Chapter 743 — Health
and Life Insurance
ORS sections in this chapter were
amended or repealed by the Legislative Assembly during its 2012 regular
session. See the table of ORS sections amended or repealed during the 2012
regular session: 2012 A&R Tables
2011 EDITION
HEALTH AND LIFE INSURANCE
INSURANCE
GENERAL PROVISIONS
743.010 Health
insurance policy and health benefit plan forms; rules
743.013 Disclosure
of differences in replacement health insurance policies; nonduplication for
persons 65 and older; rules
743.015 Filing
and approval of credit life and credit health insurance forms; filing of rates
743.018 Filing
of rates for life and health insurance; rules
743.019 Public
comment on proposed rates for health insurance
743.020 Rate
filing to include statement of administrative expenses; rules
743.024 Personal
insurance, insurable interest and beneficiaries
743.027 Consent
of individual required for life and health insurance; exceptions
743.028 Uniform
health insurance claim forms
743.030 Life
insurance for benefit of charity
743.039 Alteration
of application for life or health insurance
743.041 Payment
discharges insurer
743.043 Assignment
of policies
743.046 Exemption
of proceeds of individual life insurance other than annuities
743.047 Exemption
of proceeds of group life insurance
743.049 Exemption
of proceeds of annuity policies; assignability of rights
743.050 Exemption
of proceeds of health insurance
743.053 Prohibition
on requirement that death or dismemberment occur in less than 180 days after
accident
743.056 Insurer
may not refuse to defend or pay claim based on provider’s disclosure of adverse
event
743.061 Uniform
standards for health care financial and administrative transactions; rules
743.062 Stakeholder
work group to recommend uniform standards
743.064 Coordination
with Oregon Health Authority concerning uniform standards; Department of Human
Services to be subject to standards
743.082 Selling
and leasing of provider panels by contracting entity; definitions
743.083 Registration
of contracting entity
743.085 Third
party contracts for leasing of provider panels; requirements
743.086 Additional
requirements for third party contracts
POLICY LANGUAGE SIMPLIFICATION
743.100 Short
title
743.101 Purpose
743.103 Definitions
for ORS 743.100 to 743.109
743.104 Scope
of ORS 743.100 to 743.109
743.106 Reading
ease standards for life and health insurance policies
743.107 When
director may authorize lower standards
743.109 Approval
of certain policy forms containing specified provisions; conditions for
approval
INDIVIDUAL LIFE INSURANCE AND ANNUITIES
(Generally)
743.150 Scope
of ORS 743.150, 743.153 and 743.156
743.153 Statement
of benefits
743.154 Acceleration
of death benefits; rules
743.156 Statement
of premium
(Individual Life Insurance Policies)
743.159 Scope
of ORS 743.162 to 743.243
743.162 Payment
of premium
743.165 Grace
period
743.168 Incontestability
743.171 Incontestability
and limitation of liability after reinstatement
743.174 Entire
contract
743.177 Statements
of insured
743.180 Misstatement
of age
743.183 Dividends
743.186 Policy
loan
743.187 Maximum
interest rate on policy loan; adjustable interest rate
743.189 Reinstatement
743.192 Payment
of claim; payment of interest upon failure to pay proceeds
743.195 Installment
payments
743.198 Title
743.201 Beneficiary
of industrial policies
743.204 Standard
Nonforfeiture Law for Life Insurance; applicability
743.207 Required
provisions relating to nonforfeiture
743.210 Determination
of cash surrender values; applicability to certain policies
743.213 Determination
of paid-up nonforfeiture benefits
743.215 Calculation
of adjusted premiums
743.216 Adjusted
premiums; applicability
743.218 Requirements
for determination of future premium amounts or minimum values
743.219 Supplemental
rules for calculating nonforfeiture benefits
743.221 Cash
surrender values upon default in premium payment
743.222 Policy
benefits and premiums that shall be disregarded in calculating cash surrender
values and paid-up nonforfeiture benefits
743.225 Prohibited
provisions
743.228 Acts
of corporate insured or beneficiary with respect to policy
743.230 Variable
life policy provisions
743.231 “Profit-sharing
policy” defined
743.234 “Charter
policy” or “founders policy” defined
743.237 “Coupon
policy” defined
743.240 Profit-sharing,
charter or founders policies prohibited
743.243 Restrictions
on form of coupon policy
743.245 Variable
life insurance policy provisions
743.247 Notice
to variable life insurance policyholders
(Individual Annuity and Pure Endowment
Policies)
743.252 Scope
of ORS 743.255 to 743.273
743.255 Grace
period for annuities
743.258 Incontestability
743.261 Entire
contract
743.264 Misstatement
of age or sex
743.267 Dividends
743.268 Advancement
of policy loans
743.269 Periodic
payments for period certain
743.270 Reinstatement
743.271 Periodic
stipulated payments on variable annuities
743.272 Computing
benefits
743.273 Standard
provisions of reversionary annuities
743.275 Standard
Nonforfeiture Law for Individual Deferred Annuities; application
743.278 Required
provisions in annuity policies; exception
743.284 Computation
of benefits
743.287 Commencement
of annuity payments at optional maturity dates; calculation of benefits
743.290 Notice
of nonpayment of certain benefits to be included in annuity policy
743.293 Minimum
forfeiture amounts for annuity policies; rules
743.295 Effect
of certain life insurance and disability benefits on minimum nonforfeiture
amounts
GROUP LIFE INSURANCE
743.303 Requirements
for issuance of group life insurance policies
743.306 Required
provisions in group life insurance policies
743.309 Nonforfeiture
provisions
743.312 Grace
period
743.315 Incontestability
743.318 Application;
representations by policyholders and insureds
743.321 Evidence
of insurability
743.324 Misstatement
of age
743.327 Payments
under policy; payment of interest upon failure to pay proceeds
743.330 Issuance
of certificates
743.333 Termination
of individual coverage
743.336 Termination
of policy or class of insured persons
743.339 Death
during period for conversion to individual policy
743.342 Statement
furnished to insured under credit life insurance policy
743.345 Assignability
of group life policies
743.348 Certain
sales practices prohibited
743.351 Eligibility
of association to be group life policyholder; rules
743.354 Requirements
for certain group life policies issued to trustees of certain funds; rules
743.356 Continuing
coverage upon replacement of group life policy
743.358 Borrowing
by certificate holders under group life policy
743.360 Alternative
group life insurance coverage
CREDIT LIFE AND CREDIT HEALTH INSURANCE
743.371 Definitions
for credit life and credit health insurance provisions
743.372 Applicability
of credit life and credit health insurance provisions
743.373 Forms
of credit life and credit health insurance
743.374 Limits
on amount of credit life insurance
743.375 Limit
on amount of credit health insurance
743.376 Duration
of credit life and credit health insurance
743.377 Credit
life and credit health insurance policy or group certificate; contents;
delivery of policy, certificate or copy of application
743.378 Charges
and refunds to debtor
743.379 Status
of remuneration to creditor
743.380 Claim
report and payment
HEALTH INSURANCE
(Individual)
743.402 Exceptions
to individual health insurance policy requirements
743.405 General
requirements
743.408 Mandatory
provisions
743.411 Entire
contract; changes
743.414 Time
limit on certain defenses; incontestability
743.417 Grace
period
743.420 Reinstatement
743.423 Notice
of claim
743.426 Claim
forms
743.429 Proofs
of loss
743.432 Time
of payment of claims
743.435 Payment
of claims
743.438 Physical
examinations and autopsy
743.441 Legal
actions
743.444 Change
of beneficiary
743.447 Optional
provisions
743.450 Change
of occupation
743.453 Misstatement
of age
743.456 Other
insurance in same insurer
743.459 Insurance
with other insurers; expense incurred benefits
743.462 Insurance
with other insurers; other than expense incurred benefits
743.465 Relation
of earnings to insurance
743.468 Unpaid
premium
743.471 Cancellation
743.472 Permissible
reasons for cancellation or refusal to renew
743.474 Conformity
with state statutes
743.477 Illegal
occupation
743.483 Arrangement
of provisions
743.486 Scope
of term “insured” in statutory policy provisions
743.489 Extension
of coverage beyond policy period; effect of misstatement of age
743.492 Policy
return and premium refund provision
743.495 Use
of terms “noncancelable” or “guaranteed renewable”; synonymous terms
743.498 Statement
in policy of cancelability or renewability
743.499 Notice
to policyholder required for cancellation or nonrenewal of health benefit plan;
effect of failure to give notice
(Group and Blanket)
743.522 “Group
health insurance” described
743.523 Certain
sales practices prohibited
743.524 Eligibility
of association to be group health policyholder; rules
743.526 Determination
of whether trustees are policyholders; consequences; rules
743.527 When
group health insurance policies to continue in effect upon payment of premium
by insured individual
743.528 Required
provisions in group health insurance policies
743.529 Continuation
of benefits after termination of group health insurance policy; rules
743.530 Continuation
of benefits after injury or illness covered by workers’ compensation
743.531 Direct
payment of hospital and medical services; rate limitations
743.533 Leased
workers; offering group health insurance
743.534 “Blanket
health insurance” defined
743.537 Required
provisions for blanket health insurance policies
743.540 Application
and certificates not required for blanket health insurance policies
743.543 Payment
of benefits under blanket health insurance policies
743.546 Exemption
of policy form approval for blanket health insurance policies
743.549 Restriction
on reduction of benefits provisions in group and blanket health insurance
policies
743.550 Student
health insurance
743.552 Guidelines
for application of ORS 743.549; rules
743.560 Minimum
grace period; notice upon termination of policy; effect of failure to notify
743.562 Applicability
of ORS 743.560
743.565 Separate
notice to policyholder required before cancellation of individual or group
health insurance policy for nonpayment of premium
743.566 Rules
for certain notice requirements
(Continuation)
743.600 Availability
of continued coverage under group policy for surviving, divorced or separated
spouse 55 or older
743.601 Procedure
for obtaining continuation of coverage under ORS 743.600
743.602 Premium
for continuation of coverage under ORS 743.600; termination of right to
continuation
743.610 Continuation
of coverage under group policy upon termination of membership in group health
insurance policy; applicability of waiting period to rehired employee
(Long Term Care)
743.650 Long
Term Care Insurance Act; purpose; application
743.652 Definitions
for ORS 743.650 to 743.665
743.653 Prohibition
on certain policies
743.655 Rules;
disclosure; contents of policy
743.656 Eligibility
for benefits; providers required to be covered
743.662 Rescission
of policy and denial of claims
743.664 Offer
of nonforfeiture benefit; rules
743.665 Prompt
pay requirements; rules
(Medicare Supplement)
743.680 Definitions
for ORS 743.680 to 743.689
743.682 Application
of ORS 743.680 to 743.689
743.683 Policy
contents; standards for benefit and claims payments; rules
743.684 Filing
of policy; loss ratio standards; insurance producer compensation
743.685 Outline
of coverage; information brochure; rules
743.686 Right
to return of policy; premium refund
743.687 Advertising
743.688 Rules
743.689 Director’s
authority upon violation of ORS 743.680 to 743.689
(Small Employer, Group, Individual and Portability
Health Insurance, Generally)
743.730 Definitions
for ORS 743.730 to 743.773
743.731 Purposes
743.733 Issuance
of group health benefit plan to affiliated group of employers; determination of
number of employees for purpose of determining eligibility as small employer
743.734 Group
health benefit plans subject to provisions of specified laws; exemptions
743.736 Requirement
to offer basic health benefit plans to small employers; approval of plans and
forms; offering of plan by carriers; exceptions
743.737 Requirements
for small employer health benefit plans
743.745 Requirements
for basic health benefit plans; director’s authority to regulate portability,
small group and individual plans; standard health statement for late enrollees;
allowable preexisting condition exclusions
743.748 Submission
of information by carriers offering health benefit plans
743.749 Certifications
and disclosure of coverage
743.751 Use
of health statements in group health benefit plans
743.752 Coverage
in group health benefit plans; consideration of prospective enrollee health
status restricted; effect of discontinuing offer of plans; exceptions; coverage
by multiple employer welfare arrangements
743.754 Requirements
for group health benefit plans
743.757 Health
benefit coverage for guaranteed association
743.758 Implementation
of federal laws; rules
743.760 Approval
of portability plans; offering of plans by carriers; required provisions;
actuarial certification
743.761 Satisfaction
of requirements of ORS 743.760 by carrier offering individual health benefit
plans; rules
743.764 Preventive
health services; coverage; cost sharing
743.766 Use
of health statements in individual health benefit plans; preexisting condition
exclusions; eligibility to apply for Oregon Medical Insurance Pool; renewal;
discontinuation of coverage
743.767 Premium
rates for individual health benefit plans
743.769 Carrier
marketing of individual health benefit plans; rules; duties of carrier
regarding applications; effect of discontinuing offer of plans
743.773 Rules
for ORS 743.766 to 743.769
743.775 Submission
of information by carriers offering individual health benefit plans
743.777 Electronic
administration; discounted rates; requirements
743.787 Definitions
for ORS 743.788
743.788 Prescription
drug identification card
743.790 Rules
for prescription drug identification cards
MISCELLANEOUS
743.801 Definitions
743.803 Medical
services contract provisions; nonprovider party prohibitions; future contracts
743.804 Required
notices to applicants and enrollees; grievances, internal appeals and external
reviews
743.806 Utilization
review requirements for medical services contracts to which insurer not party
743.807 Utilization
review requirements for insurers offering health benefit plan
743.808 Requirements
for insurers that require designation of participating primary care physician;
exceptions
743.811 Applicability
743.814 Requirements
for insurers offering managed health insurance; quality assessment; rules
743.817 Requirements
for insurers offering managed health or preferred provider organization
insurance; rules; opportunity to participate
743.818 Data
reporting
743.819 Reporting
requirements; rules
743.821 Required
managed health insurance contract provision; enrollee liability
743.822 Requirement
to offer bronze and silver plans; rules
743.823 Enforcement
of Newborns’ and Mothers’ Health Protection Act of 1996
743.824 Cash
dividends for healthy behaviors
743.826 Requirements
for catastrophic plans
743.827 Health
Care Consumer Protection Advisory Committee
743.829 Decisions
regarding health care facility length of stay, level of care and follow-up care
743.831 Consortium
established; managed health care performance
743.834 Insurer
prohibited practices; patient communication and referral
743.837 Prior
authorization requirements
743.839 Disclosure
of information
743.842 Emergency
eye care services without referral from primary care provider
RIGHTS OF ENROLLEES
743.845 Designation
of women’s health care provider as primary care provider; direct access to
women’s health care provider
743.847 Medicaid
not considered in coverage eligibility determination; claims for services paid for
by medical assistance; prohibited ground for denial of enrollment of child;
insurer duties
743.854 Continuity
of care
743.856 Referrals
to specialists
743.857 External
review; rules
743.858 Director
to contract with independent review organizations to provide external review;
rules
743.859 Notice
to enrollee of right to sue if insurer does not follow decision of independent
review organization
743.861 Enrollee
application for external review; when enrollee deemed to have exhausted
internal appeal
743.862 Duties
of independent review organizations; expedited reviews
743.863 Civil
penalty for failure to comply by insurer that agreed to be bound by decision
743.864 Private
right of action
743.871 Definitions
for ORS 743.871 to 743.893
743.874 Estimate
of costs for in-network procedure or service
743.876 Estimate
of costs for out-of-network procedure or service
743.878 Submission
of methodology used to determine insurer’s allowable charges
743.883 Alternative
mechanism for disclosure of costs and charges
743.893 Rules
743.894 Rescinding
coverage; permissible bases; notice; rules
PAYMENT OF CLAIMS
743.911 Payment
or denial of health benefit plan claims; rules
743.912 Refund
of paid claims
743.913 Interest
on unpaid claims
743.917 Underpayment
of claims
743.918 Claims
submitted during credentialing period
ASSESSMENT ON CLAIMS ADMINISTERED BY
PUBLIC EMPLOYEES’ BENEFIT BOARD
743.951 Payment
procedures; right to hearing
ASSESSMENT ON PREMIUMS
743.960 Definitions
for ORS 743.960 and 743.961
743.961 Payment
procedures
743.965 Incorrect
payments; right to hearing
743.990 Penalties
743.003 [1967
c.359 §335; renumbered 742.001 in 1989]
743.006
[Formerly 736.300; renumbered 742.003 in 1989]
743.009 [1967
c.359 §337; 1969 c.336 §11; 1973 c.608 §1; renumbered 742.005 in 1989]
GENERAL PROVISIONS
743.010 Health insurance policy and health
benefit plan forms; rules. In addition to all other powers
of the Director of the Department of Consumer and Business Services with
respect thereto, the director may issue rules with respect to policy forms and
health benefit plan forms described in ORS 742.005 (6)(a) and (b):
(1)
Establishing minimum benefit standards;
(2)
Requiring the ratio of benefits to premiums to be not less than a specified
percentage in order to be considered reasonable, and requiring the periodic
filing of data that will demonstrate the insurer’s compliance; and
(3)
Establishing requirements intended to discourage duplication or overlapping of
coverage and replacement, without regard to the advantage to policyholders, of
existing policies by new policies. [1979 c.857 §2; 1997 c.96 §1; 1999 c.987 §4a]
743.011 [1985
c.827 §2; repealed by 1989 c.255 §15]
743.012 [1967
c.359 §338; 1989 c.700 §13; renumbered 742.007 in 1989]
743.013 Disclosure of differences in
replacement health insurance policies; nonduplication for persons 65 and older;
rules. (1) The Director of the Department of
Consumer and Business Services shall adopt by rule requirements for disclosure
by group and individual health insurers to individual and group health
insurance policyholders the difference between coverage under the existing
policy and coverage being offered to replace that coverage.
(2)
The provisions of this section do not apply to disability income insurance.
(3)
The director shall adopt by rule requirements for nonduplication and
replacement of major medical, Medicare supplement, long term care and special
illness policies for applicants 65 years of age and older. The insurance
producer shall offer to compare for any applicants 65 years of age and older
the applicant’s existing policy or policies and coverage being offered to
replace or supplement the applicant’s existing coverage. [1989 c.474 §2; 2003
c.364 §106]
743.015 Filing and approval of credit life
and credit health insurance forms; filing of rates.
(1) All credit life and credit health insurance policies subject to ORS 743.371
to 743.380, and all certificates of insurance, notices of proposed insurance,
applications for insurance, indorsements and riders used in connection with
such kinds of policies, delivered or issued for delivery in this state and the
schedules of premium rates pertaining thereto shall be filed with the Director
of the Department of Consumer and Business Services. Such forms are subject to
approval, disapproval or withdrawal of approval by the director as provided in
ORS 742.003, 742.005 and 742.007.
(2)
An insurer may revise the schedules of premium rates from time to time and
shall file the revised schedules with the director. An insurer may not issue
any credit life or credit health insurance policy for which the premium rate
exceeds that determined by the schedules of the insurer as then on file with
the director.
(3)
If a group policy of credit life or credit health insurance has been or is
delivered in another state, the insurer shall file only the group certificate,
the individual application and the notice of proposed insurance delivered or
issued for delivery in this state as specified in ORS 743.377 (2) and (4). The
director shall approve the group certificate, the individual application and
the notice of proposed insurance if the forms conform with the requirements
specified in ORS 743.377 (2) and (4) and the schedules of premium rates
applicable to the insurance evidenced by the certificate or notice are not in
excess of the insurer’s schedules of premium rates filed with the director. [Formerly
739.595; 1969 c.336 §12; 1971 c.231 §20; 2005 c.185 §3]
743.018 Filing of rates for life and
health insurance; rules. (1) Except for group life and
health insurance, and except as provided in ORS 743.015, every insurer shall
file with the Director of the Department of Consumer and Business Services all
schedules and tables of premium rates for life and health insurance to be used
on risks in this state, and shall file any amendments to or corrections of such
schedules and tables. Premium rates are subject to approval, disapproval or
withdrawal of approval by the director as provided in ORS 742.003, 742.005 and
742.007.
(2)
Except as provided in ORS 743.737 and 743.760 and subsection (3) of this
section, a rate filing by a carrier for any of the following health benefit
plans subject to ORS 743.730 to 743.773 shall be available for public
inspection immediately upon submission of the filing to the director:
(a)
Health benefit plans for small employers.
(b)
Portability health benefit plans.
(c)
Individual health benefit plans.
(3)
The director may by rule:
(a)
Specify all information a carrier must submit as part of a rate filing under
this section; and
(b)
Identify the information submitted that will be exempt from disclosure under
this section because the information constitutes a trade secret and would, if
disclosed, harm competition.
(4)
The director, after conducting an actuarial review of the rate filing, may
approve a proposed premium rate for a health benefit plan for small employers
or for an individual health benefit plan if, in the director’s discretion, the
proposed rates are:
(a)
Actuarially sound;
(b)
Reasonable and not excessive, inadequate or unfairly discriminatory; and
(c)
Based upon reasonable administrative expenses.
(5)
In order to determine whether the proposed premium rates for a health benefit
plan for small employers or for an individual health benefit plan are
reasonable and not excessive, inadequate or unfairly discriminatory, the
director may consider:
(a)
The insurer’s financial position, including but not limited to profitability,
surplus, reserves and investment savings.
(b)
Historical and projected administrative costs and medical and hospital
expenses.
(c)
Historical and projected loss ratio between the amounts spent on medical
services and earned premiums.
(d)
Any anticipated change in the number of enrollees if the proposed premium rate
is approved.
(e)
Changes to covered benefits or health benefit plan design.
(f)
Changes in the insurer’s health care cost containment and quality improvement
efforts since the insurer’s last rate filing for the same category of health
benefit plan.
(g)
Whether the proposed change in the premium rate is necessary to maintain the
insurer’s solvency or to maintain rate stability and prevent excessive rate
increases in the future.
(h)
Any public comments received under ORS 743.019 pertaining to the standards set
forth in subsection (4) of this section and this subsection.
(6)
With the written consent of the insurer, the director may modify a schedule or
table of premium rates filed in accordance with subsection (1) of this section.
(7)
The requirements of this section do not supersede other provisions of law that
require insurers, health care service contractors or multiple employer welfare
arrangements providing health insurance to file schedules or tables of premium
rates or proposed premium rates with the director or to seek the director’s
approval of rates or changes to rates. [1967 c.359 §340; 2007 c.391 §1; 2009
c.595 §31]
Note:
Additions by chapter 322, Oregon Laws 2011, to the series 743.730 to 743.773,
which become operative January 2, 2014, expand the series to 743.730 to
743.773, 743.822 and 743.826. See sections 1, 2 [743.822 (2)], 3 [743.822 (1)],
4 [743.826] and 6, chapter 322, Oregon Laws 2011. See Preface to Oregon Revised
Statutes for further explanation.
743.019 Public comment on proposed rates
for health insurance. (1) When an insurer files a
schedule or table of premium rates for individual, portability or small
employer health insurance under ORS 743.018, the Director of the Department of
Consumer and Business Services shall open a 30-day public comment period on the
rate filing that begins on the date the insurer files the schedule or table of
premium rates. The director shall post all comments to the website of the
Department of Consumer and Business Services without delay.
(2)
The director shall give written notice to an insurer approving or disapproving
a rate filing or, with the written consent of the insurer, modifying a rate
filing submitted under ORS 743.018 no later than 10 business days after the
close of the public comment period. The notice shall comply with the
requirements of ORS 183.415. [2009 c.595 §28]
Note:
743.019 and 743.020 were added to and made a part of ORS chapter 743 by
legislative action but were not added to any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.
743.020 Rate filing to include statement
of administrative expenses; rules. An insurer
licensed by the Department of Consumer and Business Services shall include in
any rate filing under ORS 743.018 with respect to individual and small employer
health insurance policies a statement of administrative expenses in the form
and manner prescribed by the department by rule. The statement must include,
but is not limited to:
(1)
A statement of administrative expenses on a per member per month basis; and
(2)
An explanation of the basis for any proposed premium rate increases or
decreases. [2009 c.595 §29]
Note: See
note under 743.019.
743.021 [1967
c.359 §341; 1971 c.231 §21; 1973 c.525 §1; renumbered 742.009 in 1989]
743.024 Personal insurance, insurable interest
and beneficiaries. (1) Any individual of competent
legal capacity may procure or effect an insurance policy on the individual’s
own life or body for the benefit of any person. However, except as provided in
ORS 743.030, no person shall procure or cause to be procured any insurance
policy upon the life or body of another unless the benefits under such policy
are payable to the individual insured or the personal representatives of the
individual, or to a person having, at the time such policy was entered into, an
insurable interest in the individual insured.
(2)
If the beneficiary, assignee or other payee under any policy made in violation
of this section receives from the insurer any benefits thereunder accruing upon
the death, disablement or injury of the individual insured, the individual
insured or the individual’s executor or administrator, as the case may be, may
maintain an action to recover such benefits from the person so receiving them.
(3)
An insurer shall be entitled to rely upon all statements, declarations and
representations made by an applicant for insurance relative to the matter of
insurable interest. No insurer shall incur legal liability, except as set forth
in the policy, by virtue of any untrue statements, declarations or
representations so relied upon in good faith by the insurer.
(4)
This section does not apply to annuity policies. [1967 c.359 §342]
743.027 Consent of individual required for
life and health insurance; exceptions. A life or
health insurance policy upon an individual, except a policy of group life
insurance or of group or blanket health insurance, may not be made or
effectuated unless at the time of the making of the policy the individual
insured, being of competent legal capacity to contract, applies therefor or has
consented thereto in writing, except in the following cases:
(1)
A spouse may effectuate such insurance upon the other spouse.
(2)
Any person having an insurable interest in the life of a minor, or any person
upon whom a minor is dependent for support and maintenance, may effectuate
insurance upon the life of or pertaining to such minor.
(3)
Family policies may be issued insuring any two or more members of a family on
an application signed by either parent, a stepparent, or by a husband or wife.
(4)
A person may effectuate insurance that provides for the funeral expenses of an
adult who is dependent upon the person for support and maintenance.
(5)
A person may effectuate insurance that provides for the funeral expenses of an
adult if the person:
(a)
Is closely related to the adult by blood or by law or has a substantial
interest in the adult engendered by love and affection; and
(b)
Has a lawful and substantial interest in having the life, health and bodily
safety of the adult continue. [1967 c.359 §342a; 1991 c.182 §2; 2009 c.331 §1]
743.028 Uniform health insurance claim
forms. The Director of the Department of
Consumer and Business Services shall prescribe uniform health insurance claim
forms which shall be used by all insurers transacting health insurance in this
state and by all state agencies that require health insurance claim forms for
their records. [1973 c.109 §2]
743.030 Life insurance for benefit of
charity. (1) Life insurance policies may be
effected although the person paying the consideration has no insurable interest
in the life of the person insured if a charitable, benevolent, educational or
religious institution is designated irrevocably as the beneficiary.
(2)
In making such policies the person paying the premium shall make and sign the
application therefor as owner. The application also must be signed by the
person whose life is to be insured. Such a policy shall be valid and binding
between and among all of the parties thereto.
(3)
The person paying the consideration for such insurance shall have all rights
conferred by the policy to loan value at any time during the premium-paying
period, but not at maturity, notwithstanding such person has no insurable
interest in the life of the person insured. [Formerly 739.420]
743.033 [1967
c.359 §344; renumbered 742.011 in 1989]
743.036
[Formerly 736.330; 1973 c.823 §149; repealed by 1973 c.827 §83]
743.037 [1973
c.521 §2; renumbered 743.721 in 1989]
743.039 Alteration of application for life
or health insurance. (1) An application for a life
insurance policy may not provide for alterations by any person other than the
applicant in either the application or the policy to be issued thereon with
respect to the amount of insurance, classification of risk, plan of insurance
or the benefits unless the application contains a statement that no such
changes are effective until approved in writing by the applicant.
(2)
No alteration of any written application for any health insurance policy shall
be made by any person other than the applicant without the written consent of
the applicant, except that insertions may be made by the insurer, for
administrative purposes only, in such manner as to indicate clearly that such
insertions are not to be ascribed to the applicant. [1967 c.359 §346]
743.041 Payment discharges insurer.
Whenever the proceeds of or payments under a life or health insurance policy
become payable in accordance with the terms of such policy, or the exercise of
any right or privilege under such policy, and the insurer makes payment in
accordance with the terms of the policy or in accordance with any written
assignment of the policy, the person so designated as being entitled to the
proceeds or payments shall be entitled to receive them and to give full
acquittance therefor, and such payments shall fully discharge the insurer from
all claims under the policy unless, before payment is made, the insurer has
received at its home office written notice by or on behalf of some other person
that such other person claims to be entitled to such proceeds or payments or
some interest in the policy. [Formerly 743.084]
743.042 [1967
c.359 §347; 1985 c.465 §1; renumbered 742.013 in 1989]
743.043 Assignment of policies.
A policy may be assignable or not assignable, as provided by its terms. Subject
to its terms relating to assignability, any life or health insurance policy,
under the terms of which the beneficiary may be changed upon the sole request
of the insured or owner, may be assigned either by pledge or transfer of title,
by an assignment executed by the insured or owner alone and delivered to the
insurer, whether or not the pledgee or assignee is the insurer. Any such
assignment shall entitle the insurer to deal with the assignee as the owner or
pledgee of the policy in accordance with the terms of the assignment, until the
insurer has received at its home office written notice of termination of the
assignment or pledge, or written notice by or on behalf of some other person
claiming some interest in the policy in conflict with the assignment. [Formerly
743.087]
743.045
[Formerly 736.305; 1971 c.231 §22; 1985 c.465 §2; renumbered 742.016 in 1989]
743.046 Exemption of proceeds of
individual life insurance other than annuities.
(1) When a policy of insurance is effected by any person on any person’s own
life or on another life in favor of some person other than that person having
an insurable interest in the life insured, the lawful beneficiary thereof,
other than that person or that person’s legal representative, is entitled to
its proceeds against the creditors or representatives of the person effecting
the policy.
(2)
The person to whom a policy of life insurance is made payable may maintain an
action thereon in the person’s own name.
(3)
A policy of life insurance payable to a beneficiary other than the estate of
the insured, having by its terms a cash surrender value available to the
insured, is exempt from execution issued from any court in this state and in
the event of bankruptcy of such insured is exempt from all demands in legal
proceeding under such bankruptcy.
(4)
Subject to the statute of limitations, the amount of any premiums paid in fraud
of creditors for such insurance, with interest thereon, shall inure to their benefit
from the proceeds of the policy. The insurer issuing the policy shall be
discharged of all liability thereon by payment of its proceeds in accordance
with its terms unless, before such payment, the insurer has received at its
home office written notice by or in behalf of some creditor, with
specifications of the amount claimed, claiming to recover for certain premiums
paid in fraud of creditors.
(5)
The insured under any policy within this section shall not be denied the right
to change the beneficiary when such right is expressly reserved in the policy.
(6)
This section does not apply to annuity policies. [Formerly 739.405 and then
743.099]
743.047 Exemption of proceeds of group
life insurance. (1) A policy of group life
insurance or the proceeds thereof payable to a person or persons other than the
individual insured or the individual’s estate shall be exempt from debts and
claims of creditors or representatives of the individual insured and, in the
event of bankruptcy of the individual insured, from all demands in legal
proceedings under such bankruptcy.
(2)
The provisions of subsection (1) of this section do not apply to group life
insurance issued to a creditor covering the creditor’s debtors to the extent
that such proceeds are applied to payment of the obligation for the purpose of
which the insurance was so issued. [Formerly 743.102]
743.048
[Formerly 736.315; renumbered 742.018]
743.049 Exemption of proceeds of annuity
policies; assignability of rights. (1) The
benefits, rights, privileges and options which are due or prospectively due an
annuitant under any annuity policy issued before, on or after June 8, 1967,
shall not be subject to execution, nor shall the annuitant be compelled to
exercise any such rights, powers or options, nor shall creditors be allowed to
interfere with or terminate the policy, except:
(a)
As to amounts paid for or as premium on any such annuity with intent to defraud
creditors, with interest thereon, and of which the creditor has given the
insurer written notice at its home office prior to the making of the payments
to the annuitant out of which the creditor seeks to recover. Any such notice
shall specify the amount claimed or such facts as will enable the insurer to
ascertain such amount, and shall set forth such facts as will enable the
insurer to ascertain the annuity policy, the annuitant and the payments sought
to be avoided on the ground of fraud.
(b)
The total exemption of benefits presently due and payable to any annuitant
periodically or at stated times under all annuity policies under which the
person is an annuitant shall not at any time exceed $500 per month for the
length of time represented by such installments. Such periodic payments in
excess of $500 per month shall be subject to garnishee execution to the same
extent as are wages and salaries.
(c)
If the total benefits presently due and payable to any annuitant under all
annuity policies under which the person is an annuitant shall at any time
exceed payment at the rate of $500 per month, the court may order such
annuitant to pay to a judgment creditor or apply on the judgment, in
installments, the portion of such excess benefits as to the court may appear
just and proper, after due regard for the reasonable requirements of the
judgment debtor and family, if dependent upon the judgment debtor, as well as
any payments required to be made by the annuitant to other creditors under
prior court orders.
(2)
If the policy so provides, the benefits, rights, privileges or options accruing
under the policy to a beneficiary or assignee shall not be transferable nor
subject to commutation, and if the benefits are payable periodically or at
stated times, the same exemptions and exceptions contained in this section for
the annuitant shall apply with respect to such beneficiary or assignee. [Formerly
743.105; 1991 c.182 §3]
743.050 Exemption of proceeds of health
insurance. Except as may otherwise be expressly
provided by the policy, the proceeds or avails of all health insurance policies
and of provisions providing benefits on account of the insured’s disability
which are supplemental to life insurance policies, issued before, on or after
June 8, 1967, shall be exempt from all liability for any debt of the insured,
and from any debt of the beneficiary existing at the time the proceeds are made
available for the use of the beneficiary. [Formerly 743.108]
743.051 [1967
c.359 §350; renumbered 742.021 in 1989]
743.052 [1971
c.372 §2; renumbered 743.719 in 1989]
743.053 Prohibition on requirement that
death or dismemberment occur in less than 180 days after accident.
A life insurance policy or health insurance policy, whether group or
individual, that contains provisions providing benefits in case of death or
dismemberment by accident shall not require that the death or dismemberment
occur less than 180 days after the date of the accident in order for benefits
to be paid under the policy. [1991 c.182 §8]
743.054 [1967
c.359 §351; renumbered 742.023 in 1989]
743.055 [1991
c.875 §2; repealed by 1995 c.506 §11]
743.056 Insurer may not refuse to defend
or pay claim based on provider’s disclosure of adverse event.
(1) As used in this section:
(a)
“Adverse event” means a negative consequence of patient care that is
unanticipated, is usually preventable and results in or presents a significant
risk of patient injury.
(b)
“Claim” means a written demand for restitution for an injury alleged to have
been caused by the medical negligence of a health practitioner or licensed
health care facility.
(c)
“Health practitioner” means a person described in ORS 31.740 (1).
(d)
“Patient’s family” includes:
(A)
A parent, sibling or child by marriage, blood, adoption or domestic
partnership.
(B)
A foster parent or foster child.
(2)
An insurer may not decline or refuse to defend or indemnify a health
practitioner or a health care facility with respect to a claim, for any reason
that is based on the disclosure to the patient or the patient’s family by the
health practitioner or facility of an adverse event or information relating to
the cause of an adverse event.
(3)
A policy or contract of insurance or indemnity may not include a provision or
term excluding or limiting coverage based on the disclosure to a patient or the
patient’s family by a health practitioner or facility of an adverse event or
information relating to the cause of an adverse event. [2011 c.30 §2]
Note:
743.056 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.057 [1967
c.359 §352; renumbered 742.026 in 1989]
743.060 [1967
c.359 §353; renumbered 742.028 in 1989]
743.061 Uniform standards for health care
financial and administrative transactions; rules.
(1) The Department of Consumer and Business Services may adopt by rule uniform
standards applicable to persons listed in subsection (2) of this section for
health care financial and administrative transactions, including uniform
standards for:
(a)
Eligibility inquiry and response;
(b)
Claim submission;
(c)
Payment remittance advice;
(d)
Claims payment or electronic funds transfer;
(e)
Claims status inquiry and response;
(f)
Claims attachments;
(g)
Prior authorization;
(h)
Provider credentialing; or
(i)
Health care financial and administrative transactions identified by the
stakeholder work group described in ORS 743.062.
(2)
Any uniform standards adopted under subsection (1) of this section apply to:
(a)
Health insurers.
(b)
Prepaid managed care health services organizations as defined in ORS 414.736.
(c)
Third party administrators.
(d)
Any person or public body that either individually or jointly establishes a
self-insurance plan, program or contract, including but not limited to persons
and public bodies that are otherwise exempt from the Insurance Code under ORS
731.036.
(e)
Health care clearinghouses or other entities that process or facilitate the
processing of health care financial and administrative transactions from a
nonstandard format to a standard format.
(f)
Any other person identified by the department that processes health care
financial and administrative transactions between a health care provider and an
entity described in this subsection.
(3)
In developing or updating any uniform standards adopted under subsection (1) of
this section, the department shall consider recommendations from the Oregon
Health Authority under ORS 743.062. [2011 c.130 §2]
Note:
743.061 was added to and made a part of the Insurance Code by legislative action
but was not added to ORS chapter 743 or any series therein. See Preface to
Oregon Revised Statutes for further explanation.
743.062 Stakeholder work group to recommend
uniform standards. (1) The Oregon Health Authority
shall convene a stakeholder work group to recommend uniform standards for
health care financial and administrative transactions, including, to the extent
allowed by law, standards applicable to commercial health insurance plans,
self-funded plans and state governmental health plans and programs.
(2)
The authority shall report uniform standards recommended under subsection (1)
of this section to the Department of Consumer and Business Services for
consideration in the adoption of uniform standards by the department under ORS
743.061.
(3)
The stakeholder work group, in recommending uniform standards under subsection
(1) of this section, shall consider or incorporate any applicable national
standards for administrative simplification and timelines for implementation of
national standards for administrative simplification that are established
pursuant to federal law. [2011 c.130 §3]
Note:
743.062 and 743.064 were enacted into law by the Legislative Assembly but were
not added to or made a part of ORS chapter 743 or any series therein by legislative
action. See Preface to Oregon Revised Statutes for further explanation.
743.063 [1967
c.359 §354; renumbered 742.033 in 1989]
743.064 Coordination with Oregon Health
Authority concerning uniform standards; Department of Human Services to be subject
to standards. (1) The Department of Consumer and
Business Services and the Oregon Health Authority shall confer before the
department finalizes rules implementing uniform standards under ORS 743.061,
for the purpose of reconciling any differences between the department’s and the
authority’s requirements for health care financial and administrative
transactions described in ORS 743.061. If the Department of Consumer and
Business Services proposes to amend any rule concerning uniform standards for
health care financial and administrative transactions under ORS 743.061 or the
authority proposes to amend any rule in a manner that would be inconsistent
with the uniform standards, the agency proposing to amend the rules shall
notify the other agency. The agencies shall confer before a final rule is
adopted to ensure that the standards remain uniform and consistent to the
extent practicable.
(2)
The Department of Human Services shall be subject to the uniform standards
adopted by the Department of Consumer and Business Services and the authority
under ORS 743.061 that are applicable to the operations of the Department of
Human Services. [2011 c.130 §5]
Note: See
note under 743.062.
743.066 [1967
c.359 §355; 1971 c.231 §23; renumbered 742.036 in 1989]
743.069 [1967
c.359 §356; renumbered 742.038 in 1989]
743.072
[Formerly 736.310; 1971 c.231 §24; 1973 c.149 §1; renumbered 742.041 in 1989]
743.075 [1967
c.359 §358; 1975 c.391 §1; 1977 c.742 §8; renumbered 742.043 in 1989]
743.078 [1967
c.359 §359; renumbered 742.046 in 1989]
743.080 [1971
c.231 §5; 1983 c.249 §1; renumbered 742.048 in 1989]
743.081 [1967
c.359 §360; renumbered 742.051 in 1989]
743.082 Selling and leasing of provider
panels by contracting entity; definitions. As
used in this section and ORS 743.083 to 743.086:
(1)(a)
“Contracting entity” means any person that contracts directly with a provider
for the delivery of health care services or contracts with a third party for
the purpose of selling or making available to the third party the provider’s
health care services or discounted rates or the services or rates of a provider
panel under a provider network contract.
(b)
“Contracting entity” includes a person under common ownership and control of a
contracting entity.
(c)
“Contracting entity” does not include:
(A)
A managed care organization that is certified under ORS 656.260;
(B)
A discount medical plan organization as defined in ORS 742.420;
(C)
The state medical assistance program;
(D)
An independent practice association; or
(E)
A self-funded, employer-sponsored health insurance plan regulated under the
Employee Retirement Income Security Act of 1974, as codified and amended at 29
U.S.C. 1001, et seq., or any person that provides only administrative services
to the self-funded employer-sponsored health insurance plan.
(2)
“Health care services” means the treatment of humans for bodily injury,
disablement or death by accidental means or as a result of sickness or
childbirth, or in prevention of sickness, but does not include treatment for
bodily injury, disablement or occupational diseases incurred as a result of
employment.
(3)
“Independent practice association” has the meaning given that term in ORS
743.801.
(4)
“Person” has the meaning given that term in ORS 731.116.
(5)(a)
“Provider” includes:
(A)
A physician as defined in ORS 677.010.
(B)
A physician group, independent practice association, physician-controlled
organization, hospital organization or other provider organization that
contracts with a provider for the purpose of facilitating the provider’s
participation in a provider network contract.
(C)
A person licensed, certified or otherwise authorized or permitted by the laws
of this state to administer medical services or mental health services in the
ordinary course of business or practice of a profession.
(b)
“Provider” does not include a contracting entity.
(6)
“Provider network contract” means a contract between a provider and a
contracting entity for the provision of health care services to patients other
than Medicare enrollees or medical assistance recipients.
(7)(a)
“Third party” means a person that enters into a contract with a contracting
entity or with another party, other than a provider, for the right to exercise
the rights of the contracting entity under a provider network contract.
(b)
“Third party” includes any of the following:
(A)
A payer that directly reimburses the cost of the delivery of health care
services;
(B)
A third party administrator or other entity that administers or processes claims
on behalf of a payer;
(C)
A preferred provider organization or network;
(D)
A physician-controlled organization or a hospital organization; or
(E)
An entity that is engaged in the electronic transmission of claims between a
contracting entity and a payer and does not provide to another party access to
the health care services and discounted rates of a provider.
(c)
“Third party” does not include:
(A)
Entities offering health care services under the same brand pursuant to a brand
licensing agreement with the same licenser; or
(B)
A self-funded, employer-sponsored health insurance plan regulated under the
Employee Retirement Income Security Act of 1974, as codified and amended at 29
U.S.C. 1001, et seq., or any person that provides only administrative services
to the self-funded employer-sponsored health insurance plan. [2011 c.561 §1]
Note:
743.082, 743.085 and 743.086 were enacted into law by the Legislative Assembly
but were not added to or made a part of ORS chapter 743 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.
743.083 Registration of contracting
entity. (1) A contracting entity that does not
have a certificate of authority shall register with the Department of Consumer
and Business Services as a contracting entity by submitting the following
information to the department in written or electronic form as prescribed by
the department along with any fee prescribed by the department:
(a)
The official name of the entity and any secondary, alternative or substitute
designations.
(b)
The mailing address and telephone number of the headquarters of the entity.
(c)
The name and telephone number of a representative of the entity who shall serve
as the primary contact for the department.
(2)
The requirements of this section do not apply to a contracting entity that is
under common ownership and control of a contracting entity that is licensed by
or has a certificate of authority from the department. [2011 c.561 §3]
Note:
743.083 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.084 [1967
c.359 §361; renumbered 743.041 in 1989]
743.085 Third party contracts for leasing
of provider panels; requirements. (1) A
contracting entity or a third party may not contract with another third party
to provide access to the health care services and discounted rates of a
provider under a provider network contract unless:
(a)
The third party contract is specifically authorized by the provider network
contract; and
(b)
The third party contract obligates the third party to comply with all
applicable terms, limitations and conditions of the provider network contract.
(2)
A contracting entity that provides access to the health care services and
discounted rates of a provider under a provider network contract shall:
(a)
Give to the provider in writing or electronically, at the time a provider
network contract is entered into, a list of all third parties known by the
contracting entity at the time to which the contracting entity has or will
provide access to the health care services and discounted rates of a provider
under the provider network contract;
(b)
Maintain an Internet website, toll-free telephone number or other readily
available mechanism through which a provider may obtain a list, updated at
least every 90 days, of all third parties that have access to the provider’s
health care services and discounted rates under the provider network contract;
(c)
Provide each third party listed under paragraph (a) or (b) of this subsection
with information necessary to enable the third party to comply with all
relevant terms, limitations and conditions of the provider network contract;
(d)
Require a third party to identify on each remittance or explanation of payment
sent to a provider the source of any contractual discount in rates taken by the
third party under the provider network contract; and
(e)(A)
Notify each third party listed under paragraph (a) or (b) of this subsection of
the termination of the provider network contract no later than 30 days prior to
the effective date of the termination; and
(B)
Require third parties to cease claiming entitlement to discounted rates or
other rights under a provider network contract after the termination of the
contract.
(3)
The notice required under subsection (2)(e)(A) of this section can be provided
by any reasonable means, including but not limited to written notice,
electronic communication or an update to an electronic database.
(4)
Subject to any applicable continuity of care requirements, agreements or
contractual provisions:
(a)
A third party’s right to access a provider’s health care services and
discounted rates under a provider network contract shall terminate on the date
the provider network contract is terminated;
(b)
Claims for health care services performed after the termination date of the
provider network contract are not eligible for processing and payment in
accordance with the provider network contract; and
(c)
Claims for health care services performed before the termination date of the
provider network contract, but processed after the termination date, are
eligible for processing and payment in accordance with the provider network
contract.
(5)(a)
All information made available to a provider in accordance with the
requirements of this section and ORS 743.086 shall be confidential and may not
be disclosed to any person not involved in the provider’s practice or the
administration thereof without the prior written consent of the contracting
entity.
(b)
This section and ORS 743.086 may not be construed to prohibit a contracting
entity from requiring a provider to execute a reasonable confidentiality
agreement to ensure that confidential or proprietary information disclosed by
the contracting entity is not used for any purpose other than the provider’s
direct practice management or billing activities. [2011 c.561 §4]
Note: See
note under 743.082.
743.086 Additional requirements for third
party contracts. (1) A contract between a third
party and a contracting entity or between two third parties with respect to a
provider network contract must comply with this section and ORS 743.085.
(2)(a)
A third party shall inform the contracting entity and providers under a
contracting entity’s provider network contract of a website, toll-free number
or other readily available mechanism to identify the names of all third parties
to which the third party provides access to the health care services and
discounted rates of a provider under the provider network contract.
(b)
The third party shall update the website described in paragraph (a) of this
subsection at least every 90 days to reflect all third parties currently
provided access. Upon request, the third party shall make the information
available to a provider via telephone or through direct notification.
(3)
A provider may refuse to accept as payment in full a discounted payment made by
a third party under the terms of a provider network contract if there is no
valid contractual basis for the discount or the discount is taken in violation
of this section or ORS 743.085. [2011 c.561 §5]
Note: See
note under 743.082.
743.087 [1967
c.359 §362; renumbered 743.043 in 1989]
743.090
[Formerly 736.335; repealed by 1973 c.827 §83]
743.093 [1967
c.359 §364; renumbered 742.053 in 1989]
743.096 [1967
c.359 §365; renumbered 742.056 in 1989]
743.099
[Formerly 739.405; renumbered 743.046 in 1989]
POLICY LANGUAGE SIMPLIFICATION
743.100 Short title.
ORS 743.100 to 743.109 may be cited as the Life and Health Insurance Policy
Language Simplification Act. [Formerly 743.350]
743.101 Purpose.
(1) The purpose of the Life and Health Insurance Policy Language Simplification
Act is to establish minimum standards for language used in policies and
certificates of life insurance and health insurance delivered or issued for
delivery in this state in order to facilitate ease of reading.
(2)
ORS 743.100 to 743.109 is not intended to increase the risk assumed by insurers
or to supersede their obligation to comply with the substance of other
Insurance Code provisions applicable to insurance policies. ORS 743.100 to
743.109 is not intended to impede flexibility and innovation in the development
of policy forms or content or to lead to the standardization of policy forms or
content. [Formerly 743.353]
743.102 [1967
c.359 §367; renumbered 743.047 in 1989]
743.103 Definitions for ORS 743.100 to
743.109. As used in ORS 743.100 to 743.109, “policy”
has the meaning given in ORS 731.122 and, in addition, includes a certificate
issued pursuant to a group insurance policy delivered or issued for delivery in
this state. [Formerly 743.357]
743.104 Scope of ORS 743.100 to 743.109.
(1) ORS 743.100 to 743.109 apply to all policies delivered or issued for
delivery in this state, except:
(a)
Any policy that is a security subject to federal jurisdiction.
(b)
Any group policy covering a group of 1,000 or more lives at date of issue,
other than a group credit life insurance policy or a group credit health
insurance policy. However, this paragraph shall not exempt any certificate
issued pursuant to a group policy.
(c)
Any group annuity contract that serves as a funding vehicle for a pension, profit-sharing
or deferred compensation plan.
(d)
Any form used in connection with, as a conversion from, as an addition to, or,
pursuant to a contractual provision, in exchange for, a policy delivered or
issued for delivery on a form approved or permitted to be issued prior to the
date the form must be approved under section 9, chapter 708, Oregon Laws 1979.
(e)
The renewal of a policy delivered or issued for delivery prior to the date the
policy form must be approved under section 9, chapter 708, Oregon Laws 1979.
(f)
Any certificate issued pursuant to a group policy not delivered or issued for
delivery in this state.
(2)
A non-English language policy will be deemed to comply with ORS 743.106 if the
insurer certifies that the policy is translated from an English language policy
that complies with ORS 743.106. [Formerly 743.362]
743.105 [1967
c.359 §368; renumbered 743.049 in 1989]
743.106 Reading ease standards for life
and health insurance policies. (1) No policy
form shall be delivered or issued for delivery in this state unless:
(a)
The policy text achieves a score of 40 or more on the Flesch reading ease test,
or an equivalent score on any comparable test as provided in subsection (3) of
this section;
(b)
The policy, except for specification pages, schedules and tables is printed in
not less than 10-point type, one point leaded;
(c)
The style, arrangement and overall appearance of the policy give no undue
prominence to any portion of the text, including the text of any indorsements
or riders; and
(d)
The policy contains a table of contents or an index of the principal sections
of the policy, if the policy has more than 3,000 words of text printed on three
or less pages, or regardless of the number of words if the policy has more than
three pages.
(2)
For the purposes of this section, a Flesch reading ease test score shall be
calculated as follows:
(a)
For policy forms containing 10,000 words or less of text, the entire form shall
be analyzed. For policy forms containing more than 10,000 words, two 200-word
samples per page may be analyzed instead of the entire form. The samples shall
be separated by at least 20 printed lines.
(b)
The number of words and sentences in the text shall be counted and the total
number of words divided by the total number of sentences. The figure obtained
shall be multiplied by a factor of 1.015.
(c)
The total number of syllables in the text shall be counted and divided by the
total number of words. The figure obtained shall be multiplied by a factor of
84.6.
(d)
The sum of the figures computed under paragraphs (b) and (c) of this subsection
subtracted from 206.835 equals the Flesch reading ease test score for the
policy form.
(e)
For purposes of paragraphs (b) and (c) of this subsection, the following
procedures shall be used:
(A)
A contraction, hyphenated word or numbers and letters, when separated by
spaces, shall be counted as one word.
(B)
A unit of words ending with a period, semicolon or colon shall be counted as a
sentence.
(C)
A “syllable” means a unit of spoken language consisting of one or more letters
of a word as divided by an accepted dictionary. If the dictionary shows two or
more equally acceptable pronunciations of a word, the pronunciation containing
fewer syllables may be used.
(f)
As used in this section, “text” includes all written matter except the
following:
(A)
The name and address of the insurer; the name, number or title of the policy;
the table of contents or index; captions and subcaptions; specification pages;
schedules or tables; and
(B)
Policy language drafted to conform to the requirements of any state or federal
law, regulation or agency interpretation; policy language required by any
collectively bargained agreement; medical terminology; and words that are
defined in the policy. However, the insurer shall identify the language or
terminology excepted by this subparagraph and shall certify in writing that the
language or terminology is entitled to be excepted by this subparagraph.
(3)
Any other reading test may be approved by the Director of the Department of
Consumer and Business Services as an alternative to the Flesch reading ease
test if it is comparable in result to the Flesch reading ease test.
(4)
Each policy filing shall be accompanied by a certificate signed by an officer of
the insurer stating that the policy meets the minimum required reading ease
score on the test used, or stating that the score is lower than the minimum
required but should be authorized in accordance with ORS 743.107. To confirm
the accuracy of a certification, the director may require the submission of
further information.
(5)
At the option of the insurer, riders, indorsements, applications and other
forms made a part of the policy may be scored as separate forms or as part of
the policy with which they may be used. [Formerly 743.365]
743.107 When director may authorize lower
standards. The Director of the Department of
Consumer and Business Services may authorize a lower score than the Flesch
reading ease test score required by ORS 743.106 when, in the director’s sole
discretion, the director finds that a lower required score:
(1)
Will provide a more accurate reflection of the readability of a policy form;
(2)
Is warranted by the nature of a particular policy form or type or class of
policy forms; or
(3)
Is caused by certain policy language drafted to conform to the requirements of
any state law, regulation or agency interpretation. [Formerly 743.368]
743.108 [1967
c.359 §369; renumbered 743.050 in 1989]
743.109 Approval of certain policy forms containing
specified provisions; conditions for approval.
A policy form meeting the requirements of ORS 743.106 shall not be disapproved
because of other provisions of the Insurance Code that specify the content of
policies, if the policy form provides the policyholders and claimants
protection not less favorable than they would be entitled to under such
provisions. [Formerly 743.370]
743.111
[Formerly 744.090; renumbered 742.058 in 1989]
743.114
[Formerly 736.325; 1971 c.123 §1; 1981 c.667 §1; renumbered 742.061 in 1989]
743.115 [1987
c.774 §46; 1989 c.376 §1; renumbered 742.063 in 1989]
743.116 [1971
c.603 §2; 1981 c.422 §1; 1981 c.891 §2; renumbered 743.701 in 1989]
743.117 [1967
c.271 §§2,3; renumbered 743.703 in 1989]
743.118 [1987
c.720 §2; renumbered 743.704 in 1989]
743.119 [1981
c.254 §2; renumbered 743.706 in 1989]
743.120 [1975
c.135 §2; renumbered 743.707 in 1989]
743.123 [1975
c.338 §2; renumbered 743.709 in 1989]
743.125 [1979
c.268 §6; renumbered 743.710 in 1989]
743.128 [1979
c.785 §20; renumbered 743.712 in 1989]
743.132 [1979
c.1 §15; renumbered 743.713 in 1989]
743.135 [1981
c.422 §5; 1989 c.721 §54; 1989 c.1080 §1; renumbered 743.714 in 1989]
743.138 [1987
c.739 §§2,4b; renumbered 743.715 in 1989]
743.140 [1985 c.536
§1; renumbered 743.716 in 1989]
743.143 [1985
c.312 §2; renumbered 743.717 in 1989]
743.145 [1985
c.747 §59; renumbered 743.700 in 1989]
743.147 [1987
c.530 §2; renumbered 743.718 in 1989]
INDIVIDUAL LIFE INSURANCE AND ANNUITIES
(Generally)
743.150 Scope of ORS 743.150, 743.153 and
743.156. This section and ORS 743.153 and
743.156 apply only to policies of life insurance, other than group life
insurance. [1967 c.359 §372]
743.153 Statement of benefits.
A life insurance policy shall contain a provision stating the amount of
benefits payable or the method to be used or procedure to be followed in
determining such amount, the manner of payment and the consideration therefor. [Formerly
739.310]
743.154 Acceleration of death benefits;
rules. (1) A life insurance policy or a rider
to a life insurance policy may provide for the acceleration of death benefits
as part of the life insurance coverage. For purposes of this section,
accelerated death benefits are benefits that:
(a)
Are payable to the policy owner or certificate holder during the lifetime of
the insured, in anticipation of death or upon the occurrence of specified
life-threatening or catastrophic conditions as defined by the policy or rider;
(b)
Reduce the death benefit otherwise payable under the life insurance policy; and
(c)
Are payable upon the occurrence of a single qualifying event that results in
the payment of a benefit amount fixed at the time of acceleration.
(2)
For purposes of this section, a qualifying event is one or more of the
following:
(a)
A medical condition that will result in a drastically limited life span, as
specified in the policy or rider, not exceeding 24 months.
(b)
A medical condition that has required or requires extraordinary medical
intervention, such as a major organ transplant or continuous artificial life
support, without which the insured would die.
(c)
Any condition that usually requires continuous confinement in an eligible
institution, as defined in the policy or rider, if the insured is expected to
remain there for the rest of the insured’s life.
(d)
A medical condition that in the absence of extensive or extraordinary medical
treatment will result in a drastically limited life span. Such conditions may
include but are not limited to one or more of the following:
(A)
Coronary artery disease resulting in an acute infarction or requiring surgery;
(B)
Permanent neurological deficit resulting from cerebral vascular accident;
(C)
End-stage renal failure; or
(D)
Acquired Immune Deficiency Syndrome.
(e)
Any other event determined by the Director of the Department of Consumer and
Business Services to be life-threatening.
(3)
A policy or rider that provides for the acceleration of death benefits:
(a)
Must also provide for the continuation of the policy as to the amount of the
death benefit that is not accelerated.
(b)
Must allow the policy owner or the certificate holder to request payment at any
time during the period that the qualifying event continues.
(4)
A policy or rider that provides for the acceleration of death benefits under
this section shall not be described or marketed by an insurer as long term care
insurance or as providing long term care benefits.
(5)
The director shall adopt rules establishing minimum benefits, criteria for the
payment of accelerated benefits, disclosure requirements and actuarial
standards. [1991 c.571 §2; 1993 c.17 §1]
743.156 Statement of premium.
A life insurance policy shall contain a provision separately stating the
premium for each benefit provision of the policy for which such separate
statement is necessary, as determined by the Director of the Department of
Consumer and Business Services, to give adequate disclosure of the terms of the
policy. [1967 c.359 §374]
(Individual Life Insurance Policies)
743.159 Scope of ORS 743.162 to 743.243.
ORS 743.162 to 743.243 apply only to policies of life insurance other than
group life insurance, and do not apply to annuity or pure endowment policies.
Such sections apply to such policies that are policies of variable life
insurance, except to the extent the provisions of such sections are obviously
inapplicable to variable life insurance or are in conflict with other
provisions of such sections that are expressly applicable to variable life
insurance. [1967 c.359 §375; 1973 c.435 §16]
743.162 Payment of premium.
A life insurance policy shall contain a provision relating to the time and
place of payment of premium. [1967 c.359 §376]
743.165 Grace period.
A life insurance policy shall contain a provision that a grace period of 30
days, or, at the option of the insurer, of one month of not less than 30 days,
or of four weeks in the case of industrial life insurance policies the premiums
for which are payable more frequently than monthly, shall be allowed within
which the payment of any premium after the first may be made, during which
period of grace the policy shall continue in full force. The insurer may impose
an interest charge not in excess of six percent per annum for the number of
days of grace elapsing before the payment of the premium. If a claim arises
under the policy during such period of grace the amount of any premium due or
overdue, together with interest and any deferred installment of the annual
premium, may be deducted from the policy proceeds. [1967 c.359 §377]
743.168 Incontestability.
(1) A life insurance policy shall contain a provision that the policy shall be
incontestable after it has been in force for two years from its date of issue
during the lifetime of the insured, except for nonpayment of premiums. At the
option of the insurer the two-year limit within which the policy may be
contested shall not apply to the provisions for benefits in the event of total
and permanent disability and provisions which grant additional insurance
specifically against death by accident.
(2)
A provision in a life insurance policy providing that such policy shall be
incontestable after a specified period shall preclude only a contest of the
validity of the policy, and shall not preclude the assertion at any time of
defenses based upon provisions in the policy which exclude or restrict
coverage, whether or not such restrictions or exclusions are excepted in such
provision. [1967 c.359 §378]
743.171 Incontestability and limitation of
liability after reinstatement. (1) A
reinstated policy of life insurance may be contested on account of fraud or
misrepresentation of facts material to the reinstatement only for the same
period following reinstatement, and with the same conditions and exceptions, as
the policy provides with respect to contestability after original issuance.
(2)
When any policy of life insurance is reinstated, such reinstated policy may
exclude or restrict liability to the same extent that such liability could have
been or was excluded or restricted when the policy was originally issued, and
such exclusion or restriction shall be effective from the date of
reinstatement. [1967 c.359 §379]
743.174 Entire contract.
A life insurance policy shall contain a provision that the policy constitutes
the entire contract between the parties. [1967 c.359 §380]
743.177 Statements of insured.
A life insurance policy shall contain a provision that all statements made by
or on behalf of the insured shall, in the absence of fraud, be deemed
representations and not warranties, and that no such statement shall be used in
defense of a claim under the policy unless contained in a written application
and unless a copy of such application is indorsed upon or attached to the
policy when issued. [1967 c.359 §381]
743.180 Misstatement of age.
A life insurance policy shall contain a provision that if it is found at any
time before final settlement under the policy that the age of the insured or of
any other person whose age is considered in determining the premium or benefit
accruing under the policy has been misstated, the amount payable or benefit
accruing under the policy shall be such as the premium would have purchased at
the correct age or ages, or the premium may be adjusted and credit given to the
insured or to the insurer, according to the insurer’s published rate at date of
issue. [1967 c.359 §382]
743.183 Dividends.
(1) A life insurance policy other than a nonparticipating policy shall contain
a provision that the policy shall participate in the divisible surplus of the
insurer annually, beginning not later than the end of the third policy year.
Any policy containing provision for participation beginning at the end of the
first or the second policy year may provide that dividends for either or both
of such years shall be paid subject to the payment of the premium for the next
ensuing year. The owner of the policy shall have the right each year to have
the dividend arising from such participation paid in cash, and if the policy
provides other dividend options, it shall further provide which dividend option
is effective if the owner does not elect one of such options on or before the
expiration of the period of grace allowed for the payment of the premium.
(2)
In participating industrial life insurance policies, in lieu of the provision
required in subsection (1) of this section, there shall be a provision that,
beginning not later than the end of the fifth policy year, the policy shall
participate annually in the divisible surplus in the manner set forth in the
policy.
(3)
This section does not apply to any form of paid-up insurance or temporary
insurance or endowment insurance issued or granted in exchange for lapsed or
surrendered policies. [1967 c.359 §383]
743.186 Policy loan.
(1) A life insurance policy shall contain a provision that after three full
years’ premiums have been paid and after the policy has a cash surrender value
and while no premium is in default beyond the grace period for payment, the
insurer will advance, on proper assignment or pledge of the policy and on the
sole security thereof, an amount equal to or, at the option of the party
entitled thereto, less than the loan value of the policy, at a rate of interest
not exceeding the maximum rate permitted by the policy loan provision. The
interest rate provision shall comply with ORS 743.187. The loan value of the
policy shall be equal to the cash surrender value at the end of the then
current policy year, less any existing indebtedness not already deducted in
determining such cash surrender value including any interest then accrued but
not due, any unpaid balance of the premium for the current policy year, and
interest on the loan to the end of the current policy year. The policy may also
provide that:
(a)
Interest on any indebtedness that is 90 or more days past due shall be added to
the existing indebtedness and shall bear interest at the rate applicable to the
existing indebtedness; and
(b)
Except as provided in ORS 743.187, if the total indebtedness on the policy,
including interest due or accrued, equals or exceeds the amount of the loan
value of the policy, the policy shall terminate and become void upon 30 days’
notice by the insurer mailed to the last-known address of the insured or other
policy owner and of any assignee of record at the home office of the insurer.
(2)
The policy shall reserve to the insurer the right to defer the granting of a
loan, other than for the payment of any premium to the insurer, for six months
after application therefor.
(3)
The policy, at the insurer’s option, may provide for automatic premium loan.
(4)
This section does not apply to term insurance policies or term insurance
benefits provided by rider or supplemental policy provisions, or to industrial
life insurance policies. [1967 c.359 §384; 1975 c.575 §1; 1981 c.412 §18; 2001
c.318 §12]
743.187 Maximum interest rate on policy
loan; adjustable interest rate. (1) Except as
provided otherwise in this section, the maximum interest rate in the policy
loan provision required by ORS 743.186 shall be eight percent per year. The
insurer may include in the policy loan provision, in lieu of a fixed maximum
interest rate, a provision for an adjustable interest rate. The adjustable
interest rate provision must comply with this section. A limitation on interest
rates under state law, other than a limitation contained in the Insurance Code,
shall not apply to interest rates for life insurance policy loans unless the
limitation specifically applies to life insurance policy loans.
(2)
The adjustable interest rate provision:
(a)
Shall state in substance that in accordance with the policy and the law of the
jurisdiction in which the policy is delivered, the insurer will establish from
time to time the interest rate for an existing or a new policy loan; and
(b)
Shall set forth the dates on which the insurer will determine policy loan
interest rates. These determination dates shall be at regular intervals no
longer than one year and no shorter than three months.
(3)
The maximum interest rate permitted for a policy loan under the adjustable
interest rate provision shall be established by the provision as the higher of:
(a)
The interest rate used to calculate cash surrender values under the policy
during the same period, plus one percent; and
(b)
The Moody’s Corporate Bond Yield Average - Monthly Average
Corporates, as published by Moody’s Investors Service, Inc., for the calendar
month which precedes by two months the month in which the determination date
for the policy loan interest rate falls. However, if the Moody’s Corporate Bond
Yield Average - Monthly Average Corporates is no longer published by
Moody’s Investors Service, Inc., or if the National Association of Insurance
Commissioners determines that the Moody’s Corporate Bond Yield
Average - Monthly Average Corporates is no longer an appropriate rate
for this purpose, the Director of the Department of Consumer and Business
Services by rule may establish the method of determining the rate under this
paragraph. The director’s rule, to the maximum extent reasonable, shall be
consistent with the pertinent actions of the National Association of Insurance
Commissioners.
(4)
On any date specified in the adjustable interest rate provision of the policy
for determining the policy loan interest rate:
(a)
The insurer may increase the existing rate if the maximum rate permitted by the
provision exceeds the existing rate by at least one-half of one percent. The
increase shall not be less than one-half of one percent or more than the amount
by which the permitted maximum rate exceeds the existing rate; and
(b)
The insurer shall decrease the existing rate if the existing rate exceeds the
maximum rate permitted by the provision by at least one-half of one percent.
The decrease shall not be less than the amount by which the existing rate
exceeds the permitted maximum rate.
(5)
The insurer under the adjustable interest rate provision shall give notice of
the policy loan interest rate and related matters to the policy owner and all
other persons entitled to notice by the policy, as follows:
(a)
In the case of a loan other than for payment of a premium to the insurer, the
insurer shall give notice of the initial interest rate on the loan when the
loan is made.
(b)
In the case of a loan for payment of a premium to the insurer, the insurer
shall give notice of the initial interest rate on the loan as soon as
reasonably practicable after the loan is made. However, the insurer need not
give this notice when an additional premium loan is made at the same interest
rate then applicable to an existing premium loan to the borrower.
(c)
In the case of a policy with an outstanding loan, the insurer shall give notice
of each increase in the loan interest rate reasonably in advance of the
increase.
(d)
Notices given under this subsection shall include in substance the information
required by subsection (2) of this section.
(6)
Notwithstanding ORS 743.186, a policy shall not terminate in a particular
policy year solely because a change in the policy loan interest rate during
that year caused the total indebtedness under the policy to reach the policy
loan value. The policy shall remain in force during that year unless and until
it would have terminated in the absence of any policy loan interest rate change
during that year. [1981 c.412 §20]
743.189 Reinstatement.
A life insurance policy shall contain a provision that if in the event of a
default in premium payments the value of the policy has been applied to provide
a paid-up nonforfeiture benefit, and if this benefit is currently in force and
the original policy has not been surrendered to the insurer and canceled, and
if a period of not more than three years has elapsed since the default (or two
years in the case of an industrial life insurance policy), the policy may be
reinstated upon furnishing evidence of insurability satisfactory to the insurer
and payment of arrears of premiums and payment or reinstatement of any other
indebtedness to the insurer under the policy, with interest at a rate not
exceeding the maximum permitted by the policy loan provision. [1967 c.359 §385;
1981 c.412 §21]
743.192 Payment of claim; payment of
interest upon failure to pay proceeds. (1) A life
insurance policy shall contain a provision that when the policy becomes a claim
by the death of the insured, settlement shall be made upon receipt of due proof
of death and of the interest of the claimant.
(2)
If the insurer fails to pay the proceeds of or make payment under the policy
within 30 days after receipt of due proof of death and of the interest of the
claimant, and if the beneficiary elects to receive a lump sum settlement, the
insurer shall pay interest on any money due and unpaid after expiration of the
30-day period. The insurer shall compute the interest from the date of the
insured’s death until the date of payment, at a rate not lower than that paid
by the insurer on other withdrawable policy owner funds. At the end of the
30-day period, the insurer shall notify the named beneficiary or beneficiaries
at their last-known address that interest at the applicable rate will be paid
on the lump sum proceeds from the date of death of the insured.
(3)
Nothing in this section shall be construed to allow an insurer to withhold
payment of money payable under a life insurance policy to any named beneficiary
for a period longer than reasonably necessary to transmit the payment. [1967
c.359 §386; 1983 c.754 §2]
743.195 Installment payments.
A life insurance policy shall contain a table showing the amounts of
installments, if any, by which its proceeds may be payable. [1967 c.359 §387]
743.198 Title.
A life insurance policy shall contain a title briefly and correctly describing
the policy. If an industrial life insurance policy, it shall have the words “industrial
policy” imprinted on the face thereof as part of the descriptive matter. [1967
c.359 §388]
743.201 Beneficiary of industrial
policies. An industrial life insurance policy
shall have the name of the beneficiary designated thereon, or in the
application or other form if attached to the policy, with a reservation of the
right to designate or change the beneficiary after the issuance of the policy
unless such beneficiary has been irrevocably designated. The policy may also
provide that no designation or change of beneficiary shall be binding on the
insurer until indorsed on the policy by the insurer, and that the insurer may
refuse to indorse the name of any proposed beneficiary who does not appear to
the insurer to have an insurable interest in the life of the insured. The
policy may also provide that if the beneficiary designated in the policy does
not make a claim under the policy or does not surrender the policy with due
proof of death within the period stated in the policy, which shall not be less
than 30 days after the death of the insured, or if the beneficiary is the estate
of the insured, or is a minor, or dies before the insured, or is not legally
competent to give a valid release, then the insurer may make any payment
thereunder to the executor or administrator of the insured, or to any relative
of the insured by blood or legal adoption or connection by marriage, or to any
person appearing to the insurer to be equitably entitled thereto by reason of
having been named beneficiary, or by reason of having incurred expense for the
maintenance, medical attention or burial of the insured. The policy may also
include a similar provision applicable to any other payment due under the
policy. [1967 c.359 §389]
743.204 Standard Nonforfeiture Law for
Life Insurance; applicability. (1) ORS
743.204 to 743.222 may be cited as the Standard Nonforfeiture Law for Life
Insurance.
(2)
The operative date of the Standard Nonforfeiture Law for Life Insurance as to
any policy is the earlier of:
(a)
January 1, 1948; or
(b)
The date specified in a written notice, filed with the Director of the Department
of Consumer and Business Services by the insurer, of election to comply with
the Standard Nonforfeiture Law for Life Insurance as to such policy as of the
specified date.
(3)
The Standard Nonforfeiture Law for Life Insurance shall not apply to:
(a)
Any reinsurance, group insurance, pure endowment, annuity or reversionary
annuity policy.
(b)
Any term policy or renewal thereof, of uniform amount, which provides no
guaranteed nonforfeiture or endowment benefits, of 20 years or less expiring
before age 71, for which uniform premiums are payable during the entire term of
the policy. For this purpose, the age at death for a joint term life insurance
policy shall be the age at death of the oldest life.
(c)
Any term policy of decreasing amount, which provides no guaranteed
nonforfeiture or endowment benefits, if each adjusted premium, calculated as
specified in ORS 743.215 and 743.216, is less than the adjusted premium so
calculated on a term policy or renewal thereof of uniform amount, which provides
no guaranteed nonforfeiture benefits or endowment benefits, which is issued at
the same age, for the same initial amount of insurance and for a term of 20
years or less that expires before age 71 and for which uniform premiums are
payable during the entire term of the policy. For this purpose, the age at
death for a joint term life insurance policy shall be the age at death of the
oldest life.
(d)
Any policy which provides no guaranteed nonforfeiture or endowment benefits,
and for which policy the cash surrender value or present value of paid-up
nonforfeiture benefit calculated for the beginning of any policy year as
specified in ORS 743.210, 743.213, 743.215 and 743.216 does not exceed two and
one-half percent of the amount of insurance at the beginning of such year. [Formerly
739.340; 1977 c.320 §13; 1981 c.609 §12]
743.207 Required provisions relating to
nonforfeiture. (1) A life insurance policy shall
contain in substance the following provisions, or corresponding provisions
which in the opinion of the Director of the Department of Consumer and Business
Services are at least as favorable to the defaulting or surrendering
policyholder as are the minimum requirements specified in this section, and
which are essentially in compliance with ORS 743.221:
(a)
That in the event of default in any premium payment the insurer will grant,
upon proper request not later than 60 days after the due date of the premium in
default, a paid-up nonforfeiture benefit on a plan stipulated in the policy,
effective as of such due date, of the amount required by ORS 743.213. In lieu
of this stipulated benefit the insurer may substitute, upon proper request made
not later than 60 days after the due date of the premium in default, another
paid-up nonforfeiture benefit which is actuarially equivalent and provides a
greater amount or longer period of death benefit or, if applicable, a greater
amount or earlier payment of endowment benefit.
(b)
That upon surrender of the policy within 60 days after the due date of any
premium payment in default after premiums have been paid for at least three
full years in the case of ordinary life insurance or five full years in the
case of industrial life insurance, the insurer will pay, in lieu of any paid-up
nonforfeiture benefit, a cash surrender value of the amount required by ORS
743.210.
(c)
That a specified paid-up nonforfeiture benefit will become effective as
specified in the policy unless the person entitled to make such election elects
another available option not later than 60 days after the due date of the
premium in default.
(d)
That, if the policy has become paid up by completion of all premium payments or
if it is continued under any paid-up nonforfeiture benefit which became
effective on or after the third policy anniversary in the case of ordinary life
insurance or the fifth policy anniversary in the case of industrial life
insurance, the insurer will pay, upon surrender of the policy within 30 days
after any policy anniversary, a cash surrender value of the amount required by
ORS 743.210.
(e)(A)
In the case of all policies other than those provided for in subparagraph (B)
of this paragraph, a statement of the mortality table and interest rate used in
calculating the cash surrender values and the paid-up nonforfeiture benefits
available under the policy, together with a table showing the cash surrender
value, if any, and paid-up nonforfeiture benefit, if any, available under the
policy on each policy anniversary either during the first 20 policy years or
during the term of the policy, whichever is shorter. Such values and benefits
shall be calculated on the assumption that there are no dividends or paid-up
additions credited to the policy and that there is no indebtedness to the
insurer on the policy. At the option of the insurer such table may also show
such values and benefits for any year or years beyond the 20th policy year.
(B)
In the case of policies which provide, on a basis guaranteed in the policy, for
unscheduled changes in benefits or premiums, or which provide an option for
changes in benefits or premiums other than by change to a new policy, a
statement of the mortality table, interest rate and method used in calculating
cash surrender values and paid-up nonforfeiture benefits available under the
policy.
(f)(A)
A statement that the cash surrender values and the paid-up nonforfeiture
benefits available under the policy are not less than the minimum values and
benefits required by or pursuant to the insurance law of the state in which the
policy is delivered.
(B)
An explanation of the manner in which the cash surrender values and the paid-up
nonforfeiture benefits are altered by the existence of any paid-up additions
credited to the policy or any indebtedness to the insurer on the policy.
(C)
If a detailed statement of the method of computation of the cash surrender
values and paid-up nonforfeiture benefits shown in the policy is not stated in
the policy, a statement that the method of computation has been filed with the
insurance supervisory official of the state in which the policy is delivered.
(D)
A statement of the method to be used in calculating the cash surrender value
and paid-up nonforfeiture benefit available under the policy on any policy
anniversary beyond the last anniversary for which such values and benefits are
shown for consecutive years in the policy.
(2)
Any of the provisions set forth in subsection (1) of this section, or portions
of the provisions, not applicable by reason of the particular plan of insurance
may, to the extent inapplicable, be omitted from the policy.
(3)
The insurer shall reserve the right to defer the payment of any cash surrender
value for a period of six months after demand therefor with surrender of the
policy. [Formerly 739.345; 1981 c.609 §13]
743.210 Determination of cash surrender
values; applicability to certain policies. (1)
Except as otherwise provided in subsections (2) and (3) of this section, any
cash surrender value available under a life insurance policy in the event of
default in a premium payment due on any policy anniversary, whether or not
required by ORS 743.207, shall be an amount not less than the excess, if any,
of the present value, on such anniversary, of the future guaranteed benefits
which would have been provided for by the policy, including any existing paid-up
additions, if there had been no default, over the sum of:
(a)
The present value on such anniversary of the adjusted premiums, as defined in
ORS 743.215 and 743.216, corresponding to premiums which would have fallen due
on and after such anniversary; and
(b)
The amount of any indebtedness to the insurer on the policy.
(2)
This subsection applies to a life insurance policy issued on or after the
operative date defined in ORS 743.215 which provides supplemental life
insurance or annuity benefits by rider or supplemental policy provision at the
option of the insured and for an identifiable additional premium. For such a
policy, the cash surrender value shall be an amount not less than the cash
surrender value required by subsection (1) of this section for a policy
otherwise similar to the subject policy but without such rider or supplemental
policy provision, plus the cash surrender value required by subsection (1) of
this section for a policy which provides only the benefits provided by such
rider or supplemental policy provision in the subject policy.
(3)
This subsection applies to a family life insurance policy issued on or after
the operative date defined in ORS 743.215 which policy defines a primary
insured and provides term insurance on the life of the spouse of the primary
insured with a term that expires before age 71 of the spouse. For such a
policy, the cash surrender value shall be an amount not less than the cash
surrender value required by subsection (1) of this section for a policy
otherwise similar to the subject policy but without such term insurance on the
life of the spouse, plus the cash surrender value required by subsection (1) of
this section for a policy which provides only the benefits provided by such
term insurance on the life of the spouse in the subject policy.
(4)
Any cash surrender value available within 30 days after any policy anniversary
under any policy which has been paid up by completion of all premium payments
or any policy which has been continued under any paid-up nonforfeiture benefit,
whether or not required by ORS 743.207, shall be an amount not less than the
present value, on such anniversary, of the future guaranteed benefits provided
for by the policy, including any existing paid-up additions, decreased by the amount
of any indebtedness to the insurer on the policy. [Formerly 739.350; 1981 c.609
§14]
743.213 Determination of paid-up
nonforfeiture benefits. Any paid-up nonforfeiture
benefit available under a life insurance policy in the event of default in a
premium payment due on any policy anniversary shall be such that its present
value as of such anniversary shall be at least equal to the cash surrender
value then provided for by the policy or, if none is provided for, that cash
surrender value which would have been required by ORS 743.207 in the absence of
the condition that premiums have been paid for at least a specified period. [Formerly
739.355; 1981 c.609 §15]
743.215 Calculation of adjusted premiums.
(1) This section applies to all life insurance policies issued on or after the
operative date defined in this subsection for the issuing insurer. After
January 1, 1982, any insurer may file with the Director of the Department of
Consumer and Business Services a written notice of its election to comply with
the provisions of this section with regard to any number of plans of insurance
after a specified date before January 1, 1989. The specified date shall be the
operative date of this subsection for the plan or plans, but if an insurer
elects to make this subsection operative before January 1, 1989, for fewer than
all plans, the insurer must comply with rules adopted by the director. There is
no limit to the number of times that an insurer may make the election. If an
insurer makes no such election, the operative date of this section for the
insurer shall be January 1, 1989.
(2)
Except as provided in subsection (8) of this section, the adjusted premiums
referred to in ORS 743.210 for any life insurance policy to which this section
applies shall be calculated as provided in this subsection, on an annual basis,
as a uniform percentage of the respective premiums specified in the policy for
each policy year, excluding amounts payable as extra premiums to cover
impairments or special hazards and excluding any uniform annual contract charge
or policy fee specified in the policy statement of the method to be used in
calculating the cash surrender values and paid-up nonforfeiture benefits. This
percentage shall be such that the present value, at the date of issue of the policy,
of all such adjusted premiums shall equal the sum of:
(a)
The present value at the policy issue date of the future guaranteed benefits
provided for by the policy;
(b)
One percent of either the amount of insurance, if the insurance is uniform in amount,
or the average of the amounts of insurance at the beginning of each of the
first 10 policy years; and
(c)
One hundred twenty-five percent of the nonforfeiture net level premium as
defined in subsection (3) of this section. For this purpose, any excess of the
nonforfeiture net level premium over four percent of such uniform or average
amount of insurance shall be disregarded.
(3)
The nonforfeiture net level premium referred to in subsection (2) of this
section shall equal the present value, at the date of issue of the policy, of
the guaranteed benefits provided for by the policy divided by the present
value, at the date of issue of the policy, of an annuity of one per annum
payable on the date of issue and on each anniversary of the policy on which a
premium falls due.
(4)
In the case of policies which provide, on a basis guaranteed in the policy, for
unscheduled changes in benefits or premiums, or which provide an option for
changes in benefits or premiums other than by change to a new policy, the adjusted
premiums and present values shall initially be calculated on the assumption
that future benefits and premiums do not change from those stipulated by the
policy at the date of issue. At the time of any such change in the benefits or
premiums the future adjusted premiums, nonforfeiture net level premiums and
present values shall be recalculated as provided in subsection (5) of this
section on the assumption that future benefits and premiums do not change from
those stipulated by the policy immediately after the change.
(5)
Except as otherwise provided in subsection (8) of this section, the
recalculated future adjusted premiums referred to in subsection (4) of this
section shall be calculated as provided in this subsection, on an annual basis,
as a uniform percentage of the respective future premiums specified in the
policy for each policy year, excluding amounts payable as extra premiums to
cover impairments and special hazards and excluding any uniform annual contract
charge or policy fee specified in the policy statement of the method to be used
in calculating the cash surrender values and paid-up nonforfeiture benefits.
This percentage shall be such that the present value, at the date of change to
the newly defined benefits or premiums, of all such future adjusted premiums
shall equal A plus B minus C, where these amounts are defined as follows:
(a)
“A” equals the present value, as of the date of change, of the future
guaranteed benefits provided for by the policy.
(b)
“B” equals the additional expense allowance, if any, for the policy, as defined
in subsection (6) of this section.
(c)
“C” equals the cash surrender value under the policy, if any, or present value
of any paid-up nonforfeiture benefit under the policy, as of the date of
change.
(6)
The additional expense allowance at the date of the change to the newly defined
benefits or premiums, as referred to in subsection (5) of this section, shall
equal the sum of:
(a)
One percent of the excess, if positive, of the average of the amounts of insurance
at the beginning of each of the first 10 policy years subsequent to the change,
over the average of the amounts of insurance, as defined before the change, at
the beginning of each of the first 10 policy years subsequent to the last
previous change or the policy issue date if there has been no change.
(b)
One hundred twenty-five percent of the change, if positive, in the amount of
the nonforfeiture net level premium from the amount applicable prior to the
change in policy benefits or premiums to the amount of the recalculated
nonforfeiture net level premium determined from subsection (7) of this section
as of the date of the change in policy benefits or premiums.
(7)
The recalculated nonforfeiture net level premium referred to in subsection (6)
of this section shall equal Y divided by Z, where these amounts are defined as
follows:
(a)
“Y” equals the sum of:
(A)
The nonforfeiture net level premium applicable prior to the change times the
present value at the date of change of an annuity of one per annum payable on
each anniversary of the policy, on or subsequent to the date of the change, on
which a premium would have fallen due had the change not occurred; and
(B)
The present value at the date of change of the increase in future guaranteed
benefits provided for by the policy.
(b)
“Z” equals the present value at the date of change of an annuity of one per
annum payable on each anniversary of the policy, on or subsequent to the date
of change, on which a premium falls due.
(8)
Notwithstanding any other provisions of this section, the provisions of this
subsection shall apply in the case of a policy issued on a substandard basis
which provides reduced graded amounts of insurance determined so that, in each
policy year, the policy has the same tabular mortality cost as for an otherwise
similar policy of a higher nongraded amount or amounts of insurance issued on
the standard basis. Adjusted premiums and present values for a policy on such a
substandard basis may be calculated as if the policy were issued to provide
such a higher nongraded amount or amounts of insurance on the standard basis.
(9)
Except as provided in subsection (10) of this section, all adjusted premiums
and present values referred to in the Standard Nonforfeiture Law for Life
Insurance shall, for all policies of life insurance to which this section
applies, be calculated on the mortality and interest bases as follows:
(a)
For ordinary life insurance mortality:
(A)
The Commissioners 1980 Standard Ordinary Mortality Table shall be used; or
(B)
At the option of the insurer for any one or more specified plans of life
insurance, the Commissioners 1980 Standard Ordinary Mortality Table with
Ten-Year Select Mortality Factors may be used instead of such table without
Ten-Year Select Mortality Factors.
(b)
For industrial life insurance mortality, the Commissioners 1961 Standard
Industrial Mortality Table shall be used.
(c)
For all policies issued in a particular calendar year, an interest rate shall
be used which does not exceed the nonforfeiture interest rate, as defined in
subsection (11) of this section, for policies issued in that year.
(10)
The following provisions shall also apply, for policies to which this section
applies, to the calculation of premiums and values referred to in the Standard
Nonforfeiture Law for Life Insurance:
(a)
At the option of the insurer, such calculations for all policies issued in a
particular calendar year may be made on the basis of an interest rate which
does not exceed the nonforfeiture interest rate, as defined in subsection (11)
of this section, for policies issued in the last preceding calendar year.
(b)
Under any paid-up nonforfeiture benefit, including any paid-up dividend
additions, any cash surrender value available, whether or not required by ORS 743.207,
shall be calculated on the basis of the mortality table and interest rate used
in determining the amount of such paid-up nonforfeiture benefit and paid-up
dividend additions.
(c)
An insurer shall calculate the amount of any guaranteed paid-up nonforfeiture
benefit, including any paid-up additions, on the basis of an interest rate no
lower than that specified in the policy for calculating cash surrender values.
(d)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than those shown in the
Commissioners 1980 Extended Term Insurance Table for policies of ordinary life
insurance, and not more than those shown in the Commissioners 1961 Industrial
Extended Term Insurance Table for policies of industrial life insurance.
(e)
For insurance issued on a substandard basis, the calculation of premiums and
values may be based on appropriate modifications of the mortality tables
referred to in subsection (9) of this section and in this subsection.
(f)
Any ordinary life mortality tables adopted after 1980 by the National
Association of Insurance Commissioners that are approved under rules issued by
the director for use in determining the minimum nonforfeiture standard may be
substituted for the Commissioners 1980 Standard Ordinary Mortality Table with
or without Ten-Year Select Mortality Factors, or for the Commissioners 1980
Extended Term Insurance Table.
(g)
Any industrial life mortality tables adopted after 1980 by the National
Association of Insurance Commissioners that are approved under rules issued by
the director for use in determining the minimum nonforfeiture standard may be
substituted for the Commissioners 1961 Standard Industrial Mortality Table or
the Commissioners 1961 Industrial Extended Term Insurance Table.
(11)
The nonforfeiture interest rate for any policy issued in a particular calendar
year shall equal 125 percent of the calendar year statutory valuation interest
rate for such policy as defined in the Standard Valuation Law, rounded to the
nearer one-quarter of one percent.
(12)
Notwithstanding any other provision in this chapter or ORS chapter 743A, for
any previously approved policy form, any refiling of nonforfeiture values or
their methods of computation which involves only a change in the interest rate
or mortality table used to compute nonforfeiture values shall not of itself
require refiling of any other provisions of that policy form. [1981 c.609 §17;
1983 c.282 §1]
743.216 Adjusted premiums; applicability.
This section applies only to life insurance policies issued before the
operative date defined in ORS 743.215. For such policies:
(1)
Except as provided in subsection (3) of this section, the adjusted premiums
referred to in ORS 743.210 shall be calculated on an annual basis and shall be
such uniform percentage of the respective premiums specified in the policy for
each policy year, excluding any extra premiums charged because of impairments
or special hazards, that the present value, at the date of issue of the policy,
of all such adjusted premiums shall be equal to the sum of:
(a)
The present value at the policy issue date of the future guaranteed benefits
provided for by the policy.
(b)
Two percent of the amount of insurance if the insurance is uniform in amount,
or of the equivalent uniform amount as defined in subsection (2) of this
section if the amount of insurance varies with duration of the policy.
(c)
Forty percent of the adjusted premium for the first policy year. For this
purpose, any excess of the adjusted premium over four percent of the amount of
insurance or equivalent uniform amount shall be disregarded.
(d)
Twenty-five percent of either the adjusted premium for the first policy year or
the adjusted premium for a whole life policy for the same uniform or the same
equivalent uniform amount of insurance with uniform premiums for the whole of
life issued at the same age, whichever is less. For this purpose, any excess of
the adjusted premium over four percent of the amount of insurance or equivalent
uniform amount shall be disregarded.
(2)
In the case of a policy providing an amount of insurance varying with duration
of the policy, the equivalent uniform amount of the subject policy for the
purpose of this section shall be the uniform amount of insurance provided by an
otherwise similar policy, containing the same endowment benefit or benefits, if
any, issued at the same age and for the same term, the amount of which does not
vary with duration and the benefits under which have the same present value at
the date of issue as the benefits under the subject policy. However, in the
case of a policy providing a varying amount of insurance issued on the life of
a child under age 10, the equivalent uniform amount may be computed as though
the amount of insurance provided by the subject policy prior to the attainment
of age 10 were the amount provided by the subject policy at age 10.
(3)
The adjusted premiums for any policy providing term insurance benefits by rider
or supplemental policy provision shall be calculated in accordance with this
subsection. The amounts specified in paragraphs (a) and (b) of this subsection
shall be calculated separately. Each such amount shall be calculated as specified
in subsections (1) and (2) of this section. However, for the purposes of
subsection (1)(b), (c) and (d) of this section, the amount of insurance or
equivalent uniform amount of insurance used in the calculation of the adjusted
premiums referred to in paragraph (b) of this subsection shall be equal to the
excess of the uniform or equivalent uniform amount determined for the entire
policy over the amount used in the calculation of the adjusted premiums in
paragraph (a) of this subsection. The adjusted premiums for the entire policy
shall equal the sum of:
(a)
The adjusted premiums for an otherwise similar policy issued at the same age
without such term insurance benefits; and
(b)
During the period for which premiums for such term insurance benefits are payable,
the adjusted premiums for such term insurance benefits.
(4)
Except as provided in paragraphs (a) and (b) of this subsection and subsection
(5) of this section, all adjusted premiums and present values referred to in
the Standard Nonforfeiture Law for Life Insurance shall for all policies of
ordinary life insurance to which this section applies be calculated on the
basis of the Commissioners 1941 Standard Ordinary Mortality Table. Such
calculations for any category of ordinary life insurance issued on female lives
may, however, be based on an age not more than six years younger than the
actual age of the insured. Except as provided in paragraphs (a) and (b) of this
subsection and subsection (7) of this section, such calculations of adjusted
premiums and present values for all policies of industrial life insurance shall
be made on the basis of the 1941 Standard Industrial Mortality Table. All
calculations shall be made on the basis of the rate of interest, not exceeding
three and one-half percent per annum, specified in the policy for calculating
cash surrender values and paid-up nonforfeiture benefits. The following
exceptions pertain:
(a)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than 130 percent of the rates of
mortality according to the respective table.
(b)
For insurance issued on a substandard basis, the calculation of adjusted
premiums and present values may be based on such other table of mortality as
may be specified by the insurer and approved by the Director of the Department
of Consumer and Business Services.
(5)
This subsection applies only to policies of ordinary life insurance to which
this section applies and which are issued on or after the operative date of
this subsection as defined in subsection (6) of this section. For such
policies, all adjusted premiums and present values referred to in the Standard
Nonforfeiture Law for Life Insurance shall, except as provided in paragraphs
(a) and (b) of this subsection, be calculated on the basis of the Commissioners
1958 Standard Ordinary Mortality Table and the rate of interest specified in
the policy for calculating cash surrender values and paid-up nonforfeiture
benefits. Such calculations for any category of ordinary life insurance issued
on female lives may, however, be based on an age not more than six years
younger than the actual age of the insured. Such rate of interest shall not
exceed three and one-half percent, except that a rate of interest not exceeding
four percent may be used for policies issued from January 1, 1974, to December
31, 1977, and a rate of interest not exceeding five and one-half percent may be
used for policies issued on or after January 1, 1978, and with the further
exception that for any single premium whole life or endowment insurance policy
a rate of interest not exceeding six and one-half percent may be used. The
following exceptions pertain:
(a)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than those shown in the
Commissioners 1958 Extended Term Insurance Table.
(b)
For insurance issued on a substandard basis, the calculation of adjusted
premiums and present values may be based on such other table of mortality as
may be specified by the insurer and approved by the director.
(6)
After August 9, 1961, any insurer may file with the director a written notice
of its election to comply with the provisions of subsection (5) of this section
after a specified date before January 1, 1966. After the filing of such notice,
such specified date shall be the operative date of subsection (5) of this
section for the insurer with respect to the ordinary life policies it
thereafter issues. If an insurer makes no such election, such operative date
for the insurer shall be January 1, 1966.
(7)
This subsection applies only to policies of industrial life insurance to which
this section applies and which are issued on or after the operative date of
this subsection as defined in subsection (8) of this section. For such
policies, all adjusted premiums and present values referred to in the Standard
Nonforfeiture Law for Life Insurance shall, except as provided in paragraphs
(a) and (b) of this subsection, be calculated on the basis of the Commissioners
1961 Standard Industrial Mortality Table and the rate of interest specified in
the policy for calculating cash surrender values and paid-up nonforfeiture
benefits. Such rate of interest shall not exceed three and one-half percent,
except that a rate of interest not exceeding four percent may be used for
policies issued from January 1, 1974, to December 31, 1977, and a rate of
interest not exceeding five and one-half percent may be used for policies
issued on or after January 1, 1978, and with the further exception that for any
single premium whole life or endowment insurance policy a rate of interest not
exceeding six and one-half percent may be used. The following exceptions
pertain:
(a)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than those shown in the
Commissioners 1961 Industrial Extended Term Insurance Table.
(b)
For insurance issued on a substandard basis, the calculation of adjusted
premiums and present values may be based on such other table of mortality as may
be specified by the insurer and approved by the director.
(8)
After September 2, 1963, any insurer may file with the director a written
notice of its election to comply with the provisions of subsection (7) of this
section after a specified date before January 1, 1968. After the filing of such
notice, such specified date shall be the operative date of subsection (7) of
this section for the insurer with respect to the industrial life insurance
policies it thereafter issues. If an insurer makes no such election, such
operative date for the insurer shall be January 1, 1968. [Formerly 739.360;
1973 c.636 §6; 1977 c.320 §14; 1981 c.609 §16]
743.218 Requirements for determination of
future premium amounts or minimum values. In the
case of policies of life insurance which provide for determination of future
premium amounts by the insurer on the basis of current estimates of future
experience, or policies of life insurance which are of such a nature that
minimum values cannot in the judgment of the Director of the Department of
Consumer and Business Services be determined by the methods otherwise described
in the Standard Nonforfeiture Law for Life Insurance, the following
requirements shall apply:
(1)
The director must be satisfied that the policy benefits are substantially as
favorable to policyholders and insureds as the minimum benefits otherwise
required by the Standard Nonforfeiture Law for Life Insurance;
(2)
The director must be satisfied that the benefits and the pattern of premiums of
the policy are not misleading to prospective policyholders or insureds; and
(3)
The cash surrender values and paid-up nonforfeiture benefits provided by the
policy must not be less than the minimum values and benefits required for the
policy as calculated by a method consistent with the principles of the Standard
Nonforfeiture Law for Life Insurance, as determined under rules issued by the
director. [1981 c.609 §18]
743.219 Supplemental rules for calculating
nonforfeiture benefits. (1) Any cash surrender value and
any paid-up nonforfeiture benefit available under a life insurance policy in
the event of default in a premium payment due at any time other than on the
policy anniversary date shall be calculated with allowance for the lapse of
time and the payment of fractional premiums beyond the last preceding policy
anniversary.
(2)
All values referred to in the Standard Nonforfeiture Law for Life Insurance may
be calculated on the assumption that any death benefit is payable at the end of
the policy year of death.
(3)
The net value of any paid-up additions, other than paid-up term additions,
shall not be less than the amounts used to provide the additions. [Formerly
739.365; 1981 c.609 §19]
743.221 Cash surrender values upon default
in premium payment. (1) This section shall apply to
all life insurance policies issued on or after January 1, 1986.
(2)
Any cash surrender value available in the event of default in a premium payment
due on any policy anniversary under a life insurance policy to which this
section applies shall be in an amount which does not differ, by more than
two-tenths of one percent of the amount of insurance, if uniform, or the
average of the amounts of insurance at the beginning of each of the first 10
policy years, from A plus B minus C, where these amounts are defined as
follows:
(a)
“A” equals the basic cash value on such anniversary as defined in subsection
(3) of this section.
(b)
“B” equals the present value on such anniversary of any existing paid-up
additions.
(c)
“C” equals the amount of any indebtedness to the insurer under the policy on
such anniversary.
(3)(a)
The basic cash value referred to in subsection (2) of this section shall equal
the present value, on a particular subject policy anniversary, of the future
guaranteed benefits which would have been provided for by the policy if there
had been no premium default, excluding any existing paid-up additions and
before deduction of any indebtedness to the insurer, less the present value on
such anniversary of the nonforfeiture factors, as defined in subsection (4) of
this section, corresponding to premiums which would have fallen due on and
after such anniversary. The basic cash value shall be taken as zero if this
calculation produces a negative result.
(b)
Supplemental life insurance or annuity benefits and family coverage, as
described in ORS 743.210 or 743.216, whichever is applicable to the policy,
shall affect the basic cash value in the same manner as is provided in ORS
743.210 or 743.216 for their effect on the cash surrender values.
(4)(a)
Except as provided in paragraph (b) of this subsection, the nonforfeiture
factor referred to in subsection (3) of this section shall for each policy year
equal a percentage of the adjusted premium for that policy year as defined in
ORS 743.215 or 743.216, whichever is applicable to the policy. This percentage
must:
(A)
Be uniform for each policy year between the second policy anniversary and the
later of:
(i)
The fifth policy anniversary; and
(ii)
The first policy anniversary at which there is available under the policy a
cash surrender value in an amount, before including any paid-up additions and
before deducting any indebtedness, at least equal to two-tenths of one percent
of the amount of insurance, if uniform, or of the average of the amounts of
insurance at the beginning of each of the first 10 policy years; and
(B)
Be such that no percentage after the later policy anniversary defined in
subparagraph (A) of this paragraph applies to fewer than five consecutive
policy years.
(b)
No basic cash value may be less than the value which would be obtained if the
adjusted premiums for the policy as defined in ORS 743.215 or 743.216,
whichever is applicable to the policy, were substituted for the nonforfeiture
factors defined in this subsection in the calculation of the basic cash value.
(5)
All adjusted premiums and present values referred to in this section shall for
a particular policy be calculated on the same mortality and interest bases as
are used in demonstrating the compliance of the policy with the Standard
Nonforfeiture Law for Life Insurance. The cash surrender values referred to in
this section shall include any endowment benefits provided for by the policy.
(6)(a)
Any cash surrender value available other than in the event of default in a
premium payment due on a policy anniversary, and the amount of any paid-up
nonforfeiture benefit available under the policy in the event of default in a
premium payment, shall be determined in a manner consistent with the manner
specified for determining the analogous minimum amounts under the Standard
Nonforfeiture Law for Life Insurance.
(b)
The amounts of any cash surrender values and any paid-up nonforfeiture benefits
granted in connection with additional benefits such as those described in ORS
743.222 shall conform with the principles of this section. [1981 c.609 §21]
743.222 Policy benefits and premiums that
shall be disregarded in calculating cash surrender values and paid-up
nonforfeiture benefits. (1) Notwithstanding ORS 743.210,
in ascertaining minimum cash surrender values and paid-up nonforfeiture
benefits required by the Standard Nonforfeiture Law for Life Insurance,
benefits and their respective premiums provided for in a life insurance policy
shall be disregarded where the benefits are payable:
(a)
In the event of death or dismemberment by accident or accidental means;
(b)
In the event of total and permanent disability;
(c)
As reversionary annuity or deferred reversionary annuity benefits;
(d)
As term insurance benefits provided by a rider or supplemental policy provision
to which, if issued as a separate policy, the Standard Nonforfeiture Law for
Life Insurance would not apply;
(e)
As term insurance on the life of a child or on the lives of children provided
in a policy on the life of a parent of the child, if such term insurance
expires before the child’s age is 26, is uniform in amount after the child’s
age is one, and has not become paid up by reason of the death of a parent of
the child; or
(f)
As other policy benefits additional to life insurance and endowment benefits.
(2)
No benefits such as are described in subsection (1) of this section are
required to be included in any paid-up nonforfeiture benefits. [Formerly
739.370; 1981 c.609 §20]
743.225 Prohibited provisions.
No life insurance policy shall contain any of the following provisions:
(1)
A provision limiting the time within which any action at law or suit in equity
may be commenced to less than three years after the cause of action or suit
accrues.
(2)
A provision by which the policy purports to be issued or to take effect more
than six months before the original application for the insurance was made.
(3)
A provision for forfeiture of the policy for failure to repay any loan on the
policy or any interest on such loan while the total indebtedness on the policy
is less than the loan value thereof. [Formerly 739.315]
743.228 Acts of corporate insured or
beneficiary with respect to policy. (1) Whenever
a corporation organized under the laws of this state or qualified to do
business in this state has caused to be insured the life of any director,
officer, agent or employee, or whenever such corporation is named as a
beneficiary in or assignee of any life insurance policy, due authority to
effect, assign, release, relinquish, convert, surrender, change the beneficiary
or take any other or different action with reference to such insurance shall be
sufficiently evidenced to the insurer by a written statement under oath showing
that such action has been approved by a majority of the board of directors.
Such a statement shall be signed by the president and secretary of the
corporation and bear the corporate seal.
(2)
Such a statement shall be binding upon the corporation and shall protect the
insurer concerned in any act done or suffered by it upon the faith thereof
without further inquiry into the validity of the corporate authority or the
regularity of the corporate proceedings.
(3)
No person shall be disqualified by reason of interest in the subject matter
from acting as a director or as a member of the executive committee of such a
corporation on any corporate act touching such insurance. [Formerly 739.415]
743.230 Variable life policy provisions.
A variable life insurance policy shall contain in substance the following provisions:
(1)
A provision that there will be a period of grace of 30 days within which
payment of any premium after the first may be made, during which period of
grace the policy will continue in full force. If a claim arises under the
policy during such period of grace, the amount of any premiums due or overdue,
together with interest not in excess of six percent per annum and any deferred
installment of the annual premium, may be deducted from the policy proceeds.
The policy may contain a statement of the basis for determining any variation
in benefits that may occur as a result of the payment of premium during the
period of grace.
(2)
A provision that the policy will be reinstated at any time within three years
from the date of a default in premium payments, unless the cash surrender value
has been paid or the period of extended insurance has expired, upon the
production of evidence of insurability satisfactory to the insurer and the
payment of an amount not exceeding the greater of:
(a)
All overdue premiums and any other indebtedness to the insurer upon said policy
with interest at a rate not exceeding six percent per annum; and
(b)
One hundred ten percent of the increase in cash surrender value resulting from
reinstatement.
(3)
A provision for cash surrender values and paid-up insurance benefits available
as nonforfeiture options in the event of default in a premium payment after
premiums have been paid for a specified period. If the policy does not include
a table of figures for the options so available, the policy shall provide that
the insurer will furnish, at least once in each policy year, a statement
showing the cash value as of a date no earlier than the next preceding policy
anniversary.
(a)
The method of computation of cash values and other nonforfeiture benefits shall
be as described either in the policy or in a statement filed with the Director
of the Department of Consumer and Business Services, and shall be actuarially
appropriate to the variable nature of the policy.
(b)
The method of computation must result, if the net investment return credited to
the policy at all times from the date of issue equals the specified investment
increment factor, with premiums and benefits determined accordingly under the
terms of the policy, in cash values and other nonforfeiture benefits at least
equal to the minimum values required by the Standard Nonforfeiture Law for a
policy with such premiums and benefits. The method of computation may disregard
incidental minimum guarantees as to the dollar amounts payable. Incidental
minimum guarantees include, but are not limited to, a guarantee which provides
that the amount payable at death or maturity shall be at least equal to the
amount that would be payable if the net investment return credited to the
policy at all times from the date of issue is equal to the specified investment
increment factor.
(4)
A provision specifying the investment increment factor to be used in computing
the dollar amount of variable benefits or other variable payments or values
under the policy, and guaranteeing that expense and mortality results will not
adversely affect such dollar amounts. [1973 c.435 §18]
743.231 “Profit-sharing policy” defined.
“Profit-sharing policy” means:
(1)
A life insurance policy which by its terms expressly provides that the
policyholder will participate in the distribution of earnings or surplus other
than earnings or surplus attributable, by reasonable and nondiscriminatory
standards, to the participating policies of the insurer and allocated to the
policyholder on reasonable and nondiscriminatory standards; or
(2)
A life insurance policy the provisions of which, through sales material or oral
presentations, are interpreted by the insurer to prospective policyholders as
entitling the policyholder to the benefits described in subsection (1) of this
section. [Formerly 739.705]
743.234 “Charter policy” or “founders
policy” defined. “Charter policy” or “founders
policy” means:
(1)
A life insurance policy which by its terms expressly provides that the policyholder
will receive some preferential or discriminatory advantage or benefit not
available to persons who purchase insurance from the insurer at future dates or
under other circumstances; or
(2)
A life insurance policy the provisions of which, through sales material or oral
presentations, are interpreted by the insurer to prospective policyholders as
entitling the policyholder to the benefits described in subsection (1) of this
section. [Formerly 739.710]
743.237 “Coupon policy” defined.
“Coupon policy” means a life insurance policy which provides a series of pure
endowments maturing periodically in amounts not exceeding the gross annual
policy premiums. The term “pure endowment” or “endowment” is used in its
accepted actuarial sense, meaning a benefit becoming payable at a specific
future date if the insured person is then living. [Formerly 739.715]
743.240 Profit-sharing, charter or founders
policies prohibited. No profit-sharing, charter or
founders policy shall be issued or delivered in this state. [Formerly 739.720]
743.243 Restrictions on form of coupon
policy. Coupon policies issued or delivered in
this state shall be subject to the following provisions:
(1)
No detachable coupons or certificates or passbooks may be used. No other device
may be used which tends to emphasize the periodic endowment benefits or which
tends to create the impression that the endowments represent interest earnings
or anything other than benefits which have been purchased by part of the
policyholder’s premium payments.
(2)
Each endowment benefit must have a fixed maturity date and payment of the
endowment benefit shall not be contingent upon the payment of any premium
becoming due on or after such maturity date.
(3)
The endowment benefits must be expressed in dollar amounts rather than as
percentages of other quantities or in other ways, both in the policy itself and
in the sale thereof.
(4)
A separate premium for the periodic endowment benefits must be shown in the
policy adjacent to the rest of the policy premium information and must be given
the same emphasis in the policy and in the sale thereof as that given the rest
of the policy premium information. This premium shall be calculated with
mortality, interest and expense factors which are consistent with those for the
basic policy premium. [1967 c.359 §403]
743.245 Variable life insurance policy
provisions. A variable life insurance policy shall
contain a provision stating the essential features of the procedures to be
followed by the insurer in determining benefits thereunder. Such a policy, and
any certificate evidencing such a policy, shall contain on its first page a
clear and prominent statement to the effect that benefits thereunder are
variable. [1973 c.435 §14]
743.247 Notice to variable life insurance
policyholders. An insurer issuing individual variable
life insurance policies shall mail to each policyholder at least once in each
policy year after the first, at the last address of the policyholder known to
the insurer:
(1)
A statement reporting the investments held in the applicable separate account.
(2)
A statement reporting as of a date not more than four months preceding the date
of mailing:
(a)
In the case of an annuity policy under which payments have not yet commenced,
the number of accumulation units credited to such policy and the dollar value
of a unit, or the value of the policyholder’s account; and
(b)
In the case of a life insurance policy, the dollar amount of the death benefit.
[1973 c.435 §15]
(Individual Annuity and Pure Endowment
Policies)
743.252 Scope of ORS 743.255 to 743.273.
ORS 743.255 to 743.273 apply only to annuity and pure endowment policies, other
than reversionary annuity policies except as provided in ORS 743.273, and other
than group annuity policies, and shall not apply to reversionary or deferred
annuity benefits included in life insurance policies. Such sections apply to
such policies that are variable annuity policies, except to the extent the
provisions of such sections are obviously inapplicable to variable annuities or
are in conflict with other provisions of such sections that are expressly
applicable to variable annuities. [1967 c.359 §404; 1973 c.435 §19]
743.255 Grace period for annuities.
An annuity or pure endowment policy shall contain a provision that there shall
be a period of grace of one month, but not less than 30 days, within which any
stipulated payment to the insurer falling due after the first such payment may
be made, subject at the option of the insurer to an interest charge thereon at
the rate specified in the policy but not exceeding six percent per annum for
the number of days of grace elapsing before such payment, during which period
of grace the policy shall continue in full force. In case a claim arises under
the policy on account of death prior to expiration of the period of grace
before the overdue payment to the insurer or the deferred payments of the
current policy year, if any, are made, the amount of such payments, with
interest on any overdue payments, may be deducted from any amount payable under
the policy in settlement. [1967 c.359 §405]
743.258 Incontestability.
If any statement other than those relating to age, sex and identity are
required as a condition to issuing an annuity or pure endowment policy, the
policy shall contain a provision that the policy shall be incontestable after
it has been in force during the lifetime of the person or of each of the
persons as to whom such statements are required, for a period of two years from
its date of issue, except for nonpayment of stipulated payments to the insurer.
At the option of the insurer the two year limit within which the policy may be
contested shall not apply to any provisions relative to benefits in the event
of disability and any provisions which grant insurance specifically against
death by accident or accidental means. [1967 c.359 §406]
743.261 Entire contract.
An annuity or pure endowment policy shall contain a provision that the policy,
including a copy of the application if indorsed upon or attached to the policy
when issued, shall constitute the entire contract between the parties. [1967
c.359 §407]
743.264 Misstatement of age or sex.
An annuity or pure endowment policy shall contain a provision that if the age
or sex of the person or persons upon whose life or lives the policy is made, or
of any of them, has been misstated, the amount payable or benefits accruing
under the policy shall be such as the stipulated payment or payments to the
insurer would have purchased according to the correct age or sex, and that if
the insurer has made any overpayment or overpayments on account of any such
misstatement, the amount thereof with interest at the rate specified in the
policy but not exceeding six percent per annum may be charged against the
current or next succeeding payment or payments to be made by the insurer under
the policy. [1967 c.359 §408]
743.267 Dividends.
If an annuity or pure endowment policy is participating, it shall contain a
provision that the insurer shall annually ascertain and apportion any divisible
surplus accruing on the policy. [1967 c.359 §409]
743.268 Advancement of policy loans.
(1) An insurer may advance a policy loan equal to or less than the loan value
of an annuity policy or a pure endowment policy if:
(a)
The policy premium is not in default beyond the grace period for payment;
(b)
The insured has properly assigned or pledged the policy on the sole security
thereof; and
(c)
The interest rate provision complies with ORS 743.187 and does not exceed the
maximum interest rate permitted by the policy loan provision.
(2)
An insurer may establish a minimum loan amount that may not exceed $1,000.
(3)
Except as provided in subsection (4) of this section, the loan value of the
policy shall be equal to the cash surrender value of the policy, less any
existing indebtedness and interest due that is not already deducted in
determining the cash surrender value, plus any interest then accrued but not
credited.
(4)
Subsection (3) of this section does not apply to a policy for which the loan
value is established by federal law. When the loan value is established by
federal law, the policy shall indicate the loan value as a dollar amount, a
percentage of the cash surrender value or a combination of both.
(5)
Except as provided in ORS 743.187, if the total indebtedness on the policy,
including interest due or accrued, equals or exceeds the amount of the loan
value of the policy, the policy shall terminate and become void upon 30 days’
notice by the insurer mailed to the last-known address of the insured or other
policy owner and of any assignee of record at the home office of the insurer.
However, if there is any remaining cash surrender value under the policy after
deducting the total indebtedness on the policy, an insurer may not terminate
the policy.
(6)
A insurer may provide for automatic premium loans in an annuity policy or a
pure endowment policy.
(7)
An annuity policy or a pure endowment policy may reserve to the insurer the
right to defer the granting of a loan, other than for payment of any premium to
the insurer, for six months after application for the loan if the insurer makes
a written request to and receives written approval from the chief insurance
regulator of the state of domicile of the insurer prior to exercising a
deferral. [2005 c.185 §5]
743.269 Periodic payments for period
certain. An annuity policy meeting the
requirements of this section may provide that periodic payments shall be made
under the policy for a period certain. Payments under such a policy shall begin
on a date less than 13 months after the date on which the insurer issues the
policy. The policy shall provide that payments will be made for a period of
five years or more. The periodic payments may be fixed or variable in amount.
If such policy offers commuted values on the annuity, such values must be based
on an interest rate not more than one percent in excess of the interest rates
that were used in determining the payments when the annuity was purchased. [1995
c.632 §2]
743.270 Reinstatement.
An annuity or pure endowment policy shall contain a provision that the policy
may be reinstated at any time within one year from a default in making
stipulated payments to the insurer, unless the cash surrender value has been
paid, but all overdue stipulated payments and any indebtedness to the insurer
on the policy shall be paid or reinstated with interest at the rate specified
in the policy but not exceeding six percent per annum, and in cases where
applicable the insurer may also include a requirement of evidence of
insurability satisfactory to the insurer. [1967 c.359 §410]
743.271 Periodic stipulated payments on
variable annuities. A variable annuity policy
requiring periodic stipulated payments to the insurer shall contain in
substance the following provisions:
(1)
A provision that there will be a period of grace of 30 days within which any
stipulated payment to the insurer after the first may be made, during which
period of grace the policy will continue in full force. The policy may include
a statement of the basis for determining the date as of which any such payment
received during the period of grace will be applied.
(2)
A provision that, at any time within one year from the date of a default in
making periodic stipulated payments to the insurer during the life of the annuitant,
and unless the cash surrender value has been paid, the policy may be reinstated
upon payment to the insurer of the overdue payments and all indebtedness to the
insurer on the policy, with interest. The policy may include a statement of the
basis for determining the date as of which the amount to cover such overdue
payments and indebtedness will be applied.
(3)
A provision specifying the options available in the event of a default in a
periodic stipulated payment. Such options may include an option to surrender
the policy for a cash value as determined by the policy, and shall include an
option to receive a paid-up annuity if the policy is not surrendered for cash,
the amount of the paid-up annuity being determined by applying the value of the
policy at the annuity commencement date in accordance with the terms of the
policy. [1973 c.435 §21]
743.272 Computing benefits.
(1) A variable annuity policy shall specify the investment increment factors to
be used in computing the dollar amount of variable benefits or other variable
payments or values under the policy, and may guarantee that expense or
mortality results or both will not adversely affect such dollar amounts. In the
case of an individual variable annuity policy under which the expense or mortality
results may adversely affect the dollar amount of benefits, the expense and
mortality factors shall be correspondingly specified in the policy. “Expense”
as used in this subsection may exclude some or all taxes, as specified in the
policy.
(2)
In computing the dollar amount of variable benefits or other policy payments or
values:
(a)
The annual net investment increment assumption shall not exceed five percent,
except with the approval of the Director of the Department of Consumer and
Business Services; and
(b)
To the extent that the level of benefits may be affected by future mortality
results, the mortality factor shall be determined from the Annuity Mortality
Table for 1949, Ultimate, or any modification of that table not having a lower
life expectancy at any age or, if approved by the director, from another table.
[1973 c.435 §22]
743.273 Standard provisions of
reversionary annuities. A policy of reversionary annuity
shall contain in substance the following provisions:
(1)
The provisions specified in ORS 743.255 to 743.267, except that under ORS
743.255 the insurer may at its option provide for an equitable reduction of the
amount of the annuity payments in settlement of an overdue payment in lieu of
providing for deduction of the overdue payment from an amount payable upon
settlement under the policy.
(2)
A provision that the policy may be reinstated at any time within three years
from the date of default in making stipulated payments to the insurer, upon
production of evidence of insurability satisfactory to the insurer, and upon
the condition that all overdue payments and any indebtedness to the insurer on
account of the policy be paid or reinstated with interest at the rate specified
in the policy but not exceeding six percent per annum. [1967 c.359 §411]
743.275 Standard Nonforfeiture Law for
Individual Deferred Annuities; application. (1)
ORS 743.275 to 743.295 may be cited as the Standard Nonforfeiture Law for
Individual Deferred Annuities.
(2)
The Standard Nonforfeiture Law for Individual Deferred Annuities does not apply
to:
(a)
Reinsurance.
(b)
A group annuity policy purchased under a retirement or deferred compensation
plan established or maintained by an employer, including a partnership or sole
proprietorship, or by an employee organization, or by both. This exclusion does
not apply, however, to a plan providing individual retirement accounts or
individual retirement annuities under section 408 of the federal Internal
Revenue Code.
(c)
A premium deposit fund.
(d)
A variable annuity policy.
(e)
An investment annuity policy.
(f)
An immediate annuity policy.
(g)
A deferred annuity policy after annuity payments have commenced.
(h)
A reversionary annuity.
(i)
A policy delivered outside this state through an agent or other representative
of the insurer issuing the policy. [1977 c.320 §2; 2003 c.370 §1]
743.278 Required provisions in annuity
policies; exception. (1) An annuity policy shall
contain in substance the following provisions, or corresponding provisions that
in the opinion of the Director of the Department of Consumer and Business
Services are at least as favorable to the policyholder:
(a)
That upon the termination of considerations under the policy, or upon the
written request of the policyholder, the insurer shall grant a paid-up annuity
benefit on a plan stipulated in the policy, of the value specified in ORS
743.284 and 743.287.
(b)
That, if the policy provides for a lump sum settlement at maturity or any other
time, the insurer shall pay upon surrender of the policy on or before the start
of annuity payments, in lieu of a paid-up annuity benefit, a cash surrender
benefit of the amount specified in ORS 743.284 and 743.287. The insurer may
reserve the right to defer the payment of the cash surrender benefit for a
period not to exceed six months after demand therefor with surrender of the
policy, if the insurer makes a written request and receives written approval
from the director. The request shall address the necessity and equitability to
all policyholders of the deferral.
(c)
A statement of the mortality table, if any, and interest rates used in
calculating any minimum guaranteed paid-up annuity, cash surrender or death
benefits that are guaranteed under the policy, together with sufficient
information to determine the amount of the benefits.
(d)
A statement that any paid-up annuity, cash surrender or death benefits
available under the policy are not less than the minimum benefits required by
any statute of the state in which the policy is delivered and an explanation of
the manner in which the benefits are altered by the existence of any additional
amounts credited by the insurer to the policy, any indebtedness to the insurer
on the policy or any prior withdrawals from or partial surrenders of the
policy.
(2)
Notwithstanding subsection (1) of this section, a deferred annuity policy may
provide that if no considerations have been received for two full years and the
portion of the paid-up annuity benefit at maturity on the plan stipulated in
the policy arising from prior considerations paid would be less than $20
monthly, the insurer at its option may terminate the policy by payment in cash
of the then present value of the portion of the paid-up annuity benefit. The
value shall be calculated on the basis of the mortality table, if any, and the
interest rate specified in the policy for determining the paid-up annuity
benefit. By this payment the insurer shall be relieved of further obligations
under the policy. [1977 c.320 §3; 2003 c.370 §2]
743.281 [1977
c.320 §4; repealed by 2003 c.370 §9]
743.284 Computation of benefits.
(1) Any paid-up annuity benefit available under an annuity policy shall be such
that its present value on the date annuity payments are to commence is at least
equal to the minimum nonforfeiture amount on that date. The present value shall
be computed using the mortality table, if any, and the interest rate specified
in the policy for determining the minimum paid-up annuity benefits guaranteed
in the policy.
(2)
For annuity policies that provide cash surrender benefits, the cash surrender
benefits available prior to maturity shall not be less than the present value
as of the date of surrender of the portion of the policy maturity value of the
paid-up annuity benefit that would be provided under the policy at maturity
arising from considerations paid prior to the time of cash surrender, reduced
by appropriate amounts reflecting any previous withdrawals from or partial
surrenders of the policy. The present value shall be calculated using an
interest rate not more than one percent higher than the interest rate specified
in the policy for accumulating the net considerations to determine maturity
value, shall be decreased by the amount of any indebtedness to the insurer on
the policy, including interest due and accrued, and shall be increased by any
existing additional amounts credited by the insurer to the policy. In no event
shall the cash surrender benefit be less than the minimum nonforfeiture amount
on the date of surrender. The death benefit under an annuity policy that
provides cash surrender benefits shall be at least equal to the cash surrender
benefit.
(3)
For annuity policies that do not provide cash surrender benefits, the present
value of the paid-up annuity benefit available as a nonforfeiture option at any
time prior to maturity may not be less than the present value of the portion of
the maturity value of the paid-up annuity benefits provided under the policy
arising from considerations paid before the policy is surrendered in exchange
for, or changed to, a deferred paid-up annuity. The present value shall be
calculated for the period prior to the maturity date on the basis of the
interest rate specified in the policy for accumulating the net considerations
to determine the value, and shall be increased by any additional amounts
credited by the insurer to the policy. For annuity policies that do not provide
any death benefits before annuity payments start, present values shall be
calculated on the basis of such interest rate and the mortality table specified
in the policy for determining the maturity value of paid-up annuity benefit. In
no event, however, shall the present value of a paid-up annuity benefit be less
than the minimum nonforfeiture amount at that time. [1977 c.320 §5; 2003 c.370 §5]
743.287 Commencement of annuity payments
at optional maturity dates; calculation of benefits.
(1) For the purpose of determining the benefits calculated under ORS 743.284
(2) and (3) in the case of annuity policies under which an election may be made
to have annuity payments commence at optional maturity dates, the maturity date
shall be considered to be the latest date for which such election is permitted
by the policy, but not later than the policy anniversary next following the
annuitant’s 70th birthday or the 10th anniversary of the policy, whichever is
later.
(2)
Any paid-up annuity, cash surrender or death benefits available at any time,
other than on the policy anniversary of a policy with fixed scheduled
considerations, shall be calculated with allowance for the lapse of time and
the payment of any scheduled considerations beyond the start of the policy year
in which termination of considerations occurs. [1977 c.320 §6; 2003 c.370 §6]
743.290 Notice of nonpayment of certain
benefits to be included in annuity policy. An
annuity policy that does not provide cash surrender benefits or does not
provide death benefits at least equal to the minimum nonforfeiture amount prior
to the start of annuity payments shall include a statement in a prominent place
in the policy that the benefits are not provided. [1977 c.320 §7; 2003 c.370 §7]
743.293 Minimum forfeiture amounts for
annuity policies; rules. (1) The minimum values as
specified in ORS 743.284 and 743.287 of any paid-up annuity, cash surrender or
death benefits available under an annuity policy shall be based on minimum
nonforfeiture amounts as described in this section.
(2)
The minimum nonforfeiture amount at or prior to the commencement of any annuity
payments shall be equal to an accumulation up to that time at rates of interest
as indicated in subsection (4) of this section of the net considerations
previously paid, decreased by the sum of the following:
(a)
Any prior withdrawals from or partial surrenders of the contract accumulated at
rates of interest as indicated in subsection (4) of this section;
(b)
An annual contract charge of $50, accumulated at rates of interest as indicated
in subsection (4) of this section;
(c)
Any premium tax paid by the insurer for the policy, accumulated at rates of
interest as indicated in subsection (4) of this section; and
(d)
The amount of any indebtedness to the insurer on the policy, including interest
due and accrued.
(3)
For purposes of subsection (2) of this section, the net considerations for a
given policy year used to define the minimum nonforfeiture amount shall be an
amount equal to 87.5 percent of the gross considerations credited to the policy
during that policy year.
(4)(a)
The interest rate used in determining minimum nonforfeiture amounts shall be an
annual rate of interest determined as the lesser of three percent per annum and
the rate established under paragraph (b) of this subsection. The rates
established shall be specified in the policy if the interest rate is reset.
(b)
The following provisions apply to the rate:
(A)
The rate shall be the five-year constant maturity treasury rate reported by the
Federal Reserve as of a date certain or an average over a period, rounded to
the nearest one-twentieth of one percent, that is specified in the policy and
that is no longer than 15 months prior to the policy issue date or
redetermination date under paragraph (c) of this subsection, reduced by 125
basis points.
(B)
The resulting interest rate under subparagraph (A) of this paragraph may not be
less than one percent.
(c)
The interest rate shall apply to an initial period and may be redetermined for
additional periods. The redetermination date, basis and period, if any, shall
be stated in the policy. The basis is the date certain or an average over a specified
period that produces the value of the five-year constant maturity treasury rate
to be used at each redetermination date.
(5)
During the period or term that a policy provides substantive participation in
an equity indexed benefit, it may increase the reduction described in
subsection (4)(b) of this section by up to an additional 100 basis points to
reflect the value of the equity index benefit. The present value on the policy
issue date and at each redetermination date thereafter, may not exceed the
market value of the benefit. The Director of the Department of Consumer and
Business Services may require a demonstration that the present value of the
additional reduction does not exceed the market value of the benefit. If a
demonstration is not acceptable to the director, the director may disallow or
limit the additional reduction.
(6)
The director may adopt rules to implement subsection (5) of this section and to
provide for further adjustments to the calculation of minimum nonforfeiture
amounts for policies that provide substantive participation in an equity index
benefit and for other policies that the director determines justify an
adjustment. [2003 c.370 §4]
743.295 Effect of certain life insurance
and disability benefits on minimum nonforfeiture amounts.
(1) For an annuity policy that includes, by rider or supplemental contract
provision, both annuity benefits and life insurance benefits that exceed the
greater of cash surrender benefits or a return of the gross considerations with
interest, the minimum nonforfeiture benefits shall equal the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum nonforfeiture
benefits, if any, for the life insurance portion, computed as if each portion
were a separate policy.
(2)
Notwithstanding ORS 743.284 and 743.287, additional benefits payable in the
event of total and permanent disability, as reversionary annuity or deferred
reversionary annuity benefits, or as other policy benefits additional to life
insurance, endowment and annuity benefits, and considerations for all such
additional benefits, shall be disregarded in ascertaining the minimum
nonforfeiture amounts and paid-up annuity, cash surrender and death benefits
required by the Standard Nonforfeiture Law for Individual Deferred Annuities.
The inclusion of such benefits may not be required in any paid-up benefits
unless the additional benefits would separately require minimum nonforfeiture
amounts and paid-up annuity, cash surrender and death benefits. [1977 c.320 §8;
2003 c.370 §8]
GROUP LIFE INSURANCE
743.303 Requirements for issuance of group
life insurance policies. Policies of group life insurance
are subject to the following requirements:
(1)
The policy shall be issued upon the lives of persons who are associated in a
common group formed for purposes other than the obtaining of insurance, except
that either of the following kinds of policies may be issued to persons other
than those in a common group:
(a)
Group policies of credit life insurance; or
(b)
Group policies of mortgage life insurance on first and second mortgages secured
by real estate.
(2)
No fewer than two lives are insured at the date of issue of the policy.
(3)
The amounts of insurance under the policy shall be based on some plan
precluding individual selection, except that optional supplemental insurance
may be available to persons insured under the policy, if the amounts of such
supplemental insurance are based upon age, salary, rank or similar objective
standards.
(4)
The premium for the policy must be paid from the funds of the group
policyholder or from funds contributed by persons insured under the policy, or
from both sources.
(5)
For the purposes of this section, the term “mortgage” includes trust deeds.
(6)
As used in this section, “trust deed” has the meaning given in ORS 86.705. [1967
c.359 §412; 1971 c.231 §44; 1991 c.182 §4; 1993 c.426 §1; 2007 c.560 §2]
743.306 Required provisions in group life
insurance policies. (1) Except as provided in
subsection (2) of this section a group life insurance policy shall contain in
substance the provisions described in ORS 743.309 to 743.342.
(2)
The provisions described in ORS 743.327 to 743.339 shall not apply to policies
of group credit life insurance. [1967 c.359 §413]
743.309 Nonforfeiture provisions.
If a group life insurance policy is on a plan of insurance other than the term
plan, it shall contain nonforfeiture provision or provisions which in the
opinion of the Director of the Department of Consumer and Business Services are
equitable to the insured persons and to the policyholder, but nothing in this
section shall be construed to require that group life insurance policies
contain the same nonforfeiture provisions as are required for individual life
insurance policies. [1967 c.359 §414]
743.312 Grace period.
A group life insurance policy shall contain a provision that the policyholder
is entitled to a grace period of 31 days for the payment of any premium due
except the first, during which grace period the death benefit coverage shall
continue in force, unless the policyholder shall have given the insurer written
notice of discontinuance in advance of the date of discontinuance and in
accordance with the terms of the policy. The policy may provide that the
policyholder shall be liable to the insurer for the payment of a pro rata
premium for the time the policy was in force during such grace period. [1967
c.359 §415]
743.315 Incontestability.
A group life insurance policy shall contain a provision that the validity of
the policy shall not be contested, except for nonpayment of premiums, after it
has been in force for two years from its date of issue; and that no statement
made by any person insured under the policy relating to the insurability of the
person shall be used in contesting the validity of the insurance with respect
to which such statement was made after such insurance has been in force prior
to the contest for a period of two years during such person’s lifetime nor
unless it is contained in a written instrument signed by the person. [1967
c.359 §416]
743.318 Application; representations by policyholders
and insureds. A group life insurance policy shall
contain a provision that a copy of the application, if any, of the policyholder
shall be attached to the policy when issued, that all statements made by the
policyholder or by the persons insured shall be deemed representations and not
warranties, and that no statement made by any person insured shall be used in
any contest unless a copy of the instrument containing the statement is or has
been furnished to such person or the beneficiary of the person. [1967 c.359 §417]
743.321 Evidence of insurability.
A group life insurance policy shall contain a provision setting forth the
conditions, if any, under which the insurer reserves the right to require a
person eligible for insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of the coverage. [1967
c.359 §418]
743.324 Misstatement of age.
A group life insurance policy shall contain a provision specifying an equitable
adjustment of premiums or of benefits or of both to be made in the event the
age of a person insured has been misstated, such provision to contain a clear
statement of the method of adjustment to be used. [1967 c.359 §419]
743.327 Payments under policy; payment of
interest upon failure to pay proceeds. (1) A group
life insurance policy shall contain a provision that any sum becoming due by
reason of the death of a person insured shall be payable to the beneficiary
designated by the person insured, subject to the provisions of the policy in
the event there is no designated beneficiary, as to all or any part of such
sum, living at the death of the person insured, and subject to any right
reserved by the insurer in the policy and set forth in the certificate to pay
at its option a part of such sum not exceeding $500 to any person appearing to
the insurer to be equitably entitled thereto by reason of having incurred
funeral or other expenses incident to the last illness or death of the person
insured.
(2)
If the insurer fails to pay the proceeds of or make payment under the policy
within 30 days after receipt of due proof of death and of the interest of the
claimant, and if the beneficiary elects to receive a lump sum settlement, the
insurer shall pay interest on any money due and unpaid after expiration of the
30-day period. The insurer shall compute the interest from the date of the
insured’s death until the date of payment, at a rate not lower than that paid
by the insurer on other withdrawable policy owner funds. At the end of the
30-day period, the insurer shall notify the designated beneficiary or
beneficiaries at their last-known address that interest at the applicable rate
will be paid on the lump sum proceeds from the date of death of the insured.
(3)
Nothing in this section shall be construed to allow an insurer to withhold
payment of money payable under a group life insurance policy to any designated
beneficiary for a period longer than reasonably necessary to transmit the
payment. [1967 c.359 §420; 1983 c.754 §3]
743.330 Issuance of certificates.
A group life insurance policy shall contain a provision that the insurer will
issue to the policyholder for delivery to each person insured an individual
certificate setting forth a statement as to the insurance protection to which
the person is entitled, to whom the insurance benefits are payable, and the
rights and conditions set forth in ORS 743.333, 743.336 and 743.339. [1967
c.359 §421]
743.333 Termination of individual
coverage. A group life insurance policy shall
contain a provision that if the insurance, or any portion of it, on a person
covered under the policy ceases because of termination of employment or of
membership in the class or classes eligible for coverage under the policy, such
person shall be entitled to have issued by the insurer, without evidence of
insurability, an individual policy of life insurance without disability or
other supplementary benefits, provided application for the individual policy
shall be made, and the first premium paid to the insurer, within 31 days after
such termination, and provided further that:
(1)
The individual policy shall, at the option of such person, be on any one of the
forms, except term insurance, then customarily issued by the insurer at the age
and for the amount applied for;
(2)
The individual policy shall be in an amount not in excess of the amount of life
insurance which ceases because of such termination, less the amount of any life
insurance for which such person is or becomes eligible under the same or any
other group policy within 31 days after such termination, provided that any
amount of insurance which shall have matured on or before the date of such
termination as an endowment payable to the person insured, whether in one sum
or in installments or in the form of an annuity, shall not, for the purposes of
this provision, be included in the amount which is considered to cease because
of such termination; and
(3)
The premium on the individual policy shall be at the insurer’s then customary
rate applicable to the form and amount of the individual policy, to the class
of risk to which such person then belongs, and to the age attained on the
effective date of the individual policy. [1967 c.359 §422]
743.336 Termination of policy or class of
insured persons. A group life insurance policy
shall contain a provision that if the group policy terminates or is amended so
as to terminate the insurance of any class of insured persons, every person
insured thereunder at the date of such termination whose insurance terminates
and who has been so insured for at least five years prior to such termination
date shall be entitled to have issued by the insurer an individual policy of
life insurance, subject to the same conditions and limitations as are provided
by ORS 743.333, except that the group policy may provide that the amount of
such individual policy shall not exceed the smaller of:
(1)
The amount of the person’s life insurance protection ceasing because of the termination
or amendment of the group policy, less the amount of any life insurance for
which the person is or becomes eligible under any group policy issued or
reinstated by the same or another insurer within 31 days after such
termination; and
(2)
$10,000. [1967 c.359 §423; 1989 c.784 §16]
743.339 Death during period for conversion
to individual policy. A group life insurance policy
shall contain a provision that if a person insured under the group policy dies
during the period within which the person would have been entitled to have an
individual policy issued in accordance with ORS 743.333 or 743.336 and before
such an individual policy shall have become effective, the amount of life
insurance which the person would have been entitled to have issued under such
individual policy shall be payable as a claim under the group policy, whether
or not application for the individual policy or the payment of the first
premium therefor has been made. [1967 c.359 §424]
743.342 Statement furnished to insured
under credit life insurance policy. A group
credit life insurance policy shall contain a provision that the insurer will
furnish to the policyholder for delivery to each debtor insured under the
policy a form which will contain a statement that the life of the debtor is
insured under the policy and that any death benefit paid thereunder by reason
of death shall be applied to reduce or extinguish the indebtedness. [1967 c.359
§425]
743.345 Assignability of group life
policies. Nothing in the Insurance Code or in any
other law shall be construed to prohibit any person insured under a group life
insurance policy from making an assignment of all or any part of the incidents
of ownership under such policy, including but not limited to the privilege to
have issued an individual policy of life insurance pursuant to the provisions
of ORS 743.333 to 743.339 and the right to name a beneficiary. Subject to the
terms of the policy or an agreement between the insured, the group policyholder
and the insurer relating to assignment of incidents of ownership under the
policy, such an assignment by an insured is valid for the purpose of vesting in
the assignee, in accordance with any provisions included in the assignment as
to the time at which it is to be effective, all of such incidents of ownership
so assigned, but without prejudice to the insurer on account of any payment it
may make, or individual policy it may issue in accordance with ORS 743.333 to
743.339, prior to receipt of notice of the assignment. [1971 c.231 §6; 2005 c.22
§491]
743.348 Certain sales practices
prohibited. (1) No person selling group life
insurance is authorized to sell membership in a common group for the purpose of
qualifying an applicant who is an individual for group life insurance.
(2)
No person selling membership in a common group is authorized to offer group
life insurance for the purpose of selling membership in the common group. [1989
c.784 §6]
743.350 [1979
c.708 §2; renumbered 743.100 in 1989]
743.351 Eligibility of association to be
group life policyholder; rules. (1) An
insurer shall not offer a policy of group life insurance in this state to an
association as the policyholder or offer coverage under such a policy, whether
the policy is issued in this or another state, unless the Director of the
Department of Consumer and Business Services determines that the association
satisfies the following requirements:
(a)
The association must have had an active existence for at least one year;
(b)
The association must insure under the policy the employees or members of the
association, or employees of members of the association, for the benefit of
persons other than the association or its officers or trustees; and
(c)
The association must be maintained primarily for purposes other than the
procurement of insurance.
(2)
An insurer shall submit evidence to the director that the association satisfies
the requirements of subsection (1) of this section. The director shall review
the evidence and may request additional evidence as needed.
(3)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (2) of this section.
(4)
The director may order an insurer to cease offering group life insurance to an
association if the director determines that the association does not meet the
requirements under subsection (1) of this section.
(5)
For purposes of this section:
(a)
An association includes a labor union.
(b)
“Employees” may include retired employees.
(6)
The director may adopt rules to carry out this section. [1989 c.784 §7]
743.353 [1979
c.708 §3; renumbered 743.101 in 1989]
743.354 Requirements for certain group
life policies issued to trustees of certain funds; rules.
(1) An insurer shall not offer in this state a policy of group life insurance
that is described in this section and insures persons in this state, or shall
not offer coverage under such a policy, whether the policy is to be issued in
this or another state, unless the Director of the Department of Consumer and
Business Services determines that the requirements of subsections (2) and (3)
of this section are satisfied. This section applies to a policy to be issued to
the trustees of a fund established for:
(a)
Two or more employers in the same or related industry;
(b)
One or more labor unions;
(c)
One or more employers and one or more labor unions; or
(d)
An association determined by the director to satisfy the requirements of ORS
743.351 (1).
(2)
A policy of group life insurance shall provide coverage for the benefit of
employees of the employers, members of the unions or members of the
association. The policy may include as employees the officers and managers of
the employer, and the individual proprietor or partners if the employer is an
individual proprietor or a partnership. In addition to such employees, the
policy may also insure retired employees and the trustees or their employees,
or both, if their duties are principally connected with the trust.
(3)
The director shall determine with respect to a policy whether the trustees are
the policyholder. If the director determines that the trustees are the
policyholder and if the policy is issued or proposed to be issued in this
state, the policy is subject to the Insurance Code. If the director determines
that the trustees are not the policyholder, the evidence of coverage that is
issued or proposed to be issued in this state to a participating employer,
labor union or association shall be deemed to be a group life insurance policy
subject to the Insurance Code. For purposes of this section, the director may
determine that the trustees are not the policyholder if:
(a)
The evidence of coverage issued or proposed to be issued to a participating
employer, labor union or association is in fact the primary statement of
coverage for the employer, labor union or association; and
(b)
The trust arrangement is under the actual control of the insurer.
(4)
An insurer shall submit evidence to the director showing that the requirements
of subsections (2) and (3) of this section are satisfied. The director shall
review the evidence and may request additional evidence as needed.
(5)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (4) of this section.
(6)
The director may adopt rules to carry out this section. [1989 c.784 §8]
743.356 Continuing coverage upon replacement
of group life policy. When coverage under a group life
insurance policy is replaced by coverage under another group life insurance
policy, the insurer offering the policy that is replaced shall continue to
provide coverage for each certificate holder under the replaced policy whose
premium payments are suspended because the certificate holder is disabled. [1989
c.784 §9]
Note:
743.356 was enacted into law by the Legislative Assembly but was not added to
or made a part of ORS chapter 743 or any series therein by legislative action.
See Preface to Oregon Revised Statutes for further explanation.
743.357 [1979
c.708 §4; renumbered 743.103 in 1989]
743.358 Borrowing by certificate holders
under group life policy. (1) An insurer of a group life
insurance policy may authorize certificate holders under the policy to borrow
upon the policy, subject to the following provisions:
(a)
The insurer may require a certificate holder, in order to borrow on the policy,
to have been a certificate holder under the policy for a minimum period
specified by the insurer.
(b)
The insurer may require that no premium on the policy be in default beyond the
grace period for payment.
(2)
An insurer authorizing a certificate holder under a group life insurance policy
may establish a minimum loan amount, but the amount may not exceed $1,000.
(3)
An insurer may charge a fixed interest rate not exceeding eight percent per
year, or an adjustable interest rate. The policy provision establishing an
adjustable interest rate must comply with ORS 743.187. The exemption from a
limitation on interest rates under state law established in ORS 743.187 for
individual life insurance policies also applies to interest rates established
pursuant to this section.
(4)
The loan value of a certificate shall be equal to 90 percent of the cash
surrender value of the certificate at the time of the loan, less any existing
indebtedness not already deducted, including any unpaid interest. This
subsection does not apply to certificates issued under a group policy for which
the loan value is established by federal law. [1991 c.182 §9]
743.360 Alternative group life insurance
coverage. (1) Group life insurance coverage
offered to a resident in this state under a group life insurance policy issued
to a group other than one described in ORS 743.351 or 743.354 may be delivered
if:
(a)
The Director of the Department of Consumer and Business Services finds that:
(A)
The issuance of the policy is in the best interest of the public;
(B)
The issuance of the policy would result in economies of acquisition or
administration; and
(C)
The benefits are reasonable in relation to the premiums charged;
(b)
The premium for the policy is paid either from funds of a policyholder, from
funds contributed by a covered person or from both; and
(c)
An insurer has the discretion to exclude or limit coverage for a voluntary plan
on any person for whom evidence of individual insurability is not satisfactory
to the insurer.
(2)
The requirements of ORS 743.303 do not apply to a policy authorized under
subsection (1) of this section. [2001 c.943 §3]
743.362 [1979
c.708 §5; renumbered 743.104 in 1989]
743.365 [1979
c.708 §6; renumbered 743.106 in 1989]
743.368 [1979
c.708 §7; renumbered 743.107 in 1989]
743.370 [1979
c.708 §8; renumbered 743.109 in 1989]
CREDIT LIFE AND CREDIT HEALTH INSURANCE
743.371 Definitions for credit life and
credit health insurance provisions. (1) “Credit
life insurance” means insurance on the life of a debtor pursuant to or in
connection with a specific loan or other credit transaction.
(2)
“Credit health insurance” means insurance on a debtor to provide indemnity for
payments becoming due on a specific loan or other credit transaction while the
debtor is disabled as defined in the policy.
(3)
“Creditor” means the lender of money or vendor or lessor of goods, services,
property, rights or privileges for which payment is arranged through a credit
transaction, or any successor to the right, title or interest of any such
lender, vendor or lessor, and an affiliate, associate or subsidiary of any of
them or any director, officer or employee of any of them or any other person in
any way associated with any of them.
(4)
“Debtor” means a borrower of money or a purchaser or lessee of goods, services,
property, rights or privileges for which payment is arranged through a credit
transaction.
(5)
“Indebtedness” means the total amount payable by a debtor to a creditor in
connection with a loan or other credit transaction. [Formerly 739.565 and then
743.561]
743.372 Applicability of credit life and
credit health insurance provisions. (1) All life
or health insurance in connection with loans or other credit transactions shall
be subject to ORS 743.371 to 743.380, except:
(a)
Insurance in connection with a loan or other credit transaction of more than 10
years’ duration; or
(b)
Insurance, the issuance of which is an isolated transaction on the part of the
insurer not related to an agreement or a plan for insuring debtors of the
creditor.
(2)
Notwithstanding subsection (1) of this section, credit life and credit health
insurance may be issued for up to 10 years in connection with a loan or other
credit transaction of any duration. [Formerly 739.570 and then 743.564]
743.373 Forms of credit life and credit
health insurance. Credit life and credit health
insurance shall be issued only in the following forms:
(1)
Individual policies of life insurance issued to debtors on the term plan.
(2)
Individual policies of health insurance issued to debtors on a term plan, or
disability benefit provisions in individual policies of credit life insurance.
(3)
Group policies of life insurance issued to creditors providing insurance upon
the lives of debtors on the term plan.
(4)
Group policies of health insurance issued to creditors on a term plan insuring
debtors, or disability benefit provisions in group credit life insurance
policies. [Formerly 739.575 and then 743.567]
743.374 Limits on amount of credit life
insurance. (1) The initial amount of credit life
insurance shall not exceed the total amount repayable under the contract of
indebtedness and, where an indebtedness is repayable in substantially equal
installments, the amount of insurance shall at no time exceed the scheduled or
actual amount of unpaid indebtedness, whichever is greater.
(2)
Notwithstanding the provisions of subsection (1) of this section, insurance on
agricultural credit transaction commitments not exceeding 18 months in duration
may be written up to the amount of the loan commitment, on a nondecreasing or
level term plan.
(3)
Notwithstanding the provisions of subsection (1) of this section, insurance on
educational credit transaction commitments may include the portion of such
commitment that has not been advanced by the creditor. [Formerly 743.570]
743.375 Limit on amount of credit health
insurance. The total amount of periodic indemnity
payable by credit health insurance in the event of disability, as defined in
the policy, shall not exceed the aggregate of the periodic scheduled unpaid
installments of the indebtedness; and the amount of each periodic indemnity
payment shall not exceed the original indebtedness divided by the number of
periodic installments. [Formerly 741.425 and then 743.573]
743.376 Duration of credit life and credit
health insurance. (1) The term of any credit life
or credit health insurance shall, subject to acceptance by the insurer,
commence on the date when the debtor becomes obligated to the creditor, except
that, where a group policy provides coverage with respect to existing
obligations, the insurance on a debtor with respect to such indebtedness shall
commence on the effective date of the policy. Where evidence of insurability is
required and such evidence is furnished more than 30 days after the date when
the debtor becomes obligated to the creditor, the term of the insurance may
commence on the date on which the insurer determines the evidence to be
satisfactory, and in such event there shall be an appropriate refund or
adjustment of any charge to the debtor for insurance.
(2)
The term of the insurance shall not extend more than 15 days beyond the
scheduled maturity date of the indebtedness except when extended without
additional cost to the debtor.
(3)
If the indebtedness is discharged because of renewal or refinancing prior to
the scheduled maturity date, the insurance in force shall be terminated before
any new insurance may be issued in connection with the renewed or refinanced
indebtedness.
(4)
In all cases of termination of the insurance prior to the scheduled maturity
date of the indebtedness, a refund shall be paid or credited as provided in ORS
743.378. [Formerly 739.585 and then 743.576]
743.377 Credit life and credit health
insurance policy or group certificate; contents; delivery of policy, certificate
or copy of application. (1) All credit life or credit
health insurance shall be evidenced by an individual policy or, in the case of
group insurance, by a certificate of insurance, which individual policy or
group certificate of insurance shall be delivered to the debtor.
(2)
Each individual policy or group certificate of credit life or credit health
insurance, or both shall, in addition to other requirements of law, set forth:
(a)
The name and home-office address of the insurer;
(b)
The name or names of the debtor, or in the case of a certificate under a group
policy, the identity by name or otherwise of the debtor;
(c)
The premium or amount of payment by the debtor separately for credit life
insurance and for credit health insurance;
(d)
A description of the coverage including the amount and term thereof, and any
exceptions, limitations and restrictions; and
(e)
A statement that the benefits shall be paid to the creditor to reduce or
extinguish the unpaid indebtedness and, wherever the amount of insurance may
exceed the unpaid indebtedness, that any such excess shall be payable to a
beneficiary, other than the creditor, named by the debtor or to the estate of
the debtor.
(3)
Such individual policy or group certificate of insurance shall be delivered to
the insured debtor at the time the indebtedness is incurred except as provided
in subsection (4) of this section.
(4)
If such individual policy or group certificate of insurance is not delivered to
the debtor at the time the indebtedness is incurred, a copy of the application
for insurance or a notice of proposed insurance, signed by the debtor and
setting forth the name and home-office address of the insurer, the name or
names of the debtor, the premium or amount of payment by the debtor separately
for credit life insurance and for credit health insurance, and the amount, term
and a brief description of the coverage provided, shall be delivered to the
debtor at the time the indebtedness is incurred. The copy of the application
for insurance or notice of proposed insurance shall also refer exclusively to
insurance coverage, and shall be separate and apart from the loan, sale or
other credit statement of account, instrument or agreement, unless the information
required by this subsection is prominently set forth therein. Upon acceptance
of the insurance by the insurer and within 30 days of the date upon which the
indebtedness is incurred, the insurer shall cause the individual policy or
group certificate of insurance to be delivered to the debtor. The application
for insurance or notice of proposed insurance shall state that upon acceptance
by the insurer, the insurance shall become effective as provided in ORS
743.376.
(5)
If an insurer other than the named insurer accepts the risk, then the debtor
shall receive a policy or certificate of insurance setting forth the name and
home-office address of the substituted insurer and the amount of the premium to
be charged, and if the amount of premium is less than that set forth in the
notice of proposed insurance an appropriate refund shall be made. [Formerly
739.590 and then 743.579]
743.378 Charges and refunds to debtor.
(1) Each individual policy or group certificate of credit life or credit health
insurance, or both, shall provide that in the event of termination of the
insurance prior to the scheduled maturity date of the indebtedness, any refund
of an amount paid by the debtor for insurance shall be paid or credited
promptly to the person entitled thereto. However, the Director of the
Department of Consumer and Business Services shall prescribe a minimum refund
and no refund which would be less than such minimum need be made. The formula
to be used in computing such refund shall be filed with and approved by the
director.
(2)
If a creditor requires a debtor to make any payment for credit life insurance
or credit health insurance and an individual policy or group certificate of
insurance is not issued, the creditor shall immediately give written notice to
such debtor and shall promptly make an appropriate credit to the account.
(3)
The amount charged to a debtor for credit life insurance and for credit health
insurance shall not exceed the respective premiums charged by the insurer, as
computed at the time the charge to the debtor is determined. [Formerly 739.600
and then 743.582]
743.379 Status of remuneration to
creditor. Notwithstanding the provisions of any
other law of this state which may expressly or by construction provide
otherwise, any commission or service fee or other benefit or return to any
creditor arising out of the sale or provision of credit life and credit health
insurance shall not be deemed interest or charges in connection with loans or
credit transactions. [Formerly 739.603 and then 743.585]
743.380 Claim report and payment.
(1) All claims under policies of credit life or credit health insurance, or
both, shall be promptly reported to the insurer or its designated claim
representative and the insurer shall maintain adequate claim files. All claims
shall be settled as soon as possible and in accordance with the terms of the
policy.
(2)
All claims shall be paid either by draft drawn upon the insurer or by check of
the insurer to the order of the claimant to whom payment is due pursuant to the
policy provisions or, upon direction of such claimant, to the one specified. [Formerly
739.610 and then 743.588]
HEALTH INSURANCE
(Individual)
743.402 Exceptions to individual health
insurance policy requirements. Nothing in
ORS 743.405 to 743.498, 743A.160 and 743A.164 shall apply to or affect:
(1)
Any workers’ compensation insurance policy or any liability insurance policy
with or without supplementary expense coverage therein;
(2)
Any policy of reinsurance;
(3)
Any blanket or group policy of insurance; or
(4)
Any life insurance policy, or policy supplemental thereto which contains only
such provisions relating to health insurance as:
(a)
Provide additional benefits in case of death or dismemberment or loss of sight
by accident; or
(b)
Operate to safeguard such policy against lapse, or to give a special surrender
value or special benefit or an annuity in the event the insured shall become
totally and permanently disabled, as defined by the policy or supplemental
policy.
(5)
Coverage under ORS 735.600 to 735.650. [Formerly 741.022; 2001 c.356 §5]
743.405 General requirements.
An individual health insurance policy must meet the following requirements:
(1)
The entire money and other considerations therefor shall be expressed therein.
(2)
The time at which the insurance takes effect and terminates shall be expressed
therein.
(3)
It shall purport to insure only one person, except that a policy may insure,
originally or by subsequent amendment, upon the application of an adult member
of a family who shall be deemed the policyholder, any two or more eligible
members of that family, including husband, wife, dependent children or any
children under a specified age and any other person dependent upon the
policyholder.
(4)
The policy may not be issued individually to an individual in a group of
persons as described in ORS 743.522 for the purpose of separating the
individual from health insurance benefits offered or provided in connection
with a group health benefit plan.
(5)
Except as provided in ORS 743.498, the style, arrangement and overall
appearance of the policy may not give undue prominence to any portion of the
text, and every printed portion of the text of the policy and of any
indorsements or attached papers shall be plainly printed in lightfaced type of
a style in general use, the size of which shall be uniform and not less than 10
point with a lower case unspaced alphabet length not less than 120 point.
Captions shall be printed in not less than 12-point type. As used in this
subsection, “text” includes all printed matter except the name and address of
the insurer, name or title of the policy, the brief description if any, and
captions and subcaptions.
(6)
The exceptions and reductions of indemnity must be set forth in the policy.
Except those required by ORS 743.411 to 743.477, exceptions and reductions
shall be printed at the insurer’s option either included with the applicable
benefit provision or under an appropriate caption such as EXCEPTIONS, or
EXCEPTIONS AND REDUCTIONS. However, if an exception or reduction specifically
applies only to a particular benefit of the policy, a statement of the
exception or reduction must be included with the applicable benefit provision.
(7)
Each form constituting the policy, including riders and indorsements, must be
identified by a form number in the lower left-hand corner of the first page of
the policy.
(8)
The policy may not contain provisions purporting to make any portion of the
charter, rules, constitution or bylaws of the insurer a part of the policy
unless such portion is set forth in full in the policy, except in the case of
the incorporation of or reference to a statement of rates or classification of
risks, or short rate table filed with the Director of the Department of
Consumer and Business Services. [Formerly 741.120; 1999 c.987 §5; 2009 c.11 §94;
2011 c.9 §91; 2011 c.500 §6]
743.408 Mandatory provisions.
Except as provided in ORS 742.021, a health insurance policy shall contain the
provisions set forth in ORS 743.411 to 743.444. The provisions shall be
preceded individually by the caption appearing in the sections or, at the
option of the insurer, by the appropriate individual or group captions or
subcaptions as the Director of the Department of Consumer and Business Services
may approve. [1967 c.359 §428; 2011 c.9 §92]
743.411 Entire contract; changes.
A health insurance policy shall contain a provision as follows: “ENTIRE
CONTRACT; CHANGES: This policy, including the indorsements and the attached
papers, if any, constitutes the entire contract of insurance. No change in this
policy shall be valid until approved by an executive officer of the insurer and
unless such approval be indorsed hereon or attached hereto. No insurance
producer has authority to change this policy or to waive any of its provisions.”
[1967 c.359 §429; 2003 c.364 §107]
743.412 [1977
c.632 §2; 1981 c.319 §1; 2001 c.900 §230; renumbered 743A.160 in 2007]
743.414 Time limit on certain defenses;
incontestability. (1) A health insurance policy
shall contain a provision as follows: “TIME LIMIT ON CERTAIN DEFENSES: After
two years from the date of issue of this policy no misstatements, except
fraudulent misstatements, made by the applicant in the application for such
policy shall be used to void the policy or to deny a claim for loss incurred or
disability, as defined in the policy, commencing after the expiration of that
period.”
(2)
The policy provision set forth in subsection (1) of this section shall not be
so construed as to affect any legal requirement for avoidance of a policy or
denial of a claim during such initial two-year period, or to limit the
application of ORS 743.450 to 743.462 in the event of misstatement with respect
to age or occupation or other insurance.
(3)
A policy which the insured has the right to continue in force subject to its
terms by the timely payment of premium until at least age 50 or, in the case of
a policy issued after age 44, for at least five years from its date of issue,
may contain in lieu of the provision set forth in subsection (1) of this
section the following provision, from which the clause in parentheses may be
omitted at the insurer’s option: “INCONTESTABLE: After this policy has been in
force for a period of two years during the lifetime of the insured (excluding
any period during which the insured is disabled), it shall become incontestable
as to the statements contained in the application.”
(4)
The policy shall contain a provision as follows, which shall be a separate
paragraph under the same caption as, and immediately following, the provision
set forth in subsection (1) or (3) of this section: “No claim for loss incurred
or disability, as defined in the policy, commencing after two years from the
date of issue of this policy shall be reduced or denied on the ground that a disease
or physical condition not excluded from coverage by name or specific
description effective on the date of loss had existed prior to the effective
date of coverage of this policy.” [1967 c.359 §430; 1969 c.159 §1]
743.417 Grace period.
(1) An individual health insurance policy shall contain a provision as follows:
“GRACE PERIOD: A minimum grace period of 10 days after the premium due date
will be granted for the payment of each premium falling due after the first
premium, during which grace period the policy shall continue in force.”
(2)
A policy that contains a cancellation provision may add the following clause at
the end of the provision set forth in subsection (1) of this section: “subject
to the right of the insurer to cancel in accordance with the cancellation
provision hereof.”
(3)
A policy in which the insurer reserves the right to refuse renewal shall have
the following clause at the beginning of the provision set forth in subsection
(1) of this section: “Unless not less than 30 days prior to the premium due
date the insurer has delivered to the insured or has mailed to the last address
of the insured as shown by the records of the insurer written notice of its
intention not to renew this policy beyond the period for which the premium has
been accepted. The insurer shall state in the notice the reason for its refusal
to renew this policy.” [1967 c.359 §431; 1989 c.784 §19; 2001 c.943 §9]
743.420 Reinstatement.
(1) A health insurance policy shall contain a provision as follows: “REINSTATEMENT:
If any renewal premium is not paid within the grace period, a subsequent
acceptance of premium by the insurer or by any insurance producer duly
authorized by the insurer to accept such premium, without requiring in
connection therewith an application for reinstatement, shall reinstate the
policy; provided, however, that if the insurer or such insurance producer
requires an application for reinstatement and issues a conditional receipt for
the premium tendered, the policy will be reinstated upon approval of such
application by the insurer or, lacking such approval, upon the 45th day
following the date of such conditional receipt unless the insurer has
previously notified the insured in writing of its disapproval of such
application. The reinstated policy shall cover only loss resulting from such
accidental injury as may be sustained after the date of reinstatement and loss
due to such sickness as may begin more than 10 days after such date. In all
other respects the insured and insurer shall have the same rights thereunder as
they had under the policy immediately before the due date of the defaulted
premium, subject to any provisions indorsed hereon or attached hereto in
connection with the reinstatement. Any premium accepted in connection with a
reinstatement shall be applied to a period for which premium has not been
previously paid, but not to any period more than 60 days prior to the date of
reinstatement.”
(2)
The last sentence of the provision set forth in subsection (1) of this section
may be omitted from any policy which the insured has the right to continue in
force subject to its terms by the timely payment of premiums until at least age
50 or, in the case of a policy issued after age 44, for at least five years
from its date of issue. [1967 c.359 §432; 2001 c.943 §10; 2003 c.364 §108]
743.423 Notice of claim.
(1) A health insurance policy shall contain a provision as follows: “NOTICE OF
CLAIM: Written notice of claim must be given to the insurer within 20 days
after the occurrence or commencement of any loss covered by the policy, or as
soon thereafter as is reasonably possible. Notice given by or on behalf of the
insured or the beneficiary to the insurer at ___ (insert the location of
such office as the insurer may designate for the purpose), or to any authorized
agent of the insurer, with information sufficient to identify the insured,
shall be deemed notice to the insurer.”
(2)
In a policy providing a loss-of-time benefit which may be payable for at least
two years, an insurer may at its option insert the following between the first
and second sentences of the provision set forth in subsection (1) of this
section: “Subject to the qualifications set forth below, if the insured suffers
loss of time on account of disability for which indemnity may be payable for at
least two years, the insured shall, at least once in every six months after
having given notice of claim, give to the insurer notice of continuance of such
disability, except in the event of legal incapacity. The period of six months
following any filing of proof by the insured or any payment by the insurer on
account of such claim or any denial of liability in whole or in part by the
insurer shall be excluded in applying this provision. Delay in the giving of
such notice shall not impair the insured’s right to any indemnity which would
otherwise have accrued during the period of six months preceding the date on
which such notice is actually given.” [1967 c.359 §433]
743.426 Claim forms.
A health insurance policy shall contain a provision as follows: “CLAIM FORMS:
The insurer, upon receipt of a notice of claim, will furnish to the claimant
such forms as are usually furnished by it for filing proof of loss. If such
forms are not furnished within 15 days after the giving of such notice, the claimant
shall be deemed to have complied with the requirements of this policy as to
proof of loss upon submitting, within the time fixed in the policy for filing
proofs of loss, written proof covering the occurrence, the character and the
extent of the loss for which claim is made.” [1967 c.359 §434]
743.429 Proofs of loss.
A health insurance policy shall contain a provision as follows: “PROOFS OF
LOSS: Written proof of loss must be furnished to the insurer at its office in
case of claim for loss for which this policy provides any periodic payment
contingent upon continuing loss within 90 days after the termination of the
period for which the insurer is liable and in case of claim for any other loss
within 90 days after the date of such loss. Failure to furnish such proof
within the time required shall not invalidate or reduce any claim if it was not
reasonably possible to give proof within such time, provided such proof is
furnished as soon as reasonably possible and in no event, except in the absence
of legal capacity, later than one year from the time proof is otherwise
required.” [1967 c.359 §435]
743.432 Time of payment of claims.
A health insurance policy shall contain a provision as follows: “TIME OF
PAYMENT OF CLAIMS: Indemnities payable under this policy for any loss other
than loss for which this policy provides any periodic payment will be paid
immediately upon receipt of due written proof of such loss. Subject to due
written proof of loss, all accrued indemnities for loss for which this policy provides
periodic payment will be paid ______ (insert period for payment which must not
be less frequently than monthly) and any balance remaining unpaid upon the
termination of liability will be paid immediately upon receipt of due written
proof.” [1967 c.359 §436]
743.435 Payment of claims.
(1) A health insurance policy shall contain a provision as follows: “PAYMENT OF
CLAIMS: Indemnity for loss of life will be payable in accordance with the
beneficiary designation and the provisions respecting such payment which may be
prescribed herein and effective at the time of payment. If no such designation
or provision is then effective, such indemnity shall be payable to the estate
of the insured. Any other accrued indemnities unpaid at the insured’s death
may, at the option of the insurer, be paid either to such beneficiary or to
such estate. All other indemnities will be payable to the insured.”
(2)
The following provisions, or either of them, may be included with the provision
set forth in subsection (1) of this section at the option of the insurer:
(a)
“If any indemnity of this policy shall be payable to the estate of the insured,
or to an insured or beneficiary who is a minor or otherwise not competent to
give a valid release, the insurer may pay such indemnity, up to an amount not
exceeding $___ (insert an amount which shall not exceed $1,000), to any
relative by blood or connection by marriage of the insured or beneficiary who
is deemed by the insurer to be equitably entitled thereto. Any payment made by
the insurer in good faith pursuant to this provision shall fully discharge the
insurer to the extent of such payment.”
(b)
“Subject to any written direction of the insured in the application or
otherwise all or a portion of any indemnities provided by this policy on
account of hospital, nursing, medical or surgical services may, at the insurer’s
option and unless the insured requests otherwise in writing not later than the
time of filing proofs of such loss, be paid directly to the hospital or person
rendering such services; but it is not required that the service be rendered by
a particular hospital or person.” [1967 c.359 §437]
743.438 Physical examinations and autopsy.
A health insurance policy shall contain a provision as follows: “PHYSICAL
EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right
and opportunity to examine the person of the insured when and as often as it
may reasonably require during the pendency of a claim hereunder and to make an
autopsy in case of death where it is not forbidden by law.” [1967 c.359 §438]
743.441 Legal actions.
A health insurance policy shall contain a provision as follows: “LEGAL ACTIONS:
No action at law or in equity shall be brought to recover on this policy prior
to the expiration of 60 days after written proof of loss has been furnished in
accordance with the requirements of this policy. No such action shall be
brought after the expiration of three years after the time written proof of
loss is required to be furnished.” [1967 c.359 §439]
743.444 Change of beneficiary.
(1) A health insurance policy shall contain a provision as follows: “CHANGE OF
BENEFICIARY: Unless the insured makes an irrevocable designation of
beneficiary, the right to change of beneficiary is reserved to the insured and
the consent of the beneficiary or beneficiaries shall not be requisite to
surrender or assignment of this policy or to any change of beneficiary or
beneficiaries or to any other changes in this policy.”
(2)
The first clause of the provision set forth in subsection (1) of this section,
relating to the irrevocable designation of beneficiary, may be omitted at the
insurer’s option. [1967 c.359 §440]
743.447 Optional provisions.
Except as provided in ORS 742.021, provisions in a health insurance policy
respecting the matters set forth in ORS 743.450 to 743.477 shall be in the
words that appear in such sections. Any such provision contained in the policy
shall be preceded individually by the appropriate caption appearing in such
sections or, at the option of the insurer, by such appropriate individual or
group captions or subcaptions as the Director of the Department of Consumer and
Business Services may approve. [1967 c.359 §441; 2011 c.9 §93]
743.450 Change of occupation.
A health insurance policy may contain a provision as follows: “CHANGE OF
OCCUPATION: If the insured be injured or contract sickness after having changed
occupation to one classified by the insurer as more hazardous than that stated
in this policy or while doing for compensation anything pertaining to an
occupation so classified, the insurer will pay only such portion of the
indemnities provided in this policy as the premium paid would have purchased at
the rates and within the limits fixed by the insurer for such more hazardous
occupation. If the insured changes occupation to one classified by the insurer
as less hazardous than that stated in this policy, the insurer, upon receipt of
proof of such change of occupation, will reduce the premium rate accordingly,
and will return the excess pro rata unearned premium from the date of change of
occupation or from the policy anniversary date immediately preceding receipt of
such proof, whichever is the more recent. In applying this provision, the
classification of occupational risk and the premium rates shall be such as have
been last filed by the insurer prior to the occurrence of the loss for which
the insurer is liable or prior to date of proof of change in occupation with
the state official having supervision of insurance in the state where the insured
resided at the time this policy was issued; but if such filing was not
required, then the classification of occupational risk and the premium rates
shall be those last made effective by the insurer in such state prior to the
occurrence of the loss or prior to the date of proof of change in occupation.” [1967
c.359 §442]
743.453 Misstatement of age.
A health insurance policy may contain a provision as follows: “MISSTATEMENT OF
AGE: If the age of the insured has been misstated, all amounts payable under
this policy shall be such as the premium paid would have purchased at the
correct age.” [1967 c.359 §443]
743.456 Other insurance in same insurer.
(1) A health insurance policy may contain a provision as follows: “OTHER
INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness
policy or policies previously issued by the insurer to the insured be in force
concurrently herewith, making the aggregate indemnity for _____ (insert type of
coverage or coverages) in excess of $___ (insert maximum limit of indemnity or
indemnities), the excess insurance shall be void and all premiums paid for such
excess shall be returned to the insured or to the estate of the insured.”
(2)
In lieu of the provisions set forth in subsection (1) of this section, the
policy may contain a provision as follows: “OTHER INSURANCE IN THIS INSURER:
Insurance effective at any one time on the insured under a like policy or
policies in this company is limited to the one such policy elected by the
insured, the beneficiary or the estate of the insured, as the case may be, and
the insurer will return all premiums paid for all other such policies.” [1967
c.359 §444]
743.459 Insurance with other insurers; expense
incurred benefits. (1) A health insurance policy
may contain a provision as follows: “INSURANCE WITH OTHER INSURERS: If there be
other valid coverage, not with this insurer, providing benefits for the same
loss on a provision of service basis or on an expense incurred basis and of
which this insurer has not been given written notice prior to the occurrence or
commencement of loss, the only liability under any expense incurred coverage of
this policy shall be for such proportion of the loss as the amount which would
otherwise have been payable hereunder plus the total of the like amounts under
all such other valid coverages for the same loss of which this insurer had
notice bears to the total like amounts under all valid coverages for such loss,
and for the return of such portion of the premiums paid as shall exceed the pro
rata portion for the amount so determined. For the purpose of applying this
provision when other coverage is on a provision of service basis, the ‘like
amount’ of such other coverage shall be taken as the amount which the services
rendered would have cost in the absence of such coverage.”
(2)
If the policy provision set forth in subsection (1) of this section is included
in a policy which also contains the policy provision set forth in ORS 743.462,
there shall be added to the caption of the provision set forth in subsection
(1) of this section the phrase “EXPENSE INCURRED BENE- FITS.” The insurer may,
at its option, include in this provision a definition of “other valid coverage,”
approved as to form by the Director of the Department of Consumer and Business
Services, which definition shall be limited in subject matter to coverage
provided by organizations subject to regulation by insurance law or by
insurance authorities of this or any other state of the United States or any
province of Canada, and by hospital or medical service organizations, and to
any other coverage the inclusion of which may be approved by the director. In
the absence of such definition such term shall not include group insurance,
automobile medical payments insurance or coverage provided by hospital or
medical service organizations or by union welfare plans or employer or employee
benefit organizations. For the purpose of applying the policy provision set
forth in this section with respect to any insured, any amount of benefit provided
for such insured pursuant to any compulsory benefit statute (including any
workers’ compensation or employer’s liability statute), whether provided by a
governmental agency or otherwise, shall in all cases be deemed to be “other
valid coverage” of which the insurer has had notice. In applying the policy
provision set forth in this section no third party liability coverage shall be
included as “other valid coverage.” [1967 c.359 §445]
743.462 Insurance with other insurers;
other than expense incurred benefits. (1) A health
insurance policy may contain a provision as follows: “INSURANCE WITH OTHER
INSURERS: If there be other valid coverage, not with this insurer, providing
benefits for the same loss on other than an expense incurred basis and of which
this insurer has not been given written notice prior to the occurrence or
commencement of loss, the only liability for such benefits under this policy
shall be for such proportion of the indemnities otherwise provided hereunder
for such loss as the like indemnities of which the insurer had notice
(including the indemnities under this policy) bear to the total amount of all
like indemnities for such loss, and for the return of such portion of the
premium paid as shall exceed the pro rata portion for the indemnities thus
determined.”
(2)
If the policy provision set forth in subsection (1) of this section is included
in a policy which also contains the policy provision set forth in ORS 743.459,
there shall be added to the caption of the provision set forth in subsection
(1) of this section the phrase “OTHER BENEFITS.” The insurer may, at its
option, include in this provision a definition of “other valid coverage,”
approved as to form by the Director of the Department of Consumer and Business
Services, which definition shall be limited in subject matter to coverage
provided by organizations subject to regulation by insurance law or by
insurance authorities of this or any other state of the United States or any
province of Canada, and to any other coverage the inclusion of which may be
approved by the director. In the absence of such definition such term shall not
include group insurance, or benefits provided by union welfare plans or by
employer or employee benefit organizations. For the purpose of applying the policy
provision set forth in this section with respect to any insured, any amount of
benefit provided for such insured pursuant to any compulsory benefit statute
(including any workers’ compensation or employer’s liability statute), whether
provided by a governmental agency or otherwise, shall in all cases be deemed to
be “other valid coverage” of which the insurer has had notice. In applying the
policy provision set forth in this section no third party liability coverage
shall be included as “other valid coverage.” [1967 c.359 §446]
743.465 Relation of earnings to insurance.
(1) A health insurance policy may contain a provision as follows: “RELATION OF
EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits
promised for the same loss under all valid loss of time coverage upon the
insured, whether payable on a weekly or monthly basis, shall exceed the monthly
earnings of the insured at the time disability commenced or the average monthly
earnings of the insured for the period of two years immediately preceding a
disability for which claim is made, whichever is the greater, the insurer will
be liable only for such proportionate amount of such benefits under this policy
as the amount of such monthly earnings or such average monthly earnings of the
insured bears to the total amount of monthly benefits for the same loss under
all such coverage upon the insured at the time such disability commences and
for the return of such part of the premiums paid during such two years as shall
exceed the pro rata amount of the premiums for the benefits actually paid
hereunder; but this shall not operate to reduce the total monthly amount of
benefits payable under all such coverage upon the insured below the sum of $200
or the sum of the monthly benefits specified in such coverages, whichever is
the lesser, nor shall it operate to reduce benefits other than those payable
for loss of time.”
(2)
The policy provision set forth in subsection (1) of this section may be
inserted only in a policy which the insured has the right to continue in force
subject to its terms by the timely payment of premiums until at least age 50
or, in the case of a policy issued after age 44, for at least five years from
its date of issue. The insurer may, at its option, include in this provision a
definition of “valid loss of time coverage,” approved as to form by the
Director of the Department of Consumer and Business Services, which definition
shall be limited in subject matter to coverage provided by governmental
agencies or by organizations subject to regulation by insurance law or by
insurance authorities of this or any other state of the United States or any
province of Canada, or to any other coverage the inclusion of which may be
approved by the director or any combination of such coverages. In the absence
of such definition such term shall not include any coverage provided for such
insured pursuant to any compulsory benefit statute (including any workers’
compensation or employer’s liability statute), or benefits provided by union welfare
plans or by employer or employee benefit organizations. [1967 c.359 §447]
743.468 Unpaid premium.
A health insurance policy may contain a provision as follows: “UNPAID PREMIUM:
Upon the payment of a claim under this policy, any premium then due and unpaid
or covered by any note or written order may be deducted therefrom.” [1967 c.359
§448]
743.471 Cancellation.
A health insurance policy may contain a provision as follows: “CANCELLATION:
The insurer may cancel this policy by written notice delivered to the insured,
or mailed to the last address of the insured as shown by the records of the
insurer. The notice must state the reason for cancellation and the date on
which the cancellation shall be effective. Except as provided under the ‘GRACE
PERIOD’ provision of this policy for nonpayment of premium, cancellation shall
not become effective earlier than the 30th day after the date of the notice.
After the policy has been continued beyond its original term, the insured may
cancel this policy at any time by written notice delivered or mailed to the
insurer, effective upon receipt or on such later date as may be specified in
such notice. In the event of cancellation, the insurer will return promptly the
unearned portion of any premium paid. If the insured cancels, the earned
premium shall be computed by the use of the short rate table last filed with
the state official having supervision of insurance in the state where the
insured resided when the policy was issued. If the insurer cancels, the earned
premium shall be computed pro rata. Cancellation shall be without prejudice to
any claim originating prior to the effective date of cancellation.” [1967 c.359
§449; 1989 c.784 §20]
743.472 Permissible reasons for cancellation
or refusal to renew. An insurer selling individual
health insurance policies may cancel or refuse to renew an individual health
insurance policy only if the insurer makes a determination to cancel or not to
renew all policies of the same type and form as the individual policy, or if
the ground for cancellation or nonrenewal is any of the following and is stated
as a provision of the policy:
(1)
A fraudulent or material misstatement made by the applicant in an application
for the health policy. A material misstatement is subject to any time limit, as
specified by law and included in the policy, for voiding the policy on the
basis of a misstatement. For purposes of this subsection, a misstatement may
include an incorrect statement or a misrepresentation, omission or concealment
of fact;
(2)
Excess or other insurance in the same insurer, as described in ORS 743.456;
(3)
Nonpayment of premium; or
(4)
Any other reason specified by the Director of the Department of Consumer and
Business Services by rule. [1989 c.784 §18; 1991 c.182 §5]
Note: 743.472
was added to and made a part of 743.405 to 743.498 by legislative action but
was not added to any smaller series therein. See Preface to Oregon Revised
Statutes for further explanation.
743.474 Conformity with state statutes.
A health insurance policy may contain a provision as follows: “CONFORMITY WITH
STATE STATUTES: Any provision of this policy which, on its effective date, is
in conflict with the statutes of the state in which the insured resides on such
date hereby is amended to conform to the minimum requirements of such statutes.”
[1967 c.359 §450]
743.477 Illegal occupation.
A health insurance policy may contain a provision as follows: “ILLEGAL
OCCUPATION: The insurer shall not be liable for any loss to which a
contributing cause was the insured’s commission of or attempt to commit a
felony or to which a contributing cause was the insured’s being engaged in an
illegal occupation.” [1967 c.359 §451]
743.480 [1967
c.359 §452; 1979 c.744 §64; 2007 c.128 §1; renumbered 743A.164 in 2007]
743.483 Arrangement of provisions.
The provisions of a health insurance policy that are the subject of ORS 743.408
to 743.477, or any corresponding provisions that are used in lieu thereof in
accordance with the Insurance Code, shall be printed in the consecutive order
of such sections or, at the option of the insurer, any such provision may
appear as a unit in any part of the policy, with other provisions to which it
may be logically related, provided the resulting policy shall not be in whole
or in part unintelligible, uncertain, ambiguous, abstruse or likely to mislead
a person to whom the policy is offered, delivered or issued. [1967 c.359 §453;
2009 c.11 §95; 2011 c.9 §94]
743.486 Scope of term “insured” in statutory
policy provisions. As used in ORS 743.402 to
743.498, the word “insured” shall not be construed as preventing a person other
than the insured with a proper insurable interest from making application for
and owning a policy covering the insured or from being entitled under such a
policy to any indemnities, benefits and rights provided therein. [1967 c.359 §454;
2011 c.9 §95]
743.489 Extension of coverage beyond
policy period; effect of misstatement of age. If any
health insurance policy contains a provision establishing, as an age limit or otherwise,
a date after which the coverage provided by the policy will not be effective,
and if such date falls within a period for which premium is accepted by the
insurer or if the insurer accepts a premium after such date, the coverage
provided by the policy shall continue in force subject to any right of
cancellation until the end of the period for which premium has been accepted.
In the event the age of the insured has been misstated and if, according to the
correct age of the insured, the coverage provided by the policy would not have
become effective, or would have ceased prior to the acceptance of such premium
or premiums, then the liability of the insurer shall be limited to the refund,
upon request, of all premiums paid for the period not covered by the policy. [Formerly
741.170]
743.492 Policy return and premium refund
provision. Every health insurance policy except
single premium nonrenewable policies shall have printed on its face or attached
thereto a notice stating in substance that the person to whom the policy is
issued shall be permitted to return the policy within 10 days of its delivery
to the purchaser and to have the premium paid refunded if, after examination of
the policy, the purchaser is not satisfied with it for any reason. If a policyholder
or purchaser pursuant to such notice returns the policy to the insurer at its
home or branch office or to the insurance producer through whom it was
purchased, it shall be void from the beginning and the parties shall be in the
same position as if no policy had been issued. [Formerly 741.180; 2003 c.364 §109]
743.495 Use of terms “noncancelable” or “guaranteed
renewable”; synonymous terms. (1) No health
insurance policy shall contain the following unqualified terms except as
provided in this subsection:
(a)
The unqualified terms “noncancelable” or “noncancelable and guaranteed
renewable” may be used only in a policy which the insured has the right to
continue in force for life by the timely payment of premiums set forth in the
policy, during which period the insurer has no right to make unilaterally any
change in any provision of the policy while the policy is in force.
(b)
The unqualified term “guaranteed renewable,” except as provided in paragraph
(a) of this subsection, may be used only in a policy which the insured has the
right to continue in force for life by the timely payment of premiums, during
which period the insurer has no right to make unilaterally any change in any
provision of the policy while the policy is in force, except that the insurer
may make changes in premium rates by classes.
(2)
The limitations prescribed in subsection (1) of this section on the use of the
term “noncancelable” shall also apply to any synonymous term such as “not
cancelable” and such limitations on the use of the term “guaranteed renewable”
shall also apply to any synonymous term such as “guaranteed continuable.” [Formerly
741.190]
743.498 Statement in policy of cancelability
or renewability. (1) A health insurance policy
which is noncancelable or guaranteed renewable as those terms are used in ORS
743.495, except that the insured’s right is for a limited period of more than
one year rather than for life, shall contain the applicable one of the
following statements, or such other statement which, in the opinion of the
Director of the Department of Consumer and Business Services, is equally clear
or more definite as to the subject matter:
(a)
“THIS POLICY IS NONCANCELABLE______” (designating the applicable period such
as, for example, “to age ___ (specify),” or “for the period of ___ (specify)
years from date of issuance”) if the policy is noncancelable for such period.
(b)
“THIS POLICY IS GUARANTEED RENEWABLE______” (designating the applicable period
such as, for example, “to age ___ (specify),” or “for the period of ___
(specify) years from date of issuance”) if the policy is guaranteed renewable
for such period.
(2)
Except for policies meeting the conditions specified in ORS 743.495 or
subsection (1) of this section, and except as provided in subsection (3) of
this section, a health insurance policy shall contain the applicable one of the
following statements, or such other statement which, in the opinion of the
director, is equally clear or more definite as to the subject matter:
(a)
“THIS POLICY MAY BE CANCELED BY THE INSURER ONLY FOR A REASON PERMITTED BY LAW”
if the policy contains a provision for cancellation by the insurer.
(b)
“THE INSURER MAY REFUSE TO RENEW THIS POLICY ONLY FOR A REASON PERMITTED BY LAW”
if the policy is not guaranteed renewable.
(3)
The limitations and requirements as to the use of terms contained in ORS
743.495 and this section shall not prohibit the use of other terms for policies
having other guarantees of renewability, provided such terms, in the opinion of
the director are accurate, clear and not likely to be confused with the terms
contained in ORS 743.495 and this section, and are incorporated in a concise
statement relating to the guarantees of renewability.
(4)
The statement required by this section shall be printed in a type not smaller
than the type used for captions. It shall appear prominently on the first page
of the policy and shall be a part of the brief description if the policy has a
brief description on its first page. [Formerly 741.200; 1989 c.784 §20a]
743.499 Notice to policyholder required
for cancellation or nonrenewal of health benefit plan; effect of failure to
give notice. (1) As used in this section, “health
benefit plan” has the meaning given that term in ORS 743.730.
(2)
An insurer shall notify a policyholder in writing if the insurer cancels or
does not renew the policyholder’s individual health benefit plan. The notice
shall be sent to the policyholder’s last-known mailing address by first class
mail in a specially marked envelope or, if the policyholder has elected to
receive communications from the insurer electronically, to the policyholder’s
last-known electronic mail address using a mechanism that will confirm delivery
to the address.
(3)
If the cancellation or nonrenewal results in a refund to the policyholder of
all or part of a premium, the insurer must mail with the refund a written
explanation that includes:
(a)
The effective date of the cancellation;
(b)
The reason for the cancellation; and
(c)
The time period to which the refund is applicable.
(4)
For any cancellation or nonrenewal due to a reported death of the policyholder,
the insurer must:
(a)
Confirm the accuracy of the reported death.
(b)
If the death is confirmed:
(A)
Provide any dependents covered by the plan with information about how to
continue coverage or obtain alternative coverage; and
(B)
Issue any refund that is due to the estate of the deceased in accordance with
subsection (3) of this section.
(5)
If an insurer cancels or does not renew an individual health benefit plan and
fails to comply with the requirements of this section, the insurer shall
continue the coverage under the plan for the policyholder and any dependents
covered by the plan until the date that the insurer has complied with the
requirements of this section. The insurer shall waive any premiums owed for the
period during which the coverage was continued under this subsection and shall
process all claims incurred by the policyholder or any covered dependents
according to the terms of the plan.
(6)
This section does not apply:
(a)
To a cancellation requested by the policyholder if the insurer documents the
request and confirms the request with the policyholder; or
(b)
To a cancellation or nonrenewal that results from a policyholder making a
change in coverage with the same insurer. [2011 c.500 §4a]
Note:
743.499 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.516 [1967
c.359 §459; repealed by 1999 c.987 §28]
743.519 [1967
c.359 §460; 1971 c.231 §25; repealed by 1999 c.987 §28]
743.520 [1971
c.231 §4; repealed by 1999 c.987 §28]
(Group and Blanket)
743.522 “Group health insurance” described.
(1) “Group health insurance” means that form of health insurance covering
groups of persons described in this section, with or without one or more
members of their families or one or more of their dependents, or covering one
or more members of the families or one or more dependents of such groups of
persons, and issued upon one of the following bases:
(a)
Under a policy issued to an employer or trustees of a fund established by an
employer, who shall be deemed the policyholder, insuring employees of such
employer for the benefit of persons other than the employer. As used in this
paragraph, “employees” includes:
(A)
The officers, managers and employees of the employer;
(B)
The individual proprietor or partners if the employer is an individual
proprietor or partnership;
(C)
The officers, managers and employees of subsidiary or affiliated corporations;
(D)
The individual proprietors, partners and employees of individuals and firms, if
the business of the employer and such individual or firm is under common
control through stock ownership, contract or otherwise;
(E)
The trustees or their employees, or both, if their duties are principally
connected with such trusteeship;
(F)
The leased workers of a client employer; and
(G)
Elected or appointed officials if a policy issued to insure employees of a
public body provides that the term “employees” includes elected or appointed
officials.
(b)
Under a policy issued to an association, including a labor union, that has an
active existence for at least one year, that has a constitution and bylaws and
that has been organized and is maintained in good faith primarily for purposes
other than that of obtaining insurance, which shall be deemed the policyholder,
insuring members, employees or employees of members of the association for the
benefit of persons other than the association or its officers or trustees.
(c)
Under a policy issued to the trustees of a fund established by two or more
employers in the same or related industry or by one or more labor unions or by one
or more employers and one or more labor unions or by an association as
described in paragraph (b) of this subsection, insuring employees of the
employers or members of the unions or of such association, or employees of
members of such association for the benefit of persons other than the employers
or the unions or such association. As used in this paragraph, “employees” may
include the officers, managers and employees of the employer, and the
individual proprietor or partners if the employer is an individual proprietor
or partnership. The policy may provide that the term “employees” includes the
trustees or their employees, or both, if their duties are principally connected
with such trusteeship.
(d)
Under a policy issued to any person or organization to which a policy of group
life insurance may be issued or delivered in this state, to insure any class or
classes of individuals that could be insured under such group life policy.
(2)
Group health insurance offered to a resident of this state under a group health
insurance policy issued to a group other than one described in subsection (1)
of this section may be delivered if:
(a)
The Director of the Department of Consumer and Business Services finds that:
(A)
The issuance of the policy is in the best interest of the public;
(B)
The issuance of the policy would result in economies of acquisition or
administration; and
(C)
The benefits are reasonable in relation to the premiums charged; and
(b)
The premium for the policy is paid either from funds of a policyholder, from
funds contributed by a covered person or from both.
(3)
As used in this section and ORS 743.533:
(a)
“Client employer” means an employer to whom workers are provided under contract
and for a fee on a leased basis by a worker leasing company licensed under ORS
656.850.
(b)
“Employee” may include a retired employee.
(c)
“Leased worker” means a worker provided by a worker leasing company licensed
under ORS 656.850. [1967 c.359 §461; 1975 c.229 §1; 1989 c.784 §13; 2001 c.943 §4;
2005 c.22 §492]
743.523 Certain sales practices prohibited.
(1) No person selling group health insurance is authorized to sell membership
in an association, including a labor union, for the purpose of qualifying an
applicant who is an individual for group health insurance.
(2)
No person selling membership in an association, including a labor union, is
authorized to offer group health insurance for the purpose of selling
membership in the association. [1989 c.784 §10]
743.524 Eligibility of association to be
group health policyholder; rules. (1) An
insurer may not offer a policy of group health insurance to an association as
the policyholder or offer coverage under such a policy, whether issued in this
or another state, unless the Director of the Department of Consumer and
Business Services determines that the association satisfies the requirements of
an association under ORS 743.522 (1)(b).
(2)
An insurer shall submit evidence to the director that the association satisfies
the requirements under ORS 743.522 (1)(b). The director shall review the
evidence and may request additional evidence as needed.
(3)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (2) of this section.
(4)
The director may order an insurer to cease offering health insurance to an
association if the director determines that the association does not meet the
standards under ORS 743.522 (1)(b).
(5)
The director may adopt rules to carry out this section. [1989 c.784 §11; 2005
c.22 §493]
743.525 [1967
c.359 §462; repealed by 1981 c.752 §17]
743.526 Determination of whether trustees
are policyholders; consequences; rules. (1) An
insurer may not offer a policy of group health insurance described in ORS
743.522 (1)(c) that insures persons in this state or offer coverage under such
a policy, whether the policy is to be issued in this or another state, unless
the Director of the Department of Consumer and Business Services determines
that the requirements of this section and ORS 743.522 (1)(c) are satisfied.
(2)
The director shall determine with respect to a policy whether the trustees are
the policyholder. If the director determines that the trustees are the
policyholder and if the policy is issued or proposed to be issued in this
state, the policy is subject to the Insurance Code. If the director determines
that the trustees are not the policyholder, the evidence of coverage that is
issued or proposed to be issued in this state to a participating employer,
labor union or association shall be deemed to be a group health insurance
policy subject to the provisions of the Insurance Code. The director may
determine that the trustees are not the policyholder if:
(a)
The evidence of coverage issued or proposed to be issued to a participating
employer, labor union or association is in fact the primary statement of
coverage for the employer, labor union or association; and
(b)
The trust arrangement is under the actual control of the insurer.
(3)
An insurer shall submit evidence to the director showing that the requirements
of subsection (2) of this section and ORS 743.522 (1)(c) are satisfied. The
director shall review the evidence and may request additional evidence as
needed.
(4)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (3) of this section.
(5)
The director may adopt rules to carry out this section. [1989 c.784 §12; 2005
c.22 §494]
Note:
Sections 11 and 14, chapter 752, Oregon Laws 2007, provide:
Sec. 11. (1)
The Department of Consumer and Business Services shall monitor, on a continuing
basis, association health plans to determine the degree to which the claims
experience of nonretained association groups exceeds the claims experience of
the association’s member groups as a whole.
(2)
The Director of the Department of Consumer and Business Services shall report
to the Legislative Assembly by February 1 of each odd-numbered year on the
findings under subsection (1) of this section and may recommend legislative
changes based upon the findings. [2007 c.752 §11]
Sec. 14.
Sections 11 and 12 of this 2007 Act are repealed on January 2, 2014. [2007
c.752 §14]
743.527 When group health insurance
policies to continue in effect upon payment of premium by insured individual.
(1) Every group health insurance policy delivered or issued for delivery in
this state shall contain in substance the following provisions, applicable to
the coverage for hospital or medical services or expenses provided under the
policy:
(a)
A provision that, when the premium for the policy or any part thereof is paid
by an employer under the terms of a collective bargaining agreement, if there
is a cessation of work by employees insured under the policy due to a strike or
lockout, the policy, upon timely payment of the premium, will continue in
effect with respect to those employees insured by the policy on the date of the
cessation of work who continue to pay their individual contribution and who
assume and pay the contribution due from the employer.
(b)
A provision that, when an employee insured under the policy pays a contribution
pursuant to paragraph (a) of this subsection, if the policyholder is not a
trustee of a fund established or maintained in whole or in part by an employer,
the employee’s individual contribution shall be:
(A)
The rate in the policy, on the date cessation of work occurs, applicable to an
individual in the class to which the employee belongs as set forth in the
policy; or
(B)
If the policy does not provide for a rate applicable to individuals, an amount
equal to the amount determined by dividing the total monthly premium in effect
under the policy at the date of cessation of work by the total number of
persons insured under the policy on such date.
(c)
A provision that, when an employee insured under the policy pays a contribution
pursuant to paragraph (a) of this subsection, if the policyholder is a trustee
of a fund established or maintained in whole or in part by an employer, the
employee’s individual contribution shall be the amount which the employee and
employer would have been required to contribute if the cessation of work had
not occurred.
(2)
Every group health insurance policy delivered or issued for delivery in this
state may contain in substance the following provisions applicable to the
coverage for hospital or medical services or expenses provided under the
policy:
(a)
A provision that, when employees insured under the policy pay contributions
pursuant to subsection (1)(a) of this section, the continuation of insurance
under the policy is contingent upon the collection of individual contributions
by the union representing the employees when the policyholder is not a trustee
and by the policyholder or the policyholder’s agent when the policyholder is a
trustee.
(b)
A provision that, when employees insured under the policy pay contributions
pursuant to subsection (1)(a) of this section, the continuation of insurance
under the policy on each employee is contingent upon timely payment of
contributions by the employees and timely payment of the premium by the entity
responsible for collecting the individual contributions.
(c)
A provision that, when employees insured under the policy pay contributions
pursuant to subsection (1)(a) of this section, each individual premium rate
under the policy may be increased by not more than 20 percent, or by any higher
percentage approved by the Director of the Department of Consumer and Business
Services, during the period of cessation of work in order to provide sufficient
compensation to the insurer for increased administrative costs and increased
mortality and morbidity. If the policy contains the provision allowed under
this paragraph, an employee’s contribution paid under subsection (1)(a) of this
section shall be increased by the same percentage.
(d)
A provision that, when the policy is a policy insuring employees and which may
continue in effect as provided in subsection (1)(a) of this section, if the
premium is unpaid at the date of cessation of work and the premium became due
prior to such cessation of work, the continuation of insurance is contingent
upon payment of the premium prior to the date the next premium becomes due
under the terms of the policy.
(e)
Any provision with respect to the continuation of the policy as provided in
subsection (1)(a) of this section that the director may approve.
(3)
Nothing in this section shall be deemed to limit any right which the insurer
may have in accordance with the terms of a policy to increase or decrease the
premium rates before, during or after a cessation of work by employees insured
under the policy when the insurer had the right to increase the premium rates
even if the cessation of work did not occur. If such a premium rate change is
made, it shall be effective on such date as the insurer shall determine in
accordance with the terms of the policy.
(4)
Nothing in this section shall be deemed to require continuation of any coverage
in a group health insurance policy insuring employees and which may continue in
effect as provided in subsection (1)(a) of this section for longer than:
(a)
The time that 75 percent of insured employees continue such coverage;
(b)
For an individual employee, the time at which the employee takes full-time
employment with another employer; or
(c)
Six months after cessation of work by the insured employees. [1979 c.797 §2;
1981 c.395 §1]
743.528 Required provisions in group health
insurance policies. A group health insurance policy
shall contain in substance the following provisions:
(1)
A provision that, in the absence of fraud, all statements made by applicants,
the policyholder or an insured person shall be deemed representations and not
warranties, and that no statement made for the purpose of effecting insurance
shall avoid the insurance or reduce benefits unless contained in a written instrument
signed by the policyholder or the insured person, a copy of which has been
furnished to the policyholder or to the person or the beneficiary of the
person.
(2)
A provision that the insurer will furnish to the policyholder for delivery to
each employee or member of the insured group a statement in summary form of the
essential features of the insurance coverage of the employee or member, to whom
the insurance benefits are payable, and the applicable rights and conditions
set forth in ORS 743.527, 743.529, 743.600 to 743.610 and 743.760. If
dependents are included in the coverage, only one statement need be issued for
each family unit.
(3)
A provision that to the group originally insured may be added from time to time
eligible new employees or members or dependents, as the case may be, in
accordance with the terms of the policy. [1967 c.359 §463; 1981 c.752 §13; 1997
c.716 §23]
743.529 Continuation of benefits after
termination of group health insurance policy; rules.
(1) Every group health insurance policy that provides coverage for hospital or
medical services or expenses shall provide that the insurer shall continue its
obligation for benefits under the policy for any person insured under the
policy who is hospitalized on the date of termination if the policy is
terminated and immediately replaced by a group health insurance policy issued
by another insurer. Any payment required under this section is subject to all
terms, limitations and conditions of the policy except those relating to termination
of benefits. Any obligation by an insurer under this section continues until
the hospital confinement ends or hospital benefits under the policy are
exhausted, whichever is earlier.
(2)
The Director of the Department of Consumer and Business Services may adopt
rules providing for uninterrupted coverage for individuals insured under a
group health insurance policy providing coverage for hospital or medical
expenses, when such a policy is replaced by a policy of similar benefits,
whether issued by the same insurer or another. [1977 c.402 §5; 1991 c.182 §6]
743.530 Continuation of benefits after
injury or illness covered by workers’ compensation.
Every policy of group health insurance delivered or issued for delivery in this
state shall contain a provision applicable to the coverage for hospital or
medical services or expenses provided under the policy that if an employee
incurs an injury or illness for which a workers’ compensation claim is filed,
that policy will continue in effect with respect to that employee upon timely
payment by the employee of the premium that includes the individual
contribution and the contribution due from the employer under the applicable
benefit plan. The employee may maintain such coverage until whichever of the
following events first occurs:
(1)
The employee takes full-time employment with another employer; or
(2)
Six months from the date that the employee first makes payment under this
section. [1985 c.634 §2]
743.531 Direct payment of hospital and
medical services; rate limitations. (1) A group
health insurance policy may on request by the group policyholder provide that
all or any portion of any indemnities provided by such policy on account of
hospital, nursing, medical or surgical services may, at the insurer’s option,
be paid directly to the hospital or person rendering such services. However,
the amount of any such payment shall not exceed the amount of benefit provided
by the policy with respect to the service or billing of the provider of aid.
The amount of such payments pursuant to one or more assignments shall not
exceed the amount of expenses incurred on account of such hospitalization or
medical or surgical aid.
(2)
Nothing in this section is intended to authorize an insurer to:
(a)
Furnish or provide directly services of hospitals or physicians and surgeons;
or
(b)
Direct, participate in or control the selection of the specific hospital or
physician and surgeon from whom the insured secures services or who exercises
medical or dental professional judgment.
(3)
Nothing in subsection (2) of this section prevents an insurer from negotiating
and entering into contracts for alternative rates of payment with providers and
offering the benefit of such alternative rates to insureds who select such
providers. An insurer may utilize such contracts by offering a choice of plans
at the time an insured enrolls, one of which provides benefits only for
services by members of a particular provider organization with whom the insurer
has an agreement. If an insured chooses such a plan, benefits are payable only
for services rendered by a member of that provider organization, unless such
services were requested by a member of such organization or are rendered as the
result of an emergency.
(4)
Payment so made shall discharge the insurer’s obligation with respect to the
amount of insurance so paid.
(5)
Insurers shall provide group policyholders with a current roster of
institutional and professional providers under contract to provide services at
alternative rates under their group policy and shall also make such lists
available for public inspection during regular business hours at the insurer’s
principal office within this state. [1967 c.359 §464; 1985 c.747 §71; 1989
c.784 §23]
743.532 [1987
c.782 §2; repealed by 1989 c.1044 §7]
743.533 Leased workers; offering group
health insurance. (1) A leasing company may offer
group health insurance to its leased workers. If the leasing company does not
offer group health insurance to its leased workers, the client employer may
offer group health insurance to the leased workers.
(2)
If a leasing company offers group health insurance to its leased workers, the
leasing company shall offer group health insurance to all its leased workers in
the same manner. [2001 c.943 §5]
743.534 “Blanket health insurance”
defined. “Blanket health insurance” means that
form of a health insurance covering groups of persons defined in this section
and issued on one of the following bases:
(1)
Under a policy issued to a common carrier or to an operator, owner or lessee of
a means of transportation, who shall be deemed the policyholder, insuring a
group of persons who may become passengers and which group is defined by
reference to their travel status on such common carrier or means of
transportation.
(2)
Under a policy issued to an employer, who shall be deemed the policyholder,
insuring any group of employees, dependents or guests, defined by reference to
specified hazards incident to an activity or activities or operations of the
policyholder.
(3)
Under a policy issued to a college, school or other institution of learning, a
school district or districts, or school jurisdictional unit, or to the head,
principal or governing board of any such educational unit, who or which shall
be deemed the policyholder, insuring students, teachers or employees.
(4)
Under a policy issued to a religious, charitable, recreational, educational, or
civic organization, or branch thereof, which shall be deemed the policyholder,
insuring any group of members or participants defined by reference to specified
hazards incident to an activity or activities or operations sponsored or
supervised by such policyholder.
(5)
Under a policy issued to a sports team, camp or sponsor thereof, who shall be
deemed the policyholder, insuring members, campers, employees, officials or
supervisors.
(6)
Under a policy issued to a volunteer fire department, first aid, civil defense,
or other such volunteer organization, which shall be deemed the policyholder,
insuring any group of members or participants defined by reference to specified
hazards incident to an activity or activities or operations sponsored or
supervised by such policyholder.
(7)
Under a policy issued to a newspaper or other publisher, which shall be deemed
the policyholder, insuring its carriers.
(8)
Under a policy issued to an association, including a labor union, which has a
constitution and bylaws and which has been organized and is maintained in good
faith for purposes other than that of obtaining insurance, which shall be deemed
the policyholder, insuring any group of members or participants defined by
reference to specified hazards incident to an activity or activities or
operations sponsored or supervised by such policyholder.
(9)
Under a policy issued to cover any other risk or class of risks which, in the
discretion of the Director of the Department of Consumer and Business Services,
may be properly eligible for blanket health insurance. The discretion of the
director may be exercised on an individual risk basis or class of risks basis,
or both. [1967 c.359 §465]
743.537 Required provisions for blanket health
insurance policies. A blanket health insurance
policy shall contain provisions which in the opinion of the Director of the
Department of Consumer and Business Services are not less favorable to the
policyholder and the individual insureds than the provisions described in ORS
743.411, 743.423, 743.426, 743.429, 743.432, 743.438 and 743.441. [1967 c.359 §466]
743.540 Application and certificates not
required for blanket health insurance policies.
An individual application need not be required from a person insured under a
blanket health insurance policy, nor shall it be necessary for the insurer to
furnish each person a certificate. [1967 c.359 §467]
743.543 Payment of benefits under blanket health
insurance policies. All benefits under a blanket
health insurance policy shall be payable to the person insured, or to the
designated beneficiary or beneficiaries of the person, or to the estate of the
person, except that if the person insured is a minor or otherwise not competent
to give a valid release, such benefits may be made payable to the parent,
guardian or other person actually supporting the person. However, the policy
may provide that all or a portion of any indemnities provided by such policy on
account of hospital, nursing, medical or surgical services may, at the option
of the insurer and unless the insured requests otherwise in writing not later
than the time of filing proofs of such loss, be paid directly to the hospital
or person rendering such services; but the policy may not require that the
services be rendered by a particular hospital or person. Payment so made shall
discharge the obligation of the insurer with respect to the amount of insurance
so paid. [1967 c.359 §468]
743.546 Exemption of policy form approval
for blanket health insurance policies. The Director
of the Department of Consumer and Business Services may exempt from the policy
form filing and approval requirements of ORS 742.003, for so long as the
director deems proper, any blanket health insurance policy to which in the
opinion of the director such requirements may not practicably be applied, or
may dispense with such filing and approval whenever, in the opinion of the
director, it is not desirable or necessary for the protection of the public. [1967
c.359 §469]
743.549 Restriction on reduction of
benefits provisions in group and blanket health insurance policies.
No group or blanket health insurance policy providing hospital, medical or surgical
expense benefits, and which contains a provision for the reduction of benefits
otherwise payable thereunder on the basis of other existing coverages, shall
provide that such reduction operates to reduce total benefits payable below an
amount equal to 100 percent of total allowable expenses, except as provided for
in a collective bargaining agreement. [1973 c.143 §2; 1989 c.1080 §2]
743.550 Student health insurance.
(1) Student health insurance is subject to ORS 743.537, 743.540, 743.543,
743.546 and 743.549, except as provided in this section.
(2)
Coverage under a student health insurance policy may be mandatory for all
students at the institution, voluntary for all students at the institution, or
mandatory for defined classes of students and voluntary for other classes of
students. As used in this subsection, “classes” refers to undergraduates,
graduate students, domestic students, international students or other like
classifications. Any differences based on a student’s nationality may be
established only for the purpose of complying with federal law in effect when
the policy is issued.
(3)
When coverage under a student health insurance policy is mandatory, the
policyholder may allow any student subject to the policy to decline coverage if
the student provides evidence acceptable to the policyholder that the student
has similar health coverage.
(4)
A student health insurance policy may provide for any student to purchase
optional supplemental coverage.
(5)
Student health insurance coverage for athletic injuries may:
(a)
Exclude coverage for injuries of students who have not obtained medical release
for a similar injury; and
(b)
Be provided in excess of or in addition to any other coverage under any other
health insurance policy, including a student health insurance policy.
(6)
A student health insurance policy may provide that coverage under the policy is
secondary to any other health insurance for purposes of guidelines established
under ORS 743.552.
(7)
A student health insurance policy may provide, on request by the policyholder,
that all or any portion of any indemnities provided by such policy on account
of hospital, nursing, medical or surgical services may, at the insurer’s
option, be paid directly to the hospital or person rendering such services.
However, the amount of any such payment shall not exceed the amount of benefit
provided by the policy with respect to the service or billing of the provider
of aid. The amount of such payments pursuant to one or more assignments shall
not exceed the amount of expenses incurred on account of such hospitalization
or medical or surgical aid.
(8)
An insurer providing student health insurance as primary coverage may negotiate
and enter into contracts for alternative rates of payment with providers and
offer the benefit of such alternative rates to insureds who select such
providers. An insurer may utilize such contracts by offering a choice of plans
at the time an insured enrolls, one of which provides benefits only for
services by members of a particular provider organization with whom the insurer
has an agreement. If an insured chooses such a plan, benefits are payable only
for services rendered by a member of that provider organization, unless such
services were requested by a member of such organization or are rendered as the
result of an emergency.
(9)
Payments made under subsection (8) of this section shall discharge the insurer’s
obligation with respect to the amount of insurance paid.
(10)
An insurer shall provide each student health insurance policyholder with a
current roster of institutional and professional providers under contract to
provide services at alternative rates under the group policy and shall also
make such lists available for public inspection during regular business hours
at the insurer’s principal office within this state.
(11)
As used in this section, “student health insurance” means that form of health
insurance under a policy issued to a college, school or other institution of
learning, a school district or districts, or school jurisdictional unit, or
recognized student government at a public university listed in ORS 352.002, or
to the head, principal or governing board of any such educational unit, who or
which shall be deemed the policyholder, that is available exclusively to
students at the college, school or other institution. [1995 c.623 §2; 2011
c.637 §289]
743.552 Guidelines for application of ORS
743.549; rules. The Director of the Department
of Consumer and Business Services shall by rule establish guidelines for the
application of ORS 743.549, including:
(1)
The procedures by which persons insured under such policies are to be made
aware of the existence of such a provision;
(2)
The benefits which may be subject to such a provision;
(3)
The effect of such a provision on the benefits provided;
(4)
Establishment of the order of benefit determination; and
(5)
Reasonable claim administration procedures to expedite claim payments under
such a provision which shall include a time limit of 14 days beyond which the
insurer shall not delay payment of a claim by reason of the application of
coordination of benefits provision. [1973 c.143 §3]
743.555 [1973
c.143 §4; repealed by 2005 c.22 §495]
743.556 [1987
c.411 §2; 1989 c.721 §55; 1991 c.67 §198; 1991 c.470 §19; 1991 c.654 §2; 1999
c.1086 §1; 2001 c.900 §217; 2003 c.33 §5; 2005 c.705 §1; 2007 c.71 §240;
renumbered 743A.168 in 2007]
743.557 [1975
c.698 §2; 1977 c.632 §3; 1981 c.319 §2; 1983 c.601 §5; repealed by 1987 c.411 §9]
743.558 [1973
c.613 §2; 1983 c.601 §6; repealed by 1987 c.411 §9]
743.559 [1983
c.601 §12; repealed by 1991 c.182 §20]
743.560 Minimum grace period; notice upon
termination of policy; effect of failure to notify.
(1) A group health insurance policy shall contain a provision allowing a minimum
grace period of 10 days after the premium due date for payment of premium.
(2)
An insurer of a group health insurance policy providing coverage for hospital
or medical expenses, other than coverage limited to expenses from accidents or
specific diseases, that seeks to terminate a policy for nonpayment of premium
shall notify the policyholder as described in ORS 743.565.
(3)
An insurer of a group health insurance policy providing coverage for hospital
or medical expenses, other than coverage limited to expenses from accidents or
specific diseases, shall notify the group policyholder when the policy is
terminated and the coverage is not replaced by the group policyholder. The
notice required under this subsection:
(a)
Must be given on a form prescribed by the Department of Consumer and Business
Services;
(b)
Must explain the rights of the certificate holders regarding continuation of
coverage provided by federal and state law and portability coverage in
accordance with ORS 743.760; and
(c)
Must be given by mail and must be mailed not later than 10 working days after
the date on which the group policy terminates according to the terms of the
policy.
(4)
A group health insurance policy to which subsection (3) of this section applies
shall contain a provision requiring the insurer to notify the group
policyholder when the policy is terminated and the coverage is not replaced by
the group policyholder. Each certificate issued under the policy shall also
contain a statement of the provision required under this subsection.
(5)
If an insurer fails to give notice as required by this section, the insurer
shall continue the group health insurance policy of the group policyholder in
full force from the date notice should have been provided until the date that
the notice is received by the policyholder and shall waive the premiums owing
for the period for which the coverage is continued under this subsection. The
time period within which the certificate holder may exercise any right to
continuation or portability shall commence on the date that the policyholder
receives the notice.
(6)
The insurer shall supply the employer holding the terminated policy with the
necessary information for the employer to be able to notify properly the
employee of the employee’s right to continuation of coverage under state and
federal law and portability coverage in accordance with ORS 743.760. [1991
c.673 §§3,4; 1993 c.454 §1; 1997 c.716 §24; 2001 c.943 §11]
743.561
[Formerly 739.565; renumbered 743.371 in 1989]
743.562 Applicability of ORS 743.560.
ORS 743.560 applies to multiple employer trusts when an employer ceases to
participate therein. [1991 c.673 §5]
743.564
[Formerly 739.570; 1969 c.336 §13; 1989 c.1073 §1; renumbered 743.372 in 1989]
743.565 Separate notice to policyholder
required before cancellation of individual or group health insurance policy for
nonpayment of premium. Before a health insurer selling
an individual policy or group health benefit plan, as defined in ORS 743.730,
may cancel a policy for nonpayment of premium, the insurer must mail a separate
notice to the policyholder at least 10 days prior to the end of the grace
period informing the policyholder that the premium was not received and that
the policy will be terminated as of the premium due date if the premium is not
received by the end of the applicable grace period required by ORS 743.417 and
743.560. The notice shall be in writing and mailed by first class mail to the
last-known address of the policyholder. [2001 c.943 §8]
743.566 Rules for certain notice
requirements. The Director of the Department of
Consumer and Business Services shall adopt rules necessary for the
implementation and administration of ORS 743.565 and the amendments to ORS
743.417, 743.420, 743.560, 743.737, 743.754 and 743.766 by sections 9 to 14,
chapter 943, Oregon Laws 2001. [2001 c.943 §16]
Note:
743.566 was enacted into law by the Legislative Assembly but was not added to
or made a part of ORS chapter 743 or any series therein by legislative action.
See Preface to Oregon Revised Statutes for further explanation.
743.567
[Formerly 739.575; renumbered 743.373 in 1989]
743.570 [1967
c.359 §473; renumbered 743.374 in 1989]
743.573
[Formerly 741.425; renumbered 743.375 in 1989]
743.576
[Formerly 739.585; renumbered 743.376 in 1989]
743.579
[Formerly 739.590; renumbered 743.377 in 1989]
743.582
[Formerly 739.600; renumbered 743.378 in 1989]
743.585
[Formerly 739.603; renumbered 743.379 in 1989]
743.588
[Formerly 739.610; renumbered 743.380 in 1989]
(Continuation)
743.600 Availability of continued coverage
under group policy for surviving, divorced or separated spouse 55 or older.
(1) A group health insurance policy providing coverage for hospital or medical
expenses, other than coverage limited to expenses from accidents or specific
diseases, shall contain a provision that:
(a)
The surviving spouse of a certificate holder may continue coverage under the
policy, at the death of the certificate holder, with respect to the spouse and
any dependent children whose coverage under the policy otherwise would
terminate because of the death of the certificate holder if the surviving
spouse is 55 years of age or older at the time of the death; and
(b)
The divorced or legally separated spouse of a certificate holder may continue
coverage under the policy, upon dissolution of marriage with, or legal
separation from, the certificate holder, with respect to the divorced or
legally separated spouse and any dependent children whose coverage under the
policy otherwise would terminate because of the dissolution of marriage or
legal separation, if the divorced or legally separated spouse is 55 years of
age or older at the time of the dissolution or legal separation.
(2)
Continued coverage for dental, vision care or prescription drug expenses shall
be offered to legally separated, divorced or surviving spouses and any
dependent children eligible under subsection (1) of this section if such
coverage is or was available to the certificate holder. [Formerly 743.851]
743.601 Procedure for obtaining
continuation of coverage under ORS 743.600. (1) As
used in subsections (1) to (6) of this section, “plan administrator” means:
(a)
The person designated as the plan administrator by the instrument under which
the group health insurance plan is operated; or
(b)
If no plan administrator is designated, the plan sponsor.
(2)
Within 60 days of legal separation or the entry of a judgment of dissolution of
marriage, a legally separated or divorced spouse eligible for continued
coverage under ORS 743.600 who seeks such coverage shall give the plan
administrator written notice of the legal separation or dissolution. The notice
shall include the mailing address of the legally separated or divorced spouse.
(3)
Within 30 days of the death of a covered person whose surviving spouse is
eligible for continued coverage under ORS 743.600, the group policyholder shall
give the plan administrator written notice of the death and of the mailing
address of the surviving spouse.
(4)
Within 14 days of receipt of notice under subsection (2) or (3) of this
section, the plan administrator shall notify the legally separated, divorced or
surviving spouse that the policy may be continued. The notice shall be mailed
to the mailing address provided to the plan administrator and shall include:
(a)
A form for election to continue the coverage;
(b)
A statement of the amount of periodic premiums to be charged for the
continuation of coverage and of the method and place of payment; and
(c)
Instructions for returning the election form by mail within 60 days after the
date of mailing of the notice by the plan administrator.
(5)
Failure of the legally separated, divorced or surviving spouse to exercise the
election in accordance with subsection (4) of this section shall terminate the
right to continuation of benefits.
(6)
If a plan administrator fails to notify the legally separated, divorced or
surviving spouse as required by subsection (4) of this section, premiums shall
be waived from the date the notice was required until the date notice is
received by the legally separated, divorced or surviving spouse.
(7)
The provisions of this section and ORS 743.600 and 743.602 apply only to
employers with 20 or more employees and group health insurance plans with 20 or
more enrollees on a typical business day during the preceding calendar year. [Formerly
743.852; 2003 c.576 §557; 2011 c.500 §6a]
743.602 Premium for continuation of
coverage under ORS 743.600; termination of right to continuation.
If a legally separated, divorced or surviving spouse elects continuation of
coverage under ORS 743.601 (1) to (6):
(1)
The monthly premium for the continuation shall not be greater than the amount
that would be charged if the legally separated, divorced or surviving spouse
were a current certificate holder of the group plan plus the amount that the
group policyholder would contribute toward the premium if the legally
separated, divorced or surviving spouse were a certificate holder of the group
plan, plus an additional amount not to exceed two percent of the certificate
holder and group plan holder contributions, for the costs of administration.
(2)
The first premium shall be paid by the legally separated, divorced or surviving
spouse within 45 days of the date of the election.
(3)
The right to continuation of coverage shall terminate upon the earliest of any
of the following:
(a)
The failure to pay premiums when due, including any grace period allowed by the
policy;
(b)
The date that the group policy is terminated as to all group members except
that if a different group policy is made available to group members, the
legally separated, divorced or surviving spouse shall be eligible for
continuation of coverage as if the original policy had not been terminated;
(c)
The date on which the legally separated, divorced or surviving spouse becomes
insured under any other group health plan;
(d)
The date on which the legally separated, divorced or surviving spouse remarries
and becomes covered under another group health plan; or
(e)
The date on which the legally separated, divorced or surviving spouse becomes
eligible for federal Medicare coverage. [Formerly 743.853]
743.603
[Formerly 744.070; renumbered 742.200 in 1989]
743.606 [1967
c.359 §481; 1967 c.453 §3; renumbered 742.202 in 1989]
743.607 [1967
c.453 §2; renumbered 742.204 in 1989]
743.609 [1967
c.359 §482; 1971 c.231 §26; renumbered 742.206 in 1989]
743.610 Continuation of coverage under
group policy upon termination of membership in group health insurance policy;
applicability of waiting period to rehired employee.
(1) As used in this section:
(a)
“Covered person” means an individual who was a certificate holder under a group
health insurance policy:
(A)
On the day before a qualifying event; and
(B)
During the three-month period ending on the date of the qualifying event.
(b)
“Qualified beneficiary” means:
(A)
A spouse or dependent child of a covered person who, on the day before a
qualifying event, was insured under the covered person’s group health insurance
policy; or
(B)
A child born to or adopted by a covered person during the period of the
continuation of coverage under this section who would have been insured under
the covered person’s policy if the child had been born or adopted on the day
before the qualifying event.
(c)
“Qualifying event” means the loss of membership in a group health insurance
policy caused by:
(A)
Voluntary or involuntary termination of the employment of a covered person;
(B)
A reduction in hours worked by a covered person;
(C)
A covered person becoming eligible for Medicare;
(D)
A qualified beneficiary losing dependent child status under a covered person’s
group health insurance policy;
(E)
Termination of membership in the group covered by the group health insurance
policy; or
(F)
The death of a covered person.
(2)
A group health insurance policy providing coverage for hospital or medical
expenses, other than coverage limited to expenses from accidents or specific
diseases, must contain a provision that a covered person and any qualified
beneficiary may continue coverage under the policy as provided in this section.
(3)
Continuation of coverage is not available to a covered person or qualified
beneficiary who is eligible for:
(a)
Medicare; or
(b)
Coverage for hospital or medical expenses under any other program that was not
covering the covered person or qualified beneficiary on the day before a
qualifying event.
(4)
The continued coverage need not include benefits for dental, vision care or
prescription drug expense, or any other benefits under the policy other than
hospital and medical expense benefits.
(5)
A covered person or qualified beneficiary who wishes to continue coverage must
provide the insurer with a written request for continuation no later than 10
days after the later of the date of a qualifying event or the date the insurer
provides the notice required by subsection (10) of this section.
(6)
A covered person or qualified beneficiary who requests continuation of coverage
shall pay the premium on a monthly basis and in advance to the insurer or to
the employer or policyholder, whichever the group policy provides. The required
premium payment may not exceed the group premium rate for the insurance being
continued under the group policy as of the date the premium payment is due.
(7)
Continuation of coverage as provided under this section ends on the earliest of
the following dates:
(a)
Nine months after the date of the qualifying event that was the basis for the
continuation of coverage.
(b)
The end of the period for which the last timely premium payment for the
coverage is received by the insurer.
(c)
The premium payment due date coinciding with or next following the date that
continuation of coverage ceases to be available in accordance with subsection
(3) of this section.
(d)
The date that the policy is terminated. However, if the policyholder replaces
the terminated policy with similar coverage under another group health
insurance policy:
(A)
The covered person and qualified beneficiaries may obtain coverage under the
replacement policy for the balance of the period that the covered person or
qualified beneficiary would have remained covered under the terminated policy
in accordance with this section; and
(B)
The terminated policy must continue to provide benefits to the covered person
and qualified beneficiaries to the extent of that policy’s accrued liabilities
and extensions of benefits as if the replacement had not occurred.
(8)
A qualified beneficiary who is not eligible for continuation of coverage under
ORS 743.600 may continue coverage under this section upon the dissolution of
marriage with or the death of the covered person in the same manner that a
covered person may exercise the right to continue coverage under this section.
(9)
A covered person rehired by an employer no later than nine months after the
layoff of the covered person by the employer may not be subjected to a waiting
period for coverage under the employer’s group health insurance policy if the
covered person was eligible for coverage at the time of the layoff, regardless
of whether the covered person continued coverage during the layoff.
(10)
If an insurer terminates the group health insurance coverage of a covered
person or qualified beneficiary without providing replacement coverage that
meets the criteria in subsection (7)(d) of this section, the insurer shall
provide written notice to the covered person and any qualified beneficiary no
later than 10 days after the insurer is notified of the qualifying event under
subsection (5) of this section. The notice shall include at least the following
information:
(a)
Contact information for the insurer;
(b)
Forms necessary to request continuation of coverage and instructions for
completing the forms;
(c)
Information sufficient to determine premium rates for continuation of coverage
and instructions for paying premiums;
(d)
A clear statement of who is eligible to continue coverage;
(e)
Enrollment information relating to other coverage issued by the insurer that is
held by the employer or group and for which the covered person or a qualified
beneficiary may be eligible;
(f)
An explanation of the process to appeal a denial of a claim under the
continuation of coverage;
(g)
Information, in a form approved by the Director of the Department of Consumer
and Business Services, about how to contact the consumer advocacy unit of the
Insurance Division of the Department of Consumer and Business Services; and
(h)
Other information required by the director.
(11)
This section applies only to employers who are not required to make available
continuation of health insurance benefits under Titles X and XXII of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, P.L.
99-272, April 7, 1986. [Formerly 743.850; 2009 c.73 §§3,4; 2011 c.500 §§6b,6c]
743.611
[Formerly 743.855; 1991 c.673 §6; repealed by 1995 c.603 §42]
743.612 [1967
c.359 §483; 1985 c.465 §3; renumbered 742.208 in 1989]
743.613
[Formerly 743.860; repealed by 1995 c.603 §42]
743.614
[Formerly 743.865; repealed by 1995 c.603 §42]
743.615 [1967
c.359 §484; renumbered 742.210 in 1989]
743.616
[Formerly 743.870; repealed by 1995 c.603 §42]
743.617
[Formerly 743.875; repealed by 1995 c.603 §42]
743.618 [1967
c.359 §485; renumbered 742.212 in 1989]
743.619
[Formerly 743.880; repealed by 1995 c.603 §42]
743.620
[Formerly 743.885; repealed by 1995 c.603 §42]
743.621 [1967
c.359 §486; renumbered 742.214 in 1989]
743.622
[Formerly 743.890; repealed by 1995 c.603 §42]
743.624 [1967
c.359 §487; renumbered 742.216 in 1989]
743.627 [1967
c.359 §488; renumbered 742.218 in 1989]
743.630 [1967
c.359 §489; renumbered 742.220 in 1989]
743.633 [1967
c.359 §490; renumbered 742.222 in 1989]
743.636 [1967
c.359 §491; 1989 c.426 §2; renumbered 742.224 in 1989]
743.639 [1967
c.359 §492; renumbered 742.226 in 1989]
743.642 [1967
c.359 §493; renumbered 742.228 in 1989]
743.645 [1967
c.359 §494; 1989 c.426 §1; renumbered 742.230 in 1989]
743.648 [1967
c.359 §495; renumbered 742.232 in 1989]
(Long Term Care)
743.650 Long Term Care Insurance Act;
purpose; application. (1) ORS 743.650 to 743.665 may
be known and cited as the “Long Term Care Insurance Act.”
(2)
The purpose of ORS 743.650 to 743.665 is to:
(a)
Promote the public interest in long term care insurance;
(b)
Promote the availability of long term care insurance policies;
(c)
Protect applicants for long term care insurance from unfair or deceptive sales
or enrollment practices;
(d)
Establish standards for long term care insurance;
(e)
Facilitate public understanding and comparison of long term care insurance
policies;
(f)
Facilitate flexibility and innovation in the development of long term care
insurance coverage; and
(g)
Ensure that Oregon residents who purchase insurance for long term care shall
have access to policies providing for a comprehensive range of benefits.
(3)
The requirements of ORS 743.650 to 743.665, 748.603 and 750.055 apply to
policies and certificates delivered or issued for delivery in this state on or
after December 31, 1989. ORS 743.650 to 743.665, 748.603 and 750.055 are not
intended to supersede the obligations of entities subject to ORS 743.650 to
743.665, 748.603 and 750.055 to comply with the substance of other applicable
insurance laws insofar as such laws do not conflict with ORS 743.650 to 743.665,
748.603 and 750.055, except that laws and rules designed and intended to apply
to Medicare supplement insurance policies shall not be applied to long term
care insurance. A policy that is not advertised, marketed or offered as long
term care insurance or nursing home insurance is not required to meet the
requirements of ORS 743.650 to 743.665, 748.603 and 750.055. [1989 c.1022 §§1,2,3;
2007 c.486 §1]
743.651 [1967
c.359 §496; renumbered 742.234 in 1989]
743.652 Definitions for ORS 743.650 to 743.665.
As used in ORS 743.650 to 743.665, unless the context requires otherwise:
(1)
“Applicant” means:
(a)
In the case of an individual long term care insurance policy, the person who
seeks to contract for benefits; and
(b)
In the case of a group long term care insurance policy, the proposed
certificate holder.
(2)
“Benefit trigger” means a contractual provision in a long term care insurance
policy that conditions the payment of benefits on an insured’s inability to
perform activities of daily living or on an insured’s cognitive impairment. For
qualified long term care insurance, the “benefit trigger” is the determination
that an insured is a chronically ill individual, as defined in section 7702B(c)
of the Internal Revenue Code.
(3)
“Certificate” means any certificate issued under a group long term care
insurance policy, if the policy has been delivered or issued for delivery in
this state.
(4)
“Group long term care insurance” means a long term care insurance policy that
is delivered or issued for delivery in this state and issued to:
(a)
One or more employers or labor organizations, or to a trust or to the trustees
of a fund established by one or more employers or labor organizations, or a
combination thereof, for employees or former employees or a combination
thereof, or for members or former members, or a combination thereof, of the
labor organizations;
(b)
Any professional, trade or occupational association for its members or former
or retired members, or combination thereof, if such association:
(A)
Is composed of individuals all of whom are or were actively engaged in the same
profession, trade or occupation; and
(B)
Has been maintained in good faith for purposes other than obtaining insurance;
(c)(A)
An association or a trust or the trustee of a fund established, created or
maintained for the benefit of members of one or more associations. Prior to
advertising, marketing or offering the policy within this state, the
association or associations, or the insurer of the association or associations
shall file evidence with the director that the association or associations have
been organized and maintained in good faith for purposes other than that of
obtaining insurance; have been in active existence for at least one year; and
have a constitution and bylaws that provide that:
(i)
The association or associations hold regular meetings not less than annually to
further purposes of the members;
(ii)
Except for credit unions, the association or associations collect dues or
solicit contributions from members; and
(iii)
The members have voting privileges and representation on the governing board
and committees; and
(B)
Sixty days after the filing, the association or associations shall be
considered to satisfy the organizational requirements, unless the director
makes a finding that the association or associations do not satisfy those
organizational requirements; or
(d)
A group other than as described in paragraphs (a), (b) and (c) of this
subsection, subject to a finding by the director that:
(A)
The issuance of the group policy is not contrary to the best interest of the
public;
(B)
The issuance of the group policy would result in economies of acquisition or
administration; and
(C)
The benefits are reasonable in relation to the premiums charged.
(5)
“Long term care insurance” means any insurance policy or rider advertised,
marketed, offered or designed to provide coverage for not less than 24
consecutive months for each covered person on an expense incurred, indemnity,
prepaid or other basis; for one or more necessary or medically necessary
services, including but not limited to nursing, diagnostic, preventive,
therapeutic, rehabilitative, maintenance or personal care services, provided in
a setting other than an acute care unit of a hospital. “Long term care
insurance” includes group and individual annuities and life insurance policies
or riders that provide directly or supplement long term care insurance. “Long
term care insurance” also includes a policy or rider that provides for payment
of benefits based upon cognitive impairment or the loss of functional capacity,
and qualified long term care insurance contracts. Long term care insurance may
be issued by insurers; fraternal benefit societies; nonprofit health, hospital
and medical service corporations; prepaid health plans; or health maintenance
organizations, health care service contractors or any similar organization to
the extent they are otherwise authorized to issue life or health insurance. “Long
term care insurance” does not include any insurance policy that is offered
primarily to provide basic Medicare supplement coverage, basic hospital expense
coverage, basic medical-surgical expense coverage, hospital confinement
indemnity coverage, major medical expense coverage, disability income or related
asset protection coverage, catastrophic coverage, accident only coverage,
specified disease or specified accident coverage or limited benefit health
coverage. With regard to life insurance, “long term care insurance” does not
include life insurance policies that accelerate the death benefit specifically
for one or more of the qualifying events of terminal illness, medical
conditions requiring extraordinary medical intervention or permanent
institutional confinement, and that provide the option of a lump-sum payment
for those benefits and when neither the benefits nor the eligibility for the
benefits is conditioned upon the receipt of long term care. Notwithstanding any
other provision of ORS 743.650 to 743.665, any product advertised, marketed or
offered as long term care insurance is subject to ORS 743.650 to 743.665.
(6)
“Policy” means any policy, contract, subscriber agreement, rider or indorsement
delivered or issued for delivery in this state by an insurer; fraternal benefit
society; nonprofit health, hospital or medical service corporation; prepaid
health plan; or health maintenance organization, health care service contractor
or any similar organization.
(7)
“Qualified long term care insurance” means:
(a)
The portion of a life insurance contract that provides long term care insurance
coverage by rider or as part of the contract and that satisfies the
requirements of section 7702B(b) and (e) of the Internal Revenue Code; or
(b)
Individual or group long term care insurance as defined in this section that
meets all of the following requirements of section 7702B(b) of the Internal
Revenue Code:
(A)
The only insurance protection provided under the contract is coverage of
qualified long term care services. A contract shall not fail to satisfy the
requirements of this subparagraph by reason of payments being made on a per
diem or other periodic basis without regard to the expenses incurred during the
period to which the payments relate.
(B)
The contract does not pay or reimburse expenses incurred for services or items
to the extent that the expenses are reimbursable under Title XVIII of the
Social Security Act, or would be reimbursable but for the application of a
deductible or coinsurance amount. The requirements of this subparagraph do not
apply to expenses that are reimbursable under Title XVIII of the Social
Security Act only as a secondary payer. A contract does not fail to satisfy the
requirements of this subparagraph by reason of payments being made on a per
diem or other periodic basis without regard to the expenses incurred during the
period to which the payments relate.
(C)
The contract is guaranteed renewable within the meaning of section
7702B(b)(1)(C) of the Internal Revenue Code.
(D)
The contract does not provide for a cash surrender value or other money that
can be paid, assigned, pledged as collateral for a loan, or borrowed except as
provided in subparagraph (E) of this paragraph.
(E)
All refunds of premiums, and all policyholder dividends or similar amounts,
under the contract are to be applied as a reduction in future premiums or to
increase future benefits, except that a refund on the event of death of the
insured or a complete surrender or cancellation of the contract cannot exceed
the aggregate premiums paid under the contract.
(F)
The contract meets the consumer protection provisions set forth in section
7702B(g) of the Internal Revenue Code. [1989 c.1022 §4; 1993 c.744 §30; 1995
c.79 §364; 2007 c.486 §2; 2011 c.69 §3]
Note: The
amendments to 743.652 by section 3, chapter 69, Oregon Laws 2011, apply to long
term care insurance policies issued or renewed on or after July 1, 2012. See
section 8, chapter 69, Oregon Laws 2011. The text that applies to policies
issued or renewed before July 1, 2012, is set forth for the user’s convenience.
743.652. As
used in ORS 743.650 to 743.665, unless the context requires otherwise:
(1)
“Applicant” means:
(a)
In the case of an individual long term care insurance policy, the person who
seeks to contract for benefits; and
(b)
In the case of a group long term care insurance policy, the proposed
certificate holder.
(2)
“Certificate” means any certificate issued under a group long term care
insurance policy, if the policy has been delivered or issued for delivery in
this state.
(3)
“Group long term care insurance” means a long term care insurance policy that
is delivered or issued for delivery in this state and issued to:
(a)
One or more employers or labor organizations, or to a trust or to the trustees
of a fund established by one or more employers or labor organizations, or a
combination thereof, for employees or former employees or a combination
thereof, or for members or former members, or a combination thereof, of the
labor organizations;
(b)
Any professional, trade or occupational association for its members or former
or retired members, or combination thereof, if such association:
(A)
Is composed of individuals all of whom are or were actively engaged in the same
profession, trade or occupation; and
(B)
Has been maintained in good faith for purposes other than obtaining insurance;
(c)(A)
An association or a trust or the trustee of a fund established, created or
maintained for the benefit of members of one or more associations. Prior to
advertising, marketing or offering the policy within this state, the
association or associations, or the insurer of the association or associations
shall file evidence with the director that the association or associations have
been organized and maintained in good faith for purposes other than that of
obtaining insurance; have been in active existence for at least one year; and
have a constitution and bylaws that provide that:
(i)
The association or associations hold regular meetings not less than annually to
further purposes of the members;
(ii)
Except for credit unions, the association or associations collect dues or
solicit contributions from members; and
(iii)
The members have voting privileges and representation on the governing board
and committees; and
(B)
Sixty days after the filing, the association or associations shall be
considered to satisfy the organizational requirements, unless the director
makes a finding that the association or associations do not satisfy those
organizational requirements; or
(d)
A group other than as described in paragraphs (a), (b) and (c) of this
subsection, subject to a finding by the director that:
(A)
The issuance of the group policy is not contrary to the best interest of the
public;
(B)
The issuance of the group policy would result in economies of acquisition or administration;
and
(C)
The benefits are reasonable in relation to the premiums charged.
(4)
“Long term care insurance” means any insurance policy or rider advertised,
marketed, offered or designed to provide coverage for not less than 24
consecutive months for each covered person on an expense incurred, indemnity,
prepaid or other basis; for one or more necessary or medically necessary
services, including but not limited to nursing, diagnostic, preventive,
therapeutic, rehabilitative, maintenance or personal care services, provided in
a setting other than an acute care unit of a hospital. “Long term care
insurance” includes group and individual annuities and life insurance policies
or riders that provide directly or supplement long term care insurance. “Long
term care insurance” also includes a policy or rider that provides for payment
of benefits based upon cognitive impairment or the loss of functional capacity,
and qualified long term care insurance contracts. Long term care insurance may
be issued by insurers; fraternal benefit societies; nonprofit health, hospital
and medical service corporations; prepaid health plans; or health maintenance
organizations, health care service contractors or any similar organization to
the extent they are otherwise authorized to issue life or health insurance. “Long
term care insurance” does not include any insurance policy that is offered
primarily to provide basic Medicare supplement coverage, basic hospital expense
coverage, basic medical-surgical expense coverage, hospital confinement
indemnity coverage, major medical expense coverage, disability income or
related asset protection coverage, catastrophic coverage, accident only
coverage, specified disease or specified accident coverage or limited benefit
health coverage. With regard to life insurance, “long term care insurance” does
not include life insurance policies that accelerate the death benefit
specifically for one or more of the qualifying events of terminal illness,
medical conditions requiring extraordinary medical intervention or permanent
institutional confinement, and that provide the option of a lump-sum payment
for those benefits and when neither the benefits nor the eligibility for the
benefits is conditioned upon the receipt of long term care. Notwithstanding any
other provision of ORS 743.650 to 743.665, any product advertised, marketed or
offered as long term care insurance is subject to ORS 743.650 to 743.665.
(5)
“Policy” means any policy, contract, subscriber agreement, rider or indorsement
delivered or issued for delivery in this state by an insurer; fraternal benefit
society; nonprofit health, hospital or medical service corporation; prepaid
health plan; or health maintenance organization, health care service contractor
or any similar organization.
(6)
“Qualified long term care insurance” means:
(a)
The portion of a life insurance contract that provides long term care insurance
coverage by rider or as part of the contract and that satisfies the
requirements of section 7702B(b) and (e) of the Internal Revenue Code; or
(b)
Individual or group long term care insurance as defined in this section that
meets all of the following requirements of section 7702B(b) of the Internal
Revenue Code:
(A)
The only insurance protection provided under the contract is coverage of
qualified long term care services. A contract shall not fail to satisfy the
requirements of this subparagraph by reason of payments being made on a per
diem or other periodic basis without regard to the expenses incurred during the
period to which the payments relate.
(B)
The contract does not pay or reimburse expenses incurred for services or items
to the extent that the expenses are reimbursable under Title XVIII of the
Social Security Act, or would be reimbursable but for the application of a
deductible or coinsurance amount. The requirements of this subparagraph do not
apply to expenses that are reimbursable under Title XVIII of the Social
Security Act only as a secondary payer. A contract does not fail to satisfy the
requirements of this subparagraph by reason of payments being made on a per
diem or other periodic basis without regard to the expenses incurred during the
period to which the payments relate.
(C)
The contract is guaranteed renewable within the meaning of section
7702B(b)(1)(C) of the Internal Revenue Code.
(D)
The contract does not provide for a cash surrender value or other money that
can be paid, assigned, pledged as collateral for a loan, or borrowed except as
provided in subparagraph (E) of this paragraph.
(E)
All refunds of premiums, and all policyholder dividends or similar amounts,
under the contract are to be applied as a reduction in future premiums or to
increase future benefits, except that a refund on the event of death of the
insured or a complete surrender or cancellation of the contract cannot exceed
the aggregate premiums paid under the contract.
(F)
The contract meets the consumer protection provisions set forth in section
7702B(g) of the Internal Revenue Code.
743.653 Prohibition on certain policies.
Group long term care insurance coverage may not be offered to a resident of
this state under a group policy issued in another state to a group described in
ORS 743.652 (4)(d), unless this state or another state having statutory and
regulatory long term care insurance requirements substantially similar to those
adopted in this state has made a determination that such requirements have been
met. [1989 c.1022 §5; 1991 c.67 §199; 2007 c.486 §3; 2011 c.69 §4]
Note: The
amendments to 743.653 by section 4, chapter 69, Oregon Laws 2011, apply to long
term care insurance policies issued or renewed on or after July 1, 2012. See
section 8, chapter 69, Oregon Laws 2011. The text that applies to policies
issued or renewed before July 1, 2012, is set forth for the user’s convenience.
743.653. Group
long term care insurance coverage may not be offered to a resident of this
state under a group policy issued in another state to a group described in ORS
743.652 (3)(d), unless this state or another state having statutory and regulatory
long term care insurance requirements substantially similar to those adopted in
this state has made a determination that such requirements have been met.
743.654 [1967
c.359 §497; renumbered 742.236 in 1989]
743.655 Rules; disclosure; contents of
policy. (1)(a) The Director of the Department
of Consumer and Business Services shall adopt rules that include standards for
full and fair disclosure setting forth the manner, content and required
disclosures for the sale of long term care insurance policies, terms of
renewability, initial and subsequent conditions of eligibility, nonduplication
of coverage provisions, coverage of dependents, preexisting conditions,
termination of insurance, program for public understanding, continuation or
conversion, probationary periods, limitations, exceptions, reductions,
elimination periods, underwriting at time of application, requirements for
replacement, recurrent conditions and definitions of terms and that include
required procedures for internal and external review of whether the conditions
of a benefit trigger have been met.
(b)
In adopting rules under this section, the Director of the Department of
Consumer and Business Services must give timely notice to, and shall consider
recommendations from the Director of Human Services.
(2)
A long term care insurance policy may not:
(a)
Be canceled, nonrenewed or otherwise terminated on the grounds of the age or
the deterioration of the mental or physical health of the insured individual or
certificate holder;
(b)
Contain a provision establishing a new waiting period in the event existing
coverage is converted to or replaced by a new or other form within the same
company, except with respect to an increase in benefits voluntarily selected by
the insured individual or group policyholder;
(c)
Provide coverage for skilled nursing care only or provide significantly more
coverage for skilled care in a facility than coverage for lower levels of care;
(d)
Exclude coverage for Alzheimer’s disease and related dementias;
(e)
Be nonrenewed or otherwise terminated for nonpayment of premiums until 31 days
overdue and then only after notice of nonpayment is given the policyholder
prior to expiration of the 31 days, except as otherwise provided by rule; or
(f)
Be sold to provide less than 24 months’ coverage.
(3)(a)
A long term care insurance policy or certificate other than a policy or
certificate issued to a group described in ORS 743.652 (4)(a), (b) or (c) may
not use a definition of “preexisting condition” that is more restrictive than
the following: “Preexisting condition” means a condition for which medical
advice or treatment was recommended by, or received from a provider of health
care services, within six months preceding the effective date of coverage of an
insured person.
(b)
A long term care insurance policy or certificate other than a policy or
certificate thereunder issued to a group described in ORS 743.652 (4)(a), (b)
or (c) may not exclude coverage for a loss or confinement that is the result of
a preexisting condition unless the loss or confinement begins within six months
following the effective date of coverage of an insured person.
(c)
The Director of the Department of Consumer and Business Services may extend the
limitation periods set forth in paragraphs (a) and (b) of this subsection as to
specific age group categories or specific policy forms upon findings that the
extension is in the best interest of the public.
(d)
The definition of preexisting condition does not prohibit an insurer from using
an application form designed to elicit the complete health history of an
applicant, over the 10 years immediately prior to the date of application, and,
on the basis of the answers on the application, from underwriting in accordance
with that insurer’s established underwriting standards. Unless otherwise
provided in the policy or certificate, a preexisting condition, regardless of
whether it is disclosed on the application, need not be covered until the
waiting period described in paragraph (b) of this subsection expires. A long
term care insurance policy or certificate may not exclude or use waivers or
riders of any kind to exclude, limit or reduce coverage or benefits for
specifically named or described preexisting diseases or physical conditions
beyond the waiting period described in paragraph (b) of this subsection.
(4)
A long term care insurance policy may not be delivered or issued for delivery
in this state if the policy:
(a)
Conditions eligibility for any benefits on a prior hospitalization requirement;
(b)
Conditions eligibility for benefits provided in an institutional care setting
on the receipt of a higher level of institutional care; or
(c)
Conditions eligibility for any benefits other than waiver of premium or
post-confinement, post-acute care or recuperative benefits on a prior
institutionalization requirement.
(5)(a)
A long term care insurance policy containing post-confinement, post-acute care
or recuperative benefits must clearly label in a separate paragraph of the
policy or certificate titled “Limitations or Conditions of Eligibility for
Benefits” all such limitations or conditions, including any required number of
days of confinement.
(b)
A long term care insurance policy or rider that conditions eligibility of
noninstitutional benefits on the prior receipt of institutional care may not
require a prior institutional stay of more than 30 days.
(6)
Individual long term care insurance applicants shall have the right to return
the policy or certificate within 30 days of its delivery and to have the premium
refunded if, after examination of the policy or certificate, the applicant is
not satisfied for any reason. Long term care insurance policies and
certificates must have a notice prominently printed on the first page or
attached thereto stating in substance that the applicant has the right to
return the policy or certificate within 30 days of its delivery and to have the
premium refunded if, after examination of the policy or certificate, other than
a certificate issued pursuant to a policy issued to a group described in ORS
743.652 (4)(a), the applicant is not satisfied for any reason. This subsection
also applies to denials of applications. Any refund must be made within 30 days
of the return or denial.
(7)(a)(A)
An outline of coverage shall be delivered to a prospective applicant for long
term care insurance at the time of initial solicitation through means that
prominently direct the attention of the recipient to the document and its
purpose.
(B)
The Director of the Department of Consumer and Business Services by rule must
prescribe a standard format, including style, arrangement and overall
appearance, and the content of an outline of coverage.
(C)
In the case of solicitations by an insurance producer, the insurance producer
must deliver the outline of coverage prior to the presentation of an
application or enrollment form.
(D)
In the case of direct response solicitations, the outline of coverage must be
presented in conjunction with any application or enrollment form.
(E)
In the case of a policy issued to a group described in ORS 743.652 (4)(a), an
outline of coverage is not required to be delivered as long as the information
described in paragraph (b) of this subsection is contained in other materials
related to the enrollment. Upon request, these other materials must be made
available to the Director of the Department of Consumer and Business Services.
(b)
The outline of coverage must include:
(A)
A description of the principal benefits and coverage provided in the policy;
(B)
A statement of the principal exclusions, reductions and limitations contained
in the policy;
(C)
A statement of the terms under which the policy or certificate, or both, may be
continued in force or discontinued, including any reservation in the policy of
a right to change premium. Continuation or conversion provisions of group
coverage shall be specifically described;
(D)
A statement that the outline of coverage is a summary only, not a contract of
insurance, and that the policy or group master policy contains governing
contractual provisions;
(E)
A description of the terms under which the policy or certificate may be
returned and premium refunded;
(F)
A brief description of the relationship of cost of care and benefits; and
(G)
A statement that discloses to the policyholder or certificate holder whether
the policy is intended to be qualified long term care insurance as defined in
ORS 743.652.
(8)
A certificate issued pursuant to a group long term care insurance policy if the
policy is delivered or issued for delivery in this state shall include:
(a)
A description of the principal benefits and coverage provided in the policy;
(b)
A statement of the principal exclusions, reductions and limitations contained
in the policy; and
(c)
A statement that the group master policy determines governing contractual
provisions.
(9)
If an application for a long term care insurance policy or certificate is
approved, the insurer must deliver the policy or certificate to the applicant
no later than 30 days after the date of approval.
(10)
At the time of policy delivery, a policy summary must be delivered for an
individual life insurance policy that provides long term care benefits within
the policy or by rider. In the case of direct response solicitations, the
insurer must deliver the policy summary upon the applicant’s request, but
regardless of request must make delivery not later than at the time of policy
delivery. In addition to complying with all applicable requirements, the
summary must also include the provisions required in this subsection. The
required provision may be incorporated into a basic illustration or into the
life insurance policy summary if required by rule. The following provisions
must be included in the summary:
(a)
An explanation of how the long term care benefit interacts with other
components of the policy, including deductions from death benefits;
(b)
An illustration of the amount of benefits, the length of benefits and the
guaranteed lifetime benefits, if any, for each covered person;
(c)
Any exclusions, reductions and limitations on benefits of long term care;
(d)
A statement that any long term care inflation protection option required by
rule is not available under the policy; and
(e)
If applicable to the policy type, the following:
(A)
A disclosure of the effects of exercising other rights under the policy;
(B)
A disclosure of guarantees related to long term care costs of insurance
charges; and
(C)
Current and projected maximum lifetime benefits.
(11)
When a long term care benefit that is funded through a life insurance policy by
an acceleration of the death benefit is in benefit payment status, the insurer
must provide a monthly report to the policyholder. The report must include:
(a)
Any long term care benefits paid out during the month;
(b)
An explanation of any changes in the policy, such as death benefits or cash
values, owing to payment of long term care benefits; and
(c)
The amount of long term care benefits existing or remaining.
(12)
If a claim under a long term care insurance policy is denied, then not later
than the 60th day after the date of a written request by the policyholder or
certificate holder, or a personal or authorized representative of either, the
insurer must:
(a)
Provide a written explanation of the reasons for the denial; and
(b)
Make available all information directly related to the denial.
(13)
Long term care insurance policies shall include a clear description of the
process for appealing and resolving disputes regarding whether the conditions
of a benefit trigger have been met.
(14)
A policy may not be advertised, marketed or offered as long term care or
nursing home insurance unless it complies with the provisions of ORS 743.650 to
743.665.
(15)
Rules adopted pursuant to ORS 743.650 to 743.665 shall be in accordance with
the provisions of ORS chapter 183.
(16)
This section is exempt from ORS 743A.001. [1989 c.1022 §§6,7; 1991 c.67 §200;
2003 c.364 §110; 2007 c.486 §4; 2011 c.69 §5]
Note: The
amendments to 743.655 by section 5, chapter 69, Oregon Laws 2011, apply to long
term care insurance policies issued or renewed on or after July 1, 2012. See
section 8, chapter 69, Oregon Laws 2011. The text that applies to policies
issued or renewed before July 1, 2012, is set forth for the user’s convenience.
743.655. (1)(a)
The Director of the Department of Consumer and Business Services shall adopt
rules that include standards for full and fair disclosure setting forth the
manner, content and required disclosures for the sale of long term care
insurance policies, terms of renewability, initial and subsequent conditions of
eligibility, nonduplication of coverage provisions, coverage of dependents,
preexisting conditions, termination of insurance, program for public
understanding, continuation or conversion, probationary periods, limitations,
exceptions, reductions, elimination periods, underwriting at time of
application, requirements for replacement, recurrent conditions and definitions
of terms.
(b)
In adopting rules setting standards under this section, the director must give
timely notice to, and shall consider recommendations from the Director of Human
Services.
(2)
A long term care insurance policy may not:
(a)
Be canceled, nonrenewed or otherwise terminated on the grounds of the age or
the deterioration of the mental or physical health of the insured individual or
certificate holder;
(b)
Contain a provision establishing a new waiting period in the event existing
coverage is converted to or replaced by a new or other form within the same
company, except with respect to an increase in benefits voluntarily selected by
the insured individual or group policyholder;
(c)
Provide coverage for skilled nursing care only or provide significantly more
coverage for skilled care in a facility than coverage for lower levels of care;
(d)
Exclude coverage for Alzheimer’s disease and related dementias;
(e)
Be nonrenewed or otherwise terminated for nonpayment of premiums until 31 days
overdue and then only after notice of nonpayment is given the policyholder
prior to expiration of the 31 days, except as otherwise provided by rule; or
(f)
Be sold to provide less than 24 months’ coverage.
(3)(a)
A long term care insurance policy or certificate other than a policy or
certificate issued to a group described in ORS 743.652 (3)(a), (b) or (c) may
not use a definition of “preexisting condition” that is more restrictive than
the following: “Preexisting condition” means a condition for which medical
advice or treatment was recommended by, or received from a provider of health
care services, within six months preceding the effective date of coverage of an
insured person.
(b)
A long term care insurance policy or certificate other than a policy or
certificate thereunder issued to a group described in ORS 743.652 (3)(a), (b)
or (c) may not exclude coverage for a loss or confinement that is the result of
a preexisting condition unless the loss or confinement begins within six months
following the effective date of coverage of an insured person.
(c)
The Director of the Department of Consumer and Business Services may extend the
limitation periods set forth in paragraphs (a) and (b) of this subsection as to
specific age group categories or specific policy forms upon findings that the
extension is in the best interest of the public.
(d)
The definition of preexisting condition does not prohibit an insurer from using
an application form designed to elicit the complete health history of an
applicant, over the 10 years immediately prior to the date of application, and,
on the basis of the answers on the application, from underwriting in accordance
with that insurer’s established underwriting standards. Unless otherwise
provided in the policy or certificate, a preexisting condition, regardless of
whether it is disclosed on the application, need not be covered until the
waiting period described in paragraph (b) of this subsection expires. A long
term care insurance policy or certificate may not exclude or use waivers or
riders of any kind to exclude, limit or reduce coverage or benefits for
specifically named or described preexisting diseases or physical conditions
beyond the waiting period described in paragraph (b) of this subsection.
(4)
A long term care insurance policy may not be delivered or issued for delivery
in this state if the policy:
(a)
Conditions eligibility for any benefits on a prior hospitalization requirement;
(b)
Conditions eligibility for benefits provided in an institutional care setting
on the receipt of a higher level of institutional care; or
(c)
Conditions eligibility for any benefits other than waiver of premium or
post-confinement, post-acute care or recuperative benefits on a prior
institutionalization requirement.
(5)(a)
A long term care insurance policy containing post-confinement, post-acute care
or recuperative benefits must clearly label in a separate paragraph of the
policy or certificate titled “Limitations or Conditions of Eligibility for
Benefits” all such limitations or conditions, including any required number of
days of confinement.
(b)
A long term care insurance policy or rider that conditions eligibility of
noninstitutional benefits on the prior receipt of institutional care may not
require a prior institutional stay of more than 30 days.
(6)
Individual long term care insurance applicants shall have the right to return
the policy or certificate within 30 days of its delivery and to have the
premium refunded if, after examination of the policy or certificate, the
applicant is not satisfied for any reason. Long term care insurance policies
and certificates must have a notice prominently printed on the first page or
attached thereto stating in substance that the applicant has the right to
return the policy or certificate within 30 days of its delivery and to have the
premium refunded if, after examination of the policy or certificate, other than
a certificate issued pursuant to a policy issued to a group described in ORS
743.652 (3)(a), the applicant is not satisfied for any reason. This subsection
also applies to denials of applications. Any refund must be made within 30 days
of the return or denial.
(7)(a)(A)
An outline of coverage shall be delivered to a prospective applicant for long
term care insurance at the time of initial solicitation through means that
prominently direct the attention of the recipient to the document and its
purpose.
(B)
The director by rule must prescribe a standard format, including style,
arrangement and overall appearance, and the content of an outline of coverage.
(C)
In the case of solicitations by an insurance producer, the insurance producer
must deliver the outline of coverage prior to the presentation of an
application or enrollment form.
(D)
In the case of direct response solicitations, the outline of coverage must be
presented in conjunction with any application or enrollment form.
(E)
In the case of a policy issued to a group described in ORS 743.652 (3)(a), an
outline of coverage is not required to be delivered as long as the information
described in paragraph (b) of this subsection is contained in other materials
related to the enrollment. Upon request, these other materials must be made
available to the director.
(b)
The outline of coverage must include:
(A)
A description of the principal benefits and coverage provided in the policy;
(B)
A statement of the principal exclusions, reductions and limitations contained
in the policy;
(C)
A statement of the terms under which the policy or certificate, or both, may be
continued in force or discontinued, including any reservation in the policy of
a right to change premium. Continuation or conversion provisions of group
coverage shall be specifically described;
(D)
A statement that the outline of coverage is a summary only, not a contract of
insurance, and that the policy or group master policy contains governing
contractual provisions;
(E)
A description of the terms under which the policy or certificate may be
returned and premium refunded;
(F)
A brief description of the relationship of cost of care and benefits; and
(G)
A statement that discloses to the policyholder or certificate holder whether
the policy is intended to be qualified long term care insurance as defined in
ORS 743.652.
(8)
A certificate issued pursuant to a group long term care insurance policy if the
policy is delivered or issued for delivery in this state shall include:
(a)
A description of the principal benefits and coverage provided in the policy;
(b)
A statement of the principal exclusions, reductions and limitations contained
in the policy; and
(c)
A statement that the group master policy determines governing contractual
provisions.
(9)
If an application for a long term care insurance policy or certificate is
approved, the insurer must deliver the policy or certificate to the applicant
no later than 30 days after the date of approval.
(10)
At the time of policy delivery, a policy summary must be delivered for an
individual life insurance policy that provides long term care benefits within
the policy or by rider. In the case of direct response solicitations, the
insurer must deliver the policy summary upon the applicant’s request, but
regardless of request must make delivery not later than at the time of policy
delivery. In addition to complying with all applicable requirements, the
summary must also include the provisions required in this subsection. The required
provision may be incorporated into a basic illustration or into the life
insurance policy summary if required by rule. The following provisions must be
included in the summary:
(a)
An explanation of how the long term care benefit interacts with other components
of the policy, including deductions from death benefits;
(b)
An illustration of the amount of benefits, the length of benefits and the
guaranteed lifetime benefits, if any, for each covered person;
(c)
Any exclusions, reductions and limitations on benefits of long term care;
(d)
A statement that any long term care inflation protection option required by
rule is not available under the policy; and
(e)
If applicable to the policy type, the following:
(A)
A disclosure of the effects of exercising other rights under the policy;
(B)
A disclosure of guarantees related to long term care costs of insurance
charges; and
(C)
Current and projected maximum lifetime benefits.
(11)
When a long term care benefit that is funded through a life insurance policy by
an acceleration of the death benefit is in benefit payment status, the insurer
must provide a monthly report to the policyholder. The report must include:
(a)
Any long term care benefits paid out during the month;
(b)
An explanation of any changes in the policy, such as death benefits or cash
values, owing to payment of long term care benefits; and
(c)
The amount of long term care benefits existing or remaining.
(12)
If a claim under a long term care insurance policy is denied, then not later than
the 60th day after the date of a written request by the policyholder or
certificate holder, or a representative of either, the insurer must:
(a)
Provide a written explanation of the reasons for the denial; and
(b)
Make available all information directly related to the denial.
(13)
A policy may not be advertised, marketed or offered as long term care or
nursing home insurance unless it complies with the provisions of ORS 743.650 to
743.665.
(14)
Rules adopted pursuant to ORS 743.650 to 743.665 shall be in accordance with
the provisions of ORS chapter 183.
(15)
This section is exempt from ORS 743A.001.
743.656 Eligibility for benefits; providers
required to be covered. (1) No long term care insurance
policy shall be delivered or issued for delivery in this state unless the
policy determines eligibility for benefits through a determination that is not
more restrictive than requiring that:
(a)
The policyholder be functionally impaired and needing assistance in any three
or more activities of daily living as defined by the Director of the Department
of Consumer and Business Services, by rule, after consultation with the
Director of Human Services.
(b)
Benefits must be payable when the beneficiary is receiving covered services
from any of the following providers approved by the insurer:
(A)
Nursing home;
(B)
Assisted living;
(C)
Home care; and
(D)
Adult foster care.
(c)
The insurer shall approve nursing home, assisted living, home care, adult
foster home and any other providers of covered services by using standards that
have been submitted to and approved by the director in consultation with the
Director of Human Services.
(2)
No long term care policy that offers only nursing home benefits shall be sold
in this state. [1989 c.1022 §§13,14; 2003 c.14 §449]
743.657 [1967
c.359 §498; renumbered 742.238 in 1989]
743.660 [1967
c.359 §499; renumbered 742.240 in 1989]
743.662 Rescission of policy and denial of
claims. (1) For a policy or certificate that
has been in force for less than six months, an insurer may rescind a long term
care insurance policy or certificate or deny an otherwise valid long term care
insurance claim upon a showing of a misrepresentation that is material to the
acceptance for coverage.
(2)
For a policy or certificate that has been in force for at least six months but
less than two years, an insurer may rescind a long term care insurance policy
or certificate or deny an otherwise valid long term care insurance claim upon a
showing of a misrepresentation that is material to the acceptance for coverage
and also pertains to the condition for which benefits are sought.
(3)
After a policy or certificate has been in force for two years, the policy or
certificate is not contestable upon the ground of misrepresentation alone. The
policy or certificate may be contested only upon a showing that the insured
knowingly and intentionally misrepresented relevant facts relating to the
insured’s health.
(4)
A long term care insurance policy or certificate may not be field issued based
on medical or health status. A policy or certificate is field issued for the
purposes of this subsection if the policy or certificate is issued by an
insurance producer or a third party administrator pursuant to underwriting
authority granted to the insurance producer or third party administrator by an
insurer.
(5)
If an insurer has paid benefits under the long term care insurance policy or
certificate, the insurer may not recover the benefit payments in the event that
the policy or certificate is rescinded.
(6)
This section does not apply to the remaining death benefit of a life insurance
policy in the event of the death of the insured if the policy accelerates
benefits for long term care, but this section otherwise applies to a life
insurance policy that accelerates benefits for long term care. In the event of
the death of an insured, the remaining death benefits under the life insurance
policy are governed by ORS 743.168.
(7)
This section is exempt from ORS 743A.001. [2007 c.486 §6]
743.663 [1967
c.359 §500; renumbered 742.242 in 1989]
743.664 Offer of nonforfeiture benefit;
rules. (1) Except as provided in subsection
(2) of this section, a long term care insurance policy may not be delivered or
issued for delivery in this state unless the policyholder or certificate holder
has been offered the option of purchasing a policy or certificate including a
nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form
of a rider that is attached to the policy. If the policyholder or certificate
holder declines the nonforfeiture benefit, the insurer must provide a
contingent benefit upon lapse that is available for a specified period of time
following a substantial increase in premium rates.
(2)
When a group long term care insurance policy is issued, the offer required in
subsection (1) of this section must be made to the group policyholder. However,
if the policy is issued as group long term care insurance as described in ORS
743.652 (4)(d), other than to a continuing care retirement community or similar
entity, the offering shall be made to each proposed certificate holder.
(3)
The Director of the Department of Consumer and Business Services by rule shall
specify:
(a)
The type or types of nonforfeiture benefits to be offered as part of long term
care insurance policies and certificates;
(b)
The standards for nonforfeiture benefits; and
(c)
The standards governing contingent benefits upon lapse, including a
determination of the specified period of time during which a contingent benefit
upon lapse will be available and the substantial premium increase that triggers
a contingent benefit upon lapse as described in subsection (1) of this section.
(4)
This section is exempt from ORS 743A.001. [2007 c.486 §7; 2011 c.69 §6]
Note: The
amendments to 743.664 by section 6, chapter 69, Oregon Laws 2011, apply to long
term care insurance policies issued or renewed on or after July 1, 2012. See
section 8, chapter 69, Oregon Laws 2011. The text that applies to policies
issued or renewed before July 1, 2012, is set forth for the user’s convenience.
743.664. (1)
Except as provided in subsection (2) of this section, a long term care
insurance policy may not be delivered or issued for delivery in this state
unless the policyholder or certificate holder has been offered the option of
purchasing a policy or certificate including a nonforfeiture benefit. The offer
of a nonforfeiture benefit may be in the form of a rider that is attached to
the policy. If the policyholder or certificate holder declines the
nonforfeiture benefit, the insurer must provide a contingent benefit upon lapse
that is available for a specified period of time following a substantial
increase in premium rates.
(2)
When a group long term care insurance policy is issued, the offer required in
subsection (1) of this section must be made to the group policyholder. However,
if the policy is issued as group long term care insurance as described in ORS
743.652 (3)(d), other than to a continuing care retirement community or similar
entity, the offering shall be made to each proposed certificate holder.
(3)
The Director of the Department of Consumer and Business Services by rule shall
specify:
(a)
The type or types of nonforfeiture benefits to be offered as part of long term
care insurance policies and certificates;
(b)
The standards for nonforfeiture benefits; and
(c)
The standards governing contingent benefits upon lapse, including a
determination of the specified period of time during which a contingent benefit
upon lapse will be available and the substantial premium increase that triggers
a contingent benefit upon lapse as described in subsection (1) of this section.
(4)
This section is exempt from ORS 743A.001.
743.665 Prompt pay requirements; rules.
The Director of the Department of Consumer and Business Services shall adopt by
rule prompt payment requirements for long term care insurance. The rules shall
include a definition of “claim” and a definition of “clean claim.” In adopting
the rules, the director shall consider the prompt payment requirements in long
term care insurance model acts developed by the National Association of
Insurance Commissioners. [2011 c.69 §2]
Note:
Section 8, chapter 69, Oregon Laws 2011, provides:
Sec. 8. (1)
Section 2 of this 2011 Act [743.665] and the amendments to ORS 743.652,
743.653, 743.655 and 743.664 by sections 3 to 6 of this 2011 Act apply to long
term care insurance policies issued or renewed on or after July 1, 2012.
(2)
The Director of the Department of Consumer and Business Services may take any
action necessary after the effective date of this 2011 Act [May 19, 2011] to
fully implement section 2 of this 2011 Act and the amendments to ORS 743.652,
743.653, 743.655 and 743.664 by sections 3 to 6 of this 2011 Act on July 1,
2012. [2011 c.69 §8]
743.666 [Formerly
744.125; renumbered 742.244 in 1989]
743.669
[Formerly 744.130; renumbered 742.246 in 1989]
743.672
[Formerly 744.430; renumbered 742.248 in 1989]
743.675
[Formerly 744.440; renumbered 742.250 in 1989]
743.678
[Formerly 744.450; renumbered 742.252 in 1989]
(Medicare Supplement)
743.680 Definitions for ORS 743.680 to
743.689. As used in ORS 743.680 to 743.689,
unless the context requires otherwise:
(1)
“Applicant” means:
(a)
In the case of an individual Medicare supplement policy or subscriber contract,
the person who seeks to contract for insurance benefits.
(b)
In the case of a group Medicare supplement policy or subscriber contract, the
proposed certificate holder.
(2)
“Certificate” means any certificate issued under a group Medicare supplement
policy, which certificate has been delivered or issued for delivery in this
state.
(3)
“Medicare” means the “Health Insurance for the Aged Act,” Title XVIII of the
Social Security Amendments of 1965.
(4)
“Medicare supplement policy” means a group or individual policy of insurance or
a subscriber contract which is advertised, marketed or designed primarily as a
supplement to reimbursements under Medicare for the hospital, medical or
surgical expenses of persons eligible for Medicare. [1989 c.255 §1; 1993 c.113 §1]
743.681
[Formerly 744.460; renumbered 742.254 in 1989]
743.682 Application of ORS 743.680 to
743.689. (1) Except as otherwise specifically
provided, ORS 743.680 to 743.689 apply to:
(a)
All Medicare supplement policies and subscriber contracts delivered or issued
for delivery in this state on or after May 31, 1989; and
(b)
All certificates issued under group Medicare supplement policies or subscriber
contracts, which certificates have been delivered or issued for delivery in
this state on or after May 31, 1989.
(2)
ORS 743.680 to 743.689 do not apply to a policy or contract of one or more
employers or labor organizations, or of the trustees of a fund established by
one or more employers or labor organizations, or combination thereof, for
employees or former employees or a combination thereof, or for members or
former members, or a combination thereof, of the labor organizations. [1989
c.255 §2]
743.683 Policy contents; standards for
benefit and claims payments; rules. (1) No
Medicare supplement insurance policy, contract or certificate in force in the
state shall contain benefits which duplicate benefits provided by Medicare.
(2)
The Director of the Department of Consumer and Business Services shall adopt by
rule specific standards for policy provisions of Medicare supplement policies
and certificates. The standards shall be in addition to and in accordance with
applicable laws of this state. No requirement of the Insurance Code relating to
minimum required policy benefits, other than the minimum standards contained in
ORS 743.680 to 743.689, shall apply to Medicare supplement policies. The
standards may cover, but not be limited to:
(a)
Terms of renewability;
(b)
Initial and subsequent conditions of eligibility;
(c)
Nonduplication of coverage;
(d)
Probationary periods;
(e)
Benefit limitations, exceptions and reductions;
(f)
Elimination periods;
(g)
Requirements for replacement;
(h)
Recurrent conditions; and
(i)
Definitions of terms.
(3)
Provisions established by the director governing eligibility for Medicare
supplement insurance shall not be limited to persons qualifying for Medicare by
reason of age.
(4)
The director may adopt by rule standards that specify prohibited policy
provisions not otherwise specifically authorized by statute which, in the
opinion of the director, are unjust, unfair or unfairly discriminatory to any
person insured or proposed for coverage under a Medicare supplement policy.
(5)
Notwithstanding any other provision of law of this state, a Medicare supplement
policy may not deny a claim for losses incurred more than six months from the
effective date of coverage for a preexisting condition. The policy may not
define a preexisting condition more restrictively than a condition for which
medical advice was given or treatment was recommended by or received from a
physician within six months before the effective date of coverage.
(6)
The director shall adopt by rule standards for benefits and claims payment
under Medicare supplement policies. [1989 c.255 §§3,4; 1993 c.113 §3]
743.684 Filing of policy; loss ratio
standards; insurance producer compensation. (1)
Every insurer providing group Medicare supplement insurance benefits to a
resident of this state pursuant to ORS 743.682 shall file a copy of the master
policy and any certificate used in this state in accordance with the filing
requirements and procedures applicable to group Medicare supplement policies
issued in this state. However, no insurer shall be required to make a filing
earlier than 30 days after insurance was provided to a resident of this state
under a master policy issued for delivery outside this state.
(2)
Medicare supplement policies shall return benefits which are reasonable in
relation to the premium charged. The Director of the Department of Consumer and
Business Services shall adopt by rule minimum standards for loss ratios of
Medicare supplement policies on the basis of incurred claims experience, or
incurred health care expenses where coverage is provided by a health
maintenance organization on a service rather than reimbursement basis, and
earned premiums in accordance with accepted actuarial principles and practices.
Every entity providing Medicare supplement policies or certificates in this
state shall file annually its rates, rating schedule and supporting
documentation demonstrating that it is in compliance with the applicable loss
ratio standards of this state. All filings of rates and rating schedules shall
demonstrate that the actual and expected losses in relation to premiums comply
with the requirements of ORS 743.680 to 743.689.
(3)
No entity shall provide compensation to insurance producers which is greater
than the renewal compensation which would have been paid on an existing policy
if the existing policy is replaced by another policy with the same company
where the new policy benefits are substantially similar to the benefits under
the old policy and the old policy was issued by the same insurer or insurer
group. [1989 c.255 §5; 2003 c.364 §111]
743.685 Outline of coverage; information
brochure; rules. (1) In order to provide for full
and fair disclosure in the sale of Medicare supplement policies, no Medicare
supplement policy or certificate shall be delivered in this state unless an
outline of coverage is delivered to the applicant at the time application is
made.
(2)
The Director of the Department of Consumer and Business Services shall
prescribe the format and content of the outline of coverage required by
subsection (1) of this section. The director shall consult with the Governor’s
Commission on Senior Services concerning the content and format of the outline
of coverage, especially in reference to the ease with which senior citizens may
understand the form and compare the coverage provided under the policy to which
the outline of coverage refers. For purposes of this section, “format” means
style, arrangements and overall appearance, including such items as the size,
color and prominence of type and arrangement of text and captions. The outline
of coverage required by subsection (1) of this section shall include at least
the following:
(a)
A description of the principal benefits and coverage provided in the policy;
(b)
A statement of the renewal provisions, including any reservation by the insurer
of a right to change premiums and disclosure of the existence of any automatic
renewal premium increases based on the policyholder’s age; and
(c)
A statement that the outline of coverage is a summary of the policy issued or
applied for and that the policy should be consulted to determine governing
contractual provisions.
(3)
Insurers shall fill out the standardized form and have the completed
information included on the form approved by the director before selling
supplemental Medicare coverage in this state.
(4)
In the purchase or renewal of a Medicare supplement policy, a copy of the
outline of coverage must be used in explaining policy coverage to a purchaser
and shall be provided to the applicant at the time the sales presentation is
made. The completed outline of coverage shall be considered part of the sales
presentation materials for the purposes of ORS 742.009.
(5)
The insurer shall obtain acknowledgment of receipt or certify delivery of the
outline of coverage at the time of sale.
(6)
The director may adopt by rule a standard form and the contents of an
informational brochure for persons eligible for Medicare, which is intended to
improve the buyer’s ability to select the most appropriate coverage and improve
the buyer’s understanding of Medicare. Except in the case of direct response
insurance policies, the director may require by rule that the information
brochure be provided to any prospective insureds eligible for Medicare
concurrently with delivery of the outline of coverage. With respect to direct
response insurance policies, the director may require by rule that the
prescribed brochure be provided upon request to any prospective insureds
eligible for Medicare, but in no event later than the time of policy delivery.
(7)
The director may adopt by rule captions or notice requirements, determined to
be in the public interest and designed to inform prospective insureds that
particular insurance coverages are not Medicare supplement coverages, for all
health insurance policies sold to persons eligible for Medicare, other than:
(a)
Medicare supplement policies; or
(b)
Disability income policies.
(8)
The director may adopt rules governing the full and fair disclosure of the
information in connection with the replacement of health insurance policies,
subscriber contracts or certificates by persons eligible for Medicare. [1989
c.255 §6; 1993 c.113 §2; 1997 c.96 §2]
743.686 Right to return of policy; premium
refund. Medicare supplement policies or
certificates shall have a notice prominently printed on the first page of the
policy or certificate or attached thereto stating in substance that the
applicant shall have the right to return the policy or certificate within 30
days of its delivery and to have the premium refunded if, after examination of
the policy or certificate, the applicant is not satisfied for any reason. Any
refund made pursuant to this section shall be paid directly to the applicant by
the insurer in a timely manner. [1989 c.255 §7]
743.687 Advertising.
Every insurer, health care service plan or other entity providing Medicare
supplement insurance or benefits in this state shall provide a copy of any
Medicare supplement advertisement intended for use in this state whether
through written, radio or television medium to the Director of the Department
of Consumer and Business Services of this state for review or approval by the
director to the extent it may be required under state law. [1989 c.255 §8]
743.688 Rules.
Rules adopted pursuant to ORS 743.680 to 743.689 shall be subject to the
provisions of ORS chapter 183. [1989 c.255 §9]
743.689 Director’s authority upon
violation of ORS 743.680 to 743.689. In addition
to any other applicable penalties for violations of the Insurance Code, the
Director of the Department of Consumer and Business Services may require
insurers violating any provision of ORS 743.680 to 743.689 or rules adopted
pursuant to ORS 743.680 to 743.689 to cease marketing any Medicare supplement
policy or certificate in this state which is related directly or indirectly to
a violation or may require such insurer to take such actions as are necessary
to comply with the provisions of ORS 743.680 to 743.689, or both. [1989 c.255 §10]
743.690 [1981
c.247 §17; renumbered 742.280 in 1989]
743.691 [2003
c.748 §2; renumbered 743A.110 in 2007]
743.693 [1999
c.428 §2; 2001 c.104 §289; renumbered 743A.080 in 2007]
743.694 [2001
c.742 §2; renumbered 743A.184 in 2007]
743.695 [1997
c.573 §2; renumbered 743A.060 in 2007]
743.697 [1997
c.573 §3; renumbered 743A.062 in 2007]
743.699 [1997
c.651 §2; 2003 c.137 §1; renumbered 743A.012 in 2007]
743.700
[Formerly 743.145; 2005 c.69 §1; 2005 c.482 §3; 2007 c.313 §4; renumbered
743A.001 in 2007]
743.701
[Formerly 743.116; renumbered 743A.010 in 2007]
743.702
[Formerly 746.010; repealed by 1969 c.692 §11]
743.703
[Formerly 743.117; 2005 c.442 §4; renumbered 743A.040 in 2007]
743.704
[Formerly 743.118; repealed by 2001 c.742 §3]
743.705
[Formerly 746.030; 1969 c.692 §9; 1973 c.179 §1; 1982 s.s.1 c.5 §1; 1987 c.846 §13;
renumbered 742.282 in 1989]
743.706
[Formerly 743.119; renumbered 743A.148 in 2007]
743.707
[Formerly 743.120; 1991 c.674 §2; 1995 c.506 §10; renumbered 743A.090 in 2007]
743.708
[Formerly 746.080; 1969 c.692 §10; 1973 c.823 §150; renumbered 742.284 in 1989]
743.709
[Formerly 743.123; renumbered 743A.048 in 2007]
743.710
[Formerly 743.125; renumbered 743A.088 in 2007]
743.711 [1987
c.846 §15; renumbered 742.286 in 1989]
743.712
[Formerly 743.128; renumbered 743A.036 in 2007]
743.713
[Formerly 743.132; 1993 c.142 §15; 2005 c.22 §496; renumbered 743A.028 in 2007]
743.714
[Formerly 743.135; renumbered 743A.024 in 2007]
743.715
[Formerly 743.138; repealed by 1991 c.182 §21]
743.716
[Formerly 743.140; repealed by 1995 c.506 §11]
743.717
[Formerly 743.143; renumbered 743A.180 in 2007]
743.718
[Formerly 743.147; renumbered 743A.014 in 2007]
743.719
[Formerly 743.052; renumbered 743A.032 in 2007]
743.720 [1979
c.866 §4; 1987 c.774 §56; renumbered 742.300 in 1989]
743.721
[Formerly 743.037; renumbered 743A.084 in 2007]
743.722 [1989
c.832 §2; 1991 c.314 §3; 1995 c.79 §365; repealed by 2007 c.313 §3]
743.723 [1979
c.866 §5; 1981 c.525 §1; 1987 c.774 §57; renumbered 742.302 in 1989]
743.724
[Formerly 746.307; repealed by 1997 c.695 §2 (743.725 enacted in lieu of
743.724)]
743.725 [1997
c.695 §3 (enacted in lieu of 743.724); 2003 c.446 §1; 2007 c.346 §1; renumbered
743A.044 in 2007]
743.726 [1997
c.496 §2; 2003 c.263 §1; renumbered 743A.188 in 2007]
743.727 [1993
c.575 §2; 1999 c.429 §1; renumbered 743A.100 in 2007]
743.728 [1993
c.576 §2; 1999 c.429 §2; renumbered 743A.104 in 2007]
743.729 [1993
c.407 §2; renumbered 743A.070 in 2007]
(Small Employer, Group, Individual and
Portability Health Insurance, Generally)
743.730 Definitions for ORS 743.730 to
743.773. For purposes of ORS 743.730 to 743.773:
(1)
“Actuarial certification” means a written statement by a member of the American
Academy of Actuaries or other individual acceptable to the Director of the
Department of Consumer and Business Services that a carrier is in compliance
with the provisions of ORS 743.736, 743.760 or 743.761, based upon the person’s
examination, including a review of the appropriate records and of the actuarial
assumptions and methods used by the carrier in establishing premium rates for
small employer and portability health benefit plans.
(2)
“Affiliate” of, or person “affiliated” with, a specified person means any
carrier who, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a specified
person. For purposes of this definition, “control” has the meaning given that
term in ORS 732.548.
(3)
“Affiliation period” means, under the terms of a group health benefit plan
issued by a health care service contractor, a period:
(a)
That is applied uniformly and without regard to any health status related
factors to an enrollee or late enrollee in lieu of a preexisting condition
exclusion;
(b)
That must expire before any coverage becomes effective under the plan for the
enrollee or late enrollee;
(c)
During which no premium shall be charged to the enrollee or late enrollee; and
(d)
That begins on the enrollee’s or late enrollee’s first date of eligibility for
coverage and runs concurrently with any eligibility waiting period under the
plan.
(4)
“Basic health benefit plan” means a health benefit plan approved by the
Department of Consumer and Business Services under ORS 743.736.
(5)
“Bona fide association” means an association that meets the requirements of 42
U.S.C. 300gg-91 as amended and in effect on March 23, 2010.
(6)
“Carrier,” except as provided in ORS 743.760, means any person who provides
health benefit plans in this state, including:
(a)
A licensed insurance company;
(b)
A health care service contractor;
(c)
A health maintenance organization;
(d)
An association or group of employers that provides benefits by means of a
multiple employer welfare arrangement and that:
(A)
Is subject to ORS 750.301 to 750.341; or
(B)
Is fully insured and otherwise exempt under ORS 750.303 (4) but elects to be
governed by ORS 743.733 to 743.737; or
(e)
Any other person or corporation responsible for the payment of benefits or
provision of services.
(7)
“Creditable coverage” means prior health care coverage as defined in 42 U.S.C.
300gg as amended and in effect on February 17, 2009, and includes coverage
remaining in force at the time the enrollee obtains new coverage.
(8)
“Dependent” means the spouse or child of an eligible employee, subject to
applicable terms of the health benefit plan covering the employee.
(9)
“Eligible employee” means an employee who works on a regularly scheduled basis,
with a normal work week of 17.5 or more hours. The employer may determine hours
worked for eligibility between 17.5 and 40 hours per week subject to rules of
the carrier. “Eligible employee” does not include employees who work on a
temporary, seasonal or substitute basis. Employees who have been employed by
the employer for fewer than 90 days are not eligible employees unless the
employer so allows.
(10)
“Employee” means any individual employed by an employer.
(11)
“Enrollee” means an employee, dependent of the employee or an individual
otherwise eligible for a group, individual or portability health benefit plan
who has enrolled for coverage under the terms of the plan.
(12)
“Exclusion period” means a period during which specified treatments or services
are excluded from coverage.
(13)
“Financially impaired” means a carrier that is not insolvent and is:
(a)
Considered by the director to be potentially unable to fulfill its contractual
obligations; or
(b)
Placed under an order of rehabilitation or conservation by a court of competent
jurisdiction.
(14)(a)
“Geographic average rate” means the arithmetical average of the lowest premium
and the corresponding highest premium to be charged by a carrier in a
geographic area established by the director for the carrier’s:
(A)
Group health benefit plans;
(B)
Individual health benefit plans; or
(C)
Portability health benefit plans.
(b)
“Geographic average rate” does not include premium differences that are due to
differences in benefit design or family composition.
(15)
“Grandfathered health plan” has the meaning prescribed by the United States
Secretaries of Labor, Health and Human Services and the Treasury pursuant to 42
U.S.C. 18011(e).
(16)
“Group eligibility waiting period” means, with respect to a group health
benefit plan, the period of employment or membership with the group that a
prospective enrollee must complete before plan coverage begins.
(17)(a)
“Health benefit plan” means any:
(A)
Hospital expense, medical expense or hospital or medical expense policy or
certificate;
(B)
Health care service contractor or health maintenance organization subscriber
contract; or
(C)
Plan provided by a multiple employer welfare arrangement or by another benefit
arrangement defined in the federal Employee Retirement Income Security Act of
1974, as amended, to the extent that the plan is subject to state regulation.
(b)
“Health benefit plan” does not include:
(A)
Coverage for accident only, specific disease or condition only, credit or
disability income;
(B)
Coverage of Medicare services pursuant to contracts with the federal
government;
(C)
Medicare supplement insurance policies;
(D)
Coverage of TRICARE services pursuant to contracts with the federal government;
(E)
Benefits delivered through a flexible spending arrangement established pursuant
to section 125 of the Internal Revenue Code of 1986, as amended, when the
benefits are provided in addition to a group health benefit plan;
(F)
Separately offered long term care insurance, including, but not limited to,
coverage of nursing home care, home health care and community-based care;
(G)
Independent, noncoordinated, hospital-only indemnity insurance or other fixed
indemnity insurance;
(H)
Short term health insurance policies that are in effect for periods of 12
months or less, including the term of a renewal of the policy;
(I)
Dental only coverage;
(J)
Vision only coverage;
(K)
Stop-loss coverage that meets the requirements of ORS 742.065;
(L)
Coverage issued as a supplement to liability insurance;
(M)
Insurance arising out of a workers’ compensation or similar law;
(N)
Automobile medical payment insurance or insurance under which benefits are
payable with or without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent self-insurance; or
(O)
Any employee welfare benefit plan that is exempt from state regulation because
of the federal Employee Retirement Income Security Act of 1974, as amended.
(c)
For purposes of this subsection, renewal of a short term health insurance
policy includes the issuance of a new short term health insurance policy by an
insurer to a policyholder within 60 days after the expiration of a policy
previously issued by the insurer to the policyholder.
(18)
“Health statement” means any information that is intended to inform the carrier
or insurance producer of the health status of an enrollee or prospective
enrollee in a health benefit plan. “Health statement” includes the standard
health statement approved by the director under ORS 743.745.
(19)
“Individual coverage waiting period” means a period in an individual health
benefit plan during which no premiums may be collected and health benefit plan
coverage issued is not effective.
(20)
“Initial enrollment period” means a period of at least 30 days following
commencement of the first eligibility period for an individual.
(21)
“Late enrollee” means an individual who enrolls in a group health benefit plan
subsequent to the initial enrollment period during which the individual was
eligible for coverage but declined to enroll. However, an eligible individual
shall not be considered a late enrollee if:
(a)
The individual qualifies for a special enrollment period in accordance with 42
U.S.C. 300gg as amended and in effect on February 17, 2009;
(b)
The individual applies for coverage during an open enrollment period;
(c)
A court issues an order that coverage be provided for a spouse or minor child
under an employee’s employer sponsored health benefit plan and request for
enrollment is made within 30 days after issuance of the court order;
(d)
The individual is employed by an employer that offers multiple health benefit
plans and the individual elects a different health benefit plan during an open
enrollment period; or
(e)
The individual’s coverage under Medicaid, Medicare, TRICARE, Indian Health
Service or a publicly sponsored or subsidized health plan, including, but not
limited to, the medical assistance program under ORS chapter 414, has been
involuntarily terminated within 63 days after applying for coverage in a group
health benefit plan.
(22)
“Multiple employer welfare arrangement” means a multiple employer welfare
arrangement as defined in section 3 of the federal Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. 1002, that is subject to ORS
750.301 to 750.341.
(23)
“Oregon Medical Insurance Pool” means the pool created under ORS 735.610.
(24)
“Preexisting condition exclusion” means a health benefit plan provision
applicable to an enrollee or late enrollee that excludes coverage for services,
charges or expenses incurred during a specified period immediately following enrollment
for a condition for which medical advice, diagnosis, care or treatment was
recommended or received during a specified period immediately preceding
enrollment. For purposes of ORS 743.730 to 743.773:
(a)
Pregnancy does not constitute a preexisting condition except as provided in ORS
743.766;
(b)
Genetic information does not constitute a preexisting condition in the absence
of a diagnosis of the condition related to such information; and
(c)
Except for coverage under an individual grandfathered health plan, a
preexisting condition exclusion may not exclude coverage for services, charges
or expenses incurred by an individual who is under 19 years of age.
(25)
“Premium” includes insurance premiums or other fees charged for a health
benefit plan, including the costs of benefits paid or reimbursements made to or
on behalf of enrollees covered by the plan.
(26)
“Rating period” means the 12-month calendar period for which premium rates
established by a carrier are in effect, as determined by the carrier.
(27)
“Representative” does not include an insurance producer or an employee or
authorized representative of an insurance producer or carrier.
(28)(a)
“Small employer” means an employer that employed an average of at least two but
not more than 50 employees on business days during the preceding calendar year,
the majority of whom are employed within this state, and that employs at least
two eligible employees on the date on which coverage takes effect under a
health benefit plan offered by the employer.
(b)
Any person that is treated as a single employer under subsection (b), (c), (m)
or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as
one employer for purposes of this subsection.
(c)
The determination of whether an employer that was not in existence throughout
the preceding calendar year is a small employer shall be based on the average
number of employees that it is reasonably expected the employer will employ on
business days in the current calendar year. [1991 c.916 §3; 1993 c.18 §157;
1993 c.615 §25; 1993 c.649 §8; 1993 c.744 §31; 1995 c.603 §§1,36; 1997 c.716 §§1,2;
1999 c.547 §8; 1999 c.987 §6; 2001 c.943 §6; 2003 c.364 §112; 2005 c.744 §38;
2007 c.389 §1; 2009 c.595 §1135; 2011 c.500 §7]
Note: The
amendments to 743.730 by section 49, chapter 500, Oregon Laws 2011, become
operative January 2, 2014. See section 6, chapter 322, Oregon Laws 2011, as
amended by section 50, chapter 500, Oregon Laws 2011. The text that is
operative on and after January 2, 2014, is set forth for the user’s
convenience.
743.730. For
purposes of ORS 743.730 to 743.773:
(1)
“Actuarial certification” means a written statement by a member of the American
Academy of Actuaries or other individual acceptable to the Director of the
Department of Consumer and Business Services that a carrier is in compliance
with the provisions of ORS 743.736, 743.760 or 743.761, based upon the person’s
examination, including a review of the appropriate records and of the actuarial
assumptions and methods used by the carrier in establishing premium rates for
small employer and portability health benefit plans.
(2)
“Affiliate” of, or person “affiliated” with, a specified person means any
carrier who, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a specified
person. For purposes of this definition, “control” has the meaning given that
term in ORS 732.548.
(3)
“Affiliation period” means, under the terms of a group health benefit plan
issued by a health care service contractor, a period:
(a)
That is applied uniformly and without regard to any health status related
factors to an enrollee or late enrollee in lieu of a preexisting condition
exclusion;
(b)
That must expire before any coverage becomes effective under the plan for the
enrollee or late enrollee;
(c)
During which no premium shall be charged to the enrollee or late enrollee; and
(d)
That begins on the enrollee’s or late enrollee’s first date of eligibility for
coverage and runs concurrently with any eligibility waiting period under the
plan.
(4)
“Basic health benefit plan” means a health benefit plan that provides bronze
plan coverage and that is approved by the Department of Consumer and Business
Services under ORS 743.736.
(5)
“Bona fide association” means an association that meets the requirements of 42
U.S.C. 300gg-91 as amended and in effect on March 23, 2010.
(6)
“Bronze plan” means a health benefit plan that meets the criteria for a bronze
plan prescribed by the director by rule pursuant to ORS 743.822 (2).
(7)
“Carrier,” except as provided in ORS 743.760, means any person who provides
health benefit plans in this state, including:
(a)
A licensed insurance company;
(b)
A health care service contractor;
(c)
A health maintenance organization;
(d)
An association or group of employers that provides benefits by means of a
multiple employer welfare arrangement and that:
(A)
Is subject to ORS 750.301 to 750.341; or
(B)
Is fully insured and otherwise exempt under ORS 750.303 (4) but elects to be
governed by ORS 743.733 to 743.737; or
(e)
Any other person or corporation responsible for the payment of benefits or
provision of services.
(8)
“Catastrophic plan” means a health benefit plan that meets the requirements for
a catastrophic plan under 42 U.S.C. 18022(e) and that is offered through the
Oregon Health Insurance Exchange.
(9)
“Creditable coverage” means prior health care coverage as defined in 42 U.S.C.
300gg as amended and in effect on February 17, 2009, and includes coverage
remaining in force at the time the enrollee obtains new coverage.
(10)
“Dependent” means the spouse or child of an eligible employee, subject to
applicable terms of the health benefit plan covering the employee.
(11)
“Eligible employee” means an employee who works on a regularly scheduled basis,
with a normal work week of 17.5 or more hours. The employer may determine hours
worked for eligibility between 17.5 and 40 hours per week subject to rules of
the carrier. “Eligible employee” does not include employees who work on a
temporary, seasonal or substitute basis. Employees who have been employed by
the employer for fewer than 90 days are not eligible employees unless the
employer so allows.
(12)
“Employee” means any individual employed by an employer.
(13)
“Enrollee” means an employee, dependent of the employee or an individual
otherwise eligible for a group, individual or portability health benefit plan
who has enrolled for coverage under the terms of the plan.
(14)
“Exchange” means the Oregon Health Insurance Exchange established pursuant to
section 17, chapter 595, Oregon Laws 2009.
(15)
“Exclusion period” means a period during which specified treatments or services
are excluded from coverage.
(16)
“Financial impairment” means that a carrier is not insolvent and is:
(a)
Considered by the director to be potentially unable to fulfill its contractual
obligations; or
(b)
Placed under an order of rehabilitation or conservation by a court of competent
jurisdiction.
(17)(a)
“Geographic average rate” means the arithmetical average of the lowest premium
and the corresponding highest premium to be charged by a carrier in a
geographic area established by the director for the carrier’s:
(A)
Group health benefit plans offered to small employers;
(B)
Individual health benefit plans; or
(C)
Portability health benefit plans.
(b)
“Geographic average rate” does not include premium differences that are due to
differences in benefit design or family composition.
(18)
“Grandfathered health plan” has the meaning prescribed by the United States
Secretaries of Labor, Health and Human Services and the Treasury pursuant to 42
U.S.C. 18011(e).
(19)
“Group eligibility waiting period” means, with respect to a group health
benefit plan, the period of employment or membership with the group that a
prospective enrollee must complete before plan coverage begins.
(20)(a)
“Health benefit plan” means any:
(A)
Hospital expense, medical expense or hospital or medical expense policy or
certificate;
(B)
Health care service contractor or health maintenance organization subscriber
contract; or
(C)
Plan provided by a multiple employer welfare arrangement or by another benefit
arrangement defined in the federal Employee Retirement Income Security Act of
1974, as amended, to the extent that the plan is subject to state regulation.
(b)
“Health benefit plan” does not include:
(A)
Coverage for accident only, specific disease or condition only, credit or
disability income;
(B)
Coverage of Medicare services pursuant to contracts with the federal
government;
(C)
Medicare supplement insurance policies;
(D)
Coverage of TRICARE services pursuant to contracts with the federal government;
(E)
Benefits delivered through a flexible spending arrangement established pursuant
to section 125 of the Internal Revenue Code of 1986, as amended, when the
benefits are provided in addition to a group health benefit plan;
(F)
Separately offered long term care insurance, including, but not limited to,
coverage of nursing home care, home health care and community-based care;
(G)
Independent, noncoordinated, hospital-only indemnity insurance or other fixed
indemnity insurance;
(H)
Short term health insurance policies that are in effect for periods of 12
months or less, including the term of a renewal of the policy;
(I)
Dental only coverage;
(J)
Vision only coverage;
(K)
Stop-loss coverage that meets the requirements of ORS 742.065;
(L)
Coverage issued as a supplement to liability insurance;
(M)
Insurance arising out of a workers’ compensation or similar law;
(N)
Automobile medical payment insurance or insurance under which benefits are
payable with or without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent self-insurance; or
(O)
Any employee welfare benefit plan that is exempt from state regulation because
of the federal Employee Retirement Income Security Act of 1974, as amended.
(c)
For purposes of this subsection, renewal of a short term health insurance
policy includes the issuance of a new short term health insurance policy by an
insurer to a policyholder within 60 days after the expiration of a policy
previously issued by the insurer to the policyholder.
(21)
“Health statement” means any information that is intended to inform the carrier
or insurance producer of the health status of an enrollee or prospective
enrollee in a health benefit plan. “Health statement” includes the standard
health statement approved by the director under ORS 743.745.
(22)
“Individual coverage waiting period” means a period in an individual health
benefit plan during which no premiums may be collected and health benefit plan
coverage issued is not effective.
(23)
“Initial enrollment period” means a period of at least 30 days following
commencement of the first eligibility period for an individual.
(24)
“Late enrollee” means an individual who enrolls in a group health benefit plan
subsequent to the initial enrollment period during which the individual was
eligible for coverage but declined to enroll. However, an eligible individual
shall not be considered a late enrollee if:
(a)
The individual qualifies for a special enrollment period in accordance with 42
U.S.C. 300gg as amended and in effect on February 17, 2009;
(b)
The individual applies for coverage during an open enrollment period;
(c)
A court issues an order that coverage be provided for a spouse or minor child
under an employee’s employer sponsored health benefit plan and request for
enrollment is made within 30 days after issuance of the court order;
(d)
The individual is employed by an employer that offers multiple health benefit
plans and the individual elects a different health benefit plan during an open
enrollment period; or
(e)
The individual’s coverage under Medicaid, Medicare, TRICARE, Indian Health
Service or a publicly sponsored or subsidized health plan, including, but not
limited to, the medical assistance program under ORS chapter 414, has been
involuntarily terminated within 63 days after applying for coverage in a group
health benefit plan.
(25)
“Minimal essential coverage” has the meaning given that term in section
5000A(f) of the Internal Revenue Code.
(26)
“Multiple employer welfare arrangement” means a multiple employer welfare
arrangement as defined in section 3 of the federal Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. 1002, that is subject to ORS
750.301 to 750.341.
(27)
“Oregon Medical Insurance Pool” means the pool created under ORS 735.610.
(28)
“Preexisting condition exclusion” means a health benefit plan provision
applicable to an enrollee or late enrollee that excludes coverage for services,
charges or expenses incurred during a specified period immediately following
enrollment for a condition for which medical advice, diagnosis, care or
treatment was recommended or received during a specified period immediately
preceding enrollment. For purposes of ORS 743.730 to 743.773:
(a)
Pregnancy does not constitute a preexisting condition except as provided in ORS
743.766;
(b)
Genetic information does not constitute a preexisting condition in the absence
of a diagnosis of the condition related to such information; and
(c)
Except for coverage under an individual grandfathered health plan, a
preexisting condition exclusion may not exclude coverage for services, charges
or expenses incurred by an individual who is under 19 years of age.
(29)
“Premium” includes insurance premiums or other fees charged for a health
benefit plan, including the costs of benefits paid or reimbursements made to or
on behalf of enrollees covered by the plan.
(30)
“Rating period” means the 12-month calendar period for which premium rates
established by a carrier are in effect, as determined by the carrier.
(31)
“Representative” does not include an insurance producer or an employee or authorized
representative of an insurance producer or carrier.
(32)
“Silver plan” means an individual or small group health benefit plan that meets
the criteria for a silver plan prescribed by the director by rule pursuant to
ORS 743.822 (2).
(33)(a)
“Small employer” means an employer that employed an average of at least two but
not more than 50 employees on business days during the preceding calendar year,
the majority of whom are employed within this state, and that employs at least
two eligible employees on the date on which coverage takes effect under a
health benefit plan offered by the employer.
(b)
Any person that is treated as a single employer under subsection (b), (c), (m)
or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as
one employer for purposes of this subsection.
(c)
The determination of whether an employer that was not in existence throughout
the preceding calendar year is a small employer shall be based on the average
number of employees that it is reasonably expected the employer will employ on
business days in the current calendar year.
Note:
Additions by chapter 322, Oregon Laws 2011, to the series 743.730 to 743.773,
which become operative January 2, 2014, expand the series to 743.730 to
743.773, 743.822 and 743.826. See sections 1, 2 [743.822 (2)], 3 [743.822 (1)],
4 [743.826] and 6, chapter 322, Oregon Laws 2011. See Preface to Oregon Revised
Statutes for further explanation.
743.731 Purposes.
The purposes of ORS 743.730 to 743.773 are:
(1)
To promote the availability of health insurance coverage to groups regardless
of their enrollees’ health status or claims experience;
(2)
To prevent abusive rating practices;
(3)
To require disclosure of rating practices to purchasers of small employer,
portability and individual health benefit plans;
(4)
To establish limitations on the use of preexisting condition exclusions;
(5)
To make basic health benefit plans available to all small employers;
(6)
To encourage the availability of portability and individual health benefit
plans for individuals who are not enrolled in group health benefit plans;
(7)
To improve renewability and continuity of coverage for employers and covered
individuals;
(8)
To improve the efficiency and fairness of the health insurance marketplace; and
(9)
To ensure that health insurance coverage in Oregon satisfies the requirements
of the Health Insurance Portability and Accountability Act of 1996 (P.L.
104-191) and the Patient Protection and Affordable Care Act (P.L. 111-148) as
amended by the Health Care and Education Reconciliation Act (P.L. 111-152), and
that enforcement authority for those requirements is retained by the Director
of the Department of Consumer and Business Services. [1991 c.916 §2; 1993 c.18 §158;
1993 c.649 §11; 1995 c.603 §2; 1997 c.716 §4; 2011 c.500 §8]
Note:
Additions by chapter 322, Oregon Laws 2011, to the series 743.730 to 743.773,
which become operative January 2, 2014, expand the series to 743.730 to
743.773, 743.822 and 743.826. See sections 1, 2 [743.822 (2)], 3 [743.822 (1)],
4 [743.826] and 6, chapter 322, Oregon Laws 2011. See Preface to Oregon Revised
Statutes for further explanation.
743.732
[Formerly 747.080; renumbered 742.350 in 1989]
743.733 Issuance of group health benefit
plan to affiliated group of employers; determination of number of employees for
purpose of determining eligibility as small employer.
(1) If an affiliated group of employers is treated as a single employer under
subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of
1986, a carrier may issue a single group health benefit plan to the affiliated
group on the basis of the number of employees in the affiliated group if the
group requests such coverage.
(2)
If a carrier determines that an employer has more than 50 employees, the
carrier may provide a quote for a group health benefit plan that is not subject
to ORS 743.733 to 743.737. If the employer’s workforce consists of at least two
but not more than 50 eligible employees, the carrier shall inform the employer
that if coverage is limited to the eligible employees, the carrier must treat
the employer as a small employer and shall provide a separate quote on that
basis.
(3)
Subsequent to the issuance of a health benefit plan to a small employer, a
carrier shall determine annually the number of employees of the employer for
purposes of determining the employer’s ongoing eligibility as a small employer.
The provisions of ORS 743.733 to 743.737 shall continue to apply to a health
benefit plan issued to a small employer until the plan anniversary date
following the date the employer no longer meets the definition of a small
employer. [1991 c.916 §4; 1993 c.18 §159; 1995 c.603 §3; 1999 c.987 §7; 2007
c.389 §4; subsection (3) of 2007 Edition enacted as 2007 c.389 §3; 2011 c.500 §9]
743.734 Group health benefit plans subject
to provisions of specified laws; exemptions. (1)
Every health benefit plan shall be subject to the provisions of ORS 743.733 to
743.737, if the plan provides health benefits covering one or more employees of
a small employer and if any one of the following conditions is met:
(a)
Any portion of the premium or benefits is paid by a small employer or any
eligible employee is reimbursed, whether through wage adjustments or otherwise,
by a small employer for any portion of the health benefit plan premium; or
(b)
The health benefit plan is treated by the employer or any of the eligible
employees as part of a plan or program for the purposes of section 106, section
125 or section 162 of the Internal Revenue Code of 1986, as amended.
(2)
Except as provided in ORS 743.733 to 743.737, 743.764 and 743A.012, no state
law requiring the coverage or the offer of coverage of a health care service or
benefit applies to the basic health benefit plans offered or delivered to a
small employer.
(3)
Except as otherwise provided by ORS 743.733 to 743.737 or other law, no health
benefit plan offered to a small employer shall:
(a)
Inhibit a carrier from contracting with providers or groups of providers with
respect to health care services or benefits; or
(b)
Impose any restriction on the ability of a carrier to negotiate with providers
regarding the level or method of reimbursing care or services provided under
health benefit plans.
(4)
Except to determine the application of a preexisting condition exclusion for a
late enrollee who is 19 years of age or older, a carrier shall not use health
statements when offering small employer health benefit plans and shall not use
any other method to determine the actual or expected health status of eligible
enrollees. Nothing in this subsection shall prevent a carrier from using health
statements or other information after enrollment for the purpose of providing
services or arranging for the provision of services under a health benefit
plan.
(5)
Except as provided in this section and ORS 743.737, a carrier shall not impose
different terms or conditions on the coverage, premiums or contributions of any
eligible employee of a small employer that are based on the actual or expected
health status of any eligible employee.
(6)(a)
A carrier may provide different health benefit plans to different categories of
employees of a small employer that has at least 26 but no more than 50 eligible
employees when the employer has chosen to establish different categories of
employees in a manner that does not relate to the actual or expected health
status of such employees or their dependents. The categories must be based on
bona fide employment-based classifications that are consistent with the employer’s
usual business practice.
(b)
Except as provided in ORS 743.736 (9), a carrier that offers coverage to a
small employer with no more than 25 eligible employees shall offer coverage to
all eligible employees of the small employer, without regard to the actual or
expected health status of any eligible employee.
(c)
If a small employer elects to offer coverage to dependents of eligible
employees, the carrier shall offer coverage to all dependents of eligible
employees, without regard to the actual or expected health status of any
eligible dependent.
(7)
A health benefit plan issued to a small employer group through an association
health plan is exempt from subsection (1) of this section. For purposes of this
subsection, an association health plan is group health insurance described in
ORS 743.522 (2) or a health benefit plan that:
(a)
Is delivered or issued for delivery to:
(A)
An association or trust established in this state, that meets applicable
requirements of ORS 743.524 or 743.526, or to a multiple employer welfare
arrangement located inside this state, subject to ORS 750.301 to 750.341; or
(B)
An association or trust established in another state, that is approved by the
Director of the Department of Consumer and Business Services under ORS 731.486
(7), or a multiple employer welfare arrangement located in another state that
complies with ORS 750.311; and
(b)
Satisfies all of the following:
(A)
The initial premium rate for the association health plan does not vary by more
than 50 percent across the groups of small employers under the plan.
(B)
The association policyholder does not discriminate in membership requirements
based on actual or expected health status of individual enrollees or
prospective enrollees, in accordance with ORS 743.752 (5).
(C)
Small employer groups that have two or more eligible employees and that meet
the membership requirements for the association are not excluded from the
association health plan.
(D)
Except as provided in subsection (8) of this section, the association health
plan maintains a 95 percent retention rate.
(8)(a)
The 95 percent retention rate required under subsection (7) of this section
does not apply to employer groups that:
(A)
Go out of business, whether through merger, acquisition or any other reason;
(B)
No longer meet eligibility requirements for membership in the association,
including failure to pay association dues;
(C)
No longer meet participation requirements for employers that are set forth in
the plan documents; or
(D)
Fail to pay premiums.
(b)
An association health plan that fails to maintain the 95 percent retention rate
during any year may have 12 months to correct the retention level before losing
the exemption under subsection (7) of this section.
(c)
The director may exempt an association health plan from the 95 percent
retention rate requirement in subsection (7) of this section according to
criteria prescribed by the director by rule.
(9)
Notwithstanding any other provision of law, an insurer may not deny, delay or
terminate participation of an individual in a group health benefit plan or
exclude coverage otherwise provided to an individual under a group health
benefit plan based on a preexisting condition of the individual if the
individual is under 19 years of age. [1991 c.916 §5; 1993 c.18 §160; 1995 c.603
§4; 1997 c.716 §5; 1999 c.987 §8; 2007 c.389 §5; 2007 c.752 §§4,9; 2010 c.81 §§1,2,3;
2011 c.500 §12]
Note: The
amendments to 743.734 by section 13, chapter 500, Oregon Laws 2011, become
operative January 2, 2014. See section 13, chapter 752, Oregon Laws 2007, as
amended by section 4, chapter 81, Oregon Laws 2010, and section 10, chapter
500, Oregon Laws 2011. The text that is operative on and after January 2, 2014,
is set forth for the user’s convenience.
743.734. (1)
Every health benefit plan shall be subject to the provisions of ORS 743.733 to
743.737, if the plan provides health benefits covering one or more employees of
a small employer and if any one of the following conditions is met:
(a)
Any portion of the premium or benefits is paid by a small employer or any
eligible employee is reimbursed, whether through wage adjustments or otherwise,
by a small employer for any portion of the health benefit plan premium; or
(b)
The health benefit plan is treated by the employer or any of the eligible
employees as part of a plan or program for the purposes of section 106, section
125 or section 162 of the Internal Revenue Code of 1986, as amended.
(2)
Except as provided in ORS 743.733 to 743.737, 743.764 and 743A.012, no state
law requiring the coverage or the offer of coverage of a health care service or
benefit applies to the basic health benefit plans offered or delivered to a
small employer.
(3)
Except as otherwise provided by ORS 743.733 to 743.737 or other law, no health
benefit plan offered to a small employer shall:
(a)
Inhibit a carrier from contracting with providers or groups of providers with
respect to health care services or benefits; or
(b)
Impose any restriction on the ability of a carrier to negotiate with providers
regarding the level or method of reimbursing care or services provided under
health benefit plans.
(4)
Except to determine the application of a preexisting condition exclusion for a
late enrollee who is 19 years of age or older, a carrier shall not use health
statements when offering small employer health benefit plans and shall not use
any other method to determine the actual or expected health status of eligible
enrollees. Nothing in this subsection shall prevent a carrier from using health
statements or other information after enrollment for the purpose of providing
services or arranging for the provision of services under a health benefit
plan.
(5)
Except as provided in this section and ORS 743.737, a carrier shall not impose
different terms or conditions on the coverage, premiums or contributions of any
eligible employee of a small employer that are based on the actual or expected
health status of any eligible employee.
(6)(a)
A carrier may provide different health benefit plans to different categories of
employees of a small employer that has at least 26 but no more than 50 eligible
employees when the employer has chosen to establish different categories of
employees in a manner that does not relate to the actual or expected health
status of such employees or their dependents. The categories must be based on
bona fide employment-based classifications that are consistent with the
employer’s usual business practice.
(b)
Except as provided in ORS 743.736 (9), a carrier that offers coverage to a
small employer with no more than 25 eligible employees shall offer coverage to
all eligible employees of the small employer, without regard to the actual or
expected health status of any eligible employee.
(c)
If a small employer elects to offer coverage to dependents of eligible
employees, the carrier shall offer coverage to all dependents of eligible
employees, without regard to the actual or expected health status of any
eligible dependent.
(7)
Notwithstanding any other provision of law, an insurer may not deny, delay or
terminate participation of an individual in a group health benefit plan or
exclude coverage otherwise provided to an individual under a group health
benefit plan based on a preexisting condition of the individual if the
individual is under 19 years of age.
743.735
[Formerly 747.100; 1973 c.823 §151; renumbered 742.352 in 1989]
743.736 Requirement to offer basic health
benefit plans to small employers; approval of plans and forms; offering of plan
by carriers; exceptions. (1) As a condition of
transacting business in the small employer health insurance market in this
state, a carrier shall offer small employers an approved basic health benefit
plan and all of the other plans of the carrier that have been approved by the
Department of Consumer and Business Services for use in the small employer
market.
(2)
A carrier shall submit to the department, for approval in accordance with ORS
742.003, the policy form or forms containing its basic health benefit plan.
(3)
A carrier that offers a health benefit plan in the small employer market only
through one or more bona fide associations is not required to offer that health
benefit plan to small employers that are not members of the bona fide
association.
(4)
A carrier shall issue to a small employer any health benefit plan, including a
basic health benefit plan, that is offered by the carrier if the small employer
applies for the plan and agrees to make the required premium payments and to
satisfy the other provisions of the health benefit plan.
(5)
A multiple employer welfare arrangement, professional or trade association or
other similar arrangement established or maintained to provide benefits to a
particular trade, business, profession or industry or their subsidiaries shall
not issue coverage to a group or individual that is not in the same trade,
business, profession or industry as that covered by the arrangement. The
arrangement shall accept all groups and individuals in the same trade,
business, profession or industry or their subsidiaries that apply for coverage
under the arrangement and that meet the requirements for membership in the
arrangement. For purposes of this subsection, the requirements for membership
in an arrangement shall not include any requirements that relate to the actual
or expected health status of the prospective enrollee.
(6)
A carrier shall, pursuant to subsection (4) of this section, accept
applications from and offer coverage to a small employer group covered under an
existing health benefit plan regardless of whether a prospective enrollee is
excluded from coverage under the existing plan because of late enrollment. When
a carrier accepts an application for a small employer group, the carrier may
continue to exclude the prospective enrollee excluded from coverage by the
replaced plan until the prospective enrollee would have become eligible for
coverage under that replaced plan.
(7)
A carrier is not required to accept applications from and offer coverage
pursuant to subsection (4) of this section if the department finds that
acceptance of an application or applications would endanger the carrier’s
ability to fulfill its contractual obligations or result in financial
impairment of the carrier.
(8)
A carrier shall market fairly all health benefit plans, including basic health
benefit plans, that are offered by the carrier to small employers in the
geographical areas in which the carrier makes coverage available or provides
benefits.
(9)(a)
Subsection (4) of this section does not require a carrier to offer coverage to
or accept applications from:
(A)
A small employer if the small employer is not physically located in the carrier’s
approved service area;
(B)
An employee of a small employer if the employee does not work or reside within
the carrier’s approved service areas; or
(C)
Small employers located within an area where the carrier reasonably
anticipates, and demonstrates to the department, that it will not have the
capacity in its network of providers to deliver services adequately to the
enrollees of those small employer groups because of its obligations to existing
small employer group contract holders and enrollees.
(b)
A carrier that does not offer coverage pursuant to paragraph (a)(C) of this
subsection shall not offer coverage in the applicable service area to new
employer groups other than small employers until the carrier resumes enrolling
groups of new small employers in the applicable area.
(10)
For purposes of ORS 743.733 to 743.737, except as provided in this subsection,
carriers that are affiliated carriers or that are eligible to file a
consolidated tax return pursuant to ORS 317.715 shall be treated as one carrier
and any restrictions or limitations imposed by ORS 743.733 to 743.737 apply as
if all health benefit plans delivered or issued for delivery to small employers
in this state by the affiliated carriers were issued by one carrier. However,
any insurance company or health maintenance organization that is an affiliate
of a health care service contractor located in this state, or any health maintenance
organization located in this state that is an affiliate of an insurance company
or health care service contractor, may treat the health maintenance
organization as a separate carrier and each health maintenance organization
that operates only one health maintenance organization in a service area in
this state may be considered a separate carrier.
(11)
A carrier that elects to discontinue offering all of its health benefit plans
to small employers under ORS 743.737 (6)(e), elects to discontinue renewing all
such plans or elects to discontinue offering and renewing all such plans is
prohibited from offering health benefit plans to small employers in this state
for a period of five years from one of the following dates:
(a)
The date of notice to the department pursuant to ORS 743.737 (6)(e); or
(b)
If notice is not provided under paragraph (a) of this subsection, from the date
on which the department provides notice to the carrier that the department has
determined that the carrier has effectively discontinued offering health
benefit plans to small employers in this state.
(12)
This section does not require a carrier to actively market, offer, issue or
accept applications for a grandfathered health plan or from a small employer
not eligible for coverage under such a plan as provided by the Patient
Protection and Affordable Care Act (P.L. 111-148) as amended by the Health Care
and Education Reconciliation Act (P.L. 111-152). [1991 c.916 §6; 1993 c.649 §12;
1995 c.603 §5; 1997 c.716 §6; 1999 c.987 §9; 2011 c.500 §14]
743.737 Requirements for small employer
health benefit plans. (1) A preexisting condition
exclusion in a small employer health benefit plan shall apply only to a
condition for which medical advice, diagnosis, care or treatment was
recommended or received during the six-month period immediately preceding the
enrollment date of an enrollee or late enrollee. As used in this section, the
enrollment date of an enrollee shall be the earlier of the effective date of
coverage or the first day of any required group eligibility waiting period and
the enrollment date of a late enrollee shall be the effective date of coverage.
(2)
A preexisting condition exclusion in a small employer health benefit plan shall
expire as follows:
(a)
For an enrollee, on the earlier of the following dates:
(A)
Six months after the enrollee’s effective date of coverage; or
(B)
Ten months after the start of any required group eligibility waiting period.
(b)
For a late enrollee, not later than 12 months after the late enrollee’s
effective date of coverage.
(3)
In applying a preexisting condition exclusion to an enrollee or late enrollee,
except as provided in this subsection, all small employer health benefit plans
shall reduce the duration of the provision by an amount equal to the enrollee’s
or late enrollee’s aggregate periods of creditable coverage if the most recent
period of creditable coverage is ongoing or ended within 63 days after the
enrollment date in the new small employer health benefit plan. The crediting of
prior coverage in accordance with this subsection shall be applied without
regard to the specific benefits covered during the prior period. This
subsection does not preclude, within a small employer health benefit plan,
application of:
(a)
An affiliation period that does not exceed two months for an enrollee or three
months for a late enrollee; or
(b)
An exclusion period for specified covered services, as established under ORS
743.745, applicable to all individuals enrolling for the first time in the
small employer health benefit plan.
(4)
A health benefit plan issued to a small employer may not apply a preexisting
condition exclusion to a person under 19 years of age.
(5)
Late enrollees in a small employer health benefit plan may be subjected to a
group eligibility waiting period of up to 12 months or, if 19 years of age or
older, may be subjected to a preexisting condition exclusion for up to 12
months. If both a waiting period and a preexisting condition exclusion are
applicable to a late enrollee, the combined period shall not exceed 12 months.
(6)
Each small employer health benefit plan shall be renewable with respect to all
eligible enrollees at the option of the policyholder, small employer or
contract holder unless:
(a)
The policyholder, small employer or contract holder fails to pay the required
premiums.
(b)
The policyholder, small employer or contract holder or, with respect to
coverage of individual enrollees, an enrollee or a representative of an
enrollee engages in fraud or makes an intentional misrepresentation of a
material fact as prohibited by the terms of the plan.
(c)
The number of enrollees covered under the plan is less than the number or
percentage of enrollees required by participation requirements under the plan.
(d)
The small employer fails to comply with the contribution requirements under the
health benefit plan.
(e)
The carrier discontinues offering or renewing, or offering and renewing, all of
its small employer health benefit plans in this state or in a specified service
area within this state. In order to discontinue plans under this paragraph, the
carrier:
(A)
Must give notice of the decision to the Department of Consumer and Business
Services and to all policyholders covered by the plans;
(B)
May not cancel coverage under the plans for 180 days after the date of the
notice required under subparagraph (A) of this paragraph if coverage is
discontinued in the entire state or, except as provided in subparagraph (C) of
this paragraph, in a specified service area;
(C)
May not cancel coverage under the plans for 90 days after the date of the
notice required under subparagraph (A) of this paragraph if coverage is
discontinued in a specified service area because of an inability to reach an
agreement with the health care providers or organization of health care
providers to provide services under the plans within the service area; and
(D)
Must discontinue offering or renewing, or offering and renewing, all health
benefit plans issued by the carrier in the small employer market in this state
or in the specified service area.
(f)
The carrier discontinues offering and renewing a small employer health benefit
plan in a specified service area within this state because of an inability to
reach an agreement with the health care providers or organization of health
care providers to provide services under the plan within the service area. In
order to discontinue a plan under this paragraph, the carrier:
(A)
Must give notice to the department and to all policyholders covered by the
plan;
(B)
May not cancel coverage under the plan for 90 days after the date of the notice
required under subparagraph (A) of this paragraph; and
(C)
Must offer in writing to each small employer covered by the plan, all other
small employer health benefit plans that the carrier offers to small employers
in the specified service area. The carrier shall issue any such plans
pursuant to the provisions of ORS 743.733 to 743.737. The carrier shall offer
the plans at least 90 days prior to discontinuation.
(g)
The carrier discontinues offering or renewing, or offering and renewing, a
health benefit plan, other than a grandfathered health plan, for all small
employers in this state or in a specified service area within this state, other
than a plan discontinued under paragraph (f) of this subsection.
(h)
The carrier discontinues renewing or offering and renewing a grandfathered
health plan for all small employers in this state or in a specified service
area within this state, other than a plan discontinued under paragraph (f) of
this subsection.
(i)
With respect to plans that are being discontinued under paragraph (g) or (h) of
this subsection, the carrier must:
(A)
Offer in writing to each small employer covered by the plan, all other health
benefit plans that the carrier offers to small employers in the specified
service area.
(B)
Issue any such plans pursuant to the provisions of ORS 743.733 to 743.737.
(C)
Offer the plans at least 90 days prior to discontinuation.
(D)
Act uniformly without regard to the claims experience of the affected
policyholders or the health status of any current or prospective enrollee.
(j)
The Director of the Department of Consumer and Business Services orders the
carrier to discontinue coverage in accordance with procedures specified or approved
by the director upon finding that the continuation of the coverage would:
(A)
Not be in the best interests of the enrollees; or
(B)
Impair the carrier’s ability to meet contractual obligations.
(k)
In the case of a small employer health benefit plan that delivers covered
services through a specified network of health care providers, there is no
longer any enrollee who lives, resides or works in the service area of the
provider network.
(L)
In the case of a health benefit plan that is offered in the small employer
market only through one or more bona fide associations, the membership of an
employer in the association ceases and the termination of coverage is not
related to the health status of any enrollee.
(7)
A carrier may modify a small employer health benefit plan at the time of
coverage renewal. The modification is not a discontinuation of the plan under
subsection (6)(e), (g) and (h) of this section.
(8)
Notwithstanding any provision of subsection (6) of this section to the
contrary, a carrier may not rescind the coverage of an enrollee in a small
employer health benefit plan unless:
(a)
The enrollee or a person seeking coverage on behalf of the enrollee:
(A)
Performs an act, practice or omission that constitutes fraud; or
(B)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the plan;
(b)
The carrier provides at least 30 days’ advance written notice, in the form and
manner prescribed by the department, to the enrollee; and
(c)
The carrier provides notice of the rescission to the department in the form,
manner and time frame prescribed by the department by rule.
(9)
Notwithstanding any provision of subsection (6) of this section to the
contrary, a carrier may not rescind a small employer health benefit plan
unless:
(a)
The small employer or a representative of the small employer:
(A)
Performs an act, practice or omission that constitutes fraud; or
(B)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the plan;
(b)
The carrier provides at least 30 days’ advance written notice, in the form and
manner prescribed by the department, to each plan enrollee who would be
affected by the rescission of coverage; and
(c)
The carrier provides notice of the rescission to the department in the form,
manner and time frame prescribed by the department by rule.
(10)
A carrier may continue to enforce reasonable employer participation and
contribution requirements on small employers applying for coverage. However,
participation and contribution requirements shall be applied uniformly among
all small employer groups with the same number of eligible employees applying
for coverage or receiving coverage from the carrier. In determining minimum
participation requirements, a carrier shall count only those employees who are
not covered by an existing group health benefit plan, Medicaid, Medicare,
TRICARE, Indian Health Service or a publicly sponsored or subsidized health
plan, including but not limited to the medical assistance program under ORS
chapter 414.
(11)
Premium rates for small employer health benefit plans shall be subject to the
following provisions:
(a)
Each carrier must file with the department the initial geographic average rate
and any changes in the geographic average rate with respect to each health
benefit plan issued by the carrier to small employers.
(b)(A)
The premium rates charged during a rating period for health benefit plans
issued to small employers may not vary from the geographic average rate by more
than 50 percent on or after January 1, 2008, except as provided in subparagraph
(D) of this paragraph.
(B)
The variations in premium rates described in subparagraph (A) of this paragraph
shall be based solely on the factors specified in subparagraph (C) of this paragraph.
A carrier may elect which of the factors specified in subparagraph (C) of this
paragraph apply to premium rates for health benefit plans for small employers.
The factors that are based on contributions or participation may vary with the
size of the employer. All other factors must be applied in the same actuarially
sound way to all small employer health benefit plans.
(C)
The variations in premium rates described in subparagraph (A) of this paragraph
may be based on one or more of the following factors:
(i)
The ages of enrolled employees and their dependents;
(ii)
The level at which the small employer contributes to the premiums payable for
enrolled employees and their dependents;
(iii)
The level at which eligible employees participate in the health benefit plan;
(iv)
The level at which enrolled employees and their dependents engage in tobacco
use;
(v)
The level at which enrolled employees and their dependents engage in health
promotion, disease prevention or wellness programs;
(vi)
The period of time during which a small employer retains uninterrupted coverage
in force with the same carrier; and
(vii)
Adjustments to reflect the provision of benefits not required to be covered by
the basic health benefit plan and differences in family composition.
(D)(i)
The premium rates determined in accordance with this paragraph may be further
adjusted by a carrier to reflect the expected claims experience of the covered
small employer, but the extent of this adjustment may not exceed five percent
of the annual premium rate otherwise payable by the small employer. The
adjustment under this subparagraph may not be cumulative from year to year.
(ii)
The premium rates adjusted under this subparagraph, except rates for small
employers with 25 or fewer employees, are not subject to the provisions of
subparagraph (A) of this paragraph.
(E)
A carrier shall apply the carrier’s schedule of premium rate variations as
approved by the department and in accordance with this paragraph. Except as
otherwise provided in this section, the premium rate established by a carrier
for a small employer health benefit plan shall apply uniformly to all employees
of the small employer enrolled in that plan.
(c)
Except as provided in paragraph (b) of this subsection, the variation in premium
rates between different health benefit plans offered by a carrier to small
employers must be based solely on objective differences in plan design or
coverage and must not include differences based on the risk characteristics of
groups assumed to select a particular health benefit plan.
(d)
A carrier may not increase the rates of a health benefit plan issued to a small
employer more than once in a 12-month period. Annual rate increases shall be
effective on the plan anniversary date of the health benefit plan issued to a
small employer. The percentage increase in the premium rate charged to a small
employer for a new rating period may not exceed the sum of the following:
(A)
The percentage change in the geographic average rate measured from the first
day of the prior rating period to the first day of the new period; and
(B)
Any adjustment attributable to changes in age, except an additional adjustment
may be made to reflect the provision of benefits not required to be covered by
the basic health benefit plan and differences in family composition.
(e)
Premium rates for small employer health benefit plans shall comply with the
requirements of this section.
(12)
In connection with the offering for sale of any health benefit plan to a small
employer, each carrier shall make a reasonable disclosure as part of its
solicitation and sales materials of:
(a)
The full array of health benefit plans that are offered to small employers by
the carrier;
(b)
The authority of the carrier to adjust rates, and the extent to which the
carrier will consider age, family composition and geographic factors in
establishing and adjusting rates;
(c)
Provisions relating to renewability of policies and contracts; and
(d)
Provisions affecting any preexisting condition exclusion.
(13)(a)
Each carrier shall maintain at its principal place of business a complete and
detailed description of its rating practices and renewal underwriting practices
relating to its small employer health benefit plans, including information and
documentation that demonstrate that its rating methods and practices are based
upon commonly accepted actuarial practices and are in accordance with sound
actuarial principles.
(b)
A carrier offering a small employer health benefit plan shall file with the
department at least once every 12 months an actuarial certification that the
carrier is in compliance with ORS 743.733 to 743.737 and that the rating
methods of the carrier are actuarially sound. Each certification shall be in a
uniform form and manner and shall contain such information as specified by the
department. A copy of each certification shall be retained by the carrier at
its principal place of business.
(c)
A carrier shall make the information and documentation described in paragraph
(a) of this subsection available to the department upon request. Except as
provided in ORS 743.018 and except in cases of violations of ORS 743.733 to
743.737, the information shall be considered proprietary and trade secret
information and shall not be subject to disclosure to persons outside the
department except as agreed to by the carrier or as ordered by a court of
competent jurisdiction.
(14)
A carrier shall not provide any financial or other incentive to any insurance
producer that would encourage the insurance producer to market and sell health
benefit plans of the carrier to small employer groups based on a small employer
group’s anticipated claims experience.
(15)
For purposes of this section, the date a small employer health benefit plan is
continued shall be the anniversary date of the first issuance of the health
benefit plan.
(16)
A carrier must include a provision that offers coverage to all eligible
employees of a small employer and to all dependents of the eligible employees
to the extent the employer chooses to offer coverage to dependents.
(17)
All small employer health benefit plans shall contain special enrollment
periods during which eligible employees and dependents may enroll for coverage,
as provided in 42 U.S.C. 300gg as amended and in effect on February 17, 2009.
(18)
A small employer health benefit plan may not impose annual or lifetime limits
on the dollar amount of the essential health benefits prescribed by the United
States Secretary of Health and Human Services pursuant to 42 U.S.C. 300gg-11,
except as permitted by federal law.
(19)
This section does not require a carrier to actively market, offer, issue or
accept applications for a grandfathered health plan or from a small employer
not eligible for coverage under such a plan as provided by the Patient
Protection and Affordable Care Act (P.L. 111-148) as amended by the Health Care
and Education Reconciliation Act (P.L. 111-152). [1991 c.916 §7; 1993 c.18 §161;
1993 c.649 §10; 1995 c.603 §§6,37; 1997 c.716 §§7,8; 1999 c.987 §10; 2001 c.943
§12; 2003 c.364 §113; 2003 c.599 §§4,6; 2003 c.748 §5; 2007 c.389 §§6,7; 2007
c.391 §2; 2009 c.595 §1136; 2011 c.500 §15]
743.738
[Formerly 747.110; renumbered 742.354 in 1989]
743.739 [1991
c.916 §8; repealed by 1995 c.603 §32]
743.740 [1991
c.916 §9; 1993 c.18 §162; repealed by 1995 c.603 §32]
743.741
[Formerly 747.130; renumbered 742.356 in 1989]
743.742 [1991
c.916 §10; repealed by 1995 c.603 §32]
743.743 [1991
c.916 §11; 1993 c.18 §163; 1993 c.649 §13; repealed by 1995 c.603 §32]
743.744 [Formerly
747.140; renumbered 742.358 in 1989]
743.745 Requirements for basic health
benefit plans; director’s authority to regulate portability, small group and
individual plans; standard health statement for late enrollees; allowable
preexisting condition exclusions. (1) The
Director of the Department of Consumer and Business Services shall determine
the form and level of coverages under the basic health benefit plans pursuant
to ORS 743.736 to be made available by carriers and the portability health benefit
plans to be made available pursuant to ORS 743.760 or 743.761. The director may
take into consideration the levels of health benefit plans provided in Oregon
and the appropriate medical and economic factors and shall establish benefit
levels, cost sharing, exclusions and limitations. The health benefit plans
described in this section may include cost containment features including, but
not limited to:
(a)
Preferred provider provisions;
(b)
Utilization review of health care services including review of medical
necessity of hospital and physician services;
(c)
Case management benefit alternatives;
(d)
Other managed care provisions;
(e)
Selective contracting with hospitals, physicians and other health care
providers; and
(f)
Reasonable benefit differentials applicable to participating and
nonparticipating providers.
(2)
In order to ensure the broadest availability of small employer, portability and
individual health benefit plans, the director may approve market conduct and
other requirements for carriers and insurance producers, including:
(a)
Registration by each carrier with the Department of Consumer and Business
Services of the carrier’s intention to offer group health benefit plans under
ORS 743.733 to 743.737 or individual health benefit plans, or both.
(b)
To the extent deemed necessary by the director to ensure the fair distribution
of high-risk individuals and groups among carriers, periodic reports by
carriers and insurance producers concerning small employer, portability and
individual health benefit plans issued, provided that reporting requirements
shall be limited to information concerning case characteristics and numbers of
health benefit plans in various categories marketed or issued to small
employers and individuals.
(c)
Methods concerning periodic demonstration by carriers offering health benefit
plans to individuals or small employers and insurance producers that the
carriers and insurance producers are marketing or issuing health benefit plans
in fulfillment of the purposes of ORS 743.730 to 743.773.
(3)
The director shall develop a standard health statement to be used for all late
enrollees and by all carriers offering individual policies of health insurance.
(4)
The director shall develop a list of the specified services for small employer
and portability plans for which carriers may impose an exclusion period, the
duration of the allowable exclusion period for each specified service and the
manner in which credit will be given for exclusion periods imposed pursuant to
prior health insurance coverage. [1991 c.916 §12; 1993 c.18 §164; 1995 c.603 §§10,38;
1999 c.987 §11; 2003 c.364 §114; 2011 c.500 §16]
Note:
Additions by chapter 322, Oregon Laws 2011, to the series 743.730 to 743.773,
which become operative January 2, 2014, expand the series to 743.730 to
743.773, 743.822 and 743.826. See sections 1, 2 [743.822 (2)], 3 [743.822 (1)],
4 [743.826] and 6, chapter 322, Oregon Laws 2011. See Preface to Oregon Revised
Statutes for further explanation.
743.746 [1997
c.716 §9c; repealed by 1999 c.987 §28]
743.747
[Formerly 747.150; renumbered 742.360 in 1989]
743.748 Submission of information by
carriers offering health benefit plans. (1) Each
carrier offering a health benefit plan shall submit to the Director of the
Department of Consumer and Business Services on or before April 1 of each year
a report that contains:
(a)
The following information for the preceding year that is derived from the
exhibit of premiums, enrollment and utilization included in the carrier’s
annual report:
(A)
The total number of members;
(B)
The total amount of premiums;
(C)
The total amount of costs for claims;
(D)
The medical loss ratio;
(E)
The average amount of premiums per member per month; and
(F)
The percentage change in the average premium per member per month, measured
from the previous year.
(b)
The following aggregate financial information for the preceding year that is
derived from the carrier’s annual report:
(A)
The total amount of general administrative expenses, including identification
of the five largest nonmedical administrative expenses and the assessment
against the carrier for the Oregon Medical Insurance Pool;
(B)
The total amount of the surplus maintained;
(C)
The total amount of the reserves maintained for unpaid claims;
(D)
The total net underwriting gain or loss; and
(E)
The carrier’s net income after taxes.
(2)
A carrier shall electronically submit the information described in subsection
(1) of this section in a format and according to instructions prescribed by the
Department of Consumer and Business Services by rule after obtaining a
recommendation from the Health Insurance Reform Advisory Committee.
(3)
The advisory committee shall evaluate the reporting requirements under
subsection (1)(a) of this section by the following market segments:
(a)
Individual health benefit plans;
(b)
Health benefit plans for small employers;
(c)
Health benefit plans for employers described in ORS 743.733; and
(d)
Health benefit plans for employers with more than 50 employees.
(4)
The department shall make the information reported under this section available
to the public through a searchable public website on the Internet. [2005 c.765 §2;
2007 c.752 §§5,10; 2011 c.500 §17]
Note: The
amendments to 743.748 by section 18, chapter 500, Oregon Laws 2011, become
operative January 2, 2014. See section 13, chapter 752, Oregon Laws 2007, as
amended by section 4, chapter 81, Oregon Laws 2010, and section 10, chapter
500, Oregon Laws 2011. The text that is operative on and after January 2, 2014,
is set forth for the user’s convenience.
743.748. (1)
Each carrier offering a health benefit plan shall submit to the Director of the
Department of Consumer and Business Services on or before April 1 of each year
a report that contains:
(a)
The following information for the preceding year that is derived from the
exhibit of premiums, enrollment and utilization included in the carrier’s
annual report:
(A)
The total number of members;
(B)
The total amount of premiums;
(C)
The total amount of costs for claims;
(D)
The medical loss ratio;
(E)
The average amount of premiums per member per month; and
(F)
The percentage change in the average premium per member per month, measured
from the previous year.
(b)
The following aggregate financial information for the preceding year that is
derived from the carrier’s annual report:
(A)
The total amount of general administrative expenses, including identification
of the five largest nonmedical administrative expenses and the assessment
against the carrier for the Oregon Medical Insurance Pool;
(B)
The total amount of the surplus maintained;
(C)
The total amount of the reserves maintained for unpaid claims;
(D)
The total net underwriting gain or loss; and
(E)
The carrier’s net income after taxes.
(2)
A carrier shall electronically submit the information described in subsection
(1) of this section in a format and according to instructions prescribed by the
Department of Consumer and Business Services by rule.
(3)
The department shall evaluate the reporting requirements under subsection
(1)(a) of this section by the following market segments:
(a)
Individual health benefit plans;
(b)
Health benefit plans for small employers;
(c)
Health benefit plans for employers described in ORS 743.733; and
(d)
Health benefit plans for employers with more than 50 employees.
(4)
The department shall make the information reported under this section available
to the public through a searchable public website on the Internet.
743.749 Certifications and disclosure of
coverage. All carriers that offer individual or
group health benefit plans shall provide certifications and disclosure of
coverage in accordance with 42 U.S.C. 300gg(e) and 300gg-43 as amended and in
effect on July 1, 1997. [1997 c.716 §20]
743.750 [1967
c.359 §516; renumbered 742.362 in 1989]
743.751 Use of health statements in group
health benefit plans. (1) Except to determine the
application of a preexisting condition exclusion for a late enrollee who is 19
years of age or older or as prescribed by the Department of Consumer and
Business Services by rule, a carrier offering group health benefit plans shall
not use health statements when offering such plans to a group of two or more
prospective certificate holders and shall not use any other method to determine
the actual or expected health status of eligible prospective enrollees. Nothing
in this section shall prevent a carrier from using health statements or other
information after enrollment for the purpose of providing services or arranging
for the provision of services under a health benefit plan or from obtaining
aggregate group information related to historical medical claims expenses and
health behavior surveys for rating purposes.
(2)
Subsection (1) of this section applies only to group health benefit plans that
are not small employer health benefit plans. [1995 c.603 §15; 1997 c.716 §10;
2011 c.500 §19]
743.752 Coverage in group health benefit
plans; consideration of prospective enrollee health status restricted; effect
of discontinuing offer of plans; exceptions; coverage by multiple employer
welfare arrangements. (1) Except in the case of a late
enrollee and as otherwise provided in this section, a carrier offering a group
health benefit plan to a group of two or more prospective certificate holders
shall not decline to offer coverage to any eligible prospective enrollee and
shall not impose different terms or conditions on the coverage, premiums or
contributions of any enrollee in the group that are based on the actual or
expected health status of the enrollee.
(2)
A carrier that elects to discontinue offering all of its group health benefit
plans under ORS 743.754 (6)(e), elects to discontinue renewing all such plans
or elects to discontinue offering and renewing all such plans is prohibited
from offering health benefit plans in the group market in this state for a
period of five years from one of the following dates:
(a)
The date of notice to the Director of the Department of Consumer and Business
Services pursuant to ORS 743.754 (6)(e); or
(b)
If notice is not provided under paragraph (a) of this subsection, from the date
on which the director provides notice to the carrier that the director has
determined that the carrier has effectively discontinued offering group health
benefit plans in this state.
(3)
Subsection (1) of this section applies only to group health benefit plans that
are not small employer health benefit plans.
(4)
Nothing in this section shall prohibit an employer from providing different
group health benefit plans to various categories of employees as defined by the
employer nor prohibit an employer from providing health benefit plans through
different carriers so long as the employer’s categories of employees are
established in a manner that does not relate to the actual or expected health
status of the employees or their dependents.
(5)
A multiple employer welfare arrangement, professional or trade association, or
other similar arrangement established or maintained to provide benefits to a
particular trade, business, profession or industry or their subsidiaries, shall
not issue coverage to a group or individual that is not in the same trade,
business, profession or industry or their subsidiaries as that covered by the
arrangement. The arrangement shall accept all groups and individuals in the
same trade, business, profession or industry or their subsidiaries that apply
for coverage under the arrangement and that meet the requirements for
membership in the arrangement. For purposes of this subsection, the
requirements for membership in an arrangement shall not include any
requirements that relate to the actual or expected health status of the
prospective enrollee. [1995 c.603 §16; 1997 c.716 §11; 1999 c.987 §12]
743.753
[Formerly 747.170; 1969 c.526 §2; renumbered 742.364 in 1989]
743.754 Requirements for group health
benefit plans. The following requirements apply to all
group health benefit plans other than small employer health benefit plans
covering two or more certificate holders:
(1)
A preexisting condition exclusion shall apply only to a condition for which
medical advice, diagnosis, care or treatment was recommended or received during
the six-month period immediately preceding the enrollment date of an enrollee
or late enrollee. As used in this section, the enrollment date of an enrollee
shall be the earlier of the effective date of coverage or the first day of any
required group eligibility waiting period and the enrollment date of a late
enrollee shall be the effective date of coverage.
(2)
A preexisting condition exclusion may not apply to a person under 19 years of
age and shall expire as follows:
(a)
For an enrollee, on the earlier of the following dates:
(A)
Six months after the enrollee’s effective date of coverage; or
(B)
Twelve months after the start of any required group eligibility waiting period.
(b)
For a late enrollee, not later than 12 months after the late enrollee’s
effective date of coverage.
(3)
In applying a preexisting condition exclusion to an enrollee or late enrollee
who is 19 years of age or older, except as provided in this subsection, all
plans shall reduce the duration of the provision by an amount equal to the
enrollee’s or late enrollee’s aggregate periods of creditable coverage if the
most recent period of creditable coverage is ongoing or ended within 63 days
after the enrollment date in the new plan. The crediting of prior coverage in
accordance with this subsection shall be applied without regard to the specific
benefits covered during the prior period. This subsection does not preclude,
within a plan, application of:
(a)
An affiliation period that does not exceed two months for an enrollee or three
months for a late enrollee; or
(b)
An exclusion period for specified covered services applicable to all
individuals enrolling for the first time in the plan.
(4)
Late enrollees may be subjected to a group eligibility waiting period of up to
12 months or, if 19 years of age or older, may be subjected to a preexisting
condition exclusion for up to 12 months. If both a waiting period and a preexisting
condition exclusion are applicable to a late enrollee, the combined period
shall not exceed 12 months.
(5)
Each plan shall contain a special enrollment period during which eligible
employees and dependents may enroll for coverage, as provided in 42 U.S.C.
300gg as amended and in effect on February 17, 2009.
(6)
Each plan shall be renewable with respect to all eligible enrollees at the
option of the policyholder unless:
(a)
The policyholder fails to pay the required premiums.
(b)
The policyholder or, with respect to coverage of individual enrollees, an
enrollee or a representative of an enrollee engages in fraud or makes an
intentional misrepresentation of a material fact as prohibited by the terms of
the plan.
(c)
The number of enrollees covered under the plan is less than the number or
percentage of enrollees required by participation requirements under the plan.
(d)
The policyholder fails to comply with the contribution requirements under the
plan.
(e)
The carrier discontinues offering or renewing, or offering and renewing, all of
its group plans in this state or in a specified service area within this state.
In order to discontinue plans under this paragraph, the carrier:
(A)
Must give notice of the decision to the Department of Consumer and Business
Services and to all policyholders covered by the plans;
(B)
May not cancel coverage under the plans for 180 days after the date of the
notice required under subparagraph (A) of this paragraph if coverage is
discontinued in the entire state or, except as provided in subparagraph (C) of
this paragraph, in a specified service area;
(C)
May not cancel coverage under the plans for 90 days after the date of the
notice required under subparagraph (A) of this paragraph if coverage is
discontinued in a specified service area because of an inability to reach an
agreement with the health care providers or organization of health care
providers to provide services under the plans within the service area; and
(D)
Must discontinue offering or renewing, or offering and renewing, all plans
issued by the carrier in the group market in this state or in the specified
service area.
(f)
The carrier discontinues offering and renewing a group plan in a specified
service area within this state because of an inability to reach an agreement
with the health care providers or organization of health care providers to
provide services under the plan within the service area. In order to
discontinue a plan under this paragraph, the carrier:
(A)
Must give notice of the decision to the department and to all policyholders
covered by the plan;
(B)
May not cancel coverage under the plan for 90 days after the date of the notice
required under subparagraph (A) of this paragraph; and
(C)
Must offer in writing to each policyholder covered by the plan, all other group
health benefit plans that the carrier offers in the specified service area. The
carrier shall offer the plans at least 90 days prior to discontinuation.
(g)
The carrier discontinues offering or renewing, or offering and renewing, a
health benefit plan, other than a grandfathered health plan, for all groups in
this state or in a specified service area within this state, other than a plan
discontinued under paragraph (f) of this subsection.
(h)
The carrier discontinues renewing or offering and renewing a grandfathered
health plan for all groups in this state or in a specified service are within
this state, other than a plan discontinued under paragraph (f) of this
subsection.
(i)
With respect to plans that are being discontinued under paragraph (g) or (h) of
this subsection, the carrier must:
(A)
Offer in writing to each policyholder covered by the plan, one or more health
benefit plans that the carrier offers in the specified service area.
(B)
Offer the plans at least 90 days prior to discontinuation.
(C)
Act uniformly without regard to the claims experience of the affected
policyholders or the health status of any current or prospective enrollee.
(j)
The Director of the Department of Consumer and Business Services orders the
carrier to discontinue coverage in accordance with procedures specified or
approved by the director upon finding that the continuation of the coverage
would:
(A)
Not be in the best interests of the enrollees; or
(B)
Impair the carrier’s ability to meet contractual obligations.
(k)
In the case of a plan that delivers covered services through a specified
network of health care providers, there is no longer any enrollee who lives,
resides or works in the service area of the provider network.
(L)
In the case of a plan that is offered in the group market only through one or
more bona fide associations, the membership of an employer in the association
ceases and the termination of coverage is not related to the health status of
any enrollee.
(7)
A carrier may modify a plan at the time of coverage renewal. The modification
is not a discontinuation of the plan under subsection (6)(e), (g) and (h) of
this section.
(8)
Notwithstanding any provision of subsection (6) of this section to the
contrary, a carrier may not rescind the coverage of an enrollee under the plan
unless:
(a)
The enrollee:
(A)
Performs an act, practice or omission that constitutes fraud; or
(B)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the plan;
(b)
The carrier provides at least 30 days’ advance written notice, in the form and
manner prescribed by the department, to the enrollee; and
(c)
The carrier provides notice of the rescission to the department in the form,
manner and time frame prescribed by the department by rule.
(9)
Notwithstanding any provision of subsection (6) of this section to the
contrary, a carrier may not rescind a plan unless:
(a)
The plan sponsor or a representative of the plan sponsor:
(A)
Performs an act, practice or omission that constitutes fraud; or
(B)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the plan;
(b)
The carrier provides at least 30 days’ advance written notice, in the form and
manner prescribed by the department, to each plan enrollee who would be
affected by the rescission of coverage; and
(c)
The carrier provides notice of the rescission to the department in the form,
manner and time frame prescribed by the department by rule.
(10)
A carrier that continues to offer coverage in the group market in this state is
not required to offer coverage in all of the carrier’s group plans. If a
carrier, however, elects to continue a plan that is closed to new policyholders
instead of offering alternative coverage in its other group plans, the coverage
for all existing policyholders in the closed plan is renewable in accordance
with subsection (6) of this section.
(11)
A group health benefit plan may not impose annual or lifetime limits on the
dollar amount of the essential health benefits prescribed by the United States
Secretary of Health and Human Services pursuant to 42 U.S.C. 300gg-11, except
as permitted by federal law.
(12)
This section does not require a carrier to actively market, offer, issue or
accept applications for a grandfathered health plan or from a group not
eligible for coverage under such a plan as provided by the Patient Protection
and Affordable Care Act (P.L. 111-148) as amended by the Health Care and
Education Reconciliation Act (P.L. 111-152). [1995 c.603 §17; 1995 c.603 §40;
1997 c.716 §§12,13; 1999 c.987 §13; 2001 c.943 §13; 2003 c.748 §6; 2011 c.500 §20]
743.755 [1969
c.526 §1; renumbered 742.366 in 1989]
743.756
[Formerly 747.180; renumbered 742.368 in 1989]
743.757 Health benefit coverage for
guaranteed association. (1) As used in this section, “guaranteed
association” means an association that:
(a)
The Director of the Department of Consumer and Business Services has determined
under ORS 743.524 meets the requirements described in ORS 743.522 (1)(b); and
(b)
Is a statewide nonprofit organization representing the interests of individuals
licensed under ORS chapter 696.
(2)
A carrier may offer a health benefit plan to a guaranteed association if the
plan provides health benefits covering 500 or more members or dependents of
members of the association.
(3)
When a carrier offers coverage to a guaranteed association under subsection (2)
of this section, the carrier shall offer coverage to all members of the
association and all dependents of the members of the association without regard
to the actual or expected health status of any member or any dependent of a
member of the association.
(4)
A carrier offering a health benefit plan under subsection (2) of this section
shall establish premium rates as follows:
(a)
For the initial 12-month period of coverage, the carrier shall submit to the
director a certified statement that the premium rates charged to the guaranteed
association are actuarially sound. The statement must be signed by an actuary
certifying the accuracy of the rating methodology as established by the
American Academy of Actuaries.
(b)
For any subsequent 12-month period of coverage, according to a rating
methodology as established by the American Academy of Actuaries.
(5)
A member of a guaranteed association may apply for coverage offered by a
carrier under subsection (2) of this section only:
(a)
If the member has been an active member of the association for no less than 30
days;
(b)
During an annual open enrollment period offered by the association; and
(c)
After meeting any additional eligibility requirements agreed upon by the
association and the carrier.
(6)
Notwithstanding subsection (5) of this section, if a member or a dependent of a
member of a guaranteed association terminates coverage under the health benefit
plan, the member or dependent shall be excluded from coverage for 12 months
from the date of termination of coverage. The member may enroll for coverage of
the member or the dependent during an annual open enrollment period following
the expiration of the exclusion period. [2005 c.571 §2]
743.758 Implementation of federal laws;
rules. The Department of Consumer and Business
Services may adopt rules incorporating, implementing and administering the
Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191), the
Patient Protection and Affordable Care Act (P.L. 111-148) as amended by the
Health Care and Education Reconciliation Act (P.L. 111-152) and federal
regulations that are issued in conjunction with the Acts. [1997 c.716 §21; 2011
c.500 §21]
743.759
[Formerly 747.190; renumbered 742.370 in 1989]
743.760 Approval of portability plans;
offering of plans by carriers; required provisions; actuarial certification.
(1) As used in this section:
(a)
“Carrier” means an insurer authorized to issue a policy of health insurance in
this state. “Carrier” does not include a multiple employer welfare arrangement.
(b)(A)
“Eligible individual” means an individual who:
(i)
Has left coverage that was continuously in effect for a period of 180 days or
more under one or more Oregon group health benefit plans, has applied for
portability coverage not later than the 63rd day after termination of group
coverage issued by an Oregon carrier and is an Oregon resident at the time of
such application; or
(ii)
Meets the eligibility requirements of 42 U.S.C. 300gg-41, has applied for
portability coverage not later than the 63rd day after termination of group
coverage issued by an Oregon carrier and is an Oregon resident at the time of
such application.
(B)
Except as provided in subsection (12) of this section, “eligible individual”
does not include an individual who remains eligible for the individual’s prior
group coverage or would remain eligible for prior group coverage in a plan
under the federal Employee Retirement Income Security Act of 1974, as amended,
were it not for action by the plan sponsor relating to the actual or expected
health condition of the individual, or who is covered under another health
benefit plan at the time that portability coverage would commence or is
eligible for the federal Medicare program.
(c)
“Portability health benefit plans” and “portability plans” mean health benefit
plans for eligible individuals that are required to be offered by all carriers
offering group health benefit plans and that have been approved by the Director
of the Department of Consumer and Business Services in accordance with this
section.
(2)(a)
In order to improve the availability and affordability of health benefit plans
for individuals leaving coverage under group health benefit plans, the director
shall develop two portability health benefit plans pursuant to ORS 743.745. One
plan shall be in the form of insurance and the second plan shall be consistent
with the type of coverage provided by health maintenance organizations. For
each type of portability plan, the director shall establish standards for:
(A)
A prevailing benefit plan, which shall reflect the benefit coverages that are
prevalent in the group health insurance market; and
(B)
A low cost benefit plan, which shall emphasize affordability for eligible
individuals.
(b)
Except as provided in ORS 743.730 to 743.773, no state law requiring the
coverage or the offer of coverage of a health care service or benefit shall
apply to portability health benefit plans.
(3)
The standards for portability health benefit plans established by the director
under subsection (2) of this section must provide for appropriate accessibility
and affordability of needed health care services and comply with all other
provisions of this section.
(4)
Each carrier offering group health benefit plans shall submit to the director
the policy form or forms containing at least one low cost benefit and one
prevailing benefit portability plan offered by the carrier that meets the
standards established by the director under subsection (2) of this section.
Each policy form must be submitted as prescribed by the director and is subject
to review and approval pursuant to ORS 742.003.
(5)
No later than 180 days after the director establishes standards for portability
plans, as a condition of transacting group health insurance in this state, each
carrier offering group health benefit plans shall make available to eligible
individuals the prevailing benefit and low cost benefit portability plans that
have been submitted by the carrier and approved by the director under
subsection (4) of this section.
(6)
A carrier offering group health benefit plans shall issue to an eligible
individual who is leaving or has left group coverage provided by that carrier
any portability plan offered by the carrier if the eligible individual applies
for the plan within 63 days after termination of prior coverage and agrees to
make the required premium payments and to satisfy the other provisions of the
portability plan.
(7)
Premium rates for portability plans shall be subject to the following
provisions:
(a)
Each carrier must file with the director the carrier’s initial geographic
average rate and any changes in the geographic average rate with respect to
each portability health benefit plan issued by the carrier.
(b)
The premium rates charged during the rating period for each portability health
benefit plan shall not vary from the geographic average rate, except that the
premium rate may be adjusted to reflect differences in benefit design, family
composition and age. Adjustments for age shall comply with the following:
(A)
For each plan, the variation between the lowest premium rate and the highest
premium rate shall not exceed 100 percent of the lowest premium rate.
(B)
Premium variations shall be determined by applying uniformly the carrier’s
schedule of age adjustments for portability plans as approved by the director.
(c)
Premium variations between the portability plans and the rest of the carrier’s
group plans must be based solely on objective differences in plan design or
coverage and must not include differences based on the actual or expected
health status of individuals who select portability health benefit plans. For
purposes of determining the premium variations under this paragraph, a carrier
may:
(A)
Pool all portability plans with all group health benefit plans; or
(B)
Pool all portability plans for eligible individuals leaving small employer
group health benefit plan coverage with all plans offered to small employers
and pool all portability plans for eligible individuals leaving other group
health benefit plan coverage with all health benefit plans offered to such
other groups.
(d)
A carrier may not increase the rates of a portability plan issued to a
policyholder more than once in any 12-month period. Annual rate increases shall
be effective on the anniversary date of the plan issued to the policyholder.
The percentage increase in the premium rate charged to a policyholder for a new
rating period may not exceed the average increase in the rest of the carrier’s
applicable group health benefit plans plus an adjustment for age.
(8)
A portability plan under this section may not contain preexisting condition
exclusions, waiting periods or other similar limitations on coverage.
(9)
Portability health benefit plans shall be renewable with respect to all
enrollees at the option of the enrollee unless:
(a)
The policyholder fails to pay the required premiums;
(b)
The policyholder or a representative of the policyholder engages in fraud or
makes an intentional misrepresentation of a material fact as prohibited by the
terms of the policy;
(c)
The carrier elects to discontinue offering all of its group health benefit
plans in accordance with ORS 743.737 and 743.754; or
(d)
The director orders the carrier to discontinue coverage in accordance with
procedures specified or approved by the director upon finding that the
continuation of the coverage would:
(A)
Not be in the best interests of the enrollees; or
(B)
Impair the carrier’s ability to meet its contractual obligations.
(10)(a)
A carrier offering a group health benefit plan shall maintain at its principal
place of business a complete and detailed description of its rating practices
and renewal underwriting practices relating to its portability plans, including
information and documentation that demonstrate that its rating methods and
practices are based upon commonly accepted actuarial practices and are in
accordance with sound actuarial principles.
(b)
A carrier offering a group health benefit plan shall file with the Department
of Consumer and Business Services annually on or before March 15 an actuarial
certification that the carrier is in compliance with this section and that its
rating methods are actuarially sound. Each certification shall be in a form and
manner and shall contain such information as specified by the department. A
copy of each certification shall be retained by the carrier at its principal
place of business.
(c)
A carrier offering a group health benefit plan shall make the information and
documentation described in paragraph (a) of this subsection available to the
department upon request. Except as provided in ORS 743.018 and except in cases
of violations of the Insurance Code, the information is proprietary and trade
secret information and shall not be subject to disclosure to persons outside
the department except as agreed to by the carrier or as ordered by a court of
competent jurisdiction.
(11)
A carrier offering a group health benefit plan shall not provide any financial
or other incentive to any insurance producer that would encourage the insurance
producer to market and sell portability plans of the carrier on the basis of an
eligible individual’s anticipated claims experience.
(12)
An individual who is eligible to obtain a portability plan in accordance with
this section may obtain such a plan regardless of whether the eligible
individual qualifies for a period of continuation coverage under federal law or
under ORS 743.600 or 743.610. However, an individual who has elected such
continuation coverage is not eligible to obtain a portability plan until the
continuation coverage has been discontinued by the individual or has been exhausted.
(13)
Subject to the provisions of ORS 743.894 (2) and (4), a carrier may rescind a
portability health benefit plan issued to a policyholder only if the
policyholder or a representative of the policyholder:
(a)
Performs an act, practice or omission that constitutes fraud; or
(b)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the policy. [1995 c.603 §18; 1997 c.716 §25; 1999 c.987 §14; 2003
c.364 §115; 2007 c.391 §3; 2011 c.500 §22]
Note:
Additions by chapter 322, Oregon Laws 2011, to the series 743.730 to 743.773,
which become operative January 2, 2014, expand the series to 743.730 to
743.773, 743.822 and 743.826. See sections 1, 2 [743.822 (2)], 3 [743.822 (1)],
4 [743.826] and 6, chapter 322, Oregon Laws 2011. See Preface to Oregon Revised
Statutes for further explanation.
743.761 Satisfaction of requirements of
ORS 743.760 by carrier offering individual health benefit plans; rules.
(1) A carrier approved pursuant to subsection (4) of this section that offers
individual health benefit plans may satisfy the requirements of ORS 743.760 by
issuing any individual health benefit plan offered by the carrier to any
eligible individual as defined in ORS 743.760 who:
(a)
Is leaving or has left a group health benefit plan provided by that carrier;
(b)
Applies for the policy; and
(c)
Agrees to make the required premium payments and to satisfy the other
provisions of the plan.
(2)
All health benefit plans issued pursuant to subsection (1) of this section
shall:
(a)
Comply with ORS 743.767 and 743.769; and
(b)
Contain no preexisting condition exclusions, waiting periods or other similar
limitations on coverage.
(3)
A carrier offering plans pursuant to this section shall offer plans that meet
the standards and requirements described in ORS 743.760 (2).
(4)
The Director of the Department of Consumer and Business Services shall adopt
standards for minimum participation in the individual market necessary for a
carrier to offer policies under this section and shall develop a program for
approval of carriers under this section. [1995 c.603 §19; 2011 c.500 §23]
743.762
[Formerly 747.082; 1989 c.634 §1; renumbered 742.372 in 1989]
743.763 [1995
c.603 §20; 1997 c.716 §26; renumbered 735.616 in 1997]
743.764 Preventive health services;
coverage; cost sharing. Notwithstanding any other
provision of law, a health benefit plan that is not a grandfathered health
plan:
(1)
Must provide coverage of preventive health services as prescribed by the United
States Department of Health and Human Services pursuant to 42 U.S.C. 300gg-13;
and
(2)
May not impose cost-sharing requirements on an enrollee for preventive health
services, except as allowed by federal law. [2011 c.500 §2]
Note:
743.764 was added to and made a part of 743.730 to 743.773 by legislative
action but was not added to any smaller series therein. See Preface to Oregon
Revised Statutes for further explanation.
743.765
[Formerly 747.084; 1989 c.634 §2; renumbered 742.374 in 1989]
743.766 Use of health statements in
individual health benefit plans; preexisting condition exclusions; eligibility
to apply for Oregon Medical Insurance Pool; renewal; discontinuation of
coverage. (1) All carriers that offer an
individual health benefit plan and evaluate the health status of individuals
for purposes of eligibility shall use the standard health statement established
under ORS 743.745 and may not use any other method to determine the health
status of an individual. Nothing in this subsection shall prevent a carrier from
using health information after enrollment for the purpose of providing services
or arranging for the provision of services under a health benefit plan.
(2)(a)
If an individual is accepted for coverage under an individual health benefit
plan, the carrier shall not impose exclusions or limitations other than:
(A)
A preexisting condition exclusion that complies with the following
requirements:
(i)
The exclusion applies only to a condition for which medical advice, diagnosis,
care or treatment was recommended or received during the six-month period
immediately preceding the individual’s effective date of coverage;
(ii)
The exclusion expires no later than six months after the individual’s effective
date of coverage; and
(iii)
Except for grandfathered health plans, the exclusion does not apply to
individuals who are under 19 years of age;
(B)
An individual coverage waiting period of 90 days; or
(C)
An exclusion period for specified covered services applicable to all
individuals enrolling for the first time in the individual health benefit plan.
(b)
Except for grandfathered health plans, pregnancy of individuals who are under
19 years of age may not constitute a preexisting condition for purposes of this
section.
(3)
If the carrier elects to restrict coverage through the application of a
preexisting condition exclusion or an individual coverage waiting period
provision, the carrier shall reduce the duration of the provision by an amount
equal to the individual’s aggregate periods of creditable coverage if the most
recent period of creditable coverage is ongoing or ended within 63 days after
the effective date of coverage in the new individual health benefit plan. The
crediting of prior coverage in accordance with this subsection shall be applied
without regard to the specific benefits covered during the prior period.
(4)
If an eligible prospective enrollee is rejected for coverage under an
individual health benefit plan, the prospective enrollee shall be eligible to
apply for coverage under the Oregon Medical Insurance Pool.
(5)
If a carrier accepts an individual for coverage under an individual health
benefit plan, the carrier shall renew the policy unless:
(a)
The policyholder fails to pay the required premiums.
(b)
The policyholder or a representative of the policyholder engages in fraud or
makes an intentional misrepresentation of a material fact as prohibited by the
terms of the policy.
(c)
The carrier discontinues offering or renewing, or offering and renewing, all of
its individual health benefit plans in this state or in a specified service
area within this state. In order to discontinue the plans under this paragraph,
the carrier:
(A)
Must give notice of the decision to the Department of Consumer and Business
Services and to all policyholders covered by the plans;
(B)
May not cancel coverage under the plans for 180 days after the date of the
notice required under subparagraph (A) of this paragraph if coverage is
discontinued in the entire state or, except as provided in subparagraph (C) of
this paragraph, in a specified service area;
(C)
May not cancel coverage under the plans for 90 days after the date of the
notice required under subparagraph (A) of this paragraph if coverage is
discontinued in a specified service area because of an inability to reach an
agreement with the health care providers or organization of health care
providers to provide services under the plans within the service area; and
(D)
Must discontinue offering or renewing, or offering and renewing, all health
benefit plans issued by the carrier in the individual market in this state or
in the specified service area.
(d)
The carrier discontinues offering and renewing an individual health benefit
plan in a specified service area within this state because of an inability to
reach an agreement with the health care providers or organization of health
care providers to provide services under the plan within the service area. In
order to discontinue a plan under this paragraph, the carrier:
(A)
Must give notice of the decision to the department and to all policyholders
covered by the plan;
(B)
May not cancel coverage under the plan for 90 days after the date of the notice
required under subparagraph (A) of this paragraph; and
(C)
Must offer in writing to each policyholder covered by the plan, all other
individual health benefit plans that the carrier offers in the specified
service area. The carrier shall offer the plans at least 90 days prior to
discontinuation.
(e)
The carrier discontinues offering or renewing, or offering and renewing, an
individual health benefit plan, other than a grandfathered health plan, for all
individuals in this state or in a specified service area within this state,
other than a plan discontinued under paragraph (d) of this subsection.
(f)
The carrier discontinues renewing or offering and renewing a grandfathered
health plan for all individuals in this state or in a specified service area
within this state, other than a plan discontinued under paragraph (d) of this
subsection.
(g)
With respect to plans that are being discontinued under paragraph (e) or (f) of
this subsection, the carrier must:
(A)
Offer in writing to each policyholder covered by the plan, all health benefit
plans that the carrier offers to individuals in the specified service area.
(B)
Offer the plans at least 90 days prior to discontinuation.
(C)
Act uniformly without regard to the claims experience of the affected
policyholders or the health status of any current or prospective enrollee.
(h)
The Director of the Department of Consumer and Business Services orders the
carrier to discontinue coverage in accordance with procedures specified or
approved by the director upon finding that the continuation of the coverage
would:
(A)
Not be in the best interests of the enrollee; or
(B)
Impair the carrier’s ability to meet its contractual obligations.
(i)
In the case of an individual health benefit plan that delivers covered services
through a specified network of health care providers, the enrollee no longer
lives, resides or works in the service area of the provider network and the
termination of coverage is not related to the health status of any enrollee.
(j)
In the case of a health benefit plan that is offered in the individual market
only through one or more bona fide associations, the membership of an
individual in the association ceases and the termination of coverage is not
related to the health status of any enrollee.
(6)
A carrier may modify an individual health benefit plan at the time of coverage
renewal. The modification is not a discontinuation of the plan under subsection
(5)(c), (e) and (f) of this section.
(7)
Notwithstanding any other provision of this section, and subject to the
provisions of ORS 743.894 (2) and (4), a carrier may rescind an individual
health benefit plan if the policyholder or a representative of the
policyholder:
(a)
Performs an act, practice or omission that constitutes fraud; or
(b)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the policy.
(8)
A carrier that withdraws from the market for individual health benefit plans
must continue to renew its portability health benefit plans that have been
approved pursuant to ORS 743.761.
(9)
A carrier that continues to offer coverage in the individual market in this
state is not required to offer coverage in all of the carrier’s individual
health benefit plans. However, if a carrier elects to continue a plan that is
closed to new individual policyholders instead of offering alternative coverage
in its other individual health benefit plans, the coverage for all existing
policyholders in the closed plan is renewable in accordance with subsection (5)
of this section.
(10)
An individual health benefit plan may not impose lifetime limits on the dollar
amount of the essential health benefits prescribed by the United States
Secretary of Health and Human Services pursuant to 42 U.S.C. 300gg-11, except
as permitted by federal law.
(11)
This section does not require a carrier to actively market, offer, issue or
accept applications for a grandfathered health plan or from an individual not
eligible for coverage under such a plan as provided by the Patient Protection
and Affordable Care Act (P.L. 111-148) as amended by the Health Care and
Education Reconciliation Act (P.L. 111-152). [1995 c.603 §§22,41; 1997 c.716 §§15,16;
1999 c.987 §15; 2001 c.943 §14; 2003 c.748 §7; 2011 c.500 §24]
743.767 Premium rates for individual
health benefit plans. Premium rates for individual
health benefit plans shall be subject to the following provisions:
(1)
Each carrier must file the carrier’s initial geographic average rate and any
changes to the geographic average rate for its individual health benefit plans
with the Director of the Department of Consumer and Business Services.
(2)
The premium rates charged during a rating period for individual health benefit
plans issued to individuals shall not vary from the individual geographic
average rate, except that the premium rate may be adjusted to reflect
differences in benefit design, family composition and age. For age adjustments
to the individual plans, a carrier shall apply uniformly its schedule of age
adjustments for individual health benefit plans as approved by the director.
(3)
A carrier may not increase the rates of an individual health benefit plan more
than once in a 12-month period except as approved by the director. Annual rate
increases shall be effective on the anniversary date of the individual health
benefit plan’s issuance. The percentage increase in the premium rate charged
for an individual health benefit plan for a new rating period may not exceed
the sum of the following:
(a)
The percentage change in the carrier’s geographic average rate for its
individual health benefit plan measured from the first day of the prior rating
period to the first day of the new period; and
(b)
Any adjustment attributable to changes in age and differences in benefit design
and family composition.
(4)
Notwithstanding any other provision of this section, a carrier that imposes an
individual coverage waiting period pursuant to ORS 743.766 may impose a monthly
premium rate surcharge for a period not to exceed six months and in an amount
not to exceed the percentage by which the rates for coverage under the Oregon
Medical Insurance Pool exceed the rates established by the Oregon Medical
Insurance Pool Board as applicable for individual risks under ORS 735.625. The
surcharge shall be approved by the Director of the Department of Consumer and
Business Services and, in combination with the waiting period, shall not exceed
the actuarial value of a six-month preexisting condition exclusion. [1995 c.603
§23; 1999 c.987 §16; 2011 c.500 §25]
743.768
[Formerly 747.086; 1983 c.338 §964; 1989 c.634 §3; renumbered 742.376 in 1989]
743.769 Carrier marketing of individual
health benefit plans; rules; duties of carrier regarding applications; effect
of discontinuing offer of plans. (1) Each
carrier shall actively market all individual health benefit plans sold by the
carrier.
(2)
Except as provided in subsection (3) of this section, no carrier or insurance
producer shall, directly or indirectly, discourage an individual from filing an
application for coverage because of the health status, claims experience,
occupation or geographic location of the individual.
(3)
Subsection (2) of this section does not apply with respect to information
provided by a carrier to an individual regarding the established geographic
service area or a restricted network provision of a carrier.
(4)
Rejection by a carrier of an application for coverage shall be in writing and
shall state the reason or reasons for the rejection.
(5)
The Director of the Department of Consumer and Business Services may establish
by rule additional standards to provide for the fair marketing and broad
availability of individual health benefit plans.
(6)
A carrier that elects to discontinue offering all of its individual health
benefit plans under ORS 743.766 (5)(c) or to discontinue offering and renewing
all such plans is prohibited from offering and renewing health benefit plans in
the individual market in this state for a period of five years from the date of
notice to the director pursuant to ORS 743.766 (5)(c) or, if such notice is not
provided, from the date on which the director provides notice to the carrier that
the director has determined that the carrier has effectively discontinued
offering individual health benefit plans in this state. This subsection does
not apply with respect to a health benefit plan discontinued in a specified
service area by a carrier that covers services provided only by a particular
organization of health care providers or only by health care providers who are
under contract with the carrier. [1995 c.603 §24; 1999 c.987 §17; 2003 c.364 §116;
2003 c.590 §§1,3]
743.770
[Formerly 743.780; 1987 c.774 §60; renumbered 742.400 in 1989]
743.771 [1987
c.774 §151; renumbered 742.405 in 1989]
743.772
[Formerly 743.783; renumbered 742.031 in 1989]
743.773 Rules for ORS 743.766 to 743.769.
The Director of the Department of Consumer and Business Services shall adopt
all rules necessary for the implementation and administration of ORS 743.766 to
743.769. [1995 c.603 §25]
743.774
[Formerly 486.097; renumbered 806.190 in 1987]
743.775 Submission of information by
carriers offering individual health benefit plans.
Each carrier that offers individual health benefit plans shall submit to the
Director of the Department of Consumer and Business Services any information
requested by the director for the purpose of assessing the impact of the
amendments to ORS 743.769 and 746.600 by sections 1 and 2, chapter 590, Oregon
Laws 2003. [2003 c.590 §8]
743.776
[Formerly 486.541; renumbered 742.450 in 1989]
743.777 Electronic administration; discounted
rates; requirements. (1) As used in subsections (2) to
(6) of this section:
(a)
“Explanation of benefits” means claim processing advice or notification of
action on claims.
(b)
“Payment, remittance and reconciliation information” means all information
required for premium billing or invoicing, facilitating timely electronic
payment of premiums due, delinquency notification, final billing notification
or termination of coverage.
(c)
“Plan renewal information” means all correspondence and materials related to an
offer to renew insurance provided by an insurer to a health insurance
purchaser.
(d)
“Quote information” means all correspondence and materials related to an offer
to insure or a rate quotation provided by an insurer to a health insurance
purchaser.
(e)
“Sale and enrollment information” means all information documenting the sale of
a policy or certificate of health insurance, the renewal of a policy or
certificate of health insurance, the enrollment of members in a group health
insurance plan or the enrollment of an individual in an individual health
insurance plan, including but not limited to:
(A)
The application for insurance;
(B)
Initial and ongoing documentation required by the insurer to be provided by an
insured to establish eligibility and enrollment, adjudicate and process claims
and prove prior creditable coverage or duplicate coverage;
(C)
Premium information;
(D)
Documentation of the payment of a premium; and
(E)
Membership identification cards.
(2)
In the administration of small employer group health insurance or individual
health insurance, an insurer may communicate one or more of the following by
electronic means:
(a)
Quote information.
(b)
Sale and enrollment information.
(c)
Payment, remittance and reconciliation information.
(d)
Explanation of benefits.
(e)
Plan renewal information.
(f)
Notifications required by law.
(g)
Other communications, documentation, revisions or materials otherwise provided
on paper.
(3)
Electronic administration of small employer group or individual health
insurance plans shall be transacted using secure systems specifically designed
by the insurer for the purpose of electronic health insurance administration.
(4)
An insurer who elects to offer discounted rates for a health insurance plan
utilizing electronic administration shall include the schedule of discounts for
utilization of electronic administration as part of a small employer group
health insurance or individual health insurance rate filing. The rate discounts
may be graduated and must be proportionate to the amount of administrative cost
savings the insurer anticipates as a result of the use of electronic
transactions described in subsections (2) and (3) of this section.
(5)
Discounted rates allowed under subsections (4) to (6) of this section shall be
applied uniformly to all similarly situated small employer group or individual
health insurance purchasers of an insurer.
(6)
Discounts in premium rates under subsections (4) to (6) of this section are not
premium rate variations for purposes of ORS 743.737 (11) or 743.767.
(7)
Subsections (1) to (6) of this section do not require an insurer to offer
discounted rates for a health insurance plan utilizing electronic
administration or require a small employer group or an individual health
insurance purchaser to use electronic administration. [2010 c.75 §§2 to 5; 2011
c.500 §45]
Note:
743.777 (1) to (6) were added to and made a part of the Insurance Code by
legislative action but were not added to ORS chapter 743 or any series therein.
743.777 (7) was enacted into law by the Legislative Assembly but was not added
to or made a part of ORS chapter 743 or any series therein by legislative
action. See Preface to Oregon Revised Statutes for further explanation.
743.778
[Formerly 486.546; renumbered 742.454 in 1989]
743.779
[Formerly 486.551; 1989 c.700 §14; renumbered 742.456 in 1989]
743.780 [1975
c.796 §10; 1977 c.448 §12; 1985 c.103 §14; 1985 c.323 §10; 1985 c.624 §17a;
renumbered 743.770; renumbered 742.400 in 1989]
743.781
[Formerly 486.556; 1989 c.700 §15; renumbered 742.458 in 1989]
743.782
[Formerly 486.561; 1989 c.700 §16; renumbered 742.460 in 1989]
743.783
[Formerly 736.320; renumbered 743.772; renumbered 742.031 in 1989]
743.784
[Formerly 486.564; 1989 c.700 §17; renumbered 742.462 in 1989]
743.785
[Formerly 486.566; renumbered 742.464 in 1989]
743.786 [1967
c.482 §1; 1971 c.523 §11; 1979 c.842 §7; 1983 c.338 §965; renumbered 742.500 in
1989]
743.787 Definitions for ORS 743.788.
As used in ORS 743.788:
(1)
“Carrier” has the meaning given that term in ORS 743.730.
(2)
“Enrollee” has the meaning given that term in ORS 743.730.
(3)
“Health benefit plan” has the meaning given that term in ORS 743.730. [2001
c.549 §2]
743.788 Prescription drug identification
card. (1) A carrier that provides coverage
for prescription drugs provided on an outpatient basis and issues a card or
other technology for claims processing, or an administrator of a health benefit
plan including, but not limited to, a third party administrator for a
self-insured plan, a pharmacy benefits manager and an administrator of a state
administered plan, shall issue to an enrollee a prescription drug
identification card or other technology that contains all information required
for proper claims adjudication.
(2)
Upon renewal of a health benefit plan, a carrier or administrator shall issue a
prescription drug identification card or other technology containing all
current information required for proper claims adjudication.
(3)
A carrier or administrator of a health benefit plan is not required to issue a
prescription drug identification card or other technology separate from another
identification card or technology issued to an enrollee under the health
benefit plan if the identification card or technology contains all of the
information required for proper claims adjudication. [2001 c.549 §3]
743.789 [1967
c.482 §2; 1975 c.390 §1; 1981 c.586 §1; 1983 c.338 §966; 1987 c.632 §1;
renumbered 742.502 in 1989]
743.790 Rules for prescription drug
identification cards. The Director of the Department
of Consumer and Business Services may adopt rules to implement ORS 743.788 and
may consider any relevant standards developed by a standards development
organization accredited by the American National Standards Institute that
represents organizations interested in electronic standardization with the
pharmacy services sector of the health care industry and the requirements of
the Health Insurance Portability and Accountability Act of 1996, Public Law
104-191. [2001 c.549 §4]
743.791 [2005
c.482 §2; renumbered 743A.108 in 2007]
743.792 [1967
c.482 §3; 1977 c.600 §3; 1979 c.842 §8; 1983 c.338 §967; renumbered 742.504 in
1989]
743.793 [2003
c.91 §4; renumbered 743A.064 in 2007]
743.794 [2005
c.477 §2; renumbered 743A.120 in 2007]
743.795 [1979
c.842 §10; renumbered 742.506 in 1989]
743.796 [1987
c.742 §3; renumbered 742.508 in 1989]
743.797 [1987
c.742 §2; renumbered 742.510 in 1989]
743.798 [2005
c.628 §2; renumbered 743A.050 in 2007]
743.799 [2005
c.765 §6; renumbered 743A.124 in 2007]
743.800 [1971
c.523 §2; 1973 c.551 §1; 1975 c.784 §1; 1979 c.871 §45; 1981 c.414 §1; 1983
c.338 §968; 1987 c.588 §1; renumbered 742.520 in 1989]
MISCELLANEOUS
743.801 Definitions.
As used in this section and ORS 743.803, 743.804, 743.806, 743.807, 743.808,
743.811, 743.814, 743.817, 743.819, 743.821, 743.823, 743.827, 743.829,
743.831, 743.834, 743.837, 743.839, 743.854, 743.856, 743.857, 743.858,
743.859, 743.861, 743.862, 743.863, 743.864, 743.894, 743.911, 743.912,
743.913, 743.917 and 743.918:
(1)
“Adverse benefit determination” means an insurer’s denial, reduction or
termination of a health care item or service, or an insurer’s failure or
refusal to provide or to make a payment in whole or in part for a health care
item or service, that is based on the insurer’s:
(a)
Denial of eligibility for or termination of enrollment in a health benefit
plan;
(b)
Rescission or cancellation of a policy or certificate;
(c)
Imposition of a preexisting condition exclusion as defined in ORS 743.730,
source-of-injury exclusion, network exclusion, annual benefit limit or other
limitation on otherwise covered items or services;
(d)
Determination that a health care item or service is experimental,
investigational or not medically necessary, effective or appropriate; or
(e)
Determination that a course or plan of treatment that an enrollee is undergoing
is an active course of treatment for purposes of continuity of care under ORS
743.854.
(2)
“Authorized representative” means an individual who by law or by the consent of
a person may act on behalf of the person.
(3)
“Enrollee” has the meaning given that term in ORS 743.730.
(4)
“Grievance” means:
(a)
A request submitted by an enrollee or an authorized representative of an
enrollee:
(A)
In writing, for an internal appeal or an external review; or
(B)
In writing or orally, for an expedited response described in ORS 743.804 (2)(d)
or an expedited external review; or
(b)
A written complaint submitted by an enrollee or an authorized representative of
an enrollee regarding the:
(A)
Availability, delivery or quality of a health care service;
(B)
Claims payment, handling or reimbursement for health care services and, unless
the enrollee has not submitted a request for an internal appeal, the complaint
is not disputing an adverse benefit determination; or
(C)
Matters pertaining to the contractual relationship between an enrollee and an
insurer.
(5)
“Health benefit plan” has the meaning given that term in ORS 743.730.
(6)
“Independent practice association” means a corporation wholly owned by
providers, or whose membership consists entirely of providers, formed for the
sole purpose of contracting with insurers for the provision of health care
services to enrollees, or with employers for the provision of health care
services to employees, or with a group, as described in ORS 743.522, to provide
health care services to group members.
(7)
“Insurer” includes a health care service contractor as defined in ORS 750.005.
(8)
“Internal appeal” means a review by an insurer of an adverse benefit determination
made by the insurer.
(9)
“Managed health insurance” means any health benefit plan that:
(a)
Requires an enrollee to use a specified network or networks of providers
managed, owned, under contract with or employed by the insurer in order to receive
benefits under the plan, except for emergency or other specified limited
service; or
(b)
In addition to the requirements of paragraph (a) of this subsection, offers a
point-of-service provision that allows an enrollee to use providers outside of
the specified network or networks at the option of the enrollee and receive a
reduced level of benefits.
(10)
“Medical services contract” means a contract between an insurer and an
independent practice association, between an insurer and a provider, between an
independent practice association and a provider or organization of providers,
between medical or mental health clinics, and between a medical or mental
health clinic and a provider to provide medical or mental health services. “Medical
services contract” does not include a contract of employment or a contract
creating legal entities and ownership thereof that are authorized under ORS
chapter 58, 60 or 70, or other similar professional organizations permitted by
statute.
(11)(a)
“Preferred provider organization insurance” means any health benefit plan that:
(A)
Specifies a preferred network of providers managed, owned or under contract
with or employed by an insurer;
(B)
Does not require an enrollee to use the preferred network of providers in order
to receive benefits under the plan; and
(C)
Creates financial incentives for an enrollee to use the preferred network of
providers by providing an increased level of benefits.
(b)
“Preferred provider organization insurance” does not mean a health benefit plan
that has as its sole financial incentive a hold harmless provision under which
providers in the preferred network agree to accept as payment in full the
maximum allowable amounts that are specified in the medical services contracts.
(12)
“Prior authorization” means a determination by an insurer prior to provision of
services that the insurer will provide reimbursement for the services. “Prior
authorization” does not include referral approval for evaluation and management
services between providers.
(13)
“Provider” means a person licensed, certified or otherwise authorized or
permitted by laws of this state to administer medical or mental health services
in the ordinary course of business or practice of a profession.
(14)
“Utilization review” means a set of formal techniques used by an insurer or
delegated by the insurer designed to monitor the use of or evaluate the medical
necessity, appropriateness, efficacy or efficiency of health care services,
procedures or settings. [1995 c.672 §1; 1997 c.343 §18; 2001 c.266 §1; 2001
c.747 §5; 2003 c.87 §21; 2003 c.137 §§3,4; 2005 c.418 §2; 2009 c.806 §3; 2009
c.807 §4; 2011 c.500 §26]
743.802 [1987
c.588 §5; renumbered 742.522 in 1989]
743.803 Medical services contract
provisions; nonprovider party prohibitions; future contracts.
(1) A medical services contract may not require the provider, as an element of
the contract or as a condition of compensation for services, to agree:
(a)
In the event of alleged improper medical treatment of a patient, to indemnify
the other party to the medical services contract for any damages, awards or
liabilities including but not limited to judgments, settlements, attorney fees,
court costs and any associated charges incurred for any reason other than the
negligence or intentional act of the provider or the provider’s employees;
(b)
To charge the other party to the medical services contract a rate for services
rendered pursuant to the medical services contract that is no greater than the
lowest rate that the provider charges for the same service to any other person;
(c)
To deny care to a patient because of a determination made pursuant to the
medical services contract that the care is not covered or is experimental, or
to deny referral of a patient to another provider for the provision of such
care, if the patient is informed that the patient will be responsible for the
payment of such noncovered, experimental or referral care and the patient
nonetheless desires to obtain such care or referral; or
(d)
Upon the provider’s withdrawal from or termination or nonrenewal of the medical
services contract, not to treat or solicit a patient even at that patient’s
request and expense.
(2)
A medical services contract shall:
(a)
Grant to the provider adequate notice and hearing procedures, or such other
procedures as are fair to the provider under the circumstances, prior to
termination or nonrenewal of the medical services contract when such
termination or nonrenewal is based upon issues relating to the quality of
patient care rendered by the provider.
(b)
Set forth generally the criteria used by the other party to the medical
services contract for the termination or nonrenewal of the medical services
contract.
(c)
Entitle the provider to an annual accounting accurately summarizing the financial
transactions between the parties to the medical services contract for that
year.
(d)
Allow the provider to withdraw from the care of a patient when, in the
professional judgment of the provider, it is in the best interest of the
patient to do so.
(e)
Provide that a doctor of medicine or osteopathy licensed under ORS chapter 677
shall be retained by the other party to the medical services contract and shall
be responsible for all final medical and mental health decisions relating to
coverage or payment made pursuant to the medical services contract.
(f)
Provide that a physician who is practicing in conformity with ORS 677.095 may
advocate a decision, policy or practice without being subject to termination or
penalty for the sole reason of such advocacy.
(g)(A)
Entitle the party to the medical services contract who is being reimbursed for
the provision of health care services on a basis that includes financial risk
withholds, or the party’s representative, to a full accounting of health
benefits claims data and related financial information on no less than a
quarterly basis by the party to a medical service contract who has made
reimbursement, as follows:
(i)
The data shall include all pertinent information relating to the health care
services provided, including related provider and patient information,
reimbursements made and amounts withheld under the financial risk withhold
provisions of the medical services contract for the period of time under
reconciliation and settlement between the parties.
(ii)
Any reconciliation and settlement undertaken pursuant to a medical services
contract shall be based directly and exclusively upon data provided to the
party who is being reimbursed for the provision of health care services.
(iii)
All data, including supplemental information or documentation, necessary to
finalize the reconciliation and settlement provisions of a medical services
contract relating to financial risk withholds shall be provided to the party
who is being reimbursed for the provision of health care services no later than
30 days prior to finalizing the reconciliation and settlement.
(B)
Nothing in this paragraph shall be construed to prevent parties to a medical
services contract from mutually agreeing to alternative reconciliation and
settlement policies and procedures.
(h)
Provide that when continuity of care is required to be provided under a health
benefit plan by ORS 743.854, the insurer and the individual provider shall
provide continuity of care to enrollees as provided in ORS 743.854.
(3)
The other party to a medical services contract shall not:
(a)
Refer to other documents or instruments in a contract unless the nonprovider
party agrees to make available to the provider for review a copy of the
documents or instruments within 72 hours of request; or
(b)
Provide as an element of a contract with a third party relating to the
provision of medical services to a patient of the provider that the provider’s
patient may not sue or otherwise recover from the nonprovider party, or must
hold the nonprovider party harmless for, any and all expenses, damages, awards
or liabilities that arise from the management decisions, utilization review
provisions or other policies or determinations of the nonprovider party that
have an impact on the provider’s treatment decisions and actions with regard to
the patient.
(4)
An insurer, independent practice association, medical or mental health clinic
or other party to a medical services contract shall provide the criteria for
selection of parties to future medical services contracts upon the request of
current or prospective parties. [1995 c.672 §2; 1997 c.343 §19; 1997 c.759 §4;
1999 c.271 §1; 2001 c.266 §4]
Note:
743.803, 743.806 and 743.811 were enacted into law by the Legislative Assembly
but were not added to or made a part of ORS chapter 743. See Preface to Oregon
Revised Statutes for further explanation.
743.804 Required notices to applicants and
enrollees; grievances, internal appeals and external reviews.
All insurers offering a health benefit plan in this state shall:
(1)
Provide to all enrollees directly or in the case of a group policy to the
employer or other policyholder for distribution to enrollees, to all
applicants, and to prospective applicants upon request, the following
information:
(a)
The insurer’s written policy on the rights of enrollees, including the right:
(A)
To participate in decision making regarding the enrollee’s health care.
(B)
To be treated with respect and with recognition of the enrollee’s dignity and
need for privacy.
(C)
To have grievances handled in accordance with this section.
(D)
To be provided with the information described in this section.
(b)
An explanation of the procedures described in subsection (2) of this section
for making coverage determinations and resolving grievances. The explanation
must be culturally and linguistically appropriate, as prescribed by the
department by rule, and must include:
(A)
The procedures for requesting an expedited response to an internal appeal under
subsection (2)(d) of this section or for requesting an expedited external
review of an adverse benefit determination;
(B)
A statement that if an insurer does not comply with the decision of an
independent review organization under ORS 743.862, the enrollee may sue the
insurer under ORS 743.864;
(C)
The procedure to obtain assistance available from the insurer, if any, and from
the Department of Consumer and Business Services in filing grievances; and
(D)
A description of the process for filing a complaint with the department.
(c)
A summary of benefits and an explanation of coverage in a form and manner
prescribed by the department by rule.
(d)
A summary of the insurer’s policies on prescription drugs, including:
(A)
Cost-sharing differentials;
(B)
Restrictions on coverage;
(C)
Prescription drug formularies;
(D)
Procedures by which a provider with prescribing authority may prescribe drugs
not included on the formulary;
(E)
Procedures for the coverage of prescription drugs not included on the
formulary; and
(F)
A summary of the criteria for determining whether a drug is experimental or
investigational.
(e)
A list of network providers and how the enrollee can obtain current information
about the availability of providers and how to access and schedule services
with providers, including clinic and hospital networks.
(f)
Notice of the enrollee’s right to select a primary care provider and specialty
care providers.
(g)
How to obtain referrals for specialty care in accordance with ORS 743.856.
(h)
Restrictions on services obtained outside of the insurer’s network or service
area.
(i)
The availability of continuity of care as required by ORS 743.854.
(j)
Procedures for accessing after-hours care and emergency services as required by
ORS 743A.012.
(k)
Cost-sharing requirements and other charges to enrollees.
(L)
Procedures, if any, for changing providers.
(m)
Procedures, if any, by which enrollees may participate in the development of
the insurer’s corporate policies.
(n)
A summary of how the insurer makes decisions regarding coverage and payment for
treatment or services, including a general description of any prior
authorization and utilization control requirements that affect coverage or
payment.
(o)
Disclosure of any risk-sharing arrangement the insurer has with physicians or
other providers.
(p)
A summary of the insurer’s procedures for protecting the confidentiality of
medical records and other enrollee information.
(q)
An explanation of assistance provided to non-English-speaking enrollees.
(r)
Notice of the information available from the department that is filed by
insurers as required under ORS 743.807, 743.814 and 743.817.
(2)
Establish procedures for making coverage determinations and resolving
grievances that provide for all of the following:
(a)
Timely notice of adverse benefit determinations in a form and manner approved
by the department or prescribed by the department by rule.
(b)
A method for recording all grievances, including the nature of the grievance
and significant action taken.
(c)
Written decisions meeting criteria established by the Director of the
Department of Consumer and Business Services by rule.
(d)
An expedited response to a request for an internal appeal that accommodates the
clinical urgency of the situation.
(e)
At least one but not more than two levels of internal appeal for group health
benefit plans and one level of internal appeal for individual and portability
health benefit plans. If an insurer provides:
(A)
Two levels of internal appeal, a person who was involved in the consideration
of the initial denial or the first level of internal appeal may not be involved
in the second level of internal appeal; and
(B)
No more than one level of internal appeal, a person who was involved in the
consideration of the initial denial may not be involved in the internal appeal.
(f)(A)
An external review that meets the requirements of ORS 743.857, 743.859 and
743.861 and is conducted in a manner approved by the department or prescribed
by the department by rule, after the enrollee has exhausted internal appeals or
after the enrollee has been deemed to have exhausted internal appeals.
(B)
An enrollee shall be deemed to have exhausted internal appeals if an insurer
fails to strictly comply with this section and federal requirements for
internal appeals.
(g)
The opportunity for the enrollee to receive continued coverage under the health
benefit plan pending the conclusion of the internal appeal process.
(h)
The opportunity for the enrollee or any authorized representative chosen by the
enrollee to:
(A)
Submit for consideration by the insurer any written comments, documents,
records and other materials relating to the adverse benefit determination; and
(B)
Receive from the insurer, upon request and free of charge, reasonable access to
and copies of all documents, records and other information relevant to the
adverse benefit determination.
(3)
Establish procedures for notifying affected enrollees of:
(a)
A change in or termination of any benefit; and
(b)(A)
The termination of a primary care delivery office or site; and
(B)
Assistance available to enrollees in selecting a new primary care delivery
office or site.
(4)
Provide the information described in subsection (2) of this section and ORS
743.859 at each level of internal appeal to an enrollee who is notified of an
adverse benefit determination or to an enrollee who files a grievance.
(5)
Upon the request of an enrollee, applicant or prospective applicant, provide:
(a)
The insurer’s annual report on grievances and internal appeals submitted to the
department under subsection (8) of this section.
(b)
A description of the insurer’s efforts, if any, to monitor and improve the
quality of health services.
(c)
Information about the insurer’s procedures for credentialing network providers.
(6)
Provide, upon the request of an enrollee, a written summary of information that
the insurer may consider in its utilization review of a particular condition or
disease, to the extent the insurer maintains such criteria. Nothing in this
subsection requires an insurer to advise an enrollee how the insurer would
cover or treat that particular enrollee’s disease or condition. Utilization
review criteria that are proprietary shall be subject to oral disclosure only.
(7)
Maintain for a period of at least six years written records that document all
grievances described in ORS 743.801 (4)(a) and make the written records
available for examination by the department or by an enrollee or authorized
representative of an enrollee with respect to a grievance made by the enrollee.
The written records must include but are not limited to the following:
(a)
Notices and claims associated with each grievance.
(b)
A general description of the reason for the grievance.
(c)
The date the grievance was received by the insurer.
(d)
The date of the internal appeal or the date of any internal appeal meeting held
concerning the appeal.
(e)
The result of the internal appeal at each level of appeal.
(f)
The name of the covered person for whom the grievance was submitted.
(8)
Provide an annual summary to the department of the insurer’s aggregate data
regarding grievances, internal appeals and requests for external review in a
format prescribed by the department to ensure consistent reporting on the
number, nature and disposition of grievances, internal appeals and requests for
external review.
(9)
Allow the exercise of any rights described in this section by an authorized
representative. [1997 c.343 §3; 2001 c.266 §15; 2003 c.87 §22; 2011 c.500 §27]
743.805 [1971
c.523 §3; 1973 c.551 §2; 1975 c.784 §2; 1981 c.414 §2; 1987 c.588 §2; 1989
c.775 §1; renumbered 742.524 in 1989]
743.806 Utilization review requirements
for medical services contracts to which insurer not party.
All utilization review performed pursuant to a medical services contract to
which an insurer is not a party shall comply with the following:
(1)
The criteria used in the review process and the method of development of the
criteria shall be made available for review to a party to such medical services
contract upon request.
(2)
A doctor of medicine or osteopathy licensed under ORS chapter 677 shall be
responsible for all final recommendations regarding the necessity or
appropriateness of services or the site at which the services are provided and
shall consult as appropriate with medical and mental health specialists in
making such recommendations.
(3)
Any provider who has had a request for treatment or payment for services denied
as not medically necessary or as experimental shall be provided an opportunity
for a timely appeal before an appropriate medical consultant or peer review
committee.
(4)
A provider request for prior authorization of nonemergency service must be
answered within two business days, and qualified health care personnel must be
available for same-day telephone responses to inquiries concerning
certification of continued length of stay. [1995 c.672 §6; 1997 c.343 §20; 2011
c.500 §28]
Note: See
note under 743.803.
743.807 Utilization review requirements
for insurers offering health benefit plan. (1)
All insurers offering a health benefit plan in this state that provide
utilization review or have utilization review provided on their behalf shall
file an annual summary with the Department of Consumer and Business Services
that describes all utilization review policies, including delegated utilization
review functions, and documents the insurer’s procedures for monitoring of
utilization review activities.
(2)
All utilization review activities conducted pursuant to subsection (1) of this
section shall comply with the following:
(a)
The criteria used in the utilization review process and the method of
development of the criteria shall be made available for review to contracting
providers upon request.
(b)
A doctor of medicine or osteopathy licensed under ORS chapter 677 shall be
responsible for all final recommendations regarding the necessity or
appropriateness of services or the site at which the services are provided and
shall consult as appropriate with medical and mental health specialists in making
such recommendations.
(c)
Any provider who has had a request for treatment or payment for services denied
as not medically necessary or as experimental shall be provided an opportunity
for a timely appeal before an appropriate medical consultant or peer review
committee.
(d)
A provider request for prior authorization of nonemergency service must be
answered within two business days, and qualified health care personnel must be
available for same-day telephone responses to inquiries concerning certification
of continued length of stay. [1997 c.343 §4; 2011 c.500 §29]
743.808 Requirements for insurers that
require designation of participating primary care physician; exceptions.
(1) All insurers offering a health benefit plan in this state that requires an
enrollee to designate a participating primary care physician shall:
(a)
Permit the enrollee to change participating primary care physicians at will,
except that the enrollee may be restricted to making changes no more frequently
than two times in any 12-month period and may be limited to designating only
those participating primary care physicians accepting new patients.
(b)
Have available for employer purchasers of group health plans a point-of-service
benefit plan providing for payment for the services of a provider on a
fee-for-service or discounted fee-for-service basis with reasonable access to a
broad array of licensed providers in the insurer’s geographic service area. Any
higher premium for the point-of-service benefit plan may not exceed true actuarial
cost, including administrative costs, to the insurer.
(2)
A health maintenance organization that is exempt from federal income tax under
Internal Revenue Code section 501(c)(3) or (4) shall not be required to offer a
point-of-service benefit plan as required by subsection (1)(b) of this section
if offering such a plan could result in loss of federal tax-exempt status.
Until such time as the federal government establishes guidelines for health
maintenance organizations exempt from federal income tax that offer
point-of-service benefit plans, such a health maintenance organization shall
not be required to offer a point-of-service benefit plan if:
(a)
Enrollment in Internal Revenue Code section 501(m) coverages exceeds five
percent of its business; or
(b)
Revenue from Internal Revenue Code section 501(m) coverages exceeds five
percent of its revenue.
(3)
A health maintenance organization that is federally qualified under 42 U.S.C.
300e et seq. shall not be required to offer a point-of-service benefit plan in
a manner or to an extent that is inconsistent with federal law and regulation. [1995
c.672 §4; 1997 c.343 §1; 1999 c.987 §19]
743.809 [1995
c.672 §5; repealed by 2003 c.87 §26]
743.810 [1971
c.523 §4; 1973 c.551 §4; 1975 c.784 §3; renumbered 742.526 in 1989]
743.811 Applicability.
The provisions of ORS 743.801, 743.803, 743.806 and 743.808 do not apply to
medical services contracts for services to be provided under ORS chapter 656. [1995
c.672 §7a; 2001 c.104 §290; 2003 c.87 §23]
Note: See
note under 743.803.
743.812 [1987
c.588 §4; renumbered 742.528 in 1989]
743.813 [1995
c.669 §2; renumbered 743.845 in 1997]
743.814 Requirements for insurers offering
managed health insurance; quality assessment; rules.
All insurers offering managed health insurance in this state shall:
(1)
Have a quality assessment program that enables the insurer to evaluate,
maintain and improve the quality of health services provided to enrollees. The
program shall include data gathering that allows the plan to measure progress
on specific quality improvement goals chosen by the insurer.
(2)
File an annual summary with the Department of Consumer and Business Services
that describes quality assessment activities, including any activities related
to credentialing of providers, and reports any progress on the insurer’s
quality improvement goals.
(3)
File annually with the department the following information:
(a)
Results of all publicly available federal Centers for Medicare and Medicaid
Services reports and accreditation surveys by national accreditation
organizations.
(b)
The insurer’s health promotion and disease prevention activities, if any,
including a summary of screening and preventive health care activities covered
by the insurer. In addition to the summary required in this paragraph, the
consortium established pursuant to ORS 743.831 shall develop recommendations
for, and the department shall adopt rules requiring, reporting of an insurer’s
health promotion and disease prevention activities related to:
(A)
Two specific preventive measures;
(B)
One specific chronic condition; and
(C)
One specific acute condition. [1997 c.343 §5; 2003 c.14 §450]
743.815 [1971
c.523 §5; 1973 c.551 §3; 1975 c.784 §4; 1981 c.414 §3; renumbered 742.530 in
1989]
743.816 [1995
c.506 §2; renumbered 743.847 in 1997]
743.817 Requirements for insurers offering
managed health or preferred provider organization insurance; rules; opportunity
to participate. An insurer offering managed
health insurance or preferred provider organization insurance in this state
shall:
(1)
File an annual summary with the Department of Consumer and Business Services
that reports on the scope and adequacy of the insurer’s network and the insurer’s
ongoing monitoring to ensure that all covered services are reasonably
accessible to enrollees. The Director of the Department of Consumer and
Business Services shall adopt rules establishing uniform indicators that
insurers offering managed health insurance or preferred provider organization
insurance must use for reporting under this subsection, including but not
limited to reporting on the scope and adequacy of networks. For the purpose of
developing the rules, the director shall consult with an advisory committee
appointed by the director. The advisory committee must include representatives
of persons likely to be affected by the rules, including consumers, purchasers
of health insurance and insurers that offer managed health insurance or
preferred provider organization insurance.
(2)
Establish a means to provide to the insurer’s managed care plan or preferred
provider organization insurance enrollees, purchasers and providers a
meaningful opportunity to participate in the development and implementation of
insurer policy and operation through:
(a)
The establishment of advisory panels;
(b)
Consultation with advisory panels on major policy decisions; or
(c)
Other means including but not limited to:
(A)
Governing board meetings or special meetings at which enrollees, purchasers and
providers are invited to express opinions; and
(B)
Enrollee councils that are given a reasonable opportunity to meet with the
governing board or its designee. [1997 c.343 §6; 2001 c.266 §6]
743.818 Data reporting.
(1) A carrier offering a health benefit plan as defined in ORS 743.730 and a
third party administrator licensed under ORS 744.702 shall annually submit to
the Department of Consumer and Business Services, in a form and manner
prescribed by the department, data concerning the number of covered lives of
the carrier or third party administrator, reported by line of business and by
zip code.
(2)
The department shall aggregate the data collected under subsection (1) of this
section and may publish reports on the number of covered lives in Oregon, by
line of business and by region. [2009 c.595 §1195]
Note:
743.818 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.819 Reporting requirements; rules.
The Department of Consumer and Business Services shall develop by rule
reporting requirements as necessary for the consistent and efficient
implementation of ORS 743.804, 743.807, 743.814 and 743.817. In order to
minimize duplicative reporting requirements, the department shall accept copies
of reports prepared for national accreditation organizations as sufficient to
meet the reporting requirements developed pursuant to this section to the
extent that the reports include the information required by the department
pursuant to this section. [1997 c.343 §11]
743.820 [1971
c.523 §6; 1975 c.784 §5; 1981 c.414 §4; renumbered 742.532 in 1989]
743.821 Required managed health insurance
contract provision; enrollee liability. All insurers offering
managed health insurance in this state shall include in contracts with
providers a provision requiring that in the event the insurer fails to pay for
health care services covered by the health benefit plan, the provider shall not
bill or otherwise attempt to collect from enrollees for amounts owed by
insurers, and enrollees shall not be liable to the provider for any sums owed
by the insurer. Nothing in this section shall be construed to in any manner
limit the applicability of ORS 750.095 (2). [1997 c.343 §7]
743.822 Requirement to offer bronze and
silver plans; rules. (1) As a condition of
transacting business in the health benefit plan market in this state, a carrier
shall offer to residents of this state bronze and silver plans approved by the
Department of Consumer and Business Services as meeting the requirements of
subsection (2) of this section in each individual and small group market in
which the carrier offers a health benefit plan through the Oregon Health
Insurance Exchange or outside of the exchange.
(2)
The Director of the Department of Consumer and Business Services shall
prescribe by rule the:
(a)
Requirements for a bronze plan to ensure that a bronze plan offered in this
state is actuarially equivalent to 60 percent of the full actuarial value of
benefits included in the essential health benefits package prescribed by the
United States Secretary of Health and Human Services under 42 U.S.C. 18022(a).
(b)
Requirements for a silver plan to ensure that a silver plan offered in this state
is actuarially equivalent to 70 percent of the full actuarial value of benefits
included in the essential health benefits package prescribed by the United
States Secretary of Health and Human Services under 42 U.S.C. 18022(a).
(c)
Form, level of coverage and benefit design for the bronze and silver plans to
be used by carriers in the individual and small group market in this state. [2011
c.322 §§2,3]
Note:
743.822 becomes operative January 2, 2014. See section 6, chapter 322, Oregon
Laws 2011, as amended by section 50, chapter 500, Oregon Laws 2011.
Note:
743.822 and 743.826 were added to and made a part of 743.730 to 743.773 by
legislative action but were not added to any other series. See Preface to
Oregon Revised Statutes for further explanation.
743.823 Enforcement of Newborns’ and
Mothers’ Health Protection Act of 1996. The
Department of Consumer and Business Services shall enforce insurer compliance
with the federal Newborns’ and Mothers’ Health Protection Act of 1996. [1997
c.343 §8]
743.824 Cash dividends for healthy
behaviors. (1) As used in this section, “healthy
behaviors” means participating in constructive behaviors that encourage
fitness, healthy eating and other activities that are beneficial to good
health.
(2)
An insurer offering a health benefit plan, as defined in ORS 743.730, may pay
cash dividends to enrollees in the plan who participate in a program approved
by the insurer that promotes healthy behaviors.
(3)
Dividends paid pursuant to this section are not premium variations for the
purposes of ORS 743.767. [2009 c.461 §2]
Note:
743.824 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.825 [1971
c.523 §7; 1975 c.784 §6; 1987 c.569 §4; 1987 c.632 §2; renumbered 742.534 in
1989]
743.826 Requirements for catastrophic
plans. A carrier may offer a catastrophic plan
only through the Oregon Health Insurance Exchange and only to an individual
who:
(1)
Is under 30 years of age at the beginning of the plan year; or
(2)
Is exempt from any state or federal penalties imposed for failing to maintain
minimal essential coverage during the plan year. [2011 c.322 §4]
Note:
743.826 becomes operative January 2, 2014. See section 6, chapter 322, Oregon
Laws 2011, as amended by section 50, chapter 500, Oregon Laws 2011.
Note: See
second note under 743.822.
743.827 Health Care Consumer Protection
Advisory Committee. The Director of the Department
of Consumer and Business Services shall appoint a Health Care Consumer
Protection Advisory Committee with fair representation of health care
consumers, providers and insurers. The committee shall advise the director
regarding the implementation of ORS 743.801, 743.803, 743.804, 743.806,
743.807, 743.808, 743.811, 743.814, 743.817, 743.819, 743.821, 743.823,
743.827, 743.829, 743.831, 743.834, 743.837, 743.839 and 743A.012 and other
issues related to health care consumer protection. [1997 c.343 §10; 2003 c.87 §24;
2003 c.137 §5; 2005 c.418 §3]
743.828 [1975
c.784 §8; renumbered 742.536 in 1989]
743.829 Decisions regarding health care
facility length of stay, level of care and follow-up care.
(1) All clinical decisions regarding length of stay in a health care facility
as defined in ORS 442.015, transfer between levels of care and follow-up care
shall be the decision of the treating provider in consultation with the
patient, as appropriate.
(2)
An insurer may not terminate or restrict the practice privileges of any
provider solely on the basis of one or more decisions made pursuant to
subsection (1) of this section. [1997 c.343 §12]
743.830 [1971
c.523 §8; 1975 c.784 §9; renumbered 742.538 in 1989]
743.831 Consortium established; managed
health care performance. (1) The Administrator of the
Office for Oregon Health Policy and Research shall establish a consortium of
interested parties that shall:
(a)
Develop, on a voluntary basis, standardized, quantitative performance
measurements of managed health insurance organizations for use by health care
consumers, purchasers and providers to continuously assess the quality of
clinical and service-related aspects of health care arranged for or provided by
managed health insurance organizations;
(b)
Encourage managed health insurance organizations to collect, on a voluntary
basis, the performance measurements specified in paragraph (a) of this
subsection and share that information with the consortium;
(c)
Develop, test, refine and produce one or more managed health care performance
scorecards to provide consumers and purchasers with accurate, reliable and
timely comparisons of managed health insurance organizations with respect to:
(A)
Organizational characteristics;
(B)
Clinical quality measurements;
(C)
Service-related quality measurements; and
(D)
Member and patient satisfaction; and
(d)
Carry out the activities specified in this subsection with the objective of:
(A)
Utilizing, to the greatest extent feasible and desirable, nationally developed
quality assessment tools; and
(B)
Minimizing duplicative quality assessment activities and associated
administrative costs.
(2)
The consortium established pursuant to subsection (1) of this section shall be
comprised of representatives of:
(a)
Health care consumers;
(b)
Private-sector and public-sector health care purchasers;
(c)
Managed health insurance organizations;
(d)
Health care providers, including but not limited to physicians, nurses and
hospitals;
(e)
State agencies, including but not limited to the Department of Consumer and
Business Services and the Oregon Health Authority;
(f)
Oregon institutions of higher education with relevant professional expertise;
and
(g)
Other groups or organizations as determined to be appropriate by the administrator
to ensure broad representation of interests and expertise.
(3)
The Office for Oregon Health Policy and Research shall:
(a)
Provide staffing for the consortium; and
(b)
Seek public and private funds to assist in the work of the consortium. [1997
c.343 §13; 2009 c.595 §1137]
743.833 [1975
c.784 §12; renumbered 742.540 in 1989]
743.834 Insurer prohibited practices;
patient communication and referral. No insurer
may terminate or otherwise financially penalize a provider for:
(1)
Providing information to or communicating with a patient in a manner that is
not slanderous, defamatory or intentionally inaccurate concerning:
(a)
Any aspect of the patient’s medical condition;
(b)
Any proposed treatment or treatment alternatives, whether covered by the insurer’s
health benefit plan or not; or
(c)
The provider’s general financial arrangement with the insurer.
(2)(a)
Referring a patient to another provider, whether or not that provider is under
contract with the insurer. If a provider refers a patient to another provider,
the referring provider shall:
(A)
Comply with the insurer’s written policies and procedures with respect to any
such referrals; and
(B)
Inform the patient that the referral services may not be covered by the
insurer.
(b)
Allocation of costs for referral services shall be a matter of contract between
the provider and the insurer. Allocation of costs to the provider by contract
shall not be considered a penalty under this section. [1997 c.343 §15]
743.835 [1971
c.523 §9; 1975 c.784 §10; 1987 c.632 §3; renumbered 742.542 in 1989]
743.837 Prior authorization requirements.
Except in the case of misrepresentation, prior authorization determinations
shall be subject to the following requirements:
(1)
Prior authorization determinations relating to benefit coverage and medical
necessity shall be binding on the insurer if obtained no more than 30 days
prior to the date the service is provided.
(2)
Prior authorization determinations relating to enrollee eligibility shall be
binding on the insurer if obtained no more than five business days prior to the
date the service is provided. [1997 c.343 §16]
743.839 Disclosure of information.
Nothing in ORS 743.804, 743.807, 743.814 to 743.839 and 743A.012 shall be
construed to require disclosure of information that is otherwise privileged or
confidential under any other provision of law. [1997 c.343 §17; 2003 c.137 §6;
2005 c.418 §4]
743.840 [1985
c.527 §2; renumbered 742.466 in 1989]
743.842 Emergency eye care services
without referral from primary care provider. (1) As
used in this section:
(a)
“Eye care practitioner” means an optometrist or ophthalmologist licensed by the
State of Oregon.
(b)
“Eye care services” means health care services related to the care of the eye
and related structures as specified by a health benefit plan.
(c)
“Health benefit plan” has the meaning provided for that term in ORS 743.730.
(2)
Any insurer that offers a health benefit plan that provides coverage of eye
care services shall allow any enrollee to receive covered eye care services on
an emergency basis without first receiving a referral or prior authorization
from a primary care provider. However, an insurer may require the enrollee to
receive a referral or prior authorization from a primary care provider for any
subsequent surgical procedures. Nothing in this subsection shall be construed
to require that covered eye care services rendered by an eye care practitioner
on an emergency basis be furnished in a hospital or similar medical facility.
(3)
An insurer described in subsection (2) of this section may not:
(a)
Impose a deductible or coinsurance for eye care services that is greater than
the deductible or coinsurance imposed for other medical services under the
health benefit plan.
(b)
Require an eye care practitioner to hold hospital privileges as a condition of
participation as a provider in the health benefit plan.
(4)
Nothing in this section:
(a)
Requires an insurer to provide coverage or reimbursement of eye care services;
(b)
Requires an insurer to provide coverage or reimbursement of refractive surgery,
ophthalmic materials, lenses, eyeglasses or other appurtenances; or
(c)
Prevents an enrollee from receiving eye care or other covered services from the
enrollee’s primary care provider in accordance with the terms of the enrollee’s
health benefit plan.
(5)
This section is exempt from ORS 743A.001. [1999 c.749 §2]
RIGHTS OF ENROLLEES
743.845 Designation of women’s health care
provider as primary care provider; direct access to women’s health care provider.
(1) As used in this section, “women’s health care provider” means an
obstetrician or gynecologist, physician assistant specializing in women’s
health, advanced registered nurse practitioner specialist in women’s health or
certified nurse midwife, practicing within the applicable lawful scope of
practice.
(2)
Every health insurance policy that covers hospital, medical or surgical
expenses and requires an enrollee to designate a participating primary care
provider shall permit a female enrollee to designate a women’s health care
provider as the enrollee’s primary care provider if:
(a)
The women’s health care provider meets the standards established by the insurer
in collaboration with interested parties, including but not limited to the
Oregon section of the American College of Obstetricians and Gynecologists; and
(b)
The women’s health care provider requests that the insurer make the provider
available for designation as a primary care provider.
(3)
If a female enrollee has designated a primary care provider who is not a women’s
health care provider, an insurance policy as described in subsection (2) of
this section shall permit the enrollee to have direct access to a women’s
health care provider, without a referral or prior authorization, for obstetrical
or gynecological care by a participating health care professional who
specializes in obstetrics or gynecology.
(4)
The standards established by the insurer under subsection (2) of this section
shall not prohibit an insurer from establishing the maximum number of
participating primary care providers and participating women’s health care
providers necessary to serve a defined population or geographic service area. [Formerly
743.813; 1999 c.607 §1; 2001 c.104 §291; 2011 c.500 §30]
743.847 Medicaid not considered in
coverage eligibility determination; claims for services paid for by medical
assistance; prohibited ground for denial of enrollment of child; insurer
duties. (1) For the purposes of this section:
(a)
“Health insurer” or “insurer” means an employee benefit plan, self-insured
plan, managed care organization or group health plan, a third party
administrator, fiscal intermediary or pharmacy benefit manager of the plan or
organization, or other party that is by statute, contract or agreement legally
responsible for payment of a claim for a health care item or service.
(b)
“Medicaid” means medical assistance provided under 42 U.S.C. 1396a (section
1902 of the Social Security Act).
(2)
A health insurer is prohibited from considering the availability or eligibility
for medical assistance in this or any other state under Medicaid when
considering eligibility for coverage or making payments under its group or
individual plan for eligible enrollees, subscribers, policyholders or
certificate holders.
(3)
To the extent that payment for covered expenses has been made under the state
Medicaid program for health care items or services furnished to an individual,
in any case when a third party has a legal liability to make payments, the
state is considered to have acquired the rights of the individual to payment by
any other party for those health care items or services.
(4)
An insurer may not deny a claim submitted by the state Medicaid agency, a
prepaid managed care health services organization or a coordinated care
organization described in ORS 414.651 under subsection (3) of this section
based on the date of submission of the claim, the type or format of the claim
form or a failure to present proper documentation at the point of sale that is
the basis of the claim if:
(a)
The claim is submitted by the agency, the prepaid managed care health services
organization or the coordinated care organization within the three-year period
beginning on the date on which the health care item or service was furnished; and
(b)
Any action by the agency, the prepaid managed care health services organization
or the coordinated care organization to enforce its rights with respect to the
claim is commenced within six years of the agency’s or organization’s
submission of the claim.
(5)
An insurer must provide to the state Medicaid agency, a prepaid managed care
health services organization or a coordinated care organization, upon request,
the following information:
(a)
The period during which a Medicaid recipient, the spouse or dependents may be
or may have been covered by the plan;
(b)
The nature of coverage that is or was provided by the plan; and
(c)
The name, address and identifying numbers of the plan.
(6)
An insurer may not deny enrollment of a child under the group or individual
health plan of the child’s parent on the ground that:
(a)
The child was born out of wedlock;
(b)
The child is not claimed as a dependent on the parent’s federal tax return; or
(c)
The child does not reside with the child’s parent or in the insurer’s service
area.
(7)
When a child has group or individual health coverage through an insurer of a
noncustodial parent, the insurer must:
(a)
Provide such information to the custodial parent as may be necessary for the
child to obtain benefits through that coverage;
(b)
Permit the custodial parent or the provider, with the custodial parent’s
approval, to submit claims for covered services without the approval of the
noncustodial parent; and
(c)
Make payments on claims submitted in accordance with paragraph (b) of this
subsection directly to the custodial parent, the provider or, if a claim is
filed by the state Medicaid agency, a prepaid managed care health services
organization or a coordinated care organization, directly to the agency or the
organization.
(8)
When a parent is required by a court or administrative order to provide health
coverage for a child, and the parent is eligible for family health coverage,
the insurer must:
(a)
Permit the parent to enroll, under the family coverage, a child who is
otherwise eligible for the coverage without regard to any enrollment season
restrictions;
(b)
If the parent is enrolled but fails to make application to obtain coverage for
the child, enroll the child under family coverage upon application of the child’s
other parent, the state agency administering the Medicaid program or the state
agency administering 42 U.S.C. 651 to 669, the child support enforcement
program; and
(c)
Not disenroll or eliminate coverage of the child unless the insurer is provided
satisfactory written evidence that:
(A)
The court or administrative order is no longer in effect; or
(B)
The child is or will be enrolled in comparable health coverage through another
insurer which will take effect not later than the effective date of
disenrollment.
(9)
An insurer may not impose requirements on a state agency that has been assigned
the rights of an individual eligible for medical assistance under Medicaid and
covered for health benefits from the insurer if the requirements are different
from requirements applicable to an agent or assignee of any other individual so
covered.
(10)
The provisions of ORS 743A.001 do not apply to this section. [Formerly 743.816;
2007 c.484 §2; 2011 c.602 §58]
743.850 [1981
c.752 §1; 1983 c.817 §1; 1987 c.505 §1; renumbered 743.610 in 1989]
743.851 [1987
c.505 §3; renumbered 743.600 in 1989]
743.852 [1987
c.505 §§3a,4; 1989 c.784 §22; renumbered 743.601 in 1989]
743.853 [1987
c.505 §5; renumbered 743.602 in 1989]
743.854 Continuity of care.
(1) As used in this section, “continuity of care” means the feature of a health
benefit plan under which an enrollee who is receiving care from an individual
provider is entitled to continue with care with the individual provider for a
limited period of time after the medical services contract terminates.
(2)
An insurer offering managed health insurance or preferred provider organization
insurance in this state shall provide continuity of care to an enrollee under a
health benefit plan if:
(a)
A medical services contract or other contract for an individual provider’s
services is terminated;
(b)
The provider no longer participates in the provider network; and
(c)
The insurer does not cover services when services are provided to enrollees by
the individual provider or covers services at a benefit level below the benefit
level specified in the plan for out-of-network providers.
(3)
In order to obtain continuity of care, an enrollee must request continuity of
care from the insurer.
(4)
An enrollee of a health benefit plan is entitled to continuity of care when the
following conditions are met:
(a)
The enrollee is undergoing an active course of treatment that is medically
necessary and, by agreement of the individual provider and the enrollee, it is
desirable to maintain continuity of care; and
(b)
The contractual relationship between the individual provider and the insurer
described in subsection (2) of this section with respect to the plan covering
the enrollee has ended, except as provided in subsection (5) of this section.
(5)
A health benefit plan is not required to provide continuity of care when the
contractual relationship between the individual provider and the insurer
described in subsection (2) of this section ends under one of the following
circumstances:
(a)
The contractual relationship between the individual provider and the insurer
has ended because the individual provider:
(A)
Has retired;
(B)
Has died;
(C)
No longer holds an active license;
(D)
Has relocated out of the service area;
(E)
Has gone on sabbatical; or
(F)
Is prevented from continuing to care for patients because of other
circumstances; or
(b)
The contractual relationship has terminated in accordance with provisions of
the medical services contract relating to quality of care and all contractual
appeal rights of the individual provider have been exhausted.
(6)
A health benefit plan is not required to provide continuity of care if the
enrollee leaves a health benefit plan or if the policyholder discontinues the
plan in which the enrollee is enrolled.
(7)
Except as provided for pregnancy in subsection (8) of this section, an enrollee
who is entitled to continuity of care shall receive the care until the earlier
of the following dates:
(a)
The day following the date on which the active course of treatment entitling
the enrollee to continuity of care is completed; or
(b)
The 120th day after the date of notification by the insurer to the enrollee of
the termination of the contractual relationship with the individual provider,
as required by subsection (9) of this section.
(8)
An enrollee who is undergoing care for a pregnancy and who becomes entitled to
continuity of care after commencement of the second trimester of the pregnancy
shall receive the care until the later of the following dates:
(a)
The 45th day after the birth; or
(b)
As long as the enrollee continues under an active course of treatment, but not
later than the 120th day after the date of notification by the insurer to the
enrollee of the termination of the contractual relationship with the individual
provider as required by subsection (9) of this section.
(9)
An insurer shall give written notice of the termination of the contractual
relationship between the insurer and the individual provider and of the right
to obtain continuity of care to those enrollees that the insurer knows or
reasonably should know are under the care of the individual provider. The
notice may be given prior to the date on which the termination of the
contractual relationship with the individual provider takes effect only if the
insurer gives notice in a good faith belief that the termination will take
effect as stated in the notice. In any event, the notice shall be given to
those enrollees not later than the 10th day after the date on which the termination
of the contractual relationship with the individual provider takes effect. If
the insurer first learns the identity of an affected enrollee after the date of
termination of the contractual relationship with the individual provider or
after the date on which the insurer gave notice to the other affected
enrollees, then the insurer shall give a notice of termination to the affected
enrollee not later than the 10th day after learning that enrollee’s identity.
(10)
For the purpose of notifying an enrollee under subsection (7)(b) or (8)(b) of
this section:
(a)
The date of notification by the insurer is the earlier of the date on which the
enrollee receives the notice or the date on which the insurer receives or
approves the request for continuity of care.
(b)
If an individual provider belongs to a provider group, the provider group may
deliver the notice if the insurer agrees that the provider group may do so and
if the notice clearly provides the information that the plan is required to
provide to the enrollee under subsection (9) of this section.
(11)
A health benefit plan may condition continuity of care upon the requirement
that the individual provider adhere to the medical services contract between
the provider and the insurer and accept the contractual reimbursement rate
applicable at the time of contract termination or, if the contractual
reimbursement rate was not based on a fee for service, a rate equivalent to the
contractual rate. [2001 c.266 §3]
743.855 [1981
c.752 §2; renumbered 743.611 in 1989]
743.856 Referrals to specialists.
(1) If an insurer offers a health benefit plan that requires, as a condition of
coverage for specialty care services, a referral by a physician who is
authorized under the plan or under the medical services contract between the
physician and the insurer to refer an enrollee to specialty care services, the
insurer must include the requirements of this section in the plan. The
requirements apply only to benefits for which the member is contractually
eligible under the plan. The requirements are as follows:
(a)
The plan must establish and implement a procedure for standing referrals, so
that an enrollee is not required to obtain approval from the authorized
physician for each appointment with a specialist after the initial appointment.
(b)
The plan must allow a standing referral for an enrollee if the authorized
physician determines that the enrollee needs continuing care from a specialist.
(c)
The plan must allow an enrollee to request and obtain a second medical opinion
or consultation from a second physician who is a network provider and who is
authorized to make decisions regarding the need for a referral to a specialist.
If the plan does not have a network provider available to give a second medical
opinion or consultation, the plan must allow the enrollee to obtain the opinion
or consultation from a similarly qualified physician who is not a network
provider. The plan may not impose a charge for the second medical opinion or
consultation that is greater than the cost that the enrollee would otherwise
pay for an initial medical opinion or consultation from the second physician.
(2)
A specialist to whom an enrollee is referred must make regular reports to the
authorized physician under subsection (1) of this section in accordance with
best practices for coordinated care as established by the insurer. [2001 c.266 §5]
743.857 External review; rules.
(1) An insurer offering health benefit plans in this state shall have an
external review program that meets the requirements of this section and ORS
743.861 and rules adopted by the Director of the Department of Consumer and
Business Services to carry out the provisions of this section and ORS 743.861.
Each insurer shall provide the external review through an independent review
organization that is under contract with the director to provide external
review. Each health benefit plan must allow an enrollee, by applying to the
insurer or the director, to obtain review by an independent review organization
of a dispute relating to an adverse benefit determination by the insurer on one
or more of the following:
(a)
Whether a course or plan of treatment is medically necessary.
(b)
Whether a course or plan of treatment is experimental or investigational.
(c)
Whether a course or plan of treatment that an enrollee is undergoing is an
active course of treatment for purposes of continuity of care under ORS
743.854.
(d)
Whether a course or plan of treatment is delivered in an appropriate health
care setting and with the appropriate level of care.
(2)
An insurer shall incur all costs of its external review program. The insurer
may not establish or charge a fee payable by enrollees for conducting external
review.
(3)
When an enrollee applies for external review, the director shall appoint an
independent review organization. When an independent review organization is
appointed, the insurer shall forward all medical records and other relevant
materials to the independent review organization no later than five business
days after the appointment. The insurer shall produce additional information as
requested by the independent review organization to the extent that the
information is reasonably available to the insurer. An independent review
organization may reverse the adverse benefit determination if the insurer fails
to furnish records, information and materials to the independent review
organization in a timely manner.
(4)
An enrollee may submit additional information to the independent review
organization no later than five business days after the enrollee’s receipt of
notification of the appointment of the independent review organization and the
organization must consider the information in its review.
(5)
The insurer and the director shall expedite the external review:
(a)
If the adverse benefit determination concerns an admission, the availability of
care, a continued stay or a health care service for a medical condition for
which the enrollee received emergency services, as defined in ORS 743A.012, and
has not been discharged from a health care facility; or
(b)
If a provider with an established clinical relationship to the enrollee
certifies in writing and provides supporting documentation that the ordinary
time period for external review would seriously jeopardize the life or health
of the enrollee or the enrollee’s ability to regain maximum function. [2001
c.266 §8; 2011 c.500 §31]
743.858 Director to contract with
independent review organizations to provide external review; rules.
(1) The Director of the Department of Consumer and Business Services shall
contract with independent review organizations as provided in this section for
the purpose of providing external review under ORS 743.857. The director may
have contracts with no more than five independent review organizations at any
one time. Contracts shall be let with independent review organizations on a
biennial basis. A contract may be renewed if both parties agree.
(2)
The director shall seek public comment when the director proposes to enter into
a contract with an independent review organization or proposes to renew or not
renew a contract.
(3)
When evaluating proposals to contract with independent review organizations,
the director shall consider factors that include but are not limited to
relative expertise, professionalism, quality of compliance with the rules
established under subsection (4) of this section, cost and record of past
performance.
(4)
The director shall adopt rules governing independent review organizations,
their composition and their conduct. The rules shall include but need not be
limited to:
(a)
Professional qualifications of health care providers, physicians or contract
specialists making external review determinations;
(b)
Criteria requiring independent review organizations to demonstrate protections
against bias and conflicts of interest;
(c)
Procedures for conducting external reviews;
(d)
Procedures for complaint investigations;
(e)
Procedures for ensuring the confidentiality of medical records transmitted to
the independent review organizations for use in external reviews;
(f)
Fairness of procedures used by independent review organizations;
(g)
Fees for external reviews;
(h)
Timelines for decision making and notice to the parties; and
(i)
Quality assurance mechanisms to ensure timeliness and quality of review.
(5)
The director shall develop procedures for assigning cases filed by enrollees to
independent review organizations under contract with the director. The cases
shall be assigned on a random basis. The procedures shall allow an insurer only
one opportunity to reject the assignment of an independent review organization
to a particular case. [2001 c.266 §9]
743.859 Notice to enrollee of right to sue
if insurer does not follow decision of independent review organization.
An insurer of a health benefit plan shall include in the plan the following
statements, in boldfaced type or otherwise emphasized:
(1)
A statement of the right of enrollees to apply for external review by an
independent review organization; and
(2)
A statement that if the insurer does not follow a decision of an independent
review organization, the enrollee has the right to sue the insurer. [2001 c.266
§10; 2011 c.500 §32]
743.860 [1981
c.752 §3; renumbered 743.613 in 1989]
743.861 Enrollee application for external
review; when enrollee deemed to have exhausted internal appeal.
(1) An enrollee shall apply in writing for external review of an adverse
benefit determination by the insurer of a health benefit plan not later than
the 180th day after receipt of the insurer’s final written decision following
its grievance and internal appeal process under ORS 743.804. An enrollee is
eligible for external review only if the enrollee has satisfied the following
requirements:
(a)
The enrollee must have signed a waiver granting the independent review
organization access to the medical records of the enrollee.
(b)
The enrollee must have exhausted the plan’s internal appeal procedures
established pursuant to ORS 743.804 or be deemed to have exhausted the plan’s
internal appeal procedures. The insurer may waive the requirement of compliance
with the internal appeal procedures and have a dispute referred directly to
external review upon the enrollee’s consent. An enrollee is deemed to have
exhausted the internal appeal procedures if the insurer fails to strictly
comply with ORS 743.804 and federal requirements for internal appeals.
(2)
An enrollee who applies for external review of an adverse benefit determination
shall provide complete and accurate information to the independent review
organization as provided in ORS 743.857. [2001 c.266 §11; 2011 c.500 §33]
743.862 Duties of independent review
organizations; expedited reviews. (1) An
independent review organization shall perform the following duties when
appointed under ORS 743.857 to review a dispute under a health benefit plan
between an insurer and an enrollee:
(a)
Decide whether the dispute pertains to an adverse benefit determination and
notify the enrollee and insurer in writing of the decision. If the decision is
against the enrollee, the independent review organization shall notify the
enrollee of the right to file a complaint with or seek other assistance from
the Department of Consumer and Business Services and the availability of other
assistance as specified by the department.
(b)
Appoint a reviewer or reviewers as determined appropriate by the independent
review organization.
(c)
Notify the enrollee of information that the enrollee is required to provide and
any additional information the enrollee may provide, and when the information
must be submitted as provided in ORS 743.857.
(d)
Notify the insurer of additional information the independent review
organization requires and when the information must be submitted as provided in
ORS 743.857.
(e)
Decide the dispute relating to the adverse benefit determination of the insurer
and issue the decision in writing.
(2)
A decision by an independent review organization shall be based on expert
medical judgment after consideration of the enrollee’s medical record, the recommendations
of each of the enrollee’s providers, relevant medical, scientific and
cost-effectiveness evidence and standards of medical practice in the United
States. An independent review organization must make its decision in accordance
with the coverage described in the health benefit plan, except that the
independent review organization may override the insurer’s standards for
medically necessary or experimental or investigational treatment if the
independent review organization determines that the standards of the insurer
are unreasonable or are inconsistent with sound medical practice.
(3)
When review is expedited, the independent review organization shall issue a
decision not later than the third day after the date on which the enrollee
applies to the insurer for an expedited review or the Director of the
Department of Consumer and Business Services orders an expedited review.
(4)
When a review is not expedited, the independent review organization shall issue
a decision not later than the 30th day after the enrollee applies to the
insurer for a review or the director orders a review.
(5)
An independent review organization shall file synopses of its decisions with
the director according to the format and other requirements established by the
director. The synopses shall exclude information that is confidential, that is
otherwise exempt from disclosure under ORS 192.501 and 192.502 or that may
otherwise allow identification of an enrollee. The director shall make the
synopses public. [2001 c.266 §12; 2011 c.500 §34]
743.863 Civil penalty for failure to
comply by insurer that agreed to be bound by decision.
(1) An insurer shall comply in a timely manner with a decision of an
independent review organization under ORS 743.862 that reverses, in whole or in
part, an adverse benefit determination. If an insurer fails to comply with the
decision, the Director of the Department of Consumer and Business Services may
impose on the insurer a civil penalty of not more than $1 million.
(2)
A decision of an independent review organization is admissible in any legal
proceeding involving the insurer or the enrollee and involving the disputed
issues subject to external review.
(3)
The sanctions under subsection (1) of this section and the remedies under
subsection (2) of this section are in addition to and not in lieu of other
sanctions, rights and remedies provided by law or contract. [2001 c.266 §13;
2011 c.500 §35]
743.864 Private right of action.
(1) An enrollee who is the subject of a decision of an independent review
organization has a private right of action against the insurer for damages
arising from an adverse benefit determination by the insurer that is subject to
external review if the insurer fails to comply with the decision.
(2)
The Legislative Assembly intends that there is no private right of action under
subsection (1) of this section if a court finds subsection (1) of this section
to be unconstitutional or otherwise void. [2001 c.266 §14; 2011 c.500 §36]
743.865 [1981
c.752 §4; renumbered 743.614 in 1989]
743.866 [2001
c.747 §2; renumbered 743.911 in 2007]
743.868 [2001
c.747 §3; renumbered 743.913 in 2007]
743.870 [1981
c.752 §5; renumbered 743.616 in 1989]
743.871 Definitions for ORS 743.871 to
743.893. As used in ORS 743.871 to 743.893:
(1)
“In-network” means performed by a provider or provider group that has directly
contracted with the insurer.
(2)
“Out-of-network” means performed by a provider or provider group that has not
contracted or has indirectly contracted with the insurer. [2007 c.390 §1]
Note:
743.871 to 743.893 were enacted into law by the Legislative Assembly but were
not added to or made a part of ORS chapter 743 or any series therein by
legislative action. See Preface to Oregon Revised Statutes for further
explanation.
743.874 Estimate of costs for in-network
procedure or service. (1) An insurer offering a health
benefit plan as defined in ORS 743.730 must establish a procedure for providing
to an enrollee in the plan a reasonable estimate of an enrollee’s costs for an
in-network procedure or service covered by the enrollee’s health benefit plan,
in advance of the procedure or service, when an enrollee or an enrollee’s
authorized representative provides the following information to the insurer:
(a)
The type of procedure or service;
(b)
The name of the provider;
(c)
The enrollee’s member number or policy number; and
(d)
If requested by the insurer, the site where the procedure or service will be
performed.
(2)
The estimate of costs described in subsection (1) of this section must include
an itemization of:
(a)
The enrollee’s deductible;
(b)
The amount of the deductible that has been met by processed claims;
(c)
Coinsurance, copayment or other cost share to be paid by the enrollee for the
procedure or service; and
(d)
Any applicable benefit maximum.
(3)
Subsections (1) and (2) of this section apply to the insurer’s five most common
procedures or services within each of the following categories:
(a)
Office visits;
(b)
Diagnostic radiology and imaging;
(c)
Diagnostic pathology and laboratory procedures;
(d)
Normal vaginal delivery;
(e)
Immunizations;
(f)
Orthopedic-musculoskeletal surgery; and
(g)
Digestive system endoscopy.
(4)
In addition to the information specified in subsections (1) and (2) of this
section, the insurer’s estimate must include the following disclosures:
(a)
That other services may be provided to the enrollee that are medically
necessary and appropriate as part of the common procedures, of which the
insurer or enrollee may not be aware at the time of the inquiry and for which
the enrollee may have additional financial responsibility;
(b)
That the enrollee may be responsible for costs of procedures or services not
covered by the plan;
(c)
How an enrollee may contact the insurer for an explanation, if the estimate
differs from the actual cost or if the enrollee has other questions; and
(d)
The toll-free telephone number of the consumer advocacy unit of the Department
of Consumer and Business Services and the address for the department’s consumer
information and complaints website.
(5)
An insurer must make the information required by this section available to
enrollees and in-network providers through an interactive website and by
toll-free telephone.
(6)
This section does not prohibit an insurer from providing information in
addition to or in more detail than the information required by this section. [2007
c.390 §2]
Note: See
note under 743.871.
743.875 [1981
c.752 §6; renumbered 743.617 in 1989]
743.876 Estimate of costs for out-of-network
procedure or service. (1) An insurer offering a health
benefit plan as defined in ORS 743.730 must establish a procedure for providing
to an enrollee in the plan a reasonable estimate of the enrollee’s costs for an
out-of-network procedure or service covered by the enrollee’s health benefit
plan, including the difference between the insurer’s allowable charge and the
billed charge for the procedure or service, in advance of the procedure or
service, when an enrollee or an enrollee’s authorized representative provides
the following information to the insurer:
(a)
The type of procedure or service;
(b)
The name of the provider;
(c)
The enrollee’s member number or policy number;
(d)
If requested by the insurer, the site where the procedure or service will be
performed; and
(e)
The provider’s billed charge amount.
(2)
The estimate of costs described in subsection (1) of this section must include
an itemization of:
(a)
The enrollee’s deductible;
(b)
The amount of the deductible that has been met by processed claims;
(c)
Coinsurance, copayment or other cost share to be paid by the enrollee for the
procedure or service;
(d)
Any applicable benefit maximum;
(e)
The difference between the insurer’s allowable charge and the billed charge for
the procedure or service; and
(f)
The insurer’s average payment or allowable charge for the procedure or service
if performed in-network.
(3)
Subsections (1) and (2) of this section apply to the insurer’s five most common
procedures or services within each of the following categories:
(a)
Office visits;
(b)
Diagnostic radiology and imaging;
(c)
Diagnostic pathology and laboratory procedures;
(d)
Normal vaginal delivery;
(e)
Immunizations;
(f)
Orthopedic-musculoskeletal surgery; and
(g)
Digestive system endoscopy.
(4)
In addition to the information specified in subsections (1) and (2) of this
section, the insurer’s estimate must include the following disclosures:
(a)
That other services may be provided to the enrollee that are medically
necessary and appropriate as part of the common procedures, of which the
insurer or enrollee may not be aware at the time of the inquiry and for which
the enrollee may have additional financial responsibility;
(b)
That the enrollee may be responsible for costs of procedures or services not
covered by the plan;
(c)
How an enrollee may contact the insurer for an explanation, if the estimate
differs from the actual cost or if the enrollee has other questions; and
(d)
The toll-free telephone number of the consumer advocacy unit of the Department
of Consumer and Business Services and the address for the department’s consumer
information and complaints website.
(5)
An insurer must make the information required by this section available to
enrollees and out-of-network providers through an interactive website and by
toll-free telephone.
(6)
This section does not prohibit an insurer from providing information in
addition to or in more detail than the information required by this section. [2007
c.390 §3]
Note: See
note under 743.871.
743.878 Submission of methodology used to
determine insurer’s allowable charges. An insurer
offering a health benefit plan as defined in ORS 743.730 must submit to the
Director of the Department of Consumer and Business Services:
(1)
Upon request by the director, the methodology used to determine the insurer’s
allowable charges for out-of-network procedures and services or, if the insurer
uses a third party to determine the charges, the methodology used by the third
party to determine allowable charges;
(2)
For approval, a written explanation of the method used by the insurer to
determine the allowable charge, that is in plain language and that must be
provided upon request to enrollees directly, or, in the case of group coverage,
to the employer or other policyholder for distribution to enrollees; and
(3)
Information prescribed by the director as necessary to assess the effect of the
disclosure requirements in ORS 743.874 and 743.876 on the individual and group
health insurance markets. [2007 c.390 §4; 2011 c.500 §37]
Note: See
note under 743.871.
743.880 [1981
c.752 §7; renumbered 743.619 in 1989]
743.883 Alternative mechanism for disclosure
of costs and charges. The Director of the Department
of Consumer and Business Services may waive the requirements of ORS 743.874 or
743.876 to allow an insurer to use an alternative disclosure mechanism,
provided that the mechanism enables enrollees to access information
substantially similar to or more extensive than the information disclosed in
ORS 743.874 or 743.876. [2007 c.390 §5]
Note: See
note under 743.871.
743.885 [1981
c.752 §8; renumbered 743.620 in 1989]
743.890 [1981
c.752 §9; renumbered 743.622 in 1989]
743.893 Rules.
The Director of the Department of Consumer and Business Services shall adopt
rules necessary to carry out the purposes of ORS 743.871 to 743.893. [2007
c.390 §6]
Note: See
note under 743.871.
743.894 Rescinding coverage; permissible
bases; notice; rules. (1) As used in this section, “rescind”
means to retroactively cancel or discontinue coverage under a health benefit
plan or group or individual health insurance policy for reasons other than
failure to timely pay required premiums or required contributions toward the
cost of coverage.
(2)
An insurer may not rescind coverage of an individual under a health benefit
plan or group or individual health insurance policy unless:
(a)
The individual or a person seeking coverage on behalf of the individual:
(A)
Performs an act, practice or omission that constitutes fraud; or
(B)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the plan or policy; and
(b)
The insurer provides at least 30 days’ advance written notice, in the form and
manner prescribed by the Department of Consumer and Business Services, to the
individual.
(3)
An insurer may not rescind coverage of a group under a health benefit plan
unless:
(a)
The plan sponsor:
(A)
Performs an act, practice or omission that constitutes fraud; or
(B)
Makes an intentional misrepresentation of a material fact as prohibited by the
terms of the plan; and
(b)
The insurer provides at least 30 days’ advance written notice, in the form and
manner prescribed by the department, to each plan enrollee or policy holder who
would be affected by the rescission of coverage.
(4)
An insurer that rescinds a plan or policy must provide notice of the rescission
to the department in the form, manner and time frame prescribed by the
department by rule. [2011 c.500 §4]
Note:
743.894 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.900 [1971
c.476 §2; 1975 c.570 §1; renumbered 742.560 in 1989]
743.905 [1971
c.476 §3; renumbered 742.562 in 1989]
743.910 [1971
c.476 §4; 1977 c.600 §7; 1989 c.426 §3; renumbered 742.564 in 1989]
PAYMENT OF CLAIMS
743.911 Payment or denial of health benefit
plan claims; rules. (1) Except as provided in this
subsection, when a claim under a health benefit plan is submitted to an insurer
by a provider on behalf of an enrollee, the insurer shall pay a clean claim or
deny the claim not later than 30 days after the date on which the insurer
receives the claim. If an insurer requires additional information before
payment of a claim, not later than 30 days after the date on which the insurer
receives the claim, the insurer shall notify the enrollee and the provider in
writing and give the enrollee and the provider an explanation of the additional
information needed to process the claim. The insurer shall pay a clean claim or
deny the claim not later than 30 days after the date on which the insurer
receives the additional information.
(2)
A contract between an insurer and a provider may not include a provision
governing payment of claims that limits the rights and remedies available to a
provider under this section and ORS 743.913 or has the effect of relieving
either party of their obligations under this section and ORS 743.913.
(3)
An insurer shall establish a method of communicating to providers the
procedures and information necessary to complete claim forms. The procedures
and information must be reasonably accessible to providers.
(4)
This section does not create an assignment of payment to a provider.
(5)
Each insurer shall report to the Director of the Department of Consumer and
Business Services annually on its compliance under this section according to
requirements established by the director.
(6)
The director shall adopt by rule a definition of “clean claim” and shall
consider the definition of “clean claim” used by the federal Department of
Health and Human Services for the payment of Medicare claims. [Formerly
743.866]
743.912 Refund of paid claims.
(1) As used in this section, “refund” means the return, either directly or
through an offset to a future claim, of some or all of a payment already
received by a health care provider.
(2)
Except in the case of fraud or abuse of billing, and except as provided in
subsections (3) and (5) of this section, a health insurer may not:
(a)
Request from a health care provider a refund of a payment previously made to
satisfy a claim unless the health insurer:
(A)
Requests the refund in writing on or before the last day of the period specified
by the contract with the health care provider or 18 months after the date the
payment was made, whichever is earlier; and
(B)
Specifies in the written request why the health insurer believes the provider
owes the refund.
(b)
Request that a contested refund be paid earlier than six months after the
health care provider receives the request.
(3)
A health insurer may not do the following for reasons related to coordination
of benefits with another health insurer or entity responsible for payment of a
claim:
(a)
Request from a health care provider a refund of a payment previously made to
satisfy a claim unless the health insurer:
(A)
Requests the refund in writing within 30 months after the date the payment was
made;
(B)
Specifies in the written request why the health insurer believes the provider
owes the refund; and
(C)
Includes in the written request the name and mailing address of the other
health insurer or entity that has primary responsibility for payment of the
claim.
(b)
Request that a contested refund be paid earlier than six months after the
provider receives the request.
(4)
If a health care provider fails to contest a refund request in writing to the
health insurer within 30 days after receiving the request, the request is
deemed accepted and the provider must pay the refund within 30 days after the
request is deemed accepted. If the provider has not paid the refund within 30
days after the request is deemed accepted, the health insurer may recover the
amount through an offset to a future claim.
(5)
A health insurer may at any time request from a health care provider a refund
of a payment previously made to satisfy a claim if:
(a)
A third party, including a government entity, is found responsible for
satisfaction of the claim as a consequence of liability imposed by law; and
(b)
The health insurer is unable to recover directly from the third party because
the third party has already paid or will pay the provider for the health care
services covered by the claim.
(6)
If a contract between a health insurer and a health care provider conflicts
with this section, the provisions of this section prevail. However, nothing in
this section prohibits a health care provider from choosing at any time to
refund to a health insurer any payment previously made to satisfy a claim.
(7)
This section neither permits nor precludes a health insurer from recovering
from a subscriber, enrollee or beneficiary any amounts paid to a health care
provider for benefits to which the subscriber, enrollee or beneficiary was not
entitled under the terms and conditions of the health plan, insurance policy or
other benefit agreement.
(8)
This section applies to health benefit plans. [2009 c.807 §2; 2011 c.660 §21]
Note:
743.912 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.913 Interest on unpaid claims.
(1) An insurer that fails to pay a claim to a provider within the timelines
established in ORS 743.911 shall pay simple interest of 12 percent per annum on
the unpaid amount of the claim that is due and owing, accruing from the date
after the payment was due until the claim is paid. Interest on any overdue
payment for a claim begins to accrue on the 31st day after:
(a)
The date on which the insurer received the claim; or
(b)
The date the insurer receives the requested additional information.
(2)
The interest is payable with the payment of the claim. An insurer is not required
to pay interest that is in the amount of $2 or less on any claim.
(3)
The availability of interest under subsection (1) of this section is in
addition to and not in lieu of administrative actions and penalties that may be
imposed by the Director of the Department of Consumer and Business Services
under the Insurance Code. [Formerly 743.868]
743.915 [1971
c.476 §5; repealed by 1975 c.570 §2 (743.916 enacted in lieu of 743.915)]
743.916 [1975
c.570 §3 (enacted in lieu of 743.915); 1977 c.600 §8; 1989 c.426 §4; renumbered
742.566 in 1989]
743.917 Underpayment of claims.
(1) Except in the case of fraud and except as provided in subsection (3) of
this section, a health care provider may not:
(a)
Request additional payment from a health insurer to satisfy a claim unless the
provider:
(A)
Requests the additional payment in writing on or before the last day of the
period specified by the contract or 18 months after the date the claim was
denied or payment intended to satisfy the claim was made, whichever is earlier;
and
(B)
Specifies in the written request why the provider believes the health insurer
owes the additional payment.
(b)
Request that an additional payment be paid earlier than six months after the
health insurer receives the request.
(2)
A health insurer may not consider a health care provider’s claim untimely if
the claim is made no later than 12 months after a different insurer:
(a)
Denied the claim in whole or in part; or
(b)
Requested a refund of an erroneous payment made on the claim.
(3)
A health care provider may not do the following for reasons related to
coordination of benefits with another health insurer or entity responsible for
payment of a claim:
(a)
Request additional payment from a health insurer to satisfy a claim unless the
provider:
(A)
Requests the additional payment in writing within 30 months after the date the
claim was denied or payment intended to satisfy the claim was made;
(B)
Specifies in the written request why the provider believes the health insurer
owes the additional payment; and
(C)
Includes in the written request the name and mailing address of the other
health insurer or entity that has disclaimed responsibility for payment of the
claim.
(b)
Request that the additional payment be paid earlier than six months after the
health insurer receives the request.
(4)
If a contract between a health insurer and a health care provider conflicts
with this section, the provisions of this section prevail. However, nothing in
this section prohibits a health insurer from choosing at any time to make
additional payments to a health care provider to satisfy a claim.
(5)
This section applies to health benefit plans. [2009 c.807 §3; 2011 c.660 §22]
Note:
743.917 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.918 Claims submitted during
credentialing period. (1) As used in this section:
(a)
“Complete application” means a provider’s application to a health insurer to
become a credentialed provider that includes:
(A)
Information required by the health insurer;
(B)
Proof that the provider is licensed by a health professional regulatory board
as defined in ORS 676.160;
(C)
Proof of current registration with the Drug Enforcement Administration of the
United States Department of Justice, if applicable to the provider’s practice;
and
(D)
Proof that the provider is covered by a professional liability insurance policy
or certification meeting the health insurer’s requirements.
(b)
“Credentialing period” means the period beginning on the date a health insurer
receives a complete application and ending on the date the health insurer
approves or rejects the complete application or 90 days after the health
insurer receives the complete application, whichever is earlier.
(c)
“Health insurer” means an insurer that offers managed health insurance or
preferred provider organization insurance, other than a health maintenance organization
as defined in ORS 750.005.
(2)
A health insurer shall approve or reject a complete application within 90 days
of receiving the application.
(3)(a)
A health insurer shall pay all claims for medical services covered by the
health insurer that are provided by a provider during the credentialing period.
(b)
A provider may submit claims for medical services provided during the
credentialing period during or after the credentialing period.
(c)
A health insurer may pay claims for medical services provided during the
credentialing period:
(A)
During or after the credentialing period.
(B)
At the rate paid to nonparticipating providers.
(d)
If a provider submits a claim for medical services provided during the
credentialing period within six months after the end of the credentialing
period, the health insurer may not deny payment of the claim on the basis of
the health insurer’s rules relating to timely claims submission.
(4)
Subsection (3) of this section does not require a health insurer to pay claims
for medical services provided during the credentialing period if:
(a)
The provider was previously rejected or terminated as a participating provider
in any health benefit plan underwritten or administered by the health insurer;
(b)
The rejection or termination was due to the objectively verifiable failure of
the provider to provide medical services within the recognized standards of the
provider’s profession; and
(c)
The provider was given the opportunity to contest the rejection or termination
before a panel of peers in a proceeding conducted in conformity with the Health
Care Quality Improvement Act of 1986, 42 U.S.C. 11101 et seq. [2009 c.806 §2]
Note:
743.918 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.920 [1971
c.476 §6; renumbered 742.568 in 1989]
743.925 [1971
c.476 §7; renumbered 742.570 in 1989]
743.930 [1971
c.476 §8; 1977 c.600 §4; renumbered 742.572 in 1989]
743.940 [1987
c.774 §36; renumbered 742.700 in 1989]
743.942 [1987
c.774 §37; renumbered 742.702 in 1989]
743.944 [1987
c.774 §38; renumbered 742.704 in 1989]
743.946 [1987
c.774 §§39,40; 1989 c.700 §18; renumbered 742.706 in 1989]
743.948 [1987
c.774 §41; renumbered 742.708 in 1989]
743.950 [1987
c.774 §42; 1989 c.181 §1; renumbered 742.710 in 1989]
ASSESSMENT ON CLAIMS ADMINISTERED BY
PUBLIC EMPLOYEES’ BENEFIT BOARD
743.951 Payment procedures; right to
hearing. (1) As used in this section:
(a)
“Insured” means an eligible employee or family member, as defined in ORS
243.105, who is covered by a self-insured health benefit plan under ORS 243.105
to 243.285.
(b)
“Medical claim” means a request to a self-insured health benefit plan for
payment for a health care item or service provided to an insured, other than a
dental or vision care item or service.
(2)
No later than 45 days following the end of a calendar quarter, the Public
Employees’ Benefit Board shall pay an assessment at the rate of one percent of
all medical claims received and the administrative costs associated with the
claims received during the calendar quarter.
(3)
The assessment shall be paid to the Department of Consumer and Business
Services and shall be accompanied by a verified report, on a form prescribed by
the department, together with any information required by the department.
(4)
The assessment imposed under this section is in addition to and not in lieu of
any tax, surcharge or other assessment imposed on the board.
(5)
If the department determines that the assessment paid by the board under this
section is incorrect, the department shall charge or credit to the board the
difference between the correct amount of the assessment and the amount paid by
the board.
(6)
The board is entitled to notice and an opportunity for a contested case hearing
under ORS chapter 183 to contest an action of the department taken pursuant to
subsection (5) of this section.
(7)
The assessment paid by the board under this section shall be considered part of
the board’s administrative expenses. [2009 c.867 §3]
Note:
Section 3a, chapter 867, Oregon Laws 2009, provides:
Sec. 3a.
Section 3 of this 2009 Act [743.951] applies to medical claims received by the
Public Employees’ Benefit Board, or a person that contracts with the board to
pay medical claims under a self-insured health benefit plan, during the period
from October 1, 2009, through September 30, 2013. [2009 c.867 §3a]
Note:
743.951 to 743.965 and 743.990 were added to and made a part of the Insurance
Code by legislative action but were not added to ORS chapter 743 or any series
therein. See Preface to Oregon Revised Statutes for further explanation.
ASSESSMENT ON PREMIUMS
743.960 Definitions for ORS 743.960 and
743.961. As used in this section and ORS
743.961:
(1)
“Gross amount of premiums” has the meaning given that term in ORS 731.808.
(2)
“Health plan” means health insurance and insurance provided by a health care
service contractor as defined in ORS 750.005, excluding:
(a)
Insurance policies covering vision only or dental only benefits;
(b)
Medicare advantage plans;
(c)
Medicare Part D plans;
(d)
Long term care insurance;
(e)
Health insurance issued to federal employees that is exempt from state taxes
under federal law;
(f)
A policy of stop-loss coverage that meets the requirements of ORS 742.065;
(g)
Insurance policies issued to supplement liability insurance coverage;
(h)
Automobile medical payment insurance or insurance under which benefits are
payable with or without regard to fault and that is required by law to be
contained in a liability insurance policy or equivalent self-insurance;
(i)
Reinsurance as defined in ORS 731.126;
(j)
Workers compensation insurance; and
(k)
Disability insurance. [2009 c.867 §4]
Note: See
second note under 743.951.
743.961 Payment procedures.
(1) No later than 45 days following the end of a calendar quarter, an insurer
shall pay an assessment at the rate of one percent of the gross amount of
premiums earned by the insurer during that calendar quarter that were derived
from health plan policies delivered or issued for delivery in Oregon.
(2)
The assessment shall be paid to the Department of Consumer and Business
Services and shall be accompanied by a verified form prescribed by the
department together with any information required by the department, that
reports:
(a)
All health plans issued or renewed by the insurer during the calendar quarter
for which the assessment is paid; and
(b)
The gross amount of premiums by line of insurance, derived by the insurer from
all health plans issued or renewed by the insurer during the calendar quarter
for which the assessment is paid.
(3)
The assessment imposed under this section is in addition to and not in lieu of
any tax, surcharge or other assessment imposed on an insurer.
(4)
Any rate filed for the department’s approval may include amounts paid by the
insurer under this section as a valid element of administrative expense or
retention. [2009 c.867 §5; 2010 c.34 §1]
Note: See
second note under 743.951.
Note:
Section 8, chapter 867, Oregon Laws 2009, provides:
Sec. 8. (1)
Sections 5 [743.961] and 6 [743.990] of this 2009 Act apply to premiums earned
by an insurer during the period from October 1, 2009, through September 30,
2013.
(2)
Notwithstanding any provision of contract or statute, including ORS 743.737 and
743.767, beginning October 1, 2009, insurers may include in their rates an
additional one percent of the existing rate. To the extent the existing rate
was approved by the Department of Consumer and Business Services, the resulting
rate, including the additional one percent, shall be considered an approved
rate. If an insurer increases its rates under this subsection, the insurer
shall include in all consumer billings a notice explaining the increase in a
form prescribed by the department. This subsection applies to any rate approved
by or filed for the department’s approval prior to the effective date of this
2009 Act [September 28, 2009] and to any contract of insurance not subject to
the department’s rate approval authority. [2009 c.867 §8]
743.965 Incorrect payments; right to
hearing. (1) If the Department of Consumer and
Business Services determines that the assessment paid by the insurer under ORS
743.961 is incorrect, the department shall charge or credit to the insurer the
difference between the correct amount of the assessment and the amount paid by
the insurer.
(2)
An insurer that is aggrieved by an action of the department taken pursuant to
subsection (1) of this section shall be entitled to notice and an opportunity
for a contested case hearing under ORS chapter 183. [2009 c.867 §7]
Note: See
second note under 743.951.
743.990 Penalties.
(1) If the Public Employees’ Benefit Board or an insurer fails to timely file a
verified form or to pay an assessment required under ORS 743.951 or 743.961,
the insurer or the board shall be subject to a penalty of up to $500 per day of
delinquency. The total amount of penalties imposed under this section for a
calendar quarter may not exceed five percent of the assessment due for that
calendar quarter.
(2)
Any penalty imposed under this section is in addition to and not in lieu of the
assessment imposed under ORS 743.951 and 743.961. [2009 c.867 §6]
Note: See
second note under 743.951.
Note: See
second note under 743.961.
_______________