Current through Register Vol. 63, No. 12, December 1, 2024
(1) OAR
836-080-0001 to
836-080-0043 are adopted
pursuant to the general rulemaking authority of the Director of the Department
of Consumer and Business Services in ORS
731.244 and the specific
authority in ORS 746.085(1), for
the purpose of implementing ORS
746.085 and
746.240.
(2) The purpose of OAR
836-080-0001 to
836-080-0043 is to protect the
insurance-buying public in insurance transactions involving the replacement of
life insurance or annuities by:
(a)
Regulating the activities of insurers and insurance producers with respect to
the replacement of existing life insurance and annuities.
(b) Protecting the interests of life
insurance and annuity purchasers by establishing minimum standards of conduct
to be observed in replacement or financed purchase transactions. OAR
836-080-0001 to
836-080-0043 are intended to:
(A) Assure that a purchaser receives
information with which a decision can be made in the purchaser's own best
interest;
(B) Reduce the
opportunity for misrepresentation and incomplete disclosure; and
(C) Establish penalties for failure to comply
with requirements of OAR
836-080-0001 to
836-080-0043.
(3) In OAR
836-080-0001 to
836-080-0043 and the appendices
thereto, for purposes of consistency with the Life Insurance and Annuities
Replacement Model Regulation of the National Association of Insurance
Commissioners dated July 2000, an annuity is referred to as a contract and a
life insurance policy is referred to as a policy, and they are subject to OAR
836-080-0001 to
836-080-0043 on the basis of
that terminology.
(4) Unless
otherwise specifically included, OAR
836-080-0001 to
836-080-0043 do not apply to
transactions involving:
(a) Credit life
insurance;
(b) Group life insurance
or group annuities, when there is no direct solicitation of individuals by an
insurance producer. Direct solicitation does not include any group meeting held
by an insurance producer solely for the purpose of educating or enrolling
individuals or, when initiated by an individual member of the group, assisting
with the selection of investment options offered by a single insurer in
connection with enrolling that individual. Group life insurance or group
annuity certificates marketed through direct response solicitation are subject
to the provisions of OAR
836-080-0039;
(c) An application to the existing insurer
that issued the existing policy or contract when a contractual change or a
conversion privilege is being exercised; or, when the existing policy or
contract is being replaced by the same insurer pursuant to a program filed with
and approved by the Director;
(d)
Proposed life insurance that is to replace life insurance under a binding or
conditional receipt issued by the same insurer;
(e)
(A)
Policies or contracts used to fund any of the following:
(i) An employee pension or welfare benefit
plan that is covered by the Employee Retirement and Income Security Act
(ERISA);
(ii) A plan described by
Section 401(a),
401(k) or
403(b) of the
Internal Revenue Code, when the plan, for purposes of ERISA, is established or
maintained by an employer;
(iii) A
governmental or church plan defined in Section
414 of the Internal Revenue Code,
a governmental or church welfare benefit plan, or a deferred compensation plan
of a state or local government or tax exempt organization under Section
457 of the Internal Revenue Code;
or
(iv) A nonqualified deferred
compensation arrangement established or maintained by an employer or plan
sponsor.
(B)
Notwithstanding paragraph (A) of this subsection, OAR
836-080-0001 to
836-080-0043 apply to policies
or contracts used to fund any plan or arrangement that is funded solely by
contributions an employee elects to make, whether on a pre-tax or after-tax
basis, and when the insurer has been notified that plan participants may choose
from among two or more insurers and there is a direct solicitation of an
individual employee by an insurance producer for the purchase of a contract or
policy. As used in this subsection, direct solicitation does not include any
group meeting held by an insurance producer solely for the purpose of educating
individuals about the plan or arrangement or enrolling individuals in the plan
or arrangement or, when initiated by an individual employee, assisting with the
selection of investment options offered by a single insurer in connection with
enrolling that individual employee;
(f) When new coverage is provided under a
life insurance policy or contract and the cost is borne wholly by the insured's
employer or by an association of which the insured is a member;
(g) Existing life insurance that is a
non-convertible term life insurance policy that will expire in five years or
less and cannot be renewed;
(h)
Immediate annuities that are purchased with proceeds from an existing contract.
Immediate annuities purchased with proceeds from an existing policy are not
exempted from the requirements of OAR
836-080-0001 to
836-080-0043; or
(i) Structured
settlements.
(5)
Registered contracts are exempt from the requirements of OAR
836-080-0029(1)(b)
and 836-080-0034(2)
with respect to the provision of illustrations or policy summaries, but premium
or contract contribution amounts and identification of the appropriate
prospectus or offering circular shall be required instead.
Stat. Auth.: ORS
731.244 &
746.085
Stats. Implemented: ORS
746.085 &
746.240
