2017 ORS 734.510¹
Definitions for ORS 734.510 to 734.710

As used in ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses), unless the context requires otherwise:

(1) “Association” means the Oregon Insurance Guaranty Association created by ORS 734.550 (Oregon Insurance Guaranty Association).

(2) “Board” means the board of directors of the association.

(3) “Controlled insurer” means an insurer 70 percent or more of whose stock is owned by a corporation, or by two or more corporations that are under common ownership.

(4)(a) “Covered claim” means an unpaid claim, including a claim for unearned premiums and a claim by the Workers’ Benefit Fund for payments made pursuant to ORS chapter 656, that arises out of and is within the coverage and limits of an insurance policy to which ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses) apply and which is in force at the time of the occurrence giving rise to the unpaid claim, made by a person insured under such policy or by a person suffering injury or damage for which a person insured under such policy is legally liable, if:

(A) The insurer issuing the policy becomes an insolvent insurer after September 9, 1971; and

(B) The claimant or insured is a resident of this state at the time of the occurrence giving rise to the unpaid claim, or the property for which claim arises is permanently located in this state.

(b) “Covered claim” does not include:

(A) Any amount in excess of the applicable limits of liability provided by an insurance policy to which ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses) apply;

(B) Any amount due any reinsurer, insurer, insurance pool or underwriting association as subrogated recoveries or otherwise;

(C) Except for claims arising out of workers’ compensation policies subject to ORS chapter 656, a claim filed with the association after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer; or

(D) Any first party claim by an insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer, provided that an insured’s net worth on such date is deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis.

(5) “Dividend” means any payment made to the stockholders of a controlled insurer, which payment is directly related to ownership of the stock.

(6) “Insolvent insurer” means a member insurer:

(a) Authorized to transact insurance in this state either at the time the policy was issued or at the time of the occurrence giving rise to the unpaid claim;

(b) Against which a final order of liquidation, with a finding of insolvency, has been entered by a court of competent jurisdiction in the insurer’s domicile after September 9, 1971; and

(c) With respect to which no order, judgment or finding relating to the insolvency of the insurer, whether preliminary or temporary in nature or otherwise, has been issued by a court of competent jurisdiction or by any insurance commissioner, insurance department or similar official or body prior to September 9, 1971, or which was in fact insolvent prior to September 9, 1971, and such de facto insolvency was or should have been known by the chief insurance regulatory official of its domicile.

(7) “Member insurer” means an insurer, including a reciprocal insurer, authorized to transact insurance in this state that writes any kind of insurance to which ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses) apply.

(8) “Net direct written premiums” means direct gross premiums written in this state on insurance policies to which ORS 734.510 (Definitions for ORS 734.510 to 734.710) to 734.710 (Administration of delinquency proceeding claims and expenses) apply, less return premiums thereon and dividends paid or credited to policyholders on such direct business. “Net direct written premiums” does not include premiums on contracts between insurers or reinsurers.

(9) “Plan” means the plan of operation of the association established pursuant to ORS 734.590 (Plan of operation). [1971 c.616 §5; 1977 c.793 §8; 2001 c.974 §1; 2003 c.576 §556]

Notes of Decisions

Loan receipts agree­ment between insurer and insured made insured’s indemnity claim non-covered claim. Columbia Grain, Inc. v. Oregon Ins. Guar. Ass’n, 22 F3d 928 (9th Cir. 1994)

Exclusion from defini­tion of “covered claim” of 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)

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

1 Legislative Counsel Committee, CHAPTER 734—Rehabilitation, Liquidation and Conservation of Insurers, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors734.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 734, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano734.­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.