2017 ORS 731.824¹
Tax on underwriting profits of wet marine and transportation insurers

This section is amended
Effective January 1, 2020
Relating to taxation for insurers that transact wet marine and transportation insurance; creating new provisions; and amending ORS 731.808, 731.824, 731.828 and 735.430.

(1) Wet marine and transportation insurance written by foreign or alien insurers within this state shall be taxed only on that proportion of the total underwriting profit of such insurer from such insurance written within the United States that the gross premiums of the insurer from such insurance written within this state bear to the gross premiums of such insurer from such insurance written within the United States.

(2) The “underwriting profit,” for purposes of this section, is arrived at by deducting from the net earned premiums on such insurance policies written within the United States during the calendar year:

(a) The losses incurred, and

(b) Expenses incurred, including all taxes, state and federal, in connection with such net earned premiums.

(3) The amount of “net earned premiums” on such insurance policies written during the calendar year is the sum of paragraphs (a) and (b) less paragraph (c) of this subsection.

(a) Gross premiums on such insurance policies written during the calendar year, less any and all return premiums, any and all premiums on policies not taken and any and all premiums paid for such reinsurance.

(b) Unearned premiums on such outstanding marine business at the end of the preceding calendar year.

(c) Unearned premiums on such outstanding marine business at the end of the current calendar year.

(4) “Losses incurred,” as used in this section, means gross losses incurred during the calendar year under such policies written within the United States, less reinsurance claims collected or collectible and salvages or recoveries collectible from any source applicable to the such losses.

(5) “Expenses incurred” includes:

(a) Specific expenses incurred on such earned wet marine and transportation insurance premiums, consisting of all commissions, agency expenses, taxes, licenses, fees, loss-adjustment expenses, and all other expenses incurred directly and specifically in connection with such premiums, less recoveries or reimbursements on account of or in connection with such commissions or other expenses collected or collectible because of reinsurance or from any other source.

(b) General expenses incurred on such earned premiums, consisting of that proportion of general or overhead expenses, such as salaries of officers and employees, printing and stationery, all taxes of this state and of the United States, except as otherwise provided herein, and all other expenses not chargeable specifically to a particular class of insurance, which the net premiums of such insurance written bear to the total net premiums written by such insurer from all classes of insurance written by it during the current calendar year. However, in arriving at the “underwriting profit” for purposes of taxation under this section there shall not be deducted in respect to expenses incurred, as defined and specified in paragraphs (a) and (b) of this subsection, amounts which, in the aggregate, exceed 40 percent of the gross premiums on such insurance policies. [Formerly 745.145]

Chapter 731

Atty. Gen. Opinions

Vehicle service contracts sold to purchasers by motorcycle and motor vehicle dealers as constituting sale of insurance, (1978) Vol 38, p 2218

1 Legislative Counsel Committee, CHAPTER 731—Administration and General Provisions, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors731.­html (2017) (last ac­cessed Mar. 30, 2018).
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 731, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano731.­html (2017) (last ac­cessed Mar. 30, 2018).
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.