(1) For any reason stated in subsection (2) of this section, the Director of the Department of Consumer and Business Services by order may place under supervision:
(a) A domestic insurer; or
(b) A foreign or alien insurer, if the insurance regulatory official of its state of domicile or entry has asked the director to apply this section and ORS 734.047, 734.051 and 734.055 to the insurer.
(2) The director may place an insurer under supervision if upon examination or at any other time the director determines that:
(a) The condition of the insurer renders the continuance of its business hazardous to the public or to its insureds.
(b) The insurer has refused to permit examination of its books, papers, accounts, records or affairs by the director or any deputy, examiner or employee representing the director.
(c) A domestic insurer has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the insurer.
(d) The insurer has failed to comply promptly with the applicable financial reporting statutes or rules and any request of the Department of Consumer and Business Services relating thereto.
(e) The insurer has failed to observe an order of the director to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus.
(f) The insurer is continuing to transact insurance or write business after its certificate of authority has been revoked or suspended by the director.
(g) The insurer, by contract or otherwise, has done any of the following unlawfully, in violation of an order of the director or without first having obtained written approval of the director:
(A) Totally reinsured its entire outstanding business; or
(B) Merged or consolidated substantially its entire property or business with another insurer.
(h) The insurer has engaged in any transaction in which it is not authorized to engage under the laws of this state.
(i) The insurer has failed to comply with any other order of the director.
(j) The insurer has failed to comply with any other applicable provisions of the Insurance Code.
(k) The business of the insurer is being conducted fraudulently.
(L) The insurer agrees to supervision.
(3) If the director determines that one or more conditions set forth in subsection (2) of this section exist, the director may do all of the following:
(a) Notify the insurer of the determination of the director.
(b) Furnish to the insurer a written list of the requirements to abate the condition or conditions determined to exist.
(c) Notify the insurer that it is under the supervision of the director and that the director is applying this section and ORS 734.047, 734.051 and 734.055.
(4) The director may act as the supervisor to conduct the supervision and otherwise carry out an order under subsection (1) of this section or may appoint another person as supervisor.
(5) The director or the appointed supervisor may prohibit any person from taking any of the following actions during the period of supervision without the prior approval of the director or supervisor:
(a) Disposing of, conveying or encumbering any of the insurerís assets or its business in force.
(b) Withdrawing from any of the insurerís bank accounts.
(c) Lending any of the insurerís funds.
(d) Investing any of the insurerís funds.
(e) Transferring any of the insurerís property.
(f) Incurring any debt, obligation or liability on behalf of the insurer.
(g) Merging or consolidating the insurer with another insurer or other person.
(h) Entering into any new reinsurance contract or treaty.
(i) Approving new premiums or renewing any policies.
(j) Terminating, surrendering, forfeiting, converting or lapsing any insurance policy, certificate or contract, except for nonpayment of premiums due.
(k) Releasing, paying or refunding premium deposits, accrued cash or loan values, unearned premiums, or other reserves on any insurance policy, certificate or contract.
(L) Making any material change in management.
(m) Increasing salaries and benefits of officers or directors.
(n) Making or increasing preferential payment of bonuses, dividends or other payments determined by the director to be preferential.
(o) Any other action affecting the business or condition of the insurer.
(6) The director may apply to any circuit court for any restraining order, preliminary and permanent injunctions and other orders necessary to enforce a supervision order.
(7) During the period of supervision, the insurer may file a written request for a hearing to review the supervision or any action taken or proposed to be taken. A request under this subsection shall not suspend the supervision. The insurer must specify in the request the manner in which the action being complained of would not result in improving the condition of the insurer. The hearing shall be held within 30 days after the filing of the request. The director shall complete the review of the supervision or other action and shall take action under subsection (8) of this section if appropriate within 30 days after the record for the hearing is closed.
(8) The director shall release an insurer from supervision if the director determines upon hearing that none of the conditions giving rise to the supervision exist. [1989 c.425 §6; 1991 c.401 §6; 1993 c.447 §88]Section: Previous 734.022 734.026 734.030 734.031 734.035 734.039 734.040 734.043 734.047 734.050 734.051 734.055 734.059 734.060 734.063 Next
Last modified: August 7, 2008