Location of risk is no longer the primary determining factor for determining applicable law and tax obligation. The determining factor is now the insured's principal place of business or, if an individual, the individual's principal residence. A couple of examples may be helpful for illustration purposes:
Example 1. An employer purchases an Accidental Death & Dismemberment policy to cover employees working outside the United States, or perhaps an Oregon resident buys such a policy to cover himself or herself while outside the United States. The coverage is effective only when the covered individual is outside the United States and, therefore, the risk is only present outside the United States.
In deciding this question, the Insurance Division looks at where the purchaser/insured resides (Oregon in this instance) and, to some degree, where the transaction takes place (also Oregon in this instance). Therefore, the home state of the insured is Oregon and tax is to be paid on 100 percent of the premium at the Oregon tax rate.
Example 2. An employer purchases a policy that provides medical coverage and certain trip expenses (reimbursement for travel expense back to the United States in case of illness) to cover employees/volunteers working outside the United States. The coverage is effective only when the covered individual is outside the United States and, therefore, the risk is only present outside the United States.
Under Oregon law, health insurance is excluded, by definition, from surplus lines insurance (see Oregon Revised Statute 731.144). Therefore, this type of coverage would need to be acquired under the independent procurement provisions created in Oregon Laws 2011, chapter 660, Sections 2 and 5.