Or. Admin. Code § 836-031-0855 - Recoupment of Assessments by Oregon Insurance Guaranty Association
(1) This rule is
adopted under the authority of ORS
731.244 and
734.579, for the purpose of
implementing 734.579, relating to the recoupment by insurers of assessments
made by the Oregon Insurance Guaranty Association under 734.570. For the
purpose of this rule:
(a) "OIGA assessment"
means the assessment imposed on an insurer by the Oregon Insurance Guaranty
Association.
(b) "Recoupment
assessment" means the assessment charged by the insurer to its
policyholders.
(2) An
insurer shall recoup an OIGA assessment from its policyholders on premiums
written or renewed on or after the recoupment start date as provided in section
(6) of this rule. The recoupment assessment shall be imposed on a pro-rata
basis of net direct written premiums. For the purpose of this section, "net
direct written premiums" are gross premiums, including policy and membership
fees, less return premiums and premiums on policies not taken, as reported in
column 1 of the Oregon State Page, Exhibit of Premium and Losses. An insurer
may state the recoupment assessment to be charged to each policyholder in terms
of a rate instead of a dollar amount and shall adjust the notice in section (5)
of this rule as appropriate.
(3) An
insurer may state the amount or rate of the recoupment assessment in the
premium statement on the declaration page or other page of an insurance policy
that serves as a declaration page rather than on the premium billing statement
if the premium billing statement clearly informs the policyholder that the
recoupment assessment is so located on the declaration page or other page. For
the purpose of this section, the premium billing statement is the statement
transmitted by the insurer to the policyholder that informs the policyholder of
the premium due.
(4) If an insurer
does not issue a premium billing statement, the insurer must state the amount
or rate of the recoupment assessment on the declaration page, on a balance due
notice or on a rate quote.
(5) An
insurer shall include the following notice on or with the statement of
recoupment assessment at the first time each year in which a recoupment
assessment is made: Most insurers doing business in Oregon participate in the
Oregon Insurance Guaranty Association. In the event an insurer fails, the
Association settles unpaid claims on behalf of consumers. Oregon law requires
that policies be surcharged directly to recover the costs of handling those
claims. If your policy is surcharged, the term (Note: each insurer must insert
here the descriptive term it uses to designate the surcharge) along with an
indicated dollar amount will be displayed with the statement of your
surcharge.
(6) An insurer shall
begin recoupment of an OIGA assessment on a date that is on or after January 1
of the year following the year in which the OIGA assessment was imposed but not
later than April 1 of that year and shall continue the recoupment assessment
for the 12-month period following that date. On and after the date on which an
insurer's recoupment period begins, the insurer must state the amount or rate
of the recoupment billed to the policyholder. An insurer shall make a good
faith effort to fully collect the OIGA assessment during that period and may
adjust the amount or rate of a recoupment assessment in the course of the
period as needed to make the recoupment more accurate or to add any additional
recoupment assessment required by subsequent OIGA assessments against the
insurer. Any such adjustment shall apply to all policies from which a
recoupment assessment is collected on and after the date of the
adjustment.
(7) The minimum
threshold below which a recoupment assessment need not be made is the amount at
which the cost of recouping the OIGA assessment exceeds the amount to be
recouped. When an insurer decides not to recoup an amount under this section,
the insurer shall record the amount not recouped as an expense on the income
statement of the insurer. An insurer may not later recoup any amount so
recorded.
(8) Not later than June 1
of each year in which a 12-month recoupment assessment period established by an
insurer under section (6) of this section is completed, the insurer shall
submit to the Director, on a form prescribed by the Director, the annual
certification required by ORS
734.579, indicating the total
recoupment assessed and recovered during that recoupment period.
(9) If the amount of recoupment assessments
collected by an insurer within the 12-month period beginning on the date on
which the insurer began the recoupment exceeds the total amount of the OIGA
assessment against the insurer, the insurer shall do one of the following:
(a) Pay back the excess.
(b) Subject to section (10) of this rule,
carry over the amount of the excess to a date that is not later than June 1 of
the year following the year in which the insurer submits the annual
certification under section (8) of this rule for the recoupment period to which
the excess applies.
(10)
Not later than June 1 of the year to which an insurer has carried over an
amount of excess under section (9)(b) of this rule, the insurer must dispose of
the excess carried over according to one of the following methods:
(a) By applying the excess to reduce any new
recoupment assessment arising during the carry-over period.
(b) By returning the excess to its current
policyholders.
(c) Except as
provided in this subsection, by transferring the excess to the Oregon Insurance
Guaranty Association, which shall hold all amounts so received for the purpose
of paying covered claims arising under subsequent insurer insolvencies. If the
amount of the excess divided by the number of policies from which recoupment
assessments were collected is $10 or more, the insurer instead shall dispose of
the excess according to the method in subsection (a) or (b) of this
section.
(11) If the
amount of recoupment assessments collected by an insurer within the 12-month
period beginning on the date on which the insurer began the recoupment is less
than the total amount of the assessment against the insurer, the insurer shall
carry over the amount of the insufficiency to the next 12-month period in which
the insurer imposes a new recoupment assessment. The amount carried over shall
be applied to increase the new recoupment assessment. If the insurer
determines, however, that the cost of recouping the remaining amount exceeds
the amount of the insufficiency, the insurer need not carry over the
insufficiency. The insurer instead shall record the amount not recouped as an
expense on the income statement of the insurer. An insurer may not later recoup
any amount so recorded.
(12) An
insurer may take all or any part of a recoupment charge owing from a
policyholder from the first payment of premium by the policyholder.
Notes
Stat. Auth.: ORS 731.244 & 734.579
Stats. Implemented: 734.579
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