Rehabilitation, Liquidation and Conservation of Insurers

ORS 734.570
Required functions of association

The Oregon Insurance Guaranty Association shall:


Be obligated to pay covered claims existing at the time of determination of insolvency of an insurer or arising within 30 days after the determination of insolvency. Except for covered claims arising out of workers’ compensation policies, such obligation shall include only that amount of each covered claim that is less than $300,000. The association shall pay the full amount of any covered claim arising out of a workers’ compensation policy, less any amount paid on a covered claim by the Workers’ Benefit Fund pursuant to ORS chapter 656. In no event shall the association be obligated in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises, or for claims arising after the policy expiration, policy replacement by the insured or policy cancellation caused by the insured.


Be the insurer to the extent of the association’s obligation on the covered claims and to such extent have all the rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent.


Assess member insurers the amounts necessary to pay the expenses incurred by the association in meeting its obligations and exercising its duties and powers under ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses). The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year bears to the net direct written premiums of all member insurers for the preceding calendar year, but shall in no event exceed in any one year two percent of the member insurer’s net direct written premiums for the preceding calendar year. Each member insurer shall be notified of an assessment not later than the 30th day before the day it is due. If the funds of the association do not provide in any one year an amount sufficient to pay the obligations and expenses of the association, the funds available shall be prorated among the obligations and expenses, and the unpaid portions shall be paid as soon thereafter as funds become available. If an assessment would cause a member insurer’s financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance, the association may exempt from or defer payment of the assessment, in whole or in part, by the member insurer. However, if the member insurer is a controlled insurer, the association, in making determinations regarding the exemption or deferral of assessments, shall treat all dividends paid during the three calendar years immediately preceding the year in which the assessment is made as assets of the insurer just as if such dividends had not been paid. Each member insurer designated as a servicing facility may set off against any assessment authorized payments made on covered claims and expenses incurred in the payment of such claims by the member insurer in its capacity as a servicing facility.


Investigate claims brought against the association and adjust, compromise, settle and pay covered claims to the extent of the association’s obligation, and review settlements, releases and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which such settlements, releases and judgments may be properly contested.


Reimburse servicing facilities and employees of the association for obligations and expenses incurred and paid in the handling of claims on behalf of the association, and pay all other expenses the association incurs in carrying out ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses). [1971 c.616 §8; 1977 c.793 §9; 2001 c.974 §9]

Notes of Decisions

If insurer of motorist coverage becomes insolvent, Oregon Insurance Guaranty Association is liable under contract for additional terms not offered. Taylor v. Oregon Insurance Guaranty Assoc., 99 Or App 554, 783 P2d 49 (1989)

Inability of insolvent insurer to deny responsibility for claim that was not covered claim does not prevent denial by Oregon Insurance Guaranty Association. Oregon Insurance Guaranty Association v. Hall, 200 Or App 128, 113 P3d 452 (2005), Sup Ct review denied

§§ 734.510 to 734.710

Notes of Decisions

SAIF's lien against proceeds of recoveries by injured workers in third-party actions does not attach to payments to worker by Oregon Insurance Guarantee Association acting in place of insolvent insurer. Corvallis Aero Service v. Villalobos, 81 Or App 137, 724 P2d 880 (1986), Sup Ct review denied

Automobile dealers insured for losses attributable to service contracts were not entitled to recover unearned premiums from OIGA after member insurer became insolvent when dealers' policy with insolvent insurer specifically provided there was no right to return of unearned premiums if policy was canceled. Oregon Ins. Guaranty Assn. v. Action Chrysler, 109 Or App 556, 820 P2d 846 (1991)

Where member of Oregon Insurance Guaranty Association merges with nonmember insurer and then becomes insolvent, claims arising before merger against policies issued by nonmember insurer are not covered by association. Palmrose v. Oregon Insurance Guaranty Association, 205 Or App 613, 135 P3d 370 (2006)

Chapter 734

Atty. Gen. Opinions

State is not liable for losses incurred by Oregon Medical Insurance Pool and pools' policy holders bear ultimate risk of pools' insolvency, in that there would be no source of funds to pay benefits under their policies, (1989) Vol 46, p 155


Last accessed
Jun. 26, 2021