Oregon Assumed Business Name and Producer Compensation
Assumed business name, records and producer compensation
Two producer obligations sit alongside the licensing and renewal rules covered earlier in this course: the name a producer may transact business under, and how a producer may be paid for selling life insurance in Oregon.
Assumed business name (ORS 744.068)
An Oregon producer may transact business under a name other than their own legal name, but the Director of the Department of Consumer and Business Services has to know about it first.
A producer must notify the Director before:
- Transacting business under the insurance producer license under any name other than the producer’s legal name, and
- Changing, deleting or adding an assumed business name in connection with business under the license
Note the timing, because it differs from the other notifications in the same statute. The assumed business name notice is a before obligation. The routine change notices are after obligations, given not later than the 30th day after the change:
- A change of address or telephone number of the principal place of business, or of any location where the producer transacts business in Oregon
- The opening or closing of a location where the producer transacts business in Oregon
- A change of residence, for resident producers only
Where a producer is a business entity, the entity must also notify the Director not later than the 30th day after an individual producer’s authority to act for the entity has begun or ended.
Producer records (ORS 744.068)
The same statute carries the records requirement.
- A resident producer keeps the usual and customary records of the business at the producer’s principal place of business, available and open to the Director’s inspection during business hours
- Records of insurance transacted under the license are kept for three years following expiration of the policy, unless the Director designates another period
- A nonresident producer keeps records the same way. If a nonresident producer has a place of transacting insurance in Oregon, that place is treated as the principal place of business for this purpose
Because a life policy can stay in force for decades, the three years run from the policy’s expiration, not from the date it was sold.
Commissions and fees (ORS 744.076, ORS 744.077, ORS 744.091)
Start from the default. A producer who is not licensed as an insurance consultant may receive only commission, except as otherwise provided by rule (ORS 744.077). For a person licensed as both a producer and an insurance consultant, the Director sets by rule the conditions under which that person may accept a commission, a fee, or both.
Oregon also draws a hard line around who may be paid at all (ORS 744.076):
- An insurer or producer may not pay a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in Oregon if that person is required to be licensed as a producer and is not
- A person may not accept such a payment in the same circumstances
- Renewal and other deferred commissions may still be paid to a person who was required to be licensed at the time of the sale and was then licensed. A producer who later lets a license lapse keeps trailing commissions on business written while licensed
- Commissions may be paid or assigned to an insurance agency, or to persons who do not sell, solicit or negotiate insurance, unless the payment would amount to a prohibited rebate (ORS 746.045)
When a fee may be charged in addition to a commission
Under ORS 744.091(1), an insurer or producer may charge a commission, a service fee, or a combination of the two when transacting insurance outside three categories:
- Insurance that covers an individual’s person, property or liability
- Life or health insurance for groups of fewer than 51 lives
- Insurance on a commercial or public entity paying combined annual premiums of less than $100,000
This is a permission, not a ban. Inside the three categories the ordinary rule applies, and for life insurance that rule is commission only (ORS 744.077), because the Director’s service fee rules do not apply to life insurance. For a life producer, that covers most everyday business: an individual life policy covers an individual’s person, and group life for fewer than 51 lives is named in the second category. Where a commission or service fee other than the one filed with the state is charged, the producer must have a written agreement with the prospective insured before the policy is bound or issued (ORS 744.091(2)).
Lesson summary
- A producer must notify the Director before transacting under any name other than their legal name, and before adding, changing or deleting an assumed business name (ORS 744.068(1)).
- Changes of address or telephone number, the opening or closing of a business location, and a resident producer’s change of residence are reported within 30 days after the change.
- A resident producer keeps records at the principal place of business, open to the Director’s inspection, for three years following expiration of the policy.
- A producer who is not also licensed as an insurance consultant may receive only commission (ORS 744.077).
- Commissions may not be paid to, or accepted by, an unlicensed person who was required to be licensed. Renewal and deferred commissions survive a later lapse if the producer was licensed at the time of the sale (ORS 744.076).
- A commission, a service fee or both may be charged on insurance outside three categories: an individual’s coverage, life or health groups of fewer than 51 lives, and a commercial or public entity paying under $100,000 a year (ORS 744.091). Inside those categories, a life producer is paid by commission only (ORS 744.077). A commission or fee other than the filed one needs a written agreement before binding.