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Oregon Bulletin

December 1, 2012

Department of Consumer and Business Services, Insurance Division, Chapter 836

Rule Caption: Permanent Rules Relating to Regulation and Licensing Captive Insurers in Oregon.

Adm. Order No.: ID 17-2012

Filed with Sec. of State: 11-7-2012

Certified to be Effective: 11-7-12

Notice Publication Date: 10-1-2012

Rules Adopted: 836-029-0000, 836-029-0005, 836-029-0010, 836-029-0015, 836-029-0020, 836-029-0025, 836-029-0030, 836-029-0035, 836-029-0040, 836-029-0045, 836-029-0050, 836-029-0055, 836-029-0060, 836-029-0065, 836-029-0070, 836-029-0075, 836-029-0080, 836-029-0085, 836-029-0090, 836-029-0095, 836-029-0100, 836-029-0105, 836-029-0110, 836-029-0115, 836-029-0120

Rules Amended: 836-009-0007

Rules Repealed: 836-029-0000(T), 836-029-0005(T), 836-029-0010(T), 836-029-0015(T), 836-029-0020(T), 836-029-0025(T), 836-029-0030(T), 836-029-0035(T), 836-029-0040(T), 836-029-0045(T), 836-029-0050(T), 836-029-0055(T), 836-029-0060(T), 836-029-0065(T), 836-029-0070(T), 836-029-0075(T), 836-029-0080(T), 836-029-0085(T), 836-029-0090(T), 836-029-0095(T), 836-029-0100(T), 836-029-0105(T), 836-029-0110(T), 836-029-0115(T), 836-029-0120(T)

Subject: These rules implement the provisions of chapter 84, Oregon Laws 2012 (Enrolled Senate Bill 1547, 2012 Legislative Session), setting out the regulatory and procedural details to administer the new captive insurers program. The rules include provisions that establish and clarify application requirements, annual reporting and audit requirements, documentation and recordkeeping requirements, and provisions to assure there is no conflict of interest by directors of captive insurers and their affiliates.

 These rules allow captive insurers to locate in Oregon by providing the process for licensing captive insurers.

 Upon adoption, these rules replace in their entirety temporary rules adopted on June 15, 2012.

Rules Coordinator: Sue Munson—(503) 947-7272

836-009-0007

Fees

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

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

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

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

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

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

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

(a) Examination fees:

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

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

(C) Surplus lines licensee — $45;

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

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

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

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

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

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

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

(C) Surplus lines licensee — $45;

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

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

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

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

(c) For purposes of the fees charged under subsections (a) and (b) of this section:

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

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

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

(a) Resident insurance producer — $30;

(b) Nonresident insurance producer — $30;

(c) Adjuster — $30;

(d) Insurance consultant — $30.

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

(a) Resident insurance producer — $45;

(b) Nonresident insurance producer — $45;

(c) Adjuster — $45;

(d) Insurance consultant — $45;

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

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

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

(a) Resident insurance producer — $45;

(b) Nonresident insurance producer — $45;

(c) Adjuster — $45;

(d) Insurance consultant — $45.

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

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

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

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

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

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

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

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

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

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

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

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

836-029-0000

Authority

OAR 836-029-0000 to 836-029-0120 are adopted under the general rulemaking authority of the Director of the Department of Consumer and Business Services under ORS 731.244 and the specific authority granted by Section 4, chapter 84, Oregon Laws 2012..

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0005

Purpose and Scope

The purpose of these rules is to set forth the financial, reporting, record-keeping and other requirements the Director of the Department of Consumer and Business Services considers necessary for the regulation of captive insurers, under sections 2 to 22, chapter 84, Oregon Laws 2012.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0010

Definitions

As used in OAR 836-029-0000 to 836-029-0120:

(1) “GAAP” means generally accepted accounting principles.

(2) “Work Papers” or “working papers” include but are not limited to schedules, analyses, reconciliations, abstracts, memoranda, narratives, flow charts, copies of captive insurer records or other documents prepared or obtained by the independent certified public accountant and the accountant’s employees in the conduct of their audit of a captive insurer.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0015

Annual Reporting Requirements

(1) Not later than March 1, a captive insurer authorized in this state shall file an annual report of its financial condition as of the immediately preceding December 31 with the Director of the Department of Consumer and Business Services. The report shall be verified by oath of two of its executive officers and shall be prepared using GAAP. The annual report may be filed electronically in accordance with directions from the director.

(2) An association captive insurer shall comply with the requirements of section 13, chapter 84, Oregon Laws 2012 when filing an annual report on the captive insurer’s financial condition.

(3) All captive insurers must use the “Captive Insurer Annual Statement Form” as set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov.

(4) The annual report required under section (1) of this rule must be accompanied by a management discussion and analysis that provides details of the captive’s financial condition, changes in financial condition and results of operations. The Management Discussion and analysis shall be prepared in accordance with annual statement instructions set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov and applicable to the required filing period as set forth in OAR 836-011-0000.

(5) The director may require a captive insurer to provide information applicable to its holding company systems covering activities for the preceding year.

(6) Upon request, the director may grant an extension of time for filing a report or document required under this rule.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0020

Risk Limitation

The Director of the Department of Consumer and Business Services may:

(1) Limit the net amount of risk a captive insurer retains for a single risk after considering the impact of the retention on the captive insurer’s capital and surplus; or

(2) Prescribe and demand additional capital and surplus of any captive insurer if the director determines that the captive insurer is not adequately capitalized for the type, volume and nature of the risk that is being covered by the captive insurer.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0025

Annual Audit

(1) All captive insurers shall have an annual audit by an independent certified public accountant, approved by the Director of the Department of Consumer and Business Services, and shall file an audited financial report with the director on or before June 30 for the preceding year. Financial statements furnished under this section shall be prepared in accordance with generally accepted auditing standards as determined by the AICPA. At the discretion of the director, the requirement of an audit may be waived.

(2) The annual audit report shall be filed not later than June 30 and shall be considered part of the captive insurer’s annual report of financial condition except with respect to the date by which it must be filed with the director. The director may grant an extension of time for filing the annual audit.

(3) The annual audit shall include all of the following:

(a) Opinion of an Independent Certified Public Accountant. The opinion of the independent certified public accountant shall:

(A) Cover all years presented; and

(B) Be addressed to the captive insurer on stationery of the accountant showing the address of issuance, shall bear original manual signatures and shall be dated.

(b) Internal Controls Letter.

(A) In accordance with AU Section 319 of the Professional Standards of the AICPA, Considerations of Internal Controls in a Financial Statement Audit, the independent certified public accountant shall obtain an understanding of internal controls sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to 836-029-0030, the independent certified public accountant shall consider (as that term is defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement) the most recently available report in planning and performing the audit of the financial statements.

(B) Based on such understanding, the accountant shall include a letter about the internal controls of the captive insurer relating to the methods and procedures used in the securing of assets and the reliability of the financial records, including but not limited to, controls as the system of authorization and approval and the separation of duties. The review shall be conducted in accordance with generally accepted auditing standards and procedures.

(c) Accountant’s Letter of Qualifications. For a captive insurer that has an annual direct written premium of $500 million or more, the accountant shall furnish the captive insurer, for inclusion in the filing of the audited annual report, a letter stating:

(A) That the accountant is independent with respect to the captive insurer and conforms to the standards of the profession as contained in the Code of Professional Ethics and pronouncements of the AICPA and pronouncements of the Financial Accounting Standards Board;

(B) The general background and experience of the staff engaged in the audit, including their experience in auditing captive or other insurance companies;

(C) That the accountant understands that the audited annual report and the accountant’s opinions on the audited annual report will be filed in compliance with this rule.

(D) That the accountant consents to the requirements of OAR 836-029-0055;

(E) That the accountant consents and agrees to make the work papers available for review by the director and any designee or agent of the director; and

(F) That the accountant is properly licensed by an appropriate state licensing authority.

(d) Financial Statements. The financial statements required shall include all of the following:

(A) Balance sheet;

(B) Statement of gain or loss from operations;

(C) Statement of changes in financial position;

(D) Statement of cash flow;

(E) Statement of changes in capital paid up, gross paid in and contributed surplus and unassigned funds (surplus); and

(F) Notes to financial statements required by GAAP including:

(i) A reconciliation of differences, if any, between the audited financial report and the statement or form filed with the director;

(ii) A summary of ownership and relationship of the captive insurer and all affiliated corporations or companies insured by the captive;

(iii) A narrative explanation of all material transactions with the captive insurer. For purposes of this provision, no transaction shall be deemed material unless it involves three percent or more of a captive insurer’s admitted assets as of the immediately preceding December 31; and

(iv) A reconciliation of differences between capital paid up, gross paid in and contributed surplus and unassigned funds (surplus) prepared on a GAAP and Statutory Accounting basis.

(e) Certification of Loss Reserves and Loss Expense Reserves of the Captive Insurer’s Opining Actuary. The annual audit shall include an actuarial opinion as to the reasonableness of the captive insurer’s loss reserves and loss expense reserves.

(A) The individual who certifies as to the reasonableness of reserves shall be approved by the director and shall be a Fellow or Associate of the Casualty Actuarial Society and a member in good standing of the American Academy of Actuaries, for property and casualty companies.

(B) The director may waive the requirement under this section to include an actuarial opinion as to the reasonableness of the captive insurer’s loss reserves and loss expense reserves.

(C) Certification under this subsection shall be in the form the director determines appropriate.

(4) As used in this rule, “AICPA” means American Institute of Certified Public Accountants.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0030

Management’s Report of Internal Control over Financial Reporting

(1) Each insurer required to file an audited financial report pursuant to OAR 836-029-0015 that has annual direct written and assumed premiums of $500,000,000 or more, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, shall prepare a report of the insurer’s or group of insurers’ internal control over financial reporting. The insurer shall file the report with the director, along with the Communication of Internal Control Related Matters Noted in an Audit, as described in 836-029-0035. The Management’s Report of Internal Control over Financial Reporting shall be as of December 31 immediately preceding.

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

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

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

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

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

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

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

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

(3) For a Management’s Report of Internal Control over Financial Reporting under section (2) of this rule, management may not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its Internal control over financial reporting

(4) Management shall document and make available upon financial condition examination the basis upon which its assertions, required in section (2) of this rule, are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities. In addition:

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

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

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0035

Communication of Internal Control Related Matters Noted in an Audit

(1) In addition to the annual audited financial report, each captive insurer that has annual direct written premium of $500,000,000 or more shall furnish the director with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit. The communication must be prepared by the accountant not later than the 60th day after the filing of the annual audited financial report and shall contain a description of any unremediated material weakness (as the term material weakness is defined by Statement on Auditing Standard 60, Communication of Internal Control Related Matters Noted in an Audit, or its replacement) as of December 31 immediately preceding (so as to coincide with the audited financial report required by OAR 836-029-0025 in the captive insurer’s internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication must so state.

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

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

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0040

Designation of Service Providers

(1) A certified public accountant retained to conduct the independent annual audit must be selected from the list of approved certified public accounting firms or individual certified public accountants maintained by the Director of the Department of Consumer and Business Services.

(2) A captive insurer that terminates the appointment of an independent certified public accountant retained to conduct the annual audit required in this rule shall report the name and address of the certified public accountant in writing to the director within ninety days after the appointment is terminated and shall within the same period report the name and address of the certified public accountant that is subsequently retained.

(3) A captive manager hired to manage a captive insurer must be selected from the list of approved captive managers maintained by the Director of the Department of Consumer and Business Services.

(4) A captive insurer that terminates the appointment of a captive manager hired to manage a captive insurer shall report the name and address of the captive manager in writing to the director within ninety days after the appointment is terminated and shall within the same period report the name and address of the captive manager that is subsequently retained.

(5) An actuary hired to opine on the reserves of a captive insurer must be selected from the list of approved actuaries maintained by the Director of the Department of Consumer and Business Services.

(6) A captive insurer that terminates the appointment of an actuary hired to opine on the reserves of a captive insurer shall report the name and address of the actuary in writing to the director within ninety days after the appointment is terminated and shall within the same period report the name and address of the actuary that is subsequently retained.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0045

Notification of Material Misstatement of Financial Condition

A captive insurer shall require its certified public accountant to immediately notify an officer and all members of the board of directors of the captive insurer in writing of any determination by the independent certified public accountant that the captive insurer has materially misstated its financial condition in its report to the Director of the Department of Consumer and Business Services. The captive insurer shall furnish the notification to the director within five working days after receiving the notification from its certified public accountant.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0050

Additional Deposit Requirement

(1) Whenever the Director of the Department of Consumer and Business Services determines that the financial condition of a captive insurer warrants additional security, the director may require the captive insurer to deposit with the director, in trust for the captive insurer, cash, securities approved by the director, or an irrevocable letter of credit issued by a bank chartered by the State of Oregon or a member bank of the Federal Reserve System with the director.

(2) The director shall return the deposit or letter of credit of a captive insurer if the captive insurer ceases to do any business only after being satisfied that all obligations of the captive insurer have been discharged.

(3) With the approval of the director a captive insurer may receive interest or dividends from the deposit or exchange the deposits for others of equal value.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0055

Availability and Maintenance of Working Papers of the Independent Certified Public Accountant

Availability and Maintenance of Working Papers of the Independent Certified Public Accountant

(1) Each captive insurer shall require its independent certified public accountant to make all work papers prepared in the conduct of the audit of the captive insurer available for review by the Director of the Department of Consumer and Business Services or his appointed agent. The captive insurer shall require that the accountant retain the audit work papers for a period of not less than five years after the end of the report period.

(2) The review by the director shall be considered an official investigation by the director and all working papers obtained during the course of such investigation shall be confidential business papers and shall be classified as business confidential protected records. The captive insurer shall require that the independent certified public accountant provide photocopies to the department of any of the working papers that the department considers relevant. The department may retain any photocopies of working papers.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0060

Documentation Required to be Held in Oregon by Licensed Captives

(1) Any captive insurer authorized by the Director of the Department of Consumer and Business Services, shall maintain and make ready for inspection and examination by the director, or the director’s agent, any and all documents pertaining to the formation, operation, management, finances, insurance and reinsurance of the captive insurer.

(2) Original documents may be kept in the offices of the captive insurer’s captive manager, the captive insurer’s parent or the captive insurer itself. Accurate and complete copies shall be held in an office located in Oregon designated by the captive insurer and approved by the director as part of the application process.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0065

Reinsurance

(1) Any captive insurer authorized to do business in this state may take credit for reserves on risks ceded to a reinsurer subject to the following limitations:

(a) No credit shall be allowed for reinsurance where the reinsurance contract does not result in the transfer of the risk or liability to the reinsurer.

(b) No credit shall be allowed, as an asset or a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding insurer under the contract reinsured without diminution because of the insolvency of the ceding insurer.

(2) Reinsurance under this section shall be effected through a written agreement of reinsurance setting forth the terms, provisions and conditions governing such reinsurance.

(3) A captive insurer shall file with the Director of the Department of Consumer and Business Services complete copies of all reinsurance treaties and contracts for prior approval by the director. Any amendments to reinsurance agreements must be submitted to the director for prior approval.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0070

Service Providers

A person may not act in or from this state, as a service provider, including but not limited to as a captive insurance manager, producer, actuary or certified public accountant, for a captive insurer without the authorization of the Director of the Department of Consumer and Business Services. Application for such authorization must be on a form prescribed by the director. The application shall include information regarding the service provider’s character, reputation and experience, relative to captive insurer. Any person who solicits business entities to form a captive insurer must be licensed as a producer under ORS 744.052 to 744.089.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0075

Directors

(1) Every captive insurer shall report any change in its executive officers or directors to the Director of the Department of Consumer and Business Services within thirty days after a change is made and include in its report, a biographical affidavit of any new executive officer or director.

(2) No director, officer or employee of a captive insurer shall, except on behalf of the captive insurer, accept, or be the beneficiary of, any fee, brokerage, gift or other emolument because of any investment, loan, deposit, purchase, sale, payment or exchange made by or for the captive insurer. The person may receive only reasonable compensation for necessary services rendered to the captive insurer in the person’s usual private, professional or business capacity.

(3) Any profit or gain received by or on behalf of any person in violation of this section shall inure to and be recoverable by the captive insurer.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0080

Conflict of Interest

(1) Each captive insurer licensed in Oregon shall adopt a conflict of interest statement for officers, directors and key employees. The statement shall disclose that the individual has no outside commitments, personal or otherwise, that would divert the person from the duty to further the interests of the captive insurer the person represents but this shall not preclude a person from being a director or officer in more than one insurance captive insurer.

(2) Each officer, director and key employee shall file a yearly disclosure with the board of directors.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0085

Acquisition of Control of or Merger with Domestic Captive insurer

The acquisition of control of, or merger of, a domestic captive insurer shall be regulated in accordance with section 9, chapter 84, Oregon Laws 2012. However, the Director of the Department of Consumer and Business Services may waive or modify the requirements for public notice and hearing when the director concludes the public hearing is not necessary due to limited public interest in the change of control.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0090

Suspension or Revocation

(1) The Director of the Department of Consumer and Business Services may by order suspend or revoke the license of a captive insurer or place the captive insurer on probation on the following grounds:

(a) The captive insurer has not commenced business according to its plan of operation within two years of being authorized;

(b) The captive insurer has ceased to carry on insurance business in or from within Oregon;

(c) At the request of the captive insurer;

(d) The captive insurer uses methods that render the operation of the captive insurer detrimental to the public or the policyholders of the captive insurer according to standards set forth in OAR 836-029-0095 or

(e) Any reason provided in section 16, chapter 84, Oregon Laws 2012.

(2) Before the director takes any action set forth under section 16, chapter 84, Oregon Laws 2012 the director shall give the captive insurer notice in writing of the grounds on which the director proposes to act, and shall provide an opportunity for hearing on the proposed action in accordance with the provision applicable to a contested case proceeding in ORS 183.310 to 183.490.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0095

Standards

The director may consider the following standards, either singly or in combination of two or more, to determine whether the continued operation of any captive insurer transacting insurance in this state might be determined to be hazardous to the policyholders, its creditors or the general public:

(1) Adverse findings reported in financial condition and audit reports, and actuarial opinions, reports or summaries.

(2) Whether the captive insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the captive insurer, when considered in light of the assets held by the captive insurer with respect to such reserves and related actuarial items including but not limited the investment earnings on such assets, and the considerations anticipated to be received and retained under such policies and contracts.

(3) The ability of an assuming reinsurer to perform and whether the captive insurer’s reinsurance program provides sufficient protection for the captive insurer’s remaining capital and surplus after taking into account the captive insurer’s cash flow and the classes of business written as well as the financial condition of the assuming reinsurer.

(4) Whether the captive insurer’s operating loss in the last 12-month period or any shorter period of time, including but not limited to net capital gain or loss, change in non-admitted assets and cash dividends paid to shareholders, is greater than 50 percent of the captive insurer’s remaining capital and surplus in excess of the minimum required.

(5) Whether the captive insurer’s operating loss in the last 12-month period or any shorter period of time, excluding net capital gains, is greater than 20 percent of the captive insurer’s remaining surplus as regards policyholders in excess of the minimum required.

(6) Whether a reinsurer or obligor, or any entity within the captive insurer’s insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations and which, in the opinion of the director may affect the solvency of the captive insurer.

(7) Contingent liabilities, pledges or guaranties that either individually or collectively involve a total amount that in the opinion of the director may affect the solvency of the captive insurer.

(8) Whether any “controlling person” of a captive insurer is delinquent in the transmitting to, or payment of, net premiums to the captive insurer.

(9) The age and collectability of receivables.

(10) Whether the management of a captive insurer, including officers, directors or any other person who directly or indirectly controls the operation of the captive insurer, fails to possess and demonstrate the competence, fitness and reputation determined by the director to be necessary to serve the captive insurer in such position.

(11) Whether management of a captive insurer has failed to respond to inquiries relating to the condition of the captive insurer or has furnished false and misleading information concerning an inquiry.

(12) Whether the captive insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the director.

(13) Whether management of an captive insurer either has filed a false or misleading sworn financial statement or has released a false or misleading financial statement to lending institutions or to the general public, or has made a false or misleading entry, or has omitted an entry of material amount in the books of the captive insurer.

(14) Whether the captive insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner.

(15) Whether the captive insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems, or both.

(16) Whether management has established reserves that do not comply with minimum standards established by state insurance laws, regulations, statutory accounting standards, sound actuarial principles and standards of practice.

(17) Whether management persistently engages in material under reserving that results in adverse development.

(18) Whether transactions among affiliates, subsidiaries or controlling persons for which the captive insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the captive insurer’s ability to meet its outstanding obligations as they mature.

(19) Any other finding determined by the director to be hazardous to the captive insurer’s policyholders, creditors or general public.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0100

Director’s Authority

(1) For the purposes of making a determination of the financial condition of a captive insurer under OAR 836-029-0090 to 836-029-0100, the director may do one or more of the following:

(a) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding;

(b) Make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates;

(c) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; or

(d) Increase the captive insurer’s liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the captive insurer will be called upon to meet the obligation undertaken within the next 12-month period.

(2) An order of the director under ORS 731.385 regarding a foreign captive insurer may be limited to the extent provided by statute.

(3) In addition to the requirements the director may impose under ORS 731.385, if the director determines that the continued operation of the captive insurer licensed to transact business in this state may be hazardous to the policyholders or the general public, the director may require the captive insurer to:

(a) File reports in a form acceptable to the director concerning the market value of the captive insurer’s assets;

(b) Document the adequacy of premium rates in relation to the risks insured;

(c) In addition to regular annual statements, file interim financial reports on the form specified by the director;

(d) Correct corporate governance practice deficiencies, and adopt and utilize the governance practices acceptable to the director; or

(e) Provide a business plan to the director in order to continue to transact business in this state.

(4) Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, the director may include as a requirement under section (3) of this rule, any rate adjustment for any non-life insurance product written by the captive insurer that the director considers necessary to improve the financial condition of the captive insurer.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0105

Change of Information in Initial Application

(1) Any material change in a captive insurer’s business plan that is filed with the Director of the Department of Consumer and Business Services at the time of initial application and any subsequent amendment of the plan requires prior approval of the director.

(2) Any change in any other information filed with the initial application must be filed with the director within sixty days after the change, but does not require prior approval.

(3) The captive insurer shall immediately notify the director upon making changes in board members or officers of the captive insurer.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0110

Application

(1) In order to form a domestic captive insurer a person shall apply to the Director of the Department of Consumer and Business Services for a permit to organize using the form, “Application for Permit to Organize Captive Insurer With or Without Capital Stock” as set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov. The written application for permit to organize, including all required attachments and information, must be submitted to the department in accordance with instructions provided with the application.

(2) In order to be authorized to transact insurance as a captive insurer a person shall apply to the director for authority to conduct a captive insurance using the form, “Application to Form a Captive insurer” as set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov. The application materials must:

(a) Include one complete copy of the application including forms, attachments, exhibits and all other papers and documents filed as a part thereof, accompanied by the appropriate filing fee filed in writing or online with the director. The written application, including all required attachments and information, must be submitted to the department in accordance with instructions provided with the application.

(b) Be signed in the manner prescribed in the application. If the signature of any person is affixed pursuant to a power of attorney or other similar authority, a copy of the power of attorney or other authority must also be filed with the application.

(c) Include with the application a business plan with supporting data and all other information required by the application.

(d) Include a feasibility study demonstrating the feasibility of the business plan of the captive insurer. The department may test the feasibility of the study by examining the captive insurer’s corporate records, if any, including but not limited to the insurer’s charter, bylaws and minute books, verification of capital and surplus, verification of principal place of business, determination of assets and liabilities, and any other factor the director considers necessary.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0115

Fees

(1) At the time an applicant submits an application under OAR 836-029-0110 for a permit to organize a captive insurer or for a certificate of authority to operate as a captive insurer the applicant shall pay to the Director of the Department of Consumer and Business Services a nonrefundable fee as set forth in 836-009-0007 for processing the initial application for a permit to organize or for a certificate of authority.

(2) In addition, each captive insurer that is authorized by the director shall pay prior to April 1 an annual continuation fee, without proration, for the year following the year during which the certificate of authority was originally issued and each year thereafter in the amount established in OAR 836-009-0007.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12

836-029-0120

Authorized Forms

(1) The following forms must be used for any applicant applying for a certificate of authority as a new captive insurer:

(a) “Application for Permit to Organize Captive Insurer With or Without Capital Stock;”

(b) “Application to Form a Captive insurer;”

(c) “Biographical Affidavit for Captive insurer;”

(d) “Oregon Insurance Division Captive insurer Reinsurance Exhibit;”

(e) “Oregon Approved Irrevocable Letter of Credit” if applicable;

(f) “Statement of Economic Benefit to the State of Oregon;” and

(g) “Appointment of a Registered Resident Agent as Attorney to Accept Service of Process.”

(2) Except for a captive insurance producer applying to be licensed as a producer pursuant to ORS 744.052 to 744.089, the following forms must be used when applying to become an approved captive insurer service provider:

(a) “Application for Placement on Approved Captive Insurer Management Firm List;”

(b) “Application to Certify Loss and Expense for Captive insurers Captive Actuary Application;” (c) “Application for Authorization as an Independent Certified Public Accountant for Captive insurers;” and

(d) “Application for Authorization as Producer for Captive insurers.”

(3) All captive insurers must use the “Captive Insurer Annual Statement Form.”

(4) The forms required in sections (1) to (3) of this section are set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov.

Stat. Auth.: ORS 731.244, 2012 OL Ch. 84, Sec. 4 (Enrolled SB 1547)
Stats. Implemented: 2012 OL Ch. 84, Sec. 2-22 (Enrolled SB 1547)
Hist.: ID 11-2012(Temp), f. 6-15-12, cert. ef. 7-1-12 thru 12-27-12; ID 17-2012, f. & cert. ef. 11-7-12


 

Rule Caption: Producer Licensing and Continuing Education Application Requirements and Establishing Mechanical Breakdown Limited License Class.

Adm. Order No.: ID 18-2012

Filed with Sec. of State: 11-7-2012

Certified to be Effective: 11-7-12

Notice Publication Date: 10-1-2012

Rules Amended: 836-071-0108, 836-071-0110, 836-071-0118, 836-071-0130, 836-071-0140, 836-071-0220, 836-071-0225, 836-071-0235, 836-071-0240, 836-071-0355, 836-071-0360, 836-071-0560, 836-071-0565, 836-072-0010, 836-075-0000, 836-075-0030

Subject: This rulemaking aligns licensing and continuing education rules to a new electronically-based system recently implemented by the Department of Consumer and Business Services. The rules also clarify that mechanical breakdown insurance requires a limited class insurance license rather than a limited class credit insurance license.

 The Insurance Division of the Department of Consumer and Business Services recently transitioned from a paper-based system of licensing and tracking of continuing education requirements to an electronic system. This system will benefit stakeholders of the division by eliminating data processing errors, reducing processing time, and reducing the number of fingerprint submissions that are rejected for quality reasons. Failure to adopt these rules will result in harm to those who are affected by the rules applicants, producers and those involved in continuing education programs because the process under the new electronic system will not be in sync with the rules. In order to eliminate confusion to applicants, producers and continuing education providers, it is necessary that the rules be amended to align with the new system.

Rules Coordinator: Sue Munson—(503) 947-7272

836-071-0108

Limited Class Insurance Licenses

For the purpose of ORS 744.062, the Director establishes the following classifications for limited class insurance licenses, for use on and after July 1, 2005:

(1) Under a “limited class credit insurance” license, the licensee may transact the following classes of insurance when the insurance is offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation:

(a) Credit life insurance. Under this class, an insurance producer may transact credit life insurance as approved under ORS 743.371(1).

(b) Credit health insurance. Under this class an insurance producer may transact credit health insurance as approved under ORS 743.371(2).

(c) Credit unemployment and involuntary unemployment insurance. Under this class an insurance producer may transact approved liability coverage for unemployment.

(d) Credit property insurance. Under this class, an insurance producer may transact insurance against property loss or damage that may result in failure of debtors to pay their obligations to the insured, including but not limited to motor vehicle physical damage insurance. This class does not include mortgage insurance.

(e) Mortgage guarantee insurance. Under this class, an insurance producer may transact only the insurance that is issued by an authorized mortgage insurer under ORS 742.282 to 742.286.

(f) Mortgage life or disability insurance, or mortgage life and disability insurance. Under this class, a lending institution may transact mortgage cancellation insurance as approved under ORS 743.303(1)(b) and (5).

(g) Gap insurance. This class applies to a person described in ORS 731.036(9) who does not qualify for the exemption in 731.036(9) because the person imposes an additional charge to waive the amount described in 731.036(9)(b) pursuant to an agreement to lease or to finance the purchase of a motor vehicle.

(2) Under a “limited class insurance” license, the licensee may transact the following classes of insurance:

(a) Crop insurance. Under this class, an insurance producer may place insurance providing protection against damage to crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease or other yield-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including multi-peril crop insurance.

(b) Surety insurance. Under this class an insurance producer may place insurance or a bond that covers obligations to pay the debts of, or answer for the default of another, including faithlessness in a position of public or private trust as approved under ORS 742.350 to 742.376. For the purpose of this limited line license, surety does not include surety bail bonds.

(c) Mechanical breakdown insurance. Under this class an insurance producer may place insurance that provides repair or replacement service, or indemnification for repair or replacement service, for operational or structural failure of property due to defects in materials or workmanship or normal wear and tear, including but not limited to motor vehicles, mobile equipment, boats, appliances and electronics.

(3) Under a “trip travel insurance” license, the licensee may place insurance for trip cancellation, trip interruption, baggage, accidental death, sickness and accident, disability and personal effects. Trip travel coverage provides reimbursement of expenses resulting from an emergency in connection with travel. The following provisions apply to this limited license:

(a) An insurance producer may transact trip travel insurance that covers the risks of a specific trip and sold in connection with transportation provided by a common carrier, owner of a transportation ticket agency or filed with a city, county or state as a tour business.

(b) The limited license under this subsection may be endorsed for an employee or owner, either of whom is engaged in the sale of transportation tickets.

(c) The individual coverage may not be more than the duration of a specified trip.

(d) The limited license under this subsection is issued for the sale of coverage provided by an insurer holding a certificate of authority for casualty insurance or by an insurer holding a certificate of authority for health insurance when the insurer insures only accidental death, sickness and accident or disability coverages.

(4) For the purpose of making the transition to a mechanical breakdown insurance limited class insurance license under section (2) of this rule rather than as a limited class credit insurance license under section (1) of this rule, the change shall apply to renewals of limited class credit insurance licenses applied for on or after January 1, 2013. A licensee transacting mechanical breakdown insurance under a limited class credit insurance license may continue to do so until the first renewal of the limited class credit license after January 1, 2013.

Stat. Auth.: ORS 731.244, 744.062
Stats. Implemented: ORS 744.062
Hist.: ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0110

Fingerprints

All applicants for a license shall furnish fingerprints required by the Director of the Department of Consumer and Business Services to the examination administrator who will perform the duties of obtaining electronically the fingerprints of applicants and submitting the fingerprints for Oregon or nationwide criminal history checks. The applicant shall submit the fingerprints according to the requirements and instructions of the examination administrator.

Stat. Auth.: ORS 181.534, 705.135 & 731.244
Stats. Implemented: ORS 181.534, 705.141, 744.001 & 744.059
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 23-2010, f. 12-30-10, cert. ef. 1-1-11; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0118

Requirements That Must Be Completed Prior to Submitting Licensing Application

On and after August 1, 2012, all applicants for a license shall submit application materials electronically in accordance with directions provided on the website of the Insurance Division of the Department of Consumer and Business Services. Before submitting an application for a license for consideration by the Director, the applicant must complete the following steps in the application process:

(1) Completion of all pre-examination training and experience requirements under OAR 836-071-0180;

(2) Submission of fingerprints in accordance with OAR 836-071-0110;

(3) Satisfactory passage of a licensing examination under OAR 836-071-120 and 836-071-0127; and

(4) Completion of a criminal history check as set forth in OAR 836-072-0001.

Stat. Auth.: ORS 705.141, 731.244, 731.804, 744.001, 744.003, 744.058, 744.535, 744.619 & 744.621
Stats. Implemented: ORS 744.001, 744.003, 744.058, 744.535, 744.619 & 744.621
Hist.: ID 23-2010, f. 12-30-10, cert. ef. 1-1-11; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0130

Adjuster or Insurance Consultant License Renewal

(1) The adjuster or insurance consultant license of an individual expires biennially in the month of the individual’s birthday anniversary. The adjuster or insurance consultant license of a person other than an individual expires on the last day of the month in which the second anniversary of the initial issuance date occurs. Thereafter, the license of a person other than an individual shall expire on the second anniversary following each renewal.

(2) Not later than the license expiration date, an adjuster or insurance consultant licensee applying for renewal must submit electronically in the form and according to directions set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov the following, as applicable:

(a) A completed renewal application;

(b) The renewal fee;

(c) A statement of current license status from the insurance department of the state of residence of the licensee, if the licensee is a non-resident licensee; and

(d) Evidence of current Federal Crop Insurance Corporation certification, if the applicant is a crop insurance adjuster.

(3) The Director may allow an adjuster or insurance consultant licensee not more than 30 days to submit missing information on the application form if the fees have been submitted on or before the expiration date.

(4) The Director may request on the renewal application any information requested on the original application for a license.

Stat. Auth.: ORS 731.244 & 744.007
Stats. Implemented: ORS 744.007
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 3-1997, f. 4-7-97, cert. ef. 6-1-97; ID 6-1999, f. 12-13-99, cert. ef. 1-1-00; ID 9-2002, f. & cert. ef. 3-18-02; ID 11-2007(Temp), f. & cert. ef. 12-11-07 thru 6-1-08; ID 7-2008, f. 5-20-08, cert. ef. 6-2-08; ID 2-2010, f. 1-8-10, cert. ef. 2-1-10; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0140

License Amendment

An applicant for an amendment to an adjuster or insurance consultant license shall apply electronically in the manner provided for application for the initial license under ORS 744.001.

Stat. Auth.: ORS 731.244, 731.804, 744.001, 744.003, 744.535, 744.619 & 744.621
Stats. Implemented: ORS 744.001, 744.003, 744.535, 744.619 & 744.621
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 4-1991, f. & cert. ef. 4-25-91; ID 9-2002, f. & cert. ef. 3-18-02; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0220

Continuing Education; Documentation

(1) For the purpose of furnishing evidence of completion of a course for which an insurance producer claims credit, the documentation applicable to the course shall be submitted as follows:

(a) For a registered course taken for academic credit, to the extent possible, the institution offering the course shall submit electronically a transcript, certificate of completion or grade or course completion report, whichever is issued by the institution offering the course, or a copy thereof. If it is not possible for the institution offering the course to submit a transcript, certificate of completion or grade or course completion report, the insurance producer shall submit the transcript, certificate of completion or grade or course completion report in accordance with directions provided on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov. For purposes of this subsection, a course is taken for academic credit if it is offered by a community college or four-year college or university, and the insurance producer is given academic credit for the course by such an institution;

(b) For coursework taken for the purpose of obtaining a nationally-recognized insurance industry designation, to the extent possible the entity granting the designation shall submit electronically directly to the Insurance Division, a transcript, certificate of completion or grade or course completion report, whichever is issued by the entity granting the designation;

(c) For a registered course that is not offered for academic credit, the provider shall submit to the department electronically course completion information. The information must include a statement of the hours of credit, the name of the insurance producer, the date of the course, the course registration number;

(d) For a course that is not offered for academic credit and is not registered when taken by an insurance producer, an insurance producer must comply with the requirements of OAR 836-071-0250.

(2) The Director may accept evidence of completion of a course from continuing education providers through electronic means as specified by the Director.

Stat. Auth.: ORS 731.244 & 744.072
Stats. Implemented: ORS 744.072
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 3-1997, f. 4-7-97, cert. ef. 6-1-97; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 4-2007, f. 3-6-07, cert. ef. 1-1-08; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0225

Continuing Education; Standards for Granting Credit Hours

(1) Subject to the subject matter requirements of OAR 836-071-0230, an insurance producer may receive credit for continuing education for a course taken for academic credit, for a course registered under 836-071-0240 or a course certified under 836-071-0250:

(a) For not more than the credit hours authorized by the Director;

(b) Only if an hour includes at least 50 minutes of instruction or study;

(c) For class hours in which an insurance producer is an instructor of a course if the course meets the continuing education requirements of an insurance producer attending it. Credit may be taken by an insurance producer with respect to a course only once in each renewal period in which the insurance producer instructs the course;

(d) For not more than eight credit hours in any given day;

(e) Only if the hour for which credit is taken was completed during the license period immediately preceding the renewal date;

(f) For a course taken through independent study, but only as provided in section (4) of this rule.

(2) An insurance producer may take credit for a course only if the insurance producer has successfully completed the course before the insurance producer applies for renewal or reinstatement. For the purpose of taking credit for a course other than one taken through independent study, an insurance producer successfully completes the course if the insurance producer is present for the full approved time and has signed in and out on the attendance register for the course.

(3) An insurance producer may not take continuing education credit for:

(a) Hours devoted to preparation for a course; when the insurance producer is acting as an instructor for the course;

(b) Travel time;

(c) Time exceeding the actual class time;

(d) Unplanned or incidental learning experiences;

(e) Any course not completed;

(f) Any course repeated within a two year period; or

(g) Any course during which the insurance producer is absent more than 5 minutes for each hour of credit granted, or is absent more than 20 minutes from the course as a whole.

(4) For purposes of subsection (1)(f) of this rule, a course is taken through independent study if the course is designed to allow each student to take the course at the student’s own pace on an individual basis. An insurance producer may claim credit for an independent study course if the provider and the course are both registered with the Director when the course is taken, if the insurance producer passes an examination by a score of 70 percent or higher and if the proctor of the examination affirms and the provider certifies completion and passage as provided in this section. If the independent study course is a textbook, the examination must be conducted as a closed book examination. The examination for an independent study course need not be proctored if the course is computerized and includes safeguards ensuring that the insurance producer cannot review the study material while taking the examination and if the examination has safeguards ensuring that the insurance producer cannot change answers after completing the examination. Proctor affirmation and provider certification shall be made as follows:

(a) The proctor must submit materials electronically that affirm by affidavit that the insurance producer took the examination for the course without assistance from the textbook or from any person. The proctor must disclose in the affidavit the proctor’s name, address, telephone number and the proctor’s position or connection with the insurance producer, such as a continuing education school or a librarian, and the proctor’s registration number, if the proctor is required to be registered under section (7) of this rule. The provider must retain the affidavit with the examination. A proctor affidavit is not required if the independent study course is taken from a provider that offers a nationally recognized insurance industry designation.

(b) If the provider determines that the insurance producer completed and passed the examination, the provider may issue the certificate of completion. The provider shall date the certificate according to the date on which the provider received the examination for grading, state on the certificate that to the best of the provider’s knowledge the insurance producer passed the examination and submit the certificate electronically to the Insurance Division in accordance with directions provided on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov.

(5) The provider of a course shall submit electronically completion information for the course for each qualifying insurance producer not later than the 15th day after the date on which an insurance producer completes a course or not later than the 15th day after the date on which the Director approved the course, whichever date is later. The period for issuance of a certificate does not apply to a provider who discloses to the insurance producer in writing, when the insurance producer pays for or registers for the class, the date by which or the time period within which the certificate will be issued.

(6) A provider shall notify the Director immediately of any change in authorized signers for certificates.

(7) A person may act as a proctor for one or more independent study courses under section (4) of this rule only if the person is registered as a proctor with the Insurance Division. A person applying for registration must submit the name, address and telephone number of the person; the location or locations at which examinations will be proctored; the fee or fees that will be charged, if any, for the proctoring service; and whether the person will proctor examinations for the general insurance producer population. There is no registration fee. If the person will proctor independent study course examinations for other than the general insurance producer population, the person must specify for whom the proctoring will be done. The registration requirement under this section does not apply to city, county and state public libraries, state colleges and universities, private colleges and universities other than those that are owned by or operated primarily for the insurance industry, law offices or currently licensed certified public accountants.

Stat. Auth.: ORS 731.244 & 744.119
Stats. Implemented: ORS 744.119
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 3-1997, f. 4-7-97, cert. ef. 6-1-97; ID 4-1997, f. 4-25-97, cert. ef. 6-1-97; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0235

Provider Registration

(1) A provider of continuing education courses must register with the Director in order to register courses under OAR 836-071-0240. A provider must register electronically in the method required by the Director. The registration of a provider shall include the provider’s business name, main business address, the business telephone number, email address and the name of a contact person. If a provider is a firm or corporation or a trade association, registration shall also include the names of all principal officers.

(2) A provider shall notify the Director of any change in the address, telephone number, email address or contact person of the provider within 30 days after any such change takes effect.

(3) Subject to revocation of registration under OAR 836-071-0245, a provider registration expires on the second January 1 following the date of registration.

(4) A provider is subject to rejection of registration by the Director if the provider fails to meet any requirement of OAR 836-071-0215 to 836-071-0250 applicable to the provider or to courses offered by the provider, or if any of its employees or contractors who supervise or conduct and certify completion of a course:

(a) Has a history of noncompliance with insurance statutes or rules; or

(b) Has had an insurance producer license or other insurance license revoked, suspended or refused because of violations of or noncompliance with insurance statutes or rules.

Stat. Auth.: ORS 731.244 & 744.119
Stats. Implemented: ORS 744.119
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 3-1997, f. 4-7-97, cert. ef. 6-1-97; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0240

Course Registration

(1) A provider registered under OAR 836-071-0235 shall apply to the Director for registration of each course to be offered by the provider for continuing education credit. Application for registration shall be made electronically in the method required by the Director and shall include the name of the provider, the provider’s registration number assigned by the Department, the course title and credit hours suggested by the provider for the course, and if known, the date, time and location of meetings of each course for which application is made. The provider shall include the course outline with the registration application and shall submit any other information requested by the Director. The course outline must show instruction in 50-minute periods.

(2) In order to ensure that a course is eligible to be registered prior to the date of the first meeting of the course, a registered provider must apply for registration of the course not later than the 60th day preceding the first date.

(3) The registration of a course expires on the last day of the 24th month after the date the course is registered unless the course is renewed prior to the date on which registration expires. The provider must apply for renewal of a course not later than the 21st day prior to the date on which registration expires. If the Director determines that the course materials submitted with the renewal application are sufficiently changed or otherwise so different that the course as a whole should be treated as a new course rather than renewed, the course and its materials shall be reviewed according to the review period established in section (2) of this rule.

(4) Each course registration application is subject to review by the Director for the purpose of evaluating and assigning credit hours and determining compliance with requirements of course content under OAR 836-071-0230. The Director may reject a course for registration or terminate a course’s registration if the Director determines that the course does not so comply.

(5) A registered provider shall resubmit a registered course for review and approval whenever the provider substantially changes the content of the course as registered.

(6) A provider shall notify the Director immediately of a cancellation or a change of date, time or location of a scheduled class.

(7) A course registration application that is submitted after the 60th day before the date of the first meeting of the course is subject to approval or disapproval after the date of the first meeting. If the Director approves an application for registration of a course that is submitted after the 60th day before the date of the first meeting of the course and before the tenth day prior to the date of that meeting, and if the provider gives notice of the course meeting as required by OAR 836-071-0247, the provider may grant credit for the course retroactively.

(8) A provider domiciled in another state that is a member of the Midwest Zone Continuing Education Reciprocity Agreement may offer in this state a course that is registered in its domiciliary state if the provider registers the course as provided in this rule. Such a course qualifies for registration if the Director determines that the subject matter of the course is not disqualified for credit under OAR 836-071-0230(2). A course to which this section applies is subject to renewal of its registration and the provider and the course are subject to the other provisions of this rule.

(9) All materials required under this rule shall be submitted electronically in accordance with directions of the director set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov.

Stat. Auth.: ORS 731.244, ORS 744.119 & sec. 12, Enrolled SB 268 (2001 Reg. Session)
Stats. Implemented: ORS 744.008, ORS 744.119 & sec. 12, Enrolled SB 268 (2001 Reg. Session))
Hist.: ID 3-1990, f. & cert. ef. 1-19-90; ID 6-1994, f. & cert. ef. 5-20-94; ID 3-1997, f. 4-7-97, cert. ef. 6-1-97; ID 19-1998, f. & cert. ef. 12-2-98; ID 10-2001, f. & cert. ef. 9-11-01; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0355

Limited License Application, Rental Companies; Required Information

(1) On and after October 1, 2000, a rental company must hold a limited license in order to transact insurance as authorized by ORS 744.854. An applicant for a limited license as a rental company as authorized by 744.854 shall apply for a limited license to the Director of the Department of Consumer and Business Services electronically on a form established by the Director in accordance with directions set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov. The applicant shall include the following information in the application:

(a) The applicant’s corporate, firm or other business entity name, the business address and telephone number of the principal place of business and the business address and telephone number of each additional location at which the applicant will transact business under the license;

(b) All assumed business names and other names under which the applicant will engage in business under the license;

(c) The names of all officers and directors or partners, or the sole proprietor or the owners if the applicant is other than a corporation or a partnership, and the name of the executive designated as the statewide filing officer as required by ORS 744.856;

(d) Whether any of the following has occurred with respect to an officer or director of the applicant, or a partner, or the sole proprietor or any of the owners if the applicant is other than a corporation or a partnership:

(A) Conviction of or indictment for a crime, including a felony involving dishonesty or a breach of trust to which 18 U.S.C. sec. 1033 applies;

(B) A judgment entered against the officer, director, partner, sole proprietor or owner if the applicant is other than a corporation or a partnership, for fraud;

(C) A claim of indebtedness by an insurer or agent, and the details of any such indebtedness; or

(D) Refusal, revocation or suspension of any license to act in any occupational or professional capacity in this or any other state;

(e) All states and provinces of Canada in which the applicant or an officer, director or partner of the applicant, or a sole proprietor or owner if the applicant is other than a corporation or a partnership, currently holds a license to engage in the transaction of insurance, or has held such a license within ten years prior to the date of the application;

(f) Whether any firm or corporation of which an officer, director or partner of the applicant, or the sole proprietor or an owner if the applicant is other than a corporation or a partnership, is or has been an officer, director, partner, sole proprietor or owner has ever filed for bankruptcy or been adjudged a bankrupt; and

(g) Any other information requested by the Director in the license application form.

(2) The applicant shall include with the application the following:

(a) The course of study to be used by the applicant for the training program for employees concerning the kinds of coverage offered under the license;

(b) A certification by the applicant that all employees to be involved in the sale or offer of coverage to members of the public have completed or will complete the training program prior to conducting the sales or offers; and

(c) A certification by the applicant that all employees to be involved in the sale or offer of coverage to members of the public will receive continuing education on a regular basis concerning the topics covered in the training program.

(d) A copy of the insurance sales material to be made available to renters of vehicles through the licensee.

(3) Each application shall be accompanied by a $200 fee.

(4) During the review of an application, the Director may require any other information that the Director determines will assist consideration of the application.

Stat. Auth.: ORS 731.244, 731.804, 744.852 & 744.858
Stats. Implemented: ORS 731.804, 744.852, 744.856 & 744.858
Hist.: ID 8-2000, f. & cert. ef. 7-24-00; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0360

License Renewal

(1) A limited license expires on the last day of the month in which the second anniversary of the initial issuance date occurs. Thereafter, the limited license shall expire on the second anniversary following each renewal.

(2) Not later than the license expiration date, a limited licensee applying for renewal must submit the following electronically as set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov, as applicable:

(a) A completed renewal application, on a form provided by the Director;

(b) A copy of the insurance sales material made available to renters of vehicles through the limited licensee.

(c) A renewal fee of $200.

(3) The Director may allow a limited licensee not more than 30 days to submit missing information on the application form if the fees, course of study and certifications have been submitted on or before the expiration date.

(4) The Director may request on the renewal application any information requested on the original application for a limited license.

(5) An expired license may be renewed according to the requirements and procedures in ORS 744.009, except that the person renewing an expired license must pay $50 instead of twice the amount of the renewal fee.

Stat. Auth.: ORS 731.804 & 744.858
Stats. Implemented: ORS 731.804 & 744.856
Hist.: ID 8-2000, f. & cert. ef. 7-24-00; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0560

Limited License Application, Portable Electronics Insurance Coverage; Required Information

(1) An applicant for a portable electronics limited license shall submit electronically to the Director of the Department of Consumer and Business Services a portable electronics limited license application on the form entitled “Portable Electronics Insurance Vendor.” The form is set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov.

(2) In addition to the requirements in ORS 646A.577(2)(b), the applicant shall include all of the following information in the limited license application:

(a) The applicant’s corporate, firm or other business entity name, the business address, e-mail address and telephone number of the principal place of business and the business address and telephone number of each additional location at which the applicant will transact business under the limited license.

(b) All assumed business names and other names under which the applicant will engage in business under the limited license.

(c) Whether any of the following has occurred with respect to the applicant or the employee, agent or authorized representative of the applicant that the applicant is designating as being responsible for the applicant’s compliance with ORS 646A.575 to 646A.592:

(A) Conviction of or indictment for a crime, including a felony involving dishonesty or a breach of trust to which 18 U.S.C. sec. 1033 applies;

(B) A judgment entered against the applicant or person designated by the applicant as being responsible for the applicant’s compliance with ORS 646A.575 to 646A.592, for fraud;

(C) A claim of indebtedness by an insurer or agent, and the details of any such indebtedness; or

(D) Refusal, revocation or suspension of any license to act in any occupational or professional capacity in this or any other state.

(d) All states and provinces of Canada in which the applicant currently holds a license to engage in the transaction of insurance, or has held such a license within ten years prior to the date of the application.

(e) Whether the applicant has ever filed for bankruptcy or been adjudged a bankrupt.

(f) The syllabus for the training program that is developed by the insurer or supervising entity that issued the portable electronics insurance policy to the limited licensee.

(g) A certification by the supervising entity or the applicant that all employees, agents and authorized representatives to be involved in the issuance, sale or offering for sale of portable electronics insurance coverage to customers have completed or will complete the training program under ORS 646A.585(1)(b), prior to issuing, selling or offering for sale portable electronics insurance coverage.

(h) A certification by the supervising entity or the applicant that a copy of all written disclosure materials, as required under ORS 646A.582, that are currently being made available to prospective customers of portable electronics or have been made available to prospective customers in the past, shall be maintained by the supervising entity or the applicant. This information shall be maintained by the supervising entity or the applicant for a period of seven years and must be provided to the Director, upon request, within 21 calendar days.

(i) Any other information requested by the Director in the license application form.

(3) Each application shall be accompanied by a $200 fee.

(4) During the review of an application, the Director may require any other information that the Director determines will assist consideration of the application.

Stat. Auth. : ORS 646A.575 - 646A.590 & 705.135
Stats. Implemented: ORS 646A.575 - 646A.590
Hist.: ID 22-2011, f. 12-16-11, cert. ef. 1-1-12; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-071-0565

Limited License Renewal

(1) A limited license expires on the last day of the month in which the second anniversary of the initial issuance date occurs. Thereafter, the limited license shall expire on the second anniversary following each renewal.

(2) A limited licensee applying for renewal must submit the following to the Director electronically as set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov:

(a) A completed renewal application on the form entitled “Renewal Notice for Portable Electronics Insurance Vendors.” The renewal application must be returned to the director electronically in accordance with instructions set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov not later than the limited license expiration date.

(b) An updated certification by the supervising entity or the limited licensee that all employees, agents and authorized representatives to be involved in the issuance, sale or offering for sale of portable electronics insurance coverage to customers have completed or will complete the training program under ORS 646A.585(1)(b), prior to issuing, selling or offering for sale portable electronics insurance coverage.

(c) An updated certification by the supervising entity or the limited licensee that a copy of all written disclosure materials, as required under ORS 646A.582, that are currently being made available to prospective customers of portable electronics or have been made available to prospective customers in the past, shall be maintained by the supervising entity or the applicant. This information shall be maintained by the supervising entity or the applicant for a period of seven years and must be provided to the Director, upon request, within 21 calendar days.

(d) A renewal fee of $200.

(3) The Director may allow a limited licensee not more than 30 days after the limited license expiration date to submit missing information on the renewal application form if the renewal application, fees, certification and disclosure materials have been submitted on or before the expiration date.

(4) The Director may request on the renewal application any information requested on the original application for a limited license.

(5) An expired limited license may be renewed up to one year after the limited license expiration date. The fee to renew an expired limited license is $250.

Stat. Auth. : ORS 646A.575 - 646A.590 & 705.135
Stats. Implemented: ORS 646A.575 - 646A.590
Hist.: ID 22-2011, f. 12-16-11, cert. ef. 1-1-12; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-072-0010

Criminal Records Check Process

(1) An authorized designee:

(a) Shall conduct a LEDS-based criminal history check and request that the Oregon Department of State Police conduct a criminal records check for all applicants for an initial license; and

(b) May conduct a LEDS-based criminal history check, or request that the Oregon Department of State Police conduct, a criminal records check of an applicant for renewal of a license to whom OAR 836-072-0001 to 836-072-0045 apply.

(2) An applicant to whom OAR 836-072-0001 to 836-072-0045 apply must provide as required on the application form all identifying information requested including but not limited to name, birth date, Social Security number, physical characteristics, driver’s license or identification card number and current address, and information about prior residences as requested in the DCBS Criminal Records Request form. The applicant shall submit the information and obtain the fingerprints in accordance with directions provided by the Department. An applicant, with the written consent of the authorized designee, may submit the materials necessary for the authorized designee to conduct a LEDS-based criminal history check or a criminal records check up to six months before the applicant intends to submit an application for a new license or for renewal of an existing license.

(3) If the Department and a vendor agree by contract that the vendor will perform duties of obtaining fingerprints of applicants and submitting the fingerprints for Oregon or nationwide criminal history checks, an applicant shall submit the fingerprint card according to the requirements and instructions of the vendor.

(4) Within a reasonable period of time established by an authorized designee, an applicant shall disclose additional information as requested by the Department to resolve an issue hindering the completion of either a LEDS-based criminal history check or a criminal records check, such as providing additional proof of identity.

(5) When an authorized designee determines under section (1) of this rule that a criminal records check is needed:

(a) The authorized designee shall conduct a LEDS -based criminal records check as part of any fitness determination conducted in regard to an applicant.

(b) The authorized designee may request that the Oregon Department of State Police conduct an Oregon criminal history check when:

(A) The authorized designee determines that an Oregon criminal history check is warranted after review of the information provided by the applicant, the results of a LEDS-based criminal history check or other criminal records information;

(B) The authorized designee requests a nationwide criminal history check; or

(C) Upon application for renewal, the Director has reason to believe an additional check is necessary based on information obtained by the Insurance Division.

(6) An authorized designee may request that the Oregon Department of State Police conduct a nationwide criminal history check when:

(a) An applicant for license issuance has lived outside Oregon continuously for nine years;

(b) An applicant for resident license renewal has lived outside Oregon for 60 or more consecutive days during the previous three years;

(c) For a renewal application, the Director has reason to believe an additional check is necessary based on information obtained by the Insurance Division;

(d) Information provided by the applicant or the results of a LEDS-based criminal history check or Oregon criminal history check gives reason to believe, as determined by an authorized designee, that the applicant has a criminal history outside of Oregon;

(e) As determined by an authorized designee, there is reason to question the identity of, or information provided by, an applicant, including but not limited to failure to disclose a Social Security Number, disclosure of a Social Security Number that appears to be invalid or lack of an Oregon driver’s license or identification card; or

(f) A check is required by federal law or regulation, by state law or administrative rule, or by contract or written agreement with the Department.

Stat. Auth.: ORS 181.534, 705.135, 731.244
Stats. Implemented: ORS 181.534, 705.141, 744.001, 744.059, 744.326
Hist.: ID 19-2008, f. & cert. ef 12-10-08; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-075-0000

Third Party Administrators; License Application; Required Information

An applicant for a third party administrator license shall provide the following electronically in accordance with directions set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov:

(1) Information relating to the organizational form of the applicant as follows:

(a) The name under which the applicant will transact business as a third party administrator;

(b) The principal place of business at which the applicant will transact business as a third party administrator, including the street and mailing addresses and telephone number;

(c) The organizational form of the applicant (corporation, partnership, sole proprietorship);

(d) All assumed business names and other names under which the applicant will transact business as a third party administrator;

(e) Whether the applicant has ever had a judgment entered against the applicant for fraud, and whether any insurer, insurance producer or other person claims the applicant to be indebted to it, together with the details of any such indebtedness;

(f) Whether any license of the applicant to act in any occupational or professional capacity has ever been refused, revoked or suspended in this or any other state, and whether the applicant has otherwise ever been the subject of a complaint to a professional licensing board or agency. If the applicant’s answer is affirmative in any respect, the applicant must also provide the name and address of the licensing board or agency, the date of the complaint or the action taken against the license, a description of the nature of the complaint or the reason for the action taken against the license, and, with regard to a complaint, a description of the licensing board or agency’s disposition of the complaint;

(g) Whether the applicant has ever filed for bankruptcy or been adjudged a bankrupt;

(h) All states and provinces of Canada in which the applicant currently holds a license or certificate of authority to transact business as a third party administrator, or has held such a license or certificate within ten years prior to the date of the application;

(i) The names, addresses, official positions and professional qualifications of the individuals who are responsible for the conduct of affairs of the administrator, including all members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership or association; shareholders holding directly or indirectly ten percent or more of the voting securities of the administrator; and any other person who exercises control or influence over the affairs of the administrator;

(j) The name and telephone number of a contact person who is knowledgeable about preparation of the annual financial statements or reports required under section (4) of this rule.

(2) An appointment of the Director, on the application, as agent for service of process, if the third party administrator will be a nonresident licensee.

(3) Biographical information for each owner, partner, director and officer of the applicant, on the Biographical Affidavit form designed by the National Association of Insurance Commissioners.

(4) The following documents, which must accompany the application under section (1) of this rule:

(a) All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, share-holder agreement and other applicable documents and all amendments to such documents;

(b) The bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;

(c) Annual financial statements or reports for the two most recent years, which prove that the applicant is solvent, and such information as the Director may require in order to review the current financial condition of the applicant, except as provided in subsection (d) of this section;

(d) If the applicant is a corporation that is newly formed for the purpose of transacting business as a third party administrator, the financial statements or reports of each incorporator, shareholder and officer for the two most recent years, a current balance sheet for the corporation and such information as the Director may require in order to review the current financial condition of the applicant;

(e) A statement describing the business plan, including information on staffing levels and activities proposed in this state and nationwide. The plan must provide details setting forth the applicant’s capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, recordkeeping and underwriting;

(f) Evidence that the applicant has a fiduciary account established in a federally or state-insured financial institution. An applicant that is an insurance producer licensed under ORS Chapter 744 need not comply with this subsection if the applicant is in compliance withers 744.225 with respect to the premiums, charges and return premiums referred to in 744.730;

(g) Evidence of insurance coverage required by ORS 744.726;

(h) If the applicant will be managing the solicitation of new or renewal business, proof that it employs or has contracted with an insurance producer licensed by the Director for solicitation and taking of applications. Any applicant that intends directly to solicit insurance contracts or to otherwise act as an insurance producer must provide proof that it has a license as an insurance producer in this state.

Stat. Auth.: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712, 744.726
Stats. Implemented: ORS 744.706
Hist.: ID 1-1992, f. & cert. ef. 1-27-92; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 19-2006, f. & cert. ef. 9-26-06; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

836-075-0030

Third Party Administrator License Renewal

(1) A third party administrator applying for renewal of the license must do the following, as applicable:

(a) Not later than the license expiration date, submit electronically a completed renewal application in accordance with directions set forth on the Insurance Division website of the Department of Consumer and Business Services at www.insurance.oregon.gov.

(b) Submit the renewal fee.

(2) The Director may allow a third party administrator not more than 30 days to submit missing information on the renewal application form, if the fees have been submitted on or before the expiration date.

(3) The Director may require on the renewal application any information required with regard to an original application for a license.

Stat. Auth.: ORS 731.244, 744.303, 744.635, 744.704, 744.706, 744.712 & 744.726
Stats. Implemented: ORS 744.712(3)
Hist.: ID 1-1992, f. & cert. ef. 1-27-92; ID 12-2012(Temp), f. 6-19-12, cert. ef. 8-1-12 thru 1-25-12; ID 18-2012, f. & cert. ef. 11-7-12

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.

2.) Copyright 2012 Oregon Secretary of State: Terms and Conditions of Use

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