(1)(a) When permitted by its articles of incorporation or its charter and bylaws, a captive insurer may apply to the Director of the Department of Consumer and Business Services for a certificate of authority to transact any class of insurance.

(b) Notwithstanding paragraph (a) of this subsection:

(A) A pure captive insurer may not insure a risk other than a risk of its parent or affiliate or a controlled unaffiliated business.

(B) An association captive insurer may not insure a risk other than a risk of:

(i) An affiliate;

(ii) A member organization of its association; or

(iii) An affiliate of a member organization of its association.

(C) A captive insurer may not provide workers’ compensation insurance, life insurance, health insurance or any personal property or personal casualty line of insurance, including but not limited to personal motor vehicle insurance coverage and homeowner’s insurance, and any component of such coverage.

(D) A captive insurer may not accept or cede reinsurance except as provided in ORS § 735.168.

(2) To transact insurance in this state, a captive insurer must:

(a) Obtain from the director a certificate of authority that authorizes the captive insurer to transact insurance in this state;

(b) Appoint a resident registered agent to accept service of process and to otherwise act on behalf of the captive insurer in this state; and

(c)(A) Hold at least once each year in this state a board of directors meeting; and

(B) Maintain in this state:

(i) The principal place of business of the captive insurer; or

(ii) In the case of a branch captive insurer, the principal place of business for the branch operations of the branch captive insurer.

(3) In the case of a captive insurer formed as a corporation, if the registered agent cannot be found with reasonable diligence at the registered office of the captive insurer, the director is the agent of the captive insurer upon whom process, notice or demand may be served.

(4)(a) An applicant captive insurer formed as a corporation shall file with the director:

(A) Certified copies of the articles of incorporation or the charter and bylaws of the corporation;

(B) A statement under oath of the president and secretary of the corporation showing the financial condition of the corporation; and

(C) Any other statement or document required by the director as adopted by rule.

(b) In addition to the other information required by this subsection, an applicant captive insurer shall file with the director evidence of:

(A) The amount and liquidity of the assets of the applicant captive insurer relative to the risks to be assumed by the applicant captive insurer;

(B) The adequacy of the expertise, experience and character of the individual who will manage the applicant captive insurer;

(C) The overall soundness of the plan of operation of the applicant captive insurer;

(D) The adequacy of the loss prevention programs for any parent or member organization of the applicant captive insurer; and

(E) Any other factor the director adopts by rule and considers relevant in ascertaining whether the applicant captive insurer is able to meet the policy obligations of the applicant captive insurer.

(5)(a) A captive insurer shall pay to the department nonrefundable fees established by the director by rule for:

(A) Examining, investigating and processing the captive insurer’s application for issuance of a certificate of authority;

(B) Obtaining a certificate of authority for the year the director issues a certificate of authority to the captive insurer in an amount not less than $5,000; and

(C) Renewing a certificate of authority in an amount not less than $5,000.

(b) The fees a captive insurer pays to the Department of Consumer and Business Services for obtaining or renewing a certificate of authority are in lieu of any payment of premium assessment on receipt of premium by the captive insurer. Fees for obtaining or renewing a certificate of authority may be increased by the department by rule and may be scaled on the basis of premiums the captive insurer collects in any given year.

(c) The director may retain legal, financial and examination services from outside the department to perform any functions described in ORS § 735.150 to 735.190 and may charge the applicant captive insurer the reasonable cost of services performed.

(6) If the director is satisfied that the documents and statements filed by the applicant captive insurer meet the requirements of ORS § 735.150 to 735.190, the director may issue a certificate of authority that authorizes the captive insurer to transact insurance in this state.

(7) A certificate of authority issued under this section expires annually and must be renewed by December 31 of each year beginning with the year following the year that the original certificate was issued.

(8) Upon approval of the director, a foreign or alien captive insurer may become a domestic captive insurer by complying with all of the requirements of the Insurance Code relative to the organization and licensing of a domestic captive insurer of the same or equivalent type in this state and by filing with the director certified copies of the insurer’s articles of association, charter or other organizational document, together with any appropriate amendments adopted in accordance with the laws of this state bringing those articles of association, charter or other organizational document into compliance with the laws of this state. After complying with these requirements, the captive insurer is entitled to the necessary or appropriate certificates and licenses to continue transacting insurance in this state and is subject to the authority and jurisdiction of this state. In connection with this redomestication, the director may waive any requirements for public hearings. It is not necessary for a captive insurer redomesticating into this state to merge, consolidate, transfer assets or otherwise engage in any other reorganization, other than as specified in this section. [2012 c.84 § 6]

See note under 735.150.