insurance and insurance€¦ · title 56 insurance and insurance companies u chapter 736 insurance...

TITLE 56

INSURANCE AND INSURANCECOMPANIES

u

Chapter 736 Insurance Law Generally737 Insurance Rates and Rating Organizations738 Incorporation Merger and Management of Domestic Insurance Companies739 Life Insurance740 Fraternal Benefit Societies741 Accident and Health Insurance742 Health Care Service Contractors744 Fire Insurance745 Marine Insurance

746 Mortgage Insurance Companies747 Surety Companies748 Title Insurance Companies749 Interinsurance Exchanges and LloydsOrganizations750 Surplus Line Agents and Nonresident Brokers751 Uniform Insurers Liquidation Act

Chapter 736

1965 REPLACEMENT PART

Insurance Law Generally

PURPOSE DEFINITIONS APPLICATION

736003 Purpose and construction of insurance laws736005 Definitions

736010 Application of General Insurance Law736015 Exemptions from provisions of General

Insurance Law

736020 Exempted persons or organizations requiredto obtain certificate of authority application of certain provisions of GeneralInsurance Law to exempt insurer

INSURERS

736055 Who deemed an insurance company736060 Classification and separation of insurance

for licensing736070 Reinsurance companies736075 Classes of insurance a company may

transact

736080 No certificate of authority issued to otherthan a corporation

736082 Name of insurance company

736085 Certificate of authority of domestic companies

736090 Filing and observance of rating schedules736100 Annual expiration and renewal of neensm736105 Revocation or suspension of certificate or

license effective date court review736110 Revocation or suspension of certificates of

domestic companies736120 Annual financial statement736125 Companies to report premiums and losses

in each class

736130 Fees and charges no others to be Imposed

tapersonalliabil for paying Invalidx

y 736155 Qualification of insurers maintaining security for payment of compensation

736160 Determining amount of security736165 Rate regulation rating organizations736170 Insuring groups of employers

683736175 Offset against premium tax

INSURING EMPLOYERS UNDERWORKMENSCOMPENSATION LAW

CCE 736

FOREIGN AND ALIEN INSURERS 736450 Civil and criminal responsibility of agent

736205 Requirements before doing business Innot notifying insured that he has procured insurance in unauthorized com

state issuance and revocation of cerp

tificates756455 Agent to advertise location of company

736207 Capital and surplus requirements 756460 Agents or solicitors false statement in736210 Companies to appoint attorney for legal application for insuranceservice verification of pleadings service on companies not complying with 736465 Revocation or suspension of licensessection grounds notice to company or employ

736215 Deposit required of foreign and alien cas 736470 Revvococagent reinstatement

or suspension of licenses hear

736220ualty and fire insurers

Exemption from other laws of stateby commissioner appeal to circuit

736225 Gross premium tax penalty for failure toocourt fine f lieu of revocation or susc

ipension for frst offensemake reports or pay tax 736475 Resident agent law

736235 Annual report to contain affidavit of non 736485 Adjusters to licensed right of agentviolation of resident agent law to act adjuster adjustment of losses

736237 Equalizing obligations of domestic and fornieer policies in unauthorized compa

eign insurers n

736240736245

Domicile of alien insurerDetermination of applicability of ORS 736490 Temporary permit issued to adjusters un

736237 noticeder certain circumstances application

736250 Definitions for ORS 736250 to 736258 INSURANCE DIVISION736252 Service of process on commissioner equiv

alent to personal service on foreign or 736495 Insurance Division

alien insurer 736500 Insurance Commissioner qualifications

736254 Judgment by default after service under salary oath bond conflict of interestORS 736252 736503 Administrative power of commissioner

736256 Conditions to be met by defendant in 736507 Official seal evidentiary effect of sealedsurer before filing motions or pleadings document

736258 Attorney fee allowable to plaintiff 736510 General powers and duties of commis736260 Exceptions to application of ORS 736250 sioner

to 736258 736515 Commissioner to furnish companies formsfor annual statements

POLICIES ATTORNEY FEES AND MINORS 736520 Commissionersannual reports736525 Collection and disposition of fees taxes

736300 Approval of policies by commissioner with and penaltiesdrawal of approval 736530 Deposits of securities

736305 Construction of insurance contracts in 736535 Withdrawal of deposited securities bycorporation of application in policy company

736310 Permissible combination of risks in one 756540 Proceedings with respect to deposit of inpolicy solvent company

736312 Certain vehicle and aircraft insurance poll 736542 Commissionersinquiries to companiescies not deemed accident insurance poli 736545 Examination of companies when requiredcies 736550 Examiners compensation and expenses

736315 Provision for construction according to 736555 Procedure at examination production offoreign law prohibited books

736317 Uninsured motorist clause required in 736560 Report of examination use as evidenceautomobile insurance publication

736320 Bankruptcy clause required In certain lia 736565 Expenses of examination penalty for rebillty policies fusal to furnish information

736325 Recovery of attorney fees in action on 736570 Determination of companys financialpolicy status commissioner may adopt rules

736330 Minor may contract for annuity or insurance 736575 Expenses of division audit736335 Minor may receive monthly payment on an 736580 Recording complaints commissioner to con

nuity or insurance not to exceed 200 sider complaints before issuing licenses

AGENTS SOLICITORS AND ADJUSTERS MISCE OFFENSES

736405 Certification of agents by companies ll 736605 Misrepresenting assets of companytensing by commissioner fee 736608 Prohibition against untrue or deceptive ad

736410 Certification and licensing of solicitors vertisingfee revocation of license 736610 Company agent or attorney soliciting or

736415 Qualifications for agents or solicitors Ii issuing policy without complying withtense application examination fee law

736420 Examination for agents or solicitors li 736615 Practices injurious to free competition orcense when required duties of commis der to discontinue revocation of 11sioner tense renewal

736425 Who may be licensed contents of license 736620 Rebating revocation of licensespower of licensed agent to bind com 736625 Accepting rebate proportionate reductionpany of insurance

736427 Licensing firm or corporate agency 736630 Employe officer or director profiting from736430 Compensating unlicensed agent for solicit sale of insurance to employer or cor

Ing forbidden poration736435 Commissioner to compile list of agents 736635 Exceptions to ORS 736620 to 736640

and solicitors 736640 Self incrimination Immunity736440 Acting as agent or solicitor without 11 736645 Transacting business in foreign state

tense a crime exclusions where not licensed

736445 Writing or soliciting insurance for unli 736650 False or misleading filings with commiscensed company or agent forbidden sioner

684

CROSS REFERENCES CH 736

PROHIBITED PRACTICES BY LENDERS ONREAL PROPERTY

736705 Definitions for ORS 736705 to 736755736715 Policy designation of insurer prohibited736725 Consideration for substitution of policy or

change in kind type or amount of insurance

736735 Confidentiality of information in a policyof insurance

736745 Construction of ORS 736705 to 736755736755 Violation of ORS 736715 or 736735 as

cause for license revocation

UNFAIR TRADE PRACTICES

736805 Purpose of ORS 736805 to 736840736810 Person defined

736815 Definition of unfair trade practices736820 Unfair trade practices prohibited736825 Trade practices exempted from prohibition736830 Investigation by commissioner736835 Orders of commissioner hearings736840 Nonexclusive powers of commissioner

736990 Penalties

PENALTIES

CROSS REFERENCES

Administrative procedures and males of state agencies Ch 183

State development credit corporations Ch 63Supplying information to State Tax Commission

314360

Unclaimed property disposition of 98302 to 98436736010

Application of General Insurance Law 744020745015 746020

736015

Application of General Insurance Law to reciprocalor interinsurance exchanges 749020 749130to fraternal benefit societies 740050

Educational institution annuity agreements exemptions 128860

Lodge system defined 740020Soliciting membership for unlicensed fraternal

benefit society 740990

INSURERS

Domestic insurance companies generally Ch 738Fraternal benefit societies Ch 740Health care service contractors Ch 742Interinsurance exchanges and Lloyds organizations

Ch 749736060

Bank deposit insurance 708230Classes of risks written by Lloyds organizations

749320

Classification of marine insurance 745105Disability insurance Ch 741Liability insurance for state and school vehicles

278090 332435

Mortgage insurance Ch 746Motor vehicle liability policies in connection with

financial responsibility law Ch 486736070

Authority of domestic company to reinsure itsrisks 738220

Reinsurance of marine risks 745110 745125Reinsurance of risks of insolvent or retiring com

panies 738230736080

Associations firms and persons as mortgage insurance companies 746010

Fraternal benefit societies exempted from provisions of General Insurance Law 736015 740050

Lloyds organizations authorized to do insurancebusiness 749310

Issuance of certificate of authority of domesticcorporations 738060

736090

Rates and rating organizations Ch 737736105

Educational institution authority to make annuityagreements subject to revocation 128860

Revocation of authority of mutual fire insurancecompany after notice to make good deficiency ofassets 744500

Specialty life insurance policies violations 739735736110

Bearing to revoke certificate for doing unlicensedforeign business on 10 days notice 736645

Seizure of business of domestic insurance companyby commissioner 738470 to 738500

736120

Educational institution making annuity agreementsreports 128860

Marine insurer may file photographic copy of original 745015

Reports of fire insurer doing business under additional title 744040

Reports of marine insurers 745150

736180

Fees of fire insurer doing business under additionaltitle 744040

Marine insurers tax 745145Tax on gross premiums of fire insurers for Fire

Marshal Fund 476055

736205

Accident and health insurance 741030Deposit requirements 736530Foreign marine companies 745120Foreign surety companies 747010 to 747070

736207

Accident and health insurance 741030

736210

Agent of foreign surety company service on747010

Insurance commissioner as attorney to receive service of process 736252

736215

Applicability of 1965 amendment to admitted companies 1965 c65 2

Securities acceptable for deposit purposes 736530736085 736225

Exempted persons required to have certificate of Exemption from corporation excise tax 317080authority 736020 Fire insurers gross premium tax 476055

685

CH 736 CROSS

Marine insurers tax 745145Reciprocal insurers gross premium tax 749100

736235

Applicability of this section to certain reciprocalexchanges 749130

736237

Proceedings brought under ORS 736230 limited 1961c472 6

736252

Use of certified mail when statute requires registered mail 174150

POLICIES ATTORNEY FEES AND MINORSAccident and sickness policies 741110 to 741200Autompbile policies satisfying financial responsi

bility law 486506 to 486566Guardian exercising rights of ward under policy

126306

Life insurance policies 739310 to 739370 739705 to739735

Marine insurance policies 745305Motor vehicle liability policies 486556 486561Retail instalment contracts insurance 83110 83580Mutual fire insurance company policies 744460Provisions required in life policies 739320Reciprocal or interinsurance exchanges construc

tion clause in policies of 749130Standard fire policy 744100

736300

Approval ofAccident and sickness insurance policies 741110Health care service contracts and agreements

742100

Life insurance coupon policies 739725736305

Exceptions to ORS 736305 740650 744140Financial responsibility law makes certain liability

policies subject to provisions not contained

therein 486556Financial responsibility law subsequent filing can

cels prior policy on same operator or vehicle486506

Statements in application for life policy deemedrepresentations In absence of fraud 739320

736405

Fire insurance agencies 744160 744170Life insurance agents 739505Nonresident brokers 750210

736430

Prohibition against compensating persons for procuring members for certain organizations exempt from General Insurance Law 7360152

736435

Agents for educational institution making annuityagreements 128820

736440

Member of mutual fire insurance company maysolicit without license 744160

Soliciting applications for insurance in corporationbeing organized permitted 738030

736445

Surplus line agent may act for unlicensed company750010

736465

Revoking or suspending life insurance agents orsolicitors license 739510

736475

Validity of surplus line insurance 750030736495

Division of Department of Commerce 184520Expense of public officials bonds 747110Insurance commissioner is State Fire Marshal ex

officio 476020State agencies generally Ch 182

736515

Purchase of printing generally 279712 282020736525

Educational institutions making annuity agreements fees for certificates of authority 128890

Expenditures without allotment prohibited in certain cases 291238

Gross premium tax for fire marshals department476055

736530

Securities acceptable as deposit of surety company747040

Securities guaranteed by mortgage insurance andmortgage participation certificates as deposit746080

736540

Treatment of special deposit claims by UniformInsurers Liquidation Act 751070

736545

Educational institution making annuity agreementssubject to examination 128860

Examination of mutual fire insurance company744470

736570

Basis of valuing life policies 739025Computation of marine insurance unearned prem

iums 745130

Domestic corporations engaged in marine insurancecredit for stock in another marine company745115

Domestic corporations lawful investments 738235to 745135

Educational institution assets of subject to determination 128860

Mortgage insurance companies lawful investments746050

Mortgage participation certificates as lawful investments 746080

736608

Defamation of insurance companies 163430736635

Life insurance rebating and discrimination 739540739545

Using license to evade antirebate law 744160750270

736805

Public Law 15 79th Congress see 15 USC 1011 to1015

736990

Mutual fire insurance companys agent violatingGeneral Insurance Law 744990

Soliciting business in unauthorized mutual firecompany 744990

Unfair trade practices violation of orders 736835Violations to be reported 744190

686

INSURANCE LAW GENERALLY

PURPOSE DEFINITIONSAPPLICATION

736003 Purpose and construction of insurance laws The Legislative Assemblyhereby declares that the insurance laws ofthis state are for the protection of the insurancebuying public Such laws shall beliberally construed and shall be administeredand enforced by the Insurance Commissionerto give effect to this policy1965c324 2

736005 Definitions 1 Insurance is a

contract whereby one undertakes to indemnify another against loss damage or liabilityarising from an unknown or contingentevent whereby the insured or his beneficiarysuffers loss or injury

2 General Insurance Law means allthe provisions of ORS chapters 736 738 739744 747 and 749 except ORS 736215 in so faras it does not relate to fire insurance ORS736250 to 736260 736317 736320 736325738105 739075 to 739085 739205 to739240 739410 739415 739420 739530739625 744100 744125 744130 744140747082 747084 747086 747190 749010 to749150 749990 subsection 4 of ORS736990 and subsection 5 of ORS 739990and also means ORS 163430

3 When used in the General InsuranceLaw unless the context otherwise requires

a Commissioner means the Insurance Commissioner who is the administratorof the Insurance Division

b Company corporation or insurance company or insurance corporation includes all corporations associationspartnerships or individuals engaged as insurers in the business of insurance

c Division means the Insurance Di

vision of the Department of Commerced Domestic applies to companies in

corporated under the laws of this stateForeign applies to companies incorporatedby any state of the United States other thanthis state or by any territory or insularpossession of the United States or by theDistrict of Columbia Alien applies tocompanies organized under the laws of anycountry other than the United States orsome state territory or insular possessionthereof or the District of Columbia

e Insurance agent or agent meansa person authorized in writing by any insurance company lawfully authorized to transact business in this state to act as its representative with authority to solicit negotiate

s

736020

and effect contracts of insurance in its be

half or any member of a copartnership orassociation or any stockholder officer oragent of a corporation so authorized andpermitted by law to solicit negotiate andeffect contracts of insurancef Insurance solicitor or solicitor

means an individual authorized by a duly licensed insurance agent to solicit contracts ofinsurance solely on behalf of such agentAmended by 1959 c323 8 1963 c580 91

736010 Application of General Insurance Law All insurance companies doingbusiness in this state shall be subject to theGeneral Insurance Law

736015 Exemptions from provisions ofGeneral Insurance Law The General Insur

ance Law except ORS 736020 shall not applyto

1 Any insurance written by any interinsurance exchange or reciprocal insuranceexchange authorized to transact insurancebusiness of the class or kind it proposes totransact and which has complied with theprovisions of ORS 749010 to 749150

2 A health care service contractor do

ing business in compliance with ORS chapter 742

3 A fraternal benefit society governedby ORS chapter 740

4 An association of employes whichprovides benefits to the members of such association for accidents illness or death not inexcess of 500 on behalf of any one person if

a No policy or certificate of insuranceis issued to such members and

b The association does not give or allowor promise to give or allow to any person anycompensation for procuring members

5 Patrons of husbandry or fraternalfire or life insurance associations or any religious organization engaged in the businessof writing fire insurance for its members orits churches which have been doing so continuously in this state for a period of 15 yearsprior to and including December 31 1956Amended by 1957c100 l 1959 c281 2 1961 c5621 1965 c611 15

736020 Exempted persons or organizations required to obtain certificate of authority application of certain provisions of General Insurance Law to exempt insurer 1 Noperson or organization exempted by any provision of ORS chapters 736 to 751 and notrequired to comply with any of such chaptersmay engage in any form of insurance for

37

736055 INSURANCE AND INSURANCE COMPANIES

profit or otherwise until a certificate of authority therefor has been received by suchperson or organization from the insurancecommissioner provided this section shall notapply to fraternal benefit societies which areexempted by ORS 740060 and have maintained lodges in Oregon and other states for50 years prior to January 1 1961

2 No certificate of authority shall beissued to any such exempt insurer by the insurance commissioner or renewed by himexcept upon receipt of an application to act asan exempt insurer Such application shall setforth the details of the insurance to be provided the names and addresses of the responsible parties officers and agents and proof ofsolvency of the insurer

3 Upon receipt of a satisfactory application and payment of the fees required bythis section the Insurance Commissionershall issue a certificate authorizing the applicant to act as an exempt insurer until thesucceeding April 1 Each exempt insurershall pay a fee of 10 for each certificate ofauthority and 5 annually for renewing it

4 The Insurance Commissioner mayrevoke the certificate of authority of an exempt insurer if the insurer fails to pay anylegally required fee or charge refuses to permit an inspection of books and accounts becomes insolvent or violates any legal restriction or limitation on insurers in its exemptclassification

5 An exempt insurer shall be subject inthe same manner as an insurance company tosubsection 2 of ORS 736545 and to ORS736550 736555 736560 736565 736570736605 736608 and 7369901961c562 3

786030 to 736050 Reserved for expansion

INSURERS

736055 Who deemed an insurance com

pany A company association partnership orindividual engaged in the business of insurance or suretyship or of guaranteeingagainst liability loss or damage or of entering into contracts substantially amountingto insurance shall be deemed an insurancecompany and shall not transact such business unless the business is authorized or permitted by the laws of the State of Oregonand all laws regulating the same and applicable thereto have been complied with

reinsurance comprised in any one of the following subsections

1 Fire and Marine Insurancea On property and rents and use and

occupancy against loss or damage by firelightning tempest flood earthquake hailfrost snow explosion other than explosionof steam boilers or breakage of flywheelsleakage of sprinklers or other apparatuserected for extinguishing fires and on suchapparatus against accidental injury on

automobiles against loss or damage fromcollision or theft and against liability of theowner or user for injury to property causedby his automobile

b On vessels cars and other vehiclesfreight goods moneys effects and moneyloaned on bottomry and respondentiaagainst loss or damages from the perils ofthe sea and other perils insured against bymarine insurance including the risks of inland navigation and transportation

2 Life Insurance On the lives of persons and every insurance appertaining thereto or connected therewith including endowments and to grant disability benefits andpurchase or dispose of annuities

3 Disability Insurance Against bodilyinjury or death by accident and against disablement resulting from sickness and everyinsurance appertaining thereto includingidentification

4 Casualty Insurance Against liabilityof the insured for the death or disability ofanother or for loss or damage suffered bythe assured or another in his person orproperty resulting from accidental causesother than fire marine and inland navigation hazards from explosion of steam boilersand engines pipes and machinery connectedtherewith and breakage of flywheels machinery or plate glass to make and certifyinspections thereof and against loss of useand occupancy occasioned by such accidentalcauses and against loss by burglary theftand forgery and insurance of the obligations accepted by imposed upon or assumedby employers under law for death disablement or occupational diseases of employesincluding issuing guaranty contracts in connection therewith

5 Surety Insurance Guaranteeing thefidelity of persons holding places of trustthe performance of contracts and bonds andundertakings including the signing thereofas surety and insuring the performance of

736060 Classification and separation ofInsurance for licensing A company may belicensed to make any or all insurance and

JJJ

E

lJ688

INSURANCE 11AW GENERALLY

obligations of employers under workmenscompensation laws by surety bond

6 Credit Insurance Against loss ordamage from failure of debtors to pay theirobligations to the insured

7 Title Insurance Against loss fromdefective titles

8 Live Stock Insurance Against lossdamage or death of domestic animalsAmended by 1965c285 94

736065 Repealed by 1963 c424 2

736070 Reinsurance companies A company organized and conducted solely for thereinsurance of risks insured by other companies in making such reinsurance shallhave all the authority conferred on it by theGeneral Insurance Law and such companyif it has a capital and surplus of1000000or if a foreign or alien company a surplusas defined in the General Insurance Law of1000000 may be licensed to make reinsurance of all classes of insurance defined inORS 736060

736075 Classes of insurance a companymay transact Any insurance company whichhas qualified to transact its appropriatebusiness in this state may be licensed totransact any of the classes of insurance defined in ORS 736060 and 736070 or permitted under the laws of this state and which it

may transact under the provisions of itscharter or articles of incorporation and thelaws of the state in which it has its home office or United States department officeAmended by 1963 c424 l 1965c610 3

Note The 1965 amendment to ORS 736075takes effect April 1 1966 Until then ORS 7360751963 Replacement Part remains in effect

736090 Filing and observance of ratingschedules 1 Every insurance company excepting a marine insurance company beforeit receives a license or a renewal of its li

cense to transact the business of makinginsurance as an insurer in this state shallfile in the office of the commissioner its

rating schedules and policy forms to be usedin the transaction of its business in thisstate

2 Acceptance of the schedule of a licensed rating organization which makesfilings as provided elsewhere in the insurance laws by a company which is a memberof or subscriber to such licensed rating or

736080 No certificate of authority iscanization shall be deemed a compliancewith the General Insurance Law as to the

shed to other than a corporation Unless filing of rating schedulesotherwise expressly authorized by the General Insurance Law no certificate of author 3 A company and its agents shall ob

ity shall be issued other than to a private serve its rating schedules and shall not

corporation organized under the laws of this deviate therefrom when making insurance

state or the laws of a state territory pro until amended or corrected rating schedules

vine or country or to companies organizedhave been filed in the office of the commis

under the laws of foreign governments by sioner No such company or its agents shall

deeds of settlement or articles of association discriminate between risks of essentially the

No certificate of authority may be issued to same hazard in its application of its rates

any state province or foreign governmentfor insurance

nor to any instrumentality political subdi 4 This section does not prevent anyvision or agency thereof insurance company or any interinsurance orAmended by 1955c222 11 reciprocal insurance exchange from making

return of unabsorbed premiums to policyholders or members at the end of the policyperiod

689

736082 Name of insurance company1 The corporate name of any insurer or

736090

ganized or licensed to do business in this stateshall not be the same as or deceptively similarto the name of any domestic insurance company or any foreign or alien insurance company authorized to transact business in thisstate

2 The provisions of subsection 1 shallnot apply to the corporate name existing onAugust 9 1961 of an insurer organized or licensed to do business in this state prior toAugust 9 19611961 c466 1

736085 Certificate of authority of domestic companies A domestic insurancecompany shall be granted a certificate ofauthority to transact any kind or class ofinsurance permitted by the provisions ofthe insurance laws of this state and providedfor in its articles of incorporation upon itscompliance with all the laws of this stateand the regulations of the division relatingto such companies and upon the payment ofthe fees and charges imposed by law


736095 Amended by 1955 c409 1 1959 c3386 1963 c397 l repealed by 1963 c424 2

736100 Annual expiration and renewalof licenses 1 All licenses issued to insurance companies by the commissioner shallexpire on April 1 of each year and may beissued pro rata for any period less than oneyear

2 Annually each company doing orproposing to do an insurance business in thisstate shall apply to the commissioner for alicense and if he is satisfied that suchcompany is qualified to do business underthe provisions of the General Insurance Lawhe shall issue the license on receipt of therequired fee provided in the General Insurance Law

the expiration of 20 days after it is madeand the commissioner shall take no action

pursuant to such order of revocation orsuspension except that he shall forthwithnotify the company of the making of theorder At any time within such 20 daysthe company may petition the Circuit Courtof the State of Oregon for Marion Countyto review the order of suspension or revocation and that court shall summarily hearand determine the question whether theground for the revocation or suspensionexisted and the court upon such hearing anddetermination shall make and enter such

decree as may be proper in the premises

4 If the company files such petitionwithin the 20 days then the operation ofthe order of suspension or revocation shallbe further suspended until the determinationof the cause by the circuit court If no petition is filed within the 20 days then theorder of the commissioner shall become

effective immediately upon the expirationof the 20 days

736105 Revocation or suspension ofcertificate or license effective date courtreview 1 The commissioner shall revokeor suspend all certificates of authority andlicenses granted to any insurance companyits officers or agents if

a He finds upon examination or otherevidence that the company is in an unsoundcondition or that it has failed to complywith the law or with the provisions of itscharter or articles of incorporation or association or that its condition is such as torender its proceedings hazardous to the public or to its policyholders or that its actualassets exclusive of its capital are less thanits liabilities or

b Its trustees directors officers oragents refuse to submit to examination or toproduce at the office where the same arekept its books records accounts and papersin its or their possession or control relatingto its business or affairs for examinationand inspection of the commissioner hisdeputy or examiner when required or refuseto perform any legal obligation relative tosuch examination

2 The commissioner shall cause noticeof the revocation or suspension to be givento the company and to each agent of thecompany in this state and no new businessshall thereafter be done in this state bythe company or for the company by itsagents until its authority to do business isrestored by the commissioner

3 Unless the ground for revocation orsuspension relates to the financial conditionand soundness of the company or to thedeficiencies in its assets a suspension orrevocation shall not become effective until

f

5 The order or decree of the circuit

court shall be appealable to the SupremeCourt in the same manner as other judgments and decrees

736110 Revocation or suspension ofcertificates of domestic companies A certificate of authority granted under ORS

736085 may be revoked on 30 days noticeby the commissioner or it may be suspendedtemporarily if he deems necessary or advisable Cause for revocation or suspensionshall exist if a companys capital is foundto be impaired or the required surplus hasnot been maintained or if its transactionshave been found to be in violation of thelaw

736115 Repealed by 1963 c424 2

736120 Annual financial statement Ev

ery insurance company doing business in thestate shall file with the commissioner on orbefore March 1 of each year a financial statement for the year ending December 31 immediately preceding This statement shall beon a form furnished by the commissionerwhich shall conform as nearly as may beto the form of statement from time to time

adopted by the National Association ofInsurance Commissioners It shall contain

such detailed exhibit of the condition and

transactions of the company in such form190

tINSURANCE LAW GENERALLY

and otherwise as the commissioner reasonably prescribes The statement shall be verified by the oaths of the president andsecretary of the company or in their

absence by two other principal officers Thestatement of an alien company shall embraceonly its condition and transactions in theUnited States and shall be verified by the oathof its resident manager or principal representatives in the United States If a companyfails to file its annual statement by March 1or within a reasonable extension of time

thereafter granted for good cause by thecommissioner its certificate of authorityshall terminate

Amended by 1955c188 l 1961 c466 31

736125 Companies to report premiumsand losses in each class Every insurancecompany authorized to transact business inthis state shall report the premiums receivedand losses incurred and paid for each classand kind of insurance it is authorized to

transact These reports shall be in suchmanner and form as the commissioner maydirect and shall furnish such other infor

mation concerning reinsurance and retrocessions relating to each kind of insurance asmay be required by the commissioner forstatistical purposes

736130 Fees and charges no others tobe imposed no personal liability for payinginvalid tax 1 The commissioner shall

except as otherwise provided in the GeneraInsurance Law require and receive thefollowing fees

a For issuing certificate of authorityto companies 10

b For filing power of attorney 5

c For filing annual report of Oregonbusiness 5

d For certificate of registering title ofpolicy 10

e For annual license all insurancecompanies fraternal societies reciprocal ointerinsurance exchanges mutual associations and Lloyds organizations 150

f For annual license adjusters 25

g For annual license insurance agentsA Individual licenses 2

B Firm or corporate licenses 2 foeach individual exercising the powers conferred by such licenses

736155

h For annual license solicitors 2

i For a n n u a l license nonresident

agents per class 10

j For certificate under seal of department 10

k For copy of papers filed in department per folio 1

2 Except for taxes on real and personal property located in this state thetaxes fees and charges provided for in theinsurance laws of this state shall be in lieu

of all other taxes licenses fees and chargesof every kind and character which may berequired of companies or their agents transacting insurance business by the state orany city county or other political subdivision thereof

3 No personal liability shall arise

against any director trustee officer oragent of any insurer on account of any taxeslicenses or fees paid pursuant to any statutelaw or ordinance even though such statutelaw or ordinance is subsequently declaredor held to be invalid

Amended by 1965c610 4

Note The 1965 amendment to ORS 736130

takes effect April 1 1966 Until then ORS 7361301963 Replacement Part remains in effect


INSURING EMPLOYERS UNDER

WORKMENSCOMPENSATION LAW

736155 Qualification of insurers maintaining security for payment of compensation Any company desiring admission to bepermitted to issue guaranty contracts to direct responsibility employers u n d e r ORS656001 to 656794 shall as a prerequisite tosuch admission qualify with the InsuranceCommissioner under the general provisionsof this chapter or ORS 749010 to 749150After admission such company shall in ad

rdition maintain on file in the office of the

Insurance Commissioner security of the kinddescribed in ORS 736215 in an amount provided in ORS 736160 in favor of the Work

mens Compensation Board as trustee forthe payment of compensation benefits to

r workmen employed by such direct responsibility employers1965 c285 94c

691


736160 Determining amount of security The security required by ORS 736155shall be in an amount

1 Not less than the sum of the follow

ing amounts computed less credits and deductions allowable with respect to reinsurance in admitted insurers as of the close ofthe last preceding December 31 in respect toguaranty contracts issued under ORS 736155and written s u b j e c t to ORS 656001 to656794

a The aggregate of the present valuesof four percent interest of the determinedand estimated future payments upon claimsunder such guaranty contracts written morethan three years prior to such date

b The aggregate of the amounts computed as follows For each of the precedingthree years take 65 percent of the earnedpremiums for that year and deduct all lossand lossexpense p a y m e n t s made uponclaims under such contracts written in the

corresponding year from such 65 percentexcept that the amount of each year shallnot be less than the present value at fourpercent interest of the determined and estimated unpaid claims under contracts written in that year

2 Not less than 100000

3 If the aggregate amount computedunder subsection 1 exceeds 50000 notmore than double such aggregate amount1965c285 94d

736165 Rate regulation rating organizations The provisions of ORS chapter 737relating to rate making and rating organizations shall apply to insurers qualifying underORS 736155 however all such insurersmust be members of a workmenscompensation rating organization The State Compensation Department may b e c o m e a member of a workmenscompensation rating organization If the State Compensation Department becomes a member of such an organization it is entitled without election tomembership on any committee thereof established in connection with the operation ofthe rating organization in this state1965e285 94e

736170 Insuring groups of employers1 Notwithstanding ORS 737512 an insurer qualifying under ORS 736155 may issuea guaranty contract insuring subject employers as a group provided the followingconditions are met

a All the employers in the group are

members of an organization that has been inexistence for at least two years

b The organization was formed for apurpose other than that of obtaining workmens compensation coverage

c The occupations of the employers inthe organization are substantially similartaking into consideration the nature of theservices being performed by workmen ofsuch employers

d The employers in the group constitute at least 50 percent of the total employers in such organization unless the totalnumber of workmen to be covered in the

group exceeds 500 in which event the employers in the group must constitute at least25 percent of all employers in the organization

e The formation and operation of agroup program in the organization will substantially improve accident prevention andclaims handling for the employers in thegroup

2 Insurers insuring such groups shallbe subject to the provisions of ORS chapter737 relating to rate making and rating organizations The Workmens CompensationBoard shall certify such employers as asingle direct responsibility employer group1965c285 941

736175 Offset against premium taxAssessments paid by insurers on behalf oftheir insureds to the Administrative Fund

established under ORS 656612 may be offsetyear against taxes charged under ORS

736225 on premiums for insurinf obligationsof employers under ORS 656001 to 6567941965c285 94g


FOREIGN AND ALIEN INSURERS

692

736205 Requirements before doing business in state issuance and revocation ofcertificates 1 After September 2 1963 aforeign or alien insurance company may beauthorized or licensed to do business in this

state when it has complied with the following requirements

a It shall file with the commissionera certified copy of its charter articles ofincorporation or deed of settlement and astatement of its financial condition and business in the United States in such form and

detail as he may require signed and swornto by at least two of its executive officersor the United States manager

1

INSURANCE LAW GENERALLY 736207

b It shall satisfy the commissionerthat it is fully and legally organized underthe laws of its state or government to dothe business it proposes to transact

c It shall satisfy the commissionerthat it is possessed of and will maintain atall times a combined paidup capital and surplus in the United States of not less than500000 or if a mutual corporation or company that it will maintain at all times a combined deposit capital and surplus in theUnited States over all liabilities therein for

the benefit of all policyholders in the UnitedStates of not less than 500000 except asotherwise provided in the General InsuranceLaw and as otherwise provided in this paragraph In the case of a disability insurancecompany such capital and surplus requirements shall be not less than 300000 However no requirement of capital or surplusherein shall apply to life insurance companies possessing assets amounting to1000000 or more and a surplus over allliabilities of 500000 or more

d When required by the provisions ofthe General Insurance Law it shall depositwith the commissioner securities of theamount and character required of similarcompanies incorporated under the laws ofthis state In lieu of such deposit unlessit is a special deposit required by the General Insurance Law to cover liabilities inthis state only it may furnish a certificateof deposit from the state official havingcustody of the securities showing to thesatisfaction of the commissioner that it hassecurities to an amount not less than that

required by this section deposited with thecommissioner State Treasurer or other

proper official of some one of the states ofthe United States in which it is licensed todo business and that the same are held forthe benefit and security of the policyholdersof such company in the United States Thiscertificate shall be renewed whenever re

quired by the commissioner

2 Upon compliance with the requirements of this section and all other requirements imposed on such company by existinglaws and upon payment of the fees andcharges imposed by law the commissionershall issue to it a certificate of authorityto transact business in this state

received by such insurer in the form of allpremiums assessments dues and fees received or derived or obligations takentherefor by whatever term known frombusiness in this state refuse to grant tosuch insurer a certificate of authority ora license or a renewal thereof until suchamounts are reported

4 A certificate may be revoked on 30days notice if the commissioner finds thata companys condition in the United Statesis unsound or its surplus of admitted assetsin the United States over all its policyliabilities pertaining to its United Statesbusiness and as defined in the General Insur

ance Law has not been maintained and isless than required in this section

5 Certificates of authority and licensesissued prior to September 2 1963 are notaffected by amendments to this section whichwere effective subsequent to such issuanceAmended by 1955 c409 2g 1959 c338 1 1963C397 2

736207 Capital and surplus requirements 1 No foreign or alien capital stockcorporation is authorized to transact any insurance business unless it maintains at alltimes

a A paidup capital of not less than200000 and a surplus of not less than100000 if the corporation has an unrevokedcertificate of authority received before May2 1955

b Except as provided in paragraphsc and d of this subsection a combinedpaidup capital and surplus in the UnitedStates of not less than 500000 if the corporation has received a certificate of authority after May 2 1955

c In the case of a life insurance com

pany a combined paidup capital and surplusin the United States of not less than 300000if the company has received a certificate ofauthority after May 2 1955 but before September 2 1963

d In the case of a disability insurancecompany a combined paidup capital andsurplus in the United States of not less than300000 if the company has received a certificate of authority after May 2 1955

2 No foreign or alien mutual corpora

3 The commissioner may if he findsthat an insurer has failed to include in the

annual report and statement of gross premiums required by ORS 736225 the amounts

E

Lion or company is authorized to transactany insurance business unless it maintains atall times

a A deposit capital in the UnitedStates over all liabilities therein for the

i93


benefit of all policyholders in the UnitedStates of not less than 200000 and a surplus of not less than 100000 if the corporation or company has an unrevoked certificate of authority received before May 2 1955

b Except as provided in paragraphsc and d of this subsection a combineddeposit capital and surplus in the UnitedStates over all liabilities therein for the

benefit of all policyholders in the UnitedStates of not less than 500000 if the corporation or company has received a certificateof authority after May 2 1955

c In the case of a life insurance com

pany a combined deposit capital and surplusin the United States over all liabilities there

in for the benefit of all policyholders in theUnited States of not less than 300000 if thecompany has received a certificate of authority after May 2 1955 but before September 2 1963

d In the case of a disability insurancecompany a combined deposit capital andsurplus in the United States over all liabilities therein for the benefit of all policyholders in the United States of not less than

300000 if the company has received a certificate of authority after May 2 1955

3 Notwithstanding subsections 1 and2 of this section no foreign or alien insurance company is authorized to transact anyworkmens compensation insurance businessunless it maintains at all times a combined

paidup capital and surplus in the UnitedStates of not less than15000001955 c449 7 1959 c338 2 1963 c397 3

736210 Companies to appoint attorneyfor legal service verification of pleadingsservice on companies not complying withsection 1 Every foreign or alien insurancecompany shall before transacting businesswithin this state duly execute and acknowledge a power of attorney and cause thesame to be filed in the office of the com

missioner This power of attorney shall appoint some person who is a citizen of theUnited States and a citizen and resident ofthis state as attorney in fact for suchforeign or alien company and shall constitute him the authorized agent of the company upon whom service may be made andwho may accept service of all writs processes and summons necessary to the complete jurisdiction of the court in any casesuit or proceeding commenced by or againstthe company in any court of this state oof the United States in Oregon This power

of attorney shall be irrevocable except bythe substitution of another qualified personfor the one mentioned therein as attorneyin fact

2 Any such company may at its optionappoint the commissioner its attorney infact designating in the power of attorneyan address to which the commissioner shall

forthwith forward any writ process summons complaint or other papers served uponhim This address may be changed by thecompany making the appointment by filinga new address with the commissioner

3 Any pleading on behalf of any company which has so appointed the commissioner its attorney in fact may be verifiedby any officer of such company or any ofits agents within the state

4 It shall be the duty of every suchforeign or alien company to maintain atall times within this state some qualifiedperson as its attorney in fact as providedin this section In default thereof it shall

not be entitled to transact any businesswithin this state or maintain any suit action or proceeding in any court within thisstate

5 If the attorney of any foreign oralien company appointed under the provisions of this section removes from this state

or becomes disqualified in any manner fromreceiving or accepting service of any writprocess or summons or if any company shallat any time fail to maintain within thisstate an attorney in fact valid service maybe made on such company by service onthe commissioner In case of such service

the commissioner shall immediately notifysuch company thereof inclosing with thenotice a copy of the writ process summonscomplaint or other papers served on himThis notice shall be sent by registered mailand addressed to such company at its lastauthorized address as disclosed in the declaration or authorization and appointmentof attorney in fact filed by it with thecommissioner The registry receipt shall beprima facie evidence of the completion ofthe service When service is made as provided in this subsection no proceedings shallbe had unless such corporation appears orconsents thereto until 40 days after serviceon the commissioner

736215 Deposit required of foreign andalien casualty and fire insurers 1 Every

r foreign or alien company before engaging inthe business of casualty insurance directly

694

J

C


or indirectly or assuming any such casualtinsurance risk within this state shall deposit with the commissioner 25000 in approved securities to be held in trust or ilieu of such securities a corporate suretbond of the same amount payable to thState of Oregon

2 Every foreign or alien company before engaging in the business of fire insurance directly or indirectly or assuming ansuch fire insurance risk within this stateshall deposit with the commissioner 25000in approved securities to be held in trust oin lieu of such securities a corporate suretybond of the same amount payable to thState of Oregon

3 Each deposit whether of securitiesor bond shall be held and conditioned uponthe faithful performance by the company ofall contracts and other requirements withinthe state pertaining to the particular clanof insurance for which the deposit wamade however if at any time such depositby a particular company is insufficient tperform the contracts and other requirements the faithful performance of which thdeposit was conditioned upon then any otherdeposit required under this section and madby that company shall be so used to the extent that such deposit is not used to performthe contracts and other requirements thfaithful performance of which such depositwas conditioned upon

4 Each bond shall be executed byduly licensed surety company and approveby the commissioner and shall continue ifull force and effect until the commissioner

receives 60 days written notice of its termination which notice shall be given by thsurety company that executed such bondAmended by 1955c40 1 1965 c65 11

Note The 1965 amendment to ORS 736215takes effect on April 1 1966 Until then ORS 73621

1963 Replacement Part remains in effect

736220 Exemption from other laws ofstate No foreign or alien insurance company which has complied with the requirements of the General Insurance Law shall

be subject to any other provisions of thelaws of this state relating to admission olicensing of foreign or alien corporations

736225 Gross premium tax penalty fofailure to make reports or pay tax 1Every foreign or alien insurance companyin its annual statement to the commissioneshall set forth

736225

a The gross amount of all premiumsreceived by it during the preceding calendaryear from policies or contracts of insurance

n covering risks within this stateb Return premiums paid

e c Payments made policyholdersd Consideration paid other companies

for reinsurance during such yeare Premiums received for reinsurance

y of risk during the preceding calendar yearThe term gross amount of premiums forthe purpose of taxation and reports means

r the consideration paid by the insured to theinsurer for a policy or contract of insurance

e and includes all premiums assessmentsdues and fees received or derived or obligations taken therefor by whatever termknown from business in this state Thisdefinition is for the purpose of clarity andis not intended to add to or detract from

s the meaning of the term gross amount ofs premiums

2 If the commissioner finds such re

o port as filed by an alien or foreign insurance company to be correct he shall deduct

e from the gross amount of premiumsa Return premiums

e b Payments to policyholders for dividends

c Considerations received for reinsur

eances

3 The commissioner shall compute theamount of two and one quarter percent ofthe balance determined under subsection 2

dof this section

n4 The amount computed under sub

section 3 of this section shall be chargedto such company as a tax determinedby the

amount of business done by it in the statee

for the period shown by such annual statement The commissioner shall forthwith mail

to the last known address of the principaloffice of such company a statement of theamount so charged against it which amountthe company shall pay to the commissioneron or before April 1

5 If a company ceases to do businessor collect premiums on business done in thestate it thereupon shall make a report tothe commissioner of its premiums subject

r to taxation and collected or due as of thedate when it ceased to do business or col

lect premiums on business done in the stater and not theretofore reported and shall

forthwith pay to the commissioner the taxthereon

6 If a company fails or refuses tomake any report for taxation or pay the tax

695


imposed upon it as required by law it shallbe liable to the state for the amount thereof

and a penalty of not more than 200 permonth for each month it has failed to reportor to pay after demand therefor Service ofprocess in any action to recover such tax orpenalty shall be made according to the requirements of law relating to actions

brought against insurance companies bypolicyholders thereof If any company afterfinal judgment requiring it to pay such taxor penalty shall not make such report or paysuch tax or penalty within 10 days afterentry of final judgment or decree requiringit so to do the commissioner may refuse togrant to such insurer a certificate of authority or license or a renewal thereof until suchtax or penalty or both have been paid andsuch report filed as the case may be

7 The tax payable under this sectionis in addition to any amounts payable underORS 476055

Amended by 1955c728 1

736230 Repealed by 1961c472 7

736235 Annual report to contain affidavit of nonviolation of resident agent lawEvery foreign or alien insurance companywhose policies are subject to the provisionsof ORS 736475 shall when filing its annualstatement with the commissioner attachthereto an affidavit of the president manager or chief executive officer in the UnitedStates that ORS 736475 has not beenviolated

736237 Equalizing obligations of domestic and foreign insurers 1 When by orpursuant to the laws of any other state orforeign country any taxes licenses and otherfees in the aggregate and any fines penalties deposit requirements or other materialobligations prohibitions or restrictions are orwould be imposed upon Oregon insurers orupon the agents or representatives of such insurers which are in excess of such taxes licenses and other fees in the aggregate orwhich are in excess of the fines penalties deposit requirements or other obligations prohibitions or restrictions directly imposed upon similar insurers or upon the agents orrepresentatives of such insurers of such otherstate or country under the statutes of thisstate so long as such laws of such other stateor country continue in force or are so appliedthe same taxes licenses and other fees in the

aggregate or fines penalties or deposit re

quirements or other material obligations prohibitions or restrictions of whatever kindshall be imposed by the commissioner uponthe insurers or upon the agents or representatives of such insurers of such other state orcountry doing business or seeking to do business in Oregon Any tax license or other feeor other obligation imposed by any citycounty or other political subdivision oragency of such other state or country on Oregon insurers or their agents or representativesshall be deemed to be imposed by such stateor country within the meaning of this subsection

2 The General Insurance Law shall notapply as to personal income taxes nor as tolocal ad valorem taxes on real or personalproperty nor as to special purpose obligationsor assessments heretofore imposed by another state in connection with particular kinds ofinsurance other than property insurance except that deductions from premium taxes orother taxes otherwise payable allowed on account of real estate or personal property taxespaid shall be taken into consideration by thecommissioner in determining the proprietyand extent of retaliatory action under thissubsection

1961c472231

736240 Domicile of alien insurer 1For the purposes of the General InsuranceLaw the domicile of an alien insurer otherthan insurers formed under the laws of Canada shall be that state designated by the insurer in writing filed with the commissionerat time of admission to this state or within

12 months after the effective date of this Actwhichever date is the later and may be anyone of the following states

a That in which the insurer was firstauthorized to transact insurance

b That in which is located the insurers

principal place of business in the UnitedStates or

c That in which is held the larger deposit of assets of the insurer in trust for theprotection of its policyholders and creditorsin the United States

2 If the insurer makes no such designation its domicile shall be deemed to be that

state in which is located its principal place ofbusiness in the United States

3 In the case of an insurer formed underthe laws of Canada or a province thereof itsdomicile shall be deemed to be that provincein which its head office is situated

1961c472 41696


736245 Determination of applicability ofORS 736237 notice Upon an examinationof the reports of foreign and alien insurersand not later than June 1 of each year thecommissioner shall make his determination

as to whether the provisions of the laws ofany state or country require the impositionof the burdens specified in subsection 1 ofORS 736237 shall determine the companiesaffected thereby and shall forthwith mail anotice thereof to the companies deemed affected and no proceedings shall thereafterbe brought on behalf of the State of Oregonbased upon a redetermination of the specifiedburdens after June 1 of each year except incase of fraud by the insurance company inmaking the above report1961c472 51

736250 Definitions for ORS 736250 to736258 As used in ORS 736250 to 736258unless the context requires otherwise

1 Action means an action suit orproceeding

2 Commissioner means the State Insurance Commissioner

3 Insurer means a foreign or alienperson which is not authorized or licensedto carry on insurance business in the state

4 Insurance means insurance covering property or operations in the state orthe lives or persons of residents of the statewho are physically present in the state atthe time their contracts of insurance areissued or delivered

5 Process means summons and complaint1959 c323 11

736252 Service of process on commissioner equivalent to personal service on foreign or alien insurer 1 When an insurerdoes any of the acts specified in subsection2 of this section in the state by mail orotherwise the doing of such acts shall constitute an appointment by such insurer of thecommissioner and his successor in office asits lawful attorney upon whom all processmay be served in any action begun by or onbehalf of an insured or beneficiary and arising out of contracts of insurance betweenthe insurer and persons residing or authorized to do business in the state Subject tosubsection 4 of this section the doing oany such act shall signify the insurers consent that service of process upon the commissioner is of the same legal force andeffect as personal service of process uponsuch insurer within the state

736254

2 The acts referred to in subsection1 of this section are

a Issuing or delivering contracts of insurance to persons residing or authorized todo business in the state

b Soliciting applications for contractsof insurance from such persons

c Collecting premiums membershipfees assessments or other considerations under contracts of insurance from such persons

d Any other transaction of businessarising out of contracts of insurance withsuch persons

3 Service of process upon the commissioner shall be made by delivering to andleaving with the commissioner or with anyclerk on duty in his office two copies ofsuch process Immediately after service ofprocess the commissioner shall send one ofsuch copies to the defendant insurer at itsprincipal office The commissioner shall keepa record of all processes served upon him under this section

4 Service of process in the manner provided in this section gives jurisdiction overthe person of an insurer provided

a Notice of such service and a copy ofthe process are sent by registered mail bythe plaintiff or his attorney to the defendant insurer at its principal office within 10days after the date of service and

b The defendant insurers receipt orreceipt issued by the post office with whichthe letter is registered showing the name ofthe sender of the letter and the name and

address of the person to whom the letter isaddressed and an affidavit of the plaintiffor his attorney showing compliance withthis section are filed with the clerk of the

court in which the action against such insurer is pending on or before the date onwhich such insurer is required to appear orwithin such further time as the court mayallow

5 Nothing contained in this sectionshall limit or abridge the right to serve any3rocess upon an insurer in any other manner now or hereafter permitted by law1959 c323 21

f 736254 Judgment by default after service under ORS 736252 Until the expirationof 30 days from the date of filing an affidavit of compliance under ORS 736252 noplaintiff or complainant shall be entitled to ajudgment by default in any action in which

697


service of process is made in the manner provided in such section

1959 c323 31

736256 Conditions to be met by defendant insurer before filing motions orpleadings 1 Except as provided in subsection 3 of this section before any insurer may file or cause to be filed any motion or pleading in an action started againstit by service of process in the manner provided in ORS 736252 the defendant insurershall either

a Procure a certificate of authority orlicense to transact insurance business in the

state orb Deposit cash or securities or file a

bond with good and sufficient sureties approved by the court with the clerk of thecourt in which such action is pending in anamount fixed by the court sufficient to secure the payment of any judgment whichmay be rendered in such action Howeverthe court may in its discretion make an order dispensing with such deposit or bondwhere the insurer makes a showing satisfactory to such court that the insurer maintains in a state of the United States funds

or securities in trust or otherwise sufficientand available to satisfy any final judgmentwhich may be entered in such action suitor proceeding

2 The court may order such postponement as may be necessary to give such insurer reasonable opportunity to comply withsubsection 1 of this section and to preparehis defense to such action

3 Nothing in ORS 736005 736250 to736260 and 736990 shall be construed to

prevent a defendant insurer from filing amotion to set aside service of process madein the manner provided in ORS 736252 onthe ground that such insurer has not doneany of the acts described in subsection 2of such section

1959 c323 4 51

without reasonable cause the court mayallow to the plaintiff a reasonable attorneysfee and include such fee in any judgmentthat may be rendered in such action Suchfee shall not exceed 1212 percent of theamount which the court or jury finds theplaintiff is entitled to recover against theinsurer but in no event shall such fee beless than 25 Failure of an insurer to defend any such action shall be deemed primafacie evidence that its failure to make payment was vexatious and without reasonablecause

1959 c323 6

736260 Exceptions to application of ORS736250 to 736258 ORS 736250 to 736258

do not apply to an action suit or proceedingagainst an unauthorized insurer arising outof any contract of

1 Reinsurance ocean marine aircraftor railway insurance

2 Insurance effectuated in compliancewith ORS 750010 to 750110 relating to surplus line agents

3 Insurance against legal liability arising out of ownership operation or maintenance of any property having a permanentsitus outside this state or

4 Insurance against loss of or damageto any property having a permanent situsoutside this state where such contract contains a provision designating the insurancecommissioner or a bona fide resident of this

state as the insurers lawful attorney uponwhom all process may be served in anyaction begun by or on behalf of an insuredor beneficiary and arising out of contractsof insurance between the insurer and personsresiding or authorized to do business in thestate

1959 c323 71


POLICIES ATTORNEY FEESAND MINORS

736258 Attorney fee allowable to plaintiff In any action against an insurer inwhich service of process was made in themanner provided in ORS 736252 if prior tothe commencement of the action demand ismade by the plaintiff or his attorney uponsuch insurer for payment in accordance withthe terms of the contract of insurance and

the insurer does not respond to such demandand if it appears to the court that such failure to make payment was vexatious and

698

736300 Approval of policies by commissioner withdrawal of approval 1 Exceptwhere otherwise provided by law no policyor contract of insurance including endowment or annuity contracts shall be deliveredor issued for delivery in this state until theform of the same has been filed with and approved by the commissioner

2 The commissioner shall within 30days after the filing of any policy or contract of insurance including endowment or

INSURANCE IAW GENERALLY 736310

annuity contracts a p p r o v e or disapprovesuch policy or contract The commissionershall give written notice of such action tothe company proposing to deliver such policyor contract and when a policy or contract isdisapproved the notice shall show whereinsuch policy or contract does not comply withthe law

3 The 30day period referred to in subsection 2 of this section may be extendedby the commissioner for an additional periodnot to exceed 30 days if he gives written notice within the first 30day period to thecompany proposing to deliver the policy orcontract that he needs such additional time

for the consideration of such policy or contract

4 The commissioner shall not approveany policy or contract of insurance including endowment or annuity contracts for delivery in this state

a If he finds that such policy or contract does not comply with the law

b If he finds that such policy or contract contains any provisions includingstatement of premium or has any label description of its contents title heading backing or other indication of its provisionswhich is unintelligible uncertain ambiguousor abstruse or likely to mislead a person towhom the policy or contract is offered delivered or issued or

c If in his judgment the use of suchpolicy or contract would be prejudicial to theinterests of the companys policyholders ormembers or it contains provisions which areunjust unfair or inequitable

5 The commissioner may at any timeafter a hearing held not less than 20 daysafter written notice to the company withdraw his approval of or disapprove anypolicy or contract of insurance includingendowment or annuity contracts being delivered in this state on any ground set forthin subsection 4 of this section The writtennotice of such hearing shall state the reasonfor the proposed withdrawal or disapprovalNo company shall deliver such policy or contract in this state after the effective date of

such withdrawal or disapproval which shallbe as the commissioner may prescribe butnot less than 30 days after the giving of notice of withdrawal or disapproval1965 c406 2

736305 Construction of insurance con

tracts incorporation of application in policy1 Every contract of insurance shall be

construed according to the terms and conditions of the policy except where the contract is made pursuant to a written application therefor and such written applicationis intended to be made a part of the insurancecontract In that case if the company delivers a copy of such application to theassured thereupon such application shall become a part of the insurance contract Ifthe application is not so delivered to theassured it shall not be made a part of theinsurance contract

2 Matters stated in an application shallbe deemed to be representations and notwarranties

3 This section does not apply to

fidelity and surety contracts

699

736310 Permissible combination of risks

W one policy 1 Except as provided in thissection when more than one class of insurance as enumerated and described in ORS

736060 is effected by the same insurer eachkind shall be written in a separate and distinct policy Any such policy may be canceledsurrendered or otherwise terminated without

affecting other premiums paid or policiesheld by the same assured

2 Except as provided in this sectionthe same policy shall not include risks uponwhich the liability of the insurer for unearned premiums or the reserve for unpaiddeferred or undetermined loss claims isestimated in a different manner

3 Insurance in one policy may beeffected by any company licensed to transact such business upon automobiles andvehicles and the accessories and other property transported upon and used in connection therewith against loss or damage byfire collision explosion and against loss bylegal liability for damage to persons orproperty or both resulting from the maintenance use or operation of such automobiles or vehicles and against loss by burglary embezzlement or theft or any one ormore of them Such insurance shall be known

as automobile insurance and premiumsand losses are to be reported under suchtitle For this purpose a fire insurance company need not use the standard fire policy

4 Insurance in one policy may beeffected by companies authorized to insureagainst loss or damage of property andagainst personal injury and death and liability therefor from explosion of steamboilers tanks and engines pipes and machinery connected therewith and breakage of


5 Insurance in one policy may be

effected by any company authorized totransact such business in this state uponthe lives of persons and every insuranceappertaining thereto or connected therewithincluding endowments disability benefitsand annuities

6 Insurance in one policy may beeffected by any company authorized totransact such business in this state againstany physical loss or damage occurring toprivate dwelling properties consisting offour or less living units provided that therate and premium for the perils of fire insurance as defined in ORS 736060 areshown separately on the policy for buildingsand for contents thereof Provided further

that the perils of casualty insurance as defined in ORS 736060 may be included insuch policy provided that the premium foreach casualty insurance peril assumed shallbe separately set forth on the policyAmended by 1955c225 11

736312 Certain vehicle and aircraft in

surance policies not deemed accident insurance policies Any policy insuring againstliability resulting from or incident to theownership maintenance or use of vehicles oraircraft may contain a provision for payment on behalf of an injured party or forreimbursement of the insured for paymentirrespective of legal liability of the insuredof medical hospital surgical and disabilitybenefits to persons injured and funeral anddeath benefits to dependents beneficiaries orpersonal representatives of persons who arekilled as the result of a vehicle or aircraft

accident and such provision shall not bedeemed to be an accident insurance policy1953 c663 31

736320 Bankruptcy clause required incertain liability policies No policy of insurance against loss or damage resultingfrom accident to or injury suffered by anemploye or other person and for which theperson insured is liable or against loss ordamage to property caused by horses or byany vehicle drawn propelled or operated byany motive power and for which loss or

736315 Provision for construction ac damage the person insured is liable shall becording to foreign law prohibited No do issued or delivered to any person in thismestic foreign or alien insurance company state by any corporation authorized to dotransacting business in this state shall here business in this state unless there shall beafter make issue or deliver in this state contained within such policy a provisionany policy or contract of insurance except substantially as follows Bankruptcy or inpolicies or contracts of ocean marine insur solvency of the assured shall not relieve theance containing any condition stipulation or company of any of its obligations hereunderagreement requiring such contract of in If any person or his legal representativesurance to be construed according to the shall obtain final judgment against thelaws of any other state or country Any assured because of any such injuries andsuch condition stipulation or agreement execution thereon is returned unsatisfied by

700

be void and such policy shall be bindupon the company that issued it

flywheels and machinery Such insurance shall

shall be known as steam boiler insurance ingand premiums and losses are to be reportedunder such title 736317 Uninsured motorist clause re

quired in automobile insurance 1 No policy insuring against loss resulting fromliability imposed by law for bodily injuryor death suffered by any natural person arising out of the ownership maintenance or useof a motor vehicle trailer or semitrailershall be issued or delivered in this state with

respect to a motor vehicle trailer or semitrailer registered in this state unless thepolicy includes the coverage described insubsection 2 of this section

2 The policy referred to in subsection1 of this section shall provide coveragetherein or supplemental thereto under provisions approved by the State InsuranceCommissioner for the protection of personsinsured thereunder who are legally entitledto recover damages from owners or operators of uninsured motor vehicles trailers orsemitrailers because of bodily injury sickness or disease including death resultingtherefrom Coverage shall be not less thanthe amounts or limits prescribed for bodilyinjury or death for a policy meeting the requirements of ORS chapter 486

3 Subsection 1 of this section doesnot apply to any policy covering motortrucks as defined in ORS 481035 where the

insured has employes who operate the motortrucks and such employes are covered byworkmens compensation1959 c413 11

C


reason of bankruptcy insolvency or anyother cause or if such judgment is notsatisfied within 30 days after it is renderedthen such person or his legal representativesmay proceed against the company to recover the amount of such judgment eitherat law or in equity but not exceeding thelimit of his policy applicable thereto

736325 Recovery of attorney fees inaction on policy 1 If settlement is notmade within six months from the date proofof loss is filed with an insurance companyfraternal benefit society or health care service contractor and a suit or action is broughtin any court of this state upon any policy ofinsurance of any kind or nature including apolicy or certificate issued by a fraternalbenefit society as defined in ORS 740010and a contract or agreement issued by ahealth care service contractor as defined in

ORS 742010 and the plaintiffsrecovery exceeds the amount of any tender made by thedefendant in such suit or action then theplaintiff in addition to the amount that hemay recover shall be allowed and shall recover as part of his judgment such sum asthe court or jury may adjudge to be reasonable as attorneysfees

2 If attorney fees are allowed as provided in this section and on appeal to the Supreme Court by the defendant the judgmentis affirmed the Supreme Court shall allow tothe respondent such additional sum as thecourt shall adjudge reasonable as attorneyfees of the respondent on such appealAmended by 1965c611 16

736330 Minor may contract for annuityor insurance 1 Any minor of the age of18 years or more as determined by the nearest birthday may notwithstanding his minority contract for annuities and for insuranceupon his own life body or health or on theperson of another in whom the minor has aninsurable interest Such a minor shall notwithstanding such minority be deemed competent to exercise all rights and powers withrespect to or under any contract for annuityor for insurance upon his own life body orhealth or any contract such minor effectedon the person of another as might be exercised by a person of full legal age and may at

736405

minority be entitled to rescind avoid or repudiate the contract nor to rescind avoid orrepudiate any exercise of a right or privilegethereunder except that such a minor not otherwise emancipated shall not be bound byany unperformed agreement to pay by promissory note or otherwise any premium on anysuch annuity or insurance contract

2 If any minor mentioned in subsection1 of this section is possessed of an estatethat is being administered by a guardian nosuch contract shall be binding upon the estateas to payment of premiums except as andwhen consented to by the guardian and approved by the probate court of the county inwhich the administration of the estate is

pending Such consent and approval shall berequired as to each annual premium payment

3 Any annuity contract or policy of lifeor accident and health insurance procured byor for a minor under subsection 1 of thissection shall be made payable either to theminor or his estate or to a person having aninsurable interest in the life of the minor1961 c466 2

736335 Minor may receive monthly payment on annuity or insurance not to exceed200 Any minor domiciled in this state whohas attained the age of 18 years shall bedeemed competent to receive and to give fullacquittance and discharge for a payment orpayments in aggregate amount not exceeding200 in any one month made by a life insurerunder the maturity death or settlementagreement provisions in effect or elected bysuch minor under a life insurance policy orannuity contract if such policy contract oragreement provides for the payment or payments to such minor and if prior to such payment the insurer has not received written

notice of the appointment of a duly qualifiedguardian of the property of the minor Nosuch minor shall be deemed competent toalienate the right to or to anticipate such payments This section shall not be deemed to

restrict the rights of minors set forth in ORS736330 nor shall it be deemed to require anyinsurer to determine whether any other insurer may be effecting a similar payment tothe same minor

1961 c466 41


10any time surrender his interest in any suchcontracts and give valid discharge for any AGENTS SOLICITORS AND ADJUSTERS

benefit accruing or money payable thereun 736405 Certification of agents by comder Such a minor shall not by reason of his panes licensing by commissioner fee 1

701


Any company duly authorized and licensedto transact insurance business in this stateand lawfully doing such business herein inrespect thereof may contract with andappoint as its agent or agents in eachcity town or village in this state any personor persons who hold or have qualified foran agents license under the provisions ofORS 736405 to 736425 Appointment shallbe made by filing with the commissioner acertificate showing the name and addressof the agent and the classes of business heis authorized to transact for the companyThe agent shall at all times keep the commissioner informed of his current address

The commissioner if he finds the agent qualified thereupon shall issue to such agent alicense to act for the company appointinghim for the balance of the current year ending March 31 following the date of such appointment No such license shall be issued toa firm or corporation unless it appears thatit has an office in this state managed by anindividual who is qualified in accordancewith subsection 2 of ORS 736427 Thefirm or corporation shall at all times maintain such an individual as the manager ofsuch office

2 In the event of the death disabilityor refusal to act of an insurance agentholding a certificate of authority from anyinsurance company where no other insurance agent in the agency copartnershipassociation or corporation is authorized torepresent such insurance company the company may appoint another person and thecommissioner may issue a license to suchother person enabling him to represent suchinsurance company upon an application being made in conformity with ORS 736415Such license shall continue only until thelicensee is afforded an opportunity of taking the examination provided for in ORS736420 but not to exceed a period of sixmonths Any person to whom is issued suchlicense and who fails to pass the examination shall not be entitled to the return of

any fees previously paid

3 Every license for each agent representing any company shall be renewed during the month of March in each year forthe ensuing year upon proper applicationto the commissioner by the company appointing him Renewal of an agents licensemay be accomplished by the continuance ofthe existing license for the ensuing yearupon proper application by the appointing

company The fee for issuing or renewingsuch license shall be as provided in ORS736130 and shall be paid to the commissioner

4 Any company appointing and licensing an agent as provided in this section mayupon proper application to the commissionerand upon the surrender of the license revokeor otherwise terminate the license of anyagent appointed by and licensed in behalf ofthe company In lieu of surrender of suchlicense the company may furnish to thecommissioner proof that it has made reasonable effort to secure such license and that ithas sent to the licensee written notice that

application for a termination of his licensehas been made to the commissioner Uponsuch revocation or termination the agent orany person having possession of said licenseshall return the same to the commissionerupon demand

5 The license issued to an established

agency of any company in any city townor village may be transferred by the commissioner to another qualified agent oragency upon proper application by the company and without exacting further feesAmended by 1955c189 1 1965c610 5


736410 Certification and licensing ofsolicitors fee revocation of license 1Every person duly authorized and licensedas an insurance agent to represent any company or companies as provided in ORS736405 may employ as solicitors any individuals who hold or have qualified for a solicitors license under the provisions of ORS736410 to 736425 A certificate showingthe name and address of the solicitor employed and the classes of business he is authorized to solicit for such agent shall befiled with the commissioner by such agentat the time of each such employment Thesolicitor shall at all times keep the commissioner and his employing agent informed ofhis current address The commissioner if hefinds the solicitor qualified thereupon shallissue to each such solicitor a license to solicit

contracts of insurance solely on behalf ofthe agent employing him for the balance ofthe current year ending March 31 followingthe date of such employment

2 The commissioner shall not issue tothe same individual a solicitors license and

an agents license for the same kind ofinsurance to be concurrent

2

lu

J

lu


3 An individual may apply for and thecommissioner may issue to the same individual more than one current solicitors

license to solicit any kind of insuranceauthorized under the laws of this state butno solicitor shall be licensed to solicit forthe same kind of insurance for more than

one agent

4 Every such license for each suchsolicitor shall be renewed during the monthof March in each year for the ensuing yearupon proper application to the commissionerby the agent employing him Renewal of asolicitors license may be accomplished bythe continuance of the existing license forthe ensuing year upon proper applicationto the commissioner by the employing agentThe fee for issuing or renewing such licenseshall be as provided in ORS 736130 and shallbe paid to the commissioner

5 Any agent employing and licensinga solicitor as provided in this section mayupon proper application to the commissionerand upon the surrender of the license revoke or otherwise terminate the license of

any solicitor employed by him In lieu of

surrender of such license the agent mayfurnish to the commissioner proof that ithas made reasonable effort to secure suchlicense and that it has sent to the licensee

written notice that application for termination of his license has been made to the com

missioner Upon such revocation or termination the solicitor or any person having possession of said license shall return the sameto the commissioner upon demand

6 Nothing in ORS 736410 to 735425authorizes any insurance agent to employsolicitors for life insurance

Amended by 1955c189 2 1965c610 6Note The 1965 amendment to ORS 736410

takes effect April 1 1966 Until then ORS 7364101963 Replacement Part remains in effect

736415 Qualifications for agents orsolicitors license application examinationfee 1 Agents or solicitors licenses shallbe granted only to persons who are trustworthy and competent to transact the business of an insurance agent or solicitor insuch manner as to safeguard the interest ofthe public and only after satisfactory proofthereof has been presented to the commissioner Every applicant for issuance or renewal of such license shall

736415

his application except in the case of an applicant for licensing as a nonresident insurance agent

b Not have been convicted of a felonyexcept in the case of an applicant havingspecial merit as determined by the commissioner

c Be a person of good character andbusiness reputation and

d Have the requisite learning and ability as shown by the written examination required of the applicant for issuance of suchlicense and by such other requirements asthe commissioner may establish

2 No license shall be issued to any applicant for an agents or solicitors licenseexcept as p r o v i d e d in ORS 736405 to736425 Any person hereafter desiring toengage in the insurance business in this stateas insurance a g e n t or insurance solicitorshall first apply to the commissioner for alicense authorizing him to engage in andtransact such business Such applicationshall be in writing on uniform forms andsupplements to be prescribed and furnishedby the commissioner which must show

a The applicants name business andresidence address name of company or companies to be represented if the application isfor an agents license or name of employingagent if the application is for a solicitorslicense present occupation occupation forlast 12 months portion of time to be devotedto the work previous insurance experienceand the names of employers during the fiveyears next preceding

b Whether the applicant has ever beenconvicted of or is under indictment for a

felony whether the applicant has ever had ajudgment e n t e r e d against him for fraudwhether any insurer or agent claims the applicant is indebted to it and the details ofany such indebtedness and whether any license to act as an insurance agent or insurance solicitor or in any other occupational orprofessional capacity has ever been refusedrevoked or suspended in this or any otherstate

c The applicantsfingerprints andd Such other information as the com

missioner may require

3 The information specified in paragraphs b and c of subsection 2 of thissection shall also be furnished by a married

a Have established his residence or female applicant with respect to her husplace of business in this state prior to filing band and by a firm or corporate applicant

703


with respect to each individual member comprising the firm or the principal officers ofthe corporation

4 The applicant shall make swornstatements and answers to such interrogatories as the commissioner may require insuch application

5 The application must be approved bythe company to be represented if the application is for an agents license or by the employing agent if the application is for a solicitors license

6 Each applicant for issuance of a license shall be subjected to an examinationas provided in ORS 736420 and shall pay tothe commissioner for each examination anexamination fee of 10 The fee shall be paidin advance and shall not be returned to the

applicant It shall be unlawful for any person other than the applicant directly or indirectly to pay the examination fee

7 The commissioner may in his discretion require an applicant for renewal of anagents or solicitors license to fulfill any orall of the requirements then applicable to theoriginal issuance of such licensesAmended by 1965c610 7

736420 Emunination for agents or

solicitors license when required duties ofcommissioner 1 Upon receipt of an application for issuance of a license as providedfor in ORS 736415 in due form properlyverified and certified the commissionerwithin a reasonable time and in a place reasonably accessible to the applicant shall subject the applicant to a personal written examination When it is shown to the sat

tion of the commissioner from such application and examination or from a renewal application that the applicant has the qualifications required or provided for in ORS 736415the commissioner shall issue to the applicanta license to transact business in this state as

an insurance agent or insurance solicitor orshall renew such license

2 No examination shall be required asa prerequisite to the issuance of a license to

a Any ticket selling agent of a railroad company steamship company carrierby air or public bus carrier who acts thereunder as insurance agent only in referenceto the issuance of accident insurance tickets

or baggage insuranceb Any regular salaried officer or em

ploye of any insurance company providedsuch officer or salaried employe solicitsbusiness only from for or in conjunction

with a licensed insurance agent compensatedon a commission or salaried basis

c Any corporation authorized by itsarticles of incorporation to engage in business as an insurance agent

3 If the applicant is a firm or corporation the examination shall be taken by eachindividual who is to exercise the powers conferred by a license issued to such firm orcorporation

4 The commissioner shall conduct allexaminations for applicants for licensesprepare the questions to be asked in suchexaminations grade the papers of each applicant determine the results and notify thecompany or companies or agent named inthe application thereof The commissionershall hold examinations at such times and

places as he may determine and shall determine rules of procedureAmended by 1965c610 81

736425 Who may be licensed contentsof license power of licensed agent to bindcompany 1 No license shall be issued bythe commissioner to any person except aninsurance agent or insurance solicitor asdefined in ORS 736005 A license shallstate whether the holder is an insurance

agent or insurance solicitor and what company the agent is authorized to representand by what agent the solicitor is employedIt shall designate the class of insurance covered by the license

2 No agent shall have authority torepresent or bind any insurance companyexcept a company for which he holds anagency appointment and license duly issuedas required by ORS 736405 to 736425Amended by 1965 c610 9


736427 Licensing firm or corporateagency 1 Before an agents license maybe issued to a firm or corporation and before it may be renewed there shall be filedwith the commissioner the following information on standard forms prescribed andfurnished by him

a The name of each individual membercomprising the firm or the names of theprincipal officers of the corporation and

b The name of each individual who isto exercise the powers conferred by the license upon the firm or corporation

2 Any individual exercising the powersconferred by an agents license issued to a

04

11

rINSURANCE LAW GENERALLY

firm or corporation shall qualify and otherwise be subject to the insurance laws of thisstate as though an individual licensed agentexcept that no individual license or fee therefor shall be required

3 In the case of a licensed firm or cor

poration the commissioner shall be promptly notified on standard forms prescribed andfurnished by him of all changes in personnelrequired to be named pursuant to subsection1 of this section The commissioner shall

collect fees in such amounts as though foran individual agent for each additional individual named by such firm or corporation asexercising the powers conferred by the license upon such firm or corporation andwith respect to whom fees have not previously been collected for the issuance or renewal of the current firm or corporate license

1965c610 2

Note ORS 736427 stakes effect April 1 1966

736430 Compensating unlicensed agentfor soliciting forbidden 1 No insurancecompany or agent or solicitor shall payany money or commission or give or allowany valuable consideration except regularsalaries to salaried employes or compensation to supervising general agents of anyinsurance company lawfully authorized totransact business in this state or exceptwith respect to reinsurance to any personnot an agent duly licensed under ORS736405 to 736425 for or because of soliciting insurance receiving an application ororder to write renew or procure any policyor collect any premium or attempting asmiddleman to place any insurance or negotiating or effecting in this state a contractof insurance on any property or insurablebusiness activities or interest located withinor transacted within this state

2 Nothing in this section shall bedeemed to prohibit the payment of anycommission to any agent or solicitor dulylicensed as provided in ORS 736405 to736425 for the class or classes of insuranceon which such commission is payable

736435 Commissioner to compile list ofagents and solicitors The commissioner shallrecord the names and addresses of all agentsand solicitors licensed by him in such manner that the list of duly authorized agentsand solicitors and their respective companies or employers may conveniently binspected He shall certify and deliver t

736460

the company or agent respectively a listof the names of all agents or solicitors sorecorded

736440 Acting as agent or solicitorwithout license a crime exclusions No agentor solicitor shall refuse or neglect to procure a license as provided in ORS 736405to 736425 before transacting business asan agent or solicitor This section shall notapply to regularly employed office employesof companies or agents receiving a salaryonly as to business transacted at the officeof such company or agent Nor shall thissection be construed to prevent the licensingof nonresident life insurance agents

736445 Writing or soliciting insurancefor unlicensed company or agent forbiddenNo person either directly or indirectly shallrepresent himself to be the agent of anyinsurance company not licensed to transactsuch business or the solicitor for any agentnot having an unexpired unrevoked licenseissued by the commissioner or act as agentfor any such company or as solicitor forany such agent in soliciting negotiating oreffecting in this state any contract of insurance or renewal thereof or aid in soliciting or placing any contract of insurance orrenewal thereof

736450 Civil and criminal responsibilityof agent not notifying insured that he hasprocured insurance in unauthorized company An insurance agent who fails to notifythe insured that any of his insurance hasbeen placed in an unauthorized companyshall be personally liable on any contractof insurance made issued or acceptedthrough his agency in any company notlicensed by the commissioner to make theinsurance provided in such contract andany such agent who fails so to notify theinsured shall be punished as provided insubsection 2 of ORS 736990

736455 Agent to advertise location ofcompany Every agent of any insurancecompany doing business in this state shallin all his advertisements of that companygive the location of the company the nameof the state and town in which it has its

principal office and the state or government under the laws of which it is organized

e 736460 Agents or solicitors falseo statement in application for insurance No

705


agent or solicitor shall make a false orfraudulent statement or representation onor relative to an application for insuranceor make any such statement for the purposeof obtaining a fee commission money orbenefit in a company or agency transactingsuch business under the provisions of theGeneral Insurance Law The license of an

agent or solicitor so doing shall be revoked

736465 Revocation or suspension of licenses grounds notice to company or employing agent reinstatement 1 The commissioner after notice and for cause shownshall revoke or suspend for not exceedingone year the license of any agent or solicitoror refuse to renew any agents or solicitorslicense on application therefor or refuseto issue any agents or solicitors licenseupon an original application therefor if itis evident that

a The license was obtained by fraudor misrepresentation

b The application therefor containsfalse or fraudulent statements or answers

c The agent has signed or countersigned any policy of insurance in blank

d The agent or solicitor conducts hisbusiness in a dishonest manner or misrepresents the policies or contracts he sellsor misrepresents the policies or contractsof other agents or companies

e The agent is conducting his businessin such a manner as to cause injury tothe public and those dealing with him orhas violated any provision of the insurancelaws of this state

f The conduct of the agent or solicitorhas been such that if he were then applyingfor a license as an agent or solicitor his application should be denied or

g The agent refuses to pay upon written demand a return of commission on anyunearned premium due the insured by reason of cancellation of or change in the policyof insurance requiring such return of unearned premium

2 Upon revoking or suspending any license the commissioner shall notify the company or companies or the employing agentof such revocation or suspension Thereafterexcept as provided in subsections 3 and5 of ORS 735470 such agent or solicitorshall not act as an insurance agent or insurance solicitor or transact any insurancebusiness for or on behalf of any companyor any person until

a A new certificate or certificates of

his authority are duly filed by the companyor agent thereafter appointing or employinghim and approved by the commissioner anda license issued if the license of such agentor solicitor was revoked

b The period of suspension has expiredand if necessary the license of such agentor solicitor is renewed if the license of suchagent or solicitor was suspendedAmended by 1955 c7 l 1957 c254 1 1963 c3611 1965 c66 1

736470 Revocation or suspension of licenses hearing by commissioner appeal tocircuit court fine in lieu of revocation orsuspension for first offense 1 Wheneverthe commissioner determines to revoke or

suspend any agents or solicitors license orrefuses to renew any agents or solicitorslicense on proper application therefor orrefuses to issue any agents or solicitorslicense upon an original application thereforhe shall notify the holder of or applicantfor such license of his intention and shallset a time not less than 15 days from thedate of such notice and shall designate theplace where the holder of or applicant forsuch license may be heard in his own behalfThe commissioner shall preside at such hearing and may subpena compel the attendanceof examine and swear witnesses with likeeffect as if examined and sworn by a clerkof the circuit court

2 If the commissioner decides aftersuch hearing that the license under questionshall be revoked or suspended or if he determines to withhold the renewal of anysuch license or if he refuses to issue any license under an original application he shallenter an order to that effect setting forthhis reasons in writing He shall file a copyof this order in his office and mail a copy tothe party holding said license or to the partyapplying for the issuance of a license at theaddress given in the application

3 Such an order shall not be operativefor a period of 10 days from its date Ifthe agent or solicitor or applicant for alicense feels aggrieved by the decision ofthe commissioner revoking suspending orwithholding the license he may appeal tothe circuit court within this 10day period bygiving notice of such appeal to the commissioner and filing a bond with the clerk of thecircuit court in the sum of 500 The bondshall be conditioned to pay all costs thatmay be awarded against such applicant inthe event of an adverse decision and must

706

CJ

CINSURANCE LAW GENERALLY

be approved by the judge of the courtappealed to The filing of such notice andbond shall supersede the order of the commissioner until the final determination of

such appeal4 Upon the giving of such notice of

appeal and the filing of said bond thecommissioner shall certify the reasons givenby him for the revocation suspension orwithholding of such license to the circuitcourt The judge of the court shall then proceed to a hearing and determine the law andthe facts and after such hearing may directthe continuance or issuance of a license ifsatisfied that the provisions of the insurancelaws of this state have not been violated or

are not in danger of being violated or thecourt may sustain the decision of the commissioner Such appeals shall have precedence and shall be determined by the circuit court with the least possible delay Anappeal shall lie to the Supreme Court fromthe decision of the circuit court

5 Upon the hearing of an appeal fromthe order of the commissioner revoking orsuspending a license and if a violation of thelaw is determined the court may in its discretion if the agents or solicitors licensehas not previously been revoked or suspended for a similar offense and if it believes thecommissionersorder imposes too severe apenalty for a first offense impose a fine ofnot exceeding 500 Payment of the fine bythe holder of the license within 10 days fromthe finding of the court shall continue thelicense in full force and effect otherwise thelicense automatically shall be canceled orsuspendedAmended by 1955 c7 21

736475 Resident agent law 1 Ncforeign or alien company authorized tctransact insurance or offer indemnity contracts in this state shall make write placeor cause to be made written or placedany policy or contract of insurance or indemnity of any kind or character or ageneral or floating policy covering riskson property located in this state liabilitycreated by or accruing under the laws othis state or undertakings to be performedin this state except through its regularlycommissioned and licensed resident insur

ance agents Resident agents who are regularly engaged in the solicitation of insurancefrom the public shall countersign all policiesor indemnity contracts so issued and collectthe premiums therefor or see to their collec

736485

tion in due course and keep a record of thesame This record shall contain the usual

and customary information concerning therisk undertaken including a statement as tothe full premium paid or to be paid thereforto the end that the state may receive thetaxes required by law to be paid on premiums collected for insurance on property orundertakings located in this state

2 No person shall pay or forward anypremium or application for insurance or inany manner secure help or aid in the placing of any insurance or effect any contractof insurance or indemnity upon propertyliability or undertakings located in this statewith any insurer which is not authorized totransact its business in this state

3 This section shall not apply to thefollowing contracts

a Policies covering property in transitwhile in the possession or custody of anycommon carrier or the rolling stock r otherproperty of any common carrier wed andemployed by it as a common carrier offreight and passengers

b Contracts of reinsurance or retrocessions made by or for admitted c mpanies

c Contracts of life insurce and contracts of accident and health insurance if is

sued from the home office or regional homeoffice of a life insurance company

d Bid bonds issued in connection withany public or private contract

4 Nothing contained in the Generalinsurance Law shall be construed as im

pairing the free and unlimited right of nonresident agents and brokers to negotiatecontracts of insurance wholly outside of thisstate provided the policies indorsements orevidence of such contracts covering properties or insurable interests in this state are

countersigned by a resident agent of thisstate who is regularly engaged in the solicitation of insurance from the publicAmended by 1961 c284 l 1963 c367 l 1965 c7011

736480 Repealed by 1959c323 10

f 736485 Adjusters to be licensed rightof agent to act as adjuster adjustment oflosses under policies in unauthorized companies 1 Except as provided in subsection9 any person acting in this state as anadjuster of losses claimed under insurancepolicies or contracts of insurance or indemnity of any kind or character whether acting for the insurer or the insured shall

707


annually on or before April 1 procure a license from the commissioner permitting himto adjust such claims for or against companies authorized to transact business inthis state

2 The commissioner shall license as anadjuster only an individual who has furnished evidence satisfactory to the commissionerthat he is qualified as follows

a Is at least 21 years of ageb Is a bona fide resident of this state

or is a resident of a state which will permitresidents of this state to act as adjusters insuch other state

c Is a trustworthy person with goodreputation

d Has had experience education orspecial training with reference to handlingof loss claims under insurance policies orcontracts of insurance or indemnity of sufficient duration and extent to make him com

petent to fulfill the responsibilities of anadjuster

e Has successfully passed any examination required by subsection 3 of this section

3 Each applicant for a license as anadjuster shall take and pass an examinationgiven by the commissioner as a test of hisqualifications competence and knowledgeexcept that this requirement shall not applyto

a An applicant for the renewal of licenses in force on September 2 1963 or reissued thereafter

b An applicant who is licensed as anindependent adjuster in another state whichlicenses Oregon adjusters without examination

4 Each such examination shall be asthe insurance commissioner prescribes andshall be of sufficient scope to test the applicants knowledge of the kinds of insuranceor suretyship which may be dealt with underthe license requested and also his knowledgeof the duties and responsibilities of an adjuster under the laws of this state

5 The commissioner shall give examinations at such times and places within thestate as he deems necessary to reasonablyserve the best interests of all concerned provided that the commissioner shall give anexamination at least once every six monthsif applications for licenses are then pending

6 The examination taken by the applicant shall be written under the commission

ers supervision7 The commissioner shall charge an

examination fee of 10 for each examinationThe fee shall be paid in advance and shallnot be returned to the applicant

8 All licenses issued under this section shall expire on March 31

9 A licensed agent or special agent orother salaried employe or officer of anauthorized company may adjust and settlelosses for the company which he representswithout procuring an adjusters license

10 An adjusters license shall be revoked by the commissioner if after due investigation and hearing had either beforehimself or a salaried employe of the insurancedepartment designated by him whose reporthe may adopt he determines that the holderof such license has violated any provisionof the law relating to insurance No personwhose license is so revoked shall be grantedanother license under this section for a

period of one year thereafter nor shall heuntil again licensed act as employe or participate in the profits of any insurance adjuster

11 A person shall not be held to violatethis section by making one adjustment during a license year prior to obtaining a licenseif he makes within two days after enteringupon such adjustment application thereforand in all other respects complies with thissection

12 There shall also be procured a separate license for each loss adjusted under apolicy issued by a company not authorizedto transact business in this state The fee

for such separate license shall be not lessthan 100 if the loss to be adjusted is1000 or more or 10 percent of the amountadjusted at the discretion of the commissioner if the loss is less than 1000 Nosuch loss shall be adjusted without payingthe fee and notifying the Insurance Divisionprior to entering upon adjustment of theloss

Amended by 1963 c462 1

708

736490 Temporary permit issued to adjusters under certain circumstances application 1 To facilitate the settlement ofclaims under insurance policies or contractsof insurance or indemnity involving widespread property loss in this state arising outof a catastrophe the State Insurance Commissioner may issue a temporary permit toany person authorized in another state toadjust losses claimed under insurance policies or contracts of insurance or indemnityto act as an adjuster in the catastrophe area

ru


CJ

for or against an insurer authorized to transact business in this state A temporary permit issued pursuant to this section shall beeffective for such time as the commissioner

in his discretion deems necessary and shallbe in lieu of the license and fee requirementsof ORS 736485

2 A temporary permit may be obtainedby filing with the commissioner a writtenapplication therefor in the form prescribedby the commissioner The application shallcontain the name and address of the applicant the name of the state in which the applicant is authorized to adjust losses claimedunder insurance policies or contracts of insurance or indemnity and any other information that the commissioner may require

3 Such a permit may also be issued inrespect to any adjuster who is licensed orpermitted to act as such in the state of hisdomicile and who is sent into this state on

behalf of an insurer or insured for the purpose of investigating or making adjustmentof a particular loss under policies of insurance

1957 c3 21

INSURANCE DIVISION

736495 Insurance Division The Insurance Division is established within the De

partment of Commerce and is charged withthe execution of the laws relating to insurance

1963 c580 87Note Chapter 580 Oregon Laws 1963 estab

lishing the Department of Commerce is repaled onJuly 1 1967 Section 85 chapter 580 Oregon Laws1963 is set forth below for the convenience of theuser

Sec 85 1 The Insurance Division of the Department of Commerce succeeds to and is vestedwith all the duties functions and powers vested inthe Department of Insurance of the State of Oregon and except as otherwise provided by lawthere hereby are transferred to imposed upon andvested in the Insurance Division all the dutiesfunctions and powers of the Department of Insurance of the State of Oregon and the State Insurance Commissioner After the operative date of thisAct the Insurance Division shall exercise such du

ties functions and powers2 The Legislative Counsel for the purpose of

harmonizing and clarifying the provisions of statutesections published in the Oregon Revised Statutesmay substitute for words designating the Department of Insurance of the State of Oregon and theState Insurance Commissioner wherever such wordsoccur in the statute sections to be published in theOregon Revised Statutes words designating the Insurance Division of the Department of Commerce

736507

under the supervision and control of an administrator who shall be known as the Insurance Commissioner The Director of Com

merce shall with the approval of the Governor appoint the Insurance Commissionerwho shall be a person experienced in insurance matters The commissioner shall hold

his office at the pleasure of the Director ofCommerce and shall be responsible for theperformance of the duties imposed upon thedivision The Insurance Commissioner shall

receive such salary as may be provided bylaw

2 Before entering upon the duties ofhis office the commissioner shall take andsubscribe an oath of office which shall be

filed with the Secretary of State and shallgive a bond to the state with good suretiesapproved by the Director of Commerce conditioned for the faithful performance of hisduties in such sum as may be fixed by theDirector of Commerce The premium on thebond shall be paid in the same manner asother expenses of the division

3 The commissioner during his termof office shall not be interested in the business of any insurance company except as apolicyholder1963 c580 88

736503 Administrative power of commissioner The Insurance Commissioner shall

have the power to1 For the purpose of administration

with the approval of the Director of Commerce organize and reorganize as necessary the division in the manner that hedeems necessary to properly conduct thework of the division

2 Appoint all subordinate officers andemployes of the division including but notlimited to deputies actuaries and assistantsand prescribe their duties and fix their compensation subject to the applicable provisions of the State Civil Service Law Subjectto any other applicable law regulating travelexpenses the officers and employes of thedivision shall be allowed such reasonable and

necessary travel and other expenses as maybe incurred in the performance of their duties

1963 c580 89736505 Amended by 1963 c523 10 repealed

by 1963 c580 103

736507 Official seal evidentiary effect736500 Insurance Commissioner quali of sealed document The Insurance Division

fications salary oath bond conflict of in shall adopt an official seal Any certificateterest 1 The Insurance Division shall be or other document or paper executed by the

709

736510 INSURANCE AND INSURANCE COMPAN

division in pursuance of any authority conferred upon it by law and sealed with theseal of the division and all copies of paperscertified by it and authenticated by the sealshall in all cases be evidence equally and inlike manner as the original thereof and shallhave the same force and effect as would the

original in any suit or proceedings in anycourt in this state

1963 c580 901

736510 General powers and duties ofcommissioner 1 The commissioner has thepower to enforce all the laws of the staterelating to insurance and it shall be his dutyto enforce all the provisions of such laws forthe public good He shall issue such division rulings instructions and orders as hemay deem necessary to secure the enforcement of the provisions of the General Insurance Law but nothing contained in theGeneral Insurance Law shall be construed to

prevent any company or persons affected byany order or action of the insurance commissioner from testing the validity of same in anycourt of competent jurisdiction

2 He shall issue under the seal of hisoffice all certificates and licenses provided forin the General Insurance Law Before granting certificates of authority to any insurancecompany to issue policies or make contractsof insurance in this state the commissionershall be satisfied by such examination as hemay make or such evidence as he may require that such company is duly qualifiedunder the laws of this state to transactbusiness herein

3 The commissioner shall compile andhave printed for distribution all booksblanks insurance laws in pamphlet form andother matters necessary for the informationof the public and for the proper administration of the division The commissioner maydistribute free of charge one copy of the insurance laws in pamphlet form to companieslicensed under these laws in addition totheir state representative general agentsdomiciled in Oregon insurance departmentsof other states and territories and to publicand state libraries in quantities necessary tofulfill library needs Copies not so distributedmay be sold at a price not to exceed 5 percopy

4 The commissioner shall preserve in a

for general distribution if he deems it advisable for the public goodAmended by 1963 c307 1

736515 Commissioner to furnish com

panies forms for annual statements The commissioner shall annually in November orDecember furnish to each insurance companyauthorized to transact business in this statetwo or more blank forms for its annual state

ment conforming to the class or classes ofinsurance which it is authorized to write For

this purpose he shall use what are commonlyknown as convention form blanks andwhich have been approved by the NationalConvention of Insurance Commissioners For

the purpose of carrying out the provisions ofthis section the commissioner is authorized to

purchase blanks from any publishing housewhich makes a specialty of printing convention form blanks for the different states

736520 Commissionersannual reportsThe commissioner shall transmit to the Director of Commerce annually as soon afterMarch 1 as is consistent with full and accu

rate preparation a report of his officialtransactions and a report containing in condensed form statements made to the commis

sioner by every insurance company authorized to do business in this state Such state

ments and reports shall be audited and corrected by him and arranged in tabular formor in abstracts His report also shall contain

1 A statement of all insurance companies currently authorized to do businessin this state during the year ending December 31 next preceding with their nameslocations amounts of capital dates of

incorporation and of the commencement ofbusiness and kinds of insurance in which

they are engaged respectively2 A statement of the insurance com

panies whose business has been closed sincemaking his last report and the reasons forclosing the same with the amount of theirassets and liabilities so far as the same are

known or can be ascertained by him3 Any recommendations for amend

ments to the insurance laws of the state which

in his judgment may be desirableNote Pursuant to section 8 of chapter 580

Oregon Laws 1963 the Legislative Counsel has substituted Director of Commerce for Governor in

permanent form a record of his proceedingsORS 736520

including a concise statement of the result of 736525 Collection and disposition ofall investigations or examinations of insur fees taxes and penalites All fees taxes finesance companies and shall have copies printed and penalties paid by companies or by any

710


other persons to whom the provisions of theGeneral Insurance Law apply shall be paidto the commissioner and after deductions of

refunds shall be paid by him to the StateTreasurer at the end of every calendar monthor oftener in his discretion for deposit in theGeneral Fund to become available for generalgovernmental expensesAmended by 1961 c308 31

736530 Deposits of securities 1 Adomestic insurance company may depositwith the State Treasurer securities in suchsum as it may desire to be held for the benefitand security of all persons within or withoutthe state transacting business with the company The state shall be held responsible forthe safety of any such deposit

2 When any company is required by thelaws of this state or by other competentauthority to make deposit with an insurancesupervising official or other financial officeror the company desires to make such depositin this state the commissioner shall acceptsuch deposit if made in securities recognizedby Oregon law as lawful investments of thecompany

3 The commissioner shall hold any deposited securities as trustee upon such trustas shall be designated by the company andapproved by the commissioner pursuant tothe provisions of any law governing the deposit of such securities The commissionershall deliver such securities to the StateTreasurer who shall receive and hold the same

subject to the lawful orders of the commissioner and the treasurer and his suretiesshall be liable on his official bond for their

safekeeping4 Bonds may be accepted in registered

form in the name of Treasurer of the Stateof Oregon in trust for the holders of theobligations of the company pursu

ant to Oregon Laws or in similar formspecifying also the sections of the OregonRevised Statutes under requirement of whichthe deposit is made

5 So long as the company continuessolvent and complies with the laws of thisstate it shall have the right to receive the income from such securities In the event of

insolvency of the company such income accrued and unpaid or thereafter accruingshall be collected and retained by the StateTreasurer in trust for the same purpose forwhich the securities are held

6 If the value of securities

by any company declines below th

736535

so required the company upon demand ofthe commissioner shall make a further deposit and maintain a deposit in the amountand value so required

736535 Withdrawal of deposited securities by company 1 A company may withdraw any part of its deposit by substitutingtherefor other securities of the amount valueand kind required by the law or agreementunder which the deposit was made

2 When a company determines to discontinue its business or to cease doing business in the state and desires to withdraw adeposit made under ORS 736530 the commissioner shall on the application of the company and at its expense give notice of suchintention in a newspaper of general circulation in the state once a week for eight weeksAfter such publication he shall deliver to suchcompany or its assigns the securities sodeposited when he is satisfied upon examination and investigation made by him orunder his authority and upon the oaths ofthe president and secretary or other chiefofficers of the company that all debts andliabilities of every kind due and to becomedue which the deposit was made to secureare paid and extinguished or that the payment of all such debts and liabilities has been

assumed by some responsible company orotherwise provided for to the satisfaction ofthe commissioner

3 The commissioner may also fromtime to time upon like notice and proofdeliver to a company or its assigns any portion of securities so deposited when satisfiedthat all debts and liabilities of the companydue or to become due which the deposit wasmade to secure are less than the amount andvalue of the securities to be retained by thecommissioner

4 Upon a companys being reinsuredthe commissioner may deliver to it or itsassigns the securities deposited by it uponcompliance with the following conditions

a The reinsuring company shall assumeand agree to discharge all the liabilities ofevery kind due and to become due which thedeposit of the reinsured company was madeto secure

b The reinsuring company shall have adeposit in this state or with some state officialin the United States in securities recognizedby Oregon law as lawful investments of thecompany in amount and value not less than

deposit required of the reinsured comdeposited the

e amount pany711


c The deposit of the reinsuring company shall be such that it will subsist for thesecurity of the obligations of the reinsuredcompany so reinsured and assumed by the reinsuring company

d The commissioner shall give notice ofsuch reinsurance agreement and of the application for the deposit once a week for eightweeks in a newspaper of general circulationin the state

736540 Proceedings with respect to deposit of insolvent company 1 Whenever acompany which has deposited money securities or surety bonds with the commissioneror State Treasurer has become insolvent thecommissioner shall file a suit in the Circuit

Court of the State of Oregon for MarionCounty for the benefit of the State of Oregonand of all claimants having valid claimsagainst such deposits The State Treasurershall be a party to the suit The court shalldecree the distribution of the deposit anddirect the commissioner to apportion the deposit and pay it ratably in settlement ofclaims originating in Oregon and for the payment of which such deposits were made andwhich are proved to the satisfaction of thecommissioner and approved by the court

2 Claims shall be filed in such form asthe court shall require Notice of the timeplace and manner of the filing thereof shall begiven by the commissioner by publication ina newspaper printed and published in the mostpopulous county in the state at least onceeach two months for a period of one year fromthe date of the filing of the suit

3 All claimants having claims payablefrom such deposits shall file them with thecommissioner within the oneyear period

4 The expense of publishing the noticetogether with any unpaid fees and taxes duefrom such company to the state and the costsand expenses of the commissioner and of theState Treasurer in connection with the settle

ment of such claims shall be preferred claimspayable from such deposits

5 The residue if any of any such deposits shall be disposed of by the commissioner as the court may direct and the commissioner and the State Treasurer thereuponshall be discharged from any further dutiesor responsibilities with respect to such deposits

736542 Commissioners inquiries tocompanies The commissioner may address

any proper inquiries to any insurance company or its officers in relation to its activities or condition or any other matter connected with its transactions Any companyor officer so addressed shall promptly andtruthfully reply in writing to such inquiriesThe reply shall be verified by an officer ofthe company if the commissioner so requires A reply upon receipt thereof by thecommissioner shall be deemed filed1965c173 2

736545 Examination of companieswhen required 1 The commissioner shallexamine every domestic insurance companyat least once each three years

2 The commissioner shall whenever hedeems it advisable in the interest of policyholders or for the public good examine intothe affairs of any insurance company agencycorporation partnership person or personsengaged in or proposing to engage in the insurance business in this state and into theaffairs of any company organized under anylaw of this state or having an office or representative in this state which company is engaged in or is claiming or advertising that itis engaged in organizing or receiving subscriptions for or disposing of stock of or inany manner aiding or taking part in the formation or business of an insurance companyor companies or which is holding capitalstock of one or more insurance companies forthe purpose of controlling the managementthereof as voting trustee or otherwise

736550 Examiners compensation andexpenses To make the examinations directedin ORS 736545 the commissioner may appoint as examiners one or more fair impartial and competent persons not officers ofnor connected with nor interested in any insurance company or other company referredto in ORS 736545 except as a policyholderThe compensation and expenses includingactual necessary transportation and travelexpenses of examiners so appointed shall bepaid by the commissionerAmended by 1957 c34 17

736555 Procedure at examination pro

duction of books 1 Upon an examinationthe commissioner his deputy or any examinerauthorized by him may examine under oaththe officers and agents of the company oragency being investigated and all persons

11

712


deemed to have material information regarding the property or business of the companyor agency

2 Every such company or agency itsofficers and agents shall produce at the officeof the company or agency where kept itsbooks and all papers in its or their possessionrelating to its business or affairs Any otherperson may be required to produce any bookor paper in his custody relevant to the examination for the inspection of the commissionerhis deputies or examiners whenever requiredThe officers and agents of the company oragency shall facilitate the examination andaid the examiners in making the same so faras it is in their power to do so

736560 Report of examination use asevidence publication 1 Every examinershall make a full and true report of eachexamination made by him verified by hisoath This report shall comprise only factsappearing upon the books papers records ordocuments of such company or agency orascertained from the sworn testimony ofpersons examined concerning its affairsSuch a verified report shall be presumptiveevidence of the facts stated therein in anyaction or proceeding in the name of thestate against the company or agency itsofficers or agents

2 The commissioner may withhold anyreport from public inspection for such time ashe deems proper and shall grant a hearing tothe company or agency examined before filingany report or making public the report or anymatters relating thereto If the company oragency offers no objection at such a hearingit will be an admission of acceptance Thecommissioner may after filing any report ifhe deems it for the interest of the public to doso publish any report or the result of any examination as contained therein in one or more

newspapers of the state without expense tothe company or agency

736565 Expenses of examination penalty for refusal to furnish information Anycompany or association doing business in Oregon and examined under ORS 736545 t736560 shall pay to the commissioner thjust and legitimate costs of the examinationas determined by the commissioner including actual necessary transportation and trayeling expenses The commissioner shall revoke or refuse his certificate of authorityto any company neglecting or refusing to paysuch

costs or neglecting or refusing to furnish any information to the commissionerAmended by 1957 c34 2

736570 Determination of companysflnancial status commissioner may adoptrules 1 In ascertaining the condition of aninsurance company for the purposes of theGeneral Insurance Law or in any examination made by the commissioner he shall allowas assets such investments cash and accountsas are authorized by the laws of this stateat the date of the examination He may in hisdiscretion allow investments made under theexisting laws of the state or country underwhich a foreign or alien company is organized Unpaid premiums on policies writtenwithin three months shall be admitted asavailable resources No other assets shallbe considered

2 In ascertaining a companysliabilitiesunless otherwise provided in the General Insurance Law there shall be charged thecapital stock all outstanding claims a sumequal to the total unearned premiums on thepolicies in force computed on a pro rata basisand such an amount as may be found necessary as a reserve to provide for the futurepayment of deferred and undetermined claimsfor losses and promised benefits

3 In determining the amount of suchreserve or unearned premium liability thecommissioner his deputy or examiner mayformulate such rules as he may deem properand consistent with law or he may adoptsuch rules as are used in other states or approved by the National Convention of Insurance Commissioners

736575 Expenses of division audit Theexpenses of the Insurance Division shall bepaid in the same manner that other statesalaries and expenses are paid when auditedby the Secretary of State upon claims certified and approved by the division from thefunds provided therefor The division shallbe examined and audited as other state agencies are audited1963 c580 902

0 736580 Recording complaints commise sioner to consider complaints before issuing

licenses Each written and signed complaintreceived by the Insurance Division relating tocontracts of insurance or the sale thereofregardless of its subsequent disposition shallbe recorded by the division and maintainedfor a period of not less than seven years The

713


records of such complaints shall be indexedwhenever applicable both by the name of thecompany and by the name of the agent involved The Insurance Commissioner shall

consider such complaints before issuing orrenewing any license of a company or agentnamed in such complaints1965 c57 2


MISCE OFFENSES

736605 Misrepresenting assets of company No insurance company or agent thereof doing business in this state shall anywhere publish represent or advertise assetsexcept those actually owned and possessedby the company in its own exclusive rightavailable for the payment of losses andclaims and held for the protection of itspolicyholders and creditors

736608 Prohibition against untrue ordeceptive advertising 1 No insurance company or agent or attorney as defined in ORS749010 shall make publish disseminate circulate or place before the public or causedirectly or indirectly to be made publisheddisseminated circulated or placed before thepublic in a newspaper magazine or otherpublication or in the form of a notice circular pamphlet letter or poster or overany radio station or in any other way an advertisement announcement or statement

containing any assertion representation orstatement with respect to the business ofinsurance or with respect to any person inthe conduct of his insurance business whichis untrue deceptive or misleading

2 Whenever the commissioner has

knowledge of any violation of this sectionhe forthwith shall order such offendingcompany or agent or attorney as definedin ORS 749010 to discontinue immediatelysuch practice or show cause to the satisfaction of the commissioner why such ordershould not be complied with

3 If such order is not complied withwithin 30 days of its receipt the commissioner shall as provided in ORS 737550 revokethe license or certificate of authority of suchoffending company or agent or attorney asdefined in ORS 749010 No renewal of a li

cense or certificate of authority revoked pursuant to this subsection shall be grantedwithin three years from the date of therevocation

1955 c500 21

736610 Company agent or attorneysoliciting or issuing policy without complying with law No insurance company or itsagents or attorney shall solicit insurance inthis state or issue a policy herein withouthaving complied with the laws of this state

736615 Practices injurious to free competition order to discontinue revocation oflicense renewal 1 Except as providedelsewhere in the insurance laws of this stateit is unlawful for any insurance companyauthorized to transact business in this stateor any manager agent or representativethereof either within or outside of this statedirectly or indirectly to enter into any contract understanding or combination withany other insurance company manageragent or representative thereof or jointlyor severally to do any act or engage in anypractice or practices

a For the purpose of controlling therate to be charged or commissions or othercompensations to be paid for insuring anyrisk or class or classes of risks in thisstate

b For the purpose of discriminatingagainst or differentiating from any company manager or agent by reason of its orhis plan or method of transacting businessor its or his affiliation or nonaffiliation with

any board or association of insurance companies managers agents or representativesor

c For any purpose if such purpose isdetrimental to free competition in the business or injurious to the insuring public

2 Whenever the commissioner has

knowledge of any violation of this sectionhe forthwith shall order such offendingcompany manager agent or representativeto discontinue immediately such practice orshow cause to the satisfaction of the com

missioner why such order should not becomplied with

3 If such order is not complied withwithin 30 days of its receipt the commissioner shall revoke forthwith the license of

such offending company or agent and norenewal of a license so revoked shall be

granted within three years from the date ofthe revocation

736620 Rebating revocation of licenses 1 Every insurance policy issuedin this state shall bear on its face a true

statement of the premium paid or to be paid714

C


No insurance company or officer thereofand no insurance agent or solicitor shallpersonally or otherwise offer promiseallow give set off or pay directly or indirectly any rebate of or part of the premiumpayable on any policy or agents or solicitors commission thereon or earnings profitdividends or other benefit founded arisingaccruing or to accrue thereon or therefromor any other valuable consideration or inducement to or for insurance on any riskwritten in this state which is not specified inthe policy

2 No company agent or solicitorpersonally or otherwise shall offer promisegive sell or purchase any stocks bonds securities or property or any dividends orprofits accruing or to accrue thereon orother thing of value whatsoever as inducement to insurance or in connection therewith

which is not specified in the policy3 Upon satisfactory evidence of the

violation of the provisions of this section byany insurance company agent or solicitorthe commissioner forthwith shall revoke thecertificate of authority of such company orthe license of such agent or solicitor and nocertificate of authority or license shall beissued to such company agent or solicitorwithin one year from the date of such revocation of license

736625 Accepting rebate proportionate reduction of insurance 1 No insuredperson or party shall receive or accept directly or indirectly any rebate of premiumor part thereof or any of the agents or solicitors commission thereon payable on anypolicy of insurance or any favor or advantage or share of the dividend or other benefitto accrue on any policy or any other valuable consideration or inducement not specified in the policy of insurance

2 The amount of the insurance whereon an insured has received or acceptedeither directly or indirectly any such rebatefavor advantage benefit or considerationshall be reduced in such proportion as thevalue of such rebate favor advantage orbenefit or other consideration so received bythe insured bears to the total premium onsuch policy

736630 Employe officer or director

profiting from sale of insurance to employeror corporation 1 No employe of any person firm or corporation and no officer

736640

director of any corporation shall receivedirectly or indirectly any rebate of premiumor part thereof payable on a policy of insurance issued to the person firm or corporation by which he is employed or of which heis an officer or director or shall receive except as provided in ORS 736635 any partof any agents or solicitorscommission payable on a policy issued to such person firmor corporation

2 Upon a violation of this section bya licensed insurance agent or solicitor hislicense shall be revoked or suspended for notexceeding one yearAmended by 1935 col C3

736635 Exceptions to ORS 736620 to736640 1 Nothing in ORS 736620 to736630 shall be considered as prohibiting aduly licensed insurance agent from signingcountersigning or issuing contracts of insurance upon his own property or the property of his relatives or the property of hisemployer firm or corporation and receivingfor his own use the regular agents commission thereon if the agent first has signedcountersigned or issued in good faith contracts of insurance upon other property thepremiums upon which shall be at least equalin amount to the aggregate of the premiumsupon insurance signed countersigned orissued by him on his own property and onthat of his relatives and on the property ofhis employer firm or corporation

2 For the purposes of ORS 736620to 736635 a seller of personal property whowrites issues or solicits insurance coveringthe personal property sold by him on an instalment contract wherein the title to said

property is reserved by the seller shall notbe deemed to be writing issuing or solicitinginsurance upon his own property or on thatof his relatives employer firm or corporation

3 The provisions of ORS 736620 to736640 do not apply to the business of lifeinsurance

736640 Selfincrimination immunityNo person shall be excused from testifyingor from producing any books papers contracts agreements or documents at the trialof any other person charged with violationof ORS 736620 to 736630 on the groundthat such testimony or evidence would tendto incriminate the person so testifying No

shall be prosecuted for any actor person714a


concerning which he is compelled so totestify or produce evidence documentary orotherwise except for perjury in so testifying

736645 Transacting business in foreignstate where not licensed 1 No insurerorganized under the laws of this statewhether on the stock mutual reciprocalfraternal or other plan or any of the representatives of such insurer wilfully shalltransact or attempt to transact or solicitbusiness in any manner or accept risks inany jurisdiction in which such insurer is notlicensed in accordance with the laws of suchjurisdiction

2 The term transacting business asused in subsection 1 includes advertisinglocally in any foreign jurisdiction in whichan insurer is not licensed or circularizing inany such jurisdiction without regard for thesource of such circularization wheneversuch advertising or circularization is for thepurpose of solicitation of insurance business

3 Upon determining that this sectionhas been violated the commissioner shallrevoke the certificate of authority of theoffending insurer Such determination shallbe made only after a hearing The insurershall be given 10 days notice of the timeplace and purpose of such hearing

4 No violation of this section shall befound if the major portion of the risks insured in jurisdictions in which the insurerwas not licensed originated in jurisdictionsin which the insurer was licensed to makeinsurance of the class to which such risks

belong and were procured by other meansthan circularizing or advertising locally injurisdictions where the insurer was not licensed

736650 False or misleading filings withcommissioner No person shall file or causeto be filed with the commissioner any articlecertificate report statement application orany other information required or permittedto be so filed under the insurance laws ofthis state and known to such person to befalse or misleading in any material respect1965c173 3


PROHIBITED PRACTICES BY LENDERSON REAL PROPERTY

736705 Definitions for ORS 736705 to736755 As used in ORS 736705 to 736755unless the context requires otherwise

1 Borrower means any person partnership firm or corporation who is indebtedto a lender

2 Lender means any person partnership firm or corporation engaged in thebusiness of financing the purchase of realproperty or engaged in the business of lending money on the security of real propertyand includes the servicing agent of thelender

1963 c277 21

736715 Policy designation of insurerprohibited It is the policy of the State ofOregon that its citizens have the right offree choice in the procurement of insuranceand accordingly no lender shall designatean insurance company or insurance agentfrom which a borrower may procure the insurance required by the loan or sales agreement

1963 c277 4

736725 Consideration for substitution

of policy or change in kind type or amountof insurance No lender shall require a borrower to pay a consideration in excess of 10for the substitution of an insurance policywritten with respect to the secured property nor shall a lender require that a consideration be paid to it on account of anychange in the kind type or amount of insurance except for the premium charged forsuch insurance1963 c277 31

736735 Confidentiality of informationin a policy of insurance The informationcontained in a policy of insurance furnishedby a borrower to a lender is confidential tothe borrower and accordingly the lendershall not divulge such information to anyinsurance company or insurance agent otherthan those named on the policy of insurancewithout first procuring the written consentof the borrower1963 c277 5

736745 Construction of ORS 736705 to

736755 Nothing in ORS 736705 to 736755shall be construed as preventing a lenderfrom exercising a reasonable privilege of approval or disapproval of the insurance procured by the borrowerx1963 c277 6

714b

736755 Violation of ORS 736715 or

736735 as cause for license revocation A

violation by a lender of ORS 736715 or

L

J


736735 shall be cause for the revocation of

its license as insurance agent by the StateInsurance Commissioner in accordance with

the procedures of ORS 7364701963 0277 81


UNFAIR TRADE PRACTICES

736805 Purpose of ORS 736805 to736840 The p u r p o s e of OHS 736805 to736840 is to regulate trade practices in thebusiness of insurance in accordance with the

intent of Congress as expressed in the Act ofCongress of March 9 1945 Public Law 1579th Congress by defining certain practicesin this state which constitute unfair methods

of competition or unfair or deceptive acts orpractices and by prohibiting the trade practices so defined

1965 c105 21

736810 Person defined As used in

ORS 736805 to 736840 person means anyindividual corporation association partnership reciprocal exchange interinsurerLloyds insurer fraternal benefit societyand any other legal entity engaged in thebusiness of insurance including agents solicitors brokers and adjusters1965 e105 3

736815 Definition of unfair trade practices The following are defined as unfairmethods of competition and unfair and deceptive acts or practices in the business ofinsurance

1 a E x c e p t as provided in ORS736825 making or permitting any unfairdiscrimination between individuals of the

same class and equal expectation of life inthe rates charged for any contract of lifeinsurance or of life annuity or in the dividends or other benefits payable thereon orin any other of the terms and conditions ofsuch contract

b Except as provided in ORS 736825snaking or permitting any unfair discrimination between individuals of the same class

and of essentially the same hazard in theamount of premium policy fees or ratescharged for any policy or contract of accident or health insurance or in the benefits

payable thereunder or in any of the termsor conditions of such contract or in anyother manner whatever

2 Except as provided in ORSor as otherwise expressly provided

736815

knowingly permitting or offering to make ormaking any contract of life insurance lifeannuity or accident and health insurance oragreement as to such contract other than asplainly expressed in the contract issuedthereon or paying or allowing or giving oroffering to pay allow or give directly or indirectly as inducement to such insurance orannuity any rebate of premiums payable onthe contract or any special favor or advantage in the dividends or other benefits thereon or any valuable consideration or inducement whatever not specified in the contractor giving or selling or purchasing or offering to give sell or purchase as inducement tosuch insurance or annuity or in connectiontherewith any stocks bonds or other securities of any insurance company or other corporation association or partnership or anydividends or profits accrued thereon or anything of value whatsoever not specified inthe contract

3 Making issuing circulating or causing to be made issued or circulated any estimate illustration circular or statement misrepresenting the terms of any policy issuedor to be issued or the benefits or advantagespromised thereby or the dividends or shareof the surplus to be received thereon ormaking any false or misleading statement asto the dividends or share of surplus previously paid on similar policies or making anymisleading representation or any misrepresentation as to the financial condition of anyinsurer or as to the legal reserve systemupon which any life insurer operates orusing any name or title of any policy or classof policies misrepresenting the true naturethereof or making any misrepresentation toany policyholder insured in any company forthe purpose of inducing or tending to inducesuch policyholder to lapse forfeit or surrender his insurance

4 Making publishing disseminatingcirculating or placing before the public orcausing directly or indirectiy to be madepublished disseminated circulated or placedbefore the public in a newspaper magazineor other publication or in the form of a no

tice circular pamphlet letter or poster orover any radio or television station or in anyother way an advertisement announcementor statement containing any assertion representation or statement with respect to the736825

7144by law business of insurance or with respect to any


person in the conduct of his insurce business which is untrue deceptive or misleading

5 Making publishing disseminatingor circulating directly or indirectly or aiding abetting or encouraging the makingpublishing disseminating or circulating ofany oral or written statement or any pamphlet circular article or literature which isfalse or maliciously critical of or derogatoryto the financial condition of an insurer andwhich is calculated to injure any person engaged in the business of insurance

6 Entering into any agreement to commit or by any concerted action committingany act of boycott coercion or intimidationresulting in or tending to result in unreasonable restraint of or monopoly in the business of insurance

7 Filing with any supervisory or otherpublic official or making publishing disseminating circulating or delivering to anyperson or placing before the public or causing directly or indirectly to be made published disseminated circulated delivered toany person or placed before the public anyfalse statement of financial condition of aninsurer with intent to deceive

8 Making any false entry in any bookreport or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its conditionor into any of its affairs or any public official to whom such insurer is required by Yawto report or who has authority by law toexamine into its condition or into any of itsaffairs or with like intent wilfully omittingto make a true entry of any material factpertaining to the business of such insurer inany book report or statement of such insurer

9 Issuing or delivering or permittingagents officers or employes to issue or deliver agency company stock or other capitalstock or benefit certificates or shares in anycommonlaw corporation or securities orany special or advisory board contracts orother contracts of any kind promising returns and profits as an inducement to insurance

1965 c105 5

736820 Unfair trade practices prohibited No person shall engage in this statein any trade practice which is defined inORS 736815 as an unfair method of compe

71

tition or an unfair or deceptive act or practice in the business of insurance

1965 c105 4

736825 Trade practices exempted fromprohibition Nothing in subsection 1 or2 of ORS 736815 shall prohibit any of thefollowing practices

1 In the case of any contract of lifeinsurance or life annuity paying bonuses topolicyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insuranceprovided that any such bonuses or abatement of premiums shall be fair and equitableto policyholders and for the best interests ofthe company and its policyholders

2 In the case of life insurance policiesissued on the industrial debit plan makingallowance to policyholders who have continuously for a specified period made premiumpayments directly to an office of the insurerin an amount which fairly represents thesaving in collection expense or

3 Readjustment of the rate of premium for a group insurance policy based onthe loss or expense experience thereunder atthe end of the first or any subsequent policyyear of insurance thereunder which may bemade retroactive only for such policy year1965 c105 61

736830 Investigation by commissionerThe commissioner shall have power to examine and investigate into the affairs of everyperson engaged in the business of insurancein this state in order to determine whether

such person has been or is engaged in anyunfair method of competition or in any unfair or deceptive act or practice prohibited byORS 736820

1965 c105 71

736835 Orders of commissioner hearings 1 Whenever the commissioner hasreason to believe that any person has beenengaged or is engaging in this state in anyunfair method of competition or any unfairor deceptive act or practice prohibited byORS 736820 he s h a 1 l issue an order directed to such person to discontinue suchmethod act or practice A copy of the ordershall be forwarded by certified mail to thelastknown address of such person The order shall become final 15 days after the dateof mailing unless within such 15day periodthe person to whom it is directed files withthe commissioner a written request for a

4d


hearing The copy of the order forwardedto the person involved shall set forth a statement of the specific charges and the factthat the person may request a hearing within the 15day period Where a hearing is requested the commissioner shall set a hearing date within 30 days after receipt of therequest and shall give the person involvedwritten notice of the hearing date at leastseven days prior thereto The person requesting the hearing must establish to thesatisfaction of the commissioner that such

order should not be complied with To theextent applicable and not inconsistent withthe foregoing the provisions of ORS 183420to 183500 shall govern the hearing procedure and any judicial review thereof Wherethe hearing has been requested the commissionersorder shall become final at such time

as the right to further hearing or review hasexpired or been exhausted

2 Any person who violates an order issued by the commissioner pursuant to subsection 1 of this section after it has become final and while such order is in effectshall upon proof thereof to the satisfactionof the court forfeit and pay to the State ofOregon a sum not to exceed 50 which maybe recovered in a civil action except that ifsuch violation is f o u n d to be wilful theamount of such penalty shall be a sum notto exceed 500

3 No order of the commissioner underthis section or order of a court to enforce the

same shall in any way relieve or absolve anyperson affected by such order from any liability under any other laws of this state1965c105 81

736840 Nonexclusive powers of commissioner The powers vested in the commissioner by ORS 736805 to 736840 shall be additional to any other powers to enforce anypenalties fines or forfeitures authorized bylaw with respect to the methods acts andpractices prohibited by ORS 7368201965 c105 91


PENALTIES

736990 Penalties 1 Violation of ORS736020 is punishable upon conviction by afine of not more than 500 for each offenseor by imprisonment in the county jail not toexceed 30 days or both

2 Violation of ORS 736440 is punishable upon conviction by a fine of not morethan 50 for each offense or in default of payment of the fine by imprisonment in thecounty jail not more than 15 days

3 Violation of ORS 736450 is punishable upon conviction by a fine of not morethan 500 or by imprisonment in the countyjail not to exceed 30 days or both

4 Violation of ORS 736460 is a felony

5 Violation of ORS 736605 is punishable upon conviction by a fine of 250 for thefirst offense and 500 for every subsequentoffense

6 Violation of ORS 736610 is punishable upon conviction by a fine of not morethan 100

7 Violation of ORS 736620 736625or 736630 is punishable upon conviction bya fine of not more than 100 for each violation

8 Violation of any of the provisions ofor failure to comply with any duty imposedby the General Insurance Law for which nopenalty is otherwise provided is punishableby a fine of not more than 100

9 A violation by a lender of ORS736715 736725 or 736735 shall be a misdemeanor and shall subject such lender uponconviction to a fine not to exceed 500

10 Violation of ORS 736650 is punishable upon conviction in the case of an individual by imprisonment in the county jailfor not more than one year or by a fine notexceeding 1000 or in the case of a corporation by a fine not exceeding 10000Amended by 1959c323 9 1961 c562 4 subsection9 enacted as 1963 c277 7 subsection 10 enactedas 1965c173 4

714e

INSURANCE AND INSURANCE COMPANIES

CERTIFICATE OF LEGISLATIVE COUNSEL

Pursuant to OAS 173170 I Sam R Haley Legislative Counsel do herebvcompared each section printed in this chapter with the original section inthat the sections in this chapter are correct copies of the enrolled sectionsof the changes in form permitted by ORS 173160 and other changes specificallyDone at Salem Oregonon November 15 1965

certify that I havethe enrolled bill and

with the exceptionauthorized by law

Sam R HaleyLegislative Counsel

17

714f

insurance and insurance€¦ · title 56 insurance and insurance companies u chapter 736 insurance...

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