Oregon's insurance law is the Insurance Code, ORS chapters 731 to 750 (ORS 731.004), with details in the Oregon Administrative Rules, chapter 836. Oregon's regulator is not a commissioner. It is the Director of the Department of Consumer and Business Services (DCBS), who acts through the Division of Financial Regulation. The Oregon questions on every exam come from the same core: the Director's powers, producer licensing and appointments, CE, trust accounts and fees, unfair trade and claims practices, privacy, and the guaranty associations. General concepts (what rebating or twisting means, types of insurers, agency law, federal law) are in the national Insurance Regulation guide.

About the exam

Oregon's producer exams are delivered by PSI. Every exam requires 70% to pass.

From the PSI candidate bulletin and the Division's instructions:

• Prelicensing education: resident candidates complete 20 hours for each line before testing. The certificate of completion is valid for 1 year from its issue date.
• Waivers: holders of designations such as the CLU (life and health) or CPCU (property and casualty) are exempt from prelicensing.
• Fingerprints: required for a background check, and good for 6 months. A person who already holds a valid Oregon insurance license and is testing for another class doesn't need new prints.
• Applying: after passing, apply electronically through NIPR.
• One license: all lines appear on a single license. If you pass Life first and apply, wait until that license is issued before applying to add Health.
• Exam-free and extra exams: credit life needs no exam. Surplus lines producers need a P&C license plus a separate surplus lines exam (12-05). Variable life needs a securities license (Series 6 or 7).
• The statute lets the Director contract with a testing service and sets what the exam must cover (ORS 744.058).

The regulator

• The Director of DCBS issues insurers' certificates of authority and producer licenses (ORS 731.354, 744.062). The Director enforces the Code through the Division of Financial Regulation (731.256).
• Cease and desist orders (731.252):
  • Request a hearing within 20 days of the date the order was mailed.
  • The Director must schedule the hearing within 30 days of the request.
• Restitution and criminal cases: the Director may seek restitution of a consumer's actual damages from an insurer. Matters that warrant prosecution go to the Attorney General or the district attorney (731.256).
• Inquiries: licensees must reply promptly and truthfully to the Director's inquiries (731.296).
• Examinations: every authorized insurer is examined at least once every 5 years (731.300).
• Civil penalties (731.988):
  • Up to $1,000 per offense for an individual producer, adjuster or consultant.
  • Up to $10,000 per offense for an insurer.
  • Plus up to the profit made on the violating transaction.
• A Code violation with no greater penalty specified is a Class A misdemeanor (731.992).

Insurers, rates and forms

• An insurer needs a certificate of authority from the Director (ORS 731.354).
• Rates: P&C rates may not be excessive, inadequate or unfairly discriminatory (737.310). The rate chapter is meant to encourage competition. Outside workers' comp and title, a rate isn't excessive unless it is unreasonably high and reasonable competition is lacking.
• Forms: most policy forms must be filed and approved before use (742.003). The Director acts within 30 days, which can be extended by 30 more days. A form can be disapproved for, among other things, ambiguous or misleading provisions (742.005).
• Fire premium tax: insurers covering the fire peril pay a gross premium tax that funds the Department of the State Fire Marshal (731.820).

Producer licensing

Who needs a license

• To sell, solicit or negotiate a class of insurance, you need a producer license for that class (ORS 744.053).
• Solicit means attempting to sell, or urging someone to apply for a particular kind of insurance from a particular insurer. Sell means exchanging a policy for money on behalf of an insurer (731.104).

License classes (744.062)

• Life; health; property; casualty; variable life and variable annuity; credit; title (residents only).
• Personal lines: property and casualty sold to individuals and families for mainly noncommercial purposes.

Who can be licensed

• Resident applicants must be at least 18 (744.059).
• A business entity must designate a licensed producer responsible for its compliance.
• To actually sell, a producer must also be employed by or under contract with an authorized insurer or a licensed agency.
• No brokering: Oregon doesn't permit brokering. A nonresident who is a broker at home may work in Oregon only as an appointed representative of an insurer.

Nonresidents and movers

• Nonresidents need good standing at home and reciprocity. The Director is their attorney in fact for service of process (744.063).
• A nonresident who moves to a new home state notifies the Director, with certification from the new state, within 30 days.
• Moving to Oregon: no education or exam is needed for lines already held if the application arrives within 90 days after the other state's license is canceled and Oregon residency is established (744.067).

Temporary license (744.073)

• Up to 180 days, no exam.
• It can go to the surviving spouse of a producer who has died, or the designee of a producer entering the Armed Forces, among others.
• The Director may require a sponsor who takes responsibility for the licensee.

Keeping the license

• Renewal: licenses renew every 2 years, in the month of the producer's birthday (OAR 836-071-0146). The first renewal fee is due on the last day of the month of the license's second anniversary (744.072).
• Late renewal: reinstate within 12 months of the due date without an exam by paying double the unpaid renewal fee and completing any CE owed. Producers kept from renewing by military service may ask for a waiver (744.072(6)-(7)).
• Reporting changes (744.068):
  • Notify the Director before doing business under an assumed name.
  • Report a change of principal business address or phone within 30 days.
  • Report a new office location within 30 days of opening it.
  • An agency reports when a producer starts or stops acting for it within 30 days.
• Records: keep records of business transacted for 3 years after the policy expires (744.068(2)).
• Reporting actions (744.089):
  • An administrative action elsewhere: within 30 days of final disposition.
  • A criminal prosecution: within 30 days of the initial pretrial hearing date.

Continuing education (OAR 836-071-0215 to 0230)

• 24 hours every 2-year renewal period. They must include at least 3 hours of ethics and 3 hours of Oregon insurance law and rules.
• Producers who sell flood insurance need at least 2 hours of flood-related CE in each period.
• Limits on credit:
  • No more than 8 hours in one day.
  • One credit hour is at least 50 minutes.
  • Independent study requires passing the course exam with 70%.
  • No credit for repeating a course within 2 years.
  • No credit for salesmanship or motivational courses.
  • No more than 4 hours per period for office management or business-operations courses.

Appointments and terminations

Appointments (ORS 744.078)

• A producer must be appointed before acting as an insurer's agent.
• One license lets you represent as many insurers as appoint you.
• A producer who solicits an application as the insurer's agent is regarded as the insurer's agent for that application and policy, whatever the application says.

Insurer terminates for cause (744.079)

• Only terminations for a cause listed in ORS 744.074 are reported. The insurer notifies the Director within 30 days.
• It sends the producer a copy within 15 days, by certified mail or overnight carrier.
• The producer may file written comments within 30 days.

Advance notice (744.081)

• Except for listed causes, an insurer ending an appointment gives the producer 90 days' written notice with reasons.
• Failing to remit balances owed is one cause that allows termination without the 90 days.
• A producer who ends an appointment notifies the insurer and the Director within 30 days.

Compensation, fees and trust money

Commissions

• No commission to a person who must be licensed and isn't. Renewal commissions may go to someone who was licensed at the time of sale (ORS 744.076).
• A producer who isn't also licensed as an insurance consultant may receive only commission (744.077).
• An insurance consultant advises for a fee rather than commission (744.605). Consultants carry $500,000 of E&O coverage. Attorneys giving legal advice are exempt.

Fees (OAR 836-071-0260 to 0277)

• No service fees on personal lines, apart from limited incidental charges announced in writing. Example: a charge for rewriting a policy canceled for nonpayment, but not for the first rewrite or reinstatement.
• On commercial lines, a fee is allowed only for extra service explained in writing.
• A producer who receives both a fee and a commission must disclose this and get documented acknowledgment before the sale.

Premium trust accounts (ORS 744.083; OAR 836-074)

• Resident producers keep premiums in a trust account separate from other funds, located in Oregon unless the Director permits otherwise.
• Mixing in personal funds is commingling, which is prohibited. A producer may add its own money only to advance premiums or to reserve for return premiums.
• Deposit premiums by the 7th day after receipt.
• Pay return premiums to the insured by the 30th day.
• A producer without a trust account converts cash to a money order or cashier's check payable to the insurer within 72 hours.
• Interest on the account may be kept by the producer unless the producer and insurer agree otherwise.

Unfair trade practices (ORS 746)

• Inducements must be in the policy (746.035).
• Rebating is prohibited (746.045). Allowed exceptions:
  • Promotional advertising items worth up to $100 a year to a person, other than a health insurance insured.
  • Discounts tied to a lawful wellness program.
• Personal or controlled insurance covers the producer, the producer's spouse, relatives within the second degree, and the producer's employer. Commissions on it are an unlawful rebate when controlled premiums in a year exceed the premiums on other business. For life and health, the test is twice the other premiums (746.065).
• Misrepresentation (746.075), including:
  • Misstating policy terms.
  • A misleading policy name.
  • False statements about an insurer's finances.
  • Inducing a life owner to lapse, surrender, borrow against or convert a policy by misrepresentation (twisting).
  • Misrepresenting a managed care provider network.
• Replacement commissions: the Director may limit commission on a replacement life policy (746.085).
• False statements on applications or to get a commission (746.100). False advertising (746.110). Foreign-language ads for English-only policies must say so (746.115).
• Unfair discrimination (746.015):
  • Different rates for risks of the same hazard.
  • Underwriting on age 65 or a disability such as blindness, unless actuarially justified.
  • Adverse action because someone is a victim of domestic or sexual violence.
• Anticompetitive agreements to fix rates or commissions are prohibited (746.160). The Director may also prohibit other practices found unfair (746.240).

Claims practices

• Unfair claim settlement practices include refusing to pay without a reasonable investigation and lowballing claimants so they have to sue (ORS 746.230).
• Claim deadlines (OAR 836-080-0225 to 0235):
  • Acknowledge or pay a claim within 30 days.
  • Answer a Director inquiry within 21 days.
  • Finish the investigation within 45 days.
  • Accept or deny within 30 days of proof of loss. If more time is needed, say why and update in writing every 45 days.
  • Warn an unrepresented third-party claimant of an expiring limitations period at least 60 days in advance.
• A denial must cite the exclusion relied on. A release may not go beyond the subject of the claim.

Privacy (ORS 746.600-746.690)

• Privacy notice to continuing customers at least once every 12 months (746.620).
• Disclosure authorizations are valid for no more than 24 months and may be revoked at any time (746.630).
• Adverse underwriting decisions: a consumer who asks in writing within 90 business days gets the specific reasons within 21 business days (746.650).

Guaranty associations

Oregon Life and Health Insurance Guaranty Association (ORS 734.750-734.890)

• Funded by assessments on members. Producers may not use it to sell (734.890).

Oregon Insurance Guaranty Association (P&C) (ORS 734.510-734.570)

• Covered claims are capped at $600,000 for insolvencies on or after January 1, 2025. Earlier insolvencies are limited to claims under $300,000.
• Workers' compensation claims are paid in full, less Workers' Benefit Fund payments.
• Surety isn't covered.
• First-party claims by an insured with net worth over $25 million are excluded.
• Members can be assessed no more than 2% of prior-year net direct premiums a year.

Surplus lines (ORS 735.400-735.495)

• Placement requires a surplus lines license and a diligent search of authorized insurers. Exempt commercial purchasers who receive the disclosure and request it in writing are excepted.
• Eligible nonadmitted insurers need capital and surplus of at least the greater of the home-state minimum or $15 million.

Common exam traps

• "Commissioner." Oregon's regulator is the Director of DCBS, through the Division of Financial Regulation.
• CE. 24 hours, including 3 ethics and 3 Oregon law, plus flood CE for flood sellers.
• Terminations. Insurers report only for-cause terminations (30 days). Appointments otherwise end on 90 days' notice.
• No personal lines service fees. Producers who aren't consultants receive only commission.
• Trust money. Deposit by day 7; return premiums by day 30; cash forwarded in 72 hours.
• Cease and desist hearings. Request within 20 days; the hearing is held within 30.
• P&C guaranty limit. $600,000 for 2025-and-later insolvencies.