Senate Bill No. 351-Committee on Commerce and Labor
May 2, 1997
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Referred to Committee on Commerce and Labor
SUMMARY--Provides for sale of insurance in banks. (BDR 57-831)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to insurance; providing for the sale of insurance by or on the premises of a bank; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 NRS 683A.110 is hereby amended to read as follows:
683A.1101. For the purposes of this section:
(a) "Affiliate" means a person that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, a bank.
(b) "Bank" means any institution that accepts deposits that the depositor has a legal right to withdraw on demand.
[(b) "Bank holding company," "company," "parent," "subsidiary," "affiliate" and related terms must be defined by the commissioner to effectuate the purposes of this section, which are to help maintain the separation between banking and the insurance business and to minimize the possibilities of unfair competitive activities by banks against insurance companies, agents and brokers.]
(c) "Parent" means a person that owns or controls a bank, directly or indirectly, in whole or in part.
(d) "Subsidiary" means a person owned or controlled by a bank, directly or indirectly, in whole or in part.
2. A bank [or bank holding company or its parent, subsidiaries or affiliates] must not directly or indirectly be licensed to sell insurance in this state except as to credit insurance, as defined in NRS 690A.015, and credit property insurance, or be licensed or admitted as an insurer.
3. The provisions of subsection 2 do not prohibit the licensing [of a bank or a bank holding company, or a parent, subsidiary or affiliate of a bank] by the commissioner [of insurance] :
(a) Of an affiliate, parent or subsidiary of a bank to sell insurance or be admitted as an insurer; or
(b) Of a bank to sell annuities. As used in this [subsection,] paragraph, "annuity" has the meaning ascribed to it in NRS 688A.020.
Sec. 2 Chapter 686A of NRS is hereby amended by adding thereto a new section to read as follows:
A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any services, or fix or vary the consideration for any of them, on the condition or requirement that the customer purchase insurance from a parent, subsidiary or affiliate of the bank. For the purposes of this section, the terms "affiliate," "parent" and "subsidiary" have the meanings ascribed to them in NRS 683A.110.
Sec. 3 NRS 686A.183 is hereby amended to read as follows:
686A.1831. After the hearing provided for in NRS 686A.160, the commissioner shall issue his order on hearing pursuant to NRS 679B.360. If the commissioner determines that the person charged has engaged in an unfair method of competition or an unfair or deceptive act or practice in violation of NRS 686A.010 to 686A.310, inclusive, and section 2 of this act, he shall order him to cease and desist from engaging in that method of competition, act or practice, and may order one or both of the following:
(a) If the person knew or reasonably should have known that he was in violation of NRS 686A.010 to 686A.310, inclusive, and section 2 of this act, payment of an administrative fine of not more than $5,000 for each act or violation, except that as to licensed agents, brokers, solicitors and adjusters, the administrative fine [shall] must not exceed $500 for each act or violation.
(b) Suspension or revocation of the person's license if he knew or reasonably should have known that he was in violation of NRS 686A.010 to 686A.310, inclusive [.] , and section 2 of this act.
2. Until the expiration of the time allowed for taking an appeal, pursuant to NRS 679B.370, if no petition for review has been filed within that time, or, if a petition for review has been filed within that time, until the official record in the proceeding has been filed with the court, the commissioner may, at any time, upon such notice and in such manner as he deems proper, modify or set aside, in whole or in part, any order issued by him under this section.
3. After the expiration of the time allowed for taking an appeal, if no petition for review has been filed, the commissioner may at any time, after notice and opportunity for hearing, reopen and alter, modify or set aside, in whole or in part, any order issued by him under this section whenever in his opinion conditions of fact or of law have so changed as to require such action or if the public interest so requires.
Sec. 4 This act becomes effective upon passage and approval.