ORS 732.542
Monopoly or substantial diminishment of competition

  • director’s order
  • prima facie and substantial evidence
  • determination of scope and extent of market

(1)

As used in this section:

(a)

“Highly concentrated market” means a market in which the share that the four largest insurers hold is 75 percent or more of the market.

(b)

“Insurer” means a company that transacts insurance or a group of companies that transact insurance and are under common management, ownership or control.

(c)

“Market” means the relevant product or geographical market the Director of the Department of Consumer and Business Services determines under subsection (7) of this section.

(2)

The director may issue an order under ORS 732.544 (Director’s order) if an insurer fails to submit adequate information in accordance with ORS 732.539 (Notification of acquisition) or if prima facie or substantial evidence of the type described in subsection (3)(a) or (b) of this section exists to support the director’s determination that an acquisition may:

(a)

Substantially diminish competition in a line of insurance in this state; or

(b)

Tend to create a monopoly.

(3)

Intentionally left blank —Ed.

(a)

Prima facie evidence exists to support the director’s determination that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly if the acquisition:

(A)

Is subject to ORS 732.537 (Application of ORS 732.527, 732.539, 732.542 and 732.544 to change of control of insurer);

(B)

Involves two or more insurers that compete in the same market;

(C)

Will take place in a market that has a significant trend toward increased concentration, as provided in subsection (4) of this section; and

(D)

Involves at least one insurer within a group of up to eight of the largest insurers in a market that has a significant trend toward increased concentration, as provided in subsection (4) of this section, and another insurer that is either within the same group or has a market share of two percent or more.

(b)

Substantial evidence exists to support the director’s determination that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly if:

(A)

In a highly concentrated market the insurers involved in the acquisition hold the following shares:

Insurer A Insurer B
Four percent Four percent or more
10 percent Two percent or more
15 percent One percent or more

(B)

In a market that is not highly concentrated, the insurers involved in the acquisition hold the following shares:

Insurer A Insurer B
Five percent Five percent or more
10 percent Four percent or more
15 percent Three percent or more
19 percent One percent or more

(4)

Evidence of a significant trend toward increased concentration in the market exists if the aggregate market share of any grouping of as many as eight of the largest insurers in the market has increased by seven percent or more over a period of time that begins at least five years and not more than 10 years before the date of the notice described in ORS 732.539 (Notification of acquisition) and that ends on the date of the notice described in ORS 732.539 (Notification of acquisition).

(5)

Notwithstanding the requirement in subsection (2) of this section to find prima facie or substantial evidence before issuing an order under ORS 732.544 (Director’s order), the director may issue the order if the director determines, on the basis of other substantial evidence, that the acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly. In making a determination under this subsection, the director may consider:

(a)

The market shares of the insurers involved in the acquisition;

(b)

Volatility in the relative market shares among the largest insurers in the market;

(c)

The number of competitors in the market;

(d)

The concentration of the market and any trend toward increased concentration; and

(e)

The ease with which an insurer may enter or exit the market.

(6)

The director has the burden of showing prima facie evidence for the director’s determination that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly. A person may rebut the director’s showing or determination under subsection (2), (3) or (5) of this section by providing substantial evidence to the contrary.

(7)

In determining the scope and extent of the market for the purpose of determining whether an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly, the director at a minimum shall consider definitions and guidelines that the National Association of Insurance Commissioners promulgates and information that the parties to the acquisition submit. Unless the director determines otherwise:

(a)

The product market is the direct written insurance premium for the line of business in this state that an insurer authorized to transact insurance in this state claims in the annual financial statement the insurer files under ORS 731.574 (Annual financial statement); and

(b)

The geographical market is this state.

(8)

In the tables shown in subsection (3)(b) of this section:

(a)

Percentages that do not appear in the tables may be interpolated using the percentages that appear in the tables.

(b)

Prima facie evidence exists for the director to determine that an acquisition may substantially diminish competition in a line of insurance in this state or may tend to create a monopoly if more than two insurers are involved in the acquisition and the total market share among the insurers exceeds the aggregated market share of “Insurer A” and “Insurer B” in any row shown in the tables.

(c)

“Insurer A” is the insurer with the largest share of the market.

(9)

The director may not issue an order under ORS 732.544 (Director’s order) if:

(a)

The acquisition will yield substantial economies of scale or substantial economies in resource use that cannot feasibly be achieved in any other way and the economies would provide a public benefit that outweighs the public benefit of maintaining competition in the market; or

(b)

The acquisition would substantially increase the availability of insurance and the public benefit from increased insurance availability outweighs the public benefit of maintaining competition in the market. [2013 c.370 §7]

Source: Section 732.542 — Monopoly or substantial diminishment of competition; director’s order; prima facie and substantial evidence; determination of scope and extent of market, https://www.­oregonlegislature.­gov/bills_laws/ors/ors732.­html.

732.005
Application of private corporation law
732.015
Permit to organize insurer required
732.025
Application for permit to organize stock insurer
732.035
Application for permit to organize insurer without capital stock
732.045
Investigation of applications to organize insurers
732.055
Approval or disapproval of application for permit
732.065
Reporting of changes in information in application
732.075
Revoking or suspending permit to organize insurer
732.085
Incorporators
732.095
Articles of incorporation
732.105
Filing articles of incorporation and surety bond, letter of credit or deposit
732.115
Approval of articles, documents and bond, letter of credit or deposit
732.125
Registration of securities subsequent to issuance of organization permit and certificate of incorporation
732.135
Soliciting subscriptions and applications
732.145
Stipulations required in subscriptions and applications
732.155
Organization to be completed within two years
732.165
Liability of directors and incorporators
732.175
Liability for acting as corporate insurer without authority
732.205
General powers of insurers
732.210
Assertion of lack of capacity or power
732.215
Management contracts prohibited
732.220
Exclusive agency contracts
732.225
Impairment of required capitalization prohibited
732.230
Order to cure impairment
732.235
Voluntary dissolution of insurer
732.240
Trusts of life insurance proceeds
732.245
Home office
732.250
Continuity of management in event of national emergency
732.305
Board of directors
732.320
Supporting documents for expenditures
732.325
Certain transactions and compensation between insurers and directors, trustees, officers, agents or employees prohibited
732.405
Authorized shares
732.410
Right to acquire own shares
732.415
Stock insurer’s proxies
732.420
“Equity security” defined
732.425
Application of insider trading regulation
732.430
Filing statement of security ownership with director
732.435
Suit to recover insider profits
732.440
Prohibited sales of securities
732.445
Establishing or maintaining primary or secondary market in securities
732.450
Arbitrage transactions exempt
732.455
Rules
732.460
Annual report to shareholders or members
732.465
Members of domestic mutual insurers
732.470
Voting rights of members of mutual insurer
732.475
Members’ meetings and procedures of domestic mutual and reciprocal insurers
732.480
Copy of bylaws of domestic mutual insurer to be provided to director
732.517
Purpose of ORS 732.517 to 732.546
732.518
Definitions for ORS 732.517 to 732.546
732.521
Activities that are prohibited unless specified procedures followed
732.523
Procedure for acquiring controlling interest of capital stock
732.526
Hearing on proposed activity
732.527
Approval of acquisition by chief insurance regulatory officials of two or more jurisdictions
732.528
Approval of proposed activity
732.529
Procedures following approval by director of proposed activity
732.531
Acquisition of assets or insurance of mutual or reciprocal insurers
732.533
Statement of acquisition
732.536
Compliance with foreign or alien laws
732.537
Application of ORS 732.527, 732.539, 732.542 and 732.544 to change of control of insurer
732.538
Effect of merger or consolidation
732.539
Notification of acquisition
732.541
Jurisdiction over person obtaining or attempting to obtain control
732.542
Monopoly or substantial diminishment of competition
732.544
Director’s order
732.546
Severability
732.547
Remedies for violation of ORS 732.517 to 732.546
732.548
Definitions for ORS 732.517 to 732.596
732.549
Subsidiaries
732.551
Registration of insurer members of holding company systems
732.552
Registration statement
732.553
Certain information not required to be disclosed
732.554
Changes in registration information
732.556
Requirement that certain persons provide information to insurers
732.558
Termination of registration by director
732.562
Consolidated registration
732.564
Registration for affiliated insurers
732.566
Exemption from ORS 732.517 to 732.596 by director
732.567
Presumption of control
732.568
Disclaimer of affiliation
732.569
Annual enterprise risk report
732.571
Supervisory college for domestic insurer
732.572
Rulemaking authority for ORS 732.517 to 732.596
732.574
Standards for transactions within holding company
732.576
Dividends and distributions
732.578
Liability of officers and directors of insurer that is subject to registration
732.582
Determination of reasonableness and adequacy of capital and surplus
732.584
Examinations
732.586
Confidentiality of information
732.588
Supervision, rehabilitation or liquidation
732.592
Recovery from parent corporation or holding company if domestic insurer ordered into liquidation or rehabilitation
732.594
Director’s determination or acknowledgment of appropriate group-wide supervisor for internationally active insurance group
732.596
Request by insurance holding company system for determination or acknowledgement of group-wide supervisor
732.600
Definitions for ORS 732.600 to 732.630
732.602
Intent of ORS 732.600 to 732.630
732.604
Permissible actions of domestic mutual insurer
732.606
Plan for conversion or reorganization
732.608
Waiver of requirements of ORS 732.606
732.610
Contents of plan
732.611
Eligible member of domestic mutual insurer or mutual holding company
732.612
Consideration for membership interest in converting or reorganizing mutual insurer
732.614
Effect of conversion
732.616
Reorganization involving organization of stock holding company
732.618
Reorganization involving organization of mutual holding company
732.620
Status of mutual holding company as corporation
732.622
Restructuring of mutual holding company
732.624
Approval by Director of Department of Consumer and Business Services of mutual holding company restructuring plan
732.626
Plan review and approval
732.628
Limitations on ownership of shares in companies resulting from conversion, reorganization or restructuring
732.630
Dissenters’ rights
732.650
Definitions
732.653
Scope
732.656
Risk management framework
732.659
Own risk and solvency assessment in accordance with manual
732.662
Own risk and solvency summary report
732.666
Exemptions
732.669
Documentation and supporting information
732.672
Confidentiality
732.680
Submission of corporate governance annual disclosure
732.683
Discretion as to form and content of responses to inquiries in corporate governance annual disclosure
732.686
Maintenance of confidentiality and privilege
732.689
Retention of consultant to assist director’s review of corporate governance annual disclosure
732.810
Definitions for ORS 732.810 to 732.814
732.811
Application of ORS 732.810 to 732.814
732.812
Filing of financial statements
732.813
Notice to prospective insured
732.814
Authority of director over controlling producer and controlled insurer
732.820
Interstate Insurance Product Regulation Compact
732.825
State member of Interstate Insurance Product Regulation Commission
Green check means up to date. Up to date