Oregon Statutes 733.578 – Conditions necessary for investments used to provide compensating balances
Investments of an insurer of the kind described in ORS § 733.650 (4) that are made for the purpose of providing compensating balances for other persons will not be prohibited by ORS § 733.575 or 733.780 while the following conditions are met:
Terms Used In Oregon Statutes 733.578
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Lien: A claim against real or personal property in satisfaction of a debt.
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
(1) The investment is made in the name of and remains the sole property of the insurer;
(2) The investment is not subject to appropriation in any manner by any person, including the person for whom the compensating balance is being provided, the institution in which the deposit is made and other creditors of such persons;
(3) The insurer holds an irrevocable written waiver from the depositary institution, in a form satisfactory to the Director of the Department of Consumer and Business Services, waiving all right, title and interest in or to any setoff, banker’s or similar lien or other security interest in such investment or any funds represented thereby;
(4) The investment is unrestricted as to right of withdrawal except for such restrictions as may be usual and customary for such investments under ORS § 733.650 (4) when no compensating balance is involved; and
(5) The insurer is receiving a reasonable fee, taking into consideration its return on other funds, for providing the compensating balance involved. [1975 c.232 § 3]