Oregon Revised Statutes Chapter 732 § 732.574 — Standards for transactions within holding company; notice; deposit or bond for

Standards for transactions within holding company; notice; deposit or bond for protection of insurer; records and data of affiliate. (1) A transaction within an insurance holding company system to which an insurer subject to registration is a party is subject to the following standards: (a) The terms must be fair and reasonable. (b) Charges or fees for services performed must be reasonable. (c) Expenses incurred and payment received must be allocated to the insurer in conformity with customary insurance accounting practices that are consistently applied. (d) The books, accounts and records of each party to the transaction must be maintained so as to disclose clearly and accurately the nature and details of the transaction, including accounting information that is necessary to support the reasonableness of the charges or fees to the respective parties. (e) The combined capital and surplus of the insurer following any transaction with an affiliate or any shareholder dividend must be reasonable in relation to the insurer’s outstanding liabilities and adequate to the insurer’s financial needs. (f) Agreements for cost-sharing services and management must include provisions that the Director of the Department of Consumer and Business Services requires by rule. (g)(A) If the director determines that the continued operation of an authorized insurer is hazardous to the insurer’s policyholders or to the insurance-buying public generally or that the insurer is in a condition that is grounds for supervision, conservation or a delinquency proceeding, in addition to the actions the director may order under ORS 731.385, the director may require the insurer, for the insurer’s protection, to secure and maintain with the director the insurer’s choice of a deposit or a bond for the duration of the hazard or condition or the duration of a specific contract or agreement. The director may, at the director’s sole discretion, determine the amount of the deposit or bond, which may not exceed the value during any one year of each contract or agreement for which the director requires a deposit or bond. The director may require the deposit or bond for a single contract, for more than one contract or for any or all contracts with a specific party. (B) In determining whether to require a deposit or bond, the director shall consider how the requirement will affect the insurer’s ability to perform a contract or agreement subject to, or affected by, the requirement for the deposit or bond and the ability of parties to the contract or agreement other than the insurer to perform the other parties’ duties under the contract or agreement. (h)(A) All records and data of an insurer that an affiliate holds remain the property of the insurer and must be subject to the insurer’s control, be identifiable and be segregated or readily capable of being segregated from the data and records of all other persons, all at no additional cost to the insurer. Records and data subject to the requirements of this subsection include, but are not limited to, claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records or similar records and all other data or records that are otherwise the insurer’s property, in whatever form embodied or maintained. (B) At an insurer’s request, an affiliate that holds an insurer’s data and records shall provide to a receiver a complete set of the data and records, however embodied or maintained, that pertain to the insurer’s business and shall provide access, by assumption of any applicable licenses or agreements or by other lawful means, to all operating systems and software on which the data and records are maintained or that are necessary to view, retrieve, process, store, print, export or otherwise use the data and records. The affiliate shall otherwise restrict or discontinue the affiliate’s own use of the data and records if the affiliate is not operating the insurer’s business. (C) An affiliate shall provide evidence of satisfaction or a waiver of a lien or encumbrance if necessary to give a receiver access to data or records stored in a location that is subject to the lien or encumbrance because of the insurer’s default under a lease or other agreement. (D) Premiums or other funds of an insurer that an affiliate collects or holds remain the exclusive property of, and are subject to the control of, the insurer. Any right of offset that arises because an insurer is placed into receivership is subject to ORS 37.020 to 37.410. (2)(a) A domestic insurer and any person in the domestic insurer’s insurance holding company system may enter into a transaction described in this subsection, including an amendment to or modification of an affiliate agreement that is subject to standards set forth in this section, only if: (A) The domestic insurer has notified the di