Employer/insurer Coverage Responsibility

Link to law: http://arcweb.sos.state.or.us/pages/rules/oars_400/oar_436/436_050.html
Published: 2015

The Oregon Administrative Rules contain OARs filed through November 15, 2015

 

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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,

WORKERS' COMPENSATION DIVISION










 

DIVISION 50
EMPLOYER/INSURER COVERAGE RESPONSIBILITY

436-050-0001
Authority for Rules
These rules are
adopted under the director’s authority contained in ORS 656.407, 656.430,
656.455, 656.726, 656.850, 656.855, and 731.475.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.017, 656.018, 656.021, 656.023, 656.027, 656.029, 656.031, 656.037, 656.039,
656.126, 656.128, 656.140, 656.403, 656.407, 656.419, 656.423, 656.427, 656.430,
656.434, 656.440, 656.443, 656.447, 656.455, 656.614, 656.745, 656.750, 656.850,
656.855 & 731.475

Hist.: WCB
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCB 2-1976(Admin) (Temp), f. & ef.
4-12-76; WCB 3-1976(Admin), f. & ef. 6-15-76; WCD 3-1980(Admin), f. & ef.
4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83,
ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from
436-051-0001; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0002
Purpose
The purpose of these
rules is to carry out the workers’ compensation law related to employers’
and insurers’ responsibilities to cover subject workers for compensable injuries
and illnesses.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.017

Hist.: WCB
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCB 2-1976(Admin) (Temp), f. & ef.
4-12-76; WCB 3-1976(Admin), f. & ef. 6-15-76; WCD 3-1980(Admin), f. & ef.
4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83,
ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from
436-051-0008; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87,
ef. 1-1-88; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 1-2008, f. 6-13-08, cert.
ef. 7-1-08; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0003
Applicability
of Rules
(1) These rules are effective Jan. 1,
2015, to carry out the provisions of:
(a) ORS 656.017 — Employer
required to pay compensation and perform other duties.
(b) ORS 656.029 — Independent
contractor status.
(c) ORS 656.126 — Coverage
while temporarily in or out of state.
(d) ORS 656.407 — Qualifications
of insured employers.
(e) ORS 656.419 — Workers’
compensation insurance policies.
(f) ORS 656.423 — Cancellation
of coverage by employer.
(g) ORS 656.427 — Cancellation
of workers’ compensation insurance policy or surety bond liability by insurer.
(h) ORS 656.430 — Certification
of self-insured employer.
(i) ORS 656.434 — Certification
effective until canceled or revoked; revocation of certificate.
(j) ORS 656.443 — Procedure
upon default by employer.
(k) ORS 656.447 — Sanctions
against insurer for failure to comply with orders, rules, or obligations under workers’
compensation insurance policies.
(l) ORS 656.455 — Records
location and inspection.
(m) ORS 656.745 — Civil
penalties.
(n) ORS 656.850 and 656.855
— Worker leasing companies.
(o) ORS 731.475 — Insurer’s
in-state location.
(2) The director may waive
procedural rules as justice requires, unless otherwise obligated by statute.
Stat. Auth: ORS 656.704 & 656.726(4)
Stats. Implemented: ORS 656.017,
656.029, 656.126, 656.407, 656.419, 656.423, 656.427, 656.430, 656.434, 656.443,
656.447, 656.455, 656.745, 656.850, 656.855 & 731.475
Hist.: WCD 3-1980(Admin),
f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 10-1982(Admin),
f. 9-30-82, ef. 10-1-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; Renumbered
from 436-051-0003, 1-1-86; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987,
f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90; WCD 25-1990,
f. 11-29-90, cert. ef. 12-26-90; WCD 3-1992, f. 1-10-92, cert. ef. 2-1-92; WCD 2-1994,
f. 4-1-94, cert. ef. 5-1-94; WCD 9-1996, f. 3-11-96, cert. ef. 4-1-96; WCD 1-1998,
f. 1-9-98, cert. ef. 1-23-98; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 10-2003,
f. 8-29-03, cert. ef. 9-15-03; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 5-2005,
f. 5-26-05, cert. ef. 6-1-05; WCD 8-2005, f. 12-6-05, cert. ef. 1-1-06; WCD 7-2007,
f. 11-1-07, cert. ef. 11-28-07; WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 4-2008,
f. 9-17-08, cert. ef. 7-1-09; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13; WCD 1-2013(Temp),
f. & cert. ef. 1-23-13 thru 7-21-13; WCD 5-2013, f. 7-3-13, cert. ef. 7-22-13;
WCD 8-2013, f. 11-12-13, cert. ef. 1-1-14; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14;
WCD 13-2014, f. 11-26-14, cert. ef. 1-1-15
436-050-0005
Definitions
For the purpose
of these rules unless the context requires otherwise:
(1) “Audited
financial statement” means a financial statement audited by an outside accounting
firm.
(2) “Board”
means the Workers’ Compensation Board of the Department of Consumer and Business
Services.
(3) “Cancel”
or “cancellation” of coverage means ending a policy at a date before
its expiration date.
(4) “Client”
means a person to whom workers are provided under contract and for a fee on a temporary
or leased basis.
(5) “Complete
records” means written records required to be kept in Oregon as described
in OAR 436-050-0110 and 0120 and OAR 436-050-0210 and 0220.
(6) “Controlling
person” means a person having substantial ownership or who is an officer or
director of a corporation; a member or manager of a limited liability company; a
partner of a partnership; or an individual who has, directly or indirectly, the
power to direct or cause the direction of the management, policies, or operation
of a person offering worker leasing services.
(7) “Days”
means calendar days unless otherwise specified.
(8) “Default”
means failure of an employer, insurer, or self-insured employer to pay the moneys
due the director under ORS 656.506, 656.612, and 656.614 at such intervals as the
director directs.
(9) “Department”
means the Department of Consumer and Business Services.
(10) “Director”
means the director of the Department of Consumer and Business Services or the director’s
delegate for the matter, unless the context requires otherwise.
(11) “Division”
means the Workers’ Compensation Division of the Department of Consumer and
Business Services.
(12) “Fiscal
Year” means the twelve-month period beginning July 1 and ending June 30.
(13) “Governmental
subdivision” means cities, counties, special districts defined in ORS 198.010,
intergovernmental agencies created under ORS 225.050, school districts as defined
in ORS 255.005, public housing authorities created under ORS chapter 456, or regional
council of governments created under ORS chapter 190.
(14) “Hearings
Division” means the Hearings Division of the Workers’ Compensation Board.
(15) “Insurer”
means the State Accident Insurance Fund Corporation or an insurer authorized under
ORS chapter 731 to transact workers’ compensation insurance in Oregon.
(16) “Leased
worker” means any worker provided by a worker leasing company on other than
a “temporary basis” as described in OAR 436-050-0420.
(17) “Nonrenewal”
means the insurer’s decision not to renew a policy at its expiration date.
(18) “Person”
means an individual, partnership, corporation, joint venture, limited liability
company, association, government agency, sole proprietorship, or other business
entity allowed to do business in the state of Oregon.
(19) “Premium”
means the monetary consideration for an insurance policy.
(20) “Premium
assessments” means moneys due the director under ORS 656.612 and 656.614.
(21) “Process
claims” is the determination of compensability and management of compensation
by an Oregon certified claims examiner. Determining compensability and managing
compensation must be done from within this state under ORS 731.475 and this definition.
Insurers and self-insured employers may receive claims reports at locations out-of-state
as long as claims are forwarded to an Oregon location for processing. The act of
making payment may be done from out-of-state as directed from the Oregon place of
business.
(22) “Proof
of coverage” for purposes of OAR 436-050 has the same meaning as defined in
OAR 436-162-0005.
(23) “Renewal”
or "renew" means the issuance of a policy succeeding a policy previously issued
and delivered by the same insurer or the issuance of a certificate or notice extending
the terms of an existing policy for a specified period beyond its expiration date.
(24) “Reinstatement”
means the continuation or reestablishing of workers’ compensation insurance
coverage, as noted by the effective date of the reinstatement, under a workers’
compensation insurance policy that was previously canceled.
(25) “Self-insured
employer” means an employer who has been certified under ORS 656.430 as having
met the qualifications of a self-insured employer set out by ORS 656.407.
(26) “Self-insured
employer group” means five (5) or more employers certified under ORS 656.430
as having met the qualifications of a self-insured employer set out by ORS 656.407
and OAR 436-050-0260 through 436-050-0340.
(27) “State”
means the State of Oregon.
(28) “Substantial
ownership” means a percentage of ownership equal to or greater than the average
percentage of ownership of all the owners, or ten percent, whichever is less.
(29) “Worker
leasing company” means a “person,” as described in section (18)
of this rule, who provides workers, by contract and for a fee, as established in
ORS 656.850.
(30) “Written”
means that which is expressed in writing, and includes electronic records.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.704 & 656.726(4)

Hist.: WCB
2-1976(Admin)(Temp), f. & ef. 4-12-76; WCB 3-1976(Admin), f. & ef. 6-15-76;
WCD 3-1980(Admin), f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82;
WCD 10-1982(Admin), f. 9-30-82, ef. 10-1-82; WCD 1-1983(Admin), f. 6-30-83, ef.
7-1-83; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85,
cert. ef. 1-1-86; Renumbered from 436-051-0005; WCD 9-1985(Admin), f. 12-12-85,
ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert.
ef. 1-1-90; WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 2-1994, f. 4-1-94,
cert. ef. 5-1-94; WCD 9-1996, f. 3-11-96, cert. ef. 4-1-96; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 3-2007(Temp), f.
5-31-07, cert. ef. 6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07, cert. ef. 11-28-07;
WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0006
Administration of Rules
Any orders issued
by the division in carrying out the director’s authority to enforce ORS chapter
656 and these rules are considered orders of the director.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.704 & 656.726(4)

Hist.: WCB
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef.
12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0010;
WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88;
WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0008
Administrative
Review and Contested Cases
(l) Any party as
defined by ORS 656.005, including an assigned claims agent under ORS 656.054, aggrieved
by an action taken under these rules in which a worker’s right to compensation
or the amount thereof is directly in issue may request a hearing by the Hearings
Division of the Workers’ Compensation Board under ORS chapter 656 and the
board’s Rules of Practice and Procedure for Contested Cases under the workers’
compensation law except where otherwise provided in ORS chapter 656.
(2) Any party
as described in section (1) aggrieved by a proposed order or proposed assessment
of civil penalty of the director or division issued under ORS 656.254, 656.735,
656.745, or 656.750 may request a hearing by sending a written request to the Workers’
Compensation Division’s administrator within 60 days after the order was mailed.
(3) A hearing
will not be granted if the request:
(a) Fails
to state the specific grounds for which the party contests the proposed order or
assessment; or
(b) Is mailed
or delivered to the administrator more than 60 days after the order was mailed.
(4) Under
ORS 656.704(2) and 731.240(1), any party that disagrees with an action or order
of the director or division under these rules, other than as described in section
(2), may request a hearing by filing a request for hearing as provided in OAR 436-001-0019
within 30 days of the mailing date of the order or notice of action. OAR 436-001
applies to the hearing.
(5) Any party
described in section (1) aggrieved by an action taken under these rules by another
person except as described in sections (1) through (3) above may request administrative
review by submitting a written request to the administrator. The request must specify
the grounds upon which the action is contested and be received by the administrator
within 90 days of the contested action unless the administrator determines there
was good cause for delay or that substantial injustice may otherwise result.
Stat. Auth: ORS
656.704, 656.726(4) & 656.745

Stats. Implemented:
ORS 656.254, 656.735, 656.740, 656.745 & 656.750

Hist.: WCB
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef.
12-27-83; Renumbered from 436-051-0998, 1-1-86; WCD 9-1985(Admin), f. 12-12-85,
ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-87; WCD 25-1990, f. 11-29-90, cert.
ef. 12-26-90; WCD 1-1998, f. 1-9-98, cert. ef. 1-23-98; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 8-2005, f. 12-6-05,
cert. ef. 1-1-06; WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13
436-050-0015
Suspension and Revocation of Authorization to Issue Workers’ Compensation Insurance Policies
(1) Under ORS 656.447,
the director may suspend or revoke the insurer’s authority to renew or issue
workers’ compensation insurance policies upon a determination that the insurer
has failed to comply with its obligations under the policy or that it has failed
to comply with the law, rules, or orders of the director.
(2) For the
purpose of this rule:
(a) “Suspend”
or “suspension” means a stopping by the director of the insurer’s
authority to issue new workers’ compensation insurance policies for a specified
period of time.
(b) “Revoke”
or “revocation” means a permanent revocation by the director of an insurer’s
authority to renew or issue workers’ compensation insurance policies.
(c) “Show-cause
hearing” means an informal meeting with the director or designee in which
the insurer will be provided an opportunity to be heard and present evidence regarding
any proposed orders by the director to suspend or revoke an insurer’s authority
to issue workers’ compensation insurance policies.
(3) Suspension
or revocation under this rule will not be made until the insurer has been given
notice and the opportunity to be heard through a show-cause hearing before the director
and show cause why it should be permitted to continue to issue workers’ compensation
insurance policies.
(4) A show-cause
hearing may be held at any time the director finds that an insurer has failed to
comply with its obligations under a workers’ compensation insurance policy
or has failed to comply with law, rules, or orders of the director.
(5) Following
a show-cause hearing, the director may rescind the proposed order if the insurer
establishes to the director’s satisfaction its ability and commitment to comply
with ORS Chapter 656 and these rules.
(6) A suspension
may be in effect for a period of up to 18 months. A suspended insurer may continue
to serve existing accounts and renew any existing policy, unless the policy nonrenews
or is canceled during the period of suspension.
(7) After
12 months of the suspension has elapsed, the division may audit the performance
of the insurer. If the insurer is in compliance, the administrator may request the
director to lift the suspension before the 18 months has elapsed. If the insurer
is not in compliance, the administrator may request the director revoke the insurer’s
authority to issue workers’ compensation insurance policies.
(8) When
an insurer’s authority to issue workers’ compensation insurance policies
has been revoked, the insurer may serve an existing account only until the policy
is canceled or until the next renewal date, whichever first occurs.
(9) After
a revocation of an insurer’s authority to issue workers’ compensation
insurance policies has been in effect for five years or longer, it may petition
the director to restore its authority by submitting a plan demonstrating its ability
and commitment to comply with the workers’ compensation law, these rules,
and orders of the director.
(10) Appeal
of proposed and final orders of suspension and revocation issued under this rule
may be made as provided in OAR 436-050-0008.
(11) Any
order of suspension or revocation issued under ORS 656.447 and this rule is a preliminary
order subject to revision by the director.
Stat. Auth: ORS
656.704, 656.726(4)

Stats. Implemented:
ORS 656.447

Hist. WCD
25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0025
Service of
the Notice of Civil Penalty Orders
When the director
issues a civil penalty order, it will be served by certified mail, return receipt
requested, or in any other manner provided by Oregon Rules of Civil Procedure (7)(D).
Proof of service may include a hard copy signed receipt or electronic verification.
Stat. Auth: ORS
656.704, 656.726(4)

Stats. Implemented:
ORS 656.704, 656.726, 656.740

Hist.: WCD
1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0040
Responsibility
for Providing Coverage When a Contract is Awarded
(1) In the operation
of ORS 656.029 a subject employer who fails to comply with ORS 656.017 is a “noncomplying
employer” as defined by ORS 656.005.
(2) For the
purposes of this rule:
(a) “Assistance
of others” means one or more individuals directly and immediately aiding in
a common undertaking.
(b) “Normal
and customary part or process of the person’s trade or business” refers
to the day-to-day activities or operations which are necessary to successfully carry
out the business or trade.
(3) Under
ORS 656.037, a person contracting to pay remuneration for professional real estate
activity as defined in ORS chapter 696 to a qualified real estate broker or qualified
principal real estate broker, as defined in ORS 316.209, is not an employer of the
qualified broker.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.029 & 656.037

Hist.: WCD
3-1980(Admin), f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82;
WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert.
ef. 1-1-86; Renumbered from 436-051-0052; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86;
WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90;
WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 9-1996, f. 3-11-96, cert. ef.
4-1-96; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert.
ef. 1-1-04; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0045
Non-Subject Workers
(1) As used in ORS
656.027(1):
(a) “Private
employment contract” means direct employment of the worker by the owner of
the private home.
(b) As used
in this rule, “owner of the private home” means any person who occupies
and either owns, leases, or rents the private home, or any person related by blood,
marriage, or an Oregon registered domestic partnership to that person, or any person
who by direction of that person or by order of a court has become responsible for
managing the household affairs of that person.
(2) As used
in ORS 656.027(19):
(a) “A
person performing foster parent duties” means any person certified by the
Oregon Department of Human Services under ORS chapter 418 as a foster parent, or
any person employed by that person in the operation of a foster home as defined
in ORS chapter 418 and any rules promulgated thereunder.
(b) “A
person performing adult foster care duties” means any person licensed by the
Oregon Department of Human Services or Oregon Health Authority to operate an adult
foster home, or any person employed by the operator to perform services of assistance
to the residents of the adult foster home.
(3) As used
in this rule, “adult foster home” means any family home or facility,
licensed under ORS 443.705 to 443.825, in which room, board, and 24-hour care services
are provided, for compensation, to five or fewer adults who are not related to the
operator by blood or marriage.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.027

Hist.: WCD
7-1991(Temp), f. 10-4-91, cert. ef. 10-7-91; WCD 3-1992, f. 1-10-92, cert. ef. 2-1-92;
WCD 1-1998, f. 1-9-98, cert. ef. 1-23-98; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0050
Corporate
Officers, Partnerships; Limited Liability Company Members; Subjectivity
(1) Under ORS 656.027,
a corporation, limited liability company, or partnership must elect in writing to
its insurer to provide workers’ compensation coverage for otherwise nonsubject
workers. The election must be made at the inception of a coverage policy and remain
in effect until a revised written designation is given to the insurer. A self-insured
employer must file the election with the director. If an entity does not file its
initial election, or is not in compliance under ORS 656.017 and 656.407, then those
exempt individuals will be determined in the following order:
(a) For a
corporation:
(A) President;
(B) Secretary,
if any;
(C) Vice
President, if any;
(D) Secretary/Treasurer,
if any;
(E) Treasurer,
if any;
(F) All other
officers, if any.
(b) For a
limited liability company or partners of a partnership:
(A) The member
or partner with the largest ownership interest;
(B) The next
largest ownership interest.
(c) If there
is more than one person or the ownership interest is the same in any of the offices
listed in subsections (a) and (b) of this rule, the sequence of those persons will
be determined by whose birthday falls earlier in a year.
(2) Noncomplying
corporations, noncomplying limited liability companies, or noncomplying partnerships,
regardless of the number of employees, are limited to two exempt officers, members,
or partners to be determined in accordance with section (1) of this rule.
(3) For purposes
of clarifying terms used in ORS 656.027:
(a) “Commercial
harvest of timber” means all commercial activities relating to harvest of
timber from a parcel of property including, but not limited to, road building, marking
of trees to be cut, timber falling, slash removal, and transportation of timber
to the location where it will be processed into lumber or other products.
(b) “Director”
means a person elected or appointed to a corporation’s board of directors
in accordance with its articles of incorporation or bylaws.
(c) “Eligible
officer” means a corporate officer who is also a director of the corporation
and who has a substantial ownership interest in the corporation.
(d) “Eligible
partner” or “eligible member” means a partner or member who has
substantial ownership in the business entity.
(e) “Noncomplying”
means an employing legal entity of subject workers which is in violation of ORS
656.017(1).
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.027

Hist.: WCD
4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83;
Renumbered from 436-051-0065, 1-1-86; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86;
WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 8-1990(Temp), f. 6-18-90, cert. ef. 7-1-90;
WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 7-1991(Temp), f. 10-4-91, cert.
ef. 10-7-91; WCD 3-1992, f. 1-10-92, cert. ef. 2-1-92; WCD 9-1996, f. 3-11-96, cert.
ef. 4-1-96; WCD 1-1998, f. 1-9-98, cert. ef. 1-23-98; WCD 5-2001, f. 6-22-01, cert.
ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 1-2008, f. 6-13-08, cert.
ef. 7-1-08; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0055
Extraterritorial
Coverage
(1) Criteria to
be used in determining whether a worker is temporarily in or out of state under
ORS 656.126 may include, but are not limited to:
(a) The extent
to which the worker’s work within the state is of a temporary duration;
(b) The intent
of the employer in regard to the worker’s employment status;
(c) The understanding
of the worker in regard to the employment status with the employer;
(d) The permanent
location of the employer and its permanent facilities;
(e) The circumstances
and directives surrounding the worker’s work assignment;
(f) The state
laws and regulations to which the employer is otherwise subject;
(g) The residence
of the worker;
(h) The extent
to which the employer’s work in the state is of a temporary duration, established
by a beginning date and expected ending date of the employer’s work; and
(i) Other
information relevant to the determination.
(2) Within
30 days after coverage of an Oregon employer is effective, the insurer providing
the coverage must notify the employer in writing of the provisions of ORS 656.126
and this rule.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.126

Hist.: WCD
7-1989, f. 12-22-89, cert. ef. 1-1-90; WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90;
WCD 9-1996, f. 3-11-96, cert. ef. 4-1-96; WCD 1-1998, f. 1-9-98, cert. ef. 1-23-98;
WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 12-2001, f. 12-7-01, cert. ef. 1-1-02; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0060
Transition from Guaranty Contract Filings to Policy-Based Proof of Coverages
(1) Proof of coverage reporting requirements are prescribed by OAR 436-162.
(2) An active guaranty contract on file with the director on or after July 1, 2009 meets the Oregon proof of coverage requirement until it is replaced by a proof of coverage filing for renewal or new coverage effective on or after July 1, 2009, or until canceled under ORS 656.423 or 656.427. Active guaranty contracts on file with the director will not serve as proof of coverage on or after July 1, 2010.
(3) Filings for policies with a coverage effective date before July 1, 2009 create, endorse, cancel, or reinstate a guaranty contract. Filings for policies with a coverage effective date on or after July 1, 2009 establish, endorse, cancel, or reinstate proof of coverage filings.
(4) A guaranty contract in effect on or after July 1, 2009 is canceled the earliest of:
(a) The employer obtaining other Oregon workers’ compensation coverage and causing the insurer to make a coverage filing with the director;
(b) The employer providing the insurer 30 days written notice of cancellation; or
(c) The insurer mailing notice of cancellation to the employer at least 45 days prior to the cancellation effective date, 90 days notice if the cancellation is based on an insurer’s decision not to offer insurance to employers with a specific premium category, or 10 days notice if the cancellation is based on nonpayment of premium.
Stat. Auth.: ORS 656.704 & 656.726(4)

Stats. Implemented: ORS 656.419 & 656.427

Hist.: WCB 18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 1-1983(Admin), f. 6-30-83, ef. 7-1-83; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0100; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 9-1996, f. 3-11-96, cert. ef. 4-1-96; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 3-2003, f. 3-18-03, cert. ef. 4-1-03; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09
436-050-0110
Notice of Insurer's Place of Business in State; Coverage Records Insurer Must Keep in Oregon
(1) Every insurer
that is authorized to issue workers’ compensation coverage to subject employers
as required by ORS chapter 656 must give the director notice of the location, mailing
address, telephone number, and any other contact information in this state where
the insurer processes claims and keeps written records of claims and proof of coverage
as required by ORS 731.475. The insurer may not have more than eight locations at
any one time where claims are processed or records are maintained. While the insurer
may have more than one location in this state, the information provided to the director
must reasonably lead an inquirer to a person who can respond to inquiries as to
workers’ compensation insurance policy, claim filing, and claims processing
location information and to access an in-state Oregon certified claims examiner
who can respond within a reasonable time to specific claims processing inquiries.
A response time of 48 hours or less, not including weekends or legal holidays, would
satisfy a reasonable expectation.
(2) Notice
under section (1) of this rule must be filed with the director within 30 days after
the insurer becomes authorized and starts writing workers’ compensation insurance
policies for Oregon subject employers, and must also include contact information
for:
(a) A designated
person or position within the company who will assure payment of penalties and resolution
of collections issues resulting from orders issued by the director; and
(b) A designated
person or position within the company who can respond to workers’ compensation
policy and proof of coverage filing inquiries.
(3) If an
insurer elects to use a service company to satisfy the purposes of ORS 731.475 with
respect to all or any portion of its business, the insurer must, prior to using
the service company in Oregon, file with the director a copy of the agreement between
the insurer and each company for approval, and must give the director notice of
the location and mailing address of each service company. The service agreement
must:
(a) Be between
the underwriting insurer and a service company that is incorporated in or authorized
to do business in Oregon, and must not be between any other third parties;
(b) Identify
the insurer by company name, or if multiple insurers related by ownership, by the
name of the group if it includes all affiliates;
(c) Identify
the service company by name;
(d) Grant
the service company a power of attorney to act for the insurer in workers’
compensation claims proceedings under ORS chapter 656; and,
(e) Contain
only those provisions for workers’ compensation activities that are allowed
in Oregon.
(4) If the
insurer’s or its service company’s place of business or contact information
will change, the insurer must notify the director of the new location, mailing address,
telephone number, and any other contact information at least 30 days before the
effective date of the change.
(5) When
an insurer changes claims processing locations, service companies, or self-administration,
the insurer must provide at least 10 days prior notice to workers with open or active
claims, their attorneys, and attending physicians. The notice must provide the name
of a contact person, telephone number, and mailing address of the new claim processor.
The insurer must also provide at least 10 days prior notice to the director of which
claims will be transferred. The notice to the director must include:
(a) Contact
information for both the sending processor and receiving processor of the claims
to include a contact person, telephone number, mailing address, and physical address
where the claims are to be processed;
(b) Verification
of whether the claims to be transferred include closed claims; and
(c) A listing
of the claims being transferred that identifies the underwriting insurer, employer,
claimant name, date of injury, and sending processor’s claim number.
(6) For the
purpose of this rule, those activities conducted at designated in-state location(s)
and by the authorized representative(s) of the insurer must include, but need not
be limited to:
(a) Processing
and keeping complete records of claims for compensation;
(b) Responding
to specific claims processing inquiries;
(c) Keeping
records of payments of compensation;
(d) Keeping
records, including records of claims processed by prior service companies, in a
written form, not necessarily original form, and making those records available
upon request; and
(e) Accommodating
periodic in-state audits by the director.
(7) Records
every insurer is required to keep in this state include all the written records
of the insurer that show its insured employers have complied with ORS 656.017, including
the records described by OAR 436-050-0120.
Stat. Auth.: ORS
731.475, 656.704 & 656.726(4)

Stats. Implemented:
ORS 731.475

Hist.: WCB
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef.
12-27-83; WCD 6-1984(Admin), f. & ef. 9-14-84; WCD 5-1985(Admin), f. 12-10-85,
cert. ef. 1-1-86; Renumbered from 436-051-0205; WCD 9-1985(Admin), f. 12-12-85,
ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert.
ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert.
ef. 1-1-04; WCD 8-2005, f. 12-6-05, cert. ef. 1-1-06; WCD 1-2008, f. 6-13-08, cert.
ef. 7-1-08; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09; WCD 6-2012, f. 10-4-12, cert.
ef. 1-1-13
436-050-0120
Records Insurers
Must Keep in Oregon; Removal and Disposition
(1) The records
of claims for compensation that each insurer is required to keep in this state include:
(a) Written
records used and relied upon in processing claims;
(b) A written
record of all payments made as a result of any claim including documentation of
the date the payment was mailed. Documentation may be the actual mailing date, or
an explanation of the time period between the date of issuance and mailing; and
(c) A written
record as to whether supplemental temporary disability benefits, as required under
ORS 656.210(5) for workers employed in more than one job, were approved or denied.
(2) Records
of a denied claim may be removed from this state after all the appellate procedures
have been exhausted and the denial has been affirmed by operation of law.
(3) Records
of any claim for a compensable injury may be removed from this state after the expiration
of the aggravation rights or not less than one year following the final payment
of compensation, whichever is the last to occur.
(4) When
a denied claim is found to be compensable, the records of the claim are subject
to section (3) of this rule.
(5) The insurer
may destroy claims records when the insurer can verify that all potential for benefits
to the worker or the worker’s beneficiaries is gone.
(6) The records
relating to proof of coverage that insurers are required to keep in the state include:
(a) A written
record of each workers’ compensation insurance policy and related endorsements,
reinstatements, or cancellations issued as required under the workers’ compensation
law;
(b) Written
records of premiums due and premiums collected by the insurer from its insured employers
as a result of coverage issued under the workers’ compensation law; and
(c) Written
records that segregate and show specifically for each employer the amounts due from
the employer and all such money collected and paid by the insurer for premiums for
insurance coverage, premium assessments, and any other moneys due the director or
required to be remitted to the director.
(7) If all
remittances have been made, proof of coverage records may be disposed of after the
next Insurance Division examination under ORS 731.300 or the end of three full calendar
years following the calendar year in which the workers’ compensation insurance
policy cancels or is not renewed, whichever occurs later.
Stat. Auth.: ORS
731.475, 656.704 & 656.726(4)

Stats. Implemented:
ORS 731.475

Hist.: WCB
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef.
12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0215;
WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88;
WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 12-2001, f. 12-7-01, cert. ef. 1-1-02; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04;
WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0150
Qualifications of a Self-Insured Employer
(1) To qualify as
a self-insured employer, the employer must:
(a) Establish
proof that the employer has an adequate staff qualified to process claims;
(b) Establish
proof of the financial ability to make certain the prompt payment of all compensation
and other payments due under ORS chapter 656;
(c) Obtain
excess insurance coverage in the amounts approved by the director; and
(d) Be registered
and authorized to do business in this state under ORS chapters 58, 60, 62, 63, 65,
67, 70, and 648, as applicable.
(2) An employer
establishes proof of an adequate staff qualified to process claims by:
(a) Employing
and retaining at each claims processing location, at least one person that is qualified
in accordance with OAR 436-055-0070 and is actually involved in the claims processing
function; or
(b) Contracting
the services of one or more service companies that employ at each claims processing
location in this state, at least one person qualified in accordance with OAR 436-055-0070
and that is actually involved in the self-insured employer’s claims processing.
(3) An employer
establishes proof of financial ability by providing a security deposit that the
director determines is acceptable in accordance with OAR 436-050-0165, and in an
amount as determined in accordance with OAR 436-050-0180.
(4) Failure
of a certified self-insured employer to maintain the qualifications required in
this rule will result in revocation of the employer’s self-insured certification.
The employer will be given 30 days written notice of the intent to revoke the self-insured
certification, to be effective 30 days from the date of receipt of the revocation
notice. If the employer complies with the qualification requirements within the
30-day period, the revocation will be canceled and the certification will remain
in effect.
Stat. Auth.: ORS
656.407, 656.704 & 656.726(4)

Stats. Implemented:
ORS 656.407

Hist.: WCD
3-1980(Admin), f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82;
WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert.
ef. 1-1-86; Renumbered from 436-051-0305; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86;
WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90;
WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 5-2001, f. 6-22-01, cert. ef.
7-1-01; WCD 8-2003(Temp), f. & cert. ef. 7-18-03 thru 1-13-04; WCD 12-2003,
f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0160
Applying
for Certification as a Self-Insured Employer
(1) An employer
applying for certification as a self-insured employer must submit:
(a) A completed
“Application for Self-Insurance” (Form 440-1868);
(b) Proof
of the employer’s claims processing ability by employing and retaining at
each claims processing location, at least one person that is actually involved in
the claims processing function and is qualified in accordance with OAR 436-055-0070;
or by contracting with a service company that will have at least one person qualified
in accordance with OAR 436-055-0070, that will be processing the employer’s
claims in this state, under ORS 656.455(1);
(c) The employer’s
audited financial statements or audited annual reports for the last three fiscal
or calendar years. If the audited financial statements of a parent company are provided
in lieu of statements for the employer, the director will not authorize the individual
employer to be self-insured under its own program, unless a parental company guarantee
can be obtained. Otherwise, it will be necessary for the parent company to be the
self-insured employer or to separately insure the employer. In the context of this
section, a parent company is a legal entity that owns a majority interest in the
employer, or owns a majority interest in another entity or succession of entities
that own a majority interest in the employer;
(d) The employer’s
most recent experience rating modification worksheet and supporting documentation.
Applicants with prior Oregon experience who do not submit this data will be assigned
a 1.50 experience rating modification pending receipt of the data. All those without
prior Oregon experience will be assigned a 1.00 experience rating modification;
(e) The type,
retention, and limitation levels of excess workers’ compensation insurance
the employer is planning to obtain as required by OAR 436-050-0170;
(f) If applicable,
within 30 days after the date of certification, a service agreement between the
employer and service company that has been signed by both parties. The agreement
must also contain the location, mailing address, telephone number, and any other
contact information of the service company;
(g) Evidence
from a surety bond company admitted to do surety business in this state that they
will issue a surety bond for the employer, as Principal, and the Oregon Department
of Consumer and Business Services, Workers’ Compensation Division, as Obligee;
or evidence from a qualified bank that they will issue an irrevocable standby letter
of credit for the employer with the Oregon Department of Consumer and Business Services
as the beneficiary;
(h) Evidence
of an occupational safety and health loss control program in accordance with OAR
437-001 as required by ORS 656.430(10); and
(i) Evidence
of authorization to do business in this state under ORS chapters 58, 60, 62, 63,
65, 67, 70, and 648, as applicable.
(2) Within
30 days of receipt of all information required in section (1) of this rule, the
director will review the application and notify the employer that the request for
certification as a self-insured employer is denied and the reason therefore; or,
that the employer is qualified as a self-insured employer. If the employer qualifies
as a self-insured employer, the notice will include:
(a) The type
and the amount of the security deposit required;
(b) Approval
of the type, retention, and limitation levels of the excess insurance; or
(c) The type,
retention, and limitation levels of excess insurance required.
(3) If approved,
the certification of self-insurance will be issued upon receipt of the security
deposit and the appropriate excess insurance binder.
(4) Unless
a later date is specified by the applicant, the effective date of certification
will be the first day of the month following the date the requirements of section
(3) of this rule are met.
(5) Notwithstanding
subsection (l)(c) of this rule, an employer making application may submit certified
financial statements in lieu of audited financial statements or annual reports.
However, the director may require the employer to submit audited financial statements
if the certified financial statements submitted are insufficient to evaluate the
employer’s financial status.
Stat. Auth.: ORS
656.407, 656.430, 656.455 & 656.726

Stats. Implemented:
ORS 656.430

Hist.: WCD
3-1980(Admin), f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82;
WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert.
ef. 1-1-86; Renumbered from 436-051-0310; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86;
WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90;
WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 5-2001, f. 6-22-01, cert. ef.
7-1-01; WCD 8-2003(Temp), f. & cert. ef. 7-18-03 thru 1-13-04; WCD 12-2003,
f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0165
Security
Deposit Requirements
(1) For the purposes of this rule:
(a) “Employer”
includes employer groups;
(b) “Self-insured employer”
includes self-insured employer groups; and
(c) “ISLOC” means
irrevocable standby letter of credit.
(2) A self-insured employer
is required to provide a security deposit that is acceptable to the director, to
establish proof of its financial ability, and to be qualified and certified as a
self-insured employer or to be certified as a self-insured employer group. In accordance
with ORS 656.407, a surety bond or an irrevocable standby letter of credit (ISLOC)
may be accepted for the required security deposit if it complies with the following
conditions and requirements:
(a) An ISLOC may be approved
by the director as all or part of the security deposit. The director may approve
the ISLOC if the issuing bank and the ISLOC meet the requirements of this rule:
(A) The ISLOC must be issued
by or confirmed by an Oregon state chartered bank or a federally chartered bank
from which funds will be immediately payable on demand. The bank issuing the ISLOC
must, at the time of issuance, have a credit rating as set forth below:
(i) An “Aaa”,
“Aa”, or “A” long term certificate of deposit (CD) rating
in the current monthly edition of “Moody’s Statistical Handbook”
prepared by Moody’s Investors Service Inc., New York; or
(ii) An “AAA”,
“AA” or “A” long term certificate of deposit (CD) rating
in the current quarterly edition or monthly supplement of “Financial Institutions
Ratings” prepared by Standard & Poors Corporation, New York.
(B) Federally chartered instrumentalities
of the United States operating under authority of the Farm Credit Act of 1971 as
amended, are acceptable without rating.
(C) An ISLOC issued by a
bank that does not meet the credit rating set forth in paragraph (A) at the time
of issuance will only be accepted with a confirming ISLOC issued by an Oregon state
chartered bank or federally chartered bank meeting the credit criteria of paragraph
(A). The confirming ISLOC must state that the confirming bank is primarily obligated
to pay on demand the full amount of the ISLOC regardless of reimbursement from the
bank whose ISLOC is being confirmed.
(D) The issuing bank must
use the Irrevocable Standby Letter of Credit, Form 440-3640, issued by the director.
(E) The ISLOC will be automatically
extended without amendment for an additional one (1) year from the expiry date,
or any subsequent expiry date, unless, at least 60 days before the expiry date,
the director is notified in writing by registered mail or overnight delivery, that
the bank has elected not to extend the ISLOC for another period.
(F) If the issuing bank or
any confirming bank is closed at the time of expiry of the ISLOC for any reason
that would prevent delivery of a demand notice during its normal hours of operation,
the ISLOC will be automatically extended for a period of 30 days commencing on the
next day of operation.
(G) The ISLOC can be called
immediately if:
(i) The self-insured employer
has defaulted in payment of its workers’ compensation liabilities or obligations,
or in payments due to the director under ORS chapter 656;
(ii) The self-insured employer
has filed for bankruptcy;
(iii) The self-insured employer
has failed to renew or provide acceptable substitute security by fifteen (15) days
prior to the expiry date of the ISLOC; or
(iv) The beneficiary has
determined the existing security is deemed inadequate, that additional or replacement
security must be provided by the self-insured employer, and that neither has been
provided, notwithstanding written notice to the self-insured employer.
(H) The credit must be available
by presentation of the beneficiary’s draft drawn at sight on the issuing bank,
payable within three business days, when accompanied by one of the statements contained
in 436-050-0165(2)(a)(G) signed by the director of the Department of Consumer and
Business Services, or the administrator of the Workers’ Compensation Division,
or their designated authorized representative.
(I) The ISLOC is not subject
to any qualifications or conditions by the issuing bank or confirming bank and is
each bank’s individual obligation, which is in no way contingent upon reimbursement.
(J) An ISLOC must include
a statement that the funds provided by the ISLOC are not construed to be an asset
of the self-insured employer and a statement that if legal proceedings are initiated
by any party with respect to the payment of any ISLOC, it is agreed that such proceedings
must be subject to the jurisdiction of Oregon courts and Oregon law.
(K) Payment of any amount
under an ISLOC must be made only by wire transfer in the name of the “Department
of Consumer and Business Services In Trust For [the legal name of the certified
self-insured employer]” to a department account, with the State Treasurer,
at a designated bank.
(L) An ISLOC is subject to
the International Standby Practices 1998 (ISP98), ICC Publication No. 590, which
is hereby incorporated by reference, and a reference to this publication must be
included in the text of the ISLOC. ICC Publication 590 may be obtained from the
International Chamber of Commerce website: http://iccwbo.org/policy/banking/.
(M) All bank charges for
the ISLOC are for the account of the applicant.
(N) Any amendment to the
ISLOC must be approved and accepted by the director before the amendment is effective.
(O) If a bank’s rating
subsequent to the issuance of the ISLOC falls below the acceptable rating level
as set forth in paragraph (A), the self-insured employer must, within 60 days of
the publication of the lower credit rating:
(i) Replace the ISLOC with
a new ISLOC issued by an Oregon state chartered bank or with a federally chartered
bank with an acceptable credit rating;
(ii) Confirm the ISLOC by
an Oregon state chartered bank or a federally chartered bank that has an acceptable
credit rating; or
(iii) Replace the ISLOC with
a policy of insurance or a surety bond of equal amount that is approved by the director,
as substitute security for the ISLOC, if the policy of insurance or surety bond
covers all workers’ compensation liabilities and obligations that would have
been covered by the ISLOC.
(P) Each self-insured employer
that submits an acceptable ISLOC as its security deposit, must furnish a memorandum
of understanding with the ISLOC, on the department’s Form 440-3529, that affirms
the self-insured employer’s acceptance of all of the following requirements:
(i) An ISLOC is furnished
to the director instead of a surety bond or other forms of security that may be
determined to be acceptable for certification as a self-insured employer or for
continuing as a certified self-insured employer;
(ii) The self-insured employer
understands the ISLOC will be automatically extended without amendment for an additional
one (1) year from the expiry date, or any subsequent expiry date, unless, at least
60 days before the expiry date, the director is notified in writing by the bank
that the ISLOC will not be renewed;
(iii) The ISLOC may be replaced
with an ISLOC or surety bond of equal amount or a policy of insurance that is accepted
by the director as substitute security for the ISLOC, if the new ISLOC or surety
bond or policy of insurance covers all workers’ compensation liabilities and
obligations that would have been covered by the ISLOC to be replaced;
(iv) The self-insured employer
affirms that the ISLOC, in the amount required, is being offered with the understanding
that the ISLOC can be called immediately, at the director’s discretion, if
the director receives notice that the ISLOC will not be renewed; if the self-insured
employer fails to pay its workers’ compensation liabilities, obligations,
or payments due to the director under ORS chapter 656; or the self-insured employer
files bankruptcy; or the self-insured employer fails to renew or provide acceptable
substitute security by fifteen (15) days prior to the expiry date of the ISLOC;
or the director has determined the existing security is deemed inadequate, that
additional or replacement security must be provided by the self-insured employer
and that neither has been provided, notwithstanding written notice to the self-insured
employer; and
(v) If legal proceedings
are initiated by any party with respect to payment of any ISLOC, then it is agreed
that the proceedings will be subject to the jurisdiction of Oregon courts and application
of Oregon law.
(b) A surety bond may be
accepted by the director as a security deposit or substitute security deposit for
an ISLOC, government securities, monies, or time deposits. A surety bond may be
accepted as all or part of the security deposit. The director, in each particular
case, will determine if the surety bond submitted is acceptable, if the issuing
surety is acceptable, and if its language and format are acceptable.
(A) The surety bond must
be issued by a surety company authorized to transact surety business in Oregon;
(B) Surety Bond Form 440-824
must be used for all surety bonds;
(C) Surety bonds submitted
for the self-insured employer’s security deposit must be continuous in form;
(D) Surety bonds may be terminated
by the surety company by giving the director and the Principal written notice stating
that on a date not less than thirty days after the date the notice is received by
the director, such termination will be effective. Such termination in no way limits
the liability of the Surety for subsequent defaults of the Principal’s liability
or obligations incurred under ORS chapter 656 prior to the effective date of such
termination;
(E) Surety Bond Rider Form
440-1810 must be used for all department required increases or authorized decreases
in the penal sum of the surety bond. The surety bond rider is not effective until
it is accepted by the department;
(F) Surety bonds and all
riders to the surety bonds must be executed by the surety company’s attorney
in fact and the attorney in fact’s appointment and power of attorney must
accompany all surety bonds and riders submitted. The power of attorney must authorize
the attorney in fact to execute the surety bond in the amount of the penal sum of
the bond;
(G) The liability of a surety
company under its surety bond may only be discharged in the event that:
(i) The Principal files acceptable
substitute security as the security deposit that is accepted by the director as
substitute security for the surety bond to be released, covering all past, present,
existing, and potential liability of the Principal under ORS chapter 656 and covering
all the Surety’s liability under the surety bond to be released, in an amount
required by the director; and
(ii) The surety bond is released
as documented in writing from the director or the administrator of the Workers’
Compensation Division, or their designated authorized representative.
(iii) A policy of insurance
or an ISLOC of equal amount that is acceptable by the director may be accepted as
substitute security for the surety bond if the policy of insurance or ISLOC covers
all workers’ compensation liabilities and obligations that would have been
covered by the surety bond.
(H) The surety company or
its parent must have and maintain an acceptable credit rating in accordance with
the following:
(i) Standard and Poors Insurer
Financial Strength Rating of A or better rating, or
(ii) A.M. Best Company, Financial
Strength Rating of B+ or better rating.
(I) A surety bond must be
replaced by the self-insured employer with an acceptable type of security deposit
within 30 days after notice from the department that the Surety has been placed
in conservatorship, is seized, or declares insolvency, or the current credit rating
is below the ratings required in subsection (H).
(c) Government securities,
certificates of deposit, or time deposit accounts that were accepted by the director
as a self-insured employer’s or a self-insured employer group’s required
security deposit prior to January 1, 2004, may remain as the security deposit until
the maturity date of those investments. At that time, the government securities,
certificates of deposit, or time deposit accounts pledged to the department as security
deposits must be replaced by a surety bond or ISLOC acceptable to the director.
A self-insured employer that has government securities, certificates of deposit,
or time deposit accounts as all or part of its security deposit must complete a
“Security Agreement and Notice to Intermediary,” Form 440-4023, granting
the department a security interest in and control over those financial assets.
(d) Government securities,
certificates of deposit, or time deposit accounts will not be accepted as security
deposits for certified self-insured employers who must increase their security deposit
or for employers whose self-insurance certification was granted after January 1,
2004.
[Publications: Publications referenced
are available from the agency.]
Stat. Auth.: ORS 656.430,
656.704 & 656.726(4)
Stats. Implemented: ORS 656.430
Hist.: WCD 8-2003(Temp),
f. & cert. ef. 7-18-03 thru 1-13-04; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0170
Excess Insurance Requirements
(1) A self-insured employer must have
excess workers’ compensation insurance coverage appropriate for the employer’s
potential liability under ORS 656.001 to 656.990 with an insurer authorized to do
business in this state. Except for endorsements requiring pre-approval by the director
in sections (4) and (5), the policy providing such coverage and any endorsements
thereto must be filed with the director not later than 30 days after the date the
coverage is effective. A self-insured public utility with assets in excess of $500
million as reflected by the employer’s audited financial statement submitted
in accordance with OAR 436-050-0160 or 436-050-0175, may obtain the required excess
workers’ compensation insurance coverage from an eligible surplus lines insurer.
(2) The excess insurance:
(a) Must include a provision
for reimbursement to the director of all expenses paid by the director on behalf
of the employer under ORS 656.614 and 656.443 in the same manner as if the director
were the insured employer, subject to the policy limitations or amounts and limits
of liability to the insured employer; and
(b) Coverage must be continuous
and remain in effect from the date of certification until the certification is revoked
or canceled; and
(c) Coverage must be specific
on a per occurrence basis; and
(d) Coverage may include
aggregate excess insurance; and
(e) Coverage may include
a deductible endorsement acceptable to the director under sections (4) and (5) of
this rule.
(3) The self-insured retention
level for a self-insured employer group’s excess insurance policy must not
be less than $300,000.
(4) Changes in the self-insured
retention level and policy limits of the excess insurance require prior approval
of the director. The director may require a reduction in the self-insured retention
level or an increase in the policy limits. Those items considered in determining
and approving the retention and limitation levels of the excess insurance will be
the employer’s:
(a) Financial status;
(b) For self-insured employer
groups, financial viability as determined under OAR 436-050-0260;
(c) Risk and exposure;
(d) Claim history; and
(e) The amount of the required
security deposit.
(5) Endorsements addressing
a per-accident deductible in excess of a self-insured employer group’s retention
level require prior approval of the director. In determining whether to approve
a deductible endorsement, the director will consider the group’s retention
level, policy limits, and the items in section (4) of this rule. The director will
not approve per-accident deductible endorsements in excess of the retention level
that contain language allowing the excess insurer, at its discretion, to limit its
obligations under section (2)(a) of this rule.
(6) A self-insured employer
will be allowed a period, not to exceed 30 days, within which to comply with an
order of the director to the employer to reduce the self-insured retention level
or increase the policy limitation or amounts and limits of liability of the excess
insurance.
(7) Excess insurance obtained
under this section does not relieve any self-insured employer from full responsibility
for claims processing and the payment of compensation required under ORS chapter
656 and these rules. Regardless of the types and amounts of excess coverage a self-insured
employer must not transfer claims to the excess insurer(s) for processing.
(8) When an excess insurance
policy is canceled by the excess insurer or the employer, a copy of such notice
must be filed with the director 30 days before the effective date of cancellation.
(9) If a self-insured employer
does not comply with the requirements of this section, the employer’s certification
as a self-insured will be revoked. The employer will be given written notice of
such revocation which will be effective 30 days from receipt of the notice. If the
required excess insurance is obtained within the 30 days, the revocation will be
canceled and certification will remain in effect.
Stat. Auth.: ORS 656.430, 656.704 &
656.726(4)
Stats. Implemented: ORS 656.430
Hist.: WCD 3-1980(Admin),
f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin),
f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered
from 436-051-0315; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87,
ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert.
ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 8-2005, f. 12-6-05, cert.
ef. 1-1-06; WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012, f. 10-4-12, cert.
ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0175
Annual Reporting Requirements
(1) To determine the financial status
of a self-insured employer and to evaluate the employer’s continuity of operation,
a self-insured employer must file annually with the director an audited financial
statement or annual report with audited financial statement, including SEC Form
10K if issued, for the just completed fiscal year. A self-insured employer that
is not a municipality must make the filing within 120 days of the fiscal year end
and a self-insured employer that is a municipality must make the filing within 180
days of the fiscal year end. All financial statements and annual financial reports
filed, as required by this section, will be retained by the director for a period
of at least three years. In lieu of an audited financial statement or annual report,
a self-insured employer may file a financial statement certified by the employer
that the financial statement is true and accurate and presents the employer’s
financial condition and results of operations as of the date of the statement.
(2) Notwithstanding section
(l) of this rule, the director may require an employer to submit an audited financial
statement if the certified financial statement submitted is insufficient to evaluate
the employer’s financial status.
(3) The financial statements
and reports filed by a self-insured employer group must demonstrate the group’s
acceptable financial viability based on criteria under OAR 436-050-0260 including,
but not limited to, satisfactory financial ratios and net worth.
(4) By March 1 of each year,
self-insured employer groups must file with the director:
(a) A statement certifying
the amount of the group’s combined net worth under OAR 436-050-0260(3)(a),
as of the date of the statement; and
(b) A copy of the fidelity
bond furnished to the group by the administrator or a copy of the comprehensive
crime policy obtained by the group, in an amount sufficient to protect the group
against the misappropriation or misuse of any moneys or securities. If the fidelity
bond or policy covers more than one year, is still in effect, and a copy was provided
to the director in the prior year, the group’s annual filing may state that
fact in lieu of providing an additional copy.
(5) By March 1 of each year,
self-insured employer groups consisting of private employer members must file with
the director:
(a) A statement certifying
that each employer member of the group meets the individual net worth requirement
under OAR 436-050-0260(3)(b), as of the employer member’s most recent fiscal
year end; and
(b) A list of the group’s
current board members and their professional affiliations.
(6) The self-insured employer
must report claim loss data described in Bulletin 209 by March 1 of each year for
the purposes of experience rating modification, retrospective rating calculations,
and determining deposits.
(a) The report must be certified
to be true and accurate by an authorized representative of the self-insured employer,
and must include:
(A) A report of losses for
each year in the experience rating period. The report must cover all claims incurred
during the reporting period and must be valued as of January 1 of the current year.
Reports must include:
(i) Contract medical expenses;
(ii) Total maximum medical
reimbursement amount;
(iii) Number of claims for
which the maximum medical reimbursement amount is claimed;
(iv) For claims with incurred
losses of $15,500 or less, total paid, outstanding reserves, and total incurred
losses;
(v) Number of claims with
incurred losses of $15,500 or less; and
(vi) For each claim with
incurred losses exceeding $15,500, worker’s name, date of injury, claim number,
total paid, outstanding reserves, and total incurred losses. Claims must be listed
in alphabetical order.
(B) A report of losses covering
the self-insured period prior to the experience rating period. The report must list
all open claims and must be valued as of January 1 of the current year. The report
must include:
(i) The worker’s name,
listed in alphabetical order;
(ii) Date of injury;
(iii) Claim number;
(iv) Total paid;
(v) Outstanding reserves;
and
(vi) Total incurred losses.
(C) Identification of claims
involving catastrophes, Workers with Disabilities Program, permanent total disability
or fatal benefits, third party recoveries, and claims where the total incurred has
or is expected to exceed the self-insured retention of the self-insured employer’s
excess insurance policy.
(D) The total annual paid
losses for the previous four fiscal years valued as of January 1 of the current
year.
(b) Bulletin 209 provides
guidelines for self-insured employers and their authorized representatives to use
in submitting the required data.
(c) Each self-insured city,
county, or qualified self-insured employer group that is exempted from the security
deposit requirements under ORS 656.407(3) and OAR 436-050-0185 must, in addition
to the above, provide the director by March 1 of each year, the procedures, methods,
and criteria used in the process of determining the amount of their actuarially
sound workers’ compensation loss fund, including procedures for determining
the amount for injuries incurred but not reported. The director may require a qualified
self-insured employer group exempted from the security deposit requirements to provide
an actuarial study that demonstrates its loss reserve account is actuarially sound
and adequately funded under OAR 436-050-0185(2)(d).
(7) Notwithstanding sections
(1) through (5) of this rule, the director may require a self-insured employer group
to submit financial statements, reports, or information more frequently for reasons
including, but not limited to, changes in the group’s financial status or
viability, private employer members’ individual net worth, group membership,
private employer groups’ board membership, or incurred claims costs.
(8) Notwithstanding section
(6) of this rule, the director may require a self-insured employer to submit claim
loss data more frequently if the nature of the self-insured employer’s business
has changed since the last annual loss report for reasons including, but not limited
to, mergers or acquisitions, changes in employment level, nature of employment,
or incurred claims costs.
(9) If a self-insured employer
fails to comply with the requirements of sections (1) through (8) of this rule,
the director may impose any or all of the following sanctions:
(a) Require the self-insured
employer to increase its deposit and premium assessments by 25%;
(b) Conduct an audit to obtain
the necessary loss information at the self-insured employer’s expense;
(c) Assess civil penalties
of up to $250 per day that the information is not provided beyond the deadline;
or
(d) Revoke the employer’s
certification for self-insurance.
(10) To ensure each self-insured
employer’s claims are valued appropriately for use in deposit, experience
rating, and retrospective rating calculations, the director will perform routine
test audits. If a self-insured employer’s total claims values are found to
be 10 percent or more below the director’s determined values, the current
experience rating will be recalculated using the director’s determined values
and will be used in the security deposit and retrospective rating calculations.
In addition, penalties may be assessed.
Stat. Auth: ORS 656.407, 656.430, 656.704
& 656.726(4)
Stats. Implemented: ORS 656.407
& 656.430
Hist.: WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 7-1991(Temp),
f. 10-4-91, cert. ef. 10-7-91; WCD 3-1992, f. 1-10-92, cert. ef. 2-1-92; WCD 5-2001,
f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 7-2007,
f. 11-1-07, cert. ef. 11-28-07; WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012,
f. 10-4-12, cert. ef. 1-1-13; WCD 9-2012, f. 12-7-12, cert. ef. 1-1-13; WCD 8-2013,
f. 11-12-13, cert. ef. 1-1-14; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14; WCD 13-2014,
f. 11-26-14, cert. ef. 1-1-15
436-050-0180
Determination
of Amount of Self-Insured Employer’s Deposit; Effective Date of Order to Increase
Deposit
(1) The deposit a self-insured employer
is required by ORS 656.407 to maintain with the director must be an amount not less
than the greater of:
(a) $100,000; or
(b) Future claim liability,
including losses incurred but not reported (IBNR), a claims processing administrative
cost, and the anticipated assessments payable to the director for the employer’s
next fiscal year; or
(c) The annual incurred losses
for the self-insured’s last fiscal year, including IBNR, a claims processing
administrative cost, and anticipated assessments payable to the director for the
employer’s next fiscal year.
(2) Notwithstanding section
(1) of this rule, if the employer is applying for self-insurance, the amount of
the deposit must not be less than the greater of:
(a) The anticipated assessments
payable to the director for the employer’s next fiscal year, plus an amount
equal to 65 percent of the annual premium the employer would pay if carrier-insured
using the applicable occupational base rate premium, as such rate is applied to
the anticipated payroll of the employer’s Oregon operations for the employer’s
next fiscal year; or
(b) $300,000 plus $30,000
additional for each $100,000 the employer’s net worth is below $2 million;
or
(c) The amount of the approved
self-insured retention level for the employer’s excess workers’ compensation
insurance.
(3) In determining the amount
of deposit the director will take into consideration:
(a) The financial ability
of the employer to pay compensation and other payments due;
(b) The employer’s
probable continuity of operation;
(c) A self-insured employer
group’s financial viability, as determined by the director under OAR 436-050-0260;
(d) Retention and limitation
levels of the employer’s excess insurance in relation to the employer’s
financial status;
(e) Changes in the employer’s
business including, but not limited to, mergers or acquisitions, changes in employment
level, nature of employment, incurred claims costs, or material growth in self-insured
exposure; and
(f) The balance of the Self-Insured
Employer Adjustment Reserve or the Self-Insured Employer Group Adjustment Reserve.
(4) The amount of the deposit
determined in sections (1) through (3) of this rule for a self-insured employer
group with financial ratios equaling a “moderate” rating under OAR 436-050-0260(13)(b)
will be increased by the following percentage factors:
(a) 12 total combined points
= no change in calculated deposit;
(b) 11 total combined points
= no change in calculated deposit;
(c) 10 total combined points
= 5%;
(d) 9 total combined points
= 10%;
(e) 8 total combined points
= 15%; or
(f) 7 total combined points
= 20%.
(5) Assessments payable to
the director referred to in this section include moneys and assessments due under
ORS 656.506, 656.612, and 656.614.
(6) A self-insured employer
will be allowed a period, not to exceed 30 days, within which to comply with an
order of the director to the employer to increase the amount of its deposit.
(7) “Claims processing
administrative cost” will be determined by developing a percentage rate to
be applied against the employer’s unpaid losses. The rate will be based on
the information contained in Schedule P, Part ID of the Annual Statement for the
previous calendar year as reported to the Insurance Commissioner by SAIF Corporation
and the 20 private insurers who had the highest earned premium reported for the
preceding calendar year. The rate will be computed annually to be effective for
the subsequent fiscal year. The rate will be 105 percent of the median of ratios
determined as follows for each of these insurers:
(a) “Loss expenses
unpaid” for losses incurred in the latest eight years, divided by
(b) “Losses unpaid”
for losses incurred in the latest eight years.
(8) “Incurred but not
reported” (IBNR) will be calculated by applying a loss development factor
against the employer’s annual paid losses. The loss development factor will
be calculated annually by the director. An IBNR may be included in the security
deposit calculation when the director identifies factors including, but not limited
to, a decrease in the self-insured employer’s credit rating, a negative net
worth, negative cash flow, high debt-to-equity ratio, or material growth in self-insured
exposure.
Stat. Auth.: ORS 656.407, 656.704 &
656.726(4)
Stats. Implemented: ORS 656.407
Hist.: WCB 2-1976(Admin)(Temp),
f. & ef. 4-12-76; WCB 3-1976(Admin), f. & ef. 6-15-76; WCD 3-1980(Admin),
f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin),
f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered
from 436-051-0320; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87,
ef. 1-1-88; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert.
ef. 1-1-04; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert.
ef. 9-15-14
436-050-0185
Deposit Exemption for Self-Insured
Cities and Counties, Qualifications, Application Procedures, Conditions and Requirements,
Revocation and Requalification
(1) A self-insured city, county, or
self-insured employer group that is a municipal or public corporation under ORS
297.405, may apply to be exempt from the security deposit requirements of ORS 656.407(2).
Under ORS 656.407(3), the requirements to qualify for exemption are as follows:
(a) The city, county, or
qualified self-insured employer group must be in compliance with ORS 656.407(2)
and OAR 436-050-0180 as an independently self-insured employer or self-insured employer
group for the three consecutive years immediately prior to applying for the exemption;
and
(b) The city, county, or
qualified self-insured employer group must have in effect a workers’ compensation
loss reserve account that is actuarially sound and that is adequately funded as
determined by the annual audit under ORS 297.405 to 297.740 to pay all compensation
to injured workers and amounts due the director under ORS chapter 656. The workers’
compensation loss reserve account must also be dedicated to and expended only for
payment of compensation and amounts due the director by the city or county under
ORS chapter 656.
(2) A written application
requesting exemption from ORS 656.407(2) must be submitted to the director no later
than 45 days prior to the date the exemption is desired to become effective. The
application must include the following supporting documentation for review and approval:
(a) A copy of the city’s,
county’s, or qualified self-insured employer group’s most recent annual
audit as filed with the Secretary of State under ORS 297.405 to 297.740 that identifies
the actuarially sound funded amount in the dedicated workers’ compensation
loss reserve if not previously filed as required by OAR 436-050-0175(1);
(b) A copy of the city’s,
county’s, or qualified self-insured employer group’s current fiscal
year’s approved budget documents for internal service funds that state the
budgeted amount for the funded workers’ compensation loss reserve account;
(c) A resolution or ordinance
passed by the city’s, county’s, or qualified self-insured employer group’s
governing body that establishes an actuarially sound and adequately funded workers’
compensation loss reserve account that dedicates the workers’ compensation
loss reserve account to and limits expenditures to only the payment of compensation
and amounts due the director under ORS chapter 656. The resolution must also include
the director’s first lien and priority rights to the full amount of the workers’
compensation loss reserve account required to pay the present discounted value of
all present and future claims under ORS chapter 656; and
(d) A statement giving the
amount of the current reserves for present and future liabilities, the amount funded
in the workers’ compensation loss reserve account, and the procedures, methods,
and criteria used in the process of determining the amount funded in their actuarially
sound workers’ compensation loss fund, including procedures for determining
the amount for injuries incurred but not reported.
(A) The statement must include
the city’s, county’s, or qualified self-insured employer group’s
certification that the loss reserve account is actuarially sound and adequately
funded if an actuarial study is not available.
(B) The director may require
a qualified self-insured employer group to demonstrate its loss reserve account
is actuarially sound and adequately funded based on an actuarial study requested
under OAR 436-050-0175(6)(c). The actuarial study must include an IBNR estimate
and a copy of the study must be provided to the director.
(3) Within 45 days of receipt
of all information required by section (2) of this rule, the director will review
the application and supporting documentation and notify the city, county, or qualified
self-insured employer group that the request for exemption under ORS 656.407(3)
is approved or denied.
(a) If denied, the notice
will provide the reasons for the denial, any requirements for reconsideration, and
the right to administrative review as provided by OAR 436-050-0008.
(b) If approved, the notice
will include:
(A) The confirmation of the
effective date of exemption;
(B) Authorization for cancellation
of any surety bond or ISLOC held as security under ORS 656.407(2) and OAR 436-050-0180;
and
(C) Procedures for release
of any government securities or time deposits held as security under ORS 656.407(2)
and OAR 436-050-0180.
(4) Probable cause to believe
the workers’ compensation loss reserve account is not actuarially sound includes
but is not limited to:
(a) The annual audited financial
statement under ORS 297.405 to 297.740 not containing a statement by the auditor
that the workers’ compensation loss reserve account is adequately funded,
or containing a disclaimer regarding the auditor’s qualifications or ability
to determine adequacy of the loss reserve account; or
(b) For qualified self-insured
employer groups required by the director to conduct an actuarial study under OAR
436-050-0175(6)(c) and section (2)(d)(B) of this rule, the actuarial study not containing
a statement by the actuary that the loss reserve account is actuarially sound, or
containing a disclaimer regarding the actuary’s qualifications or ability
to determine the adequacy of the reserves for current or future liabilities.
(5) A city, county, or qualified
self-insured employer group that has been exempted from ORS 656.407(2) and desires
to terminate its self-insurance certification or elects to discontinue maintaining
an actuarially sound and adequately funded workers’ compensation loss reserve
must:
(a) Submit a written request
to the director at least 60 days prior to the desired effective date the self-insured
certification is requested to be terminated or 60 days prior to the effective date
that the qualifying workers’ compensation loss reserve account is to be discontinued;
(b) If the self-insured certification
is to be terminated, the request for termination must comply with OAR 436-050-0200.
Prior to the effective date of termination the city, county, or qualified self-insured
employer group must provide a security deposit, as required by the director, in
an amount determined under 436-050-0180 and ORS 656.443; and
(c) If the city, county,
or qualified self-insured employer group desires to remain self-insured, the city,
county, or qualified self-insured employer group must requalify for self-insurance
certification by depositing, prior to the date the qualifying workers’ compensation
loss reserve account is to be discontinued, a security deposit as required by the
director under ORS 656.407(2) and OAR 436-050-0180. Under ORS 656.407(3)(e) failure
to deposit the required security deposit with the director prior to the date of
discontinuance of the qualifying workers’ compensation loss reserve account
will cause the city’s, county’s, or qualified self-insured employer
group’s self-insurance certification to be automatically revoked as of that
date.
Stat. Auth.: ORS 656.407, 656.704 &
656.726(4)
Stats. Implemented: ORS 656.407
Hist.: WCD 7-1991(Temp),
f. 10-4-91, cert. ef. 10-7-91; WCD 3-1992, f. 1-10-92, cert. ef. 2-1-92; WCD 5-2001,
f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012,
f. 10-4-12, cert. ef. 1-1-13; WCD 8-2013, f. 11-12-13, cert. ef. 1-1-14; WCD 10-2014,
f. 8-15-14, cert. ef. 9-15-14
436-050-0190
Using Self-Insured Employers Security
Deposit/Self-Insured Employers Adjustment Reserve/Self-Insured Employer Group Adjustment
Reserve
(1) In the event a self-insured employer
defaults or is unable to make all payments due under ORS chapter 656, the director
will, on behalf of the employer, assure continued payments in accordance with 656.407,
656.443, and 656.614 and in such a manner as to ensure minimum delay in the processing
of injured workers’ claims.
(2) If a self-insured employer
defaults and is being serviced by one or more service companies, the director will,
on behalf of the employer, designate those service companies to continue processing
claims in accordance with the contracts in effect. At least 90 days prior to the
time the contract expires, the service company can submit a proposal to continue
processing the claims. The director will consider such proposal along with other
options which may include referral of the claims for processing to an assigned claims
agent selected under ORS 656.054.
(3) If a self-insured employer
defaults and is self-administering, the director will, on behalf of the employer,
negotiate to have the employer’s claims processed or may refer the claims
for processing to an assigned claims agent as secured under ORS 656.054.
(4) In the event a self-insured
employer reorganizes its business, assumes additional liability, acquires new operations,
buys an additional business, merges with another business, files bankruptcy, emerges
from bankruptcy, or otherwise changes its operation in any manner that affects its
workers’ compensation claims liability, the self-insured employer must notify
the director of the modification of business within 30 days of the event.
(5) In the event a self-insured
employer group defaults or is unable to make all payments due under ORS Chapter
656, is decertified by the director under 656.434, or cancels its self-insurance
certification, the director will, on behalf of the employer, assure continued payments
in accordance with 656.407, 656.443, and 656.614 and in such a manner as to ensure
minimum delay in the processing of injured workers’ claims.
(6) In the event a self-insured
employer group reorganizes its business, assumes additional liability, acquires
new operations, buys an additional business, merges with another business, files
bankruptcy, emerges from bankruptcy, or otherwise changes its operation in any manner
that affects its workers’ compensation claims liability, or financial viability
as determined under OAR 436-050-0260, the self-insured employer group must notify
the director of the modification of business within 30 days of the event. Failure
to comply with this rule may result in revocation of the self-insured employer group’s
certification.
(7) If a self-insured employer
group defaults, cancels its self-insurance certification, or is decertified by the
director under ORS 656.434, the director may designate the service company responsible
for continuing to process the group’s claims. The director’s designation
may include referral of the claims for processing to an assigned claims agent selected
under 656.054.
(8) If a self-insured employer
group consisting of private employer members defaults, cancels its self-insurance
certification, or is decertified by the director under ORS 656.434, the director
may order private employer members of the group to pay an assessment for the group’s
continuing claim liabilities, under 656.430(7)(a)(D)(i). Failure of the group’s
members to pay director-ordered assessments under this rule will subject members
to civil penalties under 656.745.
Stat. Auth.: ORS 656.407, 656.704 &
656.726(4)
Stats. Implemented: ORS 656.407,
656.443 & 656.614
Hist.: WCD 4-1982(Admin),
f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin),
f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0322; WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03,
cert. ef. 1-1-04; WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0195
Requirements for Self-Insured Entity
Changes
(1) If there is any change in the legal
entity, changes in addresses, telephone numbers, and points of contact, or ownership
changes, a self-insured employer must notify the director in writing within 30 days
after the change occurs.
(2) A self-insured employer
must submit requests to add or delete entities under its self-insured certification
by submitting a completed “Endorsement to Self-Insured Group Application”
(Form 440-1869) signed by an officer of the company. Each entity to be approved
for inclusion in a self-insured employer’s certification must enter into an
agreement, signed by an officer of the entity being included in the self-insured
employer’s certification, making the entity jointly and severally liable for
the payment of any compensation and moneys due to the director by the certified
self-insured employer or any other entity included in the self-insured employer’s
certification.
(3) The director will determine,
based on the information provided, the effect of the change on the deposit required
and whether the entities can be combined for experience rating purposes.
(4) Failure to provide notification
as required by this section may result in assessment of penalties or revocation
of self-insurance certification, or both.
Stat. Auth.: ORS 656.407, 656.430, 656.704
& 656.726(4)
Stats. Implemented: ORS 656.407
& 656.430
Hist.: WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03,
cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0200
Self-Insured
Certification Cancellation; Revocation
(1) A certification to a self-insurer
issued by the director remains in effect until:
(a) Revoked as provided by
OAR 436-050-0150 through 436-050-0230, ORS 656.434, and 656.440; or
(b) Canceled by the employer
with the approval of the director.
(2) If a self-insured employer
wishes to cancel certification as a self-insured or cancel self-insurance for any
legal entity included under the self-insurance certification, the employer must
make written request to the director. Such a request must be submitted at least
60 days prior to the desired date of cancellation and include:
(a) What arrangements have
been made to process present and future claims for which the employer is responsible;
(b) A statement of all present
and future claims liabilities for all liabilities incurred during the period of
self-insurance; and
(c) Any reports and moneys
due the director under ORS 656.506, 656.612, and 656.614.
(3) If the employer will
continue to have subject workers after the cancellation date, the employer must
provide the director, prior to the desired date of cancellation, one of the following:
(a) An insurer filed proof
of coverage for a workers’ compensation insurance policy under ORS 656.017
and 656.419;
(b) Evidence of a worker
leasing arrangement as allowed under ORS 656.850; or
(c) An assigned risk binder
that demonstrates compliance with ORS 656.052.
(4) If the self-insured employer
fails to provide the director evidence of subsequent coverage under section (3)
prior to the desired date of cancellation, the self-insurance certification, including
reports and moneys due the director under ORS 656.506, 656.612, and 656.614, will
remain in effect.
(5) If a workers’ compensation
insurance policy is in effect and an active self insurance certification is on file
with the director for the same employer for the same time period, the self- insured
employer has the responsibility of processing claims occurring during the time period
as provided under the self insurance certification.
(6) The certification of
a self-insured employer may be revoked if:
(a) The employer fails to
comply with ORS 656.407 or 656.430 and applicable rules;
(b) The employer defaults,
under ORS 656.443; or
(c) The employer commits
any violation for which a civil penalty could be assessed under ORS 656.745.
(7) Except as provided in
OAR 436-050-0170 (9), notice of certificate revocation will be issued in accordance
with the provisions of ORS 656.440.
Stat. Auth.: ORS 656.704 & 656.726(4)
Stats. Implemented: ORS 656.434
& 656.440
Hist.: WCD 3-1980(Admin),
f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin),
f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered
from 436-051-0325; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87,
ef. 1-1-88; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert.
ef. 1-1-04; WCD 7-2007, f. 11-1-07, cert. ef. 11-28-07; WCD 1-2008, f. 6-13-08,
cert. ef. 7-1-08; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0205
Notice of
Self-Insurer’s Personal Elections
When a person makes
an election under ORS 656.039, 656.128, or 656.140, the self-insured must notify
the director in writing of the election and of any cancellation of the election
within 30 days of the effective date.
Stat. Auth.: ORS
656.704 & 656.726(4)

Stats. Implemented:
ORS 656.039, 656.128 & 656.140

Hist.: WCD
7-1989, f. 12-22-89, cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0210
Notice of
Self-Insurer’s Place of Business in State; Records Self-Insured Must Keep
in Oregon
(1) Every employer
certified as a self-insured employer must give the director notice of the location,
mailing address, telephone number, and any other contact information of at least
one location in this state where claims will be processed and claim records kept
as well as other records as required by this rule and OAR 436-050-0220. The employer
must give notice of the location, mailing address, telephone number, and any other
contact information upon application for certification. The employer may not have
at any one time more than three locations where claims are processed or records
are maintained.
(2) Notice
under section (1) of this rule must include contact information for a designated
person or position within the company who will assure payment of penalties and resolution
of collections issues resulting from orders issued by the director.
(3) With
the approval of the director, a self-insured employer may use one or more service
companies as authorized by ORS 656.455 instead of establishing its own place of
business in this state. To obtain approval or to change or add service locations,
the employer must file with the director a copy of the agreement entered into between
the employer and each company, and must give the director notice of the location,
mailing address, telephone number, and any other contact information of each service
company.
(4) If a
self-insured employer’s or its service company’s place of business or
contact information will change, the self insured employer must notify the director
of the new location, mailing address, telephone number, and any other contact information
30 days before the effective date of the change.
(5) When
a self-insured employer changes claims processing locations, service companies,
or self-administration, the employer must provide at least 10 days prior notice
to:
(a) Workers
with open or active claims, their attorneys, and attending physicians. The notice
must provide the name of a contact person, telephone number, and mailing address
of the new claim processor;
(b) The director
of which claims will be transferred. The notice must include:
(A) Contact
information for both the sending processor and receiving processor of the claims
to include a contact person, telephone number, mailing address, and physical address
where the claims are to be processed;
(B) Verification
of whether the claims to be transferred include closed claims; and
(C) A listing
of the claims being transferred that identifies the sending processor’s claim
number, claimant name, and date of injury.
(6) For the
purpose of this rule, those activities conducted at designated in-state location(s)
and by the authorized representative(s) of the self-insured employer must include,
but need not be limited to:
(a) Processing
and keeping complete records of claims for compensation;
(b) Responding
to specific claims processing inquiries;
(c) Keeping
records of payments for compensation;
(d) Keeping
records, including records of claims processed by prior service companies, in a
written form, not necessarily original form, and making those records available
upon request; and,
(e) Accommodating
periodic in-state audits by the director.
(7) Written
records every self-insured employer is required to keep in this state include, but
are not limited to, the records described by OAR 436-050-0220.
(8) Notwithstanding
section (1) of this rule, the director may approve up to two additional claims processing
locations, if the self-insured employer can show:
(a) That
meeting the requirements of section (1) of this rule will impose a financial or
operational hardship on the employer;
(b) That
such additional locations will result in improved claims processing performance
of the employer; and
(c) That
the auditing functions of the director can be met without unnecessary expense to
the director.
(9) If, upon
review of a self-insured employer’s claims processing performance, the performance
has not remained at the levels as described in OAR 436-060, approval for additional
locations provided in section (6) will be withdrawn.
(10) Notwithstanding
section (1) of this rule, a self-insured employer may, with the prior approval of
the director, make compensation payments from a single location other than the designated
claims processing location. Approval of such a location may be revoked if at any
time:
(a) Timeliness
of compensation payment falls below the minimum standards as established in OAR
436-060;
(b) Written
record of compensation payments is not available; or
(c) There
is not sufficient written documentation to support the issuance of a check for compensation.
(11) Notwithstanding
section (1) of this rule, a self-insured employer may, with prior approval of the
director, have one additional location, in or out of state, for maintaining payroll
records pertaining to premium assessments and assessment/contributions.
Stat. Auth.: ORS
656.455, 656.704 & 656.726(4)

Stats. Implemented:
ORS 656.455

Hist.: WCD
3-1980(Admin), f. & ef. 4-2-80; WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82;
WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert.
ef. 1-1-86; Renumbered from 436-051-0330; WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86;
WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90;
WCD 9-1996, f. 3-11-96, cert. ef. 4-1-96; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0220
Records Self-Insured
Employer Must Keep in Oregon; Period to be Retained, Removal and Disposition
(1) The written
records self-insured employers are required to keep in this state to ensure compliance
with ORS 656.506, 656.612, 656.614, and 656.622 include:
(a) A record
of payroll by National Council on Compensation Insurance classification; and
(b) Complete
records of all assessments, employer and employee contributions, and all such money
due the director.
(2) The self-insured
employer must maintain at a place of business in this state, those written records
relating to its safety and health program as required by ORS 656.430(10) and OAR
437-001.
(3) The records
of claims for compensation that each self-insured employer is required to keep in
this state include, but are not limited to:
(a) Written
records used and relied upon in processing claims;
(b) A written
record of all payments made as a result of any claim including documentation of
the date the payment was mailed. Documentation may be the actual mailing date or
an explanation of the time period between the date of issuance and mailing;
(c) A written
record as to whether supplemental temporary disability benefits, as required under
ORS 656.210(5) for workers employed in more than one job, were approved or denied;
and
(d) A summary
sheet for each claim showing all payments made, separated into disability, medical,
and vocational assistance payments with cumulative totals. The record of disability
payments should be limited to statutory benefits and not include any additional
employer obligations. Expenses must not be included in any of the three columns
required on the summary sheet. “Expenses” are defined in National Council
on Compensation Insurance, Workers’ Compensation Statistical Plan, Part IV.
(4) Records
of a denied claim may be removed from this state after all the appellate procedures
have been exhausted and the denial is final by operation of law.
(5) Records
of any claim for a compensable injury may be removed from this state after the expiration
of the aggravation rights or not less than one year following the final payment
of compensation, whichever is the last to occur.
(6) Notwithstanding
sections (4) and (5) of this rule, if administrative or judicial review is requested,
the claim records may not be removed from this state or disposed of until after
either the review is concluded and the time for an appeal from such review has expired
or at least one year after final payment of compensation has been made, whichever
is the last to occur.
(7) During
administrative or judicial review, if a denied claim is found to be compensable
the records of the claim are subject to section (5) of this rule.
(8) The self-insured
employer may destroy claim records when the self-insured employer can verify that
all potential for benefits to the injured worker or the worker’s beneficiaries
is gone.
(9) Records
retained as required by section (1) of this rule may be removed from the state or
destroyed at the end of three full calendar years after the calendar year in which
the money was remitted.
Stat. Auth.: ORS
656.455, 656.704 & 656.726(4)

Stats. Implemented:
ORS 656.455

Hist.: WCD
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef.
12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0335;
WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88;
WCD 7-1989, f. 12-22-89, cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01;
WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 8-2005, f. 12-6-05, cert. ef. 1-1-06;
WCD 1-2008, f. 6-13-08, cert. ef. 7-1-08; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0230
Out-of-State
Recordkeeping and Claims Processing by Self-Insured Employer; Conditions and Procedure
for Permit; Revocation
(1) Notwithstanding
OAR 436-050-0220, if a self-insured employer wishes to keep the claims records and
process claims at a location outside this state, the employer may apply to the director
for permission to do so. The application shall contain the reasons for the request
and the location, mailing address, telephone number, and any other contact information
where the records will be kept and the claims processed. The application must provide
the director contact information for a designated person or position within the
company who will assure payment of penalties and resolution of collections issues
resulting from orders issued by the director. Upon receipt, the director will review
the application and notify the employer that the request has been denied and the
reason therefor; or, that the employer will be allowed to process claims from outside
this state.
(2) The director
may grant permission to the self-insured employer unless the employer has committed
acts or engaged in a course of conduct that would be grounds for revocation of permission
or that are contrary to any of the provisions of section (3) of this rule.
(3) A self-insured
employer that keeps claims records and processes claims at a location outside this
state must:
(a) Process
claims in an accurate and timely manner;
(b) Make
reports to the director promptly as required by ORS chapter 656 and the director’s
administrative rules;
(c) Pay to
the director promptly all assessments and other money as it becomes due;
(d) Increase
or decrease its security deposit promptly when directed to do so by the director
under ORS 656.407(2); and
(e) Comply
with the rules and orders of the director in processing and paying claims for compensation.
(4) After
notice given as required by ORS 656.455(2), permission granted under this section
will be revoked by the director if the employer has committed acts or engaged in
a course of conduct that are in violation of any provisions of section (3) of this
rule.
(5) A self-insured
employer must provide written records which have been removed from this state to
the director as requested within a reasonable time not to exceed 14 days or as otherwise
negotiated.
Stat. Auth.: ORS
656.455, 656.704 & 656.726(4)

Stats. Implemented:
ORS 656.455

Hist.: WCD
18-1975(Admin), f. 12-19-75, ef. 1-1-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 4-1982(Admin), f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef.
12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0340;
WCD 9-1985(Admin), f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88;
WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 8-2005, f. 12-6-05, cert. ef. 1-1-06;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0260
Qualifications of a Self-Insured Employer Group
Five or more employers may qualify as
a self-insured employer group if the employers as a group:
(1) Incorporate or are a
cooperative under ORS Chapter 60, 62, or 65. If the group is a governmental subdivision,
it must have formed a governmental entity as provided under ORS 190.003 to 190.110;
(2) Designate:
(a) A board of trustees;
and
(b) An administrator, subject
to section (10) of this rule;
(3) Demonstrate and maintain:
(a) A combined net worth
of at least $3 million; and
(b) For private employer
groups, individual member net worth of at least $150,000. Private employer groups
must obtain annual financial data from all members regarding their individual fiscal
year end net worth;
(4) Have excess insurance
coverage of the type and amounts approved by the director, including a self-insured
retention of at least $300,000;
(5) Demonstrate that accident
prevention is likely to improve through self-insurance;
(6) Engage an adequate staff
under OAR 436-055-0070 qualified to process claims;
(7) Develop a method approved
by the director to notify the director of:
(a) The commencement or termination
of membership by employers in the group, and the effect on the remaining combined
net worth of the employers in the group; and
(b) Whether an employer who
terminates membership in the group continues to be a subject employer; and if the
employer remains a subject employer what arrangements have been made to continue
coverage;
(8) Establish a safety and
health loss prevention program as required by OAR 437-001;
(9) Create a common claims
fund approved by the director;
(10) Designate an entity
for the group responsible for centralized claims processing, payroll records, safety
requirements, recording and submitting assessments and contributions and making
such other reports as the director may require. For groups consisting of private
employer members, the designated entity may not be a member of the group or the
group’s board, or a trustee for the group. With the approval of the director,
a self-insured employer group may use service companies as authorized by ORS 656.455
instead of establishing its own place of business in this state. To obtain approval
or to change or add service locations, the employer group must file with the director
a copy of the agreement entered into between the employer group and each company,
and must give the director notice of the location, mailing address, telephone number,
and any other contact information of each service company;
(11) Establish proof of financial
ability by:
(a) Providing a security
deposit that the director determines is acceptable under OAR 436-050-0165 and in
an amount determined under OAR 436-050-0180; and
(b) Demonstrating financial
viability based on factors including, but not limited to:
(A) The group meeting the
combined net worth requirements in section (3)(a) of this rule;
(B) For private employers
that are members of a self-insured group, meeting the individual net worth requirements
in section (3)(b) of this rule; and
(C) Demonstrating acceptable
financial strength based on the total combined points for the group’s financial
ratios, in section (12) of this rule.
(12) Self-insured employer
groups must demonstrate and maintain acceptable financial strength in the following
three financial ratios. “Acceptable financial strength” means the group
has total combined points for the three ratios equaling “strong” or
“moderate” ratings, under section (13) of this rule.
(a) The current ratio equals
current assets divided by current liabilities.
(A) For purposes of calculating
this ratio:
(i) Current assets identified
in the financial statements and reports provided annually to the director under
OAR 436-050-0175(1) through (3) must reasonably be expected to be converted into
cash, or could become the equivalent of cash, within one year in the normal course
of business. Examples of such assets include readily available cash, investments,
marketable securities, and bonds where maturity occurs within one year and their
value upon conversion to cash is not reduced by penalties or fees, accounts receivable,
inventory, and prepaid expenses. Current assets must not include fixed assets, accumulated
depreciation, intangible assets, or investments, marketable securities, or bonds
with maturity dates of one year or longer.
(ii) The face value of a
self-insured group’s irrevocable standby letter of credit (ISLOC) used to
satisfy the director’s requirement for a security deposit must not be included
in the self-insured group’s reported assets, since funds provided by an ISLOC
are not construed to be an asset of the group under OAR 436-050-0165(2)(a)(J) and
the required language in the ISLOC, Form 440-3640.
(iii) Current liabilities
identified in the financial statements and reports provided annually to the director
under OAR 436-050-0175(1) through (3) are obligations expected to be due within
the next year. Examples of such liabilities include accounts payable, notes payable,
accrued taxes, and wages and salaries owed to workers. Current liabilities must
not include debts or claims on assets that will be due a year or more in the future
or longer-term liabilities intended to provide more permanent funds for the business,
including bank loans and long-term bonds.
(B) A maximum of six points
are possible for this ratio, with a 2:1 ratio the desired standard. Points for the
current ratio are determined as follows:
Ratio — Points: At least 2:1 = 6 points.
At least 1.75:1 = 5 points. At least 1.6:1 = 4 points. At least 1.4:1 = 3 points.
At least 1.25:1 = 2 points. At least 1.1:1 = 1 point. At least 1:1 = 0 points.
(b) The liquidity ratio equals cash
divided by current liabilities.
(A) For purposes of calculating
this ratio:
(i) Cash identified in the
financial statements and reports provided annually to the director under OAR 436-050-0175(1)
through (3) must include all readily available funds such as bills, coin, or checking
account balances. Cash funds exclude those held in special deposit or escrow accounts
where some degree of legal constraint against their use exists.
(ii) Current liabilities
identified in the financial statements and reports provided annually to the director
under OAR 436-050-0175(1) through (3) are obligations expected to be due within
the next year. Examples of such liabilities include accounts payable, notes payable,
accrued taxes, and wages and salaries owed to workers. Current liabilities must
not include debts or claims on assets that will be due a year or more in the future
or longer-term liabilities intended to provide more permanent funds for the business,
including bank loans and long-term bonds.
(B) A maximum of six points
are possible for this ratio, with 40% the desired standard. Points for the liquidity
ratio are determined as follows:
Ratio — Points: At least 50% = 6 points.
At least 40% = 5 points.
At least 30% = 4 points. At least
25% = 3 points. At least 20% = 2 points.
At least 10% = 1 point. At least
5% = 0 points.
(c) The premium to surplus ratio equals
earned contributions divided by the group’s adjusted net worth.
(A) For purposes of calculating
this ratio:
(i) Earned contributions
identified in the financial statements and reports provided annually to the director
under OAR 436-050-0175(1) through (3) are the net revenues from group members’
contributions. Financial statements and reports may otherwise refer to this component
as net premium, member contributions, or operating revenue. At the director’s
discretion, excess insurance premiums may be deducted from earned contributions
when there is a reasonable likelihood of performance by the excess insurance carrier.
(ii) Adjusted net worth is
the net worth identified in the certified statement provided annually to the director
under OAR 436-050-0175(4)(a) less disallowed assets, which are prepaid expenses,
inventory, and accounts receivable over 90 days old. Financial statements and reports
may otherwise refer to net worth as net position, net assets, surplus, owner’s
equity, or shareholders’ equity. The adjusted net worth is the total assets
minus the sum of the total liabilities and the disallowed assets.
(B) A maximum of six points
are possible for this ratio, with up to 1.00 the desired standard. Points for the
premium to surplus ratio are determined as follows:
Ratio — Points: 0.00 – 0.99 =
6 points. 1.00 – 1.49 = points. 1.50 – 1.99 = 4 points. 2.00 –
2.24 = points. 2.25 – 2.49 = 2 points. 2.50 – 2.74 = 1 point. 2.75 and
over = 0 points.
(13) The sum of the three ratios equals
a maximum of 18 points. That sum determines the rating for a self-insured employer
group’s financial strength and the potential consequences, as follows:
(a) 13 to 18 points: strong.
Based on meeting all requirements of this rule, the director will approve initial
or continued self-insured group certification. The group’s security deposit
amount will be determined based on OAR 436-050-0180 (1) through (3).
(b) 7 to 12 points: moderate.
Based on meeting all requirements of this rule, the director will approve initial
or continued self-insured group certification. The director will increase the security
deposit amount calculated in OAR 436-050-0180 (1) through (3) by the percentage
factor indicated for the sum of the group’s ratio points, under section (4)
of that rule.
(c) 0 to 6 points: weak.
The director will not approve the application for initial self-insured employer
group certification. For an existing certified self-insured employer group, the
director may:
(A) Provide the group notice
of the director’s intent to revoke its self-insurance certification under
OAR 436-050-0340(1); or
(B) Increase the security
deposit calculated in OAR 436-050-0180 by an amount based on factors including,
but not limited to:
(i) The considerations identified
in OAR 436-050-0180(3); or
(ii) The determination that
a financial correction plan submitted by the group demonstrates the ability to improve
its financial viability sufficient to achieve the moderate financial rating in subsection
(b) of this rule in a reasonable time period and without hampering the group’s
ability to pay compensation and other amounts due under ORS chapter 656.
(14) Comply with the requirements
of OAR 436-050-0165, 436-050-0170, 436-050-0175, 436-050-0180, 436-050-195, 436-050-0200,
436-050-0205, 436-050-0210 and 436-050-0220. Failure to comply with these requirements
will result in the actions prescribed in those rules.
(15) Every self-insured employer
group must maintain at least one place of business in this state where the employer
processes claims, keeps written records of claims and other records as required
by OAR 436-050-0210 to 436-050-0220.
(16) Failure of a private
employer that is a member of a self-insured employer group to maintain individual
net worth of at least $150,000 will result in cancellation of that member’s
participation in the group, under OAR 436-050-0290.
(17) Failure of a certified
self-insured employer group to maintain the qualifications required in this rule
will result in revocation of the self-insured employer group’s certification.
The group will be given 30 days written notice of the intent to revoke the self-insured
certification, to be effective 30 days from the date of receipt of the revocation
notice. If the self-insured employer group complies with the qualification requirements
within the 30-day period, the revocation will be canceled and the certification
will remain in effect.
Stat. Auth.: ORS 656.407, 656.430, 656.704
& 656.726(4)
Stats. Implemented: ORS 656.407
& 656.430
Hist.: WCD 4-1982(Admin),
f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin),
f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0405; WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0270
Applying
for Certification as a Self-Insured Employer Group: Private Employers
(1) Employers applying for certification
as a self-insured employer group must submit:
(a) A complete “Application
to Become a Self-Insured Employer Group: Private Employers” (Form 440-1867);
(b) Proof in the form of
a certificate from the Secretary of State’s Corporation Division showing the
employer group as a corporation or cooperative;
(c) A copy of the bylaws
or corporate minutes which include:
(A) Designation of specific
individuals as trustees for the corporation or cooperative;
(B) Naming an administrator
to administer the financial affairs of the group who may not be a member of the
group or the group’s board, or a trustee for the group; and
(C) The criteria utilized
by the trustees and administrator when approving applications for new membership
and requests for withdrawal by members of the group;
(d) A copy of the fidelity
bond furnished to the group by the administrator or a copy of the comprehensive
crime policy obtained by the group, in an amount sufficient to protect the group
against the misappropriation or misuse of any moneys or securities;
(e) A current financial statement
of each member making application which shows individual net worth of at least $150,000
and taken collectively shows the following:
(A) A combined net worth
of all members making application for coverage of at least $3 million; and
(B) Working capital in an
amount establishing financial strength, liquidity, and viability of the business,
based on OAR 436-050-0260;
(f) An individual report
by employer showing the employer’s payroll by class and description and loss
information for the last four calendar years;
(g) A completed “Group
Self-Insured Indemnity Agreement” (Form 440-1866), or another form authorized
by the director, that jointly and severally binds each member for the payment of
any compensation and moneys due to the director by the group or any member of the
group. Government subdivisions do not need to submit this agreement;
(h) Evidence of a safety
and health loss prevention program designed to demonstrate that accident prevention
will improve due to self-insurance;
(i) Proof of an adequate
staff qualified to process claims by:
(A) Employing and retaining
at each claims processing location, at least one person that is actually involved
in the claims processing function and is qualified in accordance with OAR 436-055-0070;
or
(B) Contracting the services
of one or more service companies that employ, at each claims processing location,
at least one person that is qualified in accordance with OAR 436-055-0070 and is
actually involved in the self-insured employer’s claims processing. If one
or more service companies are used, a service agreement between the employer group
and each service company, that meets the requirements of 436-050-0260(10), must
be submitted for approval of the director;
(j) The type, retention and
limitation levels of excess insurance the employers as a group are planning to obtain
in accordance with OAR 436-050-0170;
(k) A procedure for notifying
the director of:
(A) The commencement or termination
of employers within the group and the effect on the remaining combined net worth
of the group; and
(B) Arrangements made by
an employer leaving the group to continue insurance coverage.
(l) A program whereby each
employer within the group contributes to a common claims fund in accordance with
OAR 436-050-0300; and
(m) The type of security
deposit the employer group wishes to provide, with appropriate justification.
(2) Notwithstanding subsection
(1)(e) of this rule, the director may require an audited financial statement before
considering an application by a group for self-insurance.
(3) Within 60 days of receipt
of all information required in section (1) of this rule, the director will review
the application and notify the employer group that the request for certification
as a self-insured employer group is denied and the reason therefore; or, that the
group is qualified as a self-insured employer group. The notice must include:
(a) The amount of security
deposit required;
(b) Approval of the type,
retention and limitation levels of the excess insurance as determined under OAR
436-050-0170; and
(c) The type, retention and
limitation levels of excess insurance required.
(4) The certification of
self-insurance will be issued upon receipt of the security deposit and the appropriate
excess insurance binder.
(5) Unless a later date is
specified by the applicant, the effective date of certification will be the first
day of the month following the date the requirements of section (4) of this rule
are met.
Stat. Auth.: ORS 656.407, 656.430, 656.704
& 656.726(4)
Stats. Implemented: ORS 656.407
& 656.430
Hist.: WCD 4-1982(Admin),
f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin),
f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0410; WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0280
Applying for Certification as a
Self-Insured Employer Group: Governmental Subdivisions
(1) Governmental subdivisions applying
for certification as a self-insured employer group must submit:
(a) An application for the
group applying for self-insurance in a form and format prescribed by the director;
(b) Proof that the governmental
subdivisions have formed an intergovernmental entity as provided under ORS 190.003
to 190.110;
(c) An intergovernmental
agreement which includes:
(A) Designation of specific
individuals as trustees for the group and naming an administrator to administer
the financial affairs of the group; and
(B) The criteria to be used
by the trustees and administrator when approving applications for new membership
and requests for withdrawal by members of the group;
(d) A copy of the fidelity
bond furnished to the group by the administrator or a copy of the comprehensive
crime policy obtained by the group, in an amount sufficient to protect the group
against the misappropriation or misuse of any moneys or securities;
(e) A current financial statement
of each member making application which taken collectively shows the combined net
worth of all members making application for coverage must not be less than $3 million;
(f) An individual report
by employer showing the governmental subdivision’s payroll by class and description
and loss information for the last four calendar years;
(g) A resolution by the governing
body of each governmental subdivision binding it to be liable for the payment of
any compensation and other amounts due to the director under ORS Chapter 656 incurred
by that governmental subdivision during the period of group self-insurance;
(h) Evidence of a safety
and health loss prevention program designed to demonstrate that accident prevention
will improve due to self-insurance;
(i) Proof of an adequate
staff qualified to process claims by:
(A) Employing and retaining
at each claims processing location, at least one person that is actually involved
in the claims processing function and is qualified in accordance with OAR 436-055-0070;
or
(B) Contracting the services
of one or more service companies that employ, at each claims processing location,
at least one person that is actually involved in the self-insured group’s
claims processing, that is certified in accordance with OAR 436-055-0070. If service
companies are used, a service agreement between the group and each service company,
that meets the requirements of OAR 436-050-0260(10), must be submitted;
(j) The type, retention and
limitation levels of excess insurance the employers as a group are planning to obtain
in accordance with OAR 436-050-0170;
(k) A procedure for notifying
the director of:
(A) The commencement or termination
of governmental subdivisions within the group and the effect on the remaining combined
net worth of the group; and
(B) Arrangements made by
a governmental subdivision leaving the group to continue insurance coverage;
(l) A program whereby each
employer within the group contributes to a common claims fund in accordance with
OAR 436-050-0300; and
(m) The type and amount of
security deposit the group wishes to provide, with appropriate justification. In
no case will the amount be less than $300,000.
(2) Notwithstanding subsection
(l)(e) of this rule, the director may require an audited or certified financial
statement before considering an application by a group for self-insurance.
(3) Within 60 days of receipt
of all information required in section (1) of this rule, the director will review
the application and notify the group that the request for certification as a self-insured
employer group is denied and the reason therefore; or, that the group is qualified
as a self-insured employer group. The notice must include:
(a) The amount of the security
deposit required; and
(b) Approval of the type,
retention and limitation levels of the excess insurance as determined under OAR
436-050-0170; and the type, retention and limitation levels of excess insurance
required.
(4) The certification of
self-insurance will be issued upon receipt of the security deposit, the appropriate
excess insurance binder and if applicable, a service agreement between the employer
and service company that has been signed by both parties.
(5) Unless a subsequent date
is specified by the applicant, the effective date of certification will be the date
the certification is issued.
Stat. Auth.: ORS 656.407, 656.430, 656.704
& 656.726(4)
Stats. Implemented: ORS 656.430
& 656.407
Hist.: WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 25-1990, f. 11-29-90, cert. ef. 12-26-90; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0290
Commencement/Termination of Employers
with a Self-Insured Employer Group; Effect on Net Worth; Extension of Coverage;
Change in Entity; Change of Address; Recordkeeping
(1) Prospective new members of a self-insured
employer group must submit an application to the board of trustees, or its administrator.
The administrator of a group consisting of private employer members may not be a
member of the group. The trustees, or administrator, may approve the application
for membership under the bylaws of the self-insured group. Once approved, the administrator
or board of trustees must submit to the director, within 30 days of the effective
date of membership, a completed “Endorsement to Self-Insured Group Application”
(440-1869) or a form approved by the director, which must be accompanied by:
(a) A current financial statement
of the employer applying;
(b) Evidence of at least
$150,000 individual net worth if the prospective new member is a private employer;
(c) An agreement signed by
the administrator of the self-insured group and the employer, making the employer
jointly and severally liable for the payment of any compensation and moneys due
to the director by the group or any member of the group; or, if a governmental subdivision
self-insured group, a resolution by the governing body of each governmental subdivision
binding it to be liable for the payment of any compensation and other amounts due
to the director under ORS Chapter 656 incurred by that governmental subdivision
during the period of group self-insurance;
(d) A statement showing the
effect on the new combined net worth of the group; and
(e) The employer’s
payroll by class and description and loss information for the last four fiscal or
calendar years.
(2) Incomplete submissions
or incorrectly completed endorsements to add new members received by the director
will not be considered filed. Failure to file a correct and complete endorsement
with the required supporting documentation within 30 days of the effective date
of membership may result in the assessment of civil penalties.
(3) Individual members may
elect to terminate their participation in a self-insured group or be subject to
cancellation by the group under the bylaws of the group. Groups consisting of private
employer members must also cancel the membership of any private employer member
that fails to maintain the minimum individual net worth required, under OAR 436-050-0260
(16). Such cancellation must occur within 30 days of the group’s receipt of
the employer member’s most recent fiscal year end financial data demonstrating
insufficient net worth. The self-insured group must submit the following information
to the director no later than 10 days before the effective date of the member’s
termination or cancellation:
(a) A statement, without
disclaimers or qualifying language as to the accuracy of the information provided:
(A) Showing the effect of
the member’s termination or cancellation on the remaining combined net worth
of the group; and
(B) Certifying that the group
continues to meet the combined net worth requirements in OAR 436-050-0260;
(b) Evidence that the employer
requesting termination or being cancelled has made alternate arrangements for coverage
if the employer continues to employ;
(c) Evidence that the employer
requesting termination or being cancelled has been provided a written reminder about
its potential future liability as described in section (1)(c) of this rule; and
(d) The expected date of
cancellation or termination.
(4) In the event the director
determines the cancellation or termination of a group member adversely affects the
net worth of the group to the extent that the group no longer qualifies for self-insurance
certification, the director may revoke the self-insured employer group’s certification
under OAR 436-050-0340(3).
(5) An employer within a
group must, if there is a change in the employing legal entity, again apply for
membership within the group, in accordance with this rule. A change in legal entity
includes, but is not limited to:
(a) When a partner joins
or leaves the partnership;
(b) When the employer is
a sole proprietorship, partnership, or corporation, and changes to a sole proprietorship,
partnership, or corporation; or
(c) When an employer sells
an existing business to another person(s), except in the case of a corporation.
(6) An employer within a
group must, within 10 days after there is a change of address or assumed business
name, notify the board of trustees or administrator of the change. The administrator
or board of trustees must, within 10 days, submit to the director an endorsement
as notice of the change. A change of address includes, but is not limited to:
(a) Establishment of a new
or additional location; or
(b) Termination of an existing
location.
(7) The endorsement required
by section (6) of this rule must state specifically which location is being deleted
or which is being added. It must also identify the type of address, whether it is
mailing, operating, or the principal place of business.
(8) The employer group is
responsible for maintaining coverage records relating to each member, to include:
(a) The employer’s
application for membership in the group, with original signatures;
(b) The employer’s
liability agreement under OAR 436-050-0270(1)(g), or resolution under 436-050-0280(1)(g),
with original signatures;
(c) Cancellation or termination
notices;
(d) Reinstatement applications
and notices; and
(e) Records on the whereabouts
of employers that have been canceled or have terminated their participation in the
group.
Stat. Auth.: ORS 656.704 & 656.726(4)
Stats. Implemented: ORS 656.430
Hist.: WCD 4-1982(Admin),
f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin),
f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0420; WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0300
Self-Insured Employer Group, Common
Claims Fund
(1) A self-insured employer group must
establish, under the direction and control of the board of trustees and administrator,
a common claims fund for the sole purpose of ensuring the availability of funds
to make certain the prompt payment of all compensation and all other payments that
may become due from such self-insured employer group under the workers’ compensation
law.
(2) The common claims fund
must be maintained in an account held by an Oregon state chartered or a federally
chartered bank. Government subdivisions certified as a self-insured employer group
may also maintain the common claims fund in a “Local Government Investment
Pool” account held by the Office of the State Treasurer.
(3) Except as provided in
section (6) of this rule, the balance of the common claims fund must be maintained
in an amount at least equal to 30 percent of the average of the group’s paid
losses for the previous four years. The full sum of the required common claims fund
balance must be maintained at all times.
(4) The director may require
the self-insured group to increase the amount maintained in the common claims fund.
(5) By March 1 of each year,
a self-insured employer group must provide the director with adequate documentation
to validate the balance in the common claims fund or notice that the amount calculated
in section (3) or (6) of this rule must be included in the determination of the
self-insured employer group’s security deposit under OAR 436-050-0180. The
director may require a self-insured employer group to provide documentation of the
common claims fund balance more frequently.
(6) For governmental subdivisions
certified as a self-insured employer group, the balance of the common claims fund
must be maintained in an amount at least equal to 60 percent of the average of the
group’s yearly paid losses for the previous four years.
Stat. Auth.: ORS 656.704 & 656.726(4)
Stats. Implemented: ORS 656.430
Hist.: WCD 4-1982(Admin),
f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin),
f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0420; WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 7-1989, f. 12-22-89,
cert. ef. 1-1-90; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13; WCD 1-2013(Temp), f. & cert. ef. 1-23-13 thru 7-21-13; WCD
5-2013, f. 7-3-13, cert. ef. 7-22-13; WCD 10-2014, f. 8-15-14, cert. ef. 9-15-14
436-050-0340
Group Self-Insurance
Revocation
Notwithstanding ORS 656.440, the certification
of a self-insured employer group may be revoked by the director after giving 30
days notice if:
(1) The employer group does
not comply with ORS 656.430(7) or (8) or OAR 436-050-0260, 436-050-0270, 436-050-0280,
436-050-0290, or 436-050-0300;
(2) There are fewer than
five employers within a group;
(3) The net worth of the
group falls below that required by OAR 436-050-0260(3);
(4) The employer group defaults
in payment of compensation or other payments due the director;
(5) The employer group commits
any violation for which a civil penalty could be assessed under ORS 656.745; or
(6) The employer group or
any member of the group submits any false or misleading information.
Stat. Auth.: ORS 656.704 & 656.726(4)
Stats. Implemented: ORS 656.434
& 656.440
Hist.: WCD 4-1982(Admin),
f. 2-10-82, ef. 2-15-82; WCD 7-1983(Admin), f. 12-22-83, ef. 12-27-83; WCD 5-1985(Admin),
f. 12-10-85, cert. ef. 1-1-86; Renumbered from 436-051-0440; WCD 9-1985(Admin),
f. 12-12-85, ef. 1-1-86; WCD 9-1987, f. 12-18-87, ef. 1-1-88; WCD 5-2001, f. 6-22-01,
cert. ef. 7-1-01; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13; WCD 10-2014, f. 8-15-14,
cert. ef. 9-15-14
436-050-0400
Responsibility
for Providing Coverage Under a Lease Arrangement
(1) Every worker
leasing company providing workers to a client must satisfy the requirements of ORS
656.017, 656.407, or 656.419.
(2) Every
worker leasing company providing leased workers to a client must also provide workers’
compensation insurance coverage for any subject workers of the client, unless the
client has an active workers’ compensation insurance policy proof of coverage
on file with the director or is certified under ORS 656.430 as a self-insured employer.
In the latter circumstance, the client’s insurer or the self-insured employer
will be deemed to provide insurance coverage for all leased workers and subject
workers of the client.
(3) If an
insured client allows its workers’ compensation insurance policy to cancel
or does not obtain a renewal of the policy, or if a self-insured client allows its
certification to terminate, and the client continues to employ subject workers or
has leased workers, the client will be considered a noncomplying employer unless
the worker leasing company has made the filing with the director under OAR 436-050-0410(1).
(4) A client
can obtain leased workers from only one worker leasing company at a time unless
the client has an active workers’ compensation insurance policy proof of coverage
on file with the director or is certified under ORS 656.430 as a self-insured employer.
(5) A worker
leasing company must not provide workers’ compensation coverage for another
worker leasing company doing business in Oregon whether or not any of the worker
leasing companies involved is licensed for worker leasing in Oregon.
(6) A client
employer may not obtain workers by contract and for a fee on a non-temporary basis
from an unlicensed worker leasing company.
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 15-1994, f. 12-23-94, cert. ef. 2-1-95;
WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04;
WCD 3-2007(Temp), f. 5-31-07, cert. ef. 6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07,
cert. ef. 11-28-07; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13
436-050-0410
Notice to
Director of Lease Arrangement; Termination
(1) Within 14 days
after the effective date of the lease arrangement or contract, a worker leasing
company must file written notice with the director and its insurer, using Form 440-2465,
that it is providing leased workers to a client and workers’ compensation
coverage. The notice must be correct and complete, and must include:
(a) The client’s:
(A) Legal
name;
(B) FEIN
or other tax reporting number;
(C) Type
of ownership;
(D) Primary
nature of business;
(E) Mailing
address; and
(F) Street
address in Oregon;
(b) The worker
leasing company’s:
(A) Legal
name;
(B) Mailing
address;
(C) FEIN
or other tax reporting number;
(D) WCD worker
leasing license number, if any;
(E) Workers’
compensation insurer’s name (or “self-insured”);
(F) Effective
date of leasing contract;
(G) Contact
name and phone number; and
(H) A signature
of a representative of the worker leasing company.
(2) A worker
leasing company may terminate its obligation to provide workers’ compensation
coverage by giving to its insurer, its client, and the director written notice of
the termination. A notice of termination must state the effective date and hour
of termination, but the termination will be effective not less than 30 days after
the notice is received by the director. Notice to the client under this section
must be given by mail, addressed to the client at its last-known address.
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD
10-2003, f. 8-29-03, cert. ef. 9-15-03; WCD 7-2007, f. 11-1-07, cert. ef. 11-28-07;
WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0420
Temporary
Worker Distinguished from Leased Worker
(1) A person who
provides a worker to work for a client will be considered to be providing the worker
on a “temporary basis” only if there is contemporaneous written documentation
that indicates the duration of the work to be performed and that the worker is provided
for a client’s special situation under ORS 656.850(1)(b). Contemporaneous
documentation means documents that are created at the time the temporary service
provider and the client employer make the arrangements for placement of the worker.
Upon the director’s request, the documentation must be provided to the director
by either the temporary service provider or the client. Contemporaneous documentation
in support of workers being provided on a temporary basis includes one or more of
the following conditions:
(a) To cover
employee absences or employee leaves, including but not limited to such things as
maternity leave, vacation, jury duty, or illness from which the permanent worker
will return to work;
(b) To fill
a professional skill shortage, including but not limited to, professionals such
as engineers, architects, electricians, plumbers, pharmacists, nurses, or other
professions, whether licensed or not, to supplement or satisfy a shortage of that
skill for a known duration. Supporting documentation may include license information
and whether the worker is supplementing or satisfying a client employer’s
need for the skill;
(c) To staff
a seasonal or sporadic increase in workload, indicated by a temporary increase in
demand upon an employer’s normal workload that requires additional assistance
to meet the demand. When the increased demand ends, the additional positions are
eliminated. Documentation must include what constitutes the demand establishing
why this special situation is beyond the norm;
(d) To staff
a special assignment or project outside of the routine activities of the business
where the worker will be terminated or assigned to another temporary project upon
completion. For example, a construction contractor may need assistance on a construction
site to help clear branches and other debris after a windstorm so the regular construction
crew can continue its work. Documentation must describe the project and why it is
unusual;
(e) To hire
a student worker that will be provided and paid by a school district or community
college through a work experience program. Documentation must include the name of
the school and the work experience program; or
(f) To cover
special situations where the worker has a reasonable expectation of transitioning
to permanent employment with the client employer and the client employer uses a
pre-established probationary period in its overall employment selection program.
Documentation must include copies of the client employer’s written program
or other evidence supporting the pre-established probationary period and overall
employment selection program.
(2) If a
person provides workers, by contract and for a fee, to work for a client and any
such workers are not provided on a “temporary basis,” that person will
be considered a worker leasing company.
(3) If a
person provides both leased workers and workers on a temporary basis, that person
must maintain written records that show specifically which workers are provided
on a temporary basis. If the written records do not specify which workers are provided
on a temporary basis, all workers are deemed to be leased workers.
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 15-1994, f. 12-23-94, cert. ef. 2-1-95;
WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 10-2003, f. 8-29-03, cert. ef. 9-15-03;
WCD 3-2007(Temp), f. 5-31-07, cert. ef. 6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07,
cert. ef. 11-28-07; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0440
Qualifications,
Applications, and Renewals for License as a Worker-Leasing Company
(1) Each person
applying for initial license or renewal as a worker leasing company must:
(a) Be either
an Oregon corporation or other legal entity registered with the Oregon Secretary
of State, Corporations Division to conduct business in this state;
(b) Maintain
workers’ compensation coverage under ORS 656.017; and
(c) Upon
application approval and prior to licensure, pay the required licensing fee of $2,050.
(2) Each
person applying for initial license or renewal as a worker leasing company must
submit an Application for Oregon Worker Leasing License Form 440-2466. The form
and accompanying documentation must include:
(a) Legal
name;
(b) Mailing
address;
(c) In-state
and out-of-state phone numbers;
(d) FEIN
or other tax reporting number;
(e) Type
of business;
(f) Physical
address for Oregon principal place of business;
(g) Assumed
business names;
(h) Name
of workers’ compensation insurer (or “self-insured”) and policy
number;
(i) Name(s)
and contact information of the representative(s) at the Oregon location(s);
(j) List
of controlling persons, and in the case of privately held entities all owners, including
their names, titles, residence addresses, telephone numbers, email addresses, and
dates of birth;
(k) For a
person applying for an initial license, a list of all states where the person operates
as a leasing company or professional employer organization (PEO), copies of licenses,
registrations, recognitions, or certifications from states that require those actions,
and a verifiable statement that the remaining states of operation, if any, do not
require licensure, registration, recognition, or certification to provide worker
leasing or PEO services;
(l) Verification
of compliance with tax laws from Oregon Employment Department, Oregon Department
of Revenue, and the Internal Revenue Service, using Attachments A, B, and C of Form
440-2466, the worker leasing license application;
(m) A record
of any present or prior experience of providing workers by contract and for a fee
in any state, by the person or any controlling person, and an explanation of that
experience;
(n) A record
of any bankruptcies, liens, or any actions involving or demonstrating dishonesty
or misrepresentation, including but not limited to: fraud, theft, burglary, embezzlement,
deception, perjury, forgery, counterfeiting, bribery, extortion, money laundering,
or securities, investments, or insurance violations on the part of the person or
any controlling person. Records of such actions must include:
(A) Charges,
guilty pleas, or pleas of no contest;
(B) Criminal
convictions;
(C) Lawsuits;
(D) Judgments;
or
(E) Discharges
or permitted resignations based on allegations of these actions.
(o) Full
details regarding any bankruptcy, liens, or action under subsection (n) of this
section, including:
(A) The nature
and dates of the action(s);
(B) Outcomes,
sentences, and conditions imposed;
(C) Name
and location of the court or jurisdiction in which any proceedings were held or
are pending, and the dates of the proceedings; and
(D) The designation
and license number for any actions against a license;
(p) Full
details of any administrative actions against the person by a regulatory agency
of any state regarding matters listed in subsection(2)(n) or worker leasing activities;
(q) A plan
of operation that demonstrates how the worker leasing company will meet the requirements
of ORS chapter 654, The Oregon Safe Employment Act;
(r) A plan
of operation that demonstrates how the worker leasing company will collect and report
the information necessary to establish each client’s separate experience rating
to the insurer providing workers’ compensation coverage for each client, or
to the National Council on Compensation Insurance for a self-insured worker leasing
company and
(s) A notarized
signature of an authorized representative of the applicant.
(3) The director
may request additional information to further clarify the information and documentation
submitted with the application. Under ORS 656.850(2), no person may perform services
as a worker leasing company in Oregon without first being licensed to do so.
(4) The director
will review complete applications, and may conduct a background investigation of
the person applying for a license, an owner, or any controlling person. Information
learned through a background investigation, or other information submitted during
the application process, may be the basis for the director to refuse to issue or
renew a license, or to disqualify the person from making further application.
(5) If the
application is approved, the director will issue a license. Each license issued
under these rules will automatically expire two years after the date of issuance
unless renewed by the licensee. To renew a license, the worker leasing company must
submit a renewal application to the director at least 90 days before the expiration
of the current worker leasing license. Any supplemental material, whether requested
by the director or submitted by the worker leasing company to establish a complete
application, must be received by the director at least 45 days before expiration
of the current license.
(6) The director
may refuse to issue or renew a license or may disqualify a person, controlling person,
or worker leasing company from applying for a license in the future for misrepresentation,
failure to meet any of the requirements of ORS 656.850, 656.855, or these rules,
or for reasons including, but not limited to:
(a) Denial
of a previous application for, or prior suspension or revocation of, a worker leasing
license by the director;
(b) Denial,
suspension, or revocation of a license, registration, or certification, or other
discipline by any governmental agency or entity;
(c) Having
exercised authority, control, or decision-making responsibility concerning any worker
leasing company at the time that company had its authorization to provide worker
leasing services denied, suspended, revoked, or restricted;
(d) Having
been the subject of an order, adverse to the person, controlling person, or worker
leasing company, by any governmental agency or entity in connection with any worker
leasing activity;
(e) Having
been found by any governmental agency or entity to have made a false or misleading
statement, material misrepresentation, or material omission, or to have failed to
disclose material facts;
(f) Violations
of worker leasing statutes or regulations;
(g) Failure
to establish minimum experience, training, or education that demonstrates competency
in providing worker leasing services;
(h) Having
been the subject of a complaint, investigation, or proceeding related to an action
in subsection (2)(n) of this rule;
(i) Having
been charged with, convicted of, or pleaded guilty or no contest to any felony or
misdemeanor specified in subsection (2)(n) of this rule; or
(j) Having
failed to provide documents the director has requested.
(7) “Disqualification,”
as used in this rule, means a person or a prospective worker leasing company may
reapply no sooner than two years from the disqualification date.
(8) A disqualification
may apply to any new worker leasing company created through the sale, transfer,
or conveyance of ownership or of the worker leasing company’s assets to another
person, owner, or controlling person.
(9) A person
may appeal the director’s refusal to approve and issue or renew a license,
or a disqualification, under this rule as provided in OAR 436-050-0008 and OAR 436-001.
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD
10-2003, f. 8-29-03, cert. ef. 9-15-03; WCD 12-2003, f. 12-4-03, cert. ef. 1-1-04;
WCD 5-2005, f. 5-26-05, cert. ef. 6-1-05; WCD 3-2007(Temp), f. 5-31-07, cert. ef.
6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07, cert. ef. 11-28-07; WCD 6-2012, f.
10-4-12, cert. ef. 1-1-13
436-050-0450
Recordkeeping
and Reporting Requirements
(1) Every licensed
worker leasing company must give notice to the director of one Oregon location where
Oregon leasing records are kept and made available for review by the director. The
notice must include the physical address, mailing address, telephone number, and
any other contact information in this state.
(2) Every
licensed worker leasing company must have at least one representative of the worker
leasing company at the Oregon location authorized to respond to inquiries and make
records available by the date specified in the director’s request or demand
for information regarding leasing arrangements and client contracts.
(3) The following
records must be kept and made available for review at the Oregon location:
(a) Copies
of signed worker leasing notices for the most recent three years;
(b) Copies
of signed notices of termination of leasing arrangements for the most recent three
years;
(c) Copies
of signed contracts between the worker leasing company and clients for the most
recent three years; and
(d) Payroll
records for the most recent seven years for all workers that identify leased workers
subject to coverage by the worker leasing company; leased workers not subject to
coverage by the worker leasing company; and, written records for all regular and
temporary employees of the worker leasing company.
(4) The worker
leasing company must notify the director within 30 days of the effective date of
a change in any items listed in OAR 436-050-0440(2).
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD
10-2003, f. 8-29-03, cert. ef. 9-15-03; WCD 3-2007(Temp), f. 5-31-07, cert. ef.
6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07, cert. ef. 11-28-07; WCD 6-2012, f.
10-4-12, cert. ef. 1-1-13
436-050-0455
Reporting
Requirements of a Self-Insured Worker-Leasing Company
(1) A self-insured
worker leasing company must maintain and report to the National Council on Compensation
Insurance separate statistical data for each client whose coverage is provided by
the self-insured employer. Reporting must be according to the uniform statistical
plan prescribed by the director according to ORS 737.225(4).
(2) Records
relating to the client statistical data for self-insured worker leasing companies
must be made available for review by the National Council on Compensation Insurance
upon request.
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD
7-2007, f. 11-1-07, cert. ef. 11-28-07; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0460
Suspension
or Revocation of License
(1) Reasons for
suspension or revocation of a worker leasing license include, but are not limited
to:
(a) Insolvency,
whether the worker leasing company’s liabilities exceed their assets or the
worker leasing company cannot meet its financial obligations;
(b) Judgments
against or convictions, within the last ten years, of any worker leasing company
or controlling person for the reasons identified in OAR 436-050-0440(2)(n);
(c) Administrative
actions involving worker leasing activities resulting from failure to comply with
the requirements of any state;
(d) Nonpayment
of taxes, fees, assessments, or any other monies due the State of Oregon;
(e) If the
worker leasing company or controlling person has failed to comply with any provisions
of ORS chapters 654, 656, 659, 659A, 731 or 737; or any provisions of these rules;
or
(f) If the
worker leasing company or controlling person is permanently or temporarily enjoined
by a court from engaging in or continuing any conduct or practice involving any
aspect of the worker leasing business.
(2) For the
purposes of this rule:
(a) “Suspension”
means a stopping by the director of the worker leasing company’s or controlling
person’s authority to provide leased workers to clients for a specified period
of time. A suspension may be in effect for a period of up to two years. When the
suspension expires, the worker leasing company or controlling person may petition
the director to resume its worker leasing company activities.
(b) “Revocation”
means a permanent stopping by the director of the worker leasing company’s
or controlling person’s authority to provide leased workers to clients. After
a revocation has been in effect for five years or longer, the worker leasing company
or controlling person may reapply for license.
(c) “Show-cause
hearing” means an informal meeting with the director in which the worker leasing
company will be provided an opportunity to be heard and present evidence regarding
any proposed actions by the director to suspend or revoke a worker leasing company’s
authority to provide leased workers to clients.
(3) The director
may revoke a license upon discovery of a misrepresentation in the information submitted
in the worker leasing application.
(4) Suspension
or revocation under this rule will not be made until the worker leasing company
has been given notice and the opportunity to be heard through a show-cause hearing
before the director and “show cause” why it should be permitted to continue
to be licensed as a worker leasing company.
(5) A show-cause
hearing may be held at any time the director finds that a worker leasing company
has failed to comply with its obligations under a leasing contract or that it failed
to comply with the rules or orders of the director.
(6) Appeal
of proposed and final orders of suspension or revocation issued under this rule
may be made as provided in OAR 436-050-0008 and 436-001.
(7) Notwithstanding
section (4) of this rule, the director may immediately suspend or refuse to renew
a license by issuing an “emergency suspension order” if the worker leasing
company fails to maintain workers’ compensation coverage; or if the director
finds there is a serious danger to public health or safety.
(8) A suspension
or revocation may apply to any new worker leasing company created through the sale,
transfer, or conveyance of ownership or of the worker leasing company’s assets
to another person.
Stat. Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD
10-2003, f. 8-29-03, cert. ef. 9-15-03; WCD 5-2005, f. 5-26-05, cert. ef. 6-1-05;
WCD 3-2007(Temp), f. 5-31-07, cert. ef. 6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07,
cert. ef. 11-28-07; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0470
Monitoring/Auditing
(1) The division
will monitor and conduct periodic audits of employers as necessary to ensure compliance
with the worker leasing company licensing and performance requirements.
(2) All pertinent
records of the worker leasing company required by these rules must be disclosed
upon request of the director.
(3) Under
ORS 656.726 and 656.758, the director may inspect the books, records and payrolls
of employers pertinent to the administration of these rules. Employers must provide
the director with all pertinent books, records and payrolls upon request.
(4) For the
purposes of this rule, both the worker leasing company and its clients will be considered
employers.
Stat Auth.: ORS
656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
2-1994, f. 4-1-94, cert. ef. 5-1-94; WCD 9-1996, f. 3-11-96, cert. ef. 4-1-96; WCD
5-2001, f. 6-22-01, cert. ef. 7-1-01; WCD 10-2003, f. 8-29-03, cert. ef. 9-15-03;
WCD 7-2007, f. 11-1-07, cert. ef. 11-28-07; WCD 6-2012, f. 10-4-12, cert. ef. 1-1-13
436-050-0480
Assessment
of Civil Penalties
(1) Failure to provide
timely notice to the director for proof of coverage and cancellation of workers’
compensation insurance policies under ORS 656.419 or OAR 436-162, or failure to
provide timely worker leasing notice to the director under ORS 656.850(5) and OAR
436-050-0410, may result in civil penalties under ORS 656.745.
(2) The director
may assess a civil penalty under ORS 656.745 against an employer who fails to respond
to requests for information or fails to meet the requirements of 436-050-0470. Assessment
of a penalty does not relieve the employer of the obligation to provide a response.
(3) An employer
failing to meet the requirements set forth in OAR 436-050-0410, 436-050-0450, and
436-050-0455, may be assessed a civil penalty under ORS 656.745.
(4) An employer
who is found to be operating a worker leasing company without having obtained a
license or after having failed to renew a license, or who continues to operate in
Oregon as a worker leasing company after a prior Oregon license expired, may be
assessed a civil penalty for each violation under ORS 656.745.
(5) For the
purposes of ORS 656.850(2), a violation is defined as any month or part of a month
for each client in which an employer provides leased workers to a client without
having first obtained a worker leasing license.
(6) An employer
obtaining workers by contract and for a fee from an unlicensed worker leasing company
on a non-temporary basis may be subject to penalties under ORS 656.745. Upon a subsequent
or continuing violation where written notice of such violation has been served,
penalties under ORS 656.745 will be assessed against the employer.
(7) Any person
or controlling person may also be subject to penalties under ORS 656.990.
Stat. Auth.:
ORS 656.704, 656.726(4), 656.850 & 656.855

Stats. Implemented:
ORS 656.850 & 656.855

Hist.: WCD
12-2003, f. 12-4-03, cert. ef. 1-1-04; WCD 5-2005, f. 5-26-05, cert. ef. 6-1-05;
WCD 3-2007(Temp), f. 5-31-07, cert. ef. 6-1-07 thru 11-27-07; WCD 7-2007, f. 11-1-07,
cert. ef. 11-28-07; WCD 4-2008, f. 9-17-08, cert. ef. 7-1-09; WCD 6-2012, f. 10-4-12,
cert. ef. 1-1-13

The official copy of an Oregon Administrative Rule is
contained in the Administrative Order filed at the Archives Division,
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published version are satisfied in favor of the Administrative Order.
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and Conditions of Use
Read Entire Law on arcweb.sos.state.or.us