Skip to main content

Oregon State Flag An official website of the State of Oregon »

Public entities self-insurance programs (property damage)

ORS 731.036(5) instructions 

Person/Entity: Public bodies as defined in ORS 30.260

Activity: Individually or jointly establishes a self-insurance program for property damage in accordance with ORS 30.282

Before the public entity establishes a self-insurance program that is exempt from the insurance code, it must demonstrate to the Insurance Division that the program meets the requirements for exemption. 

The Insurance Division asks that the public entity provide a cover letter, along with relevant supporting documentation, that addresses each of the requirements listed in order for the self-insurance program to qualify for exemption. 

Requirements for exemption

[Program established by three or more public bodies (ORS 30.282(6))]: 

  1. Annual contributions to the program must total, in the aggregate, at least $1 million. See OAR 836-011-0253 or definition of "annual contributions." Provide an actuarial study or program projections to support this requirement. 
  2. The program must provide documentation that defines program benefits and administration. Send a copy of the agreement between the parties that sets forth the benefits and administration of the program. 
  3. Program contributions and reserves must be held in separate accounts and used for the exclusive benefit of the program. Describe the fund that will be established to account for program contributions and costs. An annual independent audit of the fund will be required. See OAR 836-011-0253(2), 836-011-0260.
  4. The program must maintain adequate reserves, calculated annually on an actuarial basis. See OAR 836-011-0255 related to reserve adequacy. The cover letter should describe the actuarial services that will be employed by the program to meet this requirement. On an annual basis, to support the independently audited financial statement, the Insurance Division requests the actuarial report be filed with the audited financial statement.
  5. The program must maintain an unallocated reserve ("surplus") account equal to the greater of: 
    • 25 percent of annual contributions, or 
    • $250,000
      See OAR 836-011-0258 for provisions related to the unallocated reserve account. The cover letter should indicate the understanding of this requirement and confirmation that the program will maintain such reserves at all times.
  6. Annual audited financial statement. See OAR 836-011-0253 for definition of "annual financial statement" and 836-011-0260 for specification of due date.
  7. Maintain adequate excess of loss insurance.  Provide a copy of the excess loss policy that the program plans to purchase.
  8. The program, a third-party administrator, or an owner of a third-party administrator may not collect commissions or fees from an insurer. The cover letter should indicate the program will comply with requirement.
  9. Provide the federal employer identification number.