ORS 731.509
Legislative intent; criteria for allowing credit for reinsurance; rules


(1)

The purpose of ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation) is to protect the interests of insureds, claimants, ceding insurers, assuming insurers and the public generally. The Legislative Assembly declares that the intent of the Legislative Assembly is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom insurers and reinsurers owe obligations. In furtherance of that state interest, the Legislative Assembly mandates that upon the insolvency of an alien insurer or reinsurer that provides security to fund the alien insurer’s or reinsurer’s United States obligations in accordance with ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation), the assets representing the security must be maintained in the United States and claims must be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets must be distributed in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurers. The Legislative Assembly declares that the laws contained in ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation) are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012.

(2)

The Director of the Department of Consumer and Business Services may not allow credit for reinsurance to a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded unless credit is allowed as provided under ORS 731.508 (Approved reinsurance) and unless the reinsurer meets the requirements of:

(a)

Subsection (4) of this section;

(b)

Subsection (5) of this section and ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) (1);

(c)

Subsection (6) of this section;

(d)

Subsections (7) and (8) of this section;

(e)

ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer); or

(f)

(A) Subsection (9) of this section; and

(B)

Additional requirements that the director specifies by rule, which may include:

(i)

The valuation of assets or reserve credits;

(ii)

The amount and forms of security that support reinsurance arrangements; and
(iii) The circumstances under which the director will reduce or eliminate credit.

(3)

The director shall allow credit under subsection (4), (5) or (6) of this section or under ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) only with respect to cessions of the kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in the state in which the assuming insurer is domiciled or, if the assuming insurer is an alien insurer, the state in which the assuming insurer is entered and is licensed or authorized to transact insurance or reinsurance. The director may allow credit under subsection (6) or (7) of this section only if the assuming insurer satisfies applicable requirements under subsection (10) of this section.

(4)

The director shall allow credit if the reinsurance is ceded to an authorized assuming insurer that accepts reinsurance of risks and retains the risk of the reinsurance within such limits as the assuming insurer is otherwise authorized to insure in this state, as provided in ORS 731.508 (Approved reinsurance).

(5)

The director shall allow credit if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state, as provided in ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer). The director may not allow credit to a domestic ceding insurer if the director has revoked accreditation of the assuming insurer after notice and opportunity for hearing.

(6)

The director shall allow credit if the reinsurance is ceded to a foreign assuming insurer or a United States branch of an alien assuming insurer meeting all of the following requirements:

(a)

The foreign assuming insurer must be domiciled in a state employing standards regarding credit for reinsurance that equal or exceed the standards applicable under this section. The United States branch of an alien assuming insurer must be entered through a state employing such standards.

(b)

The foreign assuming insurer or United States branch of an alien assuming insurer must maintain a combined capital and surplus in an amount not less than $20,000,000. The requirement of this paragraph does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.

(c)

The foreign assuming insurer or United States branch of an alien assuming insurer must submit to the authority of the director to examine the foreign assuming insurer’s or alien assuming insurer’s books and records.

(7)

The director shall allow credit if the reinsurance is ceded to an assuming insurer that maintains a trust fund meeting the requirements of this subsection and subsection (8) of this section and that also complies with other requirements of this subsection and subsection (8) of this section. The trust fund must be maintained in a qualified United States financial institution, as defined in ORS 731.510 (Criteria for allowing reduction from liability for reinsurance) (1), for the payment of the valid claims of the assuming insurer’s United States policyholders and ceding insurers and the assigns and successors in interest of the policyholders and ceding insurers. The assuming insurer must report annually to the director information that is substantially the same as information authorized insurers must report on the annual statement form under ORS 731.574 (Annual financial statement), in order to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to the director’s examination of the assuming insurer’s books and records and shall pay to the director the expenses of the examination.

(8)

The following requirements apply to the following categories of assuming insurers:

(a)

(A) For a single assuming insurer, the trust fund must consist of funds in trust in an amount not less than the assuming insurer’s liabilities attributable to reinsurance ceded by United States ceding insurers. In addition, except as provided in subparagraph (B) of this paragraph, the assuming insurer must maintain a trusteed surplus of not less than $20,000,000.

(B)

At any time after the assuming insurer permanently discontinues underwriting, for at least three full years, new business that the trust secures, the commissioner that has principal regulatory oversight over the trust may authorize a reduction in the required trusteed surplus, but only after finding based on an assessment of the risk that the new required surplus level is adequate to protect United States ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and must consider all material risk factors, including, if applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The commissioner may not reduce the amount of the minimum required trusteed surplus below 30 percent of the assuming insurer’s liabilities that are attributable to reinsurance that United States ceding insurers covered by the trust have ceded.

(b)

For a group that includes incorporated and individual unincorporated underwriters:

(A)

For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after August 1, 1995, the trust must consist of a trusteed account in an amount not less than the group’s several liabilities attributable to business United States domiciled ceding insurers have ceded to any member of the group.

(B)

For reinsurance ceded under reinsurance agreements with an inception date on or before July 31, 1995, and not amended or renewed after that date, notwithstanding the other provisions of ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation), the trust must consist of a trusteed account in an amount not less than the group’s several insurance and reinsurance liabilities attributable to business written in the United States.

(C)

In addition to the trusts described in subparagraphs (A) and (B) of this paragraph, the group shall maintain in trust a trusteed surplus of which $100,000,000 must be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account.

(D)

The incorporated members of the group may not engage in any business other than underwriting as a member of the group and are subject to the same level of regulation and solvency control by the group’s domiciliary regulator as are the unincorporated members.

(E)

Within 90 days after the group’s financial statements are due to be filed with the group’s domiciliary regulator, the group shall provide to the director an annual certification by the group’s domiciliary regulator of the solvency of each underwriter member or, if certification is unavailable, financial statements of each underwriter member of the group prepared by independent certified public accountants.

(c)

For the group of incorporated insurers described in this paragraph, the trust must be in an amount equal to the group’s several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group. This paragraph applies to a group of incorporated insurers under common administration that complies with the annual reporting requirements contained in subsection (7) of this section and that has continuously transacted an insurance business outside the United States for at least three years immediately before applying for accreditation. Such a group must have an aggregate policyholders’ surplus of $10,000,000,000 and must submit to the authority of this state to examine the group’s books and records and bear the expense of the examination. The group shall also maintain a joint trusteed surplus of which $100,000,000 must be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any such liabilities. Each member of the group shall make available to the director an annual certification of the member’s solvency by the member’s domiciliary regulator and the member’s independent certified public accountant.

(d)

The form of the trust and any amendment to the trust must be approved by the insurance commissioner of the state in which the trust is domiciled or by the insurance commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.

(e)

The form of the trust and any trust amendments also must be filed with the insurance commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust must vest legal title to the trust’s assets in the trust’s trustees for the benefit of the assuming insurer’s United States ceding insurers and the assigns and successors in interest of the ceding insurers. The trust and the assuming insurer are subject to examination as determined by the director. The trust must remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust.

(f)

Not later than March 1 of each year, the trustees of each trust shall report to the director in writing the balance of the trust, list the trust’s investments at the preceding year end and certify the date of termination of the trust, if a termination is planned, or certify that the trust will not expire prior to the following December 31.

(9)

The director shall allow credit if the reinsurance is ceded to an assuming insurer that does not meet the requirements of subsection (4), (5), (6) or (7) of this section or ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) (1) or (4), but only as to the insurance of risks located in jurisdictions in which the reinsurance is required by applicable law or regulation of that jurisdiction.

(10)

If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the director may not allow the credit permitted by subsections (6) and (7) of this section unless the assuming insurer agrees in the reinsurance agreement to the provisions stated in this subsection. This subsection does not conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate the parties’ disputes, if such an obligation is created in the agreement. The assuming insurer must agree in the reinsurance agreement:

(a)

That if the assuming insurer fails to perform the assuming insurer’s obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction and will abide by the final decision of the court or of any appellate court in the event of an appeal; and

(b)

To designate the director or a designated attorney as the assuming insurer’s true and lawful attorney upon whom any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding company may be served.

(11)

The director shall allow credit if the reinsurance is ceded to the Oregon Reinsurance Program established in section 18, chapter 538, Oregon Laws 2017.

(12)

If the assuming insurer does not meet the requirements of subsection (4), (5) or (6) of this section or ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) (1) or (4), the director may not allow the credit permitted by subsection (7) of this section unless the assuming insurer agrees in the trust agreements to the following conditions:

(a)

Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because the trust fund contains an amount less than the applicable amount required by subsection (8)(a), (b) or (c) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of the grantor’s state or country of domicile, the trustee shall comply with an order of the insurance commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance commissioner with regulatory oversight all the assets of the trust fund.

(b)

The assets must be distributed by and claims must be filed with and valued by the insurance commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that apply to the liquidation of domestic insurance companies.

(c)

If the insurance commissioner with regulatory oversight determines that the assets of the trust fund or any part of the assets is not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the insurance commissioner of the state in which the trust is domiciled shall return the assets or part of the assets in accordance with the laws of the state and the terms of the trust agreement that are consistent with the laws of the state.

(d)

The grantor shall waive any right otherwise available to the grantor under United States law that is inconsistent with this subsection. [1993 c.447 §65; 1995 c.99 §1; 2001 c.318 §15; 2013 c.698 §§5,35; 2017 c.538 §23; 2019 c.151 §20]
Note: The amendments to 731.509 (Legislative intent) by section 25, chapter 538, Oregon Laws 2017, become operative January 2, 2024. See section 46, chapter 538, Oregon Laws 2017. The text that is operative on and after January 2, 2024, including amendments by section 21, chapter 151, Oregon Laws 2019, is set forth for the user’s convenience.
731.509 (Legislative intent). (1) The purpose of ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation) is to protect the interests of insureds, claimants, ceding insurers, assuming insurers and the public generally. The Legislative Assembly declares that the intent of the Legislative Assembly is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom insurers and reinsurers owe obligations. In furtherance of that state interest, the Legislative Assembly mandates that upon the insolvency of an alien insurer or reinsurer that provides security to fund the alien insurer’s or reinsurer’s United States obligations in accordance with ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation), the assets representing the security must be maintained in the United States and claims must be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets must be distributed in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurers. The Legislative Assembly declares that the laws contained in ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation) are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012.

(2)

The Director of the Department of Consumer and Business Services may not allow credit for reinsurance to a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded unless credit is allowed as provided under ORS 731.508 (Approved reinsurance) and unless the reinsurer meets the requirements of:

(a)

Subsection (4) of this section;

(b)

Subsection (5) of this section and ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) (1);

(c)

Subsection (6) of this section;

(d)

Subsections (7) and (8) of this section;

(e)

ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer); or

(f)

(A) Subsection (9) of this section; and

(B)

Additional requirements that the director specifies by rule, which may include:

(i)

The valuation of assets or reserve credits;

(ii)

The amount and forms of security that support reinsurance arrangements; and
(iii) The circumstances under which the director will reduce or eliminate credit.

(3)

The director shall allow credit under subsection (4), (5) or (6) of this section or under ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) only with respect to cessions of the kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in the state in which the assuming insurer is domiciled or, if the assuming insurer is an alien insurer, the state in which the assuming insurer is entered and is licensed or authorized to transact insurance or reinsurance. The director may allow credit under subsection (6) or (7) of this section only if the assuming insurer satisfies applicable requirements under subsection (10) of this section.

(4)

The director shall allow credit if the reinsurance is ceded to an authorized assuming insurer that accepts reinsurance of risks and retains the risk of the reinsurance within such limits as the assuming insurer is otherwise authorized to insure in this state, as provided in ORS 731.508 (Approved reinsurance).

(5)

The director shall allow credit if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state as provided in ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer). The director may not allow credit to a domestic ceding insurer if the director has revoked accreditation of the assuming insurer after notice and opportunity for hearing.

(6)

The director shall allow credit if the reinsurance is ceded to a foreign assuming insurer or a United States branch of an alien assuming insurer meeting all of the following requirements:

(a)

The foreign assuming insurer must be domiciled in a state employing standards regarding credit for reinsurance that equal or exceed the standards applicable under this section. The United States branch of an alien assuming insurer must be entered through a state employing such standards.

(b)

The foreign assuming insurer or United States branch of an alien assuming insurer must maintain a combined capital and surplus in an amount not less than $20,000,000. The requirement of this paragraph does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.

(c)

The foreign assuming insurer or United States branch of an alien assuming insurer must submit to the authority of the director to examine the foreign assuming insurer’s or the alien assuming insurer’s books and records.

(7)

The director shall allow credit if the reinsurance is ceded to an assuming insurer that maintains a trust fund meeting the requirements of this subsection and subsection (8) of this section and that also complies with other requirements of this subsection and subsection (8) of this section. The trust fund must be maintained in a qualified United States financial institution, as defined in ORS 731.510 (Criteria for allowing reduction from liability for reinsurance) (1), for the payment of the valid claims of the assuming insurer’s United States policyholders and ceding insurers and the assigns and successors in interest of the policyholders and ceding insurers. The assuming insurer must report annually to the director information that is substantially the same as information authorized insurers must report on the annual statement form under ORS 731.574 (Annual financial statement), in order to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to the director’s examination of the assuming insurer’s books and records and shall pay to the director the expenses of the examination.

(8)

The following requirements apply to the following categories of assuming insurers:

(a)

(A) For a single assuming insurer, the trust fund must consist of funds in trust in an amount not less than the assuming insurer’s liabilities attributable to reinsurance ceded by United States ceding insurers. In addition, except as provided in subparagraph (B) of this paragraph, the assuming insurer must maintain a trusteed surplus of not less than $20,000,000.

(B)

At any time after the assuming insurer permanently discontinues underwriting, for at least three full years, new business that the trust secures, the commissioner that has principal regulatory oversight over the trust may authorize a reduction in the required trusteed surplus, but only after finding based on an assessment of the risk that the new required surplus level is adequate to protect United States ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and must consider all material risk factors including, if applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The commissioner may not reduce the amount of the minimum required trusteed surplus below 30 percent of the assuming insurer’s liabilities that are attributable to reinsurance that United States ceding insurers covered by the trust have ceded.

(b)

For a group that includes incorporated and individual unincorporated underwriters:

(A)

For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after August 1, 1995, the trust must consist of a trusteed account in an amount not less than the group’s several liabilities attributable to business United States domiciled ceding insurers have ceded to any member of the group.

(B)

For reinsurance ceded under reinsurance agreements with an inception date on or before July 31, 1995, and not amended or renewed after that date, notwithstanding the other provisions of ORS 731.509 (Legislative intent), 731.510 (Criteria for allowing reduction from liability for reinsurance), 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer), 731.512 (Withdrawal of insurer) and 731.516 (Mortgage insurance limitation), the trust must consist of a trusteed account in an amount not less than the group’s several insurance and reinsurance liabilities attributable to business written in the United States.

(C)

In addition to the trusts described in subparagraphs (A) and (B) of this paragraph, the group shall maintain in trust a trusteed surplus of which $100,000,000 must be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account.

(D)

The incorporated members of the group may not engage in any business other than underwriting as a member of the group and are subject to the same level of regulation and solvency control by the group’s domiciliary regulator as are the unincorporated members.

(E)

Within 90 days after the group’s financial statements are due to be filed with the group’s domiciliary regulator, the group shall provide to the director an annual certification by the group’s domiciliary regulator of the solvency of each underwriter member or, if certification is unavailable, financial statements of each underwriter member of the group prepared by independent certified public accountants.

(c)

For the group of incorporated insurers described in this paragraph, the trust must be in an amount equal to the group’s several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group. This paragraph applies to a group of incorporated insurers under common administration that complies with the annual reporting requirements contained in subsection (7) of this section and that has continuously transacted an insurance business outside the United States for at least three years immediately before applying for accreditation. Such a group must have an aggregate policyholders’ surplus of $10,000,000,000 and must submit to the authority of this state to examine the group’s books and records and bear the expense of the examination. The group shall also maintain a joint trusteed surplus of which $100,000,000 must be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any such liabilities. Each member of the group shall make available to the director an annual certification of the member’s solvency by the member’s domiciliary regulator and the member’s independent certified public accountant.

(d)

The form of the trust and any amendment to the trust must be approved by the insurance commissioner of the state in which the trust is domiciled or by the insurance commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.

(e)

The form of the trust and any trust amendments also must be filed with the insurance commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust must vest legal title to the trust’s assets in the trust’s trustees for the benefit of the assuming insurer’s United States ceding insurers and the assigns and successors in interest of the ceding insurers. The trust and the assuming insurer are subject to examination as determined by the director. The trust must remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust.

(f)

Not later than March 1 of each year, the trustees of each trust shall report to the director in writing the balance of the trust, list the trust’s investments at the preceding year end and certify the date of termination of the trust, if a termination is planned, or certify that the trust will not expire prior to the following December 31.

(9)

The director shall allow credit if the reinsurance is ceded to an assuming insurer that does not meet the requirements of subsection (4), (5), (6) or (7) of this section or ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) (1) or (4), but only as to the insurance of risks located in jurisdictions in which the reinsurance is required by applicable law or regulation of that jurisdiction.

(10)

If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the director may not allow the credit permitted by subsections (6) and (7) of this section unless the assuming insurer agrees in the reinsurance agreement to the provisions stated in this subsection. This subsection does not conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate the parties’ disputes, if such an obligation is created in the agreement. The assuming insurer must agree in the reinsurance agreement:

(a)

That if the assuming insurer fails to perform the assuming insurer’s obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction and will abide by the final decision of the court or of any appellate court in the event of an appeal; and

(b)

To designate the director or a designated attorney as the assuming insurer’s true and lawful attorney upon whom any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding company may be served.

(11)

If the assuming insurer does not meet the requirements of subsection (4), (5) or (6) of this section or ORS 731.511 (Criteria to be met by assuming insurer in order to be accredited as reinsurer) (1) or (4), the director may not allow the credit permitted by subsection (7) of this section unless the assuming insurer agrees in the trust agreements to the following conditions:

(a)

Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because the trust fund contains an amount less than the applicable amount required by subsection (8)(a), (b) or (c) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of the grantor’s state or country of domicile, the trustee shall comply with an order of the insurance commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance commissioner with regulatory oversight all the assets of the trust fund.

(b)

The assets must be distributed by and claims must be filed with and valued by the insurance commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that apply to the liquidation of domestic insurance companies.

(c)

If the insurance commissioner with regulatory oversight determines that the assets of the trust fund or any part of the assets is not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the insurance commissioner of the state in which the trust is domiciled shall return the assets or part of the assets in accordance with the laws of the state and the terms of the trust agreement that are consistent with the laws of the state.

(d)

The grantor shall waive any right otherwise available to the grantor under United States law that is inconsistent with this subsection.
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


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