3) If an interest rate used to determine the illustrated non-guaranteed elements is shown, it shall not be greater than the earned interest rate underlying the disciplined current scale.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0550 Standards for Basic Illustrations

(1) The format of a basic illustration shall conform to the following requirements:

(a) The illustration shall be labeled with the date on which it was prepared;

(b) Each page, including any explanatory notes or pages, shall be numbered and show its relationship to the total number of pages in the illustration (e.g., the fourth page of a seven-page illustration shall be labeled "page 4 of 7 pages");

(d) If the age of the proposed insured is shown as a component of the tabular detail, it shall be issue age plus the numbers of years the policy is assumed to have been in force.

(e) The assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments shall be identified as premium outlay;

(f) Guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed.

(g) If the illustration shows any non-guaranteed elements, they cannot be based on a scale more favorable to the policy owner than the insurer's illustrated scale at any duration. These elements shall be clearly labeled non-guaranteed;

(h) The guaranteed elements, if any, shall be shown before corresponding non-guaranteed elements and shall be specifically referred to on any page of an illustration that shows or describes only the non-guaranteed elements (e.g., "see page one for guaranteed elements");

(i) The account or accumulation value of a policy, if shown, shall be identified by the name this value is given in the policy being illustrated and shown in close proximity to the corresponding value available upon surrender;

(j) The value available upon surrender shall be identified by the name this value is given in the policy being illustrated and shall be the amount available to the policy owner in a lump sum after deduction of surrender charges, policy loans and policy loan interest, as applicable;

(k) Illustrations may show policy benefits and values in graphic or chart form in addition to the tabular form;

(l) Any illustration of non-guaranteed elements shall be accompanied by a statement indicating that:

(A) The benefits and values are not guaranteed;

(B) The assumptions on which they are based are subject to change by the insurer; and

(m) If the illustration shows that the premium payer may have the option to allow policy charges to be paid using non-guaranteed values, the illustration must clearly disclose that a charge continues to be required and that, depending on actual results, the premium payer may need to continue or resume premium outlays. Similar disclosure shall be made for premium outlay of lesser amounts or shorter durations than the contract premium. If a contract premium is due, the premium outlay display shall not be left blank or show zero unless accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up;

(n) If the applicant plans to use dividends or policy values, guaranteed or non-guaranteed, to pay all or a portion of the contract premium or policy charges, or for any other purpose, the illustration may show such use of dividends or policy values and the effect on future policy benefits and values.

(2) A basic illustration shall have a narrative summary, which shall include the following:

(a) A brief description of the policy being illustrated, including a statement that it is a life insurance policy;

(b) A brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration shall show the premium outlay that must be paid to guarantee coverage for the term of the policy, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of the Internal Revenue Code;

(c) A brief description of any policy features, riders or options, guaranteed or non-guaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy;

(d) Identification and a brief definition of column headings and key terms used in the illustration; and

(e) A statement containing in substance the following: "This illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown."

(3) Following the narrative summary, a basic illustration shall include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. The following provisions apply to the numeric summary:

(a) For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years five, ten and twenty and at age 70, if applicable, on the three bases shown in this subsection. For multiple life policies, the summary shall show policy years five, ten, twenty and thirty. The three bases are as follows:

(A) Policy guarantees;

(B) Insurer's illustrated scale;

(i) Dividends at 50 percent of the dividends contained in the illustrated scale used;

(ii) Non-guaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and

(iii) All non-guaranteed charges, including but not limited to, term insurance charges, mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and

(b) In addition, if coverage would cease prior to policy maturity or age 100, the year in which coverage ceases shall be identified for each of the three bases.

(4) A basic illustration shall include the following tabular detail:

(a) A basic illustration shall include the following for at least each policy year from one to ten and for every fifth policy year thereafter ending at age 100, policy maturity or final expiration; and except for term insurance beyond the 20th year, for any year in which the premium outlay and contract premium, if applicable, is to change:

(A) The premium outlay and mode the applicant plans to pay and the contract premium, as applicable;

(B) The corresponding guaranteed death benefit, as provided in the policy; and

(b) For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender shall correspond to the contract premium; and

(c) Non-guaranteed elements may be shown if described in the narrative. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurer's current practice is to pay terminal dividends. If any non-guaranteed elements are shown they must be shown at the same durations as the corresponding guaranteed elements, if any. If no guaranteed benefit or value is available at any duration for which a non-guaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.

(5) Statements substantially similar to the following shall be included on the same page as the numeric summary and signed by the applicant, or the policy owner in the case of an illustration provided at time of delivery, as required in OAR 836-051-0500 to 836-051-0600.

(a) A statement to be signed and dated by the applicant or policy owner reading as follows: "I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change and could be either higher or lower. The agent has told me they are not guaranteed."

(b) A statement to be signed and dated by the insurance producer that reads as follows: "I certify that this illustration has been presented to the applicant and that I have explained that any non-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration."

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0560 Standards for Supplemental Illustrations

(1) A supplemental illustration may be provided so long as:

(a) It is appended to, accompanied by or preceded by a basic illustration that complies with OAR 836-051-0500 to 836-051-0600;

(b) The non-guaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration;

(d) For a policy that has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration. For policies that do not require a contract premium, the premium outlay underlying the supplemental illustration shall be equal to the premium outlay shown in the basic illustration.

(2) The supplemental illustration shall include a notice referring to the basic illustration for guaranteed elements and other important information.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0570 Delivery of Illustration and Record Retention

(1) If a basic illustration is used by an insurance producer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with OAR 836-051-0500 to 836-051-0600, shall be submitted to the insurer at the time of policy application. A copy also shall be provided to the applicant. If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued shall be sent with the policy. The revised illustration shall conform to the requirements of 836-051-0500 to 836-051-0600, shall be labeled "Revised Illustration" and shall be signed and dated by the applicant or policy owner and insurance producer no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

(2) If no illustration is used by an insurance producer in the sale of a life insurance policy or if the policy is applied for other than as illustrated, the insurance producer shall certify to that effect in writing on a form provided by the insurer. On the same form the applicant shall acknowledge that no illustration conforming to the policy applied for was provided and shall further acknowledge an understanding that an illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. This form shall be submitted to the insurer at the time of policy application. If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

(3) If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it shall include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer. The insurer's obligation under this section shall be satisfied if the insurer can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort shall be satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.

(4) A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used or that the policy was applied for other than as illustrated, shall be retained by the insurer until three years after the policy is no longer in force. A copy need not be retained if no policy is issued.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0580 Annual Report; Notice to Policy Owners

(1) In the case of a policy designated as one for which illustrations will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that shall contain at least the following information:

(a) For universal life policies, the report shall include the following:

(A) The beginning and end date of the current report period;

(B) The policy value at the end of the previous report period and at the end of the current report period;

(C) The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders);

(D) The current death benefit at the end of the current report period on each life covered by the policy;

(E) The net cash surrender value of the policy as of the end of the current report period;

(F) The amount of outstanding loans, if any, as of the end of the current report period; and

(G) For fixed premium policies: If, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments, the policy’s net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect shall be included in the report; or

(H) For flexible premium policies: If, assuming guaranteed interest, mortality and expense loads, the policy’s net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect shall be included in the report.

(b) For all other policies, when applicable:

(A) Current death benefit;

(B) Annual contract premium;

(D) Current dividend;

(E) Application of current dividend; and

(F) Amount of outstanding loan.

(c) Insurers writing life insurance policies that do not build nonforfeiture values shall be required to provide only an annual report with respect to these policies for those years when a change has been made to nonguaranteed policy elements by the insurer.

(2) If the annual report does not include an in force illustration, it shall contain the following notice displayed prominently:

“IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling [insurer’s phone number], writing to [insurer’s name] at [insurer’s address] or contacting your agent. If you do not receive a current illustration of your policy within 30 days from your request, you should contact your state insurance department.”

The insurer may vary the sequential order of the methods for obtaining an in force illustration.

(3) Upon the request of the policy owner, the insurer shall furnish an in force illustration of current and future benefits and values based on the insurer’s present illustrated scale. This illustration shall comply with the requirements of OAR 836-051-0540(1) and (2), and 836-051-0550(1) and (5). No signature or other acknowledgment of receipt of this illustration shall be required.

(4) If an adverse change in non-guaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report shall contain a notice of that fact and the nature of that change shall be prominently displayed.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0590 Annual Certifications

(1) The board of directors of each insurer shall appoint one or more illustration actuaries.

(2) The illustration actuary shall certify that the disciplined current scale used in illustrations is in conformity with the Actuarial Standard of Practice for Compliance with the NAIC Model Regulation on Life Insurance Illustrations promulgated by the Actuarial Standards Board, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of OAR 836-051-0500 to 836-051-0600.

(3) The illustration actuary shall:

(a) Be a member in good standing of the American Academy of Actuaries;

(b) Be familiar with the standard of practice regarding life insurance policy illustrations;

(A) Violated any provision of, or any obligation imposed by, the Insurance Law or other law in the course of the actuary's dealings as an illustration actuary;

(B) Been found guilty of fraudulent or dishonest practices;

(C) Demonstrated the actuary's incompetence, lack of cooperation or untrustworthiness to act as an illustration actuary; or

(D) Resigned or been removed as an illustration actuary within the past five years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards.

(d) Not fail to notify the Director of any action taken by a commissioner of another state similar to that under subsection (c) of this section (3);

(e) Disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous five years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale. If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies, this must be disclosed in the annual certification. If nonguaranteed elements illustrated for both new and in force policies are not consistent with the nonguaranteed elements actually being paid, charged or credited to the same or similar forms, this must be disclosed in the annual certification; and

(f) Disclose in the annual certification the method used to allocate overhead expenses for all illustrations:

(A) Fully allocated expenses;

(B) Marginal expenses; or

(C) A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the Director.

(4)(a) The illustration actuary shall file a certification with the board and with the Director:

(A) Annually for all policy forms for which illustrations are used; and

(B) Before a new policy form is illustrated.

(b) If an error in a previous certification is discovered, the illustration actuary shall notify the board of directors of the insurer and the director promptly.

(5) If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary shall notify the board of directors of the insurer and the Director promptly of the actuary's inability to certify.

(6) A responsible officer of the insurer, other than the illustration actuary, shall certify annually:

(a) That the illustration formats meet the requirements of OAR 836-051-0500 to 836-051-0600 and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary; and

(b) That the insurer has provided its insurance producers with information about the expense allocation method used by the insurer in its illustrations and disclosed as required in section (3)(f) of this rule.

(7) The annual certification shall be provided to the Director each year by a date determined by the insurer. If the insurer decides to change the date for a subsequent year, the insurer must so notify the Director prior to the insurer's current elected date and include with the notification an explanation for the change. The first annual certification by an insurer is due on the date elected by the insurer during the calendar year beginning January 1, 1998.

(8) If an insurer changes the illustration actuary responsible for all or a portion of the insurer's policy forms, the insurer shall notify the Director of that fact promptly and disclose the reason for the change.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0600 Trade Practice Regulation

Violation of any provision of OAR 836-051-0500 to 836-051-0600 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.075, 746.085, 746.100, 746.110 & 746.240
ID 5-1997, f. 5-27-97, cert. ef. 7-1-97

Or. Admin. R. 836-051-0700 Authorization, Genetic Testing

(1) A person who asks an applicant for insurance to take a genetic test in connection with an application for insurance shall obtain the specific authorization of the applicant by use of the form in Exhibit 1 to this rule, or a form that is substantively similar.

(2) This rule implements ORS 746.135.

History

Statutory/Other Authority: ORS 746.135
Statutes/Other Implemented: ORS 746.135
ID 5-2004, f. & cert. ef. 6-14-04

Or. Admin. R. 836-051-0750 Purpose; Authority; Applicability; and Effective Date

(1) OAR 836-051-0750 to 836-051-0775 are adopted pursuant to the general rulemaking authority of the Director in ORS 731.244, and specific authority of ORS 733.306 and 743.215 for approving mortality tables adopted by the National Association of Insurance Commissioners for use in determining minimum valuation and nonforfeiture standards.

(2) OAR 836-051-0750 to 836-051-0775 apply to preneed insurance and to similar policies and certificates used to fund funeral services and expenses as determined by the Director, issued on or after January 1, 2009.

(3) The purpose of OAR 836-051-0750 to 836-051-0775 is to establish for preneed insurance products minimum mortality standards for reserves and nonforfeiture values, and to require the use of the 1980 Commissioners Standard Ordinary (CSO) Life Valuation Mortality Table for use in determining the minimum standard of valuation of reserves and the minimum standard nonforfeiture values for preneed insurance products.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.205
Statutes/Other Implemented: ORS 733.306, 733.310, 743.215, 743.216 & 743.221
ID 17-2008, f. & cert. ef. 12-9-08

Or. Admin. R. 836-051-0755 Definitions

As used in OAR 836-051-0750 to 836-051-0775:

(1) “Preneed insurance” is any life insurance policy that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of and immediately following the death of the insured. Goods and services may include, but are not limited to embalming, cremation, body preparation, viewing or visitation, coffin or urn, memorial stone, and transportation of the deceased. The status of the policy as preneed insurance is determined at the time of issue in accordance with the policy form filing.

(2) “Ultimate 1980 CSO” means the 1980 Commissioners’ Standard Ordinary Life Valuation Mortality Tables (1980 CSO) without ten-year (10-year) selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law approved in December 1983.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.205
Statutes/Other Implemented: ORS 733.306, 733.310, 743.215, 743.216 & 743.221
ID 17-2008, f. & cert. ef. 12-9-08

Or. Admin. R. 836-051-0760 Minimum Valuation Mortality Standards

For preneed insurance and to similar policies and certificates used to fund funeral services and expenses, the minimum mortality standard for determining reserve liabilities and nonforfeiture values for both male and female insureds shall be the Ultimate 1980 CSO.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.205
Statutes/Other Implemented: ORS 733.306, 733.310, 743.215, 743.216 & 743.221
ID 17-2008, f. & cert. ef. 12-9-08

Or. Admin. R. 836-051-0765 Minimum Valuation Interest Rate Standards

(1) The interest rates used in determining the minimum standard for valuation of preneed insurance shall be the calendar year statutory valuation interest rates as defined in ORS 733.306 and 733.310.

(2) The interest rates used in determining the minimum standard for nonforfeiture values for preneed insurance shall be the calendar year statutory nonforfeiture interest rates as defined in ORS 743.215, 743.216 and 743.221.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.205
Statutes/Other Implemented: ORS 733.306, 733.310, 743.215, 743.216 & 743.221
ID 17-2008, f. & cert. ef. 12-9-08

Or. Admin. R. 836-051-0770 Minimum Valuation Method Standards

(1) The method used in determining the standard for the minimum valuation of reserves of preneed insurance shall be the method defined in ORS 733.306 and 733.310.

(2) The method used in determining the standard for the minimum nonforfeiture values for preneed insurance shall be the method defined in ORS 743.215, 743.216 and 743.221.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.205
Statutes/Other Implemented: ORS 733.306, 733.310, 743.215, 743.216 & 743.221
ID 17-2008, f. & cert. ef. 12-9-08

Or. Admin. R. 836-051-0775 Transition Rules

(1) For preneed insurance policies issued on or after the effective date of this rule and before January 1, 2012, the 2001 CSO may be used as the minimum standard for reserves and minimum standard for nonforfeiture benefits for both male and female insureds.

(2) If an insurer elects to use the 2001 CSO as a minimum standard for any preneed insurance policy issued on or after the effective date of this rule and before January 1, 2012, the insurer shall provide, as a part of the actuarial opinion memorandum submitted in support of the company’s asset adequacy testing, an annual written notification to the Director. The notification shall include:

(a) A complete list of all preneed insurance policy forms that use the 2001 CSO as a minimum standard;

(b) A certification signed by the appointed actuary stating that the reserve methodology employed by the company in determining reserves for the preneed insurance policies issued after the effective date and using the 2001 CSO as a minimum standard, develops adequate reserves (For the purposes of this certification, the preneed insurance policies using the 2001 CSO as a minimum standard cannot be aggregated with any other policies.); and

(3) Supporting information regarding the adequacy of reserves for preneed insurance policies issued after the January 1, 2009, and using the 2001 CSO as a minimum standard for reserves.

(4) Preneed insurance policies issued on or after January 1, 2012, must use the Ultimate 1980 CSO in the calculation of minimum nonforfeiture values and minimum reserves.

History

Statutory/Other Authority: ORS 731.244, 733.306 & 743.205
Statutes/Other Implemented: ORS 733.306, 733.310, 743.215, 743.216 & 743.221
ID 17-2008, f. & cert. ef. 12-9-08

Or. Admin. R. 836-051-0900 Purpose; Authority

(1) OAR 836-051-0900 to 836-051-0925 establish standards for disclosure of minimum information relating to annuity contracts, to protect consumers and foster consumer education. OAR 836-051-0900 to 836-051-0925 prescribe the minimum information that must be disclosed and the method for disclosing it in connection with the sale of annuity contracts. The goal of 836-051-0900 to 836-051-0925 is to ensure that purchasers of annuity contracts understand certain basic features of annuity contracts.

(2) OAR 836-051-0900 to 836-051-0925 are adopted pursuant to ORS 731.244 for the purpose of implementing 746.075, 746.085, 746.110 & 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009, 746.075, 746.085, 746.110 & 746.240
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-051-0905 Applicability and Scope

(1) OAR 836-051-0900 to 836-051-0925 apply to all group and individual annuity contracts and certificates except:

(a) Immediate and deferred annuities that contain no nonguaranteed elements except as provided in OAR 836-051-0920(2);

(b) Annuities used to fund:

(A) An employee pension plan that is covered by the Employee Retirement Income Security Act (ERISA);

(B) A plan described by Sections 401(a), 401(k), 403(b), or 408(k) or (p) of the Internal Revenue Code, when the plan, for purposes of ERISA, is established or maintained by an employer;

(C) A governmental or church plan defined in Section 414 or a deferred compensation plan of a state or local government or a tax exempt organization under Section 457 of the Internal Revenue Code; or

(D) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.

(d) Funding agreements.

(2) OAR 836-051-0900 to 836-051-0925 also apply to annuities used to fund a plan or arrangement that is funded solely by contributions an employee elects to make, whether on a pre-tax or after-tax basis, and when the insurer has been notified that plan participants may choose from among two or more fixed annuity providers and there is a direct solicitation of an individual employee by a producer for the purchase of an annuity contract. A direct solicitation under this section does not include any meeting held by a producer solely for the purpose of educating or enrolling employees in the plan or arrangement.

(3) OAR 836-051-0900 to 836-051-0925 apply to annuity contracts that are sold on or after October 1, 2008. An insurer may conform its contracts to the provisions of 836-051-0900 to 836-051-0925 prior to that date.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009, 746.075, 746.085, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-051-0910 Definitions

As used in OAR 836-051-0900 to 836-051-0925:

(1) “Contract owner” means the owner named in the annuity contract or a certificate holder in the case of a group annuity contract.

(2) “Determinable elements” means elements that are derived from processes or methods that are guaranteed at issue and not subject to insurer discretion, but in which the values or amounts cannot be determined until some point after issue. These elements include the premiums, credited interest rates (including any bonus), benefits, values, non-interest based credits, charges or elements of formulas used to determine any of these. These elements may be described as guaranteed but not determined at issue. An element is considered determinable if it was calculated from underlying determinable elements only, or from both determinable and guaranteed elements.

(3) “Free look” means the number of days immediately after delivery of the contract in which the contract owner has to examine the contract and decide to return it to get the purchase payment returned penalty free. May also be referred to as “Right to Examine.”

(4) “Funding agreement” means an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies.

(5) “Generic name” means a short title descriptive of the annuity contract being applied for or illustrated, such as “single premium deferred annuity.”

(6) “Guaranteed elements” means the premiums, credited interest rates (including any bonus), benefits, values, non-interest based credits, charges or elements of formulas used to determine any of these, that are guaranteed and determined at issue. An element is considered guaranteed if all of the underlying elements that go into its calculation are guaranteed.

(7) “Non-guaranteed elements” means the premiums, credited interest rates (including any bonus), benefits, values, non-interest based credits, charges or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue. An element is considered non-guaranteed if any of the underlying non-guaranteed elements are used in its calculation.

(8) “Structured settlement annuity” means a “qualified funding asset” as defined in section 130(d) of the Internal Revenue Code or an annuity that, by its issue, would be a qualified funding asset under section 130(d) but for the fact that it is not owned by an assignee under a qualified assignment.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009, 746.075, 746.085, 746.110 & 746.240
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-051-0915 Standards for the Disclosure Document and Buyer’s Guide

(1) When the application for an annuity contract is taken in a face-to-face meeting, the applicant shall be given, at or before the time of application, both the disclosure document described in section (6) of this rule and the Buyer’s Guide contained in Exhibit 1 to this rule.

(2) When the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant shall be sent both the disclosure document and the Buyer’s Guide no later than five business days after the completed application is received by the insurer. The following provisions apply to the requirement in this section:

(a) With respect to an application received as a result of a direct solicitation through the mail:

(A) Providing a Buyer’s Guide in a mailing inviting prospective applicants to apply for an annuity contract satisfies the requirement that the Buyer’s Guide be provided no later than five business days after receipt of the application.

(B) Providing a disclosure document in a mailing inviting a prospective applicant to apply for an annuity contract satisfies the requirement that the disclosure document be provided no later than five business days after receipt of the application.

(b) With respect to an application received through the Internet:

(A) Taking reasonable steps to make the Buyer’s Guide available for viewing and printing on the insurer’s website satisfies the requirement that the Buyer’s Guide be provided no later than five business days of receipt of the application.

(B) Taking reasonable steps to make the disclosure document available for viewing and printing on the insurer’s website satisfies the requirement that the disclosure document be provided no later than five business days after receipt of the application.

(c) A solicitation for an annuity contract provided in other than a face-to-face meeting must include a statement that the proposed applicant may contact the insurance department of the state for a free annuity Buyer’s Guide, except that alternatively, an insurer may include a statement that the prospective applicant may contact the insurer for a free annuity Buyer’s Guide.

(3) When the Buyer’s Guide and disclosure document are provided at delivery of the contract and are not provided at or before the time of application, a free look period of no less than 15 days must be provided for the applicant to return the annuity contract without penalty. This free look runs concurrently with the free look provided under the contract.

(4) When the Buyer’s Guide and disclosure document are provided at the time of application, a free look period of no less than ten days must be provided to enable the contract owner to examine the contract with the disclosure document and return the annuity contract without penalty if not satisfied.

(5) For the purpose of this rule, a “Buyer’s Guide” is the document in Exhibit 1 to this rule or the most current version adopted by the NAIC, or other published descriptions that are similar in nature approved by the Director. Companies may purchase personalized brochures from the NAIC or reproduce the Buyer’s Guide in their own type, style and format. Any description of an annuity feature in the Buyer’s Guide is for general education and does not imply that all features are acceptable for filing under Oregon standards.

(6) At a minimum, the following information shall be included in the disclosure document required to be provided under OAR 836-051-0900 to 836-051-0925:

(a) The generic name of the contract, the insurer product name, if different, and form number, and the fact that it is an annuity;

(b) The insurer’s name and address;

(c) A description of the contract and its benefits, emphasizing its long-term nature, including examples when appropriate, as follows:

(A) The guaranteed, non-guaranteed and determinable elements of the contract, and their limitations, if any, and an explanation of how they operate;

(B) An explanation of the initial crediting rate, specifying any bonus or introductory portion, the duration of the rate and the fact that rates may change from time to time and are not guaranteed;

(D) Any value reductions caused by withdrawals from or surrender of the contract, and also a dollar-figure statement, which may be specific to the contract or given as an example using round numbers, of the maximum effect of penalties, surrender charges, market value adjustments and any other adjustments owing to a withdrawal or surrender;

(E) How values in the contract can be accessed;

(F) The death benefit, if available and how it will be calculated;

(G) A summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract; and

(H) The impact of any rider, such as a long-term care rider.

(d) The specific dollar amount or percentage charges and fees, which shall be listed with an explanation of how they apply.

(e) Information about the current guaranteed rate for new contracts, with a clear notice that the rate is subject to change.

(7) An insurer must define terms used in the disclosure statement in language that facilitates the understanding by a typical person within the segment of the public to which the disclosure statement is directed.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009, 746.075, 746.085, 746.110 & 746.240
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-051-0920 Report to Contract Owners

(1) For an annuity in the payout period with changes in non-guaranteed elements and for the accumulation period of a deferred annuity, the insurer shall provide each contract owner with a report, at least annually, on the status of the contract that contains at least the following information:

(a) The beginning and end date of the current report period.

(b) The accumulation and cash surrender value, if any, at the end of the previous report period and at the end of the current report period.

(c) The total amounts, if any, that have been credited, charged to the contract value or paid during the current report period; and

(d) The amount of outstanding loans, if any, as of the end of the current report period.

(2) For a deferred annuity with only guaranteed elements and no cash surrender value during the accumulation period, the insurer shall provide each contract owner with a report, at least annually, on the status of the contract that contains at least the following information:

(a) The beginning and end date of the current report period.

(b) The selected annuitization date, including any time restraints for changing the annuitization date.

(d) Any additional benefit values, such as the death benefit and any optional access to cash values.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009, 746.075, 746.085, 746.110 & 746.240
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-051-0925 Trade Practice Regulation

Violation of any provision of OAR 836-051-0900 to 836-051-0925 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009, 746.075, 746.085, 746.110 & 746.240
ID 14-2008, f. & cert. ef. 8-15-08

Division 52 INSURANCE POLICIES

Or. Admin. R. 836-052-0103 Purpose

(1) OAR 836-052-0103 to 836-052-0194 are adopted in order to:

(a) Provide for the standardization of coverage and simplification of terms and benefits of Medicare supplement policies;

(b) Facilitate public understanding and comparison of such policies;

(c) Eliminate provisions contained in such policies that may be misleading or confusing in connection with the purchase of such policies or with the settlement of claims; and

(d) Provide for full disclosures in the sale of accident and sickness insurance coverage to persons eligible for Medicare.

(2) OAR 836-052-0138, 836-052-0145, and 836-052-0151 are amended pursuant to the authority of ORS 743.683, in order to carry out the legislative intent of:

(a) Extending the opportunity for open enrollment for Medicare supplement insurance under OAR 836-052-0138 to all persons who enroll in Medicare Part B, regardless of age; and

(b) Providing that for rating purposes the pool of persons qualifying for Medicare by reason of disability is combined with the pool of persons qualifying by reason of age, so that premiums will be affordable for persons qualifying by reason of disability.

History

Statutory/Other Authority: ORS 731.244 & 743.680
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0107 Authority

OAR 836-052-0103 to 836-052-0194 are adopted pursuant to the general rulemaking authority of the Director under ORS 731.244 and the specific authority in 742.009, 743.013, 743.680 to 743.689, and 746.240.

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.010(2) & 743.683
ID 9-1997, f. & cert. ef. 7-10-97
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0114 Applicability and Scope

(1) Except as otherwise specifically provided in OAR 836-052-0134, 836-052-0140, 836-052-0144, 836-052-0145, 836-052-0160 and 836-052-0185, 836-052-0103 to 836-052-0194 apply to the following Medicare supplement policies and certificates issued under group Medicare supplement policies, as follows:

(a) All Medicare supplement policies delivered or issued for delivery in this state on or after July 1, 1992; and

(b) All certificates issued under group Medicare supplement policies and delivered or issued for delivery in this state on or after July 1, 1992.

(2) Except as otherwise specifically provided in OAR 836-052-0134, 836-052-0140, 836-052-0144, 836-052-0160, and 836-052-0185, on or after September 1, 1993, 836-052-0103 to 836-052-0194 apply to Medicare supplement policies and certificates issued under group Medicare supplement policies that are made subject to 836-052-0103 to 836-052-0194 because of amendments to the definition of "Medicare supplement policy" in ORS 743.680 and OAR 836-052-0119.

(3) A prepayment plan offered by a health maintenance organization under which the health maintenance organization and competitive medical plans provides Medicare services under the authority of Title XVIII Part C of the Social Security Act or Section 1876 of the federal Social Security Act (42 U.S.C. section 1395 et seq.) is not subject to OAR 836-052-0103 through 836-052-0194. The health maintenance organization and competitive medical plans must file with the Director, for information purposes, a copy of the Medicare contract forms and rates that the plan or health maintenance organization uses in this state, and the marketing and sales materials used therewith.

(4) OAR 836-052-0103 to 836-052-0194 do not apply to an issued policy under a demonstration project specified in 42 U.S.C. sec. 1395ss (g)(1).

(5) OAR 836-052-0103 to 836-052-0194 do not apply to a policy or contract of one or more employers or labor organizations; or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof; for employees or former employees, or a combination thereof; or for members or former members, or a combination thereof, of the labor organizations.

(6) OAR 836-052-0103 to 836-052-0194 are effective on August 1, 2005. Insurers may continue using current forms, or may make changes to current forms if offering Plan K or L, as appropriate, through 2005. Insurers may offer any authorized plan upon approval by the Director of the Department of Consumer and Business Services.

(7) The changes to OAR 836-052-0145 and 836-052-0151 effective on February 17, 2011 apply to all new Medicare supplement policies or certificates issued on or after July 1, 2011. The changes to 836-052-0145 and 836-052-0151 effective on February 17, 2011 apply to all existing 1990 Standardized Medicare supplement benefit plans and all 2010 Standardized Medicare supplement benefit plans policies or certificates renewed on or after January 1, 2012. The changes to the Exhibits to 836-052-0160 effective on February 17, 2011 apply to all Medicare supplement policies or certificates issued on or after July 1, 2011.

(8) The changes to the Exhibits to OAR 836-052-0160 apply to all Medicare supplement policies or certificates effective on or after January 1, 2020.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244 & 743.682
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 32-2018, amend filed 08/30/2018, effective 09/01/2018
ID 31-2018, amend filed 08/29/2018, effective 09/01/2018
ID 30-2018, amend filed 08/28/2018, effective 09/01/2018
ID 15-2011, f. & cert. ef. 10-31-11
ID 7-2011, f. & cert. ef. 2-23-11
ID 10-2005, f. & cert. ef. 7-26-05
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0119 Definitions

As used in OAR 836-052-0103 to 836-052-0194:

(1) "Applicant" means:

(a) In the case of an individual Medicare supplement policy, the person who seeks to contract for insurance benefits;

(b) In the case of a group Medicare supplement policy, the proposed certificate holder.

(2) "Bankruptcy" occurs when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.

(3) "Certificate" means any certificate delivered or issued for delivery under a group Medicare supplement policy.

(4) "Certificate Form" means the form on which the certificate is delivered or issued for delivery by the issuer.

(5) "Continuous period of creditable coverage" means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no break in coverage greater than 63 days.

(6)(a) "Creditable coverage" means, with respect to an individual, coverage of the individual provided under any of the following:

(A) A group health plan;

(B) Health insurance coverage;

(D) Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under section 1928;

(E) Chapter 55 of Title 10 United States Code (CHAMPUS);

(F) A medical care program of the Indian Health Service or of a tribal organization;

(G) A state health benefits risk pool;

(H) A health plan offered under chapter 89 of Title 5 United States Code (Federal Employees Health Benefits Program);

(I) A public health plan as defined in federal regulation; and

(J) A health benefit plan under Section 5(e) of the Peace Corps Act (22 United States Code 2504(e)).

(b) "Creditable coverage" does not include one or more, or any combination of the following:

(A) Coverage only for accident or disability income insurance, or any combination thereof;

(B) Coverage issued as a supplement to liability insurance;

(D) Workers' compensation or similar insurance;

(E) Automobile medical payment insurance;

(F) Credit-only insurance;

(G) Coverage for on-site medical clinics; and

(H) Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other medical benefits.

(c) "Creditable coverage" does not include the following benefits if they are provided under a separate policy, certificate or contact of insurance or are otherwise not an integral part of the plan:

(A) Limited scope dental or vision benefits;

(B) Benefits for long-term care, nursing home care, home health care, community based care, or any combination thereof; and

(d) "Creditable coverage" does not include the following benefits if offered as independent noncoordinated benefits:

(A) Coverage only for a specified disease or illness; and

(B) Hospital indemnity or other fixed indemnity insurance.

(e) "Creditable coverage" shall not include the following if it is offered as a separate policy, certificate or contract of insurance:

(A) Medicare supplemental health insurance as defined under section 1882(g)(1) of the Social Security Act;

(B) Coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code; and

(7) "Employee welfare benefit plan" means a plan, fund or program of employee benefits as defined in 29 U.S.C. Section 1002 (Employee Retirement Income Security Act).

(8) "Insolvency" means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer's state of domicile.

(9) "Insurance Policy" includes a subscriber contract or a prepayment contract of a health care service contractor and a policy or contract of a fraternal benefit society.

(10) "Issuer" includes insurers, fraternal benefit societies, health care service plans, health maintenance organizations as that term is defined in ORS 750.005, health care service contractors as that term is defined in 750.005, and any other entity delivering or issuing for delivery in this state Medicare supplement policies or certificates.

(11) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.

(12) Medicare Advantage plan" means a plan of coverage for health benefits under Medicare Part C as defined in 42 U.S.C.1395w-28(b)(1), and includes:

(a) Coordinated care plans that provide health care services, including but not limited to health maintenance organization plans (with or without a point-of-service option), plans offered by provider-sponsored organizations, and preferred provider organization plans;

(b) Medical savings account plans coupled with a contribution into a Medicare Advantage medical savings account; and

(13) "Medicare Supplement Policy" means a group or individual insurance policy or a subscriber contract, other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. section 1395 et seq.) or an issued policy under a demonstration project specified in 42 U.S.C. section 1395ss(g)(1) that is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. "Medicare Supplement policy" does not include Medicare Advantage plans established under Medicare Part C, Outpatient Prescription Drug plans established under Medicare Part D or any Health Care Prepayment Plan (HCPP) that provides benefits pursuant to an agreement under sec. 1833(a)(1)(A) of the Social Security Act.

(14) “Newly eligible” means those individuals who become eligible for Medicare due to age, disability or end-stage renal disease on or after January 1, 2020.

(15) "Policy Form" means the form on which the policy is delivered or issued for delivery by the issuer.

(16) “Pre-Standardized Medicare supplement benefit plan,” means a group or individual policy of Medicare supplement insurance issued prior to July 1, 1992.

(17) "Secretary" means the Secretary of the United States Department of Health and Human Services.

(18) “1990 Standardized Medicare supplement benefit plan,” means a group or individual policy of Medicare supplement insurance issued on or after July 1, 1992 and with an effective date of coverage prior to June 1, 2010 and includes Medicare supplement insurance policies and certificates renewed on or after that date that are not replaced by the issuer at the request of the insured.

(19) “2010 Standardized Medicare supplement benefit plan,” means a group or individual policy of Medicare supplement insurance issued with an effective date of coverage on or after June 1, 2010.

History

Statutory/Other Authority: ORS 731.244 & 743.682
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 30-2018, amend filed 08/28/2018, effective 09/01/2018
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09
ID 10-2005, f. & cert. ef. 7-26-05
ID 6-2001, f. & cert. ef. 5-22-01
ID 4-1999, f. & cert. ef. 4-29-99
ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0124 Policy Definitions and Terms

A policy or certificate may not be advertised, solicited or issued for delivering in this state as a Medicare supplement policy or certificate unless the policy or certificate contains definitions or terms that conform to the following requirements:

(1) "Accident," "accidental injury" or "accidental means" shall be defined to employ "result" language and shall not include words that establish an accidental means test or use words such as "external, violent, visible wounds" or similar words of description or characterization. The following provisions also apply to definition of the terms under this section:

(a) The definition shall not be more restrictive than the following: "'Injury or injuries for which benefits are provided' means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force";

(b) The definition may provide that injuries shall not include injuries for which benefits are provided or available under any worker's compensation, employer's liability or similar law or motor vehicle no-fault plan, unless prohibited by law.

(2) "Benefit period" or "Medicare benefit period" shall not be defined more restrictively than as defined in the Medicare program.

(3) "Convalescent nursing home," "extended care facility" or "skilled nursing facility" shall not be defined more restrictively than as defined in the Medicare program.

(4) "Health care expenses" means, for OAR 836-052-0145, expenses of health maintenance organizations associated with the delivery of health care services which expenses are analogous to incurred losses of insurers.

(5) "Hospital" may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals but not more restrictively than as defined in the Medicare program.

(6) "Medicare" shall be defined in the policy and certificate. "Medicare" may be substantially defined as "The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended," or "Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof," or words of similar import.

(7) "Medicare eligible expenses" shall mean expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare.

(8) "Physician" shall not be defined more restrictively than as defined in the Medicare program.

(9) "Sickness" shall not be defined to be more restrictive than the following: "Sickness means illness or disease of an insured person that manifests itself after the effective date of insurance and while the insurance is in force." The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any worker's compensation, occupational disease, employer's liability or similar law.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 10-2005, f. & cert. ef. 7-26-05
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0129 Policy Provisions

(1) Except for permitted preexisting condition clauses as described in OAR 836-052-0133(2)(a), 836-052-0134(2)(a) and 836-052-0132(1)(a), no policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.

(2) No Medicare supplement policy or certificate may use waivers to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions.

(3) No Medicare supplement policy or certificate in force in the state shall contain benefits that duplicate benefits provided by Medicare.

(4)(a) Subject to OAR 836-052-0133(2)(d) and (e), 836-052-0134(2)(d), (e) and (g) and 836-052-0133(1)(d) and (e), a Medicare supplement policy with benefits for outpatient prescription drugs in existence prior to January 1, 2006 may be renewed for current policyholders who do not enroll in Part D at the option of the policyholder.

(b) A Medicare supplement policy with benefits for outpatient prescription drugs may not be issued after December 31, 2005.

(c) After December 31, 2005, a Medicare supplement policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless:

(A) The policy is modified to eliminate outpatient prescription coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual's coverage under a Part D plan; and

(B) Premiums are adjusted to reflect the elimination of outpatient prescription drug coverage at the time of Medicare Part D enrollment, accounting for any claims paid, if applicable.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09
ID 10-2005, f. & cert. ef. 7-26-05
ID 5-1996, f. & cert. ef. 4-26-96
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0132 Benefit Standards for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery with an Effective Date of Coverage on or After June 1, 2010

The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date of coverage on or after June 1, 2010. A policy or certificate may not be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with or exceeds the benefit standards set forth in this rule. No issuer may offer a 1990 Standardized Medicare supplement benefit plan for sale on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates issued with an effective date of coverage before June 1, 2010 remain subject to the requirements of OAR 836-052-0133, 836-052-0134 and 836-052-0136.

(1) The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of OAR 836-052-0103 to 836-052-0194:

(a) Regarding preexisting conditions, a Medicare supplement policy or certificate shall not:

(A) Exclude or limit benefits for loss incurred more than six months after the effective date of coverage because the loss involved a preexisting condition; or

(B) Define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

(b) A Medicare supplement policy or certificate shall not cover losses resulting from sickness on a different basis than losses resulting from accidents.

(d) A Medicare supplement policy or certificate shall not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.

(e) Each Medicare supplement policy shall be guaranteed renewable. In addition:

(A) The insurer shall not cancel or nonrenew the policy solely on the ground of health status of the individual.

(B) The insurer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

(C) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under paragraph (E) of this subsection, the issuer shall offer certificate holders an individual Medicare supplement policy that, at the option of the certificate holder:

(i) Provides for continuation of the benefits contained in the group policy; or

(ii) Provides for benefits that otherwise meet the requirements of this subsection.

(D) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(i) Offer the certificate holder the conversion opportunity described in paragraph (e)(C) of this subsection; or

(ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(E) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(f) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

(g)(A) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to the assistance.

(B) If suspension occurs and if the insured loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of entitlement, as of the termination of entitlement if the insured provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(C) Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended for any period that may be provided by federal regulation at the request of the policyholder if the policyholder is entitled to benefits under Section 226 (b) of the Social Security Act and is covered under a group health plan as defined in Section 1862 (b)(1)(A)(v) of the Social Security Act. If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy shall be automatically reinstituted effective as of the date of loss of coverage if the policyholder provides notice of loss of coverage within 90 days after the date of the loss.

(D) Reinstitution of coverages as described in paragraphs (B) and (C):

(i) Shall not provide for any waiting period with respect to treatment of preexisting conditions;

(ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of the suspension; and

(iii) Shall provide for classification of premiums on terms at least as favorable to the insured as the premium classification terms that would have applied to the insured had the coverage not been suspended.

(2) This section establishes standards for basic or core benefits common to Medicare Supplement Insurance Benefit Plans A, B, C, D, F, F with High Deductible, G, M and N. Each issuer of Medicare supplement insurance benefit plans shall make available each prospective insured a policy or certificate including only the basic core package of benefits established in this section. An issuer may make available to prospective insureds any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it. The basic core package includes the following:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;

(c) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider must accept the issuer’s payment as payment in full and may not bill the insured for any balance. Billing the insured for any such balance is an unfair practice in the transaction of insurance that is injurious to the insurance-buying public, and is a violation of ORS 746.240.

(d) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;

(e) Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible;

(f) Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.

(3) This section establishes standards for additional benefits. The following additional benefits shall be included in Medicare supplement benefit Plans B, C, D, F, F with High Deductible, G, M, and N as provided by OAR 836-052-0141.

(a) Medicare Part A deductible benefit, providing coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period.

(b) Medicare Part A deductible benefit, providing coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period.

(c) Skilled Nursing Facility Care benefit, providing coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A.

(d) Medicare Part B Deductible benefit, providing coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.

(e) 100 percent of the Medicare Part B Excess Charges benefit, providing coverage for 100 percent of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.

(f) Medically Necessary Emergency Care in a Foreign Country, providing coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, when the care would have been covered by Medicare if provided in the United States and when the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, “emergency care” means care needed immediately because of an injury or an illness of sudden and unexpected onset.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

Or. Admin. R. 836-052-0133 Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery on or After July 1, 1992 and with an Effective Date of Coverage Prior to June 1, 2010

(1) The following standards in this rule are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state on or after July 1, 1992 and with an effective date of coverage prior to June 1, 2010. A policy or certificate may not be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with or exceeds the benefit standards set forth in this rule.

(2) The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of OAR 836-052-0103 to 836-052-0194.

(a) Regarding preexisting conditions, a Medicare supplement policy or certificate shall not:

(A) Exclude or limit benefits for a loss incurred more than six months after the effective date of coverage because the loss involved a preexisting condition. The benefits shall be available after the period of exclusion or limitation permitted under this subsection whether or not a claim concerning the condition was made during the period and whether or not a physician gave medical advice or recommended or gave treatment concerning the condition during the period;

(b) A Medicare supplement policy or certificate shall not cover losses resulting from sickness on a different basis than losses resulting from accidents;

(c) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment or coinsurance amounts and copayment percentage factors. Premiums may be modified to correspond with such changes. An insurer must justify any premium modification actuarially and must obtain approval from the Director before implementing the modification;

(d) A Medicare supplement policy or certificate shall not provide for termination of coverage of a spouse because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium;

(e) Each Medicare supplement policy shall be guaranteed renewable for the life of the individual in the case of an individual policy and the life of the group in the case of a group policy. In addition:

(A) The insurer shall not cancel or nonrenew the policy on the ground of the health status of the individual;

(B) The insurer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or a material misrepresentation that is discovered within two years after the effective date of coverage;

(i) Provides for continuation of the benefits contained in the group policy; or

(ii) Provides for benefits that otherwise meet the requirements of this section.

(D) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(i) Offer the certificate holder the conversion opportunity described in paragraph (C) of this subsection; or

(ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(E) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy, whether the same or a different issuer, shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced;

(F) This subsection does not prohibit rate increases otherwise authorized by law.

(G) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this section.

(f) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or to payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

(B) If the suspension occurs and if the insured loses entitlement to the medical assistance, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of such entitlement, if the insured provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period;

(C) Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended for the period provided by federal regulation at the request of the policyholder if the policyholder is entitled to benefits under section 226(b) of the Social Security Act and is covered under a group health plan as defined in section 1862(b)(1)(A)(v) of the Social Security Act. If the suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan the policy shall be automatically reinstituted effective as of the date of loss of coverage if the policyholder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(D) Reinstitution of the coverage:

(i) Shall not provide for any waiting period with respect to treatment of preexisting conditions;

(ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of such suspension. If the suspended Medicare supplement policy provided coverage for outpatient prescription drugs, reinstitution of the policy for Medicare Part D enrollees shall be without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of suspension; and

(h) If an issuer makes a written offer to the Medicare supplement policyholders or certificate holders of one or more of its plans, to exchange during a specified period from the holder’s 1990 Standardized plan as described in OAR 836-052-0136 to a 2010 Standardized plan as described in 836-052-0141, the offer and subsequent exchange shall comply with the following requirements:

(A) An issuer need not provide justification to the Director if the insured replaces a 1990 Standardized policy or certificate with an issue age rated 2010 Standardized policy or certificate at the insured’s original issue age and duration. If an insured’s policy or certificate to be replaced is priced on an issue age rate schedule at the time of such offer, the rate charged to the insured for the new exchanged policy shall recognize the policy reserve buildup, due to the pre-funding inherent in the use of an issue age rate basis, for the benefit of the insured. The method proposed to be used by an issuer must be filed with the Director of the Department of Consumer and Business Services according to ORS 743.684.

(B) The rating class of the new policy or certificate shall be the class closest to the insured’s class of the replaced coverage.

(C) An issuer may not apply new pre-existing condition limitations or a new incontestability period to the new policy for those benefits contained in the exchanged 1990 Standardized policy or certificate of the insured, but may apply pre-existing condition limitations of no more than six months to any added benefits contained in the new 2010 Standardized policy or certificate not contained in the exchanged policy.

(D) The new policy or certificate shall be offered to all policyholders or certificate holders within a given plan, except where the offer or issue would be in violation of state or federal law.

(3) This section establishes standards for basic or core benefits common to benefit plans A to J. Each issuer shall make available to each prospective insured a policy or certificate including only the basic or core package of benefits established in this section. An issuer may make available to prospective insured any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it. The basic core package includes the following:

(a) Coverage of Part A Medicare Eligible Expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage of Part A Medicare Eligible Expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day use;

(c) Upon exhaustion of the Medicare hospital inpatient coverage including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider must accept the issuer's payment as payment in full and may not bill the insured for any balance. Billing the insured for any such balance is an unfair practice in the transaction of insurance that is injurious to the insurance-buying public, and is a violation of ORS 746.240;

(e) Coverage for the coinsurance amount, or in the case of hospital outpatient department services under a prospective payment system, the copayment amount, of Medicare Eligible Expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible.

(4) This section establishes standards for additional benefits. The following additional benefits shall be included in Medicare Supplement Benefit Plans "B" through "J" only as provided by OAR 836-052-0136:

(a) Medicare Part A Deductible benefit, providing coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period;

(b) Skilled Nursing Facility Care benefit, providing coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A;

(c) Medicare Part B Deductible benefit, providing coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement;

(d) 80 percent of the Medicare Part B Excess Charges benefit, providing coverage for 80 percent of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge;

(e) 100 percent of the Medicare Part B Excess charges benefit, providing coverage for all of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge;

(f) Basic Outpatient Prescription Drug benefit, providing coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible, to a maximum of $1,250 in benefit received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006;

(g) Extended Outpatient Prescription Drug benefit, providing coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible to a maximum of $3,000 in benefits received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.

(h) Medically Necessary Emergency Care in a Foreign Country, providing coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, when the care would have been covered by Medicare if provided in the United States and when the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, "emergency care" means care needed immediately because of an injury or an illness of sudden or unexpected onset;

(i) Preventive Medical Care benefit, providing coverage for the preventive health services set forth in this subsection that are not covered by Medicare. Reimbursement shall be for the actual charges up to 100 percent of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) codes, to a maximum of $120 annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare. The preventive health services are:

(A) An annual clinical preventive medical history and physical examination that may include tests and services from paragraph (B) of this subsection and patient education to address preventive health care measures;

(B) Preventive screening tests or preventive services, the selection and frequency of which is determined to be medically appropriate by the attending physician.

(j) At-home recovery benefit, providing coverage for services to furnish short term, at-home assistance with activities of daily living for those recovering from an illness, injury or surgery. The following provisions apply to the at-home recovery benefit:

(A) For purposes of the benefit, the following definitions apply:

(i) "Activities of Daily Living" include but are not limited to bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self administered, and changing bandages or other dressings;

(ii) "Care Provider" means a duly qualified or licensed home health aide or homemaker, personal care aide or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry;

(iii) "Home" means any place used by the insured as a place of residence, if the place would qualify as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility shall not be considered the insured's place of residence;

(iv) "At-Home Recovery Visit" means the period of a visit required to provide at-home recovery care, without limit on the duration of the visit, except that each consecutive four hours in a 24-hour period of services provided by a care provider is one visit.

(B) Coverage requirements and limitations are as follows:

(i) At-home recovery services provided must be primarily services that assist in activities of daily living;

(ii) The insured's attending physician must certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare;

(iii) Coverage is limited to:

(I) No more than the number and type of at-home recovery visits certified as necessary by the insured's attending physician. The total number of at-home recovery visits shall not exceed the number of Medicare approved home health care visits under a Medicare approved home care plan of treatment;

(II) The actual charges for each visit up to a maximum reimbursement of $40 per visit;

(III) $1,600 per calendar year;

(IV) Seven visits in any one week;

(V) Care furnished on a visiting basis in the insured's home;

(VI) Services provided by a care provider as defined in subparagraph (A)(ii) of this subsection;

(VII) At-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded;

(VIII) At-home recovery visits received during the period the insured is receiving Medicare approved home care services or no more than eight weeks after the service date of the last Medicare approved home health care visit.

(i) Home care visits paid for by Medicare or other government programs; and

(ii) Care provided by family members, unpaid volunteers, or providers who are not care providers.

(5) Standards for Plans K and L:

(a) Standardized Medicare supplement benefit plan "K" shall consist of the following:

(A) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

(B) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

(C) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;

(D) Medicare Part A Deductible: Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(E) Skilled Nursing Facility Care: Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(F) Hospice Care: Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(G) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(H) Except for coverage provided in paragraph (I) of this subsection, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(I) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

(J) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.

(b) Standardized Medicare supplement benefit plan "L" shall consist of the following:

(A) The benefits described in subsection (a)(A), (B), (C), and (I) of this section;

(B) The benefit described in subsection (a)(D), (E), (F), (G), and (H) of this section, but substituting 75 percent for 50 percent; and

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09
ID 10-2005, f. & cert. ef. 7-26-05
ID 6-2001, f. & cert. ef. 5-22-01
ID 4-1999, f. & cert. ef. 4-29-99
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92

Or. Admin. R. 836-052-0134 Minimum Benefit Standards for Policies or Certificates Issued for Delivery Prior to July 1, 1992

(1) A policy or certificate may not be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate unless it meets or exceeds the standards described in this rule. The standards described in this rule are minimum standards and do not preclude the inclusion of other provisions or benefits that are not inconsistent with the standards.

(2) The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of OAR 836-052-0103 to 836-052-0194:

(a) A Medicare supplement policy or certificate shall not exclude or limit benefits for losses insured more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage;

(b) A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents;

(d) A "noncancelable," "guaranteed renewable" or "noncancelable and guaranteed renewable" Medicare supplement policy shall not:

(A) Provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium; or

(B) Be canceled or nonrenewed by the issuer on the grounds of deterioration of health.

(e)(A) Except as authorized by the Director, an issuer shall neither cancel nor nonrenew a Medicare supplement policy or certificate for any reason other than nonpayment of premium or a material misrepresentation;

(B) If a group Medicare supplement insurance policy is terminated by the group policyholder and not replaced as provided in paragraph (D) of this subsection, the issuer shall offer certificate holders an individual Medicare supplement policy. The issuer shall offer the certificate holder at least the following choices:

(i) An individual Medicare supplement policy currently offered by the issuer having comparable benefits to those contained in the terminated group Medicare supplement policy; and

(ii) An individual Medicare supplement policy that provides only such benefits as are required to meet the minimum standards as defined in OAR 836-052-0133(3).

(i) Offer the certificate holder the conversion opportunities described in paragraph (B) of this subsection; or

(ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(D) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced;

(E) This subsection does not prohibit rate increases otherwise authorized by law.

(f) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.

(g) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this section.

(3) The following minimum benefit standards apply:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage for either all or none of the Medicare Part A inpatient hospital deductible amount;

(c) Coverage of Part A Medicare eligible expenses incurred as daily hospital charges during use of Medicare's lifetime hospital inpatient reserve days;

(d) Upon exhaustion of all Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of ninety percent of all Medicare Part A eligible expenses for hospitalization not covered by Medicare, subject to a lifetime maximum benefit of an additional 365 days;

(e) Coverage under Medicare Part A for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations or already paid for under Part B;

(f) Coverage for the co-insurance amount of Medicare eligible expenses under Part B regardless of hospital confinement, subject to a maximum calendar year out-of-pocket amount equal to the Medicare Part B deductible ($100);

(g) Effective January 1, 1990, coverage under Medicare Part B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations), unless replaced in accordance with federal regulations or already paid for under Part A, subject to the Medicare deductible amount; and

(h) Effective January 1, 1990, coverage for the coinsurance amount of Medicare eligible expenses for outpatient drugs used in immunosuppressive therapy, subject to the Medicare outpatient prescription drug deductible, if applicable.

History

Statutory/Other Authority: ORS 743.010 & 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09
ID 10-2005, f. & cert. ef. 7-26-05
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0136 Standard Medicare Supplement Benefit Plans for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery on or After July 1, 1992 and with an Effective Date of Coverage Prior to June 1, 2010

(1) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as defined in OAR 836-052-0133(3).

(2) No groups, packages or combinations of Medicare supplement benefits other than those listed in this rule shall be offered for sale in this state except as may be permitted in section (6) of this rule and in OAR 836-052-0139.

(3) Benefit plans must be uniform in structure, language, designation and format to the standard benefit plans "A" through “L" listed in this rule and conform to the definitions in OAR 836-052-0119. Each standard benefit plan must be designated by the letter assigned to it under this rule. Each benefit must be structured in accordance with the format provided in 836-052-0133(3) and (4) or (5) and list the benefits in the order shown in this rule. For purposes of this rule, "structure, language, and format" means style, arrangement, and overall content of a benefit.

(4) In addition to the benefit plan designations required in section (3) of this rule, an issuer may use other designations to the extent permitted by law.

(5) The content of benefit plans must be as follows:

(a) Standardized Medicare supplement benefit plan "A" shall be limited to the basic core benefits common to all benefit plans, as defined in OAR 836-052-0133(3);

(b) Standardized Medicare supplement benefit plan "B" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible as defined in 836-052-0133(4)(a);

(c) Standardized Medicare supplement benefit plan "C" shall include only the following: the core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible and Medically Necessary Emergency Care in a Foreign Country, each as defined in 836-052-0133(4);

(d) Standardized Medicare supplement benefit plan "D" shall include only the following: The core benefit, as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country and the At-Home Recovery Benefit, each as defined in 836-052-0133(4);

(e) Standardized Medicare supplement benefit plan "E" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country and Preventive Medical Care, each as defined in 836-052-0133(4);

(f) Standardized Medicare supplement benefit plan "F" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, the Skilled Nursing Facility Care, the Part B Deductible, 100 percent of the Medicare Part B excess Charges and Medically Necessary Emergency Care in a Foreign Country, each as defined in 836-052-0133(4);

(g) Standardized Medicare supplement benefit high deductible plan "F" shall include only the following: 100 percent of covered expenses following the payment of the annual high deductible plan "F" deductible. The covered expenses include the core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges and medically necessary emergency care in a foreign country, each as defined in 836-052-0133(4). The annual high deductible plan "F" deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan "F" policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan "F" deductible shall be $1500 for 1998 and 1999, and shall be based on the calendar year. The deductible shall be adjusted annually thereafter according to the method prescribed in 42 U.S.C. 1395ss(p)(11)(C) to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(h) Standardized Medicare supplement benefit plan "G" shall include only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, 80 percent of the Medicare Part B Excess Charges, Medically Necessary Emergency Care in a Foreign Country, and the At-Home Recovery Benefit, each as defined in OAR 836-052-0133(4).

(i) Standardized Medicare supplement benefit plan "H" shall consist of only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Basic Prescription Drug Benefit and Medically Necessary Emergency Care in a Foreign Country, each as defined in 836-052-0133(4). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005;

(j) Standardized Medicare supplement benefit plan "I" shall consist of only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 percent of the Medicare Part B Excess Charges, Basic Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country and At-Home Recovery Benefit, each as defined in 836-052-0133(4). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005;

(k) Standardized Medicare supplement benefit plan "J" shall consist of only the following: The core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, 100 percent of the Medicare Part B Excess Charges, Extended Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country, Preventive Medical Care and At-Home Recovery Benefit, each as defined in 836-052-0133(4). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.

(l) Standardized Medicare supplement benefit high deductible plan "J" shall consist of only the following: 100 percent of covered expenses following the payment of the annual high deductible plan "J" deductible. The covered expenses include the core benefit as defined in OAR 836-052-0133(3), plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care benefit and at home recovery benefit, each as defined in 836-052-0133(4). The annual high deductible plan "J" deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan "J" policy, and shall be in addition to any other specific benefit deductibles. The annual deductible shall be $1500 for 1998 and 1999, and shall be based on a calendar year. The deductible shall be adjusted annually thereafter according to the method prescribed in 42 U.S.C. 1395ss(p)(11)(C) to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.

(6) Make-up of two additional Medicare supplement plans mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA);

(a) Standardized Medicare supplement benefit plan “K” shall consist of only those benefits described in OAR 836-052-0133(5).

(b) Standardized Medicare supplement benefit plan “L” shall consist of only those benefits described in OAR 836-052-0133(5).

(7) New or innovative benefits. With the prior approval of the Director, an issuer may offer policies or certificates with new or innovative benefits in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to Medicare supplement insurance, new or innovative, not otherwise available, cost-effective and offered in a manner consistent with the goal of simplification of Medicare supplement policies. After December 31, 2005, the innovative benefit shall not include an outpatient prescription drug benefit.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010(1)(a), (2) & 743.683(2)
ID 10-2005, f. & cert. ef. 7-26-05
ID 6-2001, f. & cert. ef. 5-22-01
ID 4-1999, f. & cert. ef. 4-29-99
ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99
ID 9-1997, f. & cert. ef. 7-10-97
ID 2-1995, f. & cert. ef. 4-26-95
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92

Or. Admin. R. 836-052-0138 Open Enrollment

(1)(a) An issuer may not deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this state, nor discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant in the case of an application for a Medicare supplement policy or certificate that is submitted to the issuer prior to or during the six month period beginning with the first day of the first month in which an individual is enrolled for benefits under Medicare Part B. Each Medicare supplement policy and certificate currently available from an issuer shall be made available on a guaranteed issue basis to all applicants who qualify under this section without regard to age.

(b) If a person under the age of 65 applies for enrollment under Medicare Part B due to disability and is initially denied as ineligible, but upon conclusion of the person’s appeals process the person is awarded retroactive enrollment, the six month period described in this section begins on the first day of the first month after the person receives written notice of retroactive enrollment.

(2)(a) If an applicant qualifies under section (1) of this rule and submits an application during the time period referenced in section (1) of this rule and, as of the date of application, has had a continuous period of creditable coverage of at least six months, the issuer shall not exclude benefits based on a preexisting condition;

(b) If the applicant qualifies under section (1) of this rule and submits an application during the time period referenced in section (1) of this rule and, as of the date of application, has had a continuous period of creditable coverage that is less than six months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The manner of the reduction under this subsection shall be the manner prescribed in 42 USC 300gg(a)(3) as of the effective date of this rule.

(3) Except as provided in section 2 of this rule and OAR 836-052-0142 and 836-052-0190, section (1) of this rule shall not be construed as preventing the exclusion of benefits under a policy, during the first six months, based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the coverage became effective.

(4) This section applies to a person who qualifies for Medicare by reason of disability and who obtains a Medicare supplement policy during the six month period described in section (1) of this rule. For the period that a person to whom this section applies is 65 years of age or less, the premium charged the person by the issuer shall not be greater than the premium charged by the issuer for persons who are 65 years of age. Following that period, for issuers who charge rates on policies on the basis of attained age, the rating plan shall not differentiate on the basis of the reason for eligibility for Medicare Part B.

(5) An issuer must comply with section (1) of this rule with respect to a person:

(a) Who qualifies for Medicare by reason of disability, who first enrolls for benefits under Medicare Part B on or after September 1, 1993, and who applies for a Medicare supplement policy or certificate during the period of eligibility described in section (1) of this rule;

(b) Who enrolled in Medicare Part B before attaining 65 years of age, who applies for a Medicare supplement policy or certificate upon attaining 65 years of age, during the period of eligibility described in section (1) of this rule that would apply if the person first enrolled in Medicare Part B upon attaining 65 years of age; or

(c) Who qualifies for Medicare by reason of disability and has moved to Oregon from a state that does not require Medicare Supplement policies to be issued to persons under age 65. The guaranteed issue period begins on the date that the individual establishes residency in Oregon and ends 63 days thereafter.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.683 & ORS 743.010
ID 9-2022, amend filed 12/22/2022, effective 01/01/2023
ID 4-2012, f. 2-16-12, cert. ef. 1-1-13
ID 10-2005, f. & cert. ef. 7-26-05
ID 6-2001, f. & cert. ef. 5-22-01
ID 4-1999, f. & cert. ef. 4-29-99
ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92

Or. Admin. R. 836-052-0139 Medicare Select Policies and Certificates

(1) This section applies to Medicare Select policies and certificates, as defined in this rule.

(2) No policy or certificate may be advertised as a Medicare Select policy or certificate unless it meets the requirements of this rule.

(3) For the purposes of this rule:

(a) "Complaint" means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers;

(b) "Grievance" means dissatisfaction expressed in writing by an individual insured under a Medicare Select policy or certificate with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers;

(d) "Medicare Select policy" or "Medicare Select certificate" means respectively a Medicare supplement policy or certificate that contains restricted network provisions;

(e) "Network provider" means a provider of health care, or a group of providers of health care, that has entered into a written agreement with the issuer to provide benefits insured under a Medicare Select policy;

(f) "Restricted network provision" means any provision that conditions the payment of benefits, in whole or in part, on the use of network providers; and

(g) "Service area" means the geographic area approved by the Director of the Department of Consumer and Business Services within which an issuer is authorized to offer a Medicare Select policy.

(4) The Director may authorize an issuer to offer a Medicare Select policy or certificate, pursuant to this section and Section 4358 of the Omnibus Budget Reconciliation Act (OBRA) of 1990 if the Director finds that the issuer has satisfied all of the requirements of OAR 836-052-0103 to 836-052-0194.

(5) A Medicare Select issuer shall not issue a Medicare Select policy or certificate in this state until its plan of operation has been approved by the Director.

(6) A Medicare Select issuer shall file a proposed plan of operation with the Director in a format prescribed by the Director. The plan of operation shall contain at least the following information:

(a) Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration that:

(A) Services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation and after-hour care. The hours of operation and availability of after-hour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual travel times within the community;

(B) The number of network providers in the service area is sufficient, with respect to current and expected policyholders, either:

(i) To deliver adequately all services that are subject to a restricted network provision; or

(ii) To make appropriate referrals.

(D) Emergency care is available 24 hours per day and seven days per week; and

(E) In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare Select policy or certificate. This subparagraph shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select policy or certificate.

(b) A statement or map providing a clear description of the service area;

(d) A description of the quality assurance program, including:

(A) The formal organizational structure;

(B) The written criteria for selection, retention and removal of network providers; and

(C) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted.

(e) A list and description, by specialty, of the network providers;

(f) Copies of the written information proposed to be used by the issuer to comply with section (10) of this rule; and

(g) Any other information requested by the Director.

(7) A Medicare Select issuer:

(a) Shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the Director prior to implementing the changes. Changes shall be considered approved by the Director after 30 days unless specifically disapproved; and

(b) Shall file with the Director at least quarterly, an updated list of network providers.

(8) A Medicare Select policy or certificate shall not restrict payment for covered services provided by non-network providers if:

(a) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition; and

(b) It is not reasonable to obtain services through a network provider.

(9) A Medicare Select policy or certificate shall provide payment for full coverage under the policy for covered services that are not available through network providers.

(10) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions and limitations of the Medicare Select policy or certificate to each applicant. This disclosure shall include at least the following:

(a) An outline of coverage sufficient to permit the applicant to compare the coverage and premiums of the Medicare Select policy or certificate with:

(A) Other Medicare supplement policies or certificates offered by the issuer; and

(B) Other Medicare Select policies or certificates.

(b) A description (including address, phone number and hours of operation) of the network providers, including primary care physicians, specialty physicians, hospitals and other providers;

(c) A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. Except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in plans K and L;

(d) A description of coverage for emergency and urgently needed care and other out-of-service area coverage;

(e) A description of limitations on referrals to restricted network providers and to other providers;

(f) A description of the policyholder's rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer; and

(g) A description of the Medicare Select issuer's quality assurance program and grievance procedure.

(11) Prior to the sale of a Medicare Select policy or certificate, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to section (10) of this rule and that the applicant understands the restrictions of the Medicare Select policy or certificate.

(12) A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written grievances from the subscribers. The procedures shall be aimed at mutual agreement for settlement and may include arbitration procedures. The following apply to grievance procedures:

(a) The grievance procedure shall be described in the policy and certificates and in the outline of coverage;

(b) At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder describing how a grievance may be registered with the issuer.

(c) Grievances shall be considered in a timely manner and shall be transmitted to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.

(d) If a grievance is found to be valid, corrective action shall be taken promptly.

(e) All concerned parties shall be notified about the results of a grievance.

(f) The issuer shall report no later than each March 31st to the Director regarding its grievance procedure. The report shall be in a format prescribed by the Director and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.

(13) At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer.

(14)(a) At the request of an individual insured under a Medicare Select policy or certificate, a Medicare Select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make the policies or certificates available without requiring evidence of insurability after the Medicare Select policy or certificate has been in force for six months.

(b) For the purposes of this section, a Medicare supplement policy or certificate is considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this subparagraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.

(15) Medicare Select policies and certificates shall provide for continuation of coverage in the event the Secretary of Health and Human Services determines that Medicare Select policies and certificates issued pursuant to this rule should be discontinued due to either the failure of the Medicare Select Program to be reauthorized under law or its substantial amendment.

(a) Each Medicare Select issuer shall make available to each individual insurer under a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make the policies and certificates available without requiring evidence of insurability.

(b) For the purposes of this subsection, a Medicare supplement policy or certificate is considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this subparagraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.

(16) A Medicare Select issuer shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select Program.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 10-2005, f. & cert. ef. 7-26-05
ID 9-1997, f. & cert. ef. 7-10-97

Or. Admin. R. 836-052-0140 Standards for Claims Payment

(1) An issuer must comply with Section 1882(c)(3) of the Social Security Act, as enacted by Section 4081(b)(2)(C) of the Omnibus Budget Reconciliation Act of 1987 (OBRA) 1987, Public Law No. 100-203, by:

(a) Accepting a notice from a Medicare carrier on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice;

(b) Notifying the participating physician or supplier and the beneficiary of the payment determination;

(d) Furnishing each enrollee, at the time of enrollment, with a card listing the policy name, number and a central mailing address to which notices from a Medicare carrier may be sent;

(e) Paying user fees for claim notices that are transmitted electronically or otherwise; and

(f) Providing to the Secretary of Health and Human Services, at least annually, a central mailing address to which all claims may be sent by Medicare carriers.

(2) Each insurer providing Medicare supplement coverage in this state shall, concurrent with the filing of the Accident and Health Policy Experience Exhibit, file a Medicare Supplement Insurance Experience Exhibit. The exhibit shall be in a format prescribed by the Director. The Director may prescribe the format adopted by the National Association of Insurance Commissioners. The following provisions also apply:

(a) Every insurer providing Medicare supplement coverage in this state shall file with the Medicare Supplement Insurance Experience Exhibit a list of its Medicare supplement policies or certificates offered or issued and outstanding in this state as of the end of the previous calendar year;

(b) The list under subsection (a) of this section shall identify the filing insurer by name and address, shall identify each policy or certificate by name and form number, and shall differentiate between policies and certificates filed with and approved by the Director in years prior to the previous calendar year and those filed and approved in the previous calendar year;

(c) Policies and certificates that are issued and outstanding in this state but are no longer offered for sale shall be specifically identified, as shall any policies or certificates that for any reason were not filed with and approved by the Director;

(d) The list shall include identification of any policy or certificate for which the Director’s approval was withdrawn within the previous calendar year;

(e) On or before the first day of September of each year, commencing September 1, 1989, the Director shall provide the Secretary of Health and Human Services with a list containing the information required to be submitted by this section and identifying each insurer by name and address.

(3) Compliance with the requirements set forth in this rule must be certified by the insurer on the Medicare supplement insurance experience reporting form.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.683(2) & 743.683(6)
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0141 Standard Medicare Supplement Benefit Plans for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates with an Effective Date of Coverage on or After June 1, 2010

The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date for coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit standards. No issuer may offer any 1990 Standardized Medicare supplement benefit plan for sale with an effective date for coverage on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates with an effective date for coverage before June 1, 2010 remain subject to the requirements of OAR 836-052-0133.

(1)(a) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as defined in OAR 836-052-0132(2).

(b) If an issuer makes available any of the additional benefits described in OAR 836-052-0132(3) or offers standardized benefit Plans K or L as described subsections (5)(h) and (i) of this rule, then the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic core benefits as described in subsection (a) of this section, a policy form or certificate form containing either standardized benefit Plan C as described in subsection (5)(c) of this rule or standardized benefit Plan F as described in subsection (5)(e) of this.

(2) No groups, packages or combinations of Medicare supplement benefits other than those listed in this rule shall be offered for sale in this state, except as may be permitted in subsection (6) of this rule and OAR 836-052-0139.

(3) Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans listed in this rule and conform to the definitions in OAR 836-052-0119. Each benefit plan must be structured in accordance with the format provided in 836-052-0132(2) and (3); or, in the case of plans K or L, in subsections (5)(h) and (i) of this rule and list the benefits in the order shown. For purposes of this rule, “structure, language, and format” means style, arrangement and overall content of a benefit.

(4) In addition to the benefit plan designations required in section (3) of this rule, an issuer may use other designations to the extent permitted by law.

(5) The content of the 2010 Standardized Medicare supplement benefit plans must be as follows:

(a) Standardized Medicare supplement benefit Plan A shall include only the basic core benefits as defined in OAR 836-052-0132 (2).

(b) Standardized Medicare supplement benefit Plan B shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2); plus 100 percent of the Medicare Part A deductible as defined in 836-052-0132(3)(a).

(c) Standardized Medicare supplement benefit Plan C shall include only the following: The basic (core) benefit as defined OAR 836-052-0132(2); plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, and Medically necessary emergency care in a foreign country, each as defined in OAR 836-052-0132(3)(a), (c), (d) and (f).

(d) Standardized Medicare supplement benefit Plan D shall include only the following: The basic core benefit as defined in OAR 836-052-0142(2), plus 100 percent of the Medicare Part A deductible skilled nursing facility care, and medically necessary emergency care in an foreign country each as defined in 836-052-0132(3)(a)(c) and (f).

(e) Standardized Medicare supplement regular Plan F shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2), plus 100 percent of the Medicare Part A deductible, the skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country each as defined in 836-052-132(3)(a), (c), (d), (e) and (f).

(f) Standardized Medicare supplement Plan F with high deductible shall include only the following: 100 percent of covered expenses following the payment of the annual deductible set forth in paragraph (B) of this subsection.

(A) The basic core benefit as defined in OAR 836-052-0132(2), plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(a), (c), (d), (e) and (f).

(B) The annual deductible in Plan F with high deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the standardized Medicare supplement regular Plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be $1,500 and shall be adjusted annually from 1999 according to the method prescribed by the Secretary of the U.S. Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(g) Standardized Medicare supplement benefit Plan G shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2) of this regulation, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(a), (c), (e) and (f). Effective January 1, 2020, the standardized benefit plans described in OAR 836-052-0144(1)(d) (Redesignated Plan G High Deductible) may be offered to any individual who was eligible for Medicare prior to January 1, 2020.

(h) Standardized Medicare supplement Plan K is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:

(A) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

(B) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

(C) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance;

(E) Skilled Nursing Facility Care: Coverage for fifty percent (50%) of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(G) Blood: Coverage for 50 percent under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in paragraph (J) of this subsection;

(I) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

(i) Standardized Medicare supplement Plan L is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:

(A) The benefits described in section (5)(h)(A)(B)(C) and (I) of this rule;

(B) The benefit described in section (5) (h)(D)(E)(F)(G) and (H) of this rule, but substituting 75 percent for 50 percent; and

(j) Standardized Medicare supplement Plan M shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2), plus 50 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(b), (c) and (f).

(k) Standardized Medicare supplement Plan N shall include only the following: The basic core benefit as defined in OAR 836-052-0132(2), plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country each as defined in 836-052-0132(3)(a), (c) and (f), with copayments in the following amounts:

(A) The lesser of $20 or the Medicare Part B coinsurance or copayment for each covered health care provider office visit including visits to medical specialists; and

(B) The lesser of $50 or the Medicare Part B coinsurance or copayment for each covered emergency room visit; however, this copayment shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense.

(6) With the prior approval of the Director of the Department of Consumer and Business Services, an issuer may offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits shall not include an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 30-2018, amend filed 08/28/2018, effective 09/01/2018
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

Or. Admin. R. 836-052-0142 Guaranteed Issue for Eligible Persons

(1) Guaranteed issue:

(a) Eligible persons are those individuals described in section (2) of this rule who seek to enroll under the policy during the period specified in section (3) of this rule and who submit evidence of the date of termination, disenrollment or Medicare Part D enrollment with the application for a Medicare supplement policy.

(b) With respect to eligible persons, an issuer shall not deny or condition the issuance or effectiveness of a Medicare supplement policy described in section (5) of this rule that is offered and is available for issuance to new enrollees by the issuer, shall not discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care or medical condition, and shall not impose an exclusion of benefits based on a preexisting condition under such a Medicare supplement policy.

(2) Eligible persons. An eligible person is an individual described in any of the following paragraphs:

(a) The individual is enrolled under an employee welfare benefit plan, an individual health benefit plan, a state Medicaid plan as described in Title XIX of the Social Security Act or Tricare as described in Title XVIII of the Social Security Act that provides health benefits that supplement the benefits under Medicare, and the plan terminates or the plan ceases to provide all such supplemental health benefits to the individual; or the individual is enrolled under an employee welfare benefit plan that is primary to Medicare and the plan terminates or the plan ceases to provide all health benefits to the individual.

(b) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All Inclusive Care for the Elderly (PACE) provider under section 1894 of the Social Security Act, and there are circumstances similar to those described in this subsection that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan:

(A) The certification of the organization or plan has been terminated;

(B) The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;

(C) The individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in section 1851(g)(3)(B) of the federal Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856), or the plan is terminated for all individuals within a residence area;

(D) The individual demonstrates, in accordance with guidelines established by the Secretary, that:

(i) The organization offering the plan substantially violated a material provision of the organization's contract under this part in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or

(ii) The organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or

(E) The individual meets such other exceptional conditions as the Secretary may provide.

(c)(A) The individual is enrolled with:

(i) An eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost);

(ii) A similar organization operating under demonstration project authority, effective for periods before April 1, 1999;

(iii) An organization under an agreement under Section 1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or

(iv) An organization under a Medicare Select policy; and

(B) The enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under section (2)(b) of this rule.

(d) The individual is enrolled under a Medicare supplement policy and the enrollment ceases because:

(A)(i) Of the insolvency of the issuer or bankruptcy of the non-issuer organization; or

(ii) Of other involuntary termination of coverage or enrollment under the policy.

(B) The issuer of the policy substantially violated a material provision of the policy; or

(C) The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual.

(e)(A) The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, any eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under Section 1894 of the Social Security Act or a Medicare Select policy; and

(B) The subsequent enrollment under paragraph (A) of this subsection is terminated by the enrollee during any period within the first 12 months of such subsequent enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under section 1851 (e) of the federal Social Security Act); or

(f) The individual, within six months after becoming enrolled in Part B of Medicare, enrolls in a Medicare Advantage plan under part C of Medicare, or with a PACE provider under Section 1894 of the Social Security Act, and dis-enrolls from the plan or program by not later than 12 months after the effective date of enrollment.

(g) The individual enrolls in a Medicare Part D plan during the initial enrollment period and, at the time of enrollment in Part D, was enrolled under a Medicare supplement policy that covers outpatient prescription drugs and the individual terminates enrollment in the Medicare supplement policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in section (5)(d) of this rule.

(3) Guaranteed Issue Time Periods.

(a) In the case of an individual described in section (2)(a) of this rule, the guaranteed issue period begins on the later of:

(A) The date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if a notice is not received, notice that a claim has been denied because of a termination or cessation); or

(B) The date that the applicable coverage terminates or ceases; and ends 63 days thereafter.

(b) In the case of an individual described in section (2)(b), (c), (e) or (f) of this rule whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated;

(A) The date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any; and

(B) The date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.

(d) In the case of an individual described in section (2)(b), (d)(B), (d)(C), (e) or (f) of this rule, who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date; and

(e) In the case of an individual described in section (2)(g) of this rule, the guaranteed issue period begins on the date the individual receives notice pursuant to Section 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D; and

(f) In the case of an individual described in section (2) of this rule but not described in the preceding provisions of this subsection, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date.

(4) Extended Medigap access for interrupted trial periods.

(a) In the case of an individual described in section (2)(e) of this rule (or deemed to be so described, pursuant to this paragraph) whose enrollment with an organization or provider described in section (2)(e)(A) is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in section (2)(e) of this rule.

(b) In the case of an individual described in section (2)(f) of this section (or deemed to be so described, pursuant to this paragraph) whose enrollment with a plan or in a program described in section (2)(f) of this rule is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in section (2)(f) of this rule; and

(c) For purposes of sections (2)(e) and (f) of this rule, no enrollment of an individual with an organization or provider described in section (2)(e)(A) of this rule, or with a plan or in a program described in section (2)(f) of this rule, may be deemed to be an initial enrollment under this paragraph after the two year period beginning on the date on which the individual first enrolled with such an organization provider, plan or program.

(5) Products to which eligible persons are entitled. The Medicare supplement policy to which eligible persons are entitled under:

(a) Section (2)(a), (b), (c) (except for coverage described in subparagraph (c)(A)(iv)) and (d) of this rule is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, D, F (including F with a high deductible), G, K, L, M or N offered by any issuer;

(b) Section (2)(c)(A)(iv) and (f) of this rule is any Medicare supplement policy described in OAR 836-052-0132 offered by any issuer;

(c)(A) Subject to paragraph (B) of this subsection, section (2)(e) of this rule is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in subsection (a) of this section.

(B) After December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy described in this paragraph is:

(i) The policy available from the same issuer but modified to remove prescription drug coverage; or

(ii) At the election of the policyholder, an A, B, C, F (including F with a high deductible), K or L policy that is offered by any issuer.

(d) Section (2)(g) of this rule is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, D, F (including F with a high deductible), G, K, or L, M & N and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage.

(6) Notification provisions:

(a) At the time of an event described in section (2) of this rule because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of the individual's rights under this rule, and of the obligations of issuers of Medicare supplement policies under section (1) of this rule. Such notice shall be communicated contemporaneously with the notification of termination.

(b) At the time of an event described in section (2) of this rule because of which an individual ceases enrollment under a contract or agreement, policy or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the individual's rights under this rule, and of the obligations of issuers of Medicare supplement policies under section (1) of this rule. Such notice shall be communicated within ten working days of the issuer's receiving notification of disenrollment.

History

Statutory/Other Authority: ORS 743.684
Statutes/Other Implemented: ORS 743.684 & ORS 743.010
ID 9-2022, amend filed 12/22/2022, effective 01/01/2023
ID 18-2015, f. 12-29-15, cert. ef. 1-1-16
ID 9-2014, f. & cert. ef. 5-19-14
ID 6-2013(Temp), f. & cert. ef. 12-5-13 thru 5-20-14
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09
ID 10-2005, f. & cert. ef. 7-26-05
ID 24-2002, f. & cert. ef. 12-13-02
ID 6-2001, f. & cert. ef. 5-22-01
ID 4-1999, f. & cert. ef. 4-29-99
ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99

Or. Admin. R. 836-052-0143 Annual Opportunity to Select Another Medicare Supplement Policy or Certificate

(1) For the purposes of this rule, for 1990, 2010, and 2020 Medicare Supplement Plans, “same or lesser benefits” means a policy or certificate of the same or lower benefit level as indicated on a chart available on the website of the Division of Financial Regulation of the Department of Consumer and Business Services.

(2) Beginning 30 days prior to a person’s birthday and for 30 days after the person’s birthday, a person enrolled in a Medicare supplement policy may cancel the person’s existing Medicare supplement policy or certificate and purchase or select another Medicare supplement policy or certificate with the same or lesser benefits to replace the existing Medicare supplement policy or certificate. An issuer may not deny or condition the issuance or effectiveness, nor discriminate in the pricing of the replacement policy or certificate on the basis of health status, claims experience, receipt of health care or medical condition of the applicant.

(3) This rule does not apply to Medicare supplement policies or certificates issued or delivered before January 1, 1990.

History

Statutory/Other Authority: ORS 743.010, ORS 743.680 - 743.689 & 731.244
Statutes/Other Implemented: ORS 743.010 & ORS 743.683 - 743.684
ID 9-2022, amend filed 12/22/2022, effective 01/01/2023
ID 30-2018, amend filed 08/28/2018, effective 09/01/2018
ID 4-2012, f. 2-16-12, cert. ef. 1-1-13

Or. Admin. R. 836-052-0144 Standard Medicare Supplement Benefit Plans for 2020 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery to Individuals Newly Eligible for Medicare on or after January 1, 2020.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires the following standards to be applicable to all Medicare supplement policies delivered or issued for delivery in this state to individuals newly eligible for Medicare on or after January 1, 2020. No policy or certificate that provides coverage of the Medicare Part B deductible may be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, 2020. All policies must comply with the following benefit standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued to individuals eligible for Medicare before January 1, 2020 remain subject to the requirements of OAR 836-052-0103 to 836-052-0194.

(1) Benefit Requirements. The standards and requirements of OAR 836-052-0141 shall apply to all Medicare supplement policies or certificates delivered or issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020 with the following exceptions:

(a) Standardized Medicare supplement benefit Plan C is redesignated as Plan D and shall provide the benefits contained in OAR 836-052-0141(5)(c) but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible.

(b) Standardized Medicare supplement benefit Plan F is redesignated as Plan G and shall provide the benefits contained in OAR 836-052-0141(5)(e) but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible.

(c) Standardized Medicare supplement benefit plans C, F and F With High Deductible may not be offered to individuals newly eligible for Medicare on or after January 1, 2020.

(d) Standardized Medicare supplement benefit Plan F With High Deductible is redesignated as Plan G With High Deductible and shall provide the benefits contained in OAR 836-052-0141(5)(f) but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible; provided further that the Medicare Part B deductible paid by the beneficiary shall be considered an out-of-pocket expense in meeting the annual high deductible.

(e) The reference to Plans C or F contained in OAR 836-052-0141(1)(b) is deemed a reference to Plans D or G for purposes of this section.

(2) Applicability to Certain Individuals. This section, OAR 836-052-0144, applies to only individuals that are newly eligible for Medicare on or after January 1, 2020:

(a) By reason of attaining age 65 on or after January 1, 2020; or

(b) By reason of entitlement to benefits under Part A pursuant to section 226(b) or 226A of the Social Security Act, or who is deemed to be eligible for benefits under section 226(a) of the Social Security Act on or after January 1, 2020.

(3) Guaranteed Issue for Eligible Persons. For purposes of OAR 836-052-0142, in the case of any individual newly eligible for Medicare on or after January 1, 2020, any reference to a Medicare supplement policy C or F (including F With High Deductible) shall be deemed to be a reference to Medicare supplement policy D or G (including G With High Deductible) respectively that meet the requirements of OAR 836-052-0144.

(4) Offer of Redesignated Plans to Individuals Other Than Newly Eligible. On or after January 1, 2020, the standardized benefit plans described in OAR 836-052-0144(1)(d) above may be offered to any individual who was eligible for Medicare prior to January 1, 2020 in addition to the standardized plans described in OAR 836-052-0141(5).

History

Statutory/Other Authority: ORS 731.244 & ORS 743.683
Statutes/Other Implemented: ORS 743.683 & ORS 743.010
ID 30-2018, adopt filed 08/28/2018, effective 09/01/2018

Or. Admin. R. 836-052-0145 Loss Ratio Standards and Refund or Credit of Premium

(1) The following provisions of this section establish loss ratio standards:

(a) A Medicare supplement policy form or certificate form shall not be delivered or issued for delivery unless the policy form or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return the applicable percentage specified in this section to the policyholder and certificate holder in the form of aggregate benefits, not including anticipated refunds or credits, provided under the policy form or certificate form:

(A) At least 75 percent of the aggregate amount of premiums earned, in the case of group policies; or

(B) At least 65 percent of the aggregate amount of premiums earned, in the case of individual policies.

(b) A percentage under subsection (a) of this subsection shall be calculated on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums for the period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by a health maintenance organization shall not include:

(A) Home office and overhead costs;

(B) Advertising costs;

(D) Taxes;

(E) Capital costs;

(F) Administrative costs; and

(G) Claims processing costs.

(c) All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of this rule when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards;

(d) For purposes of applying section (1)(a) of this rule and section (3)(c) of OAR 836-052-0151 only, policies issued as a result of solicitations of individuals through the mails or by mass media advertising (including both print and broadcast advertising) shall be deemed to be individual policies;

(e) For policies issued prior to September 1, 1993, expected claims in relation to premiums shall meet:

(A) The originally filed anticipated loss ratio when combined with the actual experience since inception;

(B) The appropriate loss ratio requirement from section (1)(a)(A) and (B) of this rule when combined with actual experience beginning with April 28, 1996, to date; and

(C) The appropriate loss ratio requirement from section (1)(a)(A) and (B) of this rule over the entire future period for which the rates are computed to provide coverage.

(2) The following provisions of this section apply to refund and credit calculations:

(a) An issuer shall collect and file with the Director by May 31 of each year the data contained in the applicable reporting form contained in Exhibit 1 to this rule for each type in a standard Medicare supplement benefit plan;

(b) If on the basis of the experience as reported, the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a statewide basis for each type in a standard Medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year shall be excluded;

(c) For the purpose of this rule, policies or certificates issued prior to September 1, 1993, the issuer shall make the refund or credit calculation separately for all individual policies, including all group policies subject to an individual loss ratio standard when issued, combined and all other group policies combined for experience after April 28, 1996. The first such report shall be due by May 31, 1998.

(d) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a negligible level. The refund must include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the Secretary of Health and Human services, but in no event shall it be less than the average rate of interest for 13-week Treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based.

(3) An issuer of Medicare supplement policies and certificates issued before, on or after July 1, 1992, in this state shall file annually its rates, rating schedule and supporting documentation, including ratios of incurred losses to earned premiums by policy duration for approval by the Director in accordance with the filing requirements and procedures prescribed by the Director. The supporting documentation shall also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. The demonstration shall exclude active life reserves. An expected third year loss ratio that is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than three years. As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer of Medicare supplement policies or certificates in this state shall file with the Director for approval, in accordance with the applicable filing procedures of this state the following:

(a)(A) Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. Supporting documents necessary to justify the adjustment shall accompany the filing.

(B) An issuer shall make premium adjustments necessary to produce an expected loss ratio under the policy or certificate to conform to minimum loss ratio standards for Medicare supplement policies and to be expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the Medicare supplement policies or certificates. No premium adjustment that would modify the loss ratio experience under the policy other than the adjustments described herein shall be made with respect to a policy at any time other than upon its renewal date or anniversary date. Except as provided in OAR 836-052-0138, an insurer may not increase the rates for a Medicare supplement policy or certificate issued in this state more than once in a 12-month period. If an issuer intends to exercise the right to adjust a premium for age attainment under 836-052-0138, and such adjustment results in more than one increase in a 12-month period, the issuer must provide written disclosure to the consumer prior to the issuance of the policy or certificate. The limitation on premium adjustments under this paragraph does not apply to a premium adjustment that results from a change in the policy or premium payment terms requested by an insured including but not limited to changes in the method of payment such as discontinuing payment by a preauthorized electronic funds transfer.

(C) If an issuer fails to make premium adjustments acceptable to the Director, the Director may order premium adjustments, refunds or premium credits that the Director considers necessary to achieve the loss ratio required by this rule.

(b) Any appropriate riders, endorsements or policy forms needed to accomplish the Medicare supplement policy or certificate modifications necessary to eliminate benefit duplications with Medicare. The riders, endorsements or policy forms shall provide a clear description of the Medicare supplement benefits provided by the policy or certificate.

(4) For purposes of this rule, experience of insureds who qualify for Medicare by reason of disability shall be combined with experience of insureds who qualify for Medicare by reason of age.

(5) The Director may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before, on or after July 1, 1992, if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance may be made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished as the Director determines to be appropriate.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 743.684
Statutes/Other Implemented: ORS 743.010 & 743.684
ID 15-2011, f. & cert. ef. 10-31-11
ID 7-2011, f. & cert. ef. 2-23-11
ID 10-2005, f. & cert. ef. 7-26-05
ID 11-2001, f. & cert. ef. 9-24-01
ID 8-2001(Temp), 6-15-01, cert. ef. 6-18-01 thru 12-10-01
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0151 Filing and Approval of Policies and Certificates and Premium Rates

(1) An issuer shall not deliver or issue for delivery a policy or certificate to a resident of this state unless the policy form or certificate form has been filed with and approved by the Director in accordance with filing requirements and procedures prescribed by the Director.

(2) An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 only with the Insurance Commissioner in the state in which the policy or certificate was issued.

(3)(a) An issuer shall not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule and supporting documentation have been filed with and approved by the Director in accordance with filing requirements and procedures prescribed by the Director.

(b) Except for an adjustment of premium on the basis of attained age under OAR 836-052-0138, an issuer may not increase the rates for a Medicare supplement policy or certificate issued in this state more than once in a 12-month period. Annual rate increases shall be effective on the policy or certificate anniversary date or renewal date. If an issuer intends to exercise the right to adjust a premium for age attainment under OAR 836-052-0138, and such adjustment results in more than one increase in a 12-month period, the issuer must provide written disclosure to the consumer prior to the issuance of the policy or certificate. The limitation on premium adjustments under this subsection does not apply to a premium adjustment that results from a change in the policy or premium payment terms requested by an insured including but not limited to changes in the method of payment such as discontinuing payment by a preauthorized electronic funds transfer.

(4) Except as provided in this section, an issuer shall not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan. For the purposes of this section, a "type" means an individual policy or a group policy. An issuer may offer, with the approval of the Director, not more than four additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases:

(a) The inclusion of new or innovative benefits;

(b) The addition of either direct response or agent marketing methods;

(5) The following applies to continuance and discontinuance of Medicare supplement policies and certificates:

(a) Except as provided in this subsection, an issuer shall continue to make available for purchase any policy form or certificate form issued after July 1, 1992, that has been approved by the Director. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous twelve months. The following applies to discontinuance of a policy form or certificate form to which this subsection applies:

(A) An issuer may discontinue the availability of a policy form or certificate form for new issues if the issuer provides to the Director in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the Director, the issuer shall no longer offer for sale the policy form or certificate form in this state. The issuer must continue to renew outstanding policies and certificates;

(B) An issuer that discontinues the availability of a policy form or certificate form pursuant to paragraph (A) of this subsection shall not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for a period of five years after the issuer provides notice to the Director of the discontinuance. The period of discontinuance may be reduced if the Director determines that a shorter period is appropriate.

(b) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection;

(c) A change in the rating structure or methodology shall be considered a discontinuance under subsection (a) of this section unless the issuer complies with the following requirements:

(A) The issuer provides an actuarial memorandum satisfactory to the Director, in a form and manner prescribed by the Director, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates;

(B) The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The Director may approve a change to the differential that is in the public interest.

(6) Except as provided in this section, the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in OAR 836-052-0145. Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010, 743.684(1)–(2) & 743.683(2)
ID 15-2011, f. & cert. ef. 10-31-11
ID 7-2011, f. & cert. ef. 2-23-11
ID 10-2005, f. & cert. ef. 7-26-05
ID 2-1995, f. & cert. ef. 4-26-95
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92

Or. Admin. R. 836-052-0156 Permitted Compensation Arrangements

(1) An issuer or other entity may provide commission or other compensation to an insurance producer or other representative for the sale of a Medicare supplement policy or certificate only if the first year commission or other first year compensation, including overrides and other sales-connected remuneration to field supervisory personnel, does not exceed 200 percent of the commission or the compensation paid for selling or servicing the policy or certificate in the second year or period.

(2) The commission or other compensation to an insurance producer or other representative for the sale or renewal of a guaranteed issue Medicare supplement policy or certificate must be made on the same basis as for any other Medicare supplement policy or certificate.

(3) The commission or other compensation provided in subsequent renewal years must be the same as that provided in the second year or period and must be provided for a reasonable number of renewal years. The total number of renewal years shall not be fewer than five renewal years.

(4) An issuer or entity shall not provide compensation to its insurance producers and an insurance producer shall not receive compensation greater than the renewal compensation payable by the replacing issuer if an existing policy or certificate is replaced.

(5) For purposes of this rule, "compensation" includes pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate, including but not limited to bonuses, gifts, prizes, awards and finder's fees.

(6) Violation of this rule is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 743.010, 743.013, 743.680 - 743.689, 746.240 & 731.244
Statutes/Other Implemented: ORS 743.684(3)
ID 9-2022, amend filed 12/22/2022, effective 01/01/2023
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90

Or. Admin. R. 836-052-0160 Required Disclosure Provisions

(1) The following provisions apply to all Medicare supplement policies and certificates:

(a) Each Medicare supplement policy and certificate shall include a renewal or continuation provision. The language or specifications of the provision must be consistent with the type of contract issued. The provision shall be appropriately captioned, shall appear on the first page of the policy and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder's or certificate holder's age;

(b) Each rider or endorsement added to a Medicare supplement policy after the date that the policy is issued or at reinstatement or renewal, that reduces or eliminates benefits or coverage in the policy, shall require a signed acceptance by the insured, except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits. After the date of issuance of the policy or certificate, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies, or if the increased benefits or coverage is required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy;

(c) Medicare supplement policies or certificates shall not provide for the payment of benefits based on standards described as "usual and customary," "reasonable and customary" or words of similar import;

(d) If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions, such limitations must appear as a separate paragraph of the policy and be labeled as "Preexisting Condition Limitations";

(e) Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate or attached thereto stating in substance that the policyholder or certificate holder may return the policy or certificate within 30 days of its delivery and may have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason;

(f)(A) An issuer of health policies or certificates that provide hospital or medical expense coverage on an expense incurred or indemnity basis to a person eligible for Medicare shall provide to those applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and CMS and in a type size no smaller than 12 point type. Delivery of the Guide shall be made whether or not such policies or certificates are advertised, solicited or issued as Medicare supplement policies or certificates as defined in OAR 836-052-0119. Except in the case of direct response issuers, delivery of the Guide shall be made to the applicant at the time of application, and acknowledgment of receipt of the Guide shall be obtained by the issuer. Direct response issuers shall deliver the Guide to the applicant upon request but not later than at the time the policy is delivered.

(B) For the purposes of this rule, "form" means the language, format, type size, type proportional spacing, bold character and line spacing.

(2) The following notice requirements apply to all insurers providing Medicare supplement insurance:

(a) As soon as practicable, but no later than 30 days prior to the annual effective date of any Medicare benefit change, an issuer shall notify its policyholders and certificate holders of modification it has made to Medicare supplement insurance policies or certificates. The notice must be made in a format acceptable to the Director. The notice shall:

(A) Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate; and

(B) Inform each policyholder or certificate holder as to when any premium adjustment is to be made due to changes in Medicare.

(b) The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension;

(3) MMA Notice Requirements. Issuers shall comply with any notice requirements of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(4) Each issuer shall provide an outline of coverage for Medicare supplement policies as follows:

(a) An issuer shall provide an outline of coverage to each applicant at the time the sales presentation is made to the prospective applicant and, except for direct response policies, shall obtain an acknowledgment of receipt of the outline of coverage from the applicant;

(b) If an outline of coverage provided at the time of the sales presentation and the Medicare supplement policy or certificate is issued on a basis that would require revision of the outline of coverage, a substitute outline of coverage properly describing the policy or certificate must accompany the policy or certificate when it is delivered. The revised outline of coverage shall contain the following statement, or similar language approved by the Director, in not less than twelve point type, immediately above the insurer's name: "Notice: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued";

(c) The outline of coverage provided to applicants pursuant to this section consists of four parts; a cover page, premium information, disclosure pages and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage shall be in the language and format prescribed in Exhibit 1;

(d) The outline of coverage may be designated by the insurer either as an outline of coverage or as a fact sheet.

(5) An issuer shall give notice regarding policies or certificates that are not Medicare supplement policies, as follows:

(a) Any health insurance policy, other than a Medicare supplement policy, a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Section 1395 et seq.); any disability income policy or other policy identified in OAR 836-052-0114(4), issued for delivery in this state to persons eligible for Medicare shall notify insureds under the policy that the policy is not a Medicare supplement policy or certificate;

(b) The notice under subsection (a) of this section shall be printed on or attached to the first page of the outline of coverage delivered to insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy or certificate delivered to insureds. The notice shall be in no less than 12 point type and shall contain the following language: "THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT (POLICY OR CONTRACT). If you are eligible for Medicare, review the Guide to Health Insurance for People with Medicare available from the company";

(c) Applications provided to persons eligible for Medicare for the health insurance policies or certificates described in section (4)(a) of this rule shall disclose, using the applicable standard statement in Appendix C, the extent to which the policy duplicates Medicare. The disclosure statement shall be provided as part of, or together with, the application for the policy or certificate.

[ED. NOTE: Exhibits and Appendices referenced are available from the agency.]

[Publications: Publications referenced are available from the agency.]

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244, 743.683 & 743.685
Statutes/Other Implemented: ORS 743.683, 743.685 & 743.686
ID 7-2011, f. & cert. ef. 2-23-11
ID 10-2005, f. & cert. ef. 7-26-05
ID 11-2001, f. & cert. ef. 9-24-01
ID 8-2001(Temp), f. 6-15-01, cert. ef. 6-18-01 thru 12-10-01
ID 6-2001, f. & cert. ef. 5-22-01
ID 4-1999, f. & cert. ef. 4-29-99
ID 21-1998(Temp), f. 12-8-98, cert. ef. 1-1-99 thru 6-25-99
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0165 Requirements for Application Forms, Replacement Coverage

(1) Application forms shall include the statements and questions set forth in this section designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement, Medicare Advantage, Medicaid coverage or another health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other health insurance policy or certificate currently in force. A supplementary application or other form to be signed by the applicant and agent containing such statements and questions may be used. The statements and questions are as follows:

(a) Statements:

(A) You do not need more than one Medicare supplement policy.

(B) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.

(D) If, after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing Medicaid eligibility. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

(E) If you are eligible for, and have enrolled in a Medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement policy under these circumstances, and later lose your employer or union-based group health plan, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted, if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

(F) Counseling services may be available in your state to provide advice concerning your purchase of Medicare supplement insurance and concerning medical assistance through the state Medicaid program, including benefits as a qualified Medicare beneficiary (QMB) and a specified low income Medicare beneficiary (SLMB).

(b) Questions.

If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance policy, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in ore or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS.

Please mark Yes or No below with an “X”

To the best of your knowledge,

(1)(a) Did you turn age 65 in the last six months?

Yes______ No__________

(b) Did you enroll in Medicare Part B in the last six months?

Yes______ No__________

(2) Are you covered for medical assistance through the state Medicaid program?

(NOTE TO APPLICANT: If you are participating in a “Spend-Down Program” and have not met your “Share of Cost,” please answer NO to this question.)

Yes______ No___________

If yes,

(a) Will Medicaid pay your premiums for this Medicare supplement policy?

Yes______ No__________

(b) Do you receive any benefits from Medicaid OTHER THAN payments toward your Medicare Part B premium?

Yes______ No__________

(3)(a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “END” blank.

START //___ END //___

(b) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement policy?

Yes______ No__________

(d) Did you drop a Medicare supplement policy to enroll in the Medicare plan?

Yes______ No__________

(4)(a) Do you have another Medicare supplement policy in force?

Yes______ No__________

(b) If so, with what company, and what plan do you have (optional for Direct Mailers)?__________________________________________

Yes______ No__________

(5) Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union, or individual plan)

Yes______ No__________

(a) If so, with what company and what kind of policy?

(b) What are your dates of coverage under the other policy?

START //___ END //___

(If you are still covered under the other policy, leave “END” blank.)

(2) An agent shall list any other health insurance policies that the agent has sold to the applicant, and:

(a) List such policies sold that are still in force;

(b) List such policies sold in the past five years that are no longer in force.

(3) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant and acknowledged by the issuer, shall be returned to the applicant by the issuer upon delivery of the policy.

(4) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except when the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of Medicare supplement coverage.

(5) The notice required by section (4) of this rule for an issuer, shall be provided in substantially the form shown in Exhibit 1 to this rule in no less than 12 point type.

(6) Paragraphs 1 and 2 of the replacement notice (applicable to preexisting conditions) may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 743.010 & 743.685
Statutes/Other Implemented: ORS 743.010, 743.683 & 743.685
ID 10-2005, f. & cert. ef. 7-26-05
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 11-2001, f. & cert. ef. 9-24-01
ID 8-2001(Temp), f. 6-15-01, cert. ef. 6-18-01 thru 12-10-01
ID 9-1997, f. & cert. ef. 7-10-97
ID 5-1996, f. & cert. ef. 4-26-96
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 1-1990, f. 1-10-90, cert. ef. 4-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0170 Filing Requirements for Advertising

An issuer shall provide to the Director a copy of any Medicare supplement advertisement intended for use in this state, whether through the written, radio or television medium, for review or approval by the Director to the extent it may be required under ORS 742.009 and other state law. Each advertisement shall comply with all applicable laws and rules of this state.

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.687
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 5-1989, f. 6-30-89, cert. ef. 7-3-89
ID 1-1989(Temp), f. & cert. ef. 1-3-89

Or. Admin. R. 836-052-0175 Standards for Marketing

(1) An issuer, directly or through its producers, shall:

(a) Establish marketing procedures to assure that any comparison of policies by its insurance producers will be fair and accurate;

(b) Establish marketing procedures to assure excessive insurance is not sold or issued;

(c) Display prominently by type, stamp or other appropriate means, on the first page of the policy, the following: "Notice to Buyer: This policy may not cover all of your medical expenses";

(d) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has health insurance and the types and amounts of any such insurance;

(e) Establish auditable procedures for verifying compliance with this section.

(2) In addition to the practices prohibited under ORS Chapter 746, the following acts and practices are prohibited:

(a) Twisting, which includes knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing or tending to induce any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer;

(b) High pressure tactics, which include the employing of any method of marketing having the effect of inducing or tending to induce the purchase of insurance through force, fright or threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance;

(c) Cold lead advertising, which is making use, directly or indirectly, of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance producer or insurance company.

(3) Violation of any provision of section (2) of this rule is an unfair trade practice under ORS 746.240.

(4) The terms "Medicare Supplement," "Medigap," "Medicare Wrap-Around" and words of similar import shall not be used unless the policy is issued in compliance with OAR 836-052-0103 to 836-052-0194.

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.010(1)(c), 743.010(2), 743.685(8) & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1997, f. & cert. ef. 7-10-97
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90

Or. Admin. R. 836-052-0180 Appropriateness of Recommended Purchase and Excessive Insurance

(1) In recommending the purchase or replacement of any Medicare supplement policy or certificate, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

(2) Any sale of Medicare supplement coverage that will provide an individual more than one Medicare supplement policy or certificate is prohibited.

(3) An issuer shall not issue a Medicare supplement policy or certificate to an individual enrolled in Medicare Part C unless the effective date of the coverage is after the termination date of the individual’s Part C coverage.

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.010(1)(c), 743.010(2), 743.683(2) & 743.685(8)
ID 10-2005, f. & cert. ef. 7-26-05
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90
ID 1-1990, f. 1-10-90, cert. ef. 4-1-90

Or. Admin. R. 836-052-0185 Reporting of Multiple Policies

(1) On or before March 1 of each year, each issuer shall report to the Director the following information for every individual resident of this state for which the issuer has in force more than one Medicare supplement insurance policy or certificate:

(a) Policy and certificate number; and

(b) Date of issuance.

(2) The information required under section (1) of this rule must be grouped by individual policyholder.

(3) Each issuer shall report the information required under this rule on the reporting form prescribed in Exhibit 1 to this rule.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.010(1)(c) & 743.010(2)
ID 11-2001, f. & cert. ef. 9-24-01
ID 8-2001(Temp), f. 6-15-01, cert. ef. 6-18-01 thru 12-10-01
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90

Or. Admin. R. 836-052-0190 Prohibition Against Preexisting Conditions, Waiting Periods, Elimination Periods and Probationary Periods in Replacement Policies and Certificates

(1) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new Medicare supplement policy to the extent such a time period was spent under the original policy.

(2) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate that has been in effect for at least six months, the replacing policy shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods.

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 743.010(1)(c), 743.010(2), 743.683(2) & 743.685(8)
ID 9-1993, f. 9-28-93, cert. ef. 10-1-93
ID 5-1993(Temp), f. 8-11-93, cert. ef. 9-1-93
ID 7-1992, f. & cert. ef. 5-8-92
ID 11-1990, f. 5-11-90, cert. ef. 9-1-90

Or. Admin. R. 836-052-0192 Prohibition Against Use of Genetic Information and Requests for Genetic Testing

(1) This section applies to all policies with policy years beginning on or after May 21, 2009.

(2) An issuer of a Medicare supplement policy or certificate shall not:

(a) Deny or condition the issuance or effectiveness of the policy or certificate including the imposition of any exclusion of benefits under the policy based on a pre-existing condition on the basis of the genetic information with respect to the individual; or

(b) Discriminate in the pricing of the policy or certificate including the adjustment of premium rates of an individual on the basis of the genetic information with respect to the individual.

(3) Nothing in section (2) of this rule shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, from

(a) Denying or conditioning the issuance or effectiveness of the policy or certificate or increasing the premium for a group based on the manifestation of a disease or disorder of an insured or applicant; or

(b) Increasing the premium for any policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy. In such case, the manifestation of a disease or disorder in one individual may not also be used as genetic information about other group members and to further increase the premium for the group.

(4) An issuer of a Medicare supplement policy or certificate shall not request or require an individual or a family member of the individual to undergo a genetic test.

(5) Section (4) of this rule shall not be construed to preclude an issuer of a Medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a determination regarding payment as defined for the purposes of applying the regulations promulgated under part C of title XI and section 264 of the Health Insurance Portability and Accountability Act of 1996, as may be revised from time to time and consistent with section (2) of this rule.

(6) For purposes of carrying out section (5) of this rule, an issuer of a Medicare supplement policy or certificate may request only the minimum amount of information necessary to accomplish the intended purpose.

(7) Notwithstanding section (4) of this rule, an issuer of a Medicare supplement policy may request, but not require, that an individual or a family member of the individual undergo a genetic test if each of the following conditions is met:

(a) The request is made pursuant to research that complies with part 46 of title 45, Code of Federal Regulations, or equivalent Federal regulations, and any applicable state or local law or regulation for the protection of human subjects in research.

(b) The issuer clearly indicates to each individual, or in the case of a minor child, to the legal guardian of the child, to whom the request is made that:

(A) Compliance with the request is voluntary; and

(B) Non-compliance will have no effect on enrollment status or premium or contribution amounts.

(c) No genetic information collected or acquired under this section may be used for underwriting, determination of eligibility to enroll or maintain enrollment status, premium rates, or the issuance, renewal, or replacement of a policy or certificate.

(d) The issuer notifies the Secretary of Health and Human Services in writing that the issuer is conducting activities pursuant to the exception provided for under this section, including a description of the activities conducted.

(e) The issuer complies with such other conditions as the Secretary of Health and Human Services may by regulation require for activities conducted under this section.

(8) An issuer of a Medicare supplement policy or certificate shall not request, require, or purchase genetic information for underwriting purposes.

(9) An issuer of a Medicare supplement policy or certificate shall not request, require, or purchase genetic information with respect to any individual prior to such individual’s enrollment under the policy in connection with the enrollment.

(10) If an issuer of a Medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, such request, requirement, or purchase shall not be considered a violation of section (9) of this rule if such request, requirement, or purchase is not in violation of section (8) of this rule.

(11) As used in this rule:

(a) “Issuer of a Medicare supplement policy or certificate” includes third-party administrator, or other person acting for or on behalf of such issuer.

(b) “Family member” means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of such individual.

(c)(A) “Genetic information” means, with respect to any individual, information about such individual’s genetic tests, the genetic tests of family members of such individual, and the manifestation of a disease or disorder in family members of such individual. “Genetic information” includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research which includes genetic services, by such individual or any family member of such individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman, includes genetic information of any fetus carried by such pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member.

(B) “Genetic information” does not include information about the sex or age of any individual.

(d) “Genetic services” means a genetic test, genetic counseling (including obtaining, interpreting, or assessing genetic information), or genetic education.

(e) “Genetic test” means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detect genotypes, mutations, or chromosomal changes. “Genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.

(f) “Underwriting purposes” means,

(A) Rules for, or determination of, eligibility including enrollment and continued eligibility for benefits under the policy;

(B) The computation of premium or contribution amounts under the policy;

(D) Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.

History

Statutory/Other Authority: ORS 743.683
Statutes/Other Implemented: ORS 743.010 & 743.683
ID 3-2009, f. 6-30-09, cert. ef. 7-1-09

Or. Admin. R. 836-052-0194 Separability

If any provision of OAR 836-052-0103 to 836-052-0194 or the application thereof to any person or circumstance is held to be invalid for any reason, the remainder of 836-052-0103 to 836-052-0194 shall not be affected thereby.

History

Statutory/Other Authority: ORS 731.244, 743.010, 743.013, 743.680 - 743.689 & 746.240
Statutes/Other Implemented: ORS 174.040 & 731.244
ID 7-1992, f. & cert. ef. 5-8-92

Or. Admin. R. 836-052-0225 Durational Limits for Health Maintenance Organizations

Text in ORMS

History

Reverted to ID 9-1988, f. 6-9-88, cert. ef. 7-1-88
ID 4-1998(Temp), f. & cert. ef. 2-13-98 thru 8-10-98
ID 9-1988, f. 6-9-88, cert. ef. 7-1-88

Or. Admin. R. 836-052-0230 Provider Services Limits for Insurers and Health Care Contractors

Text in ORMS

History

Reverted to ID 9-1988, f. 6-9-88, cert. ef. 7-1-88
ID 4-1998(Temp), f. & cert. ef. 2-13-98 thru 8-10-98
ID 9-1988, f. 6-9-88, cert. ef. 7-1-88

Or. Admin. R. 836-052-0500 Statutory Authority; Applicability

(1) OAR 836-052-0500 to 836-052-0786 are adopted pursuant to the requirements and authority of ORS 731.244,742.003, 742.005, 742.023, 743.013, 743.655, 743.656 and 746.240.

(2) Except as otherwise specifically provided, OAR 836-052-0500 to 836-052-0786 apply to all long term care insurance policies, including qualified long term care contracts and life insurance policies that accelerate benefits for long term care delivered or issued for delivery in this state by insurers, fraternal benefit societies, nonprofit health, hospital and medical service corporations, prepaid health plans, health maintenance organizations and all similar organizations.

(3) OAR 836-052-0500 to 836-052-0786 do not apply to a provision in a life insurance policy, rider or endorsement that provides accelerated death benefits in a single lump-sum upon the occurrence of a single qualifying event as defined in ORS 743.154.

(4) OAR 836-052-0500 to 836-052-0786 apply to policies having indemnity benefits that are triggered by activities of daily living and sold as disability income insurance if:

(a) The benefits of the disability income policy are dependent upon or vary in amount based on the receipt of long-term care services;

(b) The disability income policy is advertised, marketed or offered as insurance for long-term care services; or

(c) Benefits under the policy may commence after the policyholder has reached normal retirement age for Social Security unless benefits are designed to replace lost income or pay for specific expenses other than long-term care services.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.685 & 746.240
Statutes/Other Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05
ID 1-1996, f. & cert. ef. 1-12-96
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0508 Definitions

For the purpose of OAR 836-052-0500 to 836-052-0790:

(1) The following have the meanings given those terms in ORS 743.652:

(a) “Applicant;”

(b) “Benefit trigger;”

(d) “Group long term care insurance;”

(e) “Long term care insurance;”

(f) “Policy;” and

(g) “Qualified long term care insurance.”

(2) The following definitions apply:

(a) “Independent review organization” means an organization qualified under OAR 836-052-0768(5) that conducts independent reviews of long term care benefit trigger decisions.

(b) “Licensed health care professional” means an individual qualified by education and experience in an appropriate field, to determine, by record review, an insured’s actual functional or cognitive impairment.

(d) "Similar policy forms" means all of the long term care insurance policies and certificates issued by an insurer in the same long term care benefit classification as the policy form being considered. Certificates of groups that meet the definition of ORS 743.652(3)(a) are not considered similar to certificates or policies otherwise issued as long term care insurance, but are similar to other comparable certificates with the same long term care benefit classifications.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.685 & 746.240, OL 2007 Ch. 9 & 9a
Statutes/Other Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
ID 3-2012, f. & cert. ef. 2-14-12
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0516 Policy Definitions

A long-term care insurance policy delivered or issued for delivery in this state shall not use the terms set forth in this rule unless the terms are defined in the policy according to the definitions in this rule and satisfy the requirements in OAR 836-052-0596:

(1) "Activities of daily living" means at least bathing, continence, dressing, eating, toileting and transferring.

(2) "Acute condition" means that the individual is medically unstable and requires frequent monitoring by medical professionals, such as physicians and registered nurses, in order to maintain the individual's health status.

(3) "Adult day care" means a program for six or more individuals, of social and health-related services provided during the day in a community group setting for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home.

(4) "Adult foster care" means any family home or facility in which residential care is provided in a homelike environment for five or fewer adults who are not related to the provider by blood or marriage.

(5) "Assisted living" services means services to persons with unique needs, such as, but not limited to, dementia or traumatic brain injury.

(6) "Bathing" means washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.

(7) "Cognitive impairment" means a deficiency in a person's short or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

(8) "Continence" means the ability to maintain control of bowel and bladder function or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).

(9) "Dressing" means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.

(10) "Eating" means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

(11) "Hands-on assistance" means physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform the activity of daily living.

(12) "Home care" services means medical and nonmedical services provided to ill, disabled or infirm persons in their residences. Such services may include homemaker services, assistance with activities of daily living and respite care services.

(13) "Medicare" means "The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended," or "Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof," or words of similar import.

(14) "Mental or nervous disorder" shall not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.

(15) "Personal care" means the provision of hands-on services to assist an individual with activities of daily living.

(16) "Residential care" means the provision of room and board and services that assist the resident in activities of daily living, such as assistance with bathing, dressing, grooming, eating, medication management, money management or recreation.

(17) "Skilled nursing care," "personal care," "home care," “specialized care,” “assisted living care” and other services shall be defined in relation to the level of skill required, the nature of the care and the setting in which care must be delivered.

(18) "Toileting" means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

(19) "Transferring" means moving into or out of a bed, chair or wheelchair.

(20) All providers of services, including but not limited to "skilled nursing facility," "extended care facility," "convalescent nursing home," "personal care facility," “specialized care provider,” “assisted living facility” and "home care agency," shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider must meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the provider of services under another name.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0526 Policy Practices and Provisions

(1) Renewability. The terms "guaranteed renewable" and "noncancellable" shall not be used in any individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of OAR 836-052-0556. In addition:

(a) A policy issued to an individual shall not contain renewal provisions other than "guaranteed renewable" or "noncancellable."

(b) The term "guaranteed renewable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and when the insurer has no unilateral right to make any change in any provision of the policy or rider while the insurance is in force, and cannot decline to renew, except that rates may be revised by the insurer on a class basis.

(c) The term "noncancellable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and during which period the insurer has no right to unilaterally make any change in any provision of the insurance or in the premium rate.

(d) The term "level premium" may be used only when the insurer does not have the right to change the premium.

(e) In addition to the other requirements of this subsection, a qualified long-term care insurance contract shall be guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended.

(2) Limitations and Exclusions. A policy may not be delivered or issued for delivery in this state as long-term care insurance if the policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:

(a) Preexisting conditions or diseases as allowed in OAR 836-052-0546(4);

(b) Alcoholism and drug addiction;

(A) War or act of war (whether declared or undeclared);

(B) Participation in a felony, riot or insurrection;

(D) Suicide (sane or insane), attempted suicide or intentionally self-inflicted injury; or

(E) Aviation (this exclusion applies only to non-fare-paying passengers).

(d) Treatment provided in a government facility (unless otherwise required by law), services for which benefits are available under Medicare or other governmental program (except Medicaid), any state or federal workers' compensation, employer's liability or occupational disease law, or any motor vehicle no-fault law, services provided by a member of the covered person's immediate family and services for which no charge is normally made in the absence of insurance;

(e) Expenses for services or items available or paid under another long-term care insurance or health insurance policy;

(f) In the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act or would be so reimbursable but for the application of a deductible or coinsurance amount.

(g)(A) This subsection does not prohibit exclusions and limitations by type of provider. However, no long term care issuer may deny a claim because services are provided in a state other than the state of policy issued under the following conditions:

(i) When the state other than the state of policy issue does not have the provider licensing, certification or registration required in the policy, but when the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification or registration; or

(ii) When the state other than the state of policy issue licenses, certifies or registers the provider under another name.

(B) For the purpose of this subsection, “state of policy issue” means the state in which the individual policy or certificate was originally issued.

(h) This section does not prohibit territorial limitations.

(3) Extension of Benefits. Termination of long-term care insurance shall be without prejudice to any benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the long-term care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy waiting period and all other applicable provisions of the policy.

(4) Continuation or conversion of coverage is governed as follows:

(a) Group long-term care insurance issued in this state on or after September 1, 2005 shall provide covered individuals with a basis for continuation or conversion of coverage.

(b) For the purposes of this section, "a basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. The Director shall make a determination as to the substantial equivalency of benefits, and in doing so, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.

(c) For the purposes of this section, "a basis for conversion of coverage" means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy (and any group policy that it replaced), for at least six months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy the individual is covered, without evidence of insurability.

(d) For the purposes of this section, "converted policy" means an individual policy of long-term care insurance providing benefits identical to or benefits determined by the Director to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made. When the group policy from which conversion is made restricts provision of benefits and services to, or contains incentives to use certain providers or facilities, the Director, in making a determination as to the substantial equivalency of benefits, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.

(e) Written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed by the insurer not later than 31 days after termination of coverage under the group policy. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be renewable annually.

(f) Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy from which conversion is made. When the group policy from which conversion is made replaces previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy replaced.

(g) Continuation of coverage or issuance of a converted policy shall be mandatory, except when:

(A) Termination of group coverage resulted from an individual's failure to make any required payment of premium or contribution when due; or

(B) The terminating coverage is replaced not later than 31 days after termination by group coverage effective on the day following the termination of coverage:

(i) That provides benefits identical to or benefits determined by the Director to be substantially equivalent to or in excess of those provided by the terminating coverage; and

(ii) The premium for which is calculated in a manner consistent with the requirements of subsection (f) of this section.

(h) Notwithstanding any other provision of this rule, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy that provides benefits on the basis of incurred expenses may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100 percent of incurred expenses. The provision shall be included in the converted policy only if the converted policy also provides for a premium decrease or refund that reflects the reduction in benefits payable.

(i) The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, shall not exceed those that would have been payable had the individual's coverage under the group policy remained in force and effect.

(j) Notwithstanding any other provision of this rule, an insured individual whose eligibility for group long-term care coverage is based upon the individual's relationship to another person shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.

(k) For the purposes of this rule, a "managed-care plan" is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.

(5) Discontinuance and Replacement. If a group long-term care insurance policy is replaced by another group long-term care insurance policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination. Coverage provided or offered to individuals by the insurer and premiums charged to persons under the new group policy:

(a) Shall not result in an exclusion for preexisting conditions that would have been covered under the group policy being replaced; and

(b) Shall not vary or otherwise depend on the individual's health or disability status, claim experience or use of long-term care services.

(6)(a) The premium charged to an insured shall not increase due to either:

(A) The increasing age of the insured at ages beyond 65; or

(B) The duration the insured has been covered under the policy.

(b) The purchase of additional coverage shall not be considered a premium rate increase, but for purposes of the calculation required under, the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium.

(c) A reduction in benefits shall not be considered a premium change, but for purpose of the calculation required under, the initial annual premium shall be based on the reduced benefits.

(7) Electronic enrollment for group policies is governed by the following provisions:

(a) In the case of a group defined in ORS 743.652 (3)(a), any requirement that a signature of an insured be obtained by an insurance producer or insurer shall be deemed satisfied if:

(A) The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. A verification of enrollment information shall be provided to the enrollee;

(B) The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records; and

(C) The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information and "privileged information" as defined by ORS 746.600, is maintained.

(b) The insurer shall make available, upon request of the Director, records that will demonstrate the insurer's ability to confirm enrollment and coverage amounts.

(8) Request for termination of coverage. When the policyholder, insured or beneficiary requests termination of coverage, any unearned premiums for that insured shall be promptly refunded to the payee or beneficiary.

(9) This section applies to rate increases approved by the Director on or after January 1, 2008 for policies that were delivered or issued for delivery in this state before March 1, 2006. An insurer may offer to policyholders affected by a rate increase a contingent benefit on lapse under the terms of OAR 836-052-0746, the right to reduce coverage and lower premiums under the terms of 836-052-0740 or an alternative method approved by the Director for mitigating the rate increase. If the insurer does not offer one or the other option to policyholders:

(a) The Director may not approve the rate increase if the increase is greater than a cumulative total of 40 percent during any three-year period submitted; and

(b) The total amount of any approved rate increase must be spread equally over each of the three years. The Director may waive this restriction if the insurer demonstrates to the Director’s satisfaction that the solvency of the plan or insurer is threatened.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0531 Long Term Care Insurance Partnership Program

(1) As used in this rule, "qualified long term care insurance partnership policy" or "partnership policy" means a long term care insurance policy that meets all of the following requirements:

(a) The policy was issued on or after January 1, 2008 or exchanged as provided in section (8) of this rule on or after January 1, 2008, and covers an insured who was a resident of this state or of another state that has entered into a reciprocal agreement with this state when coverage first became effective under the policy.

(b) The policy is a qualified long term care insurance policy.

(c) The policy meets all of the applicable requirements of ORS 743.650 to 743.656 and OAR 836-052-500 to 836-052-0786 and the requirements of the National Association of Insurance Commissioners long term care insurance model act and model regulation as those requirements are set forth in sec. 1917(b)(5)(A) of the Social Security Act (42 USC sec. 1396p(b)(5)(A)).

(d) The policy provides the following inflation protections:

(A) If the policy is sold to an individual who has not attained age 61 as of the date of purchase, the policy shall provide a compound annual inflation protection that is at least equivalent to the option for inflation protection in OAR 836-052-0616(1)(a).

(B) If the policy is sold to an individual who has attained age 61 but has not attained age 76 as of the date of purchase, the policy shall provide an inflation protection that is at least equivalent to an option for inflation protection in OAR 836-052-0616.

(C) If the policy is sold to an individual who has attained age 76 as of the date of purchase, the policy may provide inflation protection, but must at least comply with the provisions for inflation protections in OAR 836-052-0616.

(2) An insurer may use as one means of providing inflation protection under section (1)(d) of this rule a guarantee of automatic benefit increases of not less than an annual percentage change in the Consumer Price Index or an alternative index approved by the Director. If this inflation protection is included in a policy sold to a person who has not attained age 61, the index adjustments must be made on a compounding basis.

(3) Any person who purchases a partnership policy that meets the inflation protection criteria specified in section (1)(d) of this rule may adjust the person’s inflation protection as the person ages. The person’s policy will maintain partnership status as long as the inflation protection continues to meet the minimum requirements for the attained age.

(4) An insurer or insurance producer soliciting or offering to sell a policy that is intended to qualify as a partnership policy shall provide to each prospective applicant the notice prescribed in Exhibit 1 to this rule, indicating the requirements and benefits of a partnership policy. The notice shall be provided with the required Outline of Coverage.

(5) A partnership policy or certificate delivered or issued for delivery in this state shall include a Partnership Disclosure Notice prescribed in Exhibit 2 or 3 to this rule as appropriate, explaining the benefits associated with a partnership policy or certificate and indicating that, at the time issued, the policy or certificate is a qualified state long term care insurance partnership policy or certificate.

(6) When an insurer is made aware that a policyholder has initiated action that will result in the loss of partnership status, the insurer shall provide an explanation of how such action impacts the insured in writing. The policyholder shall also be advised how to retain partnership status, if retention is possible. If a partnership policy subsequently loses partnership status, the insurer shall explain to the policyholder in writing the reason for the loss of status.

(7) Each insurer offering a partnership policy shall provide regular reports to the United States Secretary of Health and Human Services in accordance with regulations of the Secretary that include notification of the date benefits were paid, the amount paid, the date the policy terminates, and such other information as the Secretary determines may be appropriate to the administration of partnership policies.

(8) An insurer must file a long term care insurance policy for approval for use as a partnership policy.

(9) A long term care insurance policy that is not a qualified partnership policy may be exchanged for a qualified partnership policy, subject to underwriting criteria and any increased premium, as provided in this section. The qualified policy so exchanged is treated as newly issued and as such is eligible for partnership status. A rider, endorsement or change in schedule page that is made to a policy issued prior to January 1, 2008, but after February 8, 2006 for the purpose of meeting the requirements of this rule may be treated as giving rise to an exchange.

(10) At the request of the insured or an authorized representative of the insured, an insurer shall provide to the insured or representative a copy of the Approved Long Term Care Partnership Program Policy Summary prescribed in Exhibit 4 to this rule.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 743.650, 743.653, 743.655, 743.656 & 746.240
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0546 Required Policy Provisions

(1) Renewability. Each individual long-term care insurance policy shall contain a renewability provision. The following requirements apply to such a provision:

(a) The provision shall be appropriately captioned, shall appear on the first page of the policy and shall clearly state that the coverage is guaranteed renewable or noncancellable. This provision does not apply to a policy that does not contain a renewability provision, and under which the right to nonrenew is reserved solely to the policyholder.

(b) A long-term care insurance policy or certificate, other than one in which the insurer does not have the right to change the premium, shall include a statement that premium rates may change.

(2) Riders and Endorsements. Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care insurance policy after date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the individual insured. After the date of policy issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in a writing that is signed by the insured, unless the increased benefits or coverage is required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, rider or endorsement.

(3) Payment of Benefits. A long-term care insurance policy that provides for the payment of benefits based on standards described as "usual and customary," "reasonable and customary" or words of similar import shall include a definition of these terms and an explanation of the terms in its accompanying outline of coverage.

(4) Limitations. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations of preexisting condition shall appear as a separate paragraph of the policy or certificate and shall be labeled as "Preexisting Condition Limitations."

(5) Other limitations or conditions on eligibility for benefits. A long-term care insurance policy or certificate containing any limitations or conditions for eligibility other than those prohibited in ORS 743.655(5) shall set forth a description of the limitations or conditions, including any required number of days of confinement, in a separate paragraph of the policy or certificate and shall label the paragraph "Limitations or Conditions on Eligibility for Benefits."

(6) Disclosure of Tax Consequences. With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This section does not apply to qualified long-term care insurance contracts.

(7) Benefit Triggers. Activities of daily living and cognitive impairment shall be used to measure an insured's need for long term care, shall be described in the policy or certificate in a separate paragraph and shall be labeled "Eligibility for the Payment of Benefits." Any additional benefit triggers shall also be explained in the same paragraph. If these triggers differ for different benefits, explanation of the trigger shall accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this requirement too shall be specified.

(8) A qualified long-term care insurance contract shall include a statement in the policy and in the outline of coverage as contained in OAR 836-052-0776 that the policy is intended to be a qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.

(9) A nonqualified long-term care insurance contract shall include a statement in the policy and in the outline of coverage as contained in OAR 836-052-0776 that the policy is not intended to be a qualified long-term care insurance contract.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0556 Required Disclosure of Rating Practices to Consumers

(1) This rule applies as follows:

(a) Except as provided in subsection (b) of this section, this rule applies to any long term care policy or certificate issued in this state on or after March 1, 2006.

(b) For certificates issued on or after March 1, 2005 under a group long-term care insurance policy as defined in ORS 743.652 (3)(a), which policy was in force on March 1, 2005, the provisions of this rule shall apply on the policy anniversary following March 1, 2006.

(2) Other than policies for which no applicable premium rate or rate schedule increases can be made, an insurer shall provide all of the information listed in this section to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, the insurer shall provide all of the information listed in this rule to the applicant not later than at the time of delivery of the policy or certificate. The information is as follows:

(a) A statement that the policy may be subject to rate increases in the future;

(b) An explanation of potential future premium rate revisions and the policyholder's or certificate holder's option in the event of a premium rate revision.

(c) The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase.

(d) A general explanation for applying premium rate or rate schedule adjustments, which shall include:

(A) A description of when premium rate or rate schedule adjustments will be effective (e.g. next anniversary date, next billing date, etc.); and

(B) The right to a revised premium rate or rate schedule as provided in subsection (c) of this section if the premium rate or rate schedule is changed.

(e)(A) Information regarding each premium rate increase on this policy form or similar policy forms over the past ten years for this state or any other state that at a minimum identifies

(i) The policy forms for which premium rates have been increased.

(ii) The calendar years when the form was available for purchase; and

(iii) The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.

(B) The insurer may provide additional explanatory information related to the rate increases.

(C) An insurer shall have the right to exclude from the disclosure premium rate increases that apply only to blocks of business acquired from other nonaffiliated insurers or the long term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.

(D) If an acquiring insurer files for a rate increase on a long term care insurance policy form acquired from a nonaffiliated insurer or a block of policy forms acquired from a nonaffiliated insurer on or before the later of the effective date of this rule or the end of a 24-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. The nonaffiliated selling insurer shall include the disclosure of that rate increase in accordance with paragraph (A) of this subsection.

(E) If the acquiring insurer in paragraph (D) of this subsection files for a subsequent rate increase whether within the 24-month period or later, the acquiring insurer must make all disclosures required by this section, on the same policy form acquired from nonaffiliated insurer or block of policy forms acquired from nonaffiliated insurers referenced in paragraph (D) of this subsection, including disclosure of the earlier rate increase referenced in paragraph (A) of this subsection.

(3) An applicant shall sign an acknowledgement at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under subsection (2)(a) and (e) of this section. If owing to the method of application the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign an acknowledgement no later than at the time of delivery of the policy or certificate.

(4) An insurer shall use the forms in Exhibits 1 and 2 to comply with sections (2) and (3) of this rule.

(5) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least 45 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by section (2) of this rule when the rate increase is implemented.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0566 Initial Rate Filing Requirements

(1)(a) Except as provided in subsection (b) of this section, this rule applies to any long-term care insurance policy issued in this state on or after March 1, 2006.

(b) Sections (2)(b)(D) and (3) of this rule apply to any long-term care policy issued in this state on or after January 1, 2016.

(2) An insurer shall provide the following information to the Director for prior approval before making a long-term care insurance form available for sale:

(a) A copy of the disclosure documents required in OAR 836-052-0556; and

(b) An actuarial certification consisting of at least the following:

(A) A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;

(B) A statement that the policy design and coverage provided have been reviewed and taken into consideration;

(D) A statement that the premiums contain at least the minimum margin for moderately adverse experience defined in subparagraph (i) of this paragraph or the specification of and justification for a lower margin as required by subparagraph (ii) of this paragraph.

(i) A composite margin shall not be less than 10 percent of lifetime claims.

(ii) A composite margin that is less than 10 percent may be justified in uncommon circumstances. The proposed amount, full justification of the proposed amount and methods to monitor developing experience that would be the basis for withdrawal of approval for such lower margins must be submitted.

(iii) A composite margin that is lower than otherwise considered appropriate for the stand-alone long-term care policy may be justified for long-term care benefits provided through a life policy or an annuity contract. Such lower composite margin, if used, shall be justified by appropriate actuarial demonstration addressing margins and volatility when considering the entirety of the product.

(iv) A greater margin may be appropriate in circumstances where the company has less credible experience to support its assumptions used to determine the premium rates.

(E)(i) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or

(ii) A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

(F) A statement that reserve requirements have been reviewed and considered. Support for this statement shall include:

(i) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held; and

(ii) A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses, or if such a statement cannot be made, a complete description of the situations where this does not occur. An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship.

(3) An insurer must include an actuarial memorandum prepared, dated and signed by a member of the Academy of Actuaries. The actuarial memorandum shall address and support each specific item required as part of the actuarial certification and provide at a minimum all of the following information:

(a) An explanation of the review performed by the actuary prior to making the statements in section (2)(b)(B) and (C) of this rule.

(b) A complete description of pricing assumptions.

(c) Sources and levels of margins incorporated into the gross premiums that are the basis for the statement in the actuarial certification required by section (2)(b)(A) of this rule and an explanation of the analysis and testing performed in determining the sufficiency of the margins. Deviations in margins between ages, sexes, plans or states shall be clearly described. Deviations in margins required to be described are other than those produced utilizing generally accepted actuarial methods for smoothing and interpolating gross premium scales.

(d) A demonstration that the gross premiums include the minimum composite margin specified in section (2)(b)(D) of this rule.

(4) An insurer shall provide an actuarial demonstration showing that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claims experience on similar policy forms adjusted for any premium and benefit differences, or relevant and credible data from other studies, or both.

(5) In any review of the actuarial certification and actuarial memorandum, the Director may request review by an actuary with experience in long-term care pricing who is independent of the company.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0576 Prohibition Against Post-Claims Underwriting, Applications

(1) Each application for a long-term care insurance policy, rider or certificate, except those that are guaranteed issue, shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.

(2) If an application for long-term care insurance contains a question asking whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed;

(3) If the medications listed in the application were known by the insurer, or should have been known by the insurer at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, the policy, rider or certificate shall not be rescinded for that condition.

(4) Except for policies or certificates that are guaranteed issue:

(a) The following language shall be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long-term care insurance policy, rider or certificate: Caution: If your answers on this application are incorrect or untrue, (insurer) has the right to deny benefits or rescind your policy.

(b) The following language, or language substantially similar to the following, shall be set out conspicuously on the long-term care insurance policy, rider or certificate at the time of delivery: Caution: The issuance of this long-term care insurance (policy) (rider) (certificate) is based upon your responses to the questions on your application. A copy of your (application) (enrollment form) (is enclosed) (was retained by you when your applied). If your answers are incorrect or untrue, the insurer has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the insurer at this address: (insert address).

(5) Prior to issuance of a long-term care policy, rider or certificate to an applicant age 80 or older, the insurer shall obtain one or more of the following:

(a) A report of physical examination;

(b) An assessment of functional capacity;

(d) Copies of medical records.

(6) A copy of the completed application or enrollment form, whichever is applicable, shall be delivered to the insured not later than the time of delivery of the policy, rider or certificate unless it was retained by the applicant at the time of application.

(7) Every insurer or other entity selling long-term care insurance benefits shall maintain a record of all rescissions of policies, riders and certificates, both state- and country-wide, except those that the insured voluntarily effectuated, and shall annually furnish this information to the Director in the format prescribed in Exhibit 1 or similar form approved by the Director.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.655(10)(a)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0645, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0586 Minimum Standards for Home Health and Community Care Benefits in Long-Term Care Insurance Policies

(1) A long-term care insurance policy, certificate or rider that provides benefits for home care services or community care services may not limit or exclude those benefits:

(a) By requiring that the insured or claimant would need care in a skilled nursing facility if home care services were not provided;

(b) By requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services, or either service or simultaneously receive both services, in a home, community, or institutional setting before home care services are covered;

(d) By requiring that a nurse or therapist provide services covered by the policy when the services can be provided by a home care aide or other licensed or certified home care worker acting within the scope of the licensure or certification;

(e) By requiring that the insured or claimant have an acute condition before home care services are covered;

(f) By excluding coverage for personal care services provided by a home care aide;

(g) By requiring that the provision of home care services be at a level of certification or licensure greater than that required by the eligible service;

(h) By limiting benefits to services provided by Medicare-certified agencies or providers; or

(i) By excluding coverage for adult day care services.

(2) A provision in a long-term care insurance policy, certificate or rider for home care or community care services shall provide total home care or community care coverage that is a dollar amount equivalent to at least one-half of one year’s coverage available for nursing home benefits under the policy, certificate or rider, at the time covered home care or community care services are being received. This requirement does not apply to policies, certificates or riders issued to residents of continuing care retirement communities.

(3) Home care coverage may be applied to the nonhome care benefits provided in the policy, certificate or rider when determining maximum coverage under the terms of the policy, certificate or rider.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.655(1)(a) & 743.656
Renumbered from 836-052-0535, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0596 Standards for Covered Services

This rule establishes standards for covered services for the purpose of payment of benefits pursuant to ORS 743.656. An insurer shall not define the covered services more restrictively than the following minimum standards, or similar standards found by the Director to be substantially as favorable to the consumer:

(1) Nursing home services, when provided to the insured in this state, include services provided in or by a nursing home licensed under ORS 678.710 to 678.840. When provided to the insured outside this state, nursing home services include services provided in or by a nursing home in the other state. The nursing home must be licensed by the other state if so required by a similar licensing or other regulatory program;

(2) Assisted living services, when provided to the insured in this state, include those services provided in a facility or by a person licensed or otherwise regulated by this state to provide assisted living services as that term is defined in OAR 411-056-0005. When the services are provided to the insured outside this state, the provider or providing facility must be licensed by the other state if so required by a similar licensing or other regulatory program;

(3) Home care services, regardless of the state in which they are provided, include service provided in the insured’s own home rather than a facility such as an assisted living facility or adult foster care facility;

(4) Adult foster care services, when provided to the insured in this state, include those services that are provided in an adult foster home pursuant to a license issued under ORS 443.705 to 443.825. When the services are provided to the insured outside this state, the provider or providing facility must be licensed by the other state if so required by a similar licensing or other regulatory program; and

(5) Services through a residential care facility, when provided to the insured in this state, include those services provided in a facility or by a person licensed or otherwise regulated by this state to provide services through a residential care facility as that term is defined in ORS 443.400. When the services are provided to the insured outside this state, the provider or providing facility must be licensed by the other state if so required by a similar licensing or other regulatory program.

History

Statutory/Other Authority: ORS 731.244 & 743.656
Statutes/Other Implemented: ORS 743.656
Renumbered from 836-052-0583, ID 3-2005, f. & cert. ef. 3-1-05
ID 9-1991, f. 12-24-91, cert. ef. 1-1-92

Or. Admin. R. 836-052-0606 Use and Definition of “Home” or Similar Wording

A long-term care insurance policy that defines “home” or uses similar wording to refer to the residence of the insured shall define or use wording that means or refers to the principal place of residence for the insured, whether a private home, a foster home, congregate care or assisted living facility or other place in a community setting, other than a licensed nursing facility.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.655(1)(a) & 743.656
Renumbered from 836-052-0580, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0616 Requirement to Offer Inflation Protection

(1) An insurer may not offer a long-term care insurance policy unless the insurer also offers to the policyholder, in addition to any other inflation protection offered by the insurer, the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations that are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. An insurer must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than a feature that does one of the following:

(a) Increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than three percent.

(b) Guarantees the insured individual periodically increased benefit levels without having to provide evidence of insurability or health status, unless the policyholder declines a periodic increase. The amount of the additional benefit shall be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least three percent for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made. The insurer shall notify the policyholder, at each periodic increase, that declining an inflation increase under this subsection will imperil the policy’s partnership status.

(c) Covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit.

(2) When the policy is issued to a group, the required offer in section (1) of this rule shall be made to the group policyholder, except that if the policy is issued to a group defined in ORS 743.652 (3)(d) other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.

(3) The offer in section (1) of this section shall not be required of life insurance policies or riders containing accelerated long-term care benefits.

(4)(a) An insurer shall include the following information in or with the outline of coverage:

(A) A graphic comparison of the benefit levels of a policy that increases benefits by three percent compounded over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a 20-year period.

(B) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases.

(b) An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.

(5) Inflation protection benefit increases under a policy that contains these benefits shall continue without regard to an insured's age, claim status or claim history, or the length of time the person has been insured under the policy.

(6) An offer of inflation protection that provides for automatic benefit increases shall include an offer of a premium that the insurer expects to remain constant. The offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

(7)(a) Inflation protection as provided in section (1)(a) of this rule shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in this section. The rejection may be either in the application or on a separate form.

(b) The rejection shall be considered a part of the application and shall state:

I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans_____________, and I reject inflation protection.

(8) The following requirements apply to the inflation protection option described in section (1)(b) of this rule:

(a) The insurer must provide that benefit increases occur automatically unless the insured specifically rejects the option to increase.

(b) The option to increase must be offered every year through at least the insured’s attained age 76, and the policy or certificate must guarantee the insured the opportunity to increase benefit levels on an annual basis without providing evidence of insurability or health status.

(c) The policy or certificate must be structured so that benefit levels increase annually and must otherwise satisfy the requirements of the Deficit Reduction Act of 2005. For example, compound inflation protection must be provided under policies purchased when the insured has not yet attained age 61. Benefit increases include, but are not limited to increases at a fixed interest rate or at a rate determined by an index-based formula.

(d) The additional premium for increased benefits may not be higher than the rate based on the insured’s attained age at the time of each offer.

(e) All options through age 76 must be accepted to retain partnership policy status. Declination of an option may not operate to prevent the insured from accepting a later option.

(f) An insurer will continue to make offers regardless of the insured’s age while the insured is in claim if the claim begins at or before age 76.

(g) The insurer or insurance producer must furnish an applicant a personalized illustration at the point of sale that shows the expected pattern of future premiums and benefits under the option compared to the premiums and benefits for a policy or certificate with automatic inflation protection that qualifies for partnership status.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0626 Requirements for Application Forms and Replacement Coverage

(1) An application form for long-term care insurance shall include the questions set forth in this section designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy, rider or certificate in force or whether a long-term care insurance policy, rider or certificate is intended to replace any other health or long term care insurance policy, rider or certificate currently in force. A supplementary application or other form to be signed by the applicant and insurance producer, except when the coverage is sold without an insurance producer, containing the questions may be used. With regard to a replacement policy issued to a group defined by ORS 743.652(3)(a), the following questions may be modified only to the extent necessary to elicit information about health or long-term care insurance policies other than the group policy being replaced, but only if the certificate holder has been notified of the replacement. The questions are as follows:

(a) Do you have another long-term care insurance policy, rider or certificate in force (including health care service contract, health maintenance organization contract)?

(b) Did you have another long-term care insurance policy, rider or certificate in force during the last 12 months?

(A) If so, with which insurer?

(B) If that policy lapsed, when did it lapse?

(d) Do you intend to replace any of your medical or health insurance coverage with this policy, rider or certificate?

(2) An insurance producer shall list any other health insurance policies that the insurance producer has sold to the applicant:

(a) List such policies sold that are still in force, and;

(b) List such policies sold in the past five years that are no longer in force.

(3) Solicitations other than direct response. Upon determining that a sale will involve replacement of long-term care insurance coverage, the insurer, other than an insurer using direct response solicitation methods, or its producer, shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the form shown in Exhibit 1 to this rule.

(4) Direct Response Solicitations. An insurer using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in the form shown in Exhibit 2 to this rule.

(5) When replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured and policy number or address including zip code. Notice shall be sent within five working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

(6) Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of OAR 836-080-0001 to 836-080-0043. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

(7) Sections (1) through (6) do not apply when the application is to the existing insurer that issued the existing policy, certificate or rider when the transaction meets the following:

(a) A contractual change or a conversion privilege is being exercised, or

(b) When the existing policy, certificate or rider is being replaced by the same insurer and unearned premium is credited toward the new coverage.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.010(1), 743.013(3) & 743.655(1)(a)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0615, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0636 Reporting Requirements

(1) Every insurer shall maintain records for each insurance producer of that insurance producer's amount of replacement sales as a percent of the insurance producer's total annual sales and the amount of lapses of long-term care insurance policies sold by the insurance producer as a percent of the insurance producer's total annual sales.

(2) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely agent activities regarding the sale of long-term care insurance.

(3) Every insurer shall report to the director annually by June 30 the ten percent of its insurance producers with the greatest percentages of lapses and replacements as measured by section (1) of this rule using the form provided by the director on the Division of Financial Regulation website or a similar form and shall also include the following information in the annual report:

(a) The number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year.

(b) The number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year.

(4) Every insurer shall report to the director annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied using the form provided by the director on the Division of Financial Regulation website or a similar form.

(5) An insurer shall file the reports required under this rule with the director.

(6) As used in this rule:

(a) "Claim" means, subject to subsection (b) of this section, a request for payment of benefits under an in force policy regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met;

(b) "Denied" means the insurer refuses to pay a claim for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition;

(d) "Report" means on a statewide basis.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 743.655, 743.656, 746.240, 742.003, 742.005, 742.009, 743.010, 743.013, 743.650 & 743.653
ID 20-2024, minor correction filed 08/12/2024, effective 08/12/2024
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16
ID 4-2011, f. & cert. ef. 2-10-11
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0637 Annual Rate Certification Requirements

(1) This rule applies to any long-term care policy issued in this state on or after January 1, 2016.

(2) The following annual submission requirements apply subsequent to initial rate filings for individual long-term care insurance policies made under this rule:

(a) An actuarial certification prepared, dated and signed by the member of the American Academy of Actuaries who provides the information. The actuarial certification shall provide at least:

(A) A statement of the sufficiency of the current premium rate schedule and the following:

(i) For the rate schedules currently marketed:

(I) The premium rate schedule continues to be sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increase anticipated; or

(II) If the above statement cannot be made, a statement that margins for moderately adverse experience may no longer be sufficient. In this situation, the insurer shall provide to the Director within 60 days of the date the actuarial certification is submitted to the Director, a plan of action, including a time frame, for the re-establishment of adequate margins for moderately adverse experience so that the ultimate premium rate schedule would be reasonably expected to be sustainable over the future life of the form with no future premium increases anticipated. Failure to submit a plan of action to the Director within 60 days or to comply with the time frame stated in the plan of action constitutes grounds for the Director to withdraw or modify its approval of the form for future sales pursuant to ORS 742.007.

(ii) For the rate schedules that are no longer marketed:

(I) That the premium rate schedule continues to be sufficient to cover anticipated costs under best estimate assumptions; or

(II) That the premium rate schedule may no longer be sufficient. In this situation, the insurer shall provide to the Director, within 60 days of the date the actuarial certification is submitted to the Director, a plan of action, including a time frame, for the re-establishment of adequate margins for moderately adverse experience.

(B) A description of the review performed that led to the statement.

(b) An actuarial memorandum dated and signed by a member of the American Academy of Actuaries who prepares the information shall be prepared to support the actuarial certification. The actuarial memorandum shall provide at least the following information:

(A) A detailed explanation of the data sources and review performed by the actuary prior to making the statement in subsection (a) of this section.

(B) A complete description of experience assumptions and their relationship to the initial pricing assumptions.

(D) An explanation of the analysis and testing performed in determining the current presence of margins.

(3) The actuarial certification required under section (2)(a) and (b) of this rule must be based on calendar year data and submitted annually no later than May 1st of each year starting in the second year following the year in which the initial rate schedules are first used. The actuarial memorandum required under section (2)(a) and (b) of this rule must be submitted at least once every three years with the certification.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16

Or. Admin. R. 836-052-0639 Training for Insurance Producers

(1) When the provider of a training course notifies an insurance producer that the insurance producer has successfully completed the training course and passed the examination, the insurance producer shall send the notice of completion as verification of the training to each insurer for which the insurance producer transacts or will transact long term care insurance in this state. The insurer shall approve or disapprove the verification as meeting the requirements of section 9, chapter 486, Oregon Laws 2007 and return the verification to the insurance producer.

(2) An insurance producer shall submit the notice of completion of required training to the Director as approved by each insurer under section (2) of this rule when the insurance producer reports to the Director at license renewal regarding compliance with continuing education requirements.

(3) A training course taken online or through self-study in satisfaction of the requirements of section 9, chapter 486, Oregon Laws 2007 (Enrolled SB 191) must include an examination indicating understanding of the topics covered in the course. An insurance producer does not satisfy the training requirement of section 9, chapter 486, Oregon Laws 2007 unless the individual passes the examination for the online or self-study training course with a score of not less than 70 percent.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Sec. 9, Ch. 486 & OL 2007 (Enrolled SB 191)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0646 Benefits Provided Through Advancement of Life Insurance Proceeds

(1) When long term care benefits are provided through early payment of a portion of a life insurance policy death benefit, the insurer may make no more than a pro rata reduction in the life insurance policy cash value, based on the percentage of death benefits advanced. When the cash value is reduced in this manner, the insurer may apply no more of the payment to the reduction of any outstanding policy loans than this same pro rata percentage.

(2) For each month in which a long term care benefit has been provided through early payment of a portion of a life insurance death benefit, the insurer shall provide a report to the policyholder showing the benefits paid during the month, the change in the life insurance policy cash value, loan balance and death benefit, and the amount of benefits remaining.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Renumbered from 836-052-0588, ID 3-2005, f. & cert. ef. 3-1-05
ID 1-1996, f. & cert. ef. 1-12-96

Or. Admin. R. 836-052-0656 Reserve Standards

(1)(a) Each insurer shall use the following standards for determining policy reserves for long-term care insurance: When long-term care benefits are provided through the acceleration of benefits under a group or individual life insurance policy or a rider to such a policy, policy reserves for the benefits shall be determined in accordance with ORS 733.322. Claim reserves shall also be established in the case when the policy or rider is in claim status.

(b) Reserves for policies and riders subject to this section shall be based on the multiple decrement model using all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event shall the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefit.

(c) In the development and calculation of reserves for long-term care insurance policies and riders subject to this section, an insurer shall consider the applicable policy and rider provisions, marketing methods, administrative procedures and all other considerations that affect projected claim costs, including but not limited to the following:

(A) Definition of insured events;

(B) Covered long-term care facilities;

(C) Existence of home care and home care coverage. For purposes of this paragraph, "home" has the meaning provided in OAR 836-052-0606;

(D) Definition of facilities;

(E) Existence or absence of barriers to eligibility;

(F) Premium waiver provisions;

(G) Renewability;

(H) Ability to raise premiums;

(I) Marketing methods;

(J) Underwriting procedures;

(K) Claims adjustment procedures;

(L) Waiting periods;

(M) Maximum benefits;

(N) Availability of eligible facilities;

(O) Margins in claim costs;

(P) Optional nature of benefit;

(Q) Delay in eligibility for benefit;

(R) Inflation protection provisions; and

(S) Guaranteed insurability option.

(2) For purposes of section (1) of this rule, an applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a qualified actuary.

(3) When long term care benefits are provided other than as in section (1) of this rule, reserves shall be determined in accordance with OAR 836-031-0200 to 836-031-0300.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0545, ID 3-2005, f. & cert. ef. 3-1-05
ID 1-1996, f. & cert. ef. 1-12-96
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0666 Loss Ratio

(1) This rule applies to all long-term care insurance policies, certificates and riders except those that are subject to OAR 836-052-0566 and 836-052-0676.

(2) Benefits under long-term care insurance policies and riders shall be deemed reasonable in relation to premiums only if the expected loss ratio is at least 60 percent and is calculated in a manner providing for adequate reserving of the long-term care insurance risk.

(3) In evaluating the expected loss ratio under section (2) of this rule, an insurer shall consider all relevant factors, including:

(a) Statistical credibility of incurred claims experience and earned premiums;

(b) The period for which rates are computed to provide coverage;

(d) Concentration of experience within early policy duration;

(e) Expected claim fluctuation;

(f) Experience refunds, adjustments or dividends;

(g) Renewability features;

(h) All appropriate expense factors;

(i) Interest;

(j) Experimental nature of the coverage;

(k) Policy reserves;

(L) The mix of business by risk classification;

(m) Product features, such as long elimination periods, high deductibles and high maximum limits.

(4) The loss ratio requirements under this rule apply with respect to Oregon policyholders. Subject to the approval of the Director, an insurer may use national or regional loss ratio experience to modify the Oregon experience when the experience for Oregon policyholders is small and statistically unreliable. Oregon experience and national or regional experience must be submitted in separate tables and the modification approved by the Director.

(5) The experience under all policy and rider forms insuring a class of insureds with similar benefits and underwriting requirements shall be combined when demonstrating compliance with the requirements of this section.

(6) The effect on loss ratios of all requirements necessary to qualify for benefits shall be included in the calculations required under this rule.

(7) Sections (1) to (6) of this rule do not apply to life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid if the policy complies with all of the following provisions:

(a) The interest credited internally to determine cash value accumulations, including long-term care, if any, is guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;

(b) The portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of ORS 743.204 or 743.275;

(d) Any life policy illustration meets the applicable requirements of OAR 836-051-0500 to 836-051-0600; and

(e) An actuarial memorandum filed with the Director must be submitted by a qualified actuary in good standing with the American Academy of Actuaries. The memorandum must include:

(A) A description of the basis on which the long-term care rates were determined;

(B) A description of the basis for the reserves;

(D) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any;

(E) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;

(F) The estimated average annual premium per policy and the average issue age;

(G) A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and

(H) A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying life insurance policy, both for active lives and those in long-term care claim status.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 742.005 & 743.655(1)(a)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0530, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0676 Premium Rate Schedule Increases

(1) This rule applies as follows:

(a) Except as provided in subsection (b) of this section, this rule applies to any long-term care insurance policy or certificate issued in this state on or after March 1, 2006 and prior to January 1, 2016.

(b) For certificates issued on or after March 1, 2005 under a group long-term care insurance policy as defined in ORS 743.652(3)(a) that was in force on March 1, 2005, this rule applies on the policy anniversary following March 1, 2006.

(2) An insurer shall obtain approval of a premium rate schedule increase from the Director of the Department of Consumer and Business Services, including an exceptional increase as defined in section (3) of this rule, prior to the notice to the policyholders and shall include the following in the submission to the director:

(a) Information required by OAR 836-052-0556;

(b) Certification by a qualified actuary that:

(A) If the requested premium rate schedule increase is implemented and the underlying assumptions that reflect moderately adverse conditions are realized, no further premium rate schedule increases are anticipated; and

(B) The premium rate filing is in compliance with this rule; or

(C) The insurer may request a premium rate schedule increase that is less than what is required under this rule and the director may approve such premium rate schedule increase, without submission of the certification required under this subsection, if the actuarial memorandum discloses the premium rate schedule necessary to make the certification required under OAR 836-052-0676(2)(b), the premium rate schedule increase filing satisfies all other requirements of this rule and is, in the opinion of the director, in the best interest of policyholders.

(A) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale, as follows:

(i) Annual values for the five years preceding and the three years following the valuation date shall be provided separately;

(ii) The projections shall include the development of the lifetime loss ratio according to OAR 836-052-0666, unless the rate increase is an exceptional increase;

(iii) The projections shall demonstrate compliance with section (3) of this rule; and

(iv) For exceptional increases:

(I) The projected experience must be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and

(II) In the event the director determines as provided in OAR 836-052-0508(1)(d) that offsets may exist, the insurer shall use appropriate net projected experience.

(B) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;

(C) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the insurer have been relied on by the actuary;

(D) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and

(E) Composite rates reflecting projections of new certificates, in the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase; and

(F) A demonstration that actual and projected costs exceed costs anticipated at the time of initial pricing under moderately adverse experience and that the composite margin specified in OAR 836-052-0566(2)(b)(D) is projected to be exhausted.

(d) A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the director; and

(e) Sufficient information for review and approval of the premium rate schedule increase by the director.

(3) As used in this rule, "exceptional increase" means only those increases filed by an insurer as exceptional for which the director determines the need for the premium rate increase is justified, owing to changes in statutes or rules applicable to long-term care insurance in this state or owing to increased and unexpected utilization that affects the majority of insurers of similar products. An exceptional increase is subject to the following provisions:

(a) Except as provided in this rule, an exceptional increase is subject to the same requirements as other premium rate schedule increases.

(b) The director may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase.

(c) The director, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.

(4) All premium rate schedule increases shall be determined in accordance with the following requirements:

(a) Each exceptional increase shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;

(b) Each premium rate schedule increase shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:

(A) The accumulated value of the initial earned premium times 58 percent;

(B) 85 percent of the accumulated value of prior premium rate schedule increases on an earned basis;

(D) 85 percent of the present value of future projected premiums not in paragraph (C) of this subsection on an earned basis.

(c) In the event that a policy form has both exceptional and other increases, the values in subsection (b)(B) and (D) of this section will also include 70 percent for exceptional rate increase amounts; and

(d) All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate specified in ORS 733.310 for the valuation of life insurance issued on the same date as the long-term care insurance. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.

(5) For each rate increase that is implemented, the insurer shall file for review and approval by the director updated projections, as defined in section (2)(c)(A) of this rule, annually for the next three years and include a comparison of actual results to projected values. The director may extend the period to greater than three years if actual results are not consistent with projections values from prior projections. For group insurance policies that meet the conditions in section (12) of this rule, the projections required by this section shall be provided to the policyholder in lieu of filing with the director.

(6) If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as defined in section (2)(c)(A) of this rule, shall be filed for review and approval by the director every five years following the end of the required period in section (5) of this rule. For group insurance policies that meet the conditions in section (12) of this rule, the projections required by this section shall be provided to the policyholder in lieu of filing with the director.

(7)(a) If the director has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projection under moderately adverse conditions demonstrates that incurred claims will not exceed proportions of premiums specified in section (4) of this rule, the director may require the insurer to implement any of the following:

(A) Premium rate schedule adjustments; or

(B) Other methods to reduce the difference between the projected and actual experience.

(b) In determining whether the actual experience adequately matches the projected experience, consideration shall be given to section (2)(c)(E) of this rule, if applicable.

(8) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:

(a) A plan, subject to director approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increase, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect, otherwise the director may impose the condition in section (9) of this rule; and

(b) The original anticipated lifetime loss ratio and the premium rate schedule increase that would have been calculated according to section (4) of this rule had the greater of the original anticipated lifetime loss ratio or 58 percent been used in the calculations described in section (4)(a)(A) and (C) of this rule.

(9)(a) For a rate increase filing that meets the following criteria, the director shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if a significant adverse lapse has occurred or is anticipated:

(A) The rate increase is not the first rate increase requested for the specific policy form or forms;

(B) The rate increase is not an exceptional increase; and

(C) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

(b) In the event significant adverse lapse has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the director may determine that a rate spiral exists. Following the determination that a rate spiral exists:

(A) The director may require the insurer to offer, without underwriting, to all in force insureds subjected to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.

(B) An offer under paragraph (A) of this subsection shall:

(i) Be subject to the approval of the director;

(ii) Be based on actuarially sound principles, but not be based on attained age;

(iii) Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy; and

(iv) Shall credit any unearned premium to the new coverage.

(C) The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:

(i) The maximum rate increase determined based on the combined experience; and

(ii) The maximum rate increase determined based only on the experience of the insureds originally issued the form plus ten percent.

(10) If the director determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the director may, in addition to the provisions of section (9) of this rule, prohibit the insurer from doing either of the following:

(a) Filing and marketing comparable coverage for a period of up to five years; or

(b) Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.

(11) Sections (1) to (10) of this rule do not apply to policies for which long-term care benefits provided by the policy are incidental if the policy complies with all of the provisions of this section. For the purpose of this section, "incidental" means that the value of the long-term care benefits provided is less than ten percent of the total value of the benefits provided over the life of the policy. These values shall be measured as of the date of issue. The provisions are as follows:

(a) The interest credited internally to determine cash value accumulations, including long-term care, if any, must be guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy.

(b) The portion of the policy that provides insurance benefits other than long-term care coverage must meet the nonforfeiture requirements for those benefits.

(d) The portion of the policy that provides insurance benefits other than long term care coverage must meet the requirements as applicable for life and annuity policies.

(e) An actuarial memorandum that includes the following items must be filed with the director:

(A) A description of the basis on which the long term care rates were determined.

(B) A description of the basis for the reserves.

(D) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any.

(E) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives.

(F) The estimated average annual premium per policy and the average issue age.

(G) A statement as to whether underwriting is performed at the time of application. The statement must indicate whether underwriting is used and, if used, the statement must include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs.

(H) A description of the effect of the long term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying insurance policy, both for active lives and those in long term care claim status.

(12) Sections (6) and (8) of this rule do not apply to group insurance policies as defined in ORS 743.652(3)(a) when:

(a) The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or

(b) The policyholder and not the certificate holders pays a material portion of the premium, which shall not be less than 20 percent of the total premium for the group in the calendar year prior to the year a rate increase is filed.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.005, 743.018, 743.650 & 743.652
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 5-2006, f. 3-15-06, cert. ef. 3-20-06
ID 12-2005(Temp), f. & cert. ef. 10-3-05 thru 3-20-06
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0680 Premium Rate Schedule Increases for Policies Subject to Loss Ratio Limits Related to Original Filings

(1) This rule applies as follows:

(a) Except as provided in section (1)(b) of this rule, this rule applies to any long-term care policy or certificate issued in this state on or after January 1, 2016.

(b) For certificates issued on or after January 1, 2016 under a group long-term care insurance policy as defined in ORS 743.652(4), which policy was in force at the time this amended rule became effective, the provisions of this section shall apply on the policy anniversary following July 1, 2016.

(2) An insurer shall obtain approval of a premium rate increase from the Director of the Department of Consumer and Business Services prior to the notice to the policyholders and shall include the following in the submission to the director:

(a) Information required by OAR 836-052-0556;

(b) Certification by a qualified actuary that:

(A)(i) If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated; and

(ii) The premium rate filing is in compliance with the provisions of this rule; or

(B) The insurer may request a premium rate schedule increase less than what is required under this rule and the director may approve such premium rate schedule increase, without submission of the certification in subsection (b) of this section, if the actuarial memorandum discloses the premium rate schedule increase necessary to make the certification required under subsection (b) of this section, the premium rate schedule increase filing satisfies all other requirements of this section, and is, in the opinion of the director, in the best interest of policyholders.

(i) Annual values for the five years preceding and the three years following the valuation date shall be provided separately;

(ii) The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase; and

(iii) The projections shall demonstrate compliance with section (3) of this rule; and

(B) For exceptional increases:

(i) The projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and

(ii) In the event the Director determines as provided in OAR 836-052-0676(3)(c) that offsets may exist, the insurer shall use appropriate net projected experience.

(C) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse.

(D) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary.

(E) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration.

(F) In the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer must file composite rates reflecting projections of new certificates.

(G) A demonstration that actual and projected costs exceed costs anticipated at the time of initial pricing under moderately adverse experience and that the composite margin specified in OAR 836-052-0566(2)(b) is projected to be exhausted.

(e) Sufficient information for the director to review and approve the premium rate schedule increase.

(3) All premium rate schedule increases shall be determined in accordance with all of the following requirements:

(a) Exceptional increases shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits.

(b) Premium rate schedule increases shall be calculated such that the sum of the lesser of the accumulated value of actual incurred claims, without the inclusion of active life reserves, or the accumulated value of historic expected claims, without the inclusion of active life reserves, plus the present value of the future expected incurred claims, projected without the inclusion of active life reserves, will not be less than the sum of the following:

(A) The accumulated value of the initial earned premium times the greater of 58 percent and the lifetime loss ratio consistent with the original filing including margins for moderately adverse experience;

(B) Eighty-five percent of the accumulated value of prior premium rate schedule increases on an earned basis;

(C) The present value of future projected initial earned premiums times the greater of 58 percent and the lifetime loss ratio consistent with the original filing including margins for moderately adverse experience; and

(D) Eighty-five percent of the present value of future projected premiums not in paragraph (C) of this subsection on an earned basis.

(c) Expected claims shall be calculated based on the original filing assumptions assumed until new assumptions are filed as part of a rate increase. New assumptions shall be used for all periods beyond each requested effective date of a rate increase. Expected claims are calculated for each calendar year based on the in-force at the beginning of the calendar year. Expected claims shall include margins for moderately adverse experience; either amounts included in the claims that were used to determine the lifetime loss ratio consistent with the original filing or as modified in any rate increase filing.

(d) If a policy form has both exceptional and other increases, the values in subsection (b)(B) and (D) of this section will also include 70 percent for exceptional rate increase amounts.

(e) All present and accumulated values used to determine rate increases, including the lifetime loss ratio consistent with the original filing reflecting margins for moderately adverse experience, shall use the maximum valuation interest rate for contract reserves as specified in ORS 733.310. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.

(4) For each rate increase that is implemented, the insurer shall file for approval by the director updated projections, as defined in section (2)(c)(A) of this rule, annually for the next three years and include a comparison of actual results to projected values. The director may extend the period to greater than three years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in section (11) of this rule, the projections required by this section shall be provided to the policyholder in lieu of filing with the director.

(5) If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as defined in section (2)(c)(A) of this rule, shall be filed for approval by the director every five years following the end of the required period in section (4) of this rule. For group insurance policies that meet the conditions in section (11) of this rule, the projections required by this section shall be provided to the policyholder in lieu of filing with the director.

(6)(a) If the director has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in section (3) of this rule, the director may require the insurer to implement any of the following:

(A) Premium rate schedule adjustments; or

(B) Other measures to reduce the difference between the projected and actual experience.

(b) In determining whether the actual experience adequately matches the projected experience, consideration should be given to section (2)(c)(F) of this rule, if applicable.

(7) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file a plan, subject to director approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise the director may impose the condition in section (8) of this rule.

(8)(a) For a rate increase filing that meets the following criteria, the director shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated:

(A) The rate increase is not the first rate increase requested for the specific policy form or forms;

(B) The rate increase is not an exceptional increase; and

(C) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

(b) In the event significant adverse lapsation has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the director may determine that a rate spiral exists. Following the determination that a rate spiral exists, the director may require the insurer to offer, without underwriting, to all in force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.

(A) The offer shall:

(i) Be subject to the approval of the director;

(ii) Be based on actuarially sound principles, but not be based on attained age; and

(iii) Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.

(B) The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:

(i) The maximum rate increase determined based on the combined experience; and

(ii) The maximum rate increase determined based only on the experience of the insureds originally issued the form plus ten percent.

(9) If the director determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the director may, in addition to the provisions of section (8) of this rule, prohibit the insurer from either of the following:

(a) Filing and marketing comparable coverage for a period of up to five years; or

(b) Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.

(10) Sections (1) to (9) of this rule shall not apply to policies for which the long-term care benefits provided by the policy are incidental, as defined in OAR 836-052-0676(11), if the policy complies with all of the following provisions:

(a) The interest credited internally to determine cash value accumulations, including long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy.

(b) The portion of the policy that provides insurance benefits other than long-term care coverage meets the nonforfeiture requirements as applicable in any of the following:

(A) ORS 743.204 to 743.222; and

(B) ORS 743.275 to 743.295.

(d) The portion of the policy that provides insurance benefits other than long-term care coverage meets the requirements as applicable in the following:

(A) Policy illustrations as required by OAR 836-051-0500 to 836-051-0600; and

(B) Disclosure requirements in OAR 836-051-0900 to 836-051-0925.

(e) An actuarial memorandum is filed with the department that includes all of the following:

(A) A description of the basis on which the long-term care rates were determined.

(B) A description of the basis for the reserves.

(D) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any.

(E) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives.

(F) The estimated average annual premium per policy and the average issue age.

(G) A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. For a group policy, the statement must indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs.

(H) A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying insurance policy, both for active lives and those in long-term care claim status.

(11) Sections (6) and (8) of this rule shall not apply to group insurance policies as defined in ORS 743.652(3) if:

(a) The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or

(b) The policyholder, and not the certificate holders, pays a material portion of the premium, which shall not be less than 20 percent of the total premium for the group in the calendar year prior to the year a rate increase is filed.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Sec. 9, Ch. 486 & OL 2007 (Enrolled SB 191) ORS 744.088
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16

Or. Admin. R. 836-052-0686 Filing Requirements for Out-of-State Group Policies

Each insurer providing group long-term care insurance benefits to a resident of this state under an exempt master group policy pursuant to ORS 731.486 issued outside of this state shall file, for informational purposes, a copy of the policy form filed for approval with the state of domicile of the insurer and any rider or certificate used in this state in accordance with the filing requirements and procedures applicable to group entities filing in this state.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 731.244 & 743.653
Renumbered from 836-052-0550, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0696 Filing Requirements for Advertising

At the request of the Director, every insurer, health care service plan or other entity providing long-term care insurance or benefits in this state shall provide to the Director a copy of any long-term care insurance advertisement intended for use in this state, whether through the written, radio or television medium, for review or approval by the Director as authorized under ORS 742.009 and other state law. In addition, all advertisements shall be retained by the insurer, health care service plan or other entity for at least three years from the date the advertisement was first used. Each advertisement shall comply with all applicable laws and rules of this state.

History

Statutory/Other Authority: ORS 731.244 & 742.009
Statutes/Other Implemented: ORS 742.009 & 743.655(1)(a)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 5-2006, f. 3-15-06, cert. ef. 3-20-06
ID 12-2005(Temp), f. & cert. ef. 10-3-05 thru 3-20-06
Renumbered from 836-052-0620, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0706 Standards for Marketing

(1) Every insurer, health care service plan or other entity marketing long-term care insurance coverage in this state, directly or through its insurance producers, shall:

(a) Establish marketing procedures and insurance producer training requirements to assure that:

(A) Any marketing activities, including any comparison of policies by its insurance producers, will be fair and accurate; and

(B) Excessive insurance is not sold or issued.

(b) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy, or certificate if a group, the following:

"Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."

(d) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has health or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has health insurance is not required.

(e) Establish auditable procedures for verifying compliance with this section.

(f) At solicitation, provide written notice to the prospective policyholder and certificate holder that a senior insurance counseling program approved by the Director is available and the name, address and telephone number of the program.

(g) For long-term care insurance policies, certificates and riders, use the terms "noncancellable" or "level premium" only when the policy, certificate or rider conforms to OAR 836-052-0526(1)(c).

(h) Provide an explanation of contingent benefit upon lapse provided for in OAR 836-052-0746(4)(c) and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in 836-052-0746(4)(d).

(2) In addition to the practices prohibited under ORS Chapter 746, the following acts and practices are prohibited:

(a) Twisting, which includes knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insure.

(c) Cold lead advertising, which is making use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurer or insurance producer.

(d) Misrepresentation of a material fact in selling or offering to sell a long-term care insurance policy.

(3) An association, as defined in ORS 743.652(3)(b), and the insurer endorsing or selling long-term care insurance are subject to the following requirements and obligations:

(a) The primary responsibility of an association, when endorsing or selling long term care insurance, shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. An association shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by the association to ensure that its members receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.

(b) The insurer shall file with the Director the following material:

(A) The policy, certificate, and riders;

(B) A corresponding outline of coverage; and

(A) The specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees and other forms of financial support) that the association receives from endorsement or sale of the policy or certificate to its members; and

(B) A brief description of the process under which the policies and the insurer issuing the policies were selected.

(d) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

(e) The board of directors of an association selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(f) The association shall also:

(A) At the time of the association's decision to endorse, engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change;

(B) Actively monitor the marketing efforts of the insurer and its producers; and

(C) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies, certificates, or riders.

(g) Subsection (f) of this section does not apply to qualified long-term care insurance contracts.

(h) A group long term care insurance policy, certificate or rider may not be issued to an association unless the insurer files with the director the information required in this section.

(i) The insurer may not issue a long term care insurance policy or certificate to an association or continue to market the policy or certificate or certificate unless the insurer certifies annually that the association has complied with the requirements of this section.

(j) Failure to comply with the filing and certification requirements of this rule is an unfair trade practice in violation of ORS 746.240.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.655(1)(a) & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0640, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0716 Disclosure Statement

(1) An insurer offering long-term care insurance coverage in this state shall deliver a disclosure statement as provided in this rule to the insured under a long-term care insurance policy, rider or certificate or separately but at the same time as delivery of the policy, rider or certificate.

(2) The disclosure statement must include the following matters:

(a) A statement of the premium. The statement must give the total annual premium for the policy, rider or certificate and, if the premium varies with an applicant’s choice among benefits options, must indicate the portion of annual premium corresponding to each benefit option;

(b) The terms of renewability. The terms used to describe renewability must be used in accordance with OAR 836-052-0526. The terms must be stated on the first page of the policy and must be one of the following, defined as follows:

(A) A policy is “guaranteed renewable” when renewal cannot be declined by the insurer for any reason, but the insurer can revise rates on a class basis;

(B) A policy is “noncancellable” if the insurer cannot decline renewal and cannot revise rates.

(d) A statement of nonduplication of coverage provisions;

(e) Coverage of dependents;

(f) Preexisting conditions;

(g) Termination of insurance;

(h) Continuation or conversion of coverage;

(i) Any probationary periods;

(j) Limitations, exceptions and reductions;

(k) Elimination periods;

(l) Requirements for replacement;

(m) Recurrent conditions;

(n) Definitions of terms;

(o) Option to apply for new benefits

(3) The disclosure statement:

(a) Must be printed in not less than twelve point type;

(b) May not contain material of an advertising nature.

(4) The disclosure statement must include the following statement: CAUTION: Issuance of this long-term care insurance (policy) (rider) (certificate) is based upon your answers to the questions on your application. (A copy of your (application) (enrollment form) is enclosed.) — OR — (You retained a copy of your (application) (enrollment form) when you applied.) If your answers are incorrect or untrue, the company may deny benefits or rescind your policy.

(5) When long term care benefits are provided through early payment of a portion of a life insurance policy death benefit, the disclosure statement must include the following statements:

(a) “NOTICE: The long term care benefits described here are provided as part of a life insurance policy. Your premiums pay for life insurance. Whenever long term care benefits are paid from this policy, the payments will reduce the available cash value and death benefit under the life insurance policy”;

(b) A statement of disclosure regarding tax consequences, as described in OAR 836-052-0546(6).

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
Renumbered from 836-052-0605, ID 3-2005, f. & cert. ef. 3-1-05
ID 1-1996, f. & cert. ef. 1-12-96
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0726 Suitability

(1) This rule does not apply to life insurance policies that accelerate benefits for long-term care.

(2) Each insurer, health care service plan or other entity shall:

(a) Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;

(b) Train its insurance producers in the use of its suitability standards; and

(3)(a) To determine whether an applicant meets the standards developed by the insurer, an insurance producer and insurer shall develop procedures that take the following into consideration:

(A) The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;

(B) The applicant's goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs; and

(C) The values, benefits and costs of the applicant's existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.

(b) The insurer, and when an insurance producer is involved, the insurance producer, shall make reasonable efforts to obtain the information set out in subsection (a) of this section. The efforts shall include presentation to the applicant, at or prior to application, the "Long-Term Care Insurance Personal Worksheet." The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in OAR 836-052-0556(4), Exhibit 1, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer's personal worksheet shall be filed with the Director.

(c) A completed personal worksheet shall be returned to the insurer prior to the insurer's consideration of the applicant for coverage, except that the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.

(d) An insurer or insurance producer shall not sell or disseminate information obtained through the personal worksheet outside the insurer or agency.

(4) An insurer shall use the suitability standards it has developed pursuant to this rule in determining whether issuing long-term care insurance coverage to an applicant is appropriate.

(5) An insurance producer shall use the suitability standards developed by the insurer in marketing long-term care insurance.

(6) At the same time that the personal worksheet is provided to the applicant, the disclosure form entitled "Things You Should Know Before You Buy Long-Term Care Insurance" shall also be provided to the applicant. The form shall be in the format contained in Exhibit 1, in not less than 12 point type.

(7) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application. In the alternative, the insurer shall send the applicant a letter similar to Exhibit 2. However, if the applicant has declined to provide financial information, the insurer may use some other method to verify the applicant's intent. The insurer shall make either the applicant's returned letter or a record of the alternative method of verification a part of the applicant's file.

(8) The insurer shall report annually by May 1 to the Director the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who chose to confirm after receiving a suitability letter.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0736 Prohibition Against Preexisting Conditions, Waiting Periods and Probationary Periods in Replacement Policies and Certificates

(1) If a long-term care insurance policy replaces another long-term care insurance policy, the replacing insurer shall waive any time periods applicable to preexisting conditions, waiting periods and probationary periods in the new long-term care insurance policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.

(2) If a group long-term care policy is replaced by another group long-term care policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.655(1)(a)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0575, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0738 Availability of New Services or Providers

(1) An insurer shall notify policyholders of the availability of a new long term policy series that provides coverage for new long term care services or providers that are material in nature and not previously available through the insurer to the general public. The notice shall be provided within 12 months of the date that the new policy series is made available for sale in this state.

(2) Notwithstanding section (1) of this rule, notification is not required for any policy issued prior to the effective date of this rule or to any policyholder or certificate holder who is currently eligible for benefits, within an elimination period or on a claim, or who previously had been in claim status, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium, to add such new services or providers.

(3) An insurer shall make the new coverage available in one of the following ways:

(a) By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured’s attained age;

(b) By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate.

(c) By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged. The cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate.

(d) By an alternative program developed by the insurer that meets the intent of this rule if the program is filed with and approved by the Director.

(4) An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For the purpose of this section, “limited distribution channel” means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased such a new proprietary policy shall be notified when a new long term care policy series that provides coverage for new long term care services or providers material in nature is made available to that limited distribution channel.

(5) A policy issued pursuant to this rule shall be considered an exchange and not a replacement. An exchange is not subject to OAR 836-052-0626 and 836-052-0726, and the reporting requirements of 836-052-0636(1) to (3).

(6) When a policy is offered through an employer, labor organization, professional, trade or occupational association, the required notification in section (1) of this rule must be made to the offering entity. However, if the policy is issued to a group defined in ORS 743. 650(3)(d), the notification shall be made to each certificate holder.

(7) Nothing in this rule prohibits an insurer from offering any policy, rider, certificate or coverage change to any policyholder or certificate holder. However, upon request, any policy holder may apply for currently available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add the new services or providers.

(8) This rule does not apply to life insurance policies or riders containing accelerated long term care benefits.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Sec. 9, Ch. 486 & OL 2007 (Enrolled SB 191)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0740 Right to Reduce Coverage and Lower Premiums

(1) Every long term care insurance policy and certificate must include a provision that allows the policyholder or certificate holder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

(a) Reducing the maximum benefit; or

(b) Reducing the daily, weekly, or monthly benefit amount.

(2) An insurer may offer other reduction options that are consistent with the policy or certificate design or the insurer's administrative processes, in addition to the provision required in section (1) of this rule.

(3) If a reduction in coverage involves the reduction or elimination of the inflation protection provision, the insurer must allow the policyholder to continue the benefit amount in effect at the time of the reduction.

(4) The provision required in section (1) of this rule must include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

(5) The premium for the reduced coverage shall:

(a) Be based on the same age and underwriting class used to determine the premium for the coverage currently in force; and

(b) Be consistent with the approved rate table.

(6) The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

(7) If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of the right of the policyholder or certificate holder to reduce coverage and premiums in the notice required by ORS 743.658.

(8) This rule does not apply to life insurance policies or riders containing accelerated long term care benefits.

(9) This rule applies to any long term care policy issued in this state on or after December 1, 2008.

(10) A premium increase notice required by OAR 836-052-0556(5) shall include:

(a) Information about the amount requested and the implementation schedule;

(b) Available benefit reduction or rate increase mitigation actions and the impact such action will have on the policy, such as the loss of asset protection in a partnership plan;

(d) Clear disclosure addressing guaranteed renewable nature of policy and possibility of future rate increases;

(e) Offer of contingent benefit upon lapse or other nonforfeiture benefits, if applicable;

(f) Information about how to contact the insurer;

(g) A statement that the increase is on a class basis rather than for a particular individual and is related to expected future claims rather than economic conditions; and

(h) In the case of a partnership policy, a disclosure that some benefit reduction options may result in a loss in partnership status that may reduce policyholder protections.

(11) The requirements of section (10) of this rule apply to any rate increase implemented in this state on or after January 1, 2016.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Sec. 9, Ch. 486 & OL 2007 (Enrolled SB 191)
ID 8-2016, f. & cert. ef. 7-6-16
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0746 Nonforfeiture Benefit Requirement

(1) This rule does not apply to life insurance policies or riders containing accelerated long-term care benefits.

(2) To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of ORS 743.664:

(a) A long-term care policy, certificate or rider offered with nonforfeiture benefits must have coverage elements, eligibility, benefit triggers and benefit length that are the same as coverage to be issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must be the benefit described in section (6) of this rule.

(b) The offer must be in writing if the nonforfeiture benefit is not otherwise described in the Outline of Coverage or other materials given to the prospective policyholder.

(3) If the offer required to be made under ORS 743.664 is rejected, the insurer shall provide the contingent benefit upon lapse described in this rule. Even if this offer is accepted for a policy with a fixed or limited premium paying period, the contingent benefit on lapse in section (4)(d) of this rule shall still apply.

(4)(a) After rejection of an offer required under section ORS 743.664, for an individual or group policy without nonforfeiture benefits issued after the effective date of this section, the insurer shall provide a contingent benefit upon lapse.

(b) In the event a group policyholder elects to make the nonforfeiture benefit an option to the certificate holder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.

(c) The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in this subsection based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, a policyholder shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase. [Table not included. See ED. NOTE.]

(d) A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in this paragraph based on the insured's issue age, the policy or certificate lapses within 120 days of the due date of the premium so increased, and the ratio in subsection (e)(B) of this section is 40 percent or more. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase. This provision is in addition to the contingent benefit provided by subsection (c) of this section, and when both are triggered, the benefit provider shall be at the option of the insured. [Table not included. See ED. NOTE.]

(e) On or before the effective date of a substantial premium increase as defined in subsection (c) of this section, the insurer shall:

(A) Offer to reduce policy benefits provided by the current coverage consistent with the requirements of OAR 836-052-0740 so that the required premium payments are not increased.

(B) Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the provisions of section (6) of this rule. This option may be elected at any time during the 120-day period referenced in subsection (c) of this section; and

(C) Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period referenced in subsection (c) of this section shall be deemed to be the election of the offer to convert in paragraph (B) of this subsection unless the automatic option in subsection (f)(C) applies.

(f) On or before the effective date of a substantial premium increase as defined in subsection (d) of this section, the insurer shall:

(A) Offer to reduce policy benefits provided by the current coverage consistent with the requirements of OAR 836-052-0740 so that required premium payments are not increased;

(B) Offer to convert the coverage to a paid up status when the amount payable for each benefit is 90 percent of the amount payable in effect immediately prior to lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period. This option may be elected at any time during the 120-day period referenced in subsection (d) of this section; and

(C) Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period referenced in subsection (d) of this section shall be deemed to be the election of the offer to convert in paragraph (B) of this subsection if the ration is 40 percent or more.

(5) For any long-term care policy issued in this state on or after January 1, 2016:

(a) In the event the policy or certificate was issued at least 20 years prior to the effective date of the increase, a value of zero percent shall be used in place of all values in the table referenced in OAR 836-052-0746(4)(d).

(b) Values above 100 percent in the table referenced in OAR 836-052-0746(4)(d) shall be reduced to 100 percent.

(6) Benefits that must be continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with section (4)(c) of this rule but not section (4)(d) of this rule, are described in this section as follows:

(a) For purposes of this section, attained age rating is defined as a schedule of premiums starting from the issue date that increases age at least one percent per year prior to age 50, and at least three percent per year beyond age 50.

(b) For purposes of this section, the nonforfeiture benefit shall be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) must be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in subsection (c) of this section.

(c) The standard nonforfeiture credit must be equal to 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of section (7) of this rule.

(d)(A) The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first three years as well as thereafter.

(B) Notwithstanding paragraph (a) of this subsection, for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of:

(i) The end of the tenth year following the policy or certificate issue date; or

(ii) The end of the second year following the date the policy or certificate is no longer subject to attained age rating.

(e) Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

(7) All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status may not exceed the maximum benefits that would be payable if the policy or certificate had remained in premium paying status.

(8) There shall be no difference in the minimum nonforfeiture benefits as required under this rule for group and individual long term care insurance policies.

(9) The requirements set forth in this rule become effective March 1, 2006, after adoption of this provision and shall apply as follows:

(a) Except as provided in paragraphs (b) and (c) of this subsection, the provisions of this rule apply to any long-term care policy issued in this state on or after March 1, 2005.

(b) For certificates issued on or after March 1, 2006 under a group long-term care insurance policy as defined in ORS 743.652(3)(a), which policy was in force March 1, 2005, the provisions of this rule do not apply.

(c) The last sentence in section (3) and section (4)(d) and (f) of this rule apply to any long term care insurance policy or certificate issued in this state after May 31, 2008, except new certificates on a group policy as defined in ORS 743.652(3)(a) after December 1, 2008.

(10) Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse shall be subject to the loss ratio requirements of OAR 836-052-0666, 836-052-0676, or 836-052-0680, whichever is applicable, treating the policy as a whole.

(11) To determine whether contingent nonforfeiture upon lapse provisions are triggered under section (4)(c) or (d) of this rule, a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.

(12) A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets the following requirements:

(a) The nonforfeiture provision shall be appropriately captioned;

(b) The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium paying contracts approved by the Director for the same contract form; and

(A) Reduced paid-up insurance;

(B) Extended term insurance;

(D) Other similar offerings approved by the Director.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 5-2015, f. 6-10-15, cert. ef. 1-1-16
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0756 Standards for Benefit Triggers

(1) A long-term care insurance policy shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.

(2)(a) Activities of daily living shall include at least the following as defined in OAR 836-052-0516 and in the policy:

(A) Bathing;

(B) Continence;

(D) Eating;

(E) Toileting; and

(F) Transferring;

(b) An insurer may use activities of daily living to trigger covered benefits in addition to those contained in subsection (a) of this section as long as they are defined in the policy.

(c) For purposes of this rule, a cognitive impairment must be a result of a clinically diagnosed organic dementia, including but not limited to Alzheimer's disease or a related progressive degenerative dementia of an organic origin such as the following, by way of example only:

(A) Parkinson's Disease;

(B) Huntington's Disease;

(D) Picks Disease;

(E) Multi-infarct dementia;

(F) Normal pressure hydrocephalus;

(G) Multiple sclerosis;

(H) Inoperable tumors of the brain.

(3) An insurer may use additional provisions for determining when benefits are payable under a policy, certificate or rider, but the provisions shall not restrict, and are not in lieu of, the requirements contained in sections (1) and (2) of this rule.

(4) For purposes of this rule, the determination of a deficiency shall not be more restrictive than:

(a) Requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or

(b) Requiring that if the deficiency is due to the presence of a cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured or others.

(5) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.

(6) A long term care insurance policy shall include a clear description of the process for appealing and resolving benefit determinations.

(7) If an insurer denies payment of benefits under a long term care policy, the insurer shall include in its denial letter information about how the insured may contact the Division of Financial Regulation of the Department of Consumer and Business Services for assistance either by contacting the Division of Financial Regulation Consumer Advocacy Unit at its toll free telephone number or visiting the division’s website at the website address currently provided by the division as may be updated from time to time on the division website.

(8) The requirements set forth in this rule are effective March 1, 2006, except for the following:

(a) The requirements of this rule apply to a long-term care policy or rider issued in this state on or after March 1, 2005.

(b) This rule does not apply to a certificate issued on or after March 1, 2006, under a group long-term care insurance policy as defined in ORS 743.652(3)(a) that was in force on March 1, 2005.

History

Statutory/Other Authority: ORS 731.244, 743.655, 743.656, 746.240, 742.023 & 743.013
Statutes/Other Implemented: ORS 731.244, 743.655, 743.656, 746.240, 742.003, 742.005, 742.009, 743.010, 743.013, 743.650 & 743.653
ID 21-2024, minor correction filed 08/12/2024, effective 08/12/2024
ID 4-2011, f. & cert. ef. 2-10-11
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0766 Additional Standards for Benefit Triggers for Qualified Long-Term Care Insurance Contracts

(1) For purposes of this rule, the following definitions apply:

(a) "Qualified long-term care services" means services that meet the requirements of Section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, as follows: necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual, and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(b)(A) "Chronically ill individual" has the meaning prescribed for this term by section 7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a chronically ill individual means any individual who has been certified by a licensed health care practitioner as:

(i) Being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or

(ii) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.

(B) The term "chronically ill individual" shall not include an individual otherwise meeting these requirements unless within the preceding twelve-month period a licensed health care practitioner has certified that the individual meets these requirements.

(c) "Licensed health care practitioner" means a physician, as defined in Section 1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social worker or other individual who meets requirements prescribed by the Secretary of the Treasury.

(d) "Maintenance or personal care services" means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).

(2) A qualified long term care insurance contract shall pay only for qualified long term care services received by a chronically ill individual provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(3) A qualified long-term care insurance contract shall condition the payment of benefits on a determination of the insured's inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.

(4) Certifications regarding activities of daily living and cognitive impairment required pursuant to section (3) of this rule shall be performed by the following licensed or certified professionals: physicians, registered professional nurses, licensed social workers, or other individuals who meet requirements prescribed by the Secretary of the Treasury.

(5) Certifications required pursuant to section (3) of this rule may be performed by a licensed health care professional at the direction of the insurer as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90-day period.

(6) A qualified long-term care insurance contract shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 731.244, 742.003, 742.005, 742.009, 743.010(3), 743.013(3), 743.650, 743.653, 743.655, 743.656 & 746.240
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
ID 3-2005, f. & cert. ef. 3-1-05

Or. Admin. R. 836-052-0768 Appealing An Insurer’s Determination That The Benefit Trigger Is Not Met

(1) For purposes of this rule, “authorized representative” means a person who is authorized to act as the covered person’s personal representative within the meaning of 45 CFR 164.502(g) promulgated by the Secretary of the Department of Health and Human Services under the administrative simplification provisions of the Health Insurance Portability and Accountability Act. “Authorized representative” includes the following:

(a) A person to whom a covered person has given express written consent to represent the covered person in an external review;

(b) A person authorized by law to provide substituted consent for a covered person; or

(c) A family member of the covered person or the covered person’s treating health care professional only when the covered person is unable to provide consent.

(2) If an insurer determines that the benefit trigger of a long term care insurance policy has not been met, the insurer shall provide a clear, written notice to the insured and the insured’s authorized representative, if applicable, of all of the following:

(a) The reason that the insurer determined that the insured’s benefit trigger has not been met;

(b) The insured’s right to internal appeal in accordance with section (3) of this rule, and the right to submit new or additional information relating to the benefit trigger denial with the appeal request; and

(c) The insured’s right, after exhaustion of the insurer’s internal appeal process, to have the benefit trigger determination reviewed under the independent review process in accordance with section (4) of this rule.

(3) The insured or the insured’s authorized representative may appeal the insurer’s adverse benefit trigger determination by sending a written request to the insurer, along with any additional supporting information, within 120 calendar days after the insured and the insured’s authorized representative, if applicable, receives the insurer’s benefit determination notice. The internal appeal shall be considered by an individual or group of individuals designated by the insurer, but the individual or individuals making the internal appeal decision may not be the same individual or group of individuals who made the initial benefit determination. The internal appeal shall be completed and written notice of the internal appeal decision shall be sent to the insured and the insured’s authorized representative, if applicable, within 30 calendar days after the insurer receives all necessary information upon which a final determination can be made.

(a) If the insurer’s original determination is upheld upon internal appeal, the notice of the internal appeal decision shall describe any additional internal appeal rights offered by the insurer. Nothing in this rule shall require the insurer to offer any internal appeal rights other than those described in this subsection.

(b) If the insurer’s original determination is upheld after the internal appeal process has been exhausted, and new or additional information has not been provided to the insurer, the insurer shall provide a written description of the insured’s right to request an independent review of the benefit determination as described in section (4) of this rule to the insured and the insured’s authorized representative, if applicable.

(c) As part of the written description of the insured’s right to request an independent review, an insurer shall include the following, or substantially equivalent, language: “We have determined that the benefit eligibility criteria (“benefit trigger”) of your [policy] [certificate] has not been met. You may have the right to an independent review of our decision conducted by long term care professionals who are not associated with us. Please send a written request for independent review to us at [address]. You must inform us, in writing, of your election to have this decision reviewed within 120 days after you receive this letter. Listed below are the names and contact information of the independent review organizations approved or certified by the Department of Consumer and Business Services to conduct long term care insurance benefit eligibility reviews. If you wish to request an independent review, please choose one of the listed organizations and include its name with your request for independent review. If you elect independent review, but do not choose an independent review organization with your request, we will choose one of the independent review organizations for you and refer the request for independent review to it.”

(d) If the insurer does not believe the benefit trigger decision is eligible for independent review, the insurer shall inform the insured and the insured’s authorized representative, if applicable, and the director of the Department of Consumer and Business Services in writing and include in the notice the reasons for its determination of independent review ineligibility.

(e) The appeal process described in section (3) of this rule is not deemed to be a ‘new service or provider’ as referenced in OAR 836-052-0738, and therefore does not trigger the notice requirements of that rule.

(4)(a) The insured or the insured’s authorized representative may request an independent review of the insurer’s benefit trigger determination after the internal appeal process outlined in section (3) of this rule is exhausted. A written request for independent review may be made by the insured or the insured’s authorized representative to the insurer within 120 calendar days after the insurer’s written notice of the final internal appeal decision is received by the insured and the insured’s authorized representative, if applicable.

(b) The cost of the independent review shall be borne by the insurer.

(A) Within five business days after receiving a written request for independent review, the insurer shall refer the request to the independent review organization that the insured or the insured’s authorized representative has chosen from the list of certified or approved organizations the insurer has provided to the insured. If the insured or the insured’s authorized representative does not choose an approved independent review organization to perform the review, the insurer shall choose an independent review organization approved or certified by the state. The insurer shall vary its selection of authorized independent review organizations on a rotating basis.

(B) The insurer shall refer the request for independent review of a benefit trigger determination to an independent review organization, subject to the following:

(i) The independent review organization shall be on a list of certified or approved independent review organizations that satisfy the requirements of a qualified long term care insurance independent review organization contained in this section;

(ii) The independent review organization may not have any conflicts of interest with the insured, the insured’s authorized representative, if applicable, or the insurer; and

(iii) The independent review shall be limited to the information or documentation provided to and considered by the insurer in making its determination, including any information or documentation considered as part of the internal appeal process.

(C) If the insured or the insured’s authorized representative has new or additional information not previously provided to the insurer, whether submitted to the insurer or the independent review organization, the information shall first be considered in the internal review process, as set forth in section (3) of this rule.

(i) While the insurer is reviewing the new or additional information, the independent review organization shall suspend its review and the time period for review is suspended until the insurer completes its review.

(ii) The insurer must complete its review of the information and provide written notice of the results of the review to the insured and the insured’s authorized representative, if applicable, and the independent review organization within five business days of the insurer’s receipt of such new or additional information.

(iii) If the insurer maintains its denial after the review of the new or additional information not previously provided to the insurer, the independent review organization shall continue its review, and render its decision within the time period specified in paragraph (I) of this subsection. If the insurer overturns its decision following its review, the independent review request shall be considered withdrawn.

(D) The insurer shall acknowledge in writing to the insured and the insured’s authorized representative, if applicable, and the director that the request for independent review has been received, accepted and forwarded to an independent review organization for review. The notice must include the name and address of the independent review organization.

(E) Within five business days after receipt of the request for independent review, the independent review organization assigned under this subsection shall notify the insured and the insured’s authorized representative, if applicable, the insurer and the director that it has accepted the independent review request and identify the type of licensed health care professional assigned to the review. The assigned independent review organization shall include in the notice a statement that the insured or the insured’s authorized representative may submit in writing to the independent review organization within seven days following the date of receipt of the notice additional information and supporting documentation that the independent review organization should consider when conducting its review.

(F) The independent review organization shall review all of the information and documents received pursuant to paragraph (E) of this subsection that has been provided to the independent review organization. The independent review organization shall provide copies of any documentation or information provided by the insured or the insured’s authorized representative to the insurer for its review, if it is not part of the information or documentation submitted by the insurer to the independent review organization. The insurer shall review the information and provide its analysis of the new information in accordance with subparagraph (H) of this paragraph.

(G) The insured or the insured’s authorized representative may submit, at any time, new or additional information not previously provided to the insurer but pertinent to the benefit trigger denial. The insurer shall consider such information and affirm or overturn its benefit trigger determination. If the insurer affirms its benefit trigger determination, the insurer shall promptly provide such new or additional information to the independent review organization for its review, along with the insurer’s analysis of such information.

(H) If the insurer overturns its benefit trigger determination:

(i) The insurer shall provide notice to the independent review organization and the insured and the insured’s authorized representative, if applicable, and the director of its decision; and

(ii) The independent review process shall immediately cease.

(I) The independent review organization shall provide the insured and the insured’s authorized representative, if applicable, the insurer and the director a written notice of its decision, within 30 calendar days after the independent review organization receives the referral referenced in subsection (c)(B)of this section. If the independent review organization overturns the insurer’s decision, it shall:

(i) Establish the precise date within the specific period of time under review that the benefit trigger was deemed to have been met;

(ii) Specify the specific period of time under review for which the insurer declined eligibility, but during which the independent review organization deemed the benefit trigger to have been met; and

(iii) For tax-qualified long term care insurance contracts, provide a certification (made only by a licensed health care practitioner as defined in section 7702B(c)(4) of the Internal Revenue Code) that the insured is a chronically ill individual.

(J) The decision of the independent review organization with respect to whether the insured met the benefit trigger will be final and binding on the insurer.

(K) The independent review organization’s determination shall be used solely to establish liability for benefit trigger decisions, and is intended to be admissible in any proceeding only to the extent it establishes the eligibility of benefits payable.

(L) Nothing in this section shall restrict the insured’s right to submit a new request for benefit trigger determination after the independent review decision, should the independent review organization uphold the insurer’s decision.

(M) The independent review organization must satisfy the criteria set forth in Exhibit 1, Guidelines for Long term Care Independent Review Entities, in order to be certified or approved by the department to review long term care insurance benefit trigger decisions.

(N) The director shall maintain and periodically update a list of approved independent review organizations.

(5) Certification of Long term Care Insurance Independent Review Organizations. The director may certify or approve a qualified long term care insurance independent review organization, if the independent review organization demonstrates to the satisfaction of the director that it is unbiased and meets the following qualifications:

(a) Have on staff, or contract with, a qualified and licensed health care professional in an appropriate field for determining an insured’s functional or cognitive impairment (e.g. physical therapy, occupational therapy, neurology, physical medicine and rehabilitation) to conduct the review.

(b) Neither the organization nor any of its licensed health care professionals may, in any manner, be related to or affiliated with an entity that previously provided medical care to the insured.

(c) Utilize a licensed health care professional who is not an employee of the insurer or related in any manner to the insured.

(d) Neither it nor its licensed health care professional who conducts the reviews may receive compensation of any type that is dependent on the outcome of the review.

(e) Be state approved or certified to conduct such reviews if the state requires such approvals or certifications.

(f) Provide a description of the fees to be charged by it for independent reviews of a long term care insurance benefit trigger decision. Such fees shall be reasonable and customary for the type of long term care insurance benefit trigger decision under review.

(g) Provide the name of the medical director or health care professional responsible for the supervision and oversight of the independent review procedure.

(h) Have on staff or contract with a licensed health care practitioner, as defined by section 7702B(c)(4) of the Internal Revenue Code of 1986, as amended, who is qualified to certify that an individual is chronically ill for purposes of a qualified long term care insurance contract.

(6) Each certified independent review organization shall comply with the following:

(a) Maintain written documentation establishing the date it receives a request for independent review, the date each review is conducted, the resolution, the date such resolution was communicated to the insurer and the insured, the name and professional status of the reviewer conducting such review in an easily accessible and retrievable format for the year in which it received the information, plus two calendar years.

(b) Be able to document measures taken to appropriately safeguard the confidentiality of such records and prevent unauthorized use and disclosures in accordance with applicable federal and state law.

(c) Report annually to the director, by June 1, in the aggregate and for each long term care insurer all of the following:

(A) The total number of requests received for independent review of long term care benefit trigger decisions;

(B) The total number of reviews conducted and the resolution of such reviews (i.e., the number of reviews which upheld or overturned the long term care insurer’s determination that the benefit trigger was not met);

(D) The percentage of reviews conducted within the prescribed timeframe set forth in subsection (4)(c)(I) of this rule; and

(E) Such other information the director may require.

(d) Report immediately to the director any change in its status which would cause it to cease meeting any of the qualifications required of an independent review organization performing independent reviews of long term care benefit trigger decisions.

(7) Nothing contained in this rule shall limit the ability of an insurer to assert any rights an insurer may have under the policy related to:

(a) An insured’s misrepresentation;

(b) Changes in the insured’s benefit eligibility; and

(8) The requirements of this rule apply to a benefit trigger request made on or after July 1, 2012 under a long term care insurance policy issued or renewed after July 1, 2012.

(9) The provisions of this rule supersede any other external review requirements found in ORS 743.857, 743.858, 743.859, 743.861, 743.862, 743.863 and 743.864.

History

Statutory/Other Authority: ORS 731.244, 743.655 & 2011 OL Ch. 69 & Sec. 5 (Enrolled SB 88)
Statutes/Other Implemented: ORS 743.655 & 2011 OL Ch. 69 & Sec. 5 (Enrolled SB 88)
ID 3-2012, f. & cert. ef. 2-14-12
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0770 Prompt Payment of Clean Claims

(1) For purposes of this rule:

(a) “Claim” means a request for payment of benefits under an in-force policy, regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met.

(b) “Clean claim” means a claim that has no defect or impropriety, including any lack of required substantiating documentation, such as satisfactory evidence of expenses incurred, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim.

(2) Within 30 business days after receipt of a claim for benefits under a long term care insurance policy or certificate, an insurer shall pay the claim if it is a clean claim, or send a written notice acknowledging the date of receipt of the claim and one of the following:

(a) The insurer is declining to pay all or part of the claim and the specific reason for denial; or

(b) That additional information is necessary to determine if all or any part of the claim is payable and the specific additional information that is necessary.

(3) Within 30 business days after receipt of all the requested additional information, an insurer shall pay a claim for benefits under a long term care insurance policy or certificate if it is a clean claim, or send a written notice that the insurer is declining to pay all or part of the claim, and the specific reason for denial.

(4) If an insurer fails to comply with section (2) or (3) of this rule, such insurer shall pay interest at the rate of 1% per month on the amount of the claim that should have been paid but that remains unpaid 45 business days after the receipt of the claim with respect to section (2) of this rule or all requested additional information with respect to section (3) of this rule. The interest payable under this section shall be included in any late reimbursement without requiring the person who filed the original claim to make any additional claim for the interest.

(5) The provisions of this rule shall not apply where the insurer has a reasonable basis supported by specific information that a claim was fraudulently submitted.

(6) Any violation of this rule by an insurer if committed flagrantly and in conscious disregard of the provisions of this rule or with such frequency as to constitute a general business practice shall be considered a violation of the ORS 746.230.

(7) The requirements of this rule apply to a long term care insurance policy issued or renewed after July 1, 2012.

(8) The provisions of this rule supersede any other claim payment requirement found in ORS 746.230.

History

Statutory/Other Authority: ORS 731.244, 743.655 & 2011 OL Ch. 69 & Sec. 2 (Enrolled SB 88)
Statutes/Other Implemented: ORS 743.655 & 2011 OL Ch. 69 & Sec. 2 (Enrolled SB 88)
ID 3-2012, f. & cert. ef. 2-14-12
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

Or. Admin. R. 836-052-0776 Standard Format Outline of Coverage

(1) This rule implements, interprets and makes specific the provisions of ORS 743.655(7) in prescribing a standard format and the content of an outline of coverage. The format for the outline of coverage shall be as provided by the Department of Consumer and Business Services and displayed on the department’s website.

(2) The following requirements apply to the outline:

(a) The outline must be presented in the format prescribed on the department’s website and must be a free-standing document;

(b) The outline must be printed in no smaller than ten-point type;

(d) Text that is capitalized or underscored in the standard format outline of coverage on the department’s website may be emphasized by other means that provide prominence equivalent to the capitalization or underscoring.

(e) Use of the text and sequence of text of the standard format outline of coverage on the department’s website is mandatory, unless otherwise specifically indicated.

[ED. NOTE: Exhibits referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 742.023, 743.013, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 742.003, 742.005, 743.650, 743.655 & 743.656
ID 4-2011, f. & cert. ef. 2-10-11
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0600, ID 3-2005, f. & cert. ef. 3-1-05
ID 1-1996, f. & cert. ef. 1-12-96
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0786 Requirement to Deliver Shopper’s Guide

(1) A long-term care insurance Shopper's Guide in a form approved by the Director shall be provided to all prospective applicants of a long term care insurance policy, certificate or rider as provided in this rule.

(2) For the purpose of approving the form of a guide under this rule, the Director may consider the Shopper's Guide developed by the National Association of Insurance Commissioners, or any other guide, as a comparative standard.

(3) The Shopper's Guide shall be provided as follows:

(a) In the case of insurance producer solicitations, an insurance producer must deliver the Shopper's Guide prior to the presentation of an application or enrollment form.

(b) In the case of direct response solicitations, the Shopper's Guide must be presented in conjunction with any application or enrollment form.

(4) The requirement of a Shopper's Guide under this rule does not apply with respect to a life insurance policy or a rider containing accelerated long-term care benefits, but the insurer or producer shall furnish the policy summary required under OAR 836-052-0716.

History

Statutory/Other Authority: ORS 731, 742 & 743
Statutes/Other Implemented: ORS 743.655(1)(a)
ID 10-2007, f. 12-3-07, cert. ef. 1-1-08
Renumbered from 836-052-0610, ID 3-2005, f. & cert. ef. 3-1-05
ID 20-1990, f. 12-13-90, cert. ef. 1-1-91

Or. Admin. R. 836-052-0790 Disclosure of Benefits Paid

(1) Each insurer shall provide at a minimum the following information at least quarterly to each insured, or a designee of the insured, who is currently receiving, or has received during that quarter, any benefits under a qualified long term care partnership insurance policy:

(a) The total benefits paid by the insurer for services rendered during the quarter;

(b) The total amount of benefits paid to date under the policy; and

(A) The benefits paid are pursuant to a long term care partnership policy; and

(B) To determine if the benefits paid would qualify for asset protection, the policyholder should contact their local Medicaid office.

(2) An insurer shall provide the information required under section (1) of this rule each quarter until the claim is no longer active. The insurer may include the information required in section (1) of this rule either in a separate report to the insured or as part of the explanation of benefits provided to the insured when the insurer pays benefits under the long term care partnership policy.

History

Statutory/Other Authority: ORS 731.244, 743.655, 743.656 & 746.240
Statutes/Other Implemented: ORS 743.650, 743.655 & 743.656
ID 4-2011, f. & cert. ef. 2-10-11

Or. Admin. R. 836-052-0800 Purpose; Applicability

OAR 836-052-0800 to 836-052-0860 are adopted for the purpose of carrying out ORS 743.526, 743.560, 743.562 and 743.565.

History

Statutory/Other Authority: ORS 731.244, 743.526, 743.560 & 743.562
Statutes/Other Implemented: ORS 743.526, 743.560 & 743.562
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-2002, f. & cert. ef. 2-6-02
ID 9-1992, f. 5-26-92, cert. ef. 7-1-92

Or. Admin. R. 836-052-0810 Replacement Upon Termination

For purposes of the notice requirement under ORS 743.560, replacement of the terminated group health insurance coverage occurs when all classes of persons covered by the terminated policy are eligible for coverage:

(1) Under a group health insurance policy of the group policyholder that takes effect on the day after the end of the period through which coverage is paid up; or

(2) Under one or more group health insurance policies of the group policyholder in existence at the termination of the terminated policy.

History

Statutory/Other Authority: ORS 731.244, 743.526, 743.560 & 743.562
Statutes/Other Implemented: ORS 743.560
ID 5-2002, f. & cert. ef. 2-6-02
ID 9-1992, f. 5-26-92, cert. ef. 7-1-92

Or. Admin. R. 836-052-0840 Termination of Coverage

For purposes of ORS 743.560 and 743.562, termination of coverage under a group health insurance policy includes the amendment or reissuance of a policy to delete one or more classes of certificate holders from coverage.

History

Statutory/Other Authority: ORS 731.244, 743.526, 743.560 & 743.562
Statutes/Other Implemented: ORS 743.560
ID 5-2002, f. & cert. ef. 2-6-02
ID 9-1992, f. 5-26-92, cert. ef. 7-1-92

Or. Admin. R. 836-052-0850 Multiple Employer Trusts

(1) For purposes of ORS 743.560 and 743.562, a multiple employer trust is a trust to which a group health insurance policy has been issued, that is established and controlled by the insurer issuing the group health insurance policy.

(2) Termination of a group health insurance policy includes termination of an employer’s participation in a group health insurance policy issued to a multiple employer trust described in this rule, whether or not the group policy itself terminates.

(3) OAR 836-052-0840(1) does not apply to a multiple employer trust described in this rule. Instead, termination by an employer of the employer’s participation in a group health insurance policy issued to a multiple employer trust commences on the effective date of the employer’s termination of participation, unless participation is terminated because the policy is terminated.

History

Statutory/Other Authority: ORS 731.244, 743.526, 743.560 & 743.562
Statutes/Other Implemented: ORS 743.526, 743.560 & 743.562
ID 9-1992, f. 5-26-92, cert. ef. 7-1-92

Or. Admin. R. 836-052-0860 Form of Notice to Group Policyholder

(1) The form of the notice required by ORS 743.560 shall be as established in this rule. The form shall be printed in 12 point type, one point leaded, and shall provide at least the following:

(a) The date of the notice;

(b) A statement to the effect that the group coverage provided through the group policyholder by the insurer has terminated or will terminate, and the effective date of termination. If termination will occur because of nonpayment of premium, the statement must also provide that the premium was not received, that the policy will be terminated as of the premium due date if the premium is not received by the end of the grace period applicable to the policy and that the insurer will furnish no further notice as to termination, and must include the date of termination. The effective date of a termination for a reason other than nonpayment of premium shall be the date preceding the first day that a group policyholder is effectively without coverage under the group health insurance policy;

(d) The name of the employer;

(e) An explanation of the rights of the certificate holders under federal law and state law regarding the continuation of coverage.

(2) In the notice to a group policyholder under this rule, the insurer need include only the information that applies to the group policyholder and certificate holder,

(3) An insurer may satisfy the notice requirements of ORS 743.560(2) and (3) in a single notice that is mailed by first class mail to the last known address of the policyholder at least 10 days prior to the end of the grace period under the policy. The notice must also satisfy the requirements of ORS 743.565.

(4) An insurer may give the notice required by ORS 743.560(3) electronically if, at the time of application or renewal, the insurer allows an applicant or enrollee the opportunity to receive such notices by regular mail, and the enrollee fails to exercise that opportunity.

History

Statutory/Other Authority: ORS 731.244, 743.526, 743.560 & 743.562
Statutes/Other Implemented: ORS 743.560 & 743.777
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2006, f. & cert. ef. 9-26-06
ID 5-2002, f. & cert. ef. 2-6-02
ID 9-1992, f. 5-26-92, cert. ef. 7-1-92

Or. Admin. R. 836-052-1000 Prosthetic and Orthotic Devices

(1) For purposes of this rule, the term device has the meaning given under ORS 743A.145.

(2) The list of devices that must be covered under ORS 743A.145, includes:

(a) Any device for which the Centers for Medicare and Medicaid Services (CMS) has established an L Code in the Healthcare Common Procedure Coding System (HCPCS) Level II, as of January 1, 2026; and

(b) Any additional devices that are determined to be medically necessary and the most appropriate model that meets the medical needs of the insured for purposes of performing physical activities, including but not limited to running, biking, swimming and strength training, and that maximizes the insured’s whole-body health, including lower and upper limb function.

(3) Coverage for the devices and supplies described in subsection (2) of this section may not be subject to internal or separate limits or caps other than the policy lifetime maximum benefits. This subsection does not authorize a health benefit plan or other policy of health insurance to impose a lifetime or annual dollar limit that is otherwise prohibited under state or federal law.

(4) For purposes of ORS 743A.145, coverage provided through a managed care organization includes a health insurance policy that requires an enrollee to use a closed network of providers managed, owned, under contract with or employed by the insurer in order to receive benefits under the plan.

History

Statutory/Other Authority: ORS 731.244 & ORS 743A.145
Statutes/Other Implemented: OR Laws 2025, ch 259
ID 9-2025, amend filed 11/17/2025, effective 01/01/2026
ID 36-2024, amend filed 11/08/2024, effective 01/01/2025
ID 51-2023, amend filed 12/18/2023, effective 01/01/2024
ID 4-2016, f. & cert. ef. 4-8-16
ID 8-2012, f. & cert. ef. 4-5-12
ID 8-2011, f. & cert. ef. 2-23-11
ID 12-2009, f. & cert. ef. 12-18-09
ID 12-2007, f. 12-18-07, cert. ef. 1-1-08

Division 53 HEALTH BENEFIT PLANS

Or. Admin. R. 836-053-0000 Applicability of January 1, 2014 Amendments to OAR Chapter 836, Division 53

(1) Except as provided in section (3) of this rule, the January 1, 2014 amendment to rules in OAR chapter 836, division 53 as amended effective January 1, 2014 apply to health benefit plans issued or renewed on or after January 1, 2014.

(2) Except as provided in section (3) of this rule, the version of rules included in OAR chapter 836, division 53 in effect on December 31, 2013, applies to health benefit plans issued or renewed before January 1, 2014.

(3) Amendments to and repeals of the following rules are effective on January 1, 2014, and apply to all issuers and health benefit plans according to the specified market whether issued or renewed before, on or after January 1, 2014:

(a) OAR 836-053-0700;

(b) OAR 836-053-0710;

(d) OAR 836-053-0760;

(e) OAR 836-053-0780;

(f) OAR 836-053-0785;

(g) OAR 836-053-0790;

(h) OAR 836-053-0800;

(i) OAR 836-053-0825;

(j) OAR 836-053-0830;

(k) OAR 836-053-0835;

(l) OAR 836-053-1000;

(m) OAR 836-053-1035;

(n) OAR 836-053-1070;

(o) OAR 836-053-1130;

(p) OAR 836-053-1170;

(q) OAR 836-053-1180;

(r) OAR 836-053-1190;

(s) OAR 836-053-1315;

(t) OAR 836-053-1320;

(u) OAR 836-053-1325;

(v) OAR 836-053-1330;

(w) OAR 836-053-1335;

(x) OAR 836-053-1340;

(y) OAR 836-053-1342;

(z) OAR 836-053-1345;

(aa) OAR 836-053-1350;

(bb) OAR 836-053-1355;

(cc) OAR 836-053-1360;

(dd) OAR 836-053-1365;

(ee) OAR 836-053-1400;

(ff) OAR 836-053-1401;

(gg) OAR 836-053-1410; and

(hh) OAR 836-053-1415.

History

Statutory/Other Authority: ORS 743.018, 743.019 & 743.020
Statutes/Other Implemented: ORS 742.003, 742.005, 742.007, 743.018, 743.019, 743.020, 743.730 & 743.767
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-2010, f. & cert. ef. 2-16-10

Or. Admin. R. 836-053-0001 Modification of Health Benefit Plan Not Subject to Level of Coverage Requirements

(1) A modification of a health benefit plan not subject to the levels of coverage defined in 42 U.S.C. 18022(d) is defined in this rule for the purposes of:

(a) ORS 743.737 and 743.754, regarding group health benefit plans; and

(b) ORS 743.766, regarding individual health benefit plans.

(2) One or more decreases or increases described in this section in the services or benefits covered in a health benefit plan are a modification and not a discontinuance when the decrease or decreases, or the increase or increases, or any combination thereof, occur at the time of renewal and the change or changes together alter the actuarial valuation of the health benefit plan by less than ten percent in the aggregate to the policyholder. This section applies to a decrease or increase that:

(a) Eliminates or adds benefits payable under the plan;

(b) Decreases or increases benefits payable under the plan, including a decrease or increase that occurs as a result of a change in formulas, methodologies or schedules that serve as the basis for making benefit determinations;

(d) Establishes new conditions or requirements, such as prior authorization requirements, to obtaining services or benefits under the plan, or eliminates such conditions or requirements.

(3) A carrier must give the policyholder notice of a modification to which this rule applies not later than the 30th day before the date of renewal of the plan to which the modification applies.

(4) A change in a requirement for eligibility is not a modification for purposes of this rule but instead is a discontinuance if the change will result in the exclusion of a class or category of enrollees covered under the current plan.

(5) A decrease or increase described in this section in the services or benefits covered in a health benefit plan is a modification and not a discontinuance, but the decrease or increase is not subject to section (2) of this rule. This section applies to the following:

(a) A carrier's normal and customary administrative changes that do not have an actuarial impact, such as the following:

(A) Formulary changes.

(B) Utilization management protocols.

(C) Changes to pharmacy prior authorization requirements if, at least 48 hours before a change, the insurer prominently posts:

(i) A description of any pharmacy prior authorization requirement change to a page of the insurer’s website that an enrollee or provider can easily locate and access; and

(ii) A link to the website page described in subparagraph (i) of this paragraph on the home page of the insurer’s website.

(D) Changes to non-pharmacy prior authorization requirements that are made other than at renewal only when an insurer does all of the following:

(i) Makes a reasonable and good faith effort to identify all enrollees affected by the changes.

(ii) Makes a reasonable and good faith effort to identify providers who provide a service or treatment affected by the changes.

(iii) Notifies all enrollees and providers identified in subparagraphs (i) and (ii) of this paragraph at least 60 days in advance of the effective date of the change.

(iv) Posts a description of any change to the non-pharmacy prior authorization requirements to a page of the insurer’s website that an enrollee or provider can easily locate and access.

(v) Posts a link to the website page described in subparagraph (iv) of this paragraph on the home page of the insurer’s website.

(vi) Covers to the extent otherwise payable under the terms of the contract, and without penalty, any claim for services or treatment affected by changes to prior authorization requirements of an enrollee to whom the insurer fails to provide notice of the change.

(b) A decrease or increase required by state or federal law.

History

Statutory/Other Authority: ORS 731.244, 743.566 & 743.773
Statutes/Other Implemented: ORS 743.737, 743.754 & 743.766
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 18-2010, f. 9-14-10, cert. ef. 1-1-11
ID 7-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-053-0002 Modification of a Health Benefit Plan Subject to Levels of Coverage Requirements

(1) A modification of a health benefit plan subject to the levels of coverage defined in 42 U.S.C. 18022(d) is defined in this rule for the purposes of:

(a) ORS 743B.013, regarding small employer health benefit plans; and

(b) ORS 743B.125, regarding individual health benefit plans.

(2) At the time of coverage renewal insurers may modify the coverage for a product offered to a group or an individual.

(a) The modification must be consistent with state law and effective uniformly with that product.

(b) Modifications made uniformly and solely under applicable federal or state requirements are considered a uniform modification of coverage if:

(A) The modification is made within a reasonable time period after the imposition or modification of the federal or state requirement; and

(B) The modification is directly related to the imposition or modification of the federal or state requirement.

(c) Other types of modification made uniformly are considered a uniform modification of coverage if the coverage for the product in the individual or small group market meets all of the following criteria:

(A) The product is offered by the same health insurer;

(B) The product offered has the same product network type;

(D) Within the product, each plan has the same cost sharing structure as before the modification, except for any variation in cost sharing solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level described in 42 U.S.C. 18022(d); and

(E) The product provides the same covered benefits, except for any changes in benefits that cumulatively impact the plan-adjusted index rate for any plan within the product within an allowable variation of the plus or minus two percentage points (not including changes required under applicable federal or state law).

(3) Insurers must:

(a) Give the individual notice of a modification to which this rule applies not later than 30 days before the date of renewal of the plan to which the modification applies.

(b) Use either the standard notice created by Centers for Medicare and Medicaid Services or the standardized notice of modification or discontinuance as set forth on website for the Department of Consumer and Business Services at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, 743B.127 & 743B.324
Statutes/Other Implemented: ORS 743B.013, 743B.105 & 743B.125
ID 14-2023, minor correction filed 06/23/2023, effective 06/23/2023
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0003 Prohibition of Exclusion Period for Pregnancy

A carrier may not impose an exclusion period or a waiver in a health benefit plan for pregnancy and childbirth expenses, for which coverage is required by ORS 743A.080.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.737, 743.754, 743.766 & 743A.080
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 9-2006, f. 4-27-06, cert. ef. 5-1-06

Or. Admin. R. 836-053-0004 Compliance with Federal and State Law

Upon contract issuance or renewal, any insurer offering a health benefit plan must update the plans of the insurer as necessary to comply with state and federal law.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.005
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16

Or. Admin. R. 836-053-0005 Prescription Drug Identification Cards

(1) This rule establishes minimum standards for prescription drug identification cards or other technologies that are required by ORS 743.788 to be issued by carriers, administrators of health benefit plans, third party administrators for self-insured plans, pharmacy benefits managers and administrators of state administered plans. This rule is adopted pursuant to the rulemaking authority of 743.790 for the purpose of implementing 743.788.

(2) A prescription drug identification card or other technology required by ORS 743.788 must contain the following information:

(a) The data element consistent with the "BIN, "IIN/BIN" or "RxBIN," which is the American National Standards Institute-assigned international identification number identified in the National Council for Prescription Drug Programs Pharmacy ID Card Implementation Guide, and labeled as RxBIN or BIN.

(b) The enrollee's name and identification number.

(c) A telephone number of the carrier or other issuer of the card or technology that a pharmacist may use to contact the carrier or other issuer, and a telephone number for after hour calls from a pharmacist (if that number is different from the first), unless the telephone number or numbers are provided electronically to the pharmacist at the time of processing.

(d) If required by the claims processor of the carrier or other issuer of the card, the processor control number labeled as RxPCN, and the pharmacy group number if different from the medical group number labeled as RxGrp.

(e) Any other information and any other data element of the National Council for Prescription Drug Programs Guide required by the issuer of the card for the processing of claims.

History

Statutory/Other Authority: ORS 743.790
Statutes/Other Implemented: ORS 743.788
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 3-2003, f. 4-14-03 cert. ef. 7-1-03

Or. Admin. R. 836-053-0006 Issuance of Group Health Benefit Coverage to Employer Association

(1) As used in this rule, the term “employer association” refers to an association or other group of employers that sponsors, or wishes to sponsor one or more fully insured group health benefit plan for its members, employees, or employees of its members. For purposes of this rule, the term does not include a labor union.

(2) A health insurance carrier may not issue a policy of group health benefit coverage to an employer association as the policyholder or offer coverage under such a policy, whether issued in this or another state, unless the director of the Department of Consumer and Business Services determines that:

(a) The employer association meets the requirements of ORS 731.098 (2); and

(b) Issuance of the policy or coverage would be consistent with the requirements of this rule and the Insurance Code.

(3) A carrier proposing to offer group health benefit coverage to an employer association must submit, in the form prescribed by the director, the following information to the department’s Division of Financial Regulation for approval:

(a) A signed copy of the employer association’s current constitution and bylaws.

(b) A statement describing the purpose of the employer association and demonstrating that the employer association is organized and will be maintained in good faith primarily for purposes other than that of obtaining insurance.

(c) A statement of membership requirements describing any requirements for an employer to become and remain a member of the employer association, including requirements related to participation in a particular trade, business or industry and any geographic requirements.

(A) If only a subset of the employer association’s employer-members will be eligible to participate in the group health benefit coverage, the statement of membership requirements must explain any additional requirements that an employer-member must satisfy in order to participate. Notwithstanding any requirements, a “working owner” is not allowed to enroll in the group health benefit coverage. For purposes of this rule, the term “working owner” means sole proprietors and other self-employed individuals who do not employ at least one common law employee.

(B) If membership in the employer association is limited to a particular trade, business or industry, the statement of membership requirements must define the trade, business, or industry served by the employer association and describe how the employer association determines if the requirement is satisfied.

(d) A statement of eligibility describing the types of individuals who will be eligible to enroll in the group health benefit coverage sponsored by the employer association, whether as a subscriber or as a dependent, and any terms or conditions for continued eligibility that will be set by the carrier or by the employer association.

(e) Evidence demonstrating that the employer association may sponsor the group health benefit coverage under section 3(5) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(5)). The filing must include a letter from an attorney that concludes that the employer association qualifies as an employer under 29 U.S.C. 1002(5) and explains the basis for the conclusion using, at a minimum, the following criteria:

(A) The employer association sponsoring and the individuals benefitting from the group health benefit coverage are tied by a common economic or representational interest, or commonality of interest, beyond the provision of health insurance, considering:

(i) How employer-members of the employer association are solicited;

(ii) Eligibility criteria to participate in the employer association;

(iii) The process by which the employer association was formed;

(iv) The purpose for the formation of the employer association; and

(v) Preexisting relationships of any of the employer-members of the employer association.

(B) The members of the employer association that participate in the group health benefit coverage will exercise control, in both form and substance, over the administration and operation of the group health benefit coverage.

(f) If the employer association will offer coverage to small employer-members, evidence demonstrating that the group health benefit coverage meets 60 percent actuarial value through:

(A) Certification by an actuary in accordance with 45 CFR 156.145; or

(B) A plan that is the equivalent to an Affordable Care Act bronze level plan in accordance with 45 CFR 156.140.

(g) Any additional information requested by the division.

(4) With respect to membership in the employer association or the ability to enroll in group health benefit coverage, no carrier, employer association, or employer-member of the employer association may discriminate against an individual on the basis of the individual’s health status. This section does not prevent an employer association or carrier from charging different premium rates to different employer groups within the employer association, provided the methods used to establish each employer’s premium rate are consistent with 45 CFR 146.121.

(5) Beginning in 2023, no later than October 31 of each year, a health insurance carrier offering group health benefit coverage to an employer association must inform the division of changes to the information required under section (3) of this rule, or provide confirmation to the division that the employer association’s information has not changed since the last filing.

(6) For a carrier that was approved to offer group health benefit coverage to an employer association prior to the effective date of this rule, the requirements of this rule become effective on July 1, 2023. The carrier must file the information required under section (3) of this rule no later than October 31, 2023. If the division determines the filing is not in compliance with the requirements of this rule, the carrier offering coverage to the employer association may file a transition plan no later than 60 calendar days following the disposition of the filing, demonstrating how and when compliance will be met. The division may allow a carrier to continue offering coverage pursuant to the terms of the transition plan for up to two years following the final disposition regarding the acceptability of the transition plan.

History

Statutory/Other Authority: ORS 731.244 & ORS 743.524
Statutes/Other Implemented: ORS 743.524 & ORS 731.098
ID 6-2022, adopt filed 08/31/2022, effective 09/01/2022

Or. Admin. R. 836-053-0007 Approval and Certification of Associations, Trusts, Discretionary Groups and Multiple Employer Welfare Arrangements

(1) Before an insurer may issue coverage to an association, trust, discretionary group or Multiple Employer Welfare Arrangement (MEWA) not already approved by the Director of the Department of Consumer and Business Services as a group policyholder, the insurer must obtain approval from the director to issue coverage to the association, trust, discretionary group or MEWA as the group policyholder.

(2) Annually, or more frequently if required by the director, an insurer must certify that an association, trust, discretionary group or MEWA that is a group policyholder continues to meet the requirements of ORS 743.522 and section 7, chapter 681, Oregon Laws 2013.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.522 & Sect. 7, Ch. 681 & OL 2013
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 6-2008, f. & cert. ef. 4-18-08
ID 8-2007(Temp), f. 10-24-07, cert. ef. 10-25-07 thru 4-18-08

Or. Admin. R. 836-053-0008 Essential Health Benefits for Plan Years 2014, 2015 and 2016

(1) This rule applies to plan years beginning January 1, 2014 through December 31, 2016.

(2) As used in the Insurance Code for plan years beginning January 1, 2014 through December 31, 2016 only:

(a) “Base benchmark health benefit plan” means the PacificSource Health Plans Preferred CoDeduct Value 3000 35 70 small group health benefit plan, including prescription drug benefits, as set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov.

(b) “Essential health benefits” means the following coverage provided in compliance with 45 CFR 156:

(A) The base-benchmark health benefit plan, excluding the 24-month waiting period for transplant benefits;

(B) Pediatric dental benefits;

(D) Habilitative services.

(c) “Habilitative benefits” means the rehabilitative services provisions of the base benchmark when the services are medically necessary for the maintenance, learning or improving skills and function for daily living.

(d) “Pediatric dental benefits” means the benefits described in the children’s dental provisions of the State Children’s Health Insurance Plan as set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov. Pediatric dental benefits are payable to persons under 19 years of age.

(e) “Pediatric vision benefits” means the benefits described in the vision provisions of the Federal Employee Dental and Vision Insurance Plan Blue Vision High Option as set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov. Pediatric vision benefits are payable to persons under 19 years of age.

(3) An insurer that issues a health benefit plan offering essential health benefits may not include as an essential health benefit:

(a) Routine non-pediatric dental services;

(b) Routine non-pediatric eye exam services;

(d) Non-medically necessary orthodontia services.

History

Statutory/Other Authority: ORS 731.097
Statutes/Other Implemented: ORS 731.097
ID 15-2023, minor correction filed 06/23/2023, effective 06/23/2023
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0009 Oregon Standard Bronze and Silver Health Benefit Plans for Plan Years 2014, 2015 and 2016

(1) This rule applies to plan years beginning January 1, 2014 through December 31, 2016.

(2) As used in this rule, “coverage” includes medically necessary benefits, services, prescription drugs and medical devices. “Coverage” does not include coinsurance, copayments, deductibles, other cost sharing, provider networks, out-of-network coverage, wigs or administrative functions related to the provision of coverage, such as eligibility and medical necessity determinations.

(3) For purposes of coverage required under this rule:

(a) “Inpatient” includes but is not limited to:

(A) Inpatient surgery;

(B) Intensive care unit, neonatal intensive care unit, maternity and skilled nursing facility services; and

(b) “Outpatient” includes but is not limited to services received from ambulatory surgery centers and physician and anesthesia services and benefits when applicable.

(c) “Habilitative benefits” means services and devices that help a person keep, learn, or improve skills and functioning for daily living (habilitative services). Examples include therapy for a child who is not walking or talking at the expected age. These services and devices must include physical and occupational therapy, speech-language pathology and other services and devices for people with disabilities in a variety of inpatient or outpatient settings.

(d) A reference to a specific version of a code or manual, including but not limited to references to ICD-9, CPT, Diagnostic and Statistical Manual of Mental Disorders, DSM-IV TR, Fourth Edition; place of service and diagnosis includes a reference to a code with equivalent coverage under the most recent version of the code or manual.

(4) When offering a plan required under ORS 743B.130, an issuer must use the following naming convention: “[Name of Issuer] Oregon Standard [Bronze/ Silver] Plan.”

(5) Coverage required under ORS 743B.130 must be provided in accordance with the requirements of sections (6) to (11) of this rule.

(6) Coverage must be provided in a manner consistent with the requirements of:

(a) 45 CFR 156, except that actuarial substitution of coverage within an essential health benefits category is prohibited;

(b) OAR 836-053-1404 and 836-053-1405; and

(7) Coverage must provide essential health benefits as defined in OAR 836-053-0008.

(8) Except when a specific benefit exclusion applies, or a claim fails to satisfy the issuer’s definition of medical necessity or fails to meet other issuer requirements the following coverage must be provided:

(a) Ambulatory services based on the following Place of Service Codes:

(A) 11 — Office;

(B) 12 — Patient’s home;

(D) 22 — Outpatient hospital;

(E) 24 — Ambulatory surgical center;

(F) 25 — Birthing center;

(G) 49 — Independent clinic;

(H) 50 — Federally qualified health center;

(I) 71 — State or local public health clinic;

(J) 72 — Rural health clinic;

(b) Emergency services based on Place of Service Code 23 — Emergency;

(d) Maternity and newborn services based on the following ICD-9 codes:

(A) V20 to V20.2;

(B) V22 to V39; and

(e) Rehabilitation and habilitation services based the following ICD-9 or CPT codes:

(A) Physical Therapy/Professional: 97001-97002, 97010-97036, 97039, 97110, 97112, 97113-97116, 97122, 97128, 97139, 97140-97530, 97535, 97542, 97703, 97750, 97760, 97761-97762, 97799, and S9090;

(B) Occupational Therapy/Professional: 97003-97004 and G0129 in addition to all physical therapy codes if performed by an occupational therapist;

(f) Laboratory services in the CPT code range 8XXXX;

(g) All grade A and B United States Preventive Services Task Force preventive services, Bright Futures recommended medical screenings for children, Institute of Medicine recommended women's guidelines, and Advisory Committee on Immunization Practices recommended immunizations for children coverage must be provided without cost share; and

(h) Prescription drug coverage at the greater of:

(A) At least one drug in every United States Pharmacopeia (USP) category and class as the prescription drug coverage of the plan described in OAR 836-053-0008(1)(a); or

(B) The same number of prescription drugs in each category and class as the prescription drug coverage of the plan described in OAR 836-053-0008(1)(a).

(9) Copays and coinsurance for coverage required under ORS 743B.130 must comply with the following:

(a) Non-specialist copays apply to physical therapy, speech therapy, occupational therapy and vision services when these services are provided in connection with an office visit.

(b) Subject to the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, specialist copays apply to specialty providers including, mental health and substance abuse providers, if and when such providers act in a specialist capacity as determined under the terms of the health benefit plan.

(c) Coinsurance for emergency room coverage must be waived if a patient is admitted, at which time the inpatient coinsurance applies.

(10) Deductibles for coverage required under ORS 743B.130 must comply with the following:

(a) For a bronze plan, in accordance with the coinsurance, copayment and deductible amounts and coverage requirements for a bronze plan set forth in Exhibit 1 to this rule. The bronze plan deductible must be integrated applicable to prescription drugs and all services except preventive services.

(b) For a silver plan, in accordance with the coinsurance, copayment and deductible amounts and coverage requirements for a silver plan set forth in Exhibit 1 to this rule. The silver plan deductible applies to all services except preventive services, office visits, urgent care, and prescription drugs.

(c) The individual deductible applies to all enrollees, and the family deductible applies when multiple family members incur claims.

(11) Dollar limits for coverage required under ORS 743B.130 must comply with the following:

(a) Annual dollar limits must be converted to a non-dollar actuarial equivalent.

(b) Lifetime dollar limits must be converted to a non-dollar actuarial equivalent.

History

Statutory/Other Authority: ORS 743B.130
Statutes/Other Implemented: ORS 743B.130
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0011 Standard Bronze Plan Health Savings Account Eligible Requirement

(1) If a plan or product is HSA eligible under applicable federal law, the insurer or health care service contractor shall clearly indicate on any applicable plan and benefits template or other plan or product specific filing document that the plan is HSA eligible.

(2) All forms relating to HSA eligible plans shall be consistent with current practice and form filing requirements contained in ORS 742.003 and rules adopted under ORS 742.003.

(3) Plan benefits must be administered in compliance with HSA requirements as set forth by the United States Preventive Services Task Force, Health Resource and Services Administration, or other state or federal laws in effect in the adoption of this rule.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743B.130
ID 7-2017, f. & cert. ef. 7-26-17

Or. Admin. R. 836-053-0012 Essential Health Benefits for Plan Years Beginning on and after January 1, 2017

(1) This rule applies to plan years beginning on and after January 1, 2017.

(2) As used in the Insurance Code and OAR chapter 836:

(a) “Applied behavior analysis” has that meaning given in ORS 676.802.

(b) “Base benchmark health benefit plan” means the PacificSource Health Plans Preferred CoDeduct Value 3000 35 70 small group health benefit plan, including prescription drug benefits, as provided in Exhibit 1 to this rule;

(d) “Essential health benefits” or “EHB” means the following coverage provided in compliance with 45 CFR 156:

(A) The base-benchmark health benefit plan with the exclusions and modifications of provisions of that plan as set forth in section (3) to (7) of this rule;

(B) Pediatric dental benefits;

(D) Habilitative services and devices.

(e) “Habilitative services and devices” means services and devices that help a person keep, learn, or improve skills and functioning for daily living (habilitative services). Examples include therapy for a child who is not walking or talking at the expected age. These services and devices must include physical and occupational therapy, speech-language pathology and other services and devices for people with disabilities in a variety of inpatient or outpatient settings.

(f) “Pediatric dental benefits” means the benefits described in the Dental Plan of the Oregon Health Plan Children’s’ Health Insurance Plan as provided in Exhibit 2 of this rule. Pediatric dental benefits are payable to persons under 19 years of age.

(g) “Pediatric vision benefits” means the benefits described in the vision provisions of the Federal Employee Dental and Vision Insurance Plan Blue Vision High Option as provided in Exhibit 3 of this rule. Pediatric vision benefits are payable to persons under 19 years of age.

(h) “Treatment of a behavioral health condition” includes medical treatments and prescription drugs used to treat a behavioral health condition.

(3) The following exclusions and modifications are required supplementation to the base-benchmark health benefit plan:

(a) The following treatment limitations and exclusions of coverage currently included in the base-benchmark health benefit plan are excluded:

(A) The 24-month waiting period for transplant benefits;

(B) Visit limits for inpatient and outpatient behavioral health services, including but not limited to habilitative and rehabilitative benefits;

(C) Age limits on treatments that would otherwise be appropriate for individuals outside of the limited age, including but not limited to hearing aids, speech, physical and occupational therapy used in the treatment of behavioral health conditions as defined in OAR 836-053-1404;

(D) Exclusions for the treatment of erectile dysfunction or sexual dysfunction as defined in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, Text Revision (DSM-5-TR).

(E) Exclusions for medically necessary surgeries and procedures related to sex transformations and gender identity disorder or gender dysphoria;

(F) Any blanket exclusion for a diagnosis made using the diagnostic criteria of Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, Text Revision (DSM-5-TR).

(G) Exclusions for court-order screening interviews or drug or alcohol treatment programs;

(H) Any limitations or waiting periods for pre-existing conditions;

(I) Time limits for treatment of jaw or teeth or orthognathic surgery; and

(b) Dollar limits for coverage of durable medical equipment must comply with the following:

(A) Annual dollar limits must be converted to a non-dollar actuarial equivalent.

(B) Lifetime dollar limits must be converted to a non-dollar actuarial equivalent.

(A) Any waiting periods must be consistent with limitations imposed by state or federal law;

(B) Wigs following chemotherapy or radiation therapy must be covered up to the actuarial equivalent of $150 per calendar year;

(C) The limitation on cosmetic or reconstructive surgery to one attempt within 18 months of injury or defect must be modified to remove these limitations in cases of medical necessity in accordance with 45 CFR 156.125(a) and to avoid discrimination based on health factors under 45 CFR 146.121;

(D) Contraceptive coverage must comply with Centers for Medicare and Medicaid Services guidance and requirements related to contraception issued jointly by the United States Departments of Labor, Health and Human Services, and Treasury on May 11, 2015;

(E) Provisions related to telemedical health services must reflect changes made to ORS 743A.058 by Oregon Laws 2021, chapter 117 (Enrolled House Bill 2508); and

(F) Housing and travel expenses for transplant services are not considered essential health benefits;

(4) An insurer that issues a health benefit plan offering essential health benefits may not include as an essential health benefit:

(a) Routine non-pediatric dental services;

(b) Routine non-pediatric eye exam services;

(d) Non-medically necessary orthodontia services.

(5) If both a state law and federal law require coverage of the same or similar service, the insurer must assure that all elements of both laws are met and provide the coverage in the manner most beneficial to the consumer.

(6) In the administration of essential health benefits and the EHB base benchmark health benefit plan, an insurer may not discriminate against a provider acting within the scope of the provider’s license.

(7) In the administration of essential health benefits and the EHB base benchmark health benefit plan an insurer may not exclude services provided by a naturopathic physician if the services are otherwise covered under the plan and the naturopathic physician is acting within the scope of the provider’s license.

(8) In the administration of essential health benefits and the EHB base benchmark health benefit plan an insurer may not exclude services provided by a doctor of chiropractic medicine if the services are otherwise covered under the plan and the doctor of chiropractic medicine is acting within the scope of the provider’s license.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.097
Statutes/Other Implemented: ORS 731.097 & Or Laws 2021, ch 117
ID 8-2022, amend filed 12/22/2022, effective 01/01/2023
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16

Or. Admin. R. 836-053-0013 Oregon Standard Bronze and Silver Health Benefit Plans

(1) This rule applies to plan years beginning on and after January 1, 2017.

(2) As used in this rule, "coverage" includes medically necessary benefits, services, prescription drugs and medical devices. "Coverage" does not include coinsurance, copayments, deductibles, other cost sharing, provider networks, out-of-network coverage, or administrative functions related to the provision of coverage, such as eligibility and medical necessity determinations.

(3) For purposes of coverage required under this rule:

(a) "Inpatient" includes but is not limited to:

(A) Inpatient surgery;

(B) Intensive care unit, neonatal intensive care unit, maternity and skilled nursing facility services; and

(b) "Outpatient" includes but is not limited to services received from ambulatory surgery centers and physician and anesthesia services and benefits when applicable.

(c) A reference to a specific version of a code or manual, including but not limited to references to ICD-10, CPT, Diagnostic and Statistical Manual of Mental Disorders, (DSM-5), Fifth Edition; place of service and diagnosis includes a reference to a code with equivalent coverage under the most recent version of the code or manual.

(4) When offering a plan required under ORS 743B.130, an insurer must:

(a) Use the following naming convention: "[Name of Insurer] Standard [Bronze/HSA/Silver] Plan." The name of insurer may be shortened to an easily identifiable acronym that is commonly used by the insurer in consumer facing publications.

(b) Include a service area or network identifier in the plan name if the plan is not offered on a statewide basis with a statewide network.

(5) Coverage required under ORS 743B.130 must be provided in accordance with the requirements of sections (6) to (11) of this rule.

(6) Coverage must be provided in a manner consistent with the requirements of:

(a) 45 CFR 156, except that actuarial substitution of coverage within an essential health benefits category is prohibited;

(b) OAR 836-053-1404, 836-053-1405, 836-053-1407 and 836-053-1408;

(c) The federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, 29 U.S.C. 1185a and implementing regulations at 45 CFR 146.136 and 147.160; and

(d) For plan years beginning on or after January 1, 2019, Chapter 721, Oregon Laws 2017 (Enrolled House Bill 3391).

(7) Coverage must provide essential health benefits as defined in OAR 836-053-0012.

(8) Except when a specific benefit exclusion applies, or a claim fails to satisfy the insurer's definition of medical necessity or fails to meet other issuer requirements the following coverage must be provided:

(a) Ambulatory services;

(b) Emergency services;

(d) Maternity and newborn services;

(e) Rehabilitation and habilitation services including:

(A) Professional physical therapy services;

(B) Professional occupational therapy;

(D) Professional speech therapy;

(f) Laboratory services;

(h)(A) Prescription drug coverage at the greater of:

(i) At least one drug in every United States Pharmacopeia (USP) category and class as the prescription drug coverage of the plan described in OAR 836-053-0012(2); or

(ii) The same number of prescription drugs in each category and class as the prescription drug coverage of the plan described in OAR 836-053-0012(2).

(B) Insurers must submit the formulary drug list for review and approval. The formulary drug list must comply with filing requirements posted on the Department of Consumer and Business Services website.

(C) For plan years beginning on or after January 1, 2017 insurers must use a pharmacy and therapeutics committee that complies with the standards set forth in 45 CFR 156.122.

(9) Copays and coinsurance for coverage required under ORS 743B.130 must comply with the following:

(a) Non-specialist copays apply to physical therapy, speech therapy, occupational therapy and vision services when these services are provided in connection with an office visit.

(b) Subject to the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, 29 U.S.C. 1185a, specialist copays apply to specialty providers including mental health and substance abuse providers, if and when such providers act in a specialist capacity as determined under the terms of the health benefit plan.

(c) Coinsurance for emergency room coverage must be waived if a patient is admitted, at which time the inpatient coinsurance applies.

(10) Deductibles for coverage required under ORS 743B.130 must comply with the following:

(a) For a bronze plan, in accordance with the coinsurance, copayment and deductible amounts and coverage requirements for a bronze plan set forth in the cost-sharing matrix as adopted in Exhibit 1 to this rule.

(b) For a silver plan, in accordance with the coinsurance, copayment and deductible amounts and coverage requirements for a silver plan set forth in the cost-sharing matrix as adopted in Exhibit 2 to this rule.

(c) The individual deductible applies to all enrollees, and the family deductible applies when multiple family members incur claims.

(11) Dollar limits for coverage required under ORS 743B.130 must comply with the following:

(a) Annual dollar limits must be converted to a non-dollar actuarial equivalent.

(b) Lifetime dollar limits must be converted to a non-dollar actuarial equivalent.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244 & 45 CFR 156.135(g)
Statutes/Other Implemented: ORS 743B.130
ID 5-2026, amend filed 06/17/2026, effective 07/01/2026
ID 4-2025, amend filed 06/25/2025, effective 07/01/2025
ID 4-2024, amend filed 06/24/2024, effective 07/01/2024
ID 49-2023, amend filed 08/30/2023, effective 09/01/2023
ID 3-2022, amend filed 06/16/2022, effective 07/01/2022
ID 6-2021, amend filed 10/28/2021, effective 11/23/2021
ID 4-2021, temporary amend filed 05/28/2021, effective 05/28/2021 through 11/23/2021
ID 3-2020, amend filed 04/24/2020, effective 05/01/2020
ID 7-2019, amend filed 07/23/2019, effective 07/23/2019
ID 4-2019, temporary amend filed 03/21/2019, effective 03/21/2019 through 09/13/2019
ID 3-2019, temporary amend filed 03/18/2019, effective 03/18/2019 through 09/13/2019
ID 33-2018, amend filed 10/10/2018, effective 10/20/2018
ID 9-2018, temporary amend filed 04/24/2018, effective 04/24/2018 through 10/20/2018
ID 6-2018, amend filed 04/20/2018, effective 04/20/2018
ID 5-2018, amend filed 04/19/2018, effective 04/19/2018
ID 2-2018, amend filed 02/08/2018, effective 02/08/2018
ID 7-2017, f. & cert. ef. 7-26-17
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16

Or. Admin. R. 836-053-0014 Standards and Process for Shortened Period of Market Prohibition

(1) In order to be eligible for consideration by the director for a shortened period of prohibition under ORS 743B.012, 743B.104 or 743B.126 , a carrier must have met at least one of the following conditions upon exiting:

(a) The director determines that the continued operation of the insurer transacting insurance in this state is hazardous to the policyholders, its creditors or the general public ORS 731.385 and OAR 836-013-0100 through OAR 836-013-0120; or

(b) The domestic health care service contractor does not exceed Company Action Level risk-based capital requirements under OAR 836-011-0515(1)(a)(B).

(2) A carrier seeking consideration for a shortened period of prohibition under ORS 743B.012, 743B.104 or 743B.126, must submit a formal, written request no later than August 1, two years prior to the plan year the carrier intends to offer its products in a market.

(3) The request for reentry must be in writing and include:

(a) The chief executive officer or president’s signature; and

(b) Reason(s) for the request, including reasons why the carrier elected to discontinue offering plans in such market;

(d) Perceived harm to the market if the carrier is not permitted to enter in a shortened timeframe.

(4) The department must provide notice to the public by August 15th of the year that the request was made, indicating that a carrier intends to reenter the market under a shortened period of prohibition and post to its website the letter submitted by the carrier.

(5) If the department does not receive the required materials identified in section (6) by the due date it will consider the carrier’s intentions to reenter the market to be withdrawn.

(6) After submission of a formal request for reentry, a carrier must provide required materials to be submitted for consideration for a shortened period of prohibition by no later than November 1, two years prior to the plan year the carrier intends to offer its products in the market. The required materials shall be confidential pursuant to ORS 192.501(2) and ORS 731.752 and must include the following:

(a) An actuarial certification memorandum that includes:

(A) Requested service areas for reentry;

(B) Previous service areas;

(D) Previously offered plans;

(E) Projected membership count;

(F) Expected distribution of membership count across intended plan offerings and service areas;

(G) Scenario testing for:

(i) Expected membership;

(ii) Lower than expected membership;

(iii) Higher than expected membership;

(iv) Catastrophically higher than expected membership; and

(b) Five year projection of all revenues and expenses for each market the carrier intends to reenter.

(7) Within seven business days after receiving a formal request and supporting documentation for reentry, the director must determine whether the application is complete.

(a) If the director determines that the request is not complete, the director must notify the insurer in writing that the request is deficient and allow the insurer up to five business days from date of notification to provide the missing information or materials.

(b) If the director determines the request is complete, the director will open a 30-day public comment period.

(8) By January 15, one year prior to the plan year the carrier intends to offer its products in the market, the director must issue a decision approving or disapproving a shortened period of prohibition under ORS 743B.012, 743B.104 or 743B.126. A decision of approval to reenter the market under a shortened timeframe is contingent upon approval of rates in accordance with ORS 743.018 and section (9) of this rule and that are consistent with the information in the applications materials submitted under sections (3) and (6) of this rule.

(9) After a carrier is approved for reentry into the market it exited, the carrier shall; subject to applicable law:

(a) Submit rates in accordance with OAR 836-053-0473 through OAR 836-053-0475; and

(b) Participate in areas of the state that were identified in section (6)(a)(A) and which the director has identified in section (8).

History

Statutory/Other Authority: ORS 743B.012, 743B.104, 743B.126 & 2017 Or Laws, ch 260, sec 4-7
Statutes/Other Implemented: ORS 743B.012, 743B.104, 743B.126 & 2017 Or Laws, ch 260, sec 4-7
ID 1-2024, minor correction filed 01/04/2024, effective 01/04/2024
ID 10-2018, adopt filed 06/15/2018, effective 06/19/2018
ID 15-2017, temporary adopt filed 12/22/2017, effective 01/01/2018 through 06/19/2018

Or. Admin. R. 836-053-0015 Definition of Small Employer

(1) This rule establishes the methodology for defining a small employer to be used in any instance in which the definition set forth in ORS 743B.005 would apply and in rules of the Department of Consumer and Business Services implementing the Insurance Code.

(2) For purposes of determining the number of employees in a group health benefit plan, insurers and producers should follow:

(a) For plan years beginning before January 1, 2024, the guidance entitled, “Revised Counting Methodology for Determining Small or Large Group,” as set forth in Exhibit A of this rule; and

(b) For plan years beginning on or after January 1, 2024, the guidance entitled “Second Revised Counting Methodology for Determining Small or Large Group,” as set forth in Exhibit B of this rule.

[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

History

Statutory/Other Authority: ORS 731.244, ORS 743B.003 & 743B.020
Statutes/Other Implemented: ORS 743B.003, 743B.020 & 743B.100
ID 2-2023, amend filed 01/26/2023, effective 01/01/2024
ID 11-2017, amend filed 11/22/2017, effective 01/01/2018
ID 3-2017, f. & cert. ef. 3-9-17
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2015(Temp), f. & cert. ef. 10-16-15 thru 4-11-16

Or. Admin. R. 836-053-0017 Additions to Essential Health Benefits for Plan Years Beginning on and after January 1, 2022

(1) In addition to any other benefits required under state or federal law, a health benefit plan required to provide essential health benefits within the meaning of ORS 731.097 must, at a minimum, provide coverage for the following items and services:

(a) Up to 20 visits per year for spinal manipulation if within the scope of license of the healthcare provider;

(b) Up to 12 visits per year for acupuncture;

(c) Coverage of Buprenorphine or brand equivalent products for medication-assisted treatment of opioid use disorder without prior authorization, dispensing limits, fail first policies, or lifetime limits; and

(d) At least one intranasal opioid reversal agent for initial prescriptions of opioids with dosages of 50 or more morphine milligram equivalents (MME).

(2) The requirements of this rule apply to health benefit plans issued or renewed on or after January 1, 2022.

History

Statutory/Other Authority: ORS 731.097
Statutes/Other Implemented: ORS 731.097
ID 11-2020, adopt filed 12/22/2020, effective 01/01/2021

Or. Admin. R. 836-053-0019 Purpose; Statutory Authority; Enforcement

(1) OAR 836-053-0010 to 836-053-0070 are adopted for the purpose of implementing ORS 743B.003 to 743B.013 and 743B.100, pursuant to the authority of ORS 731.244, 743B.003 to 743B.013 and 743B.100.

(2) Violation of any provision of OAR 836-053-0021 to 836-053-0065 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244, 743B.003 & 746.240
Statutes/Other Implemented: ORS 743B.003 to 743B.013 & 743B.100.
Renumbered from 836-053-0010, ID 5-2016, f. & cert. ef. 4-26-16
ID 4-2016, f. & cert. ef. 4-8-16
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96
ID 17-1992, f. 12-3-92, cert. ef. 12-7-92

Or. Admin. R. 836-053-0021 Plans Offered to Oregon Small Employers

(1) A small employer carrier shall issue a plan to a small employer if the employee eligibility criteria established by the small employer meet the requirements of this section. A carrier must follow the methodology and address the issues included in the “Revised Counting Methodology for Determining Small or Large Group,” as set forth in Exhibit A of OAR 836-053-0015 to collect data to determine the applicable type of group coverage for an employer and to provide disclosure notices as required for small employers. The eligibility criteria must be based solely on the criteria set forth in Exhibit A and completion of a group eligibility waiting period, if applicable.

(2) Impermissible employee eligibility criteria include:

(a) Health status;

(b) Disability; and

(3) A small employer carrier may provide different health benefit plans to different categories of employees of an employer, as determined by the employer only if based on bona fide employment-based classifications that are consistent with the employer's usual business practice. The categories may not relate to the actual or expected health status of the employees or their dependents.

History

Statutory/Other Authority: ORS 731.244, 743B.020 & 743B.003
Statutes/Other Implemented: ORS 743B.003 - 743B.020 & 743B.100
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2015(Temp), f. & cert. ef. 10-16-15 thru 4-11-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 2-2008, f. & cert. ef. 2-11-08
ID 5-2007(Temp), f. 8-17-07, cert. ef. 8-20-07 thru 2-15-08
ID 23-2002, f. & cert. ef. 11-27-02
ID 5-1998, f. & cert. ef. 3-9-98

Or. Admin. R. 836-053-0027 Copayments for Certain Primary Care Visits

(1) As used in this section, “primary care” means outpatient behavioral health services, non-specialty medical services or the coordination of health care for the purpose of:

(a) Promoting or maintaining behavioral and physical health and wellness; and

(b) Diagnosis, treatment or management of acute or chronic conditions caused by disease, injury or illness.

(2) An individual or group policy or certificate of health insurance that is not offered on the health insurance exchange and that reimburses the cost of hospital, medical or surgical expenses, other than coverage limited to expenses from accidents or specific diseases and limited benefit coverage, shall, in each plan year, reimburse the cost of at least three primary care visits for behavioral health or physical health treatment.

(3) The coverage under subsection (2) of this section:

(a) May not be subject to copayments, coinsurance or deductibles in excess of $5, except as provided in ORS 742.008; and

(b) Is in addition to one annual preventive primary care visit that must be covered without cost-sharing.

(4) An insurer that offers a qualified health plan on the health insurance exchange must offer at least one plan in each metal tier offered by the insurer that provides the coverage described in subsections (2) and (3) of this section.

(5) This section does not apply to health benefit plans offered to public employees by insurers that contract with the Public Employees’ Benefit Board or the Oregon Educators' Benefit Board.

History

Statutory/Other Authority: ORS 731.244 & Oregon House Bill 3008 (2023)
Statutes/Other Implemented: Oregon House Bill 3008 (2023) & Or Laws 2022, ch 37, sec 6
ID 52-2023, adopt filed 12/19/2023, effective 01/01/2024
ID 48-2023, temporary adopt filed 07/28/2023, effective 07/28/2023 through 01/23/2024

Or. Admin. R. 836-053-0028 Primary Care Provider Assignment Methodology

(1) As used in these rules:

(a) “Enrollee” means an employee, dependent of the employee or an individual otherwise eligible for a group or individual health benefit plan who has enrolled for coverage under the terms of the plan.

(b) “Primary care provider” means an individual licensed or certified in this state to provide outpatient, non-specialty medical services or the coordination of health care for the purpose of:

(A) Promoting or maintaining mental and physical health and wellness; and

(B) Diagnosis, treatment or management of acute or chronic conditions caused by disease, injury or illness.

(2) An insurer offering an individual or group policy or certificate of health insurance that reimburses the cost of hospital, medical or surgical expenses, other than coverage limited to expenses from accidents or specific diseases and limited benefit coverage, must assign an enrollee under the policy or certificate to a primary care provider if the enrollee or a parent of a minor enrollee has not selected a primary care provider by the 90th day of the plan year. If the insurer assigns the enrollee to a primary care provider, the insurer shall provide notice of the assignment to the enrollee or parent and to the primary care provider. The requirement to provide notice under this subsection does not require an insurer to disclose protected health information if such disclosure would be prohibited under the federal Health Insurance Portability and Accountability Act (HIPAA).

(3) An enrollee may select a different primary care provider at any time.

(4) Insurers must assign enrollees who are residents of the state of Oregon to an individual or group of individuals who are "primary care providers" in the following hierarchal order:

(a) According to the enrollee’s selection. In order to prioritize enrollee choice of a primary care provider, insurers must make all reasonable efforts to communicate with enrollees to complete an initial primary care provider assignment.

(b) If the enrollee does not choose a primary care provider, insurers must assign the enrollee to a primary care provider using claim utilization information and the insurer’s assignment methodology that enables the enrollee the best opportunity to access primary care services without unreasonable delay.

(c) If the enrollee chooses a primary care provider, but has predominant claim utilization with a different primary care provider, the insurer may communicate with the enrollee the opportunity to select the primary care provider with predominant claim utilization.

(d) If the insurer has no information pertinent to enrollee choice or prior utilization, the insurer must assign the enrollee to a primary care provider using the insurer’s assignment methodology that enables the enrollee the best opportunity to access primary care services without unreasonable delay.

(5) Insurers must establish a primary care provider assignment correction process that works in partnership with providers to correct inaccurately assigned enrollees.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2022, ch 37, sec 8
Statutes/Other Implemented: Or Laws 2022, ch 37, sec 8
ID 53-2023, adopt filed 12/19/2023, effective 01/01/2024

Or. Admin. R. 836-053-0030 Marketing of a Health Benefit Plan to Small Employers

(1) A carrier may offer different small employer health benefit plans in different geographic areas. The bronze and silver plan required to be offered under ORS 743B.130 and a point-of-service plan required under ORS 743B.220 must be offered in every geographic area in which the carrier offers or renews its small employer health benefit plans. A carrier may not cease offering or renewing, or offering and renewing, the bronze or silver small group health benefit plan required to be offered under ORS 743B.130 or a point-of -service plan required under ORS 743B.130 in a geographic area unless the carrier discontinues all plans in the geographic area as provided in ORS 743B.013.

(2) A carrier must offer all of its approved nongrandfathered small employer health benefit plans and plan options, to all small employers on a guaranteed issue basis without regard to health status, claims experience or industry except that a carrier may limit enrollment to the period from November 15 to December 15 of each calendar year for small employers that fail to meet the carrier’s reasonable participation or contribution requirements. A carrier may not serve only a portion of the small employer market, such as employers with more than 25 employees, and a carrier may not establish or maintain a closed plan or plan option or a closed book of business in the small employer market. For purposes of this section, a "closed" arrangement is one in which coverage is maintained and renewed for currently enrolled small employers, but the coverage is not offered or issued to other small employers.

(3) A carrier may not require a small employer to purchase or maintain other lines of coverage, such as group life insurance, in order to purchase or maintain a small employer health benefit plan. However, a small group carrier may require reasonable assurance of pediatric dental coverage consistent with Essential Health Benefits, Final Rule, 78 Fed. Reg. 12853 (February 25, 2013).

(4) A carrier must market fairly all of its small employer health benefit plans and plan options and shall not engage in any practice that:

(a) Restricts a small employer's choice of such plans and plan options; or

(b) Has the effect or is intended to influence a small employer's choice of such plans and plan options for reasons of risk selection.

(5) A carrier shall not provide to any insurance producer any financial or other incentive that conflicts with the requirements of section (4) of this rule.

(6) A carrier must use the same sales compensation methodology for all small employer health benefit plans offered by the carrier.

(7) A small employer carrier may not terminate, fail to renew, or limit its contract or agreement of representation with an insurance producer for any reason related to the following: the health status, claims experience, occupation, geographic location of small employer groups, or the type of small employer plans placed by the insurance producer with the carrier.

History

Statutory/Other Authority: ORS 731.244 & 743B.003
Statutes/Other Implemented: ORS 743B.003, 743B.012, 743B.013, 743B.130 & 746.650
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 2-2008, f. & cert. ef. 2-11-08
ID 5-2007(Temp), f. 8-17-07, cert. ef. 8-20-07 thru 2-15-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2000, f. & cert. ef. 5-11-00
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96
ID 17-1992, f. 12-3-92, cert. ef. 12-7-92

Or. Admin. R. 836-053-0050 Trade Practices Relating to Small Employer Health Benefit Plans

(1) When offering plans to small employers, a carrier must briefly describe the variety of small employer plans and plan options that are available from the carrier and must specify that:

(a) Nongrandfathered plans and plan options are available without regard to health status, claims experience or industry and are offered on a guaranteed issue basis; and

(b) Grandfathered plans and plan options are available under limited circumstances to a small employer that has existing grandfathered coverage.

(2) Subject to requirements established by the Department of Consumer and Business Services pursuant to 45 CFR 155.720(b) for small employer health benefit plans offered through the health insurance exchange, a small employer health benefit plan must be issued with an effective date no later than 31 days after the carrier actually receives the application, and if required by the carrier, the premium.

(3) Neither a carrier nor an insurance producer may encourage or direct a small employer to seek coverage from another carrier because of the small employer's health status, claims experience, industry occupation or geographic location, if within the carrier's service area.

(4) Neither a carrier nor an insurance producer may induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from employment or from health coverage or benefits provided in connection with the employee's employment.

(5) A small employer health benefit plan may specify that an enrolled small employer may replace its current coverage with another small employer plan offered by the carrier only on the anniversary date of the current coverage. This limitation also applies to a small employer that discontinues coverage with a carrier, or forfeits coverage because of non-payment of premiums and then requests new coverage with the same carrier.

(6) A small employer carrier that also issues individual health benefit plans may not include with an invoice for small employer coverage, individual health benefit plan premiums for employees of the employer or otherwise bill a small employer for such premiums.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 743.731, 743.734(1), 743.736, 743.737 & 746.240
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 2-2008, f. & cert. ef. 2-11-08
ID 5-2007(Temp), f. 8-17-07, cert. ef. 8-20-07 thru 2-15-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96
ID 17-1992, f. 12-3-92, cert. ef. 12-7-92

Or. Admin. R. 836-053-0063 Rating for Nongrandfathered Small Group Plans

The following provisions relating to rating apply to nongrandfathered health benefit plans offered to small employers:

(1) A small employer carrier shall file a single geographic average rate for each nongrandfathered health benefit plan that is offered to small employers within a geographic area and for each category of family composition. The geographic rate must be determined on a pooled basis and the pool shall only include all of the carrier's nongrandfathered business in the small employer market.

(2) There shall be one rating class for each small employer carrier. All nongrandfathered small employer health benefit plans of the carrier shall be rated in that class. A rating of a health benefit plan is subject to adjustments reflecting age, tobacco use and differences in family composition.

(3) The variation in geographic average rates among different nongrandfathered small employer health benefit plans offered by a carrier must be based solely on objective differences in plan design or coverage. The variation shall not include differences based on the risk characteristics or claims experience of the actual or expected enrollees in a particular plan.

(4) A small employer carrier shall file its geographic average rates for nongrandfathered small employer health benefit plans in accordance with the rate filing requirements of OAR 836-053-0910.

(5) A small employer carrier shall assess administrative expenses in a uniform manner to all nongrandfathered small employer health benefit plans. Administrative expenses shall be expressed as a percentage of premium and the percentage may not vary with the size of the small employer.

(6) Nongrandfathered small group plans shall be rated within the following geographic areas comprising counties as follows:

(a) Area 1 shall include: Clackamas, Multnomah, Washington and Yamhill.

(b) Area 2 shall include: Benton, Lane and Linn.

(d) Area 4 shall include: Deschutes, Klamath and Lake.

(e) Area 5 shall include: Clatsop, Columbia, Coos, Curry, Lincoln and Tillamook.

(f) Area 6 shall include: Baker, Crook, Gilliam, Grant, Harney, Hood River, Jefferson, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, Wasco and Wheeler.

(g) Area 7 shall include: Douglas, Jackson and Josephine.

(7) For nongrandgathered small group plans, a small employer carrier may use the same geographic average rate for multiple rating areas.

(8) Premium rates for nongrandfathered small employer health benefit plans:

(a) For each group, shall total the sum of the product of the base rate and the applicable factors in section (9) of this rule for each employee and dependent 21 years of age and older and the sum of the product of the base rate and the applicable factors in section (9) of this rule for each of the three oldest dependent children under the age of 21 within each family in the group.

(b) Shall be allocated to an employee by dividing the total premium described in subsection (a) of this section by the sum of the products of the number of employees and the applicable tier factors specified in paragraphs (A) through (D) of this subsection, and multiplying the quotient by the applicable tier factor for the employee as specified in paragraphs (A) through (D) of this subsection. The tier factors are:

(A) 1.00 for an employee only;

(B) 1.85 for an employee and one or more children age 25 or younger;

(D) 2.85 for an employee and family.

(9) The variations in rates described in this rule may be based on one or more of the following factors as determined by the carrier:

(a) The ages of enrolled employees and their dependents according to Exhibit 1 to this rule. Variations in rates based on age may not exceed a ratio of three to one.

(b) A tobacco use factor of no more than 1.5 times the non-tobacco use rate for persons 18 years or older except that the factor may not be applied when the person is enrolled in a tobacco cessation program.

(c) The level at which enrolled employees and their dependents engage in health promotion, disease prevention or wellness programs.

History

Statutory/Other Authority: ORS 731.244, 743.731 & 743.758
Statutes/Other Implemented: ORS 743.731, 743.734 & 743.737
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0065 Rating for Grandfathered Small Group Plans

The following provisions relating to rating apply to grandfathered health benefit plans offered to small employers:

(1) A small employer carrier shall file a single geographic average rate for each grandfathered health benefit plan that is offered to small employers within a geographic area and for each category of family composition. The geographic average rate must be determined on a pooled basis and the pool shall include all of the carrier's grandfathered business in the small employer market.

(2) There shall be one rating class for each small employer carrier. All grandfathered small employer health benefit plans of the carrier shall be rated in that class. A rating of a grandfathered health benefit plan is subject to adjustments reflecting the level of benefits provided and differences in family composition and age.

(3) The variation in geographic average rates among different grandfathered small employer health benefit plans offered by a carrier must be based solely on objective differences in plan design or coverage. The variation shall not include differences based on the risk characteristics or claims experience of the actual or expected enrollees in a particular plan, except that a carrier may make further adjustment at renewal to reflect the expected claims experience of the covered small employer; however, this adjustment may not exceed five percent of the annual premium otherwise payable by the small employer, is not cumulative year to year, and may be based only on the carrier’s claims experience with the small employer. A variation based on the level of contribution by the small employer or on the level of participation by eligible employees, or on both, must be actuarially sound.

(4) A small employer carrier shall file its geographic average rates for grandfathered small employer health benefit plans in accordance with the rate filing requirements of OAR 836-053-0910.

(5) A small employer carrier shall assess administrative expenses in a uniform manner to all grandfathered small employer health benefit plans. Administrative expenses shall be expressed as a percentage of premium and the percentage may not vary with the size of the small employer.

(6) Grandfathered small employer plans shall be rated within the following geographic areas comprising counties as follows:

(a) Area 1 shall include: Clackamas, Multnomah, Washington and Yamhill.

(b) Area 2 shall include: Benton, Lane and Linn.

(d) Area 4 shall include: Deschutes, Klamath and Lake.

(e) Area 5 shall include: Clatsop, Columbia, Coos, Curry, Lincoln and Tillamook.

(f) Area 6 shall include: Baker, Crook, Gilliam, Grant, Harney, Hood River, Jefferson, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, Wasco and Wheeler.

(g) Area 7 shall include: Douglas, Jackson and Josephine.

(7) For grandfathered small employer plans, a small employer carrier may use five digit zip code groupings to define the carrier's geographic areas. The zip code groupings may vary from the county areas defined in section (6) of this rule by no more than ten percent of the population of a county. The small employer carrier must use either the zip code system or the county system and shall not modify the geographic areas in any other manner.

(8) For grandfathered small employer plans, a small employer carrier may use the same geographic average rate for multiple rating areas.

(9) For grandfathered small employer plans, a small employer carrier may deviate from the variation described in section (1) of this rule for coverage that extends to a geographic area outside the state of Oregon. The carrier must do so in a reasonable fashion and maintain records regarding the basis for the rate charged in the small employer's file.

(10) The premium rates charged during a rating period for a grandfathered health benefit plan issued to a small employer may not vary from the geographic average rate by more than 50 percent

(11) The variations in premium rates described in section (10) of this rule may be based on one or more of the following factors as determined by the carrier:

(a) The ages of enrolled employees and their dependents;

(b) The level at which the small employer contributes to the premiums payable for enrolled employees and their dependents;

(d) The level at which enrolled employees and their dependents engage in tobacco use;

(e) The level at which enrolled employees and their dependents engage in health promotion, disease prevention or wellness programs;

(f) The period of time during which a small employer retains uninterrupted coverage in force with the same small employer carrier; and

(g) Adjustments to reflect the level of benefits provided and differences in family composition.

(12) The premium rate determined in accordance with this rule may be further adjusted to reflect expected claims experience of a small employer but may not exceed five percent of the annual premium rate. The adjustment is not cumulative year to year.

History

Statutory/Other Authority: ORS 731.244 & 743.731
Statutes/Other Implemented: ORS 743.731, 743.734 & 743.737
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 4-2013(Temp), f. & cert. ef. 6-17-13 thru 12-6-13
ID 2-2008, f. & cert. ef. 2-11-08
ID 5-2007(Temp), f. 8-17-07, cert. ef. 8-20-07 thru 2-15-08
ID 5-2000, f. & cert. ef. 5-11-00
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96, Renumbered from 836-053-0020
ID 1-1994, f. & cert. ef. 1-26-94
ID 17-1992, f. 12-3-92, cert. ef. 12-7-92

Or. Admin. R. 836-053-0066 Rating for Transitional Health Benefit Plans Offered to Small Employers

For purposes of rating, a transitional health benefit plan offered to small employers:

(1) Is subject to the requirements of OAR 836-053-0065 that apply to grandfathered health benefit plans offered to small employers; and

(2) Must be pooled with all of the carrier’s grandfathered business in the small employer market to determine its geographic average rate.

History

Statutory/Other Authority: ORS 731.244, 743.731 & 743.737 & 2014 OL Ch. 80 & Sec. 5
Statutes/Other Implemented: ORS 743.731 & 746.737 & 2014 OL Ch. 80 & Sec. 5
ID 4-2016, f. & cert. ef. 4-8-16
ID 17-2014, f. & cert. ef. 10-6-14
ID 6-2014(Temp), f. & cert. ef. 4-11-14 thru 10-8-14

Or. Admin. R. 836-053-0070 Multiple Employer Welfare Arrangements

For purposes of determining whether a multiple employer welfare arrangement is exempt from the requirements of the Insurance Code that apply to a small employer carrier, the director must consider the following factors:

(1) Whether all of the benefits that are provided under the arrangement are guaranteed by policies of insurance issued by an authorized insurer.

(2) Whether the arrangement consists of an employee welfare benefit plan for employees of two or more employers or their beneficiaries as defined in ERISA sections 3 (5) and (40).

(3) Whether the arrangement is essentially controlled by an insurer, benefit service organization or individual for the purpose of creating a market for furnishing benefits to diverse individuals or groups rather than a bona fide multiple employer welfare arrangement.

History

Statutory/Other Authority: ORS 731.244, 743.731 & 746.240
Statutes/Other Implemented: ORS 743.730(24)
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96
ID 17-1992, f. 12-3-92, cert. ef. 12-7-92

Or. Admin. R. 836-053-0100 Work Related Injuries or Disease

A carrier may not impose an exclusion or waiver in a health benefit plan for coverage of any service otherwise provided under the plan solely on the basis that the service is provided for a work-related injury or occupational disease.

History

Statutory/Other Authority: ORS 731.008, 731.016 & 731.244
Statutes/Other Implemented: ORS 656.247, 731.008, 731.016, & 2014 OL Ch. 94 & Sec. 2
ID 18-2014, f. 10-17-14, cert. ef. 1-1-15

Or. Admin. R. 836-053-0105 Coordination of Payment for Interim Medical Services

(1) As used in this section:

(a) “Expedited preauthorization” means a determination by an insurer prior to provision of interim medical services that the insurer will provide reimbursement for the services.

(b) “Health benefit plan” does not include the Oregon Health Plan.

(d) “Interim medical services” means those services provided prior to claim acceptance or denial in accordance with ORS 656.247.

(e) “Worker” has the meaning given in ORS 656.005.

(2) A health benefit plan carrier that receives a request for expedited preauthorization under ORS 656.247(4) shall submit the expedited preauthorization to the medical provider who is proposing the treatment. The preauthorization shall be based on the terms, conditions and benefits of the health benefit plan.

(3) A carrier need only preauthorize medical services for which the health benefit plan requires a preauthorization and may exclude from the preauthorization any treatment otherwise provided by the carrier if that treatment is excluded under OAR 436-009-0010(12). A carrier must provide an expedited preauthorization not later than the third day after the date on which the request for expedited preauthorization is submitted to the carrier.

(4) If the workers’ compensation insurer denies a claim and the insurer notifies the medical provider that the initial claim has been denied, the provider must forward a copy of the workers’ compensation denial letter to the health benefit plan. Upon receipt of the denial letter, the health benefit plan carrier shall pay the provider in accordance with the expedited preauthorization issued to the provider at the time the interim medical services were provided. The carrier shall pay the claim in accordance with any other applicable requirements for payment of claims under the Insurance Code.

(5) For purposes of complying with ORS 743.911 and OAR 836-080-0080, payment for medical services under ORS 656.247 shall be considered a particular circumstance requiring special treatment that requires special handling and the claim will not be considered a clean claim until after the workers compensation insurer makes the determination to accept or deny the claim.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 656.247, 743.911 & 2014 OL Ch. 94 & Sec. 2
ID 18-2014, f. 10-17-14, cert. ef. 1-1-15

Or. Admin. R. 836-053-0211 Underwriting, Enrollment and Benefit Design Requirements Applicable to A Group Health Benefit Plan Including A Small Group Health Benefit Plan

(1) As used in this rule, an “enrollee” includes an employee covered under a group health benefit plan and a dependent of an employee covered under a group health benefit plan.

(2) A carrier issuing a group health plan may not:

(a) Modify health insurance with respect to an employee or any eligible dependent of an employee by means of a rider, endorsement or otherwise, for the purpose of restricting or excluding coverage for certain diseases or medical conditions otherwise covered by the health benefit plan;

(b) Decline to offer coverage to any eligible member of a group;

(c) Delay enrollment for an otherwise eligible member of the group or dependent for reasons related to actual or expected health status, race, color, national origin, sex, sexual orientation as defined in ORS 174.100, age or disability; or

(d) Use a health statement when offering a group health benefit plan.

(3) Unless otherwise required by law. a modification to an existing group health benefit plan that is required by ORS 743.730 to 743.754 must be implemented for each policyholder on the next renewal date. As used in this rule, “the next renewal date” means the first renewal date of the policy issued to the policyholder that occurs on or after January 1, 2014.

(4) A carrier must enroll a person who is eligible in a small group health benefit plan during the plan’s open enrollment period and when a person is eligible or becomes eligible as a result of the occurrence of an event described in this section, if:

(a) The person applies for coverage within at least 30 calendar days after:

(A) An event described in section 603 of the Employee Retirement Income Security Act of 1974, as amended;

(B) An event described in 45 CFR 146.117(a)(3) if the person is eligible for special enrollment under 45 CFR 146.117(a)(2), except for an event described in 45 CFR 146.117(a)(3)(D) a carrier must enroll a person who applies for coverage within 30 days, or later if allowed by the carrier, after the first denial of a claim due to the operation of a lifetime limit on all benefits; or

(C) Gaining a dependent, including a spouse, or becoming a dependent through marriage, birth, adoption or placement for adoption if the person is eligible for special enrollment under 45 CFR 146.117(b)(2); or

(b) The person applies for coverage within 60 calendar days after:

(A) Loss of eligibility for coverage under a Medicaid plan under title XIX of the Social Security Act or a state child health plan under title XXI of the Social Security Act; or

(B) An event described in 45 CFR 155.725(j)(2)(iii).

(5) The following effective dates apply to coverage for enrollment under section (4) of this rule:

(a) For section (4)(a)(A), coverage must be effective by the applicable date described in 45 CFR 155.420(b)(1).

(b) For section (4)(a)(B) coverage must be effective no later than the first day of the first calendar month following the date the plan or issuer receives the request for special enrollment.

(A) In the case of marriage, no later than the first day of the first calendar month following the date the carrier receives the request for special enrollment.

(B) In the case of birth, on the date of birth.

(e) For section (4)(b)(A) coverage must be effective by the applicable date described in 45 CFR 155.420(b)(1).

(f) For section (8)(b)(B) coverage must be effective no later than the first day of the first calendar month following the date the plan or issuer receives the request for special enrollment.

(6) At or before enrollment, a carrier must provide notice to an enrollee that complies with the requirements of 45 CFR 146.117(c).

(7) An enrollee under section (4) of this rule may not be considered a late enrollee.

(8) Violation of this rule is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 743.731
Statutes/Other Implemented: Sec. 7, ch. 681, OL 2013, ORS 743.522, 743.730–743.754 & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0221 Participation, Contribution, and Eligibility Requirements for Group Health Benefit Plans Including Small Group Health Benefit Plans

(1) For every group health benefit plan, a carrier that chooses to enforce participation, contribution or eligibility requirements must:

(a) Specify in the plan all of participation, contribution and eligibility requirements that have been agreed upon by the carrier and the group; and

(b) Apply the participation and eligibility requirements uniformly to all categories of eligible members and their dependents.

(2) For a small group health benefit plan, a carrier:

(a) May establish and apply contribution requirements for different categories of members and dependents that exceed the minimum contribution;

(b) Must apply participation requirements on an aggregate basis in which all categories of eligible employees of a small employer are combined;

(c) Must apply participation and eligibility requirements uniformly to all small employers with the same number of eligible employees;

(d) If a carrier requires 100 percent participation of eligible employees in a small group health benefit plan, the carrier may not impose a contribution requirement upon the employer that exceeds 50 percent of the premium of an employee-only benefit plan; and

(e) Except as provided in this subsection, a carrier may not increase any requirement for minimum employee participation or any requirement for minimum employer contribution applicable to a small employer except at plan anniversary. At plan anniversary, the carrier may increase the requirements only to the extent those requirements are applicable to all other small employer groups of the same size. At the anniversary of a plan or at any time other than the anniversary, a small employer carrier may consider the existing small group as a new group for purposes of coverage if the eligibility requirements applicable to the group are changed by the employer.

(3) Violation of this rule is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 743.751
Statutes/Other Implemented: Sec. 7, Ch. 681, OL 2013, ORS 743.522, 743.730– 743.754 & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0230 Underwriting

(1) Every group health benefit plan issued by a carrier must specify all of the participation, contribution and eligibility requirements that have been agreed upon by the carrier and the covered group, and the carrier must apply those requirements uniformly within each category of eligible members.

(2) A carrier offering a group health benefit plan shall not use health statements, except as provided in ORS 743B.103. A health statement for a group health benefit plan also must comply with the requirements of OAR 836-053-0510. After enrollment, health statements or other information may be used by a carrier for the purpose of providing services or arranging for the provision of services under a group health benefit plan.

(3) A carrier offering a group health benefit plan shall not use health statements or other information revealing individual health status to determine the acceptance or rejection of a group that has applied for coverage. Impermissible other information includes claim records that identify individual claimants.

(4) If a carrier accepts a group for coverage, the carrier shall not:

(a) Decline to offer coverage to any eligible member;

(b) Impose any terms or conditions on the coverage of an eligible member that are based on the actual or expected health status of the member, except as provided in ORS 743B.105; or

(c) Delay enrollment for an otherwise eligible employee or dependent who is disabled when enrollment would normally occur.

(5) A late enrollee, as defined in ORS 743B.005, must be accepted for coverage in a group health benefit plan, but may be subject to the coverage limitations specified in ORS 743B.105.

(6) An enrollee who qualifies under a special enrollment period, as specified in ORS 743B.105, must be accepted for coverage in a group health benefit plan and shall not be considered a late enrollee.

(7) A modification to an existing group health benefit plan that is required by ORS 743B.103 to 743B.105 or by OAR 836-053-0210 to 836-053-0250 shall be implemented for each policyholder on the next renewal date. For the purposes of this subsection, the next renewal date means the first renewal date of the policy issued to the policyholder that occurs on or after the operative date of the governing statutory provision (i.e., October 1, 1996, for SB 152 (1995); August 1, 1997, for SB 98 (1997)).

(8) A group health benefit plan shall be renewable at the option of the policyholder and shall not be discontinued by the carrier during or at the termination of the contract period except in the circumstances specified in ORS 743B.105 and consistent with the requirements of HIPAA (42 U.S.C. 300gg-12).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.522 & 743B.103 to 743B.105
ID 4-2016, f. & cert. ef. 4-8-16
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96

Or. Admin. R. 836-053-0300 Purpose; Statutory Authority; Applicability of Network Adequacy Requirements

(1) OAR 836-053-0300 to 836-053-0355 are adopted for the purpose of implementing ORS 743B.505.

(2) The requirements set forth in OAR 836-053-0310 to 836-053-0355 apply to all carriers offering individual or group health benefit plans in this state that are issued or renewed on or after January 1, 2026. These requirements apply to the adequacy of provider networks used to deliver services in a health benefit plan’s service area.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.505
Statutes/Other Implemented: ORS 743B.505
ID 6-2026, amend filed 06/22/2026, effective 06/29/2026
ID 14-2025, temporary amend filed 12/16/2025, effective 01/01/2026 through 06/29/2026
ID 10-2016, f. & cert. ef. 9-14-16

Or. Admin. R. 836-053-0310 Network Adequacy Definitions for OAR 836-053-0300 to 836-053-0355

As used in OAR 836-053-0300 to 836-053-0355:

(1) “Enrollee” means an employee, dependent of the employee or an individual otherwise eligible for a group or individual health benefit plan who has enrolled for coverage under the terms of the plan.

(2) “Carrier” has the meaning given that term in ORS 743B.005.

(3) “Health benefit plan” means any:

(a) Hospital expense, medical expense or hospital or medical expense policy or certificate;

(b) Subscriber contract of a health care service contractor as defined in ORS 750.005; or

(c) Plan provided by a multiple employer welfare arrangement or by another benefit arrangement defined in the federal Employee Retirement Income Security Act of 1974, as amended, to the extent that the plan is subject to state regulation.

(4) “Network plan” means a health benefit plan that either requires an enrollee to use, or creates incentives, including financial incentives, for an enrollee to use health care providers managed, owned, under contract with or employed by the carrier.

(5) “Marketplace” means health insurance exchange as defined in OAR 945-001-0002(23).

(6) “Low-income zip code” means a ZIP code included in the Centers for Medicare and Medicaid Services (CMS) Marketplace Low-Income ZIP Code list for the applicable plan year, as published by CMS as of January 1, 2025 and thereafter as published by the department in a bulletin made available on the division’s website at https://dfr.oregon.gov/laws-rules/Pages/bulletins.aspx, or its successor.

(7) “Health professional shortage area” or HPSA means a geographic area, population group, or facility designated as such by the Department of Health and Human Services under 42 U.S.C. § 254e. For purposes of network adequacy, a provider or facility will be considered to be located in or serving an HPSA if it is located in, or serves a population group designated as an HPSA by the Health Resources and Services Administration (HRSA), updated annually as of January 1, 2025 and thereafter as published by the department in a bulletin made available on the division’s website at https://dfr.oregon.gov/laws-rules/Pages/bulletins.aspx, or its successor.

(8) “Telemedicine” has the meaning given that term in ORS 743A.058.

(9) “Nationally recognized standard” means the federal network adequacy standard for Qualified Health Plans, as set forth in 45 C.F.R. § 156.230, as in effect on January 1, 2025, unless otherwise specified in these rules.

(10) “County" means the designation assigned by the Centers for Medicare & Medicaid Services (CMS) for purposes of applying network adequacy standards for Qualified Health Plans (QHPs). The following county classifications are defined in 42 C.F.R § 156.230, as in effect on January 1, 2025, unless otherwise specified in these rules:

(a) Large Metro – Counties with a population size and population density meeting the CMS thresholds for large metropolitan areas;

(b) Metro – Counties with a population size and population density meeting the CMS thresholds for metropolitan areas;

(d) Rural – Counties with a population size and population density meeting the CMS thresholds for rural areas; and

(e) Counties with Extreme Access Considerations (CEAC) – Counties with a population density of fewer than 10 persons per square mile, as determined by CMS.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.505
Statutes/Other Implemented: ORS 743B.505
ID 6-2026, amend filed 06/22/2026, effective 06/29/2026
ID 14-2025, temporary amend filed 12/16/2025, effective 01/01/2026 through 06/29/2026
ID 10-2016, f. & cert. ef. 9-14-16

Or. Admin. R. 836-053-0325 Network Adequacy Reporting Requirements

(1) By March 31 of each year, a carrier must submit a network adequacy report for each provider network used in connection with a health benefit plan offered or renewed in this state, demonstrating compliance with the requirements of OAR 836-053-0300 to 836-053-0355. When a single provider network is associated with multiple health benefit plans, the carrier must report once for that network and include all health benefit plans and enrollees for that network.

(2) For each provider network, the network adequacy report must include:

(a) Identification of the carrier’s provider network and the health benefit plans to which the network applies;

(b) A description of how telemedicine or other technology is used to meet network access standards, including a breakdown of the percentage of telemedicine delivered by Oregon-based providers who also provide in-person care versus the percentage delivered by telemedicine-only providers. The report must indicate the percentage of network adequacy standards met through telemedicine for each provider, consistent with the limits in OAR 836-053-0345(3);

(d) For each required provider in the network, including but not limited to behavioral health, substance use disorder, and reproductive health, the report must include the following information:

(A) Provider and facility name and unique identifier, if assigned;

(B) Specialty or provider type, consistent with department assigned categories;

(D) Contact phone number;

(E) Whether the provider is accepting new patients;

(F) Whether the provider or facility is located in, or serves, a low-income ZIP code or federally designated health professional shortage area (HPSA); and

(G) Network affiliation(s) and tier level, if applicable.

(e) Any other information or supporting documentation required by the department to verify compliance, as set forth in reporting templates and instructions published by the department.

(3) For any provider network that fails to meet a quantitative travel time and distance or appointment wait time standard established by the department in a HPSA or low-income ZIP code (as defined in OAR 836-053-0310), the annual network adequacy report must include a written justification demonstrating how the carrier ensures that all covered services will be accessible to enrollees without unreasonable delay, consistent with 45 C.F.R. 156.230(a)(2)(ii). The written justification must include, at a minimum, the following mandatory elements for each unmet standard:

(a) Identify the specific network inadequacy and the required quantitative standard (e.g., maximum travel distance/time or wait time) that was not met.

(b) Provide a clear and concise explanation of the primary reason the provider network failed to meet the standard, such as a lack of available providers, a lack of providers willing to contract, or the recent departure or closure of a key provider or facility.

(c) Documentation of specific, recent, good-faith contracting efforts undertaken by the carrier to address the network gap.

(d) A description of mitigating measures that ensure enrollees in the affected area have access to care without unreasonable delay. This must detail the carrier’s specific strategy for providing timely access, including:

(A) The use of telemedicine (consistent with OAR 836-053-0345(3)).

(B) Identification of contracted providers in adjacent counties or service areas who regularly serve the affected population, including the volume or capacity dedicated to serving enrollees in the gap area.

(C) Documentation of established case management, referral, or transportation protocols to ensure enrollees are able to access the required services outside the standard time/distance parameters.

(4) A carrier may request a waiver from the department for the detailed reporting requirements of this rule for any provider network that has zero enrolled lives in Oregon as of the reporting date. The waiver request must be submitted in writing and certify that the network is not currently marketed or used for any active health benefit plan.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.505
Statutes/Other Implemented: ORS 743B.505
ID 6-2026, adopt filed 06/22/2026, effective 06/29/2026

Or. Admin. R. 836-053-0335 Nationally Recognized Standard for Annual Network Adequacy Evaluation

(1) For purposes of the annual evaluation of network adequacy required by ORS 743B.505, the department adopts the nationally recognized standard for network adequacy, defined as the federal network adequacy standards for Qualified Health Plans set forth in 45 C.F.R. § 156.230, as in effect on January 1, 2025, and as published in annual Centers for Medicare and Medicaid Services (CMS) network adequacy guidance.

(2) For purposes of this rule, the department adopts as the default quantitative benchmark the Baseline Time and Distance Standards published by CMS for Plan Year 2025, which are available on the division’s website at https://dfr.oregon.gov/business/reg/health/Pages/annual-network-adequacy.aspx.

(3) When CMS publishes Alternative Time and Distance Standards for specific provider types or counties in any plan year, carriers may rely on those alternative benchmarks in their Oregon filings for that year, but only for the provider types and geographic areas identified in the applicable CMS guidance.

(4) Carriers must ensure network access for all provider specialties and facility types identified by CMS for Qualified Health Plans, including, at a minimum, primary care, behavioral health care, substance use disorder treatment, and reproductive health care services.

(5) Each carrier must submit all network data and documentation necessary for the department’s annual evaluation, using forms, deadlines, and reporting templates prescribed by the department.

(6) Compliance with this rule does not exempt a carrier from meeting any other applicable network adequacy requirements under Oregon or federal law.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.505
Statutes/Other Implemented: ORS 743B.505
ID 6-2026, adopt filed 06/22/2026, effective 06/29/2026

Or. Admin. R. 836-053-0345 Quantitative Network Adequacy Access Standards

(1) Carriers must meet the following minimum quantitative access benchmarks as adopted in OAR 836-053-0335, consistent with the network adequacy standards for Qualified Health Plans set forth in 45 C.F.R. § 156.230, as in effect on January 1, 2025.

(a) Travel time and distance: Carriers must meet the travel time and distance standards to ensure that at least 90 percent of enrollees have access to in-network providers within the applicable time and distance requirements for each provider type and county as defined in OAR 836-053-0310(j). The applicable federal standards, including specific time and distance benchmarks by provider and county type, are published by the Centers for Medicare & Medicaid Services (CMS) in Appendix E of the Network Adequacy Template for Plan Year 2025, which are available on the division’s website at https://dfr.oregon.gov/business/reg/health/Pages/annual-network-adequacy.aspx.

(b) Each carrier is responsible for conducting the geospatial analysis required to demonstrate compliance with travel time and distance standards. Carriers must submit the results of their analysis, showing the number and percentage of enrollees meeting each standard for every required provider and facility type, by county classification, in the format and manner prescribed by the department.

(c) Appointment wait times: For each provider type listed below, carriers must ensure that at least 90 percent of enrollees have access to an in-network provider appointment within the following timeframes:

(A) Primary care: not more than 15 business days.

(B) Behavioral health care: not more than 10 business days.

(2) In areas designated as health professional shortage areas (HPSAs), or low-income ZIP codes as defined in OAR 836-053-0310, carriers may satisfy the quantitative standards in this rule through a justification process as described in OAR 836-053-0325.

(3) In meeting the quantitative network adequacy standards in this rule, carriers may use telemedicine providers to satisfy up to:

(a) 10 percent of the access requirements for primary care and specialty care services; and

(b) 30 percent of the access requirements for behavioral health care services.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.505
Statutes/Other Implemented: ORS 743B.505
ID 6-2026, adopt filed 06/22/2026, effective 06/29/2026
ID 14-2025, temporary adopt filed 12/16/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0350 Provider Directory Requirements for Network Adequacy

(1)(a) A carrier shall post electronically a current, accurate and complete provider directory for each of its network plans with the information and search functions, as described in section (2) of this rule.

(b) In making the directory available electronically, the carrier shall ensure that the general public is able to view all of the current providers for a plan through a clearly identifiable link or tab and without creating or accessing an account or entering a policy or contract number.

(c)(A) A carrier shall update each network plan provider directory at least monthly. The provider directory shall disclose the frequency with which it is updated.

(B) The carrier shall include a disclosure in the directory that the information included in the directory is accurate as of the date posted to the web or printed and that enrollees or prospective enrollees should consult the carrier to obtain current provider directory information.

(d) A carrier shall provide a print copy, or a print copy of the requested directory information, of a current provider directory with the information described in section (2) of this rule upon request of an enrollee or a prospective enrollee.

(e) For each network plan, a carrier shall include in plain language in both the electronic and print directory, the following general information:

(A) A description of the criteria the carrier has used to build its provider network;

(B) If applicable, a description of the criteria the carrier has used to tier providers;

(C) If applicable, information about how the carrier designates the different provider tiers or levels in the network and identifies for each specific provider, hospital, or other type of facility in the network which tier each is placed, for example by name, symbols or grouping, in order for an enrollee or a prospective enrollee to be able to identify the provider tier; and

(D) If applicable, note that authorization or referral may be required to access some providers.

(f)(A) A carrier shall make it clear in both its electronic and print directories which provider directory applies to which network plan, such as including the specific name of the network plan as marketed and issued in this state.

(B) The carrier shall include in both its electronic and print directories a customer service email address and telephone number or electronic link that enrollees or the general public may use to notify the carrier of inaccurate provider directory information.

(g) For the pieces of information required under this section in a provider directory pertaining to a health care professional, a hospital or a facility other than a hospital, the carrier shall make available through the directory a general explanation of the source of the information and any limitations, if applicable.

(h) A provider directory, whether in electronic or print format, shall accommodate the communication needs of individuals with disabilities, and include a link to or information regarding available assistance for persons with limited English proficiency.

(2) The carrier shall make available through an electronic provider directory that includes search functions, for each network plan, all of the following information:

(a) For health care professionals:

(A) Name;

(B) Gender;

(D) Specialty, if applicable;

(E) Participating facility affiliations, if applicable;

(F) Languages spoken by provider other than English, if applicable;

(G) Whether interpreter services (spoken or signed) are available at the provider's practice location, and the types of access supported (e.g., in-person, telephonic, video remote);

(H) Whether the provider self-identifies as having clinical focus in serving one or more of the following populations:

(i) Individuals from diverse cultural or ethnic backgrounds;

(ii) Individuals with disabilities;

(iii) Individuals with specified physical or behavioral health conditions;

(iv) Individuals who identify as LGBTQIA+ or with diverse gender identities or sexual orientations.

(I) Whether accepting new patients;

(J) Network affiliations;

(K) Tier level, if applicable;

(L) Contact information; and

(M) Board certifications.

(b) For hospitals:

(A) Hospital name;

(B) Participating hospital location;

(D) Network affiliations;

(E) Tier level, if applicable; and

(F) Telephone number.

(A) Facility name;

(B) Facility type;

(D) Network affiliations;

(E) Tier level, if applicable; and

(F) Telephone number.

History

Statutory/Other Authority: ORS 731.244, ORS 743B.505 & ORS 743B.250
Statutes/Other Implemented: ORS 743B.505 & ORS 743B.250
ID 6-2026, amend filed 06/22/2026, effective 06/29/2026
ID 10-2016, f. & cert. ef. 9-14-16

Or. Admin. R. 836-053-0355 Behavioral Health Network Composition and Reporting

For the purpose of evaluating the sufficiency of a carrier’s network of behavioral health providers under ORS 743B.505(4)(b), the carrier must annually submit, as part of its network adequacy report, a behavioral health access and capacity analysis that includes the following:

(1) A list of all in-network behavioral health providers, by provider type, including:

(a) Licensed professional counselors;

(b) Licensed marriage and family therapists;

(d) Psychologists; and

(e) Psychiatrists.

(2) For each provider listed in (a), the report must identify:

(a) Whether the provider is accepting new patients;

(b) Whether the provider serves children, adults, or both;

(A) Individuals with limited English proficiency, without the use of an interpreter, or those who are illiterate;

(B) Individuals with diverse cultural or ethnic backgrounds;

(D) Individuals who identify as LGBTQIA+ or with diverse gender identities or sexual orientations.

(d) The geographic location (county, zip code) where services are delivered.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.505
Statutes/Other Implemented: ORS 743B.505
ID 6-2026, adopt filed 06/22/2026, effective 06/29/2026

Or. Admin. R. 836-053-0410 Purpose; Statutory Authority; Enforcement

(1) OAR 836-053-0410 to 836-053-0465 are adopted under the authority of ORS 743B.330, 743B.126 and 743B.310 for the purpose of implementing ORS 743B.022, 743B.125, 743B.126 and 743B.310 relating to individual health benefit plans.

(2) Violation of any provision of OAR 836-053-0431 to 836-053-0465 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 743B.330, 743B.126 & 743B.310
Statutes/Other Implemented: ORS 743B.330, 743B.126 & 743B.310
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96

Or. Admin. R. 836-053-0415 Cancellation of an Individual Health Benefit Plan Coverage

The notice requirements of ORS 743.499 and 743.894 are triggered at the time an insurer takes administrative action to terminate coverage.

History

Statutory/Other Authority: ORS 743.499, 743.769 & 743.894
Statutes/Other Implemented: ORS 743.499, 743.766–743.769 & 743.894
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11

Or. Admin. R. 836-053-0418 Definition of Insurer for Reimbursement of Expenses Related to Disease Outbreak or Epidemic

As used in 2017 Or Laws, ch 719, §2, “Insurer” includes:

(1) Any person with a certificate of authority to transact insurance in Oregon;

(2) A health care service contractor as defined in ORS 750.005 with a certificate to transact insurance in Oregon; and

(3) A multiple employer welfare arrangement as defined in ORS 750.301 with a certificate of multiple employer welfare arrangement in Oregon.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: 2017 Or Laws, ch 719, §2 (Enrolled House Bill 3276)
ID 12-2017, adopt filed 12/08/2017, effective 12/08/2017

Or. Admin. R. 836-053-0431 Underwriting, Enrollment and Benefit Design

(1) A carrier must offer all of its approved nongrandfathered individual health benefit plans and plan options, including individual plans offered through associations, to all individuals eligible for such plans on a guaranteed issue basis without regard to health status, age, immigration status or lawful presence in the United States. Except as provided in section (2) of this rule:

(a) For individual health benefit plans approved by October 1 of each calendar year for sale in the following calendar year, a carrier may limit enrollment to October 15 to December 7 of each preceding calendar year for coverage effective on or after January 1, 2016; and

(b) Coverage must be effective consistent with the dates described in 45 CFR 155.410(c) and (f).

(2)(a) Notwithstanding section (1) of this rule, a carrier must deny enrollment under the following circumstances:

(A) To an individual who is not lawfully present in the United States in a plan provided through the health insurance exchange.

(B) To an individual entitled to benefits under a Medicare plan under part A or B or a Medicare Choice or Medicare Advantage plan described in 42 USC 1395W–21, if and only if the individual is enrolled in such a plan.

(b) A carrier must enroll an individual who, within 60 days before application for coverage with the carrier:

(A) Loses minimum essential coverage. Loss of minimum essential coverage does not include termination or loss due to failure to pay premiums or rescission as specified in 45 CFR 147.128. The effective date of coverage for the loss of minimum essential must be consistent with the requirements of 45 CFR 155.420(b)(1).

(B) Gains a dependent or becomes a dependent through marriage, birth, adoption or placement for adoption or foster care. The effective date for coverage for enrollment under this paragraph must be:

(i) In the case of marriage, no later than the first day of the first calendar month following the date the carrier receives the request for special enrollment.

(ii) In the case of birth, on the date of birth.

(iii) In the case of adoption or placement for adoption or foster care, no later than the date of adoption or placement for adoption or foster care.

(C) Experiences a qualifying event as defined under section 603 of the Employee Retirement Income Security Act of 1974, as amended.

(D) Experiences an event described in 45 CFR 155.420(d)(4), (5), (6), or (7). The effective date of coverage for enrollment under this paragraph must be:

(i) For 45 CFR 155.420(d)(4) or (d)(5), consistent with the requirements of 45 CFR 155.420(b)(2)(iii).

(ii) For 45 CFR 155.420(d)(6) or (d)(7), consistent with the requirements of 45 CFR 155.420(b)(1).

(E) Loses eligibility for coverage under a Medicaid plan under title XIX of the Social Security Act or a state child health plan under title XXI of the Social Security Act. The effective date of coverage for enrollment under this paragraph must be consistent with the requirements of 45 CFR 155.420(b)(1).

(3) Except as permitted under a preexisting condition provision of a grandfathered individual plan, a carrier may not modify the benefit provisions of an individual health benefit plan for any enrollee by means of a rider, endorsement or otherwise for the purpose of restricting or excluding coverage for medical services or conditions that are otherwise covered by the plan.

(4) A carrier may offer wrap-around occupational coverage to an accepted individual health benefit plan applicant.

(5) A carrier may impose an individual coverage waiting period on the coverage of certain new enrollees in a grandfathered individual health benefit plan in accordance with ORS 743B.125. The terms of the waiting period must be specified in the policy form and enrollee summary. The waiting period may apply only when the carrier has determined that the enrollee has a preexisting health condition warranting the application of a waiting period through evaluation of the form entitled “Oregon Individual Standard Health Statement” as set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov.

(6) A carrier may treat a request by an enrollee in an individual health benefit plan to enroll in another individual plan as a new application for coverage.

(7) Unless otherwise required by law and except as provided in section (8) of this rule, a carrier must implement a modification of a nongrandfathered individual health benefit plan required by statute on the next anniversary or fixed renewal date of the plan that occurs on or after the operative date of the statutory provision requiring the modification.

(8) For a grandfathered individual health benefit plan:

(a) Unless otherwise required by law, a carrier must implement a modification required by statute on the first day of the calendar year that occurs on or after the operative date of the statutory provision requiring the modification.

(b) A carrier must eliminate and deem ineffective a rider or endorsement in effect for an enrollee based on the actual or expected health status of the enrollee and that excludes coverage for diseases or medical conditions otherwise covered by the plan as of the next renewal date;

(c) If an enrollee who is subject to a preexisting condition provision has a rider or endorsement eliminated in accordance with subsection (a) of this section, the enrollee's medical condition that is subject to the rider or endorsement may be subject to the preexisting conditions provision of the plan, including the prior coverage credit provisions;

(9) In accordance with applicable federal law, a carrier may not deny continuation or renewal of an individual health benefit plan based on Medicare eligibility of an individual but an individual health benefit plan may contain a Medicare non-duplication provision.

(10) Violation of this rule is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244, ORS 743.745 & 743.769
Statutes/Other Implemented: ORS 743.745 & 743.766 - 743.769
ID 16-2023, minor correction filed 06/23/2023, effective 06/23/2023
ID 4-2016, f. & cert. ef. 4-8-16
ID 17-2014, f. & cert. ef. 10-6-14
ID 14-2014, f. & cert. ef. 7-30-14
ID 7-2014(Temp), f. & cert. ef. 4-16-14 thru 9-24-14
ID 5-2014(Temp), f. & cert. ef. 4-2-14 thru 9-24-14
ID 2-2014(Temp), f. & cert. ef. 2-4-14 thru 7-31-14
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0435 Health Benefit Plan Coverage of Well-woman Preventive Care Services

Eﬀective September 1, 2024, health beneﬁt plan policies or certiﬁcates issued, renewed, modiﬁed or extended on or after September 1, 2024 must provide coverage without cost sharing for well-woman care services consistent with guidelines set forth by the United States Health Resources and Services Administration (HRSA) as of December 2022.

(1) Health beneﬁt plans must provide coverage without cost sharing for the thirteen (13) well-woman preventive services identiﬁed by HRSA. A list of these covered services can be found on the HRSA website at: https://www.hrsa.gov/womens-guidelines.

(2) Carriers shall ensure that health benefit plans are consistent with current practice and form filing requirements found in OAR 836-010-0011(2).

History

Statutory/Other Authority: ORS 743A.067
Statutes/Other Implemented: ORS 743A.067
ID 33-2024, amend filed 08/27/2024, effective 09/01/2024
ID 34-2018, minor correction filed 12/14/2018, effective 12/14/2018
ID 7-2018, adopt filed 04/23/2018, effective 04/23/2018

Or. Admin. R. 836-053-0441 Gender Affirming Treatment

(1) For purposes of this rule:

(a) “Gender-affirming treatment” has the meaning given to that term under ORS 743A.325; and

(b) “Accepted standards of care” includes, at a minimum, the World Professional Association for Transgender Health’s Standards of Care for the Health of Transgender and Gender Diverse People, Version 8 (WPATH-8).

(2) A carrier offering a health benefit plan may not deny or limit coverage under the plan including, but not limited to denying or limiting coverage of a claim, issuing automatic denials of coverage or imposing additional cost-sharing or other limitations or restrictions on coverage for gender-affirming treatment that is:

(a) Medically necessary, as determined by the physical or behavioral health care provider who prescribes the treatment; and

(b) Prescribed in accordance with accepted standards of care.

(3) Carriers may use utilization review practices to verify adherence to the accepted standards of care described in subsection (2)(b), provided that such practices are consistent with the requirements of this rule, OAR 836-053-1200, and all other applicable provisions of Oregon law. Utilization review practices shall be implemented in a manner that does not unreasonably limit or delay access to care.

(4) A carrier offering a health benefit plan may not:

(a) Apply a categorical cosmetic or blanket exclusion to medically necessary gender-affirming treatment; or

(b) Exclude, as a cosmetic service, a medically necessary procedure prescribed by a physical or behavioral health care provider as gender-affirming treatment, including but not limited to:

(A) Tracheal shave;

(B) Hair electrolysis;

(D) Revisions to prior forms of gender-affirming treatment; or

(E) Any combination of gender-affirming treatment procedures.

(5) Prior to issuing an adverse benefit determination that denies or limits access to gender-affirming treatment, a carrier offering a health benefit plan must ensure that the adverse benefit determination is reviewed and approved in accordance with the following requirements:

(a) The adverse benefit determination is reviewed by a physical or behavioral health care provider with experience prescribing or delivering gender-affirming treatment.

(b) To demonstrate experience the reviewing provider must:

(A) Meet the criteria for external medical review found in OAR 836-053-1325(6)(b)(A-C);

(B) Have experience utilizing the WPATH-8; and

(c) This subsection (5) does not apply to an adverse benefit determination that only involves the application of cost-sharing, such as deductibles, coinsurance, or copays, to gender-affirming treatment.

(6) In the event of an adverse benefit determination that denies or limits coverage for gender-affirming treatment, the carrier must meet all the requirements in:

(a) ORS 743B.250, and if requested under ORS 743B.250(2)(h)(B), disclosure of the identity of the physical or behavioral health care provider who reviewed the determination, which at a minimum includes information to demonstrate experience prescribing or delivering gender-affirming treatment:

(A) The provider’s job title and specific role in the review process; and

(B) The provider’s specialty, board certification status, and any other relevant qualifications that affirm their experience in gender-affirming treatment.

(b) OAR 836-053-1030; and

(7) Carriers offering health benefit plans shall:

(a) Satisfy any network adequacy standards under ORS 743B.505 related to gender-affirming treatment providers; and

(b)(A) Contract with a network of gender-affirming treatment providers that is sufficient in numbers and geographic locations to ensure that gender-affirming treatment services are accessible to all enrollees without unreasonable delay; or

(B) Ensure that all enrollees have geographical access without unreasonable delay to out-of-network gender-affirming treatment services with cost-sharing or other out-of-pocket costs for the services no greater than the cost-sharing or other out-of-pocket costs for the services when furnished by an in-network provider, and meet all the requirements in:

(i) OAR 836-053-1030;

(ii) OAR 836-053-1035; and

(iii) OAR 836-053-1408.

History

Statutory/Other Authority: ORS 731.244 & ORS 743A.325
Statutes/Other Implemented: ORS 743A.325
ID 41-2024, adopt filed 12/23/2024, effective 01/01/2025

Or. Admin. R. 836-053-0444 Purpose and Statutory Authority

(1) The purpose of OAR 836-053-0444 to 836-053-0461 is to implement the requirements in ORS 743B.292, which ground ambulance service organizations from balance billing health benefit plan enrollees, requires ground ambulance service organizations to report local established rates to the Department of Consumer and Business Services and requires health benefit plans pay ground ambulance service providers certain rates.

(2) These rules apply to health benefit plans issued, renewed or extended on or after January 1, 2026.

History

Statutory/Other Authority: ORS 743B.292
Statutes/Other Implemented: ORS 743B.292
ID 7-2026, adopt filed 06/24/2026, effective 06/29/2026
ID 15-2025, temporary adopt filed 12/17/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0447 Definitions

As used in OAR 836-053-0444 to 836-053-0461:

(1) “Enrollee” has the meaning given that term in ORS 743B.005.

(2) “Established local rate” means the rate established where the health care services originated for the provision of ground ambulance services through a publicly accessible process that includes an analysis of the cost to provide the ground ambulance services by:

(a) The local government entity if the ground ambulance services are provided by ground ambulance services organizations that are owned or operated by the local government entity; or

(b) The contract between a privately owned or operated ground ambulance services organization and the local government entity if the ground ambulance services are provided by a privately owned or operated ground ambulance services organization.

(3) “Ground ambulance services” means:

(a) The rendering of medical treatment and care at the scene of a medical emergency or while transporting an individual from the scene to an appropriate health care facility when the services are provided by one or more ground ambulance vehicles designed for this purpose; and

(b) Transport between health care facilities when the services are medically necessary and are provided by one or more ground ambulance vehicles designed for this purpose.

(4) “Ground ambulance services organization” means a public or private organization licensed by the Oregon Health Authority pursuant to ORS 682.045 to provide ground ambulance services.

(5) “Health benefit plan” has the meaning given that term in ORS 743B.005, except that “health benefit plan” does not include a coverage offered by the Public Employees’ Benefit Board or the Oregon Educators Benefit Board through a commercial insurer, a health care service contractor or a third party administrator.

(6) “Health care facility” means a facility that provides health care services directly to patients, including but not limited to a hospital, clinic, health care provider’s office, health maintenance organization, diagnostic or treatment center, mental health facility, behavioral health service provider, emergency services provider or hospice or nursing home.

(7) “In-network” has the meaning given that term in ORS 743B.280.

(8) “Mutual aid transport” means a transport by a ground ambulance service organization that originates outside their designated area and is requested or subject to an agreement between ground ambulance service providers for reciprocal services.

(9) “Nonresident” means a patient that does not reside in a ground ambulance service organization’s service area.

(10) “Resident” means a patient that resides in ground ambulance service organization’s service area.

History

Statutory/Other Authority: ORS 743B.292
Statutes/Other Implemented: ORS 743B.292
ID 7-2026, adopt filed 06/24/2026, effective 06/29/2026
ID 15-2025, temporary adopt filed 12/17/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0451 Balance Billing Prohibition and Consumer Cost-Sharing for Ground Ambulance Services

(1) A ground ambulance services organization may not bill an enrollee for covered ground ambulance services if the enrollee has paid the in-network cost-sharing amount specified in the enrollee’s health benefit plan.

(a) The enrollee's in-network cost-sharing amount must be calculated using the allowed amount determined under OAR 836-053-0454. The health benefit plan shall provide an explanation of benefits to the enrollee and the ground ambulance services organization that reflects the cost-sharing amount determined under this subsection.

(b) The ground ambulance services organization and any agent, trustee, or assignee of the ground ambulance services organization may not balance bill or otherwise attempt to collect from the enrollee any amount greater than the amount determined under subsection (a).

(2) A ground ambulance services organization shall refund any amount in excess of the in-network cost-sharing amount to an enrollee within 45 business days of receipt if the enrollee has paid the ground ambulance services organization an amount that exceeds the in-network cost-sharing amount determined under subsection (1)(a).

(3) This rule applies to persons covered by a self-funded group health plan, including plans offered by the Public Employees’ Benefit Board or the Oregon Educators Benefit Board, that has elected to participate in the provisions of ORS 743B.292 pursuant to OAR 836-053-0461 .

History

Statutory/Other Authority: ORS 743B.292
Statutes/Other Implemented: ORS 743B.292
ID 7-2026, adopt filed 06/24/2026, effective 06/29/2026
ID 15-2025, temporary adopt filed 12/17/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0454 Payments to Ground Ambulance Services Organizations

(1) The allowed amount paid to a ground ambulance services organization for covered ground ambulance services under a health benefit plan must be one of the following amounts:

(a)(A) The rate established by the local government entity where the covered health care services originated for the provision of ground ambulance services by ground ambulance services organizations owned or operated by the local government entity; or

(B) Where the ground ambulance services were provided by a private ground ambulance services organization under contract with the local government entity where the covered health care services originated, the contracted rate.

(b) The rate pursuant to a written contract between the ground ambulance services organization and the health benefit plan.

(c) If a rate has not been established under (a) or (b) of this subsection, an amount no less than 325 percent of the Medicare rate, as published by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services (CMS) as of January 1, 2026, and thereafter as published by the department in an annual bulletin and made available on the division’s website at https://dfr.oregon.gov/laws-rules/Pages/bulletins.aspx, or its successor. The bulletin will notify health benefit plans of annual adjustment in the Medicare rate, if any, as published by CMS. The annual adjustment will be effective January 1 of each calendar year.

(2) When a ground ambulance services organization provides a ground ambulance transport outside of their primary geographic service area, also referred to as mutual aid transport, the rate paid is one of the following amounts:

(a) The rate established by the local government entity for the ground ambulance services organization that provided the transport.

(b) If a rate has not been established under (a) or (b) of this subsection, an amount no less than 325 percent of the Medicare rate, as published by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services (CMS) as of January 1, 2026, and thereafter as published by the department in an annual bulletin and made available on the division’s website at https://dfr.oregon.gov/laws-rules/Pages/bulletins.aspx, or its successor. The bulletin will notify health benefit plans of annual adjustment in the Medicare rate, if any, as published by CMS. The annual adjustment will be effective January 1 of each calendar year.

(c) The rate pursuant to a written contract between the ground ambulance services organization and the health benefit plan.

(3) Established local rates are reported to the department by ground ambulance service organizations for transparency purposesand may be used as a reference in determining the allowed amount under sections (1) and (2) of this rule, where applicable. For billing purposes, the health benefit plan and ground ambulance services organization will determine the payment amount based on the allowed amount at the time and place of the service pursuant to sections (1) and (2) of this rule.

(4) A health benefit plan shall make payments for ground ambulance services provided by ground ambulance services organizations directly to the organization, rather than the enrollee.

(5) The allowed amount established under sections (1) and (2) of this rule constitutes payment in full for the services rendered. A ground ambulance services organization may not request or require a patient at any time, for any procedure, service, or supply, to sign or otherwise execute by oral, written, or electronic means, any document that would attempt to avoid, waive, or alter any provision of this rule.

(6) For purposes of this rule "contracted rate" means rates established in a contract or contracts between a local government entity and a private ground ambulance services organization to provide ground ambulance services in their geographic service area.

(7) This rule applies to a self-funded group health plan, including plans offered by the Public Employees’ Benefit Board or the Oregon Educators Benefit Board, that has elected to participate in the provisions of ORS 743B.292 pursuant to OAR 836-053-0461 .

History

Statutory/Other Authority: ORS 743B.292
Statutes/Other Implemented: ORS 743B.292
ID 7-2026, adopt filed 06/24/2026, effective 06/29/2026
ID 15-2025, temporary adopt filed 12/17/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0457 Ground Ambulance Service Organization Rate Reporting to the Department

(1) Each ground ambulance service organization that has established local rates for ground ambulance services provided in their geographic area must submit the established local rates in an electronic format prescribed by the director of the Department of Consumer and Business Services and in accordance with instructions set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. Established local rates for ground ambulance services include rates for services provided directly by the local government entity and contracted rates.

(2) Established local rates are reported to the department by ground ambulance service organizations for transparency purposes. For billing purposes, the health benefit plan and ground ambulance services organization will determine the payment amount based on the allowed amount at the time and place of the service pursuant to sections (1) and (2) of OAR 836-053-0454.

(3) Ground ambulance service organizations must include the following rate information in their submission to the department for each established local rate or contracted rate submitted to the department:

(a) The ground ambulance service organization’s full legal name and address;

(b) The national provider identifier(s) (NPI) for any ground ambulance services organization to which the rate applies;

(d) The service area of the ground ambulance service organization, described by listing the geographic zone improvement plan (ZIP) codes established by the United States Postal Service that are included in the entity's service area;

(e) The applicable transport codes to which the rate applies, including any separate mileage code or codes;

(f) If applicable, the established local rate for services provided to nonresidents of the local government entity's service area, if a distinction is made in rates between services provided to residents and those provided to nonresidents.

(4) Ground ambulance service organizations must submit their established local rates to the department on the following schedule:

(a) Rates must be submitted on or before January 1, 2026 and thereafter, annually on or before October 1.

(b) Updated rates must be submitted within five calendar days of a change to the rates.

(5) For purposes of this rule "contracted rates" means rates established in a contract or contracts between a local government entity and a private ground ambulance services organization to provide ground ambulance services in their geographic service area.

History

Statutory/Other Authority: ORS 743B.292
Statutes/Other Implemented: ORS 743B.292
ID 7-2026, adopt filed 06/24/2026, effective 06/29/2026
ID 15-2025, temporary adopt filed 12/17/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0461 Self-Funded Group Health Plan, Public Employees' Benefit Board and Oregon Educators Benefit Board, Election to Participate

(1) A self-funded group health plan, the Public Employees’ Benefit Board, and the Oregon Educators Benefit Board may elect to participate in the provisions of ORS 743B.292.

(2) Notice of election must be provided to the director of the Department of Consumer and Business Services on a form prescribed by the department.

(a) The self-funded group health plan, the Public Employees’ Benefit Board or the Oregon Educators Benefit Board that has elected to participate must agree and attest to:

(A) Be bound by ORS 743B.292 and rules adopted to implement the provisions of the law.

(B) Participate for a full year and elect to initiate its participation on January 1 or on the first day of the plan year of any year.

(b) On its election form, the plan must indicate whether it chooses to affirmatively renew its election on an annual basis or whether it should be presumed to have renewed on an annual basis until the department receives advance notice from the plan that it is terminating its election as of either December 31 of a calendar year or the last day of its plan year.

(3) Notices under subsection (2) must be submitted to the department at least 15 days in advance of the effective date of the election to initiate participation and the effective date of the termination of participation. Notices submitted January 1, 2026 through January 31, 2026 may have an effective date of January 1, 2026 or later.

(4) The form will be posted on the department’s division of financial regulation public website at dfr.oregon.gov for use by self-funded group health plans, the Public Employees’ Benefit Board and the Oregon Educators Benefit Board.

(5) A self-funded group health plan operated by an out-of-state employer that has at least one employee who resides in Oregon may elect to participate in ground ambulance balance billing protections as provided in ORS 743B.292 on behalf of their Oregon resident employees and dependents. If a self-funded group health plan established by an Oregon employer has elected to participate in balance billing protections under ORS 743B.292 and has employees that reside in other states, those employees are protected from ground ambulance balance billing when receiving care from an Oregon ground ambulance service provider.

(6) Self-funded group health plan sponsors and their third party administrators may develop their own internal processes related to member notification, member appeals and other functions associated with their fiduciary duty to enrollees under the Employee Retirement Income Security Act of 1974 (ERISA).

History

Statutory/Other Authority: ORS 743B.292
Statutes/Other Implemented: ORS 743B.292
ID 7-2026, adopt filed 06/24/2026, effective 06/29/2026
ID 15-2025, temporary adopt filed 12/17/2025, effective 01/01/2026 through 06/29/2026

Or. Admin. R. 836-053-0465 Rating for Individual Health Benefit Plans

(1) Individual health benefit plans must be rated in accordance with the geographic areas specified in OAR 836-053-0065. A carrier must file a single geographic average rate for each health benefit plan that is offered to individuals within a geographic area. The geographic average rate must be determined on a pooled basis, and the pool shall include all of the carrier's business in the Oregon individual health benefit plan market, except for grandfathered health benefit plans and student health benefit plans.

(2) The variation in geographic average rates among different individual health benefit plans offered by a carrier must be based solely on objective differences in plan design or coverage. The variation shall not include differences based on the risk characteristics or claims experience of the actual or expected enrollees in a particular plan.

(3) A carrier may use the same geographic average rate for multiple rating areas.

(4) For a nongrandfathered health benefit plan:

(a) A carrier must implement premium rate increases on a fixed schedule that applies concurrently to all enrollees in a plan. A carrier may adjust an enrollee's premium during the rating period if the enrollee has a change in family composition.

(b) Premium rates must total the sum of the product of the applicable factors in subsection (c) of this section for each enrollee and dependent 21 years of age and older and the sum of the product of the applicable factors in section (7) of this rule for each of the three oldest dependent children under the age of 21.

(A) The ages of enrollees and their dependents according to Exhibit 1 to this rule. Variations in rates based on age may not exceed a ratio of three to one; or

(B) A tobacco use factor of no more than one and one-half times the non-tobacco use rate for persons 18 years of age or older except that the factor may not be applied when the person is enrolled in a tobacco cessation program.

(5) For a grandfathered health benefit plan, a carrier must implement premium rate increases in a consistent manner for all enrollees in a plan. A carrier may use either of the following methods to schedule premium rate increases for all enrollees in a grandfathered health benefit plan:

(a) A rolling schedule that is based on the anniversary of the date of coverage issued to each enrollee or on another anniversary date established by the carrier; or

(b) A fixed schedule that applies concurrently to all enrollees in a plan. If a fixed schedule is used, a carrier may adjust the premium of an enrollee during the rating period if the enrollee moves into a higher age bracket or has a change in family composition.

(6) In addition to other bases offered by a carrier, an enrollee of an individual health benefit plan must be offered the opportunity to pay premium on a monthly basis.

History

Statutory/Other Authority: ORS 731.244, 743.019, 743.020, 743.769 & 2014 OL Ch. 80 & Sec. 5
Statutes/Other Implemented: ORS 743.766 - 743.769, 746.015, 746.240 & 2014 OL Ch. 80 & Sec. 5
ID 4-2016, f. & cert. ef. 4-8-16
ID 17-2014, f. & cert. ef. 10-6-14
ID 6-2014(Temp), f. & cert. ef. 4-11-14 thru 10-8-14
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-2010, f. & cert. ef. 2-16-10
ID 14-2001, f. & cert. ef. 11-20-01
Reverted to ID 5-2000, f. & cert. ef. 5-11-00
ID 7-2001(Temp), f. 5-30-01, cert. ef. 5-31-01 thru 11-16-01
ID 5-2000, f. & cert. ef. 5-11-00
Renumbered from 836-053-0420, ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96

Or. Admin. R. 836-053-0472 Statutory Authority and Implementation

(1) OAR 836-053-0473 and 836-053-0475 are adopted under the authority of ORS 731.244, 743.018, 743.019, and 743.020 to aid in giving effect to provisions of ORS Chapters 742,743 and 743B relating to the filing of rates and policy forms with the Director. The requirements of OAR 836-053-0473 and 836-053-0475 are in addition to any other requirements established by statute or by rule or bulletin of the Department.

(2) OAR 836-053-0473 and 836-053-0475 apply to the following rate filings submitted or resubmitted to the Director on or after April 1, 2010:

(a) Health benefit plans for small employers;

(b) Individual health benefit plans.

History

Statutory/Other Authority: ORS 743.018, 743.019 & 743.020
Statutes/Other Implemented: ORS 742.003, 742.005, 742.007, 743.018, 743.019, 743.020, 743.022 & 743B.005
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0473 Required Materials for Rate Filing for Individual or Small Employer Health Benefit Plans

(1) Every insurer that offers a health benefit plan for small employers or an individual health benefit plan must file the information specified in section (2) of this rule when the insurer files with the director a schedule or table of premium rates for approval.

(2) A schedule or table of base premium rates filed under section (1) of this rule must include sufficient information and data to allow the director to consider the factors set forth in ORS 743.018(4) and (5). The filing must include all of the following separately set forth and labeled as indicated:

(a) A filing description labeled “Filing Description.” The filing description must:

(A) Be submitted in the form of a cover letter;

(B) Provide a summary of the reasons an insurer is requesting a rate change and the minimum and maximum rate impact to all groups or members affected by the rate change, including the anticipated change in number of enrollees if the proposed premium rate is approved;

(D) Include a description of any significant changes the insurer is making to the following:

(i) Rating factor changes; and

(ii) Benefit or administration changes.

(b) Rate tables and factors labeled “Rate Tables and Factors.” The rate tables and factors must:

(A) Include base and geographic average rate tables;

(B) Identify factors used by the insurer in developing the rates;

(D) Include a table of rating factors reflecting ages of employees and dependents and geographic area.

(E) Include rate tier tables if base rates are not provided by rating tier;

(F) Indicate whether the rate increases are the same for all policies;

(G) Explain how the rate increases apply to different policies;

(H) Provide the entire distribution of rate changes and the average of the highest and lowest rates resulting from the application of other rating factors;

(I) Within the geographic average rate table, include family type, geographic area and the average of the highest and lowest rates resulting from the application of other rating factors;

(J) Within the base rate table, include the base rates for each available plan and sufficient information for determination of rates for each health benefit plan, including but not limited to:

(i) Each age bracket;

(ii) Each geographic area;

(iii) Each rate tier;

(iv) Any other variable used to determine rates; and

(v) If the rates vary more frequently than annually, separate rates for each effective date of change or sufficient information to permit the determination of the rates and the justification for the variation in the rates.

(K) For a grandfathered small group health benefit plan, include the following factors if applied by the insurer:

(i) Contribution;

(ii) Level of participation;

(iii)Family composition;

(iv) The level at which enrollees or dependents engage in health promotion, disease prevention or wellness programs;

(v) Duration of coverage in force;

(vi) Any adjustment to reflect expected claims experience; and

(vii) Age.

(L) For a grandfathered individual health benefit plan, include the following factors to the extent applied by the insurer:

(i) Family composition; and

(ii) Age.

(M) For a nongrandfathered health benefit plan, include the following factors if applied by the insurer:

(i) Tobacco usage; and

(ii) The level at which enrollees or dependents engage in health promotion, disease prevention, or wellness programs.

(c) An actuarial memorandum consistent with the requirements of both state and federal law labeled “Actuarial Memorandum.” The actuarial memorandum must include all of the following:

(A) A description of the benefit plan and a quantification of any changes to the benefit plan as set forth in subsection (e) of this section;

(B) A discussion of assumptions, factors, calculations, rate tables and any other information pertinent to the proposed rate, including an explanation of the impact of risk corridors, risk adjustment and state and federal reinsurance on the proposed rate;

(C) A description of any changes in rating methodology supported by sufficient detail to permit the department to evaluate the effect on rates and the rationale for the change;

(D) The range of rate impact to groups or members including the distribution of the impact on members;

(E) A cross-reference of all supporting documentation in the filing in the form of an index and citations;

(F) The dated signature of the qualified actuary or actuaries who reviewed and authorized the rate filing; and

(G) The contact information of the filer.

(d) A description of the development of the proposed rate change or base rate that is included as an exhibit to the filing and labeled “Exhibit 1: Development of Rate Change.” The development of rate change is the core of the rate filing and must:

(A) Explain how the proposed rate or rate change was calculated using generally accepted actuarial rating principles for rating blocks of business;

(B) Include actual or expected membership information;

(D) Include a rate renewal calculation that:

(i) Begins with an assumed experience period of at least one year and ends within the immediately preceding year; or

(ii) If more recent data is available, uses the one-year period that ends with the most recent period for which data is available.

(E) Show adjustments to total premium earned during the experience period to yield premium adjusted to current rates;

(F) Include a projection of premiums and claims for the period during which the proposed rates are to be effective; and

(G) Provide a renewal projection using claims underlying the projection that reflect an assumed medical trend rate and other expected changes in claims cost, including but not limited to, the impact of benefit changes or provider reimbursement.

(e) A description of changes to covered benefits or health benefit plan design that is included as an exhibit to the rate filing and labeled “Exhibit 2: Covered Benefit or Plan Design Changes.” The covered benefit or plan design changes must:

(A) Explain all applicable benefit and administrative changes with a rating impact, including but not limited to:

(i) Covered benefit level changes;

(ii) Member cost-sharing changes;

(iii) Elimination of plans;

(iv) Implementation of new plan designs;

(v) Provider network changes;

(vi) New utilization or prior authorization programs;

(vii) Changes to eligibility requirements; and

(viii) Changes to exclusions.

(B) Show any change in the plan offerings that impacts costs or coverage provided not otherwise provided pursuant to subsection (e)(A) of this section.

(f) The average annual rate change included as an exhibit to the filing and labeled “Exhibit 3: Average Annual Rate Change.” The average annual rate change must:

(A) Provide the average, maximum and minimum annual rate changes for each effective date in the filing;

(B) Include a meaningful distribution of rate changes; and

(g) Trend information and projection included as an exhibit to the filing and labeled “Exhibit 4: Trend Information and Projection.” The trend information and projection must:

(A) Describe how the assumed future growth of medical claims (the medical trends rate) was developed based on generally accepted actuarial principles; and

(B) At a minimum, include historical monthly average claim costs for the two years immediately preceding the period for which the proposed rate is to apply. If the carrier’s structure does not include claims cost, the carrier must submit this information based on allocated costs.

(h) A statement of administrative expenses and premium retention included as an exhibit to the filing and labeled “Exhibit 5: Statement of Administrative Expenses and Premium Retention.” The statement of administrative expenses and premium retention must:

(A) Include a completed chart displaying the five-year trend of administrative costs and enumerating the insurer’s administrative expenses detailed as follows:

(i) Salaries;

(ii) Rent;

(iii) Advertising;

(iv) General office expenses;

(v) Third party administration expenses;

(vi) Legal and other professional fees; and

(vii) Travel and other administrative costs not accounted for under a category in subsections (h)(B)(i)–(vi) of this section.

(B) Explain how the insurer allocates administrative expenses for the filed line of business;

(C) Include a description of the amount retained by the insurer to cover all of the insurer’s non-claim costs including expected profit or contribution to surplus for a nonprofit entity reported on a percentage of premium and per member per month basis; and

(D) Demonstrate the total premium retention for the filing, including total administrative expenses reported under subsection (h)(B) of this section, commissions, taxes, assessments and margin.

(i) Plan relativities included as an exhibit to the filing and labeled “Exhibit 6: Plan Relativities.” Plan relativities must:

(A) Explain the presentation of rates for each benefit plan;

(B) Explain the methodology of how the benefit plan relativities were developed; and

(j) Information about the insurer’s financial position included as an appendix to the filing and labeled “Appendix I: Insurer’s Financial Position.” The insurer’s financial position may reference documents filed with the department and available to the public, including the insurer’s annual statement. The insurer’s financial position must include:

(A) Information about the insurer’s financial position including but not limited to the insurer’s:

(i) Profitability;

(ii) Surplus;

(iii) Reserves; and

(iv) Investment earnings.

(B) An analysis, explanation and determination of whether the proposed change in the premium rate is necessary to maintain the insurer’s solvency or to maintain rate stability and prevent excessive rate increases in the future.

(k) Changes in the insurer’s health care cost containment and quality improvement efforts included as an appendix to the filing and labeled “Appendix II: Cost Containment and Quality Improvement Efforts. The cost containment and quality improvement efforts must:

(A) Explain any changes the insurer has made in its health care cost containment efforts and quality improvement efforts since the insurer’s last rate filing for the same category of health benefit plan;

(B) Describe significant new health care cost containment initiatives and quality improvement efforts;

(C) Include an estimate of the potential savings from the initiatives and efforts described in subsection (2)(g)(B) of this section together with an estimate of the cost or savings for the projection period; and

(D) Include information about whether the cost containment initiatives reduce costs by eliminating waste, improving efficiency, by improving health outcomes through incentives, by elimination or reduction of covered services or reduction in the fees paid to providers for services.

(l) Certification of compliance labeled “Certification of Compliance.” The certification of compliance must:

(A) Comply with OAR 836-010-0011; and

(B) Certify that the filing complies with all applicable Oregon statutes, rules, product standards and filing requirements.

(m) Third party filer’s letter of authorization labeled “Third Party Authorization.” If the filing is submitted by a person other than the insurer to which the filing applies, the filing must include a letter from the insurer that authorizes the third party to:

(A) Submit the filing to the department;

(B) Correspond with the department on matters pertaining to the rate filing; and

(3) Insurers offering individual and small group health benefit plans that spend less than 12 percent of total medical expenditures on payments for primary care must include with each health benefit plan rate filing a plan to increase spending on payments for primary care by at least one percentage point each year. Once an insurer has met the 12 percent benchmark for primary care spending, that fact must be disclosed with each health benefit plan rate filing including a disclosure of the current percentage of total medical expenditures on primary care. Insurers shall use the methodology outlined in the annual Primary Care Spending in Oregon report to calculate the percentage of primary care spending.

History

Statutory/Other Authority: ORS 743.018, 743.019 & 743.020
Statutes/Other Implemented: ORS 743.018, 743.020, 742.003, 742.005, 742.007, 743.730 & 743.767
ID 3-2024, amend filed 04/29/2024, effective 05/01/2024
ID 2-2019, amend filed 02/26/2019, effective 03/01/2019
ID 8-2018, amend filed 04/24/2018, effective 04/24/2018
ID 1-2018, amend filed 01/30/2018, effective 02/01/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0474 Process For Rate Filing for Individual and Small Employer Health Benefit Plans

(1)(a) Within 10 days after receiving a proposed table or schedule of premium rate filing, the director shall determine whether the proposed table or schedule of premium rate filing is complete. If the director determines that a filing is complete, the director must review the proposed schedule or table of premium rates in accordance with ORS 742.003, 742.005, 742.007 and 743.018. If the director determines that the filing is not complete, the director shall notify the insurer in writing that the filing is deficient and give the insurer an opportunity to provide the missing information.

(b) If the filing is complete, the director shall open the 30-day public comment period. For purposes of determining the beginning of the public comment period, the date the carrier files a proposed schedule or table of premium rates shall be the date the director determines that the filing is complete.

(2) Within 10 days after the close of the public comment period, the director shall issue a decision approving, disapproving or modifying the proposed table or schedule of premium rate filing.

(3) If the director determines that an intervening event occurs prior to the effective date which uses the previously approved premium rates and that materially impacts the director’s previous decision under ORS 743.018(4), the director may reopen the public comment period previously established under 1(b) for the period of time, to the extent necessary to address the event. The department may not consider new facts or data that are offered as a substitute for the facts or data submitted by the insurer in the original filing.

(4) At the beginning of the public comment period, the director must post on the Division of Financial Regulation website all materials submitted under section (2) of this rule.

History

Statutory/Other Authority: ORS 743.018, 743.019 & 743.020
Statutes/Other Implemented: ORS 743.018, 743.020, 742.003, 742.005, 742.007, 743.730 & 743.767
ID 22-2024, minor correction filed 08/12/2024, effective 08/12/2024
ID 8-2018, adopt filed 04/24/2018, effective 04/24/2018

Or. Admin. R. 836-053-0475 Approval, Disapproval or Modification of Premium Rates for Individual or Small Employer Health Benefit Plan

(1) The materials submitted under OAR 836-053-0473 must include information sufficient to allow the director to evaluate the proposed schedule or table of premium rates for approval, disapproval or modification. After conducting an actuarial review of the rate filing, the director may approve a proposed premium rate for a health benefit plan for small employers or for an individual health benefit plan if, in the director’s discretion, the proposed rates meet the requirements of ORS 742.003, 742.005, 742.007 and 743.018.

(2) The director may approve reasonable increases or decreases in administrative expenses supported by the information provided under OAR 836-053-0473. In addition to the materials submitted under OAR 836-053-0473, in order to determine whether the proposed increase or decrease in administrative expenses is reasonable, the director may consider the cost of living for the previous calendar year, based on the Producer Price Index for Direct Health and Medical Insurance Carriers Industry, as published by the Bureau of Labor Statistics of the United States Department of Labor.

History

Statutory/Other Authority: ORS 743.018, 743.019 & 743.020
Statutes/Other Implemented: ORS 742.003, 742.005, 742.007, 743.018, 743.019, 743.020, 743.730 & 743.767
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-2010, f. & cert. ef. 2-16-10

Or. Admin. R. 836-053-0480 Consumer Friendly Summary Document for Rate Filings

(1) This rule applies to plan years beginning on and after January 1, 2026.

(2) Every insurer that offers a health benefit plan for small employers or an individual health benefit plan must file with each rate filing a consumer-friendly summary document that includes the following:

(a) Filing company’s legal name;

(b) Filing company’s website;

(d) Rate Filing SERFF tracking number;

(e) Requested average annual rate change expressed as a percentage;

(f) Range of requested annual rate change, from minimum to maximum, expressed as a percentage;

(g) Requested rate change effective date;

(h) Plans impacted including number of plans discontinued, number of plans modified by the rate request, and number of new plans created by the rate request;

(i) Covered lives impacted by the rate request;

(j) Visual representation of changes in service areas in this state;

(k) A breakdown of the rate request attributed to the following:

(A) Dollar and percentage for medical trend;

(B) Dollar and percentage for pharmacy trend;

(D) Dollar and percentage for market-wide uncertainty;

(E) Dollar and percentage for other significant drivers of the rate request;

(l) A breakdown of retained premium and Medical Loss Ratio for the past three, full calendar years and;

(m) A narrative description of any significant changes in networks and may include, but not be limited to:

(A) Changes in network type, such as switching from a preferred provider organization (PPO) to an exclusive provider organization (EPO);

(B) Changes in out of area coverages;

(C) Changes to major health care provider network contracting including, but not limited to, adding or removing large regional hospital systems.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 121
Statutes/Other Implemented: ORS 743B.130
ID 14-2026, minor correction filed 07/20/2026, effective 07/20/2026
ID 8-2026, minor correction filed 07/01/2026, effective 07/01/2026
ID 13-2025, adopt filed 12/15/2025, effective 01/01/2026

Or. Admin. R. 836-053-0510 Evaluating the Health Status of an Applicant for Individual Health Benefit Plan Coverage

(1) A carrier may use the health statement entitled, “Oregon Standard Health Statement” set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov to evaluate the health status of an applicant for coverage in a grandfathered individual health benefit plan. In all instances in which a carrier uses the Oregon Standard Health Statement, the carrier must pay for the costs associated with its use or the collection of information described in section (2) of this rule.

(2) In evaluating an Oregon Standard Health Statement, a carrier may request the applicant’s medical records or a statement from the applicant’s attending physician, but such a request may be made only for questions marked "Yes" by the applicant in the numbered questionnaire portion of the statement. Although a carrier's request for additional medical information is limited to the specific questions marked "Yes," a carrier may use all of the information received in response to such a request in evaluating the applicant's health statement.

(3) A carrier may use the information obtained in the Oregon Standard Health Statement from an individual enrolled in a nongrandfathered individual health benefit plan for the sole purpose of health care management, including providing or arranging for the provision of services under the plan.

(4)(a) A carrier that chooses to collect health-related information from an applicant for individual grandfathered coverage before enrollment must:

(A) Prominently state immediately before, and on the same page as, any health-related questions that:

(i) Health-related information provided by the applicant will be used solely for health care management purposes.

(ii) The applicant’s coverage cannot and will not be denied, terminated, delayed, limited or rescinded based on the applicant’s responses or failure to respond to the questions.

(iii) The premium charged for the insurance policy cannot and will not change based on the applicant’s responses or failure to respond to questions.

(B) Limit pre-enrollment health-related questions to whether an applicant:

(i) Has a disability or a chronic health condition

(ii) Has been advised by a licensed medical professional in the twelve months before application that hospitalization, surgery or treatment is necessary or pending.

(iii) Is pregnant.

(b) A carrier that chooses to ask questions described in paragraph (4)(a)(B) of this section may include the following as examples of a disability or chronic health condition:

(A) Asthma,

(B) Lung disease,

(D) Diabetes,

(E) Heart disease,

(F) Chronic back pain,

(G) Chronic joint pain,

(H) Obesity.

(c) A carrier may not delay or refuse to issue nongrandfathered individual coverage to an applicant because the applicant has failed to respond or failed to respond completely to the questions allowed under paragraph (3)(a)(B) of this section.

(d) For purposes of ORS 743B.103 and this section, “applicant” includes a prospective enrollee or dependent of a prospective enrollee.

(5) Violation of any provision of this rule is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.103
Statutes/Other Implemented: ORS 743B.103
ID 17-2023, minor correction filed 06/23/2023, effective 06/23/2023
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 9-2011, f. & cert. ef. 2-23-11
ID 9-2004, f. & cert. ef. 11-19-04
ID 5-2000, f. & cert. ef. 5-11-00
Renumbered from 836-053-0470, ID 5-1998, f. & cert. ef. 3-9-98
ID 12-1996, f. & cert. ef. 9-23-96

Or. Admin. R. 836-053-0600 Purpose; Statutory Authority; Applicability

(1) OAR 836-053-0600 to 836-053-0615 are adopted for the purpose of implementing sections 2, 3 and 12, chapter 470, Oregon Laws 2015.

(2) The requirements set forth in OAR 836-053-0600 to 836-053-0615 apply to carriers and third party administrators for health benefit plans issued or renewed on or after January 1, 2016.

History

Statutory/Other Authority: ORS 731.244 & OL 2015, Ch 470 Sections 2 & 3
Statutes/Other Implemented: Ch 470, OL 2015 Ch 470 Sections 2, 3 & 12
ID 16-2015, f. 12-29-15, cert. ef. 1-1-16
ID 8-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16

Or. Admin. R. 836-053-0605 Definitions for OAR 836-053-0600 to 836-053-0615

As used in OAR 836-053-0600 to 836-053-0615:

(1) The definitions set forth in Section 2, chapter 470; Oregon Laws 2015 apply to the use of those terms in these rules.

(2) “Enrollee” includes a person covered under a health benefit plan and a dependent of a person covered under a health benefit plan.

History

Statutory/Other Authority: ORS 731.244 & OL 2015, Ch 470 Sections 2 & 3
Statutes/Other Implemented: Ch 470, OL 2015 Ch 470 Sections 2, 3 & 12
ID 16-2015, f. 12-29-15, cert. ef. 1-1-16
ID 8-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16

Or. Admin. R. 836-053-0610 Carrier Response to Request for Confidentiality

(1) A carrier or third party administrator must do all of the following:

(a) Allow enrollees to submit the standardized form entitled “Oregon Confidential Communication Request” set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

(b) Acknowledge receipt of the enrollee’s form and respond to an enrollee’s confidential communications request.

(c) Include with the acknowledgement any information the enrollee needs about the effect of the request and the process for changing the status of the request.

(2) A carrier or third party administrator must communicate with providers about the protections afforded to enrollees under chapter 470, Oregon Laws 2015 and at a minimum provide information about how to access the “Oregon Confidential Communication Request Form.” A carrier or third party administrator is not limited to providing information about the form.

History

Statutory/Other Authority: ORS 731.244 & OL 2015, Ch 470 Sections 2 & 3
Statutes/Other Implemented: Ch 470, OL 2015 Ch 470 Sections 2, 3 & 12
ID 25-2023, minor correction filed 06/28/2023, effective 06/28/2023
ID 16-2015, f. 12-29-15, cert. ef. 1-1-16
ID 8-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16

Or. Admin. R. 836-053-0615 Carrier Reporting Requirements

(1) In order to comply with the requirements of section 3, chapter 470, Oregon Laws 2015, not later than December 1, 2015, carriers and third party administrators shall submit the following to the Department of Consumer and Business Services:

(a) Information about internal and external education and outreach activities that the carrier or third party administrator will conduct to inform Oregonians about their right to have protected health information redirected. The information reported shall include mechanisms the carrier or third party administrator proposes to use to assess the effectiveness of the education and outreach activities.

(b) Baseline data for the period of October 1, 2014 through September 30, 2015 that explains:

(A) The total number of requests to redirect confidential information received by the carrier or third party administrator and of these, the number of requests to redirect confidential information that are received via:

(i) Telephone;

(ii) Email; and

(iii) Hard copy.

(B) The timeliness of processing the redirection requests segregated by method of request.

(C) The number of complaints and grievances received related to confidential communications. This number must also include the applicable grievances tracked in accordance with OAR 836-053-1080.

(D) Total number of enrolled members.

(E) Total number of policyholders or certificate holders.

(F) Total number of dependent members.

(2) Not later than September 1, 2016, carriers and third party administrators shall submit to the department the following data for the period of January 1, 2016 through June 30, 2016:

(a)(A) The total number of requests to redirect confidential information received by the carrier or third party administrator and of these, the number of requests to redirect confidential information that are received via:

(i) Telephone;

(ii) Email;

(iii) Hard copy.

(B) The timeliness of processing the redirection requests segregated by method of request.

(D) Total number of enrolled members.

(E) Total number of policyholders or certificate holders.

(F) Total number of dependent members.

(b) The following information to assist the department in determining the extent and effectiveness of the education and outreach activities conducted by the carrier or third party administrator:

(A) Explanation of how and when the process was presented to members; and

(B) Copies of outreach and education materials used over the period of January 1, 2016 through June 30, 2016.

History

Statutory/Other Authority: ORS 731.244 & OL 2015, Ch 470 Sections 2 & 3
Statutes/Other Implemented: Ch 470, OL 2015 Ch 470 Sections 2, 3 & 12
ID 16-2015, f. 12-29-15, cert. ef. 1-1-16
ID 8-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16

Or. Admin. R. 836-053-0825 Rescission of a Group Health Benefit Plan

(1) For purposes of ORS 743B.013 and ORS 743B.105, “representative” means a person who, with specific authority from the employer or plan sponsor to do so, binds the employer or plan sponsor to a contract for health benefit plan coverage.

(2) The notice required by ORS 743B.013(6), ORS 743B.105(8) and ORS 743B.310(3) to each plan enrollee affected by the rescission must be in writing and include all of the following:

(a) Clear identification of the alleged fraudulent act, practice or omission or the intentional misrepresentation of material fact underlying the rescission.

(b) An explanation of why the act, practice or omission was fraudulent or was an intentional misrepresentation of a material fact.

(c) A statement explaining an enrollee’s right to file a grievance or request a review of the decision to rescind coverage.

(d) A description of the health carrier’s applicable grievance procedures, including any time limits applicable to those procedures.

(e) A statement explaining that complaints relating to the notice of rescission required under ORS 743B.013(6), ORS 743B.105(8) and ORS 743B.310(3) may be made with the Department of Consumer and Business Services by writing to the department at PO Box 14480, Salem, OR 97309-0405; by calling 503-947-7984 or toll-free 888-877-4894; online at dfr.oregon.gov; or by electronic mail to DFR.InsuranceHelp@dcbs.oregon.gov. The statement shall also explain that complaints to the Department of Consumer and Business Services do not constitute grievances under the health benefit plan and may not preserve an enrollee’s rights under the plan.

(f) The toll-free customer service number of the insurer.

(g) The effective date of the rescission and the date back to which the coverage will be rescinded.

(3) Subject to ORS 743.023(3), a health carrier may provide the required notice for small employer group health insurance either by first class mail or electronically.

(4)(a) On or before June 30 of each calendar year, an insurer must submit an electronic notice for the preceding calendar year in the format prescribed by the director of the Department of Consumer and Business Services and in accordance with instructions set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. The notice required by ORS 743B.013(6)(c), ORS 743B.105(8)(c) and ORS 743B.310(4) must include information related to group health benefit plan rescissions including but not limited to the total number of:

(A) Fully rescinded group health benefit plans;

(B) Partially rescinded group health benefit plans;

(D) Enrollees affected by a fully rescinded group health benefit plan; and

(E) Enrollees affected by a partially rescinded group health benefit plan.

(b) The notice required under this section may be combined with the notice required under OAR 836-053-0830 and OAR 836-053-0835.

(5) An insurer may not rescind coverage for fraud if a representative fails to accurately comply with the requirement to provide reasonable assurance that pediatric dental coverage is separately provided.

History

Statutory/Other Authority: ORS 743.018, ORS 743.019, ORS 743.020 & ORS 743B.310
Statutes/Other Implemented: ORS 743.018, ORS 743.019, ORS 743.020, ORS 743B.310, ORS 742.003, ORS 742.005, ORS 742.007, ORS 743.022, ORS 743B.005, ORS 743B.013 & ORS 743B.105
ID 33-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11

Or. Admin. R. 836-053-0830 Rescission of an Individual Health Benefit Plan or Individual Health Insurance Policy

(1) The notice required by ORS 743B.310(2) to the individual whose coverage is rescinded must be in writing and include all of the following:

(a) Clear identification of the alleged fraudulent act, practice or omission or the intentional misrepresentation of material fact underlying the rescission.

(b) An explanation as to why the act, practice or omission was fraudulent or was an intentional misrepresentation of a material fact.

(c) A statement informing the individual of any right the individual has to file a grievance or to request a review of the decision to rescind coverage.

(d) A description of the health carrier’s grievance procedures, including any time limits applicable to those procedures if such procedures are available to the individual.

(e) A statement explaining that complaints relating to the notice of rescission required by ORS 743B.310(2) may be made with the Department of Consumer and Business Services by writing to the departement at PO Box 14480, Salem, OR 97309-0405; by calling 503-947-7984 or toll-free 888-877-4894; online at dfr.oregon.gov; or by electronic mail to DFR.InsuranceHelp@dcbs.oregon.gov. The statement shall also explain at such complaints to the Department of Consumer and Business Services do not constitute grievances under the health benefit plan or health insurance policy and may not preserve an enrollee’s rights under the plan or policy.

(f) The toll-free customer service number of the insurer.

(g) The effective date of the rescission and the date back to which the coverage will be rescinded.

(2) Subject to ORS 743.777, a health carrier may provide the notice required under ORS 743B.310(2) for individual health insurance either by first class mail or electronically.

(3)(a) On or before June 30 of each calendar year, an insurer must submit an electronic notice for the preceding calendar year in the format prescribed by the director of the Department of Consumer and Business Services and in accordance with instructions set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. The notice required by ORS 743B.310(4) must include information related to rescission of individual health benefit plans and individual health insurance policies including but not limited to the total number of:

(A) Fully rescinded individual health benefit plans and individual health insurance policies;

(B) Partially rescinded individual health benefit plans and health insurance policies;

(C) Individual health benefit plans and individual health insurance policies in force on December 31 of the report year; and

(D) Enrollees affected by full or partial rescission of an individual health benefit plan or individual health insurance policy.

(b) The notice required under this section may be combined with the notice required under OAR 836-053-0825 and OAR 836-053-0835.

(4) A health carrier may not rescind coverage for fraud if an individual fails to accurately comply with the requirement to provide reasonable assurance that pediatric dental coverage is separately provided.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.310
Statutes/Other Implemented: ORS 743B.310 & ORS 743B.003
ID 34-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11

Or. Admin. R. 836-053-0835 Rescission of an Individual’s Coverage under a Group Health Benefit Plan or Group Health Insurance Policy

(1) Subject to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, P.L. 99-272, April 7, 1986, and ORS 743.601 and ORS 743.610, for purposes of rescission of an individual’s coverage under a group health insurance policy, including a group health benefit plan under ORS 743B.013, ORS 743B.105 and ORS 743B.310, “rescission” does not include retroactive cancellation or discontinuance of coverage of an enrollee if:

(a) The enrollee is no longer eligible for such coverage;

(b) The enrollee has not paid required premiums or contributed to coverage or any premiums paid have been refunded; and

(2) The notice required by ORS 743B.013(5), ORS 743B.105(7) and ORS 743B.310(2) to each plan enrollee affected by rescission of coverage under a group health benefit plan or group health insurance policy must be in writing and include all of the following:

(a) Clear identification of the alleged fraudulent act, practice or omission or the intentional misrepresentation of material fact underlying the rescission.

(b) An explanation of why the act, practice or omission was fraudulent or was an intentional misrepresentation of a material fact.

(c) A statement explaining an enrollee’s right to file a grievance or request a review of the decision to rescind coverage.

(d) A description of the health carrier’s applicable grievance procedures, including any time limits applicable to those procedures.

(e) A statement explaining that complaints relating to the notice of rescission required under ORS 743B.013(5), ORS 743B.105(7) and ORS 743B.310(2) may be made with the Department of Consumer and Business Services by writing to the department at PO Box 14480, Salem, OR 97309-0405; by calling 503-947-7984 or toll-free 888-877-4894; online at dfr.oregon.gov; or by electronic mail to DFR.InsuranceHelp@dcbs.oregon.gov. The statement shall also explain that complaints to the Department of Consumer and Business Services do not constitute grievances under the group health benefit plan or group health insurance policy and may not preserve an enrollee’s rights under the plan or policy.

(f) The toll-free customer service number of the insurer.

(g) The effective date of the rescission and the date back to which the coverage will be rescinded.

(3) Subject to ORS 743.023, a health carrier may provide the required notice for small employer group health insurance either by first class mail or electronically.

(4)(a) On or before June 30 of each calendar year, an insurer must submit an electronic notice for the preceding calendar year in the format prescribed by the director of the Department of Consumer and Business Services and in accordance with instructions set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. The notice required by ORS 743B.013(5), ORS 743B.105(7) and ORS 743B.310(2) must include information related to rescissions of enrollee coverage under a group health benefit plan or group health insurance policy including but not limited to the total number of enrollees affected by full or partial rescission of coverage under a group health benefit plan or group health insurance policy.

(b) The notice required under this section may be combined with the notice required under OAR 836-053-0825 and OAR 836-053-0830.

(5) An insurer may not rescind coverage for fraud if an enrollee fails to accurately comply with the requirement to provide reasonable assurance that pediatric dental coverage is separately provided.

History

Statutory/Other Authority: ORS 743.244, ORS 743B.013, ORS 743B.105 & ORS 743B.310
Statutes/Other Implemented: ORS 743B.013, ORS 743B.105 & ORS 743B.310
ID 35-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 4-2016, f. & cert. ef. 4-8-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-0851 Purpose; Authority; Applicability; and Enforcement

OAR 836-053-0851 to 836-053-0862 apply to insurers issuing continuation coverage as required under ORS 743.610 and are adopted under the authority of ORS 731.244, 743.601 and 743.610.

History

Statutory/Other Authority: ORS 731.244 & 743.610
Statutes/Other Implemented: ORS 743.610
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 12-2010, f. & cert. ef. 6-11-10

Or. Admin. R. 836-053-0857 Definitions

(1) As used in ORS 743.601, “enrollee” has the same meaning as “covered person” as defined in ORS 743.610.

(2) As used in ORS 743.610:

(a) “Claim” means a request for payment of medical treatment, services, drugs, equipment, or other medical benefit under a health benefit plan.

(b) “Notice” means the notice provided by an insurer to a covered person or qualified beneficiary about continuing group coverage after a qualifying event.

(A) An individual eligible for Federal Medicare coverage.

(B) An individual eligible for any other group health plan. This limitation does not apply to coverage consisting only of:

(i) Dental, vision, counseling, or referral services;

(ii) Coverage under a health flexible spending arrangement as defined in section 106(c)(2) of the Internal Revenue Code of 1986; or

(iii) Treatment that is furnished in an on-site medical facility maintained by an employer.

(d) “Similar” means a plan that provides benefits that are the same or nearly the same as the coverage provided under the group health benefit plan that is being terminated.

(3) As used in ORS 743.610(7)(a), “coverage” means the benefits provided under a health benefit plan continued by a covered person or qualified beneficiary.

(4) As used in ORS 743.601 and 743.610 “dissolution” includes a separation upon a judgment of separation granted pursuant to ORS 107.025.

History

Statutory/Other Authority: ORS 731.244, 743.601, 743.610 & 2009 OL Ch. 73 (HB 2433)
Statutes/Other Implemented: ORS 743.601, 743.610 & 2009 OL Ch. 73 (HB 2433)
ID 23-2011, f. & cert. ef. 12-19-11

Or. Admin. R. 836-053-0863 Notifications

(1) For purposes of the notice required by ORS 743.610(10), an insurer must use the notice set forth on the website for the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. An insurer:

(a) May incorporate the notice into another document provided that the notice remains prominent.

(b) May modify the font of the document but the font must be at least 12 point.

(d) Must modify the notice to include the information as indicated in the brackets.

(2) An insurer may provide a single notice under ORS 743.610(10) to a covered person and a qualified beneficiary when:

(a) The notice is addressed to the covered person or qualified beneficiary at the last known address of the covered person or qualified beneficiary;

(b) The covered person and qualified beneficiary are eligible for state continuation coverage by virtue of the same qualifying event; and

(3) The requirement to provide written notice under ORS 743.610(1) may be triggered either by the notification of a qualifying event received from the covered person or qualified beneficiary under ORS 743.610(5) or notice of the qualifying event submitted to the insurer by the group policyholder.

(4) An insurer that requires a covered person or qualified beneficiary to complete a form to request continuation of coverage must provide the form to the person. The form may be provided by electronic means including via a specific website address. However, if a covered person or qualified beneficiary asks an insurer to provide the forms via mail, the insurer must do so within two business days of the request. Notice pursuant to ORS 743.610(10) is deemed provided upon receipt of any required forms when the forms are mailed by the insurer.

(5) Notice under ORS 743.610(5) provided to a group policyholder pursuant to the instruction of an insurer constitutes notice to the insurer that meets the requirements of ORS 743.610(5).

History

Statutory/Other Authority: ORS 731.244 & ORS 743.610
Statutes/Other Implemented: ORS 743.610
ID 40-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 16-2012, f. & cert. ef. 8-24-12
ID 6-2012(Temp), f. 3-27-12, cert. ef. 4-15-12 thru 10-10-12

Or. Admin. R. 836-053-0900 Purpose; Statutory Authority

OAR 836-053-0900 and 836-053-0910 are adopted under the authority of ORS 731.244 for the purpose of carrying out ORS 743.730 to 743.773 and providing rate filing requirements and procedures for small employer and individual health benefit plans.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.730 - 743.773
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-1998, f. & cert. ef. 3-9-98, Renumbered from 836-053-0180
ID 2-1997, f. & cert. ef. 3-28-97
ID 13-1996(Temp), f. & cert. ef. 9-23-96

Or. Admin. R. 836-053-0910 Rate Filing

(1) A carrier must file with the director of the Department of Consumer and Business Services the appropriate checklists and certification statements as established in OAR 836-010-0011.

(2) A carrier may not:

(a) Offer a small group or individual health benefit plan until the director has determined that the filed geographic average rate meets the applicable statutory requirements.

(b) Modify an approved geographic average rate unless the director has determined that the modification meets the applicable statutory requirements.

(3) Rate filings for small group and individual health benefit plans must be submitted to the director in one of the following electronic formats:

(a) The National Association of Insurance Commissioners’ System for Electronic Rate and Form Filings (SERFF) format; or

(b) PDF format for a filing that is less than three megabytes. For the purpose of this subsection, each filing requirement, such as an exhibit, an actuarial memorandum or a certificate of compliance, must be in a separate PDF format that is less than three megabytes. These filings may be submitted by electronic mail with documents attached in PDF format, or the filings may be submitted on a compact disc with documents attached in PDF format. If submitting by electronic mail, the combined size of the electronic mail plus attached documents being transmitted must be less than four megabytes.

(4) The director must post the contents of rate filings described in section (3) of this rule and rate filing summaries described in OAR 836-053-0473 for public inspection on the website for the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, ORS 743.019 & ORS 743.020
Statutes/Other Implemented: ORS 743.019, ORS 743.020 & 743.730 - 743.773
ID 18-2023, minor correction filed 06/23/2023, effective 06/23/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 5-2010, f. & cert. ef. 2-16-10
ID 8-2008, f. & cert. ef. 6-18-08
Reverted to ID 5-1998, f. & cert. ef. 3-9-98, Renumbered from 836-053-0185
ID 13-2007(Temp), f. & cert. ef. 12-21-07 thru 5-10-08
ID 5-1998, f. & cert. ef. 3-9-98, Renumbered from 836-053-0185
ID 2-1997, f. & cert. ef. 3-28-97
ID 13-1996(Temp), f. & cert. ef. 9-23-96

Or. Admin. R. 836-053-1000 Statutory Authority and Implementation

(1) OAR 836-053-1000 to 836-053-1200 are adopted under the authority of ORS 731.244, 743.814 and 743.819, for the purpose of implementing ORS 743.804, 743.807, 743.814, 743.817, 743.819, 743.821, 743.829, 743.837 and 743A.012.

(2) For purposes of OAR 836-053-1000 to 836-053-1200, “insurer” includes a public entity that self insures employee health coverage pursuant to ORS 731.036(6) and a carrier as defined in 743.730 that offers a health benefit plan in Oregon.

History

Statutory/Other Authority: ORS 731.244, 743.814 & 743.819
Statutes/Other Implemented: ORS 743.804, 743.807, 743.814, 743.817, 743.819, 743.821, 743.829, 743.837 & 743A.012
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 15-2010, f. & cert. ef. 8-19-10
ID 5-2000, f. & cert. ef. 5-11-00
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1010 Insurer Policies

(1) The written policy recognizing the rights of enrollees, which is required of an insurer by ORS 743.804, must be an official corporate policy of the insurer.

(2) An insurer must provide a written summary of the policy required by ORS 743.804 to:

(a) Each participating provider, upon request of the provider; and

(b) Each enrollee, as part of the written general information that is furnished as required by ORS 743.804(5) and OAR 836-053-1030, relating to services, access thereto and related charges and scheduling.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.804
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1020 Drug Formularies

(1) For purposes of OAR 836-053-0000 to 836-053-1200:

(a) "Open formulary" means a method used by an insurer to provide prescription drug benefits in which all prescribed FDA approved prescription drug products are covered except for any drug product that is excluded by the insurer pursuant to the insurer's policy regarding medical appropriateness or by the terms of a specific health benefit plan, or except for an entire class of drug product that is excluded by the insurer.

(b) "Closed formulary" means a method used by an insurer to provide prescription drug benefits in which only specified FDA approved prescription drug products are covered, as determined by the insurer, but in which medical exceptions are allowed. Maximum benefits or coverage may be limited to formulary drugs in a health benefit plan with a closed formulary.

(c) "Mandatory closed formulary" means a method used by an insurer to provide prescription drug benefits in which only specified FDA approved prescription drug products are covered, as determined by the insurer, and in which no exceptions are allowed.

(2) An insurer that uses an open formulary must have a written procedure that includes the written criteria or explains the review process established by the insurer for determining when an item will be limited or excluded pursuant to the insurer's policy regarding medical appropriateness.

(3) An insurer that uses a closed formulary must have a written procedure stating that FDA approved prescription drug products are covered only if they are listed in the formulary. The procedure must also describe how the insurer determines the content of the closed formulary and how the insurer determines the application of a medical exception. The procedure must describe how a provider may request inclusion of a new item in the closed formulary and must ensure that the insurer will issue a timely written response to a provider making such a request.

(4) An insurer that uses a mandatory closed formulary must have a written procedure stating that FDA approved prescription drug products are covered only if they are listed in the formulary and that no exception is allowed. The procedure must describe how the insurer determines the content of the mandatory closed formulary. The procedure must also describe how a provider may request inclusion of a new item in the formulary and must ensure that the insurer will issue a timely written response to a provider making such a request.

(5) An insurer must furnish a copy of the procedures it has adopted under section (2), (3) or (4) of this rule to a provider with authority to prescribe drugs and medications, upon the request of the provider.

(6) Except as provided in section (7) of this rule, a formulary must comply with the requirements of 45 CFR 156.122 and include the greater of:

(a) At least one drug in every United States Pharmacopeia therapeutic category and class; or

(b) The same number of drugs in each United States Pharmacopeia category and class as the prescription drug benefit of the plan described in OAR 836-053-0008(1)(a).

(7) An insurer that issues a small group or individual health benefit plan formulary that does not comply with the requirements of section (6) of this rule must file with the director of the Department of Consumer and Business Services the form entitled “Formulary-Inadequate Category/Class Count Justification” as set forth on the website of the Department of Consumer and Business Services at dfr.oregon.gov. The director, in the director’s discretion, may consider approval of a formulary that does not meet the requirements of section (5) of this rule if:

(a) Drugs in a category or class have been discontinued by the manufacturer;

(b) Drugs in a category or class have been deemed unsafe by the Food and Drug Administration or removed from market by the manufacturer due to safety concerns;

(d) Drugs in a category or class have become available as generics; or

(e) Drugs in a category or class are provided in a medical setting and are covered under the medical provisions of the plan.

(8) An insurer that issues a small group or individual health benefit plan formulary does not comply with the nondiscrimination requirements of OAR 836-053-0012 if most or all drugs to treat a specific condition are placed in the highest cost tier.

(9) A health benefit plan providing essential health benefits must have procedures in place that allow an enrollee to request and gain access to clinically appropriate prescription drugs not covered by the health plan.

(10) An insurer may file a Bronze or Silver standard plan that substitutes a different prescription drug benefit from the prescription drug benefit described in the benchmark plan, provided that the insurer demonstrates that its proposed benefit complies with the prescription drug formulary requirements and will have a Bronze or Silver actuarial value.

History

Statutory/Other Authority: ORS 731.244 & ORS 731.097
Statutes/Other Implemented: ORS 731.097 & ORS 743.804
ID 19-2023, minor correction filed 06/23/2023, effective 06/23/2023
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1030 Written Information to Enrollees

(1) Each insurer must furnish written information to policyholders that is required by ORS 743.804, including but not limited to information relating to enrollee rights and responsibilities, including the right to appeal adverse benefit determinations, services, access thereto and related charges and scheduling, and access to external review, as provided in this rule. An insurer:

(a) Must furnish the information regarding an individual health insurance policy to each policyholder; and

(b) Must furnish the information regarding a group health insurance policy to the group policyholder for distribution to enrollees of the group policy.

(2)(a) The written information described in section (1) of this rule must be included either in the policy or in other evidence of coverage that is delivered to the individual policyholder by the insurer, or in the case of a group health insurance policy, that is delivered by the insurer to the group policyholder for distribution to enrollees.

(b) As used in ORS 743.804(2)(g), “continued coverage under the health benefit plan” means coverage of an ongoing course of treatment previously approved by the insurer.

(A) A description of the external review process, including when external review is available and how to request external review. The description must include the phone number of the Division of Financial Regulation.

(B) A disclosure that when filing a request for an external review the enrollee will be required to authorize the release of any records, including medical records of the covered person that may be required to be reviewed for the purpose of reaching a decision on the external review.

(C) A disclosure that the enrollee is financially responsible for benefits paid to or on behalf of an enrollee pursuant to ORS 743.804(2)(g) if the insurer’s adverse benefit determination is upheld on appeal.

(D) A disclosure that the enrollee may request and receive from the insurer the information the insurer is required to disclose under ORS 743.804(5).

(3) The information required by ORS 743.804 must include the following in relation to referrals for specialty care, behavioral health services, hospital services and other services, in addition to other relevant information regarding referrals:

(a) If applicable, how gate keeping or access controls apply to referrals and whether and how the controls differ for specialty care, behavioral health services and hospital services; and

(b) Any limitation on referrals if a plan has a defined network of participating providers and if referrals for specialty care may be limited to a portion of the network, such as to those specialists who contract with an enrollee's primary care group.

(4) The information required by ORS 743.804 must include the information required by ORS 743A.012, relating to coverage of emergency medical conditions and obtaining emergency services, including a statement of the prudent layperson standard for an emergency medical condition, as that term is defined in ORS 743A.012. An insurer may meet the requirement of providing information in ORS 743A.012 by providing adequate disclosure in the information required by ORS 743.804(1) and this rule. An insurer may use the following statement regarding the use of the emergency telephone number 9-1-1, or other wording that appropriately discloses its use:

“If you or a member of your family needs immediate assistance for a medical emergency, call 9-1-1 or go directly to an emergency room.”

(5) The information required by ORS 743.804(1)(b) and (4) must include information regarding the use of the insurer's grievance process, including the assistance available to enrollees in filing written grievances in accordance with OAR 836-053-1090 and the utilization review appeal procedures required by ORS 743.807(2)(c). The information must be contained in a separate section and captioned in a manner that clearly indicates that the section addresses grievances and appeals.

(6) The information required by ORS 743.804(1)(b) and (4) must include a notice that states the right of an enrollee to file a complaint with or seek assistance from the director of the Department of Consumer and Business Services. An insurer may use the following statement or other appropriate wording for this purpose:

“You have the right to file a complaint or seek other assistance from the Division of Financial Regulation.

Assistance is available:

By calling 503-947-7984 or the toll-free message line at 888-877-4894;

By electronic mail at: DFR.InsuranceHelp@dcbs.oregon.gov;

By writing to the Division of Financial Regulation, Consumer Advocacy at:

PO Box 14480; Salem, OR 97309-0405; or

Through the Internet at dfr.oregon.gov/help.”

(7) The information required by ORS 743.804(1) for an insurance policy providing managed health care must include a description of the procedures by which enrollees, purchasers and providers may participate in the development and implementation of insurer policy and operation.

(8) The portion of the information required by ORS 743.804 that describes how an insurer makes decisions regarding coverage and payment for treatment or services must include a notice to enrollees that they may request an additional written summary of information that the insurer may consider in its utilization review of a particular condition to the extent the insurer maintains such criteria. The notice to enrollees must include the name and telephone number of the administrative section of the insurer that handles enrollee requests for information.

(9) If a plan has a defined network of participating providers, the information required by ORS 743.804 must include a list of all participating primary care providers, direct access providers and all specialty care providers. For the purposes of this section, a primary care provider or direct access provider is a participating provider under the terms of the plan who an enrollee may designate as the primary care provider for the enrollee or from whom an enrollee may obtain services without referral. The list of providers must include for each provider the provider's name, professional designation, category of practice and the city in which the practice of the provider is located.

(10) If a plan includes risk-sharing arrangements with physicians or other providers, the information required by ORS 743.804 must contain a statement to that effect, including a brief description of risk-sharing in general and must notify enrollees that additional information is available upon request. For the purpose of this requirement, a risk-sharing arrangement does not include a fee-for-service arrangement or a discounted fee-for-service arrangement. An insurer may use the following statement or other appropriate wording to describe risk-sharing:

“This plan includes "risk-sharing" arrangements with physicians who provide services to the members of this plan. Under a risk-sharing arrangement, the providers that are responsible for delivering health care services are subject to some financial risk or reward for the services they deliver. An example of a risk-sharing arrangement is a contract between an insurer and a group of heart surgeons in which the surgeons agree to provide all of the heart operations needed by plan members and the insurer agrees to pay a fixed monthly amount for those services.”

(11) If the insurer of a plan uses a mandatory closed formulary, the information required by ORS 743.804 for that plan must prominently disclose and explain the formulary provision. The disclosure and explanation must be in boldfaced type or otherwise emphasized.

(12) An insurer that issues a health benefit plan must include a notice with the information required by ORS 743.804 that discloses that additional information is available to enrollees upon request. The notice must include the name and telephone number of the insurer's administrative section that handles enrollee requests for information. The notice must also include the contact described in section (6) of this rule and a statement that the following additional information may be available from the Department of Consumer and Business Services:

(a) An annual summary of grievances and appeals;

(b) An annual summary of utilization review policies;

(d) The results of all publicly available accreditation surveys;

(e) An annual summary of the insurer's health promotion and disease prevention activities;

(f) An annual summary of scope of network and accessibility of services.

History

Statutory/Other Authority: ORS 731.244 & ORS 743.857
Statutes/Other Implemented: ORS 743.699, ORS 743.804 & ORS 743.807
ID 36-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 11-2011(Temp), f. & cert. ef. 7-7-11 thru 12-21-11
ID 5-2000, f. & cert. ef. 5-11-00
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1033 Cultural and Linguistic Appropriateness

(1) All notices and communications required to be provided by an insurer to enrollees under ORS 743.804 and 743.857 must be provided in a manner that is culturally and linguistically appropriate, as required by ORS 743.804. For purposes of this section, an insurer is considered to provide relevant notices in a culturally and linguistically appropriate manner if the plan or issuer meets all the following requirements with respect to the applicable non-English languages as described in section (2) of this rule:

(a) The plan or issuer must provide oral language services (such as a telephone customer assistance hotline) that include answering questions in any applicable non-English language and providing assistance with filing claims and appeals (including external review) in any applicable non-English language.

(b) The plan or issuer must provide, upon request, a notice in any applicable non-English language.

(c) The plan or issuer must include in the English versions of all notices, a statement prominently displayed in any applicable non-English language clearly indicating how to access the language services provided by the plan or issuer.

(2) For the purpose of this rule, “applicable non-English language” means, with respect to an address in any United States county to which a notice is sent, a non-English language for which ten percent or more of the population residing in the county is literate only in the same non-English language.

History

Statutory/Other Authority: ORS 731.244 & 743.804
Statutes/Other Implemented: ORS 743.804
ID 23-2011, f. & cert. ef. 12-19-11

Or. Admin. R. 836-053-1035 Summary of Benefits and Explanation of Coverage

The summary of benefits and explanations of coverage required by ORS 743.804 must be provided in a manner and form consistent with the requirements of 45 CFR 147.200.

History

Statutory/Other Authority: ORS 731.244 & 743.804
Statutes/Other Implemented: ORS 743.804
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11

Or. Admin. R. 836-053-1060 Definitions

For purposes of grievance procedures under OAR 836-053-1000 to 836-053-1200 and ORS 743.804:

(1) "Complaint" means an expression of dissatisfaction directly to an insurer that is about a specific problem encountered by an enrollee or about a decision by an insurer or by an insurance producer acting on behalf of the insurer and that includes a request for action to resolve the problem or change the decision. "Complaint" does not include an inquiry as that term is defined in this rule.

(2) "Inquiry" means a written request for information or clarification about any subject matter related to the enrollee's health benefit plan.

History

Statutory/Other Authority: ORS 731.244 & 743.819
Statutes/Other Implemented: ORS 743.801 & 743.804
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1070 Reporting of Grievances and Prior Authorization; Format and Contents

(1)(a) To comply with the requirements in ORS 743B.250, on or before June 30 of each calendar year, an insurer must submit information pertaining to grievances and appeals in the previous calendar year ending December 31.

(b) To comply with the requirements in Oregon Laws 2025, chapter 388, on or before January 31 of each calendar year, an insurer must submit information pertaining to prior authorizations in the previous calendar year ending December 31.

(c) The data must be reported in the format prescribed by the director of the Department of Consumer and Business Services as set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. Filing and reporting requirements in this rule apply to:

(A) A domestic insurer; and

(B) A foreign insurer transacting $2 million or more in health benefit plan premium in Oregon during the calendar year immediately preceding the due date of a required report.

(2) For purposes of this rule, a grievance is “closed” if:

(a) The grievance has been appealed through all available grievance appeal levels; or

(b) The insurer determines that the complainant is no longer pursuing the grievance.

(3) The grievance data to be included in the annual summary required by section 1 of this rule are as follows:

(a) The total number of grievances closed in the reporting year;

(b) The number of grievances closed in each of the categories listed in section 4 of this rule;

(c) The number and percentage of grievances in each of the categories listed in section 4 of this rule in which the insurer’s initial decision is upheld and the number and percentage in which the initial decision is reversed at closure of the grievance;

(d) The number and percentage of all grievances that are closed at the conclusion of the first level of appeal;

(e) The number and percentage of all grievances that are closed at the conclusion of the second level of appeal;

(f) The number and percentage of all grievances that result in applications for external review; and

(g) For each level of appeal listed in subsections d and e of this section, the average length of time between the date an enrollee files the appeal and the date an insurer sends written notice of the insurer’s determination for that appeal to the enrollee, or person filing the appeal on behalf of the enrollee.

(4) An insurer must report each grievance according to the nature of the grievance. The nature of the grievance shall be determined according to the categories listed in this section. The insurer must report each grievance in one category only and must have a system that allows the insurer to report accurately in the specified categories. If a grievance could fit in more than one category, an insurer shall report the grievance in the category established in this section that the insurer determines to be most appropriate for the grievance. The categories of grievances are as follows:

(a) Adverse benefit determinations based on medical necessity under ORS 743.857;

(b) Adverse benefit determinations based on an insurer’s determination that a plan or course of treatment is experimental or investigational under ORS 743.857;

(d) Access and referral problems including timelines and availability of a provider and quality of clinical care;

(e) Whether a course or plan of treatment is delivered in an appropriate health care setting and with the appropriate level of care;

(f) Adverse benefit determinations of otherwise covered benefits due to imposition of a source-of-injury exclusion, out-of-network or out-of-plan exclusion, annual benefit limits or other limitations of otherwise covered benefits, or imposition of a preexisting condition exclusion in a grandfathered health plan;

(g) Adverse benefit determinations based on general exclusions, not a covered benefit or other coverage issues not listed in this section;

(h) Eligibility for, or termination of enrollment, rescission or cancelation of a policy or certificate;

(i) Quality of plan services, not including the quality of clinical care as provided in subsection d of this section;

(j) Emergency services; and

(k) Administrative issues and issues other than those otherwise listed in this section.

(5) Nothing in this rule prohibits an insurer from creating or using its own system to categorize the nature of grievances in order to collect data if the system allows the insurer to report grievances accurately according to the categories in section 4 of this rule and if the system enables the director to track the grievances accurately.

(6) For the purposes of this rule, the definitions for “standard” and “expedited” prior authorizations are:

(a) “Standard prior authorization” means a prior authorization request that is not an expedited prior authorization request.

(b) “Expedited prior authorization” means a prior authorization that must be expedited in order to avoid jeopardizing the enrollee’s life, health or ability to maintain or regain maximum function.

(7) The prior authorization data to be included in the annual summary required by section 1 of this rule are as follows:

(a) The percentage and number of standard prior authorization requests that were approved;

(b) The percentage and number of standard prior authorization requests that were denied;

(d) The percentage and number of all prior authorization requests for which the time frame for review was extended and the request was approved;

(e) The percentage and number of expedited prior authorization requests that were approved;

(f) The percentage and number of expedited prior authorization requests that were denied;

(g) The average and median times that elapsed between the submission of a request and a determination by the insurer for standard prior authorization; and

(h) The average and median times that elapsed between the submission of a request and a decision by the insurer for expedited prior authorization.

History

Statutory/Other Authority: ORS 743B.250, ORS 743B.420, ORS 743B.422, ORS 743B.423, ORS 746.233 & Or Laws 2025, ch 388
Statutes/Other Implemented: ORS 743B.250, ORS 743B.420, ORS 743B.422, ORS 743B.423, ORS 746.233 & Or Laws 2025, ch 388
ID 10-2025, amend filed 11/18/2025, effective 01/01/2026
ID 10-2021, amend filed 12/14/2021, effective 01/01/2022
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 15-2010, f. & cert. ef. 8-19-10
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1080 Tracking Grievances and Prior Authorization Requests

An insurer must record data relating to all grievances, significant actions taken from each initial grievance filing through the appeals process, applications for external review as required by ORS 743B.250, and prior authorization requests in a manner sufficient for the insurer to report specified data on grievances and prior authorization accurately as required by ORS 743B.250 and OAR 836-053-1070, and for the insurer to track individual files in response to a market conduct examination or other inquiry by the director of the Department of Consumer and Business Services under ORS 731.296 or OAR 836-080-0215.

History

Statutory/Other Authority: ORS 743B.250, ORS 743B.420, ORS 743B.422, ORS 743B.423, ORS 746.233 & Or Laws 2021, ch 154
Statutes/Other Implemented: ORS 743B.250, ORS 743B.420, ORS 743B.422, ORS 743B.423, ORS 746.233 & Or Laws 2021, ch 154
ID 10-2021, amend filed 12/14/2021, effective 01/01/2022
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 15-2010, f. & cert. ef. 8-19-10
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1090 Assistance in Filing Grievances

For the purpose of providing assistance to enrollees in filing written grievances, as required by ORS 743.804, an insurer must promptly:

(1) Provide information regarding the use of the insurer’s grievance process to an enrollee who wants to submit a grievance; and

(2) Assist an enrollee in the filing of a grievance when the enrollee states a complaint and requests assistance in putting that complaint into writing.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.804
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1100 Internal Appeals Process

(1) An insurer must acknowledge receipt of an appeal from an enrollee not later than the seventh day after receiving the appeal.

(2)An insurer must make a decision on the appeal not later than the 30th day after receiving notice of the appeal.

(3) An otherwise applicable standard for timeliness in sections (1) or (2) of this rule does not apply when:

(a) The period of time is too long to accommodate the clinical urgency of the situation;

(b) The enrollee does not reasonably cooperate; or

(c) Circumstances beyond the control of a party prevent that party from complying with the standard, but only if the party who is unable to comply gives notice of the specific circumstances to the other party when the circumstances arise.

(4) For adverse benefit determinations eligible for external review under ORS 743.857, an insurer may waive its internal appeals process at any time. If the insurer waives its internal appeals process, the internal appeals process is deemed exhausted for the purposes of qualifying for external review.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.804
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 11-2011(Temp), f. & cert. ef. 7-7-11 thru 12-21-11
ID 5-2000, f. & cert. ef. 5-11-00
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1110 Notice of Complaint Filing with Director

A written decision by an insurer in response to a grievance must prominently disclose the following information:

(1) That the enrollee has a right to file a complaint or seek other assistance from the Division of Financial Regulation of the Department of Consumer and Business Services; and

(2) The contact information for the director of the Department of Consumer and Business Services described in OAR 836-053-1030(6).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.804
ID 23-2024, minor correction filed 08/12/2024, effective 08/12/2024
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1130 Annual Summary, Utilization Review

(1) To comply with the requirements of ORS 743.807, an insurer must electronically submit on or before June 30 of each calendar year, an annual utilization review program summary for the preceding calendar year to the Division of Financial Regulation in the format required by the director of the Department of Consumer and Business Services as set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. Filing and reporting requirements in this rule apply to:

(a) A domestic insurer; and

(b) A foreign insurer transacting $2 million or more in health benefit plan premium in Oregon during the calendar year immediately preceding the due date of a required report.

(2) For calendar year 2014 and each subsequent calendar year the annual summary required by section (1) of this rule must:

(a) Describe the insurer’s utilization review policies ;

(b) Provide a summary of established processes and monitoring activities for each of the following program areas:

(A) Program oversight;

(B) Utilization review criteria development, implementation and revision;

(C) List of clinical information, research publications and other information used in the development of pre-service authorization requirements, concurrent review and other utilization review activities;

(D) Provider program participation procedures;

(E) Minimum qualifications of utilization review decision makers;

(F) Time frames for utilization review decisions;

(G) Enrollee and provider communication processes; and

(H) Program monitoring, review, evaluation and update; and

(A) Delegated utilization review activities, including monitoring and oversight activities of those to whom the activities are delegated; and

(B) Policies for review and audit of delegates and delegated activities.

(3) To minimize duplicative reporting requirements, an insurer may meet the reporting requirements of this rule by submitting to the department either of the following:

(a) A copy of a report prepared for a national accreditation organization. An insurer submitting a copy of a report under this subsection must provide addenda to the report with additional information if the department determines that the report does not provide the information required.

(b) An addendum to an annual filing of the immediately preceding year:

(A) Stating, if applicable, that no information has changed since the previous annual filing; or

(B) Identifying, if applicable, only the information that has changed since the previous annual filing.

(4) An insurer may not submit addenda described in subsection (3)(b) of this rule in two consecutive years.

(5) Nothing in this rule prohibits an insurer from submitting additional information that is significant in relation to its quality assessment and improvement activities.

History

Statutory/Other Authority: ORS 731.244 & 743.819
Statutes/Other Implemented: ORS 743.801, 743.804 & 743.807
ID 20-2023, minor correction filed 06/27/2023, effective 06/27/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1140 Appeal and Utilization Review Determinations

(1) When a provider first appeals an insurer denial described in ORS 743.807(2)(c):

(a) The insurer must acknowledge receipt of the notice of appeal not later than the seventh day after receiving the notice; and

(b) An appropriate medical consultant or peer review committee must review the appeal and decide the issue not later than the 30th day after the insurer receives notice of the appeal.

(2) A standard for timeliness in section (1) of this rule does not apply when:

(a) The period of time is too long to accommodate the clinical urgency of the situation;

(b) The provider does not reasonably cooperate; or

(3) An insurer must treat an appeal from a decision by a medical consultant or peer review committee pursuant to section (1)(b) of this rule as an internal appeal under the insurer’s grievance procedures.

(4) Nothing in this rule prevents an enrollee from filing an internal appeal under the insurer’s regular grievance procedure established pursuant to ORS 743.804 when the grievance concerns an adverse benefit determination, but this rule does not entitle a person not otherwise allowed to file a grievance a decision by a medical consultant or peer review committee to file such a grievance.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.804, 743.806 & 743.807
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1170 Annual Summary, Quality Assessment Activities

(1) To comply with the requirements of ORS 743.814(2) and (3), an insurer offering a managed health benefit plan shall electronically submit on or before June 30 of each calendar year an annual quality assessment program summary for the previous calendar year to the Division of Financial Regulation in the format required by the director of the Department of Consumer and Business Services as set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services. Filing and reporting requirements in this rule apply to:

(a) A domestic insurer; and

(b) A foreign insurer transacting $2 million or more in health benefit plan premium in Oregon during the calendar year immediately preceding the due date of a required report.

(2) For calendar year 2014 and each subsequent calendar year the annual summary required under section (1) of this rule must:

(a) Identify current quality assessment program accreditations, accrediting organization, accreditation level and date. If the quality assessment program is not accredited, describe plans and timelines, if any, to gain accreditation.

(b) Describe the insurer’s quality assessment program that enables the insurer to evaluate, maintain and improve the quality of health services provided to enrollees.

(d) List quality improvement goals the insurer has identified, measures of success towards meeting those goals and outcomes demonstrated by selected measures.

(e) Provide a summary of policies and monitoring activities established for each of the following program areas:

(A) Internal program monitoring and oversight;

(B) Credentialing of providers;

(D) Clinical practice guidelines;

(E) Identification of priorities;

(F) Assessment of enrollee satisfaction; and

(G) Enrollee and provider communication processes

(3) For calendar year 2014 and each subsequent calendar year the annual summary required under section (1) of this rule must provide:

(a) The results of all publicly available federal Health Care Financing Administration reports and accreditation surveys by national accreditation organizations; and

(b) The reporting of the insurer's health promotion and disease prevention activities, if any, as defined in the Healthcare Effectiveness Data Information Set maintained by the National Committee for Quality Assurance, including:

(A) The following preventive measures:

(i) Childhood immunizations, including the percentage of children in the insurer's managed care health plans who have received appropriate immunizations by their second birthdays; and

(ii) Tobacco use cessation, including the percentage of adult smokers and the percentage of those who have ceased tobacco use after receiving advice to quit smoking from a health professional in health plans of the insurer.

(B) The chronic condition of diabetes as specified in the Healthcare Effectiveness Data Information Set maintained by the National Committee for Quality Assurance.

(C) The acute condition of pregnancy care. The information must include the percentage of pregnant women in the insurer's health plans that began prenatal care during the first 13 weeks of pregnancy.

(4) To minimize duplicative reporting requirements, the insurer may satisfy the reporting requirements of sections (2) and (3) of this rule by submitting either of the following:

(a) Information prepared by the insurer for another purpose if the information contains the information required by sections (2) and (3) of this rule and the insurer highlights the relevant information to satisfy the reporting requirement; or

(b) An addendum to an annual filing of the immediately preceding year:

(A) Stating, if applicable, that no information has changed since the previous annual filing; or

(B) Identifying, if applicable, only the information that has changed since the previous annual filing.

(5) Summary information described in sections (2) and (3) of this rule may include information prepared by the insurer for the Healthcare Effectiveness Data Information Set maintained by the National Committee for Quality Assurance and may be submitted on the basis of any sampling method recognized by the Healthcare Effectiveness Data Information Set maintained by the National Committee for Quality Assurance. A multi-state or regional Healthcare Effectiveness Data Information Set maintained by the National Committee for Quality Assurance report may be used for reporting under this subsection if the insurer furnishes with the report the number or an estimate of the number of regional members and Oregon members to whom the report applies.

(6) An insurer may not submit addenda described in sections (2) and (3) of this rule in two consecutive years.

(7) Nothing in this rule prohibits an insurer from submitting additional information that is significant in relation to its quality assessment and improvement activities.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 743.814 & 743.819
Statutes/Other Implemented: ORS 743.804 & 743.814
ID 24-2024, minor correction filed 08/12/2024, effective 08/12/2024
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 17-1998, f. & cert. ef. 11-16-98
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1180 Format and Instructions for Report Required by ORS 743.818

(1) As used in this rule:

(a) “Covered lives” means Oregon residents who are employees, dependents of employees, or individuals otherwise eligible for an individual, student health, association, group, or self-insured group health benefit plan or other benefit plan for which reporting is required and who are enrolled for coverage under the terms of the plan as of the close of the calendar quarter.

(b) “Carrier” has the meaning given that term in ORS 743.730(7).

(A) Of the employee or individual policyholder’s Oregon residence;

(B) Of an Oregon employer group covered by a stop loss policy; or,

(C) In circumstances for which no Oregon zip codes exists, the placeholder code established by the director of the Department of Consumer and Business Services set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov.

(2) At quarterly intervals covering each year, a carrier authorized to transact health insurance in Oregon must submit information pertaining to covered lives through the reporting system of the Division of Financial Regulation in the format established by the director of the Department of Consumer and Business Services and in accordance with instructions set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. The carrier must submit the required information on or before:

(a) May 1 for the first calendar quarter.

(b) August 1 for the second calendar quarter.

(d) February 1 for the fourth calendar quarter.

(3) A carrier claiming exemption from reporting must request an exemption through the reporting system of the Division of Financial Regulation on or before the due date for the calendar quarter for which reporting is first due.

(4) A carrier submitting information pertaining to covered lives or requesting an exemption from reporting is subject to the electronic reporting or response requirements of OAR 836-011-0005.

History

Statutory/Other Authority: ORS 731.244, 743.745 & ORS 743.818
Statutes/Other Implemented: ORS 743.818
ID 21-2023, minor correction filed 06/27/2023, effective 06/27/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-053-1190 Annual Summary, Uniform Indicators of Network Adequacy

(1) An insurer offering managed health insurance or preferred provider organization insurance must submit its annual summary required under ORS 743.817 on March 1 of each year. Filing and reporting requirements in this rule apply to:

(a) A domestic insurer; and

(b) A foreign insurer transacting $2 million or more in health benefit plan premium in Oregon during the calendar year immediately preceding the due date of the required report.

(2) The annual summary must include the following matters for the immediately preceding calendar year as of December 31, according to the following uniform indicators:

(a) Whether the insurer has established a requirement or goal for accessibility that providers must meet, in terms of hours, days or weeks, or in the alternative an indication that the insurer does not establish and maintain such a requirement or goal, for the following categories:

(A) Preventive care;

(B) Routine primary care; and

(b) Whether accessibility to urgent care services outside of regular business hours differs by region or geographical area of the state that the insurer serves, and if so, a description of the differences among the regions or areas.

(c) The number of communications expressing a concern regarding difficulty in obtaining an appointment with a provider, including but not limited to the inability to find a provider with an open practice or to an unreasonable length of time to wait for an appointment. Communications under this section include but are not limited to complaints and grievances from enrollees.

(d) Whether the insurer has a process for ensuring network adequacy that includes oversight, communication and monitoring, and the following information about the process:

(A) The position and department of the individual with the responsibility of ensuring and monitoring the network;

(B) The telephone number, electronic mail address, address or website that enrollees are requested to use in order to express concerns regarding network adequacy;

(C) The website at which enrollees can locate the provider directory, and the frequency with which the website is updated.

(D) The frequency with which an enrollee is specifically notified of changes to the insurer's provider network and the medium or media by which an enrollee is informed.

(E) Information regarding the insurer's monitoring of its network adequacy, including:

(i) The intervals between formal reviews;

(ii) Whether the results of the reviews are reported to senior management or the board of directors, or both, or neither; and

(iii) How the insurer uses its formal reviews to monitor and improve accessibility for clients.

(e) Whether the insurer's provider directory and updates to the directory disclose which providers are fluent in languages other than English and, if so, what languages are available.

(f) Whether the insurer keeps information on which of the physicians in its network have open practices, and if so:

(A) The frequency with which the insurer updates the information; and

(B) Whether enrollees have access to the information and if so, how enrollees may obtain the information.

(g) Any other information that the insurer determines to be significant in documenting the scope of its network or its monitoring of access to services.

(3) To minimize duplicative reporting, an insurer may meet the requirements of section (2) of this rule by submitting to the department either of the following:

(a) A copy of a report prepared by the insurer for a national accreditation organization. An insurer submitting a copy of a report under this subsection must provide addenda to the report with additional information if the department determines that the report does not provide the information required by section (2) of this rule.

(b) An addendum to an annual filing of the immediately preceding year:

(A) Stating, if applicable, that no information has changed since the previous annual filing; or

(B) Identifying, if applicable, only the information that has changed since the previous annual filing.

(4) An insurer may not submit the addendum described in section (3)(b) of this rule in two consecutive years.

History

Statutory/Other Authority: ORS 731.244 & 743.819
Statutes/Other Implemented: ORS 743.817
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1200 Prior Authorization Requirements for Health Benefit Plans

(1) The provisions of this rule implement the requirements of ORS 743B.420, ORS 743B.422 and ORS 743B.423, as well amendments to ORS 743B.420 and ORS 743B.423 by Oregon Laws 2021, chapter 154 relating to prior authorization determinations. "Prior authorization" means a form of utilization review that requires a provider or an enrollee to request a determination by an insurer, prior to provision of health care that is subject to utilization review, that the insurer will provide reimbursement for the health care requested. "Prior authorization" does not include referral approval for evaluation and management services between providers. For the purposes of this rule, “health care” includes all items and services covered by a health benefit plan, including but not limited to medical, behavioral health, dental and vision care items and services.

(2) This rule applies to prior authorization determinations that:

(a) Are issued orally or in writing by an insurer to a provider or enrollee regarding the benefit coverage or medical necessity of a health care item or service to be provided to an enrollee; and

(b) Are required under and obtained in accordance with the terms of a health benefit plan.

(3) A prior authorization may be limited to the services of a specific provider or to services of a designated group of providers who contract with or are employed by the insurer.

(4) Nothing in this rule shall require a health benefit plan to contain a prior authorization requirement.

(5) Except in the case of misrepresentation relevant to a request for prior authorization, a prior authorization determination shall be binding on the insurer for the period of time specified in section 6 of this rule.

(6) A prior authorization determination shall be binding on the insurer for:

(a) The lesser of the following periods:

(A) Five business days following the date of issuance of the authorization; or

(B) The period during which the enrollee's coverage remains in effect, provided that when the insurer issues the prior authorization, the insurer has specific knowledge that the enrollee's coverage will terminate sooner than five business days following the day the authorization is issued and the insurer specifies the termination date in the authorization; and

(b) For an item or service other than a prescription drug, the period during which the enrollee's coverage remains in effect beyond the time period established pursuant to subsection a of this section, up to a maximum of 60 calendar days or the reasonable duration of the treatment based on clinical standards, whichever is longer.

(c) For a prescription drug, the period during which the enrollee's coverage remains in effect beyond the time period established pursuant to subsection a of this section, up to a maximum of one calendar year from the date that the treatment begins following approval of the request if the drug:

(A) Is prescribed as a maintenance therapy that is expected to last at least 12 months based on medical or scientific evidence;

(B) Continues to be prescribed throughout the 12-month period; and

(C) Is prescribed for a condition that is within the scope of use for the drug as approved by the United States Food and Drug Administration; or has been proven to be a safe and effective form of treatment for the enrollee’s medical condition based on clinical practice guidelines developed from peer-reviewed medical literature.

(d) Paragraph c of this subsection does not apply if:

(A) A therapeutic equivalent of the prescription drug or a generic alternative to the prescription drug is or becomes available as a substitute for the drug for which prior authorization is requested or was approved; or

(B) A biologic product is or becomes available that is determined by the United States Food and Drug Administration to be interchangeable with the drug for which prior authorization is requested or approved.

(7) For purposes of counting days under section 6 of this rule, day one is the first business or calendar day, as applicable, following the day on which the insurer issues a prior authorization determination.

(8) An insurer may not impose a restriction or condition on its prior authorization determinations that limits, restricts or effectively eliminates the binding force established for such determinations in ORS 743B.420 and this rule.

(9) A prior authorization determination is issued when an insurer communicates orally, or in writing, a notice that meets the requirements of section 11 of this rule to the provider or enrollee who submitted the prior authorization request.

(10) Except as provided in section 13, a determination by an insurer on a provider’s or an enrollee’s request for prior authorization must be issued within a reasonable period of time appropriate to the medical circumstances but no later than two business days after receipt of the request. If the determination is issued orally, the insurer must mail, or send electronically, a written notice of the determination to the provider or enrollee who submitted the prior authorization request no later than two business days after the determination is issued. For the purposes of counting days under this subsection, day one is the first business day following the day on which the insurer receives the request for prior authorization or issues the determination, as applicable.

(11) When an insurer issues a determination in response to a request from a provider or an enrollee for prior authorization of nonemergency health care items or services, the determination must be one of the following:

(a) The requested item or service is authorized;

(b) The requested item or service is not authorized; or

(c) The entire requested item or service is not authorized, but a specified portion of the requested item or service or a specified alternative item or service is authorized.

(12) If an insurer makes a determination meeting the conditions specified in subsections b or c of section 11, the notice of that determination must be mailed, or sent electronically, to the enrollee who is the subject of the prior authorization request, regardless of whether the enrollee submitted the prior authorization request to the insurer. The notice must specify that the determination constitutes an adverse benefit determination, and that the enrollee has the right to appeal the determination, and to external review of the determination if applicable.

(13) If additional information from an enrollee or a provider requesting prior authorization is necessary to make a determination on a request for prior authorization, no later than two business days after receipt of the request, the enrollee and the requesting provider, if any, shall be notified in writing of the specific additional information needed to make the determination. The required notice is provided when it is mailed, or delivered electronically, by the insurer. For the purposes of counting days under this subsection, day one is the first business day following the day on which the insurer receives the request for prior authorization. Nothing in this subsection shall be construed to prohibit an insurer from seeking additional information related to a prior authorization request orally or by other means, provided that a written notice is supplied in the event that a determination cannot be made within two business days due to the need for additional information.

(14) Following a request for additional information submitted in compliance with section 13, the insurer must issue a determination by the later of:

(a) Two business days after receipt of a response to the request for additional information. For the purposes of counting days under this subsection, day one is the first business day following the day on which the insurer receives a response; or,

(b) Fifteen days after the date of the request for additional information, unless otherwise provided in federal law. For the purposes of counting days under this subsection, day one is the first calendar day following the day on which the insurer mails, or sends electronically, the request for additional information.

(15) When an insurer requests additional information that is necessary to make a determination on a request for prior authorization, the insurer must specify all of the information reasonably necessary to make a determination. The insurer may not request information that is substantially identical to information previously supplied by the enrollee or provider.

(16) Compliance with this rule by an insurer offering a health benefit plan will be sufficient to demonstrate compliance with the requirement for insurers to act promptly in making determinations in response to requests for prior authorization established by ORS 746.233 (2)(e). Nothing in this rule shall be construed to limit the department’s authority under this section to require a health insurer to act equitably and in good faith with respect to approving requests for prior authorization.

History

Statutory/Other Authority: ORS 743B.420, ORS 743B.422, ORS 743B.423, ORS 743B.250, ORS 746.233 & Or Laws 2021, ch 154
Statutes/Other Implemented: ORS 743B.420, ORS 743B.422, ORS 743B.423, ORS 743B.250, ORS 746.233 & Or Laws 2021, ch 154
ID 10-2021, amend filed 12/14/2021, effective 01/01/2022
ID 12-2019, amend filed 12/19/2019, effective 01/01/2020
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 1-1998, f. & cert. ef. 1-15-98

Or. Admin. R. 836-053-1203 Prior Authorization Trade Practices for Health Insurance other than Health Benefit plans

(1) The purpose of this rule is to establish standards for determining whether an insurer offering a policy or certificate of health insurance, other than a health benefit plan, acts promptly in response to a request for prior authorization within the meaning of ORS 746.233 (2)(e). Nothing in this rule shall be construed to limit the department’s authority under this section to require a health insurer to act equitably and in good faith with respect to approving requests for prior authorization.

(2) "Prior authorization" means a form of utilization review that requires a provider or an enrollee to request a determination by an insurer, prior to provision of health care that is subject to utilization review, that the insurer will provide reimbursement for the health care requested. "Prior authorization" does not include referral approval for evaluation and management services between providers. For the purposes of this rule, “health care” includes all items and services covered by a policy or certificate of health insurance, including but not limited to medical, behavioral health, dental and vision care items and services.

(3) This rule applies to prior authorization determinations that:

(a) Are issued orally or in writing to a provider or enrollee by an insurer offering a policy or certificate of health insurance, other than a health benefit plan, regarding the benefit coverage or medical necessity of a health care item or service to be provided to an enrollee; and

(b) Are required under and obtained in accordance with the terms of a health insurance plan.

(4) A prior authorization may be limited to the services of a specific provider or to services of a designated group of providers who contract with or are employed by the insurer.

(5) Nothing in this rule shall require a policy of health insurance to contain a prior authorization requirement.

(6) Except in the case of misrepresentation relevant to a request for prior authorization, a prior authorization determination shall be binding on the insurer for the period of time specified in section 7 of this rule.

(7) A prior authorization determination shall be binding on the insurer for:

(a) The lesser of the following periods:

(A) Five business days following the date of issuance of the authorization; or

(A) Is prescribed as a maintenance therapy that is expected to last at least 12 months based on medical or scientific evidence;

(B) Continues to be prescribed throughout the 12-month period; and

(d) Paragraph c of this subsection does not apply if:

(8) For purposes of counting days under section 7 of this rule, day one is the first business or calendar day, as applicable, following the day on which the insurer issues a prior authorization determination.

(9) An insurer may not impose a restriction or condition on its prior authorization determinations that limits, restricts or effectively eliminates the binding force established for such determinations in ORS 743B.420 and this rule.

(10) A prior authorization determination is issued when an insurer communicates orally, or in writing, a notice that meets the requirements of subsection 12 of this rule to the provider or enrollee who submitted the prior authorization request.

(11) Except as provided in section 13, a determination by an insurer on a provider’s or an enrollee’s request for prior authorization must be issued within a reasonable period of time appropriate to the medical circumstances but no later than two business days after receipt of the request. If the determination is issued orally, the insurer must mail, or send electronically, a written notice of the determination to the provider or enrollee who submitted the prior authorization request no later than two business days after the determination is issued. For the purposes of counting days under this subsection, day one is the first business day following the day on which the insurer receives the request for prior authorization or issues the determination, as applicable.

(12) When an insurer issues a determination in response to a request from a provider or an enrollee for prior authorization of nonemergency health care items or services, the determination must be one of the following:

(a) The requested item or service is authorized;

(b) The requested item or service is not authorized; or

(c) The entire requested item or service is not authorized, but a specified portion of the requested item or service or a specified alternative item or service is authorized.

(13) If additional information from an enrollee or a provider requesting prior authorization is necessary to make a determination on a request for prior authorization, no later than two business days after receipt of the request, the enrollee and the requesting provider, if any, shall be notified in writing of the specific additional information needed to make the determination. The required notice is provided when it is mailed, or delivered electronically, by the insurer. For the purposes of counting days under this subsection, day one is the first business day following the day on which the insurer receives the request for prior authorization. Nothing in this subsection shall be construed to prohibit an insurer from seeking additional information related to a prior authorization request orally or by other means, provided that a written notice is supplied in the event that a determination cannot be issued within two business days due to the need for additional information.

(14) Following a request for additional information submitted in compliance with section 13, the insurer must issue a determination by the later of:

(b) Fifteen days after the date of the request for additional information, unless otherwise provided in federal law. For the purposes of counting days under this subsection, day one is the first calendar day following the day on which the insurer mails, or delivers electronically, the request for additional information.

History

Statutory/Other Authority: ORS 743B.420, ORS 743B.250, ORS 743B.422, ORS 743B.423, ORS 746.233 & Or Laws 2021, ch 154
Statutes/Other Implemented: ORS 743B.420, ORS 743B.250, ORS 743B.422, ORS 743B.423, ORS 746.233 & Or Laws 2021, ch 154
ID 10-2021, amend filed 12/14/2021, effective 01/01/2022
ID 12-2019, adopt filed 12/19/2019, effective 01/01/2020

Or. Admin. R. 836-053-1205 Uniform Prescription Drug Prior Authorization Request Form

(1) As used in this rule:

(a) “Material information” means information that is:

(A) Related to the patient’s clinical condition sufficient to enable an individual with the appropriate training and experience to determine whether the prescription authorization request should be approved or disapproved; or

(B) Required by state or federal law for dispensing restricted prescription drugs.

(b) “Payer” means a person described in ORS 743.061(2) that requires prior authorization for prescription drug benefits.

(c) “Request form” means the Uniform Prescription Drug Prior Authorization Request Form set forth in Exhibit A of this rule.

(2) Any payer that requires prior authorization for a prescription drug benefit must accept a request for prior authorization for a prescription drug on the request form. A payer also may accept a prescription drug prior authorization request submitted on a form other than the request form.

(3)(a) On or before July 1, 2015, a payer shall make the request form electronically available on their websites.

(b) On and after July 1, 2015, a payer shall:

(A) Accept the request form through any reasonable means of transmission, including but not limited to paper, electronic, or another mutually agreeable accessible method of transmission or using an internet or web-based system.

(B) Request from the prescribing provider only the minimum amount of material information necessary to approve or disapprove the prescription drug prior authorization request.

(i) The prescribing provider’s request is approved;

(ii) The prescribing provider’s request is disapproved as not medically necessary or not a covered benefit;

(iii) The prescribing provider’s request is missing material information necessary to approve or disapprove the request; or

(iv) The patient is no longer eligible for coverage.

(4) A payer shall deliver any notice to a prescribing provider required under section (3) of this rule in the same manner the provider submitted the request form, or another mutually agreeable accessible method of notification.

(5) If a provider requests prescription drug prior authorization telephonically, through a web portal, or by any other manner of transmission, the payer may not require the prescribing provider to provide more information than is required by the request form.

(6) If a payer disapproves a prescribing provider’s prior authorization request:

(a) Pursuant to paragraph (3)(b)(C))(ii) or (iii), the payer shall include in the notice of disapproval an accurate and clear written explanation of the specific reasons for disapproving the prior authorization request.

(b) Pursuant to paragraph (3)(b)(C)(iii), the payer also shall include in the notice of disapproval an accurate and clear written explanation that specifically identifies the missing material information that is necessary to approve or disapprove the prior authorization request.

(7) Every payer that conducts prescription drug prior authorizations shall have written policies and procedures in place to ensure that the payer complies with the requirements of ORS 743.065 and this rule.

(8) Requiring information in excess of the minimum material information specified by the request form shall constitute a failure to accept the request form, in violation of section (2) of this rule. A payer may not disapprove a request form on grounds of missing information under paragraph (3)(b)(C)(iii) of this rule if the form provides the minimum amount of material information in accordance with subsection (3)(b)(B) of this rule.

History

Statutory/Other Authority: ORS 731.244 & 743.065
Statutes/Other Implemented: ORS 743.065
ID 4-2015, f. & cert. ef. 5-27-15

Or. Admin. R. 836-053-1300 Purpose and Scope; Application

(1) OAR 836-053-1300 to 836-053-1365 are adopted by the Director of the Department of Consumer and Business Services to implement ORS 743B.252 to 743B.256, governing the Director’s contracting with independent review organizations for the purpose of resolving disputes relating to adverse decisions by insurers in one or more of the issues specified in 743B.252.

(2) OAR 836-053-1300 to 836-053-1365 are operative with respect to disputes for which the initial grievance is filed on or after July 1, 2002 under health benefit plans in existence, issued or renewed on or after July 1, 2002.

History

Statutory/Other Authority: ORS 731.244 & 743B.253 - 743B.256
Statutes/Other Implemented: ORS 743B.252 - 743B.256
ID 11-2018, minor correction filed 08/03/2018, effective 08/03/2018
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1305 Definitions; Authority to Act for Enrollee

(1) As used in OAR 836-053-1300 to 836-053-1365, "medical reviewer" means any of the following persons who is assigned to an independent review case by an independent review organization:

(a) A doctor of medicine or osteopathy licensed under ORS Chapter 677 or under the laws of another state.

(b) A provider as defined in ORS 743B.001(16)(a)(b).

(c) A health care professional licensed, certified or otherwise authorized or permitted by the laws of another state to administer medical or mental health services in the ordinary course of business or practice of a profession.

(2) An action that may be taken by an enrollee under ORS 743B.252 to 743B.256 or under OAR 836-053-1300 to 836-053-1365 may be taken on behalf of the enrollee by a representative of the enrollee.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253 - 743B.256
Statutes/Other Implemented: ORS 743B.252 - 743B.256 & ORS 743B.001
ID 14-2018, minor correction filed 08/20/2018, effective 08/20/2018
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1310 Contracting Requirements

(1) To be considered for contracting with the Director of the Department of Consumer and Business Services as an independent review organization under ORS 743B.253 for the purpose of providing independent review under 743B.252, an independent review organization must submit to the director a response to the director's request for proposal according to its requirements. The response must include:

(a) For an independent review organization that is publicly held, the name of each stockholder or owner of more than five percent of any stock or options;

(b) The name of any holder of bonds or notes of the independent review organization that exceed $100,000;

(c) The name and type of business of each corporation or other organization that the independent review organization controls or is affiliated with and the nature and extent of the affiliation or control;

(d) The name and a biographical sketch of each director, officer and executive of the independent review organization and any entity listed under subsection (c) of this section and a description of any relationship the named individual has with:

(A) An insurer;

(B) A utilization review agent;

(D) A doctor of medicine or osteopathy, a provider or other health care professional;

(E) A drug or device manufacturer; or

(F) A group representing any of the entities described by paragraph (A) to (E) of this subsection;

(e) The percentage of the independent review organization's revenues that the independent review organization anticipates will be derived from reviews conducted under ORS 743B.256;

(f) A description of the areas of expertise of the medical reviewers making review determinations for the independent review organization, as well as policies and standards of the independent review organization that address qualifications, training and assignment of all types of medical reviewers and that are compliant with requirements of OAR 836-053-1317;

(g) The procedures that the independent review organization will use in making review determinations regarding reviews conducted under ORS 743B.256;

(h) Attestations that all requirements will be met;

(i) Evidence of accreditation by a nationally recognized private accrediting organization;

(j) Other documentation, including but not limited to legal and financial information, policies and procedures, and data that are pertinent to requirements of ORS 743B.256 and OAR 836-053-1315; and

(k) Any other requirements established by the director that demonstrate the independent review organization's ability to meet all requirements for contracting as an independent review organization in this state.

(2) In order to enable the director to consider the response of an independent review organization under section (1) of this rule:

(a) The independent review organization must authorize release of information from primary sources, including full reports of site visits, inspections and audits; and

(b) The Director may require the independent review organization to indicate which documents demonstrate compliance with specific statutory requirements under ORS 743B.256 and OAR 836-053-1315.

(3) Investigation and verification activities of the director regarding the independent review organization may include, but are not limited to:

(a) Review of the response of the independent review organization to the request for proposals and its filings for completeness and compliance with standards;

(b) On-site survey or examination;

(c) Primary-source verification with accreditation or regulatory bodies of compliance with requirements that are used to demonstrate compliance with applicable standards established in ORS 743B.256 and OAR 836-053-1315; and

(d) Other means of determining regulatory and accreditation histories.

History

Statutory/Other Authority: ORS 731.244, 743B.252 & 743B.253
Statutes/Other Implemented: ORS 743B.253
ID 15-2018, minor correction filed 08/20/2018, effective 08/20/2018
ID 23-2011, f. & cert. ef. 12-19-11
ID 11-2011(Temp), f. & cert. ef. 7-7-11 thru 12-21-11
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1315 Performance Criteria

The following are performance criteria that an independent review organization must satisfy when demonstrating its eligibility for contracting with the Director of the Department of Consumer and Business Services to perform independent review responsibilities under ORS 743B.256, and in order to continue performing those responsibilities under the contract with the director. For purposes of this rule, an independent review organization must:

(1) Demonstrate its capability of and expertise in reviewing health care, and a history of such review, in terms of the coverage issues that are subject to independent review pursuant to ORS 743B.252, in terms of the application of other health plan coverage provisions and in terms of health insurance contract law.

(2) Demonstrate the ability to handle a full range of review cases occurring in this state. An independent review organization may contract with a more specialized review organization, but the independent review organization must ensure that each review conducted meets all the requirements of ORS 743B.252, 743B.253 and 743B.256 and OAR 836-053-1300 to 836-053-1365.

(3) Comply with all conflict of interest provisions in OAR 836-053-1320.

(4) Maintain and assign an adequate number and range of qualified medical reviewers in compliance with OAR 836-053-1310 and 836-053-1315 in order to:

(a) Make determinations regarding the full range of independent review cases occurring in this state under ORS 743B.252; and

(b) Meet timelines specified in ORS 743B.256 and OAR 836-053-1340, including timelines for expedited review.

(5) Conduct reviews, reach determinations and document determinations consistent with OAR 836-053-1325 and 836-053-1330.

(6) Maintain administrative processes and capabilities in compliance with OAR 836-053-1325 and 836-053-1330.

History

Statutory/Other Authority: ORS 731.244, ORS 743B.256 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.256 & ORS 743B.253
ID 16-2018, minor correction filed 08/20/2018, effective 08/20/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1317 Professional Qualifications

(1) A doctor of medicine or osteopathy licensed under ORS Chapter 677 or under the laws of another state that govern the licensing of doctors of medicine or osteopathy shall be responsible for each final independent review determination made by an independent review organization, and in making a determination shall consult with other medical reviewers as appropriate.

(2) An independent review organization shall have a medical director who holds a current unrestricted license as a medical doctor or osteopathic physician and has had experience in direct patient care. The medical director shall provide guidance for clinical aspects of the independent review process and oversee the independent review organization's quality assurance and credentialing programs.

(3) An independent review organization shall maintain policies and practices that assure that each medical reviewer:

(a) Holds a current, unrestricted license, certification or registration in this state, or current, unrestricted credentials from another state;

(b) Has at least five years of recent clinical experience;

(c) Is certified by an appropriate member board of the American Board of Medical Specialties if board certification is available for the specialty or profession in which the medical reviewer is engaged; and

(d) Has the ability to apply scientific standards of evidence in judging research literature pertinent to review issues, as demonstrated through relevant training or professional experience.

(4) A medical reviewer who is assigned to a case must have at least five years of recent clinical experience dealing with the same health conditions under review or similar conditions. Exceptions may be made to this requirement in unusual situations when the only experts available for a highly specialized review are in academic or research work and do not meet the clinical experience requirement.

(5) An independent review organization must maintain a training program for staff and medical reviewers, addressing at least:

(a) Confidentiality;

(b) Neutrality and conflict of interest;

(d) Documentation of evidence for determination.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253
ID 17-2018, minor correction filed 08/20/2018, effective 08/20/2018
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1320 Conflict of Interest

(1) An independent review organization:

(a) Must not be a subsidiary of, or in any way owned or controlled by, an insurer or an association of insurers or of doctors, providers or other health care professionals;

(b) Must provide information to the Director of the Department of Consumer and Business Services on its own organizational affiliations and potential conflicts of interest at the time of its response to the director's request for proposals and thereafter when material changes occur;

(c) Must immediately turn down a case referred by the director if accepting it would constitute an organizational conflict of interest; and

(d) Must ensure that medical reviewers are free from any actual or potential conflict of interest in assigned cases.

(2) In connection with a case, neither an independent review organization nor any of its medical reviewers may have any material professional, familial or financial affiliation with the health insurer, enrollee, enrollee's provider, that provider's medical or practice group, the facility at which the service would be provided or the developer or manufacturer of a drug or device under review. For the purpose of this section, an affiliation with any director, officer or executive of an independent review organization shall be considered to be an affiliation with the independent review organization.

(3) Except as provided in section (4) of this rule, the following do not constitute violations of this rule:

(a) Staff affiliation with an academic medical center or National Cancer Institute-designated clinical cancer research center;

(b) Staff privileges at a health facility; or

(c) An independent review organization's receipt of an insurer's payment for independent reviews assigned by the director.

(4) A potential medical reviewer shall be considered to have a conflict of interest in connection with a case with regard to a facility or health plan, regardless of revenue from that source, if the potential reviewer is a member of a standing committee of the facility or the health plan, or a provider or other health care professional network that contracts with the health plan.

(5) A conflict of interest may be waived only if both the enrollee and the health plan agree in writing after receiving full disclosure of the conflict, and only if:

(a) The conflict involves a medical reviewer, and no alternate reviewer with necessary special expertise is available; or

(b) The conflict involves an independent review organization and the director determines that seeking a waiver of conflict is preferable to reassigning the dispute to a different independent review organization.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253
ID 18-2018, minor correction filed 08/20/2018, effective 08/20/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1325 Procedures for Conducting External Reviews

(1) An independent review organization is subject to the following decision-making standards and procedures:

(a) The independent review process is intended to be neutral and independent of influence by any affected party or by state government. The Director of the Department of Consumer and Business Services may conduct investigations as authorized by law but has no involvement in the disposition of specific cases.

(b) Independent review is a document review process. An enrollee, a health plan or an attending provider may not participate in or attend an independent review in person or obtain reconsideration of a decision by an independent review organization.

(c) An independent review organization shall present cases to medical reviewers in a way that maximizes the likelihood of a clear, unambiguous decision. This may involve stating or restating the questions for review in a clear and precise manner that encourages yes or no answers.

(d) An independent review organization may uphold an adverse determination if the patient or any provider refuses or fails to provide in a timely manner relevant medical records that are available and have been requested pursuant to ORS 743B.256. Pursuant to ORS 743B.252, an independent review organization may overturn an adverse determination if the insurer refuses or fails to provide in a timely manner relevant medical records that are available and have been requested.

(e) An independent review organization must maintain written policies and procedures covering all aspects of review.

(2) Once the director refers a dispute, the independent review organization must proceed to a final decision in accordance with the procedural requirements of ORS 743B.252 and 743B.256 and OAR 836-053-1300 to 836-053-1365 unless requested otherwise by both the insurer and the enrollee.

(3) An independent review organization must decide whether or not the dispute pertains to an adverse benefit determination as described in ORS 743B.252(1). If the dispute is covered, it is eligible for external review. An independent review organization must also decide whether the dispute concerns a covered benefit in the health benefit plan. If the dispute concerns a non-covered benefit, the dispute does not qualify for external review.

(4) An independent review organization is subject to the following standards with respect to information to be considered for reviews:

(a) An independent review organization must request as necessary and must accept and consider the following information as relevant to a case referred:

(A) Medical records and other materials that the insurer is required to submit to the independent review organization under ORS 743B.252(3), including information identified in that section that is initially missing or incomplete as submitted by the insurer.

(B) For cases in which the insurer's decision addressed whether a course or plan of treatment was medically necessary:

(i) A copy of the definition of medical necessity from the relevant health insurance policy;

(ii) An explanation of how the insurer's decision conformed to the definition of medical necessity; and

(iii) An explanation of how the insurer's decision conformed to the requirement that the definition of medical necessity be uniformly applied.

(C) For cases in which the insurer's decision addressed whether a course or plan of treatment was experimental or investigational:

(i) A copy of the definition of experimental or investigational from the relevant health insurance policy;

(ii) An explanation of how the insurer's decision conformed to that definition of experimental or investigational; and

(iii) An explanation of how the insurer's decision conformed to the requirement that the definition of experimental or investigational be uniformly applied.

(D) Other medical, scientific and cost-effectiveness evidence, as described in section (5) of this rule, that is relevant to the case.

(b) After referral of a case, an independent review organization must accept additional information from the enrollee, the insurer or a provider acting on behalf of the enrollee at the enrollee's request if the information is submitted within five business days of the independent review organization after the enrollee’s receipt of notification of the appointment of the independent review organization or, in the case of an expedited referral, within 24 hours. The additional information must be related to the case and relevant to statutory criteria contained in ORS 743B.252.

(c) An independent review organization must ensure the confidentiality of medical records and other personal health information received for use in reviews, in accordance with applicable federal and state laws.

(5) If a course or plan of treatment is determined to be subject to independent review, a determination of whether the adverse decision of an insurer should be upheld or not must be based upon expert clinical judgment, after consideration of relevant medical, scientific and cost-effectiveness evidence and medical standards of practice in the United States. As used in this section:

(a) "Medical, scientific, and cost-effectiveness evidence" means published evidence on results of clinical practice of any health profession that complies with one or more of the following requirements:

(A) Peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff;

(B) Peer-reviewed literature, biomedical compendia, and other medical literature that meet the criteria of the National Institute of Health's National Library of Medicine for indexing in Index Medicus, Excerpta Medica, Embase, Medline, Medical Literature Analysis and Retrieval System or Health Services Technology Assessment Texts;

(C) Medical journals recognized by the Secretary of Health and Human Services, under Section 1861(t)(2) of the Social Security Act;

(D) The American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluation, the American Dental Association Accepted Dental Therapeutics, and the United States Pharmacopoeia-Drug Information;

(E) Findings, studies or research conducted by or under the auspices of a federal government agency or a nationally recognized federal research institute, including the Federal Agency for Healthcare Research and Quality, National Institutes of Health, National Cancer Institute, National Academy of Sciences, Center for Medicaid and Medicare Services, Congressional Office of Technology Assessment, and any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services;

(F) Clinical practice guidelines that meet Institute of Medicine criteria; or

(G) In conjunction with other evidence, peer-reviewed abstracts accepted for presentation at major scientific or clinical meetings.

(b) Medical standards of practice include the standards appropriately applied to physicians or other providers or health care professionals, as pertinent to the case.

(6) The following standards govern the assignment by an independent review organization of appropriate medical reviewers to a case:

(a) A medical reviewer assigned to a case must comply with the conflict of interest provisions in OAR 836-053-1320.

(b) An independent review organization shall assign one or more medical reviewers to each case as necessary to meet the requirements of this subsection. The medical reviewer assigned to a case, or the medical reviewers assigned to a case together, must meet each of the following requirements:

(A) Have expertise to address each of the issues that are the source of the dispute.

(B) Be a clinical peer. For purposes of this paragraph, a clinical peer is a physician or other medical reviewer who is in the same or similar specialty that typically manages the medical condition, procedures or treatment under review. Generally, as a peer in a similar specialty, the individual must be in the same profession and the same licensure category as the attending provider. In a profession that has organized, board-certified specialties, a clinical peer generally will be in the same formal specialty.

(c) Each independent review organization must have a policy specifying the methodology for determining the number and qualifications of medical reviewers to be assigned to each case. The number of reviewers shall be governed by the following requirements:

(A) The number of reviewers must reflect the complexity of the case and the goal of avoiding unnecessary cost.

(B) The independent review organization may consider, but shall not be bound by, recommendations regarding complexity from the insurer or attending provider.

(C) The independent review organization shall consider situations such as review of experimental and investigational treatments that may benefit from an expanded panel.

(7) An independent review organization shall notify the enrollee and the insurer of its decision on the enrollee's case and provide documentation and reasons for the , decision including the clinical basis for the decision unless the decision is wholly based on application of coverage provisions.

(a) Documentation of the basis for the decision shall include references to supporting evidence, and if applicable, the reasons for any interpretation regarding the application of health benefit plan coverage provisions, but shall not recommend a course of treatment or otherwise engage in the practice of medicine.

(b) If the decision overrides the health benefit plan's standards governing the coverage issues that are subject to independent review, the reasons shall document why the health benefit plan's standards are unreasonable or inconsistent with sound, evidence-based medical practice.

(c) The written report shall include the qualifications of each medical reviewer but shall not disclose the identity of the reviewer.

(d) Notification of the decision shall be provided initially by phone, e-mail or fax, followed by a written report by mail. In the case of expedited reviews, the initial notification shall be immediate and by phone, followed by a written report.

(8) An independent review organization’s decision shall be final unless, within seven business days of an enrollee’s receipt of the written report of the independent review organization’s decision, the enrollee submits information to the director that the independent review organization failed to materially comply with the procedural requirements of ORS 743B.253 or 743B.256 or OAR 836-053-1300 to 836-053-1365. If the enrollee is satisfied with the independent review organization’s decision, the enrollee may notify the independent review organization and insurer by electronic mail, fax or telephone, followed by a written notice, stating that the enrollee waives the seven business days before the independent review organization decision is final.

(9) The director shall review the information submitted by the enrollee and, within seven business days, make a written determination whether:

(a) The director is reasonably satisfied that the independent review organization failed to materially comply with the procedural requirements of ORS 743B.253 or 743B.256 or OAR 836-053-1300 to 836-053-1365; and

(b) The independent review organization’s failure to materially comply with the procedural requirements of ORS 743B.253 or 743B.256 or OAR 836-053-1300 to 836-053-1365 materially affected the independent review organization’s decision.

(10) The director shall send a written notification of the determination to the enrollee and the independent review organization. The independent review organization’s decision will be final if the director is reasonably satisfied that the independent review organization complied with the procedural requirements in ORS 743B.253 or 743B.256 or OAR 836-053-1300 to 836-053-1365.

(11) If an independent review organization failed to materially comply with the procedural requirements in ORS 743B.253 or 743B.256 or OAR 836-053-1300 to 836-053-1365, the independent review organization shall correct the failure to materially comply by conducting a new external review, at the independent review organization’s cost, and issuing a new decision within ten business days.

(a) Within 24 hours of receipt of the written notification from the director described in section (10) of this rule, the independent review organization shall:

(A) Notify the enrollee and the insurer via electronic mail, fax or telephone that the independent review organization will be conducting a new external review, and

(B) Request from the enrollee or the insurer via electronic mail or fax any information not already provided to the independent review organization that is necessary to correct the material failure to comply with the procedural requirements of ORS 743B.253, or 743B.256 or OAR 836-053-1330 to 836-053-1365.

(12) The enrollee or insurer must provide to the independent review organization any requested information in section (11) of this rule within 48 hours after receipt of the request.

(13) Notification of the independent review organization’s new decision shall be provided to the enrollee and insurer initially via electronic mail, fax or telephone, followed by a written report by mail.

(14) For the purposes of sections (8) to (13) of this rule, “procedural requirements” does not include requirements related to the exercising of medical judgment or decision making by the independent review organization.

(15) The independent review organization’s decision based on the new external review shall be final as of the date of the decision.

(16) Except as provided in this section, an independent review organization shall not disclose the identity of a medical reviewer unless otherwise required by state or federal law. The director shall not require reviewers' identities as part of the contracting process but may examine identified information about reviewers as part of enforcement activities. The identity of the medical director of an independent review organization shall be disclosed upon request of any person.

(17) An independent review organization shall promptly report to the director any attempt by any party, including a state agency, to interfere with the carrying out of the independent review organization’s duties under ORS 743B.253 or 743B.256 or OAR 836-053-1300 to 836-053-1365.

(18) An independent review organization must maintain business hours, methods of contact (including telephone contact), procedures for after-hours requests and other relevant procedures to ensure timely availability to conduct expedited as well as regular reviews.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253, ORS 743B.252 & ORS 743B.256
ID 19-2018, minor correction filed 08/21/2018, effective 08/21/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 13-2006, f. 7-14-06 cert. ef. 1-1-07
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1330 Criteria and Considerations for External Review Determinations

(1) The following criteria and considerations apply to decisions by an independent review organization:

(a) An independent review organization must use fair procedures in making a decision, and the decision must be consistent with the standards in ORS 743B.253 and 743B.256 and OAR 836-053-1300 to 836-053-1365.

(b) An independent review organization may override the standards of a health benefit plan governing the coverage issues that are subject to independent review pursuant to ORS 743B.252(1) only if the standards are determined upon review to be unreasonable or inconsistent with sound, evidence-based medical practice.

(2) A decision by an independent review organization of a dispute relating to an adverse decision by an insurer is subject to enforcement under ORS 743B.252 to 743B.258 if:

(a) The dispute relates to an adverse decision on one or more of the following:

(A) Whether a course or plan of treatment is medically necessary;

(B) Whether a course or plan of treatment is experimental or investigational; or

(C) Whether a course or plan of treatment that an enrollee is undergoing is an active course of treatment for purposes of continuity of care under ORS 743B.225; and

(b) The decision by the independent review organization is made in accordance with the coverage described in the health benefit plan, including limitations and exclusions expressed in the plan, except that the independent review organization may override the insurer's standards for medically necessary or experimental or investigational treatment, if the independent review organization determines that:

(A) The standards of the insurer are unreasonable or are inconsistent with sound medical practice; or

(B) For cases in which the insurer's decision addressed whether a course or plan of treatment was medically necessary:

(i) The insurer's decision did not conform to the insurer's definition of medically necessary in the relevant health insurance policy, or

(ii) The insurer's decision did not conform to the requirement that the definition of medical necessity be uniformly applied; or

(C) For cases in which the insurer's decision addressed whether a course or plan of treatment was experimental or investigational:

(i) The insurer's decision did not conform to the insurer's definition of experimental or investigational in the relevant health insurance policy, or

(ii) The insurer's decision did not conform to the requirement that the definition of experimental or investigational be uniformly applied.

(3) No provision of OAR 836-053-1300 to 836-053-1365 establishes a standard of medical care or creates or eliminates any cause of action.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253, ORS 743B.225, ORS 743B.252, ORS 743B.256 & ORS 743B.258
ID 20-2018, minor correction filed 08/21/2018, effective 08/21/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 13-2006, f. 7-14-06 cert. ef. 1-1-07
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1335 Procedures for Complaint Investigation

(1) The Director of the Department of Consumer and Business Services may audit, examine and conduct an on-site review of records to investigate complaints alleging that an independent review organization or medical reviewer committed conduct contrary to ORS 743B.253 or 743B.256, or OAR 836-053-1300 to 836-053-1365 or the contract between the director and the independent review organization.

(2) In addition to the procedures for an enrollee to submit information about an independent review organization’s decision in OAR 836-053-1325, a person, including, but not limited to, an enrollee, insurer or provider, may submit a written complaint to the director alleging that an independent review organization committed conduct described in this rule. The director may consider the complaint in relation to the terms of the contract with the independent review organization and in relation to ORS 743B.253 or 743B.256 and OAR 836-053-1300 to 836-053-1365 and take action as appropriate under the contract. The director shall notify the complainant of the results of the director's determinations and of any action taken or to be taken.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253 & ORS 743B.256
ID 21-2018, minor correction filed 08/21/2018, effective 08/21/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1337 Preliminary Review by Insurer

When an enrollee applies to an insurer for independent review of a dispute, the insurer shall review the application and advise the enrollee that the application does or does not meet any of the criteria for independent review. The insurer shall send the application to the independent review organization as provided in ORS 743B.252 unless the enrollee withdraws the application.

History

Statutory/Other Authority: ORS 731.244 & OR 743B.253
Statutes/Other Implemented: ORS 743B.255
ID 22-2018, minor correction filed 08/21/2018, effective 08/21/2018
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1340 Timelines and Notice for Dispute That is Not Expedited

(1) An insurer shall give the director of the Department of Consumer and Business Services notice of an enrollee's request for independent review by delivering a copy of the request to the director not later than the second business day of the insurer after the insurer receives the request for the independent review. In the event the enrollee applies to the director rather than to the insurer for independent review, the director shall provide the insurer notice of the enrollee’s request for independent review by delivering a copy of the request to the insurer not later than the next business day of the department after the director receives the request for independent review.

(2) If an insurer reverses its final adverse determination before expiration of the deadline for sending the notice to the director under section 1 of this rule, the insurer must notify the enrollee not later than the next business day of the insurer after the insurer’s reversal. The notice to the enrollee may be given by electronic mail, facsimile or by telephone, followed by a written confirmation within two business days of the insurer.

(3) Not later than the next business day of the department after the director has received a request for independent review from an insurer or an enrollee, the director shall assign the review to one of the independent review organizations with whom the director has contracted. The director shall notify the insurer in writing of the name and address of the independent review organization to which the request for the independent review should be sent. If sending written notice will unduly delay notification, the director shall give the notice by electronic mail, facsimile or by telephone, followed by a written confirmation within two business days of the department.

(4) The director shall notify the enrollee of the assignment of the request, not later than the second business day of the department after the director gave notice under section 3 of this rule. The notice must include a written description of the independent review organization selected to conduct the independent review and information explaining how the enrollee may provide the director with documentation regarding any potential conflict of interest of the independent review organization as described in OAR 836-053-1320.

(5) Not later than the third calendar day following receipt of notice from the director under section 4 of this rule, or the subsequent business day of the department if any of the days is not a normal business day of the department, the enrollee may provide the director with documentation in writing regarding a potential conflict of interest of the independent review organization. If sending written documentation will unduly delay the process, the enrollee shall give the notice by electronic mail, facsimile or by telephone, followed by a written confirmation within two business days of the department. If the director determines that the independent review organization presents a conflict of interest as described in OAR 836-053-1320, the director shall assign another independent review organization not later than the next business day of the department. The director shall notify the insurer of the new independent review organization to which the request for the independent review should be sent. The director shall also notify the enrollee of the director's determination regarding the potential conflict of interest and the name and address of the new independent review organization.

(6) Not later than the fifth business day of the insurer after the date on which the insurer received notice from the director under section 3 of this rule, the insurer shall deliver to the assigned independent review organization the following documents and information considered in making the insurer's final adverse decision, including the following:

(a) Information submitted to the insurer by a provider or the enrollee in support of the request for coverage under the health benefit plan's procedures.

(b) Information used by the health benefit plan during the internal appeal process to determine whether the course or plan of treatment is:

(A) Medically necessary;

(B) Experimental or investigational; or

(d) An index of all submitted documents.

(7) Not later than the second business day of the independent review organization after receiving the material specified in section 6 of this rule, the independent review organization shall deliver to the enrollee the index of all materials that the insurer has submitted to the independent review organization. Upon request of the enrollee, the independent review organization shall provide to the enrollee all relevant information supplied to the independent review organization that is not confidential or privileged under state or federal law concerning the case under review.

(8) After receipt of the notice from the director under section 4 of this rule, the enrollee, the insurer or a provider acting on behalf of the enrollee or at the enrollee’s request may submit additional information to the independent review organization. In accordance with OAR 836-053-1325(4)(b) the independent review organization must consider this additional information if the information is related to the case and relevant to the statutory criteria for external review contained in ORS 743B.252. The independent review organization is not required to consider this information if the information is submitted after the fifth business day of the independent review organization following the enrollee’s receipt of notice from the director under section 4 of this rule. Upon receiving information under this section the independent review organization must:

(a) Forward any information provided by the insurer to the enrollee within one business day after the independent review organization receives the information; and

(b) Forward any information provided by the enrollee or a provider acting on behalf of the enrollee or at the enrollee’s request to the insurer within one business day after the independent review organization receives the information.

(9) The independent review organization shall notify the enrollee, the provider of the enrollee and the insurer of any additional medical information required to conduct the review after receipt of the documentation under section 7 of this rule. Not later than the fifth business day after such a request, the enrollee or the provider of the enrollee shall submit to the independent review organization the additional information or an explanation of why the additional information is not being submitted. If the enrollee or the provider of the enrollee fails to provide the additional information or the explanation of why additional information is not being submitted within the timeline specified in this subsection, the assigned independent review organization shall make a decision based on the information submitted by the insurer as required by section 6 of this rule. Except as provided in this section, failure by the insurer to provide the documents and information within the time specified in section 6 of this rule shall not delay the external review.

(10) An independent review organization must provide notice to enrollees and the insurer of the result and basis for the decision as provided in OAR 836-053-1325 not later than the fifth day after the independent review organization makes a decision in a non-expedited case.

History

Statutory/Other Authority: Or Laws 2021, ch 205, ORS 731.244, ORS 743.858 & ORS 743.862
Statutes/Other Implemented: Or Laws 2021, ch 205, ORS 743.857, ORS 743.858 & ORS 743.862
ID 9-2021, amend filed 12/14/2021, effective 01/01/2022
ID 23-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 11-2011(Temp), f. & cert. ef. 7-7-11 thru 12-21-11
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1342 Timelines and Notice for Expedited Decision-Making

(1) When an insurer expedites an enrollee's case under ORS 743B.252(5), the insurer shall inform the Director of the Department of Consumer and Business Services and the independent review organization that the referral is expedited. If information on whether a referral is expedited is not provided to the independent review organization, the independent review organization may presume that the referral is not an expedited review, but the independent review organization may request clarification from the insurer.

(2) The insurer and the director must expedite an external review that is required to be expedited under ORS 743B.252(5) when:

(a) An enrollee requests external review before the enrollee has exhausted all internal appeals; or

(b) An enrollee simultaneously requests an expedited internal appeal and an expedited external review.

(3) An independent review organization shall make its decision in each expedited case within a time period that is appropriate for accommodating the clinical urgency of the particular case, but in any event not exceeding the maximum time period specified in ORS 743B.256(3).

(4) In an expedited case, an independent review organization shall immediately provide notice to enrollees and the insurer of the result and basis for the decision as provided in OAR 836-053-1325.

History

Statutory/Other Authority: ORS 731.244, ORS 743B.253 & ORS 743B.256
Statutes/Other Implemented: ORS 743B.253, ORS 743B.256 & ORS 743B.252
ID 24-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 11-2011(Temp), f. & cert. ef. 7-7-11 thru 12-21-11
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1345 Quality Assurance Mechanisms

(1) An independent review organization must have a quality assurance program that ensures the timeliness, quality of review and communication of determinations to enrollees and insurers. The program must also ensure the qualifications, impartiality and freedom from conflict of interest of the organization, its staff and medical reviewers. The quality of review of an independent review organization includes the use of appropriate methods to match the case, confidentiality and systematic evaluation of complaints for patterns or trends.

(2) A quality assurance program must include a written plan addressing its scope and objectives; program organization, monitoring and oversight mechanisms; and evaluation and organizational improvement of independent review organization activities. Organizational improvement must include the implementation of action plans to improve or correct identified problems, and communication of the results of action plans to staff and medical reviewers.

(3) An independent review organization shall record complaints in a log. The log shall include for each complaint the nature of the complaint and how it was resolved. Upon request, the independent review organization shall provide the log and complaints to the director for review.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253
ID 25-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1350 Ongoing Requirements for Independent Review Organizations

(1) An independent review organization shall file an annual statistical report with the Director of the Department of Consumer and Business Services, on a form specified by the director, that summarizes reviews conducted. The report shall include, but need not be limited to, volumes, types of cases, compliance with timelines for expedited and non-expedited cases, determinations, number and nature of complaints and compliance with conflict of interests rules.

(2) An independent review organization shall submit updated information to the director if at any time there is a material change in the information included in the response of the independent review organization to the director's request for proposals.

(3) An independent review organization shall maintain records of all materials, including materials submitted by all parties, notifications, documents relied upon, and the independent review organization’s ultimate decision for a period of not less than three years after any review. The independent review organization shall provide copies of any of these documents to the director upon request.

History

Statutory/Other Authority: ORS 731.244, ORS 743B.252, ORS 743B.253 & ORS 743B.256
Statutes/Other Implemented: ORS 743B.253 & ORS 743B.256
ID 26-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 23-2011, f. & cert. ef. 12-19-11
ID 11-2011(Temp), f. & cert. ef. 7-7-11 thru 12-21-11
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1355 Synopses

(1) The synopses of decisions required to be filed by independent review organizations under ORS 743B.256(5) with the Director of the Department of Consumer and Business Services must meet the requirements of this rule.

(2) Synopses of decisions shall include the following for each decision:

(a) A description of the dispute sought to be reviewed by the independent review organization, including whether the dispute is alleged to concern the determination of medical necessity or experimental or investigational treatment, whether an active course of treatment is occurring for the purpose of determining whether a person is eligible for continuity of care, or whether the dispute concerns some other issue.

(b) A determination by the independent review organization whether the dispute falls within any of the categories of issues that are eligible for independent review.

(3) A synopsis may include a statement describing the illness, condition or other object of medical treatment, subject to section (4) of this rule.

(4) Synopses must exclude all facts and other matters that identify or may identify an enrollee. The facts and other matters include but are not limited to the name or address of an enrollee, the location of the provider office or other place of treatment, and the disease, condition or other treated matter, the disclosure of which may reveal the identity of the enrollee.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.256
Statutes/Other Implemented: ORS 743B.256
ID 27-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1360 External Review Reporting

(1) Each independent review organization shall maintain written records in the aggregate and by insurer on all requests for external review for which it conducted an external review for the Director of the Department of Consumer and Business Services during a calendar year.

(2) Each independent review organization shall submit to the director, by March 31 of each year for the preceding calendar year, a report in the format specified by the director. The report shall include the information required by this section in the aggregate, for each insurer, for Oregon external reviews only. The information to be included in the report as provided in this section is as follows:

(a) The total number of requests for external review received during the reporting period;

(b) The number of requests for external review for which the independent review organization has made a final decision and, of those requests, the number that uphold the insurer's final adverse determination;

(A) Disputes other than expedited disputes; and

(B) Expedited disputes.

(d) A summary of the types of coverages or cases for which an external review was sought;

(e) The number of requests for which the independent review organization decided that it did not have jurisdiction under ORS 743B.252.

(f) The number of external review cases that were terminated as the result of a reconsideration by the insurer of the insurer's final adverse determination after the receipt of additional information from the enrollee or the enrollee's designated representative; and

(g) Any other information the director requests or requires.

History

Statutory/Other Authority: ORS 731.244, ORS 743B.253 & ORS 743B.256
Statutes/Other Implemented: ORS 743B.253 & ORS 743B.256
ID 28-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1365 Fees for External Reviews

Fees to be imposed by an independent review organization for its external review of disputes shall be as determined in the competitive solicitation process, but shall be as low as is feasible in the request for proposal process. Fees shall be separately established for initial jurisdictional decisions by an independent review organization and for decisions that call for a more extended review.

History

Statutory/Other Authority: ORS 731.244 & ORS 743B.253
Statutes/Other Implemented: ORS 743B.253
ID 29-2018, minor correction filed 08/22/2018, effective 08/22/2018
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2002, f. 9-27-02, cert. ef. 9-28-02
ID 10-2002(Temp), f. & cert. ef. 4-5-02 thru 9-27-02

Or. Admin. R. 836-053-1400 Format and Instructions for Report Required by ORS 743.748

(1) A carrier shall submit the information required by ORS 743.748 electronically in the format and according to the directions established by the director of the Department of Consumer and Business Services and made available on the website of the Division of Financial Regulation.

(2) The following terms used in ORS 743.748 have the following meanings for the purpose of the information required by 743.748. References in this section to specific schedules and instructions are to schedules and instructions for the NAIC health annual statement blank. The terms are defined as follows:

(a) "Average amount of premiums per member per month" means total earned premiums as reported on the exhibit of premiums, enrollment and utilization divided by the total member months for the required reporting year.

(b) "Carrier's annual report" is the carrier's annual statement submitted as required by ORS 731.574.

(c) "Medical loss ratio" means the total medical claims cost divided by the total premiums earned, both as reported on the exhibit of premiums, enrollment and utilization.

(d) "Percentage change in the average premium per member per month" means the average amount of premiums per member per month for the reporting year less the average premium per member per month for the preceding reporting year divided by the average premium per member per month for the preceding reporting year.

(e) "Total amount of costs for claims" means incurred claims as reported by the carrier on the exhibit of premiums, enrollment and utilization in its annual statement. If the annual statement blank used by a carrier does not include an exhibit of premiums, enrollment and utilization, “total amount of costs for claims” means total incurred claims costs as calculated by the carrier using the instructions for the exhibit of premiums, enrollment and utilization for reporting the information.

(f) "Total amount of premiums" means earned premium as reported by the carrier on the exhibit of premiums, enrollment and utilization in its annual statement. If the annual statement blank used by a carrier does not include an exhibit of premiums, enrollment and utilization, “total amount of premiums” means total premiums as calculated by the carrier using the instructions for the exhibit of premiums, enrollment, and utilization for reporting the information.

(g) "Total number of members" means total number of members as of December 31 of the reporting year, as reported by the carrier in its annual statement. If the annual statement blank used by a carrier does not include an exhibit of premiums, enrollment and utilization, “total number of members means the total number of members as calculated by” the carrier using the instructions for the exhibit of premiums, enrollment and utilization for reporting the information.

(3) A carrier shall submit the following information by total for all comprehensive hospital and medical products nationwide, for all such products in each Oregon market segment and for the carrier’s association health plans:

(a) Number of members.

(b) Number of member months.

(d) Medical claims costs.

(e) Medical loss ratio.

(f) Average premium per member per month for the reporting year.

(g) Average premium per member per month for the preceding reporting year.

(h) Percentage change in premium per member per month from the preceding reporting year.

History

Statutory/Other Authority: ORS 731.244 & 743.748
Statutes/Other Implemented: ORS 743.748
ID 25-2024, minor correction filed 08/12/2024, effective 08/12/2024
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 6-2008, f. & cert. ef. 4-18-08
ID 8-2007(Temp), f. 10-24-07, cert. ef. 10-25-07 thru 4-18-08
ID 7-2006, f. & cert. ef. 4-14-06

Or. Admin. R. 836-053-1403 Definitions of Coordinated Care and Case Management for Behavioral Health Care Services

(1) The definitions set forth in ORS 743A.168 apply to the use of those terms in these rules.

(2) “Caring contacts” mean brief communications with a patient that start during care transition such as discharge or release from treatment, or when a patient misses an appointment or drops out of treatment, and continues as long as a qualified mental health professional deems necessary.

(3) “Case management” means the management of services that are provided to assist an individual in accessing medical and behavioral health care, social and educational services, public assistance and medical assistance and other needed community services identified in the individual’s patient-centered care plan.

(4) “Coordination of care” means the process of coordinating patient care activities as well as the facilitation of ongoing communication and collaboration with lay caregivers by community resource providers, health care providers, and agencies to meet the multiple needs of a patient by:

(a) Organizing and participating in team meetings; and

(b) Ensuring continuity of care during each transition of care.

(5) “Crisis stabilization plan” means an individually tailored plan provided to a patient and the patient’s lay caregiver that:

(a) Is based on the patient’s behavioral health assessment and physical health assessment; and

(b) Describes the patient’s specific short-term rehabilitation objectives and proposed crisis interventions.

(6) “Lay caregiver” means:

(a) For a patient who is younger than 14 years of age, a parent or legal guardian of the patient.

(b) For a patient who is at least 14 years of age or older, an individual designated by the patient or a parent or legal guardian of the patient to the extent permitted under ORS 109.640 and 109.675.

(c) For a patient who is at least 14 years of age or older, and who has not designated a caregiver, an individual to whom a health care provider may disclose protected health information without a signed authorization under ORS 192.567.

(7) “Lethal means counseling” means counseling strategies designed to reduce the access by a patient who is at risk for suicide to lethal means, including but not limited to firearms.

(8) “Medically appropriate treatment” means the services and supports necessary to diagnose, stabilize, care for and treat a behavioral health condition.

(9) “Patient centered care” means care provided in a manner that:

(a) Is respectful of and responsive to a patient’s preferences, needs and values; and

(b) Ensures that all clinical decisions are guided by the patient’s values.

(10) “Peer delivered services” means an array of support services provided by agencies or community-based organizations to patients or family members of patients:

(a) Using peer support specialists; and

(b) That are designed to support the needs of patients and their families.

(11) “Peer support specialist” means a Peer Wellness Specialist or a Peer Support Specialist, including Family Support Specialist and Youth Support Specialist, as defined in ORS 414.025 and 414.665 and certified under OAR 410-180-0310 to 410-180-0312.

(12) “Qualified mental health professional” means an individual meeting the minimum qualification criteria adopted by the Oregon Health Authority by rule for a qualified mental health professional.

(13) “Safety plan” means a written plan developed by a patient in collaboration with the patient’s lay caregiver, if any, as facilitated by a health care provider that identifies strategies for the patient or lay caregiver to use when the patient’s risk for suicide is elevated or following a suicide attempt.

(14) “Transition of care” means the process of transferring a patient from one provider or care setting to another provider or care setting.

(15) Coordination of Care and Case Management processes shall ensure coordination and management of services when indicated by a behavioral health assessment conducted by a behavioral health clinician, including, but not limited to:

(a) A best practices risk assessment and, if indicated, a safety plan and lethal means counseling;

(b) A determination of the patient’s clinical needs and recommendations, if within the scope of the provider’s practice, for medically appropriate treatment including but not limited to one or more of the following:

(A) Adjusting or prescribing medication;

(B) Therapeutic services;

(D) Peer delivered services.

(d) Recommendations as required or permitted under ORS 192.567, 441.054 and 441.051 to the patient, lay caregiver and health care provider.

(e) Informing the patient, lay caregiver and health care provider of the practitioners who can provide the recommended services and how to access the practitioners and other community-based resources.

(f) Explaining to the patient and the lay caregiver crisis stabilization planning and patient centered care and establishing a goal of convening a care team.

(g) Identifying a person to provide coordination of care who:

(A) Is part of a behavioral health home, as defined in ORS 414.025, a patient centered primary care home, as defined in ORS 414.025, or a patient centered medical home recognized by the National Committee for Quality Assurance;

(B) Is appropriately licensed or certified;

(D) When possible or requested, will meet personally with the patient and the lay caregiver.

(h) Creating with the patient and the lay caregiver a plan for the transition of care and sharing the plan with the patient’s health care providers and care team.

History

Statutory/Other Authority: ORS 731.244 & ORS 743A.168
Statutes/Other Implemented: ORS 743A.168
ID 8-2022, amend filed 12/22/2022, effective 01/01/2023
ID 3-2018, adopt filed 02/26/2018, effective 03/01/2018

Or. Admin. R. 836-053-1404 Definitions; Noncontracting Providers; Co-Morbidity Disorders

(1) As used in ORS 743A.168 and OAR Chapter 836:

(a) “Behavioral health condition” means any mental or substance use disorder covered by diagnostic categories listed in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, Text Revision (DSM-5-TR), the International Classification of Diseases, 10th Revision (ICD-10), or the International Classification of Diseases, 11th Revision (ICD-11).

(b) “Generally accepted standards of care” means;

(A) Standards of care and clinical practice guidelines that:

(i) Are generally recognized by health care providers practicing in relevant clinical specialties; and

(ii) Are based on valid, evidence-based sources; and

(B) Products and services that:

(i) Address the specific needs of a patient for the purpose of screening for, preventing, diagnosing, managing or treating an illness, injury or condition or symptoms of an illness, injury or condition;

(ii) Are clinically appropriate in terms of type, frequency, extent, site and duration; and

(iii) Are not primarily for the economic benefit of an insurer or payer or for the convenience of a patient, treating physician or other health care provider.

(A) Peer-reviewed scientific studies and medical literature;

(B) Recommendations of nonprofit health care provider professional associations, and;

(2) A non-contracting provider must cooperate with a health insurer's requirements for review of treatment in ORS 743A.168(2) and (3) to the same extent as a contracting provider in order to be eligible for reimbursement.

(3) The exception of a disorder in the definition of "behavioral health condition” in section (1) of this rule does not include or extend to a co-morbidity disorder accompanying the excepted disorder.

History

Statutory/Other Authority: ORS 731.244 & ORS 743A.168
Statutes/Other Implemented: ORS 743A.168
ID 8-2022, amend filed 12/22/2022, effective 01/01/2023
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16
ID 3-2015, f. & cert. ef. 5-12-15
ID 19-2014(Temp), f. & cert. ef. 11-14-14 thru 5-12-15
ID 3-2013, f. 6-10-13, cert. ef. 6-17-13
ID 19-2012(Temp), f. & cert. ef. 12-20-12 thru 6-17-13
ID 13-2006, f. 7-14-06 cert. ef. 1-1-07

Or. Admin. R. 836-053-1405 General Requirements for Coverage of Behavioral Health Conditions

(1) A group health insurance policy or an individual health benefit plan issued or renewed in this state shall provide coverage or reimbursement for medically necessary treatment of behavioral health conditions, including but not limited to prescription drugs, at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement for medically necessary treatment for medical conditions.

(a) The coverage may be made subject to provisions of the policy that apply to other benefits under the policy, including but not limited to provisions relating to copayments, deductibles and coinsurance. Copayments, deductibles and coinsurance for behavioral health treatment may not be greater than those under the policy for medical conditions.

(b) The coverage of behavioral health treatment may not be made subject to treatment limitations, limits on total payments for treatment, limits on duration of treatment or financial requirements unless similar limitations or requirements are imposed on coverage of medical conditions.

(c) The parity requirements in subsections (1)(a) and (b) must comply with the “predominant” and “substantially all” tests in the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, 29 U.S.C. 1185a and implementing regulations at 45 CFR 146.136 and 45 CFR 147.160.

(d) If annual or lifetime limits apply for treatment of behavioral health conditions the limits must comply with the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, 29 U.S.C. 1185a and implementing regulations at 45 CFR 146.136 and 147.160.

(e) Classification of prescription drugs into open, closed, or tiered drug benefit formularies, for drugs intended to treat behavioral health conditions must be by the same process as drug selection for formulary status applied for drugs intended to treat medical conditions, regardless of whether such drugs are intended to treat behavioral health conditions or medical conditions.

(f) The coverage of behavioral health treatment may not limit coverage for treatment of pervasive or chronic behavioral health conditions to short-term or acute behavioral health treatment at any level of care or placement.

(g) The coverage of behavioral health treatment must include clinically indicated outpatient coverage including follow-up in-home services or other outpatient services. The policy may limit coverage only if clinically indicated under any medical necessity, utilization or other clinical review conducted for the diagnosis, prevention or treatment of behavioral health conditions or relating to service intensity, level of care placement, continued stay or discharge. Utilization and clinical review policies and procedures must meet the requirements of OAR 836-053-1405(9), (10), (11), and (12), as well as comply with the entire definition of “generally accepted standards of care” in OAR 836-053-1404.

(2) A group health insurer or an issuer of an individual health benefit plan issued of renewed in this state must use the same methodology to set reimbursement rates paid to behavioral health treatment providers that the group health insurer or issuer of an individual health benefit plan uses to set reimbursement rates for medical and surgical treatment providers.

(3) A group health insurer or an issuer of an individual health benefit plan issued or renewed in this state must update the methodology and rates for reimbursing behavioral health treatment providers in a manner equivalent to the manner in which the group health insurer or issuer of an individual health benefit plan updates the methodology and rates for reimbursing medical and surgical treatment providers, unless otherwise required by federal law.

(4) A group health insurance policy or an individual health benefit plan issued or renewed in this state must contain a single definition of medical necessity that applies uniformly to all medical and behavioral health conditions.

(5) A group health insurance policy or an individual health benefit plan in this state shall have policies and procedures in place to ensure uniform application of the policy's definition of medical necessity to all medical and behavioral health conditions.

(6) Subject to subsection (5) of ORS 743A.168 and OAR 836-053-1405(7) through (12) coverage for expenses arising from treatment for behavioral health conditions may be managed through common methods designed to limit eligible expenses to treatment that is medically necessary only if similar limitations or requirements are imposed on coverage for expenses arising from a medical condition. Common methods include, but are not limited to, selectively contracted panels, health policy benefit differential designs, preadmission screening, prior authorization of services, case management, utilization review, or other mechanisms designed to limit eligible expenses to treatment that is medically necessary.

(7) Any medical necessity, utilization or other clinical review, not related to level of care placement decisions, must be based on:

(a) The current generally accepted standards of care; or

(b) Treatment criteria guidelines developed by the nonprofit professional association for the relevant clinical specialty.

(8) For medical necessity, utilization or other clinical review not related to level of care placement decisions, other criteria may be utilized as long as it is based on the current generally accepted standards of care including valid, evidence-based sources.

(9) Any medical necessity, utilization or other clinical review relating to level of care placement decisions must be based on:

(a) The current generally accepted standards of care; and

(b) The version available in 2021 of the levels of care placement criteria developed by the nonprofit professional association for the relevant clinical specialty.

(10) In instances where there are no guidelines or criteria from the nonprofit professional association for the relevant clinical specialty, other criteria may be utilized if the criteria are based on the generally accepted standards of care, and may include advancements in technology of types of care. Other criteria utilized must be made available to the department upon request.

(11) For purposes of medical necessity, utilization or other clinical review relating to level of care placement decisions the following guidelines or criteria will be considered compliant:

(a) For a primary substance use disorder diagnosis in adolescents and adults, the ASAM Criteria: Treatment Criteria for Addictive, Substance-Related, and Co-Occurring Conditions, 3rd Edition (2013), by the American Society of Addiction Medicine (https://www.asam.org/asam-criteria).

(b) For a primary mental health diagnosis in adults nineteen (19) years of age and older, the Level of Care Utilization System for Psychiatric and Addiction Services (LOCUS), Adult Version 20, by the American Association American Association for Community Psychiatry (https://sites.google.com/view/aacp123/resources/locus).

(c) For a primary mental health diagnosis in children six (6) to eighteen (18) years of age, the Child and Adolescent Level of Care/Service Intensity Utilization System (CALOCUS-CASII) by the American Association for Community Psychiatry and the American Academy of Child and Adolescent Psychiatry (https://www.aacap.org/aacap/Member_Resources/Practice_Information/CALOCUS_CASII.aspx).

(d) For a primary mental health diagnosis in children five (5) years of age and younger, Early Child Service Intensity Instrument (ECSII) by the American Academy of Child and Adolescent Psychiatry (https://www.aacap.org/aacap/Member_Resources/Practice_Information/ECSII.aspx).

(12) All level of care placement decisions must be authorized at the level of care consistent with the insured’s score or assessment using generally accepted standards of care and the relevant level of care placement criteria and guidelines developed by the nonprofit professional association for the relevant clinical specialty. If the level of care indicated by the criteria and guidelines is not available, the insurer shall authorize the next highest level of care based on the generally accepted standards of care. If there is disagreement about the appropriate level of care, the insurer shall provide to the provider of the service the full details of the insurer’s scoring or assessment using the relevant level of care placement criteria and guidelines including information on the generally accepted standards of care or other criteria used to make the level of care decision.

(13) A group health insurer or an individual health benefit plan shall provide, at no cost:

(a) A one-time formal education program for the insurer and insurer staff who conduct medical necessity, utilization and other clinical reviews on the proper use of such reviews. The training must be presented by nonprofit clinical specialty associations or other entities authorized by the department.

(b) Medical necessity, utilization or other clinical review criteria used by the insurer, and any education or training materials regarding medical necessity, utilization or other clinical review criteria to stakeholders, including participating providers and enrollees.

(c) Nothing in this section prohibits a group health insurer or an issuer of an individual health benefit plan from requiring providers to bill in accordance with generally accepted coding standards including the National Correct Coding Initiative.

(14) A group health insurer or an individual health benefit plan may not require providers to bill using a specific billing code or to restrict the reimbursement paid for particular billing codes other than on the basis of medical necessity.

(15) This rule does not:

(a) Prohibit an insured from receiving behavioral health treatment from an out-of-network provider or prevent an out-of-network behavioral health provider from billing the insured for any unreimbursed cost of treatment, to the extent permitted under state and federal law.

(b) Prohibit the use of value-based payment methods, including global budgets or capitated, bundled, risk-based or other value-based payment methods.

(c) Require that any value-based payment method reimburse behavioral health services based on an equivalent fee-for-service rate.

(16) Nothing in this rule prevents a group health insurance policy or an individual health benefit plan from providing coverage for conditions or disorders excepted under the definition of "behavioral health condition" in OAR 836-053-1404.

(17) The director shall review OAR 836-053-1404 to 836-053-1408 and any other materials every two years to determine whether the requirements set forth in the rules are uniformly applied to all medical and behavioral health conditions.

History

Statutory/Other Authority: ORS 731.244, ORS 743A.168 & Or Laws 2021, ch 629
Statutes/Other Implemented: ORS 743A.168 & Or Laws 2021, ch 629
ID 8-2022, amend filed 12/22/2022, effective 01/01/2023
ID 5-2016, f. & cert. ef. 4-26-16
ID 14-2015(Temp), f. & cert. ef. 12-17-15 thru 5-1-16
ID 3-2013, f. 6-10-13, cert. ef. 6-17-13
ID 19-2012(Temp), f. & cert. ef. 12-20-12 thru 6-17-13
ID 13-2006, f. 7-14-06 cert. ef. 1-1-07

Or. Admin. R. 836-053-1407 Prohibited Exclusions

(1) An insurer may not deny benefits for a medically necessary treatment or service for a behavioral health condition based solely upon:

(a) The enrollee’s interruption of or failure to complete a prior course of treatment;

(b) The insurer’s categorical exclusion of such treatment or service when applied to a class of behavioral health conditions; or

(c) The fact that a court ordered the enrollee to receive or obtain the treatment or service for a behavioral health condition, unless otherwise allowed by law.

(2) Nothing in this section:

(a) Requires coverage of a treatment or service that is or may be specifically excluded from coverage under state law.

(b) Prohibits an insurer from including a provision in a contract related to the insurer’s general responsibility to pay for any service under the plan such as an exclusion for third party liability.

(c) Requires an insurer to pay for services provided to an enrollee by a school or halfway house or received as part of an educational or training program. However, an insurer may be required to provide coverage of treatment or services related to the enrollee’s education that are provided by a provider and that are included in a medically necessary treatment plan.

History

Statutory/Other Authority: ORS 731.244 & ORS 743A.168
Statutes/Other Implemented: ORS 743A.168
ID 8-2022, amend filed 12/22/2022, effective 01/01/2023
ID 3-2015, f. & cert. ef. 5-12-15

Or. Admin. R. 836-053-1408 Required Disclosures

(1) Insurers must provide an enrollee or an enrollee’s authorized representative reasonable access to and copies of all documents, records, and other information relevant to an enrollee’s claim or request for coverage.

(2) Insurers must provide the criteria, guidelines, processes, standards and other factors used to conduct medical necessity, utilization or other clinical reviews for behavioral health conditions. This information must be made available free of charge by the insurer to any current or potential enrollee, beneficiary, or contracting provider upon request, within a reasonable time and in a manner that provides reasonable access to the requestor.

(3) Compliance with these disclosure requirements is not determinative of compliance with any other provisions of applicable federal or state law.

History

Statutory/Other Authority: ORS 731.244 & ORS 743A.168
Statutes/Other Implemented: ORS 743A.168
ID 8-2022, amend filed 12/22/2022, effective 01/01/2023
ID 3-2015, f. & cert. ef. 5-12-15

Or. Admin. R. 836-053-1409 Definitions

(1) As used in ORS 743B.281 and 743B.282, “provider” means a person licensed, certified or otherwise authorized or permitted by laws of this state to administer medical or mental health services in the practice of a profession.

(2) As used in ORS 743B.282, for the purpose of an insurer’s procedure for providing an estimate of an enrollee’s costs for a covered out-of-network procedure or service:

(a) The “allowable charge” for a covered procedure or service is the estimated amount established under the insurance policy, whether expressed as an “allowable charge,” “allowable expense,” “eligible fee” or other term denoting the amount on which the benefit is calculated.

(b) The “billed charge” is the estimated amount charged by a provider for performance of a procedure or service.

History

Statutory/Other Authority: ORS 731.244 & 743B.285
Statutes/Other Implemented: ORS 743B.281 & 743B.282
Renumbered from 836-053-1406, ID 5-2016, f. & cert. ef. 4-26-16
ID 16-2008, f. & cert. ef. 9-24-08

Or. Admin. R. 836-053-1410 Procedures

(1) An insurer must allocate covered procedures or services to the categories established in ORS 743.874(3) and 743.876(3) in a manner that will enable the insurer to provide a reasonable estimate of an enrollee’s share of costs for a procedure or service. An insurer must determine its allocation according to its Oregon block of business at least once every 12 months to ensure that the procedures and services are currently the most common procedures in the categories.

(2) When an insurer provides a combined estimate for two or more procedures or services, the insurer must apply its standard method of payment to arrive at the combined estimate or other payment method that will achieve an accurate estimate. With the estimate provided under this section, he insurer must disclose to the enrollee that the estimate includes the costs of two or more procedures or services.

(3) With any estimate, an insurer must disclose whether the estimate applies only to those costs specifically relating to the procedure or service, such as is given in commonly used procedure codes, or applies to an episode of care that includes the procedure or service and its related costs.

(4) As required by the director, an insurer must file the following information for the purpose of assessing the effect of the disclosure requirements in ORS 743.874 and 743.876:

(a) The number of requests for estimates under ORS 743.874 and 743.876 received by the insurer in a calendar year; and

(b) Of the requests in paragraph (a) of this subsection, the number of requests for in-network procedures and services and the number of requests for out-of-network procedures and services.

History

Statutory/Other Authority: ORS 731.244 & 743.893
Statutes/Other Implemented: ORS 743.874, 743.876 & 743.878
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 16-2008, f. & cert. ef. 9-24-08

Or. Admin. R. 836-053-1415 Instructions

(1) An insurer must make available to enrollees detailed instructions by telephone and Internet for obtaining estimates and benefit information under ORS 743.874 and 743.876. At a minimum, the instructions must:

(a) Specify the information needed by the insurer to provide the estimate, including but not limited to information for identifying the procedure or service and the provider;

(b) Describe how an enrollee may obtain an estimate and find benefit information for an in-network procedure, and inform the enrollee that an estimate is not required by law to be provided for a procedure or service that is not included in the insurer’s categories; and

(c) Provide a general explanation for obtaining an estimate for an out-of-network procedure or service and specify the information needed for the most accurate estimates.

(2) The instructions described in section (1) of this rule may include a statement that the accuracy of an estimate may depend on the specificity and accuracy of the information provided by the enrollee.

History

Statutory/Other Authority: ORS 731.244 & 743.893
Statutes/Other Implemented: ORS 743.874 & 743.876
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 16-2008, f. & cert. ef. 9-24-08

Or. Admin. R. 836-053-1420 Purpose and statutory authority

The purpose of OAR 836-053-1420 to 836-053-1430 is to establish the form and manner for carriers offering individual and group health benefit plans to report on behavioral health benefits.

History

Statutory/Other Authority: Or Laws 2021, ch 629
Statutes/Other Implemented: Or Laws 2021, ch 629
ID 1-2022, adopt filed 02/11/2022, effective 02/15/2022

Or. Admin. R. 836-053-1425 Definitions for behavioral health benefits reporting

As used in these rules:

(1) “Behavioral health benefits” means insurance coverage of mental health treatment and services and substance use disorder treatment and services.

(2) “Geographic region” means the regions identified as the specific geographic divisions for Oregon’s individual and small group market as required by OAR 836-053-0465.

(3) “Incentive payment” means any compensation arrangement, including but not limited to coordination fees, withholds, bonuses, capitation, or any other compensation, to pay a provider or provider group directly or indirectly.

(4) “Median maximum allowable reimbursement rate” means the median of all maximum allowable reimbursement rates, minus incentive payments, paid for each billing code for each provider type during a calendar year.

(5) “Partial denial” means the denial and non-reimbursement of portions of a medical claim submitted for services or supplies provided to a covered enrollee as specified in the plan documents.

(6) “Time-based office visit” means an in-person office or telehealth visit between a health care provider and a patient in specific increments as determined by the relevant CPT billing code.

History

Statutory/Other Authority: Or Laws 2021, ch 629
Statutes/Other Implemented: Or Laws 2021, ch 629
ID 1-2022, adopt filed 02/11/2022, effective 02/15/2022

Or. Admin. R. 836-053-1430 Form and Manner for Behavioral Health Benefits Reporting

(1) An insurer offering individual or group health benefit plans must submit its annual report for behavioral health benefits no later than March 1 of each year.

(2) General requirements for reporting and submitting information on behavioral health benefits include, submitting information from the previous calendar year in an electronic format specified by the department that adheres to standards set forth on the department’s website.

(3) Beginning March 1, 2026, annual reporting on behavioral health benefits shall include the following information submitted in accordance with standards posted on the department’s website and in compliance with federal reporting requirements specified in 42 U.S.C. 300gg-26(a)(8)(A), 29 U.S.C. 1185a(a)(8)(A), and 26 U.S.C. 9812(a)(8)(A):

(a) Plan or coverage terms or other relevant terms regarding the nonquantitative treatment limitations and a clear description of all mental health or substance use disorder and medical or surgical benefits to which each such term applies in each respective benefits classification.

(b) Factors used to determine if nonquantitative treatment limitations will apply to mental health or substance use disorder benefits and medical or surgical benefits.

(c) Evidentiary standards used for the factors identified in paragraph B of this subsection, when applicable, provided that every factor is defined, and any other source or evidence relied upon to design and apply the nonquantitative treatment limitations to mental health or substance use disorder benefits and medical or surgical benefits.

(d) The comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the nonquantitative treatment limitations to mental health or substance use disorder benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the nonquantitative treatment limitations to medical or surgical benefits in the benefits classification.

(e) The specific findings and conclusions reached by the insurer with respect to the health insurance coverage, including any results of the analyses described in paragraphs A to D of this subsection that indicate that the plan or coverage is or is not in compliance with ORS 743B.427.

(f) Denial information for all denials (including full or partial denials) on the:

(A) Number of denials of behavioral health benefits and medical and surgical benefits;

(B) Percentage of denials that were appealed;

(D) Percentage of appeals that overturned the denial.

(g) Percentage of claims paid to in-network providers and out-of-network providers for behavioral health benefits and medical and surgical benefits. This includes any partial claims paid to providers for behavioral health benefits and medical and surgical benefits.

(h) The median maximum allowable reimbursement rate for each time-based office visit CPT billing code as specified on the department’s website and in accordance with Oregon Laws 2025, chapter 599, section 1.

(A) Median maximum allowable reimbursement rates will include the range and median absolute deviation for in-network and out-of-network providers by each time-based office visit billing code. This should include a description as to whether these rates follow a normal distribution or if there are any notable differences in distribution.

(B) Provider types for behavioral health and medical and surgical will be reported according to the groupings identified on the department’s website.

(C) A description of how incentive payments were factored into the calculation of the median maximum allowable reimbursement rate.

(i) Time-based office visit reimbursement rates must be reported as the median rate by each geographic region in the state for the health care providers specified in Oregon Laws 2025, chapter 599, section 1(3)(i and j).

(A) Time-based reimbursement rate information will be grouped by CPT billing code specifying the amount of time (i.e., 30, 45, or 60 minutes). CPT billing codes will be identified on the department’s website.

(B) Calculation of the percentage of the Medicare rate of reimbursement should compare the Medicare rate to the median maximum allowable reimbursement rate for the CPT billing code by provider type.

(j) Descriptions and documentation on the policies, procedures, and other efforts to maintain compliance with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110343) and ORS 743A.168, and rules adopted thereunder.

(k) Other data and information to demonstrate compliance with state and federal mental health parity requirements will include reporting on:

(A) Telehealth claims including:

(i) Number of telehealth claims for behavioral health and medical and surgical.

(ii) Any differences in the median maximum allowable reimbursement rate for telehealth claim related to care provided by a behavioral health provider or a medical or surgical provider.

(iii) Other relevant information or differences in telehealth policies and procedures between behavioral health and medical and surgical benefits.

(B) Compliance with ORS 743A.168 including:

(i) Update all behavioral health plan coverage documents and policies to reflect coverage requirements specified in ORS 743A.168(2)(c).

(ii) Summary of how the insurer’s network of behavioral health providers meets the standards in ORS 743B.505 including:

(I) Whether providers with no claims experience are included in the analysis of the insurer’s network and the ratio of these providers to providers with claims experience.

(II) Steps taken by the insurer to provide a diverse network of providers to their enrollees evaluated by components such as geographic area, spoken language, and cultural competency.

(iii) Criteria, frequency, and the methodology used to set reimbursement rates for behavioral health providers and medical and surgical providers. Any notable differences in methodology should be reported.

(iv) Summary of the clinical and evidence-based sources used to determine “generally accepted standards of care” as defined in ORS 743A.168.

(v) Summary of the criteria and guidelines used to make level of care placement decisions and process for updating the criteria and guidelines.

(C) Any additional data or information the department reasonably determines is necessary to assess compliance with state and federal behavioral health parity requirements, consistent with the authority granted under Oregon Laws 2025, chapter 599, section 1(3)(L).

(4) All information submitted to the department under this rule is confidential and not subject to public disclosure, as provided in ORS 705.137.

History

Statutory/Other Authority: ORS 731.244, ORS 743B.427 & Or Laws 2025, ch 599
Statutes/Other Implemented: ORS 743B.427 & Or Laws 2025, ch 599
ID 11-2025, amend filed 11/20/2025, effective 01/01/2026
ID 1-2022, adopt filed 02/11/2022, effective 02/15/2022

Or. Admin. R. 836-053-1500 Purpose; Statutory Authority; Applicability

(1) OAR 836-053-1500 to 836-053-1510 are adopted for the purpose of implementing sections 1 to 4, chapter 575, Oregon Laws 2015 and section 7, chapter 26, Oregon Laws 2016.

(2) The requirements set forth in OAR 836-053-1500 to 836-053-1510 apply to prominent carriers.

History

Statutory/Other Authority: ORS 731.244; sec 1 - 4, ch 575, OLs 2015, sec 7, ch 26 & OL 2016
Statutes/Other Implemented: Sections 1 & 3, ch. 575, OL 2015, sec 7, ch. 26 & OL 2016
ID 4-2016, f. & cert. ef. 4-8-16
ID 13-2015(Temp), f. & cert. ef. 10-20-15 thru 4-8-16

Or. Admin. R. 836-053-1505 Definitions for OAR 836-053-1500 to 836-053-1510

As used in OAR 836-053-1500 to 836-053-1510:

(1) The definitions set forth in Section 2, chapter 575, Oregon Laws 2015 apply to the use of those terms in these rules.

(2) “Prominent carrier” means:

(a) A carrier with annual premium income of $200 million or more in direct health premiums written in Oregon and is not also licensed as a Coordinated Care Organization;

(b) The Public Employees’ Benefit Board; and

(3) “Non-claims based primary care expenditures” means resources given to a primary care provider or practice for the following services or arrangements:

(a) Capitation or salaried arrangements with primary care providers or practices not billed or captured through claims;

(b) Risk-based reconciliation for arrangements with primary care providers or practices not billed or captured through claims;

(c) Payments to Patient-Centered Primary Care Homes or Patient-Centered Medical Homes based upon that recognition or payments for participation in proprietary or other multi-payer medical home initiatives;

(d) Retrospective incentive payments to primary care providers or practices based on performance aimed at decreasing cost or improving value for a defined population of patients;

(e) Prospective incentive payments to primary care providers or practices aimed at developing capacity for improving care for a defined population of patients;

(f) Payments for Health Information Technology structural changes at a primary care practice such as electronic records and data reporting capacity from those records; or

(g) Workforce expenses including payments or expenses for supplemental staff or supplemental activities integrated into the primary care practice (i.e. practice coaches, patient educators, patient navigators, nurse care managers, etc.).

(4) “Non-claims based total health care expenditures” means resources given to a provider or practice for the following services or arrangements:

(a) Capitation or salaried arrangements with providers or practices not billed or captured through claims;

(b) Risk-based reconciliation for arrangements with providers or practices not billed or captured through claims;

(c) Payments to Patient-Centered Primary Care Homes, Patient-Centered Medical Homes, or Patient-Centered Specialty Practices based upon that recognition or payments for participation in proprietary or other multi-payer medical home or specialty care initiatives;

(d) Retrospective incentive payments to providers or practices based on performance aimed at decreasing cost or improving value for a defined population of patients;

(e) Prospective incentive payments to providers or practices aimed at developing capacity for improving care for a defined population of patients;

(f) Payments for Health Information Technology structural changes at a practice such as electronic records and data reporting capacity from those records; or

(g) Workforce expenses including payments or expenses for supplemental staff or supplemental activities integrated into the practice (i.e. practice coaches, patient educators, patient navigators, nurse care managers, etc.).

(5) “Patient-Centered Medical Home” means a practice or provider who has been recognized as such by the National Committee for Quality Assurance.

(6) “Patient-Centered Primary Care Home” means a health care team or clinic as defined in ORS 414.655, meets the standards pursuant to OAR 409-055-0040, and has been recognized through the process pursuant to OAR 409-055-0040.

(7) “Patient-Centered Specialty Practice” means a practice or provider who has been recognized as such by the National Committee for Quality Assurance.

(8) “Practice” means an individual, facility, institution, corporate entity, or other organization which provides direct health care services or items, also termed a performing provider, or bills, obligates and receives reimbursement on behalf of a performing provider of services, also termed a billing provider. The term provider refers to both performing providers and billing providers unless otherwise specified.

(9) “Primary care” means family medicine, general internal medicine, naturopathic medicine, obstetrics and gynecology, pediatrics or general psychiatry.

(10) “Primary care provider” means:

(a) A physician, naturopath, nurse practitioner, physician associate or other health professional licensed or certified in this state, whose clinical practice is in the area of primary care.

(b) A health care team or clinic that has been certified by the Oregon Health Authority as a Patient-Centered Primary Care Home.

History

Statutory/Other Authority: ORS 731.244 & 2015 OL Ch. 575 Sec. 1
Statutes/Other Implemented: 2015 OL Ch. 575 Sec. 1 & 3
ID 5-2024, minor correction filed 06/27/2024, effective 06/27/2024
ID 4-2016, f. & cert. ef. 4-8-16
ID 13-2015(Temp), f. & cert. ef. 10-20-15 thru 4-8-16

Or. Admin. R. 836-053-1510 Prominent Carrier Reporting Requirements

(1) Not later than October 1 of each year from 2016 through 2018, each prominent carrier shall submit to the Department of Consumer and Business Services all non-claims based primary care expenditures for the prior calendar year using the approved file layout and format set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov.

(2) Each prominent carrier shall submit to department all non-claims based total health care expenditures for the prior calendar year using the approved file layout and format set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov.

(3) Each category included in the approved file format is mutually exclusive; therefore, expenditures shall only be accounted for in one category.

(4) All data shall be submitted to the department no later than October 1 of each year that the prominent carrier is required to report under section (1) of this rule.

(5) Claims-based primary care and total health care expenditures will be calculated for each prominent carrier by the Oregon Health Authority using data from the All-Payer All-Claims Database.

(6) Expenditures for services or activities outside the primary care setting, regardless of a primary care capacity building intent, are not considered primary care expenditures for purposes of this report.

History

Statutory/Other Authority: ORS 731.244, sec. 7, ch. 26, OL 2016 & 2015 OL Ch. 575 Sec. 1 & 3
Statutes/Other Implemented: 2015 OL Ch. 575 Sec. 1 & 3, sec. 7, ch. 26 & OL 2016
ID 27-2023, minor correction filed 07/03/2023, effective 07/03/2023
ID 4-2016, f. & cert. ef. 4-8-16
ID 13-2015(Temp), f. & cert. ef. 10-20-15 thru 4-8-16

Or. Admin. R. 836-053-1520 Purpose; Statutory Authority; Applicability

The requirements set out in OAR 836-053-1520 to 836-053-1530 apply to insurers offering health benefit plans, as defined in ORS 743B.005, that reimburse the costs of services provided by a national primary care medical home payment model, conducted by the Center for Medicare and Medicaid Innovation in accordance with 42 U.S.C. 1315a, that includes performance incentive payments for primary care.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: 2017 Or Law ch 489 §7
ID 4-2018, adopt filed 03/09/2018, effective 03/09/2018

Or. Admin. R. 836-053-1525 Definitions

The following definitions apply to OAR 836-053-1520 to 836-053-1530:

(1) “APAC Data Reporting Program” means the all payer all claims data reporting program pursuant to ORS 442.464, 442.466, and 442.993.

(2) “APM” means alternative payment methodologies.

(3) “Annual supplemental provider level APM Summary report” means a data set composed of total and primary care-related dollars disbursed, by payment arrangement and line of business in the APAC Data Reporting Program pursuant to OAR 409-025-0120(8) and OAR 409-025-0120(9).

(4) “Comprehensive Primary Care Plus (CPC+)” means a national primary care medical home payment model, conducted by the Center for Medicare and Medicaid Innovation in accordance with 42 U.S.C. 1315a, that includes performance-based incentive payments for primary care.

(5) “Patient-Centered Primary Care Home (PCPCH)” means a health care team or clinic, defined in ORS 414.655, that meets the standards and has been recognized under OAR 409-055-0040.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Or Law ch 489 §7
ID 4-2018, adopt filed 03/09/2018, effective 03/09/2018

Or. Admin. R. 836-053-1530 Reporting Requirements

(1) No later than September 30 of each year beginning September 30, 2019, an insurer participating in CPC+ shall submit to the Department of Consumer and Business Services the Annual Supplemental Provider Level APM Summary report using the APAC Data Reporting Program for the prior calendar year.

(2) No later than September 30 of each year beginning September 30, 2019, an insurer participating in CPC+ shall submit to the Department of Consumer and Business Services a PCPCH APM Reporting Form (PCPCH-APM-1) for the prior calendar year providing the following information:

(a) The number of PCPCHs in their network;

(b) The number of PCPCHs in their network with an APM in their contract;

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Or Law ch 489 §7
ID 4-2018, adopt filed 03/09/2018, effective 03/09/2018

Or. Admin. R. 836-053-1630 Drug Price Transparency Insurer Reporting

(1) For the purposes of this rule, “insurer” means a licensed insurance company, health care services contractor, or health maintenance organization that issues health benefit plans as defined in ORS 743B.005(16) in this state.

(2) No later than May 1 of each year, an insurer must report to the department the information described in ORS 743.025(2) in the form and manner prescribed by the department. For drugs reimbursed by the insurer under both pharmacy and medical benefits in health benefit plans during the prior calendar year, the reporting must include all of the following:

(a) The 25 most frequently prescribed drugs.

(b) The 25 most costly drugs. In determining this list, the insurer must consider total annual spending, including the net impact of any rebates or other price concessions if applicable.

(c) The 25 drugs that have caused the greatest increase in total plan spending from one year to the next. In determining this list, the insurer must consider the net impact on total plan spending of any rebates or other price concessions if applicable.

(d) The impact of the costs of prescription drugs on premium rates, on a per member per month basis, including the net impact of any rebates or other price concessions if applicable.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.025
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 3-2024, adopt filed 04/29/2024, effective 05/01/2024

Division 54 INSURANCE POLICIES

Or. Admin. R. 836-054-0000 Election of Lower Limits for Uninsured Motorist Coverage

(1) This rule is adopted under the authority of ORS 731.244 for the purpose of implementing ORS 742.502.

(2) This rule establishes in Exhibit 1 an example of the form of statement electing lower limits for uninsured motorist coverage in a motor vehicle liability insurance policy that may be used to comply with the requirement in ORS 742.502 for a statement of election. A form used by an insurer or insurance producer that is in substantial compliance with this rule is considered to be approved by the department. A form is in substantial compliance if the for contains all of the following elements in any order: An example of a form that may be used by an insurer or insurance producer to comply with this rule is posted on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov. If an insurer or insurance producer uses this form, or any other selection form that has been approved by the department, the form is considered to be approved by the department. Any other form electing lower limits for uninsured motorist coverage in a motor vehicle liability insurance policy must be approved by the department and must contain all of the following elements in any order:

(a) An acknowledgement by the named insured that the named insured was offered uninsured motorist coverage with the limits equal to those for bodily injury liability;

(b) A brief summary, which is not part of the insurance contract, of uninsured and underinsured motorist coverages;

(c) A statement of the price for coverage per insured vehicle with limits equal to the named insured's bodily injury liability limits and the price for coverage per insured vehicle with the lower limits requested by the named insured;

(d) A statement to the effect that the statement shall remain in force until rescinded in writing by a named insured or until such time as motor vehicle bodily injury liability limits are changed; and

(e) Provision for signature of a named insured, to be made within 60 days of the time the named insured makes the election, and for the date of signature.

(3) Regarding the summary required in subsection (2)(b) of this rule, if an insurer issuing a policy that refers only to uninsured motorist coverage because uninsured motorist coverage under the policy includes underinsured motorist coverage meeting statutory requirements, the insurer need not use the term "underinsured motorist coverage."

(4) The statement required under subsection (2)(c) of this rule may state the term of coverage to which the prices relate.

(5) The form may include one or both of the following statements in addition to the items required under section (2) of this rule:

(a) A statement to the effect that the form is required by Oregon law or specifically by ORS 742.502; and

(b) A statement to the effect that limits for uninsured motorist coverage cannot be less than the amounts required to comply with financial responsibility requirements under ORS 806.070.

History

Statutory/Other Authority: ORS 731.244 & 742.502
Statutes/Other Implemented: ORS 742.502(2) & 742.504
ID 22-2023, minor correction filed 06/27/2023, effective 06/27/2023
ID 15-2015, f. 12-29-15, cert. ef. 1-1-16
ID 7-2015(Temp), f. & cert. ef. 9-14-15 thru 12-31-15
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-1994, f. & cert. ef. 5-9-94

Or. Admin. R. 836-054-0020 Timely Notice of Denial of Charges to Provider

(1) This rule is adopted under the authority of ORS 731.244 for the purpose of implementing ORS 742.524.

(2) When an insurer is required to provide notice of a denial of charges within 60 days of receipt, it shall be presumed that the provider has received the denial within three days after it is served by mail.

(3) If an insurer serves the denial electronically or by fax, it shall be presumed that the provider has received it on the day it is transmitted.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.524
ID 15-2015, f. 12-29-15, cert. ef. 1-1-16

Or. Admin. R. 836-054-0110 Statutory Authority; Purpose

(1) OAR 836-054-0110 to 836-054-0130 are adopted pursuant to the general rulemaking authority of the director of the Department of Consumer and Business Services in ORS 731.244 and the specific authority in ORS 742.075.

(2) OAR 836-054-0110 to 836-054-0130 only pertain to the obligation to provide notices under ORS 742.075 and should not be interpreted to alter, replace or remove any other requirements specified in the Insurance Code or OAR Chapter 836.

(3) ORS 742.075 requires insurers to give a clear and reasonable written explanation for any increase in the amount of premium the insured must pay upon renewing a personal auto, home, or dwelling policy when a written request from an insured is received. The purpose of OAR 836-054-0110 to 836-054-0130 is to clarify by rule the requirements of ORS 742.075(3), (6), and (8).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.075
ID 2-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-054-0115 Definitions

As used in OAR 836-054-0110 to 836-054-0130:

(1) “Qualified policy” has the meaning set forth in ORS 742.075.

(2) “Qualified insurer” means any insurer that offers a qualified policy and whose combined written premium of the qualifying lines is $1,000,000 or greater for any calendar year being reported.

(3) A factor “significantly contributes” to a policy premium increase from one policy term to the next if the portion of the policy premium increase attributable to the factor (a) exceeds 2% of the current policy premium, and (b) ranks in the highest four impacts, on a dollar increase basis, of all rating factors that contributed to the premium increase.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.075
ID 2-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-054-0120 Premium Change Explanation

(1) The clear and reasonable written explanation of a premium increase required under ORS 742.075 must identify and explain each factor that significantly contributed to the premium increase as defined in OAR 836-054-0115(3), subject to the following:

(a) The written explanation of the premium increase must identify and explain at least one factor, but not more than four factors, that significantly contributed to the premium increase, as defined in OAR 836-054-0115(3).

(b) If no individual factor significantly contributed to the premium increase, as defined in OAR 836-054-0115(3), then the insurer must provide a clear and reasonable written explanation to the insured that identifies and explains all factors and information specific to the insured that generally contributed to the premium increase.

(c) The written explanation of the premium increase may provide information to the insured about any additional factors that contributed in any way to the premium increase.

(2) If an insurer determines that all factors that contributed to an insured’s premium increase resulted from policy changes initiated by the insured with respect to policy coverage or premium amount, the insurer may respond to a premium increase notice request with information provided in a manner to be determined by the insurer that the increases were due to policy changes initiated by the insured.

(3) The clear and reasonable written explanation of a premium increase required under ORS 742.075 must contain:

(a) All information required under subsection (1) of this section;

(b) The date of the written explanation;

(d) The insured’s name, policy type, policy number, policy period, and effective date; and

(e) Information that instructs the insured how to contact the insurer if they have additional questions regarding the written explanation.

(4) An insurer may use the following format for the clear and reasonable written explanation of a premium increase required under ORS 742.075, or an insurer may submit for approval a notice that provides the information required under this section in a format that aligns with other documents that the insurer uses to communicate with their policyholders.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.075
ID 2-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-054-0125 Periodic Data Reporting

(1) Each qualified insurer must report to the department no later than April 30, 2028, and no later than April 30 of every other year thereafter, the following information grouped by zip code and calendar year, for each of the two preceding calendar years:

(a) The total number of renewal offers of qualified policies for which a policy renewal offer was made during the reporting calendar year where the renewal term premium was greater than the prior term premium.

(b) The total number of renewal offers of qualified policies for which the insurer received a written request for an explanation of a premium increase pursuant to ORS 742.075 and OAR 836-054-0110 to 836-054-0130.

(c) The percentage increase in premium for each qualified policy for which the insurer received a written request for an explanation of premium increase.

(d) Any other data the department prescribes.

(2) Qualified insurers shall submit report information from each of the two previous calendar years in the form and manner prescribed by the department as set forth on the department’s website at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.075
ID 2-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-054-0130 Form and Manner of Written Request

A written request for an explanation of a premium increase made pursuant to ORS 742.075 and OAR 836-054-0110 to 836-054-0130 must be made in the form and manner prescribed by this rule:

(1) The request must include the insured’s name, the insured’s address, and the policy number and policy type of the policy for which the request is made.

(2) The request must be printed, typewritten, or legibly handwritten.

(3) The request must clearly state the insured is requesting an explanation of why their policy premium is increasing at renewal.

(4) The request must be submitted by postal mail, email, hand delivery, or digitally through an insurer’s portal, if available.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.075
ID 2-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-054-0201 Statutory Authority and Purpose

OAR 836-054-0201 to 836-054-0210 are adopted pursuant to the general rulemaking authority of the Director of the Department of Consumer and Business Services to specify requirements for large deductible provisions of workers’ compensation insurance policies which may be approved according to ORS 742.001 to 742.007.

History

Statutory/Other Authority: ORS 731.244
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-054-0205 Definitions

As used in OAR 836-054-0201 to 836-054-0210:

(1) “Insurer” means any insurer authorized to write workers’ compensation insurance and includes the State Accident Insurance Fund Corporation.

(2) “Large Deductible” means a provision in a workers’ compensation policy, or added by endorsement thereto, which allows a policyholder to be financially responsible for claims incurred under the policy up to a percentage of premium, a stated amount per claim, or other limit specified in the provision in exchange for a prospective premium reduction.

(3) “Workers’ Compensation Insurance” means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapters 654 and 656, similar laws of the United States, or agreements between states.

(4) “Workers’ Compensation Premium Assessment” means the assessment imposed on insurers, self-insured employers, and self-insured employer groups by the Director of the Department of Consumer and Business Services pursuant to ORS 656.612.

History

Statutory/Other Authority: ORS 731.244
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-054-0210 Required Content of Large Deductible Provisions

An insurer which issues a workers' compensation insurance policy with a large deductible provision must file such provision with the Director for approval as required by ORS 742.003. The provision must satisfy the following requirements:

(1) A large deductible provision must clearly and prominently state that the insured employer must report all workers' compensation insurance claims to the insurer and the insurer retains responsibility to administer claims and to pay all costs and expenses.

(2) A large deductible provision must state that the insurer will delete the provision effective not more than ten (10) days following discovery that an insured employer has on three occasions within the policy period known of but not reported a workers' compensation insurance claim to the insurer or has on any occasion within the policy period made direct payment of claim costs. The provision may further state that the insurer will cancel the policy with notice pursuant to ORS 656.427 or that the insurer will delete the provision retroactively to the date of the offense with penalties stated in the provision. When a large deductible provision is deleted, the premium for any remaining portion of a policy term will be computed using the rating plans applied by the insurer to the policy prior to deductible credits except that any system of expense gradation applied by the insurer to similar policies must be used.

(3) A large deductible provision must specify that the basis for the Workers' Compensation Premium Assessment will be premium earned prior to any premium credits or modifications for the large deductible provision.

(4) A large deductible provision must specify that the basis for any assessments by the Plan Administrator for the Workers' Compensation Insurance Plan specified by OAR 836-043-0001 to 836-043-0090 will be premium earned prior to any premium credits or modifications for the large deductible provision.

(5) A large deductible provision must define explicitly which expenses, if any, will be billed to the employer in addition to direct claim costs and specify whether such expenses are subject to the deductible limits together with direct claim costs or will be billed in addition to deductible amounts.

(6) A large deductible provision must state that the premium credit percentage and amount for the large deductible will be recalculated after final premium audit based on actual premium or exposures and after any retrospective premium adjustments for retrospectively rated policies.

(7) A large deductible provision shall contain an offer for the insurer to provide occupational safety and health loss control consultative services as required by ORS 654.097.

(8) A large deductible provision shall contain minimum eligibility requirements of not less than $500,000 estimated country-wide annual premium prior to large deductible credits or premium credits based on premium size. The minimum deductible limit per claim for each injury or illness may not be less than $75,000. An aggregate limit for deductible amounts for all claims may be specified but may not be less than the deductible limit per claim.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.001 - 742.007
ID 11-2010, f. 5-4-10, cert. ef. 7-1-10
ID 4-1995, f. 7-21-95, cert. ef. 10-1-95

Or. Admin. R. 836-054-0300 Loan to Value

(1) A mortgage insurer may provide insurance with respect to an obligation that does not exceed, solely or in combination with liens existing at the time the insured loan is made, 105 percent of the fair market value of the securing real property at the time the loan is made if permitted by the insurer's domicile and if the obligation insured is secured by a mortgage, deed of trust or other instrument constituting a first lien or charge.

(2) A mortgage insurer may provide insurance with respect to an obligation that does not exceed, solely or in combination with liens existing at the time the insured loan is made, 110 percent of the fair market value of the securing real property at the time the loan is made if permitted by the insurer’s domicile and if the insured obligation is secured by a mortgage, deed of trust or other instrument constituting a junior lien or junior charge. In determining the 110 percent limitation, the full amount of a line of credit to be secured by a junior lien shall be considered the amount of the loan.

(3) This rule is adopted under the authority of ORS 731.244 for the purpose of implementing ORS 742.282(1)(a).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.282
ID 22-2002, f.& cert. ef. 11-27-02
ID 4-2001, f. & cert. ef. 4-3-01

Or. Admin. R. 836-054-0400 Purpose and Scope of OAR 836-054-0410

The purpose of OAR 836-054-0400 to 836-054-0410 is to wind down an emergency order by the director of the Department of Consumer and Business Services. Under ORS 731.870, the director may order the temporary postponement of insurance policy nonrenewals. This rule provides that expiration of an emergency order is a valid reason to cancel a commercial liability policy under ORS 742.702 if the emergency order was the sole reason the policy was renewed.

History

Statutory/Other Authority: ORS 731.244 & ORS 742.702
Statutes/Other Implemented: ORS 742.702 & ORS 731.870
ID 1-2021, adopt filed 01/21/2021, effective 01/22/2021
ID 5-2020, temporary adopt filed 07/27/2020, effective 07/27/2020 through 01/22/2021

Or. Admin. R. 836-054-0410 Cancellations

An insurer may cancel a commercial liability policy if:

(1) The insurer was required to renew the policy by an emergency order issued by the director;

(2) The cancellation is not due to claims resulting solely from the circumstances on which the emergency order was based, except in cases of fraud or material misrepresentation;

(3) The insurer has provided 45 days written notice to the insured and insurance producer, if any; and

(4) The cancellation does not violate any other law or order by the director.

History

Statutory/Other Authority: ORS 731.244 & ORS 742.702
Statutes/Other Implemented: ORS 742.702 & ORS 731.870
ID 1-2021, adopt filed 01/21/2021, effective 01/22/2021
ID 5-2020, temporary adopt filed 07/27/2020, effective 07/27/2020 through 01/22/2021

Division 58 MOTOR VEHICLE LIABILITY INSURANCE

Or. Admin. R. 836-058-0010 Permitted Reasons to Exclude Named Person

An insurer may exclude by name a person other than the named insured from the coverage required by ORS 742.450(2)(a) to be provided in a motor vehicle liability insurance policy issued for delivery in this state, for any of the following reasons:

(1) The excluded person is higher rated than the named insured and the difference between the annualized premium that the named insured would pay on the liability coverage under the policy including the higher rated person and the annualized premium that the named insured would pay on the policy excluding the higher rated person would cause financial hardship as described in this section to the named insured. For the purpose of this section:

(a) A financial hardship is caused only if the difference exceeds $1,000;

(b) Premium owing to rating for a high performance vehicle or a sports car shall be excluded for the purpose of determining whether financial hardship is caused.

(2) The excluded person's Oregon driver's license is suspended pursuant to ORS 809.409(5).

(3) The excluded person's Oregon driver's license is suspended pursuant to ORS 809.419(3).

History

Statutory/Other Authority: ORS 731.244 & 742.450
Statutes/Other Implemented: ORS 742.450(6)(b)
ID 19-2006, f. & cert. ef. 9-26-06
ID 6-1993, f. & cert. ef. 8-25-93

Or. Admin. R. 836-058-0020 Exclusion from Excess Coverage

(1) An insurer who excludes one or more persons as provided by law from any coverage in excess of the coverage required by ORS 742.450(2)(a) to be provided in a motor vehicle liability insurance policy issued for delivery in this state must state in the policy or indorsement the policy limits applicable to the person.

(2) The disclosure requirement of section (1) of this rule does not apply with respect to a person also excluded from coverage under a motor vehicle liability insurance policy under ORS 742.450(6)(a) or OAR 836-058-0010.

History

Statutory/Other Authority: ORS 731.244 & 742.031
Statutes/Other Implemented: ORS 742.450(1) - 742.450(2) & 742.464
ID 6-1993, f. & cert. ef. 8-25-93

Division 60 INSURANCE POLICIES (ORS CHAPTER 743)

Or. Admin. R. 836-060-0000 Statutory Authority; Purpose; Effective Date

(1) OAR 836-060-0000 through 836-060-0060 are adopted pursuant to the general rulemaking authority of the Director in ORS 731.244.

(2) The purpose of OAR 836-060-0000 through 836-060-0060 is to protect the interests of debtors and the public by providing a system of rate, policy form and operating standards for the transaction of credit life and credit health insurance in Oregon. These rules interpret and implement ORS 733.306, 742.003, 742.005, 743.015, 743.371 to 743.380, 746.160, 746.220, and 746.240.

(3) OAR 836-060-0000 through 836-060-0060 as amended become effective on January 1, 2001, and apply as follows:

(a) Except as otherwise provided in this section, on January 1, 2001, all forms not in compliance with OAR 836-060-0000 through 836-060-0060 as amended become disapproved for use in Oregon. No such form may be issued or delivered after that date unless it has been changed and resubmitted to and approved by the Director, or unless an approved rider has been attached bringing the form into compliance with 836-060-0000 through 836-060-0060 as amended;

(b) Certificates, notices of proposed insurance and premium rates for existing group policies shall conform to OAR 836-060-0000 through 836-060-0060 as amended not later than the anniversary date of the group policy on or next following January 1, 2001;

(c) Any replacement or amendment of a group credit insurance policy in an attempt to delay or circumvent application of these rules shall nonetheless be subject to OAR 836-060-0000 through 836-060-0060 as amended. No group credit insurance policy in force may be rewritten or redated in order to delay or circumvent the effect of 836-060-0000 through 836-060-0060 as amended;

(d) All forms received for filing on or after October 10, 2000 must comply with OAR 836-060-0000 through 836-060-0060 as amended. No such form may be issued or delivered on or after January 1, 2001 unless the form has been submitted to and approved by the Director.

(4) These rules, except as provided in OAR 836-060-0041, do not apply to production credit associations, bank agricultural loans or educational loan commitments.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.003, 742.005, 743.015, 743.371 - 743.380, 746.160, 746.220 & 746.240
Reverted to ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 13-2000(Temp), f. & cert. ef. 12-21-00 thru 6-9-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 11-1982, f. & ef. 6-23-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0005 Definitions

As used in OAR 836-060-0000 through 836-060-0060:

(1) "Closed-End Credit" means credit other than open-end credit.

(2) "Credit Health Insurance" means the kind of insurance defined in ORS 743.371 and limited by ORS 743.372.

(3) "Credit Insurance" means credit life insurance or credit health insurance or both.

(4) "Credit Life Insurance" means the kind of insurance defined in ORS 743.371 and limited by ORS 743.372.

(5) "Credit Transaction" means any transaction by the terms of which the repayment of money loaned, or payment for goods, services or properties sold or leased, is to be made at a future date or dates.

(6) "Indebtedness" means total amount repayable, including principal, interest and finance charges.

(7) "Open-End Credit" means credit extended by a creditor under an agreement in which:

(a) The creditor reasonably contemplates repeated transactions;

(b) The creditor imposes a finance charge from time to time on an outstanding unpaid balance; and

(c) The amount of credit that may be extended to the debtor during the term of the agreement, up to any limit set by the creditor, is generally made available to the extent that any outstanding balance is repaid.

(8) "Underwritten" or "underwriting" refers to the use of medical questions to elicit the existence of high risk medical conditions as described in OAR 836-060-0026 and 836-060-0031 for the purpose of determining insurability, to the extent such conditions were assumed in developing the underwritten prime facie rates.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.005, 743.015, 743.371-.380, 746.220 & 746.240
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82
IC 40, f. 2-15-68, ef. 4-1-68

Or. Admin. R. 836-060-0011 Rights and Treatment of Debtors

(1) Multiple Plans of Insurance. If a creditor makes available to debtors more than one plan of credit life insurance or more than one plan of credit health insurance, the creditor must inform each debtor of all such plans.

(2) Substitution. When a creditor requires credit life insurance, credit health insurance or both as additional security for an indebtedness, the creditor shall give the debtor the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by the debtor, or of procuring and furnishing the required coverage through any insurer authorized to transact insurance in this state. The debtor shall be informed by the creditor before the transaction is completed of this right to provide alternative coverage.

(3) Evidence of Coverage. All credit insurance shall be evidenced by an individual policy or, in the case of group insurance, by a certificate of insurance. The policy or certificate shall be delivered to the debtor in accordance with ORS 743.377, and shall set forth the information required by 743.377 and other provisions of the Insurance Code.

(4) Claims Processing. All credit insurance claims shall be processed in accordance with ORS 743.380.

(5) Claim Standards. The following requirements apply to claims:

(a) All claim payments shall go first to pay the balance of the indebtedness of the insured. Any residual benefit shall be paid to the insured or the designated beneficiary or the estate of the debtor;

(b) All claims are covered upon the earlier of the date of acceptance by the insurer for insurability or 30 days after the date of the application for coverage if not rescinded. Except for falsified statements, no claim may be denied for reason of ineligibility or uninsurability if the coverage is issued and not rescinded before the date of the claim; and

(6) Termination of Group Credit Insurance Policy:

(a) If a debtor is covered by a group credit insurance policy providing for the payment of single premiums to the insurer, provision shall be made by the insurer that, in the event of termination of the policy for any reason, insurance coverage with respect to the debtor shall be continued for the entire period for which the single premium was paid, subject to cancellation by the insured person;

(b) If a debtor is covered by a group credit insurance policy providing for the payment of premiums to the insurer on a monthly outstanding balance basis, the policy shall provide that, in the event of termination of the policy for any reason, notice of the termination shall be given to the debtor at least 30 days prior to the effective date of termination, unless replacement of the coverage by the same or another insurer in the same or greater amount occurs without lapse of coverage. This notice shall be given by the insurer or, at the option of the insurer, by the creditor.

(7) Interest on Premiums. If a creditor adds identifiable insurance charges or premiums for credit insurance to an indebtedness, and any direct or indirect finance, carrying, credit or service charge is made to the debtor on such insurance charges or premiums, the creditor shall remit and the insurer shall collect the insurance charges or premiums within 60 days after they are added to the indebtedness.

(8) Renewal or Refinancing of Indebtedness. If an indebtedness is discharged because of renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all such cases of termination prior to scheduled maturity, a refund shall be paid or credited to the debtor as provided in OAR 836-060-0036. In the renewal or refinancing of the indebtedness, the effective date of the insurance coverage with respect to any policy provision shall be considered to be the first date on which the debtor became insured under the policy covering the indebtedness which was renewed or refinanced, at least to the extent of the amount and term of the indebtedness outstanding at the time of the renewal or refinancing of the debt.

(9) Maximum Aggregate Provisions. A provision in an individual policy or a group certificate that sets a maximum limit on total payments shall apply only to that individual policy or group certificate.

(10) Voluntary Prepayment of Indebtedness. If a debtor prepays the indebtedness other than as a result of a death payment or a lump-sum disability payment:

(a) Any credit life insurance covering the indebtedness shall be terminated and an appropriate refund of credit life insurance premium shall be paid to the debtor in accordance with OAR 836-060-0036;

(b) Any credit health insurance covering the indebtedness shall be terminated and an appropriate refund of credit health insurance premium shall be paid to the debtor in accordance with OAR 836-060-0036. If a claim under the coverage is in progress at the time of prepayment, the amount of refund may be determined as if the prepayment did not occur until the payment of benefits terminates. No refund need be paid during any period of disability for which credit health insurance benefits are payable. A refund shall be computed as if prepayment occurred at the end of the disability period; and

(c) A refund of premium that is owing because of early termination of a loan is determined as of the date the loan or coverage is terminated. The creditor shall promptly refund the amount owing the debtor or report a refund due to the insurer. In all cases, the insurer is responsible for a prompt refund. The refund shall be made not later than the 30th day after the loan is terminated.

(11) Involuntary Prepayment of Indebtedness. If an indebtedness is prepaid by the proceeds of a credit life insurance policy or by a lump-sum payment of a disability claim under a credit insurance policy covering the debtor, it shall be the responsibility of the insurer that the following are paid to the insured debtor, if living, or to the beneficiary, other than the creditor, named by the debtor, or to the debtor's estate:

(a) In the case of prepayment by the proceeds of a credit life insurance policy, or by the proceeds of a lump-sum total and permanent disability benefit under credit life insurance coverage, an appropriate refund of the credit health insurance premium in accordance with OAR 836-060-0036.

(b) In the case of prepayment by a lump-sum payment of a disability claim, an appropriate refund of the credit life insurance premium in accordance with OAR 836-060-0036; and

(c) In either case, the amount of the benefits in excess of the amount required to repay the indebtedness after crediting any unearned interest or finance charges.

(12) Amounts insured. The following types of insurance must provide benefits as follows:

(a) Credit life insurance based on gross coverage must provide benefits not to exceed the amount of indebtedness outstanding;

(b) Credit life insurance based on net coverage must provide benefits not to exceed the amount of indebtedness outstanding less the unearned interest and finance charges;

(c) Credit health insurance must provide benefits not to exceed the amount of outstanding indebtedness inclusive of unearned interest or finance charges for the benefit period unless paid in a lump sum.

(13) Participation. No group policy shall contain a minimum participation percentage.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.376 - 743.378, 743.380, 746.220 & 746.240
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0016 Policy Forms and Related Material

(1) Permissible Forms. Credit insurance shall be issued only in the forms described in ORS 743.373.

(2) Rates and Forms Filing Requirements. All credit insurance policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders to be delivered or issued for delivery in this state and the schedules of premium rates pertaining thereto shall be filed with the Director as required by ORS 743.015.

History

Statutory/Other Authority: ORS 731, 742, 743 & 746
Statutes/Other Implemented: ORS 743.015 & 743.373
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0021 Determination of Reasonableness of Benefits in Relation to Premium Charge

(1) General Standard. Under ORS 742.005, benefits provided by credit insurance policies must be reasonable in relation to the premium charged. This requirement is satisfied, in the opinion of the Director, if the premium develops, or reasonably may be expected to develop a loss ratio of not less than 60 percent.

(2) With the exception of deviations approved under OAR 836-060-0043, the rates established in 836-060-0026 and 836-060-0031, as adjusted periodically pursuant to 836-060-0041, are the prima facie rates and shall be conclusively presumed to satisfy the standard set forth in section (1) of this rule.

(3) Nonstandard Coverage. If an insurer files for approval a form providing coverage different from that described in OAR 836-060-0026 and 836-060-0031, the insurer shall demonstrate to the satisfaction of the Director that the premium rates to be charged for such coverage will develop, or reasonably may be expected to develop, a loss ratio not less than that contemplated for standard coverage, or are actuarially consistent with the rates used for standard coverages.

(4) Prima facie rates are presumed sufficient to cover up to two months of delinquencies.

(5) Coverage Without Separate Charge. If no specific charge is made to the debtor for credit insurance, sections (1) to (3) of this rule do not apply. In this case, any premium rates which exceed the premium rate standards set out in OAR 836-060-0026 and 836-060-0031 must be filed with the Director. For purposes of this section, a specific charge is made to the debtor if an identifiable charge for insurance is disclosed in the credit or other instrument furnished the debtor which sets out the financial elements of the credit transactions, or if there is a differential in finance, interest, service or other similar charge made to debtors who are in like circumstances except for their insured or noninsured status.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.003 & 742.005
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 26-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0026 Credit Life Insurance Rates

(1) Unless data submitted to the Director under OAR 836-060-0043 justify a higher rate in the Director's opinion, credit life insurance premium rates for the insured portion of an indebtedness repayable in equal monthly installments, when the insured portion of the indebtedness decreases uniformly by the amount of the monthly installment paid, shall not exceed the rates ("prima facie" rates) set forth in subsections (a) and (b) of this section. Subsections (c), (d) and (e) of this section prescribe the corresponding "prima facie" premium rates for other types of credit life insurance benefits. The prima facie premium rates are as follows:

(a) $.65 per month per $1,000 of outstanding insured indebtedness, if premiums are payable on a monthly outstanding balance basis ($.59 if underwritten);

(b) If premiums are payable on a single premium basis and the amount of the insurance decreases in equal monthly amounts, the prima facie rates per $100 of initial insured indebtedness shall equal:

(A) $.42 per year on credit terms of 63 months or less ($.38 if underwritten); and

(B) On credit terms over 63 months

(n+1)

times $.65 ($.59 if underwritten), where n is the credit term in months. The rates so calculated are to be immediately rounded to two-decimal precision, i.e. to the nearest cent.

(c) If premiums are payable on a single premium basis and the benefit provided is level term, the prima facie rate is $.76 per $100 ($.68 if underwritten) of insured indebtedness per year of term. The rate for a fractional part of a year shall be calculated pro rata and immediately rounded to two-decimal precision, i.e. to the nearest cent.

(d) The joint coverage rate shall be 165% of the rounded rate for single person coverage;

(e) If coverage is a combination of level term and decreasing term with equal decrements, the rate shall be a combination of the appropriate rate for level term and the appropriate rate for decreasing term with equal decrements;

(f) For coverage for outstanding indebtedness when only the principal is insured and the interest is paid on a scheduled basis to provide equal monthly repayments of indebtedness (simple interest loans), the premium shall be actuarially consistent with other premiums calculations described in this rule;

(g) For other benefits, except for benefits described in subsection (2)(e), of this rule, rates shall be actuarially consistent with the rates specified in this section.

(2) The premium rates in section (1) of this rule apply to credit life insurance policies that are issued without underwriting or with underwriting for high risk conditions that have the potential of becoming terminal during the period of coverage, and that are offered to all debtors. Such policies:

(a) Shall not contain exclusions other than suicide within six months following the effective date of coverage for the insured person. If a suicide exclusion is used, the exclusion shall not be effective for more than six months following the effective date of coverage for the insured person. With respect to an exclusion under this subsection:

(A) Except as provided in paragraph (B) of this subsection, the effective date of insurance coverage applicable to an indebtedness is the date on which the individual policy or certificate of coverage was first issued; and

(B) An individual policy for an open-end plan or a certificate of coverage under a group policy for an open-end plan may provide that the effective date of coverage of a specific advance or charge, for the amount in excess of the first $3,000 of account balance, is the date of the specific advance or charge;

(b) Shall not contain age restriction other than age restrictions making ineligible for coverage debtors 66 or over at the time the indebtedness is incurred and may provide that all insurance will terminate upon attainment by the debtor of a specified age not less than 66 years;

(c) Shall not contain a provision excluding or denying a claim for death resulting from a preexisting condition except for those conditions for which the insured debtor received medical diagnosis or treatment within six months preceding the effective date of coverage and which directly contributed to the death of the insured debtor within six months following the effective date of coverage. For purposes of this subsection:

(d) May contain additional benefits to policyholders and their debtors, such as dismemberment, partial disability and other benefits of small economic value to the consumer, but an insurer shall not pass on the charge for such coverage to the debtor so as to increase the total rate to exceed the rate established by this rule.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.003 & 742.005
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0027 Credit Life Reserves

(1) For policies or certificates issued prior to January 1, 2001, the minimum reserve standard is the Commissioners 1958 Extended Term Insurance Table and 4.5% interest.

(2) For policies or certificates issued on or after January 1, 2001, the minimum reserve standard is the Male Commissioners 1980 Standard Ordinary Mortality Table and 4.5% interest.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 733.306(8)
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01

Or. Admin. R. 836-060-0031 Credit Health Insurance Rates

(1) Unless data submitted to the Director under OAR 836-060-0043 justify a higher rate in the Director's opinion, credit health insurance premium rates for the insured portion of an indebtedness repayable in equal monthly installments, where the insured portion of the indebtedness decreases uniformly by the amount of the monthly installment paid, shall not exceed the rates ("prima facie" rates) set forth in subsections (a) and (b) of this section. Subsections (c), (d) and (e) of this section prescribe the corresponding "prima facie" premium rates for other types of credit health insurance benefits. The prima facie premium rates are as follows:

(a) As set forth in Tables 1 and 2, if premiums are payable on a single premium basis for the duration of the coverage;

(b) As set forth in Tables 1 and 2, if premiums are payable on a monthly outstanding insured indebtedness basis for a closed-end loan;

(c) The actuarial equivalent of the rates specified in subsections (a) and (b) of this section, if the coverage provided is a constant maximum indemnity for a given period of time;

(d) An appropriate combination of the premium rate for a constant maximum indemnity for a given period of time and the premium rate for a maximum indemnity which decreases in even amounts per month, if the coverage provided starts as a constant maximum indemnity for a given period of time after which the maximum indemnity begins to decrease in even amounts per month;

(e) For credit health insurance on an open-end credit account, per $1,000 of outstanding insured indebtedness, the following rates shall apply to the following minimum benefit plans:

(A) 14-day nonretroactive plan — $1.66–$1.49 if underwritten;

(B) 30-day nonretroactive plan — $1.40–$1.26 if underwritten;

(D) 30-day retroactive plan — $1.74–$1.57 if underwritten;

(f) For other benefits, except for benefits described in section (2)(g) of this rule, rates shall be actuarially consistent with the rates specified in this section;

(g) For critical period credit health coverage, maximum rates shall be computed by using the conversion ratios based on the 1974 Basic Tables of Credit A & H Claim Costs published by National Association of Insurance Commissioners, NAIC Proceedings, 1975 Volume 1, pp. 676–691, and the extension as published in 1970 Volume 1, pp. 332–333. The factors are published in Exhibit 2.

(2) The premium rates in section (1) of this rule shall apply to credit health insurance policies issued without underwriting or with underwriting for conditions with a high potential of resulting in permanent disablement, and offered to all eligible debtors. Such policies:

(a) Shall not contain a provision excluding or denying a claim for disability resulting from preexisting conditions except for those conditions for which the insured debtor received medical diagnosis or treatment within six months preceding the effective date of the debtor's coverage and which caused loss that commences within six months immediately following the effective date of coverage. For purposes of this subsection:

(b) Shall not contain any other provision that excludes or restricts liability in the event of disability caused in a specified manner, except that the policy may contain provisions excluding or restricting coverage in the event of normal pregnancy and intentionally self-inflicted injuries;

(c) May contain an "actively at work test" only if the test applies solely when coverage is issued. Such a test shall not require that the debtor be employed more than 30 hours per week or deny coverage because the debtor is unemployed solely due to seasonal layoff;

(d) Shall not contain age restrictions other than age restrictions only making ineligible for coverage debtors 66 or over at the time the indebtedness is incurred and may provide that all insurance will terminate upon attainment by the debtor of a specified age not less than 66 years;

(e) Shall contain a daily benefit equal in amount to one-thirtieth of the monthly benefit payable under the policy for the indebtedness;

(f) Shall contain a definition of "disability" providing that during the first 18 months of disability the insured shall be unable to perform the duties of the insured's occupation at the time the disability occurred, and thereafter the duties of any occupation for which the insured is reasonably fitted by education, training, or experience. This subsection shall not apply to lump-sum disability coverage;

(g) May contain other additional benefits to policyholders and their debtors, such as dismemberment, partial disability and other benefits of small economic value to the consumer, but an insurer shall not pass on the charge for such coverage to the debtor so as to increase the total rate to exceed the rate established by this rule; and

(h) Shall not contain a requirement of regular physician care unless the care is medically necessary for determination of continued disability.

(3) The rates under section (1)(e) of this rule may be used as a composite rate for a benefit pay-off duration not to exceed 48 months. The percentage of monthly benefit must include accruing interest and charges. For durations greater than 48 months, rates filed must include actuarial development and adjustments consistent with this basis.

[ED. NOTE: Exhibits and Tables referenced are available from the agency.]

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.003 & 742.005(6)(c)
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0036 Refund Formulas

(1) An insurer shall file for approval by the Director its refund formulas prior to their use. The following methods are considered appropriate for the plans described:

(a) Pro Rata Method. The pro rata unearned gross premium method shall be used for level term credit life insurance or credit health insurance where under the insured is covered for a constant maximum indemnity for a given period of time, after which the maximum indemnity begins to decrease in even amounts per month, and credit insurance coverage under which premiums are collected from the debtor on a basis other than the single premium basis;

(b) Actuarial method commonly referred to as the Rule of Anticipation. A refund of unearned premium used for decreasing term credit life insurance may be made as provided in this subsection. The amount of the refund shall be not less than the total premium, less the greater of:

(A) Ten percent of the premiums or $75, whichever is less; or

(B) The premium earned to the installment due date of the loan nearest the date of prepayment, for the periods of time the loan balances were actually outstanding. For purposes of refund computations under this paragraph, the installment due date of the loan preceding the date of prepayment shall be considered to be nearest if prepayment occurs 15 days or less after that installment date. If prepayment occurs more than 15 days after the preceding installment due date, the next succeeding installment due date shall be considered to be nearest to the date of prepayment.

(c) Any method that develops refunds that are at least as favorable to the debtor as refunds based on the actuarial method described in subsection (b) of this section.

(2) In the event of termination, no charge for credit insurance may be made for the first 15 days of a loan month, and a full month may be charged for 16 days or more of a loan month.

(3) The refund formula shall be set forth in the individual policy or group certificate.

(4) The requirement of ORS 743.378 that refund formulas be filed with the Director is fulfilled by inclusion of the refund formulas in the individual policy or group certificate filed with the Director.

(5) No refund of $5 or less need be made.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.378
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0041 Experience Reports

(1) Each insurer transacting credit insurance in this state shall submit an Oregon-specific Credit Insurance Experience Exhibit to the National Association of Insurance Commissioners (NAIC). If this report is discontinued as an NAIC report, the report must be sent directly to the Director by June 1 of each year.

(2) Notwithstanding section (1) of this rule, each insurer transacting credit insurance that is underwritten shall submit to the Director an Oregon-specific Credit Insurance Experience Exhibit for the underwritten business. The information shall be reported on the NAIC form and submitted by June 1 of each year. An insurer need not comply with this section if the NAIC Credit Insurance Experience Exhibit includes a separate accounting for underwritten business.

(3) The experience reports required by this rule replace all other annual reports to the Director of credit insurance experience. The experience reports required by this rule are separate and distinct from the annual financial statement and are not for use in determining the financial condition of an insurer.

(4) The Director shall review the loss ratio development every four years and compare it with the standards set forth in OAR 836-060-0021 and the prima facie rates set forth for underwritten and non-underwritten in 836-060-0026 and 836-060-0031 as adjusted and determine therefrom the statewide loss ratio using no less than three years of experience. The Director shall compare the expected loss ratio with the actual loss ratio for the preceding review period determined from the incurred claims and earned premiums at prima facie rates reported under this rule, and publish the adjusted actual statewide prima facie rates to be used by insurers. If published, the rates are adjusted for the difference between:

(a) Actual claims and expected claims; and

(b) Any other additional premium changes necessary to meet the loss ratio standards of OAR 836-060-0021.

[ED. NOTE: Forms referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.005(6)(c)
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0043 Use of Rates — Direct Business Only

(1) An insurer that files rates or has rates on file that are not in excess of the prima facie rates shown in OAR 836-060-0026 and 836-060-0031, to the extend adjusted pursuant to 836-060-0041 may use those rates without further proof of their reasonableness except as may be required by the Director.

(2) An insurer may file for approval of and may use rates that are higher than the prima facie rates shown in OAR 836-060-0026 and 836-060-0031, to the extent adjusted pursuant to 836-060-0041, if it can be expected that the use of such higher rates will result in a ratio of claims incurred to premiums earned (assuming the use of such higher rates) that is commensurately higher, depending on the upward deviation, for those accounts to which the higher rates apply and that the upward deviations will not result on a statewide basis for that insurer of a ratio of claims incurred to premiums earned of less than the expected loss ratio underlying the current prima facie rate developed or adjusted pursuant to 836-060-0041. The insurer must justify the rates by showing its compensation structure, including compensation to lenders and other producers. If rates higher than the prima facie rates shown in 836-060-0026 and 836-060-0031, to the extent adjusted pursuant to 836-060-0041, are filed for approval, the filing shall specify the account to which the rates apply. Such rates may be applied on an equitable basis approved by the Director only to one or more accounts of the insurer for which the experience has been less favorable than expected.

(3) This section establishes approval periods of deviated rates, as follows:

(a) A deviated rate shall be in effect for a period of time not longer than the experience period used to establish such rate (i.e. one year, two years or three years). An insurer may file for a new rate before the end of a rate period, but not more often than once during any twelve-month period. A deviated rate expires at the end of the rate period unless refiled and approved again by the Director;

(b) Notwithstanding section (1) of this rule, if an account changes insurers, the succeeding insurer may use the rate approved to be used for the account by the prior insurer only if the rate is filed by the succeeding insurer and approved for use on the account for the remainder of the rate approval period approved for the prior insurer or until a new rate is approved for use on such account, if sooner.

(4) An insurer may at any time use a rate for an account that is lower than its filed rate without notice to the Director.

(5) For purposes of this rule:

(a) "Experience" means "earned premiums" and "incurred claims" during the experience period;

(b) "Experience Period" means the most recent period of time for which experience is reported, but not for a period longer than three full years. For purposes of an individual policy, a year is a calendar year. For purposes of a group policy, a year is either a calendar year or policy year, at the option of the insurer;

History

Statutory/Other Authority: ORS 731, 742, 743 & 746
Statutes/Other Implemented: ORS 742.005(6)(c) & 743.015
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91

Or. Admin. R. 836-060-0046 Supervision of Credit Insurance Operations

(1) Once every rate review period established under OAR 836-060-0041(4), each insurer transacting credit insurance in this state shall be responsible for conducting a thorough review of creditors with respect to the insurer's credit insurance business with such creditors, to assure compliance with the Oregon Insurance Code and 836-060-0000 through 836-060-0060.

(2) The insurer shall maintain written records of these reviews for review by the Director. The records shall:

(a) Review and report the creditor's activities according to OAR 836-060-0011(5); and

(b) Verify the prompt and timely payment of claims and accuracy of refunds.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 743.377, 743.378, 743.380 & 746.160
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0055 Prohibited Transactions

The following insurer practices in connection with the sale or placement of credit insurance, or as an inducement thereto, constitute unfair methods of competition under ORS 746.160 or unfair or deceptive practices injurious to the insurance-buying public under 746.240:

(1) Practices in connection with the creditor:

(a) The offer or grant by an insurer to a creditor of any special advantage or any service not set out in either the group insurance contract or in the agency contract.

(b) Agreement by an insurer to deposit with a bank or other financial institution money or securities of the insurer, with the design or intent that this deposit shall affect or take the place of a deposit of money or securities which otherwise would be required of the creditor by the bank or the other financial institution as a compensating balance or offsetting deposit for a loan or other advancement.

(c) Deposit by an insurer of money or securities with a creditor, bank or other financial institution without interest or at lesser rate of interest than is currently being paid to other depositors of like amounts. This subsection shall not be construed to prohibit the maintenance by an insurer of those demand deposits or premium deposit accounts as are reasonably necessary for use in the ordinary course of the insurer's business.

(2) Placement of insurance on an account by automatic deduction of premium payments without a signed consent by the insured authorizing such deduction for payments.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.160 & 746.240
ID 12-2000, f. 11-14-00, cert. ef. 1-1-01
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Or. Admin. R. 836-060-0060 Disclosure

(1) When a premium or identifiable charge is payable by a debtor for credit insurance coverage offered by a creditor, disclosure shall be made to the principal debtor, at the time the insurance is applied for, of the optional nature of the coverage, the eligibility requirements, and the policy limitations and exclusions. These disclosures may be the federal Truth-in-Lending disclosure accompanied by a notice of proposed insurance or the insurance policy or certificate. The disclosure may be made pursuant to the loan disclaimer requirements of the federal Truth-in-Lending law or regulations adopted thereunder, a similar disclosure requirement that is audited by an agency of a state or the federal government, accompanied by a notice of proposed insurance or the insurance policy or certificate. If disclosure is not thus made, disclosure must be given in the form and wording of the disclosure form set forth in Exhibit 1 to this rule. The insurer may modify the disclosure form required under this section as appropriate for the loan involved. Before using the modified disclosure form, the insurer must obtain approval of the form from the Director.

(2) When the term of a loan is not the same as the term of the insurance, the policy or certificate must disclose prominently, in bold letters, the limit to the coverage.

EXHIBIT 1

(OAR 836-060-0060)

DISCLOSURE FORM OPTIONAL CREDIT INSURANCE

Credit life insurance and credit health insurance provide protection for both the buyer and seller.

You are entitled to a copy of the policy or certificate of insurance within thirty days after credit is extended.

You ARE NOT required to buy credit life insurance or credit health insurance from any particular insurance company or agent. You may use existing policies if insurance is required as additional security.

If you buy credit life insurance, the proceeds will be used to reduce or pay off your unpaid loan or indebtedness when you die. Any insurance proceeds in excess of the amount required to pay off the loan will be paid to your beneficiary or estate.

If you buy credit health insurance, the proceeds will be used to reduce or pay off your unpaid loan or indebtedness if you become incapacitated.

READ your policy or certificate CAREFULLY for what the policy DOES NOT cover. For example: Some policies do not cover the total loan amount or the entire period of coverage. Some policies do not pay disability benefits unless you are disabled for 14 or 30 days or if you have a preexisting condition. Some policies will not provide coverage if you are age 66 or more or when you reach 66. See the policy for details on these matters.

You may not be eligible for credit health insurance unless you now work at least thirty hours per week, unless unemployed solely due to seasonal lay-off.

By initialing below, the customer, debtor or lessee acknowledges acceptance or refusal of credit life or credit health insurance.

ACCEPTS CREDIT LIFE INSURANCE

DECLINES CREDIT LIFE INSURANCE

ACCEPTS CREDIT HEALTH INSURANCE

DECLINES CREDIT HEALTH INSURANCE

History

Statutory/Other Authority: ORS 731, 742, 743 & 746
Statutes/Other Implemented: ORS 743.015, 743.376, 743.377 & 746.240
ID 24-1990, f. 12-28-90, cert. ef. 1-1-91
IC 1-1983, f. 1-28-83, ef. 2-1-83
Repealed by IC 13-1982, f. 11-30-82, ef. 12-1-82
IC 7-1982, f. 2-12-82, ef. 6-1-82

Division 62 VENDOR’S SINGLE INTEREST POLICIES AND MOTOR VEHICLE PHYSICAL DAMAGE ONLY POLICIES

Or. Admin. R. 836-062-0001 Statutory Authority; Effective Date

(1) OAR 836-062-0001 to 836-062-0010 are adopted pursuant to the general rulemaking authority of the Director under ORS 731.244.

(2) Not later than December 15, 1989, each insurer shall file with the Director a listing of all policy forms that comply with OAR 836-062-0005 or 836-062-0010. Any form to which 836-062-0005 or 836-062-0100 applies but does not comply with either rule becomes disapproved for use in Oregon and may not be used after that date unless it has been resubmitted to and approved by the Director.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 742.005(2), 742.023(1)(f) & 746.240
ID 9-1989, f. & cert. ef. 10-23-89

Or. Admin. R. 836-062-0005 Motor Vehicle Physical Damage Only Policies; Required Notice

(1) An insurer providing motor vehicle property damage only coverage on a domestic risk, upon issuance of coverage, shall give notice of the limited nature of the coverage as provided in this section to the purchaser of the motor vehicle to which the coverage applies. The insurer shall display the notice on the face page of the policy, the group or master contract or any other document issued by the insurer to the purchaser as evidence of insurance coverage. Except as provided in section (2) of this rule, the notice shall be in bold face type of not less than 12-point with a lower case unspaced alphabet length of not less than 120-point, or of not less than 10-point if the notice is in a contrasting color, and shall state:

"WARNING: THIS COVERAGE DOES NOT PROVIDE BODILY INJURY AND PROPERTY DAMAGE LIABILITY INSURANCE AND DOES NOT COMPLY WITH ANY FINANCIAL RESPONSIBILITY LAW OR ANY OTHER LAW MANDATING MOTOR VEHICLE INSURANCE COVERAGE."

(2) An insurer may satisfy the notice requirement under section (1) of this rule by use of a notice provision that substantially complies with the notice provision set forth in section (1) of this rule, if the alternative notice provision is approved by the Director prior to use.

(3) For purposes of this rule, a policy is a motor vehicle physical damage only policy if it insures solely against the loss of or damage to any motor vehicle designed primarily for use upon a highway.

(4) The notice requirement under this rule may be met by the attachment of a sticker or by a stamp that contains the required warning. Other devices that contain the required warning may be used if approved by the Director prior to use.

(5) The insurance producer selling the coverage to which this rule applies shall require the purchaser of the coverage to sign a receipt acknowledging that the purchaser has read and understands the warning required under section (1) of this rule. The receipt shall be retained by the insurance producer or insurer until the end of the sixth month after the termination date of the coverage to which the receipt applies.

(6) This rule applies to motor vehicle physical damage only policies on individually owned private passenger vehicles including pickup and panel trucks and station wagons that are not used as a public or livery conveyance for passengers or rented to others, and does not apply to motor vehicle physical damage only policies on commercial fleets.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.005, 742.023 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 15-1996, f. & cert. ef. 11-12-96
ID 9-1989, f. & cert. ef. 10-23-89

Or. Admin. R. 836-062-0010 Vendor Single Interest Policies; Required Notice

(1) An insurer providing vendor’s single interest coverage shall cause notice of the limited nature of the coverage to be given as provided in this rule to the borrower to whom the policy, certificate or other document giving evidence or notice of insurance coverage is issued. The notice shall be displayed on the face page of the policy, certificate or other document, or enclosed therewith. Except as provided in section (2) of this rule, the notice of the limited nature of the coverage shall be in bold face type of not less than 12-point with a lower case unspaced alphabet length of not less than 120-point or of not less than 10-point if the notice is in a contrasting color, and shall state:

“WARNING: THIS IS A LIMITED POLICY THAT PROTECTS ONLY THE LENDER’S INTEREST IN THE INSURED PROPERTY. THE POLICY DOES NOT PROVIDE BODILY INJURY AND PROPERTY DAMAGE LIABILITY INSURANCE AND DOES NOT COMPLY WITH ANY FINANCIAL RESPONSIBILITY LAW OR ANY OTHER LAW MANDATING MOTOR VEHICLE INSURANCE COVERAGE.”

(3) This rule applies to all policies of personal property insurance placed on personal property that protect only the single interest of the vendor or lender. A policy protects only the single interest of the vendor or lender if it protects against loss or damage to personal property of a debtor for the following purposes:

(a) To secure repayment of the amount borrowed from the vendor or lender;

(b) To protect the vendor’s or lender’s interest in the property; and

(c) To protect the interest in the amount of the actual cash value of the collateral, the cost of repair or the loan balance, whichever is less.

(4) The notice requirement under this rule may be met by the attachment of a sticker or separate piece of paper or by a stamp that contains the required warning. Other devices that contain the required warning may be used if approved by the Director.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 742.005(2), 742.023(1)(f) & 746.240
ID 9-1989, f. & cert. ef. 10-23-89

Division 71 INSURANCE LICENSING

Or. Admin. R. 836-071-0101 Adjuster and Insurance Consultant License Application; Required Information

(1) An applicant for an adjuster or insurance consultant license, or for a temporary adjuster permit under ORS 744.555, shall submit an application in the form and manner set forth on the department’s Division of Financial Regulation website at dfr.oregon.gov. In addition to information required under Oregon Laws 2019, chapter 151, sections 5 and 12, an applicant for an adjuster or insurance consultant license shall provide the following information relating to the applicant, as applicable on the application form:

(a) Date and place of birth;

(b) Duration of employment in insurance. Include the beginning and ending dates and the names and addresses of each employer and prior places of business in the insurance industry;

(c) All states and provinces of Canada in which the applicant currently holds a license to engage in the transaction of insurance, or has held such a license within ten years prior to the date of the application;

(d) Any assumed business name or alias ever used;

(e) Whether any firm or corporation of which the applicant is or has been a member, officer or director has ever filed for bankruptcy or been adjudged a bankrupt;

(f) The Social Security or other federally-issued identification number of the applicant; and

(g) If the applicant is a firm or corporation, the name of all current officers, directors and stockholders who own more than ten percent of any class of equity security of the applicant.

(2) An applicant for a resident adjuster or insurance consultant license who is or has been licensed as a resident producer, adjuster or insurance consultant in another state or a province of Canada within five years prior to the date of application shall include with the application a statement that the resident license is inactive or no longer valid from the insurance department of the state or province in which the applicant is or was last authorized to transact insurance.

(3) An applicant for a non-resident adjuster or insurance consultant license who is licensed as a resident producer, adjuster or insurance consultant in another state or province of Canada shall include with the application a statement of current licensure from the insurance department of the state or province in which the applicant was authorized to transact insurance as a resident licensee. The statement must indicate that the applicant has a current license for the class or classes of insurance that are being applied for in Oregon. The statement must be dated not earlier than the 90th day prior to the date of application.

(4) The director may collect Social Security numbers submitted in applications under this rule and may use a Social Security number of an individual when authorized to do so for the purposes specified in this section. In addition to the governmental uses for which a Social Security number is required in an application under federal and state law, when authorized by the holder of a Social Security number, the director may use a Social Security number for any of the following purposes:

(a) As an identification number in maintaining records and reporting grades or examination scores;

(b) For licensing purposes; and

(5) An applicant may voluntarily allow the director to use the Social Security number of the applicant, as the director may request in the application form, for the purposes specified in section (4) of this rule. Refusal to voluntarily allow such use of the Social Security number will not result in the denial of any individual right, benefit or privilege provided by law. The use authorized by an applicant is in addition to uses authorized by state and federal law for which collection of Social Security numbers is mandatory.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2019, ch 151
Statutes/Other Implemented: Or Laws 2019, ch 151, sections 5 and 12 & ORS 744.555
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 2-2010, f. 1-8-10, cert. ef. 2-1-10
ID 9-2002, f. & cert. ef. 3-18-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0105 Additional Application Information

During the review of an application, the Director may require court documents, letters of recommendation and any other information that the Director determines will assist consideration of the application.

History

Statutory/Other Authority: ORS 731 & 744
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0108 Limited Class Insurance Licenses

For the purpose of ORS 744.062, the Director establishes the following classifications for limited class insurance licenses, for use on and after July 1, 2005:

(1) Under a "limited class credit insurance" license, the licensee may transact the following classes of insurance when the insurance is offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation:

(a) Credit life insurance. Under this class, an insurance producer may transact credit life insurance as approved under ORS 743.371(1).

(b) Credit health insurance. Under this class an insurance producer may transact credit health insurance as approved under ORS 743.371(2).

(c) Credit unemployment and involuntary unemployment insurance. Under this class an insurance producer may transact approved liability coverage for unemployment.

(d) Credit property insurance. Under this class, an insurance producer may transact insurance against property loss or damage that may result in failure of debtors to pay their obligations to the insured, including but not limited to motor vehicle physical damage insurance. This class does not include mortgage insurance.

(e) Mortgage guarantee insurance. Under this class, an insurance producer may transact only the insurance that is issued by an authorized mortgage insurer under ORS 742.282 to 742.286.

(f) Mortgage life or disability insurance, or mortgage life and disability insurance. Under this class, a lending institution may transact mortgage cancellation insurance as approved under ORS 743.303(1)(b) and (5).

(g) Gap insurance. This class applies to a person described in ORS 731.036(9) who does not qualify for the exemption in 731.036(9) because the person imposes an additional charge to waive the amount described in 731.036(9)(b) pursuant to an agreement to lease or to finance the purchase of a motor vehicle.

(2) Under a "limited class insurance" license, the licensee may transact the following classes of insurance:

(a) Crop insurance. Under this class, an insurance producer may place insurance providing protection against damage to crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease or other yield-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including multi-peril crop insurance.

(b) Surety insurance. Under this class an insurance producer may place insurance or a bond that covers obligations to pay the debts of, or answer for the default of another, including faithlessness in a position of public or private trust as approved under ORS 742.350 to 742.376. For the purpose of this limited line license, surety does not include surety bail bonds.

(c) Mechanical breakdown insurance. Under this class an insurance producer may place insurance that provides repair or replacement service, or indemnification for repair or replacement service, for operational or structural failure of property due to defects in materials or workmanship or normal wear and tear, including but not limited to motor vehicles, mobile equipment, boats, appliances and electronics.

(3) Travel insurance. Under this class as defined in ORS 744.101, a limited travel insurance producer and any travel retailer offering travel insurance on behalf of and at the direction of a limited travel insurance producer shall comply with the requirements set forth in OAR 836-071-0450.

(4) For the purpose of making the transition to a mechanical breakdown insurance limited class insurance license under section (2) of this rule rather than as a limited class credit insurance license under section (1) of this rule, the change shall apply to renewals of limited class credit insurance licenses applied for on or after January 1, 2013. A licensee transacting mechanical breakdown insurance under a limited class credit insurance license may continue to do so until the first renewal of the limited class credit license after January 1, 2013.

History

Statutory/Other Authority: ORS 731.244, 744.062, 744.104 & 744.111
Statutes/Other Implemented: ORS 744.062, 744.101, 744.104 & 744.111
ID 7-2016, f. 6-30-16, cert. ef. 7-1-16
ID 18-2012, f. & cert. ef. 11-7-12
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

Or. Admin. R. 836-071-0110 Fingerprints

All applicants for a license shall furnish fingerprints required by the Director of the Department of Consumer and Business Services to the examination administrator who will perform the duties of obtaining electronically the fingerprints of applicants and submitting the fingerprints for Oregon or nationwide criminal history checks. The applicant shall submit the fingerprints according to the requirements and instructions of the examination administrator.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001 & 744.059
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 23-2010, f. 12-30-10, cert. ef. 1-1-11
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0112 Social Security Numbers; Insurance Producer Applications

(1) An applicant for an insurance producer license shall furnish the Social Security number of the applicant as provided in the application form.

(2) The Director may collect Social Security numbers submitted in applications under this rule and may use a Social Security number of an individual when authorized to do so for the purposes specified in this section. In addition to the governmental uses for which a Social Security number is required in an application under federal and state law, when authorized by the holder of a Social Security number, the Director may use a Social Security number for any of the following purposes:

(a) As an identification number in maintaining records and reporting grades or examination scores;

(b) For licensing purposes; and

(3) In addition to the governmental uses for which a Social Security number is required in an application under federal and state law, an applicant may voluntarily allow use by the Director of the Social Security number of the applicant, as the Director may request in the application form, for the purposes specified in section (2) of this rule. Refusal to voluntarily allow such use of the Social Security number will not result in the denial of any individual right, benefit or privilege provided by law.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.058 & 744.063
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02

Or. Admin. R. 836-071-0113 Crop Insurance

(1) The director designates crop insurance as a class of insurance, for the purpose of licensing crop adjusters, under the director’s authority in ORS 744.531(3).

(2) To qualify as a crop adjuster, an applicant must pass an examination recognized by the director. The director recognizes crop adjuster examinations under OAR 836-071-0120(1), and examinations administered for certification under the crop adjuster proficiency program approved by the Risk Management Agency, an agency of the United States Department of Agriculture, as adequately testing the qualifications, competence and knowledge of crop adjuster license applicants.

History

Statutory/Other Authority: ORS 731.244 & ORS 744
Statutes/Other Implemented: ORS 744.525, ORS 744.528 & ORS 744.531
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 2-2010, f. 1-8-10, cert. ef. 2-1-10

Or. Admin. R. 836-071-0115 Satisfaction of Qualifications for Classes of Insurance

An applicant must satisfy all applicable qualifications for each class of insurance applied for within a license category before the applicant may be issued a license.

History

Statutory/Other Authority: ORS 731 & 744
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0117 Managing General Agents; Amount of Claims Adjustment or Payment for Purposes of Statutory Definition

For the purpose of establishing under ORS 744.300 whether a person is acting as a managing general agent, the amount of $10,000 is the amount of claims that the Director must determine under 744.300(3)(b)(A).

History

Statutory/Other Authority: ORS 731.244, 744.300, 744.306, 744.313 & 744.314
ID 6-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-071-0118 Requirements That Must Be Completed Prior to Submitting Licensing Application

All applicants for a license shall submit application materials electronically in accordance with directions provided on the department’s Division of Financial Regulation website at dfr.oregon.gov. Before submitting an application for a license for consideration by the director, the applicant must complete the following steps in the application process:

(1) Completion of all pre-examination training and experience requirements under OAR 836-071-0180;

(2) Submission of fingerprints in accordance with OAR 836-071-0110;

(3) Satisfactory passage of a licensing examination under OAR 836-071-0120 and 836-071-0127; and

(4) Completion of a criminal history check as set forth in OAR 836-072-0001.

History

Statutory/Other Authority: 705.141, 731.244, 731.804, ORS 744.058, 744.619, 744.621 & Or Laws 2019, ch 151
Statutes/Other Implemented: ORS 744.058, 744.619, 744.621 & Or Laws 2019, ch 151
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 23-2010, f. 12-30-10, cert. ef. 1-1-11

Or. Admin. R. 836-071-0120 Examination Procedure

(1) The director recognizes the following examinations as adequately testing an applicant’s qualifications, competence and knowledge of the categories of insurance business and classes of insurance that the applicant intends to transact under a license and the applicant’s knowledge of duties under the Insurance Code and other laws of this state:

(a) Examinations that are administered for such purpose by the director; and

(b) Examinations that are administered in a substantially similar manner by other states that license adjusters of this state without examination. A listing of such examinations is set forth on the department’s Division of Financial Regulation website at dfr.oregon.gov.

(2) To take an examination administered by the director, an applicant must register with the examination administrator in advance of the examination.

(3) The administrator of the examination may require photographic identification of the applicant at the examination site.

(4) To be admitted to the examination site, an applicant must submit to the examination administrator either of the following as proof of satisfactory completion of required training:

(a) A signed certificate of insurance pre-examination training taken at a school registered under OAR 836-071-0190. The signed certificate must include the applicant's name, the classes of insurance for which training was received, the school name, the date on which the training was completed and the signature of a person authorized by the school to sign such certificates; or

(b) Proof of completion of the required pre-examination insurance training at an accredited college or university.

History

Statutory/Other Authority: ORS 731.244, 731.804, ORS 744.058, 744.619, 744.621 & Or Laws 2019, ch 151
Statutes/Other Implemented: ORS 744.058, 744.619, 744.621, 744.525 & 744.528
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 23-2010, f. 12-30-10, cert. ef. 1-1-11
ID 9-2002, f. & cert. ef. 3-18-02
ID 4-1991, f. & cert. ef. 4-25-91
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0125 Period for Completion of License Application

An application for a license is invalid if the license for which the application was made has not been granted on or before the last day of the ninth month after the date on which the application was filed with the Director.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.001
ID 6-1999, f. 12-13-99, cert. ef. 1-1-00
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0127 Examination Scores

(1) For the purpose of obtaining authorization to transact a category or class of insurance, an applicant passes an examination for the class or category when the applicant obtains a score of 70 percent or higher, with the exception of a crop insurance adjuster examination, for which the minimum passing score is 80 percent.

(2) An applicant for a surplus lines licensee's license must achieve an examination score of 70 percent or higher.

History

Statutory/Other Authority: ORS 731.244, 731.804, 744.619, 744.621, 744.066, 744.069, 744.075 & Or Laws 2019, ch 151
Statutes/Other Implemented: Or Laws 2019, ch 151
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 2-2010, f. 1-8-10, cert. ef. 2-1-10
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 4-1991, f. & cert. ef. 4-25-91
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0130 Adjuster or Insurance Consultant License Renewal

(1) The adjuster or insurance consultant license of an individual expires biennially in the month of the individual’s birthday anniversary. The adjuster or insurance consultant license of a person other than an individual expires on the last day of the month in which the second anniversary of the initial issuance date occurs. Thereafter, the license of a person other than an individual shall expire on the second anniversary following each renewal.

(2) Not later than the license expiration date, an adjuster or insurance consultant licensee applying for renewal must submit electronically in the form and according to directions set forth on the department’s Division of Financial Regulation website at dfr.oregon.gov the following, as applicable:

(a) A completed renewal application;

(b) The renewal fee;

(c) A statement of current license status from the insurance department of the state of residence of the licensee, if the licensee is a non-resident licensee; and

(d) Evidence of current Federal Crop Insurance Corporation certification, if the applicant is a crop insurance adjuster.

(3) The director may allow an adjuster or insurance consultant licensee not more than 30 days to submit missing information on the application form if the fees have been submitted on or before the expiration date.

(4) The director may request on the renewal application any information requested on the original application for a license.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2019, ch 151
Statutes/Other Implemented: Or Laws 2019, ch 151, sections 6 and 13
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 2-2010, f. 1-8-10, cert. ef. 2-1-10
ID 7-2008, f. 5-20-08, cert. ef. 6-2-08
ID 11-2007(Temp), f. & cert. ef. 12-11-07 thru 6-1-08
ID 9-2002, f. & cert. ef. 3-18-02
ID 6-1999, f. 12-13-99, cert. ef. 1-1-00
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0135 Renewal of Expired Adjuster or Insurance Consultant License

(1) When an expired license of an individual is renewed under Oregon Laws 2019, chapter 151, the renewed license expires biennially in the month of the individual’s birthday anniversary.

(2) When an expired license of a person other than an individual is renewed under Oregon Laws 2019, chapter 151, the renewed license expires biennially in the month of initial license issuance anniversary.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: Or Laws 2019, ch 151, sections 6 and 13
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 7-2008, f. 5-20-08, cert. ef. 6-2-08
ID 11-2007(Temp), f. & cert. ef. 12-11-07 thru 6-1-08
ID 9-2002, f. & cert. ef. 3-18-02
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0140 License Amendment

An applicant for an amendment to an adjuster or insurance consultant license shall apply electronically in the manner provided for application for the initial license under Oregon Laws 2019, chapter 151.

History

Statutory/Other Authority: ORS 731.244, 731.804, ORS 744.619, 744.621 & Or Laws 2019, ch 151
Statutes/Other Implemented: ORS 744.619, 744.621 & Or Laws 2019, ch 151
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 9-2002, f. & cert. ef. 3-18-02
ID 4-1991, f. & cert. ef. 4-25-91
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0145 Amended License Issuance

(1) When the director determines that an applicant for an amendment to a license satisfies all applicable requirements, the director shall issue to the applicant a license incorporating the amendment.

(2) A license issued under this rule retains the same expiration date as the license being amended.

History

Statutory/Other Authority: ORS 731 & 744
Statutes/Other Implemented: Or Laws 2019, ch151
ID 10-2019, amend filed 11/27/2019, effective 01/01/2020
ID 7-2008, f. 5-20-08, cert. ef. 6-2-08
ID 11-2007(Temp), f. & cert. ef. 12-11-07 thru 6-1-08
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0146 Individual Insurance Producer License Expiration Date

(1) A license issued to an individual insurance producer expires biennially in the month of the individual’s birthday anniversary.

(2) For the purpose of making the transition to renewal according to birth date month as provided in this rule, a license of an individual insurance producer that would have expired on or after the effective date of this rule according to ORS 744.072 expires instead in the birth date month next following the former expiration date.

History

Statutory/Other Authority: ORS 731.244 & 744.072
Statutes/Other Implemented: ORS 744.072
ID 4-2007, f. 3-6-07, cert. ef. 1-1-08

Or. Admin. R. 836-071-0148 Extended License Expiration Date, Active Military Duty and Other Extenuating Circumstances

(1) An individual insurance producer who is unable to comply with license renewal procedures due to military service or another extenuating circumstance such as a long term medical disability may request a waiver from compliance with those procedures as authorized by ORS 744.072, as provided in this rule. The waiver may include an extension of the expiration date of the license as provided in this rule.

(2) An individual insurance producer who is ordered by a branch of the armed forces of the United States into active military duty may obtain an extension of the expiration date of the license for the period of time provided in this section. The extended expiration date is established for a license as follows:

(a) By adding the number of days the licensee served on active duty to the date on which the licensee is released from active duty, if the license would otherwise have expired during the period of active duty; or

(b) By adding the number of days the licensee served on active duty to the date on which the license of the licensee expires, if the license would otherwise have expired after the date on which the licensee is released from active duty.

(3) The expiration date of the license of an insurance producer who requests extension of the expiration date of the license for an extenuating circumstance other than being ordered into active military duty under section (2) of this rule may be extended by the Director according to the Director's judgment, as provided in this section. The extended expiration date is established for a license as follows:

(a) By adding the number of days the insurance producer was unable to exercise authority under the insurance producer license to the date on which the insurance producer was once again able to resume duties under the license, if the license would otherwise have expired during the period of the extenuating circumstance; or

(b) By adding the number of days the insurance producer was unable to exercise authority under the insurance producer license to the date on which the insurance producer was once again able to resume duties under the license, if the license would otherwise have expired after the date on which the period of the extenuating circumstance ends.

(4) The extended expiration date established under sections (2) and (3) of this rule is the last day of the month in which the final day of the added period occurs. The date so established shall also be the expiration date for purposes of subsequent renewals of the license.

(5) The fee, continuing education and other applicable requirements for renewal that would have applied for the normal expiration date of a license of an insurance producer described in section (2) or (3) of this rule apply for the extended expiration date. An insurance producer applying for renewal under this rule shall include documentation with the renewal application as follows:

(a) If the reason for the requested extension is that the insurance producer was called to active duty in the military, the insurance producer shall provide a copy of documentation by the branch of the armed forces in which the insurance producer served that shows the period served on active duty or an affidavit, signed by the applicant, that states the period served on active duty.

(b) If the extension is requested for some other reason, the insurance producer shall provide documentation or other evidence of the extenuating circumstances as specified by the Director.

(6) Sections (2) and (3) of this rule apply only to licensees who leave active duty under honorable conditions. This rule does not apply to regular and routine reservist training periods of service.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.072
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 10-1997, f. & cert. ef. 10-8-97

Or. Admin. R. 836-071-0150 Errors and Omissions Insurance; Insurance Consultants; Managing General Agents

(1) The amount of insurance for which an insurance consultant must maintain a certificate of errors and omissions insurance with the Director as required by ORS 744.635 is $500,000 claims made or per occurrence.

(2) The amount of insurance for which a managing general agent as described in ORS 744.300 must maintain a certificate of errors and omissions insurance with the Director as required by 744.303 is $500,000 claims made or per occurrence.

(3) A managing general agent or an insurance consultant may obtain insurance required by ORS 744.303 or 744.635 from an insurer other than an authorized insurer if the insurer does not control or is not controlled by, or is not under common control with, the managing general agent or insurance consultant, whether directly or indirectly through one or more intermediaries, and if:

(a) The insurer is an eligible surplus lines insurer pursuant to the requirements of ORS 735.400 to 735.495 and the insurance is procured by a surplus lines licensee;

(b) The insurer is an authorized insurer in the state of domicile of the insurance consultant or managing general agent for whom the insurance is obtained; or the state of domicile of the applicant for either such license; or

(c) The insurance is procured from an Oregon surplus lines insurer that is eligible in the state of domicile of the insurance consultant or managing general agent, or applicant for either such license, if all requirements of this subsection are satisfied. The insurance for purposes of this subsection must be confirmed by the signature of an Oregon surplus lines licensee. The Oregon surplus lines licensee must also affirm in writing that the Oregon surplus lines licensee will be the agent for service of process for any action or proceeding involving the insurance consultant or managing general agent and an Oregon resident.

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-071-0160 Errors and Omissions Insurance; Reinsurance Intermediary Managers

(1) The amount of insurance for which a reinsurance intermediary manager must maintain a certificate of errors and omissions insurance with the Director as required by ORS 744.818, is $500,000 claims made or per occurrence.

(2) A reinsurance intermediary manager may obtain insurance required by ORS 744.818, from an insurer other than an authorized insurer if the insurer does not control or is not controlled by, or is not under common control with, the reinsurance intermediary manager, whether directly or indirectly through one or more intermediaries, and if:

(a) The insurer is an eligible surplus lines insurer pursuant to the requirements of ORS 735.400 to 735.495 and the insurance is procured by a surplus lines licensee;

(b) The insurer is an authorized insurer in the state of domicile of the reinsurance intermediary manager for whom the insurance is obtained; or the state of domicile of the applicant for the license; or

(c) The insurance is procured from an Oregon surplus lines insurer that is eligible in the state of domicile of the reinsurance intermediary manager or applicant for the license, if all requirements of this subsection are satisfied. The insurance for purposes of this subsection must be confirmed by the signature of an Oregon surplus lines licensee. The Oregon surplus lines licensee must also affirm in writing that the Oregon surplus lines licensee will be the agent for service of process for any action or proceeding involving the reinsurance intermediary manager and an Oregon resident.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.818
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1993, f. & cert. ef. 9-23-93

Or. Admin. R. 836-071-0180 Insurance Producer Pre-Examination Requirements

(1) An applicant for a license as an insurance producer may take an examination for the license only if the applicant first qualifies for the examination by:

(a) Satisfying pre-licensing education requirements of section (2) of this rule; or

(b) Satisfying the experience requirements of section (6) of this rule.

(2) An applicant may qualify for the examination by taking pre-licensing education meeting the requirements of section (3) of this rule according to any of the following methods:

(a) Attendance at classroom lectures supervised and conducted by an instructor;

(b) Attendance at the showing or playing of a previously videotaped or audiotaped lecture, if student check-in and check-out are supervised and a course instructor is present or available to answer student questions; or

(3) Pre-licensing education shall consist of not less than:

(a) 20 hours in basic principles of property insurance, the duties and responsibilities of an insurance producer and Oregon-related laws, for authority to transact property insurance;

(b) 20 hours in basic principles of casualty insurance, the duties and responsibilities of an insurance producer and Oregon-related laws, for authority to transact casualty insurance;

(c) 20 hours in basic principles of personal lines insurance, the duties and responsibilities of an insurance producer and Oregon-related laws, for authority to transact personal lines insurance;

(d) 20 hours in basic principles of life insurance, the duties and responsibilities of an insurance producer and Oregon-related laws, for authority to transact life insurance; and

(e) 20 hours in basic principles of health insurance, the duties and responsibilities of an insurance producer and Oregon-related laws, for authority to transact health insurance.

(4) For the purposes of sections (2) and (3) of this rule:

(a) One hour of training shall consist of not less than 50 minutes of instruction;

(b) Surety is included in the casualty insurance line and marine and transportation insurance may be included in the property insurance line or the casualty insurance line;

(c) The personal lines line is a subcategory of the casualty insurance line. Consequently, a person who obtains training for a license to transact casualty insurance need not obtain separate or additional training to transact personal lines insurance.

(5) Except as authorized in section (2) of this rule for an online self-study program, an applicant may not satisfy the training requirements established in this rule by unsupervised training or by self-study.

(6) An applicant may satisfy experience requirements for the examination by either of the methods described in this section. As provided in section (7) of this rule, an applicant may substitute successful completion of coursework to obtain an industry recognized designation for all or part of the experience requirements. An applicant may also satisfy the experience requirements for the examination by obtaining an insurance degree from an accredited college or university. The methods for satisfying experience requirements are as follows:

(a) Obtaining and showing proof of three years of verifiable experience as an unlicensed person performing the duties and activities described in OAR 836-071-0280(1) or (2) in the class or classes of insurance for which application is made, but only if any part of the experience has occurred within two years of the date of application for the insurance producer license in this state; and

(b) Obtaining and showing proof of three years of licensure as a resident insurance producer, agent or insurance broker in another state, a province of Canada or Mexico:

(A) If the applicant has been so licensed within two years of the date of application for the insurance producer license in this state; and

(B) If the applicant is not otherwise exempt from taking the examination under ORS 744.067.

(7) An applicant may substitute successful completion of coursework required for obtaining an industry-recognized designation described in this section for all or a part of the number of years of experience required under section (6) of this rule in the class or classes of insurance for which application was made. The following are the designations, the amount of experience for which the coursework may be substituted and the class or classes of insurance to which the coursework may apply:

(a) Accredited Advisor in Insurance (AAI) designation of the American Institute for CPCU (Chartered Property and Casualty Underwriter) and Insurance Institute of America: Three years' experience property and casualty;

(b) Accredited Customer Service Representative (ACSR) designation of the Independent Insurance Agents & Brokers of America: Two years' experience property and casualty;

(c) Associate in Risk Management (ARM) designation of the American Institute for CPCU (Chartered Property and Casualty Underwriter) and Insurance Institute of America: Three years' experience property and casualty;

(d) Certified Insurance Counselor (CIC) designation of the Society of Certified Insurance Counselors: Three years' experience property and casualty;

(e) Certified Professional Service Representative (CPSR) designation of the Professional Insurance Agents Association: Two years' experience property and casualty;

(f) Health Insurance Associate (HIA) designation of America’s Health Insurance Plans: Three years’ experience health;

(g) Registered Employee Benefits Consultant (REBC) designation of the American College: Three years’ experience health;

(h) Registered Health Underwriter (RHU) designation of the National Association of Health Underwriters/American College: Three years' experience health;

(i) Any registered program that fulfills the educational requirement leading to the CFP/Certified Financial Planner certification awarded by the Certified Financial Planner Board of Standards, Inc.: Three years' experience life lines;

(j) Certified Employee Benefit Specialist (CEBS) designation of the International Society of Certified Employee Benefit Specialists: Three years’ experience life and health lines;

(k) Life Underwriters Training Council (LUTCF) designation of the Life Underwriters Training Council/American College: Three years' experience life and health lines;

(l) Chartered Financial Consultant (ChFC) designation of the American College: Three years' experience life line;

(m) Fellow Life Manager Institute (FLMI) designation of LOMA (Life Office Management Association): Three years' experience life line;

(n) Certified Professional Insurance Women (CPIW) designation of the National Association of Insurance Women: Two years' experience property and casualty lines; and

(o) An industry designation determined by the Director, by virtue of the coursework, to provide experience at least comparable to experience obtained by coursework for an industry designation specifically referred to in this section.

(8) Pretraining experience claimed under section (6) of this rule is verifiable only if:

(a) The applicant's employer submits to the Division a completed Division Qualification Form that includes a description of all the pretraining experience claimed by the applicant; and

(b) The Division is able to contact the employer to verify the information contained in the Qualification Form.

(9) Proof of completion of a training course for an industry designation under section (7) of this rule must be evidenced by a certificate of completion or notice of a passing examination score by the organization sponsoring the training.

(10) The amendments to this rule that were filed in ID 15-2002 with the Secretary of State on June 26, 2002 to become effective on July 1, 2002 are re-adopted with the operative date of July 1, 2002.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.058, 744.064 & 744.067
ID 4-2007, f. 3-6-07, cert. ef. 1-1-08
ID 2-2006, f. & cert. ef. 1-31-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 8-2003, f. 12-12-03, cert. ef. 12-19-03
ID 4-2003(Temp), f. 6-30-03, cert. ef. 7-1-03 thru 12-19-03
ID 15-2002, f. 6-26-02, cert. ef. 7-1-02
ID 9-2002, f. & cert. ef. 3-18-02
ID 6-1994, f. & cert. ef. 5-20-94
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0185 Qualification of Agents Selling Variable Life Insurance, Including Variable Annuities

A person shall not solicit, place or procure variable life insurance contracts or policies, including variable annuities, unless the person is licensed as authorized by OAR 441-175-0120 or by OAR 441-175-0130.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.062
ID 12-2018, amend filed 08/16/2018, effective 08/16/2018
ID 2-2010, f. 1-8-10, cert. ef. 2-1-10
ID 9-2002, f. & cert. ef. 3-18-02
ID 4-1991, f. & cert. ef. 4-25-91
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0190 Registration of a School

(1) Each school, other than a community college or four-year college or university, offering an insurance instruction program shall register with the director in order to provide pre-examination training for applicants for insurance producer licenses. Each school shall apply for registration annually on a form provided by the director.

(2) The application shall contain:

(a) The business name, main business address and business telephone number of the school and the name of an individual employed by the school whom the director may contact;

(b) A detailed description of the school's insurance training program that shall, for each part, include the course outline and list of source materials, instructor's lesson plans, student outline, proposed student attendance record forms, proposed student progress record forms and enrollment contract form including refund policy;

(d) A list of principal officers and directors if the school is a firm or corporation;

(e) A certification that the training offered or proposed to be offered includes subject matter equivalent to the examination outline adopted by the Division of Financial Regulation.

(3) A registered school shall notify the director of any change of its address, telephone number or contact person within 30 days after the change.

(4) Promotional material advertising insurance pre-examination training published by the registered school shall state that the school is registered with the Division of Financial Regulation and that registration does not imply endorsement by the Division of Financial Regulation.

(5) A registered school shall retain for each training course the attendance and course outlines for a period of three years after the conclusion of the course.

(6) A registered school is subject to audit by the director for purposes of verifying compliance with OAR 836-071-0180.

(7) Subject to revocation of registration under OAR 836-071-0195, a registration expires on the second January 1 following the date of registration.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.072
ID 26-2024, minor correction filed 08/16/2024, effective 08/16/2024
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0195 Revocation of Registration of a School; Reinstatement

(1) The registration of an insurance school providing pre-examination training may be revoked by the Director if the Director determines that:

(a) The insurance training program as registered is not being taught; or

(b) Students who have not maintained a satisfactory attendance record or have not completed course work have been certified by the school for the insurance producer license examination.

(2) A school whose registration is revoked may apply for reinstatement. The school must demonstrate to the Director's satisfaction that the school has taken appropriate action to correct the conditions that were the basis of the revocation.

History

Statutory/Other Authority: ORS 731 & 744
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0210 Statutory Authority; Purpose

(1) OAR 836-071-0210 to 836-071-0250 are adopted under the authority of ORS 731.244 and 744.072 for the purpose of implementing 744.072, relating to continuing education for insurance producers. The purpose of OAR 836-071-0210 to 836-071-0250 is to establish requirements and standards for the program for licensees.

(2) The purpose of the continuing education program is to promote trustworthy and competent insurance services for the public by requiring a sufficient number of hours for insurance training.

History

Statutory/Other Authority: ORS 731.244 & 744.072
Statutes/Other Implemented: ORS 744.072
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97

Or. Admin. R. 836-071-0215 Continuing Education Requirements for Insurance Producers; Hours; Credit for Experience and Coursework

Each resident insurance producer is responsible for obtaining the credit hours required by this rule by enrolling in courses approved by the Director that serve the insurance producer's professional needs. The following minimum continuing education requirements apply to resident insurance producers as a condition of renewing a license as insurance producer:

(1) For each two year renewal period occurring after issuance of an insurance producer license that an insurance producer holds an insurance producer license, the insurance producer must complete 12 hours of continuing education annually or 24 hours in each two-year renewal period; and

(2) For each two year renewal period occurring after issuance of an insurance producer license, the renewing insurance producer must include in the applicable required hours of completed continuing education:

(a) At least three credit hours of continuing education on the subject of Oregon statutes and administrative rules, including recent changes;

(b) At least three credit hours of continuing education of the subject of professional ethics for insurance producers; and

(c) For a producer that negotiates, sells, or solicits flood insurance, at least two credit hours of continuing education on any combination of the following subjects: current state and federal laws relating to flood insurance, the National Flood Insurance Program, or private flood insurance.

History

Statutory/Other Authority: ORS 731.244 & ORS 744.072
Statutes/Other Implemented: ORS 744.072
ID 13-2018, amend filed 08/16/2018, effective 08/16/2018
ID 4-2007, f. 3-6-07, cert. ef. 1-1-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 6-1999, f. 12-13-99, cert. ef. 1-1-00
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 6-1994, f. & cert. ef. 5-20-94
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0220 Continuing Education; Documentation

(1) For the purpose of furnishing evidence of completion of a course for which an insurance producer claims credit, the documentation applicable to the course shall be submitted as follows:

(a) For a registered course taken for academic credit, to the extent possible, the institution offering the course shall submit electronically a transcript, certificate of completion or grade or course completion report, whichever is issued by the institution offering the course, or a copy thereof. If it is not possible for the institution offering the course to submit a transcript, certificate of completion or grade or course completion report, the insurance producer shall submit the transcript, certificate of completion or grade or course completion report in accordance with directions provided on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov. For purposes of this subsection, a course is taken for academic credit if it is offered by a community college or four-year college or university, and the insurance producer is given academic credit for the course by such an institution;

(b) For coursework taken for the purpose of obtaining a nationally-recognized insurance industry designation, to the extent possible the entity granting the designation shall submit electronically directly to the Division of Financial Regulation, a transcript, certificate of completion or grade or course completion report, whichever is issued by the entity granting the designation;

(c) For a registered course that is not offered for academic credit, the provider shall submit to the department electronically course completion information. The information must include a statement of the hours of credit, the name of the insurance producer, the date of the course, the course registration number;

(d) For a course that is not offered for academic credit and is not registered when taken by an insurance producer, an insurance producer must comply with the requirements of OAR 836-071-0250.

(2) The director may accept evidence of completion of a course from continuing education providers through electronic means as specified by the director.

History

Statutory/Other Authority: ORS 731.244 & ORS 744.072
Statutes/Other Implemented: ORS 744.072
ID 23-2023, minor correction filed 06/27/2023, effective 06/27/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 4-2007, f. 3-6-07, cert. ef. 1-1-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0225 Continuing Education; Standards for Granting Credit Hours

(1) Subject to the subject matter requirements of OAR 836-071-0230, an insurance producer may receive credit for continuing education for a course taken for academic credit, for a course registered under OAR 836-071-0240 or a course certified under OAR 836-071-0250:

(a) For not more than the credit hours authorized by the director;

(b) Only if an hour includes at least 50 minutes of instruction or study;

(c) For class hours in which an insurance producer is an instructor of a course if the course meets the continuing education requirements of an insurance producer attending it. Credit may be taken by an insurance producer with respect to a course only once in each renewal period in which the insurance producer instructs the course;

(d) For not more than eight credit hours in any given day;

(e) Only if the hour for which credit is taken was completed during the license period immediately preceding the renewal date;

(f) For a course taken through independent study, but only as provided in section (4) of this rule.

(2) An insurance producer may take credit for a course only if the insurance producer has successfully completed the course before the insurance producer applies for renewal or reinstatement. For the purpose of taking credit for a course other than one taken through independent study, an insurance producer successfully completes the course if the insurance producer is present for the full approved time and has signed in and out on the attendance register for the course.

(3) An insurance producer may not take continuing education credit for:

(a) Hours devoted to preparation for a course; when the insurance producer is acting as an instructor for the course;

(b) Travel time;

(d) Unplanned or incidental learning experiences;

(e) Any course not completed;

(f) Any course repeated within a two year period; or

(g) Any course during which the insurance producer is absent more than 5 minutes for each hour of credit granted, or is absent more than 20 minutes from the course as a whole.

(4) For purposes of subsection (1)(f) of this rule, a course is taken through independent study if the course is designed to allow each student to take the course at the student's own pace on an individual basis. An insurance producer may claim credit for an independent study course if the provider and the course are both registered with the director when the course is taken, if the insurance producer passes an examination by a score of 70 percent or higher and if the proctor of the examination affirms and the provider certifies completion and passage as provided in this section. If the independent study course is a textbook, the examination must be conducted as a closed book examination. The examination for an independent study course need not be proctored if the course is computerized and includes safeguards ensuring that the insurance producer cannot review the study material while taking the examination and if the examination has safeguards ensuring that the insurance producer cannot change answers after completing the examination. Proctor affirmation and provider certification shall be made as follows:

(a) The proctor must submit materials electronically that affirm by affidavit that the insurance producer took the examination for the course without assistance from the textbook or from any person. The proctor must disclose in the affidavit the proctor's name, address, telephone number and the proctor's position or connection with the insurance producer, such as a continuing education school or a librarian, and the proctor's registration number, if the proctor is required to be registered under section (7) of this rule. The provider must retain the affidavit with the examination. A proctor affidavit is not required if the independent study course is taken from a provider that offers a nationally recognized insurance industry designation.

(b) If the provider determines that the insurance producer completed and passed the examination, the provider may issue the certificate of completion. The provider shall date the certificate according to the date on which the provider received the examination for grading, state on the certificate that to the best of the provider's knowledge the insurance producer passed the examination and submit the certificate electronically to the division in accordance with directions provided on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

(5) The provider of a course shall submit electronically completion information for the course for each qualifying insurance producer not later than the 15th day after the date on which an insurance producer completes a course or not later than the 15th day after the date on which the director approved the course, whichever date is later. The period for issuance of a certificate does not apply to a provider who discloses to the insurance producer in writing, when the insurance producer pays for or registers for the class, the date by which or the time period within which the certificate will be issued.

(6) A provider shall notify the director immediately of any change in authorized signers for certificates.

(7) A person may act as a proctor for one or more independent study courses under section (4) of this rule only if the person is registered as a proctor with the Division of Financial Regulation. A person applying for registration must submit the name, address and telephone number of the person; the location or locations at which examinations will be proctored; the fee or fees that will be charged, if any, for the proctoring service; and whether the person will proctor examinations for the general insurance producer population. There is no registration fee. If the person will proctor independent study course examinations for other than the general insurance producer population, the person must specify for whom the proctoring will be done. The registration requirement under this section does not apply to city, county and state public libraries, state colleges and universities, private colleges and universities other than those that are owned by or operated primarily for the insurance industry, law offices or currently licensed certified public accountants.

History

Statutory/Other Authority: ORS 731.244 & ORS 744.119
Statutes/Other Implemented: ORS 744.119
ID 24-2023, minor correction filed 06/27/2023, effective 06/27/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 4-1997, f. 4-25-97, cert. ef. 6-1-97
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0230 Continuing Education; Course Qualification Guidelines

(1) An insurance producer may receive credit for a course on one or more of the following general subject matters if the course also meets the requirements of OAR 836-071-0225:

(a) Rating;

(b) Insurance fundamentals;

(d) Policy contents;

(e) Proper uses of insurance products;

(f) Oregon Insurance Code and administrative rules;

(g) Technical information related to the insurance license classes of general lines, life and health;

(h) Insurance law;

(i) Insurance policies and coverage;

(j) Contract law;

(k) Insurance needs;

(l) Insurance risk management;

(m) Ethics;

(n) Estate planning;

(o) Pension plans;

(p) Financial planning;

(q) Accounting;

(r) Finance;

(s) General underwriting principles;

(t) Prevention of errors and omissions;

(u) Office management, client relations or improving the operations of the insurance producer’s business, or any combination thereof;

(v) Any other subject matter that the Director determines will enhance the ability of an insurance producer to provide insurance services to the public effectively.

(2) An insurance producer may claim not more than four hours of credit in a renewal period for a course on the subject matter described in section (1)(u) of this rule.

(3) An insurance producer may not receive credit for the following types of courses:

(a) A course designed solely to prepare a person for a license examination;

(b) A course in mechanical, office or business skill, including but not limited to typing, speed reading or the use of calculators or other machines or equipment;

(d) A course in motivation, salesmanship, stress management, time management, psychology, writing or motivational and promotional communication;

(e) A course in personnel management or recruiting;

(f) Any product not available for sale to Oregon consumers;

(g) Securities, other than variable life and variable annuities.

History

Statutory/Other Authority: ORS 731.244 & 744.072
Statutes/Other Implemented: ORS 744.072
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 6-1994, f. & cert. ef. 5-20-94
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0235 Provider Registration

(1) A provider of continuing education courses must register with the Director in order to register courses under OAR 836-071-0240. A provider must register electronically in the method required by the Director. The registration of a provider shall include the provider's business name, main business address, the business telephone number, email address and the name of a contact person. If a provider is a firm or corporation or a trade association, registration shall also include the names of all principal officers.

(2) A provider shall notify the Director of any change in the address, telephone number, email address or contact person of the provider within 30 days after any such change takes effect.

(3) Subject to revocation of registration under OAR 836-071-0245, a provider registration expires on the second January 1 following the date of registration.

(4) A provider is subject to rejection of registration by the Director if the provider fails to meet any requirement of OAR 836-071-0215 to 836-071-0250 applicable to the provider or to courses offered by the provider, or if any of its employees or contractors who supervise or conduct and certify completion of a course:

(a) Has a history of noncompliance with insurance statutes or rules; or

(b) Has had an insurance producer license or other insurance license revoked, suspended or refused because of violations of or noncompliance with insurance statutes or rules.

History

Statutory/Other Authority: ORS 731.244 & 744.119
Statutes/Other Implemented: ORS 744.119
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0240 Course Registration

(1) A provider registered under OAR 836-071-0235 shall apply to the director for registration of each course to be offered by the provider for continuing education credit. Application for registration shall be made electronically in the method required by the director and shall include the name of the provider, the provider's registration number assigned by the department, the course title and credit hours suggested by the provider for the course, and if known, the date, time and location of meetings of each course for which application is made. The provider shall include the course outline with the registration application and shall submit any other information requested by the director. The course outline must show instruction in 50-minute periods.

(2) In order to ensure that a course is eligible to be registered prior to the date of the first meeting of the course, a registered provider must apply for registration of the course not later than the 60th day preceding the first date.

(3) The registration of a course expires on the last day of the 24th month after the date the course is registered unless the course is renewed prior to the date on which registration expires. The provider must apply for renewal of a course not later than the 21st day prior to the date on which registration expires. If the director determines that the course materials submitted with the renewal application are sufficiently changed or otherwise so different that the course as a whole should be treated as a new course rather than renewed, the course and its materials shall be reviewed according to the review period established in section (2) of this rule.

(4) Each course registration application is subject to review by the director for the purpose of evaluating and assigning credit hours and determining compliance with requirements of course content under OAR 836-071-0230. The director may reject a course for registration or terminate a course's registration if the director determines that the course does not so comply.

(5) A registered provider shall resubmit a registered course for review and approval whenever the provider substantially changes the content of the course as registered.

(6) A provider shall notify the director immediately of a cancellation or a change of date, time or location of a scheduled class.

(7) A course registration application that is submitted after the 60th day before the date of the first meeting of the course is subject to approval or disapproval after the date of the first meeting. If the director approves an application for registration of a course that is submitted after the 60th day before the date of the first meeting of the course and before the tenth day prior to the date of that meeting, and if the provider gives notice of the course meeting as required by OAR 836-071-0247, the provider may grant credit for the course retroactively.

(8) A provider domiciled in another state that is a member of the Midwest Zone Continuing Education Reciprocity Agreement may offer in this state a course that is registered in its domiciliary state if the provider registers the course as provided in this rule. Such a course qualifies for registration if the director determines that the subject matter of the course is not disqualified for credit under OAR 836-071-0230(2). A course to which this section applies is subject to renewal of its registration and the provider and the course are subject to the other provisions of this rule.

(9) All materials required under this rule shall be submitted electronically in accordance with directions of the director set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, ORS 744.119 & sec. 12 & Enrolled SB 268 (2001 Reg. Session))
Statutes/Other Implemented: ORS 744.008, ORS 744.119 & sec. 12 & Enrolled SB 268 (2001 Reg. Session))
ID 28-2023, minor correction filed 07/03/2023, effective 07/03/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 10-2001, f. & cert. ef. 9-11-01
ID 19-1998, f. & cert. ef. 12-2-98
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 6-1994, f. & cert. ef. 5-20-94
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0242 Provider Trade Practices

(1) A registered provider shall not engage in false, misleading or deceptive advertising.

(2) A registered provider must disclose in writing the charges for a course to each insurance producer applying to take the course, prior to enrollment of the insurance producer.

(3) If a registered provider cancels a course for any reason, the provider must refund all charges in full unless the refund policy is clearly described in the enrollment application for the course.

(4) A registered provider shall ensure that each registered course and each course for which registration is sought provides students with current and accurate information.

(5) A registered provider shall include a statement in all material published by the provider to advertise or promote insurance license continuing education that the provider and courses are registered with the Division of Financial Regulation and that registration does not imply endorsement by the Division of Financial Regulation.

(6) A registered provider may not advertise continuing education hours until the course has been approved by the division. If approval has been applied for, however, a registered provider may so advertise.

History

Statutory/Other Authority: ORS 731.244 & ORS 744.072
Statutes/Other Implemented: ORS 744.072
ID 27-2024, minor correction filed 08/16/2024, effective 08/16/2024
ID 4-2007, f. 3-6-07, cert. ef. 1-1-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 19-1998, f. & cert. ef. 12-2-98
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97

Or. Admin. R. 836-071-0245 Revocation of Provider Registration

(1) The Director may revoke the registration of a provider if a course does not meet the requirements of OAR 836-071-0225 and 836-071-0230 or if the provider violates 836-071-0242.

(2) A provider whose registration has been revoked under this rule may apply to the Director for reinstatement of the registration not sooner than the 60th day after revocation.

(3) The Director may reinstate a revoked registration if the Director determines, from proof furnished to the Director, that the conditions responsible for the revocation have been corrected.

History

Statutory/Other Authority: ORS 731.244 & 744.119
Statutes/Other Implemented: ORS 744.119
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0247 Requirements for Granting Credit; Attendance Records

(1) A registered provider shall provide the Director with the meeting times and places of a registered course not later than the tenth day before the date that the course is given.

(2) A registered provider shall not give credit for a course unless the Director has approved the registration application for the course and the registered provider has given the Director notice of the meeting of the course as provided in section (1) of this rule.

(3) A registered provider of lecture courses shall maintain an accurate record of each course offered, instructors and student attendance records for not less than three years after the date of completion of the course.

(4) A provider of an independent study course shall maintain examination results and proctor affidavits for not less than three years after the date of course completion.

(5) A provider of an independent study course shall notify all vendors of the provider's course materials when credit hours for the course have changed or when the course is discontinued.

(6) A course that is registered in this state pursuant to OAR 836-071-0240(8) shall be allocated the times and credits determined pursuant to the Midwest Zone Continuing Education Reciprocity Agreement.

History

Statutory/Other Authority: ORS 731.244, 744.119 & Sec. 12 & Enrolled SB 268 (2001)
Statutes/Other Implemented: ORS 744.119 & Sec. 12 & Enrolled SB 268 (2001)
ID 10-2001, f. & cert. ef. 9-11-01
ID 19-1998, f. & cert. ef. 12-2-98

Or. Admin. R. 836-071-0250 Credit for Unregistered Courses

(1) An insurance producer may apply for credit as provided in this rule for a course that is not offered for academic credit and is not registered. In order to apply for credit, the insurance producer must submit to the Director an application on a form provided by the Director and substantiation of the course as provided in this rule. The application and substantiation must be submitted not later than the 180th day after the date of completion of the course.

(2) If an unregistered course is on a subject permitted under OAR 836-071-0230, the insurance producer must substantiate to the Director's satisfaction that the course meets the requirements of OAR 836-071-0225 and 836-071-0230 and that the insurance producer attended and completed the course. To make the substantiation, the insurance producer must submit documentation of the course and proof of attendance provided by the provider concerning the course. The documentation may include, by way of example only, an outline of the course or course materials, workbooks or other materials issued by the provider that show the course work. The Director may request any other information as well, such as times allotted to the parts of the course.

(3) If an unregistered course is not on a subject permitted under OAR 836-071-0230, the insurance producer must substantiate to the Director's satisfaction that the course meets the requirements of 836-071-0225, that the course contributes to the insurance producer's professional competence and will benefit the insurance-buying public and that the insurance producer attended and completed the course. To make the substantiation, the insurance producer must submit documentation provided by the provider concerning the course. The documentation may include, by way of example only, an outline of the course or course materials, workbooks or other materials issued by the provider that show the course work, or proof of passing the final examination for the course or a letter, certificate or other documentation of completion from the provider. The Director may request any other information as well, such as times allotted to the parts of the course.

(4) The application and substantiation required under this rule are subject to review by the Director for the purpose of determining whether to certify the course for credit and evaluating and assigning credit hours. The Director may certify the course, or may reject it if the Director determines that the course does not meet applicable requirements.

History

Statutory/Other Authority: ORS 731.244 & 744.072
Statutes/Other Implemented: ORS 744.072
ID 4-2007, f. 3-6-07, cert. ef. 1-1-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1997, f. 4-7-97, cert. ef. 6-1-97
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0260 Fees Charged by Insurance Producers

(1) When an insurance producer or any affiliate of the insurance producer receives any compensation authorized under ORS 735.455, 744.091 or 744.093 from a prospective insured for transacting insurance, neither the insurance producer nor the affiliate may accept or receive any compensation from an insurer or other third party for the placement of insurance for the prospective insured unless the insurance producer, prior to the prospective insured’s purchase of insurance, has:

(a) Obtained the prospective insured’s documented acknowledgment that the compensation will be received by the insurance producer or affiliate;

(b) Disclosed the amount of compensation from the insurer or other third party for the placement. If the amount of compensation is not known at the time of disclosure, the insurance producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount; and

(c) Disclosed the nature of the work that the insurance producer or affiliate will perform on behalf of the prospective insured.

(2) When an insurance producer or any affiliate of the insurance producer receives any compensation authorized under ORS 735.455, 744.091 or 744.093 from a prospective insured for transacting insurance and receives no compensation from an insurer or other third party for placement of insurance for the prospective insured, the insurance producer or affiliate must obtain the prospective insured’s documented acknowledgement that the compensation will be received by the insurance producer and must disclose the nature of the work that the insurance producer or affiliate will perform on behalf of the prospective insured.

(3) A person is not a prospective insured for the purpose of this rule if the person is merely:

(a) A participant or beneficiary of an employee benefit plan; or

(b) Covered by a group or blanket insurance policy or group annuity contract sold, solicited or negotiated by the insurance producer or affiliate.

(4) This rule does not apply to any of the following persons:

(a) An insurance producer when the insurance producer acts only as an intermediary between an insurer and the prospective insured’s insurance producer, such as a managing general agent, a wholesale insurance producer under ORS 744.093, a surplus lines licensee when transacting insurance with a producing insurance producer under ORS 735.455 or a sales manager.

(b) An insurance producer with respect to an incidental charge that is received from the prospective insured and is authorized under OAR 836-071-0267.

(5) As used in this rule:

(a) “Affiliate” means a person that controls, is controlled by or is under common control with the insurance producer.

(b) “Compensation from an insurer or other third party” means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes or any other form of valuable consideration, whether or not payable pursuant to a written agreement.

(c) “Compensation from a prospective insured” does not include any fee or amount collected by or paid to the insurance producer that does not exceed an amount established by the Director.

History

Statutory/Other Authority: ORS 731.244, 735.455, 744.091 & 744.093
Statutes/Other Implemented: ORS 735.455, 744.091 & 744.093
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

Or. Admin. R. 836-071-0263 Fees Charged by Insurance Consultants or Insurance Producers

(1) When an insurance consultant or an affiliate of an insurance consultant receives from a prospective insured any compensation authorized under the Insurance Code or rules adopted thereunder, neither the insurance consultant nor the affiliate may accept or receive any compensation from an insurer or other third party for services provided to the prospective insured in addition to the compensation paid by the prospective insured unless the insurance consultant, prior to the transaction:

(a) Has obtained the prospective insured's documented acknowledgment that the compensation will be received by the insurance consultant or affiliate; and

(b) Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance consultant shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

(2) When an insurance producer or an affiliate of an insurance producer receives any compensation otherwise authorized under the Insurance Code or OAR 836-071-0269 to 836-071-0277 from a prospective insured, neither the insurance producer nor the affiliate may accept or receive any compensation from an insurer or other third party for the placement of insurance in the same or related transaction unless the insurance producer, prior to the prospective insured's purchase of insurance, has:

(a) Obtained the prospective insured's documented acknowledgment that the compensation will be received by the insurance producer or affiliate; and

(b) Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

(3) A person is not a prospective insured for the purpose of this rule if the person is merely:

(a) A participant or beneficiary of an employee benefit plan; or

(b) Covered by a group or blanket insurance policy or group annuity contract sold, solicited or negotiated by the insurance producer or affiliate.

(4) This rule does not apply to:

(a) An insurance producer with respect to a transaction to which ORS 735.455, 744.091 or 744.093 applies;

(b) An insurance producer when the insurance producer acts only as an intermediary between an insurer and the prospective insured's insurance producer, such as a managing general agent, a wholesale insurance producer under ORS 744.093, a surplus lines licensee when transacting insurance with a producing insurance producer under 735.455 or a sales manager;

(c) An insurance producer with respect to an incidental charge that is received from the prospective insured and is authorized under OAR 836-071-0267; or

(d) A reinsurance intermediary.

(5) As used in this rule:

(a) "Affiliate" means a person that controls, is controlled by or is under common control with the insurance consultant or insurance producer.

(b) "Compensation from an insurer or other third party" means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes or any other form of valuable consideration, whether or not payable pursuant to a written agreement.

(c) “Compensation from a prospective insured” does not include any fee or amount collected by or paid to the insurance producer that does not exceed an amount established by the Director.

History

Statutory/Other Authority: ORS 731.244, 744.077 & 744.650
Statutes/Other Implemented: ORS 737.205, 742.009, 744.077, 744.650 & 746.015
ID 13-2005, f. 12-29-05, cert. ef. 1-15-06
ID 9-2005(Temp), f. 5-18-05, cert. ef. 8-1-05 thru 1-15-06

Or. Admin. R. 836-071-0267 Incidental Charges for Customer Services; Personal, Commercial Lines

(1) This rule establishes incidental charges that an insurance producer may impose for customer services in connection with the transaction of insurance. For the purpose of this rule, personal lines insurance is property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes.

(2) An insurance producer may impose an incidental charge established in this rule on a customer only if the insurance producer has given written notice to the customer that the insurance producer may impose incidental charges authorized by this rule. The notice must disclose all incidental charges that the insurance producer may impose and the service provided for each incidental charge. The insurance producer must give the notice to a customer before providing any service for which an incidental charge may be imposed, but not later than at the time of application or the renewal before the insurance producer commences imposing the incidental charges. The written notice requirement does not apply to the binding or issuance of a policy. At the time an insurance producer charges an incidental charge under this rule, the insurance producer must clearly disclose to the customer the amount of the incidental charge and the service for which the incidental charge is imposed.

(3) An insurance producer may impose an incidental charge for rewriting or reinstating a policy that was cancelled by the insurer because of an action or inaction of the customer, such as nonpayment of premium or failure to renew according to policy terms, as provided in this section. An insurance producer may not impose the incidental charge for the first rewriting or reinstatement of the policy. The incidental charges are as follows:

(a) A charge not to exceed $25 for personal lines insurance.

(b) A charge not to exceed $100 for commercial insurance.

(4) An insurance producer may impose an incidental charge for taking a payment of premium in cash, in an amount not to exceed $10.

(5) An insurance producer may impose an incidental charge as authorized by ORS 30.701 for handling and collecting on a check from a customer that is returned for insufficient funds.

(6) An insurance producer may impose an incidental charge for the actual cost of providing photographic or inspection services to a customer in connection with issuing or amending insurance coverage, but the incidental charge may not exceed:

(a) $7.50 for the services in connection with issuing or amending personal insurance coverage.

(b) $45 for the services in connection with issuing or amending commercial insurance coverage.

(7) An insurance producer may impose an incidental charge for the actual cost of obtaining a motor vehicle report from the Motor Vehicle Division of the Oregon Department of Transportation or from the comparable agency in another state.

(8) An insurance producer may impose an incidental charge not to exceed $5 for preparing a duplicate insurance identification card at the request of a customer, when the customer requests the preparation of the card instead of waiting for the insurance identification card prepared by the insurer.

(9) An insurance producer may impose an incidental charge not to exceed $10 for each endorsement to a personal lines insurance policy that is in addition to the first six other endorsements by the insurance producer to the policy within a six-month period.

(10) An insurance producer may impose an incidental charge not to exceed $5 for obtaining a duplicate SR22 filing on behalf of a customer when the customer has lost or misplaced the original SR22 filing.

(11) An insurance producer may impose an incidental charge not to exceed $5 for each certificate of commercial insurance coverage issued by the insurance producer that is in addition to the first 20 certificates requested by the customer for the commercial insurance policy during a policy period.

History

Statutory/Other Authority: ORS 731.244 and 744.077
Statutes/Other Implemented: ORS 744.077
ID 13-2014, f. & cert. ef. 7-21-14
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

Or. Admin. R. 836-071-0269 Purpose and Authority

(1) OAR 836-071-0269 to 836-071-0277 regulate the charging of service fees by insurance producers.

(2) ORS 737.025 states, in part, that the purpose of Insurance Code Chapter 737 (Rates and Rating Organization) is "to promote the public welfare by regulating insurance rates to the end they shall not be excessive, inadequate, or unfairly discriminatory." ORS 737.205 requires every insurer to file its rates with the Director of the Department of Consumer and Business Services. ORS 746.015 prohibits unfair discrimination "between risks of essentially the same hazard in the application of rates for insurance policies or in any other terms or conditions thereof." The Director finds that, with respect to personal lines of insurance, it is reasonable and customary for the public to consider all of the charges made by the insurer or its insurance producer to be either an insurance premium charge or a premium financing charge.

(3) OAR 836-071-0269 to 836-071-0277 are issued under the general rulemaking authority of ORS 731.244:

(a) With respect to personal lines insurance coverages to give effect to the rate regulatory provisions of ORS Chapter 737 and the anti-discrimination provisions of ORS 746.015; and

(b) With respect to commercial lines insurance coverage to give effect to the provisions of ORS 746.015 (Discriminations), 746.405 to 746.530 (Premium Financing) and 742.009 (relating to necessary information for insureds). Formerly: OAR 836-030-0050

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.205, 742.009, 746.015 & 746.405 - 746.525
Renumbered from 836-030-0050, ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 15-1996, f. & cert. ef. 11-12-96
Reverted to IC 58, f. 8-9-74, ef. 9-11-74
IC 9-1983(Temp), f. 11-10-83, ef. 11-15-83
IC 58, f. 8-9-74, ef. 9-11-74

Or. Admin. R. 836-071-0272 Scope of OAR 836-071-0269 to 836-071-0277; Definitions

(1) OAR 836-071-0269 to 836-071-0277 do not apply to the transaction of life insurance, mortgage insurance, or title insurance.

(2) "Service fee" means a charge made by an insurance producer with respect to an insurance transaction to a party other than the insurer, which charge is not a part of the insurer's rate filing under ORS Chapter 737. "Service fee" does not include finance or service charges governed by 746.405 to 746.530 (Premium Financing). Formerly: OAR 836-030-0055

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.205, 742.009, 746.015 & 746.405 - 746.525
Renumbered from 836-030-0055, ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 15-1996, f. & cert. ef. 11-12-96
Reverted to IC 58, f. 8-9-74, ef. 9-11-74
IC 9-1983(Temp), f. 11-10-83, ef. 11-15-83
IC 58, f. 8-9-74, ef. 9-11-74

Or. Admin. R. 836-071-0274 Service Fees Prohibited on Personal Lines

Except as provided in OAR 836-071-0267, a service fee may not be charged with respect to the transaction of insurance covering an individual's person, property, or liability. Coverage of several individuals as members of the same family or household is considered individual coverage for the purpose of this rule. Formerly: 836-030-0060

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 737.205, 742.009, 746.015 & 746.405 - 746.525
Renumbered from 836-030-0060, ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
Reverted to IC 58, f. 8-9-74, ef. 9-11-74
IC 9-1983(Temp), f. 11-10-83, ef. 11-15-83
IC 58, f. 8-9-74, ef. 9-11-74

Or. Admin. R. 836-071-0277 Service Fees Allowed on Commercial Lines; Conditions

(1) Service fees may be charged with respect to the transaction of insurance that covers other than an individual's person, property, or liability.

(2) Except as authorized in ORS 744.091 and 744.093, a service fee may be charged only in those instances where the insurance producer has provided service additional to what is the usual and customary practice of insurance producers under similar circumstances. The insurance producer must give a written explanation of the charge and the reason for it to the person charged. If OAR 836-071-0260 or 836-071-0263 applies to the transaction in which a service fee is charged under this rule, the insurance producer may include the written explanation with the disclosure required by 836-071-0260 or 836-071-0263 or provide the written explanation separately.

(3) A service fee may not be charged with respect to arranging the financing of premium payments. This does not preclude finance charges by insurance producers on their own accounts, or service charges by premium finance companies, which conform to the provisions of ORS 746.405 to 746.530.

History

Statutory/Other Authority: ORS 731.244, 744.077 & 744.650
Statutes/Other Implemented: ORS 737.205, 742.009, 746.015 & 746.405 - 746.525
ID 13-2005, f. 12-29-05, cert. ef. 1-15-06
ID 9-2005(Temp), f. 5-18-05, cert. ef. 8-1-05 thru 1-15-06
Renumbered from 836-030-0065, ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
Reverted to IC 58, f. 8-9-74, ef. 9-11-74
IC 9-1983(Temp), f. 11-10-83, ef. 11-15-83
IC 58, f. 8-9-74, ef. 9-11-74

Or. Admin. R. 836-071-0280 Permitted and Prohibited Activities of Insurance Personnel Exempt from Insurance Producer License Requirement

For purposes of ORS 744.056(2)(a):

(1) An unlicensed person whose activities are executive, administrative, managerial, clerical or a combination of these and is employed by an insurance producer may engage in any activity described in this section, subject to review by the insurance producer or an insurance producer employed by the insurance producer if review is required under this section, if the unlicensed person engages in the activity under the supervision of the insurance producer and on the premises of the insurance producer’s business. The unlicensed person may:

(a) Disclose rates to the insurance-buying public, but only if the rates are reviewed by the insurance producer prior to submission to the insurer;

(b) Fill out an application for insurance if the application is reviewed by the insurance producer prior to submission to the insurer;

(d) Provide information to current policyholders addressing existing policy terms;

(e) Take requests for changes on in-force policies;

(f) Obtain information needed from insureds;

(g) Receive claim information directly from insureds and claimants;

(h) Engage in telephone marketing or making appointments, but only to the extent that the person may obtain policy expiration dates; and

(i) Transmit insurance policies to insureds.

(2) An unlicensed person whose activities are executive, administrative, managerial, clerical or a combination of these and is employed by an insurer may engage in any activity described in this section. The unlicensed person may:

(a) Disclose rates to the insurance-buying public;

(b) Fill out an application for insurance;

(d) Provide information to current policyholders addressing existing policy terms;

(e) Take requests for changes on in-force policies;

(f) Obtain information needed from insureds;

(g) Receive claim information directly from insureds and claimants;

(h) Engage in telephone marketing or making appointments, but only to the extent that the person may obtain policy expiration dates;

(i) Transmit insurance policies to insureds; and

(j) Analyze, interpret and resolve policy coverage questions regarding a claim.

(3) An unlicensed person whose activities are executive, administrative, managerial, clerical or a combination of these and is employed by an insurance producer may engage in the following activities only if they are indirectly related to the sale, solicitation or negotiation of insurance:

(a) Binding coverage; or

(b) Interpreting policy coverages.

History

Statutory/Other Authority: ORS 731.244 & 744.056
Statutes/Other Implemented: ORS 744.056
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 6-1994, f. & cert. ef. 5-20-94
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0285 Insurance Producer Review of Applications

An insurance producer who permits an unlicensed person to fill out an application for insurance as authorized under OAR 836-071-0280 must indicate on the office copy of the application that the insurance producer reviewed the application, giving the date of the review.

History

Statutory/Other Authority: ORS 731 & 744
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0287 Transaction of Group Life, Health Insurance by Insurance Producer without Appointment

(1) Subject to section (2) of this rule:

(a) An insurance producer licensed to transact life or health insurance, or both such classes, may solicit group insurance authorized under the license of the insurance producer for an insurer with whom the insurance producer does not hold an appointment; and

(b) The insurer may issue proposals based on the solicitation by the insurance producer.

(2) If an insurance producer under section (1) of this rule submits to the insurer an application for group coverage based on the solicitation, the insurer may not issue the coverage unless the insurer files the notice of the appointment with the Director as provided in ORS 744.078.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.053 & 744.078
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 15-1996, f. & cert. ef. 11-12-96
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0291 Certificate of Deposit in Lieu of Trust Account

For purposes of ORS 744.084, evidence of a certificate of deposit kept by an insurance producer is satisfactory:

(1) If the evidence is a written statement of verification issued by the institution issuing the certificate to the insurance producer; and

(2) If the statement shows the date of renewal, if any, and verifies that the certificate is valid as of the date of the request by the Director for verification of the certificate. Formerly: OAR 386-071-0275

History

Statutory/Other Authority: ORS 731.244 & 744.084
Statutes/Other Implemented: ORS 744.084
Renumbered from 836-071-0275, ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0295 Transaction of Insurance by Individual Insurance Producer for Appointed Firm or CorporateInsurance Producer

An individual insurance producer affiliated by employment or contract with a firm or corporate insurance producer that is appointed by an insurer may transact insurance for the insurer without an appointment from the insurer. An individual insurance producer may so transact insurance only with respect to the classes of insurance endorsed on the license of the individual insurance producer. For purposes of this rule, an individual insurance producer is affiliated with a firm or corporate insurance producer if the individual insurance producer under the contract is authorized to transact insurance in the name of the firm or corporate insurance producer.

History

Statutory/Other Authority: ORS 731 & 744
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0297 Permitted Transaction of Insurance by Unappointed Insurance Producer

(1) When an insurance producer does not hold an appointment with an insurer, the insurance producer may transact casualty insurance, property insurance or both by placing the insurance with the insurer through a firm or corporate insurance producer appointed by the insurer and:

(a) The appointed insurance producer has a contract with the unappointed insurance producer that specifies the binding authority, if any, and fiduciary responsibility of the unappointed insurance producer, including ownership and payment of the premiums, but does not authorize the unappointed insurance producer to act in the name of the appointed insurance producer; and

(b) The appointed insurance producer obtains at least 90 percent of its premium under contractual agreement with unappointed insurance producers that are not affiliated with the firm or corporate insurance producer.

(2) This rule does not apply to the transaction of insurance by an individual insurance producer affiliated with a firm or corporate insurance producer as provided in OAR 836-071-0295.

History

Statutory/Other Authority: ORS 731.244 & 744
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0300 Requirement of Contract with or Employment of Licensee

A firm or corporate adjuster or insurance consultant may engage in a category or class of insurance through an individual licensee as authorized under ORS 744.022 only if the firm or corporate licensee employs or has entered a contract with the individual licensee.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.022
ID 9-2002, f. & cert. ef. 3-18-02
ID 3-1990, f. & cert. ef. 1-19-90

Or. Admin. R. 836-071-0310 Referral Fee from Oregon Medical Insurance Pool

An insurance producer authorized to transact health insurance in Oregon may receive a referral fee from the Oregon Medical Insurance Pool, established under ORS 735.600 to 735.650, for referring prospective insureds to the Pool, without being appointed as an insurance producer by the Pool or its administering insurer or otherwise being authorized to act as an agent of the Pool, its governing board or its administering insurer.

History

Statutory/Other Authority: ORS 731 & 744
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 22-1990, f. 12-20-90, cert. ef. 12-26-90
ID 14-1990(Temp), f. & cert. ef. 6-29-90

Or. Admin. R. 836-071-0315 Managing General Agents; Dollar Amounts Governing Settlement Authority Procedures Under Contract with Insurer

For the purpose of the requirement of the written contract between a managing general agent and an insurer established under ORS 744.306, if the contract permits the managing general agent to settle claims on behalf of the insurer:

(1) The amount established by the Director for purposes of ORS 744.306(4)(b)(A) is $10,000.

(2) The amount established by the Director for purposes of ORS 744.306(4)(c) is $10,000.

History

Statutory/Other Authority: ORS 731.244, 744.300, 744.306, 744.313 & 744.314
ID 6-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-071-0320 Managing General Agents; Designation of Associations of Actuaries

For purposes of ORS 744.313, the Director determines the following associations of actuaries to have established adequate professional standards for membership:

(1) The American Academy of Actuaries.

(2) The Casualty Actuarial Society.

(3) The Society of Actuaries.

(4) The Canadian Institute of Actuaries.

History

Statutory/Other Authority: ORS 731.244, 744.300, 744.306, 744.313 & 744.314
ID 6-1992, f. & cert. ef. 3-26-92

Or. Admin. R. 836-071-0321 Terms for OAR 836-071-0323 to 836-071-0346

For purposes of OAR 836-071-0323 to 836-071-0346:

(1) A felony offense involving dishonesty includes but is not limited to any offense constituting or involving theft, burglary, perjury, bribery, forgery, counterfeiting, a false or misleading oral or written statement, deception, fraud, a scheme or artifice to deceive or defraud, a material misrepresentation or the failure to disclose material facts, or any felony the commission of which is determined by the Director to have involved some element of deceit, misrepresentation, untruthfulness or falsification.

(2) A breach of trust includes but is not limited to any offense constituting or involving misuse, misapplication or misappropriation of anything of value held as a fiduciary, including but not limited to a trustee, administrator, executor, conservator, receiver, guardian, agent, employee, partner, officer, director or public servant, or anything of value of any public, private or charitable organization.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428, 744.013 & 744.074
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

Or. Admin. R. 836-071-0323 License Applicants and Licensees with Prior Convictions

(1) When the Director considers an application for a license that indicates the applicant has been convicted of a crime or crimes described in ORS 744.113(1)(e) or 744.074(1)(f), the Director shall determine whether the crime or any of the crimes is an offense under 18 U.S.C. sec. 1033 or a felony offense involving dishonesty or breach of trust that is subject to 18 U.S.C. sec. 1033.

(2) An applicant for a license who has been convicted by final judgment of an offense under 18 U.S.C. sec. 1033 or of any felony offense involving dishonesty or breach of trust does not qualify for the license unless:

(a) The Director has reviewed the entire application of the applicant and has determined that the applicant qualifies for the license; and

(b) The Director issues a written consent as provided in this rule.

(3) An applicant for a license to whom subsection (2) of this rule applies must apply to the Director for a consent as provided in OAR 836-071-0326.

(4) A licensee who has ever been convicted of an offense described in section (1) of this rule must apply to the Director for a consent as provided in OAR 836-071-0326. The licensee may not retain the license unless the Director issues a written consent as provided in this rule.

(5) A licensee who, while licensed, is convicted of an offense described in section (1) of this rule must apply to the Director for a consent as provided in OAR 836-071-0326 not later than the 30th day after the date of the final judgment. The licensee may not retain the license unless the Director issues a written consent as provided in this rule.

(6) A license applicant or licensee who is appointed or expects to be appointed by more than one insurer need submit only one consent application under OAR 836-071-0326, but the application and related letters, statements and other information must relate to the insurer with whom the license applicant or licensee has or will have the most substantial ongoing business relationship.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428, 744.013 & 744.074
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2002, f. & cert. ef. 3-18-02
ID 9-2000, f. & cert. ef 10-24-00

Or. Admin. R. 836-071-0326 Application by Person under OAR 836-071-0323

(1) A person to whom OAR 836-071-0323 applies must submit a consent application on a form provided by the Director.

(2) A person shall submit with the application the following:

(a) A letter from the president of the insurer, or designee of the president, for whom the person acts or will act, that the president or designee is aware of the offense or offenses to which the consent application applies and that the president or designee attests to the character of the person. The letter should describe the person's character traits as they relate to the employment, position or activities for which written consent is sought and the duties and responsibilities thereof.

(b) At least five letters or other forms of statement addressed to the Director, attesting to the character and reputation of the person, in addition to the letter required in subsection (a) of this section. The statement as to character should indicate the length of time the writer has known the person and should describe the person's character traits as they relate to the employment, position or activities for which written consent is sought and the duties and responsibilities thereof. The statement as to reputation must attest to the person's reputation in the person's community, circle of business or social acquaintances.

(3) Each letter or statement required in section (2) of this rule should indicate that it has been submitted in compliance with these procedures and that the person has informed the writer of the factual basis of the application being filed with the Director and the purpose thereof. In evaluating letters or statements from relatives by blood or marriage, prospective employers or insurance related business activities, or persons serving in any capacity with the insurer, its employees or agents, the Director may take into account the personal and business interests of those persons.

(4) A person shall also submit with the application under this rule a current credit report from a credit bureau. A credit report is current if it was issued within 30 days after the date of the application.

(5) A person shall submit information in addition to that required in this rule as the Director determines to be appropriate for the proper consideration and disposition of the consent application under this rule.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428 & 744.013
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2000, f. & cert. ef. 10-24-00

Or. Admin. R. 836-071-0328 Unlicensed Individuals with Prior Convictions Who are Engaged or Participate in Business of Insurance

(1) When the Director considers an application of an individual who applies to the Director under ORS 731.428 for written consent to engage or participate in the business of insurance, other than a licensee to whom OAR 836-071-0323 applies, the Director shall determine whether the crime or any of the crimes is an offense under 18 U.S.C. sec. 1033 or a felony offense involving dishonesty or breach of trust that is subject to 18 U.S.C. sec. 1033. Individuals to whom this section applies includes any applicant for employment in the business of insurance in Oregon and any current unlicensed individual engaged or participating in the insurance business in Oregon who has ever been convicted of an offense described in this section.

(2) An applicant for written consent under this section who has been convicted by final judgment of an offense under 18 U.S.C. sec. 1033 or of any felony offense involving dishonesty or breach of trust does not qualify for the written consent unless:

(a) The Director has reviewed the entire application of the applicant and has determined that the applicant qualifies for the written consent; and

(b) The Director issues a written consent as provided in this rule.

(3) An applicant to whom this rule applies must submit a consent application on a form provided by the Director.

(4) An individual currently engaged or participating in the insurance business in Oregon and is not required to be licensed to do so may not continue to engage or participate in the business of insurance in Oregon unless the Director issues a written consent as provided in this rule.

(5) An unlicensed individual who, while engaged or participating in the insurance business in Oregon and is not required to be licensed to do so, is convicted of an offense described in section (1) of this rule must submit a consent application under this rule not later than the 30th day after the date of the final judgment. The individual may not engage or participate in the insurance business in Oregon unless the Director issues a written consent as provided in this rule.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05

Or. Admin. R. 836-071-0331 Director's Procedures, Application for Consent

When the Director has received a complete license application and the consent application required in OAR 836-071-0326, or has received the consent application required in 836-071-0326, in the case of a current licensee or an applicant for a license, or required in 836-071-0328, in the case of an unlicensed person engaged or participating in the business of insurance, and the person has otherwise complied with all applicable requirements:

(1) The Director shall determine whether the crime or any crimes committed by the person and described in the application are subject to ORS 670.280, if a license or license application is involved.

(2) The Director shall notify all state members of the National Association of Insurance Commissioners that an application for written consent has been filed, and shall include with the notice a statement including the name, address, Social Security number (if submitted with the application) and types of insurance actions to be conducted by the applicant, and a request that any insurance commissioner with relevant knowledge regarding the fitness of the applicant respond immediately. The Director shall allow at least 30 days from the date on which the notice was sent, for comment.

(3) The Director may conduct an investigation of the person. The Director may use data bases of the National Association of Insurance Commissioners, including but not necessarily limited to the Regulatory Information Retrieval system, the Producer Database, the Complaint Database and the Special Activities Database.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428 & 744.013
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2000, f. & cert. ef. 10-24-00

Or. Admin. R. 836-071-0336 Factors to be Considered by the Director

The Director shall consider at least the following factors when deliberating upon a consent application :

(1) The legitimate interest of the Director or the insurer for whom the activities would be performed in protecting property and the safety and welfare of specific individuals, businesses or the general public.

(2) Whether the applicant or someone on the applicant's behalf has made a materially false or misleading statement or omission in the application process.

(3) The nature of the circumstances surrounding, and the seriousness of, the offense or offenses.

(4) Whether the applicant has been charged with, indicted or convicted of multiple criminal offenses.

(5) What evidence exists of the applicant's rehabilitation, including good conduct in prison, on probation or on parole; good conduct in the community; counseling or psychiatric treatment received; acquisition of additional academic or vocational schooling; successful participation in correctional work-release programs; and the recommendation of persons who have or have had the applicant under their supervision (for example, letters of recommendation from prosecutors, law enforcement or correctional officers who have prosecuted, arrested or had custodial responsibility for the applicant, and letters of recommendation from the sheriff or chief of police in the community in which the applicant resides or has resided).

(6) Whether all members of the National Association of Insurance Commissioners were notified in a timely manner of the applicant's request and any relevant information regarding the fitness of the applicant received from members of the National Association of Insurance Commissioners.

(7) Whether licensing the applicant or issuing the person a written consent to engage in the business of insurance would be consistent with the public interest, with federal and state law, with applicable court orders and with the determination that the applicant is trustworthy to conduct the business of insurance.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428 & 744.013
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2000, f. & cert. ef. 10-24-00

Or. Admin. R. 836-071-0341 Issuance of Written Consent

A written consent to engage in the business of insurance issued by the Director must include the following:

(1) A reference to 18 U.S.C. Section 1033(e)(2).

(2) A statement that the written consent is conditioned on the truth and veracity of the facts disclosed by the applicant in the application for the consent.

(3) A statement that the written consent is conditioned on the applicant remaining in the approved position with its associated insurance activities in which the applicant is not considered to be a risk or threat to insurance consumers or insurers.

(4) Any specific restrictions imposed by the Director as conditions of the written consent.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.013
ID 9-2000, f. & cert. ef. 10-24-00

Or. Admin. R. 836-071-0346 Denial of Consent

(1) If the Director determines that a written consent to engage in the business of insurance should be denied to an applicant, the Director shall issue the denial in writing and shall notify the applicant of rights of review of the Director's determination.

(2) If the Director determines that the crime committed by the applicant is not one to which 18 U.S.C. Section 1033 applies, the Director shall so inform the applicant at the time of granting or denying the license application or, in response to a consent application.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 731.428 & 744.013
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-2000, f. & cert. ef. 10-24-00

Or. Admin. R. 836-071-0351 Subsequent Conviction of Person Previously Granted Written Consent

A person to whom the Director has given a written consent to engage in the business of insurance shall notify the Director immediately if subsequently convicted of a crime. If the Director determines that the person has been convicted of an offense under 18 U.S.C. Section 1033 or any felony involving dishonesty or breach of trust making the person subject once again to the prohibitions in 18 U.S.C. Section 1033, the Director shall notify the person in writing by certified mail, return receipt requested, that the written consent previously issued has been withdrawn and that engaging in the business of insurance again violates 18 U.S.C. Section 1033.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.013
ID 9-2000, f. & cert. ef. 10-24-00

Or. Admin. R. 836-071-0354 Designated Agent

As used in OAR 836-071-0355 to OAR 836-071-0400, “designated agent” means any named individual who is under contract with a vehicle rental company and who is authorized by the vehicle rental company to sell insurance under the authority of the limited license of the vehicle rental company.

History

Statutory/Other Authority: ORS 731.244, 744.852 & 744.858
Statutes/Other Implemented: ORS 744.852, 744.856 & 744.858
ID 1-2016, f. & cert. ef. 1-20-16
ID 19-2015, f. 12-30-15, cert. ef. 1-1-16

Or. Admin. R. 836-071-0355 Limited License Application, Rental Companies; Required Information

(1) On and after October 1, 2000, a rental company must hold a limited license in order to transact insurance as authorized by ORS 744.854. An applicant for a limited license as a rental company as authorized by 744.854 shall apply for a limited license to the director of the Department of Consumer and Business Services electronically on a form established by the director in accordance with directions set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov. The applicant shall include the following information in the application:

(a) The applicant's corporate, firm or other business entity name, the business address and telephone number of the principal place of business and the business address and telephone number of each additional location at which the applicant will transact business under the license;

(b) All assumed business names and other names under which the applicant will engage in business under the license;

(c) The names of all officers and directors or partners, or the sole proprietor or the owners if the applicant is other than a corporation or a partnership, and the name of the executive designated as the statewide filing officer as required by ORS 744.856;

(d) Whether any of the following has occurred with respect to an officer or director of the applicant, or a partner, or the sole proprietor or any of the owners if the applicant is other than a corporation or a partnership:

(A) Conviction of or indictment for a crime, including a felony involving dishonesty or a breach of trust to which 18 U.S.C. sec. 1033 applies;

(B) A judgment entered against the officer, director, partner, sole proprietor or owner if the applicant is other than a corporation or a partnership, for fraud;

(D) Refusal, revocation or suspension of any license to act in any occupational or professional capacity in this or any other state;

(e) All states and provinces of Canada in which the applicant or an officer, director or partner of the applicant, or a sole proprietor or owner if the applicant is other than a corporation or a partnership, currently holds a license to engage in the transaction of insurance, or has held such a license within ten years prior to the date of the application;

(f) Whether any firm or corporation of which an officer, director or partner of the applicant, or the sole proprietor or an owner if the applicant is other than a corporation or a partnership, is or has been an officer, director, partner, sole proprietor or owner has ever filed for bankruptcy or been adjudged a bankrupt; and

(g) Any other information requested by the director in the license application form.

(2) The applicant shall include with the application the following:

(a) The course of study to be used by the applicant for the training program for employees and designated agents concerning the kinds of coverage offered under the license;

(b) A certification by the applicant that all employees and designated agents to be involved in the sale or offer of coverage to members of the public have completed or will complete the training program prior to conducting the sales or offers; and

(c) A certification by the applicant that all employees and designated agents to be involved in the sale or offer of coverage to members of the public will receive continuing education on a regular basis concerning the topics covered in the training program.

(d) A copy of the insurance sales material to be made available to renters of vehicles through the licensee.

(3) Each application shall be accompanied by a $200 fee.

(4) During the review of an application, the director may require any other information that the director determines will assist consideration of the application.

History

Statutory/Other Authority: ORS 731.244, 731.804, ORS 744.852 & ORS 744.858
Statutes/Other Implemented: ORS 744.852, 744.856 & ORS 744.858
ID 29-2023, minor correction filed 07/03/2023, effective 07/03/2023
ID 1-2016, f. & cert. ef. 1-20-16
ID 19-2015, f. 12-30-15, cert. ef. 1-1-16
ID 9-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 8-2000, f. & cert. ef. 7-24-00

Or. Admin. R. 836-071-0360 License Renewal

(1) A limited license expires on the last day of the month in which the second anniversary of the initial issuance date occurs. Thereafter, the limited license shall expire on the second anniversary following each renewal.

(2) Not later than the license expiration date, a limited licensee applying for renewal must submit the following electronically as set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov as applicable:

(a) A completed renewal application, on a form provided by the director;

(b) A copy of the insurance sales material made available to renters of vehicles through the limited licensee.

(3) The director may allow a limited licensee not more than 30 days to submit missing information on the application form if the fees, course of study and certifications have been submitted on or before the expiration date.

(4) The director may request on the renewal application any information requested on the original application for a limited license.

(5) An expired license may be renewed according to the requirements and procedures in ORS 744.009, except that the person renewing an expired license must pay $50 instead of twice the amount of the renewal fee.

History

Statutory/Other Authority: ORS 744.858 & ORS 731.804
Statutes/Other Implemented: ORS 731.804 & 744.856
ID 30-2023, minor correction filed 07/03/2023, effective 07/03/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 8-2000, f. & cert. ef. 7-24-00

Or. Admin. R. 836-071-0370 List of Employees and Designated Agents Selling Coverage; Continuing Education

(1) A limited licensee shall maintain at all times a current list of all employees and designated agents who are authorized by the limited licensee to offer and sell the insurance coverage for the limited licensee. The limited licensee must provide the list to the Director upon request and the list must otherwise be available and accessible to the Director at all reasonable hours at the principal place of business of the licensee in this state.

(2) For the purpose of complying with the education filing and certification requirements of ORS 744.856, not later than March 1 of each year, a limited licensee shall:

(a) File the syllabus for the training program with the Director; and

(b) Certify to the Director that all employees and designated agents involved in the sale or offer of coverage to members of the public have completed or will complete the training program prior to conducting such sales or offers and will receive continuing education on a regular basis concerning the topics covered in the training program.

(3) For the purpose of the requirement in ORS 744.856 that employees and designated agents of a limited licensee shall receive continuing education on a regular basis, a “regular basis” is at least once every 12 months.

History

Statutory/Other Authority: ORS 744.852 & 744.858
Statutes/Other Implemented: ORS 744.856
ID 1-2016, f. & cert. ef. 1-20-16
ID 19-2015, f. 12-30-15, cert. ef. 1-1-16
ID 9-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16
ID 8-2000, f. & cert. ef. 7-24-00

Or. Admin. R. 836-071-0380 Course of Training for Training Program and for Continuing Education

A limited licensee must include at least the following information in the training program for new employees and designated agents who will be offering the insurance coverage and in the continuing education program for current employees and designated agents offering the insurance coverage, as required by ORS 744.856:

(1) Materials for the purpose of facilitating employee and designated agents understanding of the insurance coverages offered by the licensee.

(2) That renters of vehicles through the licensee are not required to purchase the coverage offered through the licensee as a condition of renting a vehicle.

(3) That renters must be informed that coverage offered by the licensee may duplicate existing coverage of the renter and that the renter should consult with the renter’s insurance agent if the renter has any question about existing coverage.

(4) Claims procedures.

(5) The identity of the insurer of the coverage offered by the licensee.

(6) That employees and designated agents of the licensee are not authorized to evaluate a renter’s existing coverages.

History

Statutory/Other Authority: ORS 744.856 & 744.858
Statutes/Other Implemented: ORS 744.856
ID 1-2016, f. & cert. ef. 1-20-16
ID 19-2015, f. 12-30-15, cert. ef. 1-1-16
ID 9-2015(Temp), f. & cert. ef. 9-15-15 thru 3-4-16
ID 8-2000, f. & cert. ef. 7-24-00

Or. Admin. R. 836-071-0390 Statewide Filing Officer

(1) Each limited licensee must appoint as the statewide filing officer of the licensee an executive or manager of the licensee who is located in this state. The statewide filing officer shall serve as the in-state representative and contact person for the limited licensee.

(2) The limited licensee shall notify the Director in writing of any change in the appointment.

History

Statutory/Other Authority: ORS 744.858
Statutes/Other Implemented: ORS 744.852 & 744.856
ID 8-2000, f. & cert. ef. 7-24-00

Or. Admin. R. 836-071-0400 Applicable Insurance Code Statutes

(1) Provisions of the Insurance Code that apply to the limited licensing program established by ORS 744.850 to 744.858 include but are not limited to the following: 744.007(6), 744.013, 744.014, 744.016, 744.018, 744.024, 744.028, 744.033, and 744.037.

(2) A limited licensee is not subject to ORS 744.225 and 744.227 and are not otherwise required to treat moneys paid by renters for insurance in a fiduciary capacity or to hold the moneys in a separate trust account.

History

Statutory/Other Authority: ORS 744.858
Statutes/Other Implemented: ORS 744.856 & 744.858
ID 8-2000, f. & cert. ef. 7-24-00

Or. Admin. R. 836-071-0405 Statutory Purpose and Authority

(1) OAR 836-071-0405 to 836-071-0425 apply to an owner who issues, sells or offers for sale insurance coverage to occupants at a self-service storage facility.

(2) OAR 836-071-0405 to 836-071-0425 are adopted pursuant to the authority in section 8, chapter 280, Oregon Laws 2013 and ORS Chapter 744, for the purpose of implementing sections 2 to 8, Chapter 280, Oregon Laws 2013.

History

Statutory/Other Authority: ORS 731.244; sect. 8, ch. 280 & OL 2013
Statutes/Other Implemented: Sects. 2 to 8, ch. 280 & OL 2013
ID 9-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-071-0410 Limited License Application, Self-Service Storage Facility; Required Information

(1) An applicant for a self-service storage facility limited license shall submit electronically to the director of the Department of Consumer and Business Services a self-service storage limited license application in accordance with instructions located on the Division of Financial Regulation website at dfr.oregon.gov.

(2) The applicant shall include all of the following information in the limited license application:

(a) The applicant's corporate, firm or other business entity name, the business address, electronic mail address and telephone number of the principal place of business and the business address and telephone number of each self-service storage facility at which the applicant will transact business under the limited license;

(b) All assumed business names and other names under which the applicant will engage in business under the limited license;

(d) Whether the applicant or any agent or authorized representative of the applicant has:

(A) Been convicted of or indicted for a crime, including a felony involving dishonesty or a breach of trust to which 18 U.S.C. 1033 applies;

(B) Had a judgment entered against the applicant or person designated by the applicant as being responsible for the applicant’s compliance, for fraud;

(D) Had any license to act in any occupational or professional capacity in this or any other state refused, revoked or suspended;

(E) Filed for bankruptcy or been adjudged bankrupt;

(e) All states and provinces of Canada in which the applicant currently holds a license to engage in the transaction of insurance, or has held such a license within ten years prior to the date of the application

(f) Any other information requested by the director.

(3) Each application shall be accompanied by a $200 fee.

History

Statutory/Other Authority: ORS 731.244 & 744.001; sect. 8, ch. 280 & OL 2013
Statutes/Other Implemented: Sects. 2 to 8, ch. 280 & OL 2013
ID 31-2023, minor correction filed 07/03/2023, effective 07/03/2023
ID 9-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-071-0415 Materials and Requirements of Application

(1) Prior to selling any insurance to an occupant of a self-service storage facility, an applicant shall provide written material to the Director of the Department of Consumer and Business Services for approval as required by section 4, chapter 280, Oregon Laws 2013.

(2) In addition to providing written material at the time of initial licensing, the licensee must provide the director with any materials that change during the term of the license.

(3) The written material provided must:

(a) Comply with the requirements of section 4, chapter 280, Oregon Laws 2013; and

(b) Provide an assurance that the enrolled customer may cancel the storage unit insurance coverage at any time and that the person paying the premium shall receive a refund of the unused portion of any amount that has been paid for coverage. A reasonable administrative fee may be charged in an amount not to exceed 10 percent of the refund due.

History

Statutory/Other Authority: ORS 731.244; sect. 8, ch. 280 & OL 2013
Statutes/Other Implemented: Sects. 2 to 8, ch. 280 & OL 2013
ID 9-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-071-0420 Requirements for Limited Licensee, List of Employees Selling Coverage; Training Program

(1) A limited licensee shall maintain at all times standard operating procedures to assure that all employees, agents and authorized representatives are authorized to issue, sell or offer for self-service storage unit property insurance coverage to a customer. The training program must instruct the employees or agents about the coverage the insurance provides and about the provisions of sections 2 to 8, chapter 280, Oregon Laws 2013. The limited licensee must provide a description of these procedures to the director at anytime that a change is made, at the time that the limited license is renewed or at any time at the request of the director.

(2) A limited licensee must ensure that the information required under section 280 chapter 280 Oregon Laws 2013, is included in any training program for the limited licensee’s employees, agents and authorized representatives who will be issuing, selling or offering for sale self-service storage insurance coverage. The licensee must maintain a list of all employees trained to sell coverage. The licensee must provide the list to the director upon request, within 21 calendar days.

(3) A limited licensee must provide certification by the entity or the applicant that the written disclosure materials made available to prospective customers will be maintained by the entity or the applicant for a period of seven years and must be made available to the Department of Consumer and Business Services director upon request within 21 calendar days.

History

Statutory/Other Authority: ORS 731.244; sect. 8, ch. 280 & OL 2013
Statutes/Other Implemented: Sects. 2 to 8, ch. 280 & OL 2013
ID 9-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-071-0425 Limited License Renewal

(2) A limited licensee applying for renewal must submit the following to the director electronically as set forth on the website of the National Insurance Producer Registry in accordance with instructions located on the Division of Financial Regulation website at dfr.oregon.gov. The renewal application must include:

(a) A completed renewal application on the form entitled “Renewal Notice for Self-Service Storage Insurance Vendors.” must be returned to the director electronically in accordance with instructions set forth on Division of Financial Regulation website not later than the limited license expiration date.

(b) An updated certification by the supervising entity or the limited licensee that all employees, agents and authorized representatives involved in the issuance, sale or offering for sale of self-service storage coverage to customers have completed or will complete the training program outlined in section (2)(c) of this rule, prior to issuing, selling or offering for sale self-service storage insurance coverage.

(c) An outline of and copies of materials the licensee uses in the training program. The director may request copies of materials annually or at renewal and at the time of any change in materials. The entity must present a complete copy of materials at renewal. In addition, materials the entity must present the materials at the time of any change and at any time upon the request of the director.

(d) A renewal fee of $200.

(3) The director may allow a limited licensee not more than 30 days after the limited license expiration date to submit missing information on the renewal application form if the renewal application, fees, certification and disclosure materials have been submitted on or before the expiration date.

(4) The director may request on the renewal application any information requested on the original application for a limited license.

(5) An expired limited license may be renewed up to one year after the limited license expiration date. The fee to renew an expired limited license is $250.

History

Statutory/Other Authority: ORS 731.244 & 744.001; Sect. 8, ch. 280 & OL 2013
Statutes/Other Implemented: Sects. 2 to 8, ch. 280 & OL 2013
ID 32-2023, minor correction filed 07/03/2023, effective 07/03/2023
ID 9-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-071-0430 Remission to Insurer; Funds Held in Trust; Compensation

(1) If authorized by an insurer the limited licensee that bills and collects the cost of self-service storage insurance coverage from an enrolled customer is not required to deposit the amount paid in a segregated account but shall remit the amount collected to the insurer or the supervising entity within 60 days of receipt from the enrolled customer.

(2) Moneys collected by a limited licensee from the enrolled customer for the cost of the self-service storage insurance are considered funds held by the licensee in trust for the benefit of the insurer.

(3) A limited licensee may receive compensation from an insurer for billing and collecting the cost of self-service storage insurance coverage purchased by enrolled customers.

(4) Limited licensees and insurers operating under a self-service storage limited license are not subject to ORS 744.083 and 744.084 for purposes of premium collected for self-service storage insurance.

History

Statutory/Other Authority: ORS 731.244, 744.001 & 744.083; Sec. 8, ch. 280 & OL 2013
Statutes/Other Implemented: Sec. 2 to 8, ch. 280 & OL 2013
ID 9-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-071-0450 Requirements for Limited Travel Insurance Producer and Travel Retailer

(1) In order to comply with ORS 744.104(2)(b), a limited travel insurance producer shall:

(a) Establish and maintain a register containing all of the information required under ORS 744.104(2)(a);

(b) Include on the register:

(A) The license number of any person described in ORS 744.104(d) and ORS 744.104(e) who is a licensed insurance producer; or

(B) The fingerprints and background check results of any person described in ORS 744.104(d) and ORS 744.104(e) who is not a licensed insurance producer; and

(c) Use the model form provided by the director of the Department of Consumer and Business Services at dfr.oregon.gov or a substantially similar form filed with and approved by the director;

(d) Update retained information recorded on the register at least annually

(e) Maintain the register in such a manner that the document and all necessary required attachments are available to be submitted in electronic form to the director within 30 days of a request as under ORS 744.104(2)(c);

(f) Maintain records of the register after the expiration of a policy as required under ORS 744.068; and

(g) Notify the director in writing of any material changes in the affidavit described in ORS

(2) All persons specified in ORS 744.104(2)(d) must:

(a) Hold a license as an insurance producer under ORS 744.052 to 744.089;

(3) All persons specified in ORS 744.104(2)(e) must:

(a) Furnish fingerprints and results from criminal history check as defined under OAR 836-072-0010 to the limited travel insurance producer keeping the register required under ORS 744.104(2)

(4) A program of instruction or training described under ORS 744.104(2)(g) shall:

(a) Include compliance with requirements under ORS 744.104(3) and (4);

(b) Address the types of insurance offered by the limited travel insurance producer and ethical sales practices; and

History

Statutory/Other Authority: ORS 731.244, ORS 744.111, ORS 744.062 & ORS 744.104
Statutes/Other Implemented: ORS 744.062, ORS 744.101, ORS 744.104 & ORS 744.107
ID 37-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 7-2016, f. 6-30-16, cert. ef. 7-1-16

Or. Admin. R. 836-071-0500 Nonresident Licensing and Placement Requirements

(1) This rule establishes requirements that a nonresident surplus lines licensee or a nonresident insurance producer not licensed in this state must satisfy in connection with placement of a surplus lines insurance policy where Oregon is determined to be the home state as defined in ORS 735.405(8).

(2) A person who is licensed as a resident agent or producer in another state must be licensed in this state as a nonresident surplus lines insurance licensee in order to place a surplus lines insurance policy on a risk where Oregon is determined to be the home state.

(3) When a nonresident surplus lines licensee transacts surplus lines insurance on a risk where Oregon is determined to be the home state, the nonresident surplus lines licensee shall comply with the placement requirements in ORS 735.410(1) and (2) related to an exempt commercial purchaser

History

Statutory/Other Authority: ORS 731.244 & 735.410
Statutes/Other Implemented: ORS 735.410
ID 21-2011, f. 12-16-11, cert. ef. 1-1-12
ID 6-2002, f. & cert. ef. 2-6-02

Or. Admin. R. 836-071-0501 Allocation of Coverage Totals on Multi-state Policies

(1) This rule establishes requirements that a surplus lines licensee must satisfy in connection with the reporting of a surplus lines insurance policy where Oregon is determined to be the home state as defined in ORS 735.405(8), and the requirements that an insured who obtains independently procured insurance must satisfy in connection with the reporting of a surplus lines insurance policy in section 5, chapter 660, Oregon Laws 2011 where Oregon is determined to be the home state.

(2) For each surplus lines insurance policy with coverage starting at any time beginning January 1, 2012 through December 31, 2016 where Oregon is determined to be the home state, each insured who obtains independently procured insurance must include in their written report filed with the Director of the Department of Consumer and Business Services the allocated premium, by coverage for Oregon and other applicable states in accordance with the filing instructions on the Surplus Line Association of Oregon Web site in addition to the filing requirements in section 5, chapter 660, Oregon Laws 2011. Notwithstanding the January 1, 2012 through December 31, 2016 time period referenced above, on or after January 1, 2015 the Director may determine that insureds no longer need to include this allocated premium information in their filed written report.

(3) For each surplus lines insurance policy with coverage starting at any time beginning January 1, 2012 through December 31, 2016 where Oregon is determined to be the home state, a surplus lines licensee must include in their statement filed with the Director the allocated premium, by coverage for Oregon and other applicable states in accordance with the filing instructions on the Surplus Line Association of Oregon Web site in addition to the filing requirements in ORS 735.425(1) and (2). Notwithstanding the January 1, 2012 through December 31, 2016 time period referenced above, on or after January 1, 2015 the Director may determine that surplus lines licensees no longer need to include this allocated premium information in their filed statement.

(4) The written report required in section 5, chapter 660, Oregon Laws 2011 and the statements required in ORS 735.425(1) must be filed with the Surplus Line Association of Oregon.

History

Statutory/Other Authority: ORS 731.244 & 735.425
Statutes/Other Implemented: ORS 735.425 & OL 2011 & Ch. 660 § 5
ID 21-2011, f. 12-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-071-0550 Statutory Purpose and Authority

(1) OAR 836-071-0550 to 836-071-0570 apply to vendors who sell or lease portable electronics devices, including but not limited to cell phones or electronic tablets, and wish to issue, sell or offer for sale portable electronics insurance coverage.

(2) OAR 836-071-0550 to 836-071-0570 are adopted pursuant to the authority in section 7, chapter 393, Oregon Laws 2011 and ORS 705.135, for the purpose of implementing sections 1 to 7, chapter 393, Oregon Laws 2011.

History

Statutory/Other Authority: : Ch. 393 § 7, OL 2011 & ORS 705.135
Statutes/Other Implemented: Ch. 393 §§ 1 to 7 & OL 2011
ID 22-2011, f. 12-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-071-0560 Limited License Application, Portable Electronics Insurance Coverage; Required Information

(1) An applicant for a portable electronics limited license shall submit electronically to the director of the Department of Consumer and Business Services a portable electronics limited license application on the form entitled “Portable Electronics Insurance Vendor.” The form is set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

(2) In addition to the requirements in ORS 646A.577(2)(b), the applicant shall include all of the following information in the limited license application:

(a) The applicant's corporate, firm or other business entity name, the business address, e-mail address and telephone number of the principal place of business and the business address and telephone number of each additional location at which the applicant will transact business under the limited license.

(b) All assumed business names and other names under which the applicant will engage in business under the limited license.

(c) Whether any of the following has occurred with respect to the applicant or the employee, agent or authorized representative of the applicant that the applicant is designating as being responsible for the applicant’s compliance with ORS 646A.575 to 646A.592:

(A) Conviction of or indictment for a crime, including a felony involving dishonesty or a breach of trust to which 18 U.S.C. sec. 1033 applies;

(B) A judgment entered against the applicant or person designated by the applicant as being responsible for the applicant’s compliance with ORS 646A.575 to 646A.592, for fraud;

(D) Refusal, revocation or suspension of any license to act in any occupational or professional capacity in this or any other state.

(d) All states and provinces of Canada in which the applicant currently holds a license to engage in the transaction of insurance, or has held such a license within ten years prior to the date of the application.

(e) Whether the applicant has ever filed for bankruptcy or been adjudged a bankrupt.

(f) The syllabus for the training program that is developed by the insurer or supervising entity that issued the portable electronics insurance policy to the limited licensee.

(g) A certification by the supervising entity or the applicant that all employees, agents and authorized representatives to be involved in the issuance, sale or offering for sale of portable electronics insurance coverage to customers have completed or will complete the training program under ORS 646A.585(1)(b), prior to issuing, selling or offering for sale portable electronics insurance coverage.

(h) A certification by the supervising entity or the applicant that a copy of all written disclosure materials, as required under ORS 646A.582, that are currently being made available to prospective customers of portable electronics or have been made available to prospective customers in the past, shall be maintained by the supervising entity or the applicant. This information shall be maintained by the supervising entity or the applicant for a period of seven years and must be provided to the director, upon request, within 21 calendar days.

(i) Any other information requested by the director in the license application form.

(3) Each application shall be accompanied by a $200 fee.

(4) During the review of an application, the director may require any other information that the director determines will assist consideration of the application.

History

Statutory/Other Authority: ORS 646A.575 - 646A.590 & ORS 705.135
Statutes/Other Implemented: ORS 646A.575 - 646A.590
ID 38-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 22-2011, f. 12-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-071-0565 Limited License Renewal

(2) A limited licensee applying for renewal must submit the following to the director electronically as set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov:

(a) A completed renewal application on the form entitled “Renewal Notice for Portable Electronics Insurance Vendors.” The renewal application must be returned to the director electronically in accordance with instructions set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov not later than the limited license expiration date.

(b) An updated certification by the supervising entity or the limited licensee that all employees, agents and authorized representatives to be involved in the issuance, sale or offering for sale of portable electronics insurance coverage to customers have completed or will complete the training program under ORS 646A.585(1)(b), prior to issuing, selling or offering for sale portable electronics insurance coverage.

(c) An updated certification by the supervising entity or the limited licensee that a copy of all written disclosure materials, as required under ORS 646A.582, that are currently being made available to prospective customers of portable electronics or have been made available to prospective customers in the past, shall be maintained by the supervising entity or the applicant. This information shall be maintained by the supervising entity or the applicant for a period of seven years and must be provided to the director, upon request, within 21 calendar days.

(d) A renewal fee of $200.

(4) The director may request on the renewal application any information requested on the original application for a limited license.

(5) An expired limited license may be renewed up to one year after the limited license expiration date. The fee to renew an expired limited license is $250.

History

Statutory/Other Authority: ORS 646A.575 - 646A.590 & ORS 705.135
Statutes/Other Implemented: ORS 646A.575 - 646A.590
ID 39-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 22-2011, f. 12-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-071-0570 List of Employees Selling Coverage; Training Program

(1) A limited licensee shall maintain at all times standard operating procedures to assure that all employees, agents and authorized representatives are authorized to issue, sell or offer for sale portable electronics insurance coverage to a customer. The limited licensee must provide a description of these procedures, upon request, to the Director within 21 calendar days.

(2) A limited licensee must ensure that the information required under section 5(1)(b), chapter 393, Oregon Laws 2011, is included in any training program for the limited licensee’s employees, agents and authorized representatives who will be issuing, selling or offering for sale portable electronics insurance coverage.

History

Statutory/Other Authority: : Ch. 393 § 7, OL 2011 & ORS 705.135
Statutes/Other Implemented: Ch. 393 §§ 1 to 7 & OL 2011
ID 22-2011, f. 12-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-071-1100 Purpose and Scope

This rule governs the qualifications and procedures for the licensing of public adjusters. It specifies the duties of and restrictions on public adjusters, which include limiting their licensure to assisting insureds in first party claims, excluding claims for personal or commercial auto lines of insurance.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1105 Definitions

“Public adjuster” means any person who, for compensation or any other thing of value on behalf of the insured:

(1) Acts or aids, solely in relation to first party claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract;

(2) Advertises for employment as a public adjuster of insurance claims or solicits business or represents themselves to the public as a public adjuster of first party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property; or

(3) Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about first party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy, for the insured.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1110 License Required

(1) A person shall not act, hold themselves out as a public adjuster, solicit, or negotiate a contract for public adjusting services in this state unless the person is licensed as a public adjuster in this state.

(2) A person licensed as a public adjuster shall not misrepresent to a claimant that they are an adjuster representing an insurer in any capacity, including acting as an employee of the insurer or acting as an independent adjuster unless so appointed by an insurer in writing to act on the insurer’s behalf for that specific claim or purpose. A licensed public adjuster is prohibited from charging that specific claimant a fee when appointed by the insurer and the appointment is accepted by the public adjuster.

(3) A business entity acting as a public adjuster is required to obtain a public adjuster license. Application shall be made using the Uniform Business Entity Application. Before approving the application, the director shall find that:

(a) The business entity has paid the fees set forth in OAR 836-009-0007; and

(b) The business entity has designated a natural person who is a licensed public adjuster responsible for the business entity’s compliance with the insurance laws, rules and regulations of this state.

(4) Notwithstanding subsections 1 to 3, a license as a public adjuster shall not be required of the following:

(a) An attorney-at-law, that renders services while performing duties as an attorney-at-law;

(b) A person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract;

(c) A person employed only for the purpose of obtaining facts surrounding a loss or furnishing technical assistance to a licensed public adjuster, including photographers, estimators, private investigators, engineers and handwriting experts;

(d) A licensed health care provider, or employee of a licensed health care provider, who prepares or files a health claim form on behalf of a patient;

(e) A person who settles subrogation claims between insurers; or

(f) Any person to whom the requirement under ORS 744.505 to obtain a license to engage in business as an adjuster does not apply pursuant to ORS 744.515(2)(a) to (k).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1115 Application for License

A person applying for a public adjuster license shall make application to the director as outlined in ORS 744.518, OAR 836-071-0101, OAR 836-071-0105, OAR 836-071-0110, and OAR 836-071-0118.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1120 Resident Adjuster Qualification

The director may issue a public adjuster license to a resident applicant under this section if the director finds that the applicant:

(1) Submitted a complete and accurate application in accordance with OAR 836-071-1115; and

(2) Satisfies the requirements set forth under ORS 744.521 and ORS 744.525.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1125 Nonresident Adjuster Qualification

The director may issue a public adjuster license to a nonresident applicant under this section if the director finds that the applicant:

(1) Submitted a complete and accurate application in accordance with OAR 836-071-1115; and

(2) Satisfies the requirements set forth under ORS 744.521 and ORS 744.528.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1130 Examination

An individual applying for a public adjuster license under this rule shall pass a written examination in accordance with OAR 836-071-0120 and OAR 836-071-0127.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1135 Exemptions from Examination

(1) An individual who applies for a public adjuster license in this state who was previously licensed as a public adjuster in another state based on an public adjuster examination shall not be required to complete any prelicensing examination. This exemption is only available if the person is currently licensed in that state or if the application is received within 12 months of the termination of the applicant’s previous license and if the prior state issues a certification that, at the time of termination, the applicant was in good standing in that state or the state’s producer database records or records maintained by the NAIC, its affiliates, or subsidiaries, indicate that the public adjuster is or was licensed in good standing.

(2) A person licensed as a nonresident public adjuster who moves to this state shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to OAR 836-071-1120. No prelicensing examination shall be required of that person to obtain a public adjuster license.

(3) An individual who applies for a public adjuster license in this state who was previously licensed as a public adjuster in this state shall not be required to complete any prelicensing examination. This exemption is only available if the application is received within 12 months of the termination of the applicant’s previous license in this state and if, at the time of termination, the applicant was in good standing in this state.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1140 Nonresident License Reciprocity

(1) The director may issue a nonresident public adjuster license to a person under this section if the director finds:

(a) The person is currently licensed as a resident public adjuster and in good standing in his or her home state;

(b) The person has paid the fees required by OAR 836-009-0007;

(d) The person’s home state awards nonresident public adjuster licenses to residents of this state on the same basis.

(2) The director may verify the public adjuster’s licensing status through the producer database maintained by the NAIC, its affiliates, or subsidiaries.

(3) As a condition to continuation of a public adjuster license issued under this section, the licensee shall maintain a resident public adjuster license in his or her home state. The nonresident public adjuster license issued under this section shall terminate and be surrendered immediately to the director if the home state public adjuster license terminates for any reason, unless the public adjuster has been issued a license as a resident public adjuster in his or her new home state. Notification to the state or states where nonresident license is issued must be made as soon as possible, yet no later than 30 days of change in new state resident license. Licensee shall include new and old address. A new state resident license is required for nonresident licenses to remain valid. The new state resident license must have reciprocity with the licensing nonresident state(s) for the nonresident license not to terminate.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1145 License

(1) A public adjuster license shall remain in effect unless revoked, terminated or suspended as long as a request for renewal is filed, the fee set forth in OAR 836-071-0130 and OAR 836-009-0007 is paid and any other requirements for license renewal are met by the due date.

(2) The licensee shall inform the director by any means acceptable to the director of a change of address, change of legal name, or change of information submitted on the application within 30 days of the change.

(3) A licensed public adjuster shall be subject to ORS 746.230, ORS 746.240 and other applicable law.

(4) A public adjuster who allows his or her license to lapse may, within 12 months from the due date of the renewal, be issued a new public adjuster license upon the director’s receipt of the request for renewal. However, a penalty in the amount of double the unpaid renewal fee shall be required for the issue of the new public adjuster license. The new public adjuster license shall be effective the date the director receives the request for renewal and the late payment penalty.

(5) Any public adjuster licensee that fails to apply for renewal of a license before expiration of the current license shall pay a lapsed license fee of twice the license fee and be subject to other penalties as provided by law before the license will be renewed. If the director receives the request for reinstatement and the required lapsed license fee within 365 days of the date the license lapsed, the director shall reinstate the license retroactively to the date the license lapsed. If the person applies for reinstatement more than 365 days from date of lapse, the person shall reapply for the license under this rule.

(6) A licensed public adjuster that is unable to comply with license renewal procedures due to military service, a long-term medical disability, or some other extenuating circumstance, may request a waiver of those procedures. The public adjuster may also request a waiver of any examination requirement, fine, or other sanction imposed for failure to comply with renewal procedures.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1150 License Denial, Non-renewal or Revocation

The director may place on probation, suspend, revoke, refuse to issue or renew, or otherwise limit or amend a public adjuster’s license in accordance with ORS 744.584.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1155 Continuing Education

An individual, who holds a public adjuster license shall satisfactorily complete the continuing education requirements as provided in ORS 744.521(2)(a)(B).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1160 Public Adjuster Fees

(1) A public adjuster shall not pay a commission, service fee or other valuable consideration to a person for investigating or settling claims in this state if that person is required to be licensed under this rule and is not so licensed.

(2) A person shall not accept a commission, service fee or other valuable consideration for investigating or settling claims in this state if that person is required to be licensed under this rule and is not so licensed.

(3) A public adjuster may pay or assign commission, service fees or other valuable consideration to persons who do not investigate or settle claims in this state, unless the payment would violate ORS 746.045 or other applicable law.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1165 Contract Between Public Adjuster and Insured

(1) Public adjusters shall ensure that all contracts for their services are in writing and contain the following terms:

(a) Legible full name of the adjuster signing the contract, as specified in Department of Consumer and Business Services records;

(b) Permanent home state business address and phone number;

(d) Title of “Public Adjuster Contract”;

(e) The insured’s full name, street address, insurance company name and policy number, if known or upon notification;

(f) A description of the loss and its location, if applicable;

(g) Description of services to be provided to the insured;

(h) Signatures of the public adjuster and the insured;

(i) Date contract was signed by the public adjuster and date the contract was signed by the insured; and

(j) Full salary, fee, commission, compensation or other considerations the public adjuster is to receive for services.

(2) The contract may specify that the public adjuster shall be named as a co-payee on an insurer’s payment of a claim:

(a) If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified.

(b) Initial expenses to be reimbursed to the public adjuster from the proceeds of the claim payment shall be specified by type, with dollar estimates set forth in the contract and with any additional expenses first approved by the insured.

(c) Compensation provisions in a public adjusting contract shall not be redacted in any copy of the contract provided to the director.

(3) If the insurer, not later than 72 hours after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy, the public adjuster shall:

(a) Not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim;

(b) Inform the insured that loss recovery amount might not be increased by insurer; and

(c) Be entitled only to reasonable compensation from the insured for services provided by the public adjuster on behalf of the insured, based on the time spent on a claim and expenses incurred by the public adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer.

(4) A public adjuster contract may not contain any contract term that:

(a) Allows the public adjuster’s percentage fee to be collected when money is due from an insurance company, but not paid, or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather than as percentage of each check issued by an insurance company;

(b) Requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster;

(d) Precludes a public adjuster from pursuing civil remedies.

(5) Prior to the signing of the contract the public adjuster shall provide the insured with a separate disclosure document regarding the claim process that states:

(a) Property insurance policies obligate the insured to present a claim to his or her insurance company for consideration. There are three types of adjusters that could be involved in that process. The definitions of the three types are as follows:

(A) “Company adjuster” means the insurance adjusters who are employees of an insurance company. They represent the interest of the insurance company and are paid by the insurance company. They will not charge you a fee.

(B) “Independent adjuster” means the insurance adjusters who are hired on a contract basis by an insurance company to represent the insurance company’s interest in the settlement of the claim. They are paid by your insurance company. They will not charge you a fee.

(C) “Public adjuster” means the insurance adjusters who do not work for any insurance company. They work for the insured to assist in the preparation, presentation and settlement of the claim. The insured hires them by signing a contract agreeing to pay them a fee or commission based on a percentage of the settlement, or other method of compensation.

(b) The insured is not required to hire a public adjuster to help the insured meet his or her obligations under the policy, but has the right to do so.

(c) The insured has the right to initiate direct communications with the insured’s attorney, the insurer, the insurer’s adjuster, and the insurer’s attorney, or any other person regarding the settlement of the insured’s claim.

(d) The public adjuster is not a representative or employee of the insurer.

(e) The salary, fee, commission or other consideration is the obligation of the insured, not the insurer.

(6) The contracts shall be executed in duplicate to provide an original contract to the public adjuster, and an original contract to the insured. The public adjuster's original contract shall be available at all times for inspection without notice by the director.

(7) The public adjuster shall provide the insurer a notification letter, which has been signed by the insured, authorizing the public adjuster to represent the insured’s interest. The insurer shall verify the public adjuster holds a valid license with the Department of Consumer and Business Services.

(8) The insured has the right to rescind the contract within three business days after the date the contract was signed. The rescission shall be in writing and mailed or delivered to the public adjuster at the address in the contract within the three business day period.

(9) If the insured exercises the right to rescind the contract, anything of value given by the insured under the contract will be returned to the insured within 15 business days following the receipt by the public adjuster of the cancellation notice.

(10) Subject to its terms relating to assignability, a property insurance policy, whether heretofore or hereafter issued, under the terms of which the policy and its rights and benefits are assignable, may provide that the rights and benefits under the insurance may only be assigned to a person who has the legal authority to represent the named insured or to a subsequent owner of the property to whom title is transferred, and may explicitly prohibit assignment of rights and benefits to any other person, including a property repair contractor. For purposes of this subsection, having “legal authority to represent the named insured” includes the person named by the named insured as having the named insured’s power of attorney, the person who is the name insured’s licensed public adjuster, or any other comparable person. Property repair contractors operating in this state may not subvert the public adjuster licensing requirements of this rule through the acquisition of a power of attorney from the named insured.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1170 Licensee’s Place of Business

A public adjuster shall maintain a place of business and all of the usual, customary and required records in accordance with ORS 744.578.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1175 Escrow or Trust Accounts

A public adjuster who receives, accepts or holds any funds on behalf of an insured, towards the settlement of a claim for loss or damage, shall deposit the funds in a non-interest bearing escrow or trust account in a financial institution that is insured by an agency of the federal government in the public adjuster’s home state or where the loss occurred.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1180 Record Retention

(1) A public adjuster shall maintain a complete record of each transaction as a public adjuster. The records required by this section shall include the following:

(a) Name of the insured;

(b) Date, location and amount of the loss;

(d) Name of the insurer, amount, expiration date and number of each policy carried with respect to the loss;

(e) Itemized statement of the insured’s recoveries;

(f) Itemized statement of all compensation received by the public adjuster, from any source whatsoever, in connection with the loss;

(g) A register of all monies received, deposited, disbursed, or withdrawn in connection with a transaction with an insured, including fees transfers and disbursements from a trust account and all transactions concerning all interest bearing accounts;

(h) Name of public adjuster who executed the contract;

(i) Name of the attorney representing the insured, if applicable, and the name of the claims representatives of the insurance company; and

(j) Evidence of financial responsibility in a format prescribed by the director.

(2) Records shall be maintained for at least five years after the termination of the transaction with an insured and shall be open to examination by the director at all times.

(3) Records submitted to the director in accordance with this section that contain information identified in writing as proprietary by the public adjuster shall be treated as confidential by the director.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1185 Standards of Conduct of Public Adjuster

(1) A public adjuster is obligated, under their license, to serve with objectivity and complete loyalty the interest of their client alone; and to render to the insured such information, counsel and service, as within the knowledge, understanding and opinion in good faith of the licensee, as will best serve the insured’s insurance claim needs and interest.

(2) A public adjuster shall not solicit, or attempt to solicit, an insured during the progress of a loss-producing occurrence, as defined in the insured’s insurance contract.

(3) A public adjuster shall not advertise or infer damage unless an inspection of the property has been completed.

(4) A public adjuster shall not offer to pay an insured’s deductible, or claim the insured’s deductible will be waived, as an inducement to using the services of a public adjuster.

(5) A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this rule.

(6) A public adjuster shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee, commission or other consideration established in the written contract with the insured.

(7) A public adjuster shall not acquire any interest in salvage of property subject to the contract with the insured unless the public adjuster obtains written permission from the insured after settlement of the claim with the insurer.

(8) The public adjuster shall abstain from referring or directing the insured to get needed repairs or services in connection with a loss from any person:

(a) With whom the public adjuster has a financial interest; or

(b) From whom the public adjuster may receive direct or indirect compensation for the referral.

(9) Any compensation or anything of value in connection with an insured’s specific loss that will be received by a public adjuster shall be disclosed by the public adjuster to the insured in writing including the source and amount of any such compensation.

(10) Public adjusters shall adhere to the following general ethical requirements:

(a) A public adjuster shall not undertake the adjustment of any claim if the public adjuster is not competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the public adjuster’s current expertise;

(b) A public adjuster shall not knowingly make any oral or written material misrepresentations or statements which are false or maliciously critical and intended to injure any person engaged in the business of insurance to any insured client or potential insured client;

(c) No public adjuster, while so licensed by the Department of Consumer and Business Services, may represent or act as a company adjuster, or independent adjuster on the same claim;

(d) The contract shall not be construed to prevent an insured from pursuing any civil remedy after the three-business day revocation or cancellation period;

(e) A public adjuster shall not enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the persons who shall perform repair work; and

(f) A public adjuster shall ensure that all contracts for the public adjuster’s services are in writing and set forth all terms and conditions of the engagement.

(11) A public adjuster may not agree to any loss settlement without the insured’s knowledge and consent.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1190 Notices Required

The public adjuster shall report to the director any of the conditions specified in ORS 744.581.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Or. Admin. R. 836-071-1195 Unlicensed Actors

A person or entity commits a fraudulent insurance act if they:

(1) Represents or advertises themself to be a public adjuster who has not met the requirements of licensure under this rule.

(2) Conducts business for which a license is required under this rule without a license.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.521
ID 5-2025, adopt filed 07/25/2025, effective 08/01/2025

Division 72 LICENSING GENERALLY

Or. Admin. R. 836-072-0001 Applicability of and authority for OAR 836-072-0001 to 836-072-0045

(1) OAR 836-072-0001 to 836-072-0045 are adopted to carry out the authority of the Department of Consumer and Business Services under ORS 181.534 to request an Oregon LEDS-based criminal history check, a fingerprint-based Oregon criminal history check or a nationwide criminal history check and, pursuant to 705.141, to require fingerprints of an applicant for any of the following licenses:

(a) Adjuster license.

(b) Insurance consultant license.

(d) Viatical settlement provider license.

(e) Viatical settlement broker license.

(2) OAR 836-072-0001 to 836-072-0045 apply to an application for a licenses set forth in section (1) of this rule submitted on and after September 1, 2009.

(3) The fact that the Department approves an applicant as fit to be a licensee under OAR 836-072-0001 to 836-072-0045 does not guarantee that the Department will issue or amend the license of the applicant.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0005 Definitions

(1) “Applicant” means an applicant applying for any of the following:

(a) An initial resident license.

(b) A renewal of a resident license.

(c) An additional line of authority under an existing resident license when a criminal history record check has not been obtained.

(d) A resident license under a change of resident license application pursuant to ORS 744.067.

(2) “Authorized designee” means a Department employee authorized to obtain and review criminal offender information and other criminal records information about an applicant through criminal records checks and other means, and to conduct a fitness determination in accordance with OAR 836-072-0015.

(3) “Criminal records check” means a fingerprint-based Oregon criminal history check or a nationwide criminal history check..

(4) “LEDS” means the Law Enforcement Data System.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0010 Criminal Records Check Process

(1) An authorized designee:

(a) Shall conduct a LEDS-based criminal history check and request that the Oregon Department of State Police conduct a criminal records check for all applicants for an initial license; and

(b) May conduct a LEDS-based criminal history check, or request that the Oregon Department of State Police conduct, a criminal records check of an applicant for renewal of a license to whom OAR 836-072-0001 to 836-072-0045 apply.

(2) An applicant to whom OAR 836-072-0001 to 836-072-0045 apply must provide as required on the application form all identifying information requested including but not limited to name, birth date, Social Security number, physical characteristics, driver’s license or identification card number and current address, and information about prior residences as requested in the DCBS Criminal Records Request form. The applicant shall submit the information and obtain the fingerprints in accordance with directions provided by the department. An applicant, with the written consent of the authorized designee, may submit the materials necessary for the authorized designee to conduct a LEDS-based criminal history check or a criminal records check up to six months before the applicant intends to submit an application for a new license or for renewal of an existing license.

(3) If the department and a vendor agree by contract that the vendor will perform duties of obtaining fingerprints of applicants and submitting the fingerprints for Oregon or nationwide criminal history checks, an applicant shall submit the fingerprint card according to the requirements and instructions of the vendor.

(4) Within a reasonable period of time established by an authorized designee, an applicant shall disclose additional information as requested by the department to resolve an issue hindering the completion of either a LEDS-based criminal history check or a criminal records check, such as providing additional proof of identity.

(5) When an authorized designee determines under section (1) of this rule that a criminal records check is needed:

(a) The authorized designee shall conduct a LEDS-based criminal records check as part of any fitness determination conducted in regard to an applicant.

(b) The authorized designee may request that the Oregon Department of State Police conduct an Oregon criminal history check when:

(A) The authorized designee determines that an Oregon criminal history check is warranted after review of the information provided by the applicant, the results of a LEDS-based criminal history check or other criminal records information;

(B) The authorized designee requests a nationwide criminal history check; or

(C) Upon application for renewal, the director has reason to believe an additional check is necessary based on information obtained by the Division of Financial Regulation.

(6) An authorized designee may request that the Oregon Department of State Police conduct a nationwide criminal history check when:

(a) An applicant for license issuance has lived outside Oregon continuously for nine years;

(b) An applicant for resident license renewal has lived outside Oregon for 60 or more consecutive days during the previous three years;

(c) For a renewal application, the director has reason to believe an additional check is necessary based on information obtained by the Division of Financial Regulation;

(d) Information provided by the applicant or the results of a LEDS-based criminal history check or Oregon criminal history check gives reason to believe, as determined by an authorized designee, that the applicant has a criminal history outside of Oregon;

(e) As determined by an authorized designee, there is reason to question the identity of, or information provided by, an applicant, including but not limited to failure to disclose a Social Security number, disclosure of a Social Security number that appears to be invalid or lack of an Oregon driver’s license or identification card; or

(f) A check is required by federal law or regulation, by state law or administrative rule, or by contract or written agreement with the department.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 28-2024, minor correction filed 08/16/2024, effective 08/16/2024
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0015 Fitness Determination

(1) An authorized designee shall make a fitness determination about an applicant based on information provided by the applicant under OAR 836-072-0010, any LEDS-based criminal history check or other criminal history check conducted and any false statements made by the applicant.

(2) When making a fitness determination about an applicant, an authorized designee shall also consider the factors in this section in relation to information provided by the applicant under OAR 836-072-0010, any LEDS-based criminal history report or criminal offender information obtained through a criminal records check and any false statement made by the applicant. To assist in considering these factors, the authorized designee may obtain other criminal records information from the applicant or any other source, including law enforcement agencies or courts within or outside of Oregon. To acquire other criminal offender information from the applicant, an authorized designee may request a meeting with the applicant and may request from the applicant written materials or authorization to obtain criminal offender information. The applicant must meet with the authorized designee if requested and provide additional information or authorization within a reasonable period of time, as established by the authorized designee. The authorized designee shall use all collected information in considering the following factors:

(a) Whether the applicant has been convicted of, found guilty except for insanity (or a comparable disposition) of, or has a pending indictment for a crime listed in OAR 836-072-0020;

(b) The nature of any crime identified under subsection (a) of this section;

(d) The facts that indicate the applicant made a false statement;

(e) The relevance, if any, of a crime identified under subsection (a) of this section or of a false statement made by the applicant to the specific requirements of the applicant’s present or proposed employment; and

(f) The following intervening circumstances, to the extent that they are relevant to the responsibilities and circumstances of the license application or renewal for which the fitness determination is being made:

(A) The passage of time since the commission or alleged commission of a crime identified under subsection (a) of this section;

(B) The age of the applicant at the time of the commission or alleged commission of a crime identified under subsection (a) of this section;

(D) The subsequent commission of another crime listed in OAR 836-072-0020;

(E) Whether a conviction identified under subsection (a) of this section has been set aside or pardoned, and the legal effect of setting aside the conviction or of a pardon;

(F) A recommendation of an employer;

(G) The disposition of a pending indictment identified under subsection (a) of this section;

(H) Whether the applicant has been arrested for or charged with a crime listed under OAR 836-072-0020 within the last five years;

(I) Whether the applicant is being investigated, or has an outstanding warrant, for a crime listed under OAR 836-072-0020;

(J) Whether the applicant is currently on probation, parole or another form of post-prison supervision for a crime listed under OAR 836-072-0020;

(K) Whether the applicant has a deferred sentence or conditional discharge or is participating in a diversion program in connection with a crime listed under OAR 836-072-0020;

(L) Whether the applicant has been adjudicated in a juvenile court and found to be within the court’s jurisdiction for an offense that would have constituted a crime listed in OAR 836-072-0020 if committed by an adult, unless that adjudication has been reversed or set aside by a subsequent court decision;

(M) Periods of incarceration of the applicant;

(N) Whether the applicant has a history of drug or alcohol abuse that relates to the applicant’s criminal activity, and the applicant’s history of treatment or rehabilitation for such abuse; and

(O) The education and work history (paid or volunteer) of the applicant since the commission or alleged commission of a crime.

(3) The following are possible outcomes of a final fitness determination:

(a) An authorized designee shall approve an applicant if the authorized designee determines pursuant to sections (1) and (2) of this rule that:

(A) No credible evidence that the applicant has been convicted of, or found guilty except for insanity (or comparable disposition) of a crime listed as a permanent review crime in OAR 836-072-0020;

(B) No credible evidence that the applicant had been convicted of, or found guilty except for insanity (or comparable disposition) of a crime listed as a ten-year review crime in OAR 836-072-0020 within ten years of the date that the applicant signed the DCBS Criminal Records Request form;

(C) No credible evidence that the applicant had been convicted of, or found guilty except for insanity (or comparable disposition) of a crime listed as a five-year review crime in OAR 836-072-0020(3) within five years of the date that the applicant signed the DCBS Criminal Records Request form;

(D) No credible evidence that the applicant has a pending indictment for a crime listed in OAR 836-072-0020;

(E) No credible evidence of the applicant having made a false statement; and

(F) No discrepancies exist between the criminal offender information, other criminal records information and information obtained from the applicant.

(b) An authorized designee shall deny issuance or renewal of a license to an applicant:

(A) If a fitness determination under this rule shows credible evidence of any of the factors identified in subsection (a) of this section and, after evaluating the information described in sections (1) and (2) of this rule, an authorized designee concludes that the applicant acting in the scope of the license for which the fitness determination is being conducted would pose a risk of harm to the insurance-buying public.

(B) If the applicant refuses to submit or consent to a criminal records check including fingerprint identification.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0020 Crimes Relevant to a Fitness Determination

The following crimes are relevant to a fitness determination under OAR 836-072-0001 to 836-072-0045, to the extent not inconsistent with ORS 670.280:

(1) Permanent review crimes.

ORS 162.015, Bribe giving; ORS 162.025, Bribe receiving; ORS 162.065, Perjury; ORS 162.117, Public investment fraud; ORS 162.235, Obstructing governmental or judicial administration; ORS 162.265, Bribing a witness; ORS 162.275, Bribe receiving by a witness; ORS 162.285, Tampering with a witness; ORS 162.305, Tampering with public records;ORS 162.325, Hindering prosecution; ORS 162.355, Simulating legal process; ORS 162.365, Criminal impersonation; ORS 162.367, Criminal impersonation of peace officer; ORS 162.405, Official misconduct II; ORS 162.415, Official misconduct I; ORS 162.425, Misuse of confidential information; ORS 163.005, Criminal homicide; ORS 163.095, Aggravated murder; ORS 163.115, Murder; ORS 163.118, Manslaughter I; ORS 163.125, Manslaughter II; ORS 163.145, Criminally negligent homicide; ORS 163.160, Assault IV; ORS 163.165, Assault III; ORS 163.175, Assault II; ORS 163.185, Assault I; ORS 163.187, Strangulation; ORS 163.200, Criminal mistreatment II; ORS 163.205, Criminal mistreatment I; ORS 163.207, Female genital mutilation; ORS 163.208, Assault of Public Safety Officer; ORS 163.225, Kidnapping II; ORS 163.235, Kidnapping I; ORS 163.257, Custodial interference I; ORS 163.275, Coercion; ORS 163.355, Rape III; ORS 163.365, Rape II; ORS 163.375, Rape I; ORS 163.385, Sodomy III; ORS 163.395, Sodomy II; ORS 163.405, Sodomy I; ORS 163.408, Unlawful Sexual penetration II; ORS 163.411, Unlawful Sexual penetration I; ORS 163.425, Sexual abuse II; ORS 163.427, Sexual abuse I; ORS 163.452, Custodial sexual misconduct I; ORS 163.454, Custodial sexual misconduct II; ORS 163.465, Public indecency; ORS 163.479, Unlawful contact with child; ORS 163.515, Bigamy; ORS 163.525, Incest; ORS 163.535, Abandonment of a child; ORS 163.537, Buying or selling a person under 18 years of age; ORS 163.547, Child neglect I; ORS 163.670, Using child in display of sexually explicit conduct; ORS 163.684, Encouraging child sexual abuse I; ORS 163.686, Encouraging child sexual abuse II; ORS 163.687, Encouraging child sexual abuse III; ORS 163.688, Possession of materials depicting sexually explicit conduct of a child I; ORS 163.689, Possession of materials depicting sexually explicit conduct of a child II; ORS 163.732, Stalking; ORS 164.055, Theft I;

ORS 164.057, Aggravated theft I; ORS 164.075, Theft by extortion; ORS 164.085, Theft by deception; ORS 164.095, Theft by receiving, if a felony; ORS 164.125, Theft of services; ORS 164.135, Unauthorized use of a vehicle; ORS 164.140, Criminal possession of rented or leased personal property, if a felony; ORS 164.162, Mail theft or receipt of stolen mail; ORS 164.170, Laundering a monetary instrument; ORS 164.172, Engaging in a financial transaction in property derived from unlawful activity; ORS 164.215, Burglary II; ORS 164.225, Burglary I; ORS 164.325, Arson I;

ORS 164.377, Computer crime; ORS 164.395, Robbery III; ORS 164.405, Robbery II; ORS 164.415, Robbery I; ORS 165.007, Forgery II;

ORS 165.013, Forgery I; ORS 165.017, Criminal possession of a forged instrument II; ORS 165.022, Criminal possession of a forged instrument I; ORS 165.032, Criminal possession of a forgery device; ORS 165.042, Fraudulently obtaining a signature; ORS 165.055, Fraudulent use of a credit card; ORS 165.065, Negotiating a bad check, if a felony; ORS 165.070, Possessing fraudulent communications device; ORS 165.074, Unlawful factoring of payment card transaction; ORS 165.080, Falsifying business records; ORS 165.085, Sports bribery; ORS 165.090, Sports bribe receiving; ORS 165.095, Misapplication of entrusted property; ORS 165.100, Issuing a false financial statement; ORS 165.577, Cellular counterfeiting III; ORS 165.579, Cellular counterfeiting II; ORS 165.581, Cellular counterfeiting I; ORS 165.692, Making false claim for health care payment, if a felony; ORS 165.800, Identity theft; ORS 165.810, Unlawful possession of a personal identification device; ORS 165.813, Unlawful possession of fictitious identification; ORS 166.155, Intimidation II; ORS 166.165, Intimidation I; ORS 166.270, Possession of weapons by certain felons; ORS 166.272, Unlawful possession of machine guns, certain short-barreled firearms and firearm silencers; ORS 166.350, Unlawful possession of armor piercing ammunition; ORS 166.370, Possession of firearm or dangerous weapon in public building or court facility; exceptions; discharging firearm at school; ORS 166.410, Manufacturing, importation or sale of firearms; ORS 166.429, Firearms used in felony; ORS 166.720, Racketeering activity unlawful; ORS 167.167, Cheating ORS 167.212, Tampering with drug records; ORS 181.599, Failure to report as sex offender; ORS 192.852/865, Prohibition on obtaining or disclosing of protected information; ORS 475.840, Prohibited acts generally (regarding drug crimes); ORS 475.904, Unlawful manufacture or delivery of controlled substance within 1000 feet of school; ORS 475.906, Penalties for distribution to minors; ORS 475.908, Causing another person to ingest a controlled substance; ORS 475.910, Application of controlled substance to the body of another person; ORS 475.914, Prohibited acts for registrants (with the State Board of Pharmacy; regarding felony crimes); ORS 475.916, Prohibited acts involving records and fraud; ORS 475.918, Falsifying drug test results; ORS 475.920, Providing drug test falsification equipment; ORS 475.967, Possession of precursor substance with intent to manufacture controlled substance; Any felony under the Oregon Labor Code (ORS Chapters 651-663), the Oregon Vehicle Code (ORS Chapter 801-826), or the Occupations and Professions Code (ORS Chapters 670-704); Any federal crime, US Military crime, or international crime; Any unclassified felony defined in Oregon Revised Statutes not listed elsewhere in this rule; Any other felony under the statutes of Oregon or any other jurisdiction not listed elsewhere in this rule that the authorized designee determines is relevant to performance of the applicant within the scope of the license for which issuance or renewal has been applied, subject to ORS 670.280; Any crime of attempt, solicitation or conspiracy to commit a crime listed in this section pursuant to ORS 161.405, 161.435, or 161.450; Any crime based on criminal liability for conduct of another pursuant to ORS 161.155, when the underlying crime is listed in this section; Any crime in any other jurisdiction that is the substantial equivalent of any of the Oregon crimes listed in this section as determined by the authorized designee;

(2) Ten-year review crimes:

ORS 133.076, Failure to appear on criminal citation; ORS 162.075, False swearing; ORS 162.085, Unsworn falsification; ORS 162.145, Escape III; ORS 162.175, Unauthorized departure; ORS 162.185, Supplying contraband; ORS 162.195, Failure to appear II; ORS 162.205, Failure to appear I; ORS 162.247, Interfering with a peace officer or parole & probation officer; ORS 162.295, Tampering with physical evidence; ORS 162.369, Possession of false law enforcement identification card; ORS 162.385, Giving false information to police officer for a citation or arrest warrant; ORS 163.245, Custodial interference II; ORS 163.415, Sexual abuse III; ORS 163.435, Contributing to the sexual delinquency of a minor; ORS 163.445, Sexual misconduct; ORS 163.467, Private indecency; ORS 163.476, Unlawfully being in a location where children congregate; ORS 163.545, Child neglect II; ORS 163.555, Criminal nonsupport; ORS 163.575, Endangering the welfare of a minor; ORS 163.693, Failure to report child pornography; ORS 163.700, Invasion of personal privacy; ORS 163.750, Violating court's stalking protective order; ORS 164.043, Theft III; ORS 164.045, Theft II; ORS 164.095, Theft by receiving, if a misdemeanor; ORS 164.140, Criminal possession of rented or leased personal property, if a misdemeanor; ORS 164.235, Possession of burglar's tools or theft device; ORS 164.255, Criminal trespass I; ORS 164.265, Criminal trespass while in possession of firearm; ORS 164.272, Unlawful entry into motor vehicle; ORS 164.315, Arson II; ORS 164.335, Reckless burning; ORS 164.354, Criminal Mischief II; ORS 164.365, Criminal Mischief I; ORS 165.037, Criminal simulation; ORS 165.065, Negotiating a bad check, if a misdemeanor; ORS 165.102, Obtaining execution of documents by deception; ORS 165.540, Obtaining contents of communication; ORS 165.543, Interception of communications; ORS 165.570, Improper use of emergency reporting system; ORS 165.572, Interference with making a report; ORS 165.577, Cellular counterfeiting III; ORS 165.579, Cellular counterfeiting II; ORS 165.692, Making false claim for health care payment, if a misdemeanor; ORS 166.065, Harassment; ORS 166.076, Abuse of a memorial to the dead; ORS 166.190, Pointing firearm at another; ORS 166.220, Unlawful use of weapon; ORS 166.240, Carrying of concealed weapon; ORS 166.250, Unlawful possession of firearms; ORS 166.382, Possession of destructive device prohibited; ORS 166.416, Providing false information in connection with a transfer of a firearm; ORS 167.065, Furnishing obscene materials to minors; ORS 167.070, Sending obscene materials to minors; ORS 167.075, Exhibiting an obscene performance to a minor; ORS 167.080, Displaying obscene materials to minors; ORS 167.090, Publicly displaying nudity or sex for advertising purposes; ORS 167.222, Frequenting a place where controlled substances are used; ORS 167.322, Aggravated animal abuse I; ORS 411.630, Unlawfully obtaining public assistance; ORS 411.640, Unlawfully receiving public assistance; ORS 411.675, Submitting wrongful claim or payment (e.g., public assistance); ORS 411.840, Unlawfully obtaining or disposing of food stamp benefits; Any Class A misdemeanor under the Oregon Labor Code (ORS Chapters 651-663), the Oregon Vehicle Code (ORS Chapter 801-826), or the Occupations and Professions Code (ORS Chapters 670-704); Any unclassified misdemeanor defined in Oregon’s or any other jurisdiction’s statutes and not listed elsewhere in this rule; Any other misdemeanor under the statutes of Oregon or any other jurisdiction and not listed elsewhere in this rule that the authorized designee determines is relevant to performance of the applicant within the scope of the license for which application is made, subject to ORS 670.280; Any crime of attempt, solicitation or conspiracy to commit a crime listed in this section pursuant to ORS 161.405, 161.435, or 161.450; Any crime based on criminal liability for conduct of another pursuant to ORS 161.155, when the underlying crime is listed in this section; Any crime in any other jurisdiction that is the substantial equivalent of any of the Oregon crimes listed in this section as determined by the authorized designee;

(3) Five-year review crimes.

ORS 162.365, Criminal impersonation; ORS 162.375, Initiating a false report; ORS 163.190, Menacing; ORS 163.195, Recklessly endangering another person; ORS 164.243, Criminal trespass II by a guest; ORS 164.245, Criminal trespass II; ORS 164.345, Criminal mischief III; ORS 166.180, Negligently wounding another; ORS 412.074, Unauthorized use and custody of records of temporary assistance for needy families program; ORS 412.099, Sharing assistance prohibited; ORS 416.990, False or fraudulent statements/information; ORS 830.053, Fraudulent report of theft of boat; ORS 830.475(1), Failure to perform the duties of an operator (boat);

ORS 830.730, False information to peace officer or State Marine Board;

Any crime of attempt, solicitation or conspiracy to commit a crime listed in this section pursuant to ORS 161.405, 161.435 or 161.450;Any crime based on criminal liability for conduct of another pursuant to ORS 161.155, when the underlying crime is listed in this section; Any crime in any other jurisdiction that is the substantial equivalent of any of the Oregon crimes listed in this section as determined by the authorized designee.

(4) An authorized designee shall evaluate a crime on the basis of Oregon laws and, if applicable, federal laws or the laws of any other jurisdiction in which a criminal records check indicates an applicant may have committed a crime, as those laws are in effect at the time of the fitness determination.

(5) An applicant may not be denied issuance or renewal of a license on the basis of the existence or contents of a juvenile record that has been expunged pursuant to ORS 419A.260 and 419A.262.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0025 Incomplete Fitness Determination

(1) The Department may close a final fitness determination as incomplete when:

(a) Circumstances change so that an applicant is no longer subject to OAR 836-072-0001 to 836-072-0045;

(b) The applicant does not provide materials or information under OAR 836-072-0020 within the time required under that rule;

(d) The applicant fails or refuses to cooperate with an authorized designee’s attempts to acquire other criminal records information under OAR 836-072-0015; or

(e) The Department determines that the applicant is not eligible or not qualified for the license for a reason unrelated to the fitness determination process.

(2) An applicant does not have a right to a contested case hearing under OAR 836-072-0035 to challenge the closing of a fitness determination as incomplete.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0030 Notice to Applicant of Fitness Determination

(1) An authorized designee shall provide, in a format approved by the Department, written notice to an applicant upon completion of a final fitness determination that denies issuance or renewal of a license, or upon the closing of a fitness determination due to incompleteness. In addition:

(a) The authorized designee shall record on the notice the date on which the fitness determination was either closed as incomplete or completed.

(b) A notice pertaining to a completed final fitness determination must be accompanied by a separate notice addressing the applicant’s right to appeal the Department’s determination under OAR 836-072-0035 and containing the information required by 137-003-0505.

(2) An authorized designee shall provide for hand delivery or first class mail delivery of the notice under section (1) of this section as soon as possible after completion or closure of a fitness determination, but in no case later than 14 calendar days after the date of completion or closure, to the address provided by the applicant on the DCBS Criminal Records Request form, or to an updated address as provided in writing by the applicant.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0035 Appealing a Fitness Determination

(1) This rule establishes a contested case hearing process by which an applicant may appeal a completed final fitness determination made under OAR 836-072-0015 that the applicant is fit or not fit for a license described in 836-072-0001 on the basis of information obtained as the result of a LEDS-based criminal history check or criminal records check conducted by or at the request of the Department pursuant to ORS 181.534.

(2) An applicant may appeal a fitness determination by submitting a written request for a contested case hearing to the address specified in the notice provided under OAR 836-072-0030. To be timely, a request for hearing must be received by the Department not later than the 10th day after the date of the notice. The Department shall address a request received after the 10th day as provided under 137-003-0528.

(3) When a timely request is received by the Department under section (2) of this rule, a contested case hearing shall be conducted by an administrative law judge assigned by the Office of Administrative Hearings, pursuant to the Attorney General's Uniform and Model Rules, “Procedural Rules, Office of Administrative Hearings,” OAR 137-003-0501 to 137-003-0700, as supplemented by this rule.

(4) An applicant’s timely hearing request under section (2) of this rule constitutes a discovery request for any records that the applicant may inspect under OAR 836-072-0040(2)(e). The Department or the administrative law judge may protect information made confidential by ORS 181.534(15) or other applicable laws as provided in OAR 137-003-0570(7) or (8).

(5) A contested case hearing on a fitness determination under this rule is closed to non-participants.

(6) After a hearing, the administrative law judge shall issue a proposed order. Exceptions, if any, are due not later than the 14th day after service of the proposed order. The proposed order must provide an address to which exceptions may be sent.

(7) A completed final fitness determination made under OAR 836-072-0015 constitutes a final order without a hearing as provided under OAR 137-003-0672.

(8) An applicant may not use the appeals process established by this rule to challenge the accuracy or completeness of information provided by the Oregon Department of State Police, the Federal Bureau of Investigation, or agencies reporting information to the Oregon Department of State Police or the Federal Bureau of Investigation. To challenge the accuracy or completeness of any such information, an applicant may use any process made available by the agency that provided the information.

(9) If an applicant successfully challenges the accuracy or completeness of information provided by the Oregon Department of State Police, the Federal Bureau of Investigation, or an agency reporting information to the Oregon Department of State Police or the Federal Bureau of Investigation, the applicant may request that the Department conduct a new criminal records check and re-evaluate the original fitness determination made under OAR 836-072-0015 by submitting a new DCBS Criminal Records Request form.

(10) An appeal of a fitness determination under this rule, a challenge of criminal offender information with the agency that provided the information or a request for a new LEDS-based criminal history check or criminal records check and re-evaluation of the original fitness determination under section (9) of this rule does not delay or postpone a licensing decision by the Department unless the authorized designee decides that a delay or postponement should occur.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0040 Recordkeeping and Confidentiality

(1) An authorized designee must document in writing a preliminary or final fitness determination or the closing of a fitness determination due to incompleteness.

(2) All records that the Department receives from the Oregon Department of State Police resulting from a criminal records check, including but not limited to LEDS reports and state or federal criminal offender information originating with the Oregon Department of State Police or the Federal Bureau of Investigation, are confidential pursuant to ORS 181.534(15) and federal laws and regulations.

(3) Within the Department, only authorized designees may have access to records the Department receives from the Oregon Department of State Police resulting from a criminal records check.

(4) An authorized designee has access to records received from the Oregon Department of State Police in response to a criminal records check only if the authorized designee has a demonstrated and legitimate need to know the information contained in the records.

(5) An authorized designee must maintain and disclose records received from the Oregon Department of State Police resulting from a criminal records check in accordance with applicable requirements and restrictions in ORS Chapter 181 and other applicable federal and state laws, rules adopted by the Oregon Department of State Police pursuant to ORS Chapter 181 (see OAR chapter 257, division 15), OAR 836-072-0001 to 836-072-0045, federal regulations and any written agreement between the Department and the Oregon Department of State Police.

(6) If a fingerprint-based criminal records check was conducted with regard to an applicant, the Department shall permit the applicant to inspect the applicant’s own state and federal criminal offender information, unless prohibited by federal law.

(7) If an applicant asks to inspect criminal offender information under section (6) of this rule requests, the Department shall provide the applicant with a copy of the applicant’s own state and federal criminal offender information, unless prohibited by law. The Department shall require sufficient identification from the applicant to determine the applicant’s identity before providing the criminal offender information to the applicant. The Department shall require that the applicant sign a receipt confirming the applicant’s receipt of the criminal offender information, except that if the criminal offender information is provided through discovery under OAR 836-072-0035, the Department must keep a record of the information provided to the applicant.

(8) The Department shall treat all records received or created under OAR 836-072-0001 to 836-072-0045 that concern the criminal history of an applicant, other than records received from the Oregon Department of State Police, including DCBS Criminal Records Request forms and fingerprint cards, as confidential pursuant to ORS 181.534(15). Within the Department, only authorized designees may have access to the records. An authorized designee may have access to the records only if the authorized designee has a demonstrated and legitimate need to know the information contained in the records.

(9) Except as otherwise provided by law, an applicant shall have access to the records referred to in section (8) of this section pursuant to the terms of the Public Records Law, ORS 192.410 to 192.505.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Or. Admin. R. 836-072-0045 Authorized Designees

(1) Authorized designees shall be employees holding positions within the Department that have been designated by the Director to include the responsibilities of an authorized designee.

(2) Appointment to a position designated under section (1) of this rule is contingent upon approval of the employee under the Department’s nationwide criminal history check and fitness determination processes and any process required by the Department of Oregon State Police or Federal Bureau of Investigations rules, regulations or policies. An appointment under this section is at the Director’s discretion.

(3) The Director and Deputy Director may also serve as authorized designees, contingent on being approved under the Department’s nationwide criminal history check and fitness determination processes and any process required by Department of Oregon State Police or Federal Bureau of Investigation rules, regulations or policies.

(3) An authorized designee may not participate in a fitness determination or review any information associated with a fitness determination for an applicant if either of the following is true:

(a) The authorized designee is related to the applicant; or

(b) The authorized designee has a financial or close personal relationship with the applicant. If an authorized designee is uncertain whether a relationship with an applicant qualifies as a financial or close personal relationship under this subsection, the authorized designee must consult with the authorized designee’s supervisor before taking any action that would violate this rule if such a relationship were determined to exist.

(4) When an authorized designee's employment in a designated position ends, the authorized designee’s status as an authorized designee is automatically terminated.

(5) The Department shall suspend or terminate a Department employee’s appointment to a designated position and suspend or terminate the employee’s status as an authorized designee if:

(a) The employee fails to comply with OAR 836-072-0001 to 836-072-0045 in conducting criminal history checks and fitness determinations;

(b) The employee loses access to LEDS or criminal offender information received from the Department of Oregon State Police or the Federal Bureau of Investigation; or

(6) An authorized designee must immediately report to the authorized designee’s supervisor if the authorized designee is arrested for or charged with, is being investigated for or has an outstanding warrant or pending indictment for a crime listed in OAR 836-072-0020. Failure to make the required report is grounds for termination of the applicant’s appointment to a designated position and termination of status as an authorized designee.

(7) The Department must review and update an authorized designee’s eligibility for service in a designated position and may require a new criminal history check and fitness determination:

(a) Every three years; or

(b) At any time the Department has reason to believe that the authorized designee has violated OAR 836-072-0001 to 836-072-0045, has committed a crime listed in 836-072-0020, or is or may no longer be eligible to serve in the current position or as an authorized designee.

History

Statutory/Other Authority: ORS 181.534, 705.135 & 731.244
Statutes/Other Implemented: ORS 181.534, 705.141, 744.001, 744.059 & 744.326
ID 19-2008, f. & cert. ef 12-10-08

Division 74 INSURANCE DIVISION TRUST ACCOUNTS

Or. Admin. R. 836-074-0005 Statutory Authority; Effective Date

OAR 836-074-0005 to 836-074-0050 are adopted under the general rulemaking authority of the Director of the Department of Consumer and Business Services under ORS 731.244 for the purpose of carrying out 744.083.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.225
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0010 Definitions

As used in OAR 836-074-0005 to 836-074-0050:

(1) “Insurance producer includes any person who is licensed by the Department as a resident insurance producer.

(2) "Premium Fund" and "Premium Funds" means any premium or other consideration received from or on behalf of an insured for the purpose of effecting or purchasing insurance, and includes return premiums, return premium credits, policy fees and premium taxes.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.225
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0015 Director’s Enforcement Authority

The Director may apply any sanction for violation of ORS 744.225 that the Director may apply for any other violation of the Insurance Code or rules adopted thereunder.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.225
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0017 Exemptions

OAR 836-074-0005 to 836-074-0050 do not apply to:

(1) An insurance producer who is exclusively a salaried employee of an insurer.

(2) An insurance producer who sells only industrial life insurance, as that term is defined in ORS 731.166.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0020 Premium Funds Trust Account

(1) Except as otherwise provided in OAR 836-074-0025, an insurance producer shall deposit in one or more premium funds trust accounts all premium funds received by the insurance producer under the insurance producer’s license. Each trust account must be located in this state unless the Director gives written permission to the insurance producer to keep the account in another state. In applying for permission, the insurance producer must give written justification for keeping the account outside this state;

(2) An insurance producer shall maintain each trust account in one or more of the following forms:

(a) In the form of a checking account, demand account, savings account or other account in a state or national bank or savings bank, a state or federal savings association or a state or federal credit union. A trust account under this subsection must be insured by the United States Government or an agency or instrumentality thereof. However, such insurance need not exceed $100,000 for each account or the amount at any time in the account, whichever is less;

(b) In the form of an account that solely invests, either directly or through an investment fund, in any or all of the following instruments: United States government bonds and Treasury certificates or other obligations for which the full faith and credit of the United States are pledged for payment of principal and interest, repurchase agreements collateralized by securities issued by the United States and bankers acceptance;

(c) In the form of an account in an open-end investment company registered under the Investment Company Act of 1940 that:

(A) Limits its portfolio investments to United States-dollar denominated instruments that the board of directors determines present minimal credit risks and that are either of high quality as determined by a nationally recognized statistical rating organization or, in the case of an instrument that is not rated, of comparable quality as determined by the board of directors; and

(B) May not purchase any instrument with a remaining maturity of greater than one year or maintain a dollar-weighted average portfolio maturity that exceeds 120 days.

(3) Premium funds may be placed in an account under section (2) of this rule only if the premium funds are readily available from the account for payments when due.

(4) Each check or other instrument drawn on a trust account must clearly identify that it is drawn on an insurance premium funds trust account.

(5) An insurance producer must make each trust account of the agent accessible to the Director for purposes of examination and audit.

(6) A trust account may be interest-bearing.

(7) For the purpose of OAR 836-074-0005 to 836-074-0050, all premium funds received by an insurance producer on or under any policy of insurance are received in the fiduciary capacity of the insurance producer.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0025 Deposit and Payment of Funds

An insurance producer shall deposit and pay premium funds received as provided in this rule. When deposit is required, the insurance producer shall deposit the funds not later than the seventh day after they are received. When a payment is owed to an insured, the insurance producer shall pay the premium funds not later than the 30th day after the receipt of the funds. The following provisions also apply to the deposit and payment of premium funds:

(1) A return premium and the insurance producer’s share of any premium funds required to be refunded, including unearned commissions, shall be deposited and paid to the insured or other person entitled to the funds. When a return premium is paid in the form of a credit to the account of an insurance producer, the insurance producer shall deposit the equivalent of the credit in money into the account.

(2) When an insurance producer receives a payment of premium funds in the form of an instrument, such as a check, made payable to an insurer, another insurance producer, a surplus line licensee or a premium finance company, the insurance producer may forward the instrument directly to the payee without depositing the instrument in the trust account, if that can be done without endorsement or alteration. Such a payment need not be accounted for with respect to the trust account.

(3) Except as otherwise provided in this section, when an insurance producer receives a payment of premium funds in the form of cash or an instrument requiring endorsement by the insurance producer, the insurance producer shall deposit the premium funds in the trust account or endorse and forward the instrument to the insurer, another insurance producer, the surplus lines licensee or the premium finance company that is entitled to the premium funds received. An insurance producer:

(a) Need not deposit premium funds that are paid in cash if the insurance producer does not maintain a premium trust account because the insurance producer does not engage in transactions for which a trust account must be established, and if the insurance producer complies with all of the following requirements:

(A) Upon receiving the cash, the insurance producer must give the payor a receipt showing the amount of money received, the date on which the money was received, the policy number and the name of the policyholder;

(B) Within 72 hours after receiving the cash, the insurance producer must convert the cash into a guaranteed negotiable instrument, such as a money order, certified check or cashier's check, that is made out to the insurer and forward the money order or check to the insurer;

(b) May deposit the premium funds under procedures established by the insurer entitled to the funds if the procedures meet the requirements of this section and the insurer has given those procedures to the insurance producer in writing. Such other procedures must:

(A) Recognize that the insurance producer is receiving premiums directly on behalf of the insurer;

(B) Direct the insurance producer to give adequate receipts on behalf of the insurer;

(4) An insurance producer may remove gross commissions from the trust account and pay them to the operating account of the insurance producer.

(5) An insurance producer shall not pay out premium funds from a trust account to pay premiums that have not been paid into the trust account.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0030 Advancing Return Premiums

An insurance producer may advance return premiums from funds of the insurance producer other than from a trust account of the insurance producer, in anticipation of receiving a credit for the return premium from the insurer. When the insurance producer credits the return premium to the trust account, the insurance producer may transfer the advanced credit out of the trust account.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0035 Other Permissible Funds

(1) An insurance producer may not deposit in a premium fund trust account any funds other than premium funds, except as follows:

(a) Funds reasonably sufficient to pay bank charges;

(b) Funds that the insurance producer determines to be prudent for advancing premiums or establishing reserves for the paying of return premiums;

(2) An insurance producer may deposit in a premium fund trust account any premium funds produced in another state. However, premium funds produced in another state must be deposited and paid in the same manner as premium funds under OAR 836-074-0025.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0040 Interest on Trust Funds

Unless an insurance producer and the insurer agree to the contrary, interest earned in a premium funds trust account may be retained by the insurance producer and:

(1) Used to offset bank charges; or

(2) Removed to the operating account of the insurance producer.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0045 Accounting Records; Inspection

(1) An insurance producer shall establish and maintain records and an appropriate accounting system for all premium funds received by the insurance producer as provided in this rule.

(2) Unless otherwise authorized by the Director, an insurance producer shall establish and maintain the records and accounting system in this state. An insurance producer may establish the records and system in another state if the Director gives written permission to the insurance producer to do so. In applying for permission, the insurance producer must give written justification for keeping the records and system outside this state.

(3) An insurance producer shall make the records available in this state for inspection by the Director during regular business hours upon demand.

(4) An insurance producer shall make the records available with respect to any premium funds received for a period of three years following the date of the policy expiration.

(5) An insurance producer may use any accounting system that effectively isolates each trust account from any operating accounts. A recordkeeping system, whether electronic or manual, must provide an audit trail so that details underlying the summary data, such as invoices, checks and statements, may be identified and made available on request. The system must provide the means of tracing any transaction back to its original source or forwarded to final entry such as is accomplished by a conventional double-entry bookkeeping system. When an automatic data processing system is used, the insurance producer shall make a description of the system available for review by the Director.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0047 Examinations and Audits

(1) The Director may examine or audit any trust account and any accounting records of premium funds as the Director determines necessary.

(2) The examination or audit shall be performed at the expense of the insurance producer, when the trust account or accounting records are located outside this state.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0048 Other Trust Account Requirements

OAR 836-074-0005 to 836-074-0050 do not prohibit an insurer from establishing requirements applicable to trust accounts of insurance producers of the insurer, if the requirements are more restrictive than the provisions of 836-074-0005 to 836-074-0050.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Or. Admin. R. 836-074-0050 Single Account for Affiliated Persons

(1) An insurance producer that is a firm or corporation may use one premium fund trust account for the funds received by an affiliated person operating under its license.

(2) An affiliated person of an insurance producer that is a firm or corporation may deposit the premium fund that the affiliated person received in the capacity of an affiliated person directly to the deposit account of the firm or corporation with which the person is affiliated.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 744.083
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 9-1987, f. 12-22-87, cert. ef. 1-1-88

Division 75 THIRD PARTY ADMINISTRATORS

Or. Admin. R. 836-075-0000 Third Party Administrators; License Application; Required Information

An applicant for a third party administrator license shall provide the following electronically in accordance with directions set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov:

(1) Information relating to the organizational form of the applicant as follows:

(a) The name under which the applicant will transact business as a third party administrator;

(b) The principal place of business at which the applicant will transact business as a third party administrator, including the street and mailing addresses and telephone number;

(d) All assumed business names and other names under which the applicant will transact business as a third party administrator;

(e) Whether the applicant has ever had a judgment entered against the applicant for fraud, and whether any insurer, insurance producer or other person claims the applicant to be indebted to it, together with the details of any such indebtedness;

(f) Whether any license of the applicant to act in any occupational or professional capacity has ever been refused, revoked or suspended in this or any other state, and whether the applicant has otherwise ever been the subject of a complaint to a professional licensing board or agency. If the applicant's answer is affirmative in any respect, the applicant must also provide the name and address of the licensing board or agency, the date of the complaint or the action taken against the license, a description of the nature of the complaint or the reason for the action taken against the license, and, with regard to a complaint, a description of the licensing board or agency's disposition of the complaint;

(g) Whether the applicant has ever filed for bankruptcy or been adjudged a bankrupt;

(h) All states and provinces of Canada in which the applicant currently holds a license or certificate of authority to transact business as a third party administrator, or has held such a license or certificate within ten years prior to the date of the application;

(i) The names, addresses, official positions and professional qualifications of the individuals who are responsible for the conduct of affairs of the administrator, including all members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership or association; shareholders holding directly or indirectly ten percent or more of the voting securities of the administrator; and any other person who exercises control or influence over the affairs of the administrator;

(j) The name and telephone number of a contact person who is knowledgeable about preparation of the annual financial statements or reports required under section (4) of this rule.

(2) An appointment of the director, on the application, as agent for service of process, if the third party administrator will be a nonresident licensee.

(3) Biographical information for each owner, partner, director and officer of the applicant, on the Biographical Affidavit form designed by the National Association of Insurance Commissioners.

(4) The following documents, which must accompany the application under section (1) of this rule:

(a) All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, share-holder agreement and other applicable documents and all amendments to such documents;

(b) The bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;

(c) Annual financial statements or reports for the two most recent years, which prove that the applicant is solvent, and such information as the director may require in order to review the current financial condition of the applicant, except as provided in subsection (d) of this section;

(d) If the applicant is a corporation that is newly formed for the purpose of transacting business as a third party administrator, the financial statements or reports of each incorporator, shareholder and officer for the two most recent years, a current balance sheet for the corporation and such information as the director may require in order to review the current financial condition of the applicant;

(e) A statement describing the business plan, including information on staffing levels and activities proposed in this state and nationwide. The plan must provide details setting forth the applicant's capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, recordkeeping and underwriting;

(f) Evidence that the applicant has a fiduciary account established in a federally or state-insured financial institution. An applicant that is an insurance producer licensed under ORS Chapter 744 need not comply with this subsection if the applicant is in compliance withers ORS 744.225 with respect to the premiums, charges and return premiums referred to in ORS 744.730;

(g) Evidence of insurance coverage required by ORS 744.726;

(h) If the applicant will be managing the solicitation of new or renewal business, proof that it employs or has contracted with an insurance producer licensed by the director for solicitation and taking of applications. Any applicant that intends directly to solicit insurance contracts or to otherwise act as an insurance producer must provide proof that it has a license as an insurance producer in this state.

History

Statutory/Other Authority: ORS 731.244, ORS 744.303, ORS 744.635, ORS 744.704, ORS 744.712, ORS 744.726 & ORS 744.706
Statutes/Other Implemented: ORS 744.706
ID 41-2023, minor correction filed 07/20/2023, effective 07/20/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0010 Completion of Application

The Director may reject a third party administrator license application if it has not been completed by the 90th day after its filing.

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Statutes/Other Implemented: ORS 744.706
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0020 Amendment of License Application Information

A third party administrator shall notify the Director in writing when the third party administrator changes its principal place of business. The notice shall include the following:

(1) The new street address, including city and state.

(2) The new mailing address, if different.

(3) The new telephone number.

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Statutes/Other Implemented: ORS 744.006, 744.716 & 744.724
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0030 Third Party Administrator License Renewal

(1) A third party administrator applying for renewal of the license must do the following, as applicable:

(a) Not later than the license expiration date, submit electronically a completed renewal application in accordance with directions set forth on the Division of Financial Regulation website of the Department of Consumer and Business Services at dfr.oregon.gov.

(b) Submit the renewal fee.

(2) The director may allow a third party administrator not more than 30 days to submit missing information on the renewal application form, if the fees have been submitted on or before the expiration date.

(3) The director may require on the renewal application any information required with regard to an original application for a license.

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Statutes/Other Implemented: ORS 744.712(3)
ID 43-2023, minor correction filed 07/24/2023, effective 07/24/2023
ID 18-2012, f. & cert. ef. 11-7-12
ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-13
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0040 Annual Report Requirements

(1) A third party administrator shall include in the annual report required in ORS 744.738 the balance sheet and income statement of the third party administrator for the immediately preceding calendar year. The balance sheet and income statement must each be verified by two of its officers, if the third party administrator is a corporation, or by two of its partners, if the third party administrator is a partnership. Each annual report must be filed not later than March 1 of each year.

(2) The first annual report required under this rule shall be filed not later than March 1, 1993.

(3) If the annual report of a third party administrator is for a year other than a calendar year, the third party administrator may file the following instead of an annual report on a calendar year basis:

(a) The annual report of the third party administrator that is most current as of March l; and

(b) The interim financial statement most current as of March 1.

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Statutes/Other Implemented: ORS 744.738
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0045 Format and Instructions for Report Required by ORS 743.818

(1) As used in this rule:

(a) “Covered lives” means Oregon residents who are employees, dependents of employees, or individuals otherwise eligible for an individual, student health, association, group or self-insured group health benefit plan or other benefit plan for which reporting is required and who are enrolled for coverage under the terms of the plan as of the close of the calendar quarter.

(b) “Third party administrator” means a third party administrator licensed under ORS 744.702.

(A) Of the employee or individual policyholder’s Oregon residence;

(B) Of an Oregon employer group covered by a stop loss policy; or

(C) In circumstances for which an Oregon zip code does not exist, the placeholder code established by the director of the Department of Consumer and Business Services and set forth on the website of the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov.

(2) At quarterly intervals covering each year, a third party administrator must submit information pertaining to covered lives through the reporting system of the Division of Financial Regulation in the format established by the director and in accordance with instructions set forth on the website of the Division of Financial Regulation at dfr.oregon.gov. The third party administrator must submit the required information on or before:

(a) May 1 for the first calendar quarter.

(b) August 1 for the second calendar quarter.

(d) February 1 for the fourth calendar quarter.

(3) A third party administrator claiming exemption from reporting must request an exemption through the reporting system of the Division of Financial Regulation on or before the due date for the calendar quarter for which reporting is first due.

(4) A third party administrator submitting information pertaining to covered lives or requesting an exemption from reporting is subject to the electronic reporting or response requirements of OAR 836-011-0005.

History

Statutory/Other Authority: ORS 731.244, 743.745 & ORS 743.818
Statutes/Other Implemented: ORS 743.818
ID 44-2023, minor correction filed 07/24/2023, effective 07/24/2023
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14

Or. Admin. R. 836-075-0050 Exemptions from Third Party Administrator License Requirements

(1) This rule is adopted under the authority of ORS 731.244 and 744.704 for the purpose of establishing exemptions under and implementing 744.704(1)(p). The persons described in this rule are exempt from the licensing requirement for third party administrators in 744.702 and from all other provisions of 744.700 to 744.740.

(2) The Department of Human Resources and any organization contracting with the Department of Human Resources for that portion of its business covered under a contract with the Department are exempt.

(3) A health care provider that contracts with an insurer to provide health care services to insurance plan enrollees and is compensated for such services on a prepaid, capitated or similar basis is exempt when the insurer and the provider operate under a written agreement that includes all of the conditions specified in this section. For the purpose of this section, a “health care provider” or “provider” means a licensed health care practitioner or a group of such practitioners, a licensed health care facility or group of such facilities and any similar health care organization. The conditions required to be included in the agreement are as follows:

(a) The primary contractual responsibility of the provider is the delivery of health care services to insurance plan enrollees and the administrative duties performed by the provider for the insurer are in support of the delivery of health care services;

(b) The administrative duties performed by the provider for the insurer are limited to the adjusting or settling of claims for insurance plan enrollees and the insurer retains responsibility for providing competent administration of its programs;

(c) The insurer performs all functions that pertain to soliciting and effecting coverage, underwriting, collecting premiums, determining plan benefits, determining premium rates and securing any reinsurance for the insurer’s obligations;

(d) The rules pertaining to the adjusting or settling of claims are provided in writing by the insurer to the provider;

(e) The insurer at least annually conducts a review of the claims-related activities performed by the provider for the insurer to ensure that those operations are in compliance with subsection (b) of this section;

(f) The provider allows the insurer access to the administrative books and records of the provider that document the claims-related activities performed for the insurer for the purpose of assuring the proper administration of claims, and the insurer agrees to make those books and records available for examination by the Director in accordance with ORS 731.300, 731.304 and 731.308;

(g) The provider allows the insurer access to the relevant financial books and records of the provider that will enable the insurer to determine the financial ability of the provider to fulfill its responsibilities under the agreement, and both parties assure that confidentiality of financial and patient records is maintained in accordance with applicable federal and state requirements;

(h) The insurer makes certain that the administrative books and records of the provider that document the claims-related activities performed for the insurer are maintained by the provider in accordance with prudent standards of insurance record-keeping and that such books and records are maintained by the provider for a period of not less than five years from the date of their creation; and

(i) The conditions applicable to the provider in subsections (f) and (h) of this section must not be terminated upon a termination of the agreement, whether by rescission or otherwise.

History

Statutory/Other Authority: ORS 731.244 & 744.304
Statutes/Other Implemented: ORS 744.704
ID 8-1996, f. & cert. ef. 5-29-96
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0060 ERISA Exemption Registration

(1) A person who is required by ORS 744.714 to register with the Director annually, verifying the person’s status as qualifying under 744.704(1)(L) for the exemption from the licensing requirement for third party administrators in 744.702 and from all other provisions of 744.700 to 744.740, shall register with the Director annually. In the registration, the person shall certify that the person qualifies for the exemption because of the person’s status and shall inform the Director:

(a) Of the person’s name, business address, mailing address if different from the business address, and telephone number; and

(b) Whether the person is acting solely as an administrator of one or more single employers, union-bargaining (Taft-Hartley) plans, rural electric cooperatives or other bona fide employer benefit plans established by an employer or an employee organization, or both, for which the Insurance Code is preempted pursuant to the Employee Retirement Income Security Act of 1974.

(2) If the Director determines that a person does not qualify for the exemption under ORS 744.704(1)(L), the person must obtain the license required under 744.702 in order to transact business as a third party administrator.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Statutes/Other Implemented: ORS 744.704(1)(l) & 744.714
ID 1-1992, f. & cert. ef. 1-27-92

Or. Admin. R. 836-075-0070 Errors and Omissions Insurance; Third Party Administrators

(1) The amount of insurance for which a third party administrator as described in ORS 744.702 must maintain a certificate of errors and omissions insurance with the Director as required by 744.726 is $500,000 claims made or per occurrence.

(2) A third party administrator may obtain insurance required by ORS 744.726 from an insurer other than an authorized insurer if the insurer is not an affiliate, as that term is defined in 744.700, of the third party administrator, and if:

(a) The insurance is procured by an Oregon surplus lines licensee from an insurer that is an eligible surplus lines insurer pursuant to the requirements of ORS 735.400 to 735.495;

(b) The insurer is an authorized insurer in the state of domicile of the third party administrator or license applicant; or

(c) The insurance is procured from a surplus lines insurer that is eligible in the state of domicile of the third party administrator or license applicant, if all requirements of this subsection are satisfied. The insurance for purposes of this subsection must be confirmed by the signature of an Oregon surplus lines licensee who also affirms in writing that the Oregon surplus lines licensee will be the agent for service of process for any action or proceeding involving the third party administrator and an Oregon resident.

History

Statutory/Other Authority: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Statutes/Other Implemented: ORS 744.726
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 1-1992, f. & cert. ef. 1-27-92

Division 80 TRADE PRACTICES

Or. Admin. R. 836-080-0001 Statutory Authority; Purpose; Applicability

(1) OAR 836-080-0001 to 836-080-0043 are adopted pursuant to the general rulemaking authority of the Director of the Department of Consumer and Business Services in ORS 731.244 and the specific authority in 746.085(1), for the purpose of implementing 746.085 and 746.240.

(2) The purpose of OAR 836-080-0001 to 836-080-0043 is to protect the insurance-buying public in insurance transactions involving the replacement of life insurance or annuities by:

(a) Regulating the activities of insurers and insurance producers with respect to the replacement of existing life insurance and annuities.

(b) Protecting the interests of life insurance and annuity purchasers by establishing minimum standards of conduct to be observed in replacement or financed purchase transactions. OAR 836-080-0001 to 836-080-0043 are intended to:

(A) Assure that a purchaser receives information with which a decision can be made in the purchaser's own best interest;

(B) Reduce the opportunity for misrepresentation and incomplete disclosure; and

(3) In OAR 836-080-0001 to 836-080-0043 and the appendices thereto, for purposes of consistency with the Life Insurance and Annuities Replacement Model Regulation of the National Association of Insurance Commissioners dated July 2000, an annuity is referred to as a contract and a life insurance policy is referred to as a policy, and they are subject to 836-080-0001 to 836-080-0043 on the basis of that terminology.

(4) Unless otherwise specifically included, OAR 836-080-0001 to 836-080-0043 do not apply to transactions involving:

(a) Credit life insurance;

(b) Group life insurance or group annuities, when there is no direct solicitation of individuals by an insurance producer. Direct solicitation does not include any group meeting held by an insurance producer solely for the purpose of educating or enrolling individuals or, when initiated by an individual member of the group, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual. Group life insurance or group annuity certificates marketed through direct response solicitation are subject to the provisions of OAR 836-080-0039;

(c) An application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the Director; or when a term conversion privilege is exercised among corporate affiliates;

(d) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same insurer;

(e)(A) Policies or contracts used to fund any of the following:

(i) An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);

(ii) A plan described by Section 401(a), 401(k) or 403(b) of the Internal Revenue Code, when the plan, for purposes of ERISA, is established or maintained by an employer;

(iii) A governmental or church plan defined in Section 414 of the Internal Revenue Code, a governmental or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457 of the Internal Revenue Code; or

(iv) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.

(B) Notwithstanding paragraph (A) of this subsection, OAR 836-080-0001 to 836-080-0043 apply to policies or contracts used to fund any plan or arrangement that is funded solely by contributions an employee elects to make, whether on a pre-tax or after-tax basis, and when the insurer has been notified that plan participants may choose from among two or more insurers and there is a direct solicitation of an individual employee by an insurance producer for the purchase of a contract or policy. As used in this subsection, direct solicitation does not include any group meeting held by an insurance producer solely for the purpose of educating individuals about the plan or arrangement or enrolling individuals in the plan or arrangement or, when initiated by an individual employee, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual employee;

(f) When new coverage is provided under a life insurance policy or contract and the cost is borne wholly by the insured's employer or by an association of which the insured is a member;

(g) Existing life insurance that is a non-convertible term life insurance policy that will expire in five years or less and cannot be renewed;

(h) Immediate annuities that are purchased with proceeds from an existing contract. Immediate annuities purchased with proceeds from an existing policy are not exempted from the requirements of OAR 836-080-0001 to 836-080-0043; or

(i) Structured settlements.

(5) Registered contracts are exempt from the requirements of OAR 836-080-0029(1)(b) and 836-080-0034(2) with respect to the provision of illustrations or policy summaries, but premium or contract contribution amounts and identification of the appropriate prospectus or offering circular shall be required instead.

History

Statutory/Other Authority: ORS 731.244 & 746.085
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 14-2008, f. & cert. ef. 8-15-08
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01
IC 8-1984, f. 10-26-84, ef. 12-1-84

Or. Admin. R. 836-080-0005 Definitions

(1) "Direct-response solicitation" means a solicitation through a sponsoring or endorsing entity or individually solely through mails, telephone, the Internet or other mass communication media.

(2) "Existing insurer" means the insurer whose policy or contract is or will be changed or affected in a manner described within the definition of "replacement."

(3) "Existing policy" means an individual life insurance policy or annuity policy in force, including a policy under a binding or conditional receipt or a policy that is within an unconditional refund period.

(4) "Financed purchase" means the purchase of a new policy involving the actual or intended use of funds obtained by the withdrawal or surrender of, or by borrowing from values of an existing policy to pay all or part of any premium due on the new policy. For purposes of a regulatory review of an individual transaction only, if a withdrawal, surrender or borrowing involving the policy values of an existing policy is used to pay premiums on a new policy owned by the same policyholder and issued by the same insurer within four months before or 13 months after the effective date of the new policy, it will be deemed prima facie evidence of the policyholder's intent to finance the purchase of the new policy with existing policy values. This prima facie standard is not intended to increase or decrease the monitoring obligations contained in OAR 836-080-0022(1)(e).

(5) "Illustration" means a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years as defined in OAR 836-051-0500 to 836-051-0600.

(6) "Policy summary" has the following meanings:

(a) For policies or contracts other than universal life policies, the term means a written statement regarding a policy or contract that shall contain to the extent applicable, but need not be limited to, the following information: current death benefit; annual contract premium; current cash surrender value; current dividend; application of current dividend; and amount of outstanding loan.

(b) For universal life policies, the term means a written statement that shall contain at least the following information: the beginning and end date of the current report period; the policy value at the end of the previous report period and at the end of the current report period; the total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders); the current death benefit at the end of the current report period on each life covered by the policy; the net cash surrender value of the policy as of the end of the current report period; and the amount of outstanding loans, if any, as of the end of the current report period.

(7) "Registered Contract" means a variable annuity contract or variable life insurance policy subject to the prospectus delivery requirements of the Securities Act of 1933.

(8) "Replacement" means a transaction in which a new policy or contract is to be purchased, and it is known or should be known to the proposing insurance producer, or to the proposing insurer if there is no insurance producer, that by reason of the transaction, an existing policy or contract has been or is to be:

(a) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated;

(b) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;

(c) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;

(d) Reissued with any reduction in cash value; or

(e) Used in a financed purchase.

(9) "Replacing Insurer" means the insurer that issues or proposes to issue a new policy or contract that replaces an existing policy or contract or that is a financed purchase.

(10) "Sales material" means a sales illustration and any other written, printed or electronically presented information created, or completed or provided by the insurer or insurance producer and used in the presentation to the policyholder or contract owner related to the policy or contract purchased.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.085
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01
IC 8-1984, f. 10-26-84, ef. 12-1-84
IC 39, f. 12-4-67, ef. 3-1-68

Or. Admin. R. 836-080-0014 Duties of Agent

(1) An insurance producer who initiates an application shall submit to the insurer, with or as part of the application, a statement signed by both the applicant and the insurance producer as to whether the applicant has existing policies or contracts and, at the option of the insurer, as to whether the applicant is replacing any of the existing policies or contracts. If the first question is asked alone and the answer is "no," or if both questions are asked and the answer to the optional question is "no," the insurance producer’s duties with respect to replacement are complete, except as provided in section (2) of this section.

(2) If the applicant answered "yes" to the question whether the applicant has existing coverage referred to in section (1) of this rule, and the question is asked alone, or if both questions are asked and the answer is "yes" to both, the insurance producer shall present and read to the applicant, not later than at the time of taking the application, a notice regarding replacements in the form as described in Appendix A to this rule or other substantially similar form approved by the Director. Approval is not required, however, when amendments to the notice are limited to the omission of references not applicable to the product being sold or replaced. The notice shall be signed by both the applicant and the insurance producer attesting that the notice has been read aloud by the insurance producer or that the applicant did not wish the notice to be read aloud (in which case the insurance producer need not have read the notice aloud) and left with the applicant.

(3) The notice under section (2) of this rule shall list all life insurance policies or annuities proposed to be replaced, properly identified by name of insurer, the insured or annuitant, and policy or contract number if available; and shall include a statement as to whether each policy or contract will be replaced or whether a policy will be used as a source of financing for the new policy or contract. If a policy or contract number has not been issued by the existing insurer, alternative identification, such as an application or receipt number, shall be listed.

(4) In connection with a replacement transaction an insurance producer shall leave with the applicant at the time an application for a new policy or contract is completed the original or a copy of all sales material. Electronically presented sales material shall be provided to the policy or contract owner in printed form not later than at the time of policy or contract delivery.

(5) Except as provided in OAR 836-080-0029(3), in connection with a replacement transaction an insurance producer shall submit to the insurer to which an application for a policy or contract is presented, a copy of each document required by this rule, a statement identifying any preprinted or electronically presented insurer-approved sales materials used, and copies of any individualized sales materials, including any illustrations related to the specific policy or contract purchased.

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244 & 746.085
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01

Or. Admin. R. 836-080-0022 Duties of Insurers that Use Agents Insurance Producers

Each insurer that uses an insurance producer shall:

(1) Maintain a system of supervision and control to insure compliance with the requirements of OAR 836-080-0001 to 836-080-0043. The system shall do at least the following:

(a) Inform its insurance producers of the requirements of OAR 836-080-0001 to 836-080-0043 and incorporate the requirements of 836-080-0001 to 836-080-0043 into all relevant insurance producer training manuals prepared by the insurer;

(b) Provide to each insurance producer a written statement of the insurer's position with respect to the acceptability of replacements, providing guidance to its insurance producer as to the appropriateness of these transactions;

(c) Include a system for reviewing the appropriateness of each replacement transaction that the insurance producer does not indicate is in accord with subsection (b) of this section;

(d) Include procedures that confirm the requirements of OAR 836-080-0001 to 836-080-0043 have been met; and

(e) Include procedures to detect transactions that are replacements of existing policies or contracts by the existing insurer, but that have not been reported as such by the applicant or insurance producer. Compliance with OAR 836-080-0001 to 836-080-0043 may include, but shall not be limited to, systematic customer surveys, interviews, confirmation letters or programs of internal monitoring;

(2) Have the capacity to monitor each insurance producer's life insurance policy and annuity contract replacements for that insurer, and shall produce, upon request, such records for and make such records available to, the Director. The capacity to monitor shall include the ability to produce records for the following with respect to each insurance producer:

(a) Life replacements, including financed purchases, as a percentage of the insurance producer's total annual sales for life insurance;

(b) Number of lapses of policies by the insurance producer as a percentage of the agent's total annual sales for life insurance;

(d) Number of transactions that are unreported replacements of existing policies or contracts by the existing insurer detected by the insurer's monitoring system as required by subsection (1)(e) of this section; and

(e) Replacements, indexed by replacing insurance producer and existing insurer;

(3) Require with or as a part of each application for life insurance or an annuity a signed statement by both the applicant and the insurance producer as to whether the applicant has existing policies or contracts;

(4) Require with each application for life insurance or an annuity that indicates an existing policy or contract a completed notice regarding replacements as contained in Appendix A to this rule, unless the notice is not required under OAR 836-080-0014(1) and (2);

(5) When the applicant has existing policies or contracts, be able to produce copies of any sales material required by OAR 836-080-0014(5), the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased, and the insurance producer's and applicant's signed statements with respect to financing and replacement for at least five years after the termination or expiration of the proposed policy or contract;

(6) Ascertain that the sales material and illustrations required by OAR 836-080-0014(5) meet the requirements of 836-080-0001 to 836-080-0043 and are complete and accurate for the proposed policy or contract;

(7) If an application does not meet the requirements of OAR 836-080-0001 to 836-080-0043, notify the insurance producer and applicant and fulfill the outstanding requirements; and

(8) Maintain records in paper, photograph, microprocess, magnetic, mechanical or electronic media or by any process that accurately reproduces the actual document.

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 19-2006, f. & cert. ef. 9-26-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01
IC 8-1984, f. 10-26-84, ef. 12-1-84

Or. Admin. R. 836-080-0029 Duties of Replacing Insurers that Use Agents

(1) When a replacement is involved in the transaction, the replacing insurer shall:

(a) Verify that the required forms are received and are in compliance with OAR 836-080-0001 to 836-080-0043;

(b) Notify any other existing insurer that may be affected by the proposed replacement within five business days of receipt of a completed application indicating replacement or when the replacement is identified if not indicated on the application, and mail a copy of the available illustration or policy summary for the proposed policy or available disclosure document for the proposed contract within five business days of a request from an existing insurer;

(c) Be able to produce copies of the notification regarding replacement required in OAR 836-080-0014(2), indexed by insurance producer, for at least five years or until the next regular examination by the insurance department of the insurer's state of domicile, whichever is later; and

(d) Provide to the policyholder or contract owner notice of the right to return the policy or contract within 30 days of the delivery of the policy or contract and receive an unconditional full refund of all premiums or considerations paid on it, including any policy fees or charges or, in the case of a variable or market value adjustment policy or contract, a payment of the cash surrender value provided under the policy or contract plus the fees and other charges deducted from the gross premiums or considerations or imposed under such policy or contract. Notice required in this subsection may be included in Appendix A or C to this rule.

(2) In a transaction in which the replacing insurer and the existing insurer are the same or are subsidiaries or affiliates under common ownership or control, the replacing insurer shall allow credit for the period of time that has elapsed under the replaced policy's or contract's incontestability and suicide period up to the face amount of the existing policy or contract. With regard to a financed purchase the credit may be limited to the amount the face amount of the existing policy is reduced by the use of existing policy values to fund the new policy or contract.

(3) If an insurer prohibits the use of sales material other than that approved by the insurer, as an alternative to the requirements made of an insurer pursuant to OAR 836-080-0014(5), the insurer may:

(a) Require with each application a statement signed by the insurance producer that:

(A) Represents that the insurance producer used only insurer-approved sales material;

(B) States that copies of all sales material were left with the applicant in accordance with OAR 836-080-0014(4); and

(b) Within ten days of the issuance of the policy or contract:

(A) Notify the applicant by sending a letter or by verbal communication with the applicant by a person whose duties are separate from the marketing area of the insurer, that the insurance producer has represented that copies of all sales material have been left with the applicant in accordance with OAR 836-080-0014(4);

(B) Provide the applicant with a toll-free number to contact insurer personnel involved in the compliance function if the insurer cannot give the applicant the notice required in paragraph (A) of this subsection; and

(4) An insurer to whom section (3) of this rule applies shall maintain the ability to produce from the policy file a copy of the letter or other verification sent to an applicant under section (3) of this rule for at least five years after the termination or expiration of the policy or contract.

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01

Or. Admin. R. 836-080-0034 Duties of the Existing Insurer

When a replacement is involved in a transaction, the existing insurer shall:

(1) Retain and be able to produce all replacement notifications received, indexed by replacing insurer, for at least five years or until the conclusion of the next regular examination conducted by the Insurance Department of its state of domicile, whichever is later.

(2) Send a letter to the policyholder or contract owner of the right to receive information regarding the existing policy or contract values including, if available, an in force illustration or policy summary if an in force illustration cannot be produced within five business days of receipt of a notice that an existing policy or contract is being replaced. The information shall be provided within five business days of receipt of the request from the policy or contract owner.

(3) Upon receipt of a request to borrow, surrender or withdraw any policy values, send a notice advising the policyholder that the release of policy values may affect the guaranteed elements, non-guaranteed elements, face amount or surrender value of the policy from which the values are released. The notice shall be sent separate from the check if the check is sent to anyone other than the policyholder. In the case of consecutive automatic premium loans, the insurer is required to send the notice only at the time of the first loan.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01

Or. Admin. R. 836-080-0039 Duties of Insurers with Respect to Direct Response Solicitations

(1) In the case of an application that is initiated as a result of a direct response solicitation, the insurer shall require, with or as part of each completed application for a policy or contract, a statement asking whether the applicant, by applying for the proposed policy or contract, intends to replace, discontinue or change an existing policy or contract. If the applicant indicates a replacement or change is not intended or if the applicant fails to respond to the statement, the insurer shall send the applicant, with the policy or contract, a notice regarding replacement in Appendix B to this rule, or other substantially similar form approved by the Director.

(2) If the insurer has proposed the replacement or if the applicant indicates a replacement is intended and the insurer continues with the replacement, the insurer shall:

(a) Provide to the applicant or prospective applicant with the policy or contract a notice, as described in Appendix C to this rule, or other substantially similar form approved by the Director. In these instances the insurer may delete the references to the insurance producer, including the insurance producer’s signature, and references not applicable to the product being sold or replaced, without having to obtain approval of the form from the Director. The insurer's obligation to obtain the applicant's signature shall be satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the notice referred to in this subsection. The requirement to make a diligent effort shall be deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed notice referred to in this section; and

(b) Comply with the requirements of OAR 836-080-0029(1)(b), if the applicant furnishes the names of the existing insurers, and the requirements of OAR 836-080-0029(1)(c) and (d), and (2).

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01

Or. Admin. R. 836-080-0043 Violations and Penalties

(1) Any failure to comply with OAR 836-080-0001 to 836-080-0043 shall be considered an unfair trade practice for purposes of ORS 746.240. Examples of violations include:

(a) Any deceptive or misleading information set forth in sales material;

(b) Failing to ask the applicant in completing the application the pertinent questions regarding the possibility of financing or replacement;

(d) Advising an applicant to respond negatively to any question regarding replacement in order to prevent notice to the existing insurer; or

(e) Advising a policyholder or contract owner to write directly to the insurer in such a way as to attempt to obscure the identity of the replacing insurance producer or insurer.

(2) Policyholders and contract owners have the right to replace existing life insurance policies or annuity contracts after indicating in or as a part of applications for new coverage that replacement is not their intention; however, patterns of such action by policyholders or contract owners of the same insurance producer shall be deemed prima facie evidence of the insurance producer’s knowledge that replacement was intended in connection with the identified transactions, and these patterns of action shall be deemed prima facie evidence of the insurance producer’s intent to violate OAR 836-080-0001 to 836-080-0043.

(3) When it is determined that the requirements of OAR 836-080-0001 to 836-080-0043 have not been met, the replacing insurer shall provide to the policyholder or contract owner an in force illustration if available or policy summary for the replacement policy or available disclosure document for the replacement contract and the appropriate notice regarding replacements in Appendix A or C to this rule.

[ED. NOTE: Appendices referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.085 & 746.240
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 5-2001, f. 4-16-01, cert. ef. 11-1-01

Or. Admin. R. 836-080-0050 Authority; Purpose and Scope

OAR 836-080-0055 is issued under ORS 743.731 and the general rulemaking authority of the Director of the Department of Consumer and Business Services set forth in ORS 731.244(2). The purpose of OAR 836-080-0055 is to identify particular insurance practices involving distinctions based on sexual orientation and distinctions between men and women or between married and unmarried individuals that constitute unfair discrimination in violation of ORS 746.015.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.015(1)
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
IC 61, f. 12-2-74, ef. 1-1-75

Or. Admin. R. 836-080-0055 Unfair Discrimination Identified

Distinctions based on sex, sexual orientation or marital status made in the following matters constitute unfair discrimination:

(1) The availability of a particular insurance policy.

(2) The availability of a particular amount of insurance or set of coverage delimiting factors.

(3) The availability of a particular policy coverage or type of benefit, except for those relating to physical characteristics unique to one sex.

(4) The premium for a particular insurance policy other than an individual or small group health benefit plan, unless the distinction is demonstrably based on reasonable supporting data.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.015(1)
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
IC 61, f. 12-2-74, ef. 1-1-75

Or. Admin. R. 836-080-0080 Definition, Claims Handling Services; Claims Procedures and Information

(1) As used in ORS 743.911 and 743.913:

(a) "Clean claim" means a claim under a health benefit plan that has no defect, impropriety, lack of any required substantiating documentation or particular circumstance requiring special treatment that prevents timely payment.

(b) “Clean claim does not mean a claim pended under 45 CFR 156.270(d)(1).

(2) For purposes of ORS 743.911 and 743.913, an insurer is considered to have received a claim when the claim is received by the insurer itself or when the claim is received by a representative of the insurer that performs claims handling on the sole behalf of the insurer, whichever receipt date is earlier. A representative may include but is not limited to a third party administrator, a claims service or a pricing service.

(3) For the purpose of communicating the information necessary for claim form completion as required by ORS 743.911(3), an insurer must include any specific description of standard supporting documentation, information and data routinely required to be submitted with a claim form. Compliance with the standard transaction requirements established under the federal Health Insurance Portability and Accountability Act at 45 CFR parts 160 and 162 or OAR 836-100-0105 and 836-100-0110 constitutes compliance with this section.

History

Statutory/Other Authority: ORS 731.244 & 743.911
Statutes/Other Implemented: ORS 743.911 & 743.913
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 1-2002, f. & cert. ef. 1-15-02

Or. Admin. R. 836-080-0085 Annual Report; Sampling

(1) Each insurer shall report to the Director annually on its compliance with Section 2, Chapter 747, Oregon Laws 2001 (Enrolled Senate Bill 894), governing claims received by an insurer from a provider on behalf of an enrollee, according to the requirements of this rule.

(2) Not later than March 1 of each year, each insurer shall submit the following to the Director:

(a) A count of all claims for which final disposition has been made by the insurer during the immediately preceding calendar year.

(b) A count of all claims included in the count in subsection (a) of this section that were each finally disposed of later than the 30th day after the date on which the insurer received the claim.

(c) A data file that includes a population list with respect to the claims described in subsection (b) of this section, in the form and manner specified by the Director.

(3) The Director shall select a number of sample files from each insurer’s data file submitted under section (2) of this rule, using a methodology determined by the Director to provide a representative and statistically valid sampling of the insurer’s insured population and shall deliver to the insurer the file numbers and the format in which the information required under section (4) of this rule shall be captured and submitted to the Director.

(4) Each insurer shall examine each sample selected under section (3) of this rule against its records to determine information requested by the Director. The information shall include but not be limited to the following:

(a) The date on which the claim was received;

(b) The date on which the insurer requested additional information on the claim;

(d) The date on which the insurer paid or denied the claim.

(e) Whether interest was owed or paid on the claim under section 3, chapter 747, Oregon Laws 2001, or whether the insurer was not required to pay interest as provided in Section 3(2), Chapter 747, Oregon Laws 2001.

(f) Whether the claim was paid or denied. For the purpose of this subsection, a claim that is paid in part and denied in part shall be treated as a paid claim.

(5) Not later than the 60th day after the date on which an insurer receives the selection of sample files from the Director under section (3) of this rule, the insurer shall submit to the Director a report of its data determined under section (4) of this rule in the format prescribed by the Director.

(6) For the purpose of the annual report that is due for calendar year 2002, an insurer shall sample and count only those claims that were submitted to an insurer on or after January 1, 2002 and on or before December 31, 2002.

History

Statutory/Other Authority: ORS 731.244 & Sec. 2 & 3, Ch. 747 & OL 2001
Statutes/Other Implemented: Sec. 2 & 3, Ch. 747 & OL 2001
ID 1-2002, f. & cert. ef. 1-15-02

Or. Admin. R. 836-080-0090 Suitability in the Sale of Life Insurance

A person may not recommend to a consumer the purchase, sale or replacement of a life insurance policy, or any rider, endorsement or amendment to the policy, without reasonable grounds to believe that the recommendation or transaction is not unsuitable for the consumer based upon reasonable inquiry concerning the consumer's insurance objectives, financial situation and needs, age and other relevant information known by the person. For the purpose of this rule, when a person recommends a group life insurance policy, "consumer" refers to the intended group policyholder.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.100, 746.110 & 746.240
ID 2-2011, f. & cert. ef. 2-4-11
ID 6-2004, f. 8-26-04, cert. ef. 1-1-05

Or. Admin. R. 836-080-0105 Statutory Authority; Purpose; Effective Date

(1) OAR 836-080-0105 to 836-080-0155 are adopted pursuant to the general rulemaking authority of the Commissioner in ORS 731.244 to aid in the effectuation of ORS Chapter 746, especially the enforcement of 746.015, 746.075, 746.160(3), and 746.240, as well as the effectuation and enforcement of 737.205 to 737.348, 742.003, 742.005, 742.009 and other related provisions of the Oregon Insurance Code.

(2) The purpose of OAR 836-080-0105 to 836-080-0155 is to regulate the content and use of participation provisions in commercial lines of property and casualty insurance policies so as to prevent misrepresentations and other unfair practices relating to future dividends, to prevent unfair and coercive practices in the allocation and payment of dividends, and to effectuate the statutes governing ratemaking, classification of risks, and approval of policy forms, with respect to commercial lines of property and casualty insurance issued on the participating basis.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746, 746.015, 746.075, 746.160 & 746.240
ID 15-1996, f. & cert. ef. 11-12-96
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0110 Applicability

OAR 836-080-0105 to 836-080-0155:

(1) Apply to all authorized insurers, whether stock, mutual, or reciprocal, and to the State Accident Insurance Fund.

(2) Apply to those forms of property and casualty insurance known by custom as “commercial lines”; and do not apply to other lines or forms of insurance.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0115 Definitions

As used in OAR 836-080-0105 to 836-080-0155, unless the context requires otherwise:

(1) “Dividend statement” has the meaning given the term by OAR 836-080-0130.

(2) “Insurer” has the meaning given the term by ORS 731.106 and includes the State Accident Insurance Fund.

(3) “Issue” when referring to an insurance policy includes “renew” and “endorse.”

(4) “Participating policy” means a policy that grants participation rights to the policyholder.

(5) “Participation” means the right of a policyholder to share in the distribution of profits or other assets of the insurer, whether or not the right is conditional or limited by other provisions.

(6) “Policy” has the meaning given the term by ORS 731.122, and the term includes endorsements and the agreements between the State Accident Insurance Fund and individual contributing employers by which the Fund provides workmen’s compensation coverage.

(7) “Policyholder” means a person who owns or has an interest in a policy and the term includes a prospective policyholder.

(8) “Prospective policyholder” includes a policyholder who is considering the renewal or discontinuance of an existing policy.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0120 Statement as to Participation Required Upon Request Before Delivery of Policy; Provision Required in Participating Policy; Contents of Provision

(1) Upon the request of a policy-holder to an insurer, the policyholder is entitled to receive a written statement, before the policy is delivered, specifying whether the policy is or is not a participating policy.

(2) If the insurer intends the policy to grant participation rights to policyholders, the policy shall contain a provision designated “Participation Provision.” The participation provision shall include the following wording or substantially equivalent wording approved by the Commissioner: “It is unlawful in Oregon for an insurer to promise to pay policyholder dividends for any unexpired portion of the policy term or to misrepresent the conditions for dividend payment. Dividends will be due and payable only for a policy period that has expired, and only if declared by and under conditions prescribed by the Board of Directors of the Insurer.”

[ED. NOTE: Effective as follows: Sec. (1), 7-20-76; Sec. (2), 1-1-77

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69-1976, f. 7-20-76, ef. 7-20-76

Or. Admin. R. 836-080-0125 Prohibited Representations Regarding Participation Rights

Prior to the declaration of a dividend, an insurer shall not represent, orally or in writing, that the insurer agrees or will agree:

(1) To pay a specified amount as a dividend; or

(2) To a formula that fixes, or to factors that fix or can be used to fix:

(a) The amount of a dividend;

(b) The percentage of premium that will be paid as a dividend; or

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0130 Dividend Statement Permitted; Required to Be Written; Prohibited and Permitted Advice

(1) An insurer may advise a policy holder of the kinds of information the insurer expects to take into consideration in determining whether to declare a dividend and the amount thereof. Any such advice is considered a “dividend statement” as the term is used in this section. A dividend statement shall not, however, be of such a nature as to make it possible to determine, directly or indirectly:

(a) The amount of a dividend;

(b) The percentage of premium that will be paid as a dividend; or

(2) A dividend statement shall be in writing. It shall include a statement that is identical to the wording of the participation provision that OAR 836-080-0120 requires to be included in the policy. Such statement shall appear ahead of and have at least equal prominence with the advice regarding dividends permitted under section (1) of this rule. A dividend statement also shall contain with equal prominence the following wording or substantially equivalent wording approved by the Commissioner: “Furthermore, it is an unlawful rebate and a violation of the Oregon Insurance Code for an insured or a representative of an insured knowingly to accept a dividend pursuant to a promise to pay policyholder dividends if the promise is made before the policy is issued or if the promise is made for any unexpired portion of a policy period.”

(3) A dividend statement may describe the rates or amounts of dividends previously declared or paid on similar policies, or the scales or schedules previously used to determine the rates or amounts of dividends. However, such a description shall also set forth the period covered by the policies on which such dividends were paid and state that past dividend performance is not a guarantee of future dividend performance.

(4) A dividend statement may set forth a time schedule according to which the insurer intends to declare or pay a dividend, if any.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. 7-20-76, ef. 1-1-77

Or. Admin. R. 836-080-0135 Dividend Rights Accrue Upon Declaration of Dividends; Contents of Dividend Declaration Resolution

(1) The right of a policyholder to a dividend, or to a determination of whether any dividend will be paid to the policyholder or the amount of a dividend that will be paid to the policyholder, shall not accrue unless the board of directors or other governing body of the insurer:

(a) Determines that the insurer has a surplus from which the dividend may lawfully be paid; and

(b) Declares the dividend by resolution adopted after the expiration of the policy period for which the dividend was earned.

(2) The resolution declaring a policyholder dividend for a group of policies shall:

(a) Identify by policy inception or expiration dates the policies to which the declaration is applicable;

(b) Specify the policy period for which the dividend is payable; and

(c) Specify the dividend plans, scales, tables, formulas, schedules, and factors applied, or to be applied, to determine whether any dividends will be paid and the amounts of dividends to be allocated to individual policies.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0140 Unfair Discrimination in Allocation of Dividends Prohibited; Criteria for Allocation; Prima Facie Evidence of Unfair Discrimination

(1) An insurer shall not unfairly discriminate in the allocation of dividends.

(2) The dividend plans, scales, tables, formulas, schedules and factors specified in the dividend declaration may provide for allocation of dividends at a fixed percentage of premiums, or may provide for variations in the percentage of premium paid as dividends or other variations in determining the amounts of dividends. The variations may be based on loss or expense factors, or on any other reasonable considerations, such as risk size, risk location, or industry or trade hazard classification, which have a probable effect on losses or expenses.

(3) Failure to apply in a consistent manner the plans, scales, tables, formulas, schedules, and factors adopted and specified in a dividend declaration is prima facie evidence of unfair discrimination. However, a variation from procedures set forth in a dividend statement that was provided to a policyholder prior to inception of the policy will not of itself be considered unfairly discriminatory.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0145 Unfair Forfeiture of Dividend for Failure to Renew Prohibited

An insurer shall not reduce or deny a policyholder dividend because of the policy-holder’s refusal to accept renewal of the policy or another policy from the same insurer. A reasonable change in the time schedule for computing or paying a policyholder dividend will not of itself be considered a reduction or denial of the dividend, or unfairly discriminatory, if:

(1) The change is applied uniformly to the policyholders in like circumstances; and

(2) The nature of the change is set forth in a dividend statement that was provided to the policyholder before the inception of the policy for which the change is made.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0150 Policyholder Dividend Rights of Group Members and Dividend Group Policyholders; Reduction or Denial Without Prior Advice Prohibited; “Dividend Group” Defined; Standards for Dividend Groups

(1) When used in this section:

(a) “Group” means a collection of insurance buyers who are members of a common organization and who are treated collectively by an insurer for determining insurance dividends; and

(b) “Laws of the group” means the articles of incorporation, bylaws, agreements of association, rules, or regulations of the organization to which members of a group belong.

(2) An insurer shall not issue a policy to a group or to any members of a group, unless:

(a) The grouping has been approved by the Commissioner in accordance with ORS 746.145 or 746.150, whichever section applies; and

(b) The laws of the group comply with section (3) of this rule.

(3) The laws of the group shall provide that a distribution of funds derived from a policyholder dividend will not be reduced or denied to any member of the group:

(a) Except for reasons stated in the laws of the group; and

(b) Unless the insurer has given a copy of the stated reasons to the member or the policyholder before issuance of the policy for which the reduction or denial is made.

(4) The Commissioner will approve dividend groups of persons or risks covered by an insurer for insurance other than workers’ compensation insurance only if:

(a) The grouping is made up of homogeneous risks;

(b) The grouping is made under the auspices of an organization which has existed for at least two years and was formed for purposes other than obtaining insurance;

(d) Information is filed with the Commissioner about eligibility for participation in the grouping and the system for allocating dividends among the participants.

(5) Within 60 days of receiving a group dividend proposal, the Commissioner shall notify the insurer whether the proposal has been approved or disapproved, stating the basis for such action.

History

Statutory/Other Authority: ORS 731.244 & 746.145
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
ID 5-1991, f. & cert. ef. 4-25-91
Reverted to IC 1-1984, f. 1-18-84, ef. 2-1-84
ID 16-1990(Temp), f. & cert. ef. 7-3-90
IC 1-1984, f. 1-18-84, ef. 2-1-84
IC 69, f. 7-20-76, ef. 1-1-77

Or. Admin. R. 836-080-0155 False or Deceptive Publications by Insurer Prohibited

An insurer shall not knowingly adopt, or cause or permit to be issued, circulated or used, any representation, plan, schedule, letter, or advertising material of any kind stating or implying that the insurer has acted or will in the future act in any manner at variance with OAR 836-080-0105 to 836-080-0155.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1), 746.075, 746.160(3) & 746.240
IC 69, f. & ef. 7-20-76

Or. Admin. R. 836-080-0160 Use of Special Certifications and Professional Designations by Insurance Producers

(1) A person may not use a certification or designation that falsely indicates or implies that the person has special certification or training, in connection with the offer, sale or purchase of insurance or providing advice as to the value of or the advisability of purchasing insurance. The prohibition in this section applies to the use of such a certification or designation directly or indirectly, through a publication or writing, or by issuing or disseminating information relating to insurance. The prohibited use of a certification or designation includes but is not limited to the following activities:

(a) Use of a certification or professional designation by a person who has not actually earned or is otherwise ineligible to use the certification or designation.

(b) Use of a nonexistent or self-conferred certification or professional designation.

(c) Use of a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training or experience that the person using the certification or professional designation does not have.

(d) Use of a certification or professional designation that falsely states or implies specialized knowledge of the insurance needs of a particular segment of the population or class of persons that the person using the certification or professional designation does not have. Examples of a particular segment of the population, or class of investors, include but are not limited to senior citizens, elderly or retired persons.

(e) Use of a certification or professional designation that was obtained from a designating or certifying organization that:

(A) Is primarily engaged in the business of instruction in sales or marketing, or both;

(B) Does not have reasonable standards or procedures for assuring the competency of its designees or certificants;

(C) Does not have reasonable standards or procedures for monitoring and disciplining its designees or certificants for improper or unethical conduct;

(D) Does not have reasonable continuing education requirements for its designees to maintain the designation or certificate; or

(E) Has not been certified or accredited by one of the following organizations or has been certified or accredited by one of the following organizations but the designation or credential issued from the organization primarily applies to sales or marketing, or both:

(i) The American National Standards Institute;

(ii) The National Commission for Certifying Agencies; or

(iii) An organization that is on the United States Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes.”

(2) The Director recognizes a rebuttable presumption that a designating or certifying organization is not disqualified solely for purposes of section (1)(e) of this rule when the designation or credential does not primarily apply to sales or marketing or both, and when the organization is accredited by:

(a) The American National Standards Institute;

(b) The National Commission for Certifying Agencies; or

(c) An organization that is on the United States Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes.”

(3) The Director shall consider at least the following factors in determining whether a combination of words or an acronym standing for a combination of words constitutes a certification or professional designation that could falsely indicate or imply that a person has special certification or training in advising or servicing a particular segment of the population or class of insurance consumers:

(a) The use of one or more words indicating specialized knowledge of a particular type of product or of the needs of a particular segment of the population including but not limited to “senior,” “elder,” “retired,” or “retirement,” or class of persons, combined with one or more words such as “certified,” “registered,” “chartered,” “adviser,” “specialist,” “consultant,” “planner,” or like words, in the name of the certification or professional designation; and

(b) The manner in which the words in subsection (a) of this section are combined.

(4) This rule does not apply to use of any of the following designations, titles, degrees or certifications by a person unless the facts and circumstances associated with the use of the designation, title, degree or certification indicate that the use suggests or implies a greater degree of certification or training than the person possesses or that the designation, title, degree or certification otherwise misleads consumers:

(a) A job title within an organization that is licensed, registered or authorized by a state or federal financial services regulatory agency, when that job title:

(A) Indicates seniority or standing within the organization; or

(B) Specifies an individual’s area of specialization within the organization;

(b) A degree, certificate or designation evidencing completion of an academic program at an institution of higher education that has been accredited by an organization that is on the United States Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes;” or

(c) A certification or designation conferred by the Insurance Institute of America and the American Institute for Chartered Property and Casualty Underwriters.

(5) Violation of section (1) of this rule is an unfair trade practice for the purpose of ORS 746.240.

(6) The prohibitions in this rule and the remedies available to the Director do not limit the Director’s authority to enforce existing provisions of law or to apply existing remedies.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 744.074, 744.605, 746.110 & 746.240
ID 9-2009, f. 10-30-09, cert. ef. 11-1-09

Or. Admin. R. 836-080-0165 Notice of Division of Financial Regulation Assistance

(1) An insurer shall include in an individual annuity contract and with any subsequent offer for sale of additional coverage in connection with the annuity a statement to the effect that the Division of Financial Regulation of the Department of Consumer and Business Services offers assistance to consumers in the event of a dispute with the insurer. When the statement appears in the contract, the statement must be displayed on the cover page, the first page of the annuity terms, the page that contains the names of the parties and basic coverage information or another prominent place. When the statement appears in an offer for sale of additional coverage, the statement must be displayed in a prominent place. The statement must include the telephone number and website information for contacting the Division of Financial Regulation for assistance.

(2) Violation of this rule is an unfair trade practice for the purpose of ORS 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.009 & 746.240
ID 32-2024, minor correction filed 08/20/2024, effective 08/20/2024
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-080-0170 Statutory Authority; Purpose

(1) OAR 836-080-0170 to 836-080-0190 are issued under the general rulemaking authority of the director in ORS 731.244 to aid in the effectuation of ORS Chapter 746, especially the provisions of ORS 746.100, 746.110, and 746.240. Additional rulemaking authority is also conferred under the provisions of ORS 743.262(5)(a), (7)(b), (13)(b)-(c), (14)(b), and (17)(c).

(2) The purpose of this rule is to require producers to disclose certain information when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise recommendations so that the insurance needs and financial objectives of consumers at the time of the transaction are effectively addressed.

(3) OAR 836-080-0170 to 836-080-0190 do not create or imply a private cause of action for a violation of OAR 836-080-0170 to 836-080-0190 or subject a producer to civil liability under the disclosure and care requirements outlined in ORS 743.262(4) or under standards that govern the conduct of a fiduciary or a fiduciary relationship.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 2-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-080-0172 Applicability and Disclosure Forms

(1)(a) Except as provided in OAR 836-080-0172(1)(b), OAR 836-080-0170 to 836-080-0190 applies to any sale or recommendation of an annuity.

(b) OAR 836-080-0170 to 836-080-0190 does not apply to the transactions described in ORS 743.262(2)(b).

(2) A producer, before making a recommendation of or selling an annuity to a consumer, shall make the disclosures required under ORS 743.262(5)(a) by means of a form substantially similar to the form identified as “Insurance Agent (Producer) Disclosure for Annuities - Exhibit 1” on the Department of Consumer and Business Services website at dfr.oregon.gov.

(3) In addition to making the disclosures required under OAR 836-080-0172(2), a producer, at the time the producer recommends or sells an annuity to a consumer, shall:

(a) Provide the consumer a copy of the record of the producer’s annuity recommendation, including the basis of how the producer determined the recommendation as required by ORS 743.262(4)(a)(D), ORS 743.262(5)(b), and ORS 743.262(7)(a); and

(b) If a consumer refuses to provide consumer profile information specified in ORS 743.262(1)(d), obtain the signed statement required under ORS 743.262(7)(b)(A) by means of a form substantially similar to the forms identified as “Consumer Refusal to Provide Information – Exhibit 2” on the Department of Consumer and Business Services website at dfr.oregon.gov; and

(c) If a consumer enters into an annuity transaction that is not based on a producer’s recommendation, obtain the signed statement required under ORS 743.262(7)(b)(B) by means of a form substantially similar to the form identified as “Consumer Decision to Purchase an Annuity Not Based on a Recommendation – Exhibit 3” on the Department of Consumer and Business Services website at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 2-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-080-0178 Definitions

(1)(a) “Annuity” means:

(A) An agreement to make periodic payments, whether fixed or variable, in an amount:

(i) That is individually solicited, whether the agreement is classified as an individual annuity or a group annuity; and

(ii) In which the obligation to make all or some of the periodic payments, or the amount of any periodic payment, depends upon the continuance of human life; and

(B) Any additional benefits that safeguard the agreement from lapse or that provide a special surrender value or special benefit or annuity if the annuitant becomes totally and permanently disabled.

(b) “Annuity” does not include:

(A) A charitable remainder annuity trust or a charitable remainder unitrust as defined in Section 664(d) of the Internal Revenue Code; or

(B) Payments made in accordance with settlement provisions of a life insurance policy.

(2) “Producer” means a person that is licensed under ORS 744.052 to 744.089 or an insurer, if the insurer solicits, negotiates or sells an annuity without involving a producer.

(3) “Recommendation” means a producer’s advice to a consumer that the producer intends as an inducement to sell, exchange or replace an annuity or that results in a sale, exchange or replacement of an annuity in accordance with the producer’s advice.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 2-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-080-0183 Insurance Producer Training

(1) A producer may not solicit the sale of an annuity unless the producer has knowledge that is adequate to make a recommendation of the annuity, has complied with the insurer’s standards for product training, and meets the requirements of ORS 743.262(13).

(2)(a) A provider of an annuity training course intended to comply with this section shall register as a continuing education provider in this state and comply with the rules and guidelines applicable to insurance producer continuing education courses as set forth in ORS 744.072 and OAR 836-071-0180 to 836-071-0250.

(b) Annuity training courses may be conducted and completed by classroom or self-study methods in accordance with ORS 744.072 and OAR 836-071-0180 to 836-071-0250.

(c) Providers of annuity training shall comply with the reporting requirements and shall issue certificates of completion in accordance with OAR 836-071-0180 to 836-071-0250.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 2-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-080-0185 Compliance Mitigation; Penalties

Violation of any provision of OAR 836-080-0170 to 836-080-0190 is an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 2-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-080-0190 Annuity Sales; Disclosure Not a Defense

The fact that a person made a disclosure to a consumer about the nature of an annuity in connection with the sale of the annuity to the consumer is not a defense by itself to a determination by the director under OAR 836-080-0170 to 836-080-0188 that the annuity sale violated the care requirements under ORS 743.262.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
Renumbered from 836-080-0095, ID 2-2011, f. & cert. ef. 2-4-11
ID 14-2008, f. & cert. ef. 8-15-08

Or. Admin. R. 836-080-0193 Operative Date

The revisions to OAR 836-080-0170 to 836-080-0190 become operative on August 12, 2024.

History

Statutory/Other Authority: ORS 731.244 & 743.262
Statutes/Other Implemented: ORS 746.100, 746.110, 746.240 & 743.262
ID 19-2024, amend filed 08/12/2024, effective 08/12/2024
ID 54-2023, temporary amend filed 12/20/2023, effective 01/01/2024 through 06/28/2024
ID 2-2011, f. & cert. ef. 2-4-11

Or. Admin. R. 836-080-0195 Oregon opt-out from certain Interstate Insurance Product Regulation Compact Uniform Standards

(1) The purpose of this rule is to exercise the opt out provisions of the Interstate Insurance Product Regulation Compact (Compact) pursuant to ORS 732.820, Article VII.

(2) The Department of Consumer and Business Services declines to participate in the following Compact Uniform Standards:

(a) The director has considered the Standards for Individual Deferred Index Linked Variable Annuity Contracts adopted by the Interstate Insurance Product Regulation Commission (IIPRC ) on April 25, 2024 and finds the protections offered to residents of Oregon are not adequate. Therefore, the Department of Consumer and Business Services declines to participate in the Standards for Individual Deferred Index Linked Variable Annuity Contracts.

(b) The director has considered the amendments to the Additional Standards for Market Value Adjustment Feature for Modified Guaranteed Annuities and Index-Linked Variable Annuities adopted by the IIPRC on April 25, 2024 and finds the protections offered to residents of Oregon are not adequate. Therefore, the Department of Consumer and Business Services declines to participate in the Additional Standards for Market Value Adjustment Feature for Modified Guaranteed Annuities and Index-Linked Variable Annuities.

(3) This rule is effective immediately upon adoption.

History

Statutory/Other Authority: ORS 732.820 & Or Const, Art VII
Statutes/Other Implemented: ORS 732.820 & Or Const, Art VII
ID 7-2025, adopt filed 10/28/2025, effective 11/01/2025

Or. Admin. R. 836-080-0200 Electronic Payment of Claims

(1) An insurer may pay claim proceeds through a prepaid card, direct deposit system, automated teller machine card or debit card, or other means of electronic transfer if the claimant elects payment by one of those methods and specifies the method of electronic payment agreed upon. The consent of the recipient of claim proceeds must be obtained prior to initiating electronic payments and may be written or verbal. The insurer must provide the recipient a written confirmation when consent is obtained verbally. Proof of mailing will act as proof of providing written notice. The recipient may discontinue receiving electronic payments by notifying the insurer in writing.

(2) The recipient of claim proceeds must receive a copy of the cardholder agreement clearly outlining the terms and conditions under which a prepaid card, an automated teller machine card or debit card has been issued prior to or at the time the initial electronic payment is made.

(3) The instrument of payment must be negotiable and payable to the recipient for the full amount due, without cost to the recipient. The recipient must be able to make an initial withdrawal of the entire amount due without delay or cost to the recipient.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230
ID 15-2014, f. & cert. ef. 8-15-14

Or. Admin. R. 836-080-0205 Statutory Authority, Purpose, and Applicability

(1) OAR 836-080-0205 to 836-080-0250 are adopted by the Director of the Department of Consumer and Business Services pursuant to the director’s general rulemaking authority in ORS 731.244, to aid in the proper effectuation of 746.230.

(2) The purpose of OAR 836-080-0205 to 836-080-0250 is to define certain minimum standards the violation of which will be considered to constitute unfair claims settlement practices within the purview of ORS 746.230.

(3) OAR 836-080-0205 to 836-080-0250:

(a) Apply with respect to all insurance except fidelity and surety bonds;

(b) Apply to workers' compensation insurance only as provided in OAR 836-080-0250; and

(c) Are not exclusive, and the Director may also consider other acts not herein specified to be violations of ORS 746.230.

(4) OAR 836-080-0205 to 836-080-0250 do not in any way expand or limit or otherwise change the procedural or substantive rights, or both, of claimants as provided in the Oregon Revised Statutes.

(5) The amendments to OAR 836-080-0210 and 836-080-0235 apply only to claims submitted to a title insurer on or after August 17, 2010.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230
ID 16-2010, f. & cert. ef. 8-19-10
ID 20-1998, f. 12-2-98, cert. ef. 2-1-99
ID 12-1992, f. & cert. ef. 7-1-92
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0210 Definitions

As used in OAR 836-080-0205 to 836-080-0240, unless the context requires otherwise:

(1) "Claim file" includes, but is not limited to, microfilm files, computer information systems and other types of files, containing information on individual claims without necessarily containing hard copies of documents.

(2) "Claimant" includes any first party claimant and any third party claimant, the designated legal representative of any such claimants and any members of a claimant's immediate family who are designated for this purpose by the claimant. For title insurance, “claimant” includes only any first party claimant and the designated legal representative of a first party claimant.

(3) "First party claimant" means a person asserting a right to payment under an insurance policy arising out of the occurrence of the contingency or loss covered by the policy.

(4) "Insurer" includes any person authorized to represent the insurer with respect to a claim who is acting within the scope of the person's authority.

(5) "Investigation" means the activities of an insurer directly or indirectly related to the determination of liabilities under coverages provided by an insurance policy.

(6) "Notification of claim" means any notification, whether in writing or other means acceptable under the terms of an insurance policy, to an insurer by a claimant that reasonably apprises the insurer of the facts pertinent to the claim.

(7) "Third party claimant" means any person asserting a claim against any person insured under an insurance policy.

(8) "Crash parts" are motor vehicle replacement parts, sheet metal or plastic, that constitute the visible exterior of the vehicle, including inner and outer panels, and are generally repaired or replaced as the result of a collision.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230
ID 16-2010, f. & cert. ef. 8-19-10
ID 20-1998, f. 12-2-98, cert. ef. 2-1-99
IC 8-1986, f. & ef. 12-30-86
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0215 Claim Files

An insurer’s claim files shall contain the information pertaining to each claim in sufficient detail that pertinent events and their dates can be reconstructed.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.230(1)(d)
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0220 Misrepresentation and Other Prohibited Claim Practices

An insurer shall not:

(1) Fail to fully disclose to a first party claimant all pertinent benefits, coverages and other provisions of an insurance policy under which the claim is asserted.

(2) Conceal from a first party claimant any insurance policy benefits, coverages or other provisions that are pertinent to the claim.

(3) Deny a claim on the grounds of the claimant’s failure to exhibit the relevant property without proof of the insurer’s demand and the claimant’s unfounded refusal.

(4) Except where there is such time limit specified in the policy, make statements, written or otherwise, that require a claimant to give written notice of loss or proof of loss within a specified time and that seek to relieve the insurer of its obligations if the time limit is not complied with, unless the failure to comply with the specified time limit prejudices the insurer’s rights.

(5) Request a first party claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment.

(6) Issue checks or drafts in partial settlement of a loss or claim under a specific policy coverage that contain language releasing the insurer or its insured from its total liability.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.230(1)(a), 746.230(f), 746.230(j) & 746.230(m)
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0225 Required Claim Communication Practices

An insurer shall:

(1) Not later than the 30th day after receipt of notification of claim, acknowledge the notification or pay the claim. An appropriate and dated notation of the acknowledgment shall be included in the insurer’s claim file.

(2) Not later than the 21st day after receipt of an inquiry from the Director about a claim, furnish the Director with an adequate response.

(3) Make an appropriate reply, not later than the 30th day after receipt, to all other pertinent communications about a claim from a claimant that reasonably indicate a response is expected.

(4) Upon receiving notification of claim from a first party claimant, promptly provide necessary claim forms, instructions and assistance that is reasonable in the light of the information possessed by the insurer, so that the claimant can comply with the policy conditions and the insurer’s reasonable requirements. Compliance with this section not later than the 30th day after receipt of notification of a claim constitutes compliance with section (1) of this rule.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230
ID 3-1998, f. & cert. ef. 2-10-98
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0230 Standard for Prompt Claim Investigation

An insurer shall complete its claim investigation not later than the 45th day after its receipt of notification of claim, unless the investigation cannot reasonably be completed within that time.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230
ID 3-1998, f. & cert. ef. 2-10-98
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0235 Standards for Prompt and Fair Settlements — Generally

(1) An insurer shall, not later than the 30th day after its receipt of properly executed proofs of loss from a first party claimant, advise the claimant of the acceptance or denial of the claim. An insurer shall not deny a claim on the grounds of a specific policy provision, condition or exclusion unless the denial includes reference to the provision, condition or exclusion. A claim denial must be in writing, with either a copy or the capability of reproducing its text included in the insurer's claim file.

(2) If a claim is made on a health insurance policy and the claim involves a coordination of benefits issue to which OAR 836-020-0700 to 836-020-0765 apply, the time allowed in 836-020-0740 to an insurer for applying a coordination of benefit provision shall be added to the time period provided in section (1) of this rule.

(3) If a claim is denied for reasons other than those described in section (1) of this rule and is made by any other means than in writing, an appropriate notation shall be made in the insurer's claim file.

(4) If an insurer needs more time to determine whether the claim of a first party claimant should be accepted or denied, it shall so notify the claimant not later than the 30th day after receipt of the proofs of loss, giving the reason more time is needed. Forty-five days from the date of such initial notification and every 45 days thereafter while the investigation remains incomplete, the insurer shall notify the claimant in writing of the reason additional time is needed for investigation.

(5) An insurer shall not fail to settle claims of first party claimants on the grounds that responsibility for payment should be assumed by others, except as may be provided otherwise by the provisions of the insurance policy issued by the insurer.

(6) If an insurer continues negotiations for settlement of a claim directly with a claimant who is neither an attorney nor represented by an attorney until the claimant's rights may be affected by a statute of limitations or policy time limit, the insurer shall give the claimant written notice that the time limit may be expiring and may affect the claimant's rights. The notice shall be given to first party claimants not less than 30 days before, and to third party claimants not less than 60 days before, the date on which the insurer believes the time limit may expire.

(7) An insurer shall not make a statement that indicates that the rights of a third party claimant may be impaired if a form or release is not completed within a given period of time, unless the statement is given for the purpose of notifying the third party claimant of the provision of a relevant statute of limitations.

(8) Notwithstanding section (4) of this rule, for title insurance:

(a) The requirements in section (4) of this rule are suspended from the date the insurer arranges or agrees to legal representation of the insured, for the term of that representation, with respect to:

(A) A matter for which the insurer accepts a tender of defense; or

(B) A matter for which the insurer prosecutes an action or proceeding or does, or causes to be done, any other act to establish the title as insured or to prevent or reduce loss or damage to the insured.

(b) When an insurer initially notifies the claimant that more time is needed, the insurer:

(A) May specify a date later than 45 days but not later than 90 days for the next and any successive notification; and

(B) Shall notify the claimant in writing by the date specified whether additional time is needed and give the reason additional time is needed.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230(1) & 746.240
ID 16-2010, f. & cert. ef. 8-19-10
ID 19-2006, f. & cert. ef. 9-26-06
ID 3-1998, f. & cert. ef. 2-10-98
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0240 Standards for Prompt and Fair Total Loss Settlements — Automobile Insurance

(1) When an automobile insurance policy provides for the adjustment and settlement of collision or comprehensive coverage total losses on the basis of actual cash value or replacement with another comparable automobile or one of like kind and quality, the insurer shall adjust and settle the claim as provided in this rule.

(2) The insurer may elect to offer a replacement automobile that is at least comparable to the insured automobile. A replacement automobile is at least comparable if it is the same make, is of the same or a newer year, is of a similar body style, has similar options and mileage as the insured automobile, is in as good or better overall condition and is available for inspection within a reasonable distance of the insured's residence. The insurer shall pay all applicable taxes, license fees and other fees incident to the transfer of evidence of ownership of the automobile at no cost other than any deductible provided in the policy. The offer and any rejection thereof must be documented in the claim file.

(3) The insurer may elect to make a cash settlement, less any deductible provided in the policy, but including all applicable taxes, license fees and other fees incident to transfer of ownership of another comparable automobile. When an insurer makes a cash settlement, the insurer shall furnish the insured copies of the information used by the insurer for the purpose of determining the amount of the cash settlement. The insurer shall comply with the provisions of the Uniform Electronic Transactions Act (ORS 84.001 to 84.061) and ORS 84.070 if the insurer provides this information electronically. If the information includes documentation of a specific and comparable automobile that the insurer intends to rely upon to preclude reopening the claim file under section (6) of this rule, the insurer shall prominently disclose that intention. The value of the automobile for purposes of a cash settlement may be based upon one of the following standards:

(a) A valuation obtained from a computerized database source that produces statistically valid and fair market values for automobiles, on the basis of the following criteria:

(A) The source shall produce values for at least 85 percent of all makes and models of private passenger automobiles for the last 15 model years;

(B) The source shall rely upon values of vehicles that are currently available or were available within the last 90 days from the date of loss for all vehicles and shall apply appropriate standards of comparability;

(C) For all vehicles of five model years or less of age, the values must be derived primarily from verifiable data or inventory from licensed dealers;

(D) The source shall monitor the average retail price of private passenger automobiles when there is insufficient data or inventory from licensed dealers to ensure statistically valid market area values;

(E) The source shall give primary consideration to the values of vehicles in the local market area and may consider data on vehicles outside the area; and

(F) The source shall produce fair market values based on current data available from the area surrounding the location where the insured vehicle was principally garaged or a necessary expansion of parameters, such as time and area, to assure statistical validity.

(b) The actual cost to purchase the automobile identified by the insurer as a replacement automobile that is at least comparable to the insured automobile as determined pursuant to section (2) of this rule, including all applicable taxes, license fees and other fees incident to purchase of the automobile other than any deductible provided in the policy; or

(c) An alternative that deviates from the methods described in subsections (a) and (b) of this section and is allowable under the policy, as long as documentation in the claim file supports the deviation and gives particulars of the pre-loss condition of the automobile. Any deductions from the cost, including deduction for salvage if the salvage is retained by the claimant, must be measurable, discernible, itemized and specified as to dollar amount and must be appropriate in amount. The basis for a settlement under this subsection must be fully explained in writing, supplied to the claimant and maintained in the claim file.

(4) When an insurer elects to make a cash settlement, the insurer shall provide the insured or third-party claimant with the written statement set forth in Exhibit 1 of this rule. The insurer shall comply with the provisions of the Uniform Electronic Transactions Act (ORS 84.001 to 84.061) and 84.070 if the insurer provides this written statement electronically.

(5) If an insurer and the insured or third-party claimant are unable to agree on the value of the automobile, an insurer shall pay the insured or third-party claimant the amount of the automobile’s value that is not in dispute as provided in section 3, chapter 65, Oregon Laws 2009. An insurer is not obligated to pay the undisputed amount until the insured or third-party owner of the automobile:

(a) Agrees to execute documents sufficient to transfer ownership of the automobile to the insurer; and

(b) Authorizes the insurer, at the insurer’s expense, to move the automobile to a disclosed location selected by the insurer, where the automobile will remain available for inspection and evaluation for not fewer than 14 calendar days. After the expiration of the 14-day period, the insurer may proceed with the salvage sale of the automobile.

(6) If the insured notifies the insurer within 35 days of the receipt of the claim draft that the insured cannot purchase an automobile for the market value as determined in section (3) of this rule, the insurer shall reopen its claim file and the following procedures shall apply:

(a) The insurer may locate an automobile that is at least comparable to the insured automobile as determined pursuant to section (2) of this rule, and that is currently available for the market value determined by the insurer at the time of settlement;

(b) The insurer may either pay the insured the difference between the market value before applicable deductions and the cost of the comparable automobile of like kind and quality that the insured has located, or negotiate and effect the purchase of the automobile for the insured;

(c) The insurer may elect to offer a replacement automobile in accordance with the provisions set forth in section (2) of this rule; or

(d) The insurer may conclude the loss settlement in the manner provided in the appraisal section of the insurance policy in force at the time of the loss. The insurer shall reimburse the insured for the reasonable appraisal costs as provided in ORS 742.466.

(7) The right of the insured to have a claim reopened under section (6) of this rule applies only to first party claims of the insured under the policy. The insurer is not required to take action under section (6) of this rule if its documentation to the insured at the time of settlement includes written notification of the availability and location of a specified automobile that is at least comparable to the insured automobile as determined pursuant to section (2) of this rule, that could have been purchased for the market value determined by the insurer before applicable deductions. The documentation shall include the vehicle identification number or another specific vehicle identifier.

(8) When the issue of liability is reasonably clear, an insurer shall not recommend that a third party claimant make claim under the claimant's own insurance policy solely for the recommending insurer to avoid paying a claim.

(9) An insurer shall not require unreasonable travel of a claimant to inspect a replacement automobile, to obtain a repair estimate or to have the automobile repaired at a repair shop.

(10) An insurer shall, upon a first party claimant's request, include the claimant's deductible in the insurer's demands under its subrogation rights. Subrogation recoveries shall be shared at least on a proportionate basis with the first party claimant, unless the deductible amount has been otherwise recovered by the claimant. No deduction for expenses may be made from the deductible recovery unless an outside attorney is retained to collect such recovery, in which case deduction may be made only for a pro rata share of the cost of retaining the attorney.

(11) If an insurer or body shop prepares an estimate of the cost of automobile repairs, the estimate shall be in the amount for which the damage may reasonably be expected to be satisfactorily repaired. If crash parts manufactured by anyone other than the original manufacturer are to be supplied or installed, the estimate shall identify each such part in a clearly understandable manner. The insurer or body shop shall give a copy of the written estimate to the claimant.

(12) As provided in ORS 746.280, an insurer shall not require that a particular person make the repairs to the first party claimant's automobile as a condition for recovery under the claimant's policy. An insurer shall not make such a requirement for the repair of a third party claimant's automobile as a condition for claim payment.

(13) When the amount claimed as automobile damage is reduced because of betterment or depreciation, all information used as the basis for the reduction shall be contained in the insurer’s claim file. Such deductions shall be itemized and specified as to dollar amount and shall be appropriate for the amount of betterment or depreciation.

(14) Sections (3), (4), (5), (8), and (12) of this rule also apply to third party claimants.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.466, 746.230, 746.240, 746.280 & 2009 OL Ch. 65, sec. 2 & 3
ID 14-2009, f. 12-23-09, cert. ef. 1-1-10
ID 12-2002, f. & cert. ef. 5-10-02
Reverted to ID 20-1998, f. 12-2-98, cert. ef. 2-1-99
ID 2-2001(Temp), f. & cert. ef. 3-15-01 thru 9-7-01
ID 20-1998, f. 12-2-98, cert. ef. 2-1-99
IC 8-1986, f. & ef. 12-30-86
IC 2-1980, f. 5-8-80, ef. 6-1-80

Or. Admin. R. 836-080-0245 Statutory Authority and Purpose

(1) OAR 836-080-0245 is adopted pursuant general rulemaking authority in ORS 731.244.

(2) For the purpose of complying with ORS 742.053(3)(b), if a total loss of contents of a residence occurred as a result of a major disaster in a location subject to a state of emergency declaration under ORS 401.165, and the loss was directly related to the emergency that was the subject of the declaration, then theinsurer shall be subject to the provisions of ORS 742.053(3)(b)(A)-(E) if the policyholder provides the insurer with a written attestation in a form substantially similar to Exhibit 1 available on the website of the Department of Consumer and Business Services at https://dfr.oregon.gov/laws-rules/Documents/OAR/div80-0245_ex1.pdf.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.053
ID 56-2023, adopt filed 12/28/2023, effective 01/01/2024

Or. Admin. R. 836-080-0250 Workers’ Compensation Insurance Unfair Claim Settlement Practices Standards

For the purposes of ORS 746.230(1)(d), the following applies to a workers’ compensation insurer:

(1) The insurer is required to conduct a “reasonable” investigation based on all available information in ascertaining whether to deny a claim. A reasonable investigation is whatever steps a reasonably prudent person with knowledge of the legal standards for determining compensbility would take in a good faith effort to ascertain the facts underlying a claim, giving due consideration to the cost of the investigation and the likely value of the claim.

(2) In determining whether an investigation is reasonable, the Director will only look at information contained in the claim record at the time of denial. The insurer may not relay on any fact not documented in the claim record at the time of denial to establish that an investigation was reasonable.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.230(1)(d)
ID 12-1992, f. & cert. ef. 7-1-92

Or. Admin. R. 836-080-0305 Statutory Authority; Purpose; Applicability

(1) OAR 836-080-0305 to 836-080-0370 are adopted by the Director of the Department of Consumer and Business Services pursuant to the general rulemaking authority in ORS 731.244, to aid in the effectuation of 746.045, 746.055, 746.160, and 746.240.

(2) The purpose of these rules is to define certain fair trade practice standards for title companies, the violation of which will be considered to constitute a practice prohibited by ORS 746.045, 746.055, 746.160(3), or 746.240.

(3) These rules are intended to regulate the marketing activities of title companies involving only intermediaries. These rules do not limit the Director’s authority to determine that other activities of title companies with any person constitute violations of ORS 746.045, 746.055, 746.160(3), or 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0310 Definitions

As used in OAR 836-080-0305 to 836-080-0370, unless the context requires otherwise:

(1) A person “affiliated” with a title company means a person who controls, is controlled by, or is under common control with the title company; or a person who is an owner, director, officer or employee of such a person and acts in such representative capacity. As used in this section, an owner is a person who owns or controls a ten percent or more interest.

(2) “Intermediary” means:

(a) A person who is engaged to any extent in any of the following business activities, other than a title company or a person affiliated with the title company giving the thing of value:

(A) Acting as an agent, broker, representative or attorney in fact or at law of a person who buys or sells an interest in real property, or who lends or borrows money secured by an interest in real property;

(B) Buying, selling or exchanging interests in real property;

(D) Building residential or commercial structures on real property;

(E) Making loans secured by interests in real property;

(F) Auctioning the sale of real property;

(G) Accommodating or facilitating exchanges in real property; or

(H) Providing real property transaction settlement services.

(b) A person who is an owner, director, officer or employee of a person described in subsection (2)(a) of this rule;

(d) A trade association of persons described in subsection (2)(a) of this rule.

(3) “Give” means to transfer to another person; or cause another person to receive, retain, use or otherwise benefit from; without receiving equivalent consideration in return.

(4) “Net cost to the title company” means the actual costs directly incurred by the title company to give a thing of value to an intermediary, less any money received by the title company from an intermediary as payment or reimbursement for the thing of value within 30 calendar days after the intermediary received the thing of value, except for the following costs:

(a) Fixed operating costs:

(b) Labor costs; and

(5) “Thing of value” means anything that has a monetary value including but not limited to any of the following:

(a) An advertisement, which for purposes of this section, without limitation:

(A) Means a representation about any product, service, equipment, facility or activity or any person who makes, distributes, sells, rents, leases or otherwise makes available such a product, service, equipment, facility or activity, when the representation:

(i) Is communicated to a person that, to any extent, by content or context, informs the recipient about such a product, service, equipment, facility or activity;

(ii) Recognizes, honors or otherwise promotes such a product, service, equipment, facility or activity; or

(iii) Invites, advises, recommends or otherwise solicits a person to participate in, inquire about, purchase, lease, rent or use such a product, service, equipment, facility or activity.

(B) Includes a representation promoting only an intermediary, promoting only a title company through the use of a testimony or endorsement by an intermediary, or promoting both an intermediary and a title company; and

(C) Includes a display of pictures of intermediaries purporting to identify intermediaries that have referred clients to the title company;

(b) The creation of a compensating balance, which for purposes of this section means the depositing of funds in a financial institution for the purpose of inducing the institution to extend credit or loan funds to any person other than the depositor;

(c) An extension of a line of credit, which for purposes of this section means the extension of any credit outside of an open account for the ordinary services of a title company, but does not include the acceptance of an indemnity as to unfiled construction liens that are insured against under a title insurance policy;

(d) A monetary advance, which for purposes of this section means the advance of funds for the purpose of paying an obligation of an intermediary or an obligation that a financial institution requires to be paid, other than payment of governmental recording, search or filing fees, and payment at the request of the escrow agent or financial institution of taxes and assessments prior to the completion of the related sale, lease or loan transaction;

(e) A product;

(f) A service; or

(g) The use of a facility.

(6) “Trade association” means an association of persons, a majority of whom are intermediaries. The term does not include a chamber of commerce or an economic development association.

(7) “Title company” means:

(a) A title insurer;

(b) A title insurance agent; or

(c) A person who is an owner, director, officer, or employee of a title insurer or title insurance agent and acts in such representative capacity. As used in this subsection, an owner means a person who owns or controls a ten percent or more interest in the title insurer or title insurance agent.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
ID 11-1988, f. & cert. ef. 6-14-88
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0315 Providing Things of Value to Intermediaries Generally Prohibited

(1) A title company shall not, directly or indirectly, give or attempt to give any thing of value to an intermediary unless permitted by OAR 836-080-0320 to 836-080-0340. If more than one provision of OAR 836-080-0320 to 836-080-0340 applies, a title company may give a thing of value to an intermediary pursuant to only one provision.

(2) A title company shall also be considered to give a thing of value to an intermediary when the thing of value is given by a person affiliated with the title company.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
ID 11-1988, f. & cert. ef. 6-14-88
IC 3-1983, f. 5-10-83, ef. 6-1-83
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0320 Miscellaneous Things of Value

A title company may give a thing of value, except money, to an intermediary if the net cost to the title company is $2 or less per thing of value or individual receiving the thing of value, whichever is applicable, and if the thing of value is used only by the intermediary and not further distributed to other persons, except that the intermediary may distribute the thing of value to other persons if the thing of value is:

(1) Printed information about the title company or a person affiliated with the title company;

(2) Any service or product offered by the title company or a person affiliated with the title company; or

(3) Any business activity of the title company or a person affiliated with the title company.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0325 Business Development Activities

(1) A title company may give a thing of value to an intermediary in connection with an activity sponsored only by the title company if the net cost to the title company is $75 or less per individual attending, when five or fewer individuals actually attend and when one of the individuals is an employee of the title company.

(2) A title company may give a thing of value to an intermediary in connection with an activity sponsored only by the title company if the net cost to the title company is $10 or less per individual reasonably expected to attend, when six or more individuals actually attend and when one of the individuals is an employee of the title company.

(3) A title company may give a thing of value to an intermediary in connection with an activity sponsored only by the title company if the activity occurs at the title company’s new or substantially remodeled office and the net cost to the title company is $25 or less per individual reasonably expected to attend. The title company shall notify the Director in writing at least 30 calendar days before the activity occurs that it intends to sponsor the activity, a description of the new office or extent of any remodeling, the number of individuals invited and reasonably expected to attend and the expected cost of the activity.

(4) A title company may give a thing of value to an intermediary in connection with an activity sponsored only by the title company if the activity occurs within 90 calendar days before or after the title company’s first and each tenth anniversary of commencing title insurance or escrow business and the net cost to the title company is $25 or less per individual reasonably expected to attend. The title company shall notify the Director in writing at least 30 calendar days before the activity occurs that it intends to sponsor the activity, an explanation of when the title company commenced business, the number of individuals invited and reasonably expected to attend and the expected cost of the activity.

(5) A title company may give a thing of value to a trade association in response to a general solicitation of the entire membership of the trade association if the net cost to the title company is $50 or less.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
ID 11-1988, f. & cert. ef. 6-14-88
IC 6-1984, f. 10-15-84, ef. 11-1-84
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0335 Gifts

(1) A title company may give a plant or flowers to an intermediary in connection with an open house of a new or substantially remodeled office of the intermediary if the net cost to the title company is $50 or less.

(2) A title company may give a thing of value to an intermediary as a condolence if the net cost to the title company is $50 or less.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0337 Real Property Information

(1) A title company may give to an intermediary information that relates to a specific parcel of real property located in this state if the cost to the title company, including but not limited to labor and materials, is $15 or less per request.

(2) A title company may distribute the information described in section (1) of this rule in any form and in any manner.

(3) This rule does not apply when a title company provides real property information in connection with a title insurance policy according to the title company’s filed rating plan approved by the Director pursuant to ORS 737.320.

(4) Nothing in this rule allows a title company to provide:

(a) The means of access to the real property information to an intermediary for less than reasonably equivalent consideration; or

(b) Any other thing of value in connection with the information described in section (1) of this rule including but not limited to packaging such as binders, dividers, folders, page protectors or compact disc cases.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 10-2012, f. & cert. ef. 6-7-12
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96

Or. Admin. R. 836-080-0340 Assistance in Qualifying a Subdivision

(1) A title company may do the following things for an intermediary that is a subdivider or developer to help qualify a subdivision for approval by a state or local government:

(a) Advance the normal county recording and filing fees;

(b) Help the subdivider or developer obtain the information necessary to complete the forms required by the state or local government;

(c) Help a subdivider or developer obtain the signatures necessary to file or record the subdivision plat with the state or local government; and

(d) Forward an item to the state or local government after the title company receives the item.

(2) As used in section (1) of this rule:

(a) “Developer” means a person who is a developer as defined in ORS 92.305 or 94.004, or a person who engages in the development of more than one commercial or industrial real property construction projects; and

(b) “Subdivider” means a person who is a subdivider as defined in ORS 92.305, or a person who acquires five or more unimproved lots or tracts of a filed subdivision for the purpose of resale or lease.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
ID 11-1988, f. & cert. ef. 6-14-88
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0345 Automatic Change in Monetary Limits

All monetary limits in OAR 836-080-0305 to 836-080-0337 will automatically change, without the necessity of amending such rules, by the percentage change from year to year in the Portland Standard Statistical Metropolitan Area Consumer Price Index for all urban consumers, all items (Base 1982=100), or its equivalent as determined by the Director. The Director shall calculate the changes and notify each title company of such changes by December 1 of each year. The changes shall be effective on January 1 of the immediately following year.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0355 Title Insurer Responsible for Violations by Agent

A title insurer also violates OAR 836-080-0315 when a title insurance agent of the title insurer engages in conduct that violates 836-080-0315, the title insurer knows that the conduct violates 836-080-0315, the title insurer knows that the conduct is occurring or is about to occur, and the title insurer fails to request, in writing within 10 calendar days after first knowing that the conduct is occurring or is about to occur, that the title insurance agent immediately discontinue the conduct.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96

Or. Admin. R. 836-080-0360 Use by Title Company of an Intermediary’s Office

A title company shall not have an employee work in a workspace owned, leased or rented by an intermediary unless all of the following apply with respect to the space:

(1) The space is separate from and can be secured against access by other occupants of the premises.

(2) The consideration paid, if any, for the space is not more than the prevailing rate for similar space in the market area.

(3) The space is open to the conduct of business with all persons.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96, Renumbered from 836-080-0330
IC 3-1980, f. 7-7-80, ef. 8-1-80

Or. Admin. R. 836-080-0365 Filing Escrow Rates Required

A title company shall file with the Director in writing each rate to be charged for escrow services and the effective date of such rate before the date the title company uses such rate. A title company shall also file a list of all escrow rates to be charged when it files a new or changed escrow rate.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96

Or. Admin. R. 836-080-0370 Instruction of Title Company Employees About Rules Required

(1) A title company shall give a copy of OAR 836-080-0305 to 836-080-0370 to each employee who markets or performs any service offered by the title company.

(2) A title company shall instruct each employee described in section (1) of this rule about the content of the rules as follows:

(a) In the case of each employee employed on the effective date of OAR 836-080-0305 to 836-080-0370, within 60 calendar days after that date; and

(b) In the case of each employee employed after the effective date of OAR 836-080-0305 to 836-080-0370, within 30 calendar days after the date the employee commences work.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160 & 746.240
ID 9-1996, f. 6-25-96, cert. ef. 7-1-96

Or. Admin. R. 836-080-0425 Applicability; Definitions

(1) OAR 836-080-0425 to 836-080-0440 apply to personal insurance as defined in ORS 746.600.

(2) "Application" means an action by a prospective insured that, if accepted by the insurer, would establish a contract of insurance.

(3) “Consumer,” “consumer reporting agency,” “credit history” and “insurance score” have the meanings given those terms in ORS 746.600.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.015 & 746.240
ID 7-2004, f. & cert. ef. 10-5-04
ID 25-2002, f. 12-17-02, cert. ef. 6-1-03

Or. Admin. R. 836-080-0430 Disclosure of Use of Credit History or Insurance Scores

(1) Before an insurer or its insurance producer may obtain the credit history or insurance score of a consumer in response to a request by the consumer relating to insurance coverage, the insurer or insurance producer shall notify the consumer that the insurer or insurance producer will check the credit history or insurance score of the consumer. The notice may be oral, in writing or in the same medium as the medium in which communication between the consumer and the insurer or insurance producer is conducted.

(2) An insurance producer need provide only one notice under section (1) of this rule to a consumer for the inquiry or inquiries that the insurance producer makes to one or more insurers in response to the request by the consumer.

(3) An insurer who uses credit histories or insurance scores for underwriting or rating coverage shall instruct each of its insurance producer that before an insurance producer may obtain a consumer's credit history or insurance score, the insurance producer must notify the consumer that the consumer's credit history or insurance score of the consumer will be checked.

(4) An insurer that uses the credit history or insurance score of a consumer when considering the consumer's application for insurance must notify the consumer during the application process that the consumer may request a written statement describing its use of credit histories or insurance scores. The notice to the consumer may be either in writing or in the same medium as the medium in which the application is made. The statement must address the following items:

(a) Why the insurer uses credit history or insurance scores.

(b) How the insurer uses credit histories or insurance scores.

(d) Whether a consumer's lack of credit history will affect the insurer's consideration of an application.

(e) Where the consumer may go with questions.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.015, 746.240, 746.661 & 746.663
ID 4-2006, f. 3-9-06, cert. ef. 3-10-06
Reverted to ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 11-2005(Temp), f. & cert. ef. 9-15-05 thru 3-6-06
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 7-2004, f. & cert. ef. 10-5-04
ID 25-2002, f. 12-17-02, cert. ef. 6-1-03

Or. Admin. R. 836-080-0435 Policies Governing Credit Histories and Insurance Scores

Each insurer that uses credit histories or insurance scores in the rating or underwriting, or both, of prospective applicants, applicants or policyholders for personal insurance shall establish a written policy that includes at least the following:

(1) An explanation of credit histories or insurance scores, or an explanation of both if the insurer uses both, and the insurer's standards governing their use.

(2) Rating and underwriting protocols, rules and instructions relating to credit histories or insurance scores. The protocols, rules and instructions shall include an explanation of the insurer's consideration and treatment, for underwriting purposes and for rating purposes, of:

(a) A consumer for whom the insurer or provider of credit scoring information has found no credit records (a "no hit"), and whether the insurer may make exceptions.

(b) A consumer for whom the insurer or provider of credit history or insurance score information has found a credit record but insufficient credit activity for creating a credit score (a "no score"), and whether the insurer may make exceptions.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.015 & 746.240
ID 7-2004, f. & cert. ef. 10-5-04
ID 25-2002, f. 12-17-02, cert. ef. 6-1-03

Or. Admin. R. 836-080-0436 Absence of or Inability to Determine Credit History; Relation to Risk to Insurer

An insurer may use the category of absence of a credit history (“no hit”) or the category of inability to determine a consumer’s credit history (“no score”) under ORS 746.661(1)(c) according to the separate risk profiles for the two categories, and any relevant subcategories, demonstrated by actuarial data that the insurer has submitted to the Director of the Department of Consumer and Business Services.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.650
ID 7-2004, f. & cert. ef. 10-5-04

Or. Admin. R. 836-080-0438 Definition of Adverse Underwriting Decision; Notice

(1) For the purpose of the notice required by ORS 746.650(5), an adverse underwriting decision as defined in 746.600(1)(a)(G)(iii) occurs when an insurer accepting an application for insurance would have given the consumer a lower rate if the consumer's credit history or the credit factors in the consumer's insurance score were more favorable.

(2) An insurer shall include in a notice of adverse underwriting decision required by ORS 746.650(5) an explanation of the consumer's right to request, no more than once annually, that the insurer rerate the consumer, and of potential negative consequences of rerating, if any.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.600 & 746.650
ID 4-2006, f. 3-9-06, cert. ef. 3-10-06
Reverted to ID 7-2004, f. & cert. ef. 10-5-04
ID 11-2005(Temp), f. & cert. ef. 9-15-05 thru 3-6-06
ID 7-2004, f. & cert. ef. 10-5-04

Or. Admin. R. 836-080-0440 Unfair Insurance Trade Practice

Violation of any provision of OAR 836-080-0425 to 836-080-0440 is an unfair trade practice for purposes of ORS 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240
ID 25-2002, f. 12-17-02, cert. ef. 6-1-03

Or. Admin. R. 836-080-0501 Authority; Rule of Construction; Applicability

(1) OAR 836-080-0501 to 836-080-0551 are adopted under the authority of ORS 731.244 and 746.620 for the purpose of implementing 746.600, 746.620, 746.630 and 746.665.

(2) The examples in OAR 836-080-0501 to 836-080-0551 are not exclusive. Compliance with an example in 836-080-0501 to 836-080-0551 constitutes compliance with the statute to which the example applies.

(3) OAR 836-080-0501 to 836-080-0551 have the same scope of applicability as ORS 746.600, 746.620, 746.630 and 746.665, applying to insurance activities of a licensee and not to noninsurance activities.

(4) The applicability of the exemptions in ORS 746.665(1)(b) and (c) includes but is not limited to a licensee's transactions described in 746.665(1)(b) and (c) with a reinsurer or with an insurer with respect to stop loss or excess loss insurance.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 19-2006, f. & cert. ef. 9-26-06
ID 11-2006, f. & cert. ef. 6-26-06
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0506 Definitions and Examples

The following definitions and examples of definitions apply to the following terms as they are defined or used in ORS 746.600 and used in 746.620, 746.630 and 746.665 or as they are defined or used in OAR 836-080-0501 to 836-080-0551:

(1) "Clear and conspicuous" means that a notice under ORS 746.620 or a disclosure authorization form under 746.630 is reasonably understandable and designed to call attention to the nature and significance of the information in the notice or disclosure authorization form. The following are applicable examples:

(a) Examples of "reasonably understandable." A licensee makes its notice or disclosure authorization form reasonably understandable if it:

(A) Presents the information in the notice or disclosure authorization form in clear, concise sentences, paragraphs and sections;

(B) Uses short explanatory sentences or bullet lists whenever possible;

(D) Avoids multiple negatives;

(E) Avoids legal and highly technical business terminology whenever possible; and

(F) Avoids explanations that are imprecise and readily subject to different interpretations.

(b) Designed to call attention. A licensee designs its notice or disclosure authorization form to call attention to the nature and significance of the information in it if the licensee:

(A) Uses a plain-language heading to call attention to the notice or disclosure authorization form;

(B) Uses a typeface and type size that are easy to read;

(D) Uses boldface or italics for key words; and

(E) Uses distinctive type size, style and graphic devices, such as shading or sidebars, when a form combines the licensee’s notice or disclosure authorization form with other information.

(c) Notices on web sites. If a licensee provides a notice on a web page, the licensee designs its notice to call attention to the nature and significance of the information in it if the licensee uses text or visual cues to encourage scrolling down the page if necessary to view the entire notice and ensures that other elements on the web site, such as text, graphics, hyperlinks or sound, do not distract attention from the notice, and the licensee either:

(A) Places the notice on a screen that consumers frequently access, such as a page on which transactions are conducted; or

(B) Places a link on a screen that consumers frequently access, such as a page on which transactions are conducted, that connects directly to the notice and is labeled appropriately to convey the importance, nature and relevance of the notice.

(2) "Collect" means to obtain information that the licensee organizes or can retrieve by the name of an individual or by identifying number, symbol or other identifying particular assigned to the individual, irrespective of the source of the underlying information.

(3) The following examples apply to the term "consumer" as it is defined in the definition of "individual" in ORS 746.600 and as it is used in 746.620, 746.630 and 746.665:

(a) An individual who provides personal information to a licensee in connection with obtaining or seeking to obtain financial, investment or economic advisory services relating to an insurance product or service is a consumer regardless of whether the licensee establishes an ongoing advisory relationship.

(b) An applicant for insurance prior to the inception of insurance coverage is a licensee’s consumer.

(c) An individual who is a consumer of another financial institution is not a licensee’s consumer solely because the licensee is acting as agent for, or provides processing or other services to, that financial institution.

(d) An individual is a licensee’s consumer if the licensee discloses personal information about the individual to a nonaffiliated third party other than as permitted under ORS 746.665(1)(a) to (j) or (m) to (q), and:

(A) The individual is a beneficiary of a life insurance policy underwritten by the licensee;

(B) The individual is a claimant under an insurance policy issued by the licensee;

(C) The individual is an insured or an annuitant under an insurance policy or an annuity, respectively, issued by the licensee; or

(D) The individual is a mortgagor of a mortgage covered under a mortgage insurance policy.

(e) If the licensee provides the initial, annual and revised notices under ORS 746.620 to the plan sponsor, group or blanket insurance policyholder or group annuity contract holder, and if the licensee does not disclose personal information about such an individual to a nonaffiliated third party other than as permitted under 746.665(1)(a) to (j) and (m) to (q), an individual is not the consumer of the licensee solely because the individual is:

(A) A participant or a beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary; or

(B) Covered under a group or blanket insurance policy or group annuity contract issued by the licensee.

(f) Individuals described in paragraphs (A) and (B) of subsection (e) of this section are consumers of a licensee if the licensee does not meet all of the conditions of subsection (e) of this section. The individuals are not customers for purposes of ORS 746.600, 746.620, 746.630 or 746.665 solely because of their status described in paragraphs (A) and (B) of subsection (e) of this section.

(4) The following examples that indicate whether a continuing relationship exists apply to the term "customer" as it is defined in the definition of "individual" in ORS 746.600:

(a) A consumer has a continuing relationship with a licensee if:

(A) The consumer is a current policyholder of an insurance product issued by or through the licensee; or

(B) The consumer obtains financial, investment or economic advisory services relating to an insurance product or service from the licensee for a fee.

(b) A consumer does not have a continuing relationship with a licensee if:

(A) The consumer applies for insurance but does not purchase the insurance;

(B) The licensee sells the consumer airline travel insurance in an isolated transaction;

(C) The individual is no longer a current policyholder of an insurance product or no longer obtains insurance services with or through the licensee;

(D) The consumer is a beneficiary or claimant under a policy and has submitted a claim under a policy choosing a settlement option involving an ongoing relationship with the licensee.

(E) The consumer is a beneficiary or a claimant under a policy and has submitted a claim under that policy choosing a lump sum settlement option;

(F) The customer’s policy is lapsed, expired or otherwise inactive or dormant under the licensee’s business practices, and the licensee has not communicated with the customer about the relationship for a period of 12 consecutive months, other than for annual privacy notices, material required by law or rule, communication at the direction of a state or federal authority, or promotional materials.

(G) The individual is an insured or an annuitant under an insurance policy or annuity, respectively, but is not the policyholder or owner of the insurance policy or annuity; or

(H) For the purposes of this rule, the individual’s last known address according to the licensee’s records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful.

(5) "Financial institution" means any institution the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in section 4(k) of the Bank Holding Company Act of 1956 (12 USC 1843(k)). "Financial institution" does not include:

(a) Any person or entity with respect to any financial activity that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act (7 USC 1 et seq.).

(b) The Federal Agricultural Mortgage Corporation or any entity charged and operating under the Farm Credit Act of 1971 (12 USC 2001 et seq.); or

(c) Institutions chartered by Congress specifically to engage in securitizations, secondary market sales, including sales of servicing rights or similar transactions related to a transaction of a consumer, as long as the institutions do not sell or transfer nonpublic personal information to a nonaffiliated third party.

(6) "Financial product or service" means any product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 (12 USC 1843(k)). The term includes a financial institution’s evaluation or brokerage of information that the financial institution collects in connection with a request or an application from a consumer for a financial product or service.

(7) The term "licensee" as defined in ORS 746.600 also includes an unauthorized insurer that accepts business placed through a licensed surplus lines agent in this state, but only with regard to the surplus lines placements placed pursuant to 735.400 to 735.495.

(8) The term "nonaffiliated third party" as defined in ORS 746.600 also includes any company that is an affiliate solely because of the direct or indirect ownership or control of the company by the licensee or its affiliate in conducting merchant banking or investment banking activities of the type described in section 4(k)(4)(H) or insurance company investment activities of the type described in section 4(k)(4)(I) of the federal Bank Holding Company Act (12 USC 1843(k)(4)(H) and (I)).

(9) "Personal financial information" is the category of personal information that does not include medical record information but includes any of the following information:

(a) Information that a consumer provides to a licensee to obtain an insurance product or service from the licensee.

(b) Information about a consumer resulting from a transaction involving an insurance product or service between a licensee and a consumer.

(c) Information that the licensee otherwise obtains about a consumer in connection with providing an insurance product or service to the consumer.

(d) Any list, description or other grouping of consumers, and publicly available information pertaining to those consumers, that is derived using any personal financial information that is not publicly available.

(10) The definition of "personal information" in ORS 746.600 provides that "’Personal information’ does not include information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records, widely distributed media or disclosures to the public that are required by federal, state or local law." For purposes of this exemption:

(a) A licensee has a reasonable basis to believe the information is lawfully made available to the general public if the licensee has taken steps to determine:

(A) That the information is of the type that is available to the general public; and

(B) Whether an individual can direct that the information not be made available to the general public and, if so, that the licensee’s consumer has not done so.

(b) The following are examples:

(A) Government records. Information in government records that is not "personal information" includes information in government real estate records and security interest filings.

(B) Widely distributed media. Information from widely distributed media that is not "personal information" includes information from a telephone book, a television or radio program, a newspaper or a web site that is available to the general public on an unrestricted basis. A web site is not restricted merely because an Internet service provider or a site operator requires a fee or a password, so long as access is available to the general public.

(i) A licensee has a reasonable basis to believe that mortgage information is lawfully made available to the general public if the licensee has determined that the information is of the type included on the public record in the jurisdiction where the mortgage would be recorded.

(ii) A licensee has a reasonable basis to believe that an individual’s telephone number is lawfully made available to the general public if the licensee has located the telephone number in the telephone book or the consumer has informed the licensee that the telephone number is not unlisted.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0511 Application of Notice Requirements

(1) A licensee is not subject to the requirements stated in ORS 746.620 if the licensee is an employee or other representative of another licensee who is the principal in the relationship and the principal otherwise complies with the requirements of 746.620, 746.630 and 746.665, and:

(a) If the licensee is an insurance producer, the licensee acts in accordance with the requirements of ORS 746.620(8); and

(b) If the licensee is other than an insurance producer, the licensee does not disclose any personal information to any person other than to the principal or its affiliate as provided in ORS 746.665(1)(a) to (j) or (m) to (q), or under 746.665(1)(L) in connection with an audit.

(2) A surplus lines licensee or surplus lines insurer is deemed to be in compliance with ORS 746.620 if:

(a) The licensee or insurer does not disclose personal information of a consumer or a customer to nonaffiliated third parties for any purpose, except as permitted by ORS 746.665(1)(a) to (j) and (L) to (q); and

(b) The licensee or insurer delivers a notice to the consumer at the time a customer relationship is established on which the following is printed in 16-point type:

PRIVACY NOTICE

NEITHER THE U.S. BROKERS THAT HANDLED THIS INSURANCE

NOR THE INSURERS THAT HAVE UNDERWRITTEN THIS INSURANCE

WILL DISCLOSE NONPUBLIC PERSONAL INFORMATION

CONCERNING THE BUYER TO NONAFFILIATES OF THE

BROKERS OR INSURERS EXCEPT AS PERMITTED BY LAW.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0516 Initial Notice to Consumers

(1) A licensee shall provide an initial notice as provided in ORS 746.620(1) and also subsequently when further information is collected in connection with a renewal or reinstatement of an insurance policy.

(2) A licensee is not required to provide an initial notice to a consumer for purposes of ORS 746.620 if any of the following circumstances applies:

(a) If the licensee does not disclose any personal information about the consumer to any nonaffiliated third party other than as authorized by ORS 746.665(1)(a) to (j) or (m) to (q) and the licensee does not have a customer relationship with the consumer.

(b) If the licensee has a customer relationship with the consumer and the consumer consents to the licensee’s searching for insurance coverage to replace existing coverage or to perform another insurance service for the consumer, and if disclosure of personal information of the consumer meets the conditions specified in ORS 746.665(1)(c)(B).

(c) If a notice has been provided by an affiliated licensee, as long as the notice clearly identifies all licensees to whom the notice applies and is accurate with respect to the licensee and the other institutions.

(3) For the purpose of the notice requirement of ORS 746.620(1), pursuant to which a licensee shall provide notice of information practices to a consumer who becomes a customer of the licensee not later than the date that the licensee establishes a continuing relationship with the consumer, a continuing relationship between a licensee and consumer is established when the consumer, as shown in the following examples:

(a) Becomes a policyholder of a licensee that is an insurer, when the insurer delivers an insurance policy or contract to the consumer, or in the case of a licensee that is an agent, obtains insurance through that licensee; or

(b) Agrees to obtain financial, economic or investment advisory services relating to insurance products or services for a fee from the licensee.

(4) When an existing customer obtains a new insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, either of the following provisions may apply to a licensee regarding the initial notice requirements of ORS 746.620:

(a) The licensee may provide a revised policy notice as provided in OAR 836-080-0531; or

(b) If the initial, revised or annual notice that the licensee most recently provided to that customer was accurate with respect to the new insurance product or service, the licensee does not need to provide a new privacy notice under ORS 746.620.

(5) A licensee may provide the initial notice required by ORS 746.620 within a reasonable time after the licensee establishes a customer relationship if establishing the customer relationship is not at the customer’s election or if providing notice not later than when the licensee establishes a customer relationship would substantially delay the customer’s transaction and the customer agrees to receive the notice at a later time. The following are examples of exceptions for purposes of this section:

(a) Not at the customer’s election: Establishing a customer relationship is not at the customer’s election if a licensee acquires or is assigned a customer’s policy from another financial institution or residual market mechanism and the customer does not have a choice about the licensee’s acquisition or assignment.

(b) Substantial delay of a customer’s transaction: Providing notice not later than when a licensee establishes a customer relationship would substantially delay the customer’s transaction when the licensee and the individual agree over the telephone to enter into a customer relationship involving prompt delivery of the insurance product or service.

(c) No substantial delay of a customer’s transaction: Providing notice not later than when a licensee establishes a customer relationship would not substantially delay the customer’s transaction when the relationship is initiated in person at the licensee’s office or through other means by which the customer may view the notice, such as on a website.

(6) When a licensee is required to deliver an initial privacy notice by ORS 746.620, the licensee shall deliver it according to OAR 836-080-0536. If the licensee uses an abbreviated notice according to ORS 746.620, the licensee may deliver the privacy notice as provided in OAR 836-080-0519(8).

(7) A licensee that uses a standard privacy notice to comply with the requirements of the federal Gramm-Leach-Bliley Act of 1999 and its implementing regulations for its business as a financial institution or that uses such a standard privacy notice for its insurance business in two or more states may comply with the initial privacy notice requirement by using either of the following options:

(a) By using the standard privacy notice and another supplementary privacy notice that includes the elements required by ORS 746.620 and OAR 836-080-0519 that are not contained in the standard privacy notice. The supplementary privacy notice must prominently and clearly state that any rights an individual may have as described in that notice are not abridged or limited by the standard privacy notice that the individual may receive separately.

(b) By using a single Oregon-specific privacy notice that complies in its entirety with ORS 746.620.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0519 Information to be Included in Initial Privacy Notice

(1) This rule implements the requirement of the initial notice under ORS 746.620, describes the contents of the initial notice and provides examples of categories of information required in the notice.

(2) The following are examples of categories of personal information collected by a licensee. A licensee satisfies the requirement of categorizing the personal information it collects if the licensee categorizes it according to the source of the information, including, for example:

(a) Information from the consumer;

(b) Information about the consumer’s transactions with the licensee or its affiliates;

(d) Information from an insurance support organization.

(3) The following are examples of categories of personal information disclosed by a licensee:

(a) A licensee satisfies the requirement of categorizing personal information it discloses if the licensee categorizes the information according to source, as described in section (2) of this rule, as applicable, and provides a few examples to illustrate the types of information in each category. These may include:

(A) Information from the consumer, including application information such as assets and income and identifying information such as name, address and social security number;

(B) Transaction information, such as information about balances, payment history and parties to the transaction; and

(b) A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.

(c) If a licensee may disclose all of the personal information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of personal information that the licensee discloses.

(4) The following are examples for describing categories of affiliated and nonaffiliated third parties to which a licensee discloses information:

(a) A licensee satisfies the requirement of categorizing the affiliates and nonaffiliated third parties to which the licensee discloses personal information about consumers if the licensee identifies the types of business in which they engage.

(b) Types of businesses may be described by general terms only if the licensee uses a few illustrative examples of significant lines of business. For example, a licensee may use the term financial products or services if it includes appropriate examples of significant lines of businesses, such as life insurer, automobile insurer, consumer banking or securities brokerage.

(c) A licensee may also categorize the affiliates and nonaffiliated third parties to which it discloses personal information about consumers using more detailed categories.

(5) A privacy notice shall include an explanation of the consumer’s right under ORS 746.665(1)(k) to opt out of the disclosure of personal information to nonaffiliated third parties, including the method by which the consumer may exercise that right at that time. The following are examples of disclosures under the exception for joint marketers under 746.665(1)(k). If a licensee discloses personal information under the exception in 746.665(1)(k) to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the applicable disclosure requirement of this rule if the licensee:

(a) Lists the categories of personal information it discloses, using the same categories and examples the licensee used to meet the requirements of section (1) of this rule.

(b) States whether the third party is:

(A) A service provider that performs marketing services on the licensee’s behalf or on behalf of the licensee and another financial institution; or

(B) A financial institution with whom the licensee has a joint marketing agreement.

(6) If a licensee does not disclose personal information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under ORS 746.665(1)(a) to (k) and (m) to (q), and under 746.665(1)(L) in connection with an audit, the licensee may simply state that fact, in addition to the information it is required to provide under 746.620(3)(a), (h), (i) and (j) and (4).

(7) A licensee describes its policies and practices relating to protection of the confidentiality and security of personal information if it does both of the following:

(a) Describes in general terms who is authorized to have access to the information; and

(b) States whether the licensee has security practices and procedures in place to ensure the confidentiality of the information in accordance with the licensee’s policy. The licensee is not required to describe technical information about the safeguards it uses.

(8) An abbreviated notice authorized by ORS 746.620(5) must include in full the elements of the notice required by the federal Gramm-Leach-Bliley Act of 1999 for the purpose of compliance with that law and shall also include the information referred to in section (5) of this rule and in 746.620(5). The licensee shall deliver its abbreviated notice according to OAR 836-080-0536. The licensee is not required to deliver its privacy notice with its abbreviated notice. The licensee instead may provide the consumer a reasonable means to obtain its privacy notice as described in 836-080-0536(9). If a consumer who receives the licensee’s abbreviated notice requests the licensee’s privacy notice, the licensee shall deliver its privacy notice according to 836-080-0536.

(9) A licensee’s initial privacy notice may include any of the following:

(a) Categories of personal information that the licensee reserves the right to disclose in the future but does not currently disclose; and

(b) Categories of affiliates or nonaffiliated third parties to whom the licensee reserves the right in the future to disclose, but to whom the licensee does not currently disclose, personal information.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0523 Annual Notice

(1) The personal information to which a licensee must refer in the annual notice need include only personal financial information. A licensee provides the notice annually if it defines the 12-consecutive-month period as a calendar year and provides the annual notice to the customer once in each calendar year following the calendar year in which the licensee provided the initial notice. For example, if a customer opens an account on any day of year 1, the licensee shall provide an annual notice to that customer by December 31 of year 2.

(2) Termination of customer relationship: A licensee is not required to provide an annual notice to a former customer. A former customer is an individual with whom a licensee no longer has a continuing relationship. The following are examples in which a continuing relationship no longer exists:

(a) A licensee no longer has a continuing relationship with an individual if the individual no longer is a current policyholder of an insurance product or no longer obtains services with or through the licensee.

(b) A licensee no longer has a continuing relationship with an individual if the individual’s policy is lapsed, expired or otherwise inactive or dormant under the licensee’s business practices, and the licensee has not communicated with the customer about the relationship for a period of 12 consecutive months, other than to provide annual privacy notices, material required by law or regulation or promotional materials.

(c) For the purpose of this rule, a licensee no longer has a continuing relationship with an individual if the individual’s last known address according to the licensee’s records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful.

(d) A licensee no longer has a continuing relationship with a customer in the case of providing real estate settlement purposes, at the time the customer completes execution of all documents related to the real estate closing, payment for those services has been received or the licensee has completed all of its responsibilities with respect to the settlement, including filing documents on the public record, whichever is later.

(3) When a licensee is required by this rule to deliver an annual privacy notice, the licensee shall deliver it according to OAR 836-080-0536.

(4) An insurer issuing a title insurance policy is not required to give the annual notice required by ORS 746.620(2) to the policyholder.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0526 Information to be Included in Annual Notice

(1) This rule implements the requirement of the annual notice under ORS 746.620, describes the contents of the annual notice and provides examples of categories of information required in the annual notice.

(2) The following are examples of categories of personal financial information collected by a licensee. A licensee satisfies the requirement of categorizing the personal financial information it collects if the licensee categorizes it according to the source of the information, as applicable:

(a) Information from the consumer;

(b) Information about the consumer’s transactions with the licensee or its affiliates;

(d) Information from an insurance support organization.

(3) The following are examples of categories of personal financial information disclosed by a licensee:

(a) A licensee satisfies the requirement of categorizing personal financial information it discloses if the licensee categorizes the information according to source, as described in section (2) of this rule, as applicable, and provides a few examples to illustrate the types of information in each category. These may include:

(A) Information from the consumer, including application information such as assets and income and identifying information such as name, address and social security number;

(B) Transaction information, such as information about balances, payment history and parties to the transaction; and

(b) A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.

(c) If a licensee may disclose all of the personal financial information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of personal financial information that the licensee discloses.

(4) The following are examples for describing categories of affiliated and nonaffiliated third parties to which a licensee discloses information:

(a) A licensee satisfies the requirement of categorizing the affiliates and nonaffiliated third parties to which the licensee discloses personal financial information about consumers if the licensee identifies the types of business in which they engage.

(c) A licensee may also categorize the affiliates and nonaffiliated third parties to which it discloses personal financial information about consumers using more detailed categories.

(5) An annual notice shall include an explanation of the consumer’s right under ORS 746.665(1)(k) to opt out of the disclosure of personal financial information to nonaffiliated third parties, including the method by which the consumer may exercise the right at that time. An annual notice that contains such an explanation satisfies the requirement of 746.620(3)(f). If a licensee discloses personal financial information under the exception in 746.665(1)(k) to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the applicable disclosure requirement of this rule if the licensee:

(a) Lists the categories of personal financial information it discloses, using the same categories and examples the licensee used to meet the requirements of section (1) of this rule.

(b) States whether the third party is:

(A) A service provider that performs marketing services on the licensee’s behalf or on behalf of the licensee and another financial institution; or

(B) A financial institution with whom the licensee has a joint marketing agreement.

(6) If a licensee does not disclose personal financial information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under ORS 746.665(1)(a) to (j) and (m) to (q), and under 746.665(1)(L) in connection with an audit, the licensee may state that fact, in addition to the information it is required to provide under 746.620(3)(a), (h) and (i), and (4).

(7) A licensee describes its policies and practices relating to protection of the confidentiality and security of personal financial information if it does both of the following:

(a) Describes in general terms who is authorized to have access to the information; and

(8) A licensee’s notice may include any of the following:

(a) Categories of personal financial information that the licensee reserves the right to disclose in the future but does not currently disclose; and

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0531 Revised Privacy Notices

(1) Except as otherwise authorized in OAR 836-080-0501 to 836-080-0551, a licensee shall not, directly or through an affiliate, disclose any personal financial information about a consumer to a nonaffiliated third party under ORS 746.665(1)(k) other than as described in the initial notice that the licensee provided to the consumer under 746.620 and OAR 836-080-0501 to 836-080-0551, unless:

(a) The licensee has provided to the consumer a clear and conspicuous revised notice that accurately describes its policies and practices;

(b) The licensee has given the consumer a reasonable opportunity, before the licensee discloses personal financial information to the nonaffiliated third party, to opt out of the disclosure; and

(2) Except as otherwise allowed by ORS 746.665(1)(a) to (j) and (m) to (q), a licensee shall provide a revised notice to the consumer under section (1) of this rule before the licensee, for example:

(a) Discloses a new category of personal financial information to a nonaffiliated third party;

(b) Discloses personal financial information to a new category of nonaffiliated third party; or

(c) Discloses personal financial information about a former customer to a nonaffiliated third party, if that former customer has not had the opportunity to indicate that the former customer does not want disclosure.

(3) A revised privacy notice under this rule shall be delivered according to OAR 836-080-0536.

(4) The prohibition in section (1) of this rule and the requirements of section (2) of this rule do not apply with respect to a revision of an initial notice, the sole purpose of which is to incorporate a notice of a disclosure of personal information for which authorization is not required by ORS 746.665.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0536 Delivery

(1) A licensee shall provide any notices required by ORS 746.620 and OAR 836-080-0501 to 836-080-0551 so that each consumer can be reasonably expected to receive actual notice in writing or, if the consumer agrees, electronically.

(2) The following are examples of reasonable expectation of actual notice. A licensee may reasonably expect that a consumer will receive actual notice if the licensee:

(a) Hand-delivers a printed copy of the notice to the consumer;

(b) Mails a printed copy of the notice to the last known address of the consumer separately, or in a policy, billing or other written communication;

(c) For a consumer who conducts transactions electronically, posts the notice on the electronic site and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining a particular insurance product or service;

(d) For an isolated transaction with a consumer, such as the licensee providing an insurance quote or selling the consumer travel insurance, posts the notice and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining the particular insurance product or service.

(3) The following are examples of unreasonable expectations of actual notice. A licensee may not reasonably expect that a consumer will receive actual notice of its privacy policies and practices if the licensee:

(a) Posts only a sign in its office or generally publishes advertisements of its privacy policies and practices; or

(b) Sends the notice by electronic mail to a consumer who does not obtain an insurance product or service from the licensee electronically.

(4) A licensee may reasonably expect that a customer will receive actual notice of the licensee’s annual privacy notice if:

(a) The customer uses the licensee’s web site to access insurance products and services electronically and agrees to receive notices at the web site and the licensee posts its current privacy notice continuously in a clear and conspicuous manner on the web site; or

(b) The customer has requested that the licensee refrain from sending any information regarding the customer relationship, and the licensee’s current privacy notice remains available to the customer upon request.

(5) A licensee may not provide any notice required by ORS 746.620 and OAR 836-080-0501 to 836-080-0551 solely by orally explaining the notice, either in person or over the telephone.

(6) For customers only, a licensee shall provide the initial notice, annual notice and revised notice required by ORS 746.620 and OAR 836-080-0501 to 836-080-0551 so that the customer can retain them or obtain them later in writing or, if the customer agrees, electronically. The following are examples of retention and accessibility of notices. A licensee provides a privacy notice to a customer so that the customer can retain it or obtain it later if the licensee:

(a) Hand-delivers a printed copy of the notice to the customer;

(b) Mails a printed copy of the notice to the last known address of the customer; or

(c) Makes its current privacy notice available on a web site or a link to another web site for the customer who obtains an insurance product or services electronically and agrees to receive the notice at the web site.

(7) A licensee may provide a joint notice from the licensee and one or more of its affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to the licensee and the other institutions. A licensee may also provide a notice on behalf of another financial institution.

(8) If two or more consumers jointly obtain an insurance product or service from a licensee, the licensee may satisfy the initial, annual and revised notice requirements by providing one notice to those consumers jointly.

(9) A licensee provides a reasonable means by which a consumer may obtain a copy of its privacy notice for the purpose of OAR 836-080-0519(8) if the licensee:

(A) Provides a toll-free telephone number that the consumer may call to request the notice; or

(B) For a consumer who conducts business in person at the licensee’s office, maintains copies of the notice on hand and provides a copy to the consumer immediately upon request.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0541 Opt in Notice; Form of Opt Out Notice to Consumers and Opt Out Methods for Purpose of ORS 746.665(1)(k)

(1) Form of opt in notice. The form of the disclosure authorization (the opt in form) is governed by ORS 746.630, and is used with respect to disclosures of personal information that do not meet one or more of the conditions specified in 746.665(1).

(2) Form of opt out notice. Sections (2) to (10) of this rule govern the form of and requirements applicable to an opt out notice when the notice is required by ORS 746.665(1)(k). If a licensee is required to provide an opt out notice by ORS 746.665(1)(k), the licensee shall accurately explain the right to opt out under that provision. The notice shall state:

(a) That the licensee discloses or reserves the right to disclose personal financial information about its consumer to a nonaffiliated third party;

(b) That the consumer has the right to opt out of that disclosure; and

(3) The following are examples for purposes of section (2) of this rule:

(a) Adequate opt out notice. A licensee provides adequate notice that the consumer may opt out of the disclosure of personal financial information to a nonaffiliated third party if the licensee:

(A) Identifies all of the categories of personal financial information that it discloses or reserves the right to disclose, and all of the categories of nonaffiliated third parties to which the licensee discloses the information as permitted by ORS 746.665(1)(k), and states that the consumer may opt out of the disclosure of that information; and

(B) Identifies the insurance products or services that the consumer obtains from the licensee, either singly or jointly, to which the opt out direction would apply.

(b) Reasonable opt out means. A licensee provides a reasonable means to exercise an opt out right if it:

(A) Designates check-off boxes in a prominent position on the relevant forms with the opt out notice;

(B) Includes a reply form together with the opt out notice;

(C) Provides an electronic means to opt out, such as a form that can be sent by electronic mail or a process at the licensee’s web site, if the consumer agrees to the electronic delivery of information; or

(D) Provides a toll-free telephone number that the consumers may call to opt out.

(A) The only means of opting out is for the consumer to write the consumer’s own letter to exercise that opt out right; or

(B) The only means of opting out as described in any notice subsequent to the initial notice is to use a check-off box that the licensee provided with the initial notice but did not include with the subsequent notice.

(d) Specific opt out means. A licensee may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer.

(4) Same form as initial notice permitted. A licensee may provide the opt out notice for purposes of ORS 746.665(1)(k) together with or on the same written or electronic form as the initial notice the licensee provides in accordance with OAR 836-080-0516.

(5) Initial notice required when opt out notice delivered subsequent to initial notice. If a licensee provides the opt out notice later than required for the initial notice in accordance with OAR 836-080-0516, the licensee shall also include a copy of the initial notice with the opt out notice in writing or, if the consumer agrees, electronically.

(6) The following governs joint relationships:

(a) If two or more consumers jointly obtain an insurance product or service from a licensee, the licensee may provide a single opt out notice. The licensee’s opt out notice shall explain how the licensee will treat an opt out direction by a joint consumer as explained in subsection (e) of this section.

(b) Any of the joint consumers may exercise the right to opt out. The licensee may either:

(A) Treat an opt out direction by a joint consumer as applying to all of the associated joint consumers; or

(B) Permit each joint consumer to opt out separately.

(c) If a licensee permits each joint consumer to opt out separately, the licensee shall permit one of the joint consumers to opt out on behalf of all of the joint consumers.

(d) A licensee may not require all joint consumers to opt out before the licensee implements any opt out direction.

(e) The following is an example for purposes of this section. If John and Mary are both named policyholders on a homeowner’s insurance policy issued by a licensee and the licensee sends policy statements to John’s address, the licensee may do any of the following, but the licensee shall explain in the opt out notice of notice of the licensee which opt out policy the licensee will follow:

(A) Send a single opt out notice to John’s address, but the licensee shall except an opt out direction from either John or Mary.

(B) Treat an opt out direction by either John or Mary as applying to the entire policy. If the licensee does so and John opts out, the licensee may not require Mary to opt out as well before implementing John’s opt out direction.

(i) The licensee shall permit John and Mary to opt out for each other;

(ii) If both opt out, the licensee shall permit both of them to notify the licensee in a single response, such as on a form or through a telephone call; and

(iii) If John opts out and Mary does not, the licensee may disclose personal financial information only about Mary but not about John, and not about John and Mary jointly.

(7) Time to comply with opt out. A licensee shall comply with a consumer’s opt out direction as soon as reasonably practicable after the licensee receives the direction.

(8) Continuing right to opt out. A consumer may exercise the right to opt out at any time.

(9) The duration of a consumer’s opt out direction is governed as follows:

(a) A consumer’s direction to opt out under this rule is effective until the consumer revokes it in writing or, if the consumer agrees, electronically.

(b) When a customer relationship terminates, the customer’s opt out direction continues to apply to the personal financial information that the licensee collected during or related to that relationship. If the individual subsequently establishes a new customer relationship with the licensee, the opt out direction that applied to the former relationship does not apply to the new relationship.

(10) Delivery. When a licensee is required to deliver an opt out notice by this rule, the licensee shall deliver it according to OAR 836-080-0536.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0546 Limits on Sharing Account Number Information for Marketing Purposes

(1) General prohibition on disclosure of account numbers. A licensee shall not, directly or through an affiliate, disclose, other than to a consumer reporting agency, a policy number or similar form of access number or access code for a consumer’s policy or transaction account to any nonaffiliated third party for use in telemarketing, direct mail marketing or other marketing through electronic mail to the consumer.

(2) Exceptions. Section (1) of this rule does not apply if a licensee discloses a policy number or similar form of access number or access code:

(a) To the licensee’s service provider solely in order to perform marketing for the licensee’s own products or services, as long as the service provider is not authorized to dir3eectly initiate charges to the account;

(b) To a licensee who is a producer solely in order to perform marketing for the licensee’s own products or services; or

(c) To a participant in an affinity or similar program when the participants in the program are identified to the customer when the customer enters into the program.

(3) The following are examples for purposes of this rule:(a) Policy number. A policy number, or similar form of access number or access code, does not include a number or code in an encrypted form, as long as the licensee does not provide the recipient with a means to decode the number or code.

(b) Policy or transaction account. For the purpose of this rule, a policy or transaction account is an account other than a deposit account or a credit card account. A policy or transaction account does not include an account to which third parties cannot initiate charges.

(4) Violation of this section is an unfair trade practice for purposes of ORS 746.240.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0551 Authorization Request Delivery

A request for authorization and an authorization form may be delivered to a consumer or a customer as part of a notice under ORS 746.620 if the request and the authorization form are clear and conspicuous.

History

Statutory/Other Authority: ORS 731.244, 746.600 & 746.620
Statutes/Other Implemented: ORS 746.600, 746.620, 746.630 & 746.665
ID 8-2002, f. & cert. ef. 2-15-02

Or. Admin. R. 836-080-0600 Authority; Rule of Construction; Applicability

(1) OAR 836-080-0600 to 836-080-0700 are adopted under the authority of ORS 731.244 and 746.608, for the purpose of implementing 746.600 and 746.607 with respect to licensees transacting health insurance.

(2) The examples in OAR 836-080-0600 to 836-080-0700 are not exclusive. Compliance with an example in 836-080-0600 to 836-080-0700 constitutes compliance with the rule to which the example applies.

(3) OAR 836-080-0600 to 836-080-0700 apply to health insurance activities of a licensee and not to noninsurance activities.

(4) The applicability of the exemptions in OAR 836-080-0670(1)(a) and (b) includes but is not limited to a licensee's transactions described in 836-080-0670(1)(a) and (b) with a reinsurer or with an insurer with respect to stop loss or excess loss insurance.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0610 Definitions and Examples

The following definitions and examples of definitions apply to the following terms as they are defined or used in OAR 836-080-0600 to 836-080-0700:

(1) "Clear and conspicuous" means that a notice under OAR 836-080-0615 or 836-080-0620 or a disclosure authorization form under 836-080-0665 is reasonably understandable and designed to call attention to the nature and significance of the information in the notice or disclosure authorization form. The following are applicable examples:

(a) Examples of "reasonably understandable." A licensee makes its notice or disclosure authorization form reasonably understandable if it:

(A) Presents the information in the notice or disclosure authorization form in clear, concise sentences, paragraphs and sections;

(B) Uses short explanatory sentences or bullet lists whenever possible;

(D) Avoids multiple negatives;

(E) Avoids legal and highly technical business terminology whenever possible; and

(F) Avoids explanations that are imprecise and readily subject to different interpretations.

(b) Designed to call attention. A licensee designs its notice or disclosure authorization form to call attention to the nature and significance of the information in it if the licensee:

(A) Uses a plain-language heading to call attention to the notice or disclosure authorization form;

(B) Uses a typeface and type size that are easy to read;

(D) Uses boldface or italics for key words; and

(E) Uses distinctive type size, style and graphic devices, such as shading or sidebars, when a form combines the licensee's notice or disclosure authorization form with other information.

(A) Places the notice on a screen that consumers frequently access, such as a page on which transactions are conducted; or

(3) The following examples apply to the term "consumer" as it is defined in ORS 746.600 and used in OAR 836-080-0600 to 836-080-0700:

(a) An individual who provides personal information to a licensee in connection with obtaining or seeking to obtain financial, investment or economic advisory services relating to a health insurance product or service is a consumer regardless of whether the licensee establishes an ongoing advisory relationship.

(b) An applicant for health insurance prior to the inception of health insurance coverage is a licensee's consumer.

(c) An individual who is a consumer of another financial institution is not a licensee's consumer solely because the licensee is acting as agent for, or provides processing or other services to, that financial institution.

(d) An individual is a licensee's consumer if the licensee discloses personal information about the individual to a nonaffiliated third party other than as permitted under OAR 836-080-0670 or 836-080-0675 and the individual is a claimant under a health insurance policy issued by the licensee.

(e) If the licensee provides the initial, annual and revised notices under OAR 836-080-0615 or 836-080-0620 to the plan sponsor or group or blanket insurance policyholder, and if the licensee does not disclose personal information about such an individual to a nonaffiliated third party other than as permitted under OAR 836-080-0670 or 836-080-0675, an individual is not the consumer of the licensee solely because the individual is:

(A) A participant or a beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary; or

(B) Covered under a group or blanket health insurance policy issued by the licensee.

(f) Individuals described in paragraphs (A) and (B) of subsection (e) of this section are consumers of a licensee if the licensee does not meet all of the conditions of subsection (e) of this section. The individuals are not customers for purposes of ORS 746.600 or this rule, or OAR 836-080-0615, 836-080-0620, 836-080-0665, 836-080-0670 or 836-080-0675, solely because of their status described in paragraphs (A) and (B) of subsection (e) of this section.

(4) The following examples that indicate whether a continuing relationship exists apply to the term "customer" as it is defined in ORS 746.600 and used in OAR 836-080-0600 to 836-080-0700:

(a) A consumer has a continuing relationship with a licensee if:

(A) The consumer is a current policyholder of a health insurance product issued by or through the licensee; or

(B) The consumer obtains financial, investment or economic advisory services relating to a health insurance product or service from the licensee for a fee.

(b) A consumer does not have a continuing relationship with a licensee if:

(A) The consumer applies for health insurance but does not purchase the health insurance;

(B) The individual is no longer a current policyholder of a health insurance product or no longer obtains health insurance services with or through the licensee;

(C) The consumer is a beneficiary or claimant under a health insurance policy and has submitted a claim under a health insurance policy choosing a settlement option involving an ongoing relationship with the licensee.

(D) The consumer is a beneficiary or a claimant under a health insurance policy and has submitted a claim under that policy choosing a lump sum settlement option;

(E) The customer's health insurance policy is lapsed, expired or otherwise inactive or dormant under the licensee's business practices, and the licensee has not communicated with the customer about the relationship for a period of 12 consecutive months, other than for annual privacy notices, material required by law or rule, communication at the direction of a state or federal authority, or promotional materials.

(F) The individual is an insured under a health insurance policy, but is not the policyholder or owner of the insurance policy; or

(G) For the purposes of this rule, the individual's last known address according to the licensee's records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful.

(a) Any person or entity with respect to any financial activity that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act (7 USC 1 et seq.).

(b) The Federal Agricultural Mortgage Corporation or any entity charged and operating under the Farm Credit Act of 1971 (12 USC 2001 et seq.); or

(6) "Financial product or service" means any product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 (12 USC 1843(k)). The term includes a financial institution's evaluation or brokerage of information that the financial institution collects in connection with a request or an application from a consumer for a financial product or service.

(7) The term "nonaffiliated third party" as defined in ORS 746.600 also includes any company that is an affiliate solely because of the direct or indirect ownership or control of the company by the licensee or its affiliate in conducting merchant banking or investment banking activities of the type described in section 4(k)(4)(H) or insurance company investment activities of the type described in section 4(k)(4)(I) of the federal Bank Holding Company Act (12 USC 1843(k)(4)(H) and (I)).

(8) "Personal financial information" is the category of personal information that includes any of the following information:

(a) Information that a consumer provides to a licensee to obtain a health insurance product or service from the licensee.

(b) Information about a consumer resulting from a transaction involving a health insurance product or service between a licensee and a consumer.

(c) Information that the licensee otherwise obtains about a consumer in connection with providing a health insurance product or service to the consumer.

(9) For purposes of the part of the definition of "personal information" in ORS 746.600 that provides that "'Personal information' does not include information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records, widely distributed media or disclosures to the public that are required by federal, state or local law":

(a) A licensee has a reasonable basis to believe the information is lawfully made available to the general public if the licensee has taken steps to determine:

(A) That the information is of the type that is available to the general public; and

(B) Whether an individual can direct that the information not be made available to the general public and, if so, that the licensee's consumer has not done so.

(b) The following are examples:

(A) Government records. Information in government records that is not "personal information" includes information in government real estate records and security interest filings.

(C) Reasonable basis example: A licensee has a reasonable basis to believe that an individual's telephone number is lawfully made available to the general public if the licensee has located the telephone number in the telephone book or the consumer has informed the licensee that the telephone number is not unlisted.

(10) Statutory definitions of terms used in OAR 836-080-0600 to 836-080-0700, including but not limited to “insurance producer,” “insurance support organization” and “privileged information,” are found in ORS 746.600.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0615 Personal Information Notice

(1) This rule governs the notice to be given by a licensee to an individual that informs the individual about a licensee’s treatment of personal information concerning the individual when the licensee and the individual are engaging in a transaction of health insurance. A licensee shall provide a clear and conspicuous notice of information practices to individuals in connection with a transaction of health insurance under the circumstances and at the times as follows:

(a) In the case of an application for health insurance, a notice shall be provided no later than:

(A) At the time of delivery of the health insurance policy or certificate, when personal information is collected only from the applicant or from public records; or

(B) At the time the collection of personal information is initiated, when personal information is collected from a source other than the applicant or public records.

(b) In the case of a health insurance policy renewal, a notice shall be provided no later than the policy renewal date, except that a notice shall not be required in connection with a policy renewal if:

(A) Personal information is collected only from the policyholder or from public records; or

(B) A notice meeting the requirements of this rule has been given within the previous 24 months.

(c) In the case of a policy reinstatement or change in health insurance benefits by an insurer, a notice shall be provided no later than the time a request for the policy reinstatement or change in insurance benefits is received by the insurer, except that a notice shall not be required if personal information is collected only from the policyholder or from public records.

(2) The notice required by section (1) of this rule shall be in writing or, if the individual agrees, in an electronic format and shall include all of the following items:

(a) Whether personal information may be collected from persons other than the individual or individuals proposed for coverage.

(b) The types of personal information that may be collected and the types of sources and investigative techniques that may be used to collect the information.

(c) The types of disclosures identified in OAR 836-080-0670 or 836-080-0675 and the circumstances under which the disclosures may be made without prior authorization. The only circumstances that need be described, however, are those that occur with such frequency as to indicate a general business practice.

(d) A description of the rights established under OAR 836-080-0695 and 836-080-0700 and the manner in which the rights may be exercised.

(e) That information obtained from a report prepared by an insurance-support organization may be retained by the insurance-support organization and disclosed to other persons.

(3) In lieu of the notice required in section (2) of this rule, an insurer or insurance producer may provide an abbreviated notice in writing or, if the individual agrees, in electronic format, informing the individual that:

(a) Personal information may be collected from persons other than the individual or individuals proposed for coverage;

(b) Personal information collected under subsection (a) of this section as well as other personal or privileged information subsequently collected by the licensee may be disclosed in certain circumstances to third parties without authorization;

(d) The notice required in section (2) of this rule will be furnished to the individual upon request.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0620 Notice of Personal Financial Information Practices

(1) This rule governs the notice to be given by a licensee to an individual, in fulfillment of requirements of the federal Gramm-Leach-Bliley Act (P.L. 106-102), that informs the individual about the licensee’s treatment of personal financial information concerning the individual in the course of the ongoing financial relationship between the licensee and the individual, in connection with a health insurance policy. A licensee shall provide a clear and conspicuous notice of its personal financial information practices to individuals under the circumstances and at the times as follows:

(a) Except as provided in this subsection, to a consumer who becomes a customer of the licensee, not later than the date that the licensee establishes a continuing relationship under which the licensee provides one or more health insurance products or services to the consumer that are to be used primarily for personal, family or household purposes. A licensee may provide the notice within a reasonable time after the date the licensee establishes a customer relationship if:

(A) Establishing the customer relationship is not at the customer’s election; or

(B) Providing notice not later than the date that the licensee establishes a customer relationship would substantially delay the customer’s transaction and the customer agrees to receive the notice at a later time.

(b) To a consumer before any personal financial information about that individual is disclosed to a nonaffiliate of the licensee, if the disclosure is made other than as permitted under OAR 836-080-0665, 836-080-0670 or 836-080-0675.

(2) A licensee shall provide a clear and conspicuous notice to a customer that accurately reflects the privacy policies and practices of the licensee not less than once in any period of 12 consecutive months during which the relationship described in section (1)(a) of this rule exists. A licensee may define the period of 12 consecutive months, but the licensee must apply the period to the customer on a consistent basis.

(3) The notice required by sections (1) and (2) of this rule shall be in writing, except that the notice may be provided in electronic form if the recipient agrees. In addition to any other information the licensee wishes to provide, the notice shall include the following items of information that apply to the licensee and to the individuals to whom the licensee sends the notice:

(a) The policy and practices of the licensee with respect to disclosing personal financial information to nonaffiliated parties other than agents of the licensee, including the categories of persons to whom the information is or may be disclosed, other than the persons to whom the information may be provided pursuant to OAR 836-080-0675, and the policies and practices with respect to disclosing personal financial information of persons who have ceased to be customers of the licensees.

(b) The categories of personal financial information that the licensee collects.

(4) A licensee that does not disclose personal financial information about customers or former customers to affiliates or nonaffiliates except as authorized in OAR 836-080-0670 or 836-080-0675, and does not wish to reserve the right to do so may satisfy the requirements of this rule by providing a customer a notice that so states and that also includes:

(a) The information described in section (3)(b) and (c) of this rule; and

(b) A statement that the licensee makes disclosures to other affiliated or nonaffiliated third parties, as applicable, as permitted by law.

(5) Before a licensee discloses personal financial information to a nonaffiliated third party other than as described in the notice required in section (1) of this rule, the licensee shall send a revised notice that accurately describes its information collection and disclosure practices. The revised notice must comply with the requirements of section (3) of this rule.

(6) For purposes of this rule and OAR 836-080-0670 and 836-080-0675, an individual is not the consumer of a licensee solely because the individual is covered under a group life or health insurance policy issued by the licensee or is a participant or beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary, if:

(a) The licensee provides to the policyholder the initial, annual and revised notices under this rule; and

(b) The licensee does not disclose to a nonaffiliated third party personal information about the individual other than as permitted by OAR 836-080-0675.

(7) When an individual becomes a consumer of a licensee under section (6) of this rule, then this rule and OAR 836-080-0670 and 836-080-0675 apply to the licensee with respect to the individual.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0625 Alternative Procedures

A licensee may satisfy the notice requirements of OAR 836-080-0615 and 836-080-0620 by either of the following alternative means:

(1) By providing separate notices or a single notice combining the requirements of both rules.

(2) By providing a single notice if two or more individuals jointly obtain or apply for an insurance product.

(3) The obligations imposed by OAR 836-080-0615 and by 836-080-0620 upon a licensee may be satisfied, either together or separately, by another licensee or another financial institution or agent authorized to act on its behalf. A licensee may provide a joint notice from the licensee and one or more of its affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to the licensee and the other institutions.

(4) Except as otherwise prohibited or limited by the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191):

(a) A licensee may include any notice required pursuant to the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) with a notice provided under OAR 836-080-0615 or 836-080-0620 or under an alternative means allowed in section (1) of this rule.

(b) Notice obligations imposed by the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) upon a licensee may be satisfied together with the obligations imposed by OAR 836-080-0615 and by 836-080-0620 upon the licensee as provided in section (2) of this rule.

(5) An insurance producer is not subject to the requirements of OAR 836-080-0615 or 836-080-0620 when the insurer on whose behalf the insurance producer acts otherwise complies with the same requirements and the insurance producer does not disclose any personal information to any person other than the insurer or its affiliate, or as otherwise authorized by law.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0630 Application of Notice Requirements

A licensee is not subject to the requirements stated in OAR 836-080-0615 or 836-080-0620 if the licensee is an employee or other representative of another licensee who is the principal in the relationship and the principal otherwise complies with the requirements of OAR 836-080-0615, 836-080-0620, 836-080-0625, 836-080-0665, 836-080-0670 and 836-080-0675 and:

(1) If the licensee is an insurance producer, the licensee acts in accordance with the requirements of OAR 836-080-0625(4); and

(2) If the licensee is other than an insurance producer, the licensee does not disclose any personal information to any person other than to the principal or its affiliate as provided in 836-080-0670 or 836-080-0675.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0635 Initial Notice to Consumers

(1) A licensee shall provide an initial notice as provided in OAR 836-080-0620(1) and also subsequently when further personal financial information is collected in connection with a renewal or reinstatement of a health insurance policy.

(2) A licensee is not required to provide an initial notice to a consumer for purposes of OAR 836-080-0620 if any of the following circumstances applies:

(a) If the licensee does not disclose any nonpublic personal financial information about the consumer to any nonaffiliated third party other than as authorized by OAR 836-080-0670 and 836-080-0675 and the licensee does not have a customer relationship with the consumer.

(b) If the licensee has a customer relationship with the consumer and the consumer consents to the licensee's searching for health insurance coverage to replace existing coverage or to perform another health insurance service for the consumer, and if disclosure of personal financial information of the consumer meets the conditions specified in OAR 836-080-0670.

(3) For the purpose of the notice requirement of OAR 836-080-0620, pursuant to which a licensee shall provide notice of personal financial information practices to a consumer who becomes a customer of the licensee not later than the date that the licensee establishes a continuing relationship with the consumer, a continuing relationship between a licensee and consumer is established when the consumer, as shown in the following examples:

(a) Becomes a health insurance policyholder of a licensee that is an insurer, when the insurer delivers a health insurance policy or contract to the consumer, or in the case of a licensee that is an insurance producer, obtains health insurance through that licensee; or

(b) Agrees to obtain financial, economic or investment advisory services relating to health insurance products or services for a fee from the licensee.

(4) When an existing customer obtains a new health insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, either of the following provisions may apply to a licensee regarding the initial notice requirements of OAR 836-080-0620 and:

(a) The licensee may provide a revised policy notice as provided in OAR 836-080-0655; or

(b) If the initial, revised or annual notice that the licensee most recently provided to that customer was accurate with respect to the new health insurance product or service, the licensee does not need to provide a new privacy notice under OAR 836-080-0620.

(5) A licensee may provide the initial notice required by OAR 836-080-0620 within a reasonable time after the licensee establishes a customer relationship if establishing the customer relationship is not at the customer's election or if providing notice not later than when the licensee establishes a customer relationship would substantially delay the customer's transaction and the customer agrees to receive the notice at a later time. The following are examples of exceptions for purposes of this section:

(a) Not at the customer's election: Establishing a customer relationship is not at the customer's election if a licensee acquires or is assigned a customer's health insurance policy from another financial institution or residual market mechanism and the customer does not have a choice about the licensee's acquisition or assignment.

(b) Substantial delay of a customer's transaction: Providing notice not later than when a licensee establishes a customer relationship would substantially delay the customer's transaction when the licensee and the individual agree over the telephone to enter into a customer relationship involving prompt delivery of the health insurance product or service.

(c) No substantial delay of a customer's transaction: Providing notice not later than when a licensee establishes a customer relationship would not substantially delay the customer's transaction when the relationship is initiated in person at the licensee's office or through other means by which the customer may view the notice, such as on a website.

(6) When a licensee is required to deliver an initial privacy notice by OAR 836-080-0620, the licensee shall deliver it according to 836-080-0660. If the licensee uses an abbreviated notice according to 836-080-0620, the licensee may deliver the privacy notice as provided in 836-080-0640(8).

(7) A licensee that uses a standard privacy notice to comply with the requirements of the federal Gramm-Leach-Bliley Act of 1999 and its implementing regulations for its business as a financial institution or that uses such a standard privacy notice for its health insurance business in two or more states may comply with the initial privacy notice requirement by using either of the following options:

(a) By using the standard privacy notice and another supplementary privacy notice that includes the elements required by OAR 836-080-0615, 836-080-0620 and 836-080-0650 that are not contained in the standard privacy notice. The supplementary privacy notice must prominently and clearly state that any rights an individual may have as described in that notice are not abridged or limited by the standard privacy notice that the individual may receive separately.

(b) By using a single Oregon-specific privacy notice that complies in its entirety with OAR 836-080-0615 and 836-080-0620, if allowed under federal law.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0640 Information to Be Included in Initial Privacy Notice

(1) This rule implements the requirement of the initial notice under OAR 836-080-0620, describes the contents of the initial notice and provides examples of categories of information required in the notice.

(2) The following are examples of categories of nonpublic personal financial information collected by a licensee. A licensee satisfies the requirement of categorizing the nonpublic personal financial information it collects if the licensee categorizes it according to the source of the information, including, for example:

(a) Information from the consumer;

(b) Information about the consumer's transactions with the licensee or its affiliates;

(d) Information from an insurance support organization.

(3) The following are examples of categories of nonpublic personal financial information disclosed by a licensee:

(a) A licensee satisfies the requirement of categorizing nonpublic personal financial information it discloses if the licensee categorizes the information according to source, as described in section (2) of this rule, as applicable, and provides a few examples to illustrate the types of information in each category. These may include:

(A) Information from the consumer, including application information such as assets and income and identifying information such as name, address and social security number;

(B) Transaction information, such as information about balances, payment history and parties to the transaction; and

(b) A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.

(c) If a licensee reserves the right to disclose all of the nonpublic personal financial information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of nonpublic personal financial information that the licensee discloses.

(4) The following are examples for describing categories of affiliated and nonaffiliated third parties to which a licensee discloses nonpublic personal financial information:

(a) A licensee satisfies the requirement of categorizing the affiliates and nonaffiliated third parties to which the licensee discloses nonpublic personal financial information about consumers if the licensee identifies the types of business in which the affiliates and nonaffiliated third parties engage.

(c) A licensee may also categorize the affiliates and nonaffiliated third parties to which it discloses nonpublic personal financial information about consumers using more detailed categories.

(5) A privacy notice shall include an explanation of the consumer's right under OAR 836-080-0675 to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the method by which the consumer may exercise that right at that time. The following are examples of disclosures under the exception for joint marketers under 836-080-0675. If a licensee discloses nonpublic personal financial information under the exception in 836-080-0675 to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the applicable disclosure requirement of this rule if the licensee:

(a) Lists the categories of nonpublic personal financial information it discloses, using the same categories and examples the licensee used to meet the requirements of section (1) of this rule.

(b) States whether the third party is:

(A) A service provider that performs marketing services on the licensee's behalf or on behalf of the licensee and another financial institution; or

(B) A financial institution with whom the licensee has a joint marketing agreement.

(6) If a licensee does not disclose nonpublic personal financial information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under OAR 836-080-0670 and 836-080-0675, the licensee may simply state that fact, in addition to the information it is required to provide under 836-080-0615(3)(a), (h), (i) and (j) and (4).

(7) A licensee describes its policies and practices relating to protection of the confidentiality and security of personal information if it does both of the following:

(a) Describes in general terms who is authorized to have access to the information; and

(b) States whether the licensee has security practices and procedures in place to ensure the confidentiality of the information in accordance with the licensee's policy. The licensee is not required to describe technical information about the safeguards it uses.

(8) An abbreviated notice authorized by OAR 836-080-0615(3) must include in full the elements of the notice required by the federal Gramm-Leach-Bliley Act of 1999 for the purpose of compliance with that law and shall also include the information referred to in section (5) of this rule and in 836-080-0615(3). The licensee shall deliver its abbreviated notice according to 836-080-0660. The licensee is not required to deliver its privacy notice with its abbreviated notice. The licensee instead may provide the consumer a reasonable means to obtain its privacy notice as described in 836-080-0660. If a consumer who receives the licensee's abbreviated notice requests the licensee's privacy notice, the licensee shall deliver its privacy notice according to 836-080-0660.

(9) A licensee's initial privacy notice may include any of the following:

(a) Categories of nonpublic personal financial information that the licensee reserves the right to disclose in the future but does not currently disclose; and

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0645 Annual Notice

(b) A licensee no longer has a continuing relationship with an individual if the individual's policy is lapsed, expired or otherwise inactive or dormant under the licensee's business practices, and the licensee has not communicated with the customer about the relationship for a period of 12 consecutive months, other than to provide annual privacy notices, material required by law or regulation or promotional materials.

(c) A licensee no longer has a continuing relationship with an individual if the individual's last known address according to the licensee's records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful.

(3) When a licensee is required by this rule to deliver an annual privacy notice, the licensee shall deliver it according to OAR 836-080-0660.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0650 Information to Be Included in Annual Notice

(1) This rule implements the requirement of the annual notice under OAR 836-080-0645, describes the contents of the annual notice and provides examples of categories of nonpublic personal financial information required in the annual notice.

(a) Information from the consumer;

(b) Information about the consumer's transactions with the licensee or its affiliates;

(d) Information from an insurance support organization.

(3) The following are examples of categories of nonpublic personal financial information disclosed by a licensee:

(A) Information from the consumer, including application information such as assets and income and identifying information such as name, address and social security number;

(B) Transaction information, such as information about balances, payment history and parties to the transaction; and

(b) A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.

(c) If a licensee may disclose all of the nonpublic personal financial information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of nonpublic personal financial information that the licensee discloses.

(4) The following are examples for describing categories of affiliated and nonaffiliated third parties to which a licensee discloses information:

(c) A licensee may also categorize the affiliates and nonaffiliated third parties to which it discloses nonpublic personal financial information about consumers using more detailed categories.

(5) An annual notice shall include an explanation of the consumer's right under OAR 836-080-0675 to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the method by which the consumer may exercise the right at that time. An annual notice that contains such an explanation satisfies the requirement of 836-080-0615. If a licensee discloses nonpublic personal financial information under the exception in 836-080-0675 to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the applicable disclosure requirement of this rule if the licensee:

(a) Lists the categories of nonpublic personal financial information it discloses, using the same categories and examples the licensee used to meet the requirements of section (1) of this rule.

(b) States whether the third party is:

(A) A service provider that performs marketing services on the licensee's behalf or on behalf of the licensee and another financial institution; or

(B) A financial institution with whom the licensee has a joint marketing agreement.

(6) If a licensee does not disclose nonpublic personal financial information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under OAR 836-080-0670(1), the licensee may state that fact, in addition to the information it is required to provide under 836-080-0615(4).

(7) A licensee describes its policies and practices relating to protection of the confidentiality and security of nonpublic personal financial information if it does both of the following:

(a) Describes in general terms who is authorized to have access to the information; and

(8) A licensee's notice may include any of the following:

(a) Categories of nonpublic personal financial information that the licensee reserves the right to disclose in the future but does not currently disclose; and

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0655 Revised Privacy Notices

(1) Except as otherwise authorized in OAR 836-080-0600 to 836-080-0700, a licensee shall not, directly or through an affiliate, disclose any personal financial information about a consumer to a nonaffiliated third party under AR 836-080-0675 other than as described in the initial notice that the licensee provided to the consumer under 836-080-0620, unless:

(a) The licensee has provided to the consumer a clear and conspicuous revised notice that accurately describes its policies and practices;

(b) The licensee has given the consumer a reasonable opportunity, before the licensee discloses personal financial information to the nonaffiliated third party, to opt out of the disclosure; and

(2) Except as otherwise allowed by OAR 836-080-0670, a licensee shall provide a revised notice to the consumer under section (1) of this rule before the licensee, for example:

(a) Discloses a new category of personal financial information to a nonaffiliated third party;

(b) Discloses personal financial information to a new category of nonaffiliated third party; or

(3) A revised privacy notice under this rule shall be delivered according to OAR 836-080-0660.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0660 Delivery

(1) A licensee shall provide any notices required by OAR 836-080-0600 to 836-080-0700 so that each consumer can be reasonably expected to receive actual notice in writing or, if the consumer agrees, electronically.

(2) The following are examples of reasonable expectation of actual notice. A licensee may reasonably expect that a consumer will receive actual notice if the licensee:

(a) Hand-delivers a printed copy of the notice to the consumer;

(b) Mails a printed copy of the notice to the last known address of the consumer separately, or in a policy, billing or other written communication;

(d) For an isolated transaction with a consumer, such as the licensee providing an insurance quote, posts the notice and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining the particular insurance product or service.

(a) Posts only a sign in its office or generally publishes advertisements of its privacy policies and practices; or

(b) Sends the notice by electronic mail to a consumer who does not obtain an insurance product or service from the licensee electronically.

(4) A licensee may reasonably expect that a customer will receive actual notice of the licensee's annual privacy notice if:

(a) The customer uses the licensee's web site to access insurance products and services electronically and agrees to receive notices at the web site and the licensee posts its current privacy notice continuously in a clear and conspicuous manner on the web site; or

(b) The customer has requested that the licensee refrain from sending any information regarding the customer relationship, and the licensee's current privacy notice remains available to the customer upon request.

(5) For customers only, a licensee shall provide the initial notice, annual notice and revised notice required by OAR 836-080-0600 to 836-080-0700 so that the customer can retain them or obtain them later in writing or, if the customer agrees, electronically. The following are examples of retention and accessibility of notices. A licensee provides a privacy notice to a customer so that the customer can retain it or obtain it later if the licensee:

(a) Hand-delivers a printed copy of the notice to the customer;

(b) Mails a printed copy of the notice to the last known address of the customer; or

(6) If two or more consumers jointly obtain a health insurance product or service from a licensee, the licensee may satisfy the initial, annual and revised notice requirements by providing one notice to those consumers jointly.

(7) A licensee provides a reasonable means by which a consumer may obtain a copy of its privacy notice for the purpose of OAR 836-080-0640(8) if the licensee:

(a) Provides a toll-free telephone number that the consumer may call to request the notice; or

(b) For a consumer who conducts business in person at the licensee's office, maintains copies of the notice on hand and provides a copy to the consumer immediately upon request.

(8) A licensee may provide a joint notice from the licensee and one or more of its affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to the licensee and the other institutions. A licensee may also provide a notice on behalf of another financial institution.

(9) A licensee may not provide any notice required by OAR 836-080-0600 to 836-080-0700 solely by orally explaining the notice, either in person or over the telephone.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0665 Authorization

(1) Except as provided in OAR 836-080-0670 and 836-080-0675, a licensee or insurance-support organization may not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction unless the disclosure is with the written authorization of the individual, and:

(a) If the authorization is submitted by another licensee or insurance-support organization, the authorization meets the requirements of this rule; or

(b) If the authorization is submitted by a person other than a licensee or insurance-support organization, the authorization is:

(A) Dated;

(B) Signed by the individual; and

(2) A licensee or insurance-support organization may not use as its disclosure authorization form in connection with health insurance transactions a form or statement that authorizes the disclosure of personal or privileged information about an individual to the licensee or insurance-support organization unless the form or statement is clear and conspicuous, and contains all of the following:

(a) The identity of the individual who is the subject of the personal information.

(b) A general description of the categories of personal information to be disclosed.

(c) The signature of the individual who is the subject of the personal information or the individual who is legally empowered to grant authority and the date signed.

(3) An authorization may not remain valid for more than 24 months.

(4) An individual who is the subject of personal information may revoke an authorization provided pursuant to this rule at any time, subject to the rights of any individual who acted in reliance on the authorization prior to notice of the revocation.

(5) A licensee shall retain the authorization of an individual or a copy thereof in the record of the individual who is the subject of the personal information.

(6) This rule does not authorize the disclosure of personal or privileged information that is also individually identifiable health information when disclosure of the individually identifiable health information is prohibited or is otherwise regulated under the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191).

(7) A licensee is not required to comply with this rule with respect to a disclosure of personal information for which the licensee has obtained an authorization under the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191).

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0670 Authorization Exemptions

(1) A licensee or insurance-support organization may disclose personal or privileged information about an individual collected or received in connection with a health insurance transaction without obtaining the written authorization required by OAR 836-080-0665 if the disclosure meets one or more of the following conditions, in which a disclosure:

(a) Is reasonably necessary to enable a person other than the licensee or insurance support organization to:

(A) Perform a business, professional or insurance function for the disclosing licensee or insurance-support organization and the person agrees not to disclose the information further without the individual’s written authorization unless the further disclosure:

(i) Would otherwise be permitted by this rule if made by a licensee or insurance-support organization; or

(ii) Is reasonably necessary for the person to perform its function for the disclosing licensee or insurance-support organization.

(B) Provide information to the disclosing licensee or insurance-support organization for the purpose of:

(i) Determining an individual’s eligibility for a health insurance benefit or payment; or

(ii) Detecting or preventing criminal activity, fraud, material misrepresentation or material nondisclosure in connection with a health insurance transaction.

(b) Is to a licensee, insurance-support organization or self-insurer, if the information disclosed is limited to that which is reasonably necessary:

(A) To detect or prevent criminal activity, fraud, material misrepresentation or material nondisclosure in connection with an insurance transaction; or

(B) For either the disclosing or receiving licensee or insurance-support organization to perform its function in connection with an insurance transaction involving the individual.

(c) Is to a medical care institution or medical professional and discloses only such information as is reasonably necessary to accomplish one or more of the following purposes:

(A) Verifying insurance coverage or benefits.

(B) Informing an individual of a medical problem of the individual, of which the individual may not be aware.

(d) Is required or authorized for compliance with federal, state or local laws, rules or other applicable legal requirements.

(e) Is required for compliance with a properly authorized civil, criminal or regulatory investigation or a subpoena or summons by a federal, state or local authority.

(f) Is required for response to judicial process or a government regulatory authority having jurisdiction over a licensee for examination, compliance or other purposes as authorized by law.

(g) Is required for protection of the confidentiality or security of a licensee’s records pertaining to the individual, service, product or transaction.

(h) Is required for institutional risk control or for resolving disputes or inquiries relating to the individual.

(i) Is to a person holding a legal or beneficial interest relating to the individual.

(j) Is to a person acting in a fiduciary or representative capacity on behalf of the individual.

(k) Is to provide information to an insurance rate advisory organization, a guaranty fund or agency, an agency that is rating a licensee, a person that is assessing the licensee’s compliance with industry standards, or the licensee’s attorneys, accountants and auditors.

(l) Is allowed or required under other provisions of law and in accordance with the federal Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.) to law enforcement agencies, but only to the extent that disclosure is specifically allowed or required, including the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, National Credit Union Administration, the Securities and Exchange Commission, the Secretary of the Treasury, with respect to 31 U.S.C. (Chapter 53, Subchapter II (Records and Reports on Monetary Instruments and transactions) and 12 U.S.C. Chapter 21 (Financial record-keeping), a state insurance authority, and the federal Trade Commission), a self-regulatory organization or for an investigation on a matter related to public safety, or is otherwise specifically permitted or required by law.

(m) Meets any of the following conditions:

(A) It is necessary to effect, administer or enforce a transaction that an individual requests or authorizes, in that the disclosure is required or is a usual, appropriate or acceptable method of handling the transaction. The condition in this subparagraph has the meaning given in section 509 of the federal Gramm-Leach-Bliley Act (P.L. 106-102).

(B) It is in connection with treatment, payment or health care operations.

(C) It is in connection with servicing or processing an insurance product or service that an individual requests or authorizes.

(D) It is in connection with maintaining or servicing an individual’s account with the licensee, a proposed or actual securitization, secondary market sale or similar transaction related a transaction of the individual.

(n) Is made for the purpose of conducting actuarial or research studies, if:

(A) No individual may be identified in any resulting actuarial or research report;

(B) Materials allowing the individual to be identified are returned or destroyed as soon as they are no longer needed; and

(C) The actuarial or research organization agrees not to disclose the information unless the disclosure would otherwise be permitted by this section if made by a licensee or insurance-support organization.

(o) Is to a party or a representative of a party to a proposed or consummated sale, transfer, merger or consolidation of all or part of the business of the licensee or insurance-support organization.

(p) Is to an affiliate whose only use of the information will be in connection with an audit of the licensee.

(q) Is to a consumer reporting agency in accordance with the federal Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) or from a consumer report prepared by a consumer reporting agency.

(r) Is to a group policyholder for the purpose of reporting claims experience or conducting an audit of the licensee’s operations or services, and the information disclosed is reasonably necessary for the group policyholder to conduct the review or audit.

(s) Is to a licensee for purposes related to replacement of a group benefit plan, a group health plan or a group welfare plan.

(t) Is to a professional peer review organization for the purpose of reviewing the service or conduct of a medical care institution or medical professional.

(u) Is to a governmental authority for the purpose of determining the individual’s eligibility for health benefits for which the governmental authority may be liable.

(v) Is to a policyholder or certificate holder, or an agent or other representative thereof, for the purpose of providing information regarding the status of a health insurance transaction.

(2) A licensee may disclose personal or privileged information to an affiliate in connection with the marketing of a financial product or service if the affiliate agrees not to disclose the information for any other purpose or to an unaffiliated persons except as authorized in section (1) of this rule. If a disclosure under this section is made for marketing a product or service other than the product or service of the disclosing licensee, individually identifiable health information may not be disclosed without the authorization required by OAR 836-080-0665.

(3) A licensee may disclose personal or privileged information to a nonaffiliated third party whose only use of the information will be pursuant to a joint marketing agreement for marketing of a product or service. As used in this subsection, "joint marketing agreement" means a formal written contract pursuant to which an insurer jointly offers, endorses or sponsors a financial product or service with a financial institution. Information that may be disclosed under this subsection does not include individually identifiable health information, privileged information or personal information relating to an individual’s character, personal habits, mode of living or general reputation, or any classification derived from such information, except as authorized in section (1) of this rule.

(4) A licensee or insurance support organization shall not disclose an access number or access code for an individual’s policy or transaction account, whether directly or through an affiliate, to any nonaffiliate for use in telemarketing, direct mail marketing or other marketing through electronic mail to an individual, other than to a consumer reporting agency. This section does not apply if a licensee or insurance support organization discloses an access number or access code:

(a) To its service provider solely in order to perform marketing for its own products or services, as long as the service provider is not authorized to directly initiate charges to the account;

(b) To an insurance producer solely in order to perform marketing for its own products or services; or

(c) To a participant in an affinity or similar program where the participants in the program are identified to the individual when the individual enters into the program. An access number or access code does not include a number or code in an encrypted form, as long as the licensee or insurance support organization does not provide the recipient with a means to decode the number or code. For purposes of this subsection, a policy or transaction account is an account other than a deposit account or a credit card account. A policy or transaction account does not include an account to which third parties cannot initiate charges.

(5) Personal or privileged information may be acquired by a group practice prepayment health care service contractor from providers that contract with the health care service contractor and may be transferred among providers that contract with the health care service contractor for the purpose of administering plans offered by the health care service contractor. The information may not be disclosed otherwise by the health care service contractor except in accordance with OAR 836-080-0670 or 836-080-0675.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0675 Disclosure Without Authorization

Unless disclosure is otherwise permitted pursuant to OAR 836-080-0665 or 836-080-0670, a licensee may disclose personal financial information about an individual to a nonaffiliated third party without obtaining the written authorization required by 836-080-0665 only if all of the following conditions are met:

(1) The nonaffiliated third party’s only use of the information will be in connection with the marketing of a product or service.

(2) No information relating to an individual’s character, personal habits, mode of living or general reputation may be disclosed, and no classification derived from such information may be disclosed.

(3) Prior to disclosure, the individual must have been given the notice described in OAR 836-080-0620 and, at the same time, an opportunity to decide whether to allow disclosure of the information by means of a clear and conspicuous notice that provides the following:

(a) That the licensee discloses or reserves the right to disclose personal financial information about the individual to a nonaffiliated third party;

(b) That the individual has the right to opt out of that disclosure; and

(4) Disclosure of personal financial information that is also individually identifiable health information is not prohibited or otherwise regulated under the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191).

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0680 Opt in Notice; Form of Opt Out Notice to Consumers and Opt Out Methods for Purpose of OAR 836-080-0675

(1) Form of opt in notice. The form of the disclosure authorization (the opt in form) is governed by OAR 836-080-0665 and is used with respect to disclosures of personal information that do not meet one or more of the conditions specified in 836-080-0670 or 836-080-0675.

(2) Form of opt out notice. Sections (2) to (10) of this rule govern the form of and requirements applicable to an opt out notice when the notice is required by OAR 836-080-0675. If a licensee is required to provide an opt out notice by 836-080-0675, the licensee shall accurately explain the right to opt out under that provision. The notice shall state:

(a) That the licensee discloses or reserves the right to disclose personal financial information about its consumer to a nonaffiliated third party;

(b) That the consumer has the right to opt out of that disclosure; and

(3) The following are examples for purposes of section (2) of this rule:

(a) Adequate opt out notice. A licensee provides adequate notice that the consumer may opt out of the disclosure of personal financial information to a nonaffiliated third party if the licensee:

(A) Identifies all of the categories of personal financial information that it discloses or reserves the right to disclose, and all of the categories of nonaffiliated third parties to which the licensee discloses the information as permitted by OAR 836-080-0675, and states that the consumer may opt out of the disclosure of that information; and

(B) Identifies the health insurance products or services that the consumer obtains from the licensee, either singly or jointly, to which the opt out direction would apply.

(b) Reasonable opt out means. A licensee provides a reasonable means to exercise an opt out right if it:

(A) Designates check-off boxes in a prominent position on the relevant forms with the opt out notice;

(B) Includes a reply form together with the opt out notice;

(C) Provides an electronic means to opt out, such as a form that can be sent by electronic mail or a process at the licensee's web site, if the consumer agrees to the electronic delivery of information; or

(D) Provides a toll-free telephone number that the consumers may call to opt out.

(A) The only means of opting out is for the consumer to write the consumer's own letter to exercise that opt out right; or

(d) Specific opt out means. A licensee may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer.

(4) Same form as initial notice permitted. A licensee may provide the opt out notice for purposes of OAR 836-080-0675 together with or on the same written or electronic form as the initial notice the licensee provides in accordance with 836-080-0636.

(5) Initial notice required when opt out notice delivered subsequent to initial notice. If a licensee provides the opt out notice later than required for the initial notice in accordance with OAR 836-080-0636, the licensee shall also include a copy of the initial notice with the opt out notice in writing or, if the consumer agrees, electronically.

(6) The following provisions of this section govern joint relationships:

(a) If two or more consumers jointly obtain a health insurance product or service from a licensee, the licensee may provide a single opt out notice. The licensee's opt out notice shall explain how the licensee will treat an opt out direction by a joint consumer as explained in subsection (e) of this section.

(b) Any of the joint consumers may exercise the right to opt out. The licensee may either:

(A) Treat an opt out direction by a joint consumer as applying to all of the associated joint consumers; or

(B) Permit each joint consumer to opt out separately.

(c) If a licensee permits each joint consumer to opt out separately, the licensee shall permit one of the joint consumers to opt out on behalf of all of the joint consumers.

(d) A licensee may not require all joint consumers to opt out before the licensee implements any opt out direction.

(e) The following is an example for purposes of this section. If John and Mary are both named policyholders on a health insurance policy issued by a licensee and the licensee sends policy statements to John's address, the licensee may do any of the following, but the licensee shall explain in the opt out notice of notice of the licensee which opt out policy the licensee will follow:

(A) Send a single opt out notice to John's address, but the licensee shall accept an opt out direction from either John or Mary.

(i) The licensee shall permit John and Mary to opt out for each other;

(ii) If both opt out, the licensee shall permit both of them to notify the licensee in a single response, such as on a form or through a telephone call; and

(iii) If John opts out and Mary does not, the licensee may disclose personal financial information only about Mary but not about John, and not about John and Mary jointly.

(7) Time to comply with opt out. A licensee shall comply with a consumer's opt out direction as soon as reasonably practicable after the licensee receives the direction.

(8) Continuing right to opt out. A consumer may exercise the right to opt out at any time.

(9) The duration of a consumer's opt out direction is governed as follows:

(a) A consumer's direction to opt out under this rule is effective until the consumer revokes it in writing or, if the consumer agrees, electronically.

(b) When a customer relationship terminates, the customer's opt out direction continues to apply to the personal financial information that the licensee collected during or related to that relationship. If the individual subsequently establishes a new customer relationship with the licensee, the opt out direction that applied to the former relationship does not apply to the new relationship.

(10) Delivery. When a licensee is required to deliver an opt out notice by this rule, the licensee shall deliver it according to OAR 836-080-0660.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0685 Limits on Sharing Account Number Information for Marketing Purposes

(1) General prohibition on disclosure of account numbers. A licensee shall not, directly or through an affiliate, other than to a consumer reporting agency, disclose a policy number or similar form of access number or access code for a consumer's policy or transaction account to any nonaffiliated third party for use in telemarketing, direct mail marketing or other marketing through electronic mail to the consumer.

(2) Exceptions. Section (1) of this rule does not apply if a licensee discloses a policy number or similar form of access number or access code:

(a) To the licensee's service provider solely in order to perform marketing for the licensee's own products or services, as long as the service provider is not authorized to directly initiate charges to the account;

(b) To a licensee who is an insurance producer solely in order to perform marketing for the licensee's own products or services; or

(c) To a participant in an affinity or similar program when the participants in the program are identified to the customer when the customer enters into the program.

(3) The following are examples for purposes of this rule:

(a) Policy number. A policy number, or similar form of access number or access code, does not include a number or code in an encrypted form, as long as the licensee does not provide the recipient with a means to decode the number or code.

(4) Violation of this section is an unfair trade practice for purposes of ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600, 746.240 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0690 Authorization Request Delivery

A request for authorization and an authorization form may be delivered to a consumer or a customer as part of a notice under OAR 836-080-0615, 836-080-0620 or 836-080-0625 if the request and the authorization form are clear and conspicuous.

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0695 Access to Recorded Personal Information

(1) If an individual or personal representative of an individual, after proper identification, submits a written request to an insurer, insurance producer or insurance-support organization for access to recorded personal information about the individual that is reasonably described by the individual and reasonably locatable and retrievable by the insurer, insurance producer or insurance-support organization, the insurer, insurance producer or insurance-support organization within 30 business days from the date the request is received shall:

(a) Inform the individual of the nature and substance of the recorded personal information in writing, by telephone or by other oral communication, whichever the insurer, insurance producer or insurance-support organization prefers;

(b) Permit access to inspect or obtain a copy of the individual’s personal financial information or protected health information that is maintained in a designated record set about the individual; and

(c) Provide the individual with a summary of the procedures by which the individual may request correction, amendment or deletion of recorded personal information.

(2) Any personal information provided pursuant to this section must identify the source of the information if the source is an institutional source.

(3) If an individual requests individually identifiable health information supplied by a health care provider, the insurer, insurance producer or insurance-support organization shall provide the information, including the identity of the health care provider either directly to the individual or to a health care provider designated by the individual and licensed to provide health care with respect to the condition to which the information relates, whichever the insurer, insurance producer or insurance-support organization prefers. If the insurer, insurance producer or insurance-support organization elects to disclose the information to a health care provider designated by the individual, the insurer, insurance producer or insurance-support organization shall notify the individual, at the time of the disclosure, that the insurer, insurance producer or insurance-support organization has provided the information to the health care provider.

(4) Except for personal information provided under ORS 746.650, an insurer, insurance producer or insurance-support organization may charge a reasonable fee to cover the costs incurred in providing a copy of recorded personal information to an individual.

(5) The obligations imposed by this rule upon an insurer or insurance producer may be satisfied by another insurer or insurance producer authorized to act on its behalf. With respect to the copying and disclosure of recorded personal information pursuant to a request under this rule, an insurer, insurance producer or insurance-support organization may make arrangements with an insurance-support organization or a consumer reporting agency to copy and disclose recorded personal information on its behalf.

(6) The rights granted to individuals by this rule shall extend to all natural persons to the extent information about them is collected and maintained by an insurer, insurance producer or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this section does not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or a civil or criminal proceeding involving them.

(7) This rule does not authorize the disclosure of individually identifiable health information when the disclosure is prohibited or is otherwise regulated under the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191).

(8) For purposes of this rule, the term ' insurance-support organization' does not include 'consumer reporting agency.'

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0700 Correction, Amendment or Deletion of Recorded Personal Information

(1) Within 30 business days from the date of receipt of a written request from an individual to correct, amend or delete any recorded personal information about the individual within its possession, an insurer, insurance producer or insurance-support organization shall either:

(a) Correct, amend or delete the portion of the recorded personal information in dispute; or

(b) Notify the individual of:

(A) Its refusal to make the correction, amendment or deletion;

(B) The reasons for the refusal; and

(2) If the insurer, insurance producer or insurance-support organization corrects, amends or deletes recorded personal information in accordance with section (1) of this rule, the insurer, insurance producer or insurance-support organization shall so notify the individual in writing and furnish the correction, amendment or fact of deletion to:

(a) Each person specifically designated by the individual who may have, within the preceding two years, received the recorded personal information;

(b) Each insurance-support organization whose primary source of personal information is insurers, if the insurance-support organization has systematically received recorded personal information from the insurer within the preceding seven years. However, the correction, amendment or fact of deletion need not be furnished if the insurance-support organization no longer maintains recorded personal information about the individual; and

(c) Each insurance-support organization that furnished the recorded personal information that has been corrected, amended or deleted.

(3) Whenever an individual disagrees with an insurer’s, insurance producer’s or insurance-support organization’s refusal to correct, amend or delete recorded personal information, the individual shall be permitted to file with the insurer, insurance producer or insurance-support organization:

(a) A concise statement setting forth what the individual thinks is the correct, relevant or fair information; and

(b) A concise statement of the reasons why the individual disagrees with the insurer’s, insurance producer’s or insurance-support organization’s refusal to correct, amend or delete recorded personal information.

(4) In the event an individual files either or both of the statements described in section (3) of this rule, the insurer, insurance producer or insurance-support organization shall:

(a) File the statements with the disputed personal information and provide a means by which anyone reviewing the disputed personal information will be made aware of the individual’s statements and have access to them;

(b) In any subsequent disclosure by the insurer, insurance producer or insurance-support organization of the recorded personal information that is the subject of the disagreement, clearly identify the matter or matters in dispute and provide the individual’s statements along with the recorded personal information being disclosed; and

(5) The rights granted to individuals by this rule extends to all natural persons to the extent information about them is collected and maintained by an insurer, insurance producer or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this rule does not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or a civil or criminal proceeding involving them.

(6) For purposes of this rule, the term "insurance-support organization" does not include "consumer reporting agency."

History

Statutory/Other Authority: ORS 731.244 & 746.608
Statutes/Other Implemented: ORS 746.600 & 746.607
ID 4-2005, f. & cert. ef. 4-1-05

Or. Admin. R. 836-080-0750 Purpose; Statutory Authority

(1) OAR 836-080-0750 to 836-080-0775 establish standards for protecting active duty service members of the United States Armed Forces from dishonest and predatory insurance sales practices by declaring certain identified practices to be false, misleading, deceptive or unfair.

(2) OAR 836-080-0750 to 836-080-0775 are adopted pursuant to the authority of ORS 731.244 for the purpose of implementing 746.075, 746.110 and 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.075, 746.110 & 746.240
ID 7-2007, f. 9-14-07, cert. ef. 1-1-08

Or. Admin. R. 836-080-0755 Application of OAR 836-080-0750 to 836-080-0775

(1) OAR 836-080-0750 to 836-080-0775 apply only to the solicitation or sale of any life insurance or annuity product by an insurer or insurance producer to an active duty service member of the United States Armed Forces.

(2) OAR 836-080-0750 to 836-080-0775 do not apply to solicitations or sales involving:

(a) Credit insurance;

(b) Group life insurance or group annuities when there is no in-person, face-to-face solicitation of individuals by an insurance producer or when the policy or certificate does not include a side fund;

(c) An application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the Director; or, when a term conversion privilege is exercised among corporate affiliates;

(d) Individual stand-alone health policies, including disability income policies;

(e) Contracts offered by Servicemembers’ Group Life Insurance (SGLI) or Veteran’s Group Life Insurance (VGLI), as authorized by 38 U.S.C. Section 1965 et seq.;

(f) Contracts offered by State Sponsored Life Insurance (SSLI), as authorized by Public Law 93-289, Title 37 U.S.C., sec. 707 et seq;

(g) Life insurance contracts offered through or by a non-profit military association, qualifying under Section 501 (c) (23) of the Internal Revenue Code (IRS), and which are not underwritten by an insurer; or

(h) Contracts used to fund:

(A) An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);

(B) A plan described by Sections 401(a), 401(k), 403(b), 408(k), or 408(p) of the IRC, as amended, if established or maintained by an employer;

(C) A government or church plan defined in Section 414 of the IRS, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457 of the IRS;

(D) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;

(E) Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or

(F) Prearranged funeral contracts.

(3) Nothing in this rule shall be construed to abrogate the ability of nonprofit organizations (or other organizations) to educate members of the United States Armed Forces in accordance with Department of Defense DoD Instruction 1344.07 — PERSONAL COMMERCIAL SOLICITATION ON DoD INSTALLATIONS or successor directive.

(4) For purposes of OAR 836-080-0750 to 836-080-0775, general advertisements, direct mail, and internet marketing do not constitute “solicitation.” Telephone marketing does not constitute “soliciting” provided the caller explicitly and conspicuously discloses that the product concerned is life insurance and makes no statements that avoid a clear and unequivocal statement that life insurance is the subject matter of the solicitation. Nothing in this section, however, shall be construed to exempt an insurer or insurance producer from OAR 836-080-0750 to 836-080-0775 in any in-person, face-to-face meeting established as a result of the “solicitation” exemptions identified in this section.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.075, 746.110 & 746.240
ID 7-2007, f. 9-14-07, cert. ef. 1-1-08

Or. Admin. R. 836-080-0760 Definitions for OAR 836-080-0750 to 836-080-0775

The following definitions apply to OAR 836-080-0750 to 836-080-0775:

(1) “Active Duty” means full-time duty in the active military service of the United States and includes members of the reserve component (National Guard and Reserve) while serving under published orders for active duty or full-time training. The term does not include members of the reserve component who are performing active duty or active duty for training under military calls or orders specifying periods of less than 31 calendar days.

(2) “Department of Defense (DoD) Personnel” means all active duty service members and all civilian employees, including nonappropriated fund employees and special government employees, of the Department of Defense.

(3) “Door to Door” means a solicitation or sales method whereby an insurance producer proceeds randomly or selectively from household to household without prior specific appointment.

(4) “General Advertisement” means an advertisement having as its sole purpose the promotion of the reader’s or viewer’s interest in the concept of insurance, or the promotion of the insurer or the insurance producer.

(5) “Insurer” means an insurance company required to be licensed under the laws of this state to provide life insurance products, including annuities.

(6) “Insurance producer” means a person required to be licensed under the laws of this state to sell, solicit, or negotiate life insurance, including annuities.

(7) “Known” or “knowingly” means, depending on its use in OAR 836-080-0750 to 836-080-0775, the insurance producer or insurer had actual awareness, or in the exercise of ordinary care should have know, at the time of the act or practice complained of, that the person solicited:

(a) Is a service member; or

(b) Is a service member with a pay grade of E-4 or below.

(8) “Life insurance” means insurance coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income and unless otherwise specifically excluded, includes individually issued annuities.

(9) “Military installation” means any federally owned, leased, or operated base, reservation, post, camp, building, or other facility to which service members are assigned for duty, including barracks, transient housing, and family quarters.

(10) “MyPay” is a Defense Finance and Accounting Service (DFAS) web-based system that enables service members to process certain discretionary pay transactions or provide updates to personal information data elements without using paper forms.

(11) “Service member” means any active duty officer (commissioner and warrant) or enlisted member of the United States Armed Forces.

(12) “Side fund” means a fund or reserve that is part of or otherwise attached to a life insurance policy (excluding individually issued annuities) by rider, endorsement, or other mechanism which accumulates premium or deposits with interest or by other means. The term does not include:

(a) Accumulated value or cash value or secondary guarantees provided by a universal life policy;

(b) Cash values provided by a whole life policy that are subject to standard nonforfeiture law for life insurance; or

(A) Contains only premiums paid in advance that accumulate at interest;

(B) Imposes no penalty for withdrawal;

(D) Is not marketed or intended as an investment; and

(E) Does not carry a commission, either paid or calculated.

(13) “Specific appointment” means a prearranged appointment agreed upon by both parties and definite as to place and time.

(14) “United States Armed Forces” means all components of the Army, Navy, Air Force, Marines Corps, and Coast Guard.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.075, 746.110 & 746.240
ID 7-2007, f. 9-14-07, cert. ef. 1-1-08

Or. Admin. R. 836-080-0765 Practices Declared False, Misleading, Deceptive or Unfair on a Military Installation

(1) The following acts or practices when committed on a military installation by an insurer or insurance producer with respect to the in-person, face-to-face solicitation of life insurance are declared to be false, misleading, deceptive or unfair:

(a) Knowingly soliciting the purchase of any life insurance product “door to door” or without first establishing a specific appointment for each meeting with the prospective purchaser.

(b) Soliciting service members in a group or “mass” audience or in a “captive” audience when attendance is not voluntary.

(d) Making appointments with or soliciting service members in barracks, day rooms, unit areas, or transient personnel housing or other areas in which the installation commander has prohibited solicitation.

(e) Soliciting the sale of life insurance without first obtaining permission from the installation commander or the commander’s designee.

(f) Posting unauthorized bulletins notices or advertisements.

(g) Failing to present DD Form 2885, “Personal Commercial Solicitation Evaluation, to service members solicited or encouraging service members solicited not to complete or submit a DD Form 2885.

(h) Knowingly accepting an application for life insurance or issuing a policy of life insurance on the life of an enlisted member of the United States Armed Forces without first obtaining for the insurer’s files a completed copy of any required form that confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance established by regulations, directives or rules of the DoD or any branch of the Armed Forces.

(2) The following acts or practices when committed on a military installation by an insurer or insurance producer constitute corrupt practices, improper influences or inducements and are declared to be false, misleading, deceptive or unfair:

(a) Using DoD personnel, directly or indirectly, as a representative or agent in any official or business capacity with or without compensation with respect to the solicitation or sale of life insurance to service members.

(b) Using an insurance producer to participate in any United States Armed Forces sponsored education or orientation program.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.075, 746.110 & 746.240
ID 7-2007, f. 9-14-07, cert. ef. 1-1-08

Or. Admin. R. 836-080-0770 Practices Declared False, Misleading, Deceptive or Unfair, Regardless of Location

(1) The following acts or practices by an insurer or insurance producer constitute corrupt practices, improper influences or inducements and are declared to be false, misleading, deceptive or unfair:

(a) Submitting, processing or assisting in the submission or processing of any allotment form or similar device used by the United States Armed Forces to direct a service member’s pay to a third party for the purchase of life insurance. The acts or practices described in this subsection include, but are not limited to, using or assisting in using a service member’s “MyPay” account or other similar Internet or electronic medium for such purposes. This subsection does not prohibit assisting a service member by providing insurer or premium information necessary to complete any allotment form.

(b) Knowingly receiving funds from a service member for the payment of premium from a depository institution with which the service member has no formal banking relationship. For purposes of this rule, a formal banking relationship is established when the depository institution:

(A) Provides the service member a deposit agreement and periodic statements and makes the disclosures required by the Truth in Savings Act, 12 U.S.C. § 4301 et seq. and the regulations promulgated thereunder; and

(B) Permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums.

(c) Employing any device or method or entering into any agreement in which funds received from a service member by allotment for the payment of insurance premiums are identified on the service member’s Leave and Earnings Statement or equivalent or successor form as “Savings” or “Checking” and when the service member has no formal banking relationship as defined in section (1)(b) of this rule.

(d) Entering into any agreement with a depository institution for the purpose of receiving funds from a service member in which the depository institution, with or without compensation, agrees to accept direct deposits from a service member with whom it has not formal banking relationship.

(e) Using DoD personnel, directly or indirectly, as a representative or agent in any official or unofficial capacity with or without compensation with respect to the solicitation or sale of life insurance to service members who are junior in rank or grade, or to the family members of such personnel.

(f) Offering or giving anything of value, directly or indirectly, to DoD personnel to procure their assistance in encouraging, assisting or facilitating the solicitation or sale of life insurance to another service member.

(g) Knowingly offering or giving anything of value to a service member with a pay grade of E-4 or below for the service member’s attendance to any event in which an application for life insurance is solicited.

(h) Advising a service member with a pay grade of E-4 or below to change the service member’s income tax withholding or State of legal residence for the sole purpose of increasing disposable income to purchase life insurance.

(2) The following acts or practices by an insurer or insurance producer lead to confusion regarding source, sponsorship, approval or affiliation and are declared to be false, misleading, deceptive or unfair:

(a) Making any representation, or using any device, title, descriptive name or identifier that has the tendency or capacity to confuse or mislead a service member into believing that the insurer, insurance producer or product offered is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, the United States Armed Forces or any state or federal agency or government entity. Examples of prohibited insurance producer titles include, but are not limited to, “Battalion Insurance Counselor,” “Unit Insurance Advisor,” “Servicemen’s Group Life Insurance Conversion Consultant” or “Veteran’s Benefits Counselor.” Nothing in this subsection shall be construed to prohibit a person from using a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an accredited institution of higher learning. Such designations include, but are not limited to, Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP), Master of Science In Financial Services (MSFS) or Masters of Science Financial Planning (MS).

(b) Soliciting the purchase of any life insurance product through the use of or in conjunction with any third party organization that promotes the welfare of or assists members of the United States Armed Forces in a manner that has the tendency or capacity to confuse or mislead a service member into believing that either the insurer, insurance producer, or insurance product is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, or the United States Armed Forces.

(3) The following acts or practices by an insurer or insurance producer lead to confusion regarding premiums, cost or investment returned and are declared to be false, misleading, deceptive or unfair:

(a) Using or describing credited interest rate on a life insurance policy in a manner that implies that the credited interest rate is a net return on all premium paid.

(b) Excluding individually issued annuities, misrepresenting the mortality costs of a life insurance product, including stating or implying that the product “costs nothing” or is “free.”

(4) The following acts or practices by an insurer or insurance producer regarding SGLI, VGLI or SSLI are declared to be false, misleading, deceptive or unfair:

(a) Making any representation regarding the availability, suitability, amount, cost, exclusions or limitations to coverage provided to a service member or dependents by SGLI, VGLI or SSLI, that is false, misleading or deceptive.

(b) Making any representation regarding conversion requirements, including the costs of coverage, or exclusions or limitations to coverage of SGLI, VGLI or SSLI to private insurers that is false, misleading, or deceptive.

(c) Suggesting, recommending or encouraging a service member to cancel or terminate the service member’s SGLI or SSLI policy or issuing a life insurance policy that replaces an existing SGLI or SSLI policy unless the replacement takes effect upon or after the service member’s separation from the United States Armed Forces.

(5) The following acts or practices by an insurer or insurance producer regarding disclosure are declared to be false, misleading, deceptive or unfair:

(a) Deploying, using or contracting for any lead generating materials designed exclusively for use with service members that do not clearly and conspicuously disclose that the recipient will be contacted by an insurance producer, if that is the case, for the purpose of soliciting the purchase of life insurance.

(b) Failing to disclose that a solicitation for the sale of life insurance will be made when establishing a specific appointment for an in-person, face-to-face meeting with a prospective purchaser.

(c) Excluding individually issued annuities, failing to clearly and conspicuously disclose the fact that the product being sold is life insurance.

(d) Failing to make, at the time of sale or offer to an individual known to be a service member, the written disclosures required by Section of the “Military Personnel Financial Services Protection Act,” Pub. L. No. 109-209, p.16.

(e) Excluding individually issued annuities, when the sale is conducted in-person, face-to-face with an individual known to be a service member, failing to provide the applicant at the time the application is taken:

(A) An explanation of any free look period with instructions on how to cancel if a policy is issued; and

(B) Either a copy of the application or a written disclosure. The copy of the application or the written disclosure shall clearly and concisely set out the type of life insurance, the death benefit applied for an its expected first year cost. A basic illustration that meets the requirements of OAR 836-051-0500 to 836-051-0600 or the NAIC Life Insurance Buyer’s Guide shall be deemed sufficient to meet this requirement for a written disclosure.

(6) The following acts or practices by an insurer or insurance producer with respect to the sale of certain life insurance products are declared to be false, misleading, deceptive or unfair:

(a) Excluding individually issued annuities, recommending the purchase of any life insurance product that includes a side fund to a service member in pay grades E-4 and below unless the insurer has reasonable grounds for believing that the life insurance death benefit, standing along, is suitable.

(b) Offering for sale or selling a life insurance product that includes a side fund to a service member in pay grades E-4 and below who is currently enrolled in SGLI or SSLI, is presumed unsuitable unless, after the completion of a needs assessment, the insurer demonstrates that the applicant’s SGLI or SSLI death benefit, together with any other military survivor benefits, savings and investments, survivor income, and other life insurance are insufficient to meet the applicant’s insurance needs for life insurance. For the purpose of this subsection:

(A) “Insurance needs” are the risks associated with premature death taking into consideration the financial obligations and immediate and future cash needs of the applicant’s estate or survivors or dependents, or both the estate and the survivors or dependents.

(B) “Other military survivor benefits” include, but are not limited to: the Death Gratuity, Funeral Reimbursement, Transition Assistance, Survivor and Dependents’ Educational Assistance, Dependency and Indemnity Compensation, TRICARE Healthcare benefits, Survivor Housing Benefits and Allowances, Federal Income Tax Forgiveness, and Social Security Survivor Benefits.

(c) Excluding individually issued annuities, offering for sale or selling any life insurance contract that includes a side fund:

(A) Unless interest credited accrues from the date of deposit to the death of withdrawal and permits withdrawals without limit or penalty;

(B) Unless the applicant has been provided with a schedule of effective rates of return based upon cash flows of the combined product. For this disclosure, the effective rate of return will consider all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender values available to the policyholder in addition to life insurance coverage. This schedule will be provided for at least each policy year from one (1) to ten (10) and every fifth policy year thereafter ending at age 100, policy maturity, or final expiration; and

(d) Excluding individually issued annuities, offering for sale or selling any life insurance contract that after considering all policy benefits, including but not limited to endowment, return of premium or persistency, does not comply with the standard nonforfeiture law for life insurance.

(e) Selling any life insurance product to an individual known to be a service member that excludes coverage if the insured’s death is related to war, declared or undeclared, or any act related to military service save and except for an accidental death coverage, e.g., double indemnity, which may be excluded.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.075, 746.110 & 746.240
ID 7-2007, f. 9-14-07, cert. ef. 1-1-08

Or. Admin. R. 836-080-0775 Severability

If any provisions of OAR 836-080-0750 to 836-080-0775 or their application to any person or circumstance is held invalid for any reason, the invalidity shall not affect the other provisions or any other application of 836-080-0750 to 836-080-0775 that can be given effect without the invalid provisions or applicant. To this end all provisions of 836-080-0750 to 836-080-0775 are declared to be severable.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.075, 746.110 & 746.240
ID 7-2007, f. 9-14-07, cert. ef. 1-1-08

Or. Admin. R. 836-080-0800 Definitions

As used in OAR 836-080-0800 to 836-080-0810, “loss runs” means information about a current or prior commercial policyholder’s reported losses, including paid amounts on all reported claims. Such losses shall be valued as of the insurer’s most current valuation date, but not more than 90 days prior to the date of the request for loss runs.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.160 & 746.240
ID 24-2010, f. 12-30-10, cert. ef. 3-1-11

Or. Admin. R. 836-080-0805 Statutory Authority, Purpose, and Applicability

(1) OAR 836-080-0800 to 836-080-0810 are adopted by the Director of the Department of Consumer and Business Services pursuant to the Director’s general rulemaking authority in ORS 731.244.

(2) The purpose of OAR 836-080-0800 to 836-080-0810 is to require certain property and casualty insurers or their appointed producers of record to provide loss runs on a timely basis to current and prior commercial policyholders, upon request by the policyholder to the insurer or its appointed producer of record.

(3)(a) Except as provided in subsection (b) of this section, OAR 836-080-0800 to 836-080-0810 apply with respect to all commercial property, commercial liability including umbrella or excess policies, and commercial automobile insurance except title and surety insurance.

(b) OAR 836-080-0810(2) applies only to workers’ compensation insurance.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.160 & 746.240
ID 24-2010, f. 12-30-10, cert. ef. 3-1-11

Or. Admin. R. 836-080-0810 Provision of Commercial Loss Runs

(1) Property and casualty insurers or their appointed producers of record shall make loss runs available to current and prior commercial policyholders within 15 calendar days upon request by the policyholder to the insurer or its appointed producer of record. The insurer shall provide five years of loss runs, or, if the commercial policyholder has been insured with that insurer for less than five years, for the entire period the policyholder has been insured with that insurer.

(2) Loss runs related to workers’ compensation insurance shall not include confidential worker medical and vocational claim records pursuant to ORS 656.360 and 656.362.

(3) Violation of this rule is an unfair trade practice for the purpose of ORS 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.160 & 746.240
ID 24-2010, f. 12-30-10, cert. ef. 3-1-11

Or. Admin. R. 836-080-0900 Definitions

As used in OAR 836-080-0900 to 836-080-0905:

(1) “Covered loss” means any loss, damage, or injury that would be covered by a property and casualty personal lines policy unless arising out of an act or omission of a person insured under such policy.

(2) “Innocent person” means, with respect to any covered loss, a person:

(a) Who did not cause such covered loss;

(b) Who did not materially contribute to such covered loss; and

(c) Who did not know that such covered loss was reasonably likely to occur or undertook reasonable efforts to prevent or limit such covered loss.

History

Statutory/Other Authority: ORS 742.005
Statutes/Other Implemented: ORS 731.244
ID 3-2023, adopt filed 02/09/2023, effective 03/01/2023

Or. Admin. R. 836-080-0905 Language used for co-insureds on property and casualty personal lines policies

No property and casualty personal lines policy may contain any provision or other language that would deny coverage to any innocent person insured under such policy for any covered loss arising out of any act or omission of any other person insured under such policy.

History

Statutory/Other Authority: ORS 742.005
Statutes/Other Implemented: ORS 731.244
ID 3-2023, adopt filed 02/09/2023, effective 03/01/2023

Division 81 TRADE PRACTICES — GENERAL PROVISIONS

Or. Admin. R. 836-081-0005 Statutory Authority; Purpose; Definitions

(1) OAR 836-081-0005 and 836-081-0010 are adopted by the Director of the Department of Consumer and Business Services pursuant to the general rulemaking authority in ORS 731.244.

(2) OAR 836-081-0005 and 836-081-0010 identify particular practices that make an unfair discrimination in the availability of insurance in violation of ORS 746.015. OAR 836-081-0005 and 836-081-0010 do not limit the director's authority to determine that other practices relating to insurance availability are unfairly discriminatory.

(3) OAR 836-081-0005 and 836-081-0010 do not concern the making and use of insurance rates. Under ORS 737.310, which applies to most lines of property and casualty insurance, the making and use of rates that are unfairly discriminatory is prohibited. Under ORS 746.015 unfair discrimination in the application of rates is prohibited.

(4) OAR 836-081-0005 and 836-081-0010 do not prohibit the use of other risk selection criteria that reasonably can be related to the rates and policy forms used by the insurer.

(5) For the purpose of OAR 836-081-0005 and 836-081-0010:

(a) "Availability of insurance" includes all terms, conditions, and types of coverage under insurance policies.

(b) "Insurer", when used in connection with several insurers in a group under common ownership or control, refers to the group of insurers collectively rather than individually.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.015(1)
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 19-2006, f. & cert. ef. 9-26-06
IC 2-1978, f. 5-22-78, ef. 6-1-78

Or. Admin. R. 836-081-0010 Unfair Discrimination — Insurance Other than Life or Health Insurance

(1) An insurer decision on the availability of insurance for an individual, other than life or health insurance, that is based on any of the following characteristics is considered to be unfair discrimination:

(a) Age of individuals;

(b) Sex;

(d) Race or color;

(e) Creed;

(f) National origin;

(g) Ancestry;

(h) Occupation, if lawful, unless the occupation significantly increase the degree of hazard. This paragraph does not apply in the case of an insurer that limits its market to one occupation or several related occupations;

(i) Change of occupation, unless the frequency of change is significant;

(j) Change of domicile, unless the frequency of change is significant or the change significantly increases the degree of hazard or the expense of administering policy benefits;

(k) Previous rejection, cancellation or nonrenewal of insurance by another insurer;

(l) Change of insurer;

(m) Lack of previous insurance, unless the lack is in violation of law.

(2) An insurer may use a combination of the characteristics described in paragraphs (h) to (j) of section (1) of this rule as a basis for a decision under section (1) of this rule only if the combination significantly increases the degree of hazard.

History

Statutory/Other Authority: ORS 731 & 746
Statutes/Other Implemented: ORS 746.015(1)
ID 19-2006, f. & cert. ef. 9-26-06
IC 2-1978, f. 5-22-78, ef. 6-1-78

Or. Admin. R. 836-081-0020 Statutory Authority; Purpose; Applicability

(1) OAR 836-081-0020 and 836-081-0030 are adopted pursuant to the general rulemaking authority of the Director of the Department of Consumer and Business Services in ORS 731.244 as an aid in effectuation of 746.015(2).

(2) The purpose of OAR 836-081-0020 to 836-081-0030 is to protect blind or partially blind members of the insurance-buying public from unfair discrimination by insurers by identifying specific acts or practices that are prohibited by ORS 746.015(2) when an insurer engages in one or more of them solely on the basis of blindness or partial blindness.

(3) OAR 836-081-0020 to 836-081-0030 shall apply to all insurance transactions.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.015(2)
ID 19-2006, f. & cert. ef. 9-26-06
IC 1-1985, f. & ef. 2-1-85

Or. Admin. R. 836-081-0030 Unfair Discrimination Acts or Practices

(1) The following acts and practices constitute unfair discrimination between individuals of the same class when an insurer engages in one or more of them solely because of blindness or partial blindness of an individual:

(a) Refusing to insure, or refusing to continue to insure, the individual; or

(b) Limiting the amount, extent or kind of coverage available to the individual or

(2) For purposes of section (1) of this rule:

(a) With respect to all other conditions, including the underlying cause of the blindness or partial blindness, persons who are blind or partially blind shall be subject to the same standards of sound actuarial principles or actual or reasonably anticipated experience as are sighted persons.

(b) Refusal to insure includes denial by an insurer of disability insurance coverage on the grounds that the policy defines “disability” as being presumed in the event that the insured loses eyesight.

(c) An insurer may exclude from coverage disabilities consisting solely of blindness or partial blindness when such condition existed at the time the policy was issued.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.015(2)
ID 19-2006, f. & cert. ef. 9-26-06
IC 1-1985, f. & ef. 2-1-85

Or. Admin. R. 836-081-0101 Purpose, Policy, Authority and Effective Date

(1) OAR 836-081-0101 to 836-081-0126 are adopted by the Director of the Department of Consumer and Business Services under the authority of ORS 731.244 for the purpose of implementing:

(a) ORS 746.240, relating to trade practices found by the Director to be an unfair or deceptive act or practice in the transaction of insurance that is injurious to the insurance-buying public; and

(b) ORS 746.670, relating to the Director's authority to examine and investigate into the affairs of an insurer, agent or insurance support organization in order to determine whether any of those entities is violating or has violated any provision of ORS 746.600 to 746.690, governing the use and disclosure of insurance information.

(2) OAR 836-081-0101 to 836-081-0126 establish standards for developing and implementing administrative, technical and physical safeguards to protect the security, confidentiality and integrity of customer information, pursuant to Sections 501, 505(b), and 507 of the Gramm-Leach-Bliley Act, codified at 15 U.S.C. 6801, 6805(b) and 6807, as follows:

(a) Section 501(a) provides that it is the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers' nonpublic personal information. Section 501(b) requires the state insurance regulatory authorities to establish appropriate standards relating to administrative, technical and physical safeguards:

(A) To ensure the security and confidentiality of customer records and information;

(B) To protect against any anticipated threats or hazards to the security or integrity of such records; and

(C) To protect against unauthorized access to or use of records or information that could result in substantial harm or inconvenience to a customer.

(b) Section 503(a)(3) requires each financial institution to develop policies for protecting the nonpublic personal information of consumers, and to make those policies available in written form.

(c) Section 505(b)(2) calls on state insurance regulatory authorities to implement the standards prescribed under Section 501(b) by regulation with respect to persons engaged in providing insurance.

(d) Section 507 provides, among other things, that a state regulation may afford persons greater privacy protections than those provided by subtitle A of Title V of the Gramm-Leach-Bliley Act. The safeguards established pursuant to OAR 836-081-0101 to 836-081-0126 apply to nonpublic personal information, including financial information and health information.

(3) Each licensee shall establish and implement an information security program, including appropriate policies and systems pursuant to OAR 836-081-0101 to 836-081-0126.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240 & 746.670
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 2-2003, f. & cert. ef. 3-17-03

Or. Admin. R. 836-081-0106 Definitions

For purposes of OAR 836-081-0101 to 836-081-0126, the following definitions apply:

(1) "Customer" means a customer of the licensee as the term "customer" is defined in ORS 746.600(10).

(2) "Customer information" means personal information as defined in ORS 746.600 about a customer, whether in paper, electronic or other form, that is maintained by or on behalf of the licensee.

(3) "Customer information systems" means the electronic or physical methods used to access, collect, store, use, transmit, protect or dispose of customer information.

(4) "Licensee" means a licensee as that term is defined in ORS 746.600, except that "licensee" does not include a purchasing group or an unauthorized insurer in regard to surplus lines business conducted pursuant to 735.400 to 735.495.

(5) "Service provider" means a person that maintains, processes or otherwise is permitted access to customer information through its provision of services directly to the licensee.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240 & 746.670
ID 2-2003, f. & cert. ef. 3-17-03

Or. Admin. R. 836-081-0111 Information Security Program

(1) Each licensee shall implement a comprehensive written information security program that includes administrative, technical and physical safeguards for the protection of customer information. The administrative, technical and physical safeguards included in the information security program shall be appropriate to the size and complexity of the licensee and the nature and scope of its activities.

(2) If a licensee is domiciled in another jurisdiction or subject to the primary jurisdiction of a different functional regulator, and the statutes and rules administered by its domiciliary regulator or primary functional regulator establish standards for protecting the security of consumer information that are substantially similar to those established by OAR 836-081-0101 to 836-081-0126, then good faith compliance with those standards to the satisfaction of the licensee’s primary regulator shall constitute compliance with OAR 836-081-0101 to 836-081-0126.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240 & 746.670
ID 2-2003, f. & cert. ef. 3-17-03

Or. Admin. R. 836-081-0116 Objectives of Information Security Program

A licensee’s information security program shall be designed to:

(1) Ensure the security and confidentiality of customer information;

(2) Protect against any anticipated threats or hazards to the security or integrity of the information; and

(3) Protect against unauthorized access to or use of the information that could result in substantial harm or inconvenience to any customer.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240 & 746.670
ID 2-2003, f. & cert. ef. 3-17-03

Or. Admin. R. 836-081-0121 Examples of Methods of Development and Implementation

The actions and procedures described in this rule are examples of methods of implementation of the requirements of OAR 836-081-0111 and 836-081-0116. These examples are nonexclusive illustrations of actions and procedures that licensees may follow to implement 836-081-0111 and 836-081-0116. The examples are as follows:

(1) Assessing risk. The licensee:

(a) Identifies reasonably foreseeable internal or external threats that could result in unauthorized disclosure, misuse, alteration or destruction of customer information or customer information systems;

(b) Assesses the likelihood and potential damage of these threats, taking into consideration the sensitivity of customer information; and

(c) Assesses the sufficiency of policies, procedures, customer information systems and other safeguards in place to control risks.

(2) Managing and controlling risk. The licensee:

(a) Designs its information security program to control the identified risks, commensurate with the sensitivity of the information, as well as the complexity and scope of the licensee’s activities;

(b) Trains staff, as appropriate, to implement the licensee’s information security program; and

(c) Regularly tests or otherwise regularly monitors the key controls, systems and procedures of the information security program. The frequency and nature of these tests or other monitoring practices are determined by the licensee’s risk assessment.

(3) Overseeing service provider arrangements. The licensee:

(a) Exercises appropriate due diligence in selecting its service providers; and

(b) Requires its service providers to implement appropriate measures designed to meet the objectives of this regulation, and, where indicated by the licensee’s risk assessment, takes appropriate steps to confirm that its service providers have satisfied these obligations.

(4) Adjusting the program. The licensee monitors, evaluates and adjusts, as appropriate, the information security program in light of any relevant changes in technology, the sensitivity of its customer information, internal or external threats to information, and the licensee’s own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements and changes to customer information systems.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240 & 746.670
ID 2-2003, f. & cert. ef. 3-17-03

Or. Admin. R. 836-081-0126 Unfair Insurance Trade Practice

Violation of any provision of OAR 836-081-0101 to 836-081-0126 is an unfair trade practice for purposes of ORS 746.240.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 746.240
ID 2-2003, f. & cert. ef. 3-17-03

Division 82 DISCONTINUANCE AND REPLACEMENT OF GROUP COVERAGE

Or. Admin. R. 836-082-0050 Statutory Authority

OAR 836-082-0055 is adopted by the Director of the Department of Consumer and Business Services pursuant to the authority of the Director:

(1) To carry out the prohibition in ORS 746.015 against unfair discrimination in the availability of insurance and in the terms or conditions of insurance policies;

(2) To aid in the carrying out of ORS 742.005(3); and

(3) To aid in the carrying out of ORS 742.005(4).

History

Statutory/Other Authority: ORS 731.244, 742 & 746.240
Statutes/Other Implemented: ORS 742.005(3)–742.005(4) & 746.0015(1)
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 13-1990, f. 6-12-90, cert. ef. 7-1-90

Or. Admin. R. 836-082-0055 Continuance of Group Health Insurance Coverage in Situations Involving Replacement

(1) This rule:

(a) Establishes the liable insurer when one insurer's group health policy or contract providing coverage for hospital or medical services or expenses replaces a policy or contract of similar benefits of another insurer;

(b) Establishes which policy or contract provides coverage for a policyholder when an insurer replaces a group health insurance policy or contract with a policy or contract of similar benefits.

(2) An insurer of a prior policy or contract is liable as follows:

(a) If the insurer of the prior policy or contract is not the insurer of the succeeding policy, the insurer of the prior policy or contract remains liable as provided in ORS 743.529 with respect to an individual who is hospitalized on the date of termination of a prior policy or contract only to the extent of its accrued liabilities and extensions of benefits;

(b) If the insurer of the prior policy or contract and the succeeding policy or contract is the same, the insurer remains liable under the prior policy or contract only to the extent of its accrued liabilities and extensions of benefits.

(3) Except as ORS 743.529 otherwise applies to an individual who is hospitalized on the date of termination of the prior policy, if an individual was validly covered under the prior plan on the date of discontinuance and is a member of the class or classes of individuals eligible for coverage under the succeeding plan, the individual is eligible for coverage under the succeeding plan without regard to actively-at-work or nonconfinement provisions. Any reference under this section to an individual who was or was not totally disabled is a reference to the individual's status immediately prior to the date the succeeding plan's coverage becomes effective. The following provisions govern such coverage:

(a) The minimum level of benefits to be provided by a succeeding plan is the applicable level of benefits of the succeeding plan reduced by any benefits payable by the prior plan;

(b) Such coverage must be provided under the succeeding plan until the date on which the individual's coverage would terminate in accordance with the succeeding plan provisions applicable to individual termination of coverage, such as termination of employment or eligibility as a dependent.

(4) Section (3) of this rule does not apply with respect to an individual who is excluded under the succeeding policy because the individual is otherwise covered under another policy with similar benefits.

(5) In applying deductibles or waiting periods, the insurer of a succeeding plan must give credit for the satisfaction or partial satisfaction of the same or similar provisions under a prior plan providing similar benefits, whether the prior plan is its own or was issued by another insurer. In the case of deductible provisions, the credit must apply for the same or overlapping benefit periods and must be given for expenses actually incurred and applied against the deductible provisions of the prior plan during the calendar year in which the succeeding plan becomes effective. However, the credit applies or must be given only to the extent the expenses are recognized under the terms of the succeeding plan and are subject to a similar deductible provision.

(6) In any situation in which a determination of the prior insurer's benefit is required, it is the responsibility of the claimant to furnish evidence of the terms of the prior plan and of claim payments by the prior insurer.

History

Statutory/Other Authority: ORS 731.244, 742 & 746.240
Statutes/Other Implemented: ORS 742.005(3), (4) & 746.0015(1)
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 13-1990, f. 6-12-90, cert. ef. 7-1-90

Division 85 PRACTICES INJURIOUS TO PUBLIC OR FREE COMPETITION

Or. Admin. R. 836-085-0001 Statutory Authority; Purpose; Applicability

(1) OAR 836-085-0001 to 836-085-0050 are adopted pursuant to the general rulemaking authority of the Director of the Department of Consumer and Business Services in ORS 731.244 to aid in implementing ORS 737.330, 746.160 and 746.240.

(2) The purpose of OAR 836-085-0001 to 836-085-0050 is to protect the insurance-buying public in insurance transactions involving termination, renewal or nonrenewal, or premium increases on contracts of insurance by:

(a) Regulating the grounds for midterm cancellation of an insurance policy;

(b) Prohibiting midterm increases in premium;

(d) Reducing the opportunity for breach of policy bargain, misrepresentation by omission or untimely disclosure, and unfair discrimination among insureds; and

(e) Increasing the opportunity for insurance producers to freely compete.

(3) OAR 836-085-0001 to 836-085-0050 shall apply to all forms of commercial insurance that are subject to filing under ORS 737.330 on risks or operations in this state, except for:

(a) Commercial liability insurance as defined in ORS 731.074, and comprehensive or package policies that include commercial liability insurance coverage;

(b) Reinsurance;

(d) Marine and transportation insurance;

(e) Health Insurance;

(f) Life Insurance;

(g) FAIR plans and automobile assigned risk insurance;

(h) Workers' Compensation and employers' liability insurance;

(i) Nuclear liability insurance;

(j) Fidelity and surety insurance;

(k) Hazardous waste and environmental impairment insurance;

(l) Aviation insurance;

(m) Commercial automobile liability insurance;

(n) Any commercial insurance policy that has not been previously renewed if the policy has been effect less than 60 days at the time notice of cancellation is mailed or otherwise delivered;

(o) Any policy issued by a surplus lines insurer.

(4) OAR 836-085-0001 to 836-085-0050 are not exclusive. The director may also consider other provisions of the Insurance Code to be applicable to the circumstances or situations addressed herein. Policies may provide terms more favorable to policyholders than are required by these rules. The rights provided by these rules are in addition to, and do not prejudice any other rights the policyholder may have under, common law, statute or other Oregon Administrative Rules.

History

Statutory/Other Authority: ORS 731.244, 737 & 746.240
Statutes/Other Implemented: ORS 737.330, 742.005(3)–(4), 746.160(3) & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 21-1988, f. & cert. ef. 12-16-88
ID 8-1987, f. & ef. 12-1-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0005 Definitions

As used in OAR 836-085-0001 to 836-085-0050:

(1) "Cancellation" means termination of a policy at a date other than its expiration date.

(2) "Expiration date" means the date upon which coverage under a policy ends. For a policy written for a term longer than one year or with no fixed expiration date, "expiration date" means the annual anniversary date of the policy.

(3) “Nonpayment of premium” means the failure of the named insured to discharge any obligation in connection with the payment of premium on a policy of commercial insurance whether the payments are payable directly to the insurer or an insurance producer or indirectly payable under a premium finance plan or extension of credit.

(4) "Premium" means the contractual consideration charged to an insured for insurance for a specified period of time regardless of the timing of actual charges.

((5) "Renewal" or "Renew" means the issuance of, or the offer to issue by an insurer, a policy succeeding a policy previously issued and delivered by the same insurer or the issuance of a certificate or notice extending the terms of an existing policy for a specified period beyond its expiration date.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-1987, f. & ef. 12-14-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0010 Midterm Cancellation

(1) A policy of commercial insurance may not be cancelled by the insurer prior to the expiration date of the policy, except on one or more of the following grounds:

(a) Nonpayment of premium;

(b) Fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy or in presenting a claim under the policy;

(c) Substantial increase in the risk of loss after insurance coverage has been issued or renewed, including but not limited to an increase in exposure due to rules, legislation or court decision;

(d) Failure to comply with reasonable loss control recommendations;

(e) Substantial breach of contractual duties, conditions or warranties;

(f) Determination by the Director of the Department of Consumer and Business Services that the continuation of a line of insurance or class of business to which the policy belongs will jeopardize a company's solvency or will place the insurer in violation of the insurance laws of Oregon or any other state; or

(g) Loss or decrease in reinsurance covering the risk.

(2) Cancellation of a commercial policy that includes provisions of the standard fire insurance policy under ORS 742.206 to 742.242 and is written as a single coverage shall not be effective until at least 30 days after the insured receives a written notice of cancellation. Cancellation of a commercial policy that does not include provisions of the standard fire insurance policy shall not be effective until at least 10 working days after the insured receives a written notice of cancellation. The notice in either case shall state the effective date of and the reason for cancellation and shall inform the insured of the hearing rights established by OAR 836-085-0011.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 737.330, 742.005, 746.160 & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 15-1996, f. & cert. ef. 11-12-96
ID 8-1990, f. & cert. ef. 5-4-90
ID 21-1988, f. & cert. ef. 12-16-88
ID 8-1987, f. & cert. ef. 12-14-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0011 Hearing on Cancellation

Within 30 days after receiving a notice of cancellation under OAR 836-085-0010, an insured may request a hearing before the Director. The purpose of this hearing shall be limited to establishing the existence of the proof or evidence given by the insurer in its notice of cancellation. The burden of proving the reason for cancellation shall be upon the insurer.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 8-1987, f. & cert. ef. 12-14-87

Or. Admin. R. 836-085-0015 Long-term Cancellation

If a policy is issued for a term longer than one year, and for additional consideration a premium is guaranteed, the insurer may not refuse to renew the policy or increase the premium for the term of that policy.

History

Statutory/Other Authority: ORS 731, 737 & 746
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 21-1988, f. & cert. ef. 12-16-88
ID 8-1987, f. & cert. ef. 12-14-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0025 Renewal with Altered Terms

(1) If an insurer offers or purports to renew a policy of insurance on terms less favorable to the insured or at higher rates, the new terms or rates may take effect on the renewal date if the insurer provides 30 days' written notice to the insured and to the insurance producer, if any. If the insurer does not provide such notice, the insured may cancel the renewal policy within 30 days after receipt of such notice. Earned premium for period of coverage, if any, shall be calculated pro rata at the lower of the current or previous year's rate. If the insured accepts the renewal, any premium increase or changes in terms shall be effective immediately following the prior policy's expiration date.

(2) Nonrenewal of a policy shall not be effective until at least 30 days after the insured receives a written notice of nonrenewal. If, after an insurer provides a notice of nonrenewal as described in this section, the insurer extends the policy 90 days or less, additional notice of nonrenewal is not required with respect to the extension. For purposes of this section, "nonrenewal" means the refusal of an insurer to renew a policy at its expiration date.

(3) Section (1) of this rule does not apply:

(a) If the change is a form, rate or plan filed with the Director of the Department of Consumer and Business Services and applicable to the entire line of insurance or class of business to which the policy belongs; or

(b) To a premium increase based on the altered nature or extent of the risk insured against.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 21-1988, f. & cert. ef. 12-16-88
ID 8-1988, f. & cert. ef. 12-14-87
IC 6-1985, f. 11-29-85, ef. 12-1-85
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0035 Cancellation or Nonrenewal Notice

(1) If a risk sharing plan exists under ORS Chapter 735 for the kind of coverage cancelled or nonrenewed, notice of cancellation or nonrenewal required under OAR 836-085-0010(2) is not effective unless the notice contains adequate instructions to the policyholder and the insurance producer, if any, for applying for insurance through a risk sharing plan under ORS Chapter 735.

(2) Adequate instructions under section (1) of this rule must direct the policyholder to the agent of the notifying insurer for assistance or, if no agent exists, must provide that the insurer will directly assist in submission of the application.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 8-1987, f. & ef. 12-14-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0040 Cancellation for Nonpayment of Premium

OAR 836-085-0035 does not apply if the ground for cancellation or nonrenewal is nonpayment of the premium and if the notice so states.

History

Statutory/Other Authority: ORS 731
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 8-1987, f. & ef. 12-14-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0045 Unfair Trade Practices

(1) Failure of an insurer to comply with OAR 836-085-0010 to 836-085-0050 constitutes an unfair trade practice under ORS 746.240.

(2) A midterm premium increase or a policy coverage reduction attempted or executed in nonconformance with ORS 737.330 or 742.003 constitutes an unfair trade practice under 746.240.

(3) Block Cancellations or Nonrenewals of entire lines of insurance or withdrawal of classes of business are presumed to be unfairly discriminatory and constitute an unfair trade practice under ORS 746.240, unless prior authorization is received.

(4) Termination of an appointed insurance producer, or an attempt to terminate an appointed insurance producer solely to achieve block cancellation or nonrenewal of entire lines of insurance or other such instant reunderwriting of an insurance producer book of business is presumed to constitute an unfair trade practice under ORS 746.240 and an unfair trade practice detrimental to free competition under 746.160.

(5) Any nonrenewal must be for justifiable cause.

(6) Inability to substantiate justifiable cause for nonrenewal will be subject to Division of Financial Regulation review.

(7) Unjustified nonrenewals of such frequency as to indicate a general business practice are presumed to constitute an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731.244 & ORS 746.240
Statutes/Other Implemented: ORS 746.240, ORS 746.045, 746.055 & 746.160(3)
ID 31-2024, minor correction filed 08/20/2024, effective 08/20/2024
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-2005, f. 5-18-05, cert. ef. 8-1-05
ID 8-1987, f. & ef. 12-14-87
IC 4-1985, f. & ef. 9-19-85
IC 2-1985(Temp), f. 5-31-85, ef. 6-15-85

Or. Admin. R. 836-085-0050 Proof of Notice

A post office certificate of mailing to the named insured at the named insured's last-known address constitutes conclusive proof that the named insured received the notice of cancellation or nonrenewal on the third calendar day after the date of the certificate of mailing.

History

Statutory/Other Authority: ORS 731.244 & 746.240
Statutes/Other Implemented: ORS 746.045, 746.055, 746.160(3) & 746.240
ID 12-2013, f. 12-31-13, cert. ef. 1-1-14
ID 8-1987, f. & ef. 12-14-87

Or. Admin. R. 836-085-0055 Cancellation and Renewal of Commercial Package Policies

(1) A commercial package policy that includes commercial liability insurance coverage is subject to ORS 742.702 (Grounds for cancellation) and ORS 742.706 (Renewal), governing the cancellation and renewal of commercial liability insurance policies. For purposes of this rule, “commercial liability insurance” has the meaning given that term in ORS 731.074 (“Commercial liability insurance”).

(2) An insurer may cancel a commercial package policy that includes commercial liability insurance if:

(a) At least 10 working days prior written or electronic notice is given for non-payment of premium; or

(b) At least 30 days prior written or electronic notice is given for any other statutorily permitted reason.

(3) An insurer may nonrenew a commercial package policy that includes commercial liability insurance if at least 45 days prior written notice or electronic notice is given.

(4) Sections (2) and (3) do not apply to a commercial package policy subject to the exemptions set forth in ORS 742.710.

(5) OAR 836-058-0055 does not apply to a commercial package policy cancelled at the request of the insured.

History

Statutory/Other Authority: ORS 731.244, 742.702, 742.706 & 742.710
Statutes/Other Implemented: 742.702
ID 7-2022, amend filed 09/23/2022, effective 10/01/2022
ID 8-1990, f. & cert. ef. 5-4-90

Or. Admin. R. 836-085-0201 Statutory Authority; Purpose; Applicability

(1) OAR 836-085-0201 to 836-085-0230 are adopted pursuant to the specific authority of 737.322, and the general rulemaking authority of the Director in ORS 731.244, to carry out 746.240 and the orderly administration of ORS Chapter 737 with respect to the workers' compensation experience rating system and its supporting statistical plan.

(2) The purpose of OAR 836-085-0201 to 836-085-0230 is to amend the authorized workers' compensation experience rating system for timely apprising insured employers of their premium modification factors so the employers can make necessary adjustments in the cost of goods or services sold.

(3) OAR 836-085-0201 to 836-085-0230 apply to all workers' compensation policies delivered or issued for delivery to employers in this state.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2) & 746.240
ID 6-2005, f. & cert. ef. 4-7-05
ID 3-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-085-0205 Definitions

As used in OAR 836-085-0201 to 836-085-0230, unless the context requires otherwise:

(1) “Experience Rating” means the prospective modification of a workers’ compensation insurance premium according to the Experience Rating Plan Manual of the National Council on Compensation Insurance filed with the Director, or an alternative plan otherwise authorized pursuant to OAR 836-042-0015(6)(b).

(2) “Insurer” means any person authorized to write workers’ compensation insurance in this state and includes the State Accident Insurance Fund Corporation.

(3) “Modification Factor” means the numerical result of an experience rating calculation.

(4) “Normal Anniversary Rating Date” means the date the rates and experience rating modification for an individual employer changes, as established by the rating organization.

(5) “Premium” means the contractual amount charged to an insured for insurance for a specified period of time, regardless of the timing of actual charges.

(6) “Rating Plan” means any set of rules and values filed with the Director of the Department of Insurance and Finance and used by an insurer to calculate premiums.

(7) “Statistical Plan” means the uniform statistical plan for workers’ compensation insurance statistics as prescribed by OAR 836-042-0045.

(8) “Tentative Experience Modification Endorsement” is the form of prior notice to the employer of the tentative modification factor calculation by the insurer for use in policy issuance.

(9) “Workers’ Compensation Insurance” means insurance providing coverage for the obligation of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656 of this state, similar laws of the United States or agreements between states.

[Publications: Publications referenced are available from the agency.]

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2)
ID 3-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-085-0210 Adjustment for Experience of Employer; Calculation of Tentative Modification Factors

For purposes of OAR 836-085-0201 to 836-085-0230:

(1) An insurer shall adjust for experience of an employer by multiplying the insurance premium by the modification factor.

(2) An insurer shall calculate tentative modification factors in accordance with experience data known or discoverable by the insurer and in accordance with the provisions and formulas of the experience rating plan authorized by OAR 836-042-0015(6).

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2)
ID 3-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-085-0215 Insurer Implementation of Employer Experience Rating Modifications

(1) An insurer may apply to a policy for an individual employer as of the policy inception date, or as of the normal anniversary rating date, if different, the experience rating modification factors for the employer received by the insurer from the rating organization within 90 days from the inception of the policy or normal anniversary rating date, if the insurer has provided a tentative experience modification endorsement in compliance with OAR 836-085-0210, or normal anniversary rating endorsement, to the insured at policy issuance.

(2) An insurer shall not apply to a policy for an individual employer the individual employer experience rating modification factors received by the insurer from the rating organization or produced by an insurer that produces its individual employer experience rating modification factors pursuant to OAR 836-042-0015 after 90 days from the inception of the policy, or normal anniversary rating date, if different, until a date at least 30 days after the insurer has provided notice to the individual employer of the experience rating modification factor by endorsement. Prior to that date, the insurer may apply to the policy a tentative experience rating endorsement issued in compliance with 836-085-0210.

(3) An insurer shall not apply to a policy of an individual employer the employer experience rating modification factors received by the insurer from the rating organization or produced by an insurer that produces its individual employer experience rating modification factors pursuant to OAR 836-042-0015 if application of the procedures in sections (1) and (2) of this rule will result in implementation of the factors less than 90 days before the expiration date or subsequent anniversary rating date of the policy. However, the insurer shall provide written notice of the inapplicable experience rating modification to the employer.

(4) Notwithstanding sections (1), (2), and (3) of this rule, any employer experience rating modification factors received by the insurer from the rating organization or produced by an insurer that produces its individual employer experience rating modification factors pursuant to OAR 836-042-0015 prior to policy or rating period expiration that results in a premium reduction to that employer shall be applied to the policy as of the inception date of that policy or the applicable anniversary rating date.

(5) This rule applies to intrastate and interstate experience rating modification factors.

(6) This rule does not apply to experience rating modification factors that result from changes in the ownership of the insured operation.

(7) If an employer is a client of a worker leasing company, as established under ORS 656.850, the provisions of this rule are modified as follows:

(a) Sections (1), (2) and (3) of this rule apply if the leasing company has filed a worker leasing notice naming the client with the Workers’ Compensation Division and the insurer within 30 days of the date leased workers were first provided to the client;

(b) When the leasing company files the worker leasing notice with its insurer for an experience rated client 31 or more days after the date leased workers were first provided to the client, an insurer may apply an experience rating modification factor to a client’s premium as of the date the leased workers were first provided, if the insurer receives such factors from the rating organization within 90 days of the date the worker leasing notice is received by the insurer. Prior to the receipt of the experience rating modification factor, the insurer may apply a tentative factor to the client’s premium in compliance with OAR 836-085-0210 and by giving written notice to the leasing company;

(c) An insurer may not apply an experience rating modification factor to a client’s premium from the date leased workers were first provided if the factor is received from the rating organization more than 90 days after the insurer’s receipt of the client’s worker leasing notice, until a date at least 30 days after the insurer has provided notice to the leasing company; and

(d) Notwithstanding subsections (a), (b) and (c) of this section, any client experience rating modification factors received by the insurer for a client that results in a premium reduction to that client shall be applied as of the date leased workers were first provided by the leasing company to the client.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2) & 746.240
ID 9-1998, f. & cert. ef. 7-28-98
Reverted to ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
ID 19-1997(Temp), f. 12-23-97, cert. ef. 1-1-98 thru 6-22-98
ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
ID 13-1989, f. 12-6-89, cert. ef. 1-1-90
ID 3-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-085-0217 Employer Failure to Cooperate; Appeal

(1) As provided in this rule, sections (2) and (3) of OAR 836-085-0215 do not apply if the rating organization is unable to calculate the modification factor for an insured employer because the employer has failed to cooperate in audits or because of other material fault attributable to the employer or an agent of the employer.

(2) An employer may appeal application of experience modification factors under section (1) of this rule by applying to the administrator of the Division of Financial Regulation for a hearing not later than the 30th day after the insurer notifies the employer that the insure intends to apply the factors because of the employer’s noncooperation or other material fault. The administrator shall hold a hearing on the appeal as provided in ORS 737.505, and may affirm or deny the appeal.

(3) An appeal under section (2) of this rule shall stay the application of the experience modification factors under section (1) of this rule.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2) & 746.240
ID 30-2024, minor correction filed 08/20/2024, effective 08/20/2024
ID 3-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-085-0225 Unfair Trade Practices

(1) Retroactive application of experience rating modification factors in any manner other than provided for in OAR 836-085-0215 constitutes an unfair trade practice under ORS 746.240.

(2) Failure of an insurer or rating organization to comply with the statistical reporting requirements of OAR 836-042-0045 constitutes an unfair trade practice under ORS 746.240.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2) & 746.240
ID 6-2005, f. & cert. ef. 4-7-05
ID 3-1988, f. & cert. ef. 1-20-88

Or. Admin. R. 836-085-0230 Penalties for Late Submission of Rating Data

(1) When the Director imposes a civil penalty for violation of OAR 836-042-0045, the civil penalty shall be not less than $100 for each failure by the insurer to submit the data on the date that the submission of data is due. The Director may increase the civil penalty by $100 with respect to each such failure for each 30-day period following the due date in which the insurer continues the failure to submit the data.

(2) With respect to each calendar month in which an insurer has failed to submit data, for all failures by the insurer to submit data during that month, including continuing failures, the Director shall not impose civil penalties under section (1) of this rule that exceed $10,000 in the aggregate.

(3) Failure by an insurer to submit data for an individual employer after imposition of civil penalty under section (1) of this rule may result in suspension of the insurer’s certificate of authority.

History

Statutory/Other Authority: ORS 731 & 737
Statutes/Other Implemented: ORS 737.322(2)
ID 7-1989, f. & cert. ef. 7-28-89
ID 3-1988, f. & cert. ef. 1-20-88

Division 100 HEALTH INSURANCE REFORM

Or. Admin. R. 836-100-0100 Authority; Purpose; Scope

(1) OAR 836-100-0100 to 836-100-0120 are adopted by the Director of the Department of Consumer and Business Services pursuant to ORS 743.061. The purpose of OAR 836-100-0100 to 836-100-0120 is to establish the uniform administrative standards that health insurers and health care entities are required to comply with under ORS 743.061. The uniform standards have been developed by the Office for Oregon Health Policy and Research in consultation with stakeholders pursuant to ORS 743.062.

(2) The uniform standards adopted under OAR 836-100-0100 to 836-100-0120 apply to all health insurers and health care entities in Oregon as specified in each companion guide.

History

Statutory/Other Authority: ORS 731.244 & 743.061
Statutes/Other Implemented: ORS 743.061
ID 11-2013, f. 12-31-13, cert. ef. 1-1-14
ID 12-2011, f. & cert. ef. 7-15-11

Or. Admin. R. 836-100-0105 Definitions

(1) “Electronic transaction” means to conduct a transaction:

(a) Through the use of a computer program or an electronic or other automated means independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual; or

(b) Through the use of a web portal or the internet.

(2)(a) “Health care entity” includes:

(A) A health care service contractor as required under ORS 750.055;

(B) A multiple employer welfare arrangement as required under ORS 750.333;

(D) Any entity licensed as a third party administrator under ORS 744.702;

(E) Any person or public body that either individually or jointly established a self-insurance plan, program or contract, including but not limited to persons and public bodies that are otherwise exempt from the Insurance Code under ORS 731.036;

(F) A health care clearinghouse or other entity that processes or facilitates the processing of health care financial and administrative transactions from a nonstandard format to a standard format; and

(G) Any other person identified by the department that processes health care financial and administrative transactions between a health care provider and an entity described in this subsection.

(b) “Health care entity” does not include a pharmacy or a pharmacy benefits manager.

(3) “Health insurer” means any insurer authorized to transact health insurance in Oregon.

(4) “Oregon Companion Guide” means one of the compilations of uniform standards adopted by the Department of Consumer and Business Services and posted on the Oregon Division of Financial Regulation’s website that provide standards for health care financial and administrative transactions. The following Oregon Companion Guides are applicable to respective transactions with health insurers and health care entities in Oregon:

(a) Oregon Companion Guide for the Implementation of the ASC X12N/005010X279 Health Care Eligibility Benefit Inquiry and Response (270/271).

(b) Oregon Companion Guide for the Implementation of the ASC X12/005010X212: Claim Status Request and Response (276/277).

(c) The Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12N/005010X221 Health Care Claim Payment/Advice (835).

(d) The Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12/005010X222 Health Care Claim: Professional (837).

(e) The Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12/005010X223 Health Care Claim: Institutional (837).

(f) The Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12/005010X224 Health Care Claim: Dental (837).

(5) “Oregon Companion Guide Oversight Committee” means the committee appointed jointly by the Department of Consumer and Business Services and the Oregon Health Authority to carry out the responsibilities under OAR 836-100-0120.

(6) “Provider” means a health care provider that provides health care or medical services within Oregon for a fee and is eligible for reimbursement for these services.

History

Statutory/Other Authority: ORS 731.244 & ORS 743.061
Statutes/Other Implemented: ORS 743.061
ID 34-2024, minor correction filed 09/03/2024, effective 09/03/2024
ID 11-2013, f. 12-31-13, cert. ef. 1-1-14
ID 16-2011, f. & cert. ef. 10-31-11
ID 12-2011, f. & cert. ef. 7-15-11

Or. Admin. R. 836-100-0110 Adoption of Standards

(1) On or after October 1, 2012, to the extent possible, all health insurers and health care entities must conduct eligibility benefit inquiry and response transactions with health care providers as electronic transactions that conform to the uniform standards developed by the Office for Oregon Health Policy and Research pursuant to ORS 743.062 as set forth in the Oregon Companion Guide for Health Care Eligibility Benefit Inquiry and Response in accordance with the following schedule:

(2) On and after October 1, 2012, to the extent possible, all health insurers and health care entities must conduct claims or encounter transactions with health care providers in conformance with the uniform standards developed by the Office for Oregon Health Policy and Research pursuant to ORS 743.062 as set forth in the Oregon Companion Guide for Health Care Claim: Professional, Oregon Companion Guide for Health Care Claim: Institutional and Oregon Companion Guide for Health Care Claim: Dental in accordance with the following schedule:

(3) On and after January 1, 2014, to the extent possible, all health insurers and health care entities must conduct claims payment or advice transactions with health care providers as electronic transactions that conform to the uniform standards developed by the Office for Oregon Health Policy and Research pursuant to ORS 743.062 as set forth in the Oregon Companion Guide for Health Care Claim Payment or Advice.

(4) On and after January 1, 2014, to the extent possible, all health insurers and health care entities must conduct claims status request and response transactions with health care providers as electronic transactions that conform to the uniform standards developed by the Office for Oregon Health Policy and Research pursuant to ORS 743.062 as set forth in the Oregon Companion Guide for Claim Status Request and Response.

History

Statutory/Other Authority: ORS 731.244 & 743.061
Statutes/Other Implemented: ORS 743.061
ID 11-2013, f. 12-31-13, cert. ef. 1-1-14
ID 16-2011, f. & cert. ef. 10-31-11
ID 12-2011, f. & cert. ef. 7-15-11

Or. Admin. R. 836-100-0115 Waiver

If the director has granted a waiver before January 1, 2014, upon expiration of the waiver, the health insurer or health care entity shall comply with the requirements of OAR 836-100-0100.

History

Statutory/Other Authority: ORS 731.244 & 743.061
Statutes/Other Implemented: ORS 743.061
ID 11-2013, f. 12-31-13, cert. ef. 1-1-14
ID 16-2011, f. & cert. ef. 10-31-11
ID 12-2011, f. & cert. ef. 7-15-11

Or. Admin. R. 836-100-0120 Review and Update of Standards

(1) The Department of Consumer and Business Services and the Oregon Health Authority shall jointly appoint an Oregon Companion Guide Oversight Committee. The members appointed to the committee must demonstrate knowledge of the transactions subject to the Oregon Companion Guides, financial knowledge, operational industry or business expertise, or knowledge of the technology necessary to implement the requirements of the companion guides.

(2) The Oregon Companion Guide Oversight Committee shall meet as needed to review the implementation of the administrative standards encompassed by the Oregon Companion Guides. The committee shall address issues identified by the Department of Consumer and Business Services and the Oregon Health Authority, including but not limited to:

(a) Consider and make recommendations to Oregon Health Authority and Department of Consumer and Business Services about needed changes to the guides in order to keep the guide up to date with industry and federal government driven changes.

(b) Provide reports to Department of Consumer and Business Services and Oregon Health Authority regarding health insurer and provider participation, successes and areas for improvement.

(d) Review any proposed changes developed by Department of Consumer and Business Services to the rules requiring compliance with the companion guides.

History

Statutory/Other Authority: ORS 731.244 & 2011 OL Ch. 130 Sec. 2 (Enrolled SB 94)
Statutes/Other Implemented: 2011 OL Ch. 130 Sec. 2 (Enrolled SB 94)
ID 12-2011, f. & cert. ef. 7-15-11

Division 150 OREGON REINSURANCE PROGRAM

Or. Admin. R. 836-150-0010 Purpose and Statutory Authority

The purpose of OAR 836-150-0010 to 836-150-0060 is to administer the Oregon Reinsurance Program established in the Department of Consumer and Business Services for the purposes of stabilizing the rates and premiums for individual health benefit plans and providing greater financial certainty to consumers of health insurance in this state.

History

Statutory/Other Authority: ORS 731.244 & 2017 Or Laws ch 538 sec 19
Statutes/Other Implemented: 2017 Or Laws ch 538 sec 18-21
ID 38-2018, adopt filed 12/19/2018, effective 01/01/2019

Or. Admin. R. 836-150-0020 Definitions

The terms used in OAR 836-150-0010 to 836-150-0060 have the meaning prescribed in section 19, chapter 538, Oregon Laws 2017 (Enrolled House Bill 2391) and:

(1) “Benefit year” means a calendar year beginning on or after January 1, 2018 for which a reinsurance eligible health benefit plan provides health insurance coverage.

(2) “Department” means the Oregon Department of Consumer and Business Services.

(3) “Reinsurance eligible claim” means a claim for services covered under a reinsurance eligible health benefit plan that is incurred by a reinsurance eligible issuer during a benefit year and paid by the reinsurance eligible issuer before July 1 of the following year.

(4) “Reinsurance eligible issuer” means an insurer or health care service contractor who offers a reinsurance eligible health benefit plan to reinsurance eligible individuals.

(5) “Reinsurance payment” means payments issued to a reinsurance eligible issuer in accordance with section 2(3), chapter 538 Oregon Laws 2017 (Enrolled House Bill 2391) and OAR 836-150-0050.

History

Statutory/Other Authority: ORS 731.244 & 2017 Or Laws ch 538 sec 19
Statutes/Other Implemented: 2017 Or Laws ch 538 sec 18-21
ID 38-2018, adopt filed 12/19/2018, effective 01/01/2019

Or. Admin. R. 836-150-0030 Information Reporting

(1) As a condition of receiving reinsurance payments from the Oregon Reinsurance Program, a reinsurance eligible issuer must provide, for each benefit year, the following information to the department in the form and manner prescribed by the department:

(a) The name and company code assigned to the reinsurance eligible issuer by the National Association of Insurance Commissioners;

(b) The identification number assigned to the reinsurance eligible issuer by the Health Insurance Oversight System (HIOS);

(d) The portion of the reinsurance eligible issuer’s total reinsurance eligible claims for the benefit year that fall between the attachment point and reinsurance cap;

(e) A summary data file containing the following information for each reinsurance eligible individual with claims for which reinsurance payments are being requested:

(A) The member identification number assigned by the reinsurance eligible issuer to the reinsurance eligible individual;

(B) The start and end dates of coverage for the reinsurance eligible individual;

(C) The HIOS plan identification number for the reinsurance eligible health benefit plan in which the reinsurance eligible individual was enrolled;

(D) The total amount of reinsurance eligible claims for the reinsurance eligible individual for the benefit year; and

(E) The total amount of reinsurance eligible claims for the reinsurance eligible individual for the benefit year that fall between the attachment point and reinsurance cap;

(f) A detailed claims file extracted from the reinsurance eligible issuer’s claims processing system that includes the issuer’s complete record of all reinsurance eligible claims for the benefit year;

(g) An attestation signed by an executive officer of the reinsurance eligible issuer stating that the information is accurate as of the date of submission; and

(h) Any other information requested by the department.

(2) As a condition of receiving reinsurance payments from the Oregon Reinsurance Program, a reinsurance eligible issuer must submit the information required under this rule to the department:

(a) Using a secure method of transmission approved by the department; and

(b) On or before July 15 of the year following the benefit year for which the reinsurance payment is requested.

History

Statutory/Other Authority: ORS 731.244 & 2017 Or Laws ch 538 sec 19
Statutes/Other Implemented: 2017 Or Laws ch 538 sec 18-21
ID 38-2018, adopt filed 12/19/2018, effective 01/01/2019

Or. Admin. R. 836-150-0040 Reinsurance Parameters

(1) For the benefit year beginning on January 1, 2022 the parameters for the Oregon Reinsurance Program are:

(a) An attachment point of $92,000;

(b) A reinsurance cap of $1,000,000; and

(2) For the benefit year beginning on January 1, 2023 the parameters for the Oregon Reinsurance Program are:

(a) An attachment point of $95,000;

(b) A reinsurance cap of $1,000,000; and

(3) For the benefit year beginning on January 1, 2024 the parameters for the Oregon Reinsurance Program are:

(a) An attachment point of $95,000;

(b) A reinsurance cap of $1,000,000; and

(4) For the benefit year beginning on January 1, 2025 the parameters for the Oregon Reinsurance Program are:

(a) An attachment point of $103,000;

(b) A reinsurance cap of $1,000,000; and

(5) For the benefit year beginning on January 1, 2026 the parameters for the Oregon Reinsurance Program are:

(a) An attachment point of $108,000;

(b) A reinsurance cap of $1,000,000; and

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2017, ch 538, sec 19
Statutes/Other Implemented: Or Laws 2017, ch 538, sec 18-21
ID 8-2025, amend filed 11/17/2025, effective 01/01/2026
ID 1-2025, amend filed 01/16/2025, effective 01/16/2025
ID 55-2023, amend filed 12/21/2023, effective 01/01/2024
ID 1-2023, amend filed 01/24/2023, effective 01/31/2023
ID 12-2021, amend filed 12/16/2021, effective 01/01/2022
ID 2-2021, amend filed 01/21/2021, effective 02/01/2021
ID 2-2020, amend filed 04/24/2020, effective 04/24/2020
ID 8-2019, temporary amend filed 10/25/2019, effective 10/25/2019 through 04/21/2020
ID 38-2018, adopt filed 12/19/2018, effective 01/01/2019

Or. Admin. R. 836-150-0050 Reinsurance Payments

(1) The department will calculate the total reinsurance payment owed to each reinsurance eligible issuer.

(a) Subject to paragraph (b) and (c) of this rule, the reinsurance payment made to each reinsurance eligible issuer for a benefit year will be the product of the coinsurance rate and the portion of the reinsurance eligible issuer’s total reinsurance eligible claims for the benefit year that fall between the attachment point and the reinsurance cap.

(b) If the total reinsurance payments calculated under paragraph (a) of this rule would exceed the total dollar amount budgeted for the reinsurance program in a benefit year, the department may uniformly reduce the coinsurance rate for all reinsurance eligible issuers in that benefit year. If the department elects to reduce the coinsurance rate under this paragraph, the department will reduce the coinsurance rate only to the extent necessary to ensure that reinsurance payments do not exceed the total dollar amount budgeted for the benefit year.

(c) In making the calculation under paragraph (a), the department may disregard any or all reinsurance eligible claims reported by a reinsurance eligible issuer under OAR 836-150-0030 that cannot be verified as part of the audit described under OAR 836-150-0060(1).

(2) The department will issue reinsurance payments to all reinsurance eligible issuers on an annual basis in the year following each benefit year.

(3) Payments will be made directly to reinsurance eligible issuers by a method selected by the department.

History

Statutory/Other Authority: ORS 731.244 & 2017 Or Laws ch 538 sec 19
Statutes/Other Implemented: 2017 Or Laws ch 538 sec 18-21
ID 38-2018, adopt filed 12/19/2018, effective 01/01/2019

Or. Admin. R. 836-150-0060 Duties of the Administrator

As administrator of the Oregon Reinsurance program, the department will:

(1) Conduct an audit of the information submitted under 836-150-0030.

(2) Notify reinsurance eligible issuers of the results of the calculation described under 836-150-0050, including any modifications of the coinsurance rate.

(3) Issue reinsurance payments to each reinsurance eligible issuer in accordance with OAR 836-150-0050.

History

Statutory/Other Authority: ORS 731.244 & 2017 Or Laws ch 538 sec 19
Statutes/Other Implemented: 2017 Or Laws ch 538 sec 18-21
ID 38-2018, adopt filed 12/19/2018, effective 01/01/2019

Division 200 DEPARTMENT REGULATORY PROGRAMS

Or. Admin. R. 836-200-0000 Statutory Authority; Registration; Fees; Expiration; Renewal

(1) OAR 836-200-0000 to 836-200-0060 are adopted under the authority of ORS 646.267 and 646.285 for the purpose of implementing 646.263 to 646.285.

(2) The fee for filing a registration as an obligor of service contracts is $200. The fee under this section (2) must be included with the filing.

(3) The fee for annual renewal of a registration as an obligor of service contracts is $50.

(4) A registration expires on July 1 unless it is renewed on or before that date. A registrant must renew the registration by submitting the renewal fee to the Director of the Department of Consumer and Business Services.

(5) A registrant shall immediately notify the Director of any change in the information submitted in the registration of the registrant.

(6) ORS 646.263 to 646.285 and OAR 836-200-0000 to 836-200-0060 apply to merchandise and not to real property.

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263 - 646.285
ID 8-1997, f. & cert. ef. 7-10-97
ID 7-1996, f. & cert. ef. 5-28-96
ID 6-1995(Temp), f. & cert. ef. 9-12-95

Or. Admin. R. 836-200-0010 Assessments

(1) An obligor shall pay an annual assessment as required in ORS 646.281 in the amount of $75. The amount of the assessment is based on the expected costs of this registration program.

(2) Assessments under section (1) of this rule shall be imposed and collected annually unless the Director determines that additional amounts need to be assessed and collected in order to support the legislatively authorized budget of the Department with respect to its functions under ORS 646.263 to 646.285 or in order to support changes in the budget authorized by the Emergency Board. The additional amounts shall be assessed as provided in this rule.

(3) The Director shall assess a registrant only if the registrant is authorized to transact service contracts at the time of billing.

(4) A registrant must pay each assessment imposed under this rule not later than the 30th day after the date of the billing of the assessment by the Department. A registrant shall pay interest at nine percent per annum on any assessment that is not paid when due.

(5) In the event the Director determines that an assessment or a part thereof paid by a registrant is in excess of the amount legally due and payable to the Department, if the amount of the refund is less than $50, the Department shall pay the refund only upon receipt of a written request from the registrant. The written request must be received by the Department not later than three years from the date the assessment was paid to the Department.

History

Statutory/Other Authority: ORS 646.285
Statutes/Other Implemented: ORS 646.285
ID 8-1997, f. & cert. ef. 7-10-97
ID 7-1996, f. & cert. ef. 5-28-96

Or. Admin. R. 836-200-0020 Filing Procedures

(1) An applicant for registration must include proof of financial stability with the registration application. The proof must satisfy applicable requirements of OAR 836-200-0030 and 836-200-0040, or ORS 646.267(6).

(2) An applicant for registration must file with the Director a copy of the service contract form or forms that the applicant intends to use as a registrant in Oregon.

(3) A registrant must file with the Director all amendments to its service contract form or forms used in Oregon that change any contract term or condition applicable to the contract's use in Oregon, and all new contract forms to be used in Oregon. A registrant need not file any amendment that changes a contract only in graphics or form, and not substantively.

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263–646.285
ID 18-2006, f. & cert. ef. 9-8-06
ID 7-1996, f. & cert. ef. 5-28-96
ID 6-1995(Temp), f. & cert. ef. 9-12-95

Or. Admin. R. 836-200-0030 Form 10 K and Other Financial Stability Filings

(1) As provided in ORS 646.267, a registrant or applicant for registration may submit as proof of financial stability its own most recent Form 10-K that is filed with the Securities and Exchange Commission or, if the obligor's financial statements are consolidated with those of its parent company, may file the most recent Form 10-K of its parent company.

(2) A registrant or applicant for registration that is incorporated in another country may submit as proof of financial stability its own most recent Form 20-F or Form 40-F that is filed with the Securities and Exchange Commissioner, or may file the most recent Form 20-F or Form 40-F of its parent company if the obligor's financial statements are consolidated with those of its parent company, if the Form 20-F or Form 40-F shows a net worth of the obligor or its parent of at least $100 million in United States funds.

(3) A registrant or applicant for registration that is incorporated in another country that is a signing party to the North American Free Trade Agreement may submit as proof of financial stability its own most recent filing in its domiciliary country that the Securities and Exchange Commission recognizes as equivalent to the Form 10-K. If the parent company of the registrant or applicant is incorporated in another country that is a signing party to the North American Free Trade Agreement, the registrant or applicant may file the most recent filing by its parent company in the domiciliary country that the Securities and Exchange Commission recognizes as equivalent to the Form 10-K. A filing described in this section (3) is acceptable as proof of financial stability only if the filing shows a net worth of the obligor or its parent of at least $100 million in United States funds.

(4) A registrant or applicant who submits the Form 10-K, Form 20-F or Form 40-F of its parent company, or submits a filing described in section (3) of this rule that is filed by its parent company must include with the filing a statement by the parent company to the effect that:

(a) The company is the parent of the registrant; and

(b) The parent company agrees to guarantee the obligations of the registrant relating to service contracts sold by the obligor in this state.

(5) A statement described in section (4) of this rule must be signed by a director or officer of the parent company who is authorized by the parent company to sign such an agreement.

(6) A statement described in section (4) of this rule, when filed as proof of financial stability, shall be considered to be signed by a person who was authorized by the parent company to sign the agreement.

(7) A statement described in section (4) of this rule may be revoked by the parent company only if:

(a) The registrant gives notice of the revocation not later than the 60th day before the effective date of the revocation;

(b) The parent company agrees that it will continue to be liable for the obligations of the registrant relating to service contracts sold by the obligor in this state that are outstanding as of the effective date of revocation, or the registrant submits other proof satisfactory to the Director that a successor person is likewise obligated; and

(c) The registrant files proof of financial stability that replaces or succeeds the proof of financial stability guaranteed by the parent company.

(8) A registrant or applicant that maintains a net worth or shareholders’ equity of at least $100,000,000 but who is not required to file a Form 10-K with the Securities and Exchange Commission may file a copy of the obligor’s most recently audited annual financial statements to satisfy the requirement of ORS 646.267(5)(a), instead of the Form 10-K, Form 20-F or Form 40-F of its parent company or the filing described in section (3) of this rule. A registrant or applicant that substitutes an audited annual financial statement for a Form 10-K shall file a copy of its most recent audited annual financial statement annually with the director. The copy of the annual financial statements filed under this section shall be considered to be signed by a person who was authorized by the registrant or applicant to sign the agreement.

(9) If a registrant has submitted its Form 10-K or other proof of financial stability under this rule or has submitted the parent company's Form 10-K or other proof of financial stability of the parent under this rule, the registrant or its parent company must continue to be qualified to file the Form 10-K or other proof as long as the Form 10K or other submission is relied upon as proof of financial stability. A registrant must notify the Director if the net worth of the company that filed the Form 10-K or other proof of financial stability, whether the company is itself or the parent company, falls below $100 million or if the company is no longer publicly held.

(10) If a registrant goes out of business or if the registration of a registrant expires or is suspended or revoked:

(a) A parent company that is bound by a statement described in section (4) of this rule continues to be responsible for all obligations of the registrant that are still outstanding.

(b) A registrant that is qualified under section (8) of this rule continues to be responsible for all obligations of the registrant that are still outstanding.

(11) For the purpose of payment under a guarantee described in this rule, an obligor fails to perform under the service contract when the obligor fails to perform as agreed in the service contract by a date that is not later than the 60th day after the date of the demand for performance or by a date specified in the service contract for performance, whichever date is earlier.

(12) A registrant or applicant that is qualified under section (8) of this rule shall perform as agreed in the service contract by a date that is not later than the 60th day after the date of the demand for performance or by a date specified in the service contract for performance, whichever date is earlier.

[ED. NOTE: Tables referenced are available from the agency.]

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263 - 646.285
ID 21-2002, f. & cert. ef. 10-30-02
ID 7-1996, f. & cert. ef. 5-28-96
ID 6-1995(Temp), f. & cert. ef. 9-12-95

Or. Admin. R. 836-200-0040 Reimbursement Insurance Policy

(1) When an obligor or applicant for registration relies on a reimbursement insurance policy for purposes of the financial stability requirement in ORS 646.267, the obligor or applicant must submit a copy of the policy to the Director.

(2) A reimbursement insurance policy insuring service contracts issued, sold or offered for sale in this state shall conspicuously state that, upon failure of the obligor to perform under the contract, the insurer that issued the policy shall pay on behalf of the obligor any sums the obligor is legally obligated to pay or shall provide the service that the obligor is legally obligated to perform according to the obligor’s contractual obligations under the service contracts issued by the obligor. The following is an example of wording that will be acceptable for the purpose of this section:

Upon failure of the obligor to perform under the contract, _________ (name of insurer issuing policy) shall pay on behalf of the obligor any sums the obligor is legally obligated to pay or shall provide the service that the obligor is legally obligated to perform according to the obligor’s contractual obligation under the service contracts issued by the obligor, and _________ (insurer) will pay claims against the obligor for return of the unearned purchase price of the service contract.

(3) For the purpose of payment under a reimbursement insurance policy, an obligor fails to perform under the service contract when the obligor fails to perform as agreed in the service contract by a date that is not later than the 60th day after the date of the demand for performance or by a date specified in the service contract for performance, whichever date is earlier.

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263 - 646.285
ID 7-1996, f. & cert. ef. 5-28-96
ID 6-1995(Temp), f. & cert. ef. 9-12-95

Or. Admin. R. 836-200-0050 Registration Requirements Not Exclusive

Compliance with the filing requirements of OAR 836-200-0000 to 836-200-0060 are additional to and not in lieu of filing and other requirements established by law for the purpose of doing business in this state, including but not limited to compliance with filing requirements of the Secretary of State applicable to assumed business names and applicable to the business structure of an applicant.

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263 - 646.285
ID 7-1996, f. & cert. ef. 5-28-96
ID 6-1995(Temp), f. & cert. ef. 9-12-95

Or. Admin. R. 836-200-0055 Annual Report

For the purpose of enabling the Director to determine the assessment against each registrant according to the formula established in 836-200-0010, each registrant shall file a report for the preceding calendar year with the Director on or before March 1 of each year, or within such extension of time therefor as the Director may grant. The first report must be filed on or before March 1, 1997, for calendar year 1996. The report shall be in the form specified by the Director, shall contain the total number of service contracts produced in Oregon by the registrant during the preceding calendar year and shall be verified as follows:

(1) If the registrant is a corporation, by at least two principal officers of the registrant.

(2) If the registrant is a partnership, by two partners.

(3) If the registrant is neither a corporation nor a partnership, by its president and secretary.

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263 - 646.285
ID 7-1996, f. & cert. ef. 5-28-96

Or. Admin. R. 836-200-0060 Service on Registrant

The Director may make service on a registrant at the address shown on the current registration of the registrant on file with the Director, in the manner provided in ORS 183.310 to 183.550.

History

Statutory/Other Authority: ORS 646.267 & 646.285
Statutes/Other Implemented: ORS 646.263 - 646.285
ID 7-1996, f. & cert. ef. 5-28-96
ID 6-1995(Temp), f. & cert. ef. 9-12-95

Or. Admin. R. 836-200-0100 Notice, Collision Damage Waivers

For purposes of ORS 646.859, which provides that an auto rental agency offering collision damage waivers shall post a sign approved by the Department, the Department shall consider a sign approved if the sign meets the following requirements:

(1) The sign must state the following in bold type that is at least 1.25 inches high:

OUR CONTRACTS OFFER OPTIONAL COLLISION DAMAGE WAIVERS AT AN ADDITIONAL COST.

(2) The sign must be posted in the place of business of the auto rental agency in a location that is conspicuous to the public.

History

Statutory/Other Authority: ORS 705.135
Statutes/Other Implemented: ORS 646.859
Renumbered from 440-010-0001, ID 17-2006, f. & cert. ef. 8-11-06
IF 8-1989, f. 11-6-89, cert. ef. 12-11-89

Or. Admin. R. 836-200-0105 Statutory Authority; Registration; Fees; Expiration; Renewal

(1) OAR 836-200-0100 to 836-200-0140 are adopted under the authority of section 11, ch. 685, Oregon Laws 2007, for the purpose of implementing sections 1 to 11, Ch. 685, Oregon Laws 2007.

(2) The fee for submitting a Registration Application is $70.

(3) The fee for annual renewal of a Registration is $25.

History

Statutory/Other Authority: ORS 731.244; 2007 OL Ch. 685 & Sec. 11
Statutes/Other Implemented: 2007 OL Ch. 685 & Sec. 1 - 11
ID 4-2008, f. & cert. ef. 4-7-08

Or. Admin. R. 836-200-0110 Registration Procedures

(1) A warrantor of a vehicle protection product shall register with the Department of Consumer and Business Services by submitting to the Director a completed Warrantor of Vehicle Protection Product Registration Application on the form prescribed by the Director.

(2) A warrantor must include with the Registration Application a copy of each warranty form to be used in this state, and any amendments to the form that the warrantor proposes to use in the state of Oregon. A warrantor need not include any amendment that:

(a) Changes a warranty only in graphics or form, and not substantively; or

(b) Is a direct translation of the warranty form the warrantor proposes to use into a language other than English.

(3) A warrantor must also include with the Registration Application a copy of a warranty reimbursement insurance policy the warrantor intends to use to demonstrate the warrantor’s financial responsibility.

(4) A warrantor must include the registration fee with the Registration Application.

(5) A registration is not effective until the warrantor receives written notification from the Director.

(6) A warrantor must renew a registration by submitting to the Director on or before December 31 of each calendar year the renewal fee and a completed Warrantor of Vehicle Protection Product Renewal Form on the form prescribed by the Director.

(7) A warrantor shall notify the Director in writing of any change in the information contained in the Registration Application not later than 30 days after the information has changed.

History

Statutory/Other Authority: ORS 731.244; 2007 OL Ch. 685 & Sec. 11
Statutes/Other Implemented: 2007 OL Ch. 685 & Sec. 4
ID 4-2008, f. & cert. ef. 4-7-08

Or. Admin. R. 836-200-0120 Warranty

To comply with the requirement in section 3, chapter 685, Oregon Laws 2007 that each warranty must list the name, mailing address, and telephone number for the Division of Financial Regulation, Department of Consumer and Business Services, a warrantor shall include the contact information for Consumer Advocacy as set out on the website for the Division of Financial Regulation at dfr.oregon.gov.

History

Statutory/Other Authority: ORS 731.244, Or Laws 2007, ch 685 & sec 11
Statutes/Other Implemented: Or Laws 2007, ch 685 & sec 3
ID 47-2023, minor correction filed 07/24/2023, effective 07/24/2023
ID 4-2008, f. & cert. ef. 4-7-08

Or. Admin. R. 836-200-0130 Reimbursement Insurance Policy

(1) A reimbursement insurer must deliver to the warrantor and the Director of the Department of Consumer and Business Services the written notice of cancellation for a reimbursement insurance policy as required by Section 6(2), Ch. 685, Oregon Laws 2007 not later than 30 days prior to the effective date of the cancellation.

(2) A warrantor must discontinue offering vehicle protection product warranties as of the date of cancellation of the reimbursement insurance until the warrantor obtains new reimbursement insurance.

(3) A warrantor must deliver a copy of the new reimbursement policy to the Director within 10 business days of the warrantor’s receipt of the new reimbursement policy.

History

Statutory/Other Authority: ORS 731.244; 2007 OL Ch. 685 & Sec. 11
Statutes/Other Implemented: 2007 OL Ch. 685, Sec. 5 & 6
ID 4-2008, f. & cert. ef. 4-7-08

Or. Admin. R. 836-200-0140 Registration Requirements Not Exclusive

Compliance with the registration requirements of OAR 836-200-0100 to 836-200-0140 is additional to and not in lieu of any other requirements established by law for the purpose of doing business in this state, including but not limited to compliance with filing requirements of the Secretary of State applicable to assumed business names and applicable to the business structure of an applicant.

History

Statutory/Other Authority: ORS 731.244; 2007 OL Ch. 685 & Sec. 11
Statutes/Other Implemented: 2007 OL Ch. 685 & Sec. 11
ID 4-2008, f. & cert. ef. 4-7-08

Or. Admin. R. 836-200-0200 License, Discount Medical Plan Organization; Renewal

(1) An applicant for a license to operate as a discount medical plan organization shall apply for the license by completing and submitting to the Director the application form prescribed by the Director. The application form shall request the information required by section 5, chapter 272, Oregon Laws 2007 and this rule.

(2) To enable the Director to determine whether an applicant is financially responsible, the application shall require the following information:

(a) Whether the applicant has ever filed for bankruptcy or been adjudged a bankrupt.

(b) An audited annual financial statement for the most recent year or alternatively, an unaudited financial statement and the applicable signed federal tax form of the applicant for the most recent year, to prove that the applicant is solvent and has a continuing income stream. An applicant may submit a consolidated financial statement if the statement clearly segregates and reports the affairs of the applicant. The applicable federal tax form for the purpose of this subsection is as follows:

(A) For an individual, Form 1040.

(B) For a corporation, Form 1120.

(D) For a partnership, Form 1065.

(E) For a limited liability company, the form that the company files for federal income tax purposes.

(c) If the applicant is a corporation that is newly formed for the purpose of transacting business as a discount medical plan organization, the statements and forms required under subsection (b) of this section as they may be available, and the applicant’s business plan, including three years of projections of net worth, revenue, expenses and net income.

(3) To enable the Director to determine whether an applicant has adequate experience and expertise to operate a discount medical plan organization, an applicant shall indicate, as provided in the application, all states and provinces of Canada in which the applicant currently holds a license, registration or certificate of authority to transact business as a discount medical plan organization, or has held such a license or certificate within ten years prior to the date of the application.

(4) To enable the Director to determine whether an applicant is of good character, an applicant shall indicate, as provided in the application, whether any license or registration of the applicant to act in any occupational or professional capacity has ever been refused, revoked or suspended in this or any other state, and whether the applicant has otherwise ever been the subject of an enforcement action taken by a licensing or registration agency. If the applicant's answer is affirmative in any respect, the applicant must also provide the name and address of the licensing or registration agency, the date of the complaint or the action taken against the license or registration, a description of the nature of the complaint or the reason for the action taken against the license or registration, and, with regard to a complaint, a description of the licensing or registering agency's disposition of the complaint.

(5) In addition to the requirements of sections (3) and (4) of this rule, to enable the Director further to determine whether an applicant has adequate experience and expertise to operate a discount medical plan organization and whether an applicant is of good character, an applicant shall submit with the application a copy of the NAIC biographical affidavit, completed by the following individuals:

(a) Each member of the board of directors, executive committee or other governing board or committee of the discount medical plan organization;

(b) Each principal officer in the case of a corporation or each partner or member in the case of a partnership or association who holds an interest of ten percent or more in the partnership or association; and

(c) Each shareholder holding directly or indirectly ten percent or more of the voting securities of the discount medical plan organization.

(6) A licensee must renew a license by submitting to the Director a completed license renewal application on the form prescribed by the Director, not later than the 30th day after receiving a notice of renewal from the Director.

History

Statutory/Other Authority: ORS 731.244 & 742.426
Statutes/Other Implemented: ORS 742.426
ID 5-2008, f. & cert. ef. 4-14-08

Or. Admin. R. 836-200-0210 Renewal of expired license

(1) A person whose license as a discount medical plan organization has expired may renew the license by submitting a completed license renewal application on the form prescribed by the Director, not later than the 90th day after the date the license expired and if:

(a) The license was not suspended or revoked by the Director, or not renewed, on any ground under Section 11, Chapter 272, Oregon Laws 2007; and

(b) The Director is satisfied that the person meets the requirements for the license in Section 5, Chapter 272, Oregon Laws 2007.

(2) A person who does not renew an expired license as provided in this rule may obtain a license only if the person applies and qualifies for and is issued the license in the same manner as a person who initially applies for the license.

History

Statutory/Other Authority: ORS 731.244 & 742.430
Statutes/Other Implemented: ORS 742.430
ID 5-2008, f. & cert. ef. 4-14-08

Or. Admin. R. 836-200-0215 One-time processing fee, cancelled application

A discount medical plan organization may retain a one-time processing fee that is not more than $30 when the organization refunds fees, service or subscription charges, dues or other consideration paid by a member who cancels a discount medical plan as provided in section 8, chapter 272, Oregon Laws 2007.

History

Statutory/Other Authority: ORS 731.244 & 742.432
Statutes/Other Implemented: ORS 742.432
ID 5-2008, f. & cert. ef. 4-14-08

Or. Admin. R. 836-200-0220 License Requirement Not Exclusive

Compliance with the licensing requirement of OAR 836-200-0200 is additional to and not in lieu of any other requirements established by law for the purpose of doing business in this state, including but not limited to compliance with filing requirements of the Secretary of State applicable to assumed business names and applicable to the business structure of an applicant.

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: ORS 742.426
ID 5-2008, f. & cert. ef. 4-14-08

Or. Admin. R. 836-200-0250 Purpose and Authority

OAR 836-200-0255 is adopted to implement the provisions of Section 3, chapter 561, Oregon Laws 2011. OAR 836-014-0255 applies to a contracting entity as defined in Section 1, chapter 561, Oregon Laws 2011 (Enrolled Senate Bill 634) other than an entity operating under a certificate of authority or license issued by the Department of Consumer and Business Services that enters into or renews a contract subject to Section 4, chapter 561, Oregon Laws 2011 on or after January 1, 2012.

History

Statutory/Other Authority: ORS 731.244 & sec. 3, ch. 561 & OL 2011 (Enrolled SB 634)
Statutes/Other Implemented: Sec. 1 to 5, ch. 561 & OL 2011 (Enrolled SB 634))
ID 18-2011, f. 11-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-200-0255 Registration of Contracting Entity

(1) A contracting entity, as defined in Section 1, chapter 561, Oregon Laws 2011 (Enrolled Senate Bill 634), that is not operating under a certificate of authority or license issued by the Department of Consumer and Business Services shall register annually with the Department of Consumer and Business Services by submitting the following information to the department in the manner requested by the Director, along with a $150 fee:

(a) The official name of the entity and any secondary, alternative or substitute designations;

(b) The mailing address and telephone number of the headquarters of the entity; and

(c) The name and phone number of a representative of the entity who shall serve as the primary contact for the department.

(2) The requirements of this rule do not apply to a contracting entity that is under common ownership and control of a contracting entity that is licensed by or has a certificate of authority from the department.

History

Statutory/Other Authority: ORS 731.244 & sec. 3, ch. 561 & OL 2011 (Enrolled SB 634)
Statutes/Other Implemented: Sec. 1 to 5, ch. 561 & OL 2011 (Enrolled SB 634))
ID 18-2011, f. 11-16-11, cert. ef. 1-1-12

Or. Admin. R. 836-200-0300 Statement of Purpose; Authority

OAR 836-200-0300 to 836-200-0315 are adopted by the Director of the Department of Consumer and Business Services pursuant to sections 2 and 3, chapter 499, Oregon Laws 2011 (Enrolled Senate Bill 86). The purpose of OAR 836-200-0300 to 836-200-0315 is to establish the requirements for initial certification, disclosure requirements and certification renewal, for a retainer medical practice.

History

Statutory/Other Authority: ORS 731.244 & sec. 2, 3, ch. 499 & OL 2011 (Enrolled SB 86)
Statutes/Other Implemented: sec. 2, 3, ch. 499 & OL 2011 (Enrolled SB 86)
ID 19-2011, f. 11-29-11, cert. ef. 1-1-12

Or. Admin. R. 836-200-0305 Retainer Medical Practice Application for Certification

(1) The director of the Department of Consumer and Business Services may certify a retainer medical practice for a period of one year or more, if the applicant:

(a) Acts in accordance with the attestations required by paragraph (c) of this section;

(b) Complies with and meets the requirements of OAR 836-200-0300 to 836-200-0315 and sections (2) and (3), chapter 499, Oregon Laws 2011 (Enrolled Senate Bill 86); and

(c) Completes and submits to the satisfaction of the director a retainer medical practice application as set forth on the website for the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. As required on the form, the applicant shall:

(A) Attest to the following:

(i) Under the retainer medical agreement providers providing services are licensed or certified under ORS Chapters 677, 678, 684, or 685 and the services provided will be limited to primary care services allowed within the scope of such licenses or certifications.

(ii) The applicant is not and has never been authorized in this or any other state to transact insurance or act as an insurer, managed care organization, health care services contractor, or similar entity;

(iii) The applicant is not controlled by any person described in subparagraph (ii) of this paragraph;

(iv) The applicant will structure the retainer medical practice to ensure that all services promised under the retainer medical agreement are within the capacity of the practice to provide in a timely manner;

(v) The applicant is financially responsible and has the necessary business experience or expertise to operate the practice;

(vi) The applicant will not discriminate based on race, religion, gender, sexual identity, sexual preference, or health status;

(vii) The applicant is authorized to conduct business in the state of Oregon and has complied with all registration requirements of this state; and

(viii) The information provided in the application and all supplemental and additional information is true and complete, and the applicant will submit to the jurisdiction of the courts of the state of Oregon.

(B) Establish to the satisfaction of the director that the applicant is financially responsible. To establish that an applicant is financially responsible, the applicant must provide all of the following:

(i) A statement of whether the applicant has filed for bankruptcy during the 25-year period prior to the application or renewal.

(ii) The applicant’s business plan, including a discussion of how the applicant intends to monitor the practice to ensure the services promised under the retainer medical agreement are provided in a timely manner. The plan must include a clear description of how the retainer medical practice will ensure repayment of retainer medical fees paid in advance if the retainer medical practice is unable to provide the services promised under the retainer medical agreement.

(iii) A copy of any marketing materials and the retainer medical agreement that will be used for the 12-month certification period and each subsequent renewal. The agreement must include provisions that obligate the retainer medical practice to reimburse retainer medical patients for retainer medical fees paid in advance in the event the retainer medical practice is unable to provide services promised under the retainer medical agreement.

(C) Establish that the applicant has the necessary experience and expertise to operate a retainer medical practice by providing all of the following:

(i) The name of any other jurisdiction in which the applicant currently holds a license, registration or certification to transact business as a retainer medical practice or similar entity, or has held such a license or certification within ten years prior to the date of the application.

(ii) A statement of whether any license or registration of the applicant or any person with control of the applicant has ever been denied, suspended, revoked or not renewed in this or any other state and whether the applicant or any person with control of the applicant has otherwise ever been the subject of an enforcement action taken by a licensing or registration agency. For any action taken, the applicant shall provide the name and address of the licensing or registration agency, the date of the action taken against the license or registration and a description of the reason for the action taken against the license or registration.

(iii) A biographical affidavit in the form and manner prescribed by the director, completed by each member of the board of directors, executive committee, or other governing board or committee of the applicant; and

(iv) A statement describing the background or training of the applicant that provides the necessary business experience or expertise to operate a retainer medical practice. The statement shall include the number of years the applicant has been in practice. The statement may also include a description of any similar business the applicant has operated, how many years the applicant operated the similar business and any pertinent training or experience the applicant has completed that has allowed the applicant to develop the necessary experience or expertise to operate a practice. The experience need not be specific to a retainer medical practice.

(D) Provide the names and Oregon license numbers of all providers providing services through the medical retainer practice.

(E) Provide the physical and mailing address, telephone number, facsimile number, email address and website address for each location providing retainer medical services.

(F) Provide the name and address for service of process for the retainer medical practice.

(G) Provide the name, mailing address, telephone number, signature and email address of the person completing the application on behalf of the applicant.

(H) Provide all names, including assumed business names, under which the retainer medical practice will operate, market or otherwise do business.

(2)(a) A retainer medical practice certification issued on or before February 1 of any given year is valid through January 31 of the following year.

(b) A retainer medical practice certification issued after February 1 of any given year is valid through January 31 of the second year following the year of certification.

History

Statutory/Other Authority: ORS 731.244, Or Laws 2011, ch 499 & sec 2 & 3
Statutes/Other Implemented: ORS 731.244, Or Laws 2011, ch 499 & sec 2 & 3
ID 46-2023, minor correction filed 07/24/2023, effective 07/24/2023
ID 19-2011, f. 11-29-11, cert. ef. 1-1-12

Or. Admin. R. 836-200-0310 Retainer Medical Practice Application for Renewal

(1) The director may renew a retainer medical practice certification if the practice complies with all of the following:

(a) The retainer medical practice completes and submits to the satisfaction of the director a retainer medical practice renewal application as set forth on the website for the Division of Financial Regulation of the Department of Consumer and Business Services at dfr.oregon.gov. The renewal application must be submitted annually before February 1 of each year in accordance with OAR 836-200-0305(2).

(b) The retainer medical practice acts in accordance with the attestations required by OAR 836-200-0305(1).

(c) The retainer medical practice shall provide with the renewal application, the following information for the prior calendar year through December 31:

(A) The total number of retainer medical patients under agreement with the retainer medical practice;

(B) The total number of retainer medical patients that voluntarily terminated the retainer medical agreement;

(C) The total number of patients with whom the retainer medical practice terminated an agreement and the reasons for the terminations;

(D) The total number of applicants declined by the retainer medical practice and the reasons for the declinations; and

(E) Any changes to the information submitted on the applicant’s original application for certification.

(2) The director shall use the information required by section (1) of this rule to determine whether the retainer medical practice meets the requirements of, and complies with, section 2, chapter 499, Oregon Laws 2011 (Enrolled Senate Bill 86) for purposes of renewing a certification.

(3) A renewal certification shall be for a period of one year.

History

Statutory/Other Authority: ORS 731.244 & sec. 2, 3, ch. 499 & OL 2011 (Enrolled SB 86)
Statutes/Other Implemented: 3, ch. 499, OL 2011 (Enrolled SB 86), ORS 731.244 & sec. 2
ID 45-2023, minor correction filed 07/24/2023, effective 07/24/2023
ID 19-2011, f. 11-29-11, cert. ef. 1-1-12

Or. Admin. R. 836-200-0315 Disclosures; Form and Contents

(1) The disclosures required by Oregon Laws 2011, chapter 499, section 2(4) shall be in 12-point font or larger, on the first content page of marketing materials, including websites, and in the first content page of contracts with retainer medical patients, including the retainer medical agreement.

(2) In addition to the disclosures required by Oregon Laws 2011, chapter 499, section 2(4), a retainer medical practice shall make the following written information available to retainer medical patients and prospective retainer medical patients by prominently disclosing, in 12-point font or larger, in all marketing materials, including websites and in the medical retainer agreement:

(a) “The Department of Consumer and Business Services issued a certification to this practice. You can contact consumer advocates at the Division of Financial Regulation at (888) 877-4894, DFR.InsuranceHelp.dcbs.oregon.gov, or dfr.oregon.gov.”;

(b) A statement explaining the retainer medical practice’s cancellation and refund policy;

(d) A list of services included for the fees charged.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2011, ch 499, sec 2-3
Statutes/Other Implemented: ORS 731.244 & Or Laws 2011, ch 499, sec 2-3
ID 35-2024, minor correction filed 09/19/2024, effective 09/19/2024
ID 19-2011, f. 11-29-11, cert. ef. 1-1-12

Or. Admin. R. 836-200-0401 Statement of Purpose; Authority; Applicability

Under the authority of Oregon Laws 2013, chapter 570, section 1, ORS 735.530 to 735.552 shall be administered and enforced in accordance with the Insurance Code. The rules promulgated under ORS 735.530 to 735.552 are authorized and reasonably necessary for, or as an aid to, the effectuation of the Insurance Code.

History

Statutory/Other Authority: ORS 731.244 & 735.532
Statutes/Other Implemented: ORS 735.530 - 735.552
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 16-2017, amend filed 12/28/2017, effective 01/01/2018
ID 12-2014, f. & cert. ef. 7-21-14

Or. Admin. R. 836-200-0406 Application Requirements for Pharmacy Benefit Manager

(1) Each pharmacy benefit manager conducting business in Oregon must obtain a license to transact business as a pharmacy benefit manager from the Department of Consumer and Business Services. To obtain a license under this rule, an applicant must submit a Pharmacy Benefit Manager Application, in form as posted on the department’s Division of Financial Regulation website.

(2) An application for licensure as a pharmacy benefit manager shall include:

(a) The name, address and FEIN of the pharmacy benefit manager;

(b) The names, business addresses and job titles of the principal officers of the pharmacy benefit manager;

(c) The name, business address, business telephone number, business e-mail address and job title of the officer or employee who should be contacted regarding any pharmacy benefit manager regulatory compliance concerns;

(d) The business telephone number and business e-mail address where pharmacy benefit manager personnel directly responsible for the processing of appeals may be contacted; and

(e) Information relevant to a determination of the circumstances listed in ORS 735.533(1).

(3) A pharmacy benefit manager shall provide the department with written notification of any change to its licensure information not later than 30 days after the date of change.

(4) The application for licensure as a pharmacy benefit manager must include a fee of $1100.

History

Statutory/Other Authority: ORS 731.244 & ORS 735.532
Statutes/Other Implemented: ORS 735.532, ORS 735.530 & Or Laws 2024, ch 87
ID 9-2026, minor correction filed 07/01/2026, effective 07/01/2026
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 16-2017, amend filed 12/28/2017, effective 01/01/2018
ID 12-2014, f. & cert. ef. 7-21-14

Or. Admin. R. 836-200-0411 Renewal of Pharmacy Benefit License

(1) All pharmacy benefit manager licenses expire annually on September 1 unless renewed on or before that date. A pharmacy benefit manager must apply for renewal of the license by submitting a renewal application, in form as posted on the department’s Division of Financial Regulation website, to the director of the Department of Consumer and Business Services. The application to renew a license to transact business as a pharmacy benefit manager must include a renewal fee of $1100.

(2) A pharmacy benefit manager shall provide the department with written notification of any change to its licensure information not later than 30 days after the date of change.

History

Statutory/Other Authority: ORS 731.244 & ORS 735.532
Statutes/Other Implemented: ORS 735.532, ORS 735.530 & Or Laws 2024, ch 87
ID 10-2026, minor correction filed 07/01/2026, effective 07/01/2026
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 16-2017, amend filed 12/28/2017, effective 01/01/2018
ID 12-2014, f. & cert. ef. 7-21-14

Or. Admin. R. 836-200-0416 Licensure Requirements Not Exclusive

Compliance with pharmacy benefit manager licensure requirements is additional to and not in lieu of filing and other requirements established by law for the purpose of doing business in this state, including but not limited to licensure as a third-party administrator under ORS 744.700 et seq and compliance with registration requirements of the Secretary of State applicable to assumed business names and applicable to the business structure of an applicant.

History

Statutory/Other Authority: ORS 731.244 & ORS 735.532
Statutes/Other Implemented: ORS 735.532, ORS 735.530 & Or Laws 2024, ch 87
ID 11-2026, minor correction filed 07/01/2026, effective 07/01/2026
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 16-2017, amend filed 12/28/2017, effective 01/01/2018
ID 12-2014, f. & cert. ef. 7-21-14

Or. Admin. R. 836-200-0418 Aggregated Rebate and Payment Reports

(1) For the purposes of this rule, “health benefit plan” has the meaning defined in ORS 743B.005(16).

(2) For the purposes of this rule, “pharmacy benefit manager” has the meaning defined in ORS 735.530.

(3) For the purposes of this rule “administrative fee” has the meaning defined in ORS 735.537(a).

(4) For the purposes of this rule, “dispensing fee” means an amount paid to a pharmacy licensed in Oregon for dispensing a prescription in addition to reimbursement for the cost of the drug.

(5) No later than June 1 of each year, a pharmacy benefit manager required to be licensed with the Department of Consumer and Business Services must file a report using the form and manner prescribed by the department. The report must contain the following information for the immediately preceding calendar year:

(a) The aggregated amount of rebates, fees, price protection payments, and any other payments the pharmacy benefit manager received from manufacturers related to managing the pharmacy benefits for carriers issuing health benefit plans in this state. This amount must include payments that the pharmacy benefit manager received from manufacturers directly and payments the pharmacy benefit manager received from manufacturers by the pharmacy benefit manager’s subsidiaries, any other entities that the pharmacy benefit manager holds an ownership in, or any entities which hold an ownership interest in the pharmacy benefit manager. This includes:

(A) The aggregated amount of any payments, as described in subsection (5)(a) of this rule, that were passed on to carriers issuing health benefit plans in this state.

(B) The aggregated amount of any payments, as described in subsection (5)(a) of this rule, that were passed on to enrollees in a health benefit plan at the point of sale in this state.

(C) The aggregated amount of any payments, as described in subsection (5)(a) of this rule, that were retained as revenue by the pharmacy benefit manager.

(b) The amount described in section (5)(a) of this rule should be equal to the sum of the amounts described in sections (5)(a)(A), (5)(a)(B), and (5)(a)(C) of this rule.

(c) The total dispensing fees paid to the pharmacy benefit manager in this state from insurers, coordinated care organizations, and the Oregon Prescription Drug Program.

(d) The total dispensing fees paid to pharmacies in this state by the pharmacy benefit manager.

(e) The total administrative fees received from manufacturers and carriers.

(f) The total administrative fees as described in subsection (e) that were retained by the pharmacy benefit manager.

(g) The total amount of revenue received by the pharmacy benefit manager through spread pricing, pay-for-performance arrangements, or similar means which includes the following:

(A) The difference between the total amount the pharmacy benefit manager reimbursed pharmacies in Oregon for prescriptions, inclusive of ingredient cost and dispensing fee, and the total amount the pharmacy benefit manager was reimbursed by carriers for prescriptions dispensed by pharmacies in Oregon; and

(B) Any revenue obtained by the pharmacy benefit manager through spread pricing for prescriptions dispensed by pharmacies in Oregon as defined in ORS 735.537(1)(e).

History

Statutory/Other Authority: ORS 731.244
Statutes/Other Implemented: 735.537 & Or Laws 2024, ch 87
ID 12-2026, minor correction filed 07/01/2026, effective 07/01/2026
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 3-2024, adopt filed 04/29/2024, effective 05/01/2024

Or. Admin. R. 836-200-0421 Service on Licensee

The director of the Department of Consumer and Business Services may direct notices and inquiries to, and make service on a pharmacy benefit manager at, the address shown on the current license of the pharmacy benefit manager on file with the director, in the manner provided in ORS Chapter 183.

History

Statutory/Other Authority: ORS 731.244 & 735.532
Statutes/Other Implemented: ORS 735.530 - 735.552, 731.296, 731.236 & Or Laws 2024, ch 87
ID 13-2026, minor correction filed 07/01/2026, effective 07/01/2026
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 16-2017, amend filed 12/28/2017, effective 01/01/2018
ID 12-2014, f. & cert. ef. 7-21-14

Or. Admin. R. 836-200-0436 Submission of Complaints

(1) Any complaint filed with the Department of Consumer and Business Services by a pharmacy, or by an entity acting on behalf of a pharmacy, alleging a violation of ORS 735.530 to 735.552, shall be in form as posted on the department’s Division of Financial Regulation website.

(2) A complaint shall include documentation of the alleged violation and of all efforts made to resolve the alleged violation prior to filing of the complaint.

History

Statutory/Other Authority: ORS 731.244 & 735.532
Statutes/Other Implemented: ORS 735.530 - 735.552
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 16-2017, adopt filed 12/28/2017, effective 01/01/2018

Or. Admin. R. 836-200-0440 Market Conduct Requirements for Pharmacy Benefit Managers

(1) A pharmacy benefit manager shall allow a network pharmacy to mail, ship or deliver prescription drugs to its patients as an ancillary service. A contract between a pharmacy benefit manager and a network pharmacy may establish limits and parameters on the pharmacy’s mail, shipment and/or delivery of prescription drugs on the request of enrollees based on the pharmacy’s total prescription volume. A pharmacy benefit manager is not required to reimburse a delivery fee charged by a network pharmacy unless the fee is specified in the contract between the pharmacy benefit manager and the pharmacy.

(2) Except as provided in subsection (6) of this rule, a pharmacy benefit manager may require a prescription for a specialty drug to be filled or refilled at a specialty pharmacy as a condition for the reimbursement of the cost of a drug.

(3) For the purposes of subsection (2) of this section, the department will consider a prescription drug to meet the definition of “specialty drug” under ORS 735.530 if, to be properly dispensed according to standard industry practice, the drug:

(a) Requires specialized preparation, administration, handling, storage, inventory, reporting or distribution;

(b) Is associated with difficult or unusual data collection or administrative requirements; or

(c) Requires a pharmacist to manage the patient’s use of the drug by monitoring, provide disease or therapeutic support systems, provide care coordination including collaboration with patients or other health care providers to manage adherence, identify side effects, monitor clinical parameters, assess responses to therapy, or document outcomes.

(4) For the purposes of subsection (2) of this section, a pharmacy may demonstrate to the department that it meets the definition of “specialty pharmacy” under ORS 735.530 by showing that:

(a) Its business is primarily providing specialty drugs and specialized, disease-specific clinical care and services for people with serious or chronic health conditions requiring complex medication therapies; or

(b) It has been validated for meeting quality, safety and accountability standards for specialty pharmacy practice through accreditation in specialty pharmacy by a nationally recognized, independent accreditation organization such as URAC or the Accreditation Commission for Health Care (ACHC).

(5) Nothing in subsection (4) of this section shall be construed to prohibit a pharmacy benefit manager from specifying additional terms and conditions for a specialty pharmacy network contract, including terms and conditions related to reimbursement.

(6) A pharmacy benefit manager shall reimburse the cost of a specialty drug that is filled or refilled at a network pharmacy that is a long term care pharmacy, provided that the specialty drug is dispensed to an enrollee who is a resident of a long term care facility served by the long term care pharmacy.

(7) A pharmacy benefit manager 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.

(8) A network pharmacy may appeal its reimbursement from a pharmacy benefit manager for a drug subject to maximum allowable cost pricing on the basis that the reimbursement for the drug is less than the net amount that the network pharmacy paid to the supplier of the drug.

(a) If the pharmacy benefit manager denies a pharmacy’s appeal under this rule, it must provide the reason for the denial and identify a national drug code for the drug, generally available for purchase by similarly situated pharmacies, and national or regional wholesalers where that national drug code was listed at a price equal to or less than the maximum allowable cost for the drug at the time that the claim in question was adjudicated.

(b) For the purposes of this rule, “generally available for purchase” means a drug is available for purchase in this state by a pharmacy from a national or regional wholesaler at the time a claim for reimbursement is submitted by a network pharmacy. A drug is not “generally available for purchase” if the drug:

(A) May only be dispensed in a hospital or inpatient care facility;

(B) Is unavailable due to a shortage of the product or an ingredient;

(C) Is available to a pharmacy at a price at or below the maximum allowable cost only if purchased in substantial quantities in excess of its business needs. For the purposes of this subsection, a quantity in excess of the business needs of a network pharmacy is defined as a purchase quantity greater than a 3-month supply based on the pharmacy’s total dispensing history over the most recent rolling 12 months. A pharmacy benefit manager may require a network pharmacy appealing its reimbursement for a drug in accordance with this subsection to submit applicable evidence of its dispensing history to the pharmacy benefit manager as part of the appeal process.

(D) Is sold at a discount due to a short expiration date on the drug; or

(E) Is the subject of an active or pending recall.

(c) The appeals process required by ORS 735.534(4) must provide the pharmacy the opportunity to rebut an appeal on the basis that the NDC provided in the denial is not generally available for purchase for similarly situated pharmacies for one of the reasons described in subsection (8)(b) of this rule.

(d) If an appeal is upheld under this rule, the pharmacy benefit manager must make an adjustment for the appealing pharmacy from the date of initial adjudication forward and allow the pharmacy to reverse the claim and resubmit an adjusted claim without any charges.

(e) If a prescription drug subject to a specified maximum allowable cost is available at that price if purchased in quantities that are consistent with the business needs of some pharmacies but inconsistent with the business needs of others, nothing in subsection (8) shall be construed to prohibit a pharmacy benefit manager from applying the maximum allowable cost to pharmacies that can purchase the drug in the necessary quantities consistent with their business needs.

(f) If the request for an adjustment has come from a “critical access pharmacy”, as defined by the Oregon Health Authority in OAR 431-121-2000, the adjustment approved under subsection (8) of this rule is only required to apply to critical access pharmacies.

(9) A pharmacy benefit manager may not retroactively deny or reduce payment on a claim for reimbursement of the cost of services after the claim has been adjudicated by the pharmacy benefit manager unless the:

(a) Adjudicated claim was submitted fraudulently. For the purposes of this section, “fraud” has the meaning defined in ORS 735.540;

(b) The payment was incorrect because the pharmacy had already been paid for the services;

(d) The payment was incorrect due to an error that the pharmacy and pharmacy benefit manager agree was a clerical error.

(10) A pharmacy benefit manager may not impose a fee for a particular claim on a pharmacy after the point of sale. For the purposes of this subsection, “point-of-sale” means the time that the claim was adjudicated.

(11) A pharmacy benefit manager may not penalize a network pharmacy for:

(a) Appealing the reimbursement of a drug to the pharmacy benefit manager;

(b) Filing a complaint against the pharmacy benefit manager with the department;

(d) Challenging the pharmacy benefit manager’s practices or agreements.

(12) For the purposes of subsection (11) of this rule, “penalize” includes but is not limited any of the following actions if applied to a network pharmacy that has engaged in the protected conduct described in subsections (11)(a) to (d) of this rule differently from similarly situated pharmacies that have not engaged in said protected conduct: imposing charges or fees, requiring contract amendments, canceling or terminating contracts, demanding recoupment, or conducting an unnecessary or unwarranted audit of a pharmacy.

(13) A pharmacy benefit manager may not charge a fee to a pharmacy for submitting claims or for the adjudication of claims.

(14) Nothing in subsections (9) and (11) of this rule shall be construed as limiting a pharmacy benefit manager from conducting a pharmacy claims audit that is in compliance with the requirements of ORS 735.540 to 735.552.

History

Statutory/Other Authority: ORS 735.534 & 735.536
Statutes/Other Implemented: ORS 735.534, 735.536 & OL 2024, ch 87
ID 6-2025, amend filed 07/29/2025, effective 08/01/2025
ID 42-2024, temporary amend filed 12/23/2024, effective 01/01/2025 through 06/29/2025
ID 10-2020, adopt filed 12/18/2020, effective 01/01/2021

Or. Admin. R. 836-200-0500 Purpose and Statutory Authority

The purpose of OAR 836-200-0500 to 836-200-0560 is to administer the Oregon Prescription Drug Price Transparency Program established in the Department of Consumer and Business Services for the purposes of providing notice and disclosure of information relating to the cost and pricing of prescription drugs in order to provide accountability for prescription drug pricing.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689 & 646A.692
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0505 Definitions

For purposes of OAR 836-200-0500 to 836-200-0560, the following definitions apply, unless the context requires otherwise:

(1) “Course of treatment” means the total dosage of a drug that would be prescribed in a single prescription to a patient taking the drug as recommended by its prescribing label as approved by the United States Food and Drug Administration. If there is more than one such recommended dosage, the largest recommended total dosage will be considered for the purposes of determining a course of treatment.

(2) “Developed by the manufacturer” means, for a prescription drug, that its research and development costs were funded by the manufacturer in whole or in part through Phase I, II, or III trials as defined in 21 CFR 312.21.

(3) “Dosage” is the highest amount, strength, and frequency that a patient would take the drug as recommended by its prescribing label as approved by the United States Food and Drug Administration (such as one 10mg pill per day or one 5mL injection per week).

(4) “Inaccurate or incomplete information” means representations or statements that are false or misleading or that fail to provide all available information required in a report or in response to a request for additional information under OAR 836-200-0515 to 836-200-0535.

(5) “Net yearly increase” means an increase in the wholesale acquisition cost of a drug over the course of a calendar year dividing the average wholesale acquisition cost of the drug over the course of a calendar year by the average wholesale acquisition cost over the course of the previous calendar year.

(6) "New prescription drug" means a prescription drug that has received initial approval under an original new drug application under 21 U.S.C. 355(b), under an abbreviated new drug application under 21 U.S.C. 355(j), or under a biologics license application under 42 U.S.C. 262. In cases where multiple products are included on an application or approved later, each product with a unique national drug code will be considered a new prescription drug. A new prescription drug’s introduction date is the FDA start marketing date or the date the product is first available for purchase in the United States, whichever is later. A new prescription drug does not include:

(a) A product that is only for use under an emergency use authorization (EUA).

(b) A product with a change in the national drug code or labeler name that has been previously marketed by the same or a different manufacturer.

(c) A vaccine that has been reformulated and replaces a vaccine using the same name, application number, manufacturer, and labeler.

(7) “One-month supply” means the total dosage of a prescription drug recommended by its prescribing label as approved by the United States Food and Drug Administration for 30 days or for a course of treatment lasting less than one month.

(8) “Price” means the wholesale acquisition cost of a prescription drug.

(9) “Price increase” means any increase in the wholesale acquisition cost of a prescription drug.

(10) “Public funds” means any funds granted, loaned or otherwise provided by a national, state, local or foreign government entity.

(11) “Reporting manufacturer” means an entity meeting all the following characteristics:

(a) Required to be registered with the Oregon Board of Pharmacy as a drug manufacturer;

(b) Engages in the manufacture, directly or indirectly including through contracts with other entities, of prescription drugs available for sale in this state, as defined by ORS 646A.689(1)(d), that are approved by the United States Food and Drug Administration under:

(A) A new drug application;

(B) An abbreviated new drug application; or

(d) Does not only manufacture prescription drugs as a registered 503B facility (section 503B of the Federal Food, Drug, and Cosmetic Act; 21 U.S.C. 353b).

(12) "Timely" and "timely manner" mean in compliance with the required deadlines for reporting and providing responses to requests for additional information detailed in OAR 826-200-0515 to 826-200-0535.

(13) “Wholesale acquisition cost” or “WAC” has the meaning given to the term in 42 U.S.C. 1395w-3a(c)(6)(B).

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0510 Account Generation Requirement

(1) Beginning in 2020 and for any subsequent year, reporting manufacturers must create an online account with the department no later than 30 days after becoming a reporting manufacturer or 10 days prior to a required reporting deadline, whichever is earlier.

(2) Reporting manufacturers are responsible for ensuring that they designate at least one contact person, with a valid email address, mailing address, and phone number, in the department’s reporting system for purposes of communications and notices by the department. At least one contact person must be a reporting manufacturer employee who manages access to the account and receipt of trade secret determinations.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0515 Threshold for Reporting Drug Price Increase

(1) No later than July 1, 2019, a reporting manufacturer must report the information described in OAR 836-200-0530(2) to the department regarding each prescription drug for which:

(a) The price at any point in 2018 was $100 or more for a one-month supply; and

(b) There was a net yearly increase of 10 percent or more in the price of the prescription drug described in subsection (a) of this section during 2018.

(2) Beginning February 16, 2024, no later than March 15 annually, a reporting manufacturer may voluntarily report to the department the information described in OAR 836-200-0530(2) regarding each prescription drug for which:

(a) The price at any point during the previous year was $100 or more for a one-month supply; and

(b) There was a net yearly increase of 10 percent or more in the price of the prescription drug described in subsection (a) of this section over the course of the previous calendar year.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 1-2026, temporary amend filed 02/12/2026, effective 02/13/2026 through 08/11/2026
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0520 Threshold for Reporting New Prescription Drug

(1) For new prescription drugs introduced on or after March 15, 2019, with a price for a one-month supply that exceeds the threshold established by the Centers for Medicare and Medicaid Services for specialty drugs in the Medicare Part D program, the manufacturer must report to the department the information described in OAR 836-200-0531.

(2) For new prescription drugs introduced on or after January 1, 2025, the threshold is $950, which is the dollar amount specified for minimum Medicare Part D specialty tier eligibility in the 2024 Final Call Letter from the Centers for Medicare and Medicaid Services.

(3) For new prescription drugs introduced prior to January 1, 2025, the threshold is $670, which is the dollar amount specified for minimum Medicare Part D specialty tier eligibility in the 2018 Final Call Letter from the Centers for Medicare and Medicaid Services.

(4) The date of introduction is the FDA start marketing date or the date the product is first available for purchase in the United States, whichever is later.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0525 Expectations of Reporting Manufacturers

(1) Reporting manufacturers must act in good faith to include all of the information required in a report or a response to a request for additional information under OAR 836-200-0530 to 836-200-0535, and conduct a reasonable investigation to ensure the accuracy and completeness of their reports.

(2) If any of the information required in a report or a response to a request for additional information under OAR 836-200-0530 to 836-200-0535 is not available to the reporting manufacturer at the time of the filing due to circumstances outside the manufacturer’s control, the manufacturer must provide any available portion of the required information and a thorough explanation. The explanation must include a description of the missing information and the circumstances contributing to the manufacturer’s inability to meet the requirement.

(3) If the information required in a report or a response to a request for additional information under OAR 836-200-0530 to 836-200-0535 is not currently available to the manufacturer but is expected to be available in the future, the manufacturer must provide an explanation and a timeline for providing the required information to the department.

(4) When providing information required by ORS 646A.689(2) to (7), reporting manufacturers must act in good faith to limit information provided to the department to information that is necessary for the director’s review and analysis of drug prices.

(5) A reporting manufacturer’s failure to comply with sections (1) to (4) of this rule may subject the manufacturer to a civil penalty under OAR 836-200-0560.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689 & 646A.692
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0530 Form and Manner Requirements for Drug Pricing Reporting

(1) General requirements. All reports submitted by drug manufacturers under ORS 646A.689 must:

(a) Be provided in an electronic format specified by the department;

(b) Be provided via an electronic system specified by the department;

(d) Be capable of being reduced to written form;

(e) Clearly indicate the information the manufacturer asserts to be conditionally exempt from disclosure under ORS 192.345 as a trade secret in adherence with OAR 836-200-0540;

(f) Include a certification of compliance document certifying that the filing complies with all applicable Oregon statutes, rules, standards and filing requirements; and

(g) Adhere to the standards set forth on the department’s website.

(2) Prescription Drug Reporting - Price Increase. For drugs meeting the conditions specified in OAR 836-200-0515, a report may be voluntarily furnished to the department and include the following information, along with any documentation to support the information reported under this section:

(a) The full trade name of the drug, full chemical name or biologic product name of the drug, and recognized industry standard drug identification information for the drug as specified on the department’s website;

(b) The price of the drug at the beginning of the calendar year preceding the report;

(d) The highest and lowest prices of the drug at any point during the calendar year preceding the report;

(e) The increase in the price of the drug over the preceding calendar year, expressed as a percentage;

(f) The price and dosage of the drug the reporting manufacturer used to determine that the drug cost $100 or more for a one-month supply;

(g) The length of time the prescription drug has been on the market;

(h) The factors that contributed to the price increase, including a narrative description and explanation of all major financial and nonfinancial factors that influenced the decision to increase the wholesale acquisition cost of the drug product and to decide on the amount of the increase;

(i) The name of any generic version or biosimilar of the prescription drug available for sale in the United States at the time of the report;

(j) The research and development costs associated with the prescription drug that were paid using public funds, including all available information about the sources and uses of these public funds;

(k) The direct costs incurred and specific total dollars expended by the manufacturer in the previous calendar year:

(A) To manufacture the prescription drug;

(B) To market the prescription drug, including spending on direct-to-consumer marketing such as paid advertising, as well as spending to promote the drug to physicians;

(D) For ongoing safety and effectiveness research associated with the prescription drug.

(l) The total sales revenue for the prescription drug during the previous calendar year;

(m) The manufacturer’s net profit attributable to the prescription drug during the previous calendar year;

(n) The introductory price of the prescription drug when it was approved for marketing by the United States Food and Drug Administration;

(o) The net yearly increase, if any, by calendar year, in the price of the prescription drug during the previous five calendar years;

(p) The 10 highest prices paid for the prescription drug during the previous calendar year in any country other than the United States, expressed in dollars according to the prevailing exchange rate at the time of the report; and

(q) Any other information that the manufacturer deems relevant to the price increase and that the manufacturer deems will assist the director to complete a review of a drug price under ORS 646A.689.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 1-2026, temporary amend filed 02/12/2026, effective 02/13/2026 through 08/11/2026
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0531 Prescription Drug Reporting – New Prescription Drug

For new prescription drugs meeting the conditions specified in OAR 836-200-0520, the report furnished to the department must include the following information:

(1) The full trade name of the drug (proprietary), full chemical name or biologic product name of the drug (nonproprietary), recognized industry standard drug identification information for the drug as specified on the department’s website, drug strength, drug package size, the date the drug was initially approved by the United States Food and Drug Administration, and the date the drug was introduced in the United States market.

(2) The price and dosage of the drug the reporting manufacturer used to determine that the price of the drug for a one-month supply exceeds the threshold defined in OAR 836-200-0520.

(3) A description of the marketing used in the introduction of the drug, including the types of marketing, target audience, and associated spending for the four quarters prior to launch and planned costs for the four quarters following launch, with any associated explanation:

(a) Types of marketing includes digital (e.g., consumer or industry websites, social media), TV or audio, and other types of promotion;

(b) Target audience includes consumers, health care professionals, pharmacy benefit managers, insurance carriers, and other entities in the pharmaceutical supply chain.

(4) The methodology used to establish the price of the new prescription drug, including all factors, with any associated impact or explanation, that influenced the decision to set the price of the drug at the level it was first set by the reporting manufacturer following its approval for marketing by the United States Food and Drug Administration. Factors may include, but are not limited to:

(a) Other prescription drugs including the drug name, labeler name, and price;

(b) Estimated manufacturing costs for the prescription drug;

(d) Estimated distribution costs for the prescription drug;

(e) Estimated costs of ongoing safety and effectiveness research associated with the prescription drug;

(f) Other costs for the prescription drug; and,

(g) Other costs not specifically associated with the prescription drug.

(5) Whether the United States Food and Drug Administration granted the new prescription drug a breakthrough therapy designation or a priority review;

(6) If the new prescription drug was not developed by the manufacturer, the date of and the price paid for acquisition of the new prescription drug by the manufacturer;

(7) The manufacturer’s estimate of the average number of patients in the United States who will be prescribed the new prescription drug each month; and

(8) The research and development costs associated with the new prescription drug that were paid using public funds, including all available information about the sources and uses of these public funds.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, adopt filed 03/26/2025, effective 04/01/2025

Or. Admin. R. 836-200-0532 Prescription Drug Reporting – Patient Assistance Programs

(1) If a reporting manufacturer offers one or more patient assistance programs to consumers residing in Oregon to reduce consumer out-of-pocket costs for a drug meeting the conditions specified in OAR 836-200-0515, the report furnished to the department under OAR 836-200-0530(2) must have an appendix that includes at least the following information for each patient assistance program relevant to the drug that is the subject of the report:

(a) The number of consumers residing in Oregon who participated in the patient assistance program over the previous calendar year;

(b) The total dollar value of the coupons, discounts, copayment assistance or other reduction in costs provided to consumers residing in Oregon who participated in the patient assistance program over the previous calendar year;

(d) If the program expires after a specified period of time, the period of time that the program is available to each consumer; and

(e) The eligibility criteria for the program and how eligibility is verified for accuracy.

(2) If a reporting manufacturer provides funding for an independent patient assistance program that reduces consumer out-of-pocket costs for a drug meeting the conditions specified in OAR 836-200-0515, the report furnished to the department under OAR 836-200-0530(2) must have an appendix that provides the name of the independent program and includes all of the information specified in section (1) that is available to the manufacturer at the time of the report. If the independent program provides services in addition to reducing consumer out-of-pocket costs for the drug that is the subject of the report, the manufacturer may limit the information provided to the information applicable to the drug that is the subject of the report. Reporting manufacturers that provide funding for independent patient assistance programs must act in good faith to secure this information.

(3) Reporting manufacturers that provide funding for a bona fide Independent Charity Patient Assistance Program operating in full compliance with the guidance provided in the Department of Health and Human Services Office of the Inspector General’s Supplemental Special Advisory Bulletin: Independent Charity Patient Assistance Programs (Federal Register / Vol. 79, No. 104 / Friday, May 30, 2014 / Notices) are not required to include information about the bona fide Independent Charity Patient Assistance Program in any appendix required by this rule.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, adopt filed 03/26/2025, effective 04/01/2025

Or. Admin. R. 836-200-0535 Additional Information Requests

(1) Within 60 calendar days of receiving a report from a prescription drug manufacturer in accordance with OAR 836-200-0515 to 836-200-0532, the director or director's designee may submit one or more written requests for supporting documentation or additional information to the manufacturer.

(2) The department’s request shall be limited to information necessary to clarify or substantiate the material previously reported, or to enable the department to conduct an analysis of factors affecting drug prices for the purposes of providing recommendations to the Legislature as provided by ORS 646A.689.

(3) Within 60 calendar days of receiving the department’s request for supporting documentation or additional information following a report provided in accordance with OAR 836-200-0515 to 836-200-0532, a prescription drug manufacturer must provide a full and complete written response, including any requested documentation. Supporting documentation or additional information submitted will be part of the report published to the department’s website. If the manufacturer asserts that any of the requested information is conditionally exempt from disclosure as a trade secret, the manufacturer must clearly identify the information claimed as trade secret and provide an explanation, as specified under OAR 836-200-0540, for each piece of information that is claimed to be exempt from disclosure.

(4) If additional time is needed, within 15 calendar days of receiving the department’s request for supporting documentation or additional information following a report provided in accordance with ORS 646A.689 and OAR 836-200-0515 to 836-200-0532, a prescription drug manufacturer must submit a notice to the department for up to 30 additional days to prepare and submit a response. A drug manufacturer’s request for additional time must be in writing, and must explain the grounds for the request and the need for additional time to prepare a response. The department will automatically grant requests submitted in accordance with this section.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0540 Information Claimed to be Trade Secret

(1) To request exemption from the disclosures required under OAR 836-200-0545, reporting manufacturers must clearly identify any information provided to the department that they assert to be conditionally exempt from disclosure under ORS 192.345 as a trade secret, in the following fashion:

(a) Each line and informational element in every filed document that is claimed to be a trade secret must be clearly marked by the manufacturer;

(b) Each filing that contains information claimed as trade secret by the manufacturer must include, in accordance with standards set forth on the department’s website, for each individual piece of information claimed as trade secret:

(A) The name of the data element;

(B) A detailed written explanation, including factual information, demonstrating the information is exempt from disclosure in accordance with the following requirements:

(i) The information is not patented;

(ii) The information is known only to certain individuals within the manufacturer’s organization and used in any business the organization conducts;

(iii) The information has actual or potential commercial value;

(iv) The information gives the manufacturer an opportunity to obtain a business advantage over competitors who do not know or use it; and

(v) To the extent required by law, the public interest does not require disclosure of the information.

(c) If the manufacturer asserts that disclosure of any information provided in a report is affirmatively prohibited by state or federal law, the manufacturer must clearly indicate the relevant information and explain the basis of this assertion, including citations of the applicable state and federal laws and the facts that support the assertion.

(2) The burden of proof to establish that information in a filing is conditionally exempt from disclosure as a trade secret is on the manufacturer submitting the filing. The department shall review the manufacturer’s explanations and supporting information, as well as other information available to the department, and determine exemptions from the disclosures required under OAR 836-200-0545 on a case-by-case basis.

(3) If the department determines that any information claimed as trade secret by a reporting manufacturer must be disclosed, the department shall notify the manufacturer and provide a written explanation of the department’s determination. Within 15 days after receiving this notification, a manufacturer may submit a letter to the director to appeal the department’s determination and request reconsideration. The letter must explain the grounds for the request.

(4) The director or the director’s designee will review appeals provided under section (3) of this rule and issue a determination within 15 days, or within a time period necessary to obtain legal review, of receiving an appeal letter. If the director’s determination would result in the release of information claimed as trade secret by the manufacturer, the department shall notify the manufacturer of the director’s decision at least 21 days in advance of disclosing the information as provided under OAR 836-200-0545.

(5) If the department exempts information provided by a manufacturer under OAR 836-200-0515 to 836-200-0535 from disclosure under OAR 836-200-0545, the department shall post an explanation of the basis of the exemption to its website along with a general description of the nature of the information exempted.

(6) A person may petition the Attorney General, as provided in ORS 192.411, to review a decision by the department to exempt information from disclosure under this rule.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0545 Public Disclosure of Prescription Drug Manufacturer Filings

(1) As soon as practicable after receiving a filing from a prescription drug manufacturer under OAR 836-200-0530 to 836-200-0532, the department shall post to its website the name of the manufacturer and the prescription drug that is the subject of the filing.

(2) Notwithstanding section (1), if a manufacturer has made a trade secret claim, the information that is the subject of the trade secret claim will not be posted to the department's website until a determination has been made by the department or, in the case of a manufacturer's appeal, the director, as specified by OAR 836-200-0540.

(3) No information determined by the department or the director to be exempt from disclosure under OAR 836-200-0540 shall be included in the information posted to the department's website.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 1-2020, amend filed 01/29/2020, effective 02/01/2020
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0550 Consumer Notices to the Department

(1) The department shall make available a telephone line and an online mechanism to receive notices from members of the public about increases in the cost of prescription drugs. The department shall prominently display the telephone and online contact information on its website.

(2) The department shall include a summary of the notices received in its annual report to the Legislature for that calendar year under ORS 646A.689.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0553 Annual fees paid by drug manufacturers

(1) Each reporting manufacturer, as defined under OAR 836-200-0505, shall pay an annual fee to the Department of Consumer and Business Services to meet the costs of the department in administering ORS 646A.680 to 646A.697. The fee shall be based on the manufacturer’s size as set forth in sections (3) and (5) of this rule.

(2) For purposes of section (1), the director shall determine the amount of revenue needed by considering expenditures in administering ORS 646A.680 to 646A.697 and cash reserves.

(3) Each reporting manufacturer shall be assigned to one of three size categories based on the number and FDA market category of the National Drug Code package codes (NDCs) for U.S. Food and Drug Administration (FDA) approved prescription drugs in the manufacturer’s portfolio during the annual billing period.

(a) The annual billing period is the calendar year prior to the year the annual fee is imposed.

(b) The department shall determine the number of NDCs for a manufacturer by referencing the FDA National Drug Code directory to calculate the number of unique NDCs for the manufacturer and any known labeler the manufacturer uses.

(A) For all reporting manufacturers not subject to paragraph (3)(c)(B), there are three size categories: large (40 or more NDCs), medium (11 to 39 NDCs), and small (10 or fewer NDCs).

(B) For reporting manufacturers where every NDC used for billing purposes under this section (3), has an FDA market category of ANDA (abbreviated new drug application) or NDA authorized generic (new drug application for an authorized generic of a brand name drug) or is a biosimilar product where the proprietary and nonproprietary name are the same that is approved under a biologics license application (BLA), there are two size categories: medium (40 or more NDCs) and small (39 or fewer NDCs).

(4) The department shall inform manufacturers of their assigned size category and provide manufacturers the opportunity to request a change to their assigned size category prior to assessment. Manufacturers will have 30 days to submit the request, which must include information to demonstrate why their size category is not correct. If a manufacturer does not submit a request to change within 30 days, the assigned size category for the billing period is final.

(5) At the end of the annual billing period each manufacturer’s annual fee will be calculated based on its size category, the amount of total revenue needed apportioned to its size category, and the number of reporting manufacturers in its size category.

(a) Manufacturers classified as large shall collectively be apportioned 62 percent of the total revenue needed.

(b) Manufacturers classified as medium shall collectively be apportioned 31 percent of the total revenue needed.

(6) The revenue collected under this rule shall be deposited in the Prescription Drug Affordability Account established in ORS 705.146.

(7) A manufacturer shall pay its annual fee imposed under this rule no later than 30 days after the date of the assessment by the department. A manufacturer shall pay interest at nine percent per annum on any assessment that is not paid when due.

(8) Reporting manufacturers shall be subject to the assessment requirements set forth under OAR 836-200-0555 in sections (1) to (5) for billing periods through July 31, 2023. For billing periods on or after August 1, 2023, reporting manufacturers shall be subject to the annual fee set forth under this rule.

History

Statutory/Other Authority: ORS 646A.693 & ORS 646A.695
Statutes/Other Implemented: ORS 646A.695
ID 14-2024, adopt filed 07/31/2024, effective 08/01/2024

Or. Admin. R. 836-200-0555 Assessments Against Prescription Drug Manufacturers for 2023 and prior

(1) Once annually, no later than October 1, all reporting manufacturers will pay an assessment of $400. The director may by order reduce the fees assessed for any specific year.

(2) Once annually, no later than October 1, reporting manufacturers that have filed one or more reports under OAR 836-200-0515 to 836-200-0532 between August 1 of the previous year and July 31 of the current year must pay an additional assessment for each report filed.

(3) For the purposes of section (2), the director shall determine the amount of the assessment by subtracting the revenue collected under section (1) from the amount of revenue needed to cover the department's estimated expenses in administering ORS 646A.689 and OAR 836-200-0500 to 836-200-0550, and dividing the resulting amount by the total number of filings subject to assessment between August 1 of the previous year and July 31 of the current year. The director shall determine the amount of revenue needed by considering the legislatively approved expenditures for administration of ORS 646A.689 and OAR 836-200-0500 to 836-200-0555, as well as the timing of cash revenues and expenditures.

(4) The revenue collected under sections (1) and (2) of this rule must be used solely for expenses incurred in the administration of ORS 646A.689 and OAR 836-200-0500 to 836-200-0555.

(5) A manufacturer must pay each assessment imposed under this rule no later than 30 days after the date of the assessment by the department. A manufacturer must pay interest at nine percent per annum on any assessment that is not paid when due.

(6) Reporting manufacturers shall be subject to the assessment requirements set forth in sections (1) to (5) of this rule for billing periods through July 31, 2023. For billing periods on or after August 1, 2023, reporting manufacturers shall be subject to the annual fee set forth in OAR 836-200-0553.

History

Statutory/Other Authority: ORS 646A.689
Statutes/Other Implemented: ORS 646A.689
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 14-2024, amend filed 07/31/2024, effective 08/01/2024
ID 2-2024, minor correction filed 03/20/2024, effective 03/20/2024
ID 1-2020, amend filed 01/29/2020, effective 02/01/2020
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0560 Civil Penalties

(1) The director may impose civil penalties on reporting manufacturers for violations of ORS 646A.689 or OAR 836-200-0500 to 836-200-0560 including the following:

(a) Failing to provide required information, or providing inaccurate or incomplete information;

(b) Failing to respond in a timely manner to a written request by the department for additional information; or

(2) For a reporting manufacturer’s first violation of ORS 646A.689 or OAR 836-200-0500 to 836-200-0560, the civil penalties imposed under this section will adhere to the following schedule:

(a) For failing to provide required information or providing inaccurate or incomplete information, and for each missing, inaccurate or incomplete data element. No greater than $500 per day of violation for the first 30 days, and no greater than $1,000 per day of violation thereafter.

(b) For failing to respond in a timely manner to a written request by the department for additional information. No greater than $1,500 per day of violation for the first 30 days, and no greater than $3,000 per day of violation thereafter.

(c) For failing to submit timely required reports. No greater than $2,500 per day of violation for the first 30 days, and no greater than $5,000 per day of violation thereafter.

(3) For reporting manufacturers that have previously violated ORS 646A.689 or OAR 836-200-0500 to 836-200-0560, the civil penalties imposed under this section will adhere to the following schedule:

(b) For failing to respond in a timely manner to a written request by the department for additional information. No greater than $3,000 per day of violation.

(4) For any other violation, including any violation constituting a breach of the good faith expectations specified in OAR 836-200-0525, any violation committed with intent to obstruct the department’s administration of ORS 646A.689 or OAR 836-200-0500 to 836-200-0560, or any violation committed with intent to engage in conduct injurious to the public, the civil penalty imposed under this section will be no greater than $10,000 per day of violation.

History

Statutory/Other Authority: ORS 646A.689 & 646A.692
Statutes/Other Implemented: ORS 646A.689 & 646A.692
ID 2-2025, amend filed 03/26/2025, effective 04/01/2025
ID 2-2019, adopt filed 02/26/2019, effective 03/01/2019

Or. Admin. R. 836-200-0600 Purpose and Statutory Authority

The purpose of OAR 836-200-0600 to 836-200-0670 is to administer the licensure of pharmaceutical representatives doing business in the state of Oregon pursuant to Oregon Laws 2021, chapter 593.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0605 Definitions

For the purposes of OAR 836-200-0600 to 836-200-0670 the following definitions apply, unless the context requires otherwise:

(1) The “department” means the Oregon Department of Consumer and Business Services.

(2) “Pharmaceutical product” means a medication approved for human use by the federal Food and Drug Administration that may be legally dispensed only with a valid prescription from a health care provider.

(3) “Pharmaceutical representative” means a person that markets or promotes pharmaceutical products to health care providers.

(4) “License” means a license issued to a pharmaceutical representative by the department pursuant to OAR 836-200-0600 to 836-200-0670.

(5) “Licensee” means a person that holds a valid and unexpired license issued under this section.

(6) “Calendar year” means each successive period of 12 calendar months commencing on January 1 and ending on December 31.

(7) “Material change in a licensee’s business operations” means any change in the following information:

(a) A change in the business activity in which the licensee engages;

(b) Termination for cause from any employer or company that the licensee represents;

(c) Any complaints made to the licensee, the licensee’s employer, or a company that the licensee represents regarding the licensee’s activities conducted under a license issued under these rules.

(8) “Monetary value,” for the purposes of describing the value of drug samples for reports made pursuant to OAR 836-200-0620(3)(e), means the monetary value of an equivalent volume or quantity of the prescription drug estimated using the WAC price for the most comparable NDC.

(9) “In writing” means through NIPR as allowed or by electronic mail.

(10) “Gift” means anything of economic value given to, or for the personal benefit of, a health care provider without consideration of equivalent or market value.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0610 License Required

(1) A pharmaceutical representative who does business with health care professionals located within the state of Oregon must acquire a license from the department prior to doing business in the state on 15 or more days in a calendar year.

(2) A license issued pursuant to these rules is valid until the end of the calendar year in which the license was issued.

(3) A license issued pursuant to these rules is not transferable.

(4) A pharmaceutical representative must show their license or an exact copy of it when a health care provider asks to see it. An exact copy may include a legible reproduction, such as a photocopy or an image saved or produced on an electronic device.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0615 License Application and Renewal Application

(1) An applicant for a license to engage in business as a pharmaceutical representative must submit the following information in a form and manner specified by the department:

(a) The applicant’s full name, Social Security number, email address, residence address, personal telephone number, business address, and business telephone number;

(b) A description of the business activities in which the applicant will engage;

(c) Documentation that shows the applicant has completed at least 10 hours of education as described in OAR 836-200-0635(1);

(d) The application for licensure must be accompanied by a license fee of $750.

(2) A pharmaceutical representative may apply for a license renewal if they held a valid and unrevoked license through the end of the preceding calendar year. An applicant for renewal must submit the following information on a form specified by the department:

(a) The applicant’s full name, Social Security number, email address, residence address, personal telephone number, business address, and business telephone number;

(b) A description of the business activities in which the applicant will engage;

(c) Documentation that shows the applicant has completed at least five hours of education as described in OAR 836-200-0635(2), if such documentation has not already been submitted by education providers;

(d) For any renewal application submitted on or after April 1, 2023, documentation that shows the applicant for renewal has submitted the information required by OAR 836-200-0620;

(e) The application for license renewal must be accompanied by a license fee of $750.

(3) An incomplete application for initial licensure or application for license renewal under these rules will be considered abandoned if not completed within 30 days of opening the application process.

(4) The $750 application fee is not refundable.

(5) The department may collect Social Security numbers submitted in applications under this rule and may use a Social Security number of an individual when authorized to do so for the purposes specified in this section. In addition to the governmental uses for which a Social Security number is required in an application under federal and state law, when authorized by the holder of a Social Security number, the department may use a Social Security number for any of the following purposes:

(a) As an identification number in maintaining records and reporting grades or examination scores;

(b) For licensing purposes; and

(6) An applicant may voluntarily allow the department to use the Social Security number of the applicant, as the department may request in the application form, for the purposes specified in section (5) of this rule. Refusal to voluntarily allow such use of the Social Security number will not result in the denial of any individual right, benefit or privilege provided by law. The use authorized by an applicant is in addition to uses authorized by state and federal law for which collection of Social Security numbers is mandatory.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0620 Licensee Reporting Requirements

(1) A licensee must report to the department in writing, in a form specified by the department, any changes to the information submitted in an initial license application submitted pursuant to OAR 836-200-0615(1) or a renewal application submitted pursuant to OAR 836-200-0615(2), including any material changes made in the licensee’s business operations, as defined in OAR 836-200-0605(7).

(2) A licensee must report the information regarding contacts specified in subsection (3) of this rule no later than April 1, 2023, and each year thereafter.

(3) The report described in subsection (2) of this rule must contain the following information in a form specified by the department:

(a) A list of health care providers within this state that the licensee contacted during the preceding calendar year;

(b) The number of times the licensee contacted each health care provider during the preceding calendar year;

(d) Which pharmaceutical products the licensee promoted;

(e) Whether the licensee provided the health care provider with any product samples, materials or gifts, and, if so, the monetary value of the samples, materials or gifts; and

(f) Whether and how the licensee otherwise compensated the health care provider for contact with the licensee.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0625 Prohibited Conduct for Licensees

A licensee may not:

(1) Engage in any deceptive or misleading marketing of a pharmaceutical product, including knowingly concealing, suppressing, omitting, misrepresenting, or misstating material facts concerning or related to a pharmaceutical product;

(2) Use a title or designation that could reasonably lead a health care provider or an employee of a health care provider to believe that the licensee is a health care provider if the licensee is not licensed as a health care provider or otherwise authorized to provide health care services;

(3) Attend an examination of a patient without the patient’s consent; or

(4) Make or file, or cause to be made or filed, to or with the director of the Department of Consumer and Business Services, any statement, report or document which is known to be false in any material respect or matter.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0630 Civil Penalties and License Revocation

The department may impose civil penalties on licensees, or to unlicensed pharmaceutical representatives under subsection (1)(c) of this rule, for violations of Oregon Laws 2021, chapter 593 and OAR 836-200-0600 to 836-200-0670, including but not limited to the following:

(1) Engaging in any of the prohibited conduct described in OAR 836-200-0625;

(2) Failure to timely report any of the information described OAR 836-200-0620;

(3) Engaging in business as a pharmaceutical representative in the state of Oregon for 15 or more days without first obtaining a license from the department.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0635 Education Requirements

(1) Education requirements for initial licensure. In order to satisfy the education requirement for an initial pharmaceutical representative license, applicants must complete a course of education of at least 10 hours. The education program must be approved by the department under OAR 836-200-0635 to 836-200-0670.The coursework must cover at least the following topics, and may also include any of the topics described in subsection (2)(a) of this rule:

(a) The comparative clinical effectiveness of pharmaceutical products, evidence based medicine, or basic pharmacology;

(b) The comparative cost effectiveness of pharmaceutical products, or pharmoeconomics; and

(c) Legal and ethical issues related to promoting pharmaceutical products to healthcare professionals, or professional ethics generally.

(2) Education requirement for license renewal. In order to renew a pharmaceutical representative license, applicants must complete at least five hours of education. By applying for renewal, an applicant is affirming that they have completed five hours of education during the preceding 12 months. The education must be approved by the department under OAR 836-200-0635 to 836-200-0670. Education coursework under this section must be in one or more of the following subject areas:

(a) General medical and pharmaceutical terminology and abbreviations;

(b) Food and Drug Administration laws and regulations pertaining to drug marketing, labeling, and clinical trials;

(d) Therapeutic drug classes and categories;

(e) Professional ethics;

(f) Properties and actions of drugs and drug delivery mechanisms;

(g) Etiologies, characteristics, and therapeutics of disease states;

(h) Pharmacology;

(i) The anatomical and physiological effect of pharmaceuticals;

(j) The comparative effectiveness of pharmaceutical products;

(k) How to read and analyze peer-reviewed literature on pharmaceutical products; or

(l) Safe prescribing practices to prevent abuse.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022
ID 13-2021, temporary adopt filed 12/20/2021, effective 12/20/2021 through 06/17/2022

Or. Admin. R. 836-200-0640 Education

To demonstrate completion of a professional education course for the purpose of initial licensure as a pharmaceutical representative under these rules or renewal of licensure, documentation shall be submitted as follows:

(1) To the extent possible, the education provider offering the course shall submit electronically a transcript, certificate of completion or grade or course completion report, whichever is issued by the education provider offering the course, or a copy thereof. If it is not possible for the education provider offering the course to submit a transcript, certificate of completion or grade or course completion report, the pharmaceutical representative shall submit the transcript, certificate of completion or grade or course completion report in accordance with directions provided on the Department of Consumer and Business Services website.

(2) The department may accept evidence of completion of a course from education providers through electronic means as specified by the department.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0645 Education; Standards for Granting Credit Hours

(1) Subject to the subject matter requirements of OAR 836-200-0635, a pharmaceutical representative may receive credit for a course registered under OAR 836-200-0655:

(a) For not more than the credit hours authorized by the director;

(b) Only if an hour includes at least 50 minutes of instruction or study;

(c) For class hours in which a pharmaceutical representative is an instructor of a course if the course meets the education requirements of a pharmaceutical representative attending it. Credit may be taken by pharmaceutical representative with respect to a course only once in each renewal period in which the pharmaceutical representative instructs the course;

(2) A pharmaceutical representative successfully completes the course if the pharmaceutical representative is present for the full approved time.

(3) A pharmaceutical representative may not take education credit for:

(a) Hours devoted to preparation for a course; when the pharmaceutical representative is acting as an instructor for the course;

(b) Travel time;

(d) Unplanned or incidental learning experiences;

(e) Any course not completed; or

(f) Any course repeated within a two year period.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0650 Education; Education Provider Registration

A provider of education courses must register with the department in order to register courses under OAR 836-200-0655. An education provider must register electronically in the method required by the director. The registration of an education provider shall include the education provider's business name, business address, and the business telephone number. In addition, a direct contact name and telephone number employed by the provider.

(1) A provider shall notify the department of any change in the address, telephone number, email address or contact person of the education provider within 30 days after any such change takes effect.

(2) Subject to revocation of registration under OAR 836-200-0665, an education provider registration expires on the second January 1 following the date of registration.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0655 Education; Course Registration

(1) An education provider registered under OAR 836-200-0650 shall apply to the department for registration of each course to be offered by the provider for education credit. Application for registration shall be made electronically in the method required by the department and shall include the name of the provider, the education provider's registration number assigned by the department, the course title and credit hours suggested by the education provider for the course. The education provider shall include the course outline with the registration application and shall submit any other information requested by the department. The course outline must show instruction in 50-minute periods. In order to ensure that a course is eligible to be registered prior to the date of the first meeting of the course, a registered education provider must apply for registration of the course not later than the 60th day preceding the first date.

(2) The registration of a course expires on the last day of the 24th month after the date the course is registered unless the course is renewed prior to the date on which registration expires.

(3) Each course registration application is subject to review by the department for the purpose of evaluating and assigning credit hours and determining compliance with requirements of course content under OAR 836-200-0635. The department may reject a course for registration or terminate a course's registration if the department determines that the course submitted fails to provide accurate, sufficient, or germane information, or fails to show good faith with meeting educational goals.

(4) A registered education provider shall resubmit a registered course for review and approval whenever the provider substantially changes the content of the course as registered.

(5) All materials required under this rule shall be submitted electronically in accordance with directions of the department set forth on the division’s website.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0660 Education; Provider Trade Practices

(1) A registered education provider shall not engage in false, misleading or deceptive advertising.

(2) A registered education provider must disclose in writing the charges for a course to each pharmaceutical representative applying to take the course, prior to enrollment of the course.

(3) If a registered education provider cancels a course for any reason, the education provider must refund all charges in full unless the refund policy is clearly described in the enrollment application for the course.

(4) A registered education provider shall ensure that each registered course and each course for which registration is sought provides students with current and accurate information.

(5) A registered education provider shall include a statement in all material published by the education provider to advertise or promote pharmaceutical representative education that the education provider and courses are registered with the department and that registration does not imply endorsement by the department.

(6) A registered education provider may not advertise education hours until the course has been approved by the department. If approval has been applied for, however, a registered education provider may so advertise.

(7) A registered education provider shall not give credit for a course unless the department has approved the registration application for the course and the registered provider.

(8) A registered education provider of courses shall maintain an accurate record of each course offered, instructors and student attendance records for not less than three years after the date of completion of the course.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0670 Education; Credit for Unregistered Courses

(1) A pharmaceutical representative may apply for credit as provided in this rule for a course that is not registered. In order to apply for credit, the pharmaceutical representative must submit to the department an application on a form provided by the department and substantiation of the course as provided in this rule. The application and substantiation must be submitted not later than the 180th day after the date of completion of the course.

(2) If an unregistered course is on a subject permitted under OAR 836-200-0635, the pharmaceutical representative must substantiate to the department's satisfaction that the course meets the requirements of OAR 836-200-0645 and that the pharmaceutical representative attended and completed the course. To make the substantiation, the pharmaceutical representative must submit documentation of the proof of attendance and course completion provided by the education provider concerning the course.

(3) The application and substantiation required under this rule are subject to review by the department for the purpose of determining whether to certify the course for credit and evaluating and assigning credit hours. The department may certify the course, or may reject it if the department determines that the course does not meet applicable requirements.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2021, ch 593
Statutes/Other Implemented: Or Laws 2021, ch 593
ID 2-2022, adopt filed 06/16/2022, effective 06/17/2022

Or. Admin. R. 836-200-0700 Purpose and Scope

This rule establishes the Affordable Housing Premium Assistance Program required under Oregon Laws 2025, chapter 600, section 1 administered by the Department of Consumer and Business Services. The program provides financial assistance to eligible entities for property or liability insurance premiums paid on qualifying affordable housing and shelter units.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0705 Definitions

(1) “Premium assistance payment” means a financial reimbursement issued under this program, subject to statutory caps.

(2) “Eligible entity” means any public, private, or nonprofit entity that pays insurance premiums for liability insurance and property insurance that covers losses on eligible property owned or operated by the entity.

(3) “Affordable housing” means properties defined in ORS 197A.445 and that are subject to regulation under the laws of this state.

(4) “Shelter locations” means congregate, family, youth, alternative, and other shelter locations regulated by or receiving financial support from the state, any county, city, or other political subdivision of the state, or any agency or instrumentality of the state or any county, city, or other political subdivision of the state.

(5) “Project Turnkey” means sites that received Project Turnkey grants from the Oregon Community Foundation.

(6) “Navigation centers” means entities established and operating in accordance with the “Shelter Infrastructure Operations Program - Navigation Centers (SIOP-NAV): SIOP-NAV Operations Manual” published by Oregon Housing and Community Services.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0710 Program Structure

(1) The moneys in the Affordable Housing Premium Assistance Fund established by Oregon Laws 2025, chapter 600, section 2 shall be paid to entities that complete an electronic application process meeting the prioritization requirements in OAR 836-200-0720. Eligible entities include:

(a) Regulated affordable housing owners and/or operators;

(b) Shelter location owners and/or operators;

(d) Navigation centers.

(2) There will be a 60-day initial application window to provide eligible entities sufficient time to gather and submit the required documents necessary to complete the application process.

(3) After the initial application window, the department will review and prioritize applications and make payment determinations in accordance with the provisions of OAR 836-200-0720.

(4) After the initial round of assistance payments are made, if program funds are still available, the department can:

(a) Consider applicants placed on a waitlist;

(b) Open an additional application window for new applicants; or

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0715 Eligibility Criteria

To qualify for premium assistance, an applicant must:

(1) Be an eligible entity as defined in Oregon Laws 2025, chapter 600, section 1(1)(a).

(2) Demonstrate ownership or operational control of eligible property, such as affordable housing dwellings, shelter locations, Project Turnkey sites, and navigation centers.

(3) Provide documentation of paid property or liability insurance premiums for eligible property.

(4) Maintain active property and liability insurance coverage for the duration of the assistance period.

(5) Non-profit applicants must provide documentation sufficient to establish their non-profit status.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0720 Prioritization of Payments

In allocating funds, the department shall prioritize payment to eligible applicants based upon:

(1) Applicants experiencing severe financial distress, as evidenced by factors including but not limited to:

(a) Insurance costs that are more than 20 percent of non-staff operating costs;

(b) Operating reserves that are below three months of routine operations;

(d) Insufficient cash flows to meet immediate operating needs and showing a negative cash flow trend;

(e) Increasing month-over-month accounts payable balances and/or accounts payable balances that are past due with an adverse trend in account balance aging;

(f) Properties foregoing required maintenance expenditures necessary to maintain a property in livable conditions;

(g) Depleted operating accounts and/or reserve funds accounts; or

(h) Verifiable annual net operating losses.

(2) Properties with the highest risk of default on must-pay debt service obligations.

(3) Eligible properties providing more than 15 percent of the beds in their HB 3644 shelter region or more than five percent of their county’s total permanent supportive housing units.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0725 Payment Structure and Limits

(1) Premium assistance payments shall be capped at the lesser of:

(a) Forty percent (40.0%) of total annual insurance premiums paid; or

(b) Thirty thousand dollars ($30,000) per eligible entity.

(2) The department may prorate payments if total eligible requests exceed available program funds. However, full payment preference will be given to nonprofit entities and entities operating in communities or geographic regions with limited affordable housing inventory or available shelter beds.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 4-2026, minor correction filed 04/28/2026, effective 04/28/2026
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0730 Application Process

(1) There is an initial application window of 60 calendar days from the program’s initial launch date. All applications received during the initial 60-calendar day window will be screened and scored by department staff. Eligible entities may apply past the 60-calendar day window but will receive lower payment priority than applications submitted in the first 60 days.

(2) Applications must be submitted electronically or by mail and be received by the department. To be included in the initial 60-calandar day review window, all application materials must be submitted and received by the department on or before the 60th day of the initial application window.

(3) Initial premium assistance payments shall commence following the close of the initial application window. If program funds remain available after this date, assistance payments to additional eligible entities will occur monthly on the 15th calendar day of each month.

(4) Each application must include:

(a) Name of the eligible entity;

(b) The name(s) of the owner(s), senior leadership, and their job title within the eligible entity;

(c) Specify the applicant’s eligible entity type (e.g. affordable housing owner and/or operators, shelter location owners and/or operators, etc.);

(d) Applicants that are an affordable housing owner or operator must disclose if they have applied for and received preservation funding from Oregon Housing and Community Services;

(e) Description of the housing or shelter stock (year structure(s) was built; type of structure(s), i.e. single-family, multi-family, or high-density living spaces; and number of units or number of shelter beds);

(f) Geographic designation (urban, suburban, rural; inland vs coastal; proximity to areas considered to have elevated wildfire risk);

(g) Documentation of insurance premium payments, to include:

(A) A legible copy of the insurance policy declaration page for the current and prior year policy coverage periods; and

(B) Proof of annual premium payment(s) for the current and prior year policy coverage periods, such as a copy of the payment check(s) or an electronic payment receipt(s).

(h) Applicant must provide a narrative description of their efforts to maintain, preserve, or increase their existing affordable housing inventory or number of available shelter beds;

(i) Entity classification (for-profit, nonprofit, public);

(A) Nonprofit entities must provide the following documentation:

(i) A copy of the most recent nonprofit corporation annual report filed with the Oregon Secretary of State. If an applicant is a public benefit nonprofit, a copy of the annual report to the Oregon Department of Justice – Charitable Activities Division must also be included; and

(ii) Proof of listing on the Internal Revenue Service (IRS) Tax-Exempt Organization Search (TEOS) database; or

(iii) A copy of the applicant’s IRS determination letter.

(B) For profit entities must provide the following documentation:

(i) A copy of the two most recent audited annual financial statements;

(ii) A copy of the two most recent Federal tax filings; and

(iii) A copy of the two most recent Oregon state tax filings.

(j) Under penalty of perjury, provide a legal attestation by the owner, senior partner(s), or duly appointed legal representative of the eligible entity that the contents of the application, to include all supporting documents submitted, are truthful, accurate, and complete.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026

Or. Admin. R. 836-200-0735 Program Metrics and Reporting

(1) The department shall collect and report the following metrics annually to the Oregon Legislature:

(a) Number of applicants who received premium assistance funds;

(b) Number of applications submitted, approved, placed on waitlist with total funding need noted, and denied;

(d) Total number of shelter properties and number of shelter beds preserved or increased due to assistance;

(e) Total funds disbursed and average payment per entity;

(f) Distribution of funds by geographic region and entity type;

(g) Percentage of existing affordable housing stock preserved; and

(h) Department administrative costs as a percentage of total program expenditures.

(2) Additional metrics may include:

(a) How much did each premium assistance payment offset each applicant’s insurance coverage cost(s) for eligible properties;

(b) The extent to which premium assistance funding reduced insurance-related financial distress reported by eligible entities (i.e. without assistance payments, how many assistance recipients would have reduced/lost previously available affordable housing units or shelter beds);

(c) Number of eligible entities that applied and were approved but did not receive assistance due to program funding; and

(d) The department may conduct a follow-up survey of premium assistance program participants for feedback on program accessibility and program impact on operations.

History

Statutory/Other Authority: ORS 731.244 & Or Laws 2025, ch 600
Statutes/Other Implemented: ORS 746.100, ORS 746.110 & ORS 746.240
ID 3-2026, adopt filed 03/26/2026, effective 04/01/2026