ORS 731.504
Limit of risk


No insurer shall retain any risk on any one subject of insurance, whether a domestic risk or not, in an amount exceeding 10 percent of its surplus to policyholders, or in the case of title insurance, more than 50 percent of such surplus, except that an insurance company, including a reciprocal insurance company, comprised solely of 1,000 or more licensed Oregon physicians organized for the purpose of insuring for professional liability may consider aggregate insurance as surplus to policyholders for purposes of this section and shall not be allowed to retain the risk on any one subject of insurance in excess of two and one-half percent of such aggregate insurance.


For purposes of this section, aggregate insurance is insurance which provides coverage in the event that the total fund of an insurance company, including a reciprocal insurance company, which is available to pay claims for occurrences of any one year, is exhausted. Aggregate insurance shall be in an amount equal to at least five times the annual premium collected by the insurance company.


A “subject of insurance” for the purposes of this section:


As to insurance against fire and hazards other than windstorm, earthquake and other catastrophic hazards, includes all properties insured by the same insurer that customarily are considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of any other hazard insured against;


As to group life and health insurance, refers individually to each person benefited under the group policy as a separate subject; and


As to mortgage insurance, includes all obligations secured by real property in a single tract, or in multiple tracts not separated by at least one-half mile.


Reinsurance ceded as authorized by ORS 731.508 (Approved reinsurance) shall be deducted in determining risk retained. As to surety risks, deduction also shall be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety’s consent and for the surety’s protection.


As to alien insurers, this section relates only to risks and surplus to policyholders of the insurer’s United States branch.


As used in this section, “surplus to policyholders,” in addition to the insurer’s capital and surplus, includes any voluntary reserves that are not required pursuant to law, includes the contingency reserve held for mortgage insurance as required by ORS 733.100 (Contingency reserve liability for mortgage insurance), and shall be determined from the last sworn statement of the insurer on file with the Director of the Department of Consumer and Business Services, or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk.


This section does not apply to wet marine and transportation insurance or to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy. [1967 c.359 §103; 1969 c.692 §3; 1975 c.796 §12]
Chapter 731

Atty. Gen. Opinions

Vehicle service contracts sold to purchasers by motorcycle and motor vehicle dealers as constituting sale of insurance, (1978) Vol 38, p 2218

Last accessed
May. 15, 2020