NRS: CHAPTER 696B - DELINQUENT INSURERS: CONSERVATION, REHABILITATION AND LIQUIDATION

NRS 696B.190 Jurisdiction of delinquency proceedings; Nevada Rules of Civil Procedure do not govern commencement of delinquency proceeding; venue; exclusiveness of remedy; appeal.

NRS 696B.200 Jurisdiction over related persons and transactions; service of process.

NRS 696B.210 Grounds for conservation or rehabilitation of domestic insurer or domiciled alien insurer.

NRS 696B.220 Grounds for liquidation of domestic insurer or domiciled alien insurer.

NRS 696B.230 Grounds for conservation: Foreign and alien insurers.

NRS 696B.240 Grounds for ancillary liquidation: Foreign and alien insurers.

NRS 696B.250 Commencement of delinquency proceeding: Petition; order to show cause.

NRS 696B.255 Commissioner as receiver, rehabilitator or liquidator authorized to appoint advisory committee; payment of costs.

NRS 696B.260 Service of process.

NRS 696B.270 Injunctions.

NRS 696B.280 Uniform Insurers Liquidation Act and Insurer Receivership Model Act: Composition; severability; interpretation.

NRS 696B.290 Conduct of delinquency proceedings against domestic insurers and certain alien insurers; appointment and payment of costs of special deputy commissioners and other persons.

NRS 696B.300 Conduct of delinquency proceedings against foreign insurers.

NRS 696B.310 Claims of nonresidents against domestic insurers.

NRS 696B.320 Claims of residents against foreign insurers.

NRS 696B.330 Claims: Form; date for filing; approval or denial by receiver; notice and report regarding determinations; objections; hearing; order.

NRS 696B.332 Reporting and filing requirements of receiver; extension or modification of time.

NRS 696B.334 Reporting and filing requirements of guaranty association; extension or modification of time.

NRS 696B.340 Attachment and garnishment of or execution on insurer or assets prohibited during pendency of delinquency proceedings.

NRS 696B.350 Limitations on enjoining, restraining or interfering with insurer’s business or appointment of receiver; action by judgment creditor.

NRS 696B.360 Deposit of money.

NRS 696B.370 Exemption of Commissioner from fees.

NRS 696B.380 Borrowing on pledge of assets.

NRS 696B.390 Termination of conservation or rehabilitation.

NRS 696B.400 Date rights fixed on liquidation.

NRS 696B.410 Prohibited and voidable transfers and liens.

NRS 696B.412 Recovery by receiver of certain distributions on capital stock and payments to directors, officers and employees; scope of liability.

NRS 696B.415 Disbursements to insurance guaranty associations; administrative expenses; claims for unearned premiums.

NRS 696B.420 Order of distribution of claims from estate of insurer on liquidation.

NRS 696B.430 Subordination of claims for failure to cooperate.

NRS 696B.440 Offsets.

NRS 696B.450 Allowance of certain claims.

NRS 696B.460 Entry of order of insolvency; notice by Commissioner of time to file claims.

NRS 696B.470 Report and petition for assessment.

NRS 696B.480 Assessment: Order and levy.

NRS 696B.490 Assessment: Prima facie correct; notice to members and subscribers; payment; proceedings to collect.

NRS 696B.500 Summary proceedings: Commissioner’s corrective orders authorized.

NRS 696B.510 Summary proceedings: Appeal from Commissioner’s order.

NRS 696B.520 Summary proceedings: Enforcement; penalty.

NRS 696B.530 Summary proceedings: Seizure under court order.

NRS 696B.540 Summary proceedings: Seizure under Commissioner’s order.

NRS 696B.550 Summary proceedings: Conduct of administrative and judicial hearings; confidentiality of records.

NRS 696B.560 Summary proceedings: Penalty for refusal to deliver property and records.

NRS 696B.565 Officers, agents, employees and attorneys of Division: Immunity from liability; indemnification.

NRS 696B.570 Federal receivership.

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NRS 696B.010 Short title. This chapter constitutes and may be cited as the Insurers Conservation, Rehabilitation and Liquidation Law.

(Added to NRS by 1971, 1883)

NRS 696B.020 Applicability of chapter. The applicable provisions of this chapter apply to:

1. All insurers authorized to transact insurance in this state;

2. All insurers having policyholders resident in this state;

3. All insurers against whom a claim under an insurance contract may arise in this state;

4. All persons in the process of organization, or holding themselves out as organizing, or proposing to organize in this state for the purpose of becoming an insurer; and

5. All other persons to whom such provisions are otherwise expressly made applicable by law.

(Added to NRS by 1971, 1883; A 1995, 2167; 1997, 1455)

NRS 696B.030 Definitions. As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 696B.040 to 696B.180, inclusive, shall have the meanings ascribed to them in NRS 696B.040 to 696B.180, inclusive.

(Added to NRS by 1971, 1884)

NRS 696B.040 “Ancillary state” defined. “Ancillary state” means any state other than a domiciliary state.

(Added to NRS by 1971, 1884)

NRS 696B.050 “Creditor” defined. “Creditor” means a person having a claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, or absolute, fixed or contingent.

(Added to NRS by 1971, 1884)

NRS 696B.060 “Delinquency proceeding” defined. “Delinquency proceeding” means:

1. Any proceeding commenced against an insurer pursuant to this chapter for the purpose of conserving, rehabilitating, reorganizing or liquidating the insurer; or

2. The summary proceedings authorized by NRS 696B.500 to 696B.565, inclusive.

(Added to NRS by 1971, 1884)

NRS 696B.070 “Domiciliary state” defined. “Domiciliary state” means the state in which an insurer is incorporated or organized or, as to an alien insurer, the state in which at the commencement of delinquency proceedings the larger amount of the insurer’s assets are held in trust or on deposit for the benefit of policyholders and creditors in the United States of America.

(Added to NRS by 1971, 1884)

NRS 696B.080 “Foreign country” defined. “Foreign country” means territory not in any state.

(Added to NRS by 1971, 1884)

NRS 696B.090 “General assets” defined.

1. “General assets” means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to such specifically encumbered property the term includes all such property or its proceeds in excess of the amount necessary to discharge the sums secured thereby.

2. Assets held in trust or on deposit for the security or benefit of all policyholders or all policyholders and creditors in the United States of America are deemed general assets.

(Added to NRS by 1971, 1884)

NRS 696B.100 “Impairment” defined. “Impairment” exists as to:

1. A stock insurer when the insurer’s assets do not at least equal the sum of its liabilities, including also its paid-in capital stock account and the minimum surplus required to be maintained under this Code for authority to transact the kinds of insurance transacted.

2. A mutual insurer when the insurer’s assets do not at least equal the sum of the insurer’s liabilities and the minimum surplus required under this Code to be maintained for authority to transact the kinds of insurance transacted.

(Added to NRS by 1971, 1885)

NRS 696B.110 “Insolvency” defined. “Insolvency” exists:

1. When the insurer fails to meet its obligations as they mature;

2. When a stock insurer’s assets are less than the sum of its liabilities and its paid-in capital stock account;

3. When a mutual insurer’s assets are less than the sum of its liabilities and the minimum basic surplus required to be maintained by the insurer under this Code for authority to transact the kinds of insurance transacted; or

4. As otherwise expressly provided in this Code.

(Added to NRS by 1971, 1885)

NRS 696B.120 “Insurer” defined. “Insurer,” in addition to persons so defined under NRS 679A.100, includes also persons purporting to be insurers, or organizing or holding themselves out as organizing in this state for the purpose of becoming insurers.

(Added to NRS by 1971, 1885)

NRS 696B.130 “Preferred claim” defined. “Preferred claim” means any claim accorded priority of payment from the insurer’s general assets under applicable law.

(Added to NRS by 1971, 1885)

NRS 696B.140 “Receiver” defined. “Receiver” means a receiver, liquidator, rehabilitator or conservator, as the context requires.

(Added to NRS by 1971, 1885)

NRS 696B.150 “Reciprocal state” defined. “Reciprocal state” means any state other than this state in which in substance and effect the provisions of the Uniform Insurers Liquidation Act or the Insurer Receivership Model Act are in force, including provisions requiring that the commissioner of insurance or the equivalent insurance supervisory officer be the receiver of a delinquent insurer, and in which effective provisions exist for avoidance of fraudulent conveyances and unlawful preferential transfers.

(Added to NRS by 1971, 1885; A 2019, 1725)

NRS 696B.160 “Secured claim” defined.

1. “Secured claim” means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow or otherwise, but not including special deposit claims or claims against general assets.

2. “Secured claim” includes claims which have become liens upon specific assets through judicial process and not invalidated.

(Added to NRS by 1971, 1886)

NRS 696B.170 “Special deposit claim” defined. “Special deposit claim” means any claim secured by a deposit made under a statute for the security or benefit of a limited class or classes of persons, but not including any general assets.

(Added to NRS by 1971, 1886)

NRS 696B.180 “State” defined. “State” has the meaning ascribed to it in NRS 679A.120.

(Added to NRS by 1971, 1886)

NRS 696B.190 Jurisdiction of delinquency proceedings; Nevada Rules of Civil Procedure do not govern commencement of delinquency proceeding; venue; exclusiveness of remedy; appeal.

1. The district court has original jurisdiction of delinquency proceedings under NRS 696B.010 to 696B.565, inclusive, and any court with jurisdiction may make all necessary or proper orders to carry out the purposes of those sections. The Nevada Rules of Civil Procedure do not govern the commencement of a delinquency proceeding pursuant to NRS 696B.250 and the filing of a petition by the Commissioner or the issuance by the court of an order to show cause pursuant to that section.

2. The venue of delinquency proceedings against a domestic insurer must be in the county in this state of the insurer’s principal place of business or, if the principal place of business is located in another state, in any county in this state selected by the Commissioner for the purpose. The venue of proceedings against foreign insurers must be in any county in this state selected by the Commissioner for the purpose.

3. At any time after commencement of a proceeding, the Commissioner or any other party may apply to the court for an order changing the venue of, and removing, the proceeding to any other county of this state in which the proceeding may most conveniently, economically and efficiently be conducted.

4. No court has jurisdiction to entertain, hear or determine any petition or complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation or receivership of any insurer, or for an injunction or restraining order or other relief preliminary, incidental or relating to such proceedings, other than in accordance with NRS 696B.010 to 696B.565, inclusive.

5. An appeal to the appellate court of competent jurisdiction pursuant to the rules fixed by the Supreme Court pursuant to Section 4 of Article 6 of the Nevada Constitution may be taken from any court granting or refusing rehabilitation, liquidation, conservation or receivership, and from every order in delinquency proceedings having the character of a final order as to the particular portion of the proceedings embraced therein.

(Added to NRS by 1971, 1886; A 1995, 1635; 1997, 3037; 2013, 1796; 2023, 2644)

NRS 696B.200 Jurisdiction over related persons and transactions; service of process.

1. A court of this state in which an order of rehabilitation or liquidation has been entered in delinquency proceedings against a domestic insurer or alien insurer domiciled in this state, has jurisdiction also over persons, served as provided in subsection 2, in an action brought by the insurer’s receiver on or arising out of such obligation or relationship, as follows:

(a) Persons obligated to the insurer as a result of agency or brokerage or transactions between such persons and the insurer;

(b) Reinsurers of the insurer and their representatives; and

(c) Past or present officers, managers, trustees, directors, organizers and promoters of the insurer, and other persons in positions of similar responsibility with the insurer.

2. As to those of such persons who are in this state, personal service of process shall be made as in other civil actions. As to those of such persons who cannot be found in this state at the time process is to be served, personal service of process shall be made thereon by a public officer of the jurisdiction in which such person may be found, in the same manner as personal service of process is required to be made within this state under the Nevada Rules of Civil Procedure; and the affidavit or certificate under oath setting forth the facts of such service shall be filed in the court in this state in which the action is pending.

(Added to NRS by 1971, 1887)

NRS 696B.210 Grounds for conservation or rehabilitation of domestic insurer or domiciled alien insurer. The Commissioner may petition for an order directing the Commissioner to conserve the assets of or to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds:

1. On any ground for liquidation of the insurer under NRS 696B.220, if the Commissioner believes conservation or rehabilitation possible without substantial increase of risk to creditors, policyholders or the public;

2. If the insurer is in unsound condition, or is using, or has been subject to such methods and practices in the conduct of its business as to render its further transaction of insurance presently or prospectively hazardous to its policyholders, or creditors, or the public;

3. If the insurer’s solvency is endangered by illegal action;

4. For material falsification of the insurer’s records, reports or financial condition;

5. If the Commissioner finds after hearing that any individual exercising executive power with respect to or otherwise materially influencing or controlling the insurer, directly or indirectly, is dishonest or untrustworthy in matters affecting the insurer, and has not been or cannot effectively and permanently be removed from such power, influence or control;

6. For unlawful concealment or removal by the insurer of any of its records or assets;

7. For failure of the insurer, or its parent corporation, or subsidiary or affiliated person controlled by the insurer, to submit its books, accounts, records and affairs to the reasonable inspection or examination of the Commissioner or an examiner of the Commissioner as authorized under this Code;

8. If any individual exercising any executive authority in the affairs of the insurer, or parent corporation, or subsidiary or affiliated person has refused to be examined under oath, by the Commissioner or an examiner of the Commissioner thereunto duly authorized, whether within this state or otherwise, concerning the pertinent affairs of the insurer, or parent corporation, or subsidiary, or affiliated person, or if examined under oath refuses to divulge pertinent information reasonably known to him or her;

9. For failure of officers, employees and other representatives of the insurer, or parent corporation, or subsidiary, or affiliated person to comply promptly with the reasonable requests of the Commissioner or an examiner of the Commissioner for the purposes of and during the conduct of any examination;

10. That a deadlock exists in the insurer’s board of directors relative to the general management of the insurer’s affairs, that the insurer’s stockholders or members (as to a mutual insurer) are unable to break the deadlock, and that the same threatens irreparable injury to the insurer, or its creditors, or its policyholders, or to the public;

11. If the insurer has transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge or consolidate substantially its entire property or business in that of any other insurer, without first having obtained the written approval of the Commissioner as required under this Code;

12. If the controlling stock of the insurer has been transferred to others without compliance with the requirements of NRS 693A.320 (transfer of controlling stock), except where such transfer is by testamentary bequest or inheritance;

13. If the insurer has willfully violated its charter or a law of this state, or has willfully exceeded its corporate powers;

14. If the insurer has requested or consented to conservation or rehabilitation by a vote or written authorization of a majority of its directors, or stockholders, or members (as to mutual insurers); or

15. If the insurer has failed to pay any valid judgment against it within 30 days after the judgment became final.

(Added to NRS by 1971, 1887)

NRS 696B.220 Grounds for liquidation of domestic insurer or domiciled alien insurer. The Commissioner may apply to the court for an order appointing the Commissioner as receiver (if his or her appointment as receiver is not then in effect) and directing the Commissioner to liquidate the business of a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this state, whether or not there has been a prior order directing the Commissioner to conserve or rehabilitate the insurer, upon any one or more of the following grounds:

1. That the insurer has failed to cure an impairment of surplus, or capital, or assets within the time allowed therefor by any lawful order of the Commissioner.

2. That the insurer is insolvent, or has commenced voluntary liquidation or dissolution, or attempts to commence or prosecute or is the object, in this state or elsewhere, of any action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian or sequestrator under any law except this Code. This subsection does not apply to the conversion of a stock insurer to an ordinary business corporation as authorized under NRS 693A.300, or to voluntary dissolution of the insurer pursuant to NRS 692B.250.

3. That the insurer has ceased for a period of 1 year to transact insurance business.

4. If a proposed insurer has not completed its organization and obtained a certificate of authority as an insurer within the time allowed therefor under any applicable solicitation permit issued by the Commissioner.

5. That efforts to rehabilitate the insurer and remove the causes or adverse effects thereof for which rehabilitation was instituted have failed despite all reasonable efforts by the Commissioner, or cannot be continued without material increase of risk of loss to the insurer’s creditors or policyholders.

6. If the insurer has requested or consented to liquidation by a vote or written authorization of a majority of its directors, or stockholders, or members (if a mutual insurer).

(Added to NRS by 1971, 1888)

NRS 696B.230 Grounds for conservation: Foreign and alien insurers. The Commissioner may apply to the court for an order appointing the Commissioner as receiver or ancillary receiver, and directing the Commissioner to conserve the assets within this state, of a foreign or alien insurer:

1. Upon any of the applicable grounds specified in NRS 696B.210 or 696B.220;

2. Upon the ground that the insurer’s property has been sequestrated in its domiciliary sovereignty or in any other sovereignty; or

3. In the case of an alien insurer, upon the ground that the insurer has failed to make good an impairment of its trusteed funds within the time required therefor by order of the Commissioner.

(Added to NRS by 1971, 1889)

NRS 696B.240 Grounds for ancillary liquidation: Foreign and alien insurers. The Commissioner may apply to the court for an order appointing the Commissioner as ancillary receiver of and directing the Commissioner to liquidate the business of a foreign or alien insurer having assets, business or claims in this state upon the appointment in the domiciliary sovereignty of such insurer of a receiver, liquidator, conservator, rehabilitator or other officer by whatever name called for the purpose of liquidating the business of the insurer.

(Added to NRS by 1971, 1889)

NRS 696B.250 Commencement of delinquency proceeding: Petition; order to show cause.

1. The Commissioner shall commence a delinquency proceeding authorized under this chapter, the Attorney General representing the Commissioner, by filing a petition in a court of proper jurisdiction praying for appointment of the Commissioner as receiver of the insurer.

2. Upon the filing of the petition the court shall issue an order directing the insurer to appear in court on the day fixed in the order and show cause why the petition should not be granted. Unless good cause is shown for a shorter period, the order shall require the insurer so to show cause not less than 15 days nor more than 30 days from the date of the order.

3. The order to show cause and service thereof on the insurer shall constitute due and legal process and shall be in lieu of any other process otherwise provided by law or court rule.

(Added to NRS by 1971, 1890)

NRS 696B.255 Commissioner as receiver, rehabilitator or liquidator authorized to appoint advisory committee; payment of costs.

1. The Commissioner, as receiver, rehabilitator or liquidator, may, with the approval of the court, appoint an advisory committee of policyholders, claimants or other creditors, including guaranty associations, if the Commissioner considers such a committee necessary. The committee serves at the pleasure of the Commissioner and serves without compensation other than reimbursement for reasonable travel and other expenses. No other committee of any nature may be appointed by the Commissioner or the court in proceedings for receivership, rehabilitation or liquidation conducted pursuant to this chapter.

2. If the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the Commissioner may advance the costs so incurred out of any appropriation for the maintenance of the Division. Any amounts so advanced for expenses of administration must be repaid to the Commissioner out of the first available money of the insurer.

(Added to NRS by 1995, 1634; A 2023, 2645)

NRS 696B.260 Service of process. A certified copy of any order to show cause issued under NRS 696B.250, and a copy of the petition upon which the order is made, must be served upon the insurer by delivering the same to its president, vice president, secretary, treasurer, director, agent for service of process, or to its managing agent, or attorney-in-fact, if a reciprocal insurer. If no such officer or functionary can readily be found in this State, then such process may be served upon the insurer by service thereof upon the Commissioner pursuant to NRS 680A.250 and 680A.260, and in which case the additional 10 days provided by subsection 3 of NRS 680A.260 does not apply.

(Added to NRS by 1971, 1890; A 2007, 2727)

NRS 696B.270 Injunctions.

1. Upon application by the Commissioner for such an order to show cause, or at any time thereafter, the court may without notice issue an injunction restraining the insurer, its officers, directors, stockholders, members, subscribers, agents and all other persons from the transaction of its business or the waste or disposition of its property until the further order of the court, but the court shall so frame its injunction as not to prevent the Nevada Life and Health Insurance Guaranty Association and the Nevada Insurance Guaranty Association from exercising their respective powers under this title.

2. The court may at any time during a proceeding under NRS 696B.010 to 696B.565, inclusive, issue such other injunctions or orders as may be deemed necessary to prevent interference with the Commissioner or the proceeding, or waste of the assets of the insurer, or the commencement or prosecution of any actions, or the obtaining of preferences, judgments, attachments or other liens, or the making of any levy against the insurer or against its assets or any part thereof.

3. No bond may be required of the Commissioner as a prerequisite for the issuance of any injunction or restraining order pursuant to this section.

(Added to NRS by 1971, 1890; A 1991, 883)

NRS 696B.280 Uniform Insurers Liquidation Act and Insurer Receivership Model Act: Composition; severability; interpretation.

1. This section, NRS 696B.030 to 696B.180, inclusive, (definitions) and NRS 696B.290 to 696B.340, inclusive, comprise the Uniform Insurers Liquidation Act and the Insurer Receivership Model Act.

2. If any provision of the NAIC Acts or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the NAIC Acts which can be given effect without the invalid provision or application, and to this end the provisions of the NAIC Acts are declared to be severable.

3. The NAIC Acts shall be so interpreted as to effectuate the general purpose to make uniform the laws of those states which enact the Uniform Insurers Liquidation Act or the Insurer Receivership Model Act. To the extent that the provisions of the NAIC Acts, when applicable, conflict with other provisions of this Code, the provisions of the NAIC Acts shall control.

4. As used in this section, “NAIC Acts” means this section, NRS 696B.030 to 696B.180, inclusive, and NRS 696B.290 to 696B.340, inclusive.

(Added to NRS by 1971, 1891; A 2019, 1725)

NRS 696B.290 Conduct of delinquency proceedings against domestic insurers and certain alien insurers; appointment and payment of costs of special deputy commissioners and other persons.

1. Whenever under this chapter a receiver is to be appointed in delinquency proceedings for an insurer, the court shall appoint the Commissioner as such receiver. The court shall order the Commissioner forthwith to take possession of the assets of the insurer and to administer the assets under the orders of the court.

2. As a domiciliary receiver, the Commissioner shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books and records of the insurer, wherever located, as of the date of entry of the order directing the Commissioner to conserve, rehabilitate or liquidate a domestic insurer or to liquidate the United States branch of an alien insurer domiciled in this state, and the Commissioner shall have the right to recover the same and reduce the same to possession; but ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are prescribed in this chapter for ancillary receivers appointed in this state as to assets located in this state.

3. The filing or recording of the order directing possession to be taken, or a certified copy thereof, in any office where instruments affecting title to property are required to be filed or recorded shall impart the same notice as would be imparted by a deed, bill of sale or other evidence of title duly filed or recorded.

4. The Commissioner as domiciliary receiver shall be responsible for the proper administration of all assets coming into the possession or control of the Commissioner. The court may at any time require a bond from the Commissioner or the deputies of the Commissioner if deemed desirable for the protection of such assets.

5. Upon taking possession of the assets of an insurer, the domiciliary receiver shall immediately proceed to conduct the business of the insurer or to take such steps as are authorized by this chapter for the purpose of rehabilitating, liquidating or conserving the affairs or assets of the insurer.

6. In connection with delinquency proceedings, the Commissioner may appoint one or more special deputy commissioners to act for the Commissioner and the Commissioner may employ such counsel, clerks and assistants as the Commissioner deems necessary. The compensation of the special deputies, counsel, clerks or assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the receiver and shall be paid out of the funds or assets of the insurer. Within the limits of duties imposed upon them, special deputies shall possess all the powers given to and, in the exercise of those powers, shall be subject to all of the duties imposed upon the receiver with respect to such proceedings. The persons appointed pursuant to this subsection serve at the pleasure of the Commissioner.

7. During such receivership the Commissioner shall file in the court, at regular intervals not less frequently than quarterly, the Commissioner’s true reports in summary form of the insurer’s affairs under the receivership, and of progress being made in accomplishing the objectives of the receivership. All such reports, together with such additional or special reports as the court may reasonably require, shall be subject to review by the court; and all actions of the receiver therein reported shall be subject to the court’s approval, but the court shall not withhold approval or disapprove any such action unless found by the court after a hearing thereon in open court to be unlawful, arbitrary or capricious.

(Added to NRS by 1971, 1891; A 2023, 2645)

NRS 696B.300 Conduct of delinquency proceedings against foreign insurers.

1. Whenever under this chapter an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this State, the court shall appoint the Commissioner as ancillary receiver. The Commissioner shall file a petition requesting the appointment on the grounds set forth in NRS 696B.230 or 696B.240:

(a) If the Commissioner finds that there are sufficient assets of the insurer located in this State to justify the appointment of an ancillary receiver; or

(b) If 10 or more persons resident in this State having claims against such insurer file a petition with the Commissioner requesting the appointment of such ancillary receiver.

2. The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books and records of the insurer located in this State, and the domiciliary receiver shall have the immediate right to recover balances due from local agents and to obtain possession of any books and records of the insurer found in this State. The domiciliary receiver shall also be entitled to recover the other assets of the insurer located in this State, except that upon the appointment of an ancillary receiver in this State, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this State, and shall pay the necessary expenses of the proceedings. All remaining assets the ancillary receiver shall promptly transfer to the domiciliary receiver. Subject to the provisions of this section, the ancillary receiver and the deputies of the ancillary receiver shall have the same powers and be subject to the same duties with respect to the administration of such assets as a receiver of an insurer domiciled in this State.

3. The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this State to recover any assets of such insurer to which the domiciliary receiver may be entitled under the laws of this State.

(Added to NRS by 1971, 1892)

NRS 696B.310 Claims of nonresidents against domestic insurers.

1. In a delinquency proceeding begun in this state against a domestic insurer, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings.

2. Controverted claims belonging to claimants residing in reciprocal states may either:

(a) Be proved in this state; or

(b) If ancillary proceedings have been commenced in such reciprocal states, be proved in those proceedings. If a claimant elects to prove a claim in ancillary proceedings and if notice of the claim and opportunity to appear and be heard is afforded the domiciliary receiver of this state, as provided in NRS 696B.320 with respect to ancillary proceedings in this state, the final allowance of such claim by the courts in the ancillary state shall be accepted in this state as conclusive as to its amount and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within the ancillary state.

(Added to NRS by 1971, 1893)

NRS 696B.320 Claims of residents against foreign insurers.

1. In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against such insurer who reside within this state may file claims either with the ancillary receiver, if any, appointed in this state, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings.

2. Controverted claims belonging to claimants residing in this state may either:

(a) Be proved in the domiciliary state as provided by the law of that state; or

(b) If ancillary proceedings have been commenced in this state, be proved in those proceedings. If any such claimant elects to prove a claim in this state, the claimant shall file the claim with the ancillary receiver and shall give notice in writing to the receiver in the domiciliary state, either by registered or certified mail or by personal service at least 40 days prior to the date set for hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any. If the domiciliary receiver within 30 days after the giving of such notice gives notice in writing to the ancillary receiver and to the claimant, either by registered or certified mail or by personal service, of the intention of the domiciliary receiver to contest such claim, the domiciliary receiver shall be entitled to appear or to be represented in any proceeding in this state involving adjudication of the claim. The final allowance of the claim by the courts of this state shall be accepted as conclusive as to its amount and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within this state.

(Added to NRS by 1971, 1893)

NRS 696B.330 Claims: Form; date for filing; approval or denial by receiver; notice and report regarding determinations; objections; hearing; order.

1. All claims against an insurer against which delinquency proceedings have commenced must be filed in the manner and form established by the receiver and set forth in reasonable detail the amount of the claim, or the basis upon which that amount can be ascertained, the facts upon which the claim is based, and the priorities asserted, if any. All such claims must be verified by the affidavit of the claimant, or someone authorized to act on the behalf of the claimant and having knowledge of the facts, and be supported by such documents as may be material thereto.

2. All claims filed in this State must be filed with the receiver, whether domiciliary or ancillary, in this State, on or before the last date for filing as specified in this chapter or as directed by the court.

3. Except as otherwise provided in subsection 4, after the last date for filing a claim against an insurer as specified in this chapter, the receiver shall:

(a) Determine whether to approve or deny, in whole or in part, each claim against the insurer filed with the receiver pursuant to subsection 2; and

(b) If the receiver approves a claim, in whole or in part, determine the class of the claim as provided in NRS 696B.420.

4. The receiver is not required to process any claims in a class until it appears that assets will be available for distribution to that class. If there are insufficient assets to process claims for a class, the receiver shall notify the court and may make a recommendation to the court for the processing of any such claims.

5. The receiver shall mail, by first-class mail, postage prepaid, to each claimant that filed a claim with the receiver pursuant to subsection 2, written notice of the determination regarding the claim.

6. The receiver shall submit to the court a report on the determination of the receiver on each claim approved in whole or in part.

7. Not more than 60 days after the mailing of the written notice pursuant to subsection 5 or the submission of the report pursuant to subsection 6, whichever occurs later, a person may file with the receiver an objection to the determination of the receiver on a claim.

8. If an objection is filed pursuant to subsection 7, the receiver shall submit to the court a report on the determination of the receiver on each claim to which an objection has been filed. The court shall fix a time for a hearing on such claims and shall direct the receiver to give notice of the hearing. The notice provided by the receiver must:

(a) Be sent to the claimant by first-class mail, postage prepaid, not more than 30 days and not less than 10 days before the hearing, on any claim to which an objection has been filed; and

(b) Specify the time and place of the hearing.

9. A hearing may be conducted by the court or by a master or referee appointed by the court. If a hearing is conducted by a master or referee, the master or referee shall submit findings of fact and recommendations to the court. The court shall enter an order approving or denying, in whole or in part, a claim filed against an insurer. Any such order is an appealable order.

(Added to NRS by 1971, 1894; A 2007, 3331)

NRS 696B.332 Reporting and filing requirements of receiver; extension or modification of time.

1. Not later than 1 year after the date of entry of an order appointing a receiver in delinquency proceedings for an insurer pursuant to this chapter, and not less frequently than annually thereafter, the receiver shall comply with all requirements for financial reporting for a receivership as specified by the National Association of Insurance Commissioners. The reports required pursuant to this subsection include, without limitation, a statement of:

(a) The assets and liabilities of the insurer;

(b) Changes in those assets and liabilities; and

2. The receiver may:

(a) Qualify any report and provide notes to any statement for further explanation; and

(b) Provide any additional information required pursuant to an order of the court or as the receiver deems appropriate.

3. In addition to satisfying any filing requirements established by the National Association of Insurance Commissioners, the receiver shall file the reports, statements and other documents required by this section with the court that has jurisdiction over the receivership.

4. For good cause shown, the court may grant an extension or modification of time to comply with subsection 1 or such other relief as may be appropriate.

(Added to NRS by 2019, 1724)

NRS 696B.334 Reporting and filing requirements of guaranty association; extension or modification of time.

1. Not later than 1 year after the date of entry of an order appointing a receiver in delinquency proceedings for an insurer pursuant to this chapter, and at such intervals as may be agreed to between the receiver and a guaranty association but in no event less frequently than annually, each guaranty association which is affected by the delinquency proceedings shall comply with all applicable requirements for financial reporting as specified by the National Association of Insurance Commissioners.

2. In addition to satisfying any filing requirements established by the National Association of Insurance Commissioners, each guaranty association which is affected by the delinquency proceedings shall file the reports and other documents required by this section with:

(a) The court that has jurisdiction over the receivership;

(b) The Commissioner; and

3. For good cause shown, the court may grant an extension or modification of time to comply with subsection 1 or such other relief as may be appropriate.

4. As used in this section, “guaranty association” means the Nevada Insurance Guaranty Association, the Nevada Life and Health Insurance Guaranty Association or a similar organization in another jurisdiction, as applicable.

(Added to NRS by 2019, 1725)

NRS 696B.340 Attachment and garnishment of or execution on insurer or assets prohibited during pendency of delinquency proceedings. During the pendency of delinquency proceedings in this or any reciprocal state, no action or proceeding in the nature of an attachment, garnishment or execution shall be commenced or maintained in the courts of this state against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within 4 months prior to the commencement of any such delinquency proceedings or at any time thereafter is void as against any rights arising in such delinquency proceedings.

(Added to NRS by 1971, 1894)

NRS 696B.350 Limitations on enjoining, restraining or interfering with insurer’s business or appointment of receiver; action by judgment creditor.

1. Except as provided in subsection 2, no order, judgment or decree enjoining, restraining or interfering with the prosecution of the business of any insurer or for the appointment of a temporary or permanent receiver of a domestic insurer shall be made or granted otherwise than upon the petition of the Commissioner represented by the Attorney General as provided in this chapter.

2. A judgment creditor may commence an action for the enforcement and protection of his or her judgment or institute proceedings supplementary to execution against any such debtor insurer, giving 30 days’ notice to the Commissioner of the judgment creditor’s intention so to do, and in any such action or proceeding the court may, subject to NRS 696B.340, appoint a receiver for the purposes thereof as the court may deem necessary.

(Added to NRS by 1971, 1895)

NRS 696B.360 Deposit of money.

1. Except as otherwise provided in this section:

(a) The money collected by the Commissioner in a proceeding under this chapter must be from time to time deposited in one or more state or national banks, savings banks, credit unions or trust companies, and in the case of the insolvency or voluntary or involuntary liquidation of any such depositary which is an institution organized and supervised under the laws of this state, such deposits are entitled to priority of payment on an equality with any other priority given by the banking laws of this state.

(b) The Commissioner may deposit the money or any part thereof in a national bank, credit union or trust company as a trust fund.

2. The Commissioner shall deposit in the State Insurance Fund any money collected in a proceeding under this chapter that is required to be held in trust by a successor organization of the State Industrial Insurance System by NRS 616B.042. The money must be used by the Commissioner for the payment of claims made against the successor organization under a policy of industrial insurance issued by that organization, and any administration costs and expenses related thereto. The payment of the claims must be made in accordance with the provisions of this chapter.

(Added to NRS by 1971, 1895; A 1999, 1555, 1834)

NRS 696B.370 Exemption of Commissioner from fees. The Commissioner shall not be required to pay any fee to any public officer in this state for service of process, or for filing, recording, issuing a transcript or certificate or authenticating any paper or instrument pertaining to the exercise by the Commissioner of any of the powers or duties conferred upon him or her under this chapter, whether or not such paper or instrument is executed by the Commissioner or the deputies, employees or attorneys of record of the Commissioner and whether or not it is connected with the commencement of any action or proceeding by or against the Commissioner, or with the subsequent conduct of such action or proceeding.

(Added to NRS by 1971, 1895)

NRS 696B.380 Borrowing on pledge of assets.

1. For the purpose of facilitating the rehabilitation, liquidation, conservation or dissolution of an insurer pursuant to NRS 696B.010 to 696B.565, inclusive, the Commissioner may, subject to the approval of the court, borrow money and execute, acknowledge and deliver notes or other evidences of indebtedness therefor and secure the repayment of the same by the mortgage, pledge, assignment, transfer in trust or hypothecation of any or all of the property, whether real, personal or mixed, of such insurer, and the Commissioner, subject to the approval of the court, shall have power to take any and all other action necessary and proper to consummate any such loan and to provide for the repayment thereof.

2. The Commissioner shall be under no obligation personally or in his or her official capacity to repay any loan made pursuant to this section.

(Added to NRS by 1971, 1895)

NRS 696B.390 Termination of conservation or rehabilitation. If at any time the court finds, after a hearing in open court, upon petition of the Commissioner or of the insurer or of its own motion, that the objectives of an order to conserve or rehabilitate a domestic insurer or an alien insurer domiciled in this state have been accomplished, and that the insurer can be returned to its own management without further jeopardy to the insurer and its creditors or policyholders or stockholders or to the public, the court may, upon a full report and accounting by the Commissioner relative to the conduct of the insurer’s affairs during the conservation or rehabilitation and of the insurer’s current financial condition, terminate the conservation or rehabilitation and by order return the insurer, its assets and affairs, to the insurer’s management.

(Added to NRS by 1971, 1896)

NRS 696B.400 Date rights fixed on liquidation. The rights and liabilities of the insurer and of its creditors, policyholders, stockholders, members, subscribers and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date on which the order directing the liquidation of the insurer is filed in the office of the clerk of the court which made the order, subject to the provisions of this chapter with respect to the rights of claimants holding contingent claims.

(Added to NRS by 1971, 1896)

NRS 696B.410 Prohibited and voidable transfers and liens.

1. No insurer shall make any transfer of or create any lien upon any of its property with the intent of giving to or enabling any creditor or policyholder to obtain a greater percentage of his or her debt than any other creditor or policyholder of the same class.

2. Any transfer of, or lien upon, any property of any insurer made or created within 4 months prior to the filing of a petition for an order to show cause under this chapter, which gives to any creditor or policyholder or enables the creditor or policyholder to obtain a greater percentage of his or her debt than any other creditor or policyholder in the same class, and which is accepted by a creditor or policyholder having reasonable cause to believe that such a preference will occur, is voidable. Where the preference consists of a transfer, such period of 4 months shall not expire until 4 months after the date of the recording or registering of the transfer if by law such recording or registering is required.

3. Every director, officer, employee, stockholder, member or any other person acting on behalf of such insurer, who, within 2 years prior to the filing of a petition for an order to show cause against such insurer under this chapter, knowingly participates in the making of any transfer or the creation of any lien prohibited by subsection 1, and every person receiving any property of, or cash surrender from, such insurer or the benefit thereof as a result of a transaction voidable under subsection 2, shall be jointly and severally liable therefor and shall be bound to account to the Commissioner as receiver, rehabilitator, liquidator or conservator, as the case may be.

4. The Commissioner as receiver, rehabilitator, liquidator or conservator may avoid any transfer of or lien upon the property of an insurer which any creditor, stockholder or member of such insurer might have avoided and may recover the property so transferred or its value from the person to whom it was transferred unless the person was a bona fide holder for value prior to the date of the entry of an order to show cause under this chapter. Such property may be recovered or its value collected from whoever may have received it except a bona fide holder for value.

(Added to NRS by 1971, 1896)

NRS 696B.412 Recovery by receiver of certain distributions on capital stock and payments to directors, officers and employees; scope of liability.

1. Except as otherwise provided in subsections 2 and 4, if an order for liquidation or rehabilitation of a domestic insurer has been issued, the receiver appointed under the order may recover on behalf of the insurer:

(a) From any parent corporation, holding company, affiliate or person who otherwise controlled the insurer, the amount of any distribution, other than a distribution of shares of the same class of stock, made by the insurer on its capital stock; and

(b) Any payment in the form of a bonus, settlement on termination, or extraordinary adjustment of salary in a lump sum made by the insurer or a subsidiary to a director, officer or employee,

Ê made during the year preceding the petition for liquidation, conservation or rehabilitation.

2. A distribution is not recoverable if the parent corporation, holding company or affiliate shows that when made the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.

3. A parent corporation, holding company or person who otherwise controlled the insurer or affiliate at the time the distribution or payment was made is liable up to the amount of the distribution or payment which he or she received. A person who otherwise controlled the insurer at the time a distribution was declared is liable up to the amount that would have been received if the distribution had been made immediately. If two or more persons are liable with respect to the same distribution, they are jointly and severally liable.

4. The greatest amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay its contractual obligations and reimburse any guaranty fund.

5. To the extent that a person liable under subsection 3 is insolvent or otherwise fails to pay a claim due from it, a parent corporation, holding company or person who otherwise controlled it at the time the distribution was made is jointly and severally liable for any resulting deficiency in the amount recovered from the person so liable.

(Added to NRS by 2001, 2251)

NRS 696B.415 Disbursements to insurance guaranty associations; administrative expenses; claims for unearned premiums.

1. Upon the issuance of an order of liquidation with a finding of insolvency against a domestic insurer, the Commissioner shall apply to the district court for authority to disburse money to the Nevada Insurance Guaranty Association or the Nevada Life and Health Insurance Guaranty Association out of the marshaled assets of the insurer, as money becomes available, in amounts equal to disbursements made or to be made by the Association for claims-handling expense and covered-claims obligations upon the presentation of evidence that disbursements have been made by the Association. The Commissioner shall apply to the district court for authority to make similar disbursements to insurance guaranty associations in other jurisdictions if one of the Nevada Associations is entitled to like payment pursuant to the laws relating to insolvent insurers in the jurisdiction in which the organization is domiciled.

2. The Commissioner, in determining the amounts available for disbursement to the Nevada Insurance Guaranty Association, the Nevada Life and Health Insurance Guaranty Association and similar organizations in other jurisdictions, shall reserve sufficient assets for the payment of the expenses of administration.

3. The Commissioner shall establish procedures for the ratable allocation of disbursements to the Nevada Insurance Guaranty Association, the Nevada Life and Health Insurance Guaranty Association and similar organizations in other jurisdictions, and shall secure from each organization to which money is paid as a condition to advances in reimbursement of covered-claims obligations an agreement to return to the Commissioner, on demand, amounts previously advanced which are required to pay claims of secured creditors and claims falling within the priorities established in paragraph (a) or (b) of subsection 1 of NRS 696B.420.

4. The Commissioner, as receiver for an insolvent insurer, may file a claim on behalf of all insureds for any unearned premiums. The Nevada Insurance Guaranty Association, the Nevada Life and Health Insurance Guaranty Association and similar organizations in other jurisdictions shall accept the claim in lieu of requiring each insured to file a claim for the unearned premium.

(Added to NRS by 1977, 439; A 1997, 3037; 1999, 2524; 2003, 3333)

NRS 696B.420 Order of distribution of claims from estate of insurer on liquidation.

1. The order of distribution of claims from the estate of the insurer on liquidation of the insurer must be as set forth in this section. Each claim in each class must be paid in full or adequate money retained for the payment before the members of the next class receive any payment. No subclasses may be established within any class. Except as otherwise provided in subsection 2, the order of distribution and of priority must be as follows:

(a) Administration costs and expenses, including, but not limited to, the following:

(1) The actual and necessary costs of preserving or recovering the assets of the insurer;

(2) Compensation for any services rendered in the liquidation;

(3) Any necessary filing fees;

(4) The fees and mileage payable to witnesses; and

(5) Reasonable attorney’s fees.

(b) All claims under policies, any claims against an insured for liability for bodily injury or for injury to or destruction of tangible property which are covered claims under policies, including any such claims of the Federal Government or any state or local government, and any claims of the Nevada Insurance Guaranty Association, the Nevada Life and Health Insurance Guaranty Association and other similar statutory organizations in other jurisdictions. Any claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds or investment values, must be treated as loss claims. That portion of any loss for which indemnification is provided by other benefits or advantages recovered or recoverable by the claimant may not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or because of succession at death or as proceeds of life insurance, or as gratuities. No payment made by an employer to an employee of the employer may be treated as a gratuity.

(c) Unearned premiums and small loss claims, including claims under nonassessable policies for unearned premiums or other premium refunds.

(d) Except as otherwise provided in paragraph (b), claims of the Federal Government.

(e) Except as otherwise provided in paragraph (b), claims of any state or local government, including, but not limited to, a claim of a state or local government for a penalty or forfeiture.

(f) Wage debts due employees for services performed, not to exceed an amount equal to 2 months of monetary compensation for each employee for services performed within 6 months before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within 1 year before the filing of the petition for rehabilitation. Officers of the insurer are not entitled to the benefit of this priority. The priority set forth in this paragraph must be in lieu of any other similar priority authorized by law as to wages or compensation of employees.

(g) Residual classification, including any other claims not falling within other classes pursuant to the provisions of this section. Claims for a penalty or forfeiture must be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of the claims must be postponed to the class of claims specified in paragraph (j).

(h) Judgment claims based solely on judgments. If a claimant files a claim and bases the claim on the judgment and on the underlying facts, the claim must be considered by the liquidator, who shall give the judgment such weight as the liquidator deems appropriate. The claim as allowed must receive the priority it would receive in the absence of the judgment. If the judgment is larger than the allowance on the underlying claim, the remaining portion of the judgment must be treated as if it were a claim based solely on a judgment.

(i) Interest on claims already paid, which must be calculated at the legal rate compounded annually on any claims in the classes specified in paragraphs (a) to (h), inclusive, from the date of the petition for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the dividend is declared. The liquidator, with the approval of the court, may:

(1) Make reasonable classifications of claims for purposes of computing interest;

(2) Make approximate computations; and

(3) Ignore certain classifications and periods as de minimis.

(j) Miscellaneous subordinated claims, with interest as provided in paragraph (i):

(1) Claims subordinated by NRS 696B.430;

(2) Claims filed late;

(3) Portions of claims subordinated pursuant to the provisions of paragraph (g);

(4) Claims or portions of claims the payment of which is provided by other benefits or advantages recovered or recoverable by the claimant; and

(5) Claims not otherwise provided for in this section.

(k) Preferred ownership claims, including surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Interest at the legal rate must be added to each claim, as provided in paragraphs (i) and (j).

(l) Proprietary claims of shareholders or other owners.

2. If there are no existing or potential claims of the government against the estate, claims for wages have priority over any claims set forth in paragraphs (c) to (k), inclusive, of subsection 1. The provisions of this subsection must not be construed to require the accumulation of interest for claims as described in paragraph (i) of subsection 1.

(Added to NRS by 1971, 1897; A 1977, 440; 1997, 3038; 1999, 2524; 2003, 3334)

NRS 696B.430 Subordination of claims for failure to cooperate. If an ancillary receiver in another state or foreign country, by whatever name called, fails to transfer to the domiciliary liquidator in this state any assets within the control of the ancillary receiver other than special deposits, diminished only by the expenses, if any, of the ancillary receivership, claims filed in the ancillary receivership, other than special deposit claims or secured claims, must be placed in the class of claims specified in paragraph (j) of subsection 1 of NRS 696B.420.

(Added to NRS by 1971, 1899; A 1997, 3040; 1999, 2526)

NRS 696B.440 Offsets.

1. Except as provided in subsection 2, in all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter, such credits and debts shall be setoff and the balance only shall be allowed or paid.

2. No offset shall be allowed in favor of any such person where:

(a) The obligation of the insurer to such person would not at the date of the entry of any liquidation order or otherwise, as provided in NRS 696B.400, entitle him or her to share as a claimant in the assets of the insurer;

(b) The obligation of the insurer to such person was purchased by or transferred to such person with a view of its being used as an offset; or

(c) The obligation of such person is to pay an assessment levied against the members of a mutual insurer, or against the subscribers of a reciprocal insurer, or is to pay a balance upon the subscription to the capital stock of a stock insurer.

(Added to NRS by 1971, 1899)

NRS 696B.450 Allowance of certain claims.

1. No contingent and unliquidated claim shall share in a distribution of the assets of an insurer which has been adjudicated to be insolvent by an order made pursuant to this chapter, except that such claim shall be considered, if properly presented, and may be allowed to share where:

(a) Such claim becomes absolute against the insurer on or before the last day for filing claims against the assets of such insurer; or

(b) There is a surplus and the liquidation is thereafter conducted upon the basis that such insurer is solvent.

2. Where an insurer has been so adjudicated to be insolvent any person who has a cause of action against an insured of such insurer under a liability insurance policy issued by such insurer shall have the right to file a claim in the liquidation proceeding, regardless of the fact that such claim may be contingent, and such claim may be allowed:

(a) If it may be reasonably inferred from the proof presented upon such claim that such person would be able to obtain a judgment upon such cause of action against such insured;

(b) If such person furnishes suitable proof, unless the court for good cause shown otherwise directs, that no further valid claim against such insurer arising out of his or her cause of action other than those already presented can be made; and

(c) If the total liability of such insurer to all claimants arising out of the same act of its insured is no greater than its maximum liability would be were it not in liquidation.

3. No judgment against such an insured taken after the date of entry of the liquidation order shall be considered in the liquidation proceedings as evidence of liability, or of the amount of damages, and no judgment against an insured taken by default, or by collusion prior to the entry of the liquidation order shall be considered as conclusive evidence in the liquidation proceedings, either of the liability of such insured to such person upon such cause of action or of the amount of damages to which such person is therein entitled.

4. No claim of any secured claimant shall be allowed at a sum greater than the difference between the value of the claim without security and the value of the security itself as of the date of the entry of the order of liquidation or such other date set by the court for determining rights and liabilities as provided in NRS 696B.400 unless the claimant surrenders his or her security to the Commissioner, in which event the claim shall be allowed in the full amount for which it is valued.

(Added to NRS by 1971, 1899)

NRS 696B.460 Entry of order of insolvency; notice by Commissioner of time to file claims.

1. If upon the entry of an order of liquidation under this chapter or at any time thereafter during liquidation proceedings the insurer is not clearly solvent, the court shall, upon a hearing after such notice as it deems proper, make and enter an order adjudging the insurer to be insolvent.

2. After the entry of the order of insolvency, regardless of any prior notice that may have been given to creditors, the Commissioner shall notify all persons who may have claims against the insurer to file such claims with him or her, at a place and within the time specified in the notice, or that such claims shall be forever barred. The time specified in the notice shall be as fixed by the court for filing of claims, which shall be not less than 6 months after the entry of the order of insolvency. The notice shall be given in such manner and for such reasonable period of time as may be ordered by the court.

(Added to NRS by 1971, 1900)

NRS 696B.470 Report and petition for assessment. Within 3 years after the date of the entry of an order of rehabilitation or liquidation of a domestic mutual insurer or a domestic reciprocal insurer, the Commissioner may make and file a report and petition to the court setting forth:

1. The reasonable value of the assets of the insurer;

2. The liabilities of the insurer to the extent thus far ascertained by the Commissioner;

3. The aggregate amount of the assessment, if any, which the Commissioner deems reasonably necessary to pay all claims, the costs and expenses of the collection of the assessments and the costs and expenses of the delinquency proceedings in full; and

4. Any other information relative to the affairs or property of the insurer that the Commissioner deems material.

(Added to NRS by 1971, 1900)

NRS 696B.480 Assessment: Order and levy.

1. Upon the filing and reading of the report and petition provided for in NRS 696B.470, the court, ex parte, may order the Commissioner to assess all members or subscribers of the insurer who may be subject to such an assessment, in such an aggregate amount as the court finds reasonably necessary to pay all such valid claims as may be timely filed and proved in the delinquency proceedings, together with the costs and expenses of levying and collecting assessments and the costs and expenses of the delinquency proceedings in full. Any such order shall require the Commissioner to assess each such member or subscriber for his or her proportion of the aggregate assessment, according to such reasonable classification of such members or subscribers and formula as may be made by the Commissioner and approved by the court.

2. The court may order additional assessments upon the filing and reading of any amendment or supplement to the report and petition referred to in subsection 1, if such amendment or supplement is filed within 3 years after the date of the entry of the order of rehabilitation or liquidation.

3. After the entry of the order to levy and assess members or subscribers of an insurer referred to in subsection 1 or 2, the Commissioner shall levy and assess members or subscribers in accordance with the order.

4. The total of all assessments against any member or subscriber with respect to any policy, whether levied pursuant to this chapter or pursuant to any other provision of this Code, shall be for no greater amount than that specified in the policy or policies of the member or subscriber and as limited under this Code, except as to any policy which was issued at a rate of premium below the minimum rate lawfully permitted for the risk insured, in which event the assessment against any such policyholder shall be upon the basis of the minimum rate for such risk.

5. No assessment shall be levied against any member or subscriber with respect to any nonassessable policy issued in accordance with this Code.

(Added to NRS by 1971, 1901)

NRS 696B.490 Assessment: Prima facie correct; notice to members and subscribers; payment; proceedings to collect.

1. Any assessment of a subscriber or member of an insurer made by the Commissioner pursuant to the order of court fixing the aggregate amount of the assessment against all members or subscribers and approving the classification and formula made by the Commissioner under subsection 1 of NRS 696B.480 shall be prima facie correct.

2. Each member or subscriber shall be notified of the amount of the assessment to be paid by the member or subscriber by written notice mailed to the address of the member or subscriber last of record with the insurer. Failure of the member or subscriber to receive the notice so mailed, within the time specified therein or at all, shall be no defense in any proceeding to collect the assessment.

3. If any such member or subscriber fails to pay the assessment within the period specified in the notice, which period shall not be less than 20 days after mailing, the Commissioner may obtain an order in the delinquency proceedings requiring the member or subscriber to show cause at a time and place fixed by the court why judgment should not be entered against such member or subscriber for the amount of the assessment together with all costs, and a copy of the order and a copy of the petition therefor shall be served upon the member or subscriber within the time and in the manner designated in the order.

4. If the subscriber or member, after due service of a copy of the order and petition referred to in subsection 3 is made upon the subscriber or member:

(a) Fails to appear at the time and place specified in the order, judgment shall be entered against the subscriber or member as prayed for in the petition; or

(b) Appears in the manner and form required by law in response to the order, the court shall hear and determine the matter and enter a judgment in accordance with its decision.

5. The Commissioner may collect any such assessment through any other lawful means.

(Added to NRS by 1971, 1901)

NRS 696B.500 Summary proceedings: Commissioner’s corrective orders authorized.

1. If the Commissioner determines after a hearing that any insurer has committed or engaged in, or is committing or engaging in, or is about to commit or engage in any act, practice or transaction that would subject it to formal delinquency proceedings under this chapter, the Commissioner may make and serve upon the insurer and other persons involved, such orders (other than seizure orders under NRS 696B.530 and 696B.540) as the Commissioner deems reasonably necessary to correct, eliminate or remedy such conduct, condition or ground. Orders to cure impairment of capital or surplus of a domestic insurer are subject to NRS 693A.260 and 693A.270.

2. If the Commissioner believes that irreparable harm to the insurer, or its policyholders, creditors or the public may occur unless an order of the Commissioner is issued with immediate effect, the Commissioner may make and serve an order without notice and before hearing, and shall simultaneously therewith serve upon the insurer and other persons involved the notice of hearing as required under subsection 3.

3. The Commissioner’s order and notice of hearing shall be served by personal service in any manner provided by the Nevada Rules of Civil Procedure.

(Added to NRS by 1971, 1902)

NRS 696B.510 Summary proceedings: Appeal from Commissioner’s order.

1. If the Commissioner has issued a summary order before hearing as provided in subsection 2 of NRS 696B.500, any person upon whom such order is served may waive the Commissioner’s hearing and apply for any immediate judicial relief available under law and without first exhausting his or her administrative remedies.

2. NRS 679B.370 (appeal from Commissioner) applies to appeals from the Commissioner’s order made after hearing.

(Added to NRS by 1971, 1902)

NRS 696B.520 Summary proceedings: Enforcement; penalty.

1. The Commissioner may apply for and any district court may grant such restraining orders, temporary and permanent injunctions and other orders as may be deemed necessary to enforce the Commissioner’s order.

2. A violation of any order of the Commissioner issued under NRS 696B.500 by any person as to whom the order is in effect subjects the person to a penalty of not more than $10,000, to be collected in a civil action brought by the Attorney General in the name of the State of Nevada. The Attorney General shall deposit all money so collected in the State Treasury for credit to the State General Fund.

(Added to NRS by 1971, 1903; A 1979, 122; 1993, 573, 1924, 2267; 1995, 692)

NRS 696B.530 Summary proceedings: Seizure under court order.

1. Upon filing by the Commissioner in any district court of this state of his or her verified petition alleging any ground for a formal delinquency proceeding against an insurer under this chapter and that the interests of the insurer’s policyholders or creditors or the public will be jeopardized by delay, and setting forth the order deemed necessary by the Commissioner, the court shall, ex parte and without notice or hearing, issue the requested order. The requested order may:

(a) Direct the Commissioner to take possession and control of all or part of the property, books, accounts and records of the insurer and the premises occupied by it for transaction of its business; and

(b) Until further order of the court, enjoin the insurer and its officers, managers, agents and employees from removal, concealment or other disposition of its property, and from the transaction of its business, except with the Commissioner’s written consent.

2. The court’s order shall be for such duration, specified in the order, as the court deems necessary to enable the Commissioner to ascertain the insurer’s condition. On motion of any party or on its own motion, the court may hold such hearings as it deems desirable after such notice as it deems appropriate, and extend or shorten the duration or modify the terms of the order. The court shall vacate the seizure order if the Commissioner fails to commence a formal proceeding under this chapter after reasonable opportunity to do so; and a seizure order is automatically vacated by issuance of the court’s order pursuant to formal delinquency proceedings under this chapter.

3. Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.

(Added to NRS by 1971, 1903)

NRS 696B.540 Summary proceedings: Seizure under Commissioner’s order.

1. If it appears to the Commissioner that the interests of policyholders, creditors or the public will be jeopardized by delay incident to requesting a court seizure order, then on any ground which would justify a court seizure order under NRS 696B.530, and without notice and without applying to the court, the Commissioner may issue a seizure order which must contain a statement verified by the Commissioner of the grounds of the Commissioner’s action. As directed by the seizure order, the Commissioner’s representatives shall forthwith take possession and control of all or part of the property, books, accounts and records of the insurer, and of the premises occupied by the insurer for transaction of its business. The Commissioner shall retain possession and control until the order is vacated or is replaced by an order of court pursuant to subsection 2, or pursuant to a formal proceeding under this chapter.

2. At any time after seizure under subsection 1, the insurer may apply to the district court for Carson City. The court shall thereupon order the Commissioner to appear forthwith and shall thereafter proceed as if the order were a court seizure order issued under NRS 696B.530.

3. Every peace officer of this state shall assist the Commissioner in making and enforcing any such seizure, and every sheriff and police department shall furnish the Commissioner with such deputies, patrol officers or other officers as are necessary for the purpose.

4. Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.

(Added to NRS by 1971, 1904)

NRS 696B.550 Summary proceedings: Conduct of administrative and judicial hearings; confidentiality of records.

1. The Commissioner shall hold all hearings in summary proceedings privately unless the insurer requests a public hearing, in which case the hearing must be public.

2. The court may hold all hearings in summary proceedings and judicial reviews thereof privately in chambers, and shall do so on request of the insurer proceeded against.

3. In all summary proceedings and judicial reviews thereof, all records of the insurer, other documents and all Division files and court records and papers, so far as they pertain to or are part of the record of the summary proceedings, are confidential except as otherwise provided in NRS 239.0115 and except as necessary to obtain compliance therewith, unless the court after hearing arguments by the parties in chambers, orders otherwise, or unless the insurer requests that the matter be made public. Until the court otherwise orders, all papers filed with the clerk of the court must be held by the clerk of the court in a confidential file.

4. If at any time it appears to the court that any person whose interest is or will be substantially affected by an order did not appear at the hearing and has not been served, the court may order that notice be given and the proceedings be adjourned to give the person an opportunity to appear, on such terms as may be reasonable and just.

(Added to NRS by 1971, 1904; A 1991, 1635; 1993, 1924; 2007, 2160)

NRS 696B.560 Summary proceedings: Penalty for refusal to deliver property and records. Any person having possession or custody of and refusing to deliver to the Commissioner or a representative of the Commissioner upon request any of the property, books, accounts, documents or other records of an insurer against which a seizure order or a summary order has been issued by the Commissioner or by the court, as provided in NRS 696B.500 to 696B.550, inclusive, is guilty of a misdemeanor.

(Added to NRS by 1971, 1905)

NRS 696B.565 Officers, agents, employees and attorneys of Division: Immunity from liability; indemnification.

1. The Commissioner, as receiver, all present and former deputy receivers, special deputy receivers and their employees, and the other officers, agents, employees and attorneys of the Division are immune from liability, both personally and in their official capacities, for any claim for damage to or loss of property or personal injury or other civil liability caused by or resulting from any alleged act, error or omission of the officers, agents, employees and attorneys of the Division arising out of or by reason of their duties or employment. This subsection must not be construed to hold the officers, agents, employees and attorneys of the Division immune from liability for any damage, loss, injury or liability caused by actual malice.

2. Attorneys, accountants, auditors and other professional persons or firms who are retained by the Commissioner as independent contractors and their employers must not be considered employees for the purposes of this chapter.

3. The Commissioner, all present and former deputy receivers, special deputy receivers and their employees, and the other officers, agents, employees and attorneys of the Division must be indemnified for all expenses, attorney’s fees, judgments, settlements, decrees, or amounts due or paid in satisfaction of, or incurred in the defense of, such a legal action, unless it is determined upon a final adjudication on the merits of the case that the alleged acts, error or omission of the officer, agent, employee or attorney of the division did not arise out of or by reason of his or her duties or employment and was caused by actual malice.

4. The State may seek indemnification for the payment of expenses, judgments, settlements, decrees, attorney’s fees, surety bond premiums or other amounts paid or to be paid from the insurer’s assets. Any payment pursuant to this section shall be deemed an administrative expense of the insurer.

(Added to NRS by 1997, 3037; A 2001, 2252)

NRS 696B.570 Federal receivership.

1. If the Commissioner believes that rehabilitation or liquidation of a domestic insurer or alien insurer domiciled in this state upon grounds for such rehabilitation or liquidation set forth in this chapter would thereby be facilitated, and whether or not delinquency proceedings against the insurer are already pending in the courts of this state, the Commissioner may cause or consent to the filing of a petition in a federal district court in another state for the appointment of a federal receiver of the insurer. The Commissioner may intervene in any such action, and may accept appointment as the federal receiver if so designated. Upon the designation of a federal receiver in any such action, the courts of this state shall relinquish jurisdiction of the rehabilitation or liquidation of the insurer upon the Commissioner’s motion therefor.

2. The provisions of this chapter relating to delinquency proceedings in courts of this state shall apply to such a federal receivership to the extent applicable and appropriate.

3. If the Commissioner is appointed a federal receiver under this section, the Commissioner shall comply with any requirements necessary to give the Commissioner title to and control over the insurer’s assets and affairs.

(Added to NRS by 1971, 1905)