Bill Text: OR SB814 | 2013 | Regular Session | Enrolled
Bill Title: Relating to insurance for environmental claims; and declaring an emergency.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2013-06-13 - Effective date, June 10, 2013. [SB814 Detail]
Download: Oregon-2013-SB814-Enrolled.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
Enrolled
Senate Bill 814
Sponsored by Senators SHIELDS, JOHNSON
CHAPTER ................
AN ACT
Relating to insurance for environmental claims; creating new
provisions; amending ORS 465.479 and 465.480; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2013 Act is added to and made
a part of ORS 465.475 to 465.480. + }
SECTION 2. { + (1) A general liability insurance policy that
contains a provision that requires the consent of an insurance
company before the rights under an insurance policy may be
assigned may not prohibit the assignment without consent of an
environmental claim for payment under the policy for losses or
damages that commenced prior to the assignment. The assignment
and any release or covenant given for the assignment may not
extinguish the cause of action against the insurer unless the
assignment specifically so provides.
(2) The provisions of this section apply without limitation to
voluntary assignments, assignments made in settlement of an
environmental claim against a policyholder, assignments made as a
matter of law and assignments made in the course of a corporate
insured reorganization, merger, acquisition or liquidation. + }
SECTION 3. ORS 465.479 is amended to read:
465.479. (1) If, after a diligent investigation by an insured
of the insured's own records, including computer records and the
records of past and present agents of the insured, the insured is
unable to reconstruct a lost policy, the insured may provide a
notice of a lost policy to an insurer.
(2) An insurer must investigate thoroughly and promptly a
notice of a lost policy. An insurer fails to investigate
thoroughly and promptly if the insurer fails to provide all facts
known or discovered during an investigation concerning the
issuance and terms of a policy, including copies of documents
establishing the issuance and terms of a policy, to the insured
claiming coverage under a lost policy.
(3) An insurer and an insured must comply with the following
minimum standards for facilitating reconstruction of a lost
policy and determining the terms of a lost policy as provided in
this section:
(a) Within 30 business days after receipt by the insurer of
notice of a lost policy, the insurer shall commence an
investigation into the insurer's records, including computer
records, to determine whether the insurer issued the lost policy.
If the insurer determines that it issued the policy, the insurer
Enrolled Senate Bill 814 (SB 814-INTRO) Page 1
shall commence an investigation into the terms and conditions
relevant to any environmental claim made under the policy.
(b) The insurer and the insured shall cooperate with each other
in determining the terms of a lost policy. The insurer and the
insured:
(A) Shall provide to each other the facts known or discovered
during an investigation, including the identity of any witnesses
with knowledge of facts related to the issuance or existence of a
lost policy.
(B) Shall provide each other with copies of documents
establishing facts related to the lost policy.
(C) Are not required to produce material subject to a legal
privilege or confidential claims documents provided to the
insurer by another policyholder.
(c) If the insurer or the insured discovers information tending
to show the existence of an insurance policy applicable to the
claim, the insurer or the insured shall provide an accurate copy
of the terms of the policy or a reconstruction of the policy,
upon the request of the insurer or the insured.
(d) If the insurer is not able to locate portions of the policy
or determine its terms, conditions or exclusions, the insurer
shall provide copies of all insurance policy forms issued by the
insurer during the applicable policy period that are potentially
applicable to the environmental claim. The insurer shall state
which of the potentially applicable forms, if any, is most likely
to have been issued by the insurer, or the insurer shall state
why it is unable to identify the forms after a good faith search.
(4) Following the minimum standards established in this section
does not create a presumption of coverage for an environmental
claim once the lost policy has been reconstructed.
(5) Following the minimum standards established in this section
does not constitute:
(a) An admission by an insurer that a policy was issued or
effective; or
(b) An affirmation that if the policy was issued, it was
necessarily in the form produced, unless so stated by the
insurer.
(6) If, based on the information discovered in an investigation
of a lost policy, the insured can show by a preponderance of the
evidence that a general liability insurance policy was issued to
the insured by the insurer, then if:
(a) The insured cannot produce evidence that tends to show the
policy limits applicable to the policy, it shall be assumed that
the minimum limits of coverage, including any exclusions to
coverage, offered by the insurer during the period in question
were purchased by the insured.
(b) The insured can produce evidence that tends to show the
policy limits applicable to the policy, then the insurer has the
burden of proof to show that a different policy limit, including
any exclusions to coverage, should apply.
(7) An insurer may claim an affirmative defense to a claim that
the insurer failed to follow the minimum standards established
under this section if the insured fails to cooperate with the
insurer in the reconstruction of a lost policy under this
section.
(8) The Director of the Department of Consumer and Business
Services shall enforce this section and any rules adopted by the
director to implement this section.
(9) Violation by an insurer of any provision of this section or
any rule adopted under this section is an { + :
Enrolled Senate Bill 814 (SB 814-INTRO) Page 2
(a) Unfair environmental claims settlement practice under
section 6 of this 2013 Act; and
(b) + } Unfair claim settlement practice under ORS 746.230.
(10) As used in this section, 'notice of a lost policy ' means
written notice of the lost policy in sufficient detail to
identify the person or entity claiming coverage, including
information concerning the name of the alleged policyholder, if
known, and material facts concerning the lost policy known to the
alleged policyholder.
SECTION 4. ORS 465.480 is amended to read:
465.480. (1) As used in this section:
{ + (a) 'Long-tail environmental claim' means an
environmental claim covered by multiple general liability
insurance policies. + }
{ - (a) - } { + (b) + } 'Suit' or 'lawsuit' includes but is
not limited to formal judicial proceedings, administrative
proceedings and actions taken under Oregon or federal law,
including actions taken under administrative oversight of the
Department of Environmental Quality or the United States
Environmental Protection Agency pursuant to written voluntary
agreements, consent decrees and consent orders.
{ - (b) - } { + (c) + } 'Uninsured' means an insured who,
for any period of time after January 1, 1971, that is included in
an environmental claim, failed to purchase and maintain an
occurrence-based general liability insurance policy that would
have provided coverage for the environmental claim, provided that
such insurance was commercially available at such time. A general
liability insurance policy is 'commercially available' if the
policy can be purchased under the Insurance Code on reasonable
commercial terms.
(2) Except as provided in subsection { - (7) - }
{ + (8) + } of this section, in any action between an insured
and an insurer to determine the existence of coverage for the
costs of investigating and remediating environmental
contamination, whether in response to governmental demand or
pursuant to a written voluntary agreement, consent decree or
consent order, including the existence of coverage for the costs
of defending a suit against the insured for such costs, the
following rules of construction shall apply in the interpretation
of general liability insurance policies involving environmental
claims:
(a) Oregon law shall be applied in all cases where the
contaminated property to which the action relates is located
within the State of Oregon. Nothing in this section shall be
interpreted to modify common law rules governing choice of law
determinations for sites located outside the State of Oregon.
(b) Any action or agreement by the Department of Environmental
Quality or the United States Environmental Protection Agency
against or with an insured in which the Department of
Environmental Quality or the United States Environmental
Protection Agency in writing directs, requests or agrees that an
insured take action with respect to contamination within the
State of Oregon is equivalent to a suit or lawsuit as those terms
are used in any general liability insurance policy.
(c) Insurance coverage for any reasonable and necessary fees,
costs and expenses, including remedial investigations,
feasibility study costs and expenses, incurred by the insured
pursuant to a written voluntary agreement, consent decree or
consent order between the insured and either the Department of
Environmental Quality or the United States Environmental
Enrolled Senate Bill 814 (SB 814-INTRO) Page 3
Protection Agency, when incurred as a result of a written
direction, request or agreement by the Department of
Environmental Quality or the United States Environmental
Protection Agency to take action with respect to contamination
within the State of Oregon, shall not be denied the insured on
the ground that such expenses constitute voluntary payments by
the insured.
{ + (d) A general liability insurance policy that provides
that any loss covered under the policy must be reduced by any
amounts due to the insured on account of such loss under prior
insurance may not be construed to reduce the policy limits
available to an insured that has filed a long-tail environmental
claim, or to reduce those policies from which an insurer that has
paid an environmental claim may seek contribution. Such
provisions may be a factor considered in the allocation of
contribution claims between insurers under subsection (4) of this
section.
(e) The release of a hazardous substance into the waters of
this state, as defined in ORS 196.800, or onto real property
owned by a party other than the insured constitutes damage,
destruction or injury to property. Any remedial action costs, as
defined in ORS 465.200, that an insured incurs as a result of any
action taken to cut off a pathway by which a hazardous substance
threatens to, or has, migrated, leached or otherwise been
released into the waters of this state, as defined in ORS
196.800, or onto real property owned by a party other than the
insured are remedial action costs that the insured is legally
obligated to pay as damages because of the damage, destruction or
injury to such property even though such action also involves the
property of the insured. + }
(3)(a) An insurer with a duty to pay defense or indemnity
costs, or both, to an insured for an environmental claim under a
general liability insurance policy that provides that the insurer
has a duty to pay all sums arising out of a risk covered by the
policy, must pay all defense or indemnity costs, or both,
proximately arising out of the risk pursuant to the applicable
terms of its policy, including its limit of liability,
independent and unaffected by other insurance that may provide
coverage for the same claim.
(b) If an insured who makes an environmental claim under
{ + one or more + } general liability insurance policies that
provide that an insurer has a duty to pay all sums arising out of
a risk covered by the { - policy - } { + policies + } has
more than one such general liability insurance policy
{ - insurer - } { + that is triggered with one or more
insurers + }, the insured shall provide notice of the claim to
all such insurers for whom the insured has current addresses. If
the insured's claim is not fully satisfied and the insured files
suit on the claim against { - only one such insurer, - } { +
less than all the insurers, the insured may choose which of the
general liability insurance policies respond to the loss if not
all are required to satisfy the insured's claim. The insured or
the insurers have a right to contribution as specified in
subsection (4) of this section from all other insurers whose
policies are triggered, and an insurer that has an obligation to
pay may not fail to make payment to the insured on the grounds
that another insurer has not made payment, unless the insurer has
no obligation to respond to a claim until the limits of the
underlying policy have been paid. + } The insured must choose
that insurer based on the following factors:
Enrolled Senate Bill 814 (SB 814-INTRO) Page 4
(A) The total period of time that an insurer issued a general
liability insurance policy to the insured applicable to the
environmental claim;
(B) The policy limits, including any exclusions to coverage, of
each of the general liability insurance policies that provide
coverage or payment for the environmental claim; or
(C) The policy that provides the most appropriate type of
coverage for the type of environmental claim for which the
insured is liable or potentially liable.
(c) If requested by an insurer chosen by an insured under
paragraph (b) of this subsection, the insured shall provide
information regarding other general liability insurance policies
held by the insured that would potentially provide coverage for
the same environmental claim.
(d) An insurer chosen by an insured under paragraph (b) of this
subsection may not be required to pay defense or indemnity costs
in excess of the applicable policy limits, if any, on such
defense or indemnity costs, including any exclusions to coverage.
(4) { + (a) + } An insurer that has paid { + all or part
of + } an environmental claim may seek contribution from any
other insurer that is liable or potentially liable { + to the
insured and that has not entered into a good-faith settlement
agreement with the insured regarding the environmental claim + }.
{ + (b) There is a rebuttable presumption that all binding
settlement agreements entered into between an insured and an
insurer are good-faith settlements. A settlement agreement
between an insured and insurer that has been approved by a court
of competent jurisdiction after 30 days' notice to other insurers
is a good-faith settlement agreement with respect to all such
insurers to whom such notice was provided.
(c) For purposes of ascertaining whether a right of
contribution exists between insurers, an insurer that seeks to
avoid or minimize payment of contribution may not assert a
defense that the insurer is not liable or potentially liable
because another insurer has fully satisfied the environmental
claim of the insured and damages or coverage obligations are no
longer owed to the insured.
(d) Contribution rights by and among insurers under this
section preempt all common law contribution rights, if any, by
and between insurers for environmental claims.
(5) + } If a court determines that the apportionment of
recoverable costs between insurers is appropriate, the court
shall allocate the covered damages between the insurers before
the court, based on the following factors:
(a) The total period of time that each solvent insurer issued a
general liability insurance policy to the insured applicable to
the environmental claim;
(b) The policy limits, including any exclusions to coverage, of
each of the general liability insurance policies that provide
coverage or payment for the environmental claim for which the
insured is liable or potentially liable;
(c) The policy that provides the most appropriate type of
coverage for the type of environmental claim; { - and - }
{ + (d) The terms of the policies that related to the
equitable allocation between insurers; and + }
{ - (d) - } { + (e) + } If the insured is an uninsured for
any part of the time period included in the environmental claim,
the insured shall be considered an insurer for purposes of
allocation.
Enrolled Senate Bill 814 (SB 814-INTRO) Page 5
{ - (5) - } { + (6) + } If an insured is an uninsured for
any part of the time period included in the environmental claim,
an insurer who otherwise has an obligation to pay defense costs
may deny that portion of defense costs that would be allocated to
the insured under subsection { - (4) - } { + (5) + } of this
section.
{ - (6)(a) - } { + (7)(a) + } There is a rebuttable
presumption that the costs of preliminary assessments, remedial
investigations, risk assessments or other necessary
investigation, as those terms are defined by rule by the
Department of Environmental Quality, are defense costs payable by
the insurer, subject to the provisions of the applicable general
liability insurance policy or policies.
(b) There is a rebuttable presumption that payment of the costs
of removal actions or feasibility studies, as those terms are
defined by rule by the Department of Environmental Quality, are
indemnity costs and reduce the insurer's applicable limit of
liability on the insurer's indemnity obligations, subject to the
provisions of the applicable general liability insurance policy
or policies.
{ - (7) - } { + (8) + } The rules of construction set forth
in this section { + and sections 2 and 7 of this 2013 Act + }
do not apply if the application of the rule results in an
interpretation contrary to the intent of the parties to the
general liability insurance policy.
SECTION 5. { + Sections 6 and 7 of this 2013 Act are added to
and made a part of ORS 465.475 to 465.480. + }
SECTION 6. { + (1) An insurer or any other person may not
commit any of the following unfair environmental claims
settlement practices:
(a) Failure to commence investigation of an environmental claim
within 15 working days after receipt of a notice of an
environmental claim or failure to diligently respond to tenders
of environmental claims, provided that an excess insurer may rely
on the investigation of a primary insurer.
(b) Failure to make timely payments for costs reasonably
incurred in the defense of environmental claims or for reasonable
costs for which indemnity is owed.
(c) Denial of a claim for any improper purpose, such as to
harass or to cause unnecessary delay or to needlessly increase
the cost of litigation.
(d) Require that the insured provide answers to repetitive
questions and requests for information concerning matters or
issues unnecessary for resolution of the environmental claim of
the insured, provided that an insurer may reserve its rights as
to information that is not available at the time of the
correspondence.
(e) Failure to pay interest as specified in ORS 82.010:
(A) On payments that an insured has made and that the insurer
is legally obligated to pay as costs of defense or indemnity,
provided that interest begins to accrue only on the 31st day
after the claim for payment or reimbursement is presented or
payment is made by the insured, whichever is later; or
(B) On overdue payments that an insurer agreed to make pursuant
to an agreed settlement with an insured, provided that interest
begins to accrue on the 31st day after the date of the settlement
or on the date by which the insurer agreed to make the payment,
whichever is later.
(f) Violation by insurers as described in ORS 465.479 (9)(a).
Enrolled Senate Bill 814 (SB 814-INTRO) Page 6
(2)(a) In addition to the unfair environmental claims
settlement practices specified in subsection (1) of this section,
it is an unfair environmental claims settlement practice for an
insurer to fail to participate in good faith in a nonbinding
environmental claim mediation described under this subsection
that is requested by an insured concerning the existence, terms
or conditions of a lost policy or regarding coverage for an
environmental claim.
(b) The insured may request in writing that the insurer
participate in a nonbinding environmental claim mediation.
(c) Upon request from an insured to participate in a nonbinding
environmental claim mediation, an insurer shall provide an
insured with information concerning a nonbinding environmental
claim mediation program. The information must include, but need
not be limited to, a description of how an insured can
efficiently commence the mediation with the insurer.
(d) The purposes of the nonbinding environmental claim
mediation include, but are not be limited to, the following:
(A) To assist the parties in resolving disputes concerning
whether or not a general liability insurance policy applicable to
the environmental claim was issued to the insured by the insurer
and concerning the relevant terms, conditions and exclusions;
(B) To determine whether the entire claim, or a portion
thereof, can be settled by agreement of the parties;
(C) To determine, if the claim cannot be settled, whether one
or more issues can be resolved to the satisfaction of the
parties; and
(D) To discuss any other methods of streamlining or reducing
the cost of litigation.
(e) The Attorney General shall:
(A) Appoint a mediation service provider to operate a mediation
program related to environmental claims;
(B) Prescribe by rule requirements related to qualification,
training and experience for mediators who participate in the
mediation program; and
(C) Establish by rule a schedule of fees related to the
mediation program.
(f) Unless otherwise agreed, information provided and
statements made by either party in a mediation shall be kept
confidential by the parties and used only for purposes of the
mediation in accordance with ORS 36.220.
(g) The insured and the insurer shall have representatives
present, or available by telephone, with authority to settle the
matter at all mediation sessions.
(3) The unfair environmental claims settlement practices
specified in this section are in addition to any provisions
relating to unfair claim settlement practices under ORS 746.230.
(4)(a) Any insured aggrieved by one or more unfair
environmental claims settlement practices specified in this
section may apply to the circuit court for the county in which
the insured resides, or any other court of competent
jurisdiction, to recover the actual damages sustained, together
with the costs of the action, including reasonable attorney fees
and litigation costs.
(b) Twenty days prior to filing an action based on this
section, the insured must provide written notice of the basis for
the cause of action to the insurer and office of the Director of
the Department of Consumer and Business Services. Notice and
proof of notice must be provided by regular mail, registered mail
or certified mail with return receipt requested. The insurer and
Enrolled Senate Bill 814 (SB 814-INTRO) Page 7
director are deemed to have received notice three business days
after the notice is mailed.
(c) If the insurer fails to resolve the basis for the action
within the 20-day period after the written notice by the insured,
the insured may bring the action without any further notice.
(d) If a written notice of claim is served under paragraph (b)
of this subsection within the time prescribed for the filing of
an action under this subsection, the statute of limitations for
the action is tolled during the period of time required to comply
with paragraph (b) of this subsection.
(e) In any action brought pursuant to this subsection, the
court may, after finding that an insurer has acted unreasonably,
increase the total award of damages to an amount not to exceed
three times the actual damages.
(f) An action under this subsection must be brought within two
years from the date the alleged violation is, or should have
been, discovered.
(5) The provisions of this section do not limit the ability of
a court to provide for any other remedy that is available at
law. + }
SECTION 7. { + (1) If the provisions of a general liability
insurance policy impose a duty to defend upon an insurer, and the
insurer has undertaken the defense of an environmental claim on
behalf of an insured under a reservation of rights, or if the
insured has potential liability for the environmental claim in
excess of the limits of the general liability insurance policy,
the insurer shall provide independent counsel to defend the
insured who shall represent only the insured and not the insurer.
(2)(a)(A) Independent counsel retained by the insurer to defend
the insured under the provisions of this section must be
experienced in handling the type and complexity of the
environmental claim at issue.
(B) If independent counsel who meet the requirements specified
in this paragraph are not available within the insured's
community, then independent counsel from outside the insured's
community who meet the requirements of this paragraph must be
considered.
(b)(A) An insurer may retain environmental consultants to
assist an independent counsel described in subsection (1) of this
section. Any environmental consultants retained by the insurer
must be experienced in responding to the type and complexity of
the environmental claim at issue.
(B) If environmental consultants who meet the requirements
specified in this paragraph are not available within the
insured's community, then environmental consultants from outside
the insured's community who meet the requirements of this
paragraph must be considered.
(c) As used in this subsection, 'experienced' means an
established environmental practice that includes substantial
defense experience in the type and complexity of environmental
claim at issue.
(3)(a) The obligation of the insurer to pay fees to independent
counsel and environmental consultants is based on the regular and
customary rates for the type and complexity of environmental
claim at issue in the community where the underlying claim arose
or is being defended.
(b) In the event of a dispute concerning the selection of
independent counsel or environmental consultants, or the fees of
the independent counsel or an environmental consultant, either
party may request that the other party participate in nonbinding
Enrolled Senate Bill 814 (SB 814-INTRO) Page 8
environmental claim mediation described in section 6 (2) of this
2013 Act.
(4) The provisions of this section do not relieve the insured
of its duty to cooperate with the insurer under the terms of the
insurance contract. + }
SECTION 8. { + (1) Except as provided in subsections (2) and
(3) of this section, sections 2, 6 and 7 of this 2013 Act and the
amendments to ORS 465.479 and 465.480 by sections 3 and 4 of this
2013 Act apply to all environmental claims, whether arising
before, on or after the effective date of this 2013 Act.
(2) Sections 2, 6 and 7 of this 2013 Act and the amendments to
ORS 465.479 and 465.480 by sections 3 and 4 of this 2013 Act do
not apply to any environmental claim for which a final judgment,
after exhaustion of all appeals, was entered before the effective
date of this 2013 Act.
(3) Nothing in sections 2, 6 and 7 of this 2013 Act or the
amendments to ORS 465.479 and 465.480 by sections 3 and 4 of this
2013 Act may be construed to require the retrying of any finding
of fact made by a jury in a trial of an action based on an
environmental claim that was conducted before the effective date
of this 2013 Act. + }
SECTION 9. { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
----------
Passed by Senate April 10, 2013
.............................................................
Robert Taylor, Secretary of Senate
.............................................................
Peter Courtney, President of Senate
Passed by House May 30, 2013
.............................................................
Tina Kotek, Speaker of House
Enrolled Senate Bill 814 (SB 814-INTRO) Page 9
Received by Governor:
......M.,............., 2013
Approved:
......M.,............., 2013
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2013
.............................................................
Kate Brown, Secretary of State
Enrolled Senate Bill 814 (SB 814-INTRO) Page 10
