OAR 410-141-5060
FINANCIAL SOLVENCY REGULATION: Qualified Trust Agreements

(1) As used in this section:
(a) “Beneficiary” includes any successor by operation of law of the named beneficiary, including without limitation any liquidator, rehabilitator, receiver or conservator.
(b) “Grantor” means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unauthorized or unlicensed unaccredited reinsurer.
(c) “Obligations” as used in subsection (2) means:
(A) Reinsured losses and allocated loss expenses paid by the cedent CCO, but not recovered from the reinsurer;
(B) Reserves for reinsured losses reported and outstanding;
(C) Reserves for reinsured losses incurred but not reported; and
(D) Reserves for allocated reinsured loss expenses and unearned capitated revenue.
(2) The following are required conditions applicable to the trust agreement:
(a) The trust agreement shall be entered into between the beneficiary, the grantor and a trustee that must be a Qualified United States Financial Institution.
(b) The trust agreement shall create a trust account into which assets must be deposited.
(c) All assets in the trust account shall be held by the trustee at the trustee’s office in the United States.
(d) The trust agreement shall provide that:
(A) The beneficiary shall have the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;
(B) No other statement or document is required to be presented in order to withdraw assets, except that the beneficiary may be required to acknowledge receipt of withdrawn assets;
(C) It is not subject to any conditions or qualifications outside of the trust agreement; and
(D) It shall not contain references to any other agreements or documents except as provided for under subsection (l) of this section.
(e) The trust agreement shall be established for the sole benefit of the beneficiary.
(f) The trust agreement shall require the trustee to:
(A) Receive assets and hold all assets in a safe place;
(B) Determine that all assets are in such form that the beneficiary, or the trustee upon direction by the beneficiary, may whenever necessary negotiate any such assets, without consent or signature from the grantor or any other person or entity;
(C) Furnish to the grantor and the beneficiary a statement of all assets in the trust account upon its inception and at intervals no less frequent than the end of each calendar quarter;
(D) Notify the grantor and the beneficiary within ten days of any deposits to or withdrawals from the trust account;
(E) Upon written demand of the beneficiary, immediately take all steps necessary to transfer absolutely and unequivocally all right, title and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and
(F) Allow no substitutions or withdrawals of assets from the trust account, except on written instructions from the beneficiary, except that the trustee may, without the consent of, but with notice to the beneficiary, upon call or maturity of any trust asset, withdraw such asset upon condition that the proceeds are paid into the trust account.
(g) The trust agreement shall provide that at least 30 days but not more than 45 days prior to termination of the trust account, written notification of termination shall be delivered by the trustee to the beneficiary.
(h) The trust agreement shall be made subject to and governed by the laws of the state in which the trust is domiciled.
(i) The trust agreement shall prohibit invasion of the trust corpus for the purpose of paying commissions to or reimbursing the expenses of the trustee.
(j) In order for a letter of credit to qualify as an asset of the trust, the trustee must have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the Authority, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.
(k) The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances in which such a draw would be required shall be deemed to be negligence or willful misconduct, or both.
(l) The trust agreement may provide that the cedent CCO shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the cedent CCO or the reinsurer, only for the following purposes:
(A) To pay or reimburse the cedent CCO for the reinsurer’s share under the reinsurance agreement of any losses and allocated loss expenses paid by the cedent CCO, but not recovered from the reinsurer, or for unearned capitated revenue due to the cedent CCO if not otherwise paid by the reinsurer;
(B) To pay the reinsurer any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the reinsurer’s obligations under the reinsurance agreement; or
(C) When the cedent CCO has received notification of termination of the trust account and if the reinsurer’s entire obligations under the reinsurance agreement remain unliquidated and undischarged ten days prior to the termination date, to withdraw amounts equal to the obligations and deposit those amounts in a separate account held apart from its general assets, in the name of the cedent CCO in any Qualified United States Financial Institution, in trust for such uses and purposes specified in paragraphs (A) and (B) of this subsection as may remain executory after such withdrawal and for any period after the termination date.
(3) The following are permitted conditions applicable to the trust agreement:
(a) The trust agreement may provide that the trustee may resign upon delivery of a written notice of resignation, effective not less than 90 days after the beneficiary and grantor receive the notice, and that the trustee may be removed by the grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective not less than 90 days after the trustee and the beneficiary receive the notice, except that such a resignation or removal shall not be effective until a successor trustee has been duly appointed and approved by the beneficiary and the grantor and all assets in the trust have been duly transferred to the new trustee.
(b) The grantor may have the full and unqualified right to vote any shares of stock in the trust account and to receive from time to time payments of any dividends or interest upon any shares of stock or obligations included in the trust account. Any such interest or dividends shall be either forwarded promptly upon receipt to the grantor or deposited in a separate account established in the grantor’s name.
(c) The trustee may be given authority to invest and accept substitutions of any funds in the account, except that an investment or substitution shall not be made without prior approval of the beneficiary, unless the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in market value to the assets withdrawn.
(d) The trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets are to be transferred. Such a transfer may be conditioned upon the trustee receiving other specified assets prior to or simultaneously with the transfer.
(e) The trust agreement may provide that, upon termination of the trust account, all assets not previously withdrawn by the beneficiary shall be delivered to the grantor with written approval by the beneficiary.
(4) The following are additional conditions applicable to reinsurance agreements:
(a) A reinsurance agreement may contain provisions that:
(A) Require the reinsurer to enter into a trust agreement and to establish a trust account for the benefit of the cedent CCO and specify what the agreement is to cover.
(B) Stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars; certificates of deposit issued by a United States bank and payable in United States dollars; and investments permitted by OAR 410-141-5095 (ASSET VALUATION AND PERMITTED INVESTMENTS: Assets Other Than Securities; Bonds; Real Property; Mortgages; Compensating Balances) to 410-141-5165 (ASSET VALUATION AND PERMITTED INVESTMENTS: Prohibited Investments) or any combination thereof, except that investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed five percent of total investments.
(C) Require the reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the cedent CCO, or the trustee upon the direction of the cedent CCO, may whenever necessary negotiate these assets without consent or signature from the reinsurer or any other entity.
(D) Require that all settlements of account between the cedent CCO and the reinsurer be made in cash or its equivalent.
(E) Stipulate that the reinsurer and the cedent CCO agree that the assets in the trust account, established pursuant to the provisions of the reinsurance agreement, may be withdrawn by the cedent CCO at any time, notwithstanding any other provisions in the reinsurance agreement, and shall be used and applied by the cedent CCO or its successors in interest by operation of law, including without limitation any liquidator, rehabilitator, receiver or conservator of the cedent CCO, without diminution because of insolvency on the part of the cedent CCO or the reinsurer, only for the following purposes:
(i) To pay or reimburse the cedent CCO for:
(I) The reinsurer’s share under the specific reinsurance agreement of unearned capitated revenue returned, but not yet recovered from the reinsurer.
(II) The reinsurer’s share of benefits or losses paid by the cedent CCO pursuant to the provisions of the Member Contracts reinsured under the reinsurance agreement.
(III) Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the cedent CCO.
(ii) To make payment to the reinsurer of amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the cedent CCO.
(b) The reinsurance agreement may also contain provisions that:
(A) Give the reinsurer the right to seek the cedent CCO’s approval, which the cedent CCO shall not unnecessarily or arbitrarily withhold, to withdraw from the trust account all or any part of the trust assets and transfer those assets to the reinsurer. The right to seek approval under this paragraph must be subject to one of the following requirements:
(i) The reinsurer shall, at the time of withdrawal, replace the withdrawn assets with other qualified assets having a market value equal to the market value of the assets withdrawn so as to maintain at all times the deposit in the required amount; or
(ii) After withdrawal and transfer, the market value of the trust account is no less than 102 percent of the required amount.
(B) Provide for:
(i) The reinsurer’s return of any amount withdrawn in excess of the actual amounts required under subsection (2)(l)(B) of this section; and
(ii) Interest payments at a rate not in excess of the prime rate of interest on the amounts held in trust pursuant to this section.
(iii) Permit the award by any arbitration panel or court of competent jurisdiction of:
(I) Court or arbitration costs;
(II) Attorney fees; and
(III) Any other reasonable expenses.
(c) A trust agreement may be used to reduce any liability for reinsurance ceded to an unauthorized reinsurer in financial statements required to be filed with the Authority in compliance with the provisions of OAR 410-141-5010 (FINANCIAL SOLVENCY REGULATION: Procedure for General Financial Reporting and for Determining Financial Solvency Matters) to 5020 when established on or before the date of filing of the financial statement of the cedent CCO. The reduction for the existence of an acceptable trust account may be up to the current fair market value of acceptable assets available to be withdrawn from the trust account at that time, but such reduction shall be no greater than the specific obligations under the reinsurance agreement that the trust account was established to secure.

Source: Rule 410-141-5060 — FINANCIAL SOLVENCY REGULATION: Qualified Trust Agreements, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=410-141-5060.

410‑141‑3500
Definitions 410‑141‑3501
Administration of Oregon Integrated and Coordinated Health Care Delivery System Regulation 410‑141‑3505
Use of Subcontractors 410‑141‑3510
Provider Contracting and Credentialing 410‑141‑3515
Network Adequacy 410‑141‑3520
Record Keeping and Use of Health Information Technology 410‑141‑3525
Outcome and Quality Measures 410‑141‑3530
Sanctions 410‑141‑3540
Member Protections 410‑141‑3545
Coordinated Care Organization Behavioral Health Provider, Treatment and Facility Certification and Licensure 410‑141‑3550
Resolving Disputes between MCEs and the Authority 410‑141‑3555
Resolving Disputes between Health Care Entities and CCOs that Concern CCO Contact Award 410‑141‑3560
Resolving Contract Disputes Between Health Care Entities and CCOs 410‑141‑3565
Managed Care Entity Billing 410‑141‑3566
Telehealth Service and Reimbursement Requirements 410‑141‑3570
Managed Care Entity Encounter Claims Data Reporting 410‑141‑3575
MCE Member Relations: Marketing 410‑141‑3580
MCE Member Relations: Potential Member Information 410‑141‑3585
MCE Member Relations: Education and Information 410‑141‑3590
MCE Member Relations: Member Rights and Responsibilities 410‑141‑3600
MCE Assessment: Definitions 410‑141‑3601
MCE Assessment: General Administration 410‑141‑3605
MCE Assessment: Disclosure of Information 410‑141‑3610
MCE Assessment: Calculation, Report, Due Date, Verification 410‑141‑3615
MCE Assessment: Filing an Amended Report 410‑141‑3620
MCE Assessment: Determining the Date Filed 410‑141‑3625
MCE Assessment: Authority to Audit Records 410‑141‑3630
MCE Assessment: Determining Assessment Liability on Failure to File 410‑141‑3635
MCE Assessment: Financial Penalty for Failure to File a Report or Failure to Pay Assessment When Due 410‑141‑3640
MCE Assessment: Notice of Proposed Action 410‑141‑3645
MCE Assessment: Hearing Process 410‑141‑3650
MCE Assessment: Final Order of Payment 410‑141‑3655
Assessment: Remedies Available after Final Order of Payment 410‑141‑3700
CCO Application and Contracting Procedures 410‑141‑3705
Criteria for CCOs 410‑141‑3710
Contract Termination and Close-Out Requirements 410‑141‑3715
CCO Governance 410‑141‑3720
Service Area Change for Existing CCOs 410‑141‑3725
CCO Contract Renewal Notification 410‑141‑3730
Community Health Assessment and Community Health Improvement Plans 410‑141‑3735
Social Determinants of Health and Equity 410‑141‑3740
Traditional Health Workers 410‑141‑3800
CCO Enrollment for Children Receiving Health Services 410‑141‑3805
Mandatory MCE Enrollment Exceptions 410‑141‑3810
Disenrollment from MCEs 410‑141‑3815
CCO Enrollment for Temporary Out-of-Area Behavioral Health Treatment Services 410‑141‑3820
Covered Services 410‑141‑3825
Excluded Services and Limitations 410‑141‑3830
Prioritized List of Health Services 410‑141‑3835
MCE Service Authorization 410‑141‑3840
Emergency and Urgent Care Services 410‑141‑3845
Health-Related Services 410‑141‑3850
Transition of Care 410‑141‑3855
Pharmaceutical Services 410‑141‑3860
Integration and Coordination of Care 410‑141‑3865
Care Coordination Requirements 410‑141‑3870
Intensive Care Coordination 410‑141‑3875
MCE Grievances & Appeals: Definitions and General Requirements 410‑141‑3880
Grievances & Appeals: Grievance Process Requirements 410‑141‑3885
Grievances & Appeals: Notice of Action/Adverse Benefit Determination 410‑141‑3890
Grievances & Appeals: Appeal Process 410‑141‑3895
Grievances & Appeals: Expedited Appeal 410‑141‑3900
Grievances & Appeals: Contested Case Hearings 410‑141‑3905
Grievances & Appeals: Expedited Contested Case Hearings 410‑141‑3910
Grievances & Appeals: Continuation of Benefits 410‑141‑3915
Grievances & Appeals: System Recordkeeping 410‑141‑3920
Transportation: NEMT General Requirements 410‑141‑3925
Transportation: Vehicle Equipment and Driver Standards 410‑141‑3930
Transportation: Out-of-Service Area and Out-of-State Transportation 410‑141‑3935
Transportation: Attendants for Child and Special Needs Transports 410‑141‑3940
Transportation: Secured Transports 410‑141‑3945
Transportation: Ground and Air Ambulance Transports 410‑141‑3955
Transportation: Member Service Modifications and Rights 410‑141‑3960
Transportation: Member Reimbursed Mileage, Meals, and Lodging 410‑141‑3965
Reports and Documentation 410‑141‑5000
FINANCIAL SOLVENCY REGULATION: Definitions 410‑141‑5005
FINANCIAL SOLVENCY REGULATION: CCO Financial Solvency Requirements 410‑141‑5010
FINANCIAL SOLVENCY REGULATION: Procedure for General Financial Reporting and for Determining Financial Solvency Matters 410‑141‑5015
FINANCIAL SOLVENCY REGULATION: Financial Statement Reporting 410‑141‑5020
FINANCIAL SOLVENCY REGULATION: Annual Audited Financial Statements and Auditor’s Report 410‑141‑5025
FINANCIAL SOLVENCY REGULATION: Qualifications of Independent Certified Public Accountant 410‑141‑5030
FINANCIAL SOLVENCY REGULATION: Notification of Adverse Financial Condition 410‑141‑5035
FINANCIAL SOLVENCY REGULATION: Accountant’s Letter of Qualifications 410‑141‑5040
FINANCIAL SOLVENCY REGULATION: Independent Certified Public Accountants Workpapers 410‑141‑5045
FINANCIAL SOLVENCY REGULATION: Corporate Governance Annual Disclosure Filing 410‑141‑5050
FINANCIAL SOLVENCY REGULATION: Requirements for Reinsurance 410‑141‑5055
FINANCIAL SOLVENCY REGULATION: Requirements for Obtaining Credit for Reinsurance 410‑141‑5060
FINANCIAL SOLVENCY REGULATION: Qualified Trust Agreements 410‑141‑5065
FINANCIAL SOLVENCY REGULATION: Letters of Credit 410‑141‑5070
FINANCIAL SOLVENCY REGULATION: Assets, Liabilities, Reserves 410‑141‑5075
FINANCIAL SOLVENCY REGULATION: Disallowance of Certain Reinsurance Transactions 410‑141‑5080
FINANCIAL SOLVENCY REGULATION: Transparency 410‑141‑5085
ASSET VALUATION AND PERMITTED INVESTMENTS: Definitions 410‑141‑5090
ASSET VALUATION AND PERMITTED INVESTMENTS: Calculation of Value 410‑141‑5095
ASSET VALUATION AND PERMITTED INVESTMENTS: Assets Other Than Securities 410‑141‑5100
ASSET VALUATION AND PERMITTED INVESTMENTS: Investments Used to Provide Compensating Balances 410‑141‑5105
ASSET VALUATION AND PERMITTED INVESTMENTS: Investment of Required Capitalization 410‑141‑5110
ASSET VALUATION AND PERMITTED INVESTMENTS: Investment in Mortgage Loans 410‑141‑5115
ASSET VALUATION AND PERMITTED INVESTMENTS: Investment in Real Property 410‑141‑5120
ASSET VALUATION AND PERMITTED INVESTMENTS: Investment in Corporate Stocks 410‑141‑5125
ASSET VALUATION AND PERMITTED INVESTMENTS: Loans 410‑141‑5130
ASSET VALUATION AND PERMITTED INVESTMENTS: Investments 410‑141‑5135
ASSET VALUATION AND PERMITTED INVESTMENTS: Personal Property 410‑141‑5140
ASSET VALUATION AND PERMITTED INVESTMENTS: “Prudent Investor” Standard 410‑141‑5145
ASSET VALUATION AND PERMITTED INVESTMENTS: Prohibited Conduct by Directors, Trustees, Officers, Agents or Employees 410‑141‑5150
ASSET VALUATION AND PERMITTED INVESTMENTS: Investment of Funds in Obligations That Are Not Investment Quality 410‑141‑5155
ASSET VALUATION AND PERMITTED INVESTMENTS: Approval by Board 410‑141‑5160
ASSET VALUATION AND PERMITTED INVESTMENTS: Record of Investments 410‑141‑5165
ASSET VALUATION AND PERMITTED INVESTMENTS: Prohibited Investments 410‑141‑5170
CAPITALIZATION: Capital and Surplus 410‑141‑5175
CAPITALIZATION: Impaired Capital and Surplus 410‑141‑5180
CAPITALIZATION: Dividend and Distribution Restrictions 410‑141‑5185
CAPITALIZATION: Restricted Reserve Account 410‑141‑5190
CAPITALIZATION: Surplus Notes 410‑141‑5195
CAPITALIZATION: Risk-based Capital (RBC) Definitions 410‑141‑5200
CAPITALIZATION: RBC Reports 410‑141‑5205
CAPITALIZATION: Company Action Level Event 410‑141‑5210
CAPITALIZATION: Regulatory Action Level Event 410‑141‑5215
CAPITALIZATION: Authorized Control Level Event 410‑141‑5220
CAPITALIZATION: Mandatory Control Level Event 410‑141‑5225
REPORTING AND APPROVAL OF CERTAIN TRANSACTIONS: Extraordinary Dividends and Other Distributions 410‑141‑5230
REPORTING AND APPROVAL OF CERTAIN TRANSACTIONS: Reports of Material Acquisitions And Dispositions Of Assets, and Changes to Ceded Reinsurance Agreements 410‑141‑5235
REPORTING AND APPROVAL OF CERTAIN TRANSACTIONS: Reports of Material Materiality and Reporting Standards for Asset Acquisitions and Dispositions 410‑141‑5240
REPORTING AND APPROVAL OF CERTAIN TRANSACTIONS: Materiality and Reporting Standards for Changes in Ceded Reinsurance Agreements 410‑141‑5245
EXAMINATIONS: CCO Production of Books and Records 410‑141‑5250
EXAMINATIONS: Authority Examinations of CCOs 410‑141‑5255
CCO ACQUISITIONS AND MERGERS: Purpose 410‑141‑5260
CCO ACQUISITIONS AND MERGERS: Activities Prohibited Unless Certain Provisions Satisfied 410‑141‑5265
CCO ACQUISITIONS AND MERGERS: Procedure For Acquiring Controlling Interest 410‑141‑5270
CCO ACQUISITIONS AND MERGERS: Information to Be Included in Form A 410‑141‑5275
CCO ACQUISITIONS AND MERGERS: Hearing, Request, Notice 410‑141‑5280
CCO ACQUISITIONS AND MERGERS: Determination Concerning Proposed Activity, Time For Decision, Grounds For Refusal 410‑141‑5285
CCO HOLDING COMPANY REGULATION: Definitions 410‑141‑5290
CCO HOLDING COMPANY REGULATION: Members of Holding Company Systems 410‑141‑5295
CCO HOLDING COMPANY REGULATION: Form and Contents of Registration Statement 410‑141‑5300
CCO HOLDING COMPANY REGULATION: Registration Statement Filing 410‑141‑5305
CCO HOLDING COMPANY REGULATION: Information Required to Be Disclosed 410‑141‑5310
CCO HOLDING COMPANY REGULATION: Presumption of Control 410‑141‑5315
CCO HOLDING COMPANY REGULATION: Disclaimer of Affiliation 410‑141‑5320
CCO HOLDING COMPANY REGULATION: Transactions Within Holding Company 410‑141‑5325
CCO HOLDING COMPANY REGULATION: Director and Officer Liability 410‑141‑5330
CCO HOLDING COMPANY REGULATION: Annual Enterprise Risk Report 410‑141‑5335
CCO HOLDING COMPANY REGULATION: Disclaimers and Termination of Registration 410‑141‑5340
CCO HOLDING COMPANY REGULATION: Forms 410‑141‑5345
CCO HOLDING COMPANY REGULATION: Forms 410‑141‑5350
CCO HOLDING COMPANY REGULATION: Forms 410‑141‑5355
CCO HOLDING COMPANY REGULATION: Forms 410‑141‑5360
CCO INSOLVENCY AND DISSOLUTION: Access to Funds and Transition of Members and Records 410‑141‑5365
CCO INSOLVENCY AND DISSOLUTION: Hazardous Operations 410‑141‑5370
CCO INSOLVENCY AND DISSOLUTION: Recovery From Parent Corporation Or Holding Company In The Event Of Liquidation Or Rehabilitation 410‑141‑5375
CCO INSOLVENCY AND DISSOLUTION: Voluntary Dissolution 410‑141‑5380
CIVIL PENALTIES
Last Updated

Jun. 8, 2021

Rule 410-141-5060’s source at or​.us