Investment in securities or obligations of certain corporations
(1) Except as provided in this section, funds of an insurer may be invested in common stock, preferred stock, debt obligations and other securities of one or more corporations without regard to the provisions and limitations of ORS 733.590 (Investment in obligations of sovereign, political subdivision thereof or corporation), 733.620 (Investment in stocks of corporation), 733.770 (Limitations on investments in property of any one person or single parcel of real estate) and 733.780 (Prohibited investments) (1)(a) if the corporation is engaged, or will be engaged, in the kind of business or activity which is related to the insurance business as described in ORS 733.635 (Approved activities of corporations in which investments authorized), provided 80 percent or more of the shares of the corporation having voting powers are owned by the insurer either by itself or with prior approval of the Director of the Department of Consumer and Business Services in cooperation with one or more other persons.
(2) Except as provided in subsection (3) of this section, the amount of funds so invested may not exceed the lesser of 10 percent of the insurer’s assets or 50 percent of the amount of the insurer’s combined capital and surplus. However, after such investments, the combined capital and surplus of the insurer must be reasonable in relation to the outstanding liabilities of the insurer and adequate to its financial needs. For the purpose of this subsection, the amount of investments by an insurer shall be calculated by:
(a) Excluding the admitted value of investments in subsidiaries of the insurer;
(b) Adding the total moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the insurance subsidiary or the shareholders’ equity of a noninsurance subsidiary, whether or not represented by the purchase of capital stock or issuance of other securities;
(c) Adding to the sum determined under paragraph (b) of this subsection all amounts expended in acquiring additional common stock, preferred stock, debt obligations and other securities of a subsidiary, and all contributions to the capital or surplus of an insurance subsidiary or the shareholders’ equity of a noninsurance subsidiary, subsequent to its acquisition or formation; and
(d) Subtracting from the sum determined under paragraph (c) of this subsection the return of any amount included in paragraph (b) or (c) of this subsection, whether the return is in the form of cash, securities or other property.
(3) Funds of an insurer may be invested in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer. However, each subsidiary must agree to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in subsection (2) of this section or in ORS 733.510 (Investments of insurers) to 733.780 (Prohibited investments) that apply to the insurer. For the purpose of this subsection, the total investment of the insurer includes:
(a) Any direct investment by the insurer in an asset; and
(b) The insurer’s proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary’s investment by the percentage of the ownership of the subsidiary.
(4) With the approval of the director, an insurer may invest any greater amount in common stock, preferred stock, debt obligations or other securities of one or more subsidiaries. However, after such an investment, the combined capital and surplus of the insurer must be reasonable in relation to the outstanding liabilities of the insurer and adequate to its financial needs.
(5) An insurer must determine whether any investment pursuant to subsection (2), (3) or (4) of this section meets the applicable requirements on the last day of the month immediately preceding the day on which the investment is made. The determination must be made prior to the investment by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends. [1967 c.359 §241; 1969 c.285 §1; 1993 c.447 §113a; 1995 c.638 §7; 2005 c.255 §1]
Note: Sections 2 and 3, chapter 255, Oregon Laws 2005, provide:
Sec. 2. Investments by health care service contractors. Notwithstanding ORS 733.630 (Investment in securities or obligations of certain corporations), a health care service contractor may make investments subject to ORS 750.047 (repealed by this 2005 Act) as long as the investments are based on the combined capital and surplus of the health care service contractor as of December 31, 2004. The combined capital and surplus of the health care service contractor on the day the investment is made must be reasonable in relation to the outstanding liabilities of the health care service contractor and adequate to its financial needs. An investment made under this section is a permitted investment for the purpose of ORS 733.630 (Investment in securities or obligations of certain corporations). [2005 c.255 §2]
Sec. 3. Section 2 of this 2005 Act is repealed on January 2, 2009. [2005 c.255 §3]
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information