OAR 836-080-0150: Policyholder Dividend Rights of Group Members and Dividend Group Policyholders; Reduction or Denial Without Prior Advice Prohibited; “Dividend Group” Defined; Standards for Dividend Groups

(1) When used in this section: (a) “Group” means a collection of insurance buyers who are members of a common organization and who are treated collectively by an insurer for determining insurance dividends; and (b) “Laws of the group” means the articles of incorporation, bylaws, agreements of association, rules, or regulations of the organization to which members of a group belong. (2) An insurer shall not issue a policy to a group or to any members of a group, unless: (a) The grouping has been approved by the Commissioner in accordance with ORS 746.145 or 746.150, whichever section applies; and (b) The laws of the group comply with section (3) of this rule. (3) The laws of the group shall provide that a distribution of funds derived from a policyholder dividend will not be reduced or denied to any member of the group: (a) Except for reasons stated in the laws of the group; and (b) Unless the insurer has given a copy of the stated reasons to the member or the policyholder before issuance of the policy for which the reduction or denial is made. (4) The Commissioner will approve dividend groups of persons or risks covered by an insurer for insurance other than workers’ compensation insurance only if: (a) The grouping is made up of homogeneous risks; (b) The grouping is made under the auspices of an organization which has existed for at least two years and was formed for purposes other than obtaining insurance; (c) The grouping is likely to bring about substantial improvement in loss prevention or claims handling; and (d) Information is filed with the Commissioner about eligibility for participation in the grouping and the system for allocating dividends among the participants. (5) Within 60 days of receiving a group dividend proposal, the Commissioner shall notify the insurer whether the proposal has been approved or disapproved, stating the basis for such action.