Assembly Bill No.
453–Committee on
Commerce and Labor
CHAPTER..........
AN ACT relating to insurance; expanding the authority of the Commissioner of Insurance to enter into cooperative agreements and to share certain information; authorizing the Commissioner to examine the accounts, records, documents and transactions of an external review organization for certain purposes; revising the requirements for a person to act as a broker for reinsurance; authorizing an insurance consultant to qualify for a license in certain lines of authority; increasing the amount of surplus required to accept surplus lines; requiring an essential insurance association to qualify as a domestic mutual insurer if requested to do so by the Commissioner; clarifying that underinsured vehicle coverage includes coverage for certain damages to the extent those damages exceed a limitation of liability for a governmental agency; revising the amount of money that the Nevada Insurance Guaranty Association and the Nevada Life and Health Insurance Guaranty Association are obligated to pay for a covered claim; requiring an insurer that issues a policy of insurance covering the liability of certain physicians to submit a report to the Commissioner within a certain period after closing a claim under the policy; revising the order of distribution of certain claims from the estate of an insurer on liquidation of the insurer; prohibiting a bail agent from acting as an attorney-in-fact for an insurer on an undertaking unless the bail agent registers in the office of the sheriff and with the clerk of the district court in which the bail agent resides; requiring a member of an association of self-insured public or private employers to include certain information in a notice of intent to withdraw from the association; providing penalties; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 679B of NRS is hereby amended by adding
1-2 thereto a new section to read as follows:
1-3 1. In addition to the authority conferred upon him pursuant
1-4 to NRS 679B.120, the Commissioner may:
1-5 (a) Enter into and comply with any cooperative or
1-6 coordination agreement with any governmental entity within or
1-7 outside this state relating to the regulation and administration of
2-1 insurance and persons who are materially involved in the business
2-2 of insurance;
2-3 (b) Share any document, material or other information,
2-4 including any document, material or information that is
2-5 confidential or privileged, with any state, federal or international
2-6 regulatory, law enforcement or legislative agency, and the
2-7 National Association of Insurance Commissioners and any of its
2-8 affiliates or subsidiaries, if the recipient of the document, material
2-9 or other information agrees:
2-10 (1) To ensure that the document, material or other
2-11 information remains confidential and privileged; and
2-12 (2) To submit to the jurisdiction of the courts of this state if
2-13 the recipient violates a provision of subparagraph (1); and
2-14 (c) Receive any document, material or other information from
2-15 any agency, association, affiliate or subsidiary specified in
2-16 paragraph (b). The Commissioner shall ensure that any
2-17 document, material or information received pursuant to this
2-18 paragraph remains confidential if the document, material or
2-19 information is provided to the Commissioner with a notice or the
2-20 understanding that it is confidential or privileged under the laws
2-21 of the jurisdiction from which it is submitted.
2-22 2. The sharing or receipt of any document, material or other
2-23 information by the Commissioner pursuant to this section does
2-24 not waive any applicable privilege or claim of confidentiality in
2-25 the document, material or other information.
2-26 Sec. 2. NRS 679B.130 is hereby amended to read as follows:
2-27 679B.130 1. The Commissioner may adopt reasonable
2-28 regulations [for] :
2-29 (a) For the administration of any provision of this Code, NRS
2-30 287.04335 or chapters 616A to 617, inclusive, of NRS[.] ; or
2-31 (b) As required to ensure compliance by the Commissioner
2-32 with any federal law or regulation relating to insurance.
2-33 2. A person who willfully violates any regulation of the
2-34 Commissioner is subject to such suspension or revocation of a
2-35 certificate of authority or license, or administrative fine in lieu of
2-36 such suspension or revocation, as may be applicable under this
2-37 Code or chapter 616A, 616B, 616C, 616D or 617 of NRS for
2-38 violation of the provision to which the regulation relates. No
2-39 penalty applies to any act done or omitted in good faith in
2-40 conformity with any such regulation, notwithstanding that the
2-41 regulation may, after the act or omission, be amended, rescinded or
2-42 determined by a judicial or other authority to be invalid for any
2-43 reason.
2-44 Sec. 3. NRS 679B.144 is hereby amended to read as follows:
2-45 679B.144 1. The Commissioner shall collect and maintain
2-46 the information provided by insurers pursuant to NRS 690B.050
2-47 regarding each closed claim for medical malpractice filed against
3-1 [physicians and surgeons] a person who is covered by a policy of
3-2 insurance for medical malpractice in this state, including, without
3-3 limitation:
3-4 (a) The cause of the loss;
3-5 (b) A description of the injury for which the claim was filed;
3-6 (c) The sex of the injured person;
3-7 (d) The names and number of defendants in each claim;
3-8 (e) The type of coverage provided;
3-9 (f) The amount of the initial, highest and last reserves of an
3-10 insurer for each claim before final resolution of the claim by
3-11 settlement or trial;
3-12 (g) The disposition of each claim;
3-13 (h) The amount of money awarded through settlement or by
3-14 verdict;
3-15 (i) The sum of money paid to each claimant and the source of
3-16 that sum; [and]
3-17 (j) Any sum of money allocated to expenses for the adjustment
3-18 of losses[.] ; and
3-19 (k) Any other information the Commissioner determines to be
3-20 necessary or appropriate.
3-21 2. The Commissioner shall submit with his report to the
3-22 Legislature required pursuant to NRS 679B.410[,] a summary of
3-23 the information collected pursuant to this section.
3-24 3. The Commissioner shall adopt regulations necessary to carry
3-25 out the provisions of this section.
3-26 4. As used in this section, “policy of insurance for medical
3-27 malpractice” means a policy that provides coverage for any
3-28 medical professional liability of the insured under the policy.
3-29 Sec. 3.3. NRS 679B.240 is hereby amended to read as follows:
3-30 679B.240 To ascertain compliance with law, or relationships
3-31 and transactions between any person and any insurer or proposed
3-32 insurer, the Commissioner may, as often as he deems advisable,
3-33 examine the accounts, records, documents and transactions relating
3-34 to such compliance or relationships of:
3-35 1. Any insurance agent, solicitor, broker, surplus lines broker,
3-36 general agent, adjuster, insurer representative, bail agent, motor
3-37 club agent or any other licensee or any other person the
3-38 Commissioner has reason to believe may be acting as or holding
3-39 himself out as any of the foregoing.
3-40 2. Any person having a contract under which he enjoys in fact
3-41 the exclusive or dominant right to manage or control an insurer.
3-42 3. Any insurance holding company or other person holding the
3-43 shares of voting stock or the proxies of policyholders of a domestic
3-44 insurer, to control the management thereof, as voting trustee or
3-45 otherwise.
3-46 4. Any subsidiary of the insurer.
4-1 5. Any person engaged in this state in, or proposing to be
4-2 engaged in this state in, or holding himself out in this state as so
4-3 engaging or proposing, or in this state assisting in, the promotion,
4-4 formation or financing of an insurer or insurance holding
4-5 corporation, or corporation or other group to finance an insurer or
4-6 the production of its business.
4-7 6. Any external review organization, as defined in section 19
4-8 of Assembly Bill No. 79 of this session.
4-9 Sec. 3.7. NRS 679B.290 is hereby amended to read as follows:
4-10 679B.290 1. Except as otherwise provided in subsection 2:
4-11 (a) The expense of examination of an insurer, or of any person
4-12 referred to in subsection 1, 2 , [or] 5 or 6 of NRS 679B.240, must
4-13 be borne by the person examined. Such expense includes only the
4-14 reasonable and proper hotel and travel expenses of the
4-15 Commissioner and his examiners and assistants, including expert
4-16 assistance, reasonable compensation as to such examiners and
4-17 assistants and incidental expenses as necessarily incurred in the
4-18 examination. As to expense and compensation involved in any such
4-19 examination the Commissioner shall give due consideration to
4-20 scales and limitations recommended by the National Association of
4-21 Insurance Commissioners and outlined in the examination manual
4-22 sponsored by that association.
4-23 (b) The person examined shall promptly pay to the
4-24 Commissioner the expenses of the examination upon presentation
4-25 by the Commissioner of a reasonably detailed written statement
4-26 thereof.
4-27 2. The Commissioner may bill an insurer for the examination
4-28 of any person referred to in subsection 1 of NRS 679B.240 and
4-29 shall adopt regulations governing such billings.
4-30 Sec. 4. NRS 679B.440 is hereby amended to read as follows:
4-31 679B.440 1. The Commissioner may require that reports
4-32 submitted pursuant to NRS 679B.430 include, without limitation,
4-33 information regarding:
4-34 (a) Liability insurance provided to:
4-35 (1) Governmental agencies and political subdivisions of this
4-36 state, reported separately for:
4-37 (I) Cities and towns;
4-38 (II) School districts; and
4-39 (III) Other political subdivisions;
4-40 (2) Public officers;
4-41 (3) Establishments where alcoholic beverages are sold;
4-42 (4) Facilities for the care of children;
4-43 (5) Labor, fraternal or religious organizations; and
4-44 (6) Officers or directors of organizations formed pursuant to
4-45 title 7 of NRS, reported separately for nonprofit entities and entities
4-46 organized for profit;
5-1 (b) Liability insurance for:
5-2 (1) Defective products;
5-3 (2) Medical or dental malpractice [;] of:
5-4 (I) A practitioner licensed pursuant to chapter 630,
5-5 630A, 631, 632, 633, 634, 634A, 635, 636, 637, 637A, 637B, 639
5-6 or 640 of NRS;
5-7 (II) A hospital or other health care facility; or
5-8 (III) Any related corporate entity.
5-9 (3) Malpractice of attorneys;
5-10 (4) Malpractice of architects and engineers; and
5-11 (5) Errors and omissions by other professionally qualified
5-12 persons;
5-13 (c) Vehicle insurance, reported separately for:
5-14 (1) Private vehicles;
5-15 (2) Commercial vehicles;
5-16 (3) Liability insurance; and
5-17 (4) Insurance for property damage; [and]
5-18 (d) Workers’ compensation insurance[.] ; and
5-19 (e) In addition to any information provided pursuant to
5-20 subparagraph (2) of paragraph (b) or NRS 690B.050, a policy of
5-21 insurance for medical malpractice. As used in this paragraph,
5-22 “policy of insurance for medical malpractice” has the meaning
5-23 ascribed to it in NRS 679B.144.
5-24 2. The Commissioner may require that the report include,
5-25 without limitation, information specifically pertaining to this state
5-26 or to an insurer in its entirety, in the aggregate or by type of
5-27 insurance, and for a previous or current year, regarding:
5-28 (a) Premiums directly written;
5-29 (b) Premiums directly earned;
5-30 (c) Number of policies issued;
5-31 (d) Net investment income, using appropriate estimates when
5-32 necessary;
5-33 (e) Losses paid;
5-34 (f) Losses incurred;
5-35 (g) Loss reserves, including:
5-36 (1) Losses unpaid on reported claims; and
5-37 (2) Losses unpaid on incurred but not reported claims;
5-38 (h) Number of claims, including:
5-39 (1) Claims paid; and
5-40 (2) Claims that have arisen but are unpaid;
5-41 (i) Expenses for adjustment of losses, including allocated and
5-42 unallocated losses;
5-43 (j) Net underwriting gain or loss;
5-44 (k) Net operation gain or loss, including net investment income;
5-45 and
5-46 (l) Any other information requested by the Commissioner.
6-1 3. The Commissioner may also obtain, based upon an insurer
6-2 in its entirety, information regarding:
6-3 (a) Recoverable federal income tax;
6-4 (b) Net unrealized capital gain or loss; and
6-5 (c) All other expenses not included in subsection 2.
6-6 Sec. 5. NRS 679B.460 is hereby amended to read as follows:
6-7 679B.460 1. An insurer who willfully or repeatedly violates
6-8 or fails to comply with a provision of NRS 679B.400 to 679B.450,
6-9 inclusive, or 690B.050 or a regulation adopted pursuant to NRS
6-10 679B.430 is subject, after notice and a hearing held pursuant to
6-11 NRS 679B.310 to 679B.370, inclusive, to payment of an
6-12 administrative fine of not more than $1,000 for each day of the
6-13 violation or failure to comply, up to a maximum fine of $50,000.
6-14 2. An insurer who fails or refuses to comply with an order
6-15 issued by the Commissioner pursuant to NRS 679B.430 is subject,
6-16 after notice and a hearing held pursuant to NRS 679B.310 to
6-17 679B.370, inclusive, to suspension or revocation of his certificate
6-18 of authority to transact insurance in this state.
6-19 3. The imposition of an administrative fine pursuant to this
6-20 section must not be considered by the Commissioner in any other
6-21 administrative proceeding unless the fine has been paid or a court
6-22 order for payment of the fine has become final.
6-23 Sec. 6. NRS 680A.270 is hereby amended to read as follows:
6-24 680A.270 1. Each authorized insurer shall annually on or
6-25 before March 1, or within any reasonable extension of time therefor
6-26 which the Commissioner for good cause may have granted on or
6-27 before that date, file with the Commissioner a full and true
6-28 statement of its financial condition, transactions and affairs as of
6-29 December 31 preceding. The statement must be [in] :
6-30 (a) In the general form and context of, and require information
6-31 as called for by, [the form of] an annual statement as is currently in
6-32 general and customary use in the United States for the type of
6-33 insurer and kinds of insurance to be reported upon, with any useful
6-34 or necessary modification or adaptation thereof, supplemented by
6-35 additional information required by the Commissioner[. The
6-36 statement must be verified] ;
6-37 (b) Prepared in accordance with:
6-38 (1) The Annual Statement Instructions for the type of
6-39 insurer to be reported on as adopted by the National Association
6-40 of Insurance Commissioners for the year in which the insurer
6-41 files the statement; and
6-42 (2) The Accounting Practices and Procedures Manual
6-43 adopted by the National Association of Insurance Commissioners
6-44 and effective on January 1, 2001, and as amended by the National
6-45 Association of Insurance Commissioners after that date; and
7-1 (c) Verified by the oath of the insurer’s president or vice
7-2 president and secretary or actuary, as applicable, or, in the absence
7-3 of the foregoing, by two other principal officers, or if a reciprocal
7-4 insurer, by the oath of the attorney-in-fact, or its like officers if a
7-5 corporation.
7-6 2. The statement of an alien insurer must be verified by its
7-7 United States manager or other officer [duly authorized,] who is
7-8 authorized to do so, and may relate only to the insurer’s
7-9 transactions and affairs in the United States unless the
7-10 Commissioner requires otherwise. If the Commissioner requires a
7-11 statement as to [such an] the insurer’s affairs throughout the world,
7-12 the insurer shall file the statement with the Commissioner as soon
7-13 as reasonably possible.
7-14 3. The Commissioner may refuse to continue, or may suspend
7-15 or revoke, the certificate of authority of any insurer failing to file its
7-16 annual statement when due.
7-17 4. At the time of filing, the insurer shall pay the fee for filing
7-18 its annual statement as prescribed by NRS 680B.010.
7-19 5. The Commissioner may adopt regulations requiring each
7-20 domestic, foreign and alien insurer which is authorized to transact
7-21 insurance in this state to file the insurer’s annual statement with the
7-22 National Association of Insurance Commissioners or its successor
7-23 organization.
7-24 6. All ratios of financial analyses and synopses of examinations
7-25 concerning insurers that are submitted to the Division by the
7-26 National Association of Insurance Commissioners’ Insurance
7-27 Regulatory Information System are confidential and may not be
7-28 disclosed by the Division.
7-29 Sec. 7. NRS 680B.010 is hereby amended to read as follows:
7-30 680B.010 The Commissioner shall collect in advance and
7-31 receipt for, and persons so served must pay to the Commissioner,
7-32 fees and miscellaneous charges as follows:
7-33 1. Insurer’s certificate of authority:
7-34 (a) Filing initial application.............. $2,450
7-35 (b) Issuance of certificate:
7-36 (1) For any one kind of insurance as defined in NRS
7-37 681A.010 to 681A.080, inclusive............ 283
7-38 (2) For two or more kinds of insurance as so defined 578
7-39 (3) For a reinsurer........................... 2,450
7-40 (c) Each annual continuation of a certificate.. 2,450
7-41 (d) Reinstatement pursuant to NRS 680A.180, 50
7-42 percent of the annual continuation fee otherwise required.
7-43 (e) Registration of additional title pursuant to NRS
7-44 680A.240..................................................... 50
7-45 (f) Annual renewal of the registration of additional title
7-46 pursuant to NRS 680A.240........................ 25
8-1 2. Charter documents, other than those filed with an
8-2 application for a certificate of authority. Filing amendments
8-3 to articles of incorporation, charter, bylaws, power of
8-4 attorney and other constituent documents of the insurer,
8-5 each document............................................ $10
8-6 3. Annual statement or report. For filing annual
8-7 statement or report..................................... $25
8-8 4. Service of process:
8-9 (a) Filing of power of attorney..................... $5
8-10 (b) Acceptance of service of process........ 30
8-11 5. Licenses, appointments and renewals for producers
8-12 of insurance:
8-13 (a) Application and license................... $125
8-14 (b) Appointment fee for each insurer....... 15
8-15 (c) Triennial renewal of each license..... 125
8-16 (d) Temporary license............................... 10
8-17 (e) Modification of an existing license.... 50
8-18 6. Surplus lines brokers:
8-19 (a) Application and license ................. $ 125
8-20 (b) Triennial renewal of each license..... 125
8-21 7. Managing general agents’ licenses, appointments
8-22 and renewals:
8-23 (a) Application and license................... $125
8-24 (b) Appointment fee for each insurer....... 15
8-25 (c) Triennial renewal of each license..... 125
8-26 8. Adjusters’ licenses and renewals:
8-27 (a) Independent and public adjusters:
8-28 (1) Application and license ............. $125
8-29 (2) Triennial renewal of each license. 125
8-30 (b) Associate adjusters:
8-31 (1) Application and license ................ 125
8-32 (2) Triennial renewal of each license. 125
8-33 9. Licenses and renewals for appraisers of physical
8-34 damage to motor vehicles:
8-35 (a) Application and license .................. $125
8-36 (b) Triennial renewal of each license..... 125
8-37 10. Additional title and property insurers pursuant to
8-38 NRS 680A.240:
8-39 (a) Original registration.......................... $50
8-40 (b) Annual renewal.................................... 25
8-41 11. Insurance vending machines:
8-42 (a) Application and license, for each machine $125
8-43 (b) Triennial renewal of each license..... 125
8-44 12. Permit for solicitation for securities:
8-45 (a) Application for permit.................... $100
8-46 (b) Extension of permit............................. 50
9-1 13. Securities salesmen for domestic insurers:
9-2 (a) Application and license ........................ $25
9-3 (b) Annual renewal of license...................... 15
9-4 14. Rating organizations:
9-5 (a) Application and license ...................... $500
9-6 (b) Annual renewal..................................... 500
9-7 15. Certificates and renewals for administrators
9-8 licensed pursuant to chapter 683A of NRS:
9-9 (a) Application and certificate of registration $125
9-10 (b) Triennial renewal.............................. 125
9-11 16. For copies of the insurance laws of Nevada, a fee
9-12 which is not less than the cost of producing the copies.
9-13 17. Certified copies of certificates of authority and
9-14 licenses issued pursuant to the Insurance Code $10
9-15 18. For copies and amendments of documents on file
9-16 in the Division, a reasonable charge fixed by the
9-17 Commissioner, including charges for duplicating or
9-18 amending the forms and for certifying the copies and
9-19 affixing the official seal.
9-20 19. Letter of clearance for a producer of insurance or
9-21 other licensee[,] if requested by someone other than the
9-22 licensee....................................................... $10
9-23 20. Certificate of status as a producer of insurance or
9-24 other licensee[,] if requested by someone other than the
9-25 licensee....................................................... $10
9-26 21. Licenses, appointments and renewals for bail
9-27 agents:
9-28 (a) Application and license .................. $125
9-29 (b) Appointment for each surety insurer.. 15
9-30 (c) Triennial renewal of each license..... 125
9-31 22. Licenses and renewals for bail enforcement agents:
9-32 (a) Application and license .................. $125
9-33 (b) Triennial renewal of each license..... 125
9-34 23. Licenses, appointments and renewals for general
9-35 agents for bail:
9-36 (a) Application and license .................. $125
9-37 (b) Initial appointment by each insurer.... 15
9-38 (c) Triennial renewal of each license..... 125
9-39 24. Licenses and renewals for bail solicitors:
9-40 (a) Application and license................... $125
9-41 (b) Triennial renewal of each license..... 125
9-42 25. Licenses and renewals for title agents and escrow
9-43 officers:
9-44 (a) Application and license .................. $125
9-45 (b) Triennial renewal of each license..... 125
9-46 (c) Appointment fee for each title insurer15
10-1 (d) Change in name or location of business or in
10-2 association.................................................. $10
10-3 26. Certificate of authority and renewal for a seller of
10-4 prepaid funeral contracts......................... $125
10-5 27. Licenses and renewals for agents for prepaid
10-6 funeral contracts:
10-7 (a) Application and license .................. $125
10-8 (b) Triennial renewal of each license..... 125
10-9 28. Licenses, appointments and renewals for agents for
10-10 fraternal benefit societies:
10-11 (a) Application and license .................. $125
10-12 (b) Appointment for each insurer............. 15
10-13 (c) Triennial renewal of each license..... 125
10-14 29. Reinsurance intermediary broker or manager:
10-15 (a) Application and license................... $125
10-16 (b) Triennial renewal of each license..... 125
10-17 30. Agents for and sellers of prepaid burial contracts:
10-18 (a) Application and certificate or license$125
10-19 (b) Triennial renewal.............................. 125
10-20 31. Risk retention groups:
10-21 (a) Initial registration and review of an application$2,450
10-22 (b) Each annual continuation of a certificate of
10-23 registration............................................. 2,450
10-24 32. Required filing of forms:
10-25 (a) For rates and policies........................ $25
10-26 (b) For riders and endorsements............... 10
10-27 33. Viatical settlements:
10-28 (a) Provider of viatical settlements:
10-29 (1) Application and license........... $1,000
10-30 (2) Annual renewal.......................... 1,000
10-31 (b) Broker of viatical settlements:
10-32 (1) Application and license................. 500
10-33 (2) Annual renewal............................. 500
10-34 34. Insurance consultants:
10-35 (a) Application and license................... $125
10-36 (b) Triennial renewal.............................. 125
10-37 35. Licensee’s association with or appointment or
10-38 sponsorship by an organization:
10-39 (a) Initial appointment, association or sponsorship, for
10-40 each organization...................................... $50
10-41 (b) Renewal of each association or sponsorship 50
10-42 (c) Annual renewal of appointment.......... 15
10-43 36. Purchasing groups:
10-44 (a) Initial registration and review of an application $100
10-45 (b) Each annual continuation of registration 100
11-1 Sec. 8. NRS 680B.070 is hereby amended to read as follows:
11-2 680B.070 1. Each authorized insurer, fraternal benefit
11-3 society, health maintenance organization, organization for dental
11-4 care , prepaid limited health service organization and motor club
11-5 shall on or before March 1 of each year pay to the Commissioner
11-6 [the] a reasonable uniform amount, not to exceed [$15,] $30, as the
11-7 Commissioner requires, to cover the assessment levied upon this
11-8 state in the same calendar year by the National Association of
11-9 Insurance Commissioners to defray:
11-10 (a) The general expenses of the Association; and
11-11 (b) Reasonable and necessary travel and related expenses
11-12 incurred by the Commissioner and members of his staff, without
11-13 limitation as to number, in attending meetings of the Association
11-14 and its committees, subcommittees, hearings and other official
11-15 activities.
11-16 The Commissioner shall give written notice of the required amount.
11-17 2. Expenses incurred for the purposes described in paragraphs
11-18 (a) and (b) of subsection 1 must be paid in full and are not subject
11-19 to the limitations expressed in NRS 281.160 or in the regulations of
11-20 any state agency.
11-21 3. All money received by the Commissioner pursuant to
11-22 subsection 1 must be deposited in the State Treasury for credit to
11-23 the National Association Account of the Division of Insurance,
11-24 which is hereby created in the State General Fund. Except as
11-25 otherwise provided in subsection 2, all claims against the Account
11-26 must be paid as other claims against the State are paid.
11-27 Sec. 9. NRS 681A.160 is hereby amended to read as follows:
11-28 681A.160 1. Except as otherwise provided in subsection 2,
11-29 credit must be allowed if reinsurance is ceded to an assuming
11-30 insurer which is accredited as a reinsurer in this state. An accredited
11-31 reinsurer is one which:
11-32 (a) Files with the Commissioner an executed form approved by
11-33 the Commissioner as evidence of its submission to this state’s
11-34 jurisdiction;
11-35 (b) Submits to this state’s authority to examine its books and
11-36 records;
11-37 (c) [Is] Files with the Commissioner a certified copy of a
11-38 certificate of authority or other evidence approved by the
11-39 Commissioner indicating that it is licensed to transact insurance or
11-40 reinsurance in at least one state, or in the case of a branch in the
11-41 United States of an alien assuming insurer is entered through and
11-42 licensed to transact insurance or reinsurance in at least one state;
11-43 (d) Files annually with the Commissioner a copy of its annual
11-44 statement filed with the Division of its state of domicile or entry
11-45 and a copy of its most recent audited financial statement; and
12-1 (e) Maintains a surplus as regards policyholders in an amount
12-2 which is not less than $20,000,000 and whose accreditation:
12-3 (1) Has not been denied by the Commissioner within 90 days
12-4 after its submission; or
12-5 (2) Has been approved by the Commissioner.
12-6 2. No credit may be allowed for a domestic ceding insurer if
12-7 the assuming insurer’s accreditation has been revoked by the
12-8 Commissioner after notice and a hearing.
12-9 Sec. 10. NRS 681A.180 is hereby amended to read as follows:
12-10 681A.180 1. [Credit] Except as otherwise provided in
12-11 subsection 4, credit must be allowed if reinsurance is ceded to an
12-12 assuming insurer which maintains a trust fund in a qualified
12-13 financial institution in the United States for the payment of the
12-14 valid claims of its policyholders and ceding insurers in the United
12-15 States, their assigns and successors in interest. The assuming
12-16 insurer shall report annually to the Commissioner information
12-17 substantially the same as that required to be reported on the
12-18 National Association of Insurance Commissioners’ form of annual
12-19 statement by licensed insurers to enable the Commissioner to
12-20 determine the sufficiency of the trust fund.
12-21 2. In the case of a single assuming insurer, the trust must
12-22 consist of an account in trust equal to the assuming insurer’s
12-23 liabilities attributable to business written in the United States and
12-24 the assuming insurer shall maintain a surplus in trust of not less
12-25 than $20,000,000.
12-26 3. In the case of a group of incorporated and individual
12-27 unincorporated underwriters, the trust must consist of an account in
12-28 trust equal to the group’s liabilities attributable to business written
12-29 in the United States and the group shall maintain a surplus in trust
12-30 of which $100,000,000 must be held jointly for the benefit of
12-31 ceding insurers in the United States to any member of the group,
12-32 and the group shall make available to the Commissioner an annual
12-33 certification of the solvency of each underwriter by the group’s
12-34 domiciliary regulator and its independent public accountants.
12-35 4. If the assuming insurer does not meet the requirements of
12-36 NRS 681A.110, 681A.160 or 681A.170, credit must not be allowed
12-37 unless the assuming insurer has agreed to the following
12-38 conditions set forth in the trust agreement:
12-39 (a) Notwithstanding any provision to the contrary in the trust
12-40 instrument, if the trust fund consists of an amount that is less
12-41 than the amount required pursuant to this section, or if the
12-42 grantor of the trust fund is declared to be insolvent or placed into
12-43 receivership, rehabilitation, liquidation or a similar proceeding in
12-44 accordance with the laws of the grantor’s state or country of
12-45 domicile, the trustee of the trust fund must comply with an order
12-46 of the commissioner of insurance or other appropriate person
12-47 with
13-1 regulatory authority over the trust fund in that state or country or
13-2 a court of competent jurisdiction requiring the trustee to transfer
13-3 to that commissioner or person all the assets of the trust fund;
13-4 (b) The assets of the trust fund must be distributed by and
13-5 claims filed with and valued by the commissioner of insurance or
13-6 other appropriate person with regulatory authority over the trust
13-7 fund in accordance with the laws of the state in which the trust
13-8 fund is domiciled that are applicable to the liquidation of
13-9 domestic insurers in that state;
13-10 (c) If the commissioner of insurance or other appropriate
13-11 person with regulatory authority over the trust fund determines
13-12 that the assets of the trust fund or any portion of the trust fund
13-13 are not required to satisfy any claim of any ceding insurer of the
13-14 grantor of the trust fund in the United States, the assets must be
13-15 returned by that commissioner or person to the trustee of the trust
13-16 fund for distribution in accordance with the trust agreement; and
13-17 (d) The grantor of the trust must waive any right that:
13-18 (1) Is otherwise available to him under the laws of the
13-19 United States; and
13-20 (2) Is inconsistent with the provisions of this subsection.
13-21 Sec. 11. NRS 681A.190 is hereby amended to read as follows:
13-22 681A.190 1. Credit must be allowed if reinsurance is ceded
13-23 to a group of incorporated insurers under common administration
13-24 which:
13-25 (a) Does not engage in any business other than underwriting
13-26 as a member of the group;
13-27 (b) Is subject to the same amount of regulation and solvency
13-28 control by the group’s domiciliary regulator as are the
13-29 unincorporated members of the group;
13-30 (c) Reports annually to the Commissioner the information
13-31 required by subsection 1 of NRS 681A.180;
13-32 [(b)] (d) Has continuously transacted insurance outside the
13-33 United States for at least 3 years immediately before making an
13-34 application for accreditation;
13-35 [(c)] (e) Submits to this state’s authority to examine its books
13-36 and records and bears the expense of the examination;
13-37 [(d)] (f) Has aggregate policyholders’ surplus of
13-38 $10,000,000,000; and
13-39 [(e)] (g) Maintains a trust pursuant to subsection 2.
13-40 2. The trust must be in an amount equal to the group’s several
13-41 liabilities attributable to business ceded by ceding insurers in the
13-42 United States to any member of the group pursuant to contracts of
13-43 reinsurance issued in the name of the group, and the group shall
13-44 maintain a joint surplus in trust of which $100,000,000 must be
13-45 held jointly for the benefit of ceding insurers in the United States to
13-46 any member of the group as additional security for any such
13-47 liabilities.
14-1 3. Each member of the group shall , within 90 days after the
14-2 date its financial statements must be filed with the group’s
14-3 domiciliary regulator, make available to the Commissioner an
14-4 annual certification of the member’s solvency by the member’s
14-5 domiciliary regulator and its independent public accountant.
14-6 Sec. 12. NRS 681A.200 is hereby amended to read as follows:
14-7 681A.200 1. A trust for the purposes of NRS 681A.180 or
14-8 681A.190 , and any amendment to the trust, must be established
14-9 or amended in a form approved by [the Commissioner.] :
14-10 (a) The Commissioner; and
14-11 (b) The commissioner of insurance or other appropriate
14-12 person of:
14-13 (1) The state in which the trust is domiciled; or
14-14 (2) Any other state that, pursuant to the trust instrument,
14-15 accepts regulatory authority over the trust.
14-16 2. The form of the trust and any amendment to the trust must
14-17 be filed with the commissioner of insurance or other appropriate
14-18 person of each state in which the policyholders of the ceding
14-19 insurer who are the beneficiaries of the trust are domiciled.
14-20 3. The trust instrument must provide that contested claims
14-21 become valid [and enforceable upon] , enforceable and payable
14-22 from money held in the trust fund to the extent that the contested
14-23 claims remain unsatisfied, within 30 days after the entry of the
14-24 final order of any court of competent jurisdiction in the United
14-25 States. The trust must vest legal title to its assets in the trustees of
14-26 the trust for its policyholders and ceding insurers in the United
14-27 States, their assigns and successors in interest. The trust and
14-28 the assuming insurer are subject to examination as determined by
14-29 the Commissioner. The trust must remain in effect for as long as the
14-30 assuming insurer or any member or former member of the group
14-31 of insurers has outstanding obligations due under the agreements
14-32 for reinsurance subject to the trust.
14-33 [2. No]
14-34 4. Not later than February 28 of each year the trustees of the
14-35 trust shall report to the Commissioner in writing setting forth the
14-36 balance of the trust and listing the trust’s investments at the end of
14-37 the preceding year and shall certify the date of termination of the
14-38 trust, if so planned, or certify that the trust will not expire before the
14-39 next following December 31.
14-40 Sec. 13. NRS 681A.210 is hereby amended to read as follows:
14-41 681A.210 1. Except as otherwise provided in subsection 2, if
14-42 the assuming insurer is not licensed or accredited to transact
14-43 insurance or reinsurance in this state, the credit permitted by NRS
14-44 681A.170 or 681A.180 must not be allowed unless the assuming
14-45 insurer agrees in the agreements for reinsurance:
15-1 (a) That in the event of the failure of the assuming insurer to
15-2 perform its obligations under the terms of the agreement, the
15-3 assuming insurer, at the request of the ceding insurer, will submit to
15-4 the jurisdiction of any court of competent jurisdiction in any state
15-5 of the United States, will comply with all requirements necessary to
15-6 give the court jurisdiction, and will abide by the final decision of
15-7 the court or of any appellate court in the event of an appeal; [and]
15-8 (b) To designate the Commissioner or a designated attorney as
15-9 its true and lawful attorney upon whom may be served any lawful
15-10 process in an action, suit or proceeding instituted by or on behalf of
15-11 the ceding company[.] ; and
15-12 (c) To comply with the conditions set forth in subsection 4 of
15-13 NRS 681A.180.
15-14 2. This section does not conflict with or override the obligation
15-15 of the parties to an agreement for reinsurance to arbitrate their
15-16 disputes[,] if such an obligation is created in the agreement.
15-17 Sec. 14. NRS 681A.420 is hereby amended to read as follows:
15-18 681A.420 1. A person shall not act as a broker for
15-19 reinsurance [if he maintains an office, directly or as a member or
15-20 employee of a firm or association or as an officer, director or
15-21 employee of a corporation:
15-22 (a) In this state,] for a domestic insurer or reinsurer unless he
15-23 is [a] :
15-24 (a) A licensed producer in this state; or
15-25 (b) [In another state, unless he is a licensed producer] Licensed
15-26 as a nonresident intermediary for reinsurance in this state . [or in
15-27 another state having a law substantially similar to this title or he is
15-28 licensed in this state as a nonresident intermediary.]
15-29 2. A person shall not act as a [manager] broker for reinsurance
15-30 [:
15-31 (a) For] for a foreign or alien insurer or reinsurer [domiciled] if
15-32 he maintains an office, directly or as a member or employee of a
15-33 firm or association or as an officer, director or employee of a
15-34 corporation in this state, unless he is [a] :
15-35 (a) A licensed producer in this state; or
15-36 (b) [In] Licensed as a nonresident intermediary for
15-37 reinsurance in this state . [, if he maintains an office individually
15-38 or as a member or employee of a firm or association or as an
15-39 officer, director or employee of a corporation in this state, unless he
15-40 is a licensed producer in this state; or
15-41 (c) In another state for a foreign insurer, unless he is a licensed
15-42 producer in this state or in another state having a law substantially
15-43 similar to this title or he is licensed in this state as a nonresident
15-44 intermediary.]
15-45 3. A person shall not act as a manager for reinsurance [shall:]
15-46 for a domestic insurer or reinsurer unless he is:
16-1 (a) A licensed producer in this state; or
16-2 (b) Licensed as a nonresident manager for reinsurance in this
16-3 state.
16-4 4. A person shall not act as a manager for reinsurance for
16-5 any foreign or alien insurer or reinsurer if he maintains an
16-6 office, directly or as a member or employee of a firm or
16-7 association or as an officer, director or employee of a corporation
16-8 in this state, unless he is:
16-9 (a) A licensed producer in this state; or
16-10 (b) Licensed as a nonresident manager for reinsurance in this
16-11 state.
16-12 5. A manager for reinsurance shall:
16-13 (a) File a bond from an insurer in an amount that is acceptable to
16-14 the Commissioner for the protection of the reinsurer; and
16-15 (b) Maintain a policy covering errors and omissions in an
16-16 amount that is acceptable to the Commissioner.
16-17 Sec. 15. NRS 681B.160 is hereby amended to read as follows:
16-18 681B.160 1. [All] Except as otherwise provided in
16-19 subsection 5, all bonds or other evidences of debt having a fixed
16-20 term and rate of interest held by an insurer may, if amply secured
16-21 and not in default as to principal or interest, be valued as follows:
16-22 (a) If purchased at par, at the par value.
16-23 (b) If purchased above or below par, on the basis of the purchase
16-24 price adjusted so as to bring the value to par at maturity and so as to
16-25 yield in the meantime the effective rate of interest at which the
16-26 purchase was made[,] or , in lieu of [such] that method, according
16-27 to [such] an accepted method of valuation [as] that is approved by
16-28 the Commissioner.
16-29 2. The purchase price [shall in no case] must not be taken at a
16-30 higher figure than the actual market value at the time of purchase,
16-31 plus actual brokerage, transfer, postage or express charges paid in
16-32 the acquisition of such securities.
16-33 3. Unless otherwise provided by a valuation established or
16-34 approved by the Commissioner, [no such security shall] the
16-35 security must not be carried at above the call price for the entire
16-36 issue during any period within which the security may be so called.
16-37 4. The Commissioner [shall have] has full discretion in
16-38 determining the method of calculating values [according to the
16-39 rules set forth in] pursuant to this section.
16-40 5. A valuation determined pursuant to this section must not
16-41 be inconsistent with any applicable valuation or method then
16-42 currently formulated or approved by the National Association of
16-43 Insurance Commissioners or its successor organization.
16-44 Sec. 16. NRS 681B.170 is hereby amended to read as follows:
16-45 681B.170 1. [Securities,] Except as otherwise provided in
16-46 subsection 4, securities, other than those [referred to] specified in
17-1 NRS 681B.160, held by an insurer [shall] must be valued, in the
17-2 discretion of the Commissioner, at their market value, or at their
17-3 appraised value, or at prices determined by him as representing
17-4 their fair market value.
17-5 2. Preferred or guaranteed stocks or shares while paying full
17-6 dividends may be carried at a fixed value in lieu of market value, at
17-7 the discretion of the Commissioner and in accordance with [such] a
17-8 method of computation [as he may approve.] approved by the
17-9 Commissioner.
17-10 3. The stock of a subsidiary of an insurer [shall] must be
17-11 valued on the basis of the value of only [such of the] those assets of
17-12 [such] the subsidiary as would constitute lawful investments of the
17-13 insurer if acquired or held directly by the insurer.
17-14 4. A valuation determined pursuant to this section must not
17-15 be inconsistent with any applicable valuation or method then
17-16 currently formulated or approved by the National Association of
17-17 Insurance Commissioners or its successor organization.
17-18 Sec. 17. NRS 682A.080 is hereby amended to read as follows:
17-19 682A.080 1. An insurer may invest any of its funds in
17-20 obligations other than those eligible for investment under NRS
17-21 682A.230 [(] , relating to real property mortgages , [),] if they are
17-22 issued, assumed or guaranteed by any solvent institution [created or
17-23 existing under the laws of the United States of America, Canada or
17-24 Mexico, or of any state, district, province or territory thereof,] and
17-25 are qualified under any of the following:
17-26 (a) Obligations which are secured by adequate collateral security
17-27 and bear fixed interest if , during each of any 3, including the last 2,
17-28 of the 5 fiscal years next preceding the date of acquisition by the
17-29 insurer, the net earnings of the issuing, assuming or guaranteeing
17-30 institution available for its fixed charges, as defined in NRS
17-31 682A.090, have been not less than 1 1/2 times the total of its fixed
17-32 charges for [such] that year. In determining the adequacy of
17-33 collateral security , not more than one-third of the total value of
17-34 [such] the required collateral may consist of stock other than stock
17-35 meeting the requirements of NRS 682A.100 [(] , relating to
17-36 preferred or guaranteed stock . [).]
17-37 (b) Fixed interest-bearing obligations, other than those described
17-38 in paragraph (a), if the net earnings of the issuing, assuming or
17-39 guaranteeing institution available for its fixed charges for a period
17-40 of 5 fiscal years next preceding the date of acquisition by the
17-41 insurer have averaged per year not less than 1 1/2 times its average
17-42 annual fixed charges applicable to [such] that period and if , during
17-43 the last year of [such period such] that period, the net earnings
17-44 have been not less than 1 1/2 times its fixed charges for [such] that
17-45 year.
17-46 (c) Adjustment, income or other contingent interest obligations
17-47 if the net earnings of the issuing, assuming or guaranteeing
18-1 institution available for its fixed charges for a period of 5 fiscal
18-2 years next preceding the date of acquisition by the insurer have
18-3 averaged per year not less than 1 1/2 times the sum of its average
18-4 annual fixed charges and its average annual maximum contingent
18-5 interest applicable to such period and if , during each of the last 2
18-6 years of [such period such] that period, the net earnings have not
18-7 been less than 1 1/2 times the sum of its fixed charges and
18-8 maximum contingent interest for such year.
18-9 (d) Capital stock and other securities of:
18-10 (1) A state development corporation organized under the
18-11 provisions of chapter 670 of NRS.
18-12 (2) A corporation for economic revitalization and
18-13 diversification organized under the provisions of chapter 670A of
18-14 NRS, if the insurer is a member of the corporation, and to the extent
18-15 of its loan limit established under NRS 670A.200.
18-16 2. No insurer may invest in any such bonds or evidences of
18-17 indebtedness in excess of 10 percent of any issue of such bonds or
18-18 evidences of indebtedness or, subject to subsection 1 of NRS
18-19 682A.050 [(diversification),] , relating to diversification, more than
18-20 an amount equal to 10 percent of the insurer’s admitted assets in
18-21 any issue.
18-22 Sec. 18. NRS 682A.100 is hereby amended to read as follows:
18-23 682A.100 1. An insurer may invest in preferred or
18-24 guaranteed stocks or shares of any solvent institution [existing
18-25 under the laws of the United States of America, Canada or Mexico,
18-26 or of any state or province thereof,] if all of the prior obligations
18-27 and prior preferred stocks, if any, of the institution at the date of
18-28 acquisition of the investment by the insurer are eligible as
18-29 investments under this chapter and if the net earnings of the
18-30 institution available for its fixed charges during either of the last 2
18-31 years have been, and during each of the last 5 years have averaged,
18-32 not less than 1 1/2 times the sum of its average annual fixed
18-33 charges, if any, its average annual maximum contingent interest, if
18-34 any, and its average annual preferred dividend requirements. For
18-35 the purposes of this section, the computation refers to the fiscal
18-36 years immediately preceding the date of acquisition of the
18-37 investment by the insurer, and the term “preferred dividend
18-38 requirement” means cumulative or noncumulative dividends,
18-39 whether paid or not.
18-40 2. No insurer may invest in any such preferred or guaranteed
18-41 stocks in an amount in excess of 35 percent of the particular issue
18-42 of guaranteed or preferred stock or, subject to subsection 1 of NRS
18-43 682A.050 , more than an amount equal to 10 percent of the
18-44 insurer’s admitted assets in any one issue.
18-45 Sec. 19. NRS 682A.110 is hereby amended to read as follows:
18-46 682A.110 1. An insurer may invest up to 35 percent of its
18-47 assets in nonassessable common stocks, other than insurance
18-48 stocks,
19-1 of any solvent corporation , [organized and existing under the laws
19-2 of the United States of America, Canada or Mexico, or of any state
19-3 or province thereof,] except that bank or trust company stocks may
19-4 be assessable and any stocks may be assessable for taxes[,] if the
19-5 corporation has had net earnings available for dividends on the
19-6 stock in each of the 5 fiscal years next preceding acquisition by the
19-7 insurer. If the issuing corporation has not been in legal existence for
19-8 all of the 5 fiscal years but was formed as a consolidation or merger
19-9 of two or more businesses of which at least one was in operation on
19-10 a date 5 years before the investment, the test of eligibility of its
19-11 common stock under this section must be based upon consolidated
19-12 pro forma statements of the predecessor or constituent institutions.
19-13 2. Any amount invested in a fund or trust under NRS 682A.140
19-14 must not be included in computing the amounts prescribed in
19-15 subsection 1.
19-16 Sec. 20. NRS 683A.08524 is hereby amended to read as
19-17 follows:
19-18 683A.08524 1. Except as otherwise provided [by] in
19-19 subsection 2, the Commissioner shall issue a certificate of
19-20 registration as an administrator to an applicant who:
19-21 (a) Submits an application on a form prescribed by the
19-22 Commissioner;
19-23 (b) Has complied with the provisions of NRS 683A.08522; and
19-24 (c) Pays the fee for the issuance of a certificate of registration
19-25 prescribed in NRS 680B.010.
19-26 2. The Commissioner may refuse to issue a certificate of
19-27 registration as an administrator to an applicant if the Commissioner
19-28 determines that the applicant or any person who has completed an
19-29 affidavit pursuant to subsection 6 of NRS 683A.08522:
19-30 (a) Is not competent to act as an administrator;
19-31 (b) Is not trustworthy or financially responsible;
19-32 (c) Does not have a good personal or business reputation;
19-33 (d) Has had a license or certificate to transact insurance denied
19-34 for cause, suspended or revoked in this state or any other state; [or]
19-35 (e) Has failed to comply with any provision of this chapter[.] ;
19-36 or
19-37 (f) Is financially unsound.
19-38 Sec. 21. NRS 683A.08528 is hereby amended to read as
19-39 follows:
19-40 683A.08528 1. Not later than [March] July 1 of each year,
19-41 each holder of a certificate of registration as an administrator shall
19-42 file [a financial statement] with the Commissioner [on a form
19-43 approved by the Commissioner.] an annual report for the most
19-44 recently completed fiscal year of the administrator. Each annual
19-45 report must be verified by at least two officers of the
19-46 administrator.
20-1 2. Each annual report filed pursuant to this section must
20-2 include all the following:
20-3 (a) Except as otherwise provided in this paragraph, a financial
20-4 statement of the administrator that has been audited and prepared
20-5 by an independent certified public accountant. In lieu of a
20-6 financial statement that has been audited and prepared by an
20-7 independent certified public accountant, the administrator may
20-8 include with the annual report a financial statement that has been
20-9 reviewed by an independent certified public accountant if:
20-10 (1) The total business assets of the administrator were less
20-11 than $100,000 at the end of the most recently completed fiscal
20-12 year of the administrator; or
20-13 (2) The administrator did not have any agreements to act as
20-14 an administrator during the most recently completed fiscal year of
20-15 the administrator.
20-16 (b) The complete name and address of each person, if any, for
20-17 whom the administrator agreed to act as an administrator during
20-18 the most recently completed fiscal year of the administrator.
20-19 (c) Any other information required by the Commissioner.
20-20 3. In addition to the information required pursuant to
20-21 subsection 2, if an annual report is prepared on a consolidated
20-22 basis, the annual report must include a columnar or combining
20-23 worksheet that:
20-24 (a) Includes the amounts shown on the consolidated financial
20-25 statement accompanying the annual report;
20-26 (b) Separately sets forth the amounts for each entity included
20-27 in the worksheet; and
20-28 (c) Includes an explanation of each consolidating and
20-29 eliminating entry included in Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).the worksheet.
20-30 4. Each administrator who files an annual report pursuant to
20-31 this section shall, at the time of filing the annual report, pay a
20-32 filing fee in an amount determined by the Commissioner.
20-33 5. On or before September 1 of each year, the Commissioner
20-34 shall, for each administrator, review the annual report that is
20-35 most recently filed by the administrator. As soon as practicable
20-36 after reviewing the report, the Commissioner shall:
20-37 (a) Issue a certificate to the administrator:
20-38 (1) Indicating that, based on the annual report and
20-39 accompanying financial statement, the administrator has a
20-40 positive net worth and is currently licensed and in good standing
20-41 in this state; or
20-42 (2) Setting forth any deficiency found by the Commissioner
20-43 in the annual report and accompanying financial statement; or
20-44 (b) Submit a statement to any electronic database maintained
20-45 by the National Association of Insurance Commissioners or any
20-46 affiliate or subsidiary of the Association:
21-1 (1) Indicating that, based on the annual report and
21-2 accompanying financial statement, the administrator has a
21-3 positive net worth and is in compliance with existing law; or
21-4 (2) Setting forth any deficiency found by the Commissioner
21-5 in the annual report and accompanying financial statement.
21-6 Sec. 22. NRS 683A.0892 is hereby amended to read as
21-7 follows:
21-8 683A.0892 1. The Commissioner:
21-9 [1.] (a) Shall suspend or revoke the certificate of registration of
21-10 an administrator if the Commissioner has determined, after notice
21-11 and a hearing, that the administrator:
21-12 [(a)] (1) Is in an unsound financial condition;
21-13 [(b)] (2) Uses methods or practices in the conduct of his
21-14 business that are hazardous or injurious to insured persons or
21-15 members of the general public; or
21-16 [(c)] (3) Has failed to pay any judgment against him in this state
21-17 within 60 days after the judgment became final.
21-18 [2.] (b) May suspend or revoke the certificate of registration of
21-19 an administrator if the Commissioner determines, after notice and a
21-20 hearing, that the administrator:
21-21 [(a)] (1) Has willfully violated or failed to comply with any
21-22 provision of this Code, any regulation adopted pursuant to this
21-23 Code or any order of the Commissioner;
21-24 [(b)] (2) Has refused to be examined by the Commissioner or
21-25 has refused to produce accounts, records or files for examination
21-26 upon the request of the Commissioner;
21-27 [(c)] (3) Has, without just cause, refused to pay claims or
21-28 perform services pursuant to his contracts or has, without just
21-29 cause, caused persons to accept less than the amount of money
21-30 owed to them pursuant to the contracts, or has caused persons to
21-31 employ an attorney or bring a civil action against him to receive full
21-32 payment or settlement of claims;
21-33 [(d)] (4) Is affiliated with, managed by or owned by another
21-34 administrator or an insurer who transacts insurance in this state
21-35 without a certificate of authority or certificate of registration;
21-36 [(e)] (5) Fails to comply with any of the requirements for a
21-37 certificate of registration;
21-38 [(f)] (6) Has been convicted of[,] or has entered a plea of guilty
21-39 or nolo contendere to a felony, whether or not adjudication was
21-40 withheld; [or
21-41 (g)] (7) Has had his authority to act as an administrator in
21-42 another state limited, suspended or revoked[.
21-43 3. May,] ; or
21-44 (8) Has failed to file an annual report in accordance with
21-45 NRS 683A.08528.
22-1 (c) May suspend or revoke the certificate of registration of an
22-2 administrator if the Commissioner determines, after notice and a
22-3 hearing, that a responsible person:
22-4 (1) Has refused to provide any information relating to the
22-5 administrator’s affairs or refused to perform any other legal
22-6 obligation relating to an examination upon request by the
22-7 Commissioner; or
22-8 (2) Has been convicted of or has entered a plea of guilty or
22-9 nolo contendere to a felony committed on or after October 1,
22-10 2003, whether or not adjudication was withheld.
22-11 (d) May, upon notice to the administrator, suspend the
22-12 certificate of registration of the administrator pending a hearing if:
22-13 [(a)] (1) The administrator is impaired or insolvent;
22-14 [(b)] (2) A proceeding for receivership, conservatorship or
22-15 rehabilitation has been commenced against the administrator in any
22-16 state; or
22-17 [(c)] (3) The financial condition or the business practices of the
22-18 administrator represent an imminent threat to the public health,
22-19 safety or welfare of the residents of this state.
22-20 [4.] (e) May, in addition to or in lieu of the suspension or
22-21 revocation of the certificate of registration of the administrator,
22-22 impose a fine of $2,000 for each act or violation.
22-23 2. As used in this section, “responsible person” means any
22-24 person who is responsible for or controls or is authorized to
22-25 control or advise the affairs of an administrator, including,
22-26 without limitation:
22-27 (a) A member of the board of directors, board of trustees,
22-28 executive committee or other governing board or committee of the
22-29 administrator;
22-30 (b) The president, vice president, chief executive officer, chief
22-31 operating officer or any other principal officer of an
22-32 administrator, if the administrator is a corporation;
22-33 (c) A partner or member of the administrator, if the
22-34 administrator is a partnership, association or limited-liability
22-35 company; and
22-36 (d) Any shareholder or member of the administrator who
22-37 directly or indirectly holds 10 percent or more of the voting stock,
22-38 voting securities or voting interest of the administrator.
22-39 Sec. 23. NRS 683A.201 is hereby amended to read as follows:
22-40 683A.201 1. A person shall not sell, solicit or negotiate
22-41 insurance in this state for any class of insurance unless he is
22-42 licensed for that class of insurance.
22-43 2. An insurer is exempt from the requirement for licensure as a
22-44 producer of insurance, but this exemption does not extend to an
22-45 insurer’s officers, directors, employees, subsidiaries or affiliates[.]
22-46 who sell, solicit or negotiate insurance.
23-1 3. A person required to be licensed in this state who transacts
23-2 insurance without a license is subject to an administrative fine of not
23-3 more that $1,000 for each violation.
23-4 Sec. 24. NRS 683A.211 is hereby amended to read as follows:
23-5 683A.211 The following persons need not be licensed as
23-6 producers of insurance:
23-7 1. An officer, director or employee of an insurer or of a
23-8 producer of insurance if the officer, director or employee does not
23-9 receive any commission on policies written or sold to insure risks
23-10 residing, located or to be performed in this state and:
23-11 (a) The officer, director or employee’s activities are executive,
23-12 administrative, managerial[,] or clerical , or a combination [of
23-13 these,] thereof, and are only indirectly related to the sale,
23-14 solicitation or negotiation of insurance;
23-15 (b) The officer, director or employee’s function relates to
23-16 underwriting, control of losses, inspection or the processing,
23-17 adjusting, investigating or settling of claims on contracts of
23-18 insurance; or
23-19 (c) The officer, director or employee is acting in the capacity of
23-20 a special agent or supervisor of an agency assisting producers of
23-21 insurance where his activities are limited to providing technical
23-22 advice and assistance to licensed producers and do not include sale,
23-23 solicitation or negotiation of insurance.
23-24 2. A person who secures and furnishes information for the
23-25 purpose of group life insurance, group property and casualty
23-26 insurance, group annuities, or group or blanket accident and health
23-27 insurance, or for the purpose of enrolling natural persons under
23-28 plans, issuing certificates under plans or otherwise assisting in
23-29 administering plans, or who performs administrative services
23-30 related to mass marketed property and casualty insurance, if no
23-31 commission is paid to him for the service[.] and he does not sell,
23-32 solicit or negotiate insurance. As used in this subsection, “blanket
23-33 accident and health insurance” has the meaning ascribed to it in
23-34 NRS 689B.070.
23-35 3. An employer or association or its officers, directors or
23-36 employees, or the trustees of an employees’ trust plan, to the extent
23-37 that the employer, association, officers, directors, employees or
23-38 trustees are engaged in the administration or operation of a program
23-39 of employees’ benefits for the employer’s or association’s own
23-40 employees or the employees of its subsidiaries or affiliates, if the
23-41 program involves the use of insurance issued by an insurer and the
23-42 employer, association, officers, directors, employees or trustees are
23-43 not compensated by the insurer issuing the contracts.
23-44 4. Employees of insurers or organizations employed by
23-45 insurers who are engaged in the inspection, rating or classification
23-46 of risks or in the supervision of the training of producers of
24-1 insurance and are not individually engaged in the sale, solicitation or
24-2 negotiation of insurance.
24-3 5. A person whose activities in this state are limited to
24-4 advertising, without the intent to solicit insurance in this state,
24-5 through communications in printed publications or electronic mass
24-6 media whose distribution is not limited to residents of this state, if
24-7 he does not sell, solicit or negotiate insurance of risks residing,
24-8 located or to be performed in this state.
24-9 6. A salaried full-time employee who counsels or advises his
24-10 employer concerning the interests of the employer, or of the
24-11 subsidiaries or affiliates of the employer, in insurance, if the
24-12 employee does not sell or solicit insurance or receive a commission.
24-13 7. An employee of a producer of insurance or an insurer who
24-14 responds to requests from holders of policies previously issued, if
24-15 the employee is not directly compensated according to the volume
24-16 of premiums that may result from those services and does not
24-17 solicit insurance or offer advice concerning terms or conditions of
24-18 policies.
24-19 Sec. 25. NRS 683A.251 is hereby amended to read as follows:
24-20 683A.251 1. The Commissioner shall prescribe the form of
24-21 application by a natural person for a license as a resident producer
24-22 of insurance. The applicant must declare, under penalty of refusal to
24-23 issue, or suspension or revocation of, the license, that the
24-24 statements made in the application are true, correct and complete to
24-25 the best of his knowledge and belief. Before approving the
24-26 application, the Commissioner must find that the applicant has:
24-27 (a) Attained the age of 18 years;
24-28 (b) Not committed any act that is a ground for refusal to issue,
24-29 or suspension or revocation of, a license;
24-30 (c) Completed a course of study for the lines of authority for
24-31 which the application is made, unless the applicant is exempt from
24-32 this requirement;
24-33 (d) Paid the fee prescribed for the license and a fee of $15 for
24-34 deposit in the Insurance Recovery Account, neither of which may
24-35 be refunded; and
24-36 (e) Successfully passed the examinations for the lines of
24-37 authority for which application is made, unless the applicant is
24-38 exempt from this requirement.
24-39 2. A business organization must be licensed as a producer of
24-40 insurance in order to act as such. Application must be made on a
24-41 form prescribed by the Commissioner. Before approving the
24-42 application, the Commissioner must find that the applicant has:
24-43 (a) Paid the fee prescribed for the license and a fee of $15 for
24-44 deposit in the Insurance Recovery Account, neither of which may
24-45 be refunded; and
24-46 (b) Designated a natural person who is licensed as a producer of
24-47 insurance and who is affiliated with the business organization to
24-48 be
25-1 responsible for the organization’s compliance with the laws and
25-2 regulations of this state relating to insurance.
25-3 3. A natural person who is a resident of this state applying for a
25-4 license must furnish a copy of a search concerning him conducted
25-5 by the Federal Bureau of Investigation in its national criminal
25-6 records[,] and of a search concerning him of the Central Repository
25-7 for Nevada Records of Criminal History. The Commissioner shall
25-8 adopt regulations concerning the procedures for obtaining this
25-9 information.
25-10 4. The Commissioner may require any document reasonably
25-11 necessary to verify information contained in an application.
25-12 Sec. 26. NRS 683A.261 is hereby amended to read as follows:
25-13 683A.261 1. Unless the Commissioner refuses to issue the
25-14 license under NRS 683A.451, he shall issue a license as a producer
25-15 of insurance to a person who has satisfied the requirements of NRS
25-16 683A.241 and 683A.251. A producer of insurance may qualify for
25-17 a license in one or more of the lines of authority permitted by
25-18 statute or regulation, including:
25-19 (a) Life insurance on human lives, which includes benefits from
25-20 endowments and annuities and may include additional benefits
25-21 from death by accident and benefits for dismemberment by accident
25-22 and for disability.
25-23 (b) Health insurance for sickness, bodily injury or accidental
25-24 death, which may include benefits for disability.
25-25 (c) Property insurance for direct or consequential loss or damage
25-26 to property of every kind.
25-27 (d) Casualty insurance against legal liability, including liability
25-28 for death, injury or disability and damage to real or personal
25-29 property.
25-30 (e) Surety indemnifying financial institutions or providing bonds
25-31 for fidelity, performance of contracts[,] or financial guaranty.
25-32 (f) Variable annuities[,] and variable life insurance, including
25-33 coverage reflecting the results of a separate investment account.
25-34 (g) Credit insurance, including life, disability, property,
25-35 unemployment, involuntary unemployment, mortgage life,
25-36 mortgage guaranty, mortgage disability, guaranteed protection of
25-37 assets, and any other form of insurance offered in connection with
25-38 an extension of credit that is limited to wholly or partially
25-39 extinguishing the obligation which the Commissioner determines
25-40 should be considered as limited-line credit insurance.
25-41 (h) Personal lines, consisting of automobile and motorcycle
25-42 insurance and residential property insurance, including coverage for
25-43 flood, of personal watercraft and of excess liability, written over
25-44 one or more underlying policies of automobile or residential
25-45 property insurance.
25-46 (i) Fixed annuities as a limited line.
26-1 (j) Travel and baggage as a limited line.
26-2 (k) Rental car agency as a limited line.
26-3 2. A license as a producer of insurance remains in effect unless
26-4 revoked, suspended[, allowed to expire] or otherwise terminated[,
26-5 if the license is renewed when due,] if a request for a renewal is
26-6 submitted on or before the date for the renewal specified on the
26-7 license, the fee for renewal and a fee of $15 for deposit in the
26-8 Insurance Recovery Account are paid for each license and each
26-9 affiliation with a business organization licensed pursuant to
26-10 subsection 2 of NRS 683A.251 , and any requirement for education
26-11 or any other requirement to renew the license is satisfied by the
26-12 [due date.] date specified on the license for the renewal. A
26-13 producer of insurance may submit a request for a renewal of his
26-14 license within 30 days after the date specified on the license for
26-15 the renewal if the producer of insurance otherwise complies with
26-16 the provisions of this subsection and pays, in addition to any fee
26-17 paid pursuant to this subsection, a penalty of 50 percent of the
26-18 renewal fee. A license as a producer of insurance expires if the
26-19 Commissioner receives a request for a renewal of the license
26-20 more than 30 days after the date specified on the license for the
26-21 renewal. A fee paid pursuant to this subsection is nonrefundable.
26-22 3. A natural person who allows his license as a producer of
26-23 insurance to expire may reapply for the same license within 12
26-24 months after the date specified on the license for a renewal [was
26-25 due] without passing a written examination[,] or completing a
26-26 course of study required by paragraph (c) of subsection 1 of NRS
26-27 683A.251, but a penalty of twice the [unpaid] renewal fee is
26-28 required for any request for a renewal [fee] of the license that is
26-29 received after the [due date.] date specified on the license for the
26-30 renewal.
26-31 4. A licensed producer of insurance who is unable to renew his
26-32 license because of military service, extended medical disability or
26-33 other extenuating circumstance may request a waiver of the time
26-34 limit and of [an examination,] any fine or sanction otherwise
26-35 required or imposed because of the failure to renew.
26-36 5. A license must state the licensee’s name, address, personal
26-37 identification number, the date of issuance, the lines of authority
26-38 and the date of expiration and must contain any other information
26-39 the Commissioner considers necessary. A resident producer of
26-40 insurance shall maintain a place of business in this state which is
26-41 accessible to the public and where he principally conducts
26-42 transactions under his license. The place of business may be in his
26-43 residence. The license must be conspicuously displayed in an area
26-44 of the place of business which is open to the public.
26-45 6. A licensee shall inform the Commissioner of [a] each
26-46 change of location from which he conducts business as a
26-47 producer
27-1 of insurance and each change of business or residence address, in
27-2 writing or by other means acceptable to the Commissioner , within
27-3 30 days after the change. If a licensee changes [his] the location
27-4 from which he conducts business as a producer of insurance or
27-5 his business or residence address without giving written notice and
27-6 the Commissioner is unable to locate the licensee after diligent
27-7 effort, he may revoke the license without a hearing. The mailing of
27-8 a letter by certified mail, return receipt requested, addressed to the
27-9 licensee at his last mailing address appearing on the records of the
27-10 Division, and the return of the letter undelivered, constitutes a
27-11 diligent effort by the Commissioner.
27-12 Sec. 27. NRS 683A.301 is hereby amended to read as follows:
27-13 683A.301 1. An applicant for a license as a producer of
27-14 insurance or a licensee who desires to use a name other than his
27-15 true name as shown on the license shall submit a request for
27-16 approval of the name and file with the Commissioner a certified
27-17 copy of the certificate or any renewal certificate filed pursuant to
27-18 chapter 602 of NRS. An incorporated applicant or licensee shall file
27-19 with the Commissioner a document showing the corporation’s true
27-20 name and all fictitious names under which it conducts or intends to
27-21 conduct business. A licensee shall file promptly with the
27-22 Commissioner a written notice of any change in or discontinuance
27-23 of the use of a fictitious name.
27-24 2. The Commissioner may disapprove in writing the use of a
27-25 true name, other than the true name of a natural person who is the
27-26 applicant or licensee, or a fictitious name of any applicant or
27-27 licensee, on any of the following grounds:
27-28 (a) The name interferes with or is deceptively similar to a name
27-29 already filed and in use by another licensee.
27-30 (b) Use of the name may mislead the public in any respect.
27-31 (c) The name states or implies that the applicant or licensee is an
27-32 insurer, motor club or hospital service plan or is entitled to engage
27-33 in activities related to insurance not permitted under the license
27-34 applied for or held.
27-35 (d) The name states or implies that the licensee is an
27-36 underwriter, but:
27-37 (1) A natural person licensed as an agent or broker for life
27-38 insurance may describe himself as an underwriter or “chartered life
27-39 underwriter” if entitled to do so;
27-40 (2) A natural person licensed for property and casualty
27-41 insurance may use the designation “chartered property and casualty
27-42 underwriter” if entitled thereto; and
27-43 (3) An insurance agent or brokers’ trade association may use
27-44 a name containing the word “underwriter.”
28-1 (e) The licensee [has already filed and not discontinued the use
28-2 of] submits a request to use more than [two names, including the
28-3 true name.] one fictitious name at a single business location.
28-4 3. A licensee shall not use a name after written notice from the
28-5 Commissioner indicates that its use violates the provisions of this
28-6 section. If the Commissioner determines that the use is justified by
28-7 mitigating circumstances, he may permit, in writing, the use of the
28-8 name to continue for a specified reasonable period upon conditions
28-9 imposed by him for the protection of the public consistent with this
28-10 section.
28-11 4. Paragraphs (a), (c) and (d) of subsection 2 do not apply to
28-12 the true name of an organization which on July 1, 1965, held under
28-13 that name a type of license similar to those governed by this
28-14 chapter, or to a fictitious name used on July 1, 1965, by a natural
28-15 person or organization holding such a license, if the fictitious name
28-16 was filed with the Commissioner on or before July 1, 1965.
28-17 Sec. 28. NRS 683A.351 is hereby amended to read as follows:
28-18 683A.351 1. Every producer of insurance shall keep
28-19 complete records of transactions under his license. The records
28-20 must show, for each insurance policy placed or countersigned by or
28-21 through the licensee, not less than the names of the insurer and
28-22 insured, the number and expiration date of, and premium payable as
28-23 to, the policy or contract, the names of all other persons from whom
28-24 business is accepted or to whom commissions are promised or paid,
28-25 all premiums collected, and such additional information as the
28-26 Commissioner may reasonably require.
28-27 2. The records must be open to examination of the
28-28 Commissioner at all times, and the Commissioner may at any time
28-29 require the licensee to furnish to him, in such a manner or form as
28-30 he requires, any information kept or required to be kept in those
28-31 records. The records may be kept in an electronic format if, using
28-32 the electronic format, the records are retained in accordance with
28-33 this section.
28-34 3. Records of a particular policy or contract may be destroyed
28-35 3 years after expiration of the policy or contract.
28-36 Sec. 29. Chapter 683C of NRS is hereby amended by adding
28-37 thereto the provisions set forth as sections 30 and 31 of this act.
28-38 Sec. 30. The provisions of chapters 679A and 679B of NRS
28-39 and NRS 683A.301, 683A.341 and 683A.351 apply to an
28-40 insurance consultant.
28-41 Sec. 31. A licensee shall inform the Commissioner of all
28-42 locations from which business is conducted and of any change of
28-43 business or residence address, in writing or by any other means
28-44 acceptable to the Commissioner, within 30 days after the change.
28-45 If a licensee changes his address without giving written notice
28-46 and the Commissioner is unable to locate the licensee after
28-47 making a
29-1 diligent effort, the Commissioner may revoke the license without a
29-2 hearing. The mailing of a letter by certified mail, return receipt
29-3 requested, addressed to the licensee at his last mailing address
29-4 appearing on the records of the Division, and the return of the
29-5 letter undelivered, constitutes a diligent effort by the
29-6 Commissioner.
29-7 Sec. 32. NRS 683C.020 is hereby amended to read as follows:
29-8 683C.020 1. Except as otherwise provided in subsection 2,
29-9 no person may engage in the business of an insurance consultant
29-10 unless a license has been issued to him by the Commissioner.
29-11 2. An insurance consultant’s license is not required for:
29-12 (a) An attorney licensed to practice law in this state who is
29-13 acting in his professional capacity;
29-14 (b) A licensed insurance agent, broker or surplus lines broker;
29-15 (c) A trust officer of a bank who is acting in the normal course
29-16 of his employment; or
29-17 (d) An actuary or a certified public accountant who provides
29-18 information, recommendations, advice or services in his
29-19 professional capacity.
29-20 3. A person required to be licensed in this state who acts as
29-21 an insurance consultant without a license is subject to an
29-22 administrative fine of not more than $1,000 for each act or
29-23 violation.
29-24 Sec. 33. NRS 683C.030 is hereby amended to read as follows:
29-25 683C.030 1. An application for a license to act as an
29-26 insurance consultant must be submitted to the Commissioner on
29-27 forms prescribed by the Commissioner and must be accompanied
29-28 by [a]the applicable license fee [of $78]set forth in NRS
29-29 680B.010 and an additional fee of $15 which must be deposited in
29-30 the Insurance Recovery Account created pursuant to NRS
29-31 679B.305. The license fee and the additional fee are not
29-32 refundable. If the applicant is a natural person, the application must
29-33 include the social security number of the applicant.
29-34 2. An applicant for an insurance consultant’s license must
29-35 successfully complete an examination and a course of instruction
29-36 which the Commissioner shall establish by regulation.
29-37 3. Each license issued pursuant to this chapter is valid for 3
29-38 years from the date of issuance[,] or until it is suspended, revoked
29-39 or otherwise terminated.
29-40 Sec. 34. NRS 683C.035 is hereby amended to read as follows:
29-41 683C.035 1. The Commissioner shall prescribe the form of
29-42 application by a natural person for a license as an insurance
29-43 consultant. The applicant must declare, under penalty of refusal to
29-44 issue, or suspension or revocation of, the license, that the
29-45 statements made in the application are true, correct and complete to
29-46 the best of
30-1 his knowledge and belief. Before approving the application, the
30-2 Commissioner must find that the applicant has:
30-3 (a) Attained the age of 18 years.
30-4 (b) Not committed any act that is a ground for refusal to issue,
30-5 or suspension or revocation of, a license[.] pursuant to
30-6 NRS 683A.451.
30-7 (c) Paid the fee prescribed for the license and a fee of $15 for
30-8 deposit in the Insurance Recovery Account, neither of which may
30-9 be refunded.
30-10 (d) Passed each examination required for the license and
30-11 successfully completed each course of instruction which the
30-12 Commissioner requires by regulation, unless he is a resident of
30-13 another state and holds a similar license in that state.
30-14 2. A business organization must be licensed as an insurance
30-15 consultant in order to act as such. Application must be made on a
30-16 form prescribed by the Commissioner. Before approving the
30-17 application, the Commissioner must find that the applicant has:
30-18 (a) Paid the fee prescribed for the license and a fee of $15 for
30-19 deposit in the Insurance Recovery Account, neither of which may
30-20 be refunded; and
30-21 (b) Designated a natural person who is licensed as an insurance
30-22 consultant in this state and who is affiliated with the business
30-23 organization to be responsible for the organization’s compliance
30-24 with the laws and regulations of this state relating to insurance.
30-25 3. The Commissioner may require any document reasonably
30-26 necessary to verify information contained in an application.
30-27 4. A license issued pursuant to this chapter is valid for 3 years
30-28 after the date of issuance or until it is suspended, revoked or
30-29 otherwise terminated.
30-30 5. An insurance consultant may qualify for a license
30-31 pursuant to this chapter in one or more of the lines of authority
30-32 set forth in paragraphs (a) to (d), inclusive, of subsection 1 of
30-33 NRS 683A.261.
30-34 Sec. 35. NRS 683C.040 is hereby amended to read as follows:
30-35 683C.040 1. A license may be renewed for additional 3-year
30-36 periods by submitting to the Commissioner an application for
30-37 renewal and:
30-38 [1.] (a) If the application is made:
30-39 [(a)] (1) On or before the expiration date of the license, the
30-40 applicable renewal fee and an additional fee of $15 for deposit in
30-41 the Insurance Recovery Account; or
30-42 [(b)] (2) Not more than 30 days after the expiration date of the
30-43 license, the applicable renewal fee plus any late fee required and an
30-44 additional fee of $15 for deposit in the Insurance Recovery
30-45 Account;
30-46 [2.] (b) If the applicant is a natural person, the statement
30-47 required pursuant to NRS 683C.043; and
31-1 [3.] (c) If the applicant is a resident, proof of the successful
31-2 completion of appropriate courses of study required for renewal, as
31-3 established by the Commissioner by regulation.
31-4 2. The fees specified in this section are not refundable.
31-5 Sec. 36. NRS 683C.070 is hereby amended to read as follows:
31-6 683C.070 [No] A person licensed pursuant to this chapter may
31-7 not concurrently hold [an insurance agent’s license, broker’s] a
31-8 license as a producer of insurance or a surplus lines broker’s
31-9 license in any line.
31-10 Sec. 37. NRS 683C.080 is hereby amended to read as follows:
31-11 683C.080 [No] A licensed insurance consultant [may] shall not
31-12 employ, be employed by or be in partnership with, or receive any
31-13 remuneration arising out of his activities as an insurance consultant
31-14 from, any licensed producer of insurance [agent, broker] or surplus
31-15 lines broker or insurer.
31-16 Sec. 38. NRS 685A.070 is hereby amended to read as follows:
31-17 685A.070 1. A broker shall not knowingly place surplus lines
31-18 insurance with an insurer which is unsound financially or ineligible
31-19 pursuant to this section.
31-20 2. Except as otherwise provided in this section, [no]an insurer
31-21 is not eligible [for the acceptance of]to accept surplus lines risks
31-22 pursuant to this chapter unless it has surplus as to policyholders in
31-23 an amount of not less than [$5,000,000]$15,000,000 and, if an
31-24 alien insurer, unless it has and maintains in a bank or trust company
31-25 which is a member of the United States Federal Reserve System a
31-26 trust fund established pursuant to terms that are reasonably
31-27 adequate [for the protection of]to protect all of its policyholders in
31-28 the United States .[in an amount of not less than $1,500,000.] Such
31-29 a trust fund must not have an expiration date which is at any time
31-30 less than 5 years in the future, on a continuing basis. In the case of:
31-31 (a) A single alien insurer, such a trust fund must not be less
31-32 than the greater of $5,400,000 or 30 percent of the gross liabilities
31-33 of the alien insurer for surplus lines in the United States,
31-34 excluding any liabilities for aviation, wet marine and
31-35 transportation insurance, not to exceed $60,000,000, to be
31-36 determined annually on the basis of accounting practices and
31-37 procedures that are substantially equivalent to the accounting
31-38 practices and procedures applicable in this state as of
31-39 December 31 of the year immediately preceding the date of the
31-40 determination where:
31-41 (1) The liabilities are maintained in an irrevocable trust
31-42 account in a qualified financial institution in the United States,
31-43 on behalf of policyholders in the United States, consisting of cash,
31-44 securities, letters of credit or any other investments of
31-45 substantially the same character and quality as investments that
31-46 are eligible investments pursuant to chapter 682A of NRS for the
31-47 capital and
32-1 statutory reserves of admitted insurers to write like kinds of
32-2 insurance in this state. The trust fund, which must be included in
32-3 any calculation of capital and surplus or its equivalent, must
32-4 comply with the requirements set forth in the Standard Trust
32-5 Agreement required for listing with the International Insurers
32-6 Department of the National Association of Insurance
32-7 Commissioners;
32-8 (2) The alien insurer may request approval by the
32-9 Commissioner to use the trust fund to pay any valid claim against
32-10 a surplus line if the balance of the trust fund is not, during any
32-11 period, less than $5,400,000 or 30 percent of the alien insurer’s
32-12 current gross liabilities for surplus lines in the United States,
32-13 excluding any liabilities for aviation, wet marine and
32-14 transportation insurance; and
32-15 (3) In calculating the amount of the trust fund required by
32-16 this subsection, credit must be given for any deposits for any
32-17 surplus lines that are separately required and maintained within a
32-18 state or territory of the United States, not to exceed the amount of
32-19 the alien insurer’s loss and loss adjustment reserves maintained
32-20 in that state or territory.
32-21 (b) A group of insurers which includes individual
32-22 unincorporated insurers, such a trust fund must not be less than
32-23 $100,000,000.
32-24 [(b)] (c) A group of incorporated insurers under common
32-25 administration, such a trust fund must not be less than
32-26 $100,000,000. Each insurer within the group must individually
32-27 maintain capital and surplus of not less than $25,000,000. The
32-28 group of incorporated insurers must:
32-29 (1) Operate under the supervision of the Department of Trade
32-30 and Industry of the United Kingdom;
32-31 (2) Possess aggregate policyholders surplus of
32-32 $10,000,000,000, which must consist of money in trust in an
32-33 amount not less than the assuming insurers’ liabilities attributable
32-34 to insurance written in the United States; and
32-35 (3) Maintain a joint trusteed surplus of which $100,000,000
32-36 must be held jointly for the benefit of United States ceding insurers
32-37 of any member of the group.
32-38 [(c)] (d) An insurance exchange created by the laws of a state,
32-39 the insurance exchange shall have and maintain a trust fund in an
32-40 amount of not less than [$50,000,000]$75,000,000 or have a
32-41 surplus as to policyholders in an amount of not less than
32-42 [$50,000,000.]$75,000,000. If an insurance exchange maintains
32-43 money for the protection of all policyholders, each syndicate shall
32-44 maintain minimum capital and surplus of not less than [$5,000,000]
32-45 $15,000,000 and must qualify separately to be eligible for the
32-46 acceptance of surplus lines risks pursuant to this chapter.
33-1 The Commissioner may require larger trust funds or surplus as to
33-2 policyholders than those set forth in this section if, in his judgment,
33-3 the volume of business being transacted or proposed to be
33-4 transacted warrants larger amounts.
33-5 3. [No]An insurer is not eligible to write surplus lines of
33-6 insurance unless it has established a reputation for financial
33-7 integrity and satisfactory practices in underwriting and handling
33-8 claims. In addition, a foreign insurer must be authorized in the state
33-9 of its domicile to write the kinds of insurance which it intends to
33-10 write in Nevada.
33-11 4. The Commissioner may from time to time compile or
33-12 approve a list of all surplus lines insurers deemed by him to be
33-13 eligible currently, and may mail a copy of the list to each broker at
33-14 his office last of record with the Commissioner. To be placed on the
33-15 list, a surplus lines insurer must file an application with the
33-16 Commissioner. The application must be accompanied by a
33-17 nonrefundable fee of $2,450. This subsection does not require the
33-18 Commissioner to determine the actual financial condition or claims
33-19 practices of any unauthorized insurer. The status of eligibility, if
33-20 granted by the Commissioner, indicates only that the insurer
33-21 appears to be sound financially and to have satisfactory claims
33-22 practices, and that the Commissioner has no credible evidence to
33-23 the contrary. While any such list is in effect, the broker shall restrict
33-24 to the insurers so listed all surplus lines business placed by him.
33-25 Sec. 38.3. NRS 685A.080 is hereby amended to read as
33-26 follows:
33-27 685A.080 1. Upon placing a surplus lines coverage, the
33-28 broker shall promptly issue and deliver to the insured evidence of
33-29 the insurance consisting either of the policy as issued by the insurer,
33-30 or, if such a policy is not then available, the surplus lines broker’s
33-31 certificate executed by the broker or a cover note . [endorsed by the
33-32 broker.] Such a certificate or [endorsed] cover note must show the
33-33 description and location of the subject of the insurance, coverage,
33-34 conditions and term of the insurance, the premium and rate charged
33-35 and taxes collected from the insured, and the name and address of
33-36 the insured and insurer and must state that the broker has verified
33-37 that the insurance described has been granted or issued. If the direct
33-38 risk is assumed by more than one insurer, the certificate must state
33-39 the name and address and proportion of the entire direct risk
33-40 assumed by each such insurer.
33-41 2. A broker shall not issue any such certificate or any cover
33-42 note, or purport to insure or represent that insurance will be or has
33-43 been granted by any unauthorized insurer, unless he has prior
33-44 written authority from the insurer for the insurance, or has received
33-45 information from the insurer in the regular course of business that
33-46 the insurance has been granted, or an insurance policy providing the
34-1 insurance actually has been issued by the insurer and delivered to
34-2 the insured.
34-3 3. If after the issuance and delivery of any such certificate there
34-4 is any change as to the identity of the insurers, or the proportion of
34-5 the direct risk assumed by an insurer as stated in the broker’s
34-6 original certificate, or in any other material respect as to the
34-7 insurance evidenced by the certificate, the broker shall promptly
34-8 issue and deliver to the insured a substitute certificate accurately
34-9 showing the current status of the coverage and the insurers
34-10 responsible thereunder.
34-11 4. If a policy issued by the insurer is not available upon
34-12 placement of the insurance and the broker has issued and delivered
34-13 his certificate as provided in this section, upon request therefor by
34-14 the insured the broker shall as soon as reasonably possible procure
34-15 from the insurer its policy evidencing the insurance and deliver the
34-16 policy to the insured in replacement of the broker’s certificate
34-17 theretofore issued.
34-18 5. Any surplus lines broker who knowingly or negligently
34-19 issues a false certificate of insurance or who fails promptly to notify
34-20 the insured of any material change with respect to the insurance by
34-21 delivery to the insured of a substitute certificate as provided in
34-22 subsection 3 is subject to the penalty provided by NRS 679A.180 or
34-23 to any greater applicable penalty otherwise provided by law.
34-24 Sec. 38.7. NRS 685A.090 is hereby amended to read as
34-25 follows:
34-26 685A.090 [Every] Each insurance contract procured and
34-27 delivered as a surplus lines coverage pursuant to this chapter must
34-28 [be countersigned by the broker who procured it, and must] have
34-29 conspicuously stamped upon it:
34-30 This insurance contract is issued pursuant to the Nevada
34-31 insurance laws by an insurer neither licensed by nor under
34-32 the supervision of the Division of Insurance of the
34-33 Department of Business and Industry of the State of Nevada.
34-34 If the insurer is found insolvent, a claim under this contract is
34-35 not covered by the Nevada Insurance Guaranty Association
34-36 Act.
34-37 Sec. 39. NRS 685A.120 is hereby amended to read as follows:
34-38 685A.120 1. No person [in this state] may act as, hold
34-39 himself out as[,] or be a surplus lines broker with respect to
34-40 subjects of insurance resident, located or to be performed in this
34-41 state or elsewhere unless he is licensed as such by the
34-42 Commissioner pursuant to this chapter.
34-43 2. Any person who has been licensed by this state as a [broker]
34-44 producer of insurance for general lines for at least 6 months, or has
34-45 been licensed in another state as a surplus lines broker [for at least 1
35-1 year] and continues to be licensed in that state, and who is deemed
35-2 by the Commissioner to be competent and trustworthy with respect
35-3 to the handling of surplus lines may be licensed as a surplus lines
35-4 broker upon:
35-5 (a) Application for a license and payment of the applicable fee
35-6 for a license and a fee of $15 for deposit in the Insurance Recovery
35-7 Account created by NRS 679B.305;
35-8 (b) Submitting the statement required pursuant to NRS
35-9 685A.127; and
35-10 (c) Passing any examination prescribed by the Commissioner on
35-11 the subject of surplus lines.
35-12 3. An application for a license must be submitted to the
35-13 Commissioner on a form designated and furnished by him. The
35-14 application must include the social security number of the
35-15 applicant.
35-16 4. A license issued pursuant to this chapter continues in force
35-17 for 3 years unless it is suspended, revoked or otherwise terminated.
35-18 The license may be renewed upon submission of the statement
35-19 required pursuant to NRS 685A.127 and payment of the applicable
35-20 fee for renewal and a fee of $15 for deposit in the Insurance
35-21 Recovery Account created by NRS 679B.305 to the Commissioner
35-22 on or before the last day of the month in which the license is
35-23 renewable.
35-24 5. A license which is not renewed expires at midnight on the
35-25 last day specified for its renewal. The Commissioner may accept a
35-26 request for renewal received by him within 30 days after the
35-27 expiration of the license if the request is accompanied by [the] :
35-28 (a) The statement required pursuant to NRS 685A.127[, a] ;
35-29 (b) The applicable fee for renewal [of 150] ;
35-30 (c) A penalty in an amount that is equal to 50 percent of the
35-31 applicable fee [otherwise required and a] for renewal; and
35-32 (d) A fee of $15 for deposit in the Insurance Recovery Account
35-33 created by NRS 679B.305.
35-34 Sec. 39.5. NRS 685A.180 is hereby amended to read as
35-35 follows:
35-36 685A.180 1. On or before March 1 of each year each broker
35-37 shall pay to the Commissioner a tax on surplus lines coverages
35-38 written by him in unauthorized insurers during the preceding
35-39 calendar year at the same rate of tax as imposed by law on the
35-40 premiums of similar coverages written by authorized insurers. If a
35-41 broker has paid any taxes pursuant to NRS 685A.175, he shall
35-42 deduct the total paid from the tax due and pay the remainder, if any.
35-43 2. For the purposes of this section, the “premium” on surplus
35-44 lines coverages includes:
35-45 (a) The gross amount charged by the insurer for the insurance,
35-46 less any return premium;
35-47 (b) Any fee allowed by NRS 685A.155;
36-1 (c) Any policy fee;
36-2 (d) Any membership fee; [and]
36-3 (e) Any inspection fee; and
36-4 (f) Any other fees or assessments charged by the insurer as
36-5 consideration for the insurance.
36-6 Premium does not include any additional amount charged for state
36-7 or federal tax, or for filing affidavits or reports of coverage . [,
36-8 inspection fee or the communication expenses of the broker.]
36-9 3. If a contract for surplus lines insurance covers risks or
36-10 exposures only partially in this state, the tax so payable must be
36-11 computed on that portion of the premium properly allocable to the
36-12 risks or exposures located in this state. The Commissioner may
36-13 adopt regulations which establish standards for allocating premiums
36-14 for risks located in this state in the same manner as premiums are
36-15 allocated pursuant to NRS 680B.030.
36-16 4. The Commissioner shall promptly deposit all taxes collected
36-17 by him pursuant to this section with the State Treasurer, to the
36-18 credit of the State General Fund.
36-19 5. A broker who receives a credit for tax paid shall refund to
36-20 each insured the amount of the credit attributable to the insured
36-21 when the insurer pays a return premium or within 30 days,
36-22 whichever is earlier.
36-23 Sec. 40. NRS 685B.080 is hereby amended to read as follows:
36-24 685B.080 1. Any unauthorized insurer who transacts any
36-25 unauthorized act of an insurance business as set forth in the
36-26 Unauthorized Insurers Act may be fined not more than $10,000 for
36-27 each act or violation.
36-28 2. In addition to any other penalties provided in this Code:
36-29 (a) Any producer of insurance or surplus lines broker licensed
36-30 in this state who in this state knowingly represents or aids an
36-31 unauthorized insurer in violation of the Unauthorized Insurers
36-32 Act is guilty of a category C felony and shall be punished as
36-33 provided in NRS 193.130.
36-34 (b) Any person other than a producer of insurance or surplus
36-35 lines broker licensed in this state who in this state represents or
36-36 aids an unauthorized insurer in violation of the Unauthorized
36-37 Insurers Act is guilty of a category C felony and shall be punished
36-38 as provided in NRS 193.130.
36-39 (c) Any person who commits a second or subsequent violation
36-40 of this section is guilty of a category B felony and shall be
36-41 punished by imprisonment in the state prison for a minimum term
36-42 of not less than 1 year and a maximum term of not more than 20
36-43 years.
36-44 3. In addition to the penalties provided in subsection 2, such
36-45 a violator is liable, personally, jointly and severally with any other
36-46 person liable therefor, for the payment of premium taxes at the
37-1 same rate of tax as imposed by law on the premiums of similar
37-2 coverages written by authorized insurers.
37-3 Sec. 41. Chapter 686B of NRS is hereby amended by adding
37-4 thereto the provisions set forth as sections 42 to 46, inclusive, of
37-5 this act.
37-6 Sec. 42. As used in sections 42 to 46, inclusive, of this act,
37-7 unless the context otherwise requires, “insured” has the meaning
37-8 ascribed to it in NRS 686B.260.
37-9 Sec. 43. The provisions of NRS 81.130 and 81.510 do not
37-10 apply to the conversion of an essential insurance association to a
37-11 domestic mutual insurer or a domestic reciprocal insurer as
37-12 provided in sections 42 to 46, inclusive, of this act.
37-13 Sec. 44. 1. An essential insurance association shall, if
37-14 requested to do so by the Commissioner, file a notice of intent to
37-15 qualify as a domestic mutual insurer or a domestic reciprocal
37-16 insurer. In the absence of a request by the Commissioner, an
37-17 essential insurance association may file such a notice at such
37-18 time as the association determines appropriate.
37-19 2. The notice must be filed with the Commissioner at least 4
37-20 months before the date the association is to become a domestic
37-21 mutual insurer or a domestic reciprocal insurer and must
37-22 include:
37-23 (a) An application prepared pursuant to chapter 680A of NRS
37-24 for a certificate of authority to transact business in Nevada as a
37-25 domestic mutual insurer or a domestic reciprocal insurer;
37-26 (b) A valuation of the policyholder’s surplus according to both
37-27 market and amortized value based on the association’s annual
37-28 financial statement for the previous year; and
37-29 (c) A provision for the return of any unused portion of the
37-30 insured’s capital stabilization charges.
37-31 Sec. 45. 1. At the time the association files a notice of
37-32 intent to qualify as a domestic mutual insurer or domestic
37-33 reciprocal insurer, it must give a notice of intent to all
37-34 participating insurers and all insureds on a form approved by the
37-35 Commissioner.
37-36 2. Any participating insurer or insured may, within 30 days
37-37 after the date of the notice, apply to the Division for a hearing
37-38 concerning the association’s ability to qualify as a domestic
37-39 mutual insurer or domestic reciprocal insurer.
37-40 3. An association must comply with the provisions of:
37-41 (a) Chapter 692B of NRS, as applicable to mutual insurers, to
37-42 qualify as a domestic mutual insurer; or
37-43 (b) Chapter 694B of NRS, as applicable to reciprocal insurers,
37-44 to qualify as a domestic reciprocal insurer.
37-45 Sec. 46. Upon determining that an association has complied
37-46 with sections 42 to 46, inclusive, of this act and all other
37-47 requirements applicable to domestic mutual insurers, if the
38-1 association is qualifying as a domestic mutual insurer, or to
38-2 domestic reciprocal insurers, if the association is qualifying as a
38-3 domestic reciprocal insurer, the Commissioner may issue to the
38-4 association a certificate of authority to transact business as a
38-5 domestic mutual insurer or a domestic reciprocal insurer.
38-6 Sec. 47. NRS 686B.030 is hereby amended to read as follows:
38-7 686B.030 1. Except as otherwise provided in subsection 2,
38-8 NRS 686B.010 to 686B.1799, inclusive, apply to all kinds and lines
38-9 of direct insurance written on risks or operations in this state by any
38-10 insurer authorized to do business in this state, except:
38-11 (a) Ocean marine insurance;
38-12 (b) Contracts issued by fraternal benefit societies;
38-13 (c) Life insurance and credit life insurance;
38-14 (d) Variable and fixed annuities;
38-15 (e) Group and blanket health insurance and credit health
38-16 insurance;
38-17 (f) Property insurance for business and commercial risks; [and]
38-18 (g) Casualty insurance for business and commercial risks other
38-19 than insurance covering the liability of a practitioner licensed
38-20 pursuant to chapters 630 to 640, inclusive, of NRS[.] ; and
38-21 (h) Surety insurance.
38-22 2. The exclusions set forth in paragraphs (f) and (g) of
38-23 subsection 1 extend only to issues related to the determination or
38-24 approval of premium rates.
38-25 Sec. 48. NRS 686B.1781 is hereby amended to read as
38-26 follows:
38-27 686B.1781 [NRS 686B.1751 to 686B.1799, inclusive, do not
38-28 prohibit or regulate the payment of dividends, savings, unearned
38-29 premiums deposits or an equivalent abatement of premiums
38-30 allowed or returned by insurers to their policyholders, members or
38-31 subscribers.]
38-32 1. An insurer shall not unfairly discriminate among its
38-33 policyholders in paying a dividend[.] , savings, unearned
38-34 premium deposits or an equivalent abatement of premiums
38-35 allowed or returned by an insurer for a policy of industrial
38-36 insurance.
38-37 2. A plan for the payment of dividends [is not a rating system
38-38 or plan.] for industrial insurance must be filed before there is a
38-39 dividend payment. The plan shall be deemed approved unless the
38-40 Commissioner disapproves the plan within 30 days after it is filed
38-41 and received by the Commissioner. An insurer shall not condition
38-42 the payment of [such] a dividend upon the renewal of a policy or
38-43 contract by the policyholder, member or subscriber.
38-44 3. An insurer paying savings, unearned premium deposits or
38-45 an equivalent abatement for premiums allowed or returned for a
38-46 policy of industrial insurance must receive prior approval.
39-1 Sec. 49. NRS 686B.230 is hereby amended to read as follows:
39-2 686B.230 1. The Nevada Essential Insurance Association
39-3 has, for purposes of this section and to the extent approved by the
39-4 Commissioner, the general powers and authority granted under the
39-5 laws of this state to carriers licensed to transact the kinds of
39-6 insurance defined in NRS 681A.020 to 681A.080, inclusive.
39-7 2. The Association may take any necessary action to make
39-8 available necessary insurance, including , but not limited to , the
39-9 following:
39-10 (a) Assess participating insurers amounts necessary to pay the
39-11 obligations of the Association, administration expenses, the cost of
39-12 examinations conducted pursuant to NRS 687A.110 and other
39-13 expenses authorized by this chapter. The assessment of each
39-14 member insurer for the kind or kinds of insurance designated in the
39-15 plan [shall] must be in the proportion that the net direct written
39-16 premiums of the member insurer for the preceding calendar year
39-17 bear to the net direct written premiums of all member insurers for
39-18 the preceding calendar year. A member insurer may not be assessed
39-19 in any year an amount greater than 5 percent of his net direct
39-20 written premiums for the preceding calendar year. Each member
39-21 insurer [shall] must be allowed a premium tax credit at the rate of
39-22 20 percent per year for 5 successive years [following termination of
39-23 the Association.] beginning on the first day of the calendar year
39-24 after the calendar year in which the insurer pays the assessment
39-25 pursuant to this subsection.
39-26 (b) Enter into such contracts as are necessary or proper to carry
39-27 out the provisions and purposes of this section.
39-28 (c) Sue or be sued, including taking any legal action necessary
39-29 to recover any assessments for, on behalf of or against participating
39-30 carriers.
39-31 (d) Investigate claims brought against the fund and adjust,
39-32 compromise, settle and pay covered claims to the extent of the
39-33 association’s obligation and deny all other claims. Process claims
39-34 through its employees or through one or more member insurers or
39-35 other persons designated as servicing facilities. Designation of a
39-36 service facility is subject to the approval of the Commissioner , but
39-37 such a designation may be declined by a member insurer.
39-38 (e) Classify risks as may be applicable and equitable.
39-39 (f) Establish appropriate rates, rate classifications and rating
39-40 adjustments and file [such] those rates with the Commissioner in
39-41 accordance with this chapter.
39-42 (g) Administer any type of reinsurance program for or on behalf
39-43 of the Association or any participating carriers.
39-44 (h) Pool risks among participating carriers.
40-1 (i) Issue and market, through agents, policies of insurance
40-2 providing the coverage required by this section in its own name or
40-3 on behalf of participating carriers.
40-4 (j) Administer separate pools, separate accounts or other plans
40-5 as may be deemed appropriate for separate carriers or groups of
40-6 carriers.
40-7 (k) Invest, reinvest and administer all funds and moneys held by
40-8 the Association.
40-9 (l) Borrow funds needed by the Association to [effect] carry out
40-10 the purposes of this section.
40-11 (m) Develop, effectuate and promulgate any loss-prevention
40-12 programs aimed at the best interests of the Association and the
40-13 insuring public.
40-14 (n) Operate and administer any combination of plans, pools,
40-15 reinsurance arrangements or other mechanisms as deemed
40-16 appropriate to best accomplish the fair and equitable operation of
40-17 the Association for the purposes of making available essential
40-18 insurance coverage.
40-19 3. In providing for the recoupment of a deficit of the
40-20 Association, an option [shall] must be offered to an insured each
40-21 policy year to pay a capital stabilization charge which [shall] must
40-22 not exceed 100 percent of the premium charged to the insured in
40-23 that year. The Board of Directors shall determine the amount of the
40-24 charge from appropriate factors of loss experience and risk
40-25 associated with the Association and the insured. An insured who
40-26 pays the stabilization charge [shall] must not be required to pay any
40-27 assessment to recoup a deficit of the Association incurred in any
40-28 policy year for which the charge is paid. The Association’s plan of
40-29 operation [shall] must provide for the return to the insured of so
40-30 much of his payment as remains after all actual or potential
40-31 liabilities under the policy have been discharged.
40-32 Sec. 50. NRS 686B.240 is hereby amended to read as follows:
40-33 686B.240 The Commissioner and the Nevada Essential
40-34 Insurance Association may:
40-35 1. Give consideration to the need for adequate and readily
40-36 accessible coverage, to alternative methods of improving the
40-37 market affected, to the preferences of the insurers and agents, to the
40-38 inherent limitations of the insurance mechanism, to the need for
40-39 reasonable underwriting standards and to the requirement of
40-40 reasonable loss-prevention measures.
40-41 2. Establish procedures that will create minimum interference
40-42 with the voluntary market.
40-43 3. Spread the burden imposed by the facility equitably and
40-44 efficiently.
40-45 4. Establish procedures for applicants and participants to have
40-46 grievances reviewed.
41-1 5. Take all reasonable and necessary steps to dissolve the
41-2 Association at the earliest date when essential insurance becomes
41-3 readily available in the private market. The dissolution of the
41-4 Association, including its assets and liabilities, [shall] must be
41-5 accomplished under the supervision of the Commissioner in an
41-6 equitable and reasonable manner. The dissolution must, if
41-7 determined to be appropriate by the Commissioner, provide for
41-8 the repayment of any loans or other money provided or
41-9 contributed by the State of Nevada for the formation or
41-10 continuance of the Association.
41-11 Sec. 51. NRS 686B.290 is hereby amended to read as follows:
41-12 686B.290 1. At the time the Association files a notice of
41-13 intent to qualify as a domestic stock insurer, it must give notice of
41-14 its intent to all participating insurers and all insureds [in] on a form
41-15 approved by the Commissioner. The notice to each insured must
41-16 state the total amount of stock to be issued and the amount of shares
41-17 to which he is entitled.
41-18 2. Any participating insurer or insured may, within 30 days
41-19 after the date of the notice, apply to the Division for a hearing
41-20 concerning the Association’s ability to qualify as a domestic
41-21 insurer, the valuation of capital and surplus , or the proposed
41-22 number and distribution of shares of stock.
41-23 Sec. 52. NRS 686B.320 is hereby amended to read as follows:
41-24 686B.320 Upon determining that [an] the Association has
41-25 complied with NRS 686B.280 to 686B.310, inclusive, and all other
41-26 requirements applicable to domestic stock insurers, the
41-27 Commissioner may issue to the Association a certificate of
41-28 authority to transact business as a domestic stock insurer . [to
41-29 become effective the next following January 1.]
41-30 Sec. 53. NRS 687A.033 is hereby amended to read as follows:
41-31 687A.033 1. “Covered claim” means an unpaid claim or
41-32 judgment, including a claim for unearned premiums, which arises
41-33 out of and is within the coverage of an insurance policy to which
41-34 this chapter applies issued by an insurer which becomes an
41-35 insolvent insurer, if one of the following conditions exists:
41-36 (a) The claimant or insured, if a natural person, is a resident of
41-37 this state at the time of the insured event.
41-38 (b) The claimant or insured, if other than a natural person,
41-39 maintains its principal place of business in this state at the time of
41-40 the insured event.
41-41 (c) The property from which the first party property damage
41-42 claim arises is permanently located in this state.
41-43 (d) The claim is not a covered claim pursuant to the laws of any
41-44 other state and the premium tax imposed on the insurance policy is
41-45 payable in this state pursuant to NRS 680B.027.
41-46 2. The term does not include:
42-1 (a) An amount that is directly or indirectly due a reinsurer,
42-2 insurer, insurance pool or underwriting association, as recovered by
42-3 subrogation, indemnity or contribution, or otherwise.
42-4 (b) That part of a loss which would not be payable because of a
42-5 provision for a deductible or a self-insured retention specified in the
42-6 policy.
42-7 (c) Except as otherwise provided in this paragraph, any claim
42-8 filed with the Association [after:
42-9 (1) Eighteen] :
42-10 (1) More than 18 months after the date of the order of
42-11 liquidation; or
42-12 (2) [The] After the final date set by the court for the filing of
42-13 claims against the liquidator or receiver of the insolvent
42-14 insurer,
42-15 whichever is earlier. The provisions of this paragraph do not apply
42-16 to a claim for workers’ compensation that is reopened pursuant to
42-17 the provisions of NRS 616C.390.
42-18 (d) A claim filed with the Association for a loss that is incurred
42-19 but is not reported to the Association before the expiration of the
42-20 period specified in subparagraph (1) or (2) of paragraph (c).
42-21 (e) An obligation to make a supplementary payment for
42-22 adjustment or attorney’s fees and expenses, court costs or interest
42-23 and bond premiums incurred by the insolvent insurer before the
42-24 appointment of a liquidator, unless the expenses would also be a
42-25 valid claim against the insured.
42-26 (f) A first party or third party claim brought by or against an
42-27 insured, if the aggregate net worth of the insured and any affiliate
42-28 of the insured, as determined on a consolidated basis, is more than
42-29 $25,000,000 on December 31 of the year immediately preceding
42-30 the date the insurer becomes an insolvent insurer. The provisions of
42-31 this paragraph do not apply to a claim for workers’ compensation.
42-32 As used in this paragraph, “affiliate” means a person who
42-33 directly or indirectly owns or controls, is owned or controlled by,
42-34 or is under common ownership or control with, another person.
42-35 For the purpose of this definition, the terms “owns,” “is owned”
42-36 and “ownership” mean ownership of an equity interest, or the
42-37 equivalent thereof, of 10 percent or more.
42-38 Sec. 54. NRS 687A.060 is hereby amended to read as follows:
42-39 687A.060 1. The Association:
42-40 (a) Is obligated to the extent of the covered claims existing
42-41 before the determination of insolvency and arising within 30 days
42-42 after the determination of insolvency, or before the expiration date
42-43 of the policy if that date is less than 30 days after the determination,
42-44 or before the insured replaces the policy or on request cancels
42-45 the policy if he does so within 30 days after the determination. The
43-1 obligation of the Association to pay a covered claim is limited to the
43-2 payment of:
43-3 (1) The entire amount of the claim, if the claim is for
43-4 workers’ compensation pursuant to the provisions of chapters 616A
43-5 to 616D, inclusive, or chapter 617 of NRS;
43-6 (2) [More than $100 but not] Not more than $300,000 for
43-7 each policy[,] if the claim is for the return of unearned premiums;
43-8 or
43-9 (3) The limit specified in a policy or $300,000, whichever is
43-10 less, for each occurrence for any covered claim other than a covered
43-11 claim specified in subparagraph (1) or (2).
43-12 (b) Shall be deemed the insurer to the extent of its obligations on
43-13 the covered claims and to that extent has any rights, duties and
43-14 obligations of the insolvent insurer as if the insurer had not become
43-15 insolvent. The rights include, without limitation, the right to seek
43-16 and obtain any recoverable salvage and to subrogate a covered
43-17 claim, to the extent that the Association has paid its obligation
43-18 under the claim.
43-19 (c) Shall assess member insurers amounts necessary to pay the
43-20 obligations of the Association pursuant to paragraph (a) after an
43-21 insolvency, the expenses of handling covered claims subsequent to
43-22 an insolvency, the cost of examinations pursuant to NRS 687A.110
43-23 [,] and other expenses authorized by this chapter. The assessment of
43-24 each member insurer must be in the proportion that the net direct
43-25 written premiums of the member insurer for the calendar year
43-26 preceding the assessment bear to the net direct written premiums of
43-27 all member insurers for the same calendar year. Each member
43-28 insurer must be notified of the assessment not later than 30 days
43-29 before it is due. No member insurer may be assessed in any year an
43-30 amount greater than 2 percent of the net direct written premiums of
43-31 that member insurer for the calendar year preceding the assessment.
43-32 If the maximum assessment, together with the other assets of the
43-33 Association, does not provide in any 1 year an amount sufficient to
43-34 make all necessary payments, the money available may be prorated
43-35 and the unpaid portion must be paid as soon as money becomes
43-36 available. The Association may pay claims in any order, including
43-37 the order in which the claims are received or in groups or
43-38 categories. The Association may exempt or defer, in whole or in
43-39 part, the assessment of any member insurer if the assessment would
43-40 cause the financial statement of the member insurer to reflect
43-41 amounts of capital or surplus less than the minimum amounts
43-42 required for a certificate of authority by any jurisdiction in which
43-43 the member insurer is authorized to transact insurance. During the
43-44 period of deferment, no dividends may be paid to shareholders or
43-45 policyholders. Deferred assessments must be paid when payment
43-46 will not reduce capital or surplus below required minimums.
44-1 Payments must be refunded to those companies receiving larger
44-2 assessments because of deferment, or, in the discretion of the
44-3 company, credited against future assessments. Each member insurer
44-4 must be allowed a premium tax credit for any amounts paid
44-5 pursuant to the provisions of this chapter:
44-6 (1) For assessments made before January 1, 1993, at the rate
44-7 of 10 percent per year for 10 successive years beginning March 1,
44-8 1996; or
44-9 (2) For assessments made on or after January 1, 1993, at the
44-10 rate of 20 percent per year for 5 successive years beginning with the
44-11 calendar year following the calendar year in which the assessments
44-12 are paid.
44-13 (d) Shall investigate claims brought against the fund and adjust,
44-14 compromise, settle and pay covered claims to the extent of the
44-15 obligation of the Association and deny any other claims.
44-16 (e) Shall notify such persons as the Commissioner directs
44-17 pursuant to paragraph (a) of subsection 2 of NRS 687A.080.
44-18 (f) Shall act on claims through its employees or through one or
44-19 more member insurers or other persons designated as servicing
44-20 facilities. Designation of a servicing facility is subject to the
44-21 approval of the Commissioner, but the designation may be declined
44-22 by a member insurer.
44-23 (g) Shall reimburse each servicing facility for obligations of
44-24 the Association paid by the facility and for expenses incurred by the
44-25 facility while handling claims on behalf of the Association[,] and
44-26 pay the other expenses of the Association authorized by this
44-27 chapter.
44-28 2. The Association may:
44-29 (a) Appear in, defend and appeal any action on a claim brought
44-30 against the Association.
44-31 (b) Employ or retain persons necessary to handle claims and
44-32 perform other duties of the Association.
44-33 (c) Borrow money necessary to carry out the purposes of this
44-34 chapter in accordance with the plan of operation.
44-35 (d) Sue or be sued.
44-36 (e) Negotiate and become a party to contracts necessary to carry
44-37 out the purposes of this chapter.
44-38 (f) Perform other acts necessary or proper to effectuate the
44-39 purposes of this chapter.
44-40 (g) If, at the end of any calendar year, the Board of Directors
44-41 finds that the assets of the Association exceed its liabilities as
44-42 estimated by the Board of Directors for the coming year, refund to
44-43 the member insurers in proportion to the contribution of each that
44-44 amount by which the assets of the Association exceed the liabilities.
44-45 (h) Assess each member insurer equally not more than $100 per
44-46 year for administrative expenses not related to the insolvency of
44-47 any insurer.
45-1 Sec. 55. NRS 687A.090 is hereby amended to read as follows:
45-2 687A.090 1. Any person recovering under this chapter shall
45-3 be deemed to have assigned his rights under the policy to the
45-4 Association to the extent of his recovery from the Association.
45-5 Every insured or claimant seeking the protection of this chapter
45-6 shall cooperate with the Association to the same extent as [such]
45-7 the person would have been required to cooperate with the
45-8 insolvent insurer. [The Association shall have no] Except as
45-9 otherwise provided in subsection 2, the Association does not have
45-10 a cause of action against the insured of the insolvent insurer for any
45-11 sums it has paid out.
45-12 2. The Association may recover the amount of money paid to
45-13 or on behalf of an insured of an insolvent insurer:
45-14 (a) If the aggregate net worth of the insured and any affiliate
45-15 of the insured, as determined on a consolidated basis, is more
45-16 than $25,000,000 on December 31 of the year immediately
45-17 preceding the date the insurer becomes an insolvent insurer; or
45-18 (b) If the Association paid the money in error.
45-19 3. The receiver, liquidator or statutory successor of an
45-20 insolvent insurer [shall be] is bound by any settlements of covered
45-21 claims by the Association or a similar organization in another state.
45-22 The court having jurisdiction shall grant [such] those claims
45-23 priority equal to that to which the claimant would have been
45-24 entitled in the absence of this chapter against the assets of the
45-25 insolvent insurer. The expenses of the Association or similar
45-26 organization in handling claims [shall] must be accorded the same
45-27 priority as the liquidator’s expenses.
45-28 [3.] 4. The Association shall periodically file with the receiver
45-29 or liquidator of the insolvent insurer statements of the covered
45-30 claims paid by the Association and estimates of anticipated claims
45-31 on the Association, which statements shall preserve the rights of the
45-32 Association against the assets of the insolvent insurer.
45-33 5. As used in this section, “affiliate” means a person who
45-34 directly or indirectly owns or controls, is owned or controlled by,
45-35 or is under common ownership or control with, another person.
45-36 For the purpose of this definition, the terms “owns,” “is owned”
45-37 and “ownership” mean ownership of an equity interest, or the
45-38 equivalent thereof, of 10 percent or more.
45-39 Sec. 55.2. Chapter 687B of NRS is hereby amended by adding
45-40 thereto a new section to read as follows:
45-41 1. No policy of industrial insurance that has been in effect for
45-42 at least 70 days or that has been renewed may be cancelled by the
45-43 insurer before the expiration of the agreed term or 1 year from
45-44 the effective date of the policy or renewal, whichever occurs first,
45-45 except on any one of the following grounds:
46-1 (a) A failure by the policyholder to pay a premium for the
46-2 policy of industrial insurance when due;
46-3 (b) A failure by the policyholder to:
46-4 (1) Report any payroll;
46-5 (2) Allow the insurer to audit any payroll in accordance
46-6 with the terms of the policy or any previous policy issued by the
46-7 insurer; or
46-8 (3) Pay any additional premium charged because of an
46-9 audit of any payroll as required by the terms of the policy or any
46-10 previous policy issued by the insurer;
46-11 (c) A material failure by the policyholder to comply with any
46-12 federal or state order concerning safety or any written
46-13 recommendation of the insurer’s designated representative for
46-14 loss control;
46-15 (d) A material change in ownership of the policyholder or any
46-16 change in the policyholder’s business or operations that:
46-17 (1) Materially increases the hazard for frequency or
46-18 severity of loss;
46-19 (2) Requires additional or different classifications for the
46-20 calculation of premiums; or
46-21 (3) Contemplates an activity that is excluded by any
46-22 reinsurance treaty of the insurer;
46-23 (e) A material misrepresentation made by the policyholder; or
46-24 (f) A failure by the policyholder to cooperate with the insurer
46-25 in conducting an investigation of a claim.
46-26 2. An insurer shall not cancel a policy of industrial insurance
46-27 pursuant to paragraph (a), (b), (e) or (f) of subsection 1 except
46-28 upon 10 days’ written notice submitted by the insurer to the
46-29 policyholder.
46-30 3. Except as otherwise provided in this subsection, an insurer
46-31 shall not cancel a policy of industrial insurance pursuant to
46-32 paragraph (c) or (d) of subsection 1 except upon 30 days’ written
46-33 notice by the insurer to the policyholder. An insurer is not
46-34 required to provide a written notice to a policyholder pursuant to
46-35 this subsection if the policyholder and the insurer consent to the
46-36 cancellation of the policy of industrial insurance and to the
46-37 reissuance of another policy of industrial insurance effective
46-38 upon a material change in the ownership or operations of the
46-39 insured. If the policyholder corrects the condition to the
46-40 satisfaction of the insurer within the period specified in the policy
46-41 of insurance, the insurer shall not cancel the policy.
46-42 4. Any written notice submitted to a policyholder pursuant to
46-43 this section must be given by first class mail addressed to the
46-44 policyholder at the address of the policyholder set forth in the
46-45 policy of industrial insurance. Evidence indicating that a written
47-1 notice specified in this section has been mailed is sufficient proof
47-2 of notice.
47-3 5. The provisions of this section do not prohibit, during any
47-4 period in which a policy of industrial insurance is in force, any
47-5 change in the premium rate required or authorized by any law,
47-6 regulation or order of the Commissioner, or otherwise agreed
47-7 upon by the policyholder and the insurer.
47-8 6. For the purposes of this section, any policy of industrial
47-9 insurance that is written for a term of more than 1 year, or any
47-10 policy of industrial insurance with no fixed date of expiration,
47-11 shall be deemed to be written for successive periods of 1 year.
47-12 Sec. 55.4. NRS 687B.145 is hereby amended to read as
47-13 follows:
47-14 687B.145 1. Any policy of insurance or endorsement
47-15 providing coverage under the provisions of NRS 690B.020 or other
47-16 policy of casualty insurance may provide that if the insured has
47-17 coverage available to him under more than one policy or provision
47-18 of coverage, any recovery or benefits may equal but not exceed the
47-19 higher of the applicable limits of the respective coverages, and the
47-20 recovery or benefits must be prorated between the applicable
47-21 coverages in the proportion that their respective limits bear to the
47-22 aggregate of their limits. Any provision which limits benefits
47-23 pursuant to this section must be in clear language and be
47-24 prominently displayed in the policy, binder or endorsement. Any
47-25 limiting provision is void if the named insured has purchased
47-26 separate coverage on the same risk and has paid a premium
47-27 calculated for full reimbursement under that coverage.
47-28 2. Except as otherwise provided in subsection 5, insurance
47-29 companies transacting motor vehicle insurance in this state must
47-30 offer, on a form approved by the Commissioner, uninsured and
47-31 underinsured vehicle coverage in an amount equal to the limits of
47-32 coverage for bodily injury sold to an insured under a policy of
47-33 insurance covering the use of a passenger car. The insurer is not
47-34 required to reoffer the coverage to the insured in any replacement,
47-35 reinstatement, substitute or amended policy, but the insured may
47-36 purchase the coverage by requesting it in writing from the insurer.
47-37 Each renewal must include a copy of the form offering such
47-38 coverage. Uninsured and underinsured vehicle coverage must
47-39 include a provision which enables the insured to recover up to the
47-40 limits of his own coverage any amount of damages for bodily injury
47-41 from his insurer which he is legally entitled to recover from the
47-42 owner or operator of the other vehicle to the extent that those
47-43 damages exceed the limits of the coverage for bodily injury carried
47-44 by that owner or operator. If an insured suffers actual damages
47-45 subject to the limitation of liability provided pursuant to NRS
47-46 41.035, underinsured vehicle coverage must include a provision
48-1 which enables the insured to recover up to the limits of his own
48-2 coverage any amount of damages for bodily injury from his
48-3 insurer for the actual damages suffered by the insured that
48-4 exceed that limitation of liability.
48-5 3. An insurance company transacting motor vehicle insurance
48-6 in this state must offer an insured under a policy covering the use of
48-7 a passenger car, the option of purchasing coverage in an amount of
48-8 at least $1,000 for the payment of reasonable and necessary medical
48-9 expenses resulting from an accident. The offer must be made on a
48-10 form approved by the Commissioner. The insurer is not required to
48-11 reoffer the coverage to the insured in any replacement,
48-12 reinstatement, substitute or amended policy, but the insured may
48-13 purchase the coverage by requesting it in writing from the insurer.
48-14 Each renewal must include a copy of the form offering such
48-15 coverage.
48-16 4. An insurer who makes a payment to an injured person on
48-17 account of underinsured vehicle coverage as described in
48-18 subsection 2 is not entitled to subrogation against the underinsured
48-19 motorist who is liable for damages to the injured payee. This
48-20 subsection does not affect the right or remedy of an insurer under
48-21 subsection 5 of NRS 690B.020 with respect to uninsured vehicle
48-22 coverage. As used in this subsection, “damages” means the amount
48-23 for which the underinsured motorist is alleged to be liable to the
48-24 claimant in excess of the limits of bodily injury coverage set by the
48-25 underinsured motorist’s policy of casualty insurance.
48-26 5. An insurer need not offer, provide or make available
48-27 uninsured or underinsured vehicle coverage in connection with a
48-28 general commercial liability policy, an excess policy, an umbrella
48-29 policy or other policy that does not provide primary motor vehicle
48-30 insurance for liabilities arising out of the ownership, maintenance,
48-31 operation or use of a specifically insured motor vehicle.
48-32 6. As used in this section:
48-33 (a) “Excess policy” means a policy that protects a person against
48-34 loss in excess of a stated amount or in excess of coverage provided
48-35 pursuant to another insurance contract.
48-36 (b) “Passenger car” has the meaning ascribed to it in NRS
48-37 482.087.
48-38 (c) “Umbrella policy” means a policy that protects a person
48-39 against losses in excess of the underlying amount required to be
48-40 covered by other policies.
48-41 Sec. 55.6. NRS 687B.310 is hereby amended to read as
48-42 follows:
48-43 687B.310 1. NRS 687B.310 to 687B.420, inclusive, and
48-44 section 55.2 of this act apply to all binders and all contracts of
48-45 insurance the general terms of which are required to be approved or
49-1 are subject to disapproval by the Commissioner, except as otherwise
49-2 provided by statute or by rule pursuant to subsection 3.
49-3 2. The contract may provide terms more favorable to
49-4 policyholders than are required by NRS 687B.310 to 687B.420,
49-5 inclusive [.] , and section 55.2 of this act.
49-6 3. The Commissioner may by rule exempt from NRS 687B.310
49-7 to 687B.420, inclusive, and section 55.2 of this act classes of
49-8 insurance contracts where the policyholders do not need protection
49-9 against arbitrary termination.
49-10 4. The rights provided by NRS 687B.310 to 687B.420,
49-11 inclusive, and section 55.2 of this act are in addition to and do not
49-12 prejudice any other rights the policyholder may have at common
49-13 law or under other statutes.
49-14 5. NRS 687B.310 to 687B.420, inclusive, and section 55.2 of
49-15 this act do not prevent the rescission or reformation of any life or
49-16 health insurance contract not otherwise denied by the terms of the
49-17 contract or by any other statute.
49-18 6. Any notice to an insured required pursuant to NRS
49-19 687B.320 to 687B.350, inclusive, and section 55.2 of this act must
49-20 be personally delivered to the insured or mailed first class or
49-21 certified to the insured at his address last known by the insurer. The
49-22 notice must state the effective date of the cancellation or
49-23 nonrenewal and be accompanied by a written explanation of the
49-24 specific reasons for the cancellation or nonrenewal.
49-25 Sec. 55.8. NRS 687B.320 is hereby amended to read as
49-26 follows:
49-27 687B.320 1. [No] Except as otherwise provided in
49-28 subsection 3, no insurance policy that has been in effect for at least
49-29 70 days or that has been renewed may be cancelled by the insurer
49-30 [prior to] before the expiration of the agreed term or 1 year from
49-31 the effective date of the policy or renewal, whichever [is less,]
49-32 occurs first, except on any one of the following grounds:
49-33 (a) Failure to pay a premium when due;
49-34 (b) Conviction of the insured of a crime arising out of acts
49-35 increasing the hazard insured against;
49-36 (c) Discovery of fraud or material misrepresentation in the
49-37 obtaining of the policy or in the presentation of a claim thereunder;
49-38 (d) Discovery of:
49-39 (1) An act or omission; or
49-40 (2) A violation of any condition of the policy,
49-41 which occurred after the first effective date of the current policy and
49-42 substantially and materially increases the hazard insured against;
49-43 (e) A material change in the nature or extent of the risk,
49-44 occurring after the first effective date of the current policy, which
49-45 causes the risk of loss to be substantially and materially increased
50-1 beyond that contemplated at the time the policy was issued or last
50-2 renewed;
50-3 (f) A determination by the Commissioner that continuation of
50-4 the insurer’s present volume of premiums would jeopardize the
50-5 insurer’s solvency or be hazardous to the interests of policyholders
50-6 of the insurer, its creditors or the public; or
50-7 (g) A determination by the Commissioner that the continuation
50-8 of the policy would violate, or place the insurer in violation of, any
50-9 provision of the Code.
50-10 2. No cancellation under subsection 1 is effective until in the
50-11 case of paragraph (a) of subsection 1 at least 10 days and in the case
50-12 of any other paragraph of subsection 1 at least 30 days after the
50-13 notice is delivered or mailed to the policyholder.
50-14 3. The provisions of this section do not apply to a policy of
50-15 industrial insurance.
50-16 Sec. 56. NRS 687B.350 is hereby amended to read as follows:
50-17 687B.350 1. [An] Except as otherwise provided in
50-18 subsection 2, an insurer shall not renew a policy on different terms,
50-19 including different rates, unless the insurer notifies the insured in
50-20 writing of the different terms or rates at least 30 days before [those
50-21 terms or rates become effective.] the expiration of the policy. If the
50-22 insurer [offers or purports to] fails to provide adequate and timely
50-23 notice, the insurer shall renew the policy [but on different terms,
50-24 including different rates, the policyholder may, for 30 days after he
50-25 receives notice of the changes in the policy, cancel the policy. If he
50-26 elects to cancel, the insurer shall refund to him the excess of the
50-27 premium paid by him above the pro rata premium for the expired
50-28 portion of the new term.] at the expiring terms and rates:
50-29 (a) For a period that is equal to the expiring term if the agreed
50-30 term is 1 year or less; or
50-31 (b) For 1 year if the agreed term is more than 1 year.
50-32 2. The provisions of this section do not apply to a policy of
50-33 industrial insurance.
50-34 Sec. 56.1. NRS 687B.360 is hereby amended to read as
50-35 follows:
50-36 687B.360 If a notice of cancellation or nonrenewal under NRS
50-37 687B.310 to 687B.420, inclusive, and section 55.2 of this act does
50-38 not state with reasonable precision the facts on which the insurer’s
50-39 decision is based, the insurer shall supply that information within 6
50-40 days after receipt of a written request by the policyholder. No
50-41 notice is effective unless it contains adequate information about the
50-42 policyholder’s right to make such a request.
50-43 Sec. 56.3. NRS 687B.370 is hereby amended to read as
50-44 follows:
50-45 687B.370 Except for a notice of cancellation for the failure to
50-46 pay a premium when due, no notice required pursuant to NRS
51-1 687B.310 to 687B.420, inclusive, and section 55.2 of this act is
51-2 effective unless it contains adequate instructions enabling the
51-3 policyholder to apply for insurance through any voluntary or
51-4 mandatory risk-sharing plan established pursuant to NRS 686B.180
51-5 and 686B.200 existing at the time of the notice, for which the
51-6 policyholder may be eligible.
51-7 Sec. 56.5. NRS 687B.380 is hereby amended to read as
51-8 follows:
51-9 687B.380 There is no liability on the part of and no cause of
51-10 action of any nature may arise against any insurer, its authorized
51-11 representative, its agents, its employees, or any person furnishing to
51-12 the insurer information as to reasons for cancellation or
51-13 nonrenewal, for any statement made by them in complying with
51-14 NRS 687B.310 to 687B.420, inclusive, and section 55.2 of this act
51-15 or for the providing of information pertaining thereto.
51-16 Sec. 56.7. NRS 688A.361 is hereby amended to read as
51-17 follows:
51-18 688A.361 No contract of annuity may be delivered or issued
51-19 for delivery in this state unless it contains in substance the
51-20 following provisions, or corresponding provisions which in the
51-21 opinion of the Commissioner are at least as favorable to the
51-22 contract holder:
51-23 1. A statement that upon cessation of payment of
51-24 considerations under a contract, or upon receipt of a written
51-25 request submitted by an owner of a contract, the company will
51-26 grant a paid-up annuity benefit on a plan stipulated in the contract
51-27 of such value as is specified in NRS 688A.3631 to 688A.3637,
51-28 inclusive, and 688A.366;
51-29 2. If a contract provides for a lump-sum settlement at maturity
51-30 or any other time, a statement that upon surrender of the contract at
51-31 or before the commencement of any annuity payments, the
51-32 company will pay in lieu of any paid-up annuity benefit a cash
51-33 surrender benefit of an amount specified in NRS 688A.3631,
51-34 688A.3633, 688A.3637 and 688A.366, and that the company
51-35 [reserves] may reserve the right to defer the payment of such cash
51-36 surrender benefit for a period of not more than 6 months after
51-37 demand therefor with surrender of the contract [;] if the company
51-38 submits a written request to and receives written approval for the
51-39 deferral from the Commissioner. The request must address the
51-40 necessity and equitability to all policyholders of the deferral;
51-41 3. A statement of the mortality table, if any, and interest rates
51-42 used in calculating any minimum paid-up annuity, cash surrender or
51-43 death benefits which are guaranteed under the contract, together
51-44 with sufficient information to determine the amounts of those
51-45 benefits; and
51-46 4. A statement that any paid-up annuity, cash surrender or
51-47 death benefits which may be available under the contract are not
51-48 less
52-1 than the minimum benefits required by any statute of the state in
52-2 which the contract is delivered and an explanation of the manner in
52-3 which such benefits are altered by the existence of any additional
52-4 amounts credited by the company to the contract, any indebtedness
52-5 to the company on the contract or any prior withdrawals from or
52-6 partial surrenders of the contract,
52-7 except that any deferred annuity contract may provide that if no
52-8 considerations have been received under a contract for a period of 2
52-9 full years, and the portion of the paid-up annuity benefit at maturity
52-10 on the plan stipulated in the contract arising from considerations
52-11 paid before that period would be less than $20 monthly, the
52-12 company may terminate the contract by payment in cash of the then
52-13 present value of such portion of the paid-up annuity benefit,
52-14 calculated on the basis of the mortality table, if any, and interest
52-15 rate specified in the contract for determining the paid-up annuity
52-16 benefit, and by such payment shall be relieved of any further
52-17 obligation under the contract.
52-18 Sec. 56.9. NRS 688A.363 is hereby amended to read as
52-19 follows:
52-20 688A.363 1. The minimum values, specified in NRS
52-21 688A.3631 to 688A.3637, inclusive, and 688A.366, of any paid-up
52-22 annuity, cash surrender or death benefits available under an annuity
52-23 contract [shall] must be based upon minimum nonforfeiture
52-24 amounts as defined in this section.
52-25 [1.] 2. With respect to contracts providing for flexible
52-26 considerations, the minimum nonforfeiture amount for any time at
52-27 or before the commencement of any annuity payments is equal to
52-28 an accumulation up to such time at a rate of interest [of 3 percent
52-29 per annum of percentages of the net considerations paid before such
52-30 time,] calculated pursuant to subsection 3, which must be
52-31 decreased by the sum of:
52-32 (a) Any prior withdrawals from or partial surrenders of the
52-33 contract, accumulated at a rate of interest [of 3 percent per annum;
52-34 and] calculated pursuant to subsection 3;
52-35 (b) An annual charge in the amount of $50, accumulated at
52-36 rates of interest calculated pursuant to subsection 3;
52-37 (c) Any premium tax paid by the company for the contract,
52-38 accumulated at rates of interest calculated pursuant to subsection
52-39 3; and
52-40 (d) The amount of any indebtedness to the company on the
52-41 contract, including interest due and accrued . [, and increased by
52-42 any existing additional amounts credited by the company to the
52-43 contract.]
52-44 The net considerations for a given contract year used to define the
52-45 minimum nonforfeiture amount [shall] must be an amount [not less
52-46 than zero and shall be] that is equal to 87.5 percent of the
53-1 [corresponding] gross considerations credited to the contract during
53-2 that contract year . [less an annual contract charge of $30 and a
53-3 collection charge of $1.25 per consideration credited to the contract
53-4 during that contract year. The percentages of net considerations
53-5 shall be 65 percent of the net consideration for the first contract
53-6 year and 87.5 percent of the net considerations for the second and
53-7 later contract years, except that the percentage shall be 65 percent
53-8 of the portion of the total net consideration for any renewal contract
53-9 year which exceeds by not more than 2 times the sum of those
53-10 portions of the net considerations in all prior contract years for
53-11 which the percentage was 65 percent.
53-12 2. With respect to contracts providing for fixed scheduled
53-13 considerations, minimum nonforfeiture amounts shall be calculated
53-14 on the assumption that considerations are paid annually in advance
53-15 and shall be defined as for contracts with flexible considerations
53-16 which are paid annually, with the following exceptions:
53-17 (a) The portion of the net consideration for the first contract year
53-18 to be accumulated shall be the sum of 65 percent of the net
53-19 consideration for the first contract year plus 22.5 percent of the
53-20 excess of the net consideration for the first contract year over the
53-21 lesser of the net considerations for the second and third contract
53-22 years.
53-23 (b) The annual contract charge shall be the lesser of:
53-24 (1) Thirty dollars; or
53-25 (2) Ten percent of the gross annual consideration.
53-26 3. With respect to contracts providing for a single
53-27 consideration, minimum nonforfeiture amounts shall be defined as
53-28 for contracts with flexible considerations except that the percentage
53-29 of net consideration used to determine the minimum nonforfeiture
53-30 amount shall be equal to 90 percent and the net consideration shall
53-31 be the gross consideration less a contract charge of $75.]
53-32 3. For the purpose of this section, the rate of interest used to
53-33 determine the minimum nonforfeiture amounts must be an
53-34 annual rate of interest determined as the lesser of 3 percent per
53-35 annum or a rate specified in the contract if the rate is calculated
53-36 in accordance with regulations adopted by the Commissioner,
53-37 except that at no time may the resulting rate be less than 1 percent
53-38 per annum.
53-39 Sec. 57. NRS 690B.050 is hereby amended to read as follows:
53-40 690B.050 1. Each insurer which issues a policy of insurance
53-41 covering the liability of a physician licensed under chapter 630 of
53-42 NRS or an osteopathic physician licensed under chapter 633 of
53-43 NRS for a breach of his professional duty toward a patient shall ,
53-44 within 30 days after a claim is closed under the policy, submit a
53-45 report to the Commissioner [within 30 days each settlement or
53-46 award made or
54-1 judgment rendered by reason of a claim, giving the] concerning the
54-2 claim. The report must include, without limitation:
54-3 (a) The name and address of the claimant and [physician and]
54-4 the insured under the policy;
54-5 (b) A statement setting forth the circumstances of the case[.
54-6 2.] ;
54-7 (c) Information indicating whether any payment was made on
54-8 the claim and the amount of the payment, if any; and
54-9 (d) The information specified in subsection 2 of NRS
54-10 679B.144.
54-11 2. An insurer who fails to comply with the provisions of
54-12 subsection 1 is subject to the imposition of an administrative fine
54-13 pursuant to NRS 679B.460.
54-14 3. The Commissioner shall , within 30 days after receiving a
54-15 report from an insurer pursuant to this section, submit a report to
54-16 the Board of Medical Examiners or the state board of osteopathic
54-17 medicine, as applicable, [within 30 days after receiving the report
54-18 of the insurer, each claim made and each settlement, award or
54-19 judgment.] setting forth the information provided to the
54-20 Commissioner by the insurer pursuant to this section.
54-21 Sec. 57.5. NRS 690B.100 is hereby amended to read as
54-22 follows:
54-23 690B.100 As used in NRS 690B.100 to 690B.180, inclusive,
54-24 unless the context otherwise requires:
54-25 1. “Home” means a structure used primarily for residential
54-26 purposes and includes, without limitation:
54-27 (a) A single-family dwelling;
54-28 (b) A unit in a multiple-family structure;
54-29 (c) A mobile home; and
54-30 (d) The common elements of a common-interest community, as
54-31 defined in NRS 116.110318, and any appurtenance to the common
54-32 elements.
54-33 2. “Insurance for home protection” means a contract of
54-34 insurance, which affords coverage over a specified term for a
54-35 predetermined fee, under which a person, other than the
54-36 manufacturer, builder, seller or lessor of the home, agrees to repair,
54-37 replace or indemnify from the cost of repair or replacement based
54-38 upon the failure of any structure, component, system or appliance
54-39 of the home. The term does not include [a] :
54-40 (a) A contract which insures against any consequential losses
54-41 caused by the defects or failures.
54-42 (b) An annual home service agreement on household
54-43 appliances, systems and components if the agreement principally
54-44 provides for service, repair or replacement due to normal wear
54-45 and tear or inherent defect. Such agreements may include
55-1 provisions for incidental indemnity or for service or repair of roof
55-2 leaks.
55-3 Sec. 58. Chapter 692C of NRS is hereby amended by adding
55-4 thereto the provisions set forth as sections 59 to 65, inclusive, of
55-5 this act.
55-6 Sec. 59. “Acquisition” means any agreement, arrangement
55-7 or activity, the consummation of which results in a person directly
55-8 or indirectly acquiring the control of another person. The term
55-9 includes, but is not limited to:
55-10 1. The acquiring of a voting security;
55-11 2. The acquiring of any asset;
55-12 3. Bulk reinsurance; and
55-13 4. A merger.
55-14 Sec. 60. “Involved insurer” includes an insurer that:
55-15 1. Acquires a person or is acquired by a person;
55-16 2. Is affiliated with an insurer that acquires a person or is
55-17 acquired by a person; or
55-18 3. Is the result of a merger.
55-19 Sec. 61. The provisions of this chapter apply to any
55-20 acquisition in which a change in control of an insurer who is
55-21 authorized to do business in this state occurs, except:
55-22 1. An acquisition that is subject to approval or disapproval by
55-23 the Commissioner pursuant to NRS 692C.180 to 692C.250,
55-24 inclusive.
55-25 2. A purchase of securities solely for investment purposes if
55-26 the securities are not used for voting or not otherwise used to
55-27 cause or attempt to cause a substantial lessening of competition in
55-28 any insurance market in this state, except that, if a purchase of
55-29 securities creates a presumption of control of the insurer
55-30 pursuant to subsection 2 of NRS 692C.050, the purchase is not
55-31 solely for investment purposes unless the Commissioner of
55-32 insurance of the insurer’s state of domicile:
55-33 (a) Accepts a disclaimer of control or affirmatively finds that
55-34 control does not exist; and
55-35 (b) Submits the accepted disclaimer or a statement setting
55-36 forth the affirmative finding to the Commissioner.
55-37 3. An acquisition of a person by another person if:
55-38 (a) Each of those persons is not directly or through an affiliate
55-39 primarily engaged in the business of insurance; and
55-40 (b) At least 30 days before the effective date of the acquisition,
55-41 a notice is filed with the Commissioner in accordance with section
55-42 62 of this act, if required.
55-43 4. An acquisition by a person of an affiliate of that person.
55-44 5. An acquisition that does not immediately cause:
55-45 (a) The combined market share of the involved insurers to
55-46 exceed 5 percent of the total market;
56-1 (b) An increase in any market share; or
56-2 (c) For any market:
56-3 (1) The combined market share of the involved insurers to
56-4 exceed 12 percent of the total market; and
56-5 (2) The market share to increase by more than 2 percent of
56-6 the total market.
56-7 As used in this subsection, “market” means direct written
56-8 premiums in this state for a line of authority set forth in the
56-9 annual statement required to be filed by insurers authorized to do
56-10 business in this state.
56-11 6. An acquisition for which, solely because of the effect of the
56-12 acquisition on ocean marine insurance, a notification is required
56-13 pursuant to this section.
56-14 7. An acquisition of an insurer whose domiciliary
56-15 commissioner of insurance:
56-16 (a) Determines that:
56-17 (1) The insurer is in a failing condition;
56-18 (2) A feasible alternative for improving that condition does
56-19 not exist; and
56-20 (3) The public benefit received from improving that
56-21 condition through the acquisition of the insurer outweighs the
56-22 public benefit received from increasing competition; and
56-23 (b) Submits his determination made pursuant to paragraph (a)
56-24 to the Commissioner.
56-25 Sec. 62. 1. An acquisition to which the provisions of
56-26 section 61 of this act apply is subject to an order issued pursuant
56-27 to section 64 of this act unless:
56-28 (a) The acquiring person files a notice of acquisition pursuant
56-29 to this section; and
56-30 (b) The waiting period specified in subsection 4 has expired.
56-31 2. The Commissioner shall prescribe the form of the notice
56-32 required pursuant to subsection 1. A notice of acquisition filed
56-33 pursuant to this section must include:
56-34 (a) The information required by the National Association of
56-35 Insurance Commissioners relating to any market that, pursuant
56-36 to subsection 5 of section 61 of this act, causes the acquisition not
56-37 to be exempted from the provisions of this section; and
56-38 (b) Any other material or information required by the
56-39 Commissioner to determine whether or not the proposed
56-40 acquisition, if consummated, would violate the provisions of
56-41 section 63 of this act.
56-42 3. The information required pursuant to subsection 2 may
56-43 include the opinion of an economist relating to the competitive
56-44 effect of the acquisition on the business of insurance in this state
56-45 if the opinion is accompanied by a summary of the education and
57-1 experience of the economist and a statement indicating his ability
57-2 to provide an informed opinion.
57-3 4. Except as otherwise provided in subsection 5, the waiting
57-4 period for an acquisition required pursuant to subsection 1 begins
57-5 on the date the Commissioner receives the notice filed pursuant to
57-6 subsection 1 and ends on the expiration of 30 days after that date
57-7 or on the expiration of a shorter period prescribed by the
57-8 Commissioner, whichever is earlier.
57-9 5. Before the expiration of the waiting period specified in
57-10 subsection 4, the Commissioner may, not more than once, require
57-11 a person to submit additional information relating to the proposed
57-12 acquisition. If the Commissioner requires the submission of
57-13 additional information, the waiting period for the acquisition ends
57-14 upon the expiration of 30 days after the Commissioner receives
57-15 the additional information or upon the expiration of a shorter
57-16 period prescribed by the Commissioner, whichever is earlier.
57-17 Sec. 63. 1. The Commissioner may issue an order pursuant
57-18 to section 64 of this act relating to an acquisition if:
57-19 (a) The effect of the acquisition may substantially lessen
57-20 competition in any line of insurance in this state or tend to create
57-21 a monopoly; or
57-22 (b) The acquiring person fails to file sufficient materials or
57-23 information pursuant to section 62 of this act.
57-24 2. In determining whether to issue an order pursuant to
57-25 subsection 1, the Commissioner shall consider the standards set
57-26 forth in the Horizontal Merger Guidelines issued by the United
57-27 States Department of Justice and the Federal Trade Commission
57-28 and in effect at the time the Commissioner receives the notice
57-29 required pursuant to section 62 of this act.
57-30 3. The Commissioner shall not issue an order specified in
57-31 subsection 1:
57-32 (a) If:
57-33 (1) The acquisition creates substantial economies of scale
57-34 or economies in the use of resources that may not be created in
57-35 any other manner; and
57-36 (2) The public benefit received from those economies
57-37 exceeds the public benefit received from not lessening
57-38 competition; or
57-39 (b) If:
57-40 (1) The acquisition substantially increases the availability
57-41 of insurance; and
57-42 (2) The public benefit received by that increase exceeds the
57-43 public benefit received from not lessening competition.
57-44 4. The public benefits set forth in subparagraph 2 of
57-45 paragraphs (a) and (b) of subsection 3 may be considered
57-46 together, as applicable, in assessing whether the public benefits
58-1 received from the acquisition exceed any benefit to competition
58-2 that would arise from disapproving the acquisition.
58-3 5. The Commissioner has the burden of establishing a
58-4 violation of the competitive standard set forth in subsection 1.
58-5 Sec. 64. 1. Except as otherwise provided in this section, if
58-6 the Commissioner determines that an acquisition may
58-7 substantially lessen competition in any line of insurance in this
58-8 state or tends to create a monopoly, he may issue an order:
58-9 (a) Requiring an involved insurer to cease and desist from
58-10 doing business in this state relating to that line of insurance; or
58-11 (b) Denying the application of an acquired or acquiring
58-12 insurer for a license or authority to do business in this state.
58-13 2. The Commissioner shall not issue an order pursuant to
58-14 subsection 1 unless:
58-15 (a) He conducts a hearing concerning the acquisition in
58-16 accordance with NRS 679B.310 to 679B.370, inclusive;
58-17 (b) A notice of the hearing is issued before the expiration of
58-18 the waiting period for the acquisition specified in section 62 of
58-19 this act, but not less than 15 days before the hearing; and
58-20 (c) The hearing is conducted and the order is issued not later
58-21 than 60 days after the expiration of the waiting period.
58-22 3. Each order issued pursuant to subsection 1 must include a
58-23 written decision of the Commissioner setting forth his findings of
58-24 fact and conclusions of law relating to the acquisition.
58-25 4. An order issued pursuant to this section does not become
58-26 final until 30 days after it is issued, during which time the
58-27 involved insurer may submit to the Commissioner a plan to
58-28 remedy, within a reasonable period, the anticompetitive effect of
58-29 the acquisition. As soon as practicable after receiving the plan,
58-30 the Commissioner shall, based upon the plan and any
58-31 information included in the plan, issue a written determination
58-32 setting forth:
58-33 (a) The conditions or actions, if any, required to:
58-34 (1) Eliminate the anticompetitive effect of the acquisition;
58-35 and
58-36 (2) Vacate or modify the order; and
58-37 (b) The period in which the conditions or actions specified in
58-38 paragraph (a) must be performed.
58-39 5. An order issued pursuant to subsection 1 does not apply to
58-40 an acquisition that is not consummated.
58-41 6. A person who violates a cease and desist order issued
58-42 pursuant to this section during any period in which the order is in
58-43 effect is subject, at the discretion of the Commissioner, to:
58-44 (a) The imposition of a civil penalty of not more than $10,000
58-45 per day for each day the violation continues;
58-46 (b) The suspension or revocation of the person’s license or
58-47 certificate of authority; or
59-1 (c) Both the imposition of a civil penalty pursuant to
59-2 paragraph (a) and the suspension or revocation of the person’s
59-3 license or certificate of authority pursuant to paragraph (b).
59-4 7. In addition to any fine imposed pursuant to NRS
59-5 692C.480, any insurer or other person who fails to make any
59-6 filing required by sections 61 to 64, inclusive, of this act and who
59-7 fails to make a good faith effort to comply with any such
59-8 requirement is subject to a fine of not more than $50,000.
59-9 8. The provisions of NRS 692C.430, 692C.440 and 692C.460
59-10 do not apply to an acquisition to which the provisions of section
59-11 61 of this act apply.
59-12 Sec. 65. 1. A director or officer of an insurance holding
59-13 company system who knowingly violates, or knowingly
59-14 participates in or assents to a violation of, NRS 692C.350,
59-15 692C.360, 692C.363 or 692C.390, or who knowingly permits any
59-16 officer or agent of the insurance holding company to engage in a
59-17 transaction in violation of NRS 692C.360 or 692C.363 or to pay a
59-18 dividend or make an extraordinary distribution in violation of
59-19 NRS 692C.390 shall pay, after receiving notice and a hearing
59-20 before the Commissioner, a fine of not more than $10,000 for
59-21 each violation. In determining the amount of the fine, the
59-22 Commissioner shall consider the appropriateness of the fine in
59-23 relation to:
59-24 (a) The gravity of the violation;
59-25 (b) The history of any previous violations committed by the
59-26 director or officer; and
59-27 (c) Any other matters as justice may require.
59-28 2. Whenever it appears to the Commissioner that an insurer
59-29 or any director, officer, employee or agent of the insurer has
59-30 engaged in a transaction or entered into a contract to which the
59-31 provisions of NRS 692C.363 apply and for which the insurer has
59-32 not obtained the Commissioner’s approval, the Commissioner
59-33 may order the insurer to cease and desist immediately from
59-34 engaging in any further activity relating to the transaction or
59-35 contract. In addition to issuing such an order, the Commissioner
59-36 may order the insurer to rescind the contract and return each
59-37 party to the contract to the position he was in before the execution
59-38 of the contract if the issuing of the order is in the best interest of:
59-39 (a) The policyholders or creditors of the insurer; or
59-40 (b) The members of the general public.
59-41 Sec. 66. NRS 692C.020 is hereby amended to read as follows:
59-42 692C.020 As used in this chapter, unless the context otherwise
59-43 requires, the words and terms defined in NRS 692C.030 to
59-44 692C.110, inclusive, and sections 59 and 60 of this act, have the
59-45 meanings ascribed to them in those sections.
60-1 Sec. 67. NRS 692C.080 is hereby amended to read as follows:
60-2 692C.080 “Person” includes an individual, corporation,
60-3 limited-liability company, partnership, association, joint stock
60-4 company, trust, unincorporated organization or any similar
60-5 entity, or any combination thereof acting in concert. The term
60-6 does not include [any] :
60-7 1. Any joint venture partnership that is exclusively engaged
60-8 in owning, managing, leasing or developing any real or tangible
60-9 personal property; or
60-10 2. Any securities broker performing no more than the usual and
60-11 customary broker’s function.
60-12 Sec. 68. NRS 692C.140 is hereby amended to read as follows:
60-13 692C.140 In addition to making investments in common stock,
60-14 preferred stock, debt obligations and other securities permitted
60-15 under chapter 682A of NRS, a domestic insurer may invest:
60-16 1. In common stock, preferred stock, debt obligations and other
60-17 securities of one or more subsidiaries, amounts which do not
60-18 exceed the lesser of 10 percent of the insurer’s assets or 50 percent
60-19 of its surplus as regards policyholders, if the insurer’s surplus as
60-20 regards policyholders remains at a reasonable level in relation to the
60-21 insurer’s outstanding liabilities and adequate to its financial needs.
60-22 In calculating the amount of such investments, the following must
60-23 be included:
60-24 (a) Total money or other consideration expended and obligations
60-25 assumed in the acquisition or formation of a subsidiary, including
60-26 all organizational expenses and contributions to capital and surplus
60-27 of the subsidiary whether or not represented by the purchase of
60-28 capital stock or issuance of other securities; and
60-29 (b) All amounts expended in acquiring additional common
60-30 stock, preferred stock, debt obligations and other securities and all
60-31 contributions to the capital or surplus of a subsidiary after its
60-32 acquisition or formation.
60-33 2. Any amount in common stock, preferred stock, debt
60-34 obligations and other securities of one or more subsidiaries, if [the
60-35 insurer’s total liabilities, as calculated for the National Association
60-36 of Insurance Commissioners’ annual statement purposes, are less
60-37 than 10 percent of assets and if the insurer’s surplus remains as
60-38 regards policyholders, considering such investment as if it were a
60-39 disallowed asset, at a reasonable level in relation to the insurer’s
60-40 outstanding liabilities and adequate to its financial needs.
60-41 3. Any amount in common stock, preferred stock, debt
60-42 obligations and other securities of one or more subsidiaries if] each
60-43 subsidiary agrees to limit its investments in any asset so that those
60-44 investments will not cause the amount of the total investment of the
60-45 insurer to exceed any of the investment limitations specified in
60-46 subsection 1 or in chapter 682A of NRS. For the purpose of this
61-1 subsection, “total investment of the insurer” includes any direct
61-2 investment by the insurer in an asset and the insurer’s proportionate
61-3 share of any investment in an asset by any subsidiary of the insurer,
61-4 which must be calculated by multiplying the amount of the
61-5 subsidiary’s investment by the percentage of the insurer’s
61-6 ownership of the subsidiary.
61-7 [4.] 3. Any amount in common stock, preferred stock, debt
61-8 obligations or other securities of one or more subsidiaries, with the
61-9 approval of the Commissioner, if the insurer’s surplus as regards
61-10 policyholders remains at a reasonable level in relation to the
61-11 insurer’s outstanding liabilities and adequate to its financial needs.
61-12 [5. Any amount in the common stock, preferred stock, debt
61-13 obligations or other securities of any subsidiary exclusively
61-14 engaged in holding title to or holding title to and managing or
61-15 developing real or personal property, if after considering as a
61-16 disallowed asset so much of the investment as is represented by
61-17 subsidiary assets which if held directly by the insurer would be
61-18 considered as a disallowed asset, the insurer’s surplus as regards
61-19 policyholders will remain at a reasonable level in relation to the
61-20 insurer’s outstanding liabilities and adequate to its financial needs,
61-21 and if after the investment all voting securities of the subsidiary are
61-22 owned by the insurer.]
61-23 Sec. 69. NRS 692C.180 is hereby amended to read as follows:
61-24 692C.180 1. No person other than the issuer may make a
61-25 tender for or a request or invitation for tenders of, or enter into any
61-26 agreement to exchange securities for, seek to acquire or acquire in
61-27 the open market or otherwise, any voting security of a domestic
61-28 insurer if, after the consummation thereof, he would directly or
61-29 indirectly, or by conversion or by exercise of any right to acquire,
61-30 be in control of the insurer , nor may any person enter into an
61-31 agreement to merge with or otherwise acquire control of a domestic
61-32 insurer, unless, at the time any such offer, request or invitation is
61-33 made or any such agreement is entered into, or before the
61-34 acquisition of those securities if no offer or agreement is involved,
61-35 he has filed with the Commissioner and has sent to the insurer, and
61-36 the insurer has sent to its shareholders, a statement containing the
61-37 information required by NRS 692C.180 to 692C.250, inclusive, and
61-38 the offer, request, invitation, agreement or acquisition has been
61-39 approved by the Commissioner in the manner prescribed in this
61-40 chapter.
61-41 2. For purposes of this section, a domestic insurer includes any
61-42 other person controlling a domestic insurer unless the other person
61-43 is [either] directly or through [its] his affiliates primarily engaged in
61-44 a business other than the business of insurance. [However,] If a
61-45 person is directly or through his affiliates primarily engaged in
61-46 [another] a business other than the business of insurance, he shall
61-47 ,
62-1 at least 60 days before the proposed effective date of the
62-2 acquisition, file a notice of intent to acquire[, on a form prescribed
62-3 by] with the Commissioner[, at least 60 days before the proposed
62-4 effective date of the acquisition.] setting forth the information
62-5 required by section 62 of this act.
62-6 Sec. 70. NRS 692C.210 is hereby amended to read as follows:
62-7 692C.210 1. [The] Except as otherwise provided in
62-8 subsection 5, the Commissioner shall approve any merger or other
62-9 acquisition of control referred to in NRS 692C.180 unless, after a
62-10 public hearing thereon, he finds that:
62-11 (a) After the change of control , the domestic insurer [referred
62-12 to] specified in NRS 692C.180 would not be able to satisfy the
62-13 requirements for the issuance of a license to write the line or lines
62-14 of insurance for which it is presently licensed;
62-15 (b) The effect of the merger or other acquisition of control
62-16 would be substantially to lessen competition in insurance in this
62-17 state or tend to create a monopoly ; [therein;]
62-18 (c) The financial condition of any acquiring party [is such as
62-19 might] may jeopardize the financial stability of the insurer, or
62-20 prejudice the interest of its policyholders or the interests of any
62-21 remaining security holders who are unaffiliated with the acquiring
62-22 party;
62-23 (d) The terms of the offer, request, invitation, agreement or
62-24 acquisition referred to in NRS 692C.180 are unfair and
62-25 unreasonable to the security holders of the insurer;
62-26 (e) The plans or proposals which the acquiring party has to
62-27 liquidate the insurer, sell its assets or consolidate or merge it with
62-28 any person, or to make any other material change in its business or
62-29 corporate structure or management, are unfair and unreasonable to
62-30 policyholders of the insurer and not in the public interest; [or]
62-31 (f) The competence, experience and integrity of those persons
62-32 who would control the operation of the insurer are such that it
62-33 would not be in the interest of policyholders of the insurer and of
62-34 the public to permit the merger or other acquisition of control[.] ;
62-35 or
62-36 (g) If approved, the merger or acquisition of control would
62-37 likely be harmful or prejudicial to the members of the public who
62-38 purchase insurance.
62-39 2. The public hearing [referred to] specified in subsection 1
62-40 must be held within 30 days after the statement required by NRS
62-41 692C.180 has been filed, and at least 20 days’ notice thereof must
62-42 be given by the Commissioner to the person filing the statement.
62-43 Not less than 7 days’ notice of the public hearing must be given by
62-44 the person filing the statement to the insurer and to [such other
62-45 persons as may be] any other person designated by the
62-46 Commissioner. The insurer shall give such notice to its security
62-47 holders. The Commissioner shall make a determination within 30
63-1 days after the conclusion of the hearing. If he determines that an
63-2 infusion of capital to restore capital in connection with the change in
63-3 control is required, the requirement must be met within 60 days
63-4 after notification is given of the determination. At the hearing, the
63-5 person filing the statement, the insurer, any person to whom notice
63-6 of hearing was sent[,] and any other person whose interests may be
63-7 affected thereby may present evidence, examine and cross-examine
63-8 witnesses, and offer oral and written arguments and , in connection
63-9 therewith , may conduct discovery proceedings in the same manner
63-10 as is presently allowed in the district court of this state. All
63-11 discovery proceedings must be concluded not later than 3 days
63-12 before the commencement of the public hearing.
63-13 3. The Commissioner may retain at the acquiring party’s
63-14 expense attorneys, actuaries, accountants and other experts not
63-15 otherwise a part of his staff as may be reasonably necessary to
63-16 assist him in reviewing the proposed acquisition of control.
63-17 4. The period for review by the Commissioner must not exceed
63-18 the 60 days allowed between the filing of the notice of intent to
63-19 acquire required pursuant to subsection 2 of NRS 692C.180 and
63-20 the date of the proposed acquisition if the proposed affiliation or
63-21 change of control involves a financial institution, or an affiliate of a
63-22 financial institution, and an insured.
63-23 5. When making a determination pursuant to paragraph (b)
63-24 of subsection 1, the Commissioner:
63-25 (a) Shall require the submission of the information specified
63-26 in subsection 2 of section 62 of this act;
63-27 (b) Shall not disapprove the merger or acquisition of control if
63-28 he finds that any of the circumstances specified in subsection 3 of
63-29 section 63 of this act exist; and
63-30 (c) May condition his approval of the merger or acquisition of
63-31 control in the manner provided in subsection 4 of section 64 of
63-32 this act.
63-33 6. If, in connection with a change of control of a domestic
63-34 insurer, the Commissioner determines that the person who is
63-35 acquiring control of the domestic insurer must maintain or
63-36 restore the capital of the domestic insurer in an amount that is
63-37 required by the laws and regulations of this state, the
63-38 Commissioner shall make the determination not later than 60
63-39 days after the notice of intent to acquire required pursuant to
63-40 subsection 2 of NRS 692C.180 is filed with the Commissioner.
63-41 Sec. 71. NRS 692C.260 is hereby amended to read as follows:
63-42 692C.260 1. Every insurer which is authorized to do business
63-43 in this state and which is a member of an insurance holding
63-44 company system shall register with the Commissioner, except a
63-45 foreign insurer subject to disclosure requirements and standards
63-46 adopted by a statute or regulation in the jurisdiction of its domicile
64-1 which are substantially similar to those contained in NRS 692C.260
64-2 to 692C.350, inclusive.
64-3 2. Any insurer which is subject to registration under NRS
64-4 692C.260 to 692C.350, inclusive, shall register [no] not later than
64-5 September 1, 1973, or 15 days after it becomes subject to
64-6 registration, whichever is later, unless the Commissioner for good
64-7 cause shown extends the time for registration. The Commissioner
64-8 may require any authorized insurer which is a member of a holding
64-9 company system which is not subject to registration under this
64-10 section to furnish a copy of the registration statement or other
64-11 information filed by [such] the insurance company with the
64-12 insurance regulatory authority of domiciliary jurisdiction.
64-13 3. Any person within an insurance holding company system
64-14 subject to registration shall, upon request by an insurer, provide
64-15 complete and accurate information to the insurer if the
64-16 information is reasonably necessary to enable the insurer to
64-17 comply with the provisions of this section.
64-18 Sec. 72. NRS 692C.270 is hereby amended to read as follows:
64-19 692C.270 Every insurer subject to registration shall file a
64-20 registration statement on a form provided by the Commissioner,
64-21 which [shall] must contain current information about:
64-22 1. The capital structure, general financial condition, ownership
64-23 and management of the insurer and any person controlling the
64-24 insurer.
64-25 2. The identity of every member of the insurance holding
64-26 company system.
64-27 3. The following agreements in force, relationships subsisting
64-28 and transactions currently outstanding between [such] the insurer
64-29 and its affiliates:
64-30 (a) Loans, other investments or purchases, sales or exchanges of
64-31 securities of the affiliates by the insurer or of the insurer by its
64-32 affiliates.
64-33 (b) Purchases, sales or exchanges of assets.
64-34 (c) Transactions not in the ordinary course of business.
64-35 (d) Guarantees or undertakings for the benefit of an affiliate
64-36 which result in an actual contingent exposure of the insurer’s assets
64-37 to liability, other than insurance contracts entered into in the
64-38 ordinary course of the insurer’s business.
64-39 (e) All management and service contracts and all cost-sharing
64-40 arrangements, other than cost allocation arrangements based upon
64-41 generally accepted accounting principles.
64-42 (f) Reinsurance agreements covering all or substantially all of
64-43 one or more lines of insurance of the ceding company.
64-44 (g) Any dividend or other distribution made to a shareholder.
64-45 (h) Any consolidated agreement to allocate taxes.
65-1 4. [Other] Any pledge of the insurer’s stock, including the
65-2 stock of any subsidiary or controlling affiliate of the insurer, for a
65-3 loan made to any member of the insurance holding company
65-4 system.
65-5 5. Any other matters concerning transactions between
65-6 registered insurers and any affiliates as may be included from time
65-7 to time in any registration forms adopted or approved by the
65-8 Commissioner.
65-9 Sec. 73. NRS 692C.330 is hereby amended to read as follows:
65-10 692C.330 1. Any person may file with the Commissioner
65-11 [a] :
65-12 (a) A disclaimer of affiliation with any authorized insurer
65-13 specified in the disclaimer; or [such a]
65-14 (b) A request for a termination of registration on the basis that
65-15 the person does not, or will not after taking an action specified in
65-16 the request for termination, control another person specified in
65-17 the request.
65-18 2. A disclaimer of affiliation or request for a termination of
65-19 registration specified in subsection 1 may be filed by [such] the
65-20 authorized insurer or any member of an insurance holding
65-21 company system. [The disclaimer shall fully disclose] A disclaimer
65-22 of affiliation or request for a termination of registration filed
65-23 pursuant to subsection 1 must include:
65-24 (a) A statement indicating the number of authorized, issued
65-25 and outstanding voting securities of the person specified in the
65-26 disclaimer of affiliation or request for a termination of
65-27 registration;
65-28 (b) A statement indicating the number and percentage of
65-29 shares of the person specified in the disclaimer of affiliation or
65-30 request for a termination of registration that are owned or
65-31 beneficially owned by the person disclaiming control, and the
65-32 number of those shares for which the person disclaiming control
65-33 has a direct or indirect right to acquire;
65-34 (c) A statement setting forth all material relationships and bases
65-35 for affiliation between [such person and such insurer as well as the
65-36 basis for disclaiming such affiliation.
65-37 2.] the person specified in the disclaimer of affiliation or
65-38 request for a termination of registration and the person and any
65-39 affiliate of the person who is disclaiming control of the person
65-40 specified in the disclaimer of affiliation or request for a
65-41 termination of registration; and
65-42 (d) An explanation of why the person who is disclaiming
65-43 control does not control the person specified in the disclaimer of
65-44 affiliation or request for a termination of registration.
65-45 3. A request for a termination of registration filed pursuant to
65-46 subsection 1 shall be deemed granted upon filing unless the
66-1 Commissioner, within 30 days after receipt of the request for a
66-2 termination of registration, notifies the person, authorized insurer
66-3 or member of an insurance holding company system that the
66-4 request is denied.
66-5 4. After a disclaimer of affiliation has been filed, the insurer
66-6 [shall be] is relieved of any duty to register or report under NRS
66-7 692C.260 to 692C.350, inclusive, which may arise out of the
66-8 insurer’s relationship with [such] the person unless the
66-9 Commissioner disallows [such a] the disclaimer. The
66-10 Commissioner [shall disallow such a] may disallow the disclaimer
66-11 only after furnishing all parties in interest with a notice and
66-12 opportunity to be heard and after making specific findings of fact to
66-13 support [such] the disallowance.
66-14 Sec. 74. NRS 692C.350 is hereby amended to read as follows:
66-15 692C.350 1. The failure to file a registration statement or any
66-16 amendment thereto required by NRS 692C.260 to 692C.350,
66-17 inclusive, within the time specified for [such filing, shall be] the
66-18 filing is a violation of NRS 692C.260 to 692C.350, inclusive.
66-19 2. Except as otherwise provided in subsection 3, if an insurer
66-20 fails, without just cause, to file a registration statement required
66-21 pursuant to NRS 692C.270, the insurer shall, after receiving
66-22 notice and a hearing, pay a civil penalty of $100 for each day the
66-23 insurer fails to file the registration statement. The civil penalty
66-24 may be recovered in a civil action brought by the Commissioner.
66-25 Any civil penalty paid pursuant to this subsection must be
66-26 deposited in the State General Fund.
66-27 3. The maximum civil penalty that may be imposed pursuant
66-28 to subsection 2 is $20,000. The Commissioner may reduce the
66-29 amount of the civil penalty if the insurer demonstrates to the
66-30 satisfaction of the Commissioner that the payment of the civil
66-31 penalty would impose a financial hardship on the insurer.
66-32 4. Any officer, director or employee of an insurance holding
66-33 company system who willfully and knowingly subscribes to or
66-34 makes or causes to be made any false statement, false report or
66-35 false filing with the intent to deceive the Commissioner in the
66-36 performance of his duties pursuant to NRS 692C.260 to
66-37 692C.350, inclusive, is guilty of a category D felony and shall be
66-38 punished as provided in NRS 193.130. The officer, director or
66-39 employee is personally liable for any fine imposed against him
66-40 pursuant to that section.
66-41 Sec. 75. NRS 692C.363 is hereby amended to read as follows:
66-42 692C.363 1. A domestic insurer shall not enter into any of
66-43 the following transactions with an affiliate unless the insurer has
66-44 notified the Commissioner in writing of its intention to enter into
66-45 the transaction at least 60 days previously, or such shorter period as
66-46 the
67-1 Commissioner may permit, and the Commissioner has not
67-2 disapproved it within that period:
67-3 (a) A sale, purchase, exchange, loan or extension of credit,
67-4 guaranty or investment if the transaction equals at least:
67-5 (1) With respect to an insurer other than a life insurer, the
67-6 lesser of 3 percent of the insurer’s admitted assets or 25 percent of
67-7 surplus as regards policyholders; or
67-8 (2) With respect to a life insurer, 3 percent of the insurer’s
67-9 admitted assets,
67-10 computed as of December 31 next preceding the transaction.
67-11 (b) A loan or extension of credit to any person who is not an
67-12 affiliate, if the insurer makes the loan or extension of credit with the
67-13 agreement or understanding that the proceeds of the transaction, in
67-14 whole or in substantial part, are to be used to make loans or
67-15 extensions of credit to, to purchase assets of, or to make
67-16 investments in, any affiliate of the insurer if the transaction equals
67-17 at least:
67-18 (1) With respect to insurers other than life insurers, the lesser
67-19 of 3 percent of the insurer’s admitted assets or 25 percent of surplus
67-20 as regards policyholders; or
67-21 (2) With respect to life insurers, 3 percent of the insurer’s
67-22 admitted assets,
67-23 computed as of December 31 next preceding the transaction.
67-24 (c) An agreement for reinsurance or a modification thereto in
67-25 which the premium for reinsurance or a change in the insurer’s
67-26 liabilities equals at least 5 percent of the insurer’s surplus as regards
67-27 policyholders as of December 31 next preceding the transaction,
67-28 including an agreement which requires as consideration the transfer
67-29 of assets from an insurer to a nonaffiliate, if an agreement or
67-30 understanding exists between the insurer and nonaffiliate that any
67-31 portion of those assets will be transferred to an affiliate of the
67-32 insurer.
67-33 (d) An agreement for management, contract for service,
67-34 guarantee or arrangement to share costs.
67-35 (e) A guaranty made by a domestic insurer, except that a
67-36 guaranty that is quantifiable as to amount is not subject to
67-37 the provisions of this subsection unless the guaranty exceeds the
67-38 lesser of one-half of 1 percent of the admitted assets of the
67-39 domestic insurer or 10 percent of its surplus as regards
67-40 policyholders as of December 31 next preceding the guaranty.
67-41 (f) Except as otherwise provided in subsection 3, a direct or
67-42 indirect acquisition of or investment in a person who controls the
67-43 domestic insurer or an affiliate of the domestic insurer in an
67-44 amount that, when added to its present holdings, exceeds 2.5
67-45 percent of the domestic insurer’s surplus to policyholders.
68-1 (g) A material transaction, specified by regulation, which the
68-2 Commissioner determines may adversely affect the interest of the
68-3 insurer’s policyholders.
68-4 2. This section does not authorize or permit any transaction
68-5 which, in the case of an insurer not an affiliate, would be contrary
68-6 to law.
68-7 3. The provisions of paragraph (f) of subsection 1 do not
68-8 apply to a direct or indirect acquisition of or investment in:
68-9 (a) A subsidiary acquired in accordance with this section or
68-10 NRS 692C.140; or
68-11 (b) A nonsubsidiary insurance affiliate that is subject to the
68-12 provisions of this chapter.
68-13 Sec. 76. (Deleted by amendment.)
68-14 Sec. 77. NRS 692C.390 is hereby amended to read as follows:
68-15 692C.390 [No]
68-16 1. An insurer subject to registration under NRS 692C.260 to
68-17 692C.350, inclusive, shall not pay any extraordinary dividend or
68-18 make any other extraordinary distribution to its shareholders until:
68-19 [1.] (a) Thirty days after the Commissioner has received notice
68-20 of the declaration thereof and has not within [such] that period
68-21 disapproved [such] the payment; or
68-22 [2.] (b) The Commissioner [shall have approved such] approves
68-23 the payment within [such] the 30-day period.
68-24 2. A request for approval of an extraordinary dividend or any
68-25 other extraordinary distribution pursuant to subsection 1 must
68-26 include:
68-27 (a) A statement indicating the amount of the proposed
68-28 dividend or distribution;
68-29 (b) The date established for the payment of the proposed
68-30 dividend or distribution;
68-31 (c) A statement indicating whether the proposed dividend or
68-32 distribution is to be paid in the form of cash or property and, if it
68-33 is to be paid in the form of property, a description of the property,
68-34 its cost and its fair market value together with an explanation
68-35 setting forth the basis for determining its fair market value;
68-36 (d) A copy of a work paper or other document setting forth the
68-37 calculations used to determine that the proposed dividend or
68-38 distribution is extraordinary, including:
68-39 (1) The amount, date and form of payment of each regular
68-40 dividend or distribution paid by the insurer, other than any
68-41 distribution of a security of the insurer, within the 12 consecutive
68-42 months immediately preceding the date established for the
68-43 payment of the proposed dividend or distribution;
68-44 (2) The amount of surplus, if any, as regards policyholders,
68-45 including total capital and surplus, as of December 31 next
68-46 preceding;
69-1 (3) If the insurer is a life insurer, the amount of any net
69-2 gains obtained from the operations of the insurer for the 12-month
69-3 period ending December 31 next preceding;
69-4 (4) If the insurer is not a life insurer, the amount of net
69-5 income of the insurer less any realized capital gains for the 12
69-6 -month period ending on the December 31 of the year next
69-7 preceding and the two consecutive 12-month periods immediately
69-8 preceding that period; and
69-9 (5) If the insurer is not a life insurer, the amount of each
69-10 dividend paid by the insurer to shareholders, other than a
69-11 distribution of any securities of the insurer, during the preceding
69-12 2 calendar years;
69-13 (e) A balance sheet and statement of income for the period
69-14 beginning on the date of the last annual statement filed by the
69-15 insurer with the Commissioner and ending on the last day of the
69-16 month immediately preceding the month in which the insurer files
69-17 the request for approval; and
69-18 (f) A brief statement setting forth:
69-19 (1) The effect of the proposed dividend or distribution upon
69-20 the insurer’s surplus;
69-21 (2) The reasonableness of the insurer’s surplus in relation
69-22 to the insurer’s outstanding liabilities; and
69-23 (3) The adequacy of the insurer’s surplus in relation to the
69-24 insurer’s financial requirements.
69-25 3. Each insurer specified in subsection 1 that pays an
69-26 extraordinary dividend or makes any other extraordinary
69-27 distribution to its shareholders shall, within 15 days after
69-28 declaring the dividend or making the distribution, report that fact
69-29 to the Commissioner. The report must include the information
69-30 specified in paragraph (d) of subsection 2.
69-31 Sec. 78. NRS 692C.420 is hereby amended to read as follows:
69-32 692C.420 1. All information, documents and copies thereof
69-33 obtained by or disclosed to the Commissioner or any other person
69-34 in the course of an examination or investigation made pursuant to
69-35 NRS 692C.410, and all information reported pursuant to NRS
69-36 692C.260 to 692C.350, inclusive, [shall] must be given confidential
69-37 treatment and [shall not be] is not subject to subpoena and [shall]
69-38 must not be made public by the Commissioner or any other person,
69-39 except to insurance departments of other states, without the prior
69-40 written consent of the insurer to which it pertains unless the
69-41 Commissioner, after giving the insurer and its affiliates who would
69-42 be affected thereby[,] notice and an opportunity to be heard,
69-43 determines that the interests of policyholders, shareholders or the
69-44 public will be served by the publication thereof, in which event he
69-45 may publish all or any part thereof in [such] any manner as he may
69-46 deem appropriate.
70-1 2. The Commissioner or any person who receives any
70-2 documents, materials or other information while acting under the
70-3 authority of the Commissioner must not be permitted or required
70-4 to testify in a private civil action concerning any information,
70-5 document or copy thereof specified in subsection 1.
70-6 3. The Commissioner may share or receive any information,
70-7 document or copy thereof specified in subsection 1 in accordance
70-8 with section 1 of this act. The sharing or receipt of the
70-9 information, document or copy pursuant to this subsection does
70-10 not waive any applicable privilege or claim of confidentiality in
70-11 the information, document or copy.
70-12 Sec. 78.3. NRS 693A.495 is hereby amended to read as
70-13 follows:
70-14 693A.495 1. No director, officer, employee or agent of the
70-15 converting mutual, or any other person, may receive any fee,
70-16 commission or other valuable consideration, other than his usual
70-17 regular salary and compensation, for aiding, promoting or assisting
70-18 in a plan of conversion except as set forth in the plan of conversion
70-19 approved by the Commissioner.
70-20 2. Subsection 1 does not prohibit a management or employee
70-21 incentive compensation program that is contained in the plan of
70-22 conversion and approved by the Commissioner to be adopted upon
70-23 conversion to the new stock insurer or prohibit such a program to
70-24 be adopted later by the new stock insurer.
70-25 3. Subsection 1 does not prohibit the payment of reasonable
70-26 fees and compensation to attorneys, accountants, actuaries and
70-27 investment bankers for services performed in the independent
70-28 practice of their professions if the person is also a member of the
70-29 board of directors of the converting mutual.
70-30 Sec. 78.5. NRS 693A.625 is hereby amended to read as
70-31 follows:
70-32 693A.625 1. All the initial shares of the capital stock of a
70-33 reorganized stock insurer must be issued to the mutual insurance
70-34 holding company or to [a single] one or more intermediate stock
70-35 holding [company.] companies.
70-36 2. Policyholders of a domestic mutual insurer that has been
70-37 reorganized are members of the mutual insurance holding company,
70-38 and their voting rights must be determined in accordance with the
70-39 articles of incorporation and bylaws of the mutual insurance
70-40 holding company. The mutual insurance holding company shall
70-41 provide its members with the same membership rights as were
70-42 provided to policyholders of the mutual insurer immediately before
70-43 reorganization. The reorganization must not reduce, limit or
70-44 otherwise affect the number or identity of the policyholders who
70-45 may become members of the mutual insurance holding company or
71-1 secure for managerial personnel any unfair advantage through or
71-2 connected with the reorganization.
71-3 3. A mutual insurance holding company or an intermediate
71-4 stock holding company formed pursuant to NRS 693A.550 to
71-5 693A.665, inclusive:
71-6 (a) Must not be authorized to transact the business of insurance;
71-7 (b) Is subject to the jurisdiction of the Commissioner, who shall
71-8 ensure that policyholder interests are protected; and
71-9 (c) Shall be deemed to be an insurer for the purposes of chapter
71-10 696B of NRS.
71-11 4. An intermediate stock holding company formed pursuant to
71-12 NRS 693A.550 to 693A.665, inclusive, shall be deemed to be a
71-13 mutual insurance holding company subject to the provisions of
71-14 NRS 693A.400 to 693A.540, inclusive.
71-15 5. A mutual insurance holding company formed pursuant to
71-16 NRS 693A.550 to 693A.665, inclusive:
71-17 (a) Shall not issue stock.
71-18 (b) Shall invest in insurers not less than 50 percent of its net
71-19 worth as determined by generally accepted accounting practices.
71-20 6. The aggregate pledges and encumbrances of the assets of a
71-21 mutual insurance holding company must not affect more than 49
71-22 percent of the mutual insurance holding company’s stock in an
71-23 intermediate stock holding company or a reorganized stock insurer.
71-24 7. If any proceeding under chapter 696B of NRS is brought
71-25 against a reorganized stock insurer, the mutual insurance holding
71-26 company and each intermediate stock holding company must be
71-27 named parties to the proceeding. All the assets of the mutual
71-28 insurance holding company and [the] each intermediate stock
71-29 holding company shall be deemed assets of the estate of the
71-30 reorganized stock insurer to the extent necessary to satisfy claims
71-31 against the reorganized stock insurer.
71-32 8. No distribution to members of a mutual insurance holding
71-33 company may occur without the prior written approval of the
71-34 Commissioner. The Commissioner may give such approval only if
71-35 he is satisfied that the distribution is fair and equitable to
71-36 policyholders as members of the mutual insurance holding
71-37 company.
71-38 9. No solicitation for the sale of the stock of an intermediate
71-39 stock holding company or a reorganized stock insurer may be made
71-40 without the prior written approval of the Commissioner.
71-41 10. A mutual insurance holding company or an intermediate
71-42 stock holding company may not voluntarily dissolve without the
71-43 approval of the Commissioner.
72-1 Sec. 78.7. NRS 693A.640 is hereby amended to read as
72-2 follows:
72-3 693A.640 1. No director, officer, employee or agent of the
72-4 mutual insurer, or any other person, may receive any fee,
72-5 commission or other valuable consideration, other than his usual
72-6 regular salary and compensation, for aiding, promoting or assisting
72-7 in a plan of reorganization except as set forth in the plan of
72-8 reorganization approved by the Commissioner.
72-9 2. Subsection 1 does not prohibit a management or employee
72-10 incentive compensation program that is contained in the plan of
72-11 reorganization and approved by the Commissioner to be adopted
72-12 upon reorganization to the reorganized stock insurer or prohibit
72-13 such a program to be adopted later by the reorganized stock insurer.
72-14 3. Subsection 1 does not prohibit the payment of reasonable
72-15 fees and compensation to attorneys, accountants, actuaries and
72-16 investment bankers for services performed in the independent
72-17 practice of their professions if the person is also a member of the
72-18 board of directors of the mutual insurer.
72-19 Sec. 79. NRS 694C.050 is hereby amended to read as follows:
72-20 694C.050 “Association captive insurer” means a captive
72-21 insurer that only insures risks of the member organizations of an
72-22 association and the affiliated companies of those members,
72-23 including groups formed pursuant to the Product Liability Risk
72-24 Retention Act of 1981, as amended, 15 U.S.C. §§ 3901 et seq. , if:
72-25 1. The association or the member organizations of the
72-26 association:
72-27 (a) Own, control or hold with the power to vote all the
72-28 outstanding voting securities of the association captive insurer, if
72-29 the association captive insurer is incorporated as a stock insurer;
72-30 or
72-31 (b) Have complete voting control over the captive insurer, if
72-32 the captive insurer is formed as a mutual insurer; and
72-33 2. The member organizations of the association collectively
72-34 constitute all the subscribers of the captive insurer, if the captive
72-35 insurer is formed as a reciprocal insurer.
72-36 Sec. 80. NRS 694C.450 is hereby amended to read as follows:
72-37 694C.450 1. Except as otherwise provided in this section, a
72-38 captive insurer shall pay to the Division, not later than March 1 of
72-39 each year, a tax at the rate of:
72-40 (a) Two-fifths of 1 percent on the first $20,000,000 of its net
72-41 direct premiums;
72-42 (b) One-fifth of 1 percent on the next $20,000,000 of its net
72-43 direct premiums; and
72-44 (c) Seventy-five thousandths of 1 percent on each additional
72-45 dollar of its net direct premiums.
73-1 2. Except as otherwise provided in this section, a captive
73-2 insurer shall pay to the Division, not later than March 1 of each
73-3 year, a tax at a rate of:
73-4 (a) Two hundred twenty-five thousandths of 1 percent on the
73-5 first $20,000,000 of revenue from assumed reinsurance premiums;
73-6 (b) One hundred fifty thousandths of 1 percent on the next
73-7 $20,000,000 of revenue from assumed reinsurance premiums; and
73-8 (c) Twenty-five thousandths of 1 percent on each additional
73-9 dollar of revenue from assumed reinsurance premiums.
73-10 The tax on reinsurance premiums pursuant to this subsection must
73-11 not be levied on premiums for risks or portions of risks which are
73-12 subject to taxation on a direct basis pursuant to subsection 1. A
73-13 captive insurer is not required to pay any reinsurance premium tax
73-14 pursuant to this subsection on revenue related to the receipt of
73-15 assets by the captive insurer in exchange for the assumption of loss
73-16 reserves and other liabilities of another insurer that is under
73-17 common ownership and control with the captive insurer, if the
73-18 transaction is part of a plan to discontinue the operation of the other
73-19 insurer and the intent of the parties to the transaction is to renew or
73-20 maintain such business with the captive insurer.
73-21 3. If the sum of the taxes to be paid by a captive insurer
73-22 calculated pursuant to subsections 1 and 2 is less than $5,000 in any
73-23 given year, the captive insurer shall pay a tax of $5,000 for that
73-24 year.
73-25 4. Two or more captive insurers under common ownership and
73-26 control must be taxed as if they were a single captive insurer.
73-27 5. Notwithstanding any specific statute to the contrary and
73-28 except as otherwise provided in this subsection, the tax provided for
73-29 by this section constitutes all the taxes collectible pursuant to the
73-30 laws of this state from a captive insurer, and no occupation tax or
73-31 other taxes may be levied or collected from a captive insurer by this
73-32 state or by any county, city or municipality within this state, except
73-33 for ad valorem taxes on real or personal property located in this
73-34 state used in the production of income by the captive insurer.
73-35 6. Ten percent of the revenues collected from the tax imposed
73-36 pursuant to this section must be deposited with the State Treasurer
73-37 for credit to the Account for the Regulation and Supervision of
73-38 Captive Insurers created pursuant to NRS 694C.460. The remaining
73-39 90 percent of the revenues collected must be deposited with the
73-40 State Treasurer for credit to the State General Fund.
73-41 7. A captive insurer that is issued a license pursuant to this
73-42 chapter after July 1, 2003, is entitled to receive a nonrefundable
73-43 credit of $5,000 applied against the aggregate taxes owed by the
73-44 captive insurer for the first year in which the captive insurer
73-45 incurs any liability for the payment of taxes pursuant to this
73-46 section. A captive insurer is entitled to a nonrefundable credit
74-1 pursuant to this section not more than once after the captive
74-2 insurer is initially licensed pursuant to this chapter.
74-3 8. As used in this section, unless the context otherwise
74-4 requires:
74-5 (a) “Common ownership and control” means:
74-6 (1) In the case of a stock insurer, the direct or indirect
74-7 ownership of 80 percent or more of the outstanding voting stock of
74-8 two or more corporations by the same member or members.
74-9 (2) In the case of a mutual insurer, the direct or indirect
74-10 ownership of 80 percent or more of the surplus and the voting
74-11 power of two or more corporations by the same member or
74-12 members.
74-13 (b) “Net direct premiums” means the direct premiums collected
74-14 or contracted for on policies or contracts of insurance written by a
74-15 captive insurer during the preceding calendar year, less the amounts
74-16 paid to policyholders as return premiums, including dividends on
74-17 unabsorbed premiums or premium deposits returned or credited to
74-18 policyholders.
74-19 Sec. 80.5. NRS 695C.055 is hereby amended to read as
74-20 follows:
74-21 695C.055 1. The provisions of NRS 449.465, 679B.700,
74-22 subsections 2, 4, 18, 19 and 32 of NRS 680B.010, NRS [680B.025]
74-23 680B.020 to 680B.060, inclusive, and chapter 695G of NRS apply
74-24 to a health maintenance organization.
74-25 2. For the purposes of subsection 1, unless the context requires
74-26 that a provision apply only to insurers, any reference in those
74-27 sections to “insurer” must be replaced by “health maintenance
74-28 organization.”
74-29 Sec. 81. NRS 696B.415 is hereby amended to read as follows:
74-30 696B.415 1. Upon the issuance of an order of liquidation
74-31 with a finding of insolvency against a domestic insurer, the
74-32 Commissioner shall apply to the district court for authority to
74-33 disburse money to the Nevada Insurance Guaranty Association or
74-34 the Nevada Life and Health Insurance Guaranty Association out of
74-35 the marshaled assets of the insurer, as money becomes available, in
74-36 amounts equal to disbursements made or to be made by the
74-37 Association for claims-handling expense and covered-claims
74-38 obligations upon the presentation of evidence that disbursements
74-39 have been made by the Association. The Commissioner shall apply
74-40 to the district court for authority to make similar disbursements to
74-41 insurance guaranty associations in other jurisdictions if one of the
74-42 Nevada Associations is entitled to like payment pursuant to the
74-43 laws relating to insolvent insurers in the jurisdiction in which the
74-44 organization is domiciled.
74-45 2. The Commissioner, in determining the amounts available for
74-46 disbursement to the Nevada Insurance Guaranty Association, the
74-47 Nevada Life and Health Insurance Guaranty Association[,] and
75-1 similar organizations in other jurisdictions, shall reserve sufficient
75-2 assets for the payment of the expenses of administration.
75-3 3. The Commissioner shall establish procedures for the ratable
75-4 allocation of disbursements to the Nevada Insurance Guaranty
75-5 Association, the Nevada Life and Health Insurance Guaranty
75-6 Association[,] and similar organizations in other jurisdictions, and
75-7 shall secure from each organization to which money is paid as a
75-8 condition to advances in reimbursement of covered-claims
75-9 obligations an agreement to return to the Commissioner, on
75-10 demand, amounts previously advanced which are required to pay
75-11 claims of secured creditors and claims falling within the priorities
75-12 established in paragraph (a) or (b) of subsection 1 of NRS
75-13 696B.420.
75-14 4. The Commissioner, as receiver for an insolvent insurer,
75-15 may file a claim on behalf of all insureds for any unearned
75-16 premiums. The Nevada Insurance Guaranty Association, the
75-17 Nevada Life and Health Insurance Guaranty Association and
75-18 similar organizations in other jurisdictions shall accept the claim
75-19 in lieu of requiring each insured to file a claim for the unearned
75-20 premium.
75-21 Sec. 82. NRS 696B.420 is hereby amended to read as follows:
75-22 696B.420 1. The order of distribution of claims from the
75-23 estate of the insurer on liquidation of the insurer must be as set
75-24 forth in this section. Each claim in each class must be paid in full or
75-25 adequate money retained for the payment before the members of
75-26 the next class receive any payment. No subclasses may be
75-27 established within any class. Except as otherwise provided in
75-28 subsection 2, the order of distribution and of priority must be as
75-29 follows:
75-30 (a) Administration costs and expenses, including, but not limited
75-31 to, the following:
75-32 (1) The actual and necessary costs of preserving or
75-33 recovering the assets of the insurer;
75-34 (2) Compensation for any services rendered in the
75-35 liquidation;
75-36 (3) Any necessary filing fees;
75-37 (4) The fees and mileage payable to witnesses; and
75-38 (5) Reasonable attorney’s fees.
75-39 (b) [Loss claims, including any] All claims under policies , [for
75-40 losses incurred, including third-party claims,] any claims against
75-41 [the insurer]an insured for liability for bodily injury or for injury
75-42 to or destruction of tangible property which are [not]covered
75-43 claims under policies, including any such claims of the Federal
75-44 Government or any state or local government, and any claims of
75-45 the Nevada Insurance Guaranty Association, the Nevada Life and
75-46 Health Insurance Guaranty Association[,] and other similar
75-47 statutory organizations in other jurisdictions. Any claims under life
75-48 insurance and annuity policies, whether for death proceeds, annuity
76-1 proceeds or investment values, must be treated as loss claims. That
76-2 portion of any loss for which indemnification is provided by other
76-3 benefits or advantages recovered or recoverable by the claimant
76-4 may not be included in this class, other than benefits or advantages
76-5 recovered or recoverable in discharge of familial obligations of
76-6 support or because of succession at death or as proceeds of life
76-7 insurance, or as gratuities. No payment made by an employer to his
76-8 employee may be treated as a gratuity.
76-9 (c) Unearned premiums and small loss claims, including claims
76-10 under nonassessable policies for unearned premiums or other
76-11 premium refunds.
76-12 (d) [Claims]Except as otherwise provided in paragraph (b),
76-13 claims of the Federal Government.
76-14 (e) [Claims]Except as otherwise provided in paragraph (b),
76-15 claims of any state or local government, including, but not limited
76-16 to, a claim of a state or local government for a penalty or forfeiture.
76-17 (f) Wage debts due employees for services performed, not to
76-18 exceed [$1,000 to]an amount equal to 2 months of monetary
76-19 compensation for each employee[, that have been earned]for
76-20 services performed within 6 months before the filing of the
76-21 petition for liquidation or, if rehabilitation preceded liquidation,
76-22 within 1 year before the filing of the petition for [liquidation.]
76-23 rehabilitation. Officers of the insurer are not entitled to the benefit
76-24 of this priority. The priority set forth in this paragraph must be in
76-25 lieu of any other similar priority authorized by law as to wages or
76-26 compensation of employees.
76-27 (g) Residual classification, including any other claims not
76-28 falling within other classes pursuant to the provisions of this
76-29 section. Claims for a penalty or forfeiture must be allowed in this
76-30 class only to the extent of the pecuniary loss sustained from the act,
76-31 transaction or proceeding out of which the penalty or forfeiture
76-32 arose, with reasonable and actual costs occasioned thereby. The
76-33 remainder of the claims must be postponed to the class of claims
76-34 specified in paragraph (j).
76-35 (h) Judgment claims based solely on judgments. If a claimant
76-36 files a claim and bases the claim on the judgment and on the
76-37 underlying facts, the claim must be considered by the liquidator,
76-38 who shall give the judgment such weight as he deems appropriate.
76-39 The claim as allowed must receive the priority it would receive in
76-40 the absence of the judgment. If the judgment is larger than the
76-41 allowance on the underlying claim, the remaining portion of the
76-42 judgment must be treated as if it were a claim based solely on a
76-43 judgment.
76-44 (i) Interest on claims already paid, which must be calculated at
76-45 the legal rate compounded annually on any claims in the classes
76-46 specified in paragraphs (a) to (h), inclusive, from the date of the
77-1 petition for liquidation or the date on which the claim becomes due,
77-2 whichever is later, until the date on which the dividend is declared.
77-3 The liquidator, with the approval of the court, may:
77-4 (1) Make reasonable classifications of claims for purposes of
77-5 computing interest;
77-6 (2) Make approximate computations; and
77-7 (3) Ignore certain classifications and periods as de minimis.
77-8 (j) Miscellaneous subordinated claims, with interest as provided
77-9 in paragraph (i):
77-10 (1) Claims subordinated by NRS 696B.430;
77-11 (2) Claims filed late;
77-12 (3) Portions of claims subordinated pursuant to the
77-13 provisions of paragraph (g);
77-14 (4) Claims or portions of claims the payment of which is
77-15 provided by other benefits or advantages recovered or recoverable
77-16 by the claimant; and
77-17 (5) Claims not otherwise provided for in this section.
77-18 (k) Preferred ownership claims, including surplus or
77-19 contribution notes, or similar obligations, and premium refunds on
77-20 assessable policies. Interest at the legal rate must be added to each
77-21 claim, as provided in paragraphs (i) and (j).
77-22 (l) Proprietary claims of shareholders or other owners.
77-23 2. If there are no existing or potential claims of the government
77-24 against the estate, claims for wages have priority over any claims
77-25 set forth in paragraphs (c) to (k), inclusive, of subsection 1. The
77-26 provisions of this subsection must not be construed to require the
77-27 accumulation of interest for claims as described in paragraph (i) of
77-28 subsection 1.
77-29 Sec. 82.5. NRS 697.270 is hereby amended to read as follows:
77-30 697.270 A bail agent shall not [become a surety] act as an
77-31 attorney-in-fact for an insurer on an undertaking unless he has
77-32 registered in the office of the sheriff and with the clerk of the
77-33 district court in which the agent resides, and he may register in the
77-34 same manner in any other county. Any bail agent shall file a
77-35 certified copy of his appointment by power of attorney from each
77-36 insurer which he represents as agent with each of such officers. The
77-37 bail agent shall register and file a certified copy of renewed power
77-38 of attorney annually on July 1. The clerk of the district court and
77-39 the sheriff shall not permit the registration of a bail agent unless the
77-40 agent is licensed by the Commissioner.
77-41 Sec. 83. NRS 697.290 is hereby amended to read as follows:
77-42 697.290 Every bail agent must maintain in his office such
77-43 records of bail bonds, and such additional information as the
77-44 Commissioner may reasonably require, executed or countersigned
77-45 by him to enable the public to obtain all necessary information
77-46 concerning the bail bonds for at least [1 year] 3 years after the
78-1 liability of the surety has been terminated. The records must be open
78-2 to examination by the Commissioner or his representatives at all
78-3 times, and the Commissioner at any time may require the licensee
78-4 to furnish to him, in such manner or form as he requires, any
78-5 information kept or required to be kept in the records.
78-6 Sec. 83.5. NRS 697.300 is hereby amended to read as follows:
78-7 697.300 1. A bail agent shall not, in any bail transaction or in
78-8 connection therewith, directly or indirectly, charge or collect money
78-9 or other valuable consideration from any person except for the
78-10 following purposes:
78-11 (a) To pay the premium at the rates established by the insurer, in
78-12 accordance with chapter 686B of NRS, or to pay the charges for the
78-13 bail bond filed in connection with the transaction at the rates filed
78-14 in accordance with the provisions of this Code. The rates must be
78-15 [not less than 10 percent or more than] 15 percent of the amount of
78-16 the bond or $50, whichever is greater.
78-17 (b) To provide collateral.
78-18 (c) To reimburse himself for actual expenses incurred in
78-19 connection with the transaction. Such expenses are limited to:
78-20 (1) Guard fees.
78-21 (2) Notary public fees, recording fees, expenses incurred for
78-22 necessary long distance telephone calls and charges for telegrams.
78-23 (3) Travel expenses incurred more than 25 miles from the
78-24 agent’s principal place of business. Such expenses:
78-25 (I) May be billed at the rate provided for state officers and
78-26 employees generally; and
78-27 (II) May not be charged in areas where bail agents
78-28 advertise a local telephone number.
78-29 (4) Expenses incurred to verify underwriting information.
78-30 (5) Any other actual expenditure necessary to the transaction
78-31 which is not usually and customarily incurred in connection with
78-32 bail transactions.
78-33 (d) To reimburse himself, or have a right of action against the
78-34 principal or any indemnitor, for actual expenses incurred in good
78-35 faith, by reason of breach by the defendant of any of the terms of
78-36 the written agreement under which and pursuant to which the
78-37 undertaking of bail or bail bond was written. If there is no written
78-38 agreement, or an incomplete writing, the surety may, at law,
78-39 enforce its equitable rights against the principal and his
78-40 indemnitors, in exoneration. Such reimbursement or right of action
78-41 must not exceed the principal sum of the bond or undertaking, plus
78-42 any reasonable expenses that may be verified by receipt in a total
78-43 amount of not more than the principal sum of the bond or
78-44 undertaking, incurred in good faith by the surety, its agents,
78-45 licensees and employees by reason of the principal’s breach.
79-1 2. This section does not prevent the full and unlimited right of
79-2 a bail agent to execute undertaking of bail on behalf of a nonresident
79-3 agent of the surety he represents. The licensed resident bail agent is
79-4 entitled to a minimum countersignature fee of $5, with a maximum
79-5 countersignature fee of $100, plus expenses incurred in accordance
79-6 with paragraphs (c) and (d) of subsection 1. Such countersignature
79-7 fees may be charged in addition to the premium of the undertaking.
79-8 Sec. 84. NRS 697.320 is hereby amended to read as follows:
79-9 697.320 1. A bail agent may accept collateral security in
79-10 connection with a bail transaction if the collateral security is
79-11 reasonable in relation to the face amount of the bond. The bail
79-12 agent shall not transfer the collateral to any person other than a
79-13 bail agent licensed pursuant to this chapter or a surety insurer
79-14 holding a valid certificate of authority issued by the
79-15 Commissioner. The collateral must not be transported or
79-16 otherwise removed from this state. Any person who receives the
79-17 collateral:
79-18 (a) Shall be deemed to hold the collateral in a fiduciary
79-19 capacity to the same extent as a bail agent; and
79-20 (b) Shall retain, return and otherwise possess the collateral in
79-21 accordance with the provisions of this chapter.
79-22 2. The collateral security must be received by the bail agent in
79-23 his fiduciary capacity, and before any forfeiture of bail must be kept
79-24 separate and apart from any other funds or assets of the licensee.
79-25 Any collateral received must be returned to the person who
79-26 deposited it with the bail agent or any assignee other than the bail
79-27 agent as soon as the obligation, the satisfaction of which was
79-28 secured by the collateral, is discharged and all fees owed to the bail
79-29 agent have been paid. The bail agent or any surety insurer having
79-30 custody of the collateral shall, immediately after the bail agent or
79-31 surety insurer receives a request for return of the collateral from
79-32 the person who deposited the collateral, determine whether the
79-33 bail agent or surety insurer has received notice that the obligation
79-34 is discharged. If the collateral is deposited to secure the obligation
79-35 of a bond, it must be returned [within 30 days] immediately after
79-36 receipt of the request for return of the collateral and notice of the
79-37 entry of any order by an authorized official by virtue of which
79-38 liability under the bond is terminated or upon payment of all fees
79-39 owed to the bail agent, whichever is later. A certified copy of the
79-40 minute order from the court wherein the bail or undertaking was
79-41 ordered exonerated shall be deemed prima facie evidence of
79-42 exoneration or termination of liability.
79-43 3. If a bail agent receives as collateral in a bail transaction,
79-44 whether on his or another person’s behalf, any document
79-45 conveying title to real property, the bail agent shall not accept the
79-46 document unless it indicates on its face that it is executed as part
79-47 of a security transaction. If the document is recorded, the bail
80-1 agent or any surety insurer having possession of the document
80-2 shall, immediately after the bail agent or surety insurer receives a
80-3 request for return of the collateral from the person who executed
80-4 the document:
80-5 (a) Determine whether the bail agent or surety insurer has
80-6 received notice that the obligation for which the document was
80-7 accepted is discharged; and
80-8 (b) If the obligation has been discharged, reconvey the real
80-9 property by delivering a deed or other document of conveyance to
80-10 the person or to his heirs, legal representative or successor in
80-11 interest. The deed or other document of conveyance must be
80-12 prepared in such a manner that it may be recorded.
80-13 4. If the amount of any collateral received in a bail
80-14 transaction exceeds the amount of any bail forfeited by the
80-15 defendant for whom the collateral was accepted, the bail agent or
80-16 any surety insurer having custody of the collateral shall,
80-17 immediately after the bail is forfeited, return to the person who
80-18 deposited the collateral the amount by which the collateral
80-19 exceeds the amount of the bail forfeited. Any collateral returned
80-20 to a person pursuant to this subsection is subject to a claim for
80-21 fees, if any, owed to the bail agent returning the collateral.
80-22 5. If a bail agent accepts collateral, he shall give a written
80-23 receipt for the collateral. The receipt must include in detail a full
80-24 account of the collateral received.
80-25 Sec. 85. NRS 697.360 is hereby amended to read as follows:
80-26 697.360 Licensed bail agents, bail solicitors and bail
80-27 enforcement agents, and general agents are also subject to the
80-28 following provisions of this Code, to the extent reasonably
80-29 applicable:
80-30 1. Chapter 679A of NRS.
80-31 2. Chapter 679B of NRS.
80-32 3. NRS 683A.261.
80-33 4. NRS 683A.301.
80-34 [4.] 5. NRS 683A.311.
80-35 [5.] 6. NRS 683A.341.
80-36 [6.] 7. NRS 683A.361.
80-37 [7.] 8. NRS 683A.400.
80-38 [8.] 9. NRS 683A.451.
80-39 [9.] 10. NRS 683A.461.
80-40 [10.] 11. NRS 683A.480.
80-41 [11.] 12. NRS 683A.500.
80-42 13. NRS 683A.520.
80-43 [12.] 14. NRS 686A.010 to 686A.310, inclusive.
80-44 Sec. 85.5. NRS 178.512 is hereby amended to read as follows:
80-45 178.512 The court shall not set aside a forfeiture unless:
81-1 1. The surety submits an application to set it aside on the
81-2 ground that the defendant:
81-3 (a) Has appeared before the court since the date of the forfeiture
81-4 and has presented [a] :
81-5 (1) A satisfactory excuse for his absence; or
81-6 (2) Satisfactory evidence that the surety did not in any way
81-7 cause or aid the absence of the defendant;
81-8 (b) Was dead before the date of the forfeiture but the surety did
81-9 not know and could not reasonably have known of his death before
81-10 that date;
81-11 (c) Was unable to appear before the court before the date of the
81-12 forfeiture because of his illness or his insanity, but the surety did
81-13 not know and could not reasonably have known of his illness or
81-14 insanity before that date;
81-15 (d) Was unable to appear before the court before the date of the
81-16 forfeiture because he was being detained by civil or military
81-17 authorities, but the surety did not know and could not reasonably
81-18 have known of his detention before that date; or
81-19 (e) Was unable to appear before the court before the date of the
81-20 forfeiture because he was deported, but the surety did not know and
81-21 could not reasonably have known of his deportation before that
81-22 date,
81-23 and the court, upon hearing the matter, determines that one or more
81-24 of the grounds described in this subsection exist and that the surety
81-25 did not in any way cause or aid the absence of the defendant; and
81-26 2. The court determines that justice does not require the
81-27 enforcement of the forfeiture.
81-28 Sec. 86. NRS 616B.318 is hereby amended to read as follows:
81-29 616B.318 1. The Commissioner shall impose an
81-30 administrative fine, not to exceed $1,000 for each violation, and:
81-31 (a) Shall withdraw the certification of a self-insured employer if:
81-32 (1) The deposit required pursuant to NRS 616B.300 is not
81-33 sufficient and the employer fails to increase the deposit after he has
81-34 been ordered to do so by the Commissioner;
81-35 (2) The self-insured employer fails to provide evidence of
81-36 excess insurance pursuant to NRS 616B.300 within 45 days after he
81-37 has been so ordered; or
81-38 (3) [The] Except as otherwise provided in subsection 4, the
81-39 employer becomes insolvent, institutes any voluntary proceeding
81-40 under the Bankruptcy Act or is named in any involuntary
81-41 proceeding thereunder.
81-42 (b) May withdraw the certification of a self-insured employer if:
81-43 (1) The employer intentionally fails to comply with
81-44 regulations of the Commissioner regarding reports or other
81-45 requirements necessary to carry out the purposes of chapters 616A
81-46 to 616D, inclusive, and chapter 617 of NRS;
82-1 (2) The employer violates the provisions of subsection 2 of
82-2 NRS 616B.500 or any regulation adopted by the Commissioner or
82-3 the Administrator concerning the administration of the employer’s
82-4 plan of self-insurance; or
82-5 (3) The employer makes a general or special assignment for
82-6 the benefit of creditors or fails to pay compensation after an order
82-7 for payment of any claim becomes final.
82-8 2. Any employer whose certification as a self-insured employer
82-9 is withdrawn must, on the effective date of the withdrawal, qualify
82-10 as an employer pursuant to NRS 616B.650.
82-11 3. The Commissioner may, upon the written request of an
82-12 employer whose certification as a self-insured employer is
82-13 withdrawn pursuant to subparagraph (3) of paragraph (a) of
82-14 subsection 1, reinstate the employer’s certificate for a reasonable
82-15 period to allow the employer sufficient time to provide industrial
82-16 insurance for his employees.
82-17 4. The Commissioner may authorize an employer to retain his
82-18 certification as a self-insured employer during the pendency of a
82-19 proceeding specified in subparagraph (3) of paragraph (a) of
82-20 subsection 1 if the employer establishes to the satisfaction of the
82-21 Commissioner that the employer is able to pay all claims for
82-22 compensation during the pendency of the proceeding.
82-23 Sec. 87. NRS 616B.336 is hereby amended to read as follows:
82-24 616B.336 1. Each self-insured employer shall furnish audited
82-25 financial statements, certified by an auditor licensed to do business
82-26 in this state, to the Commissioner [of Insurance annually.] annually
82-27 within 120 days after the expiration of the self-insured employer’s
82-28 fiscal year.
82-29 2. The Commissioner [of Insurance] may examine the records
82-30 and interview the employees of each self-insured employer as often
82-31 as he deems advisable to determine the adequacy of the deposit
82-32 which the employer has made with the Commissioner, the
82-33 sufficiency of reserves and the reporting, handling and processing
82-34 of injuries or claims. The Commissioner shall examine the records
82-35 for that purpose at least once every 3 years. The self-insured
82-36 employer shall reimburse the Commissioner for the cost of the
82-37 examination.
82-38 Sec. 88. NRS 616B.359 is hereby amended to read as follows:
82-39 616B.359 1. The Commissioner shall grant or deny an
82-40 application for certification as an association of self-insured public
82-41 or private employers within 60 days after receiving the application.
82-42 If the application is materially incomplete or does not comply with
82-43 the applicable provisions of the law, the Commissioner shall notify
82-44 the applicant of the additional information or changes required.
82-45 Under such circumstances, if the Commissioner is unable to act
82-46 upon the application within this 60-day period, he may extend the
83-1 period for granting or denying the application, but for not longer
83-2 than an additional 90 days.
83-3 2. Upon determining that an association is qualified as an
83-4 association of self-insured public or private employers, the
83-5 Commissioner shall issue a certificate to that effect to the
83-6 association and the Administrator. No certificate may be issued to
83-7 an association that, within the 2 years immediately preceding its
83-8 application, has had its certification as an association of self-insured
83-9 public or private employers involuntarily withdrawn by the
83-10 Commissioner.
83-11 3. A certificate issued pursuant to this section must include,
83-12 without limitation:
83-13 (a) The name of the association;
83-14 (b) The name of each employer who the Commissioner
83-15 determines is a member of the association at the time of the
83-16 issuance of the certificate;
83-17 (c) An identification number assigned to the association by the
83-18 Commissioner; and
83-19 (d) The date on which the certificate was issued.
83-20 4. A certificate issued pursuant to this section remains in effect
83-21 until withdrawn by the Commissioner or cancelled at the request of
83-22 the association. Coverage for an association granted a certificate
83-23 becomes effective on the date of certification or the date specified
83-24 in the certificate.
83-25 5. The Commissioner shall not grant a request to cancel a
83-26 certificate unless the association has insured or reinsured all
83-27 incurred obligations with an insurer authorized to do business in
83-28 this state pursuant to an agreement filed with and approved by the
83-29 Commissioner. The agreement must include coverage for actual
83-30 claims and claims [filed with the association] incurred but not
83-31 reported, and the expenses associated with those claims.
83-32 Sec. 89. NRS 616B.386 is hereby amended to read as follows:
83-33 616B.386 1. If an employer wishes to become a member of
83-34 an association of self-insured public or private employers, the
83-35 employer must:
83-36 (a) Submit an application for membership to the board of
83-37 trustees or third-party administrator of the association; and
83-38 (b) Enter into an indemnity agreement as required by
83-39 NRS 616B.353.
83-40 2. The membership of the applicant becomes effective when
83-41 each member of the association approves the application or on a
83-42 later date specified by the association. The application for
83-43 membership and the action taken on the application must be
83-44 maintained as permanent records of the board of trustees.
84-1 3. Each member who is a member of an association during the
84-2 12 months immediately following the formation of the association
84-3 must:
84-4 (a) Have a tangible net worth of at least $500,000; or
84-5 (b) Have had a reported payroll for the previous 12 months
84-6 which would have resulted in a manual premium of at least
84-7 $15,000, calculated in accordance with a manual prepared pursuant
84-8 to subsection 4 of NRS 686B.1765.
84-9 4. An employer who seeks to become a member of the
84-10 association after the 12 months immediately following the
84-11 formation of the association must meet the requirement set forth in
84-12 paragraph (a) or (b) of subsection 3 unless the Commissioner
84-13 adjusts the requirement for membership in the association after
84-14 conducting an annual review of the actuarial solvency of the
84-15 association pursuant to subsection 1 of NRS 616B.353.
84-16 5. An association of self-insured private employers may apply
84-17 to the Commissioner for authority to determine the amount of
84-18 tangible net worth and manual premium that an employer must
84-19 have to become a member of the association. The Commissioner
84-20 shall approve the application if the association:
84-21 (a) Has been certified to act as an association for at least the 3
84-22 consecutive years immediately preceding the date on which the
84-23 association filed the application with the Commissioner;
84-24 (b) Has a combined tangible net worth of all members in the
84-25 association of at least $5,000,000;
84-26 (c) Has at least 15 members; and
84-27 (d) Has not been required to meet informally with the
84-28 Commissioner pursuant to subsection 1 of NRS 616B.431 during
84-29 the 18-month period immediately preceding the date on which the
84-30 association filed the application with the Commissioner or, if the
84-31 association has been required to attend such a meeting during that
84-32 period, has not had its certificate withdrawn before the date on
84-33 which the association filed the application.
84-34 6. An association of self-insured private employers may apply
84-35 to the Commissioner for authority to determine the documentation
84-36 demonstrating solvency that an employer must provide to become a
84-37 member of the association. The Commissioner shall approve the
84-38 application if the association:
84-39 (a) Has been certified to act as an association for at least the 3
84-40 consecutive years immediately preceding the date on which the
84-41 association filed the application with the Commissioner;
84-42 (b) Has a combined tangible net worth of all members in the
84-43 association of at least $5,000,000; and
84-44 (c) Has at least 15 members.
84-45 7. The Commissioner may withdraw his approval of an
84-46 application submitted pursuant to subsection 5 or 6 if he determines
85-1 the association has ceased to comply with any of the requirements
85-2 set forth in subsection 5 or 6, as applicable.
85-3 8. A member of an association may terminate his membership
85-4 at any time. To terminate his membership, a member must submit
85-5 to the association’s administrator a notice of intent to withdraw
85-6 from the association at least 120 days before the effective date of
85-7 withdrawal. The [association’s administrator shall, within 10 days
85-8 after receipt of the notice, notify the Commissioner of the
85-9 employer’s] notice of intent to withdraw [from the association.]
85-10 must include a statement indicating that the member has:
85-11 (a) Been certified as a self-insured employer pursuant to
85-12 NRS 616B.312;
85-13 (b) Become a member of another association of self-insured
85-14 public or private employers; or
85-15 (c) Become insured by a private carrier.
85-16 9. The members of an association may cancel the membership
85-17 of any member of the association in accordance with the bylaws of
85-18 the association.
85-19 10. The association shall:
85-20 (a) Within 30 days after the addition of an employer to the
85-21 membership of the association, notify the Commissioner of the
85-22 addition and:
85-23 (1) If the association has not received authority from the
85-24 Commissioner pursuant to subsection 5 or 6, as applicable, provide
85-25 to the Commissioner all information and assurances for the new
85-26 member that were required from each of the original members of
85-27 the association upon its organization; or
85-28 (2) If the association has received authority from the
85-29 Commissioner pursuant to subsection 5 or 6, as applicable, provide
85-30 to the Commissioner evidence that is satisfactory to the
85-31 Commissioner that the new member is a member or associate
85-32 member of the bona fide trade association as required pursuant to
85-33 paragraph (a) of subsection 2 of NRS 616B.350, a copy of the
85-34 indemnity agreement that jointly and severally binds the new
85-35 member, the other members of the association and the association
85-36 that is required to be executed pursuant to paragraph (a) of
85-37 subsection 1 of NRS 616B.353 and any other information the
85-38 Commissioner may reasonably require to determine whether the
85-39 amount of security deposited with the Commissioner pursuant to
85-40 paragraph (d) or (e) of subsection 1 of NRS 616B.353 is sufficient,
85-41 but such information must not exceed the information required to
85-42 be provided to the Commissioner pursuant to subparagraph (1);
85-43 (b) Notify the Commissioner and the Administrator of the
85-44 termination or cancellation of the membership of any member of
85-45 the association within 10 days after the termination or cancellation;
85-46 and
86-1 (c) At the expense of the member whose membership is
86-2 terminated or cancelled, maintain coverage for that member for 30
86-3 days after a notice is given pursuant to paragraph (b), unless the
86-4 association first receives notice from the Administrator that the
86-5 member has:
86-6 (1) Been certified as a self-insured employer pursuant to
86-7 NRS 616B.312;
86-8 (2) Become a member of another association of self-insured
86-9 public or private employers; or
86-10 (3) Become insured by a private carrier.
86-11 11. If a member of an association changes his name or form of
86-12 organization, the member remains liable for any obligations
86-13 incurred or any responsibilities imposed pursuant to chapters 616A
86-14 to 617, inclusive, of NRS under his former name or form of
86-15 organization.
86-16 12. An association is liable for the payment of any
86-17 compensation required to be paid by a member of the association
86-18 pursuant to chapters 616A to 616D, inclusive, or chapter 617 of
86-19 NRS during his period of membership. The insolvency or
86-20 bankruptcy of a member does not relieve the association of liability
86-21 for the payment of the compensation.
86-22 Sec. 90. NRS 616B.404 is hereby amended to read as follows:
86-23 616B.404 1. An association of self-insured public or private
86-24 employers shall file with the Commissioner an audited statement of
86-25 financial condition prepared by an independent certified public
86-26 accountant. The statement must be filed on or before [April] May 1
86-27 of each year or within [90] 120 days after the conclusion of the
86-28 association’s fiscal year[,] and must contain information for the
86-29 previous fiscal year.
86-30 2. The statement required by subsection 1 must be in a form
86-31 prescribed by the Commissioner and include, without limitation:
86-32 (a) A statement of the reserves for:
86-33 (1) Actual claims and expenses;
86-34 (2) Claims [filed with the association] incurred but not
86-35 reported, and the expenses associated with those claims;
86-36 (3) Assessments that are due, but not paid; and
86-37 (4) Unpaid debts, which must be shown as liabilities.
86-38 (b) An actuarial opinion regarding reserves that is prepared by a
86-39 member of the American Academy of Actuaries or another
86-40 specialist in loss reserves identified in the annual statement adopted
86-41 by the National Association of Insurance Commissioners. The
86-42 actuarial opinion must include a statement of:
86-43 (1) Actual claims and the expenses associated with those
86-44 claims; and
86-45 (2) Claims [filed with the association] incurred but not
86-46 reported, and the expenses associated with those claims.
87-1 3. The Commissioner may adopt a uniform financial reporting
87-2 system for associations of self-insured public and private employers
87-3 to ensure the accurate and complete reporting of financial
87-4 information.
87-5 4. The Commissioner may require the filing of such other
87-6 reports as he deems necessary to carry out the provisions of this
87-7 section, including, without limitation:
87-8 (a) Audits of the payrolls of the members of an association of
87-9 self-insured public or private employers;
87-10 (b) Reports of losses; and
87-11 (c) Quarterly financial statements.
87-12 Sec. 91. NRS 616B.413 is hereby amended to read as follows:
87-13 616B.413 1. If the assets of an association of self-insured
87-14 public or private employers exceed the amount necessary for the
87-15 association to:
87-16 (a) Pay its obligations and administrative expenses;
87-17 (b) Carry reasonable reserves; and
87-18 (c) Provide for contingencies,
87-19 the board of trustees of the association may, after obtaining the
87-20 approval of the Commissioner, declare and distribute dividends to
87-21 the members of the association.
87-22 2. Any dividend declared pursuant to subsection 1 must be
87-23 distributed not less than 12 months after the end of the [fiscal] fund
87-24 year.
87-25 3. A dividend may be paid only to those members who are
87-26 members of the association for the entire [fiscal] fund year. The
87-27 payment of a dividend must not be conditioned upon the member
87-28 continuing his membership in the association after the [fiscal] fund
87-29 year.
87-30 4. An association shall give to each prospective member of the
87-31 association a written description of its plan for distributing
87-32 dividends when he applies for membership in the association.
87-33 Sec. 92. (Deleted by amendment.)
87-34 Sec. 93. NRS 616B.419 is hereby amended to read as follows:
87-35 616B.419 Each association of self-insured public or private
87-36 employers shall maintain:
87-37 1. Actuarially appropriate loss reserves. Such reserves must
87-38 include reserves for:
87-39 (a) Actual claims and the expenses associated with those claims;
87-40 and
87-41 (b) Claims [filed with the association] incurred but not reported,
87-42 and the expenses associated with those claims.
87-43 2. Reserves for uncollected debts based on the experience of
87-44 the association or other associations.
88-1 Sec. 94. NRS 616B.422 is hereby amended to read as follows:
88-2 616B.422 1. If the assets of an association of self-insured
88-3 public or private employers are insufficient to make certain the
88-4 prompt payment of all compensation under chapters 616A to 617,
88-5 inclusive, of NRS and to maintain the reserves required by NRS
88-6 616B.419, the association shall immediately notify the
88-7 Commissioner of the deficiency and:
88-8 (a) Transfer any surplus acquired from a previous [fiscal] fund
88-9 year to the current [fiscal] fund year to make up the deficiency;
88-10 (b) Transfer money from its administrative account to its claims
88-11 account;
88-12 (c) Collect an additional assessment from its members in an
88-13 amount required to make up the deficiency; or
88-14 (d) Take any other action to make up the deficiency which is
88-15 approved by the Commissioner.
88-16 2. If the association wishes to transfer any surplus from one
88-17 [fiscal] fund year to another, the association must first notify the
88-18 Commissioner of the transfer.
88-19 3. The Commissioner shall order the association to make up
88-20 any deficiency pursuant to subsection 1 if the association fails to do
88-21 so within 30 days after notifying the Commissioner of the
88-22 deficiency. The association shall be deemed insolvent if it fails to:
88-23 (a) Collect an additional assessment from its members within 30
88-24 days after being ordered to do so by the Commissioner; or
88-25 (b) Make up the deficiency in any other manner within 60 days
88-26 after being ordered to do so by the Commissioner.
88-27 Sec. 95. The amendatory provisions of sections 56.7 and 56.9
88-28 of this act:
88-29 1. Do not apply to any contract of annuity that is delivered or
88-30 issued for delivery in this state before October 1, 2003.
88-31 2. Do not apply to any contract of annuity that is delivered or
88-32 issued for delivery in this state on or after October 1, 2003, and
88-33 before October 1, 2005, unless the company elects to incorporate
88-34 the substance of those amendatory provisions into the contract.
88-35 3. Apply to any contract of annuity that is delivered or issued
88-36 for delivery in this state on or after October 1, 2005.
88-37 Sec. 96. 1. The Governor or his designee shall conduct a
88-38 study of the feasibility and potential benefits of consolidating the
88-39 powers and duties of the Division of Insurance of the Department
88-40 of Business and Industry and the Division of Industrial Relations of
88-41 the Department of Business and Industry into a single division
88-42 within the Department of Business and Industry.
88-43 2. The study must include, without limitation:
88-44 (a) An assessment of whether such a consolidation would
88-45 increase administrative efficiency, improve regulation and result in
88-46 cost savings.
89-1 (b) An assessment of whether such a consolidation would
89-2 benefit the businesses and industries regulated by the Division of
89-3 Insurance and the Division of Industrial Relations.
89-4 3. Not later than October 1, 2004, the Governor or his designee
89-5 shall prepare a report that contains the findings of the study and
89-6 submit the report and any recommendations for legislation to the
89-7 Director of the Legislative Counsel Bureau for transmittal to:
89-8 (a) The Senators who served as members of the Senate Standing
89-9 Committee on Commerce and Labor during the 72nd Session of the
89-10 Nevada Legislature;
89-11 (b) The Assemblymen who served as members of the Assembly
89-12 Standing Committee on Commerce and Labor during the 72nd
89-13 Session of the Nevada Legislature; and
89-14 (c) Any other Senators or Assemblymen upon request.
89-15 Sec. 97. 1. This section and section 96 of this act become
89-16 effective upon passage and approval.
89-17 2. Sections 3.3 and 3.7 of this act become effective:
89-18 (a) Upon passage and approval of this act, if Assembly Bill No.
89-19 79 of this session is enacted into law before passage and approval
89-20 of this act; or
89-21 (b) Upon passage and approval of Assembly Bill No. 79 of this
89-22 session, if Assembly Bill No. 79 of this session is enacted into law
89-23 after passage and approval of this act.
89-24 3. Sections 56.7 and 56.9 of this act become effective on
89-25 July 1, 2003, for the purpose of adopting regulations and on
89-26 October 1, 2003, for all other purposes.
89-27 4. Sections 1, 2, 3, 4 to 56.5, inclusive, and 57 to 95, inclusive,
89-28 of this act become effective on October 1, 2003.
89-29 20~~~~~03