Oregon Surplus Lines cheat sheet

The Oregon Insurance Code is codified in ORS chapters 731 through 752; surplus lines provisions are in ORS 735.400 through 735.495.

The Director of the Department of Consumer and Business Services administers the code and directs the Insurance Division.

The Director adopts administrative rules in OAR chapter 836; surplus lines rules appear in division 80.

The Director may examine insurers and producers, investigate complaints, subpoena records, issue cease-and-desist orders, and impose civil penalties.

Market conduct examinations review sales, underwriting, rating, claims, and recordkeeping practices for compliance.

Contested cases proceed under ORS chapter 183; final orders are subject to judicial review.

The Director publishes the eligible surplus lines insurer list and the export list by rule.

A surplus lines license is separate from a property and casualty producer license; Oregon requires both authorities.

Qualifications include an Oregon producer license in good standing, passage of the surplus lines examination, a surety bond, and payment of fees.

The surplus lines surety bond is filed with the Director and is conditioned on compliance with surplus lines law and remittance of premiums and taxes.

An insurer must appoint a producer before the producer acts for it; appointments and terminations are filed with the Insurance Division.

Oregon producer licenses are renewed every two years; renewal requires completion of continuing education.

Continuing education is 24 hours per two-year term, including at least three hours of ethics.

Name and address changes must be reported to the Division; a lapsed license bars surplus lines placement.

Diligent search requires the producer to determine that the full amount of coverage cannot be procured from authorized insurers.

The file must document declinations from at least three authorized insurers, unless the coverage is on the export list.

An eligible surplus lines insurer is authorized in its domicile, meets Oregon capital and surplus standards, and appears on the Director's list; alien insurers must be on the NAIC IID list.

Surplus lines insurance must be placed through an Oregon-licensed surplus lines producer.

The surplus lines producer represents the insured, not the nonadmitted insurer, and owes the insured the duties of a broker.

Insurer eligibility must be verified as of the placement date, and evidence of eligibility must be retained.

Coverage that can be procured from an authorized insurer may not be placed in the surplus lines market.

The Director adopts an export list identifying commercial coverages that may be placed without individual declinations.

Export-list placement requires the insured to meet commercial size thresholds set by rule, such as net worth, revenue, or employee counts.

The specific coverage must appear on the export list; unlisted coverage requires a full diligent search.

The producer must document the insured's export-list eligibility at the time of placement.

Export-list placements still require an eligible surplus lines insurer, the required disclosures, transaction filing, and premium tax payment.

The export list may not be used for personal lines or for coverages excluded by rule.

A risk that fails the export-list conditions must be placed only after a complete diligent search.

Oregon imposes a 2 percent premium tax on gross surplus lines premiums.

The surplus lines producer collects the tax from the insured and remits it to the state.

If the producer fails to collect the tax, the producer is personally liable for the tax.

The tax applies to the policy premium, not to separately stated producer fees unless the fee is part of the premium.

Tax is remitted with the transaction filing; late payment triggers penalties and interest.

Failure to remit premium tax is grounds for license suspension or revocation and civil penalties.

Tax records must be retained for at least five years.

The Surplus Line Association of Oregon is the designated surplus lines stamping office.

Each transaction must be filed with SLAO, including declarations, the disclosure acknowledgment, diligent search documentation, and tax payment.

Filings must be submitted within the deadline set by law and SLAO rules; late filings incur fees.

SLAO reviews filings for insurer eligibility and completeness.

A stamp confirms receipt of the filing; it is not approval of rates or policy forms.

Filing is required for export-list placements and for all surplus lines transactions.

Electronic filing is completed through the SLAO system.

Surplus lines producers must retain transaction records for at least five years.

Records include applications, declinations, disclosure acknowledgments, policies, endorsements, filings, and tax documents.

Export-list eligibility documentation must be retained for each placement.

Records must be available to the Director for examination and produced promptly on request.

Retention duties continue after a license is terminated or surrendered.

Electronic records are acceptable if they are legible and retrievable.

Failure to maintain required records is an insurance law violation.

Before placement, the producer must give the insured a written surplus lines disclosure.

The disclosure states that the insurer is not admitted in Oregon and is not subject to Oregon insurance regulation.

The disclosure states that the Oregon Insurance Guaranty Association does not protect the policy.

The disclosure states that rates and forms are not filed with or approved by the Oregon Insurance Division.

The insured must sign an acknowledgment of the disclosure; if the insured refuses, the producer documents the refusal.

The disclosure must be provided before the policy is issued and kept in the transaction file.

Misrepresenting the insurer's solvency, coverage, or regulatory status is prohibited.

Selling or placing insurance for an insurer that is not authorized or eligible in Oregon is prohibited.

Prohibited acts include misrepresentation, rebating, false records, premium theft, and aiding an unauthorized insurer.

The Director may impose civil penalties per violation, order restitution, and suspend or revoke a license.

Willful violations may be referred for criminal prosecution.

The Director may issue cease-and-desist orders, including temporary orders, to stop unauthorized insurance activity.

Producers must act in good faith, disclose material information, and remit premiums promptly.

Ethical duties include avoiding conflicts of interest and maintaining accurate transaction records.