(1) As used in this section, ‘policyholders’ position’ means the aggregate amount of mortgage insurance policies covering amounts of insured obligations, divided by the insurer’s surplus to policyholders as defined in ORS § 731.504 (6).

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(2) Except as provided in subsection (3) of this section, a mortgage insurer shall not have outstanding at any time a policyholders’ position greater than 25.

(3)(a) The Director of the Department of Consumer and Business Services may waive the requirement in subsection (2) of this section in response to the request of a mortgage insurer if the director finds that the mortgage insurer’s policyholders’ position is reasonable in relation to the mortgage insurer’s aggregate insured risk and adequate to the mortgage insurer’s financial needs.

(b) The request of the mortgage insurer must be made in writing at least 60 days prior to the date the mortgage insurer expects to exceed the policyholders’ position allowed by subsection (2) of this section, and shall at a minimum address the factors set forth in subsection (4) of this section that the director may use in making a decision on the waiver request.

(4) In determining whether a mortgage insurer’s requested policyholders’ position is reasonable in relation to the mortgage insurer’s aggregate insured risk and adequate to the mortgage insurer’s financial needs, the director may consider the following factors:

(a) The size of the mortgage insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria.

(b) The extent to which the mortgage insurer’s business is diversified across time, geography, credit quality, origination and distribution channels.

(c) The nature and extent of the mortgage insurer’s reinsurance program.

(d) The quality, diversification and liquidity of the mortgage insurer’s assets and investment portfolio.

(e) The historical and projected trends in the magnitude of the mortgage insurer’s policyholders’ position.

(f) The policyholders’ position maintained by other comparable mortgage insurers.

(g) The adequacy of the mortgage insurer’s reserves.

(h) The quality and liquidity of investments in affiliates of the mortgage insurer. The director may treat any such investment as a nonadmitted asset for purposes of determining the adequacy of the mortgage insurer’s policyholders’ position.

(i) The quality of the mortgage insurer’s earnings and the extent to which the reported earnings of the mortgage insurer include extraordinary items.

(j) An independent actuary’s opinion as to the reasonableness and adequacy of the mortgage insurer’s historical and projected policyholders’ position.

(k) The capital contributions that have been invested or are available for future investment in the mortgage insurer.

(L) The historical and projected trends in the components of the mortgage insurer’s aggregate insured risk including, but not limited to, the quality and type of the risks included in the aggregate insured risk.

(m) Any other factors the director believes are relevant in making a decision on the request.

(5) The director may retain accountants, actuaries or other experts to assist the director in the review of the mortgage insurer’s request submitted under subsection (3) of this section.

(6) Any waiver granted by the director under subsection (3) of this section is:

(a) In effect for a specified period of time, not to exceed two years. The mortgage insurer may request an extension of the waiver for a period not exceeding two additional years, and the director shall review the extension request based upon the factors set forth in subsection (4) of this section.

(b) Subject to any terms and conditions that the director considers necessary to restore the mortgage insurer’s policyholders’ position to 25 or lower as required by subsection (2) of this section.

(7) The director may adopt rules to carry out the provisions of this section.

(8) The director shall charge a fee for a waiver request under this section designed to reimburse the Department of Consumer and Business Services for all costs incurred by the department in reviewing the waiver request. [1969 c.692 § 5; 1977 c.600 § 1; 2010 c.46 § 1]