AB618_EN

Assembly Bill No. 618–Committee on Commerce and Labor

CHAPTER..........

AN ACT relating to insurance; providing for the regulation of the business of viatical settlements; requiring the commissioner of insurance to adopt regulations governing the use of electronic records and signatures; temporarily authorizing the adoption of regulations to enforce federal law concerning a bill of rights for patients; limiting the disclosure of certain information concerning consumers; providing for the conversion of domestic mutual insurers into domestic stock insurers; providing for the reorganization of domestic mutual insurers into mutual insurance holding companies; making various other changes concerning the regulation of insurance; providing penalties; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Title 57 of NRS is hereby amended by adding thereto a

new chapter to consist of the provisions set forth as sections 2 to 52,

inclusive, of this act.

Sec. 2. As used in sections 2 to 52, inclusive, of this act, unless the

context otherwise requires, the words and terms defined in sections 3 to

16, inclusive, of this act have the meanings ascribed to them in those

sections.

Sec. 3. “Advertising” means a written, electronic or printed

communication or a communication by recorded telephone message,

radio, television, the Internet or a similar medium of communication,

including a film strip, motion picture or videotape, published,

communicated or otherwise placed before the public to create an interest

in, or induce a person to sell a policy of life insurance pursuant to, a

viatical settlement.

Sec. 4. “Broker of viatical settlements” means a person who on

behalf of a viator and for a fee, commission or other valuable

consideration offers or attempts to negotiate a viatical settlement

between the viator and one or more providers of viatical settlements. The

term does not include an attorney at law, certified public accountant or

financial planner accredited by a nationally recognized accrediting

agency who is retained by the viator and whose compensation is not paid

by a provider or purchaser of viatical settlements.

Sec. 5. “Business of viatical settlements” means the offering,

solicitation, negotiation, procurement, effectuation, purchasing,

financing, monitoring, tracking, underwriting, selling, transferring,

pledging or otherwise hypothecating viatical settlements.

Sec. 6. “Chronically ill” means:

1. Being unable to perform at least two activities of daily living, such

as eating, moving from one place to another, bathing, dressing,

continence, defecation or urination;

2. Requiring substantial supervision for protection from threats to

health and safety because of cognitive impairment; or

3. Having a level of disability similar to that described in subsection

1 as determined by the Secretary of Health and Human Services.

Sec. 7. 1. “Financing agent” means an underwriter, agent for

placement, enhancer of credit, lender, purchaser of securities, purchaser

of a policy from a provider of viatical settlements or other person that

may enter into a viatical settlement and has direct ownership in a policy

that is the subject of the viatical settlement but:

(a) Whose principal activity related to the transaction is providing

money to effect the viatical settlement; and

(b) Who has an agreement in writing with one or more licensed

providers of viatical settlements to finance the acquisition of one or

more viatical settlements.

2. The term does not include a nonaccredited investor or a purchaser

of viatical settlements.

Sec. 8. “Policy” means an individual or group policy, group

certificate, contract or arrangement of life insurance affecting the rights

of a person, whether or not delivered or issued for delivery in this state.

Sec. 9. “Provider of viatical settlements” means a person other than

a viator who enters into or effectuates a viatical settlement. The term

does not include:

1. A bank, savings and loan association, thrift company, credit union

or other licensed lender that takes an assignment of a policy as security

for a loan;

2. The issuer of a policy that provides accelerated benefits pursuant

to the contract;

3. An authorized or eligible insurer that provides stop-loss coverage

to a provider or purchaser of viatical settlements;

4. A natural person who enters into no more than one agreement in

a calendar year for the transfer of policies for a value less than the

expected death benefit;

5. A financing agent;

6. A special organization;

7. A trust for a related provider; or

8. A purchaser of viatical settlements.

Sec. 10. “Purchaser of viatical settlements” means a person who

gives a sum of money as consideration for a policy or an interest in the

death benefits of a policy, or a person who owns or acquires or is

entitled to a beneficial interest in a trust that owns a viatical settlement

contract or is the beneficiary of a policy that has been or will be the

subject of a viatical settlement contract, for the purpose of deriving an

economic benefit. The term does not include:

1. A person licensed pursuant to sections 2 to 52, inclusive, of this

act;

2. An accredited investor or qualified institutional buyer as defined

respectively in Regulation D, Rule 501 or Rule 144A of the Federal

Securities Act of 1933, as amended;

3. A financing agent;

4. A special organization; or

5. A trust for a related provider.

Sec. 11. “Special organization” means an organization formed by a

licensed provider of viatical settlements solely to enable the provider to

gain access to institutional markets for capital.

Sec. 12. “Terminally ill” means having an illness that can

reasonably be expected to result in death within 24 months.

Sec. 13. “Trust for a related provider” means a trust established by a

licensed provider of viatical settlements solely to hold the ownership of

or beneficial interests in purchased policies in connection with

financing.

Sec. 14. “Viatical settlement” means a written agreement for the

payment of money, or anything else of value, which is less than the

expected death benefit of a policy, in exchange for the viator’s

assignment, sale, transfer or devise of the death benefit or ownership of

any portion of the policy. The term includes:

1. An agreement for a loan or other financing secured primarily by a

policy, other than a loan by an insurer pursuant to or secured by the

cash value of a policy; and

2. An agreement to transfer ownership or change the beneficiary, in

the future, regardless of the date of payment to the viator.

Sec. 15. “Viaticated policy” means a policy that has been acquired

by a provider of viatical settlements pursuant to a viatical settlement.

Sec. 16. “Viator” means the owner of a policy or the holder of a

certificate of insurance under a policy of group insurance. The term is

not limited to an owner who is terminally or chronically ill except where

that limitation is expressly provided.

Sec. 17. The trustee of a trust for a related provider must agree in

writing with the provider of viatical settlements that the provider is

responsible for ensuring compliance with all statutory and regulatory

requirements and that the trustee will make all records and files related

to viatical settlements available to the commissioner as if those records

and files were maintained directly by the provider.

Sec. 18. If there is more than one viator with respect to a single

policy and they are residents of different states, the legal effect of a

viatical settlement is governed by the law of the state in which the viator

having the largest fractional ownership resides. If the viators own equal

fractions, they may agree in writing to choose the state in which one

resides.

Sec. 19. 1. A person shall not, without first obtaining a license

from the commissioner, operate in or from this state as a provider or

broker of viatical settlements.

2. Application for a license must be made to the commissioner on a

form prescribed by him, accompanied by the prescribed fee. A license

may be renewed from year to year on its anniversary by payment of the

prescribed fee. The license expires if the fee is not paid by that date.

3. An applicant shall provide information on forms required by the

commissioner, who may at any time require the applicant to disclose the

identity of all stockholders, partners, members, officers and employees.

The commissioner may refuse to issue a license to an organization if he

is not satisfied that a stockholder, partner, member or officer who may

materially influence the applicant’s conduct satisfies the requirements of

this chapter.

4. A license issued to an organization authorizes all partners,

members, officers and designated employees to act as providers or

brokers of viatical settlements. Those persons must be named in the

application or a supplement to it.

Sec. 20. 1. Upon the filing of an application and payment of the

fee, the commissioner shall investigate the applicant, and issue a license

if he finds that the applicant:

(a) If a provider of viatical settlements, has set forth a detailed plan of

operation;

(b) Is competent and trustworthy and intends to act in good faith in

the capacity for which the license is sought;

had experience, training or education which qualifies him in that

capacity;

(d) If an organization, provides a certificate of good standing from the

state of its domicile; and

(e) If a provider or broker of viatical settlements, has included a plan

to prevent fraud which satisfies the requirements of section 50 of this

act.

2. The commissioner shall not issue a license to a nonresident unless

a written designation of an agent for service of process, or an

irrevocable written consent to the commencement of an action against

the applicant by service of process upon the commissioner, accompanies

the application.

3. A provider or broker of viatical settlements shall furnish to the

commissioner new or revised information concerning partners,

members, officers, holders of more than 10 percent of its stock, and

designated employees within 30 days after a change occurs.

Sec. 21. After notice, and after a hearing if requested, the

commissioner may suspend, revoke, refuse to issue or refuse to renew a

license under this chapter if he finds that:

1. There was material misrepresentation in the application for the

license;

2. The licensee or an officer, partner, member or significant

managerial employee has been convicted of fraudulent or dishonest

practices, is subject to a final administrative action for disqualification,

or is otherwise shown to be untrustworthy or incompetent;

3. A provider of viatical settlements has engaged in a pattern of

unreasonable payments to viators;

4. The applicant or licensee has been found guilty of, or pleaded

guilty or nolo contendere to, a felony or a misdemeanor involving fraud,

forgery, embezzlement, obtaining money under false pretenses, larceny,

extortion, conspiracy to defraud or any crime involving moral turpitude,

whether or not a judgment of conviction has been entered by the court;

5. A provider of viatical settlements has entered into a viatical

settlement in a form not approved pursuant to section 22 of this act;

6. A provider of viatical settlements has failed to honor obligations of

a viatical settlement;

7. The licensee no longer meets a requirement for initial licensure;

8. A provider of viatical settlements has assigned, transferred or

pledged a viaticated policy to a person other than another provider

licensed under this chapter, a purchaser of the viatical settlement, a

special organization or a trust for a related provider;

9. The applicant or licensee has provided materially untrue

information to an insurer that issued a policy that is the subject of a

viatical settlement; or

10. The applicant or licensee has violated a provision of this chapter.

Sec. 22. A person shall not use a form of viatical settlement or of

disclosure in this state unless the form has been filed with and approved

by the commissioner. The commissioner shall disapprove such a form if,

in his opinion, the settlement or any of its terms is unreasonable,

contrary to the interests of the public or otherwise misleading or unfair

to the viator. The commissioner may require the submission of

advertising material before its use.

Sec. 23. 1. Each licensee under this chapter shall file with the

commissioner on or before March 1 of each year an annual statement

containing such information as the commissioner prescribes by

regulation.

2. Except as allowed or required by a statute other than this chapter,

a provider or broker of viatical settlements, an insurer, a producer of

insurance, an information bureau, a rating agency or any other person

knowing the identity of an insured shall not disclose that identity as an

insured to any other person unless the disclosure is:

(a) Necessary to effect a viatical settlement between the viator and a

provider of viatical settlements and the viator and the insured have given

prior written consent to the disclosure;

(b) Furnished in response to an investigation or examination by the

commissioner or another governmental officer or agency;

viatical settlements to another provider; or

(d) Necessary to permit a financing agent to finance the purchase of a

policy by a provider of viatical settlements and the insured has given

prior written consent to the disclosure.

Sec. 24. The commissioner may examine or investigate a licensee

under this chapter as often as he considers appropriate. An examination

will be conducted in the manner provided in NRS 679B.230 to 679B.300,

inclusive. The commissioner may also examine or investigate any other

person or business insofar as he considers necessary or material to the

examination or investigation of the licensee. Instead of an examination

or investigation under this chapter of a foreign or alien person licensed

under this chapter, the commissioner may accept a report on

examination or investigation of the licensee by the equivalent authority

of the licensee’s state of domicile or port of entry.

Sec. 25. 1. A person required to be licensed under this chapter

shall retain for 5 years copies of all:

(a) Contracts, underwriting documents, forms of policy and

applications, from the date of the proposal, offer or execution,

whichever is latest;

(b) Checks, drafts and other evidence or documentation relating to the

payment, transfer or release of money, from the date of the transaction;

and

2. This section does not relieve a person of the obligation to produce

a document described in subsection 1 to the commissioner after the

expiration of the relevant period if the person has retained the

document.

3. Records required by this section to be retained must be legible and

complete. They may be retained in any form or by any process that

accurately reproduces or is a durable medium for the reproduction of

the record.

Sec. 26. 1. With each application for a viatical settlement, a

provider or broker of viatical settlements shall furnish to the viator at

least the following disclosures no later than the time the application for

the settlement is signed by all the parties, in a separate document signed

by the viator and the provider or broker:

(a) The possible alternatives to viatical settlement, including any

accelerated death benefits or loans offered under the viator’s policy.

(b) Some or all of the proceeds of the viatical settlement may be

taxable under the federal income tax or a state franchise or income tax,

and assistance should be sought from a professional tax adviser.

creditors.

(d) Receipt of proceeds of a viatical settlement may adversely affect

the viator’s eligibility for Medicaid or other governmental benefits, and

advice should be sought from the appropriate governmental agencies.

(e) The viator has a right to terminate a viatical settlement within 15

days after his receipt of the proceeds, as provided in section 31 of this

act, and if the insured dies during that period, the settlement is

terminated and all proceeds must be repaid to the provider.

(f) Money will be sent to the viator within 3 business days after the

provider has received the insurer’s or group administrator’s

acknowledgment that ownership of or interest in the policy has been

transferred and the beneficiary has been designated.

(g) Entering into a viatical settlement may cause other rights,

including conversion and waiver of premium, that may exist under the

policy to be forfeited by the viator, and assistance should be sought from

a financial adviser.

(h) A brochure is provided which describes the process of viatical

settlement, in the form prescribed by the National Association of

Insurance Commissioners unless the commissioner prescribes a

different form.

2. The document in which the disclosures required by paragraphs (a)

to (g), inclusive, of subsection 1 are made must also contain the

following:

All medical, financial and personal information solicited or

obtained by a provider or broker of viatical settlements about an

insured, including his identity and that of members of his family, a

spouse or other relationship, may be disclosed as necessary to effect

the viatical settlement between the viator and the provider. If you

are asked to provide this information, you will be asked to consent to

the disclosure. Failure to consent may affect your ability to viaticate

your policy. The information may be furnished to someone who

buys the policy or provides money for the purchase.

Sec. 27. A provider of viatical settlements shall furnish to the viator,

no later than the date the viatical settlement is signed by all parties, at

least the following disclosures, conspicuously displayed in the viatical

settlement or in a separate document signed by the viator and the

provider or broker of viatical settlements:

1. The affiliation, if any, between the provider and the issuer of the

policy to be viaticated.

2. The name, address and telephone number of the provider.

3. The amount and method of calculating the broker’s commission,

including anything of value paid or given to the broker for placing the

policy.

4. If the policy to be viaticated was issued as a joint policy, contains

family riders or covers a life other than that of the insured under it, any

possible loss of coverage on the other lives under the policy, and that the

viator should consult the producer of the insurance or the issuer of the

policy for advice concerning the settlement.

5. The monetary amount of the current death benefit payable to the

provider under the policy and, if known, the availability of any other

guaranteed benefit, the monetary amount of any benefit for accidental

death or dismemberment, and the provider’s interest in those benefits.

6. The name, business address and telephone number of the escrow

agent, and the right of the viator or owner to inspect or receive copies of

the relevant escrow or trust agreements or related documents.

Sec. 28. If a provider of viatical settlements transfers ownership or

changes the beneficiary of a viaticated policy, he shall inform the

insured of the transfer or change within 20 days after it occurs.

Sec. 29. 1. A provider of viatical settlements who enters into a

settlement shall first obtain:

(a) If the viator is the insured, a written statement from a licensed

attending physician that the viator is of sound mind and under no

constraint or undue influence to enter into a settlement;

(b) A witnessed document in which the viator represents that he has a

full and complete understanding of the settlement and of the benefits of

the policy, acknowledges that he has entered into the settlement freely

and voluntarily and, if applicable to determine a payment to a person

terminally or chronically ill, acknowledges that he is terminally or

chronically ill and that the illness was diagnosed after the policy was

issued; and

medical records to a provider or broker of viatical settlements and the

insurer that issued the policy covering him.

2. Within 20 days after a viator executes documents necessary to

transfer rights under a policy, or enters into an agreement in any form,

express or implied, to viaticate the policy, the provider of viatical

settlements shall give written notice to the issuer of the policy that the

policy has or will become viaticated. The notice must be accompanied by

a copy of the release of medical records and the application for the

viatical settlement.

Sec. 30. All medical information solicited or obtained by a licensee

under this chapter is subject to other laws of this state relating to the

confidentiality of the information.

Sec. 31. A viatical settlement entered into in this state must reserve

to the viator an unconditional right to terminate the settlement within 15

days after he receives the proceeds of the settlement. If the insured dies

during that period, the settlement is terminated, but the proceeds must be

repaid to the provider of the viatical settlement.

Sec. 32. 1. A provider of viatical settlements shall instruct the

viator to send the executed documents required to effect the change in

ownership or assignment or change of beneficiary of the affected policy

to a designated independent escrow agent. Within 3 business days after

the date the escrow agent receives the documents, or within 3 business

days after the provider receives the documents if by mistake they are sent

directly to him, the escrow agent shall deposit the proceeds of the

settlement into an escrow or trust account maintained in a regulated

financial institution whose deposits are insured by the Federal Deposit

Insurance Corporation.

2. Upon deposit of the proceeds in that account, the escrow agent

shall deliver to the provider the original documents executed by the

viator. Upon the provider’s receipt from the insurer of an

acknowledgment of the change in ownership or assignment or change of

beneficiary of the affected policy, he shall instruct the escrow agent to

pay the proceeds of the settlement to the viator.

3. Payment to the viator must be made within 3 business days after

the date the provider received the acknowledgment from the insurer.

Failure to make the payment within that time makes the viatical

settlement voidable by the viator for lack of consideration until payment

is tendered to and accepted by the viator.

Sec. 33. 1. Contact with an insured to determine the status of his

health after a viatical settlement may be made only by a provider or

broker of viatical settlements who is licensed in this state, or its

authorized representative, and no oftener than once every 3 months if

the insured has a life expectancy of 1 year or more, or once every month

if the insured has a life expectancy of less than 1 year. The provider or

broker shall explain the procedure for those contacts at the time the

settlement is entered into.

2. The limitations of subsection 1 do not apply to contacts for

purposes other than determining status of health.

3. A provider or broker is responsible for the acts of his authorized

representative.

Sec. 34. 1. A viator may not enter into a viatical settlement within

2 years after the issuance of the policy to which the settlement relates

unless one or more of the following conditions is or has been satisfied:

(a) The policy was issued upon the owner’s exercise of a right of

conversion arising out of a group policy.

(b) The owner of the policy is a charitable organization exempt from

taxation under 26 U.S.C. § 501(c)(3).

(d) The viator or owner submits to the provider of viatical settlements

independent evidence that within the 2-year period:

(1) The owner or insured has been diagnosed to have an illness or

condition that is life-threatening or requires a course of treatment for at

least 2 years, long-term care or health care at home, or any combination

of these;

(2) The spouse of the owner or insured has died;

(3) The owner or insured has divorced his spouse;

(4) The owner or insured has retired from full-time employment;

(5) The owner or insured has become physically or mentally

disabled and a physician determines that the disability precludes him

from maintaining full-time employment;

(6) The owner of the policy was the employer of the insured and

that relationship has terminated;

(7) A final judgment or order has been entered or issued by a court

of competent jurisdiction, on the application of a creditor or owner of

the insured, adjudging the owner or insured bankrupt or insolvent, or

approving a petition for reorganization of the owner or insured or

appointing a receiver, trustee or liquidator for all or a substantial part of

the assets of the owner or insured;

(8) The owner of the policy experiences a significant decrease in

income which is unexpected by him and impairs his reasonable ability to

pay the premium on the policy; or

(9) The owner or insured disposes of his ownership in a closely held

corporation.

2. The independent evidence must be submitted to the insurer when

the provider of viatical settlements submits a request to the insurer to

effect transfer of the policy to him. The insurer shall respond timely to

the request. This section does not prohibit an insurer from exercising its

right to contest a policy on the ground of fraud.

3. If a provider of viatical settlements submits to an insurer a copy of

the owner’s or insured’s certification that one of the events described in

paragraph (d) of subsection 1 has occurred, the certification

conclusively establishes that the viatical settlement is valid, and the

insurer shall timely respond to the provider’s request to effect a transfer

of the policy.

Sec. 35. Sections 35 to 43, inclusive, of this act apply to advertising

of viatical settlements or related services intended for dissemination in

this state, including advertising on the Internet which is viewed by

persons in this state. To the extent that federal regulation establishes

requirements for disclosure, those sections must be so interpreted as to

eliminate or minimize conflict with the federal requirements.

Sec. 36. Each licensee under this chapter shall establish and

continuously maintain a system of control over the content, form and

method of dissemination of all advertisements of its contracts and

services. Each advertisement is the responsibility of the licensee as well

as the person who creates or presents it. A system of control must

include notification to persons authorized by the licensee who

disseminate

advertisements, at least annually, of the requirements and procedures for

approval before use of any advertisements not furnished by the licensee.

Sec. 37. An advertisement must be truthful and not misleading in

fact or by implication. The form and content of an advertisement for

viatical settlements must be sufficiently complete and clear to avoid

deception. An advertisement may not have a capacity or tendency to

mislead or deceive, as determined by the commissioner from the overall

impression it may reasonably be expected to create upon a person of

average education or intelligence in the segment of the public to which it

is directed.

Sec. 38. 1. The information required to be disclosed under sections

35 to 43, inclusive, of this act may not be minimized, obscured, presented

ambiguously or so intermingled with other text of an advertisement as to

be confusing or misleading.

2. An advertisement may not omit material information or use

language or illustrations if the omission or use has a capacity or

tendency to, or does, mislead viators as to the nature or extent of any

benefit, loss covered, premium payable or effect on federal or state taxes.

Making a viatical settlement available for inspection before it is

consummated, or offering to refund payment if the viator is not satisfied

within the period prescribed in section 31 of this act, does not remedy

misleading statements.

3. An advertisement may not use the name or title of an insurer or

policy unless the advertisement has been approved by the insurer.

4. An advertisement may not state or imply that interest charged on

an accelerated death benefit or loan on a policy is unfair or in any way

improper.

5. The words “free,” “no additional cost” or words of similar import

may not be used with respect to any benefit or service unless true.

Sec. 39. 1. A testimonial, appraisal or analysis used in an

advertisement must be genuine, represent the present opinion of the

author, apply to the viatical settlement advertised, if any, and be

reproduced with sufficient completeness to avoid misleading viators. In

using a testimonial, appraisal or analysis, a licensee under this chapter

makes the statements contained his own, and the statements must satisfy

the requirements of sections 35 to 43, inclusive, of this act.

2. If the person making a testimonial, appraisal, analysis or

endorsement has a financial interest in the provider of viatical

settlements or a related organization, or receives a benefit other than

required wages, that fact must be prominently disclosed in the

advertisement.

3. An advertisement may not state or imply that a viatical settlement,

benefit or service has been approved or endorsed by a group, society or

other organization unless that is the fact and any relationship between

the organization and the provider of viatical settlements is disclosed. If

the organization is owned, controlled or managed by the provider, or

receives any payment or other consideration from the provider for

making the endorsement or testimonial, that fact must be disclosed in

the advertisement.

4. An advertisement may not contain statistical information unless it

accurately reflects recent and relevant facts. The source of all statistics

used in an advertisement must be identified.

Sec. 40. An advertisement may not disparage insurers, providers of

insurance, other providers or brokers of viatical settlements, policies,

services or methods of marketing.

Sec. 41. 1. The name of the provider of viatical settlements must be

clearly identified in an advertisement about him or his viatical

settlements. If a viatical settlement is advertised, it must be identified by

number or other appropriate description. If an application is part of an

advertisement, the name of the provider must be shown on the

application.

2. An advertisement may not use a trade name, designation of a

group, name of a parent or particular division of a provider of viatical

settlements, service mark, slogan or other device or reference without

disclosing the identity of the provider of viatical settlements licensed

under this chapter if the advertisement would have the capacity or

tendency to mislead as to his true identity or create the impression that

an organization other than the licensee would have a responsibility for

the financial obligation under a viatical settlement. The name of the

licensee must be stated in all advertisements.

Sec. 42. 1. An advertisement may not use a combination of words,

symbols or physical materials that by their content, phraseology, shape,

color or other characteristic are so similar to a combination of words,

symbols or physical materials used by a governmental program or

agency, or otherwise appear to be of such a nature, that they tend to

mislead viators into believing that the solicitation is connected with a

governmental program or agency. An advertisement may not create the

impression that a provider of viatical settlements, his financial condition

or business practices, the payment of his claims or the merit, desirability

or advisability of his viatical settlements is recommended or endorsed by

a governmental authority.

2. An advertisement may state that a provider of viatical settlements

is licensed in the state in which the advertisement appears, if it does not

imply that competing providers are not so licensed. The advertisement

may suggest consulting the licensee’s web site or communicating with

the commissioner to ascertain whether the state requires licensing and,

if so, whether a particular provider or broker of viatical settlements is

licensed.

Sec. 43. 1. If an advertiser emphasizes the speed with which

viatication will occur, the advertisement must disclose the average time

from completed application to date of offer and from acceptance of offer

to receipt of funds by the viator.

2. If an advertiser emphasizes the monetary amounts available to

viators, the advertisement must disclose the average purchase price as a

fraction of face value obtained by viators who contracted with the

advertiser during the preceding 6 months.

Sec. 44. It is a category D felony, and the offender shall be punished

as provided in NRS 193.130, for any person, knowingly or with intent to

defraud, to do any of the following acts in order to deprive another of

property or for his own pecuniary gain:

1. Present, cause to be presented or prepare with knowledge or belief

that it will be presented, false information to or by a provider or broker

of viatical settlements, a financing agent, an insurer, a provider of

insurance or any other person, or to conceal information, as part of, in

support of or concerning a fact material to:

(a) An application for the issuance of a policy or viatical settlement;

(b) The underwriting of a policy or viatical settlement;

settlement;

(d) A premium paid on a policy;

(e) A payment or change of beneficiary or ownership pursuant to a

policy or viatical settlement;

(f) The reinstatement or conversion of a policy;

(g) The solicitation, offer or effectuation of a policy or viatical

settlement; or

(h) The issuance of written evidence of a policy or viatical settlement.

2. In furtherance of a fraud or to prevent detection of a fraud:

(a) Remove, conceal, alter, destroy or sequester from the

commissioner assets or records of a licensee under this chapter or other

person engaged in the business of viatical settlements;

(b) Misrepresent or conceal the financial condition of a licensee, a

financing agent, an insurer or other person;

chapter; or

(d) File with the commissioner or analogous officer of another

jurisdiction a document containing false information or otherwise

conceal information about a material fact from the commissioner or

other officer.

3. Present, cause to be presented or prepare with knowledge or belief

that it will be presented to or by a provider or broker of viatical

settlements, a financing agent, an insurer, a provider of insurance or

any other person, in connection with a viatical settlement or transaction

of insurance, a policy fraudulently by the insured or owner or an agent

of either.

4. Embezzle, steal, misappropriate or convert money, premiums,

credits or other property of a provider of viatical settlements, a viator, an

insurer, an insured, an owner of a policy or other person engaged in the

business of viatical settlements or insurance.

5. Attempt to commit, assist, aid, abet or conspire to commit an act or

omission described in subsections 1 to 4, inclusive.

Sec. 45. It is unlawful knowingly or intentionally:

1. For any person to interfere with the enforcement of the provisions

of this chapter or an investigation of a possible violation of those

provisions.

2. For a person engaged in the business of viatical settlements to

permit any person convicted of a felony involving dishonesty or breach of

trust to participate in that business.

Sec. 46. An application or contract for a viatical settlement, however

transmitted, must contain a settlement substantially as follows: “ A

person who knowingly presents false information in an application for a

viatical settlement is guilty of insurance fraud and subject to fine and

imprisonment.” The lack of such a statement is not a defense in a

prosecution for violation of section 44 of this act.

Sec. 47. 1. A person engaged in the business of viatical settlements

who knows or reasonably believes that a violation of section 44 of this

act is being, has been or will be committed shall promptly report the

facts and circumstances pertaining to the violation to the commissioner.

2. Any other person who knows or reasonably believes that a

violation of section 43 of this act is being, has been or will be committed

may furnish to the commissioner the information required by the

commissioner.

Sec. 48. 1. Except as otherwise provided in subsection 2, a person

furnishing information of the kind described in section 47 of this act is

immune from liability and civil action if the information is furnished to

or received from:

(a) The commissioner or his employees, agents or representatives;

(b) Another federal, state or local law enforcement or regulatory

officer or his employees, agents or representatives;

violations of section 44 of this act or similar offenses or his employees,

agents or representatives;

(d) The National Association of Insurance Commissioners or other

regulatory body overseeing life insurance or viatical settlements, or its

employees, agents or representatives; or

(e) The insurer that issued the policy concerned in the information.

2. The immunity provided in subsection 1 does not extend to a

statement made with actual malice. In an action brought against a

person for filing a report or furnishing other information concerning a

violation of section 44 of this act, the plaintiff must plead specifically

that the defendant acted with actual malice.

3. This section does not supplant or modify any other privilege or

immunity at common law or under another statute enjoyed by a person

described in subsection 1.

Sec. 49. 1. A document or information furnished pursuant to

section 48 of this act or obtained by the commissioner in an investigation

of an actual or suspected violation of section 44 of this act is

confidential and privileged, is not a public record and is not subject to

discovery or subpoena in a civil action or criminal prosecution.

2. Subsection 1 does not prohibit the commissioner from disclosing

documents or evidence so furnished or obtained:

(a) In an administrative or judicial proceeding to enforce a statute

administered by him;

(b) To another federal, state or local law enforcement or regulatory

officer, another person involved in the prevention or detection of

violations of section 44 of this act or similar offenses, or the National

Association of Insurance Commissioners; or

aggrieved by the violation.

3. Disclosure of a document or evidence under subsection 2 does not

abrogate or modify the privilege covering it under subsection 1.

Sec. 50. 1. Each licensee under this chapter shall establish and

maintain protective measures against fraud which are reasonably

calculated to prevent, detect and assist in the prosecution of violations of

section 44 of this act. The commissioner may order, or a licensee may

request and the commissioner may approve, modifications of the

measures otherwise required under this section, more or less restrictive

than those measures, as necessary to protect against fraud. Required

measures are employment of or contracting with investigators and

submission of a plan to the commissioner which includes:

(a) A description of the procedures for detecting and investigating

possible violations of section 44 of this act and for resolving

inconsistencies between medical records and applications for insurance;

(b) A description of the procedures for reporting possible violations to

the commissioner;

and other personnel against fraud; and

(d) A description or chart of the organizational arrangement of the

personnel responsible for detecting and investigating possible violations

of section 44 of this act and for resolving inconsistencies between

medical records and applications for insurance.

2. A plan submitted to the commissioner pursuant to subsection 1 is

privileged and confidential, not a public record and not subject to

discovery or subpoena in a civil action or criminal prosecution.

Sec. 51. 1. In addition to the penalties and other means of

enforcement provided under this chapter:

(a) If a person violates a provision of this chapter or of a regulation

adopted under this chapter, the commissioner may seek an injunction

and apply for temporary and permanent orders he determines to be

necessary to restrain the violator.

(b) A person who violates a provision of this chapter is subject to an

administrative fine of not more than $1,000 for each violation.

restitution to the person aggrieved by the violation.

2. A person aggrieved by a violation of this chapter may bring a civil

action against the violator to recover the damages suffered.

Sec. 52. The commissioner may adopt regulations to:

1. Establish standards for evaluating the reasonableness of payments

under viatical settlements to persons chronically or terminally ill,

including the regulation of the rates of discount used to determine the

amount paid in exchange for an assignment, transfer, sale or devise of a

benefit under a policy.

2. Require a bond or otherwise ensure financial accountability of

providers and brokers of viatical settlements.

3. Govern the relationship of insurers with providers and brokers of

viatical settlements during the viatication of a policy.

Sec. 53. Chapter 679A of NRS is hereby amended by adding thereto

the provisions set forth as sections 54 and 55 of this act.

Sec. 54. “Producer of insurance” means a person required to be

licensed under the laws of this state to sell, solicit or negotiate insurance.

Sec. 55. “Provider of insurance” includes an insurer, producer of

insurance, managing general agent, third party administrator,

organization composed of or using preferred providers of health care,

health maintenance organization, commercial bank, trust company,

savings and loan association, credit union, thrift company, financial

holding company, affiliate or subsidiary of an insurer or financial

holding company, broker-dealer in securities, mortgage lender, and any

other person engaged in the business of insurance.

Sec. 56. NRS 679A.020 is hereby amended to read as follows:

679A.020 As used in this code, unless the context otherwise requires,

the words and terms defined in NRS 679A.030 to 679A.130, inclusive,

and sections 54 and 55 of this act have the meanings ascribed to them in

those sections.

Sec. 57. Chapter 679B of NRS is hereby amended by adding thereto

the provisions set forth as sections 58 and 59 of this act.

Sec. 58. 1. The commissioner shall adopt regulations governing:

(a) The use of electronic signatures, and the acceptance and

transmission of electronic records, in transactions relating to insurance;

and

(b) The electronic filing of forms and payment of fees, and the storage

and reproduction of records, filed with the division.

2. As used in this section:

(a) “Electronic” means relating to technology having electrical,

digital, magnetic, wireless, optical, electromagnetic or similar

capabilities.

(b) “Electronic record” means a record created, generated, sent,

communicated, received or stored by electronic means.

process attached to or logically associated with a record and executed or

adopted by a person with the intent to sign the record.

(d) “Record” means information that is inscribed on a tangible

medium or that is stored in an electronic or other medium and is

retrievable in perceivable form.

(e) “Transaction” means an action or set of actions occurring

between two or more persons relating to the transaction of business,

commercial or governmental affairs.

Sec. 59. The commissioner may adopt regulations, not inconsistent

with any provision of NRS, to enforce the provisions of any federal law

enacted after January 1, 2001, concerning a bill of rights for patients.

Sec. 60. NRS 679B.090 is hereby amended to read as follows:

679B.090 1. The commissioner may employ such other technical,

actuarial, rating, clerical and other assistants and examiners as he may

reasonably require for execution of his duties, each of whom must be in the

classified service of the state.

2. The commissioner may contract for and procure services of

examiners and other or additional specialized technical or professional

assistance, as independent contractors or for a fee, as he may reasonably

require. None of the persons providing those services or assistance on [a]

contract or for a fee [basis] may be in the classified service of the state.

3. The commissioner may contract with a person outside the division

for administering examinations, processing applications for licenses,

and collecting fees.

4. The commissioner may adopt regulations to carry out the

provisions of subsections 2 and 3.

Sec. 61. NRS 679B.150 is hereby amended to read as follows:

679B.150 1. The commissioner may:

(a) Take measures to enhance the public understanding of insurance

coverages purchased by consumers and encourage price competition

among insurers and a public understanding of the standards promulgated

under paragraph (b).

(b) Develop, promulgate and revise as he deems appropriate, standards

in each of the several areas of insurance appropriate to be applied to

policies sold in the State of Nevada. The standards [shall] must seek to

ensure that policies [shall not be] are not unjust, unfair, inequitable,

unfairly discriminatory, misleading, deceptive, obscure or encourage

misrepresentation or misunderstanding of the contract.

and the practices used in the sale of insurance.

2. [Nothing in this section shall] This section does not prohibit an

insurer from offering policies encompassing standards more favorable to

the insured than those promulgated under this section.

Sec. 62. NRS 679B.152 is hereby amended to read as follows:

679B.152 1. Every insurer or organization for dental care which pays

claims on the basis of fees for medical or dental care which are “usual and

customary” shall submit to the commissioner a complete description of the

method it uses to determine those fees. This information must be kept

confidential by the commissioner. The fees determined by the insurer or

organization to be the usual and customary fees for that care are subject to

the approval of the commissioner as being the usual and customary fees in

that locality. The provisions of this subsection apply to medical or dental

care provided to a claimant under any contract of insurance.

2. Any contract for group, blanket or individual health insurance and

any contract issued by a nonprofit hospital, medical or dental service

corporation or organization for dental care, which provides a plan for

dental care to its insureds or members which limits their choice of a

dentist, under the plan to those in a preselected group, must offer its

insureds or members the option of selecting a plan of benefits which does

not restrict the choice of a dentist. The selection of that option does not

entitle the insured or member to any increase in contributions by his

employer or other organization toward the premium or cost of the optional

plan over that contributed under the restricted plan.

Sec. 63. NRS 679B.190 is hereby amended to read as follows:

679B.190 1. The commissioner shall carefully preserve in the

division and in permanent form all papers and records relating to the

business and transactions of the division and shall hand them over to his

successor in office.

2. Except as otherwise provided in subsections 3[, 5 and 6,] and 5 to

9, inclusive, other provisions of this code and NRS 616B.015, the papers

and records must be open to public inspection.

3. Any records or information in the possession of the division related

to an investigation conducted by the commissioner is confidential unless:

(a) The commissioner releases, in the manner that he deems appropriate,

all or any part of the records or information for public inspection after

determining that the release of the records or information:

(1) Will not harm his investigation or the person who is being

investigated; or

(2) Serves the interests of a policyholder, the shareholders of the

insurer or the public; or

(b) A court orders the release of the records or information after

determining that the production of the records or information will not

damage any investigation being conducted by the commissioner.

4. The commissioner may destroy unneeded or obsolete records and

filings in the division in accordance with provisions and procedures

applicable in general to administrative agencies of this state.

5. The commissioner may classify as confidential [certain] :

(a) Specified records and information obtained from a governmental

agency [or] ;

(b) Documents obtained or received from other sources upon the

express condition that they remain confidential.

6. All information and documents in the possession of the division or

any of its employees which are related to cases or matters under

investigation by the commissioner or his staff are confidential for the

period of the investigation and may not be made public unless the

commissioner finds the existence of an imminent threat of harm to the

safety or welfare of the policyholder, shareholders or the public and

determines that the interests of the policyholder, shareholders or the public

will be served by publication thereof, in which event he may make a

record public or publish all or any part of the record in any manner he

deems appropriate.

7. The commissioner may classify as confidential the records of a

consumer or information relating to a consumer to protect the health,

welfare or safety of the consumer.

8. In performing his duties, the commissioner may:

(a) Share documents, materials or other information, including any

documents, materials or information classified as confidential, with

other state, federal and international regulatory or law enforcement

agencies or with the National Association of Insurance Commissioners

and its affiliates and subsidiaries if the recipient agrees to maintain the

confidentiality and privileged status of the documents, materials or other

information.

(b) May receive documents, materials or other information, including

any documents, materials or information otherwise confidential and

privileged, from other state, federal and international regulatory or law

enforcement agencies or from the National Association of Insurance

Commissioners and its affiliates and subsidiaries, and shall maintain as

confidential or privileged any document, material or information

received with notice or the understanding that it is confidential or

privileged under the law of the jurisdiction from which it was received.

the sharing and use of information.

9. No waiver of confidentiality or privilege with respect to any

document, material or information occurs as a result of disclosure to the

commissioner under this section or of sharing as authorized under this

chapter.

Sec. 64. NRS 679B.220 is hereby amended to read as follows:

679B.220 1. The commissioner shall communicate on request of the

regulatory officer for insurance [supervisory official of] in any state,

province or country any information which it is his duty by law to

ascertain respecting authorized insurers.

2. The commissioner may:

(a) Be a member of the National Association of Insurance

Commissioners or any successor organization;

(b) Exchange with the association or any successor organization any

information, not otherwise confidential, relating to applicants and

licensees under this Title;

concerning the business of insurance generally; [and]

(d) Enter into compacts with the regulatory officers in other states to

further the uniform treatment of insurers throughout the United States;

and

(e) Participate in and support other cooperative activities of public

officers having supervision of the business of insurance.

Sec. 65. NRS 679B.510 is hereby amended to read as follows:

679B.510 As used in NRS 679B.510 to 679B.560, inclusive, and

section 59 of this act, unless the context otherwise requires, the words and

terms defined in NRS 679B.520, 679B.530 and 679B.540 have the

meanings ascribed to them in those sections.

Sec. 66. NRS 680A.320 is hereby amended to read as follows:

680A.320 1. For the purposes of this section:

(a) An “affiliated person” is a person controlled by any combination of

the insurer, the parent corporation, a subsidiary or the principal

stockholders or officers or directors of any of the foregoing.

(b) “Depository institution” has the meaning ascribed to it in section 3

of the Federal Deposit Insurance Act, 12 U.S.C. § 1813(c)(1).

that satisfies the requirements of section 4(l)(1) of the Bank Holding

Company Act of 1956, 12 U.S.C. § 1841(l)(1).

(d) “Health facility” has the meaning ascribed to it in NRS 439A.015.

[(c)] (e) A “subsidiary” is a person of which either the insurer and the

parent corporation or the insurer or the parent corporation holds practical

control.

2. No insurer may engage directly or indirectly in any transaction or

agreement with its parent corporation, a financial holding company, a

depository institution, or [with] any subsidiary or affiliated person which

will result or tend to result in:

(a) Substitution contrary to the interest of the insurer and through any

method of any asset of the insurer with an asset or assets of inferior quality

or lower fair market value;

(b) Deception as to the true operating results of the insurer;

(d) Allocation to the insurer of a proportion of the expense of combined

facilities or operations which is unfair and unfavorable to the insurer;

(e) Unfair or excessive charges against the insurer for services,

facilities, supplies or reinsurance;

(f) Unfair and inadequate charges by the insurer for reinsurance,

services, facilities or supplies furnished by the insurer to others;

(g) Payment by the insurer for services, facilities, supplies or

reinsurance not reasonably needed by the insurer;

(h) Depletion of the insurer’s surplus, through payment of dividends or

other distribution or withdrawal, below the amount thereof reasonably

required for conduct of the insurer’s business and maintenance of growth

with safety to policyholders; or

(i) Payment by the insurer for services or products for which the health

facility has charged less than fair market value, unless the reduced charge

is reflected in the form of reduced premiums. In determining what

constitutes fair market value, consideration must be given to reasonable

agreements for the preferential provision of health care, in accordance

with regulations adopted by the commissioner. An insurer which pays less

than fair market value for services or products in a transaction which is

subject to the provisions of this paragraph shall annually file a certification

with the commissioner that the reduced payment has been reflected in the

form of reduced premiums, together with documentation supporting the

certification.

3. In all transactions between the insurer and its parent corporation, or

involving the insurer and any subsidiary or affiliated person, full

recognition must be given to the paramount duty and obligation of the

insurer to protect the interests of policyholders, both existing and future.

4. If a health facility is a parent, subsidiary or affiliate of an insurer or

of a parent or facility of an insurer, and the insurer purchases medical or

any other services or products from the health facility, the health facility

may not:

(a) Attempt artificially to reduce or increase its margin of profit by

altering the charges to the insurer.

(b) Alter its true operating results or financial condition through charges

to the insurer for services or products.

This subsection does not prohibit activities authorized pursuant to

paragraph (i) of subsection 2.

5. If a health facility is found, after notice and a hearing, to have

violated the provisions of subsection 4, the commissioner may impose an

administrative fine of not more than $5,000 for each violation.

Sec. 67. NRS 680B.010 is hereby amended to read as follows:

680B.010 The commissioner shall collect in advance and receipt for,

and persons so served must pay to the commissioner, fees and

miscellaneous charges as follows:

1. Insurer’s certificate of authority:

(a) Filing initial application $2,450

(b) Issuance of certificate:

(1) For any one kind of insurance as defined in NRS 681A.010

to 681A.080, inclusive283

(2) For two or more kinds of insurance as so defined 578

(3) For a reinsurer2,450

(d) Reinstatement pursuant to NRS 680A.180, 50 percent of the

annual continuation fee otherwise required.

(e) Registration of additional title pursuant to NRS 680A.240 50

(f) Annual renewal of the registration of additional title pursuant

to NRS 680A.240 25

2. Charter documents, other than those filed with an application

for a certificate of authority. Filing amendments to articles of

incorporation, charter, bylaws, power of attorney and other

constituent documents of the insurer, each document$10

3. Annual statement or report. For filing annual statement or

report $25

4. Service of process:

(a) Filing of power of attorney$5

(b) Acceptance of service of process30

5. [Agents’ licenses,] Licenses, appointments and renewals[:]

for producers of insurance:

(a) [Resident agents and nonresident agents qualifying under

subsection 3 of NRS 683A.340:

(1)] Application and license [$78] $125

[(2) Appointment by]

(b) Appointment fee for each insurer [5] 15

[(3)] (c) Triennial renewal of each license [78] 125

[(4)] (d) Temporary license 10

[(b) Other nonresident agents:

(1) Application and license 138

(2) Appointment by each insurer 25

(3) Triennial renewal of each license 138

6. Brokers’ licenses and renewals:

(a) Resident brokers and nonresident brokers qualifying under

subsection 3 of NRS 683A.340:

(1) Application and license $78

(2) Triennial renewal of each license 78

(b) Other nonresident brokers:

(1) Application and license 258

(2) Triennial renewal of each license 258

(e) Modification of an existing license 50

6. Surplus lines brokers:

[(1)] (a) Application and license [78] $125

[(2)] (b) Triennial renewal of each license [78] 125

[(d) Nonresident surplus lines brokers:

(1) Application and license 258

(2) Triennial renewal of each license 258

7. Solicitors’ licenses, appointments and renewals:

(a) Application and license $78

(b) Triennial renewal of each license 78

8.] 7. Managing general agents’ licenses, appointments and

renewals:

(a) [Resident managing general agents:

(1)] Application and license [$78] $125

[(2) Initial appointment,]

(b) Appointment fee for each insurer [5] 15

[(3)] Triennial renewal of each license [78] 125

[(b) Nonresident managing general agents:

(1) Application and license 138

(2) Initial appointment, each insurer 25

(3) Triennial renewal of each license 138

9.] 8. Adjusters’ licenses and renewals:

(a) Independent and public adjusters:

(1) Application and license [$78] $125

(2) Triennial renewal of each license [78] 125

(b) Associate adjusters:

(1) Application and license [78] 125

(2) [Initial appointment5

(3)]Triennial renewal of each license [78] 125

[10.] 9. Licenses and renewals for appraisers of physical

damage to motor vehicles:

(a) Application and license [$78] $125

(b) Triennial renewal of each license [78] 125

[11.] 10. Additional title and property insurers pursuant to NRS

680A.240:

(a) Original registration $50

(b) Annual renewal 25

[12.] 11. Insurance vending machines:

(a) Application and license, for each machine[$78] $125

(b) Triennial renewal of each license [78] 125

[13.] 12. Permit for solicitation for securities:

(a) Application for permit $100

(b) Extension of permit 50

[14.] 13. Securities salesmen for domestic insurers:

(a) Application and license $25

(b) Annual renewal of license 15

[15.] 14. Rating organizations:

(a) Application and license $500

(b) Annual renewal 500

[16.] 15. Certificates and renewals for administrators licensed

pursuant to chapter 683A of NRS:

(a) [Resident administrators:

(1)] Application and certificate of registration [$78] $125

[(2)] (b) Triennial renewal [78] 125

[(b) Nonresident administrators:

(1) Application and certificate of registration 138

(2) Triennial renewal 138

17.] 16. For copies of the insurance laws of Nevada, a fee

which is not less than the cost of producing the copies.

[18.] 17. Certified copies of certificates of authority and

licenses issued pursuant to the insurance code $10

[19.] 18. For copies and amendments of documents on file in

the division, a reasonable charge fixed by the commissioner,

including charges for duplicating or amending the forms and for

certifying the copies and affixing the official seal.

[20.] 19. Letter of clearance for [an agent or broker] a

producer of insurance or other licensee, if requested by someone

other than the licensee$10

[21.] 20. Certificate of status as a [licensed agent or broker]

producer of insurance or other licensee, if requested by someone

other than the licensee$10

[22.] 21. Licenses, appointments and renewals for bail agents:

(a) Application and license [$78] $125

(b) [Initial appointment by] Appointment for each surety insurer [5] 15

[23.] 22. Licenses and renewals for bail enforcement agents:

(a) Application and license [$78] $125

(b) Triennial renewal of each license [78] 125

[24.] 23. Licenses, appointments and renewals for general [bail

agents:] agents for bail:

(a) Application and license [$78] $125

(b) Initial appointment by each insurer [5] 15

[25.] 24. Licenses and renewals for bail solicitors:

(a) Application and license [$78] $125

(b) Triennial renewal of each license [78] 125

[26.] 25. Licenses and renewals for title agents and escrow

officers:

(a) [Resident title agents and escrow officers:

(1)] Application and license [$78] $125

[(2)] (b) Triennial renewal of each license [78] 125

[(b) Nonresident title agents and escrow officers:

(1) Application and license 138

(2) Triennial renewal of each license 138]

(d) Change in name or location of business or in association 10

[27.] 26. Certificate of authority and renewal for a seller of

prepaid funeral contracts [$78] $125

[28.] 27. Licenses and renewals for agents for prepaid funeral

contracts:

(a) [Resident agents:

(1)] Application and license [$78] $125

[(2)] (b) Triennial renewal of each license [78] 125

[(b) Nonresident agents:

(1) Application and license 138

(2) Triennial renewal of each license 138

29.] 28. Licenses, appointments and renewals for agents for

fraternal benefit societies:

(a) [Resident agents:

(1)] Application and license [$78] $125

[(2) Appointment5

(3)] (b) Appointment for each insurer 15

[(b) Nonresident agents:

(1) Application and license 138

(2) Triennial renewal of each license 138

30.] 29. Reinsurance intermediary broker or manager:

(a) [Resident agents:

(1)] Application and license [$78] $125

[(2)] (b) Triennial renewal of each license [78] 125

[(b) Nonresident agents:

(1) Application and license 138

(2) Triennial renewal of each license 138

31.] 30. Agents for and sellers of prepaid burial contracts:

(a) [Resident agents and sellers:

(1)] Application and certificate or license [$78] $125

[(2)] (b) Triennial renewal [78] 125

[(b) Nonresident agents and sellers:

(1) Application and certificate or license 138

(2) Triennial renewal 138

32.] 31. Risk retention groups:

(a) Initial registration and review of an application $2,450

(b) Each annual continuation of a certificate of registration 2,450

[33.] 32. Required filing of forms:

(a) For rates and policies $25

(b) For riders and endorsements 10

33. Viatical settlements:

(a) Provider of viatical settlements:

(1) Application and license $1,000

(2) Annual renewal1,000

(b) Broker of viatical settlements:

(1) Application and license 500

(2) Annual renewal500

34. Insurance consultants:

(a) Application and license $125

(b) Triennial renewal125

35. Licensee’s association with or appointment or sponsorship

by an organization:

(a) Initial appointment, association or sponsorship, for each

organization $50

(b) Renewal of each association or sponsorship 50

Sec. 68. NRS 682A.100 is hereby amended to read as follows:

682A.100 1. An insurer may invest in preferred or guaranteed stocks

or shares of any solvent institution existing under the laws of the United

States of America, Canada or Mexico, or of any state or province thereof,

if all of the prior obligations and prior preferred stocks, if any, of [such]

the institution at the date of acquisition of the investment by the insurer

are eligible as investments under this chapter and if the net earnings of

[such] the institution available for its fixed charges during either of the last

2 years have been, and during each of the last 5 years have averaged, not

less than 1 1/2 times the sum of its average annual fixed charges, if any, its

average annual maximum contingent interest, if any, and its average

annual preferred dividend requirements. For the purposes of this section

[such computation shall refer] the computation refers to the fiscal years

immediately preceding the date of acquisition of the investment by the

insurer, and the term “preferred dividend requirement” [shall be deemed to

mean] means cumulative or noncumulative dividends, whether paid or

not.

2. No insurer [shall] may invest in any such preferred or guaranteed

stocks in an amount in excess of [10] 35 percent of [any issue or such] the

particular issue of guaranteed or preferred [stocks] stock or, subject to

subsection 1 of NRS 682A.050 [(diversification),] more than an amount

equal to 10 percent of the insurer’s admitted assets in any one issue.

Sec. 69. NRS 682A.110 is hereby amended to read as follows:

682A.110 1. An insurer may invest up to [25] 35 percent of its assets

in nonassessable [(except as to bank or trust company stocks, and except

for taxes)] common stocks, other than insurance stocks, of any solvent

corporation organized and existing under the laws of the United States of

America, Canada or Mexico, or of any state or province thereof, except

that bank or trust company stocks may be assessable and any stocks may

be assessable for taxes, if [such] the corporation has had net earnings

available for dividends on [such] the stock in each of the 5 fiscal years

next preceding acquisition by the insurer. If the issuing corporation has not

been in legal existence for [the whole of such] all of the 5 fiscal years but

was formed as a consolidation or merger of two or more businesses of

which at least one was in operation on a date 5 years [prior to] before the

investment, the test of eligibility of its common stock under this section

[shall] must be based upon consolidated pro forma statements of the

predecessor or constituent institutions.

2. Any amount invested in a fund or trust under NRS 682A.140 must

not be included in computing the amounts prescribed in subsection 1.

Sec. 70. NRS 682A.130 is hereby amended to read as follows:

682A.130 1. An insurer may invest in the stock of [its] a subsidiary

insurance corporation formed or acquired by it, or in the stock of [its] a

subsidiary business corporation [or corporations] formed and engaged

solely in any one or more of the following businesses:

(a) [In any] A business necessary and incidental to the convenient

operation of the insurer’s insurance business or to the administration of any

of its lawful affairs;

(b) Providing any actuarial, computer, data processing, accounting,

claims, appraisal, collection, sales, loss prevention or safety engineering

and similar services;

(d) Premium financing;

(e) Financing of agents of the insurer;

(f) Acting as investment adviser and principal underwriter or investment

adviser or principal underwriter of a management company or

management companies (mutual funds), registered as such under the

Investment Company Act of 1940;

(g) Financial and investment counseling services;

(h) Administration of self-insurance plans;

(i) Administration of self-insured pension and similar plans, or the self

-insured portions of such plans;

(j) Securities broker-dealer;

(k) Escrow services; [or]

(l) Trust services with respect to funds payable or paid by it under its

insurance contracts[.] ;

(m) Bank, savings and loan association or thrift company; or

(n) Insurance agency.

2. For the purposes of this section a “subsidiary” is a corporation of

which the insurer owns sufficient stock to give it effective control.

3. All of the insurer’s investments under this section shall be deemed

to be common stocks for the purposes of the [25-percent-of-assets]

limitation imposed by NRS 682A.110[.] on the percentage of admitted

assets which may be invested in common stock.

Sec. 71. NRS 682A.190 is hereby amended to read as follows:

682A.190 An insurer may invest in share or savings accounts of thrift

companies, credit unions or savings and loan associations, or in savings

accounts of banks, and in any one such institution only to the extent that

the investment is insured by the Federal Deposit Insurance Corporation,

the National Credit Union Share Insurance Fund or a private insurer

approved pursuant to NRS 677.247 or 678.755.

Sec. 72. NRS 682A.200 is hereby amended to read as follows:

682A.200 1. An insurer may make loans or investments not

otherwise expressly permitted under this chapter, in an aggregate amount

not over [5] 10 percent of the insurer’s admitted assets and not over 1

percent of [such] those assets as to any one such loan or investment, if

[such] the loan or investment fulfills the requirements of NRS 682A.030

and otherwise qualifies as a sound investment. No such loan or investment

[shall] may be represented by:

(a) Any item described in NRS 681B.020 , [(assets not allowed),] or any

loan or investment otherwise expressly prohibited.

(b) Agents’ balances, or amounts advanced to or owing by agents,

except as to policy loans, mortgage loans and collateral loans otherwise

authorized under this chapter.

other provision of this chapter.

(d) Any asset [theretofore] acquired or held by the insurer under any

other category of loans or investments eligible under this chapter.

2. The insurer shall keep a separate record of all loans and investments

made under this section.

Sec. 73. NRS 682A.240 is hereby amended to read as follows:

682A.240 1. A domestic insurer may invest in real property only if

used for the purposes or acquired in any manner, and within limits, set

forth below:

(a) The building in which it has its principal office, the land upon which

the building stands, and such other real property as may be requisite for

the insurer’s convenient accommodation in the transaction of its business.

The amount so invested, and apportioned as to space actually so occupied

or used, must not aggregate more than 15 percent of the insurer’s assets;

but the commissioner may authorize an insurer to increase the investment

in such amount as he may determine if, upon proper showing made upon a

hearing held by him, he finds that the 15-percent limitation is insufficient

to provide reasonable and convenient accommodation for the insurer’s

business.

(b) Real property acquired in satisfaction or part payment of loans,

mortgages, liens, judgments, decrees or debts previously owing to the

insurer in the due course of its business.

sale of other real property owned by it, if [such] the transaction has

effected a net reduction in the insurer’s investments in real property.

(d) Real property acquired by gift or devise, or through merger,

consolidation or bulk reinsurance of another insurer under this code.

(e) Additional real property and equipment incidental thereto, if

necessary or convenient for the purpose of enhancing the sale or other

value of real property previously acquired or held under this section.

[Such] The additional real property and equipment, together with the real

property for the enhancement of which it was acquired, must be included

together, for the purpose of applicable investment limits, and is subject to

disposal under NRS 682A.250 at the same time and under the same

conditions as apply to [such] the enhanced real property.

(f) Real property, or any interest therein, acquired or held by purchase,

lease or otherwise, other than real property to be used primarily for

mining, development of oil or mineral resources, recreational, amusement,

hotel, motel or club purposes, acquired as an investment for production of

income, or acquired to be improved or developed for investment purposes

pursuant to an existing program therefor. The insurer may hold, mortgage,

improve, develop, maintain, manage, lease, sell, convey and otherwise

dispose of real property acquired by it under this section. An insurer

[shall] may not have at any one time invested in real property under this

paragraph more than [15] 20 percent of its admitted assets.

2. Total investments of the insurer in real property under this section

[must] may not at any time exceed [25] 35 percent of the insurer’s

admitted assets.

Sec. 74. Chapter 683A of NRS is hereby amended by adding thereto

the provisions set forth as sections 75 to 99, inclusive, of this act.

Sec. 75. “Business organization” means a corporation, association,

partnership, limited liability company, limited liability partnership or

other legal form of organization.

Sec. 76. “Home state” means the District of Columbia or any state

or territory of the United States or Canada in which a producer of

insurance maintains his principal place of residence or principal place

of business and is licensed to act as a producer of insurance.

Sec. 77. “License” means a document issued by the commissioner

authorizing a person to act as a producer of insurance for the lines of

authority specified in the document.

Sec. 78. “Negotiate” means to confer directly with, or offer advice

directly to, a purchaser or prospective purchaser of a particular contract

of insurance concerning any of the substantive benefits, terms or

conditions of the contract, if the person conferring or offering the advice

sells insurance or obtains insurance from insurers or purchasers.

Sec. 79. (Deleted by amendment.)

Sec. 80. “Sell” means to exchange a contract of insurance, by any

means, for money or its equivalent on behalf of an insurer.

Sec. 81. “Solicit” means to attempt to sell insurance or to ask or

urge a person to apply for a particular kind of insurance from a

particular insurer.

Sec. 82. “Terminate” means to cancel the relationship between a

producer of insurance and the insurer or to terminate a producer’s

authority to transact insurance.

Sec. 83. “Uniform application” means the uniform application for

licensing of producers of insurance prepared by the National

Association of Insurance Commissioners and adopted by the

commissioner.

Sec. 84. 1. A person shall not sell, solicit or negotiate insurance in

this state for any class of insurance unless he is licensed for that class of

insurance.

2. An insurer is exempt from the requirement for licensure as a

producer of insurance, but this exemption does not extend to an

insurer’s officers, directors, employees, subsidiaries or affiliates.

3. A person required to be licensed in this state who transacts

insurance without a license is subject to an administrative fine of not

more than $1,000 for each violation.

Sec. 85. The following persons need not be licensed as producers of

insurance:

1. An officer, director or employee of an insurer or of a producer of

insurance if the officer, director or employee does not receive any

commission on policies written or sold to insure risks residing, located or

to be performed in this state and:

(a) The officer, director or employee’s activities are executive,

administrative, managerial, clerical or a combination of these, and are

only indirectly related to the sale, solicitation or negotiation of

insurance;

(b) The officer, director or employee’s function relates to

underwriting, control of losses, inspection or the processing, adjusting,

investigating or settling of claims on contracts of insurance; or

special agent or supervisor of an agency assisting producers of

insurance where his activities are limited to providing technical advice

and assistance to licensed producers and do not include sale, solicitation

or negotiation of insurance.

2. A person who secures and furnishes information for the purpose

of group life insurance, group property and casualty insurance, group

annuities, or group or blanket accident and health insurance, or for the

purpose of enrolling natural persons under plans, issuing certificates

under plans or otherwise assisting in administering plans, or who

performs administrative services related to mass marketed property and

casualty insurance, if no commission is paid to him for the service. As

used in this subsection, “blanket accident and health insurance” has the

meaning ascribed to it in NRS 689B.070.

3. An employer or association or its officers, directors or employees,

or the trustees of an employees’ trust plan, to the extent that the

employer, association, officers, directors, employees or trustees are

engaged in the administration or operation of a program of employees’

benefits for the employer’s or association’s own employees or the

employees of its subsidiaries or affiliates, if the program involves the use

of insurance issued by an insurer and the employer, association,

officers, directors, employees or trustees are not compensated by the

insurer issuing the contracts.

4. Employees of insurers or organizations employed by insurers who

are engaged in the inspection, rating or classification of risks or in the

supervision of the training of producers of insurance and are not

individually engaged in the sale, solicitation or negotiation of insurance.

5. A person whose activities in this state are limited to advertising,

without the intent to solicit insurance in this state, through

communications in printed publications or electronic mass media whose

distribution is not limited to residents of this state, if he does not sell,

solicit or negotiate insurance of risks residing, located or to be

performed in this state.

6. A salaried full-time employee who counsels or advises his

employer concerning the interests of the employer, or of the subsidiaries

or affiliates of the employer, in insurance, if the employee does not sell

or solicit insurance or receive a commission.

7. An employee of a producer of insurance or an insurer who

responds to requests from holders of policies previously issued, if the

employee is not directly compensated according to the volume of

premiums that may result from those services and does not solicit

insurance or offer advice concerning terms or conditions of policies.

Sec. 86. 1. A resident natural person applying for a license as a

producer of insurance must pass a written examination unless exempt

under section 90 of this act. The examination must test his knowledge

concerning the lines of authority for which application is made, the

duties and responsibilities of a producer and the laws and regulations of

this state relating to insurance. The commissioner shall adopt

regulations for developing and conducting examinations required by this

section.

2. The commissioner may contract with a person outside the division

for administering examinations, processing applications, collecting fees

and performing any other functions he considers appropriate.

3. Each natural person applying for an examination shall pay a

nonrefundable fee in an amount prescribed by the commissioner to

defray the cost of processing the application and administering the

examination.

4. An applicant who fails to appear for the examination as scheduled

or fails to pass the examination must reapply for examination and pay

the required fee in order to be scheduled for another examination.

Sec. 87. 1. The commissioner shall prescribe the form of

application by a natural person for a license as a resident producer of

insurance. The applicant must declare, under penalty of refusal to issue,

or suspension or revocation of, the license, that the statements made in

the application are true, correct and complete to the best of his

knowledge and belief. Before approving the application, the

commissioner must find that the applicant has:

(a) Attained the age of 18 years;

(b) Not committed any act that is a ground for refusal to issue, or

suspension or revocation of, a license;

application is made, unless the applicant is exempt from this

requirement;

(d) Paid the fee prescribed for the license and a fee of $15 for deposit

in the insurance recovery account, neither of which may be refunded;

and

(e) Successfully passed the examinations for the lines of authority for

which application is made, unless the applicant is exempt from this

requirement.

2. A business organization must be licensed as a producer of

insurance in order to act as such. Application must be made on a form

prescribed by the commissioner. Before approving the application, the

commissioner must find that the applicant has:

(a) Paid the fee prescribed for the license and a fee of $15 for deposit

in the insurance recovery account, neither of which may be refunded;

and

(b) Designated a natural person licensed as a producer of insurance

to be responsible for the organization’s compliance with the laws and

regulations of this state relating to insurance.

3. A natural person who is a resident of this state applying for a

license must furnish a copy of a search concerning him conducted by

the Federal Bureau of Investigation in its national criminal records, and

of a search concerning him of the central repository for Nevada records

of criminal history. The commissioner shall adopt regulations

concerning the procedures for obtaining this information.

4. The commissioner may require any document reasonably

necessary to verify information contained in an application.

Sec. 88. 1. Unless the commissioner refuses to issue the license

under section 93 of this act, he shall issue a license as a producer of

insurance to a person who has satisfied the requirements of sections 86

and 87 of this act. A producer may qualify for a license in one or more

of the lines of authority permitted by statute or regulation, including:

(a) Life insurance on human lives, which includes benefits from

endowments and annuities and may include additional benefits from

death by accident and benefits for dismemberment by accident and for

disability.

(b) Health insurance for sickness, bodily injury or accidental death,

which may include benefits for disability.

property of every kind.

(d) Casualty insurance against legal liability, including liability for

death, injury or disability and damage to real or personal property.

(e) Surety indemnifying financial institutions or providing bonds for

fidelity, performance of contracts, or financial guaranty.

(f) Variable annuities, including coverage reflecting the results of a

separate investment account.

(g) Credit insurance, including life, disability, property,

unemployment, involuntary unemployment, mortgage life, mortgage

guaranty, mortgage disability, guaranteed protection of assets, and any

other form of insurance offered in connection with an extension of

credit that is limited to wholly or partially extinguishing the obligation

which the commissioner determines should be considered as limited-line

credit insurance.

(h) Personal lines, consisting of automobile and motorcycle insurance

and residential property insurance, including coverage for flood, of

personal watercraft and of excess liability, written over one or more

underlying policies of automobile or residential property insurance.

(i) Fixed annuities as a limited line.

(j) Travel and baggage as a limited line.

(k) Rental car agency as a limited line.

2. A license as a producer of insurance remains in effect unless

revoked, suspended, allowed to expire or otherwise terminated, if the

license is renewed when due, the fee for renewal and a fee of $15 for

deposit in the insurance recovery account are paid for each license and

each affiliation with a business organization licensed pursuant to

subsection 2 of section 87 of this act and any requirement for education

is satisfied by the due date.

3. A natural person who allows his license as a producer of

insurance to expire may reapply for the same license within 12 months

after the date renewal was due without passing a written examination,

but a penalty twice the unpaid renewal fee is required for any renewal

fee received after the due date.

4. A licensed producer of insurance who is unable to renew his

license because of military service, extended medical disability or other

extenuating circumstance may request a waiver of the time limit and of

an examination, fine or sanction otherwise required or imposed because

of failure to renew.

5. A license must state the licensee’s name, address, personal

identification number, the date of issuance, the lines of authority and the

date of expiration and contain any other information the commissioner

considers necessary. A resident producer shall maintain a place of

business in this state which is accessible to the public and where he

principally conducts transactions under his license. The place of

business may be in his residence. The license must be conspicuously

displayed in an area of the place of business which is open to the public.

6. A licensee shall inform the commissioner of a change of address,

in writing or by other means acceptable to the commissioner within 30

days after the change. If a licensee changes his address without giving

written notice and the commissioner is unable to locate the licensee after

diligent effort, he may revoke the license without a hearing. The mailing

of a letter by certified mail, return receipt requested, addressed to the

licensee at his last mailing address appearing on the records of the

division, and the return of the letter undelivered, constitutes a diligent

effort by the commissioner.

Sec. 89. 1. Unless the commissioner refuses to issue the license

under section 94 of this act, the commissioner shall issue a license as a

producer of insurance to a nonresident person if:

(a) He is currently licensed as a resident and in good standing in his

home state;

(b) He has made the proper request for licensure and paid the fee

prescribed for the license and a fee of $15 for deposit in the insurance

recovery account;

he made in his home state, or a completed uniform application; and

(d) His home state issues nonresident licenses as producers of

insurance to residents of this state pursuant to substantially the same

procedure.

2. The commissioner may participate with the National Association

of Insurance Commissioners or a subsidiary in a centralized registry in

which licensing and appointment of producers of insurance may be

effected for all states that require licensing and participate in the

registry. If he finds that participation is in the public interest, he may

adopt by regulation any uniform standards and procedures necessary for

participation, including central collection of fees for licensing and

appointment that are handled through the registry.

3. A nonresident producer who moves from one state to another state

shall file a change of address and certification from his new state of

residence within 30 days after his change of legal residence. No fee or

application for license is required.

4. A nonresident licensed as a producer for surplus lines in his home

state must be issued a nonresident license of that kind in this state

pursuant to subsection 1, subject in all other respects to chapter 685A of

NRS. A nonresident licensed as a producer for limited lines in his home

state is entitled to a nonresident license of that kind in this state

pursuant to subsection 1, granting the same scope of authority as the

license issued in the home state. As used in this subsection, insurance

for limited lines is authority granted by the home state which is restricted

to less than the

total authority prescribed for the associated major lines pursuant to

section 88 of this act.

Sec. 90. 1. An applicant for licensing in this state as a producer of

insurance who was previously licensed for the same lines of authority in

another state need not complete any education or examination if he is

currently licensed in that state or, if the application is received within 90

days after the cancellation of his license, the other state certifies that he

was in good standing at the time of cancellation. Alternatively, the

exemption is available if the records of the National Association of

Insurance Commissioners show that the applicant is or was licensed and

in good standing for the lines of authority requested.

2. An examination is not required for a producer of insurance who

confines his activity to insurance categorized as limited line, credit,

travel, baggage or fixed annuity, or covering vehicles leased for a short

term.

3. A person licensed in another state who moves to this state and

desires to become licensed as a resident producer of insurance with the

benefit of the exemption provided in subsection 1 must apply for

licensing within 90 days after establishing legal residence.

Sec. 91. 1. An applicant for a license as a producer of insurance

who desires to use a name other than his true name as shown on the

license shall file with the commissioner a certified copy of the certificate

filed pursuant to chapter 602 of NRS. An incorporated applicant or

licensee shall file with the commissioner a document showing the

corporation’s true name and all fictitious names under which it

conducts or intends to conduct business. A licensee shall file promptly

with the commissioner written notice of any change in or discontinuance

of the use of a fictitious name.

2. The commissioner may disapprove in writing the use of a true

name, other than the true name of a natural person who is the applicant

or licensee, or a fictitious name of any applicant or licensee, on any of

the following grounds:

(a) The name interferes with or is deceptively similar to a name

already filed and in use by another licensee.

(b) Use of the name may mislead the public in any respect.

insurer, motor club or hospital service plan or is entitled to engage in

activities related to insurance not permitted under the license applied for

or held.

(d) The name states or implies that the licensee is an underwriter, but:

(1) A natural person licensed as an agent or broker for life

insurance may describe himself as an underwriter or “chartered life

underwriter” if entitled to do so;

(2) A natural person licensed for property and casualty insurance

may use the designation “chartered property and casualty underwriter”

if entitled thereto; and

(3) An insurance agent or brokers’ trade association may use a

name containing the word “underwriter.”

(e) The licensee has already filed and not discontinued the use of

more than two names, including the true name.

3. A licensee shall not use a name after written notice from the

commissioner that its use violates the provisions of this section. If the

commissioner determines that the use is justified by mitigating

circumstances, he may permit, in writing, the use of the name to

continue for a specified reasonable period upon conditions imposed by

him for the protection of the public consistent with this section.

4. Paragraphs (a), (c) and (d) of subsection 2 do not apply to the true

name of an organization which on July 1, 1965, held under that name a

type of license similar to those governed by this chapter, or to a fictitious

name used on July 1, 1965, by a natural person or organization holding

such a license, if the fictitious name was filed with the commissioner on

or before July 1, 1965.

Sec. 92. 1. The commissioner may issue a temporary license as a

producer of insurance to any of the following for 180 days or less

without requiring an examination if he believes that the temporary

license is necessary to carry on the business of insurance:

(a) The surviving spouse, personal representative or guardian of a

licensed producer who dies or becomes incompetent, to allow adequate

time for the sale of the business, the recovery or return of the producer,

or the training and licensing of new personnel to operate the business;

(b) A member or employee of a business organization licensed as a

producer, upon the death or disability of the natural person designated

in it application or license;

armed forces of the United States; or

(d) A person in any other circumstance where the commissioner

believes that the public interest will be best served by issuing the license.

2. The commissioner may limit by order the authority of a temporary

licensee as he believes necessary to protect persons insured and the

public. He may require the temporary licensee to have a suitable sponsor

who is licensed as a producer of insurance or authorized as an insurer

and who assumes responsibility for all acts of the temporary licensee,

and may impose similar requirements to protect persons insured and the

public. The commissioner may revoke a temporary license by order if the

interests of persons insured or the public are endangered. A temporary

license expires when the owner or his personal representative or

guardian disposes of the business.

Sec. 93. The commissioner may refuse to issue a license or

certificate pursuant to this chapter or may place any person to whom a

license or certificate is issued pursuant to this chapter on probation,

suspend him for not more than 12 months, or revoke or refuse to renew

his license or certificate, or may impose an administrative fine or take

any combination of the foregoing actions, for one or more of the

following causes:

1. Providing incorrect, misleading, incomplete or partially untrue

information in his application for a license.

2. Violating a law regulating insurance, or violating a regulation,

order or subpoena of the commissioner or an equivalent officer of

another state.

3. Obtaining or attempting to obtain a license through

misrepresentation or fraud.

4. Misappropriating, converting or improperly withholding money or

property received in the course of the business of insurance.

5. Intentionally misrepresenting the terms of an actual or proposed

contract of or application for insurance.

6. Conviction of a felony.

7. Admitting or being found to have committed an unfair trade

practice or fraud.

8. Using fraudulent, coercive or dishonest practices, or demonstrated

incompetence, untrustworthiness or financial irresponsibility in the

conduct of business in this state or elsewhere.

9. Denial, suspension or revocation of a license as a producer of

insurance, or its equivalent, in any other state, territory or province.

10. Forging another’s name to an application for insurance or any

other document relating to the transaction of insurance.

11. Improperly using notes or other reference material to complete

an examination for a license related to insurance.

12. Knowingly accepting business related to insurance from an

unlicensed person.

13. Failing to comply with an administrative or judicial order

imposing an obligation of child support.

Sec. 94. 1. If the commissioner denies an application for, or

refuses to renew, a license, he shall notify the applicant or licensee and

state in writing the reason for the denial or refusal. The applicant or

licensee may apply in writing, pursuant to NRS 679B.310, for a hearing

before the commissioner to determine the reasonableness of the denial

or refusal. The hearing must be held within 30 days and conducted

pursuant to NRS 679B.330. The applicant or licensee may waive the

requirement to hold the hearing within 30 days, in writing, before a

hearing is held.

2. The commissioner may suspend, revoke or refuse to renew the

license of a business organization if he finds, after hearing, that a

violation by a natural person was known or should have been known by

one or more of the partners, officers or managers acting on behalf of the

organization, the violation was not reported to the commissioner, and no

corrective action was taken.

3. In addition to or in lieu of a denial, suspension or revocation of,

or refusal to renew, a license, an administrative fine of not less than $25

nor more than $500 may be imposed for each violation or act. An order

imposing a fine must specify the date, not less than 15 days nor more

than 30 days after the date of the order, before which the fine must be

paid. If the fine is not paid when due, the commissioner shall

immediately revoke the license of a licensee and the fine must be

recovered in a civil action brought on behalf of the commissioner by the

attorney general. The commissioner shall immediately deposit all such

fines collected with the state treasurer for credit to the state general

fund.

4. The commissioner retains the authority to enforce the provisions

of, and impose any penalty or pursue any remedy authorized by, this

Title against any person who is under investigation for or charged with a

violation of a provision of this Title even if his license or registration has

been surrendered or has lapsed by operation of law.

5. A licensee must pay all applicable fees, including renewal fees,

and maintain any required education during a period of suspension of

his license.

Sec. 95. 1. An insurer or a producer of insurance shall not pay a

commission, brokerage, fee for service or other valuable consideration

to a person for selling, soliciting or negotiating insurance in this state if

his activities require him to be licensed under this Title and he is not so

licensed.

2. A person shall not accept a commission, brokerage, fee for service

or other valuable consideration for selling, soliciting or negotiating

insurance in this state if his activities require him to be licensed under

this Title and he is not so licensed.

3. Commissions for renewal and other deferred commissions may be

paid to a person whose activities required him to be licensed under this

Title at the time of the sale, solicitation or negotiation and he was so

licensed at that time.

4. An insurer or producer of insurance may pay or assign

commissions, brokerage, fees for service or other valuable

considerations to an insurance agency or a person who does not sell,

solicit or negotiate insurance in this state unless the payment would

violate the provisions of NRS 686A.110 or 686A.120.

Sec. 96. 1. A producer of insurance shall not act as an agent

unless he is appointed as an agent by the insurer. A producer who is not

acting as an agent is a broker who does not need to be appointed.

2. To appoint a producer of insurance as its agent, an insurer must

file, in a form approved by the commissioner, a notice of appointment

within 15 days after the contract is executed or the first application for

insurance is submitted. An insurer may appoint a producer to act as

agent for all or some insurers within its holding company or group by

filing a single notice of appointment. A notice of appointment may

include several agents.

3. Upon receipt of a notice of appointment, the commissioner shall

determine within 30 days whether the producer of insurance is eligible

for appointment. If he is not, the commissioner shall so notify the

insurer within 5 days after the determination is made.

4. An insurer shall pay an appointment fee and remit an annual

renewal fee for each producer of insurance appointed as its agent. A

payment or remittance may include fees for several agents.

5. A broker shall not place insurance, other than life insurance,

health insurance, annuity contracts or coverage written pursuant to the

Surplus Lines Law set forth in chapter 685A of NRS, that covers

property or risks within this state unless the broker does so with a

licensed agent of an authorized insurer.

6. A producer who is acting as an agent may also act as and be a

broker with regard to insurers for which he is not acting as an agent.

The sole relationship between an insurer and a broker who is appointed

as an agent by the insurer as to any transactions arising during the

period in

which he is appointed as an agent is that of insurer and agent, and not

insurer and broker.

7. As used in this section:

(a) “Agent” means a producer of insurance who is compensated by

the insurer and sells, solicits or negotiates insurance for the insurer.

(b) “Broker” means a producer of insurance who:

(1) Is not an agent of an insurer;

(2) Solicits, negotiates or procures insurance on behalf of an

insured or prospective insured; and

(3) Does not have the power, by his own actions as a broker, to

obligate an insurer upon any risk or with reference to any transaction of

insurance.

Sec. 97. 1. An insurer or its authorized representative who

terminates the appointment, employment or other relationship of a

producer of insurance to the insurer for any reason shall notify the

commissioner within 30 days after the effective date of the termination,

in a form prescribed by the commissioner. The insurer shall provide

additional information or documents if so requested in writing by the

commissioner.

2. If the reason for termination is an activity described in section 93

of this act as a cause for disciplinary action or the insurer knows that

the producer has been found to have engaged in such an activity by a

court, governmental agency or self-regulatory organization authorized

by law, the insurer or its authorized representative shall notify the

commissioner, in a form acceptable to the commissioner, if upon further

review or investigation the insurer discovers additional information that

would have been reportable originally to the commissioner if the insurer

had then known it.

3. Within 15 days after notifying the commissioner under subsection

1 or 2, the insurer shall mail a copy of the notification to the producer of

insurance at his last known address. If the termination was for an

activity described in subsection 2, the copy must be sent by certified mail,

return receipt requested, or by overnight delivery using a nationally

recognized carrier.

4. Within 30 days after the producer has received the original or

additional notification, he may file written comments concerning the

substance of the notification with the commissioner. The producer shall

send a copy of the comments, by the same means and at the same time,

to the reporting insurer. The comments become a part of the

commissioner’s file and must accompany every copy of the underlying

report that is distributed or disclosed by the commissioner.

5. In the absence of actual malice, an insurer, its authorized

representative, a producer of insurance, the commissioner, and any

organization of which the commissioner is a member which compiles

information and makes it available to other commissioners of insurance

or to regulatory or law enforcement agencies are not subject to civil

liability, and no cause of action arises against any of them or their

respective agents or employees, as a result of any statement or

information required by or provided pursuant to this section or any

statement by a terminating insurer or a producer to another insurer or

producer limited to whether a termination for a cause described in

subsection 2 was reported to the commissioner, if in the latter case the

propriety of termination for that cause is certified in writing by an

officer or authorized representative of the insurer or by the producer.

6. In an action brought against a person who may have immunity

under subsection 5 for making a statement or providing information

required by this section or requested by the commissioner under this

section, the plaintiff must plead specifically that subsection 5 does not

apply because the person making the statement or providing the

information did so with actual malice.

7. Subsections 5 and 6 do not abrogate or modify any other privilege

or immunity under statute or the common law.

Sec. 98. An insurer or its authorized representative who fails to

report as required by section 97 of this act or is found by a court of

competent jurisdiction to have reported with actual malice is subject to

the suspension or revocation of its license, after notice and hearing, and

may be further punished by a fine under NRS 679A.180.

Sec. 99. A producer of insurance shall report to the commissioner:

1. Any administrative action taken against him in another

jurisdiction or by another governmental agency in this state, within 30

days after the final disposition of the matter. The report must include a

copy of the complaint filed, the order issued, and any other relevant

legal documents.

2. Any criminal prosecution against him in any jurisdiction, within

30 days after the initial pretrial hearing. The report must include a copy

of the complaint filed, the order as a result of the pretrial hearing, and