Rehabilitation, Liquidation and Conservation of Insurers

ORS 734.695
Liability of insured of insolvent insurer


(1)

The insured of an insolvent insurer may not be personally liable for amounts due any reinsurer, insurer, insurance pool or underwriting association as subrogation recoveries or otherwise up to the applicable limits of liability provided by the insurance policy issued by the insolvent insurer.

(2)

Notwithstanding the provisions of subsection (1) of this section, and except for claims arising out of workers’ compensation policies subject to ORS chapter 656, the Oregon Insurance Guaranty Association may recover from the following persons the amount of any covered claim paid on behalf of such person under ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses):

(a)

Any insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses); and

(b)

Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses). [1977 c.793 §4; 2001 c.974 §2]

Notes of Decisions

Under this section, only insured of insolvent insurer or persons whose allegedly actionable conduct is within coverage of insolvent insurer's policy are relieved from potential liability for amounts due insurers as subrogation. Window Coverings, Inc. v. Campbell, 91 Or App 335, 755 P2d 719 (1988)

Exclusion of insured liability for amounts owed to reinsurer, insurer, insurance pool or underwriting association does not violate remedy clause of section 10, Article I of Oregon Constitution. Liberty Northwest Insurance v. Oregon Insurance Guarantee Association, 206 Or App 102, 136 P3d 49 (2006)

§§ 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


Source

Last accessed
Jun. 26, 2021