OR DFR Bulletin 1970-04: Reinsurance of Title Insurance

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INSURANCE DIVISION BULLETIN INS 70-4

( Ed. The Insurance Division is changing the numbering system for Division Bulletins. In the

future, bulletins will be identified by the last two digits of the year (e.g. 70) followed by a

hyphen and the number of the bulletin within that year. Each January, commencing in 1971, an

index of the preceding year's bulletins will be prepared. Bulletin 70-1 is the first bulletin issued

after Division Bulletin 64.)

TO: All title insurers

Subject: Reinsurance

Reinsurance of title insurance on Oregon real property is subject to the following statutes and

interpretations:

REINSURANCE IN AN ADMITTED INSURER:

ORS 731.508 (2) permits reinsurance of title insurance in any insurer authorized to transact title

insurance in Oregon.

It should be noted, however, that since a rate has been filed and approved for title reinsurance,

such reinsurance must be effected at the approved rate, which is presently set forth at Section IX

9.1 of the Title Insurance Rating Schedule.

Insurers should be aware that ORS 746.055, which prohibits commissions, rebates or discounts

to certain persons on title insurance, applies to reinsurance of title insurance as well as direct title

insurance.

REINSURANCE IN A NON-ADMITTED INSURER:

ORS 731.508 (2) prohibits any reinsurance contract with a non-admitted insurer unless such

reinsurer is a solvent insurer approved or accepted by the commissioner for the purpose of such

reinsurance.

Each such proposed reinsurance contract, therefore, will require the specific approval of the

commissioner. Such contracts will not be approved in the absence of an affirmative showing that

Department of Consumer and Business Services

Insurance Division

350 Winter St. NE, Room 440

PO Box 14480

Salem, OR 97301-0405

nsurer approved or accepted by the commissioner for the purpose of such

reinsurance.

Each such proposed reinsurance contract, therefore, will require the specific approval of the

commissioner. Such contracts will not be approved in the absence of an affirmative showing that

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

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the interests of the policyholders and/or stockholders require that such reinsurance be placed in

an unauthorized insurer rather than an authorized insurer.

Such reinsurance contracts will not be approved in any non-admitted reinsurer which has an

interest or lien upon the real property which is the subject of the title insurance involved or is

acting for or on the behalf of a person with such an interest or lien, unless the premium to be paid

for such reinsurance is reasonably related to the expected risk of loss.

If the reinsurer is the subsidiary, parent or affiliate of a person who a) has an interest in or lien

upon real property which is the subject of title insurance involved or b) is acting for or on the

behalf of a person who has such an interest or lien, the reinsurer will be deemed to be acting for

or on behalf of such a person and the limitation on premiums set forth in the preceding paragraph

will be applied.

_______(signed)_______

Cornelius C. Bateson

Insurance Commissioner

November 6, 1970