USA Statutes : oregon
Title : TITLE 56 INSURANCE
Chapter : Chapter 744 Insurance Producers; Life Settlement Providers, Brokers and Contracts; Adjusters; Consultants; Third Party Admin
(1) ORS 744.001 to 744.009, 744.011,
744.013, 744.014, 744.018, 744.022 to 744.033 and 744.037 govern the
licensing of adjusters and insurance consultants.

(2) An applicant for a license as an adjuster or an insurance
consultant shall apply for the license to the Director of the Department
of Consumer and Business Services. The applicant shall include the
following information:

(a) The applicant’s name, business address, residence address,
present occupation, occupation for the last 12 months, the portion of
time to be devoted to the insurance business, previous insurance
experience and the names of employers during the preceding five years.
The applicant shall include the business address of the principal place
of business and the business address 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) Whether the applicant has ever been convicted of or is under
indictment for a crime, whether the applicant has ever had a judgment
entered against the applicant for fraud, whether any insurer or insurance
producer claims the applicant is indebted to it and the details of any
such indebtedness, and 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.

(d) The applicant’s fingerprints, if the applicant is applying for
a resident license. An applicant applying for a nonresident license shall
provide the applicant’s fingerprints only if the director so requests.

(e) The class or classes of insurance to be transacted under the
license.

(f) Any other information that the director requires by rule.

(3) If the applicant for a license under this section is a firm or
corporation, the application shall show, in addition, the names of all
members, officers and directors. If the application is a corporation, the
application shall state the names of all stockholders who own, directly
or indirectly, more than 10 percent of any class of any equity security
of the corporation, and shall designate each individual who is to
exercise the powers to be conferred by the license upon the firm or
corporation.

(4) Each application shall be accompanied by the applicable fees
established by the director. [1989 c.701 §§13,81g; 2001 c.191 §26; 2003
c.364 §117] (1) The Director of the Department of
Consumer and Business Services may issue a license authorizing a person
to act as an adjuster or an insurance consultant. A person licensed to
act in one capacity may also be licensed to act in the other capacity if
the person meets the appropriate qualifications. For purposes of this
chapter, the capacity in which a person is licensed to act constitutes a
“license category” or a “category of insurance business.”

(2) A license issued under this section shall set forth each
license category in which the licensee may engage. For each license
category, the license shall also set forth the class or classes of
insurance in which the licensee may engage, as provided in:

(a) ORS 744.531, for the license category of adjuster.

(b) ORS 744.626, for the license category of insurance consultant.

(3) The director may issue resident and nonresident licenses under
this section as follows:

(a) The director may issue a resident license to a person if the
person is a resident of this state or, if not a resident of this state,
the person has a place of transacting insurance in this state.

(b) The director may issue a nonresident license to a person if the
person is not a resident of this state.

(4) The director shall issue a license under this section:

(a) If the applicant has completed and submitted to the director an
application for the license and has submitted all applicable fees,
including any examination fees, as established by the director with the
application;

(b) If the director determines that no ground for denial of the
license exists under ORS 744.013; and

(c) If the director determines that the applicant has met the
applicable qualifications and requirements for each license category, and
for each class of insurance for which application is made. [1989 c.701
§§2,81e; 1995 c.639 §3; 2001 c.191 §27] (1) The Director of the Department of
Consumer and Business Services may add a category of insurance business
to an adjuster or insurance consultant license upon application by the
licensee for amendment of the license.

(2) The director may add a class or classes of insurance to a
license upon application by the licensee for amendment of the license.

(3) The director may require that applications under this section
be made in the same manner as applications for the initial license, or
the director may establish other application procedures. [1989 c.701 §3;
2001 c.191 §28] (1) The Director of the
Department of Consumer and Business Services may issue or amend a firm or
corporation license under ORS 744.002 only if the firm or corporation,
for each category of insurance business that the firm or corporation
applies for on its license, employs an individual whose license under ORS
744.002 authorizes the individual to engage in that category of insurance
business.

(2) When a firm or corporation applies for a license or applies to
amend the license, the director may issue or amend the license only if
the firm or corporation, for each class of insurance that the firm
applies to transact, employs an individual whose license under ORS
744.002 authorizes the individual to transact that class of insurance.
[1989 c.701 §4] (1) A
license issued under ORS 744.002 expires on its expiration date unless it
is renewed on or before its expiration date.

(2) A license expires on the last day of the month in which the
first anniversary of the initial issuance date of the license occurs,
unless the Director of the Department of Consumer and Business Services
designates another date. Thereafter, the license shall expire on the
second anniversary following each renewal.

(3) When a category of insurance business is added to a license,
the expiration date for the license shall be the last day of the month in
which the second anniversary of the issuance date of the amended license
occurs, unless the director establishes another expiration date.

(4) The fee for renewal of a license shall be the fee established
by the director, which shall include the fee established for each
category of insurance business on the license.

(5) The director by rule may establish procedures for renewal of
licenses.

(6) A suspended license is subject to renewal and to all
requirements applicable to renewal if the license expires during the
suspension period. [1989 c.701 §§5,81f] An adjuster or insurance consultant may
renew a license subject to the following requirements:

(1) The licensee must pay the applicable fee established by the
Director of the Department of Consumer and Business Services.

(2) The licensee must satisfy all applicable continuing education
requirements and all other applicable conditions and requirements
specified by statute.

(3) If the licensee holds a nonresident license, the licensee must
submit proof to the director, with respect to each category of insurance
business and class of insurance set forth on the license, that the
licensee continues to hold a valid license or other evidence of authority
issued by the state of residence of the licensee for the same category of
insurance business.

(4) If the licensee is an insurance consultant, the licensee must
provide satisfactory evidence that the insurance required under ORS
744.635 is in effect.

(5) The licensee must satisfy any other requirements established by
the director by rule. [1989 c.701 §§14,81h; 1991 c.810 §2; 2001 c.191 §29] (1) The Director of the
Department of Consumer and Business Services may renew an expired license
of an adjuster or insurance consultant upon application if the license
expired within two years prior to the application and if:

(a) The license was not suspended or revoked by the director, or
not renewed, on any ground under ORS 744.013;

(b) The director is satisfied, by examination or otherwise, that
the person is knowledgeable about the portions of the Insurance Code
applicable to the license;

(c) The person pays double the amount of the regular renewal fee;
and

(d) The person satisfies all requirements for renewal.

(2) A person who does not renew an expired license as provided in
this section may obtain a license only if the person applies and
qualifies for and is issued the license in the same manner as a person
who initially applies for the license. [1989 c.701 §6; 2001 c.191 §30](1) The
expiration of a license or the voluntary surrender of a license by a
licensee under this chapter shall not deprive the Director of the
Department of Consumer and Business Services of jurisdiction to proceed
with any investigation of, or any action or disciplinary proceedings
against, the licensee or to revise or render void an order suspending or
revoking the license.

(2) As provided in this subsection, a person who has voluntarily
surrendered a license may qualify for a license conferring the same
authority as the surrendered license without having to take an
examination that is otherwise required. In order to qualify without
examination, the person must apply for the license within two years after
the date on which the person surrendered the prior license. The person
must apply and otherwise qualify for the license in the same manner as a
person who initially applies for the license. If the person is required
to satisfy continuing education requirements for renewal of the license,
the person must show satisfaction of continuing education requirements
for each renewal date occurring during the period following the surrender
in which the person did not hold a license. [1989 c.701 §11; 1991 c.810
§3; 2001 c.191 §42](1) If the Director of the Department of Consumer
and Business Services finds with respect to an adjuster or insurance
consultant or an applicant for an adjuster or insurance consultant
license that one or more of the grounds set forth in subsection (2) of
this section exist, the director may take the following disciplinary
actions:

(a) The director may refuse to renew or may suspend or revoke a
license issued under ORS 744.002 or the authority under a license to
engage in any category of insurance business or any class of insurance.

(b) The director may refuse to issue a license under ORS 744.002 or
refuse to grant authority under a license to engage in any category of
insurance business or any class of insurance.

(2) The director may take any disciplinary action under subsection
(1) of this section on one or more of the following grounds:

(a) Incompetence or untrustworthiness of the applicant or adjuster
or insurance consultant.

(b) Falsification by the applicant or adjuster or insurance
consultant of the application for the license or an amendment thereto, or
engagement in any dishonest act in relation to the application or
examination therefor.

(c) Violation of or noncompliance with any applicable provision of
the Insurance Code or any rule or order of the director.

(d) Misappropriation or conversion to the adjuster’s or insurance
consultant’s own use, or illegal withholding, of money or property
belonging to policyholders, insurers, beneficiaries or others, and
received by the adjuster or insurance consultant in the conduct of
business under the license.

(e) Conviction in any jurisdiction, of an offense which if
committed in this state, constitutes a felony, a misdemeanor involving
dishonesty or breach of trust, or an offense punishable by death or
imprisonment under the laws of the United States. The record of the
conviction shall be conclusive evidence of the conviction.

(f) Material misrepresentation of the terms of any insurance policy
or proposed insurance policy.

(g) Use of a fraudulent or dishonest practice by the adjuster or
insurance consultant in the conduct of business under the license, or
demonstration therein that the adjuster or insurance consultant is
incompetent, untrustworthy or a source of injury and loss to the public
or others.

(h) Error by the director in issuing or renewing a license.

(i) Failure to pay a civil penalty assessed by the director that
has become final by operation of law or upon appeal.

(j) Failure to pay any fee or charge to the director.

(k) Use of the license principally to effect insurance on property
or against liability of the applicant or adjuster or insurance
consultant, or to evade the provisions of ORS chapter 746.

(L) Cancellation, revocation, suspension or refusal to renew by any
state of a license or other evidence of authority to act as an insurance
producer, adjuster or insurance consultant. The record of the
cancellation, revocation, suspension or refusal to renew shall be
conclusive evidence of the action taken.

(m) Cancellation, revocation, suspension or refusal to renew by any
state or federal agency of the authority to practice law or to practice
under any other regulatory authority if the cancellation, revocation,
suspension or refusal to renew was related to the business of an
insurance producer, adjuster or insurance consultant or if dishonesty,
fraud or deception was involved. The record of the cancellation,
revocation, suspension or refusal to renew shall be conclusive evidence
of the action taken.

(n) Failure to comply with continuing education requirements
applicable to the license or any category of insurance authorized under
the license, unless the director has waived the requirements.

(o) Dishonesty, fraud or misrepresentation not related to the
business of an insurance producer, adjuster or insurance consultant.

(3) The director may refuse to issue or renew or may revoke or
suspend the license of a firm or corporation or may take any such action
with respect to any authority applied for by or granted to the firm or
corporation to engage under the license in any category of insurance
business or class of insurance if the director finds that any ground set
forth in subsection (2) of this section exists:

(a) With respect to any individual adjuster or insurance consultant
employed by or under contract with the firm or corporation.

(b) With respect to a director or officer of the firm or
corporation.

(c) With respect to any person who directly or indirectly has the
power to direct or cause to be directed the management, control or
activities of the adjuster or insurance consultant. [Formerly 744.255;
1991 c.810 §4; 1993 c.447 §84; 2001 c.191 §31; 2003 c.364 §118; 2003
c.576 §258](1) The Director of the Department of Consumer and
Business Services may place a condition of probation on an adjuster or
insurance consultant license or on a category of insurance business
authorized by a license or on a class of insurance if any ground for
disciplinary action under ORS 744.013 exists, as follows:

(a) When the license is initially issued.

(b) When the license is renewed, amended or reinstated, or when a
new license is issued for the purpose of adding a category of insurance
business or class of insurance.

(c) At any time during the effective period of the license.

(2) During a probationary period under this section, the director
may take any action authorized under ORS 744.013.

(3) A license applicant or licensee has the same right to a hearing
on the placing of a condition of probation as the license applicant or
licensee has with respect to any action taken by the director under ORS
744.013. [Formerly 744.260; 2001 c.191 §32] With
regard to any license issued under this chapter:

(1) The Director of the Department of Consumer and Business
Services may reinstate a revoked license, any revoked category of
insurance business or any revoked class of insurance. The director may
grant reinstatement upon fulfillment by the former holder of the license
of conditions set by the director.

(2) The director may modify the suspension of a license, a category
of insurance business or a class of insurance and reinstate the license,
category or class:

(a) At a time certain; or

(b) When the person subject to the suspension fulfills conditions
set by the director for reinstatement. [1989 c.701 §12; 2001 c.191 §43] (1) A firm or corporate adjuster or
insurance consultant may engage in a category of insurance business or a
class of insurance authorized on its license only through an individual
adjuster or insurance consultant who is authorized to engage in insurance
business in that same category or class.

(2) An individual adjuster or insurance consultant who is employed
by or under contract with a firm or corporate adjuster or insurance
consultant may engage in insurance business only to the extent authorized
by the license of the individual. [1989 c.701 §15; 2001 c.191 §33](1) Each resident adjuster or insurance consultant
shall maintain in this state a place of business in which the licensee
principally engages in insurance business under the license.

(2) The principal place of business under subsection (1) of this
section of an adjuster or insurance consultant must be accessible to the
public.

(3) An adjuster or insurance consultant shall keep at the place of
business of the adjuster or insurance consultant the usual and customary
records pertaining to the business under the license. All such records as
to any particular transactions shall be kept available and open to the
inspection of the Director of the Department of Consumer and Business
Services during business hours. An adjuster or insurance consultant shall
keep records of a particular transaction by the adjuster or insurance
consultant for three years following the conclusion of the transaction.

(4) This section does not prohibit maintenance of a place of
business under a license in the licensee’s place of residence in this
state. [1989 c.701 §16; 2001 c.191 §34](1) A nonresident adjuster or insurance consultant
shall keep at the principal place of business of the licensee the usual
and customary records pertaining to the business under the nonresident
license. All such records as to any particular transaction shall be kept
available and open to the inspection of the Director of the Department of
Consumer and Business Services during business hours. For the purpose of
this subsection, if a nonresident licensee has a place of transacting
insurance in this state, that place shall be the principal place of
business for the licensee.

(2) A nonresident adjuster or insurance consultant shall keep
records of a particular transaction by the nonresident adjuster or
insurance consultant for three years following conclusion of the
transaction. [1989 c.701 §17; 1995 c.639 §4; 2001 c.191 §35] (1) Not
later than the 30th day after an adjuster or insurance consultant changes
the address or telephone number of the principal place of business or the
residence of the adjuster or insurance consultant, or any other location
at which the licensee transacts business under the license, the licensee
shall notify the Director of the Department of Consumer and Business
Services of the change. The licensee also shall so notify the director
not later than the 30th day after the licensee opens or closes a location
at which the licensee transacts business under the license.

(2) Not later than the 30th day after a change in or deletion or
addition of an assumed business name under which a licensee transacts
business under a license as an adjuster or insurance consultant, the
licensee shall notify the director of the change. [1989 c.701 §18; 2001
c.191 §36](1) Not later than the 30th
day after the authority of an individual adjuster or insurance consultant
to act for a firm or corporate adjuster or insurance consultant has
commenced or terminated, the firm or corporate adjuster or insurance
consultant shall notify the Director of the Department of Consumer and
Business Services of the commencement or termination.

(2) A firm or corporate adjuster or insurance consultant shall
notify the director annually of all changes in its officers and directors
during the immediately previous calendar year. If the licensee is a
corporation, the licensee shall include in the notice any changes in its
stockholders who own, directly or indirectly, more than 10 percent of any
class of any equity security of the licensee.

(3) The director may establish by rule a different period within
which a firm or corporate adjuster or insurance consultant must notify
the director under subsection (1) or (2) of this section. [1989 c.701
§19; 2001 c.191 §37] Any application or
notice to the Director of the Department of Consumer and Business
Services regarding the licensing of an adjuster or insurance consultant
under this chapter must be made in the manner prescribed by the director.
[1989 c.701 §20; 2001 c.191 §38] A fee paid in connection with a license or a
license application under this chapter is not refundable unless the
Director of the Department of Consumer and Business Services provides
otherwise by rule. [1989 c.701 §7; 2001 c.191 §44]INSURANCE PRODUCERS As used in ORS
744.052 to 744.089:

(1) “Business entity” has the meaning given that term in ORS
731.116.

(2) “Home state” means any state, district or territory of the
United States, in which an insurance producer maintains the insurance
producer’s principal place of residence or principal place of business
and is licensed to act as an insurance producer.

(3) “Limited class credit insurance” includes but is not limited to
credit life, credit disability, credit property, credit unemployment,
involuntary unemployment, mortgage life, mortgage guaranty, mortgage
disability, and guaranteed automobile protection insurance, and any other
form of insurance offered in connection with an extension of credit that
is limited to partially or wholly extinguishing the credit obligation
that the Director of the Department of Consumer and Business Services
determines should be designated a form of limited class credit insurance.

(4) “Limited class credit insurance producer” means a person
required to be licensed to sell, solicit or negotiate one or more forms
of limited class credit insurance coverage to individuals through a
master, corporate, group or individual policy.

(5) “Limited class insurance” includes but is not limited to
credit, mortgage, automobile dealer guaranteed automobile protection and
any other form of insurance designated by the director as a form of
limited class insurance.

(6) “Limited class insurance producer” means a person required to
be licensed to sell, solicit or negotiate one or more forms of limited
class insurance coverage to individuals through a master, corporate,
group or individual policy.

(7) “Negotiate,” “sell” and “solicit” have the meanings given those
terms in ORS 731.104.

(8) “Terminate” means to cancel the relationship between an
insurance producer and the insurer or to revoke an insurance producer’s
authority to sell, solicit or negotiate insurance.

(9) “Uniform Application” means the current version of the Uniform
Application for resident and nonresident insurance producer licensing,
produced by the National Association of Insurance Commissioners.

(10) “Uniform Business Entity Application” means the current
version of the Uniform Business Entity Application for resident and
nonresident business entities, produced by the National Association of
Insurance Commissioners. [2001 c.191 §2; 2003 c.364 §2]A person may not sell, solicit or negotiate insurance in
this state for any class or classes of insurance unless the person is
licensed as an insurance producer for that class or those classes in
accordance with ORS 744.052 to 744.089. [2001 c.191 §3; 2003 c.364 §3]
(1) ORS 744.052 to 744.089 do not require an insurer to obtain a license
as an insurance producer as required by ORS 744.053. For purposes of this
section, the term “insurer” does not include an insurer’s officers,
directors, employees, subsidiaries or affiliates.

(2) A license as an insurance producer is not be required of any of
the following:

(a) An officer, director or employee of an insurer or an insurance
producer, if the officer, director or employee does not receive any
commission on or fee for policies written or sold to insure risks
residing, located or to be performed in this state and:

(A) The officer’s, director’s or employee’s activities are
executive, administrative, managerial, clerical or a combination of
these, and are only indirectly related to the sale, solicitation or
negotiation of insurance;

(B) The officer’s, director’s or employee’s function relates to
underwriting, loss control, inspection or the processing, adjusting,
investigating or settling of a claim on a contract of insurance; or

(C) The officer, director or employee is acting in the capacity of
an agency supervisor assisting insurance producers when the person’s
activities are limited to providing technical advice and assistance to
insurance producers and do not include the sale, solicitation or
negotiation of insurance.

(b) A person who does either of the following, when the person does
not receive any commission or fee for the service:

(A) Secures and furnishes information for the purpose of group life
insurance, group property and casualty insurance, group annuities or
group or blanket health insurance or for the purpose of enrolling
individuals under plans, issuing certificates under plans or otherwise
assisting in administrative plans; or

(B) Performs administrative services related to mass-marketed
property and casualty insurance.

(c) An employer or an association of employers or its officers,
directors or employees, or the trustees of an employee trust plan:

(A) To the extent that the employers, associations, directors,
officers, employees or trustees are engaged in the administration or
operation of a program of employee benefits for the employer’s or
association’s own employees or the employees of its subsidiaries or
affiliates;

(B) To the extent that the program of employee benefits involves
the use of insurance issued by an insurer; and

(C) As long as the employers, associations, officers, directors,
employees or trustees are not in any manner compensated, directly or
indirectly, by the insurer issuing the insurance.

(d) An employee of an insurer or an organization employed by
insurers who is engaging in the inspection, rating or classification of
risks, or in the supervision of the training of insurance producers and
who is not individually engaged in the sale, solicitation or negotiation
of insurance.

(e) A person whose activities in this state are limited to
advertising without the intent to solicit insurance in this state through
communications in printed publications or electronic mass media, the
distribution of which is not limited to residents of this state, but only
if the person does not sell, solicit or negotiate insurance that would
insure risks residing, located or to be performed in this state.

(f) A person who is not a resident of this state who sells,
solicits or negotiates a policy of insurance for commercial property and
casualty risks to an insured with risks located in more than one state
insured under that policy, but only if the person is otherwise licensed
as an insurance producer to sell, solicit or negotiate that insurance in
the state where the insured maintains its principal place of business and
the contract of insurance insures risks located in that state.

(g) A salaried full-time employee who counsels or advises the
employer of the employee relative to the insurance interests of the
employer or of the subsidiaries or business affiliates of the employer,
but only if the employee does not sell or solicit insurance or receive
any commission.

(h) An attorney in fact of an authorized reciprocal insurer, or the
salaried representative of the insurer or attorney who does not receive
any commission.

(i) A person engaging in the lawful transaction of reinsurance.

(j) Salaried employees of title insurance producers or insurers,
except for the individual or individuals designated as exercising the
powers conferred by a title insurance producer’s license.

(k) Any agent or representative of persons exempt from the
Insurance Code under ORS 731.036 or holding a certificate of exemption
under ORS 731.042, with respect to the exempted transactions.

(L) Any agent or representative of a fraternal benefit society who
devotes, or intends to devote, less than 50 percent of the agent’s or
representative’s time to the solicitation and procurement of insurance
policies for that society. Any person who in the preceding calendar year
has solicited and procured life insurance policies on behalf of any
fraternal benefit society for an amount of insurance in excess of $50,000
or, in the case of any other class or classes of insurance that the
society might write, on the persons of more than 25 individuals, and who
has received or will receive a commission or other compensation therefor,
shall be presumed to be devoting, or intending to devote, 50 percent or
more of the person’s time to the solicitation and procurement of
insurance policies for that society.

(m) A person engaging in the lawful transaction of home protection
insurance if the person is a real estate licensee as defined in ORS
696.010, and if the transaction of such insurance by the person is
subject to a written contract, to which the insurer is a party, governing
the person’s activities in the transaction.

(n) Salaried employees of a financial institution or trust company,
as those terms are defined in ORS 706.008, who, in the regular course of
business with the customers of the financial institution or trust
company, present the customers with written information about savings
account annuities issued by an authorized insurer. Any person who
purchases such an annuity may rescind the transaction within 10 days
after the issuance of the contract. For purposes of this paragraph,
“savings account annuities” means annuities purchased with the proceeds
of a savings account, certificate or share in a financial institution or
trust company.

(3) A person who provides general insurance advice in connection
with providing other professional services such as legal services, trust
services, tax and accounting services, financial planning or investment
advisory services is not considered to be soliciting the sale of
insurance for the purpose of the definition of “insurance producer” in
ORS 731.104. [2001 c.191 §4; 2003 c.364 §4; 2003 c.802 §175] (1) An individual
applying for a resident insurance producer license must pass a written
examination unless the individual is exempt from the prelicensing
education and examination requirement as provided in ORS 744.067. The
examination must test the knowledge of the individual concerning the
class or classes of insurance for which application is made, the duties
and responsibilities of an insurance producer and the insurance statutes
and rules of this state. Except as provided in subsection (2) of this
section, the examination required by this section shall be developed and
conducted by the Director of the Department of Consumer and Business
Services. An individual may apply for a resident insurance producer
license only if the individual has established in this state a residence
or a place of business for acting as an insurance producer.

(2) The director may make arrangements, including contracting with
a private testing service, for developing and administering the
examination and collecting applicable fees.

(3) Each individual applying to take an examination shall pay fees
as established by the director.

(4) An individual who fails to appear for the examination as
scheduled or fails to pass the examination may reapply to take the
examination according to requirements and procedures established by the
director by rule. [2001 c.191 §5; 2003 c.364 §5] (1)
An individual applying for a resident insurance producer license shall
apply to the Director of the Department of Consumer and Business Services
on the Uniform Application and shall declare that the statements made in
the application are true, correct and complete to the best of the
individual’s knowledge and belief. Before approving the application, the
director must find that the individual:

(a) Is at least 18 years of age;

(b) Has not committed an act that is a ground for action on a
license set forth in ORS 744.074;

(c) When required by the director, has completed a prelicensing
course of study for the lines of authority for which the person has
applied;

(d) Has paid all applicable fees; and

(e) Has successfully passed the examination for the lines of
authority for which the person has applied.

(2) A business entity acting as an insurance producer is required
to obtain an insurance producer license. Application shall be made on the
Uniform Business Entity Application. Before approving the application,
the director must find that:

(a) The business entity has paid all applicable fees; and

(b) The business entity has designated a licensed insurance
producer responsible for the business entity’s compliance with the
insurance laws and rules of this state.

(3) The director may require any documents necessary to verify the
information contained in an application.

(4) Each insurer that sells, solicits or negotiates any form of
limited class credit insurance shall provide to each limited class credit
insurance producer a program of instruction, which is subject to review
and approval by the director. [2001 c.191 §6; 2003 c.364 §6] (1) The
Insurance Code does not limit or prohibit the licensing of a banking
institution, as defined in ORS 706.008, as an insurance producer to
transact one or more of the classes of insurance described in ORS
744.062, except for title insurance.

(2) The Insurance Code does not limit or prohibit the licensing, as
an insurance producer to transact one or more of the classes of insurance
described in ORS 744.062, of any of the following:

(a) A corporation owned in whole or in part by a banking
institution under ORS 708A.120, 716.588 or 716.594.

(b) A corporation owned in whole or in part by a financial holding
company or a bank holding company, as defined in ORS 706.008. [1989 c.701
§24; 1997 c.631 §548; 2001 c.191 §24; 2001 c.377 §51; 2003 c.364 §7; 2005
c.194 §5] (1) Unless
the Director of the Department of Consumer and Business Services refuses
to issue or renew a license pursuant to ORS 744.074, a person who has met
the requirements of ORS 744.058 and 744.059, or ORS 744.063, shall be
issued an insurance producer license. An insurance producer may receive
qualification for a license in one or more of the following classes of
insurance:

(a) Life insurance as defined in ORS 731.170.

(b) Health insurance as defined in ORS 731.162.

(c) Property insurance as defined in ORS 731.182.

(d) Casualty insurance as defined in ORS 731.158.

(e) Variable life insurance, including variable annuities.

(f) Property and casualty insurance coverage sold to individuals
and families for primarily noncommercial purposes.

(g) Limited class credit insurance.

(h) Any form of insurance designated by the director as a form of
limited class insurance.

(i) Title insurance as defined in ORS 731.190. A license for the
class of title insurance may be issued only to a resident insurance
producer.

(j) Any other class of insurance permitted under the Insurance Code
or rules adopted thereunder.

(2) For assistance in performance of the director’s duties, the
director may participate with the National Association of Insurance
Commissioners, or any affiliate or subsidiary that the National
Association of Insurance Commissioners oversees, in a centralized
producer licensing registry in which insurance producer licenses and
appointments are centrally or simultaneously effected for all states that
require an insurance producer license. The director may adopt by rule any
uniform standards and procedures as are necessary to participate in the
registry, including the centralized collection of fees for licenses or
appointments that are processed through the registry.

(3) An insurance producer may apply to amend a license for the
purpose of adding or deleting a class of insurance on the license in the
manner prescribed for license application in ORS 744.059 or 744.063, or
as otherwise prescribed by the director. [2001 c.191 §8; 2003 c.364 §8] (1) Unless the
Director of the Department of Consumer and Business Services refuses to
issue or renew a license pursuant to ORS 744.074, a nonresident person
shall receive a nonresident insurance producer license if:

(a) The person is currently licensed as a resident insurance
producer and is in good standing in the person’s home state;

(b) The person has submitted the proper request for a nonresident
insurance producer license and has paid the applicable fees;

(c) The person has submitted or transmitted to the director the
resident insurance producer license application that the person submitted
to the person’s home state, or in lieu of that application, a completed
Uniform Application; and

(d) The person’s home state grants nonresident insurance producer
licenses to residents of this state on the same basis.

(2) The director may verify the insurance producer’s licensing
status through the Producer Database maintained by the National
Association of Insurance Commissioners, its affiliates or subsidiaries.

(3) A nonresident insurance producer licensed in this state who
moves from one state to another state or a resident insurance producer
who moves from this state to another state shall file with the director a
change of address and provide certification from the new resident state
not later than the 30th day after the change of legal residence. No fee
or license application is required under this subsection.

(4) A person licensed as a surplus lines insurance producer in the
person’s home state shall receive a nonresident surplus lines insurance
producer license pursuant to subsection (1) of this section. Except as
provided in subsection (1) of this section, nothing in this section
supersedes any provision of ORS 735.400 to 735.495.

(5) Notwithstanding any other provision of ORS 744.052 to 744.089,
the director shall issue a nonresident limited class insurance producer
license pursuant to subsection (1) of this section to a person who is
licensed as a limited class credit insurance producer or as another type
of limited class insurance producer under the laws of the person’s home
state that restrict the authority of the license to less than the
authority prescribed in ORS 744.062 for the classes of life insurance,
health insurance, property insurance or casualty insurance.

(6) A license for the class of title insurance may not be issued to
a nonresident insurance producer.

(7) The director is the attorney in fact of a person to whom a
license is issued under this section, and upon whom all legal process in
any action or proceeding against the person may be served. Any legal
process against the person that is served upon the director has the same
legal force and validity as if served upon the person. The authority of
the director under this subsection continues as long as any liability
remains outstanding in this state. The director becomes the attorney in
fact of the person on the date that the director issues the nonresident
insurance producer license to the person. [2001 c.191 §7; 2003 c.364 §9] (1) Unless denied a license
pursuant to ORS 744.074, a person who is currently licensed as a resident
insurance producer in a Canadian province, in Mexico or in a state that
does not grant nonresident insurance producer licenses to residents of
this state on the same basis that this state grants nonresident insurance
producer licenses under ORS 744.063 shall receive a nonresident insurance
producer license if:

(a) The Director of the Department of Consumer and Business
Services determines that the insurance regulator in the person’s place of
residence grants nonresident insurance producer licenses to residents of
this state on the same basis that the director grants nonresident
insurance producer licenses to residents of the other jurisdiction or on
the same basis that the insurance regulator grants insurance producer
licenses to residents of the other jurisdiction, or on another basis that
is reasonable and fair to licensees of this state; and

(b) The person meets all of the following requirements:

(A) The person is in good standing as a resident insurance producer
in the person’s place of residence in Canada, Mexico or the person’s
state of residence.

(B) The person has submitted the proper request for a nonresident
insurance producer license and has paid the applicable fees.

(C) The person has submitted or transmitted to the Director of the
Department of Consumer and Business Services the resident insurance
producer license application that the person submitted to the insurance
regulator in the person’s place of residence, or in lieu of that
application, a completed Uniform Application.

(D) The person has taken and passed a written examination specified
by the director under this section with respect to the authority to
transact the class or classes of insurance for which the applicant has
applied. The requirement of an examination does not apply to an applicant
that is a business entity.

(E) The person has satisfied any other qualifications established
by the director by rule or has satisfied qualifications that the director
establishes by rule in lieu of the qualifications established in this
subsection.

(2) A person who is licensed by this state to sell, solicit or
negotiate insurance as a nonresident insurance producer under this
section may sell, solicit or negotiate any policy of insurance upon
domestic risks to the same extent and upon the same terms as provided by
the insurance regulator in the person’s place of residence for residents
of this state transacting a like business in a province of Canada, in
Mexico or in the person’s state of residence.

(3) The examination requirement under subsection (1) of this
section is subject to waiver if:

(a) The director determines that a written examination or other
comparable requirement acceptable to the director is required of
applicants for a resident insurance producer license in the other
jurisdiction;

(b) The insurance regulator of the other jurisdiction certifies
that the applicant holds a valid license as a resident insurance producer
in the other jurisdiction and either passed the written examination, was
the holder of a resident insurance producer license prior to the time the
written examination was first required or meets the other comparable
requirement acceptable to the director; and

(c) In the other jurisdiction, a resident of this state is
privileged to procure an insurance producer license upon conditions that
the director determines to be reasonable and fair to licensees of this
state.

(4) The director shall establish the form of the nonresident
insurance producer license issued under this section.

(5) A person licensed as a surplus lines insurance producer in the
person’s home state is eligible for a nonresident surplus lines insurance
producer license in the manner provided for nonresident insurance
producer licenses in subsection (1) of this section. A person to whom a
nonresident surplus lines insurance producer license is issued under this
section is subject to ORS 735.400 to 735.495.

(6) The director is the attorney in fact of a person to whom a
license is issued under this section, and upon whom all legal process in
any action or proceeding against the person may be served. Any legal
process against the person that is served upon the director has the same
legal force and validity as if served upon the person. The authority of
the director under this subsection continues as long as any liability
remains outstanding in this state. The director becomes the attorney in
fact of the person on the date that the director issues the nonresident
insurance producer license to the person. This subsection does not apply
to a person to whom a nonresident surplus lines insurance producer
license is issued. [2001 c.191 §9; 2003 c.364 §10](1) An individual who applies for a resident insurance
producer license in this state who is or was previously licensed as an
insurance producer for the same lines of authority in another state is
not required to complete any prelicensing education or examination. The
exemption under this subsection is available only if the individual is
currently licensed in the other state or if the application is received
by the Director of the Department of Consumer and Business Services not
later than the 90th day after the applicant’s previous license was
terminated and if the other state issues a certification that, at the
time of termination, the applicant was in good standing in that state or
the state’s Producer Database maintained by the National Association of
Insurance Commissioners, its affiliates or subsidiaries indicate that the
applicant is or was licensed in good standing for the class of insurance
requested.

(2) A person licensed as an insurance producer in another state who
moves to this state must apply for a resident insurance producer license
not later than the 90th day after the date on which the person
established legal residence in order to qualify for a resident insurance
producer license pursuant to ORS 744.059. Neither prelicensing education
nor an examination is required of a person to whom this subsection
applies in order to obtain a license in a class of insurance described in
ORS 744.062 if the person held a license in that class in the other
state, except when the director has determined otherwise by rule.

(3) An individual who holds an industry designation described in
this subsection is not required to complete prelicensing education or the
examination required in ORS 744.058 if the director is satisfied, by
examination or otherwise, that the applicant is knowledgeable in the
particulars of the applicable provisions of the Insurance Code. This
subsection applies to:

(a) An applicant for a license authorizing the applicant to
transact property or casualty insurance or both, upon whom the American
Institute for Chartered Property Casualty Underwriters has conferred the
Chartered Property Casualty Underwriter (C.P.C.U.) designation.

(b) An applicant for a license authorizing the applicant to
transact life or health insurance, or both, upon whom the American
College has conferred the Chartered Life Underwriter (C.L.U.) designation.

(4) The director may recognize one or more industry designations as
exempting an applicant from the prelicensing education requirement or the
examination required in ORS 744.058 or both. For each industry
designation that the director recognizes and for the extent of the
exemption to be given, the director shall consider the content, quality
and scope of the educational program required for the designation as well
as other factors determined by the director to be relevant.

(5) An individual is not required to complete prelicensing
education or the examination required in ORS 744.058 or 744.064 for the
following licenses:

(a) A license authorizing the individual to transact a type of
limited class insurance, except as the director otherwise provides by
rule.

(b) A license authorizing the individual to transact title
insurance. [2001 c.191 §10; 2003 c.364 §11](1) An insurance producer shall notify the Director of
the Department of Consumer and Business Services prior to transacting
business under the insurance producer license under any name other than
the insurance producer’s legal name and prior to changing, deleting or
adding an assumed business name in connection with the insurance
producer’s business under the insurance producer license.

(2) A resident insurance producer shall keep at the principal place
of business of the insurance producer the usual and customary records
pertaining to the business under the resident insurance producer license.
All such records shall be kept available and open to the inspection of
the director during business hours. A resident insurance producer shall
keep records of insurance transacted by the insurance producer under the
license for three years following expiration of the policy unless the
director designates another period.

(3) A nonresident insurance producer shall keep at the principal
place of business of the insurance producer the usual and customary
records pertaining to the business under the nonresident insurance
producer license. All such records shall be kept available and open to
the inspection of the director during business hours. For the purpose of
this subsection, if a nonresident insurance producer has a place of
transacting insurance in this state, that place shall be the principal
place of business for the nonresident insurance producer. A nonresident
insurance producer shall keep records of insurance transacted by the
insurance producer under the nonresident insurance producer license for
three years following expiration of the policy unless the director
designates another period.

(4) An insurance producer shall notify the director of any of the
following changes not later than the 30th day after the date of the
change:

(a) A change of address or telephone number of the principal place
of business or any location at which the insurance producer transacts
business under the license in this state.

(b) The opening or closing of a location at which the insurance
producer transacts business under the license in this state.

(c) A change of residence. This paragraph applies only to a
resident insurance producer.

(5) Not later than the 30th day after the authority of an
individual insurance producer to act for an insurance producer that is a
business entity has commenced or terminated, the business entity shall
notify the director of the commencement or termination. The director may
establish by rule a different period within which the business entity
must notify the director under this subsection. [2001 c.191 §11; 2003
c.364 §12](1) An insurance producer license remains in
effect unless revoked or suspended as long as all applicable fees are
paid by the due date and, if the licensee is a resident individual
insurance producer, as long as the licensee has met applicable continuing
education requirements for resident individual insurance producers under
subsection (4) of this section by the due date. The renewal fee is due on
the last day of the month in which the second anniversary of the initial
issuance date of the license occurs and on the second anniversary
following each renewal. The Director of the Department of Consumer and
Business Services may establish another renewal period for the purpose of
coordination with any national registration or licensing system.

(2) As a condition for or in connection with the renewal of an
insurance producer license the director may require the insurance
producer to file information with the director regarding use made of the
license during the previous year or two years, and especially showing
whether the license has been used principally for the writing of personal
or controlled insurance, as defined in ORS 746.065.

(3) The director may require an insurance producer, as a condition
for renewal of the insurance producer license, to fulfill any or all of
the requirements then applicable to the original issuance of the license.

(4) The director by rule may establish requirements for continuing
education that each resident individual insurance producer must satisfy
as a condition for renewing the resident insurance producer license. The
hours of education so required shall not exceed 45 hours annually during
the first five years an individual is licensed, 24 hours annually during
the next five years an individual is licensed, and 12 hours annually for
individuals licensed for more than 10 years or for individuals who have
received the designation C.P.C.U., C.L.U. or comparable designation
recognized by the director. Continuing education shall not be required
for:

(a) Any person to whom a license is issued without examination
pursuant to ORS 744.067 (5);

(b) Any retired person who is authorized to transact life insurance
only, if the person is 58 years of age or more, has 10 years’ experience
as a licensed insurance producer, will be servicing existing policies
only and requests an exemption from the requirement; or

(c) Any person whose license is indorsed to authorize the person to
act as a reinsurance intermediary broker or reinsurance intermediary
manager, or both, as described in ORS 744.800, but the exemption applies
solely for the purpose of maintaining the indorsement and does not affect
any continuing education requirement that otherwise applies.

(5) In connection with establishing continuing education
requirements under subsection (4) of this section, the director may make
arrangements, including contracting with a private service, for
establishing and operating a program and standards for approving and
registering continuing education programs and their providers.

(6) An individual insurance producer who allows the insurance
producer license to lapse may apply to the director to reinstate the same
license within 12 months from the due date for renewal without having to
take and pass a written examination, but the insurance producer must pay
an amount for the reinstatement that is equal to double the unpaid
renewal fee for any renewal fee paid after the due date and must complete
any continuing education requirements not satisfied to date, including
the period for which the license was lapsed. A license reinstated under
this subsection is effective upon the date that the director grants the
reinstatement.

(7) An individual insurance producer who is unable to comply with
license renewal procedures due to military service or another extenuating
circumstance such as a long term medical disability may request a waiver
from compliance with those procedures. The insurance producer may also
request a waiver of any examination requirement or any penalty imposed
for failure to comply with renewal procedures. [2001 c.191 §12; 2003
c.364 §13] (1) The Director of
the Department of Consumer and Business Services may issue a temporary
insurance producer license for a period not to exceed 180 days without
requiring a written examination if the director determines that the
temporary license is necessary for the servicing of an insurance business
in the following cases:

(a) To the surviving spouse or court-appointed personal
representative of a licensed insurance producer who dies or becomes
mentally or physically disabled to allow adequate time for the sale of
the insurance business owned by the insurance producer, for the recovery
or return of the insurance producer to the business, or to provide for
the training and licensing of new personnel to operate the insurance
producer’s business;

(b) To a member or employee of a business entity licensed as an
insurance producer, upon the death or disability of the individual
designated in the business entity application or the license;

(c) To the designee of a licensed insurance producer entering
active service in the Armed Forces of the United States; or

(d) In any other circumstance in which the director determines that
the public interest will best be served by the issuance of the license.

(2) The director may by order limit the authority of any temporary
licensee in any way that the director determines to be necessary to
protect insureds and the public. The director may require the temporary
licensee to have a suitable sponsor who is a licensed insurance producer
or insurer and who assumes responsibility for all acts of the temporary
licensee and may impose other similar requirements designed to protect
insureds and the public. The director may revoke a temporary license if
the interest of insureds or the public is endangered. A temporary license
may not continue after the owner or the personal representative disposes
of the business. [2001 c.191 §13; 2003 c.364 §14](1) The Director of
the Department of Consumer and Business Services may place a licensee on
probation or suspend, revoke or refuse to issue or renew an insurance
producer license and may take other actions authorized by the Insurance
Code in lieu thereof or in addition thereto, for any one or more of the
following causes:

(a) Providing incorrect, misleading, incomplete or materially
untrue information in the license application.

(b) Violating any insurance laws, or violating any rule, subpoena
or order of the director or of the insurance commissioner of another
state or Mexico or Canada.

(c) Obtaining or attempting to obtain a license through
misrepresentation or fraud.

(d) Improperly withholding, misappropriating or converting any
moneys or properties received in the course of doing insurance business.

(e) Intentionally misrepresenting the terms of an actual or
proposed insurance contract or application for insurance.

(f) Having been convicted of a felony, of a misdemeanor involving
dishonesty or breach of trust, or of an offense punishable by death or
imprisonment under the laws of the United States. The record of the
conviction shall be conclusive evidence of the conviction.

(g) Having admitted or been found to have committed any unfair
trade practice or fraud related to insurance.

(h) Using fraudulent, coercive or dishonest practices, or
demonstrating incompetence, untrustworthiness or financial
irresponsibility in the conduct of business in this state or elsewhere.

(i) Cancellation, revocation, suspension or refusal to renew by any
state of a license or other evidence of authority to act as an adjuster
or an insurance producer or consultant. The record of the cancellation,
revocation, suspension or refusal to renew shall be conclusive evidence
of the action taken.

(j) Cancellation, revocation, suspension or refusal to renew by any
state or federal agency, by a Canadian province or by the government of
Mexico of the authority to practice law or to practice under any other
regulatory authority if the cancellation, revocation, suspension or
refusal to renew was related to the business of an adjuster or an
insurance producer or consultant, or if dishonesty, fraud or deception
was involved. The record of the cancellation, revocation, suspension or
refusal to renew shall be conclusive evidence of the action taken.

(k) Forging another person’s name to an application for insurance
or to any document related to an insurance transaction.

(L) Improperly using notes or any other reference material to
complete an examination for an insurance license.

(m) Knowingly accepting insurance business from an individual who
is not licensed.

(n) Error by the director in issuing or renewing a license.

(o) Failing to pay a civil penalty assessed by the director that
has become final by operation of law or upon appeal.

(p) Failing to pay any fee or charge to the director.

(q) Failing to comply with continuing education requirements
applicable to the license or any class of insurance authorized under the
license, unless the director has waived the requirements.

(2) If the director refuses to issue or renew an insurance producer
license, the director shall notify the applicant or licensee and inform
the applicant or licensee in writing of the reason for the refusal to
issue or renew and of the applicant’s or licensee’s rights under ORS
chapter 183.

(3) The director may suspend, revoke or refuse to issue or renew
the insurance producer license of a business entity if the director
determines that an individual licensee’s violation was known or should
have been known by one or more of the partners, officers or managers
acting on behalf of the partnership or corporation but the violation was
not reported to the director and corrective action was not taken. [2001
c.191 §14; 2003 c.364 §15] (1) An
insurer or insurance producer may not pay a commission, service fee,
brokerage or other valuable consideration to a person for selling,
soliciting or negotiating insurance in this state if that person is
required to be licensed as an insurance producer and is not so licensed.

(2) A person shall not accept a commission, service fee, brokerage
or other valuable consideration for selling, soliciting or negotiating
insurance in this state if that person is required to be licensed as an
insurance producer and is not so licensed.

(3) Renewal or other deferred commissions may be paid to a person
for selling, soliciting or negotiating insurance in this state if the
person was required to be licensed as an insurance producer at the time
of the sale, solicitation or negotiation and was then so licensed.

(4) An insurer or insurance producer may pay or assign commissions,
service fees, brokerages or other valuable consideration to an insurance
agency or to persons who do not sell, solicit or negotiate insurance in
this state, except when the payment or assignment would violate ORS
746.045 or 746.055. [2001 c.191 §15; 2003 c.364 §16](1) The
Director of the Department of Consumer and Business Services shall
establish by rule the conditions under which a person who is licensed as
an insurance producer and as an insurance consultant may accept a
commission or a fee, or both, in a transaction or in related
transactions. The director may establish different conditions for such
products as employee benefit plans, insurance for personal, family or
household purposes and insurance for commercial purposes, and for any
other insurance product as determined appropriate by the director. In
developing rules under this subsection, the director shall take into
account the requirements and characteristics of the different insurance
products and the varying degrees of trade practice regulation needed.

(2) Except as otherwise provided by rule, an insurance producer who
is not licensed as an insurance consultant may receive only commission.
[Formerly 744.039; 2003 c.364 §17] (1) An insurance
producer shall not act as an agent of an insurer unless:

(a) The insurance producer is an appointed agent of that insurer; or

(b) The insurance producer transacts insurance on behalf of another
insurance producer who is an appointed agent of that insurer according to
conditions and limitations established by the Director of the Department
of Consumer and Business Services by rule.

(2) Each insurer shall maintain a current list of insurance
producers contractually authorized to accept applications on behalf of
the insurer. Each insurer shall make the list available to the director
upon request.

(3) An insurance producer may represent as agent under one
insurance producer license as many insurers as may appoint the insurance
producer in accordance with this section.

(4) Except as provided in a group contract of insurance under
subsection (5) of this section, any person who solicits or procures an
application for insurance as an agent of the insurer shall in all matters
relating to the application for insurance and the policy issued in
consequence of the application be regarded as the agent of the insurer
issuing the policy and not the agent of the insured. Any provision in the
application and policy to the contrary is invalid and of no effect.

(5) A group contract of insurance and the individual certificate
issued pursuant to the group contract may contain provisions stating
whether the group policyholder acts as the agent of the individual
insured or as the agent of the insurer. [2001 c.191 §16; 2003 c.364 §18] (1) An
insurer or authorized representative of the insurer who terminates the
appointment, employment, contract or other insurance business
relationship with an insurance producer shall notify the Director of the
Department of Consumer and Business Services not later than the 30th day
after the effective date of the termination, in the manner prescribed by
the director, if the reason for termination is one of the reasons set
forth in ORS 744.074 or if the insurer has knowledge that the insurance
producer was found by a court, government body or self-regulatory
organization authorized by law to have engaged in any of the activities
set forth in ORS 744.074. Upon the written request of the director, the
insurer shall provide additional information, documents, records or other
data pertaining to the termination or activity of the insurance producer.

(2) An insurer or the authorized representative of the insurer
shall promptly notify the director in a manner acceptable to the director
if, upon further review or investigation, the insurer discovers
additional information that would have been reportable to the director in
accordance with subsection (1) of this section if the insurer had then
known of its existence.

(3) Not later than the 15th day after making a notification
required by subsection (1) or (2) of this section, the insurer shall mail
a copy of the notification to the insurance producer at the insurance
producer’s last known business address. If the insurance producer is
terminated for cause for any of the reasons listed in ORS 744.074, the
insurer shall provide a copy of the notification to the insurance
producer at the insurance producer’s last known business address by
certified mail, return receipt requested, postage prepaid or by overnight
delivery using a nationally recognized carrier.

(4) Not later than the 30th day after the insurance producer has
received a notification under subsection (3) of this section, the
insurance producer may file with the director written comments concerning
the substance of the notification. The insurance producer shall, by the
same means, simultaneously send a copy of the comments to the reporting
insurer. The comments shall become a part of the director’s file and
shall accompany every copy of a report distributed or disclosed for any
reason about the insurance producer as allowed under subsection (5) of
this section.

(5) In the absence of actual malice, an insurer, the authorized
representative of the insurer, an insurance producer, the director or an
organization of which the director is a member and that compiles the
information and makes it available to other insurance regulators or
regulatory or law enforcement agencies shall not be subject to civil
liability. In the absence of actual malice, a civil cause of action shall
not arise against any such entity or its agents or employees as a result
of any statement or information required by or provided pursuant to this
section, or any information relating to any statement that may be
requested in writing by the director from an insurer or insurance
producer, or relating to a statement by a terminating insurer or
insurance producer to an insurer or insurance producer, that is limited
exclusively to whether a termination for cause under subsection (1) of
this section was reported to the director. Immunity under this subsection
is available only if the propriety of any termination for cause under
subsection (1) of this section is certified in writing by an officer or
authorized representative of the insurer terminating the relationship.

(6) In any action brought against a person who may have immunity
under subsection (5) of this section for making any statement required by
this section or providing any information relating to any statement that
may be requested in writing by the director, the party bringing the
action must plead specifically in any allegation that subsection (5) of
this section does not apply because the person making the statement or
providing the information did so with actual malice.

(7) Subsections (5) and (6) of this section do not abrogate or
modify any existing statutory or common law privileges or immunities.

(8) The director may take any administrative action authorized by
the Insurance Code, including suspension or revocation of a license or
certificate of authority, against an insurer, the authorized
representative of an insurer or an insurance producer who fails to file
notice as required by this section or who is found by a court of
competent jurisdiction to have filed notice with actual malice.

(9) Any information, documents, records or other data in the
control or possession of the director that are furnished by an insurer or
an insurance producer, or an employee or agent thereof acting on behalf
of the insurer or insurance producer, or that are obtained by the
director in an investigation pursuant to this section shall be
confidential, shall not be subject to subpoena and shall not be subject
to discovery nor admissible in evidence in any private civil action. The
director, however, may use the confidential information, documents,
records or other data in administering this section and in the
furtherance of any other regulatory or legal action brought as a part of
the director’s duties. The information, documents, records or other data
referred to in this subsection are subject to the public officer
privilege described in ORS 40.270. [2001 c.191 §17; 2003 c.364 §19] (1) An insurer may terminate an
agency appointment at any time as provided in this section. Termination
shall be without prejudice to the contract rights, if any, of the
insurance producer so terminated. The insurer shall give written notice
of the termination and the date thereof to the insurance producer at
least 90 days prior to the effective date of the termination. The notice
must specify the reasons for the termination. The insurer shall deliver
the notice either in person or by mail at the address last provided by
the insurance producer to the insurer. The insurance producer shall not
have a cause of action against the insurer as a result of any statement
in the notice unless the statement is false and the insurer knew the
statement was false when made.

(2) An insurer may terminate an agency appointment without giving
the notice required by subsection (1) of this section on any of the
grounds specified in this subsection. The following are grounds for
termination under this subsection:

(a) The insurance producer’s insurance license is denied,
restricted, revoked, suspended or canceled by any public authority;

(b) The insurance producer’s business is sold, transferred or
merged and the insurer has not appointed the successor;

(c) The insurance producer is insolvent or fails to remit balances
to the insurer in accordance with the agreement;

(d) The insurance producer commits fraud or engages in intentional
misconduct;

(e) The insurer amends its certificate of authority in order to
discontinue a class of insurance;

(f) The insurer ceases selling insurance in this state; or

(g) The insurer and insurance producer mutually agree to terminate
the agency appointment.

(3) An insurance producer may terminate an agency appointment at
any time, but the termination shall be without prejudice to the contract
rights, if any, of the appointing insurer. The insurance producer shall
give written notice of the termination and the date thereof to the
director not later than the 30th day after the effective date of the
termination, and to the insurer. The director may require reasonable
proof from the insurance producer that the insurance producer has given
such notice to the insurer. [Formerly 744.175; 2003 c.364 §20]The Director of the Department of Consumer and
Business Services shall waive any requirement for a nonresident insurance
producer license applicant with a valid resident insurance producer
license from the applicant’s home state, except the requirements imposed
by ORS 744.063, if the applicant’s home state grants nonresident
insurance producer licenses to residents of this state on the same basis.
[2001 c.191 §18; 2003 c.364 §21]
(1) All premium funds received by a resident insurance producer shall be
accounted for and maintained in a trust account separate from all other
business and personal funds.

(2) Except as provided in subsection (3) of this section, a
resident insurance producer may not commingle or otherwise combine
premiums with any other moneys.

(3) A resident insurance producer may commingle with premium funds
in the trust account required by subsection (1) of this section any
additional funds the insurance producer deems prudent for the purpose of
advancing premiums, establishing reserves for the paying of return
premiums, or for any contingencies that may arise in the course of
receiving and transmitting premium or return premium funds.

(4) This section does not apply to:

(a) Any financial institution or trust company, as those terms are
defined in ORS 706.008, or any entity licensed under ORS chapter 725 or
726.

(b) Any class of insurance producers that the Director of the
Department of Consumer and Business Services designates by rule. The
director may exempt a class of insurance producer from this section if
the director determines that the requirements of this section are unduly
burdensome to the insurance producers in relation to the public good
served. [Formerly 744.225; 2003 c.364 §22] (1)
In lieu of the trust account required by ORS 744.083, a resident
insurance producer may keep a certificate of deposit from an institution
insured by the federal government or an instrumentality thereof if the
resident insurance producer has an average monthly balance of premium
funds received and held for the last 12 months of at least $2 million. A
resident insurance producer who keeps a certificate of deposit shall have
satisfactory evidence of the certificate available at all times for
inspection by the Director of the Department of Consumer and Business
Services.

(2) A certificate of deposit authorized under subsection (1) of
this section shall be for an amount at least equal to the average monthly
balance of premium funds received and held by the resident insurance
producer for the last 12 months. Nothing in this subsection requires that
the required amount of the certificate of deposit be calculated, or the
amount changed, more often than once a month.

(3) The director may adopt rules specifying what constitutes
satisfactory evidence for purposes of subsection (1) of this section.

(4) Authorization to use a certificate of deposit may be revoked by
the director at any time upon a determination that the resident insurance
producer has failed to comply with the provisions of this section or
rules adopted under subsection (3) of this section. Upon revocation, the
resident insurance producer shall comply immediately with the provisions
of ORS 744.083. [Formerly 744.227; 2003 c.364 §23]The Legislative Assembly finds that it is in
the interest of the insurance-buying public that insurance producers
authorized to transact title insurance be subject to the Insurance Code.
It is declared to be the intent of the Legislative Assembly that the
Insurance Code shall apply to such insurance producer only to the extent
necessary for the regulation of title insurance ratemaking and unfair
trade practices. [Formerly 744.240; 2003 c.364 §24]The Director of the Department of Consumer and
Business Services may require the filing by an insurer of any
compensation agreements for insurance producers who are appointed by the
insurer as agents of the insurer under ORS 744.078. No such filing shall
be deemed a “public record” as defined in ORS 192.410. [Formerly 744.245;
2003 c.364 §25](1) An insurance producer shall report to the Director of the
Department of Consumer and Business Services any administrative action
taken against the insurance producer in another jurisdiction or by
another governmental agency in this state not later than the 30th day
after the date of the final disposition of the matter. This report shall
include a copy of the order, consent to order and other relevant legal
documents.

(2) Not later than the 30th day after the initial pretrial hearing
date, an insurance producer shall report to the director any criminal
prosecution of the insurance producer taken in any jurisdiction. The
report shall include a copy of the initial complaint filed, the order
resulting from the hearing and any other relevant legal documents. [2001
c.191 §19; 2003 c.364 §26](1) An insurer or insurance producer may charge a commission, a
service fee or a combination of the two when transacting insurance in
other than the following categories of insurance:

(a) Insurance that covers an individual’s person, property or
liability;

(b) Life or health insurance for groups of fewer than 51 lives; or

(c) Insurance on a commercial or public entity paying combined
annual premiums of less than $100,000 for the insurance.

(2) An insurer or insurance producer may charge a commission or
service fee other than the commission or fee filed in accordance with ORS
737.205 only if the insurer or insurance producer has a written agreement
with the prospective insured prior to the binding or issuance of an
insurance policy. The Director of the Department of Consumer and Business
Services may establish by rule minimum conditions for written agreements
entered into under this subsection. An insurer or insurance producer who
enters into a written agreement as provided in this subsection is not in
violation of ORS 746.035 or 746.045. [2003 c.364 §17b](1) As used in
this section:

(a) “Retail insurance producer” means an insurance producer who
directly solicits or sells an insurance policy to a prospective insured
or directly negotiates an insurance policy with a prospective insured.

(b) “Wholesale insurance producer” means an insurance producer who
solicits or sells an insurance policy to a prospective insured through a
retail insurance producer or negotiates an insurance policy for a
prospective insured with a retail insurance producer and does not solicit
or sell directly to or negotiate directly with a prospective insured.

(2) A wholesale insurance producer who sells, solicits or
negotiates a policy directly with a retail insurance producer and not on
behalf of a prospective insured may charge the retail insurance producer
a fee or a combination of a fee and a commission if the wholesale
insurance producer has a written agreement with the retail insurance
producer prior to the binding or issuance of the insurance policy. The
charge must be commensurate with the services provided by the wholesale
insurance producer.

(3) A retail insurance producer may charge a fee to a prospective
insured when the retail insurance producer pays a fee or a combination of
a fee and a commission to a wholesale insurance producer under subsection
(2) of this section if the retail insurance producer has a written
agreement with the prospective insured prior to the binding or issuance
of the insurance policy. The fee may not exceed the amount of
compensation paid by the retail insurance producer to the wholesale
insurance producer.

(4) For the purpose of determining the charge under subsection (2)
of this section, the retail insurance producer and wholesale insurance
producer may agree to any allocation of the fee that the retail insurance
producer charges the consumer under this section. The Director of the
Department of Consumer and Business Services may establish by rule
minimum conditions for written agreements entered into under this
section. An insurer or insurance producer who enters into a written
agreement as provided in this section is not in violation of ORS 746.035
or 746.045. [2003 c.364 §26b]MANAGING GENERAL AGENTS
(1) A person shall not act as a managing general agent with respect to
risks located in this state for an authorized insurer unless the person
holds a license issued under ORS 744.062 authorizing the person to act as
an insurance producer and indorsed to authorize the person to act as a
managing general agent.

(2) A person shall not act as a managing general agent representing
a domestic insurer with respect to risks located outside this state
unless the person holds a license issued under ORS 744.062 authorizing
the person to act as an insurance producer and indorsed to authorize the
person to act as a managing general agent.

(3) For purposes of ORS 744.300 to 744.316, a person acts as a
managing general agent when the person:

(a) Negotiates and binds ceding reinsurance contracts on behalf of
an authorized insurer or manages all or part of the insurance business of
an authorized insurer, including the management of a separate division,
department or underwriting office, and acts as an insurance producer for
the insurer, whether the person is known as a managing general agent,
manager or other similar term; and

(b) With or without the authority, either separately or together
with affiliates, produces, directly or indirectly, and underwrites an
amount of gross direct written premium equal to or more than five percent
of the policyholder surplus as reported in the last annual statement of
the insurer in any one quarter or year, together with either or both of
the following activities:

(A) Adjusting or paying claims in excess of an amount determined by
the Director of the Department of Consumer and Business Services.

(B) Negotiating reinsurance on behalf of the insurer.

(4) The provisions of ORS 744.062 governing application for
amendment of a license apply to the indorsement of the license of an
insurance producer for authority to act as a managing general agent,
except that an examination is not required for the indorsement.

(5) The provisions of this section are subject to exemptions stated
in ORS 744.301. [1991 c.495 §2; 2001 c.191 §39; 2003 c.364 §119] The following persons
are exempt from ORS 744.300:

(1) An employee of an insurer, when the employee is acting as a
managing general agent for the insurer.

(2) A United States manager of the United States branch of an alien
insurer.

(3) An underwriting manager who, pursuant to contract, manages all
the insurance operations of the insurer, is under common control with the
insurer and is subject to ORS 732.517 to 732.592, and whose compensation
is not based on the volume of premiums written.

(4) The attorney or attorney-in-fact authorized by and acting for
the subscribers of a reciprocal insurer or interinsurance exchange under
powers of attorney. [1991 c.495 §3; 1993 c.447 §63a] (1) A
managing general agent must maintain with the Director of the Department
of Consumer and Business Services at all times a current certificate of
errors and omissions insurance, in an amount established by the director
by rule, from an insurer authorized to transact insurance in this state
or from any other insurer acceptable to the director according to
standards established by rule. The insurance must cover errors and
omissions of and any violation of fiduciary responsibility by the
managing general agent or its employees, or both.

(2) If the director determines that insurance required under this
section is not generally available at a reasonable cost, the director by
rule may suspend the requirement of insurance, but must reimpose the
requirement when the insurance once again becomes generally available.
[1991 c.495 §4] A
person acting as a managing general agent shall not place business with
an insurer unless a written contract is in force between the parties. The
following requirements apply to such a contract:

(1) The contract must set forth the responsibilities of each party.

(2) The contract must specify the division of responsibility for a
particular function, when both parties share responsibility for the
function.

(3) The contract must include at least the following provisions:

(a) That the insurer may terminate the contract for cause upon
written notice to the managing general agent, and may suspend the
underwriting authority of the managing general agent while any dispute
regarding the cause for termination is pending.

(b) That at least monthly, the managing general agent shall report
all transactions and remit all funds due under the contract to the
insurer.

(c) That with respect to all funds collected by a managing general
agent for the account of an insurer, the managing general agent must
comply with ORS 744.083 or 744.084, except that the managing general
agent may retain in the account an amount not exceeding three months’
estimated claims payments and allocated loss adjustment expenses.

(d) That the managing general agent shall maintain separate records
of business written by the managing general agent. Further, that the
managing general agent shall allow the insurer access to all accounts and
records related to its business, shall keep all such accounts and records
in a form usable by the insurer and shall allow the insurer to copy all
such accounts and records.

(e) That the managing general agent shall not assign the contract
either in whole or part.

(f) Appropriate underwriting guidelines, including:

(A) The maximum annual premium volume;

(B) The basis of the rates to be charged;

(C) The types of risks that may be written;

(D) Maximum limits of liability;

(E) Applicable exclusions;

(F) Territorial limitations;

(G) Policy cancellation provisions; and

(H) The maximum policy period.

(g) That the insurer may cancel or nonrenew any policy of
insurance, subject to applicable statutes and rules governing
cancellation and nonrenewal of insurance policies.

(h) Provisions addressing the timely transmission of the data, when
electronic claims files exist.

(i) That if the contract provides for a sharing of interim profits
of the managing general agent and if the managing general agent has the
authority to determine the amount of the interim profits by establishing
loss reserves or controlling claim payments, or in any other manner,
interim profits shall not be paid to the managing general agent until one
year after they are earned for property or surety insurance business and
five years after they are earned on casualty business and not until the
profits have been verified pursuant to ORS 744.313.

(j) That a managing general agent shall not do any of the following:

(A) Bind reinsurance or retrocessions on behalf of the insurer,
except that the managing general agent may bind facultative reinsurance
contracts pursuant to obligatory facultative agreements if the contract
with the insurer contains reinsurance underwriting guidelines that
include, for both reinsurance assumed and ceded, a list of reinsurers
with which the automatic agreements are in effect, the coverage and
amounts or percentages that may be reinsured and commission schedules.

(B) Commit the insurer to participate in insurance or reinsurance
syndicates.

(C) Appoint any insurance producer without assuring that the
insurance producer is licensed in this state to transact the type of
insurance for which the insurance producer is appointed.

(D) Collect any payment from a reinsurer or commit the insurer to
any claim settlement with a reinsurer without prior approval of the
insurer. The contract must also provide that if prior approval is given,
the managing general agent must forward a report to the insurer promptly.

(E) Appoint a submanaging general agent.

(k) Provisions establishing which disputes, if any, arising under
the contract shall be decided by arbitration, mediation or other means of
dispute resolution.

(L) If the managing general agent will calculate the loss reserves
or a portion thereof, provisions:

(A) That the insurer is ultimately responsible for reporting the
loss reserves; and

(B) That the insurer shall annually obtain the opinion of an
actuary attesting to the adequacy of loss reserves calculated for losses
incurred and outstanding on business produced by the managing general
agent, in addition to any other required loss reserve actuarial opinion,
as provided in ORS 744.313.

(4) In addition to the requirements of subsection (3) of this
section, if the contract permits the managing general agent to settle
claims on behalf of the insurer, the contract must also include at least
the following provisions:

(a) The time requirements within which the managing general agent
must report claims to the insurer.

(b) A requirement that the managing general agent must send a copy
of the claim file or report of claim to the insurer at its request or as
soon as it becomes known to the managing general agent that the claim:

(A) Has the potential of exceeding an amount determined by the
Director of the Department of Consumer and Business Services or the limit
set by the insurer, whichever is less;

(B) Involves a coverage dispute;

(C) May exceed the claim settlement authority of the managing
general agent; or

(D) Is of a serious nature as predetermined by the insurer by
written guidelines.

(c) A provision establishing the settlement authority granted the
managing general agent for claims in general and specific guidelines for
handling claims that exceed the amount established by the director or the
insurer, whichever is less.

(d) A provision that all claim files are the joint property of the
insurer and managing general agent, except upon an order of liquidation
of the insurer, and that in the event of such an order:

(A) The files become the sole property of the insurer or its
estate; and

(B) The managing general agent shall have reasonable access to and
the right to copy the files on a timely basis.

(e) A provision that the insurer may terminate for cause any
settlement authority granted to the managing general agent upon written
notice by the insurer to the managing general agent or upon the
termination of the contract, and that the insurer may suspend the
settlement authority during the pendency of any dispute regarding the
cause for termination.

(5) The contract must provide that the insurer may not allow the
managing general agent to pay or commit the insurer to pay a claim in
excess of a specified amount, net of reinsurance, without approval by the
insurer. The amount shall not exceed the amount established in ORS
744.308. [1991 c.495 §5; 2003 c.364 §120](1) An insurer shall not allow a managing general agent, without
prior approval of the insurer, to pay or commit the insurer to pay a
claim over the amount, net of reinsurance, specified in the contract
under ORS 744.306. The amount established in the contract shall not
exceed one percent of the insurer’s policyholder surplus as of December
31 of the last completed calendar year.

(2) Neither an insurer nor a managing general agent may allow a
subagent of the managing general agent to serve on the board of directors
of the insurer.

(3) An insurer and a managing general agent may not jointly employ
any individual. [1991 c.495 §6] A managing general agent
shall maintain all of its books, bank accounts and records in a form
usable by the Director of the Department of Consumer and Business
Services. The managing general agent shall allow the director access to
all of its books, bank accounts and records. [1991 c.495 §7](1) An insurer shall have on file an independently performed
financial examination of each managing general agent with which it has
done business, in a form prescribed by the Director of the Department of
Consumer and Business Services.

(2) An insurer is ultimately responsible for reporting the loss
reserves. If a managing general agent calculates the loss reserves or a
portion thereof, the insurer shall annually obtain the opinion of an
actuary attesting to the adequacy of loss reserves calculated for losses
incurred and outstanding on business produced by the managing general
agent. The requirement under this subsection is in addition to any other
required loss reserve actuarial opinion. The actuary must be a member in
good standing of an association of actuaries determined by the director
to have established adequate professional standards for membership.

(3) Periodically, but not less frequently than annually, an insurer
shall conduct an on-site review of the underwriting and claims processing
operations of the managing general agent.

(4) Binding authority for all reinsurance contracts or
participation in insurance or reinsurance syndicates shall rest with an
officer of the insurer. The officer must not be affiliated with the
managing general agent.

(5) Not later than the 30th day after entering into a contract with
a managing general agent, and not later than the 30th day after
terminating such a contract, an insurer shall provide written
notification of the appointment or termination to the director. A notice
of appointment shall include any information required by the director.

(6) An insurer shall review its books and records each calendar
quarter to determine if any insurance producer who previously had not
produced and underwritten sufficient gross direct written premium to meet
the description of a managing general agent in ORS 744.300 has become a
managing general agent subject to ORS 744.300 to 744.316. When an insurer
determines that an insurance producer has become a managing general agent:

(a) The insurer shall promptly notify the insurance producer and
the director of its determination.

(b) The insurer and insurance producer must fully comply with ORS
744.300 to 744.316 not later than the 60th day after the date of
notification under paragraph (a) of this subsection.

(7) An insurer shall not appoint to its board of directors an
officer, director, employee, subproducer or controlling shareholder of
any of its managing general agents. This subsection does not apply to
relationships governed by ORS 732.517 to 732.592.

(8) The acts of a managing general agent shall be regarded as the
acts of the insurer on whose behalf the managing general agent is acting.
The director may examine a managing general agent as if it were the
insurer. [1991 c.495 §§8,9; 2003 c.364 §121] The Director of the Department of Consumer and
Business Services may adopt rules to carry out ORS 744.300 to 744.316.
[1991 c.495 §10]If the Director of the Department
of Consumer and Business Services finds that a managing general agent has
violated any provision of ORS 744.300 to 744.316, the director may order
the managing general agent to reimburse the insurer or the rehabilitator
or liquidator of the insurer for losses incurred by the insurer because
of the violation. The director may take action under this section in
addition to or instead of any other action the director may take under
the Insurance Code. [1993 c.447 §63c]LIFE SETTLEMENT CONTRACTSAs used in ORS 744.319 to 744.358:

(1) “Licensee” means either a life settlement provider or life
settlement broker.

(2) “Life settlement broker” means a person who, for another person
and for a fee, commission or other consideration:

(a) Offers or advertises the availability of life settlement
contracts; or

(b) Introduces holders of life insurance policies or certificates
insuring the lives of persons with a terminal illness or condition to
life settlement providers or offers or attempts to negotiate life
settlement contracts between such policyholders or certificate holders
and one or more life settlement providers.

(3) “Life settlement contract” means an agreement between a life
settlement provider and the holder of a group or individual life
insurance policy insuring the life of a person with a terminal illness or
condition, or between a life settlement provider and the certificate
holder of such a policy, in which:

(a) The terms establish that the life settlement provider pays
something of value in return for the policyholder’s or certificate
holder’s assignment, transfer, sale, devise or bequest of the death
benefit or ownership of the insurance policy or certificate to the life
settlement provider; and

(b) The policyholder or certificate holder holds an irrevocable
right under the policy or certificate to name the beneficiary.

(4) “Life settlement provider” means a person who solicits, enters
or negotiates life settlement contracts or offers to enter or negotiate
life settlement contracts. [1995 c.342 §2] (1) A person shall not act as a
life settlement provider unless the person holds a license of life
settlement provider issued by the Director of the Department of Consumer
and Business Services.

(2) The term “life settlement provider” does not apply to any of
the following:

(a) Any bank, savings bank, savings and loan association, credit
union or other licensed lending institution that takes an assignment of a
life insurance policy as collateral for a loan. The exemption in this
paragraph applies only with respect to such an assignment.

(b) An insurer issuing a life insurance policy providing
accelerated benefits pursuant to ORS 743.154 or pursuant to the laws of
the state to which the policy was subject when issued. The exemption in
this paragraph applies only with respect to the relationship between the
insurer and insured under such a policy.

(c) Any individual who enters into not more than one agreement in a
calendar year for the transfer of life insurance policies for any value
less than the expected death benefit.

(3) A life settlement provider may use the term “viatical
settlement provider” to describe the business transacted under the
license and may use the term “viatical settlement contract” instead of
“life settlement contract.” [1995 c.342 §3] (1) A person shall not act as a
life settlement broker unless the person holds a license of life
settlement broker issued by the Director of the Department of Consumer
and Business Services.

(2) The term “life settlement broker” does not apply to an
attorney, accountant or financial planner retained to represent the
policyholder or certificate holder unless compensation paid to the
attorney, accountant or financial planner is paid by the life settlement
provider.

(3) A life settlement broker may use the term “viatical settlement
broker” to describe the business transacted under the license and may use
the term “viatical settlement contract” instead of “life settlement
contract.” [1995 c.342 §4] (1) In order to obtain a license
to transact business as a life settlement provider or as a life
settlement broker, an applicant shall apply for the license on a form
prescribed by the Director of the Department of Consumer and Business
Services, with payment of any fee required for the application.

(2) The director may request biographical, organizational,
locational, financial, employment and any other information on the
application form that the director determines to be relevant to the
evaluation of applications and to the granting of the license. The
director may also require a statement of the business plan or plan of
operation of the applicant. The director may also require an applicant
for a life settlement provider license to file with the application a
copy of the life settlement contract that the applicant intends to use in
business under the license.

(3) If an applicant is a corporation, the corporation must be
incorporated under the laws of this state or must be a foreign
corporation authorized to transact business in this state. [1995 c.342 §5] (1) If the Director of the Department
of Consumer and Business Services determines that an applicant has
satisfied all requirements for the license for which application is made,
the director shall issue the license to the applicant. The director may
issue a license if the director determines that the applicant, as
required to be set forth in the application for the license:

(a) Has not engaged in conduct that would authorize the director to
refuse to issue a license under ORS 744.338; and

(b) Is financially responsible and has a good business reputation.

(2) The director may refuse to issue a license in the name of any
firm, partnership or corporation if the director is not satisfied that
any officer, employee, stockholder or partner thereof who may materially
influence the conduct of the applicant meets the standards of this
section.

(3) The director may issue a license to a nonresident applicant
only if the nonresident applicant files with the director in writing an
appointment of the director to be the attorney of the applicant upon whom
all legal process in any action or proceeding against the applicant may
be served. In the appointment, the applicant shall agree that any lawful
process against the applicant that is served upon the director shall be
of the same legal force and validity as if served upon the applicant, and
that the authority shall continue in force so long as any liability
remains outstanding in this state. An appointment under this subsection
becomes effective on the date that the director issues the license to the
applicant.

(4) If the director denies an application, the director shall so
inform the applicant, stating the grounds for the denial. [1995 c.342 §6] (1) A license
issued under ORS 744.328 expires on its expiration date unless it is
renewed on or before its expiration date.

(2) Unless the Director of the Department of Consumer and Business
Services designates another date, a license expires on the last day of
the month in which the second anniversary of the initial issuance date of
the license occurs, and on the second anniversary following each renewal.

(3) The director by rule may establish requirements for renewing
licenses. [1995 c.342 §7]An individual may act as a life settlement provider under
the authority of the license of a firm or corporate life settlement
provider, whether or not the individual holds a license as a life
settlement provider, if:

(1) The individual is a member or employee of the firm or is an
employee, officer or director of the corporation; and

(2) The individual is designated by the firm or corporation on its
license application or on an amendatory or supplementary form thereto as
authorized to act as a life settlement provider under the authority of
the license. [1995 c.342 §8]A licensee shall immediately notify the
Director of the Department of Consumer and Business Services of any
material change in ownership or control or in any other matter affecting
the qualification of the licensee for the license in this state. [1995
c.342 §9]
(1) The Director of the Department of Consumer and Business Services may
suspend, revoke, refuse to issue or refuse to renew a license of a
licensee if the director finds one or more of the following with respect
to the licensee or applicant for a license:

(a) Dishonesty, fraud or gross negligence in the conduct of
business as a licensee, or the licensee or applicant is otherwise shown
to be untrustworthy or incompetent to act as a licensee.

(b) The life settlement provider demonstrates a pattern of
unreasonable payments to policyholders or certificate holders.

(c) Falsification by the applicant or licensee of an application
for the license or renewal thereof, or misrepresentation or engagement in
any other dishonest act in relation to the application.

(d) Conduct resulting in a conviction of a felony under the laws of
any state or of the United States, to the extent that such conduct may be
considered under ORS 670.280.

(e) Conviction of any crime, an essential element of which is
dishonesty or fraud, under the laws of any state or of the United States.

(f) Refusal to renew or cancellation, revocation or suspension of
authority to transact insurance or business as a life settlement
provider, life settlement broker or similar entity in another state.

(g) Failure to pay a civil penalty imposed by final order of the
director or to carry out terms of probation set by the director.

(h) Refusal by a licensee to be examined or to produce accounts,
records or files for examination, refusal by any officers to give
information with respect to the affairs of the licensee or refusal to
perform any other legal obligation as to the examination when required by
the director.

(i) Affiliation with or under the same general management or
interlocking directorate or ownership as another life settlement provider
or life settlement broker or an insurer, any of which unlawfully
transacts business in this state.

(j) Failure at any time to meet any qualification for which
issuance of the license could have been refused had the failure then
existed and been known to the director.

(k) Violation of any rule or order of the director or any provision
of the Insurance Code.

(2) The director may suspend or refuse to renew a license
immediately and without hearing if the director determines that one or
both of the following circumstances exist:

(a) The licensee is insolvent.

(b) The financial condition or business practices of the licensee
otherwise pose an imminent threat to the public health, safety or welfare
of the residents of this state.

(3) A life settlement provider or life settlement broker holding a
license that has not been renewed or has been revoked shall surrender the
license to the director at the director’s request.

(4) The director may take any other administrative action
authorized under the Insurance Code in addition to or in lieu of the
actions authorized under this section. [1995 c.342 §10] (1) A life settlement contract must be
in writing. A life settlement provider shall establish in the contract
the terms under which the life settlement provider will pay compensation
or anything of value in return for the policyholder’s or certificate
holder’s assignment, transfer, sale, devise or bequest of the death
benefit or ownership of the insurance policy or certificate to the life
settlement provider.

(2) A life settlement provider shall not use a life settlement
contract in this state unless the life settlement provider has filed the
contract form with the Director of the Department of Consumer and
Business Services and the director has approved the contract form. The
director shall disapprove a life settlement contract form if, in the
director’s opinion, the contract or any provision of the contract is
unreasonable, contrary to the interests of the public, or otherwise
misleading or unfair to the policyholder or certificate holder.

(3) Each life settlement contract entered into in this state must
contain a provision enabling the policyholder or certificate holder to
rescind the contract not later than the 30th day after the date on which
the contract is executed by all parties or not later than the 15th day
after the policyholder or certificate holder receives the life settlement
proceeds, whichever is the lesser period. In order to rescind such a
contract, a policyholder or certificate holder who has received the
proceeds must return them to the life settlement provider. [1995 c.342
§11] Each life settlement provider
shall file a report for the preceding calendar year with the Director of
the Department of Consumer and Business Services on or before March 1 of
each year, or within such extension of time therefor as the director may
grant. The report shall be in the form and contain such information as
the director prescribes and shall be verified as follows:

(1) If the life settlement provider is a corporation, by at least
two principal officers of the life settlement provider.

(2) If the life settlement provider is a partnership, by two
partners.

(3) If the life settlement provider is neither a corporation nor a
partnership, by its president and secretary. [1995 c.342 §12](1) The Director of the Department of Consumer and
Business Services may examine the business and practices of any licensee
or applicant for a license when the director determines an examination to
be necessary. The director may order a licensee or applicant to produce
any records, books, files or other information reasonably necessary to
ascertain whether or not the licensee or applicant is acting or has acted
in violation of the law or otherwise contrary to the interests of the
public. The expenses incurred in conducting any examination shall be paid
by the licensee or applicant.

(2) A life settlement provider shall maintain records of all
transactions of life settlement contracts of the life settlement provider
and must make the records available to the director for inspection during
reasonable business hours. The records must be maintained for a period of
not later than five years from the date of their creation.

(3) The director at any time may require a licensee to fully
disclose the identity of all stockholders, partners, officers and
employees.

(4) Names of, and individual identification data for, all
policyholders and certificate holders who have entered life settlement
contracts with life settlement providers shall be confidential as
provided in ORS 705.137. [1995 c.342 §13; 2001 c.377 §15] A life
settlement provider shall disclose the information specified in this
section to the policyholder or certificate holder entering the life
settlement contract, not later than the date on which the life settlement
contract is signed by all parties. The disclosure must be in the manner
prescribed by the Director of the Department of Consumer and Business
Services. The information must include the following:

(1) Possible alternatives to life settlement contracts for persons
with terminal illnesses or conditions, including but not limited to
accelerated benefits offered by the issuer of the life insurance policy.

(2) The fact that some or all of the proceeds of the life
settlement may be taxable, and that assistance should be sought from a
personal tax advisor.

(3) The fact that the life settlement could be subject to the
claims of creditors.

(4) The fact that receipt of a life settlement may adversely affect
the recipient’s eligibility for Medicaid or other government benefits or
entitlements, and that advice should be obtained from the appropriate
agencies.

(5) The right of a policyholder or certificate holder to rescind a
life settlement contract as provided in ORS 744.341. The disclosure shall
state the deadlines for rescission and return of proceeds received.

(6) The date by which the funds will be available to the
policyholder or certificate holder and the source of the funds. [1995
c.342 §14](1) Before a life settlement provider enters into a life
settlement contract with a policyholder or certificate holder who has a
terminal illness or condition, the life settlement provider shall first
obtain both of the following:

(a) A written statement from an attending physician that the
policyholder or certificate holder is of sound mind and under no
constraint or undue influence.

(b) A witnessed document in which the policyholder or certificate
holder consents to the life settlement contract, acknowledges the illness
or condition is terminal, represents that the policyholder or certificate
holder has a full and complete understanding of the life settlement
contract, that the policyholder or certificate holder has a full and
complete understanding of the benefits of the life insurance policy,
releases the medical records of the policyholder or certificate holder
relating to the terminal illness or condition and acknowledges that the
policyholder or certificate holder has entered into the life settlement
contract freely and voluntarily.

(2) A life settlement provider may enter a life settlement contract
only after the individual whose life would be the subject of the life
settlement contract is determined to have a terminal illness or
condition, as follows:

(a) If the individual is the policyholder or certificate holder, an
attending physician of the policyholder or certificate holder must make
the determination.

(b) If the individual is a person other than the policyholder or
certificate holder, an attending physician of the individual or of the
policyholder or certificate holder must make the determination.

(3) For the purposes of this section, an attending physician is a
medical doctor, doctor of osteopathy or naturopathic physician licensed
in this state, who is primarily responsible for the treatment or a
portion of treatment of the individual whose life would be the subject of
the life settlement contract. [1995 c.342 §15](1) A licensee shall not pay or offer to pay a finder’s
fee, commission or other compensation to a person described in this
subsection, in connection with a policy insuring the life of an
individual with a terminal illness or condition. The prohibition under
this subsection applies with respect to payments or offers of payment to:

(a) The physician, attorney or accountant of the policyholder, of
the certificate holder or of the insured individual when the individual
is other than the policyholder or certificate holder.

(b) Any person other than a physician, attorney or accountant
described in paragraph (a) of this subsection, who provides medical,
legal or financial planning services to the policyholder, to the
certificate holder or to the insured individual when the individual is
other than the policyholder or certificate holder.

(c) Any person other than one described in paragraph (a) or (b) of
this subsection who acts as an agent of the policyholder, certificate
holder or insured individual.

(2) A licensee shall not solicit an investor who could influence
the treatment of the illness or condition of the individual whose life
would be the subject of a life settlement contract.

(3) All information solicited or obtained from a policyholder or
certificate holder by a licensee shall be subject to ORS 746.600 to
746.690. For purposes of this subsection, a licensee shall be considered
an insurance-support organization within the meaning of ORS 746.600.

(4) A licensee shall not discriminate in the making of a life
settlement contract on the basis of race, age, sex, national origin,
creed, religion, occupation, marital or family status, sexual
orientation, or discriminate between persons who have dependents and
persons who do not have dependents. [1995 c.342 §16] (1)
Immediately upon receipt of documents from the policyholder or
certificate holder effecting the transfer of the insurance policy or
certificate, the life settlement provider shall pay the proceeds of the
settlement to an escrow or trust account managed by a trustee or escrow
agent in a bank approved by the Director of the Department of Consumer
and Business Services, pending acknowledgment of the transfer by the
issuer of the life insurance policy. The trustee or escrow agent shall be
required to transfer the proceeds due to the policyholder or certificate
holder immediately upon receipt of acknowledgment of the transfer from
the insurer.

(2) A life settlement provider shall make payment of the proceeds
of a life settlement contract in a lump sum, except as provided in this
subsection. A life settlement provider shall not retain any portion of
the proceeds. A life settlement provider may make installment payments
only if the life settlement provider has purchased an annuity issued by
an authorized insurer or a similar financial instrument issued by a
financial institution authorized to engage in the business of a financial
institution in this state.

(3) Failure by the life settlement provider to tender the life
settlement by the date disclosed to the policyholder or certificate
holder renders the contract void. [1995 c.342 §17] The Director of the Department of
Consumer and Business Services may adopt rules for the purpose of
carrying out ORS 744.319 to 744.358. In addition:

(1) The director may establish standards for evaluating
reasonableness of payments under life settlement contracts. The authority
includes but is not limited to regulation of discount rates used to
determine the amount paid in exchange for assignment, transfer, sale,
devise or bequest of a benefit under a life insurance policy. For the
purpose of the standards, the director shall consider payments made in
regional and national life settlement markets, to the extent such
information is available, as well as model standards developed by the
National Association of Insurance Commissioners.

(2) The director may require a bond or an errors and omissions
insurance policy of either or both kinds of licensees.

(3) The director may establish trade practice standards by rule for
the purpose of regulating advertising and solicitation of life settlement
contracts. [1995 c.342 §18]ADJUSTERS (1) Except as provided in ORS
744.515, a person shall not act or attempt to act as an adjuster of
losses claimed under insurance policies, whether acting for the insurer
or the insured, unless the person holds a valid license issued by the
Director of the Department of Consumer and Business Services that
authorizes the person to act as an adjuster. A license under this section
authorizes an adjuster to adjust losses for or against authorized
insurers or insurers with which policies were placed under a surplus line
insurance license as provided in ORS 735.400 to 735.495.

(2) A license under this section does not authorize a person to act
as an adjuster for any person other than the insurer or insured.
[Formerly 736.485; 1983 c.76 §10; 1987 c.774 §139; 1989 c.413 §14; 1989
c.701 §43; 1991 c.810 §12] (1) A
licensed resident insurance producer or salaried employee or officer of
an authorized insurer may adjust and settle losses for the insurer that
the insurance producer, employee or officer represents, without obtaining
an adjuster’s license.

(2) A person may make one adjustment before obtaining an adjuster’s
license if the person applies for the license within two days after
entering upon the adjustment, and in all other respects complies with the
provisions of this chapter governing adjusters.

(3) A person holding a temporary permit under ORS 744.555 may
perform acts authorized under ORS 744.555 without obtaining an adjuster’s
license.

(4) Any average adjuster or adjuster of maritime losses may adjust
maritime losses without obtaining an adjuster’s license.

(5) A person may perform or provide repair or replacement service
under home protection insurance without obtaining an adjuster’s license.
[1967 c.359 §560; 1971 c.231 §33; 1981 c.247 §19; 1983 c.76 §11; 1989
c.701 §44; 2003 c.364 §122] An applicant for a license as a
resident adjuster shall apply for the license as provided in ORS 744.001
and must meet the following requirements:

(1) If the applicant is an individual, the applicant must establish
a residence or place of transacting insurance business in this state
prior to filing an application. If the applicant is a firm or
corporation, the applicant must establish an office in this state that
employs an individual licensed under ORS 744.002 as an adjuster.

(2) If the applicant is an individual, the applicant must pass any
examination required by ORS 744.535.

(3) The applicant must satisfy all other requirements established
by the Director of the Department of Consumer and Business Services by
rule. [1967 c.359 §561; 1971 c.231 §34; 1973 c.827 §81; 1983 c.76 §12;
1989 c.701 §45] (1) A person who resides in
another state or a province of Canada and is licensed in that state or
province as an adjuster may be licensed to act as a nonresident adjuster
in this state as provided in this section if the state or province in
which the person resides gives the same privilege to a resident adjuster
of this state.

(2) An applicant for a license to act as a nonresident adjuster
must do the following:

(a) Apply for the license on forms designed and furnished by the
Director of the Department of Consumer and Business Services as provided
in ORS 744.001.

(b) If the applicant is an individual, pass an examination required
by ORS 744.535. [1989 c.701 §46; 1991 c.810 §13] When the Director of
the Department of Consumer and Business Services issues a license
authorizing a person to act as an adjuster, the director shall indorse on
the license the class or classes of insurance described in this section
with respect to which the person is authorized to adjust losses. The
classes of insurance are as follows:

(1) Property and casualty insurance. Under this class, in addition
to property and casualty insurance, an adjuster may also adjust losses
with respect to marine and transportation and surety insurance.

(2) Health insurance, whether provided by an insurer or a health
care service contractor as defined in ORS 750.005.

(3) Any class of insurance designated by the director by rule.
[1989 c.701 §47; 2003 c.802 §170]Note: 744.531 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 744 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation. (1) The Director of the
Department of Consumer and Business Services shall give an examination to
each individual applicant for a license as an adjuster. The examination
must test the qualifications and competence of the applicant and the
knowledge of the applicant with respect to the classes of insurance that
may be dealt with under the license and with respect to the duties and
responsibilities of an adjuster under the laws of this state.

(2) The requirement of an examination under subsection (1) of this
section shall not apply to an applicant who is licensed as an independent
adjuster in another state that licenses adjusters of this state without
examination.

(3) The director shall give examinations at such times and places
within the state as the director deems necessary to reasonably serve the
best interests of all concerned, provided that the director shall give an
examination at least once every six months if applications for licenses
are then pending. [1967 c.359 §562; 1989 c.413 §15; 1989 c.701 §48; 1991
c.810 §14] (1) A
nonresident adjuster shall not act as an adjuster in this state when the
adjuster no longer holds a valid license as an adjuster in the state or
province in which the adjuster resides. If the license of the adjuster in
the state in which the adjuster resides is reinstated, and if the
nonresident adjuster’s license has not expired, the adjuster may apply to
the Director of the Department of Consumer and Business Services for
reinstatement of the nonresident license.

(2) A nonresident adjuster who establishes residence in this state
shall not transact business as an adjuster in this state under the
nonresident license following the 30th day after the adjuster establishes
the residence. An adjuster under this subsection may thereafter act as an
adjuster in this state only under a license to act as a resident adjuster.

(3) A nonresident adjuster who changes residence to another state
other than this state or to a province must apply to the director for a
license as a nonresident adjuster as if the adjuster were initially
applying for such a license. [1989 c.701 §49; 1995 c.639 §6]An adjuster may adjust a loss claimed under an insurance policy
issued by an unauthorized insurer other than a surplus line insurer. The
adjuster shall notify the Director of the Department of Consumer and
Business Services thereof not later than the 20th day after adjusting the
loss. [1989 c.701 §50] (1) To facilitate the settlement
of claims under insurance policies when there is widespread property loss
in this state arising out of a catastrophe, the Director of the
Department of Consumer and Business Services may issue a temporary permit
to any person authorized in another state to adjust losses claimed under
insurance policies to act as an adjuster in the catastrophe area for or
against an authorized insurer. A temporary permit issued pursuant to this
section shall be effective for such time as the director determines
necessary and shall be in lieu of the license and fee requirements
otherwise applicable.

(2) A temporary permit may be obtained by filing with the director
a written application therefor in the form prescribed by the director.
The application shall contain the name and address of the applicant, the
name of the state in which the applicant is authorized to adjust losses
claimed under insurance policies and any other information the director
may require.

(3) Such a permit may also be issued in respect to any adjuster who
is licensed or permitted to act as such in the state of domicile of the
adjuster and who is sent into this state on behalf of an authorized
insurer or insured for the purpose of investigating or making adjustment
of a particular loss under policies of insurance. [Formerly 736.490; 1989
c.701 §51]No plan or arrangement shall be used with respect to credit
life or credit health insurance whereby any person other than the insurer
or its designated claim representative shall be authorized to settle or
adjust claims. The creditor shall not be designated as claim
representative for the insurer in adjusting claims, except that a group
policyholder may, by arrangement with the group insurer, draw drafts or
checks in payment of claims due to the group policyholder subject to
audit and review by the insurer. [Formerly 741.455; 1989 c.701 §52]INSURANCE CONSULTANTS (1) A person shall
not act as an insurance consultant unless the person holds a valid
license issued by the Director of the Department of Consumer and Business
Services that authorizes the person to act as an insurance consultant.
For purposes of this section, a person acts as an insurance consultant if:

(a) The person purports or offers to engage in any of the
activities described in paragraph (b) of this subsection by using, in
conjunction with the person’s name, the title or designation of insurance
planner, consultant, adviser or counselor, or financial and insurance
planner, consultant, adviser or counselor, or any similar title or
designation; or

(b) The person, for compensation other than commission from the
sale of insurance, engages, attempts to engage or offers to engage in any
of the following activities:

(A) Acting as a consultant regarding insurance.

(B) Giving advice, counsel, opinion or service with respect to the
benefits, advantages or disadvantages of insurance that may be issued in
this state.

(C) In any other manner providing information about insurance.

(2) For the purposes of subsection (1)(b) of this section,
compensation includes consideration paid for financial and other related
services provided by the person in connection with services referred to
in subsection (1)(b) of this section. [1985 c.697 §2; 1989 c.701 §53;
1991 c.810 §15; 1997 c.419 §1] The following persons are not insurance
consultants for the purposes of this chapter, and the prohibition in ORS
744.605 does not apply to them:

(1) Any attorney-at-law rendering services in the performance of
duties of an attorney-at-law.

(2) Any certified public accountant or public accountant rendering
services in the performance of the duties of a certified public
accountant or public accountant, as authorized by law.

(3) Any person who, while conducting an educational seminar,
performs any of the activities described in ORS 744.605 (1)(b).

(4) Any financial institution, as defined in ORS 706.008, or
consumer finance licensee under ORS chapter 725.

(5) Any actuary who is a member of an organization determined by
the Director of the Department of Consumer and Business Services as
establishing standards for the actuarial profession.

(6) A person who provides or offers or purports to provide any of
the services described in ORS 744.605 only to an insurance producer or an
authorized insurer. [1985 c.697 §3; 1989 c.701 §54; 1991 c.810 §16; 1997
c.419 §2; 1999 c.59 §228; 2003 c.364 §123]
An applicant for a license as a resident insurance consultant shall apply
for the license as provided in ORS 744.001 and must meet the following
requirements:

(1) The applicant must provide satisfactory evidence to the
Director of the Department of Consumer and Business Services that the
insurance required under ORS 744.635 has been procured and is in effect.

(2) The applicant, if an individual, must establish a residence or
place of transacting insurance business in this state prior to filing an
application. If the application is a firm or corporation, the applicant
must establish an office in this state that is managed by an individual
licensed as an insurance consultant.

(3) The applicant, if an individual, must have had at least five
years’ experience in the insurance business relating to the class or
classes of insurance for which the applicant is applying to be an
insurance consultant or have equivalent educational qualifications as
prescribed by the director.

(4) The applicant, if an individual, must pass a written
examination given by the director. The examination requirement does not
apply to an applicant who is licensed as a resident insurance producer to
transact the class or classes of insurance for which the applicant is
applying to be an insurance consultant.

(5) The applicant must satisfy any other requirements established
by the director by rule. [1985 c.697 §5; 1989 c.701 §57; 1991 c.810 §17;
2003 c.364 §124] (1) A person who
resides in another state or province of Canada and is licensed in that
state or province as an insurance consultant or is registered under a
regulatory program of the other state or province similar to the
regulatory program for insurance consultants under this chapter, as
determined by the Director of the Department of Consumer and Business
Services, may be licensed to act as a nonresident insurance consultant in
this state as provided in this section if the state or province in which
the person resides gives the same privilege to a resident insurance
consultant of this state.

(2) An applicant for a license to act as a nonresident insurance
consultant shall apply for the license as provided in ORS 744.001 and
must meet the following requirements:

(a) The applicant must provide satisfactory evidence to the
director that the insurance required under ORS 744.635 has been procured
and is in effect.

(b) If the applicant is an individual, the applicant must have had
at least five years’ experience in the insurance business relating to the
class or classes of insurance for which the applicant is applying to be
an insurance consultant or have equivalent educational qualifications as
prescribed by the director.

(c) If the applicant is an individual, the applicant must take and
pass a written examination given by the director, unless the state or
province in which the applicant resides licenses or registers insurance
consultants of this state without examination. The examination
requirement does not apply to an applicant who is licensed as a
nonresident insurance producer to transact the class or classes of
insurance for which the applicant is applying to be an insurance
consultant.

(d) The applicant must satisfy any other requirements established
by the director by rule. [1989 c.701 §58; 1991 c.810 §18; 2003 c.364 §125] When the Director of
the Department of Consumer and Business Services issues a license
authorizing a person to act as an insurance consultant, the director
shall indorse on the license the class or classes of insurance described
in this section with respect to which the person is authorized to act as
an insurance consultant. The classes of insurance are as follows:

(1) Life insurance.

(2) Health insurance.

(3) Property and casualty insurance. Under this class, in addition
to property and casualty insurance, an insurance consultant may also act
as insurance consultant with respect to marine and transportation and
surety insurance.

(4) Any class of insurance designated by the director by rule.
[1989 c.701 §62; 2003 c.802 §171]Note: 744.626 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 744 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.
(1) A nonresident insurance consultant shall not act as an insurance
consultant in this state when the insurance consultant no longer holds a
valid license as an insurance consultant in the state or province in
which the insurance consultant resides. If the license of the insurance
consultant in the state in which the insurance consultant resides is
reinstated and if the nonresident license has not expired, the insurance
consultant may apply to the Director of the Department of Consumer and
Business Services for reinstatement of the nonresident license.

(2) A nonresident insurance consultant who establishes residence in
this state shall not transact business as an insurance consultant in this
state under the nonresident license following the 30th day after the
insurance consultant establishes the residence. An insurance consultant
under this paragraph may act as a resident insurance consultant in this
state if the insurance consultant obtains the appropriate license.

(3) A nonresident insurance consultant who changes residence to
another state other than this state or to a province must apply to the
director for a license as a nonresident insurance consultant as if the
insurance consultant were initially applying for such a license. [1989
c.701 §61; 1995 c.639 §7] (1) An insurance
consultant shall maintain with the Director of the Department of Consumer
and Business Services a current certificate of errors and omissions
insurance in an amount established by the director by rule from an
insurer authorized to do business in this state or from any other insurer
acceptable to the director according to standards established by rule.

(2) If the director determines that errors and omissions insurance
required under this section is not generally available at a reasonable
cost, the director by rule may suspend the requirement of insurance, but
must reimpose the requirement when the insurance becomes available once
again. [1985 c.697 §8; 1989 c.701 §63; 1991 c.331 §131; 1991 c.810 §19] (1) An insurance
consultant shall furnish to each client and prospective client a written
disclosure statement containing the following information:

(a) A description of the nature of the work to be performed by the
insurance consultant.

(b) The applicable occupational and educational background of the
insurance consultant.

(c) The area or areas of insurance in which the insurance
consultant has particular expertise.

(d) The fee schedule and any other expenses that the insurance
consultant charges, and whether fees may be negotiated.

(e) The name of any person, other than clients, that the insurance
consultant represents.

(f) Whether the insurance consultant will receive any commission or
obtain any other compensation for services provided the client in
addition to fees and other expenses paid by the client.

(g) Any other information required by the Director of the
Department of Consumer and Business Services by rule.

(2) An insurance consultant shall disclose information required
under this subsection to each client in the course of providing insurance
consultant services to the client and before the insurance consultant
makes any final insurance recommendation to the client. The insurance
consultant shall disclose at least the following information as
applicable to the line of insurance for which the insurance consultant is
providing services:

(a) Other business activities of the insurance consultant relating
to financial planning.

(b) The method of investment analysis and comparison used.

(c) Assumptions contributing to insurance recommendations for the
client.

(d) Any other information required by the director by rule.

(3) The director may establish additional disclosure requirements
for licensees who are licensed both as insurance producers and insurance
consultants.

(4) The director may design the form of disclosure statement to be
used under subsection (1) of this section. [1985 c.697 §11; 1991 c.810
§20; 2003 c.364 §126] An insurance consultant may not give or
receive or offer to give or receive a rebate of all or a part of any fee
or other expenses charged for services or any earnings, profit, dividends
or other benefit accruing to the insurance consultant from the services
provided by the insurance consultant. [1985 c.697 §12; 1991 c.810 §23] The Director of the Department
of Consumer and Business Services by rule may establish requirements for
continuing education that each insurance consultant must satisfy as a
condition for continuation of the license. [1985 c.697 §14]THIRD PARTY ADMINISTRATORS As used in ORS
744.700 to 744.740:

(1) “Affiliate” of, or person “affiliated” with, a specific person
means any person who directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with, a specified person.

(2) “Control” has the meaning given that term in ORS 732.548.

(3) “Insurer” includes a health care service contractor, a multiple
employer welfare arrangement or any other person providing a plan of
insurance subject to state insurance regulation. “Insurer” does not
include a bona fide employee benefit plan established by an employer or
an employee organization, or both, for which the insurance laws of this
state are preempted pursuant to the Employee Retirement Income Security
Act of 1974.

(4) “Underwrite” or “underwriting” includes the acceptance of
employer or individual applications for coverage of individuals in
accordance with the written rules of the insurer, the overall planning
and coordinating of an insurance program and the ability to procure bonds
and excess insurance. [1991 c.812 §2](1) Subject to ORS
744.704, a person shall not transact business or purport or offer to
transact business as a third party administrator in this state unless the
person holds a third party administrator license issued by the Director
of the Department of Consumer and Business Services.

(2) For purposes of ORS 744.700 to 744.740, a person transacts or
purports or offers to transact business as a third party administrator
when the person directly or indirectly solicits or effects coverage of,
underwrites, collects charges or premiums from, or adjusts or settles
claims on, residents of this state or residents of another state from
offices in this state, in connection with life insurance or health
insurance coverage.

(3) Nothing in ORS 744.700 to 744.740 exempts a third party
administrator from any other applicable licensing requirement when the
third party administrator performs the functions of an insurance
producer, adjuster or insurance consultant. [1991 c.812 §3; 2003 c.364
§127] (1) The following
persons are exempt from the licensing requirement for third party
administrators in ORS 744.702 and from all other provisions of ORS
744.700 to 744.740 applicable to third party administrators:

(a) A person licensed under ORS 744.002 as an adjuster, whose
activities are limited to adjustment of claims and whose activities do
not include the activities of a third party administrator.

(b) A person licensed as an insurance producer as required by ORS
744.053 and authorized to transact life or health insurance in this
state, whose activities are limited exclusively to the sale of insurance
and whose activities do not include the activities of a third party
administrator.

(c) An employer acting as a third party administrator on behalf of:

(A) Its employees;

(B) The employees of one or more subsidiary or affiliated
corporations of the employer; or

(C) The employees of one or more persons with a dealership,
franchise, distributorship or other similar arrangement with the
employers.

(d) A union, or an affiliate thereof, acting as a third party
administrator on behalf of its members.

(e) An insurer that is authorized to transact insurance in this
state with respect to a policy issued and delivered in and pursuant to
the laws of this state or another state.

(f) A creditor acting on behalf of its debtors with respect to
insurance covering a debt between the creditor and its debtors.

(g) A trust and the trustees, agents and employees of the trust,
when acting pursuant to the trust, if the trust is established in
conformity with 29 U.S.C. 186.

(h) A trust exempt from taxation under section 501(a) of the
Internal Revenue Code, its trustees and employees acting pursuant to the
trust, or a voluntary employees beneficiary association described in
section 501(c) of the Internal Revenue Code, its agents and employees and
a custodian and the custodian’s agents and employees acting pursuant to a
custodian account meeting the requirements of section 401(f) of the
Internal Revenue Code.

(i) A financial institution that is subject to supervision or
examination by federal or state financial institution regulatory
authorities, or a mortgage lender, to the extent the financial
institution or mortgage lender collects and remits premiums to licensed
insurance producers or authorized insurers in connection with loan
payments.

(j) A company that issues credit cards and advances for and
collects premiums or charges from its credit card holders who have
authorized collection. The exemption under this paragraph applies only if
the company does not adjust or settle claims.

(k) A person who adjusts or settles claims in the normal course of
practice or employment as an attorney at law. The exemption under this
subsection applies only if the person does not collect charges or
premiums in connection with life insurance or health insurance coverage.

(L) A person who acts solely as an administrator of one or more
bona fide employee benefit plans established by an employer or an
employee organization, or both, for which the Insurance Code is preempted
pursuant to the Employee Retirement Income Security Act of 1974. A person
to whom this paragraph applies must comply with the requirements of ORS
744.714.

(m) The Oregon Medical Insurance Pool Board, established under ORS
735.600 to 735.650, and the administering insurer or insurers for the
board, for services provided pursuant to ORS 735.600 to 735.650.

(n) An entity or association owned by or composed of like employers
who administer partially or fully self-insured plans for employees of the
employers or association members.

(o) A trust established by a cooperative body formed between
cities, counties, districts or other political subdivisions of this
state, or between any combination of such entities, and the trustees,
agents and employees acting pursuant to the trust.

(p) Any person designated by the Director of the Department of
Consumer and Business Services by rule.

(2) A third party administrator is not required to be licensed as a
third party administrator in this state if the following conditions are
met:

(a) The third party administrator has its principal place of
business in another state;

(b) The third party administrator is not soliciting business as a
third party administrator in this state; and

(c) In the case of any group policy or plan of insurance serviced
by the third party administrator, the lesser of five percent or 100
certificate holders reside in this state. [1991 c.812 §4; 2001 c.191 §40;
2003 c.364 §128] (1) In order to obtain a license
to transact business as a third party administrator, an applicant shall
apply for the license on a form prescribed by the Director of the
Department of Consumer and Business Services, with payment of any fee
required for the application.

(2) The director may request biographical, organizational,
locational, financial, employment and any other information on the
application form that the director determines to be relevant to the
evaluation of applications and to the granting of the license, including
satisfactory evidence that the insurance required under ORS 744.726 has
been procured and is in effect. The director may also require a statement
of the business plan of the applicant. [1991 c.812 §5] Upon request from a
third party administrator, the Director of the Department of Consumer and
Business Services may waive requirements established pursuant to ORS
744.706 for information to be included in or with the application if the
third party administrator has a valid license or other document of
authority as a third party administrator issued in a state having
requirements for third party administrators that the director determines
to be sufficiently similar to the requirements established under ORS
744.706 so that the filing of the information would serve little or no
regulatory purpose. [1991 c.812 §6] (1) If the Director of the
Department of Consumer and Business Services determines that an applicant
has satisfied all requirements for a license as a third party
administrator, the director shall issue the license to the applicant. The
director shall not issue a license if the director determines that the
third party administrator, or any individual responsible for the conduct
of affairs of the third party administrator, as required to be set forth
in the application for the license, is not competent, trustworthy,
financially responsible or of good personal and business reputation, or
has had a license or other document of authority to transact insurance as
an insurer, insurance producer or third party administrator denied or
revoked for cause by any state.

(2) If the director denies an application, the director shall so
inform the applicant, stating the grounds for the denial. [1991 c.812 §7;
2003 c.364 §129] (1) A
license of a third party administrator expires on its expiration date
unless it is renewed on or before its expiration date.

(2) Unless the Director of the Department of Consumer and Business
Services designates another date, a license expires on the last day of
the month in which the second anniversary of the initial issuance date of
the license occurs, and on the second anniversary following each renewal.

(3) The director by rule may establish requirements for renewing
licenses of third party administrators. [1991 c.812 §8] A person who
is exempt from the requirement of a license as a third party
administrator under ORS 744.704 because the person acts solely as an
administrator of one or more bona fide employee benefit plans established
by an employer or an employee organization, or both, for which the
Insurance Code is preempted pursuant to the Employee Retirement Income
Security Act of 1974, shall register with the Director of the Department
of Consumer and Business Services annually, verifying the status of the
person as qualifying for the exemption. [1991 c.812 §9] A third
party administrator shall immediately notify the Director of the
Department of Consumer and Business Services of any material change in
ownership or control or in any other matter affecting the qualification
of the third party administrator for a license as a third party
administrator in this state. [1991 c.812 §10](1) The Director of the Department of Consumer and Business
Services shall suspend, revoke or refuse to renew a license of a third
party administrator if the director finds that the third party
administrator:

(a) Is in an unsound financial condition;

(b) Is using such methods or practices in the conduct of business
so as to render further transaction of business by the third party
administrator in this state hazardous or injurious to insured persons or
to the public; or

(c) Has failed to pay any judgment rendered against the third party
administrator in this state within 60 days after the judgment has become
final.

(2) The director may suspend, revoke, refuse to issue or refuse to
renew a license of a third party administrator if the director finds one
or more of the following with respect to a third party administrator or
an applicant for a license therefor:

(a) Falsification by the applicant or licensee of an application
for the license or renewal thereof, or engagement in any dishonest act in
relation to the application;

(b) Dishonesty, fraud or gross negligence in the transaction of
insurance or in the conduct of business as a third party administrator;

(c) Conduct resulting in a conviction of a felony under the laws of
any state or of the United States, to the extent that such conduct may be
considered under ORS 670.280;

(d) Conviction of any crime, an essential element of which is
dishonesty or fraud, under the laws of any state or of the United States;

(e) Refusal to renew or cancellation, revocation or suspension of
authority to transact insurance or business as a third party
administrator or similar entity in another state;

(f) Failure to pay a civil penalty imposed by final order of the
director or to carry out terms of probation set by the director;

(g) Refusal to be examined or to produce accounts, records or files
for examination, refusal by any officers to give information with respect
to the affairs of the third party administrator or refusal to perform any
other legal obligation as to the examination when required by the
director;

(h) Affiliation with or under the same general management or
interlocking directorate or ownership as another administrator or insurer
that unlawfully transacts business in this state;

(i) Failure at any time to meet any qualification for which
issuance of the license could have been refused had the failure then
existed and been known to the director; or

(j) Violation of any rule or order of the director or any provision
of the Insurance Code.

(3) The director may suspend or refuse to renew a license
immediately and without hearing if the director determines that one or
more of the following circumstances exist:

(a) The third party administrator is insolvent;

(b) A proceeding for receivership, conservatorship or
rehabilitation or other delinquency proceeding regarding the third party
administrator has been commenced in any state; or

(c) The financial condition or business practices of the third
party administrator otherwise pose an imminent threat to the public
health, safety or welfare of the residents of this state.

(4) A third party administrator holding a license that has not been
renewed or has been revoked shall surrender the license to the director
at the director’s request.

(5) The director may take any other administrative action
authorized under the Insurance Code in addition to or in lieu of the
actions authorized under this section. [1991 c.812 §11]
(1) A third party administrator licensed under ORS 744.702 may transact
business as a third party administrator only pursuant to a written
agreement between the third party administrator and the insurer. The
agreement shall contain all provisions required by this section. However,
any provision that does not apply to the functions to be performed by the
third party administrator need not be included.

(2) An insurer and a third party administrator transacting business
under an agreement required in subsection (1) of this section shall each
retain the agreement with its records for the duration of the agreement
and for five years following the date of its termination.

(3) An agreement required by this section shall include at least
the following, in addition to any other requirements of ORS 744.700 to
744.740:

(a) A statement of duties that the third party administrator is
expected to perform on behalf of the insurer and the lines, classes or
types of insurance for which the third party administrator is to be
authorized to administer;

(b) Provisions with respect to underwriting or other standards
pertaining to the business underwritten by the insurer. The agreement
shall also state the responsibilities of the third party administrator
for determining the benefits, premium rates, underwriting criteria and
claims payment procedures, and for securing any reinsurance, subject to
the responsibilities of the insurer established in ORS 744.740;

(c) Provisions for the third party administrator to periodically
render an accounting to the insurer detailing all transactions performed
by the administrator pertaining to the business underwritten by the
insurer;

(d) Provisions governing withdrawals from the fiduciary account
required under ORS 744.730, and provisions otherwise relating to the
fiduciary account, addressing at least the following matters:

(A) Remittance to an insurer entitled to the remittance;

(B) Deposit in an account maintained in the name of the insurer;

(C) Transfer to and deposit in a claims-paying account, with claims
to be paid as provided in ORS 744.730;

(D) Payment to a group policyholder for remittance to the insurer
entitled to the remittance;

(E) Payment to the third party administrator of its commission fees
or charges; and

(F) Remittance of return premiums to the person entitled to the
return premium; and

(e) Provisions establishing which disputes, if any, arising under
the contract shall be decided by arbitration, mediation or other means of
dispute resolution.

(4) Upon written notice, the insurer or third party administrator
may terminate the written agreement for cause as provided in the
agreement. The insurer may suspend the underwriting authority of the
third party administrator during any dispute regarding the cause for
termination of the written agreement. The insurer must fulfill any lawful
obligations with respect to policies affected by the agreement,
regardless of any dispute between the insurer and the third party
administrator.

(5) A third party administrator shall make available for inspection
to the Director of the Department of Consumer and Business Services
copies of all contracts, and amendments thereto, with insurers or other
persons using its services. [1991 c.812 §12](1) When an insurer uses the services of a third
party administrator:

(a) Payment to the third party administrator of any premiums or
charges for insurance by or on behalf of the insured party shall be
considered to have been received by the insurer.

(b) Payment of return premiums or claim payments forwarded by the
insurer to the third party administrator shall not be considered to have
been paid to the insured party or claimant until the payment is received
by the insured party or claimant.

(2) Nothing in this section limits any right of the insurer against
the third party administrator resulting from failure by the third party
administrator to make payments to the insurer, insured parties or
claimants. [1991 c.812 §13] (1) Except as provided in subsection (4)
of this section, a third party administrator shall maintain and make
available to the insurer complete books and records of each transaction
performed on behalf of the insurer. The books and records shall be
maintained in accordance with prudent standards of insurance
recordkeeping and must be maintained for a period of not less than five
years from the date of their creation.

(2) The Director of the Department of Consumer and Business
Services shall have access to the books and records maintained under
subsection (1) of this section for the purpose of examination, audit and
inspection. Any document, material or other information in the possession
or control of the director that is furnished by a third party
administrator, an insurer, an agent or an employee or an agent acting on
behalf of the third party administrator, insurer or insurance producer,
or that is obtained by the director in an investigation, shall be
confidential as provided in ORS 705.137.

(3) An insurer that has entered into an agreement with a third
party administrator shall own the records generated by the third party
administrator pertaining to the insurer. However, the third party
administrator has the right to continuing access to the books and records
to permit the third party administrator to fulfill all of its contractual
obligations to insured parties, claimants and the insurer.

(4) If an insurer and third party administrator cancel their
agreement, the third party administrator may agree in writing with the
insurer to transfer all records to a successor third party administrator.
If the agreement includes provisions to transfer the records, the third
party administrator is no longer responsible for retaining the records
for the five-year period. The successor third party administrator shall
acknowledge in writing as part of its agreement with the insurer that it
is responsible for retaining the records of the prior third party
administrator as required in subsection (1) of this section. [1991 c.812
§14; 2001 c.377 §16; 2003 c.364 §130] (1) A third party
administrator must maintain with the Director of the Department of
Consumer and Business Services at all times a current certificate of
errors and omissions insurance, in an amount established by the director
by rule, from an insurer authorized to transact insurance in this state
or from any other insurer acceptable to the director according to
standards established by rule. The insurance must cover errors and
omissions of and any violation of fiduciary responsibility by the third
party administrator or its employees, or both.

(2) If the director determines that insurance required under this
section is not generally available at a reasonable cost, the director by
rule may suspend the requirement of insurance, but must reimpose the
requirement when the insurance becomes available. [1991 c.812 §15] A third party administrator may use only such
advertising pertaining to the business underwritten by an insurer that
the insurer has approved in advance of its use. [1991 c.812 §16] (1) A third party
administrator shall hold in a fiduciary capacity all insurance charges or
premiums collected by the third party administrator on behalf of or for
an insurer, and all return premiums received from the insurer. The third
party administrator shall immediately remit all charges, premiums or
return premiums to the person entitled to them or shall deposit them
promptly in a fiduciary account established and maintained by the third
party administrator in a federally or state insured financial
institution. The fiduciary account may be used only for deposits
authorized under this subsection.

(2) If the charges or premiums deposited in a fiduciary account
have been collected on behalf of or for one or more insurers, a third
party administrator shall keep records clearly recording the deposits in
and withdrawals from the account on behalf of each insurer. The third
party administrator shall keep copies of all such records and, upon
request of an insurer, shall furnish the insurer with copies of the
records pertaining to such deposits and withdrawals.

(3) A third party administrator shall not pay any claim by
withdrawals from a fiduciary account in which premiums or charges are
deposited.

(4) All claims by a third party administrator from funds collected
on behalf of the insurer shall be paid only on drafts of and as
authorized by the insurer.

(5) A third party administrator that is an insurance producer
licensed under this chapter need not comply with this section if the
third party administrator is in compliance with ORS 744.083 or 744.084
with respect to the premiums, charges and return premiums referred to in
this section. [1991 c.812 §17; 2003 c.364 §131] (1) A third party administrator
shall not enter into any agreement or understanding with an insurer the
effect of which is to make the amount of the third party administrator’s
commissions, fees or charges contingent upon savings effected in the
adjustment, settlement and payment of losses covered by the obligations
of the insurer.

(2) This section does not prohibit:

(a) A third party administrator from receiving performance-based
compensation for providing hospital or other auditing services; or

(b) A third party administrator from receiving compensation based
on premiums or charges collected or on the number of claims processed.

(3) The third party administrator shall disclose to the insurer all
charges, fees and commissions received from all sources in connection
with the provision of administrative services for the insurer, including
any fees or commissions paid by insurers providing reinsurance. [1991
c.812 §18] (1)
When an insurer uses the services of a third party administrator, the
third party administrator shall provide to covered individuals a written
notice approved by the insurer that advises them of the identity of and
relationship among the third party administrator, the policyholder and
the insurer.

(2) When a third party administrator collects funds, the reason for
collection of each item must be identified to the insured party and each
item must be shown separately from any premium. Additional charges may
not be made for services to the extent the services have been paid for by
the insurer. [1991 c.812 §19] When the third party
administrator receives policies, certificates, booklets, termination
notices or other written communications from the insurer for delivery to
insured parties or covered individuals, the third party administrator
shall promptly make the delivery after receiving instructions from the
insurer. [1991 c.812 §20] (1) Each third party administrator shall
file an annual report for the preceding calendar year with the Director
of the Department of Consumer and Business Services on or before March 1
of each year, or within such extension of time therefor as the director
may grant. The report shall be in the form and contain such information
as the director prescribes and shall be verified by at least two officers
of the third party administrator if the third party administrator is a
corporation, and by two partners if the third party administrator is a
partnership.

(2) The annual report shall include the complete names and
addresses of all insurers with which the third party administrator had an
agreement during the preceding fiscal year. [1991 c.812 §21]
(1) An insurer who uses the services of a third party administrator is
responsible for determining the benefits, premium rates, underwriting
criteria and claims payment procedures applicable to the coverage and for
securing any reinsurance. The rules pertaining to such matters must be
provided in writing by the insurer to the third party administrator.

(2) An insurer is solely responsible for providing competent
administration of its programs.

(3) When a third party administrator administers benefits for more
than 100 certificate holders on behalf of an insurer, the insurer shall
conduct a review of the operations of the third party administrator at
least annually. [1991 c.812 §22]REINSURANCE INTERMEDIARIES(1) For purposes of ORS 744.800 to 744.818:

(a) A reinsurance intermediary broker is a person who solicits,
negotiates or places reinsurance cessions or retrocessions on behalf of a
ceding insurer without acting as a reinsurance intermediary manager on
behalf of the insurer.

(b) A reinsurance intermediary manager is a person who has
authority to bind a reinsurer or who manages all or part of the assumed
reinsurance business of a reinsurer, including the management of a
separate division, department or underwriting office, and acts as an
insurance producer for the reinsurer, regardless of the title or
designation of the person.

(c) A reinsurance intermediary means a reinsurance intermediary
broker or a reinsurance intermediary manager.

(d) “Business entity” has the meaning given that term in ORS
731.116.

(2) A person may act as a reinsurance intermediary broker in this
state only as follows:

(a) The person maintains an office in this state either directly or
as a member or employee of a firm or association, or an officer, director
or employee of a corporation, and the person is a licensed insurance
producer or reinsurance intermediary in this state; or

(b) The person maintains an office in another state either directly
or as a member or employee of a firm or association, or an officer,
director or employee of a corporation, and the person is a licensed
insurance producer or reinsurance intermediary in this state or another
state having laws substantially similar to ORS 744.800 to 744.818.

(3) A person may act as a reinsurance intermediary manager only as
follows:

(a) A person may act as a reinsurance intermediary manager for a
reinsurer domiciled in this state if the person is a licensed insurance
producer or reinsurance intermediary in this state.

(b) A person may act as a reinsurance intermediary manager in this
state if the person maintains an office in this state either directly or
as a member or employee of a firm or association, or as an officer,
director or employee of a corporation, if the person is a licensed
insurance producer or reinsurance intermediary in this state.

(4) The Director of the Department of Consumer and Business
Services may issue a reinsurance intermediary license to any person that
has complied with the requirements of this section. A license issued to a
firm or association authorizes all of the members of the firm or
association and any designated employees of the firm or association to
act as reinsurance intermediaries under the license. All such persons
must be named in the license application and any supplements to the
application. A license issued to a corporation authorizes all of the
officers and any designated employees and directors of the corporation to
act as reinsurance intermediaries on behalf of the corporation. All such
persons must be named in the license application and any supplements to
the application.

(5) The director shall issue a resident reinsurance intermediary
license to a person if the person holds an insurance producer license
issued under ORS 744.062 and indorsed with the designation of reinsurance
intermediary.

(6) The director shall issue a nonresident reinsurance intermediary
license to a person if:

(a) The person is currently licensed in the person’s home state as
a resident reinsurance intermediary or insurance producer and is in good
standing in the person’s home state;

(b) The person has submitted the proper request for a license and
has paid the applicable fees;

(c) The person has submitted or transmitted to the director the
license application that the person submitted to the person’s home state
or, in lieu of that application, a completed application acceptable to
the director; and

(d) The person’s home state awards nonresident reinsurance
intermediary licenses to residents of this state on the same basis.

(7) The director may refuse to issue a reinsurance intermediary
license if, in the director’s judgment:

(a) The application, anyone named in the application or any member,
principal, officer, director or controlling person of the applicant is
not trustworthy; or

(b) Any person described in paragraph (a) of this subsection has
given cause for revocation or suspension of the license or has failed to
comply with any requirement for issuance of the license.

(8) In order to obtain and maintain the indorsement of reinsurance
intermediary manager, a resident reinsurance intermediary must satisfy
the requirements of ORS 744.818 regarding errors and omissions insurance.
[1993 c.447 §74; 2001 c.191 §41; 2003 c.364 §27](1) An officer or employee of a ceding
insurer is not subject to the requirements of ORS 744.800 to 744.818 that
apply to reinsurance intermediary brokers, with respect to the ceding
insurer.

(2) When engaged in a relationship described in this subsection,
the following persons are not subject, with respect to the reinsurer in
the relationship, to the requirements of ORS 744.800 to 744.818 that
apply to reinsurance intermediary managers:

(a) An employee of the reinsurer.

(b) A United States manager of the United States branch of an alien
reinsurer.

(c) An underwriting manager who, pursuant to contract, manages all
of the reinsurance operations of the reinsurer, is under common control
with the reinsurer and subject to ORS 732.517 to 732.592, and whose
compensation is not based on the volume of premiums written.

(d) The manager of a group, association, pool or organization of
insurers who engage in joint underwriting or joint reinsurance and who
are subject to examination by the insurance regulatory official of the
state in which the manager’s principal business office is located.

(3) An attorney-at-law rendering services in the performance of
duties of an attorney-at-law is not subject to the requirements of ORS
744.800 to 744.818 that apply to reinsurance intermediary brokers or
reinsurance intermediary managers. [1993 c.447 §75; 2003 c.364 §28]A reinsurance intermediary broker
and the insurer it represents in the capacity of a reinsurance
intermediary broker may enter one or more transactions between them only
pursuant to a written authorization that specifies the responsibilities
of each party. The authorization must at least provide that:

(1) The insurer may terminate the authority of the reinsurance
intermediary broker at any time.

(2) The reinsurance intermediary broker must render to the insurer
accounts accurately detailing all material transactions, including
information necessary to support all commissions, charges and other fees
received by or owing to the reinsurance intermediary broker, and remit
all funds due to the insurer not later than the 30th day following the
date of receipt.

(3) All funds collected for the account of the insurer must be held
by the reinsurance intermediary broker in a fiduciary capacity in a
qualified United States financial institution. For purposes of this
subsection, a “qualified United States financial institution” is an
institution that:

(a) Is organized, or, in the case of a United States office of a
foreign banking organization, is licensed, under the laws of the United
States or any state thereof;

(b) Is regulated, supervised and examined by authorities of the
United States or of any state thereof having regulatory authority over
banks and trust companies; and

(c) Has been determined by the Director of the Department of
Consumer and Business Services to meet standards of financial condition
and standing that are necessary and appropriate for regulating the
quality of financial institutions whose letters of credit will be
acceptable to the director. The director may consider standards and
classifications of institutions established by the Securities Valuation
Office of the National Association of Insurance Commissioners for the
purpose of making determinations under this paragraph.

(4) The reinsurance intermediary broker must comply with ORS
744.806.

(5) The reinsurance intermediary broker must comply with the
written standards established by the insurer for the cession or
retrocession of all risks.

(6) The reinsurance intermediary broker must disclose to the
insurer any relationship with any reinsurer to which business will be
ceded or retroceded. [1993 c.447 §76; 2003 c.364 §29](1) A reinsurance intermediary broker must keep a complete
record for each transaction of a contract of reinsurance as provided in
this subsection. For each contract of reinsurance transacted by the
reinsurance intermediary broker that is limited to first party property
coverages, the reinsurance intermediary broker must keep the record for
not less than five years after expiration of the contract of reinsurance.
For all other contracts of reinsurance transacted by the reinsurance
intermediary broker, the reinsurance intermediary broker must keep the
record for not less than 10 years after expiration of each contract of
reinsurance. The record must show all of the following:

(a) The type of contract, limits, underwriting restrictions,
classes or risks and territory.

(b) The period of coverage, including effective and expiration
dates, cancellation provisions and notice required of cancellation.

(c) Reporting and settlement requirements of balances.

(d) The rate used to compute the reinsurance premium.

(e) Names and addresses of assuming reinsurers.

(f) Rates of all reinsurance commissions, including the commissions
on any retrocessions handled by the reinsurance intermediary broker.

(g) Related correspondence and memoranda.

(h) Proof of placement.

(i) Details regarding retrocessions handled by the reinsurance
intermediary broker, including the identity of retrocessionaires and
percentage of each contract assumed or ceded.

(j) Financial records, including premium and loss accounts.

(k) The following written evidence, when the reinsurance
intermediary broker procures a reinsurance contract on behalf of an
authorized ceding insurer:

(A) When the contract is procured directly from any assuming
reinsurer, written evidence that the assuming reinsurer has agreed to
assume the risk.

(B) When the contract is placed through a representative of the
assuming reinsurer other than an employee, written evidence that the
reinsurer has delegated binding authority to the representative.

(2) The insurer must have access to and the right to copy and audit
all accounts and records maintained by the reinsurance intermediary
broker and related to its business. The reinsurance intermediary broker
must maintain the accounts and records in a form usable by the insurer.
[1993 c.447 §77; 2003 c.364 §30](1) An insurer may not engage the
services of any person to act as a reinsurance intermediary broker on its
behalf unless the person is licensed as a reinsurance intermediary broker
as required by ORS 744.800.

(2) An insurer may not employ an individual who is employed by a
reinsurance intermediary broker with which it transacts business unless
the reinsurance intermediary broker is under common control with the
insurer and subject to ORS 732.517 to 732.592.

(3) The insurer must annually obtain a copy of statements of the
financial condition of each reinsurance intermediary broker with which it
transacts business. [1993 c.447 §78; 2003 c.364 §31]A reinsurance intermediary manager
and the reinsurer it represents in that capacity may enter a transaction
only pursuant to a written contract that specifies the responsibilities
of each party and otherwise satisfies the requirements of this section.
The contract must be approved by the board of directors of the reinsurer.
Not later than the 30th day before the reinsurer assumes or cedes
business through the reinsurance intermediary manager, a true copy of the
approved contract must be filed with the Director of the Department of
Consumer and Business Services for approval. The contract must at least
provide that:

(1) The reinsurer may terminate the contract for cause upon written
notice to the reinsurance intermediary manager, and the reinsurer may
immediately suspend the authority of the reinsurance intermediary manager
to assume or cede business during the pendency of any dispute regarding
the cause for termination.

(2) The reinsurance intermediary manager must render accounts to
the reinsurer, accurately detailing all material transactions and
including information necessary to support all commissions, charges and
other fees received by or owing to the reinsurance intermediary manager
and remit all funds due under the contract to the reinsurer on not less
than a monthly basis.

(3) All funds collected for the account of the reinsurer must be
held by the reinsurance intermediary manager in a fiduciary capacity in a
qualified United States financial institution as that term is described
in ORS 744.804. The reinsurance intermediary manager may retain not more
than three months’ estimated claims payments and allocated loss
adjustment expenses. The reinsurance intermediary manager must maintain a
separate bank account for each reinsurer that it represents.

(4) A reinsurance intermediary manager must keep a complete record
for each transaction of a contract of reinsurance as provided in this
subsection. For each contract of reinsurance transacted by the
reinsurance intermediary manager that is limited to first party property
coverages, the reinsurance intermediary manager must keep the record for
not less than five years after expiration of the contract of reinsurance.
For all other contracts of reinsurance transacted by the reinsurance
intermediary manager, the reinsurance intermediary manager must keep the
record for not less than 10 years after expiration of each contract of
reinsurance. The record must show all of the following:

(a) The type of contract, limits, underwriting restrictions,
classes or risks and territory.

(b) The period of coverage, including effective and expiration
dates, cancellation provisions and notice required of cancellation, and
disposition of outstanding reserves on covered risks.

(c) Reporting and settlement requirements of balances.

(d) The rate used to compute the reinsurance premium.

(e) Names and addresses of reinsurers.

(f) The rates of all reinsurance commissions, including the
commissions on any retrocessions handled by the reinsurance intermediary
manager.

(g) Related correspondence and memoranda.

(h) Proof of placement.

(i) Specific information regarding retrocessions handled by the
reinsurance intermediary manager, including the identity of
retrocessionaires and percentage of each contract assumed or ceded.

(j) Financial records, including premium and loss accounts.

(k) The following written evidence, when the reinsurance
intermediary manager places a reinsurance contract on behalf of a ceding
insurer:

(A) When the contract is procured directly from any assuming
reinsurer, written evidence that the assuming reinsurer has agreed to
assume the risk; or

(B) When the contract is placed through a representative of the
assuming reinsurer, other than an employee, written evidence that the
reinsurer has delegated binding authority to the representative.

(5) The reinsurer must have access to and the right to copy all
accounts and records maintained by the reinsurance intermediary manager
that are related to its business. The reinsurance intermediary manager
must maintain the accounts and records in a form usable by the reinsurer.

(6) The contract cannot be assigned in whole or in part by the
reinsurance intermediary manager.

(7) The reinsurance intermediary manager must comply with the
written underwriting and rating standards established by the insurer for
the acceptance, rejection or cession of all risks.

(8) The contract must set forth the rates, terms and purposes of
commissions, charges and other fees that the reinsurance intermediary
manager may levy against the reinsurer.

(9) If the contract permits the reinsurance intermediary manager to
settle claims on behalf of the reinsurer, all of the following provisions
must apply:

(a) All claims must be reported to the reinsurer in a timely manner.

(b) A copy of the claim file must be sent to the reinsurer at its
request or as soon as it becomes known that the claim:

(A) Has the potential of exceeding the lesser of an amount
determined by the director or the limit set by the reinsurer;

(B) Involves a coverage dispute;

(C) May exceed the claims settlement authority of the reinsurance
intermediary manager;

(D) Is open for more than six months; or

(E) Is closed by payment of the lesser of an amount set by the
director or an amount set by the reinsurer.

(c) All claim files must be the joint property of the reinsurer and
the reinsurance intermediary manager. However, upon an order of
liquidation of the reinsurer, the files become the sole property of the
reinsurer or its estate but the reinsurance intermediary manager shall
have reasonable access to and the right to copy the files on a timely
basis.

(d) Any settlement authority granted to the reinsurance
intermediary manager may be terminated for cause upon written notice by
the reinsurer to the reinsurance intermediary manager or upon the
termination of the contract. The reinsurer may suspend the settlement
authority during the pendency of the dispute regarding the cause of
termination.

(10) If the contract provides for a sharing of interim profits by
the reinsurance intermediary manager, the interim profits must not be
paid until one year after the end of each underwriting period for
property business and five years after the end of each underwriting
period for casualty business, or a later period set by the director for
specified lines of insurance, and not until the adequacy of loss reserves
on remaining claims has been attested to by an actuary pursuant to ORS
744.814.

(11) The reinsurance intermediary manager must annually provide the
reinsurer with a statement of its financial condition that is prepared by
an independent certified public accountant.

(12) Periodically, but not less frequently than semiannually, the
reinsurer shall conduct an on-site review of the underwriting and claims
processing operations of the reinsurance intermediary manager.

(13) The reinsurance intermediary manager must disclose to the
reinsurer any relationship it has with any insurer prior to ceding or
assuming any business with such insurer pursuant to the contract.

(14) Within the scope of the actual or apparent authority of the
reinsurance intermediary manager, the acts of the reinsurance
intermediary manager are considered to be the acts of the reinsurer on
whose behalf it is acting. [1993 c.447 §79; 2003 c.364 §32]A reinsurance intermediary manager may not do any of the
following:

(1) Cede retrocessions on behalf of the reinsurer that the
reinsurance intermediary manager represents, except that the reinsurance
intermediary manager may cede facultative retrocessions pursuant to
obligatory facultative agreements if the contract with the reinsurer
contains reinsurance underwriting guidelines for the retrocessions. The
guidelines must include:

(a) A list of reinsurers with which the automatic agreements are in
effect;

(b) For each such reinsurer, the coverages and amounts or
percentages that may be reinsured; and

(c) For each such reinsurer, the commission schedules.

(2) Commit the reinsurer to participate in reinsurance syndicates.

(3) Appoint an insurance producer, reinsurance intermediary broker
or reinsurance intermediary manager without assuring that the insurance
producer, reinsurance intermediary broker or reinsurance intermediary
manager is lawfully licensed to transact the type of reinsurance for
which the appointment is made.

(4) Without prior approval of the reinsurer, pay or commit the
reinsurer to pay a claim, net of retrocessions, that exceeds the lesser
of an amount specified by the reinsurer or one percent of the combined
capital and surplus of the reinsurer as of December 31 of the last
complete calendar year.

(5) Collect any payment from a retrocessionaire or commit the
reinsurer to any claim settlement with a retrocessionaire, without prior
approval of the reinsurer. If prior approval is given, the reinsurance
intermediary manager must promptly forward a report to the reinsurer.

(6) Jointly employ an individual who is employed by the reinsurer,
unless the reinsurance intermediary manager is under common control with
the reinsurer subject to ORS 732.517 to 732.592.

(7) Appoint a reinsurance subintermediary manager. [1993 c.447 §80;
2003 c.364 §33](1) A reinsurer
may not engage the services of any person to act as a reinsurance
intermediary manager on its behalf unless the person is licensed to act
as a reinsurance intermediary manager as required by ORS 744.800.

(2) A reinsurer shall annually obtain a copy of statements of the
financial condition of each reinsurance intermediary manager that the
reinsurer has engaged. Each statement must be prepared by an independent
certified public accountant in a form acceptable to the Director of the
Department of Consumer and Business Services.

(3) If a reinsurance intermediary manager establishes loss
reserves, the reinsurer shall annually obtain the opinion of an actuary
who is in good standing of the American Academy of Actuaries, attesting
to the adequacy of loss reserves established for losses incurred and
outstanding on business produced by the reinsurance intermediary manager.
The opinion must be in addition to any other required loss reserve
certification.

(4) Binding authority for all retrocessional contracts or
participation in reinsurance syndicates must rest with an officer of the
reinsurer who is not affiliated with the reinsurance intermediary manager.

(5) Not later than the 30th day after termination of a contract
with a reinsurance intermediary manager, the reinsurer shall provide
written notification of the termination to the director.

(6) A reinsurer may not appoint to its board of directors any
officer, director, employee, controlling shareholder or subproducer of
its reinsurance intermediary manager. This subsection does not apply to
relationships governed by ORS 732.517 to 732.592. [1993 c.447 §81; 2003
c.364 §34] (1) The
Director of the Department of Consumer and Business Services may examine
any reinsurance intermediary broker and any reinsurance intermediary
manager. The director shall have access to all books, bank accounts and
records of a reinsurance intermediary broker or reinsurance intermediary
manager being examined. All such books, bank accounts and records must be
maintained in a form usable to the director.

(2) A reinsurance intermediary manager may be examined as if the
reinsurance intermediary manager were the reinsurer. [1993 c.447 §82;
2003 c.364 §35](1) A resident reinsurance intermediary acting as a
reinsurance intermediary manager shall maintain with the Director of the
Department of Consumer and Business Services a current certificate of
errors and omissions insurance in an amount established by the director
by rule from an insurer authorized to do business in this state or from
any other insurer acceptable to the director according to standards
established by rule.

(2) If the director determines that errors and omissions insurance
required under this section is not generally available at a reasonable
cost, the director by rule may suspend the requirement of insurance, but
must reimpose the requirement when the insurance becomes available once
again. [1993 c.447 §83; 2003 c.364 §36]If the Director of
the Department of Consumer and Business Services finds that a reinsurance
intermediary broker or a reinsurance intermediary manager has violated
any provision of ORS 744.800 to 744.818, the director may order the
reinsurance intermediary broker or reinsurance intermediary manager to
reimburse the insurer, reinsurer, rehabilitator or liquidator for losses
incurred by the insurer or reinsurer because of the violation. The
director may take action under this section in addition to or instead of
any other action that the director may take under the Insurance Code.
[1993 c.447 §83a; 2003 c.364 §37]VEHICLE RENTAL COMPANIES As used in ORS
744.850 to 744.858:

(1) “Limited license” means a license issued under ORS 744.852 that
authorizes a rental company to offer or sell insurance as provided in ORS
744.854.

(2) “Rental agreement” means a written agreement setting forth the
terms and conditions governing use of a vehicle provided by a rental
company for rent.

(3) “Rental company” means a person or entity in the business of
providing motor vehicles to the public under a rental agreement for a
period of 90 days or less.

(4) “Renter” means a person obtaining the use of a vehicle from a
rental company for a period of 90 days or less.

(5) “Vehicle” means an automobile, van, minivan, sports utility
vehicle, cargo van, pickup truck or truck with a gross vehicle weight of
less than 26,000 pounds that does not require a commercial driver license
to operate. [1999 c.485 §2]Note: 744.850 to 744.858 were added to and made a part of the
Insurance Code by legislative action but were not added to ORS chapter
744 or any series therein. See Preface to Oregon Revised Statutes for
further explanation.
(1) The Director of the Department of Consumer and Business Services
shall adopt rules establishing information required to be submitted by
rental companies applying for a limited license.

(2) A rental company that intends to offer insurance as described
in ORS 744.854 shall file a limited license application with the director
in such form and containing such information as the director requires.

(3) Upon receipt of an application, if the director is satisfied
that the application is complete, the director may issue a limited
license to the rental company. [1999 c.485 §3]Note: See note under 744.850. A limited
license issued under ORS 744.852 authorizes a rental company to offer and
sell the following kinds of insurance in connection with the rental of
vehicles:

(1) Personal accident insurance covering the risks of travel,
including but not limited to accident and health insurance that provides
coverage to renters and other occupants of the rental vehicle for
accidental death or dismemberment and reimbursement for medical expenses
resulting from an accident that occurs during the rental period.

(2) Liability insurance that provides coverage to renters and other
authorized drivers of the rental vehicle for liability arising from the
operation of the rental vehicle. Liability insurance shall include
uninsured and underinsured motorist coverage, insofar as required by
state law or rule.

(3) Personal effects insurance that provides coverage to renters
and other vehicle occupants for loss of and damage to personal effects
during the rental period.

(4) Roadside assistance and emergency sickness insurance. [1999
c.485 §4]Note: See note under 744.850.(1) A rental company issued a limited license under ORS 744.852
may not issue insurance pursuant to ORS 744.854 unless:

(a) The rental agreement is for a period of 90 consecutive days or
less.

(b) At every location where rental agreements are executed, there
is written material available to prospective renters that:

(A) Summarizes clearly and correctly the material terms of the
coverage offered and identifies the insurer;

(B) Discloses that the coverage offered by the rental company may
duplicate coverage already provided by a renter’s personal motor vehicle
liability insurance policy, personal liability insurance policy or other
source of coverage;

(C) States that the purchase of the coverage offered is not
required in order to rent a vehicle; and

(D) Describes the process for filing a claim.

(c) The written material referred to in paragraph (b) of this
subsection has been filed with and approved by the Director of the
Department of Consumer and Business Services.

(d) The rental agreement separately discloses the price for the
coverage purchased.

(2) A rental company issued a limited license under ORS 744.852
must conduct a training program for employees concerning kinds of
coverage offered by the company. The syllabus for the training program
shall be filed annually with the Director of the Department of Consumer
and Business Services by the rental company and is subject to approval by
the director. The rental company shall certify annually to the director
that all employees involved in the sale or offer of coverage to members
of the public have completed or will complete the training program prior
to conducting such sales or offers. The rental company shall also certify
annually to the director that all such employees will receive continuing
education on a regular basis concerning the topics covered in the
training program. The rental company’s compliance with its certification
to the director and with the filed training program syllabus is subject
to audit by the Department of Consumer and Business Services.

(3) A rental company issued a limited license under ORS 744.852 may
not advertise, represent or otherwise hold itself or its employees out as
licensed insurers or insurance producers.

(4) A rental company issued a limited license under ORS 744.852 may
offer and sell insurance only in connection with and incidental to the
rental of vehicles.

(5) A rental company issued a limited license under ORS 744.852
shall designate an executive as the statewide filing officer for the
rental company. [1999 c.485 §5; 2003 c.364 §132]Note: See note under 744.850.(1) If a rental company
issued a limited license under ORS 744.852 offers or sells insurance not
authorized by ORS 744.854, or violates any provision of ORS 744.856, the
Director of the Department of Consumer and Business Services may, after
notice and hearing, revoke or suspend the limited license or may impose
such other penalties as the director prescribes, including but not
limited to suspension of transaction of insurance at specific rental
locations where violations of ORS 744.854 or 744.856 have occurred.

(2) All provisions of the Insurance Code apply to rental companies
issued limited licenses under ORS 744.852 unless specifically rendered
inapplicable by statute or by rule adopted by the director.

(3) The director may adopt any rules necessary for the
implementation of ORS 744.850 to 744.858, including rules establishing
license fees to defray the cost to the Department of Consumer and
Business Services of administering the limited licensure program. [1999
c.485 §6]Note: See note under 744.850.

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