[Rev. 6/29/2024 5:01:21 PM--2023]
CHAPTER 692B - FORMATION AND CAPITALIZATION OF DOMESTIC STOCK AND MUTUAL INSURERS; FINANCING OF INSURERS AND HOLDING COMPANIES
NRS 692B.010 Scope.
NRS 692B.020 Incorporation.
NRS 692B.030 Amendment of articles of incorporation: Submission and approval of Commissioner; applicability to existing insurers.
NRS 692B.040 Solicitation permit required; penalty.
NRS 692B.050 “Insurance holding corporation” defined; Massachusetts trusts.
NRS 692B.060 Exemptions.
NRS 692B.070 Application for solicitation permit. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 692B.070 Application for solicitation permit. [Effective on the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 692B.080 Application for permit to solicit qualifying mutual applications.
NRS 692B.090 Investigation; exception.
NRS 692B.100 Granting or denial of permit.
NRS 692B.110 Issuance and terms of permit; compliance.
NRS 692B.120 Effect of granting permit; prohibited use as inducement; provision required to be placed on permit.
NRS 692B.130 Prospectus required; contents of prospectus; other literature; filing of certain sales literature and visual sales material with Commissioner.
NRS 692B.140 Modification or revocation of permit.
NRS 692B.150 Bond; deposit in lieu of bond; waiver or release; exception.
NRS 692B.160 Filing of articles of incorporation; rights under permit.
NRS 692B.170 Deposit of money in escrow.
NRS 692B.180 Subscription contracts.
NRS 692B.190 License to sell securities. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 692B.190 License to sell securities. [Effective on the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 692B.193 Payment of child support: Statement by applicant for permit or license; grounds for denial of permit or license; duty of Commissioner. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 692B.197 Suspension of permit or license for failure to pay child support or comply with certain subpoenas or warrants; reinstatement of permit or license. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 692B.200 Mutual insurers: Initial qualifications.
NRS 692B.210 Mutual insurers: Permit; bond or deposit.
NRS 692B.220 Mutual insurers: Qualifying applications for insurance.
NRS 692B.230 Mutual insurers: Deposit of premiums in escrow.
NRS 692B.240 Failure to complete or qualify.
NRS 692B.250 Voluntary dissolution.
NRS 692B.260 Subsequent financing: Solicitation permit required; penalty.
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NRS 692B.010 Scope. This chapter applies to the formation, after January 1, 1972, of domestic stock and mutual insurers, to the capitalization of domestic stock insurers, and to the financing of domestic insurers of all types and of insurance holding corporations thereof.
(Added to NRS by 1971, 1782)
1. The general corporation laws of this state govern the incorporation of domestic stock and mutual insurers formed after January 1, 1972, where not in conflict with the express provisions of this Code. In case of such conflict the express provisions of this Code govern.
2. A domestic insurer must be incorporated by not less than three natural persons. The articles of incorporation must set forth the name and residence address of each of the true incorporators, and dummy incorporators must not be used.
3. The articles of incorporation must also set forth:
(a) The names and addresses of each proposed director or officer who is not an incorporator;
(b) The kind or kinds of insurance proposed to be transacted, in accordance with the definitions thereof contained in NRS 681A.010 to 681A.080, inclusive;
(c) If to be a stock insurer, the amount of authorized capital, the number of shares into which divided, and the par value of each share, which par value must not be less than $1. Shares without nominal or par value must not be authorized. All authorized shares must be of one class, with one vote per outstanding share and equal rights between outstanding shares as to dividends and distributions, and in all other respects; and
(d) If to be a mutual insurer, the contingent liability of policyholders for payment of losses and expenses of the insurer, which liability must not be less than one or more than six times the policyholder’s premium at the annual rate for a term of 1 year, as specified in the articles of incorporation. Such contingent liability may be rendered inoperative pursuant to the provisions of NRS 693A.250.
4. The articles of incorporation of a proposed stock insurer must require that all shares be issued at a price not less than par value, and must not provide for stock options.
(Added to NRS by 1971, 1782; A 1991, 2204)
NRS 692B.030 Amendment of articles of incorporation: Submission and approval of Commissioner; applicability to existing insurers.
1. An amendment of articles of incorporation of a domestic insurer shall not be filed or accepted for filing with the Secretary of State unless first submitted to and approved by the Commissioner.
2. The insurer shall deliver executed quadruplicate originals of the proposed articles of amendment to the Commissioner. If the Commissioner finds the same to be in accordance with law, the Commissioner shall endorse his or her approval on each set of the articles of amendment and return the same to the insurer. The insurer shall then file the original set with the Secretary of State, one set with the Commissioner, and otherwise as required by law. If the Commissioner does not so find, the Commissioner shall not approve the proposed articles of amendment, but shall return all sets to the insurer together with a written statement of the reasons for nonapproval.
3. After January 1, 1972, no existing domestic stock or mutual insurer shall amend its articles of incorporation in any way which would conflict with the requirements of this Code as to a newly formed similar domestic insurer; but an existing domestic stock insurer with preferred stock already as part of its authorized capital shall have the right to increase or decrease the amount of the same or modify the rights and priorities thereof as otherwise permitted by law.
(Added to NRS by 1971, 1783)
NRS 692B.040 Solicitation permit required; penalty.
1. A person forming or proposing to form a domestic insurer, or insurance holding corporation thereof, or corporation to be attorney-in-fact for a domestic reciprocal insurer, or proposing to secure funds for the formation or financing of a domestic insurer, or production of insurance business therefor, or for an insurance holding corporation holding or proposing to hold securities of a domestic insurer, or for an attorney-in-fact corporation of a domestic reciprocal insurer, or for the formation or financing of a syndicate, association, firm, partnership or organization for any such purposes, shall not in this state advertise or offer for sale any securities or policies, or solicit or receive any funds, subscriptions, applications, premiums or memberships, except as authorized by a currently effective permit, in this chapter sometimes referred to as a “solicitation permit,” issued by the Commissioner.
2. A person who violates the provisions of this section is guilty of a category D felony and shall be punished as provided in NRS 193.130.
(Added to NRS by 1971, 1783; A 1979, 1492; 1995, 1319)
NRS 692B.050 “Insurance holding corporation” defined; Massachusetts trusts.
1. As used in this Code, an insurance holding corporation is a corporation, whether or not incorporated under the laws of this state, owning or holding, or proposing to own or hold, a controlling stock interest in a domestic stock insurer. Shares owned directly or indirectly by the corporation or by its subsidiary or affiliate corporation, firm or organization, or by its officers, directors or principal stockholders, shall be deemed to be owned or held by the corporation for the purposes of this section.
2. For the purposes of this chapter that type of organization known as a “Massachusetts trust” shall be deemed to be a corporation.
(Added to NRS by 1971, 1784)
NRS 692B.060 Exemptions. NRS 692B.040 does not apply to:
1. Sales of securities not involving a public offering, and under a plan filed with and not disapproved by the Commissioner; that is, sales on which no commission or other compensation is payable resulting from offers privately made to not over 20 persons (other than banks, savings associations, investment companies registered as such under the Investment Company Act of 1940, registered securities dealers, investment houses and other financial institutions) within a 12-month period, and where all persons (including such banks, associations, companies, dealers, houses and institutions) so acquiring such securities do so for investment purposes only and not with a view to further distribution. The Commissioner shall disapprove any such plan within 10 days after filing, or within such reasonable additional period as the Commissioner may request within such 10 days, if found by the Commissioner to be:
(a) Unfair to any existing or proposed other holders of securities of the insurer; or
(b) Unlawful.
2. Sales of securities by an insurance holding corporation for purposes which do not include the financing, directly or indirectly, of a domestic insurer.
3. Stock of the insurer or insurance holding corporation to be offered and sold (without payment of commission thereon) exclusively to directors, employees and agents of the insurer or corporation, or any of them, under stock options granted pursuant to a written lawful plan therefor adopted by the board of directors, approved by a majority of the stock of the issuer corporation having voting rights, and filed with and approved by the Commissioner. The Commissioner shall approve such a plan unless found by the Commissioner to be inequitable to other personnel of the insurer or other persons financially interested in the insurer.
4. Securities issued or proposed to be issued pursuant to any merger, consolidation, bulk reinsurance, conversion, mutualization or corporate affiliation approved by the Commissioner pursuant to chapter 693A of NRS.
5. Securities issued in exchange for outstanding securities of the issuer, or partly in exchange for such outstanding securities and partly for cash, in connection with a recapitalization of the issuer or the exercise of conversion or exchange rights under such outstanding securities.
6. Securities issued and distributed to existing holders of securities of the insurer as a dividend paid in securities.
7. Fractional share interests in stock of the issuer offered and sold for the purpose of rounding out to whole shares in connection with any stock dividend or other distribution of shares to existing security holders of the issuer.
(Added to NRS by 1971, 1784)
NRS 692B.070 Application for solicitation permit. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. A written application for any permit required under NRS 692B.040 must be filed with the Commissioner. The application must include or be accompanied by:
(a) The name, type and purposes of the insurer, corporation, syndicate, association, firm or organization formed or proposed to be formed or financed;
(b) On forms furnished by the Commissioner, for each person associated or to be associated as incorporator, director, promoter, manager or in other similar capacity in the enterprise, or in the formation of the proposed insurer, corporation, syndicate, association, firm or organization, or in the proposed financing:
(1) The person’s name, residential address and qualifications; and
(2) The person’s business background and experience for the preceding 10 years;
(c) A full disclosure of the terms of all pertinent understandings and agreements existing or proposed among any persons or entities so associated or to be associated, and a copy of each such agreement;
(d) Executed quadruplicate originals of the articles of incorporation of a proposed domestic stock or mutual insurer;
(e) The original and one copy of the proposed bylaws of a proposed domestic stock or mutual insurer;
(f) The plan according to which solicitations are to be made and a reasonably detailed estimate of all organization and sales expenses to be incurred in the proposed organization and offering;
(g) A copy of any security, receipt or certificate proposed to be offered, and a copy of any proposed subscription agreement or application therefor;
(h) A copy of any prospectus, offering circular, advertising or sales literature or material proposed to be used;
(i) A copy of the proposed form of any escrow agreement required;
(j) A copy of:
(1) The articles of incorporation of any corporation, other than a proposed domestic insurer, proposing to offer its securities, certified by the public officer having custody of the original thereof;
(2) Any syndicate, association, firm, organization or other similar agreement, by whatever name called, if funds for any of the purposes referred to in subsection 1 of NRS 692B.040 are to be secured through the sale of any security, interest or right in or relative to such syndicate, association, firm or organization; and
(3) If the insurer is, or is to be, a reciprocal insurer, the power of attorney and of other agreements existing or proposed affecting subscribers, investors, the attorney-in-fact or the insurer;
(k) If the applicant is a natural person, the statement required pursuant to NRS 692B.193; and
(l) Such additional pertinent information as the Commissioner may reasonably require.
2. The application must be accompanied by a deposit of the fees required under NRS 680B.010 for the filing of the application and for issuance of the permit, if granted.
3. If the applicant is a natural person, the application must include the social security number of the applicant.
4. In lieu of a special filing thereof of information required by subsection 1, the Commissioner may accept a copy of any pertinent filing made with the Securities and Exchange Commission relative to the same offering.
5. Each person identified in paragraph (b) of subsection 1 who is a resident of this State must, as part of his or her application and at the person’s own expense:
(a) Arrange to have a complete set of his or her fingerprints taken by a law enforcement agency or other authorized entity acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and written permission authorizing the Commissioner to submit the person’s fingerprints to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for a report on the person’s background and to such other law enforcement agencies as the Commissioner deems necessary; or
(2) Written verification, on a form prescribed by the Commissioner, stating that the fingerprints of the person were taken and directly forwarded electronically or by another means to the Central Repository and that the person has given written permission to the law enforcement agency or other authorized entity taking the fingerprints to submit the fingerprints to the Central Repository for submission to the Federal Bureau of Investigation for a report on the person’s background and to such other law enforcement agencies as the Commissioner deems necessary.
6. The Commissioner may:
(a) Unless the person’s fingerprints are directly forwarded pursuant to subparagraph (2) of paragraph (b) of subsection 5, submit those fingerprints to the Central Repository for submission to the Federal Bureau of Investigation and to such other law enforcement agencies as the Commissioner deems necessary; and
(b) Request from each such agency any information regarding the person’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1785; A 1997, 2203; 1999, 520, 543; 2003, 2870; 2011, 3389; 2013, 3837)
NRS 692B.070 Application for solicitation permit. [Effective on the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. A written application for any permit required under NRS 692B.040 must be filed with the Commissioner. The application must include or be accompanied by:
(a) The name, type and purposes of the insurer, corporation, syndicate, association, firm or organization formed or proposed to be formed or financed;
(b) On forms furnished by the Commissioner, for each person associated or to be associated as incorporator, director, promoter, manager or in other similar capacity in the enterprise, or in the formation of the proposed insurer, corporation, syndicate, association, firm or organization, or in the proposed financing:
(1) The person’s name, residential address and qualifications; and
(2) The person’s business background and experience for the preceding 10 years;
(c) A full disclosure of the terms of all pertinent understandings and agreements existing or proposed among any persons or entities so associated or to be associated, and a copy of each such agreement;
(d) Executed quadruplicate originals of the articles of incorporation of a proposed domestic stock or mutual insurer;
(e) The original and one copy of the proposed bylaws of a proposed domestic stock or mutual insurer;
(f) The plan according to which solicitations are to be made and a reasonably detailed estimate of all organization and sales expenses to be incurred in the proposed organization and offering;
(g) A copy of any security, receipt or certificate proposed to be offered, and a copy of any proposed subscription agreement or application therefor;
(h) A copy of any prospectus, offering circular, advertising or sales literature or material proposed to be used;
(i) A copy of the proposed form of any escrow agreement required;
(j) A copy of:
(1) The articles of incorporation of any corporation, other than a proposed domestic insurer, proposing to offer its securities, certified by the public officer having custody of the original thereof;
(2) Any syndicate, association, firm, organization or other similar agreement, by whatever name called, if funds for any of the purposes referred to in subsection 1 of NRS 692B.040 are to be secured through the sale of any security, interest or right in or relative to such syndicate, association, firm or organization; and
(3) If the insurer is, or is to be, a reciprocal insurer, the power of attorney and of other agreements existing or proposed affecting subscribers, investors, the attorney-in-fact or the insurer; and
(k) Such additional pertinent information as the Commissioner may reasonably require.
2. The application must be accompanied by a deposit of the fees required under NRS 680B.010 for the filing of the application and for issuance of the permit, if granted.
3. In lieu of a special filing thereof of information required by subsection 1, the Commissioner may accept a copy of any pertinent filing made with the Securities and Exchange Commission relative to the same offering.
4. Each person identified in paragraph (b) of subsection 1 who is a resident of this State must, as part of his or her application and at the person’s own expense:
(a) Arrange to have a complete set of his or her fingerprints taken by a law enforcement agency or other authorized entity acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and written permission authorizing the Commissioner to submit the person’s fingerprints to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for a report on the person’s background and to such other law enforcement agencies as the Commissioner deems necessary; or
(2) Written verification, on a form prescribed by the Commissioner, stating that the fingerprints of the person were taken and directly forwarded electronically or by another means to the Central Repository and that the person has given written permission to the law enforcement agency or other authorized entity taking the fingerprints to submit the fingerprints to the Central Repository for submission to the Federal Bureau of Investigation for a report on the person’s background and to such other law enforcement agencies as the Commissioner deems necessary.
5. The Commissioner may:
(a) Unless the person’s fingerprints are directly forwarded pursuant to subparagraph (2) of paragraph (b) of subsection 4, submit those fingerprints to the Central Repository for submission to the Federal Bureau of Investigation and to such other law enforcement agencies as the Commissioner deems necessary; and
(b) Request from each such agency any information regarding the person’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1785; A 1997, 2203; 1999, 520, 543; 2003, 2870; 2011, 3389; 2013, 3837, effective on the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings)
NRS 692B.080 Application for permit to solicit qualifying mutual applications. Written application for any permit required under NRS 692B.040 in connection with the formation of a domestic mutual insurer by the securing of qualifying applications for insurance as provided in NRS 692B.200 shall be filed with the Commissioner. The application shall contain such information and be accompanied by such of the documents and the fees required under NRS 692B.070 as may be applicable, and in addition shall be accompanied by:
1. A copy of each policy for which applications are proposed to be solicited;
2. A copy of the proposed insurance application form, consistent with the requirements of NRS 692B.220 (qualifying applications for insurance); and
3. A schedule of the premiums or premium rates proposed to be charged in connection with such insurance applications.
(Added to NRS by 1971, 1786)
NRS 692B.090 Investigation; exception.
1. Upon completion of the application for a permit under NRS 692B.070 and 692B.080, the Commissioner shall promptly cause an investigation to be made of:
(a) The identity, character, reputation, experience, financial standing and motives of the persons proposing to organize, promote or finance the insurer or organization;
(b) The character, financial responsibility, insurance management experience and business qualifications of the officers, directors and managers of the insurer or organization existing or proposed; and
(c) Such other aspects of the insurer, organization or proposed financing as the Commissioner deems advisable.
2. The Commissioner may, in the Commissioner’s discretion, waive investigation with respect to the further financing of a domestic insurer already duly authorized to transact insurance in this state.
(Added to NRS by 1971, 1786)
NRS 692B.100 Granting or denial of permit.
1. The Commissioner shall expeditiously examine an application for a solicitation permit and complete the investigation as called for. Subject to subsection 2, if the Commissioner finds on such examination and investigation that:
(a) The application is complete;
(b) The documents therewith filed are proper in form; and
(c) The proposed financing is reasonable and adequate in amount for the purposes intended and the applicant is otherwise entitled to the permit,
Ê the Commissioner shall give notice to the applicant that the Commissioner will issue the permit upon the filing of any bond required by NRS 692B.150 or 692B.210, or deposit in lieu thereof, and the filing of an executed copy of any escrow agreement required in connection therewith. If quadruplicate executed originals of articles of incorporation of a proposed domestic stock or mutual insurer have been filed with the Commissioner as required under paragraph (d) of subsection 1 of NRS 692B.070, the Commissioner shall inscribe the approval of the Commissioner on each copy thereof and return them to the applicant for filing with the Secretary of State and otherwise as required by law.
2. If the Commissioner does not so find, or finds that:
(a) The proposed sale of securities would be or tend to be unfair or inequitable as to present or proposed security holders or investors;
(b) Any of the individuals associated or to be associated in the insurer, corporation, syndicate, association, firm, organization or financing are not of good reputation as to business affairs or financial responsibility;
(c) The proposed insurer would not be able to qualify for a certificate of authority in this state by virtue of the provisions of subsection 2 of NRS 680A.090 (ownership, management);
(d) If an insurance holding corporation, its plan of capitalization or security options, or financing are such as would be prohibited under this Code as to a newly formed domestic stock insurer; or
(e) There is material variance, adverse to the applicant, as between the information furnished by the applicant in connection with the application and that determined by the Commissioner on investigation,
Ê the Commissioner shall give notice to the applicant that a permit will not be granted, stating the particulars of the grounds for such denial, and refund to the applicant all sums deposited in connection with the application other than the fee for the filing of the application.
(Added to NRS by 1971, 1787)
NRS 692B.110 Issuance and terms of permit; compliance.
1. Upon filing any bond (or making the deposit in lieu of bond) required under NRS 692B.150 or 692B.210, and upon filing with the Commissioner an executed copy of any required escrow agreement, the Commissioner shall issue a permit to the applicant if the applicant is entitled thereto under NRS 692B.100.
2. Every such permit shall contain provisions, as applicable, as follows:
(a) It shall state the securities which are to be offered, the number and selling price; or identify the insurance policy or policies for which applications are to be solicited in the case of the formation of a new domestic mutual insurer.
(b) It shall require that all premiums and the purchase price of securities shall be payable only in lawful money of the United States of America, or, in the case of sale of securities, in such other securities as may be specified by class or description in the permit.
(c) It shall require that all securities to be offered or sold shall be so offered and sold at the same price to all parties, subject, at the option of the issuer in the case of subscriptions to be paid in installments, to a reasonable additional charge to cover expenses and loss of interest earnings attributable to such installment subscriptions.
(d) It shall limit the portion of funds received on account of the sale of securities under the permit which may be used for organization, securities sales and promotion expenses to such amount as the Commissioner deems reasonably adequate under the proposed plan of solicitation, but in no event to exceed 15 percent of such funds as and when the funds are actually received.
(e) If the Commissioner believes the same desirable for the protection of the public or for any other reasonable purpose, the permit may:
(1) Require the founders, promoters, incorporators or other persons directly involved in the proposed offering, to subscribe and pay for immediately and in cash, at the proposed public offering price, a reasonable proportion of the same securities as proposed to be offered under the permit.
(2) Prohibit, limit or control the granting of options, to such founders, promoters, incorporators or other persons, to buy the securities.
(3) Prohibit, by any founder, promoter, incorporator or other person associated or to be associated under the permit, the resale or transfer for a period terminating 1 year after expiration or other termination of the permit, of his or her interest in any security, right or interest of the kind proposed to be offered under the permit, or of any other security, interest or right which he or she may have in or as to the same issuing entity, or the granting of any option or lien as to any such security, right or interest. The Commissioner may, in the discretion of the Commissioner, require that any security, right or interest the resale or transfer of which is prohibited in this subparagraph, shall be deposited and held in escrow for the prescribed period. This subparagraph does not prohibit the sale or transfer of any such security, right or interest by the personal representative of a deceased founder, promoter or incorporator, or of any other deceased person associated under the permit.
(4) Contain other reasonable provisions.
(f) If the permit is issued in connection with the solicitation of qualifying applications for insurance policies of a proposed mutual insurer, it shall limit the portion of funds received therefor which may be used for organization and sales expense to a reasonable commission related to the kind of insurance policy involved, and provide that no such commissions shall be deemed earned or be paid until the insurer has received its certificate of authority and the policies so applied for have been actually issued, delivered to and accepted by the respective insureds.
(g) The permit shall expire at the expiration of a period stated therein, which period shall be not more than 2 years after its date of issue, unless earlier terminated by the Commissioner, but subject to the right of the Commissioner, for good cause shown, to grant an extension for an additional reasonable period.
(h) The permit shall contain such other reasonable conditions relative to accounting, reports, deposits and other matters consistent with this chapter as the Commissioner deems advisable for the protection of existing or prospective investors or policyholders.
3. The holder of the permit, and its directors, officers, employees, agents, founders, promoters, incorporators and representatives shall comply with the terms of the permit.
(Added to NRS by 1971, 1787)
NRS 692B.120 Effect of granting permit; prohibited use as inducement; provision required to be placed on permit.
1. The granting of a solicitation permit is permissive only and shall not constitute an endorsement by the Commissioner of any person or thing related to any such insurer, corporation, syndicate, association, firm, organization or financing, or constitute evidence of the completeness or accuracy of information presented in any prospectus or other sales literature. The existence of the permit shall not be advertised or used as an inducement in any solicitation.
2. The Commissioner shall place the substance of this section in conspicuous type at the top of each such permit issued.
(Added to NRS by 1971, 1789)
NRS 692B.130 Prospectus required; contents of prospectus; other literature; filing of certain sales literature and visual sales material with Commissioner.
1. An offering of securities, or of insurance policies (in case of qualifying applications for insurance in the formation of a domestic mutual insurer), shall be made only by a written prospectus as filed with the Commissioner and delivered to the prospective investor or policyholder.
2. The prospectus shall disclose all facts relative to the issuer and the offered security or policy which are reasonably material thereto, and shall not omit a material fact necessary to make the statements made, in the light of the circumstances under which made, not misleading. The Commissioner may make reasonable rules and regulations concerning the form and contents of prospectuses, not inconsistent with the provisions of this Code.
3. The Commissioner may accept, as a compliance with this section, a prospectus or offering circular covering securities to be offered in this state under an existing registration thereof with the Securities and Exchange Commission or under an existing exemption from such registration pursuant to Regulation A of the general rules and regulations of the Securities and Exchange Commission under the Securities Act of 1933, as amended.
4. As to securities covered by a solicitation permit, no sales literature or visual sales material other than the prospectus or offering circular shall be used in solicitations unless a copy thereof has been filed with the Commissioner in advance of such use and not disapproved by the Commissioner in writing mailed or delivered to the filing party within 10 days after the date of such filing. The Commissioner shall disapprove any such literature or material found by the Commissioner to be untrue or misleading. This subsection does not modify or affect any applicable requirement or prohibition under or pursuant to the Securities Act of 1933, as amended.
(Added to NRS by 1971, 1789)
NRS 692B.140 Modification or revocation of permit. The Commissioner may for cause modify a solicitation permit theretofore issued; and may after a hearing thereon revoke the permit for a violation of law or the terms of the permit, of any proper order of the Commissioner, or for material misrepresentation in the offering or sale of securities or policies under the permit.
(Added to NRS by 1971, 1790)
NRS 692B.150 Bond; deposit in lieu of bond; waiver or release; exception.
1. Except as otherwise provided in this section, the Commissioner shall not issue a solicitation permit until the applicant has filed with the Commissioner a bond in favor of the State of Nevada, in the penal sum of $50,000 and issued by a surety insurer authorized to transact such insurance in this state.
2. The bond shall be conditioned upon:
(a) The payment of costs incurred by the State of Nevada in the event of any proceeding for liquidation or dissolution of the proposed organization before completion or organization, or, if to be an insurer, a certificate of authority is not granted;
(b) Compliance with terms of the permit and with applicable laws of this state; and
(c) A full accounting for all funds received in transactions under the permit until the proposed insurer has been granted its certificate of authority or until the corporation, syndicate, association, firm or organization or financing has been completed within the terms of the permit.
3. In lieu of filing such a bond the applicant may deposit with the Commissioner cash in the amount of $50,000 or securities of the United States Government or of the State of Nevada in market value of at least $50,000, and the Commissioner shall hold such deposit in trust for the same purposes as apply to a bond under subsection 2. The amount so deposited may, in the Commissioner’s discretion, be credited toward payment of subscriptions to securities by founders, promoters and incorporators if required under subparagraph (1) of paragraph (e) of subsection 2 of NRS 692B.110, (terms of permit) but subject to such diminution of such credit as may result from actual application of the deposit to the purposes for which made.
4. The Commissioner may, in the discretion of the Commissioner, waive the requirement for a bond or deposit in lieu thereof if the securities are to be issued in connection with subsequent financing as provided for in NRS 692B.260.
5. The Commissioner shall release and discharge the bond or deposit or remaining portion thereof held under this section upon settlement of all liabilities, if any, against it.
6. This section does not apply to solicitation of initial qualifying applications for insurance in a proposed domestic mutual insurer pursuant to NRS 692B.200 except as provided in NRS 692B.210.
(Added to NRS by 1971, 1790)
NRS 692B.160 Filing of articles of incorporation; rights under permit. Upon issuance to it by the Commissioner of its solicitation permit, a newly formed proposed domestic stock or mutual insurer shall file with the Commissioner a copy of its articles of incorporation as filed with the Secretary of State and proceed to the offer and sale of its securities and insurance policies as provided for in the permit.
(Added to NRS by 1971, 1791)
NRS 692B.170 Deposit of money in escrow.
1. The holder of the solicitation permit shall promptly deposit all money except as provided in paragraph (a) of subsection 2, received from an offering of securities in this state pursuant to the permit, other than advance premiums for insurance which are subject to NRS 692B.230, in escrow in a bank, credit union or trust company located in this state and under an agreement consistent with this chapter filed with and approved by the Commissioner.
2. No part of the money may be withdrawn from the deposit, except:
(a) For payment of organization, sales and promotion expenses as earned and as authorized by the permit, and money for such purposes, up to the applicable expense limit on money as received, may be withheld from the deposit;
(b) For the purpose of making any deposit with the Commissioner required for the issuance of a certificate of authority to an insurer, or if the organization is not, or is not to be, an insurer, upon completion of payments on securities subscriptions made under the permit and deposit or appropriation of such money to the purposes specified in the permit; or
(c) For the making of refunds as provided in NRS 692B.240.
3. Money while so held in escrow may be invested in certificates of deposit or savings accounts. Interest accruing thereon becomes part of the money released as provided in paragraph (b) of subsection 2, or must be applied toward the cost of making refunds under paragraph (c) of subsection 2, or to supplement the bond or deposit in lieu thereof if the bond or deposit is called on pursuant to NRS 692B.150.
4. When the Commissioner has issued a certificate of authority to a proposed insurer the Commissioner shall release to the insurer any money remaining in escrow for its account.
5. The Commissioner may in the discretion of the Commissioner waive compliance with this section as to money to be received under a subsequent financing permit pursuant to NRS 692B.260, or in other circumstances where the Commissioner deems such an escrow to be unnecessary for the protection of investors or the public.
(Added to NRS by 1971, 1791; A 1999, 1553)
NRS 692B.180 Subscription contracts.
1. No form of subscription contract to sell securities under a solicitation permit shall be used unless the form has been filed with the Commissioner not less than 10 days prior to use and not disapproved by the Commissioner. The Commissioner shall disapprove any such form found by the Commissioner, either within or after such 10-day period, to be:
(a) Prolix or unduly complicated as to terms;
(b) In any material part, printed in such a manner as to be difficult to read;
(c) Unfair to the subscriber in its terms; or
(d) Contrary to law or the terms of the solicitation permit.
2. No such disapproval shall be retroactively effective.
3. Every such contract providing for payment of the subscription price in installments shall:
(a) Require payment in full prior to expiration of the permit; and
(b) Provide for the forfeiture, at the option of the corporation, of all payments theretofore made if the subscriber fails to cure all delinquencies of payments thereunder within 45 days after written notice of such delinquencies and of such forfeiture requirement has been mailed by the permit holder to the subscriber at his or her address last of record with the permit holder.
(Added to NRS by 1971, 1791)
NRS 692B.190 License to sell securities. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. No person may in this State solicit subscription to or purchase of any security covered by a solicitation permit issued under this chapter, unless then licensed therefor by the Commissioner.
2. Such a license may be issued only to natural persons, and the Commissioner shall not license any person found by the Commissioner to be:
(a) Dishonest or untrustworthy;
(b) Financially irresponsible;
(c) Of unfavorable personal or business history or reputation; or
(d) For any other cause, reasonably unsuited for fulfillment of the responsibilities of such a licensee.
3. The applicant for such a license must file a written application therefor with the Commissioner, on forms and containing inquiries as designated and required by the Commissioner. The application must include or be accompanied by:
(a) The social security number of the applicant;
(b) An endorsement by the holder of the permit under which the securities are proposed to be sold; and
(c) The application fee specified in NRS 680B.010.
4. The Commissioner shall promptly cause an investigation to be made of the identity and qualifications of the applicant.
5. The license, if issued, must be for the period of the permit, and must automatically be extended if the permit is extended.
6. The Commissioner shall revoke the license if at any time after issuance the Commissioner has found that the license was obtained through misrepresentation or concealment of facts, or that the licensee is no longer qualified therefor, or that the licensee has misrepresented the securities offered, or has otherwise conducted himself or herself in or with respect to transactions under the license in a manner injurious to the permit holder or to subscribers or prospects or the public.
7. This section does not apply to securities broker-dealers registered as such under the Securities Exchange Act of 1934, or with respect to securities the sale of which is underwritten, other than on a best efforts basis, by such a broker-dealer.
8. With respect to solicitation of subscriptions to or purchase of securities covered by a solicitation permit issued by the Commissioner, the license required by this section is in lieu of a license or permit otherwise required of the solicitor under any other law of this State.
9. An applicant who is a resident of this State must, as part of his or her application and at the applicant’s own expense:
(a) Arrange to have a complete set of his or her fingerprints taken by a law enforcement agency or other authorized entity acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and written permission authorizing the Commissioner to submit the applicant’s fingerprints to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for a report on the applicant’s background and to such other law enforcement agencies as the Commissioner deems necessary; or
(2) Written verification, on a form prescribed by the Commissioner, stating that the fingerprints of the applicant were taken and directly forwarded electronically or by another means to the Central Repository and that the applicant has given written permission to the law enforcement agency or other authorized entity taking the fingerprints to submit the fingerprints to the Central Repository for submission to the Federal Bureau of Investigation for a report on the applicant’s background and to such other law enforcement agencies as the Commissioner deems necessary.
10. The Commissioner may:
(a) Unless the applicant’s fingerprints are directly forwarded pursuant to subparagraph (2) of paragraph (b) of subsection 9, submit those fingerprints to the Central Repository for submission to the Federal Bureau of Investigation and to such other law enforcement agencies as the Commissioner deems necessary; and
(b) Request from each such agency any information regarding the applicant’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1792; A 1997, 2204; 1999, 520, 544; 2003, 2871; 2011, 3391; 2013, 3837)
NRS 692B.190 License to sell securities. [Effective on the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. No person may in this State solicit subscription to or purchase of any security covered by a solicitation permit issued under this chapter, unless then licensed therefor by the Commissioner.
2. Such a license may be issued only to natural persons, and the Commissioner shall not license any person found by the Commissioner to be:
(a) Dishonest or untrustworthy;
(b) Financially irresponsible;
(c) Of unfavorable personal or business history or reputation; or
(d) For any other cause, reasonably unsuited for fulfillment of the responsibilities of such a licensee.
3. The applicant for such a license must file a written application therefor with the Commissioner, on forms and containing inquiries as designated and required by the Commissioner. The application must include or be accompanied by:
(a) An endorsement by the holder of the permit under which the securities are proposed to be sold; and
(b) The application fee specified in NRS 680B.010.
4. The Commissioner shall promptly cause an investigation to be made of the identity and qualifications of the applicant.
5. The license, if issued, must be for the period of the permit, and must automatically be extended if the permit is extended.
6. The Commissioner shall revoke the license if at any time after issuance the Commissioner has found that the license was obtained through misrepresentation or concealment of facts, or that the licensee is no longer qualified therefor, or that the licensee has misrepresented the securities offered, or has otherwise conducted himself or herself in or with respect to transactions under the license in a manner injurious to the permit holder or to subscribers or prospects or the public.
7. This section does not apply to securities broker-dealers registered as such under the Securities Exchange Act of 1934, or with respect to securities the sale of which is underwritten, other than on a best efforts basis, by such a broker-dealer.
8. With respect to solicitation of subscriptions to or purchase of securities covered by a solicitation permit issued by the Commissioner, the license required by this section is in lieu of a license or permit otherwise required of the solicitor under any other law of this State.
9. An applicant who is a resident of this State must, as part of his or her application and at the applicant’s own expense:
(a) Arrange to have a complete set of his or her fingerprints taken by a law enforcement agency or other authorized entity acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and written permission authorizing the Commissioner to submit the applicant’s fingerprints to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for a report on the applicant’s background and to such other law enforcement agencies as the Commissioner deems necessary; or
(2) Written verification, on a form prescribed by the Commissioner, stating that the fingerprints of the applicant were taken and directly forwarded electronically or by another means to the Central Repository and that the applicant has given written permission to the law enforcement agency or other authorized entity taking the fingerprints to submit the fingerprints to the Central Repository for submission to the Federal Bureau of Investigation for a report on the applicant’s background and to such other law enforcement agencies as the Commissioner deems necessary.
10. The Commissioner may:
(a) Unless the applicant’s fingerprints are directly forwarded pursuant to subparagraph (2) of paragraph (b) of subsection 9, submit those fingerprints to the Central Repository for submission to the Federal Bureau of Investigation and to such other law enforcement agencies as the Commissioner deems necessary; and
(b) Request from each such agency any information regarding the applicant’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1792; A 1997, 2204; 1999, 520, 544; 2003, 2871; 2011, 3391; 2013, 3837, effective on the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings)
NRS 692B.193 Payment of child support: Statement by applicant for permit or license; grounds for denial of permit or license; duty of Commissioner. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. A natural person who applies for the issuance of a permit or license pursuant to this chapter shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.
2. The Commissioner shall include the statement required pursuant to subsection 1 in:
(a) The application or any other forms that must be submitted for the issuance or renewal of the permit or license; or
(b) A separate form prescribed by the Commissioner.
3. A permit or license may not be issued by the Commissioner pursuant to this chapter if the applicant is a natural person who:
(a) Fails to submit the statement required pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant to subsection 1 that the applicant is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.
4. If an applicant indicates on the statement submitted pursuant to subsection 1 that the applicant is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Commissioner shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.
(Added to NRS by 1997, 2202)
NRS 692B.197 Suspension of permit or license for failure to pay child support or comply with certain subpoenas or warrants; reinstatement of permit or license. [Effective until the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. If the Commissioner receives a copy of a court order issued pursuant to NRS 425.540 that provides for the suspension of all professional, occupational and recreational licenses, certificates and permits issued to a person who is the holder of a permit or license issued pursuant to this chapter, the Commissioner shall deem the permit or license issued to that person to be suspended at the end of the 30th day after the date on which the court order was issued unless the Commissioner receives a letter issued to the holder of the permit or license by the district attorney or other public agency pursuant to NRS 425.550 stating that the holder of the permit or license has complied with the subpoena or warrant or has satisfied the arrearage pursuant to NRS 425.560.
2. The Commissioner shall reinstate a permit or license issued pursuant to this chapter that has been suspended by a district court pursuant to NRS 425.540 if the Commissioner receives a letter issued by the district attorney or other public agency pursuant to NRS 425.550 to the person whose permit or license was suspended stating that the person whose permit or license was suspended has complied with the subpoena or warrant or has satisfied the arrearage pursuant to NRS 425.560.
(Added to NRS by 1997, 2203)
NRS 692B.200 Mutual insurers: Initial qualifications.
1. When newly organized, a domestic mutual insurer may be authorized to transact any one of the kinds of insurance listed in the schedule contained in subsection 2.
2. When applying for an original certificate of authority, the insurer must be otherwise qualified therefor under this Code, and must have received and accepted bona fide applications as to substantial insurable subjects for insurance of a substantial character of the kind of insurance proposed to be transacted, must have collected in cash the full premium therefor at a rate not less than that usually charged by other insurers for comparable coverages, must have surplus funds on hand and deposited as of the date such insurance coverages are to become effective, or, in lieu of such applications, premiums, and surplus, may deposit and thereafter maintain surplus, all in accordance with that part of the following schedule which applies to the one kind of insurance the insurer proposes to transact:
(A) (B) (C) (D) (E) (F) (G) (H)
Max. Deposit Deposit
Min. Min.No. Min. Min. Amt. Min. of
No.of Subjects Prem. Amt. Ins.Ea. Surplus Surplus
Kind of Apps. Cov- Col- Ins.Ea. Subj. Funds In Lieu
Ins. Accepted ered lected Subj. (v) (vi) (vi)
Life (i)....................... 500 500 Annual $2,000 $5,000 $100,000 $200,000
Health (ii)................. 500 500 Quarterly $25 $50 $100,000 $200,000
(Weekly Indemnity)
Property (iii)............. 100 250 Annual $3,000 $7,000 $100,000 $200,000
Casualty (iv)............... 50 500 Annual $5,000 $25,000 $200,000 $300,000
Expendable surplus: In addition to surplus deposited and thereafter to be maintained as shown in column (G) or (H) in the above schedule, the insurer when first authorized must have on hand additional surplus funds in an amount not less than 150 percent of the applicable deposited surplus required of it under the above schedule. Of such additional surplus the insurer may expend two- thirds thereof thereafter in conduct of its business, and shall maintain unimpaired the remaining one-third together with such deposited surplus.
3. The following provisions are respectively applicable to the schedule in subsection 2 and provisions as indicated by like Roman numerals appearing in such schedule:
(i) No group insurance or term policies for terms of less than 10 years shall be included.
(ii) No group, blanket or family plans of insurance shall be included. In lieu of weekly indemnity a like premium value in medical, surgical and hospital benefits may be provided. Any accidental death or dismemberment benefit provided shall not exceed $5,000.
(iii) Only insurance of the owner’s interest in real property may be included.
(iv) Insurance of legal liability for bodily injury and property damage, to which the maximum and minimum insured amounts apply, must be included.
(v) The maximums provided for in column (F) are net of applicable reinsurance.
(vi) The deposit of surplus in the amount specified in columns (G) and (H) must thereafter be maintained unimpaired. The deposit is subject to the provisions of NRS 682B.010 to 682B.120, inclusive (administration of deposits).
As to the financial requirements for the authority of such insurer to transact additional kinds of insurance, see NRS 693A.190.
(Added to NRS by 1971, 1793)
NRS 692B.210 Mutual insurers: Permit; bond or deposit.
1. Before soliciting applications for insurance as required under NRS 692B.200, the incorporators of the proposed insurer shall procure a solicitation permit as required by NRS 692B.040, and shall file with the Commissioner a corporate surety bond in the penal sum of $50,000 in favor of the State of Nevada and conditioned as follows:
(a) Upon due accounting for and deposit, as required under NRS 692B.230, of funds received as premiums upon applications for insurance; and
(b) If the corporation fails to complete its organization and secure a certificate of authority issued by the Commissioner within the period allowed therefor by the solicitation permit, all premiums collected from applicant members will be promptly returned to them, and all other indebtedness of the corporation, other than any compensation to directors, officers or solicitors of insurance applications, and costs incurred by the State of Nevada in any legal proceedings for the liquidation or dissolution of the corporation will be paid.
2. In lieu of such a bond, the incorporators may deposit with the Commissioner cash in the amount of $50,000, or securities of the United States Government or of the State of Nevada of a market value of at least $50,000, and the Commissioner shall hold such deposit in trust for the same purposes as apply to a bond under subsection 1.
3. If the corporation or an affiliate corporation proposes also to offer securities for initial financing of the proposed insurer, in addition to the securing of qualifying applications for insurance, the bond or deposit required by this section may be combined with that required under NRS 692B.150, with appropriate extension of the conditions of such bond or deposit to comply with the requirements of both sections, so that only one such bond or deposit of $50,000 shall be necessary for all such purposes.
4. The Commissioner shall release and discharge the bond or deposit or remaining portion thereof held under this section upon settlement of all liabilities, if any, against it.
(Added to NRS by 1971, 1794)
NRS 692B.220 Mutual insurers: Qualifying applications for insurance.
1. Upon issuance of the required solicitation permit, the proposed insurer may commence solicitation of requisite applications for insurance policies and may receive deposits of premiums thereon.
2. All such applications shall be in writing signed by the applicant, covering subjects of insurance resident, located or to be performed in this state.
3. All such applications shall provide that:
(a) Issuance of the policy is contingent upon the insurer qualifying for and receiving a certificate of authority;
(b) No insurance is in effect unless and until the certificate of authority has been issued;
(c) The prepaid premium or deposit, and membership or policy fee, if any, shall be refunded in full to the applicant if organization is not completed and the certificate of authority is not issued and received by the insurer before expiration or other termination of the solicitation permit; and
(d) All qualifying premiums shall be paid in cash.
4. Solicitations for such qualifying applications for insurance shall be by licensed agents of the corporation; and the Commissioner shall upon the corporation’s request therefor and fulfillment of the requirements applicable under chapter 683A of NRS (agents, brokers and solicitors), license as agents of the corporation individuals qualified therefor under, and subject to, such sections.
(Added to NRS by 1971, 1795)
NRS 692B.230 Mutual insurers: Deposit of premiums in escrow.
1. All sums collected by a domestic mutual corporation as premiums or fees on qualifying applications for insurance therein must be deposited in escrow with a bank, credit union or trust company located in this state under a written agreement filed with and approved by the Commissioner. The terms of such an agreement must be consistent with those of the solicitation permit and of the applicable provisions of this section and NRS 692B.250.
2. Upon issuance to the corporation of a certificate of authority as an insurer for the kind of insurance for which such applications were solicited, all money so held in escrow becomes the money of the insurer. Until the certificate of authority is issued, the money remains the property of the applicants for insurance as respectively entitled thereto.
(Added to NRS by 1971, 1795; A 1999, 1553)
NRS 692B.240 Failure to complete or qualify.
1. The Commissioner shall withdraw all funds held in escrow under NRS 692B.170, and refund to securities subscribers or purchasers all sums paid in thereon under the solicitation permit, less that part allowed and used for organization, sales and promotion expenses, if:
(a) The permit holder has failed to complete its organization or financing, within the terms of the permit, or, if to be an insurer, it has failed to secure its certificate of authority, all before expiration of the permit; or
(b) The permit is revoked.
2. As to funds paid in on subscriptions by founders, promoters and incorporators and held on deposit in lieu of the bond under subsection 3 of NRS 692B.150, only such portion of such funds shall be refundable under this section as may remain after discharge of all liabilities against the deposit under NRS 692B.150 and the charging of such funds with a proportionate share of organization, sales and promotion expenses.
3. If a proposed domestic mutual insurer fails to complete its organization and to secure its original certificate of authority within the period allowed therefor by the solicitation permit, the corporation shall transact no further business, and the Commissioner shall return or cause to be returned to the persons entitled thereto all advance deposits or payments of premiums or fees held in escrow under NRS 692B.230.
(Added to NRS by 1971, 1795)
NRS 692B.250 Voluntary dissolution.
1. At any time prior to the issuance of a certificate of authority to a proposed domestic stock or mutual insurer, the incorporators may voluntarily surrender the articles of incorporation and the corporation may be voluntarily dissolved by written agreement filed with the Commissioner. The agreement shall be signed and verified by a majority of the incorporators, and shall be signed (without verification) by at least two-thirds of all persons who theretofore have become subscribers to or purchasers of securities of the corporation and (in the case of a proposed mutual insurer) by at least two-thirds of all persons who theretofore have applied for policies in the proposed insurer.
2. The Commissioner shall approve the surrender of such articles of incorporation and dissolution if upon investigation the Commissioner finds that:
(a) No insurance business has been transacted by the corporation except (in the case of a proposed mutual insurer) for solicitation of qualifying applications for insurance;
(b) Arrangements satisfactory to the Commissioner have been made for the return to subscribers, purchasers and applicants of all funds paid by them upon subscription or purchase of securities, or upon applications for insurance, under the solicitation permit theretofore held by the corporation, less (as to securities subscriptions and purchases) the part thereof actually and lawfully used for expenses; and
(c) All obligations of the corporation have been paid or discharged.
3. The articles of incorporation so surrendered, together with the executed copy of the agreement, bearing thereon the endorsed approval of the Commissioner, shall be filed with the Secretary of State and thereupon the corporate existence of the corporation shall cease.
4. The provisions of NRS 696B.210 and 696B.220 (grounds for rehabilitation, liquidation of domestic insurer) do not apply to the voluntary dissolution of a proposed domestic insurer pursuant to this section.
(Added to NRS by 1971, 1796)
NRS 692B.260 Subsequent financing: Solicitation permit required; penalty.
1. No person referred to in NRS 692B.040 (solicitation permit required), after receiving a certificate of authority, if an insurer, or after completing its original organization and financing, if other than an insurer, shall in this state solicit or receive funds in exchange for or grant options with respect to its securities until it has applied to the Commissioner for, and has been granted, a solicitation permit. This section is subject to the same exemptions as are provided by NRS 692B.060 (exemptions).
2. The Commissioner shall issue such a permit unless the Commissioner finds that:
(a) The funds proposed to be secured are inadequate or excessive in amount for the purposes intended;
(b) The proposed securities or the manner of their distribution would be unfair or inequitable to existing or proposed security holders or policyholders of the issuer; or
(c) Other reasonable objections exist as to the proposed financing.
3. Any such permit granted by the Commissioner shall be for such duration, and shall contain such terms and be issued upon such conditions, as the Commissioner may reasonably require for the protection of existing or proposed investors. In the Commissioner’s discretion escrow of funds, or a bond or deposit in lieu thereof, need not be required, and other terms and conditions of the permit may be substantially the same as or materially different from requirements made under this chapter as to solicitation permits for initial financing; but no such permit shall allow sales or promotion expense, for the sale of the securities in excess of the amount reasonably required therefor, and in no event to exceed 15 percent of the proceeds of such sales if and as such funds are actually received.
4. Every person who violates the provisions of subsection 1 is subject to the same penalties prescribed by NRS 692B.040 (solicitation permit required; penalty).
(Added to NRS by 1971, 1797)