Oregon Insurance Division Bulletin INS 2008-2
DATE: February 5, 2008
TO: All Insurers Transacting Insurance in Oregon
RE: Application of HB 2007, Oregon's Domestic Partnership Legislation
Oregon Insurance Division Bulletin INS 2007-6 is withdrawn.
The purpose of this bulletin is to guide insurers in applying HB 2007 to
the transaction and regulation of insurance in Oregon, because the Insurance
Code as affected by that legislation imposes new responsibilities on insurers
and on the Department of Consumer and Business Services. HB 2007 (now ch.
99, Oregon Laws 2007) recognizes and authorizes domestic partnerships in Oregon.
This legislation was to take effect January 1, 2008. A subsequent legal challenge
stayed the application of this statute until it was heard and reviewed by
the Federal District Court. The court upheld the legislation. A domestic partnership
is defined in section 3, ch. 99, Oregon Laws 2007 to mean “a civil contract
entered into in person between two individuals of the same sex who are at
least 18 years of age, who are otherwise capable and at least one of whom
is a resident of Oregon.”
This bulletin explains how ch. 99, Oregon Laws 2007 affects the Insurance
Code and is not intended as either an independent statement of policy or as
an extension of the legislation. Examples
of application of the legislation to the Insurance Code are available
on the website of the Insurance Division (insurance.oregon.gov). These examples
are intended to answer practical and specific questions that have arisen and
will continue to arise as ch. 99, Oregon Laws 2007 is implemented.
Section 9, ch. 99, Oregon Laws 2007 states the general scope of legal rights
and responsibilities to which domestic partnerships are subject. In summary,
section 9 provides that a privilege, immunity, right or benefit granted to
an individual by a statute, administrative or court rule, policy, common law
or any other law because of the marital relationship is granted on equivalent
terms to an individual because the individual is or was in a domestic partnership
or because of a specific relation between the individual and another because
of the domestic partnership. In addition, Senate Bill 2 (ch. 100, Oregon Laws
2007) prohibits discrimination in providing employment benefits, public accommodations
and housing, as well as in other specific situations, based upon race, religion,
color, sex, national origin, sexual orientation or familial status.
The Director will apply the following principles to implement ch. 99, Oregon Laws 2007:
- Terms and provisions in the Insurance Code and in rules adopted under
the Code that refer to or indicate the marital relationship, its dissolution
and dependents in a marital relationship will apply in the same manner to
domestic partnerships, to their dissolution and to dependents in the partnership.
These references appear in the Code and rules with respect to a class or
line of insurance in some cases and in other cases in connection with the
regulation of insurance generally, such as in connection with credit scoring.
- When provisions in the Insurance Code or related rules described in the
preceding paragraph specifically apply to terms of a policy form, the Code
provisions must be applied generally to other provisions in the policy form
as well. The same is true with respect to a privilege, immunity, right or
benefit under provisions of the Code or rules that apply to an individual
by virtue of the marital relationship.
- Chapter 99, Oregon Laws 2007 applies to forms filed for approval on or
after February 4, 2008, but the Department does not consider ch. 99, Oregon
Laws 2007 to apply to a group life or health policy issued or renewed before
April 1, 2008, when the policy form was filed and approved for use prior
to February 4, 2008.
- An insurer must rate the members of a domestic partnership according to
the same standards that the insurer uses to rate a husband and wife. If
the insurer uses a “married” rate for a husband and wife, the
insurer may not apply the “named insured” classification to
each member of a domestic partnership. The insurer may use appropriate rating
methods that reflect the composition of a domestic partnership, in the same
way that the insurer uses rating methods to reflect the composition of a
marriage. For example, if a married rate is determined by using or otherwise
taking into account the age and sex of each member of the married couple,
the insurer may apply a comparable rate that takes into account the fact
that the members of a domestic partnership are both men or both women.
- Ch. 99, Oregon Laws 2007 does not alter federal law, which confers marriage
rights and privileges only to opposite-sex married couples. (See 1 U.S.C.A.
sec. 7, defining marriage, under Federal Defense of Marriage Act, as a “legal
union between one man and one woman.”)
- Ch. 99, Oregon Laws 2007 does not affect stop-loss policies for self-insured
group health plans.
- An insurer may issue a policy to an employer only if the employer’s
health plan is compliant with ch. 99, Oregon Laws 2007.
- For the purpose of policy coverage, discounts and other matters provided
in connection with marriage, an insurer must require and apply the same
level of proof for existence of a domestic partnership that the insurer
requires and applies for existence of a marriage.
- Ch. 99, Oregon Laws 2007 does not prevent insurers from using actuarial
data relating to gender, for both underwriting and rating decisions. If
loss results experience is different for same sex couples, underwriting
rules and rates may therefore reflect the differences without conflict with
ch. 99, Oregon Laws 2007 , whether the data relate to a marriage, a male-male
partnership or a female-female partnership.
- Regarding commercially insured ERISA plans, the Insurance Division will
carry out its authority under the Insurance Code without distinction between
commercial insurance plans sold to employers subject to ERISA and commercial
insurance plans sold to employers not subject to ERISA. The savings provision
in ERISA for state regulation of insurance authorizes the Director to apply
provisions of the Insurance Code affected by ch. 99, Oregon Laws 2007 to
all group health insurance policies, regardless of whether the policyholder
is otherwise an ERISA employer. Consequently:
- Commercially insured employee benefit plans that are currently subject
to state regulation remain subject to the Insurance Code; and
- The exception in section 9(7), ch. 99, Oregon Laws 2007 applies to
- Regarding credit scoring, Insurance Code provisions prohibiting an insurer
from rerating an existing policy or rerating a customer based on a customer’s
credit history when the marital status of the customer changes due to death
or divorce applies with the same force to a customer who belongs to a domestic
partnership that ends because of death or dissolution. Concern has been
expressed that this application of ch. 99, Oregon Laws 2007 will conflict
with federal law such as the Fair Credit Reporting Act and will otherwise
cause inconvenience and confusion for consumers. In response, there should
be no conflict because ch. 99, Oregon Laws 2007 applies only to matters
of Oregon law. To the extent that a federal law applies in credit scoring
or any other matter, then that federal law would apply. For example, if
the federal Fair Credit Reporting Act (FCRA) governs the use of credit information
with respect to a divorced husband and wife, then ch. 99, Oregon Laws 2007
could not require application of the FCRA provision to members of a domestic
partnership that has been dissolved. Of course, if Oregon law independently
applies in the circumstance, the fact that federal law applies as well would
not prevent application of the state law.
This bulletin is intended as a general statement of principles for enforcing and applying the Insurance Code in light of ch. 99, Oregon Laws 2007,
and is not meant to answer all questions that may arise because of that legislation. Consequently, specific questions should be directed toward
the Insurance Division for resolution.
This bulletin is dated February 5, 2008, at Salem, Oregon.
Scott J. Kipper