Regulatory Alerts2002-01-01 | Bulletin 2002-1Bulletin 2002-1: No Policy Changes Required by 2001 Amendment to ORS 743.186(1)(A)
The Oregon Insurance Division issued Bulletin INS 2002-1 to clarify that the 2001 amendment to ORS 743.186(1)(A) does not require life insurance companies to amend existing policy language. The amendment, which implements statutory accounting principles regarding policy loans, was subject to questions regarding its impact on interest accrual provisions. The regulator explicitly states that insurers are not obligated to change their current policy terms in response to this legislative change.
OREGON INSURANCE DIVISION BULLETIN INS 2002-1 DATE: January 23, 2002 TO: ALL LIFE INSURANCE COMPANIES RE: NO POLICY CHANGES REQUIRED BY 2001 AMENDMENT TO ORS 743.186(1)(A) Questions have arisen about one part of legislation enacted by the Oregon Legislative Assembly in 2001, which is found at Chapter 318, Oregon Laws 2001 (Senate Bill 267). The amendment in question, to ORS 743.186, was intended to implement codification of statutory accounting principles by the National Association of Insurance Commissioners. The accounting principle that was intended to be implemented by this change instructs insurers whether to carry the unpaid balance of all policy loans as admitted or nonadmitted assets. ORS 743.186(1)(a), effective January 1, 2001, reads in relevant part (underlined wording was added by the amendment): “The policy may also provide that: (a) Interest on any indebtedness that is 90 or more days past due shall be added to the existing indebtedness and shall bear interest at the rate applicable to the existing indebtedness;” The Insurance Division does not interpret this amendment to require insurers to amend existing policy language. Effective Date: This bulletin shall take immediate effect. Issued this 31st day of January 2002. _(Signed) Joel Ario, Insurance Administrator Department of Consumer and Business Services Insurance Division 350 Winter St. NE, Room 440 PO Box 14480 Salem, OR 97301-0405 (503) 947-7980 FAX (503) 378-4351 TTY (503) 947-7280 www.oregoninsurance.org