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DEPARTMENT OF TRANSPORTATION,
MOTOR CARRIER TRANSPORTATION DIVISION

 

DIVISION 40

INSURANCE AND BONDS

740-040-0010

Insurance

(1) Insurance required in compliance with ORS 825.160 or 825.166 must provide for payment of any final judgment recovered against the carrier for bodily injury to or the death of any person or for damage to property resulting from negligence in the operation, maintenance, ownership or use of the vehicle involved, except injury to or death of the name insured's employees while engaged in the course of their employment, and loss of or damage to property owned or operated by or in the care, custody or control of the name insured, and property transported by the named insured, designated as cargo, and to any obligation for which the named insured may be held liable under any workers' compensation law.

(2) The liability of the insurer as to each vehicle must be a continuing one notwithstanding any recovery under the policy.

(3) Prior to operating, carriers or persons engaged solely in intrastate commerce shall file an insurance policy of public liability and property damage or a signed certificate of insurance signed by the carrier's insurer with the Department. Such policy of insurance or certificate of insurance signed by the carrier’s insurer shall be effective and retained on file for the duration of the time operating.

(4) Carriers formerly engaged in interstate commerce that change operations and engage solely in intrastate commerce shall cause to be filed within 30 days of the date the Department is notified of such change, an insurance policy of public liability and property damage or a signed certificate of insurance signed by the carrier's insurer with the Department. Such policy of insurance or certificate of insurance signed by the carrier's insurer shall show that the carrier's insurance was effective at the time of the change in operations and remained effective for the duration of the time operated. Failure to file within 30 days of notification from the Department is cause for revocation or suspension of the carrier’s certificate or permit.

(5) If for any reason the evidence of insurance becomes insufficient, the certificate or permit of the concerned carrier shall immediately, and by operation hereof, be suspended.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 823.011 & 825.164
Stats. Implemented: ORS 825.160 & 825.166
Hist.: PUC 18, f. 1-21-55, ef. 9-1-54 (Order No. 33203); PUC 120, f. 10-26-62, ef. 11-15-62 (Order No. 38811); PUC 135, f. 5-9-66, ef. 5-15-66 (Order No. 42332); PUC 148, f. 7-29-68, ef. 9-1-68 (Order No. 44783); PUC 152, f. & ef. 12-22-69 (Order No. 46489); PUC 156, f. 8-6-73, ef. 8-15-73 (Order No. 73-507); PUC 181, f. 12-30-77, ef. 1-15-78 (Order No. 77-896); PUC 3-30, Part 1, f. & ef. 6-30-80 (Order No. 79-805); Renumbered from 860-033-0005; PUC 12-1981, f. & ef. 12-16-81 (Order 81-880); PUC 19-1985, f. & ef. 11-1-85 (Order No. 85-1030); PUC 14-1986, f. & ef. 10-31-86 (Order No. 86-1116); PUC 16-1994(Temp), f. 12-28-94, cert. ef. 1-1-95 (Order No. 94-2077); PUC 5-1995, f. & cert. ef. 6-23-95 (Order No. 95-561); MCT 3-1996, f. & cert. ef. 3-14-96; Renumbered from 860-063-0005; MCT 9-1997, f. & cert. ef. 12-22-97; MCTB 1-2002, f. 6-21-02, cert. ef. 7-1-02; MCTD 4-2010, f. & cert. ef. 10-25-10

740-040-0020

Liability Insurance

Carriers who are required to file liability insurance shall file evidence of such insurance for a minimum single limit of $750,000 per accident.

Stat. Auth.: ORS 823 & ORS 825
Stats. Implemented: ORS 825.160
Hist.: PUC 3-30, Part 1, f. & ef. 6-30-80 (Order No. 79-805); Renumbered from 860-033-0008; PUC 8-1985, f. & ef. 6-10-85 (Order No. 85-499); PUC 7-1992, f. 2-26-92, cert. ef. 3-1-92 (Order No. 91-1141); MCT 3-1996, f. & cert. ef. 3-14-96; Renumbered from 860-063-0008

740-040-0030

Cargo Insurance

(1) All Class 1A, 1G, 1B and 1C for-hire carriers are required under ORS 825.162 to have cargo insurance. A policy or a certificate of insurance in the minimum amount of $10,000, signed by the carrier's insurer, must be filed with the Department of Transportation.

(2) The Department may waive the requirement for cargo insurance in circumstances where a carrier makes a sufficient showing that its service is limited to commodities not subject to material damage or loss through ordinary transportation hazards. Commodities not subject to material damage or loss through ordinary transportation hazards include, but shall not be limited to: Sand, gravel, rock, dirt, debris, cinders, wet ready-mix concrete, metallic ores and concentrates; logs, poles, piling, and cut trees; cordwood, wood chips, lumber, shingles, veneer, plywood, particle board, wallboard, and siding; unprocessed agricultural commodities; fish scrap; newspapers; garbage and waste material for recycling; compressed motor vehicle bodies; and water.

Stat. Auth.: ORS 823.011 & ORS 825.162
Stats. Implemented: ORS 825.162
Hist.: PUC 18, f. 1-21-55, ef. 9-1-54 (Order No. 33203); PUC 120, f. 10-26-62, ef. 11-15-62 (Order No. 38811); PUC 135, f. 5-9-66, ef. 5-15-66 (Order No. 42332); PUC 148, f. 7-29-68, ef. 9-1-68 (Order No. 44783); PUC 156, f. 8-6-73, ef. 8-15-73 (Order No. 73-507); Renumbered from 860-033-0010; PUC 12-1981, f. & ef. 12-16-81 (Order No. 81-880); PUC 1-1984, f. & ef. 2-9-84 (Order No. 84-076); PUC 19-1985, f. & ef. 11-1-85 (Order No. 85-1030); PUC 8-1987(Temp), f. & ef. 10-2-87 (Order No. 87-989); PUC 1-1988, f. & cert. ef. 1-14-88 (Order No. 88-023)); PUC 16-1994(Temp), f. 12-28-94, cert. ef. 1-1-95 (Order No. 94-2077); PUC 5-1995, f. & cert. ef. 6-23-95 (Order No. 95-561); MCT 2-1996, f. & cert. ef. 2-16-96; Renumbered from 860-063-0010; MCT 3-1996, f. & cert. ef. 3-14-96

740-040-0040

Sanctions for Insurance Cancellation

If a carrier’s policy required pursuant to ORS 825.160 or 825.162 is cancelled, the motor vehicles assigned to that carrier shall not be operated on the highways of this state and the carrier’s certificate or permit may be suspended by the Department.

Stat. Auth.: ORS 823.011, 825.160 & 825.164
Stats. Implemented: ORS 825.164
Hist.: PUC 19-1985, f. & ef. 11-1-85 (Order No. 85-1030); MCT 3-1996, f. & cert. ef. 3-14-96; Renumbered from 860-063-0012; MCTB 1-2002, f. 6-21-02, cert. ef. 7-1-02

740-040-0060

Irrevocable Letters of Credit

(1) In lieu of filing liability insurance or cargo insurance, a motor carrier may file with the Department an irrevocable letter of credit.

(2) Any irrevocable letter of credit must meet the definition and requirements of ORS 75.1010 through 75.1170 and must:

(a) State the name and address of the issuing bank;

(b) State the name of the motor carrier;

(c) List the account number or numbers upon which draws may be made;

(d) Identify the Department as beneficiary of the letter;

(e) Set forth the amount of credit of the letter;

(f) Allow for partial draws;

(g) State the effective and termination dates of the letter;

(h) Be signed by a person with authority to bind the issuing bank; and

(i) Contain a provision that the issuing bank agrees to provide the Department written notice of at least 30 days before the issuing bank cancels the letter.

(3) The minimum amount of credit in an irrevocable letter of credit shall be as follows:

(a) For liability insurance, the minimum limit required by OAR 740-040-0020;

(b) For cargo insurance, the minimum limit required by OAR 740-040-0030.

(4) A claimant requesting that the Department make a payment under an irrevocable letter of credit shall provide:

(a) A true copy of an agreement showing that the motor carrier has consented to settle for the amount of the payment; or

(b) A true copy of a judgment showing that a court is requiring the motor carrier to tender the amount of the payment and a statement certifying:

(A) That the judgment has not been appealed and that the time for appeal has run; or

(B) That the motor carrier has exhausted its appeal rights and that such appeal or appeals were unsuccessful.

(5) If the Department's authorization of payment will cause the amount of credit in an irrevocable letter of credit to fall below the applicable minimum of section (3) of this rule, the Department shall, prior to such authorization, send the motor carrier a written notice requiring the motor carrier to increase the amount of credit so that, after payment, the amount of credit will at least equal the applicable minimum of section (3) of this rule.

(6) On or before the tenth day following the date of the written notice required by section (5) of this rule, the motor carrier shall increase the amount of credit in its irrevocable letter of credit so that, after payment, the amount of credit will at least equal the applicable minimum of section (3) of this rule.

(7) A motor carrier that fails to comply with any requirement of this rule is subject to suspension of its authority.

Stat. Auth.: ORS 823.011, 825.160 & 825.164
Stats. Implemented: ORS 825.166
Hist.: PUC 9-1992, f. & cert. ef. 6-4-92 (Order No. 92-791); MCT 3-1996, f. & cert. ef. 3-14-96; Renumbered from 860-063-0017; MCT 8-1997, f. & cert. ef. 11-17-97; MCTB 2-1998, f. & cert. ef. 8-20-98; MCTD 4-2010, f. & cert. ef. 10-25-10

740-040-0070

Deposits to Secure Payment of Fees, Taxes, Charges, Penalties and Interest

(1) The Department requires each motor carrier that does not qualify for a deposit waiver under section (4) of this rule to deposit with the Department an amount of money necessary to insure the collection of fees, taxes, charges, penalties and interest.

(2) For purposes of this rule:

(a) “New carrier” means any motor carrier that has not:

(A) Previously received a permit or certificate of authority from the Department; or

(B) Operated in Oregon for 12 months or more in the most recent 36 month period after receiving a permit or certificate of authority from the Department.

(b) “Established carrier” means any motor carrier that has operated in Oregon for 12 months or more in the most recent 36-month period;

(c) If an applicant, carrier, or employee of the applicant or carrier has had substantial interest or control, directly or indirectly, in or over the operations conducted in Oregon under any carrier’s authority, the Department may treat the applicant or carrier as an established carrier.

(3) The security deposit schedule is as follows:

(a) Except as described in subsections (c) and (d) of this section, for new carriers:

(A) One vehicle — $2,000;

(B) Plus $375 for each additional vehicle from 2-5 vehicles;

(C) Plus $250 for each additional vehicle from 6-10 vehicles;

(D) Plus $125 for each additional vehicle above 10 vehicles;

(E) Maximum deposit required — $10,000.

(b) Except as described in subsections (c) and (d) of this section, for established carriers required to have a deposit, the deposit amount will be an amount determined by a review of Department records or as specified in paragraph (A) to (E) of this subsection, whichever is greater:

(A) One vehicle — $2,000;

(B) Plus $750 for each additional vehicle from 2-5 vehicles;

(C) Plus $500 for each additional vehicle from 6-10 vehicles;

(D) Plus $250 for each additional vehicle from 10 vehicles;

(E) Maximum deposit required -- $20,000.

(c) For private carriers, carriers that conduct operations under ORS 825.020 or farmers issued permits under 825.024 who operate motor vehicles weighing under 55,000 pounds that use gasoline on which gasoline tax provided by law has been paid to the State of Oregon:

(A) One vehicle — $500;

(B) Plus $150 for each additional vehicle;

(C) Maximum deposit required — $10,000.

(d) For private carriers, carriers that conduct operations under ORS 825.020 or farmers issued permits under 825.024 who operate motor vehicles weighing under 55,000 pounds that use any fuel other than gasoline or use gasoline on which gasoline tax provided by law has not been paid to the State of Oregon:

(A) One vehicle — $750;

(B) Plus $225 for each additional vehicle;

(C) Maximum deposit required — $15,000.

(4) The Department may waive the deposit required of:

(a) A new carrier with a Dun & Bradstreet rating of 3A2 or higher;

(b) An established carrier if the Department finds that in the previous 12 months the motor carrier has been required to file weight-mile tax reports for each of the reporting periods (monthly, quarterly, or annually) and has had no:

(A) Suspensions with the Department;

(B) Revocation of IFTA tax license;

(C) Weight-mile tax reports filed late;

(D) Fees not timely paid;

(E) More than two estimated weight-mile tax reports filed;

(F) More than one estimated weight-mile tax report filed without an actual report filed within a 30-day period;

(G) Non-sufficient fund check(s) or returned Automated Clearing House (ACH) transaction(s); and

(H) Outstanding billings for over-dimensional variance permits.

(5) Notwithstanding subsection (4) of this rule, a carrier may not qualify for a waiver of the deposit if within the previous 36 months the carrier has had:

(a) A weight-mile tax audit resulting in an assessment that exceeds by more than 15% the amount of the weight-mile taxes and fees reported and paid during the audit period; or

(b) An outstanding balance with the Department’s Collection Unit for fees owed to the Department under ORS chapter 825 and/or ORS 818.225.

(6) The deposit required of a motor carrier may be increased, or a previously waived deposit may be required of a motor carrier, in accordance with subsection (3)(b) of this rule, if Department records indicate that:

(a) In the previous 12 months the motor carrier has had:

(A) Any suspensions with the Department;

(B) Revocation of IFTA tax license;

(C) More than one weight-mile tax report filed late;

(D) Fees not timely paid;

(E) More than two estimated weight-mile tax reports filed;

(F) More than one estimated weight-mile tax report filed without an actual report filed within 30 days;

(G) Any non-sufficient fund check(s) or returned ACH transaction(s) with the Department; or

(H) Delinquent billings for over-dimensional variance permits, including associated road use assessment fees;

(I) Delinquent reports required for operations subject to ORS 818.225; or

(b) In the previous 36 months, the carrier has had a weight-mile tax audit resulting in an assessment that exceeds by more than 15% the amount of the weight-mile taxes and fees reported and paid during the audit period; or

(c) The carrier has had an outstanding balance with the Department’s Collection Unit for fees owed to the Department under ORS 818.225 and/or ORS chapter 825.

(7) The Department may delay granting a waiver of the security deposit if the carrier is being audited.

(8) If a carrier’s cash deposit is applied to an outstanding balance or a claim is filed against a carrier’s highway use tax bond filed pursuant to ORS 825.506, the authority under the certificate or permit shall be suspended until the cash deposit has been replaced or the full bond requirements have again been met.

(9) Acceptable forms of deposit. Any motor carrier may deposit:

(a) Cash;

(b) A bond in the form prescribed and furnished by the Department of Transportation;

(c) Bonds, negotiable by delivery, of the State of Oregon, school districts therein, or obligations of the United States, or obligations for which the faith of the United States is pledged for the payment of both principal and interest, equal in value to the amount of the requested deposit; or

(d) Bank or savings and loan savings certificates.

(10) The Department may require a cash deposit if a motor carrier operates on temporary passes. A portion of the total required deposit may be collected incrementally on each successive temporary pass purchased. The required deposit will be in the amount of $100 or twice the amount of weight-mile tax charged on the temporary pass rounded up to the next ten dollars, whichever is greater. A motor carrier may opt to provide a bond in lieu of serial incremental cash deposits.

(11) The Department reserves the right to modify or waive a deposit required by this rule if Department records indicate such modification, or waiver, is in the public interest.

Stat. Auth.: ORS 823.011 & 825.506
Stats. Implemented: ORS 825.506
Hist.: PUC 120, f. 10-26-62, ef. 11-15-62 (Order No. 38811); PUC 135, f. 5-9-66, ef. 5-15-66 (Order No. 42332); PUC 148, f. 7-29-68, ef. 9-1-68 (Order No. 44783); PUC 156, f. 8-6-73, ef. 8-15-73 (Order No. 73-507); PUC 3-30, Part 1, f. & ef. 6-30-80 (Order No. 79-805); Renumbered from 860-033-0020; PUC 6-1984(Temp), f. & ef. 3-19-84 (Order No. 84-197); PUC 11-1984, f. & ef. 5-25-84 (Order No. 84-418); PUC 8-1985, f. & ef. 6-10-85 (Order No. 85-499); PUC 12-1990, f. & cert. ef. 7-6-90 (Order No. 90-950); PUC 2-1992, f. & cert. ef. 1-24-92 (Order No. 92-028); MCT 2-1996, f. & cert. ef. 2-16-96; Renumbered from 860-063-0020; MCT 3-1996, f. & cert. ef. 3-14-96; MCTB 3-1998, f. & cert. ef. 10-16-98; MCTB 1-2002, f. 6-21-02, cert. ef. 7-1-02; MCTB 4-2002, f. & cert. ef. 8-23-02; MCTD 4-2010, f. & cert. ef. 10-25-10; MCTD 7-2012, f. & cert. ef. 8-17-12

740-040-0080

Instruments Filed Become Permanent Records

All bonds, except those filed pursuant to ORS 825.166, policies or certificates of insurance filed with the Department as required by statute are permanent records and cannot be returned to insurer or removed from the custody of the Department as long as the insured is subject to regulation under ORS Chapter 825.

Stat. Auth.: ORS 823 & ORS 825
Stats. Implemented: ORS 825.506
Hist.: PUC 18, f. 1-21-55, ef. 9-1-54 (Order No. 33203); PUC 120, f. 10-26-62, ef. 11-15-62 (Order No 38811); PUC 135, f. 5-9-66, ef. 5-15-66 (Order No. 42332); PUC 148, f. 7-29-68, ef. 9-1-68 (Order No. 44783); PUC 156, f. 8-6-73, ef. 8-15-73 (Order No. 73-507); Renumbered from 860-033-0025; MCT 3-1996, f. & cert. ef. 3-14-96; Renumbered from 860-063-0025

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