ORS Chapter 733 - Oregon Statutes

Chapter 733 — Accountingand Investments

 

2009 EDITION

 

 

ACCOUNTINGAND INVESTMENTS

 

INSURANCE

 

ACCOUNTING

 

733.010     Assetsallowed

 

733.020     Assetsnot allowed

 

733.030     Liabilitiesin general

 

733.040     Reinsurancecredit

 

733.050     Increaseof inadequate reserves

 

733.060     Unearnedpremium reserve

 

733.070     Unearnedpremium reserve for marine and transportation insurance trip risks

 

733.080     Reservesfor health insurance

 

733.090     Unearnedpremium reserve and fund for title insurance

 

733.095     Unearnedpremium reserve for home protection insurance

 

733.100     Contingencyreserve liability for mortgage insurance

 

733.115     Establishingreserves for variable life insurance and annuity policies

 

733.140     Disallowanceof “wash” transactions

 

733.150     Alternativeaccounting for assets and liabilities

 

733.160     Valuationof assets other than securities

 

733.165     Valuationof securities

 

733.170     Accountsand records

 

733.210     Director’sdeterminations

 

733.220     Establishmentand regulation of separate accounts to fund life insurance or annuities

 

733.230     Transactionsof separate accounts registered with Securities and Exchange Commission;application of laws and rules to members of separate account managementcommittee

 

STANDARDVALUATION LAW

 

733.300     Shorttitle

 

733.302     Reservevaluation method for life insurance policies and annuity and pure endowmentcontracts

 

733.304     Opinionof actuary; rules

 

733.306     Computationof minimum standards for life insurance, industrial insurance, annuities andpure endowment contracts; rules

 

733.308     Computationof minimum standard for annuities and pure endowment contracts; rules

 

733.310     Interestrates for determining minimum standard for valuation

 

733.312     Amountof required reserves for life insurance policies

 

733.314     Amountof required reserves for certain annuity and pure endowment contracts

 

733.316     Aggregatereserves

 

733.318     Alternativestandards of valuation

 

733.320     Minimumrequired reserve for certain policies

 

733.322     Calculationof reserves for plans for which minimum reserves cannot be determined under ORS733.312, 733.314 or 733.320; rules

 

INVESTMENTS

 

733.510     Investmentsof insurers; rules

 

733.520     Currentoperating requirements exempted

 

733.530     “Corporation,”“sovereign,” “political subdivision” defined

 

733.540     “Obligation”defined

 

733.550     “Amplysecured obligation” defined

 

733.560     “Unencumbered”defined

 

733.570     “Improvedreal property” defined

 

733.575     Prohibiteduse of funds as compensating balances

 

733.578     Conditionsnecessary for investments used to provide compensating balances

 

733.580     Investmentof required capitalization

 

733.590     Investmentin obligations of sovereign, political subdivision thereof or corporation

 

733.600     Investmentin mortgage loans

 

733.610     Investmentin real property

 

733.620     Investmentin stocks of corporation

 

733.630     Investmentin securities or obligations of certain corporations

 

733.635     Approvedactivities of corporations in which investments authorized

 

733.640     Lendingfunds; limitations on loans

 

733.650     Investmentof funds in certain obligations and other specified items

 

733.652     Investmentof funds of separate accounts

 

733.654     Limitationon amount of separate account investments; exceptions

 

733.656     Limitationon securities owned or controlled by separate account investments

 

733.658     Applicabilityof separate account investment limitations

 

733.670     Investmentof funds under “prudent investor” standard

 

733.680     Acquisitionand retention of personal property generally; purchases or loans for protectionof investment property

 

733.685     Investmentof funds by home protection insurer; rules

 

733.690     Investmentof funds in title plant

 

733.695     Investmentof funds in obligations that are not investment quality; rules

 

733.700     Investmentof funds in health care service facilities

 

733.710     Investmentsauthorized by prior law; date of eligibility of investment

 

733.720     Investmentssubject to additional limitations and requirements

 

733.730     Approvalby board of directors of investments and deposits

 

733.740     Recordof investments required

 

733.750     Disposalof investments on order of director

 

733.760     Insurancerequired on buildings on property which is security for loan

 

733.770     Limitationson investments in property of any one person or single parcel of real estate

 

733.780     Prohibitedinvestments

 

ACCOUNTING

 

      733.010Assets allowed.In any determination of the financial condition of an insurer, there shall beallowed as assets only such assets as are owned by the insurer and whichconsist of:

      (1)Cash in the possession or control of the insurer, including the true balance ofany deposit in a solvent bank or trust company.

      (2)Investments held in accordance with the Insurance Code, and due or accruedincome items in connection therewith to the extent considered by the Directorof the Department of Consumer and Business Services to be collectible.

      (3)Premium notes, policy loans, liens and other like policy assets on lifeinsurance policies and accrued interest thereon, in an amount not exceeding theloan value of the policy.

      (4)Due premiums, deferred premiums, installment premiums, and written obligationstaken for premiums, to the extent allowed by the director.

      (5)The amount recoverable from a reinsurer if credit for reinsurance may beallowed to the insurer under ORS 731.509 or 731.510 and amounts receivable onassumed reinsurance representing funds withheld by a solvent ceding insurerunder a reinsurance treaty.

      (6)Deposits or equities recoverable from underwriting associations, syndicates andreinsurance funds, or from any suspended banking institution, to the extentdeemed by the director to be available for the payment of losses and claims.

      (7)Other assets considered by the director to be available for the payment oflosses and claims, at values determined by the director. [1967 c.359 §208; 1971c.321 §18; 1979 c.818 §1; 1993 c.447 §69; 2001 c.318 §7]

 

      733.020Assets not allowed.In addition to assets impliedly excluded by ORS 733.010, the followingexpressly shall not be allowed as assets in any determination of the financialcondition of an insurer:

      (1)Advances to officers, other than policy loans, whether secured or not, andadvances to employees, agents and other persons on personal security only.

      (2)Stock of such insurer owned by it, or any material equity therein or loanssecured thereby, or any material proportionate interest in such stock acquiredor held through the ownership by such insurer of an interest in another firm,corporation or business unit.

      (3)Tangible personal property, except such property as the insurer is otherwisepermitted to acquire and retain as an investment under the Insurance Code andwhich is deemed by the Director of the Department of Consumer and BusinessServices to be available for the payment of losses and claims or which isotherwise expressly allowable, in whole or in part, as an asset.

      (4)The amount, if any, by which the book value of any investment as carried in theledger assets of the insurer exceeds the value thereof as determined under theInsurance Code. [1967 c.359 §209; 2001 c.318 §8]

 

      733.030Liabilities in general. In any determination of the financial condition ofan insurer, liabilities to be charged against its assets shall be calculated inaccordance with the Insurance Code and shall include:

      (1)The amount necessary to pay all of its unpaid losses and claims incurred on orprior to the date of the statement, whether reported or unreported to theinsurer, together with the expenses of adjustment or settlement thereof.

      (2)For insurance other than specified in subsections (3) and (4) of this section,the amount of reserves equal to the unearned portions of the gross premiumscharged on policies in force, calculated in accordance with the Insurance Code.

      (3)For life insurance policies:

      (a)Reserves on life insurance benefits, valued according to the tables ofmortality, rates of interest, and valuation methods applicable thereto whichare adopted pursuant to the Insurance Code.

      (b)Reserves for disability benefits, for both active and disabled lives.

      (c)Reserves for accidental death benefits.

      (d)Any additional reserves considered to be necessary by the Director of theDepartment of Consumer and Business Services.

      (4)For health insurance policies, the amount of reserves required pursuant to ORS733.080.

      (5)Taxes, expenses and other obligations due or accrued at the date of thestatement.

      (6)Any additional reserves for asset valuation contingencies or loss contingenciesrequired by the Insurance Code or considered to be necessary by the directorfor the protection of policyholders and stockholders of the insurer. [1967c.359 §210]

 

      733.040Reinsurance credit.The Director of the Department of Consumer and Business Services shall disallowreinsurance as credit against the liabilities of a ceding insurer if creditagainst the liabilities of the ceding insurer is not allowed as a credit to theceding insurer under ORS 731.509 or 731.510. [1967 c.359 §211; 1993 c.447 §70]

 

      733.050Increase of inadequate reserves. If the Director of the Department ofConsumer and Business Services determines that an insurer’s reserves, howevercalculated or estimated, are inadequate, the director shall require the insurerto maintain reserves in such additional amount as is needed to make themadequate. [1967 c.359 §212]

 

      733.060Unearned premium reserve. (1) Every insurer shall maintain an unearnedpremium reserve on all policies in force.

      (2)The Director of the Department of Consumer and Business Services may requirethat such reserves shall be equal to the unearned portions of the grosspremiums in force as calculated pro rata on each respective risk from thepolicy’s date of issue. In the absence of such requirement, the unearnedpremium reserve shall be equal to the pro rata unearned portions of the grosspremiums in force as calculated by an approximation method approved by thedirector. After adopting a method of computing such reserves, an insurer shallnot change methods without approval of the insurance supervisory official ofthe insurer’s domicile.

      (3)This section does not apply to:

      (a)Marine and transportation insurance on trip risks not terminated.

      (b)Health insurance.

      (c)Title insurance.

      (d)Home protection insurance under policies issued by a home protection insurer.

      (e)Life insurance. [1967 c.359 §213; 1981 c.247 §9]

 

      733.070Unearned premium reserve for marine and transportation insurance trip risks. As to marineand transportation insurance, the entire amount of premiums on trip risks notterminated shall be deemed unearned. The Director of the Department of Consumerand Business Services may require the insurer to carry a reserve equal to 100percent of premiums on trip risks written during the month ended as of the dateof statement. [1967 c.359 §214]