Senate Bill No. 167–Committee on Commerce and Labor

 

(On Behalf of the Nevada League of
Cities and Municipalities)

 

February 19, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Revises provisions relating to industrial insurance. (BDR 53‑337)

 

FISCAL NOTE:    Effect on Local Government: No.

                             Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to industrial insurance; authorizing a self-insured public employer under certain circumstances to file a report of its reserves in lieu of filing a bond or another authorized form of security; 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. NRS 616B.300 is hereby amended to read as

1-2  follows:

1-3  616B.300  1.  An employer may qualify as a self-insured

1-4  employer by establishing to the satisfaction of the Commissioner

1-5  that the employer has sufficient administrative and financial

1-6  resources to make certain the prompt payment of all compensation

1-7  under chapters 616A to 616D, inclusive, or chapter 617 of NRS.

1-8  2.  [A] Except as otherwise provided in this section, a self-

1-9  insured employer must, in addition to establishing financial ability

1-10  to pay, deposit with the Commissioner a bond executed by the self-

1-11  insured employer as principal, and by a corporation qualified under

1-12  the laws of this state as surety, payable to the State of Nevada, and

1-13  conditioned upon the payment of compensation for injuries and

1-14  occupational diseases to employees. The bond must be in an amount

2-1  reasonably sufficient to ensure payment of compensation, but in no

2-2  event may it be less than 105 percent of the self-insured employer’s

2-3  expected annual incurred cost of claims, or less than $100,000. [In

2-4  arriving at an amount for the expected annual cost of claims, due

2-5  consideration must be given to the past and prospective experience

2-6  of the employer with losses and expenses within this state, to the

2-7  hazard of catastrophic loss, to other contingencies, and to trends

2-8  within the state. In arriving at the amount of the deposit required,

2-9  the commissioner may consider the nature of the employer’s

2-10  business, the financial ability of the employer to pay compensation

2-11  and his probable continuity of operation.]

2-12      3.  In lieu of a bond , the self-insured employer may deposit

2-13  with the Commissioner a like amount of lawful money of the United

2-14  States or any other form of security authorized by NRS 100.065. If

2-15  security is provided in the form of a savings certificate, certificate of

2-16  deposit or investment certificate, the certificate must state that

2-17  the amount is unavailable for withdrawal except upon order of the

2-18  Commissioner.

2-19      4.  The required deposit may be increased or decreased by the

2-20  Commissioner in accordance with chapter 681B of NRS and his

2-21  regulations for loss reserves in casualty insurance. If the

2-22  Commissioner requires [an] the self-insured employer to increase

2-23  [his] the required deposit, the Commissioner may specify the form

2-24  of the additional security. The self-insured employer shall comply

2-25  with such a requirement within 60 days after receiving notice from

2-26  the Commissioner.

2-27      5.  In lieu of a bond or another authorized form of security,

2-28  the self-insured employer may file with the Commissioner a copy

2-29  of the report of its reserves required by NRS 616B.009 if the self-

2-30  insured employer:

2-31      (a) Is a public employer; and

2-32      (b) Maintains reserves in an amount that is reasonably

2-33  sufficient to ensure payment of compensation, but in no event less

2-34  than the self-insured employer’s expected annual incurred cost of

2-35  claims.

2-36      6.  The Commissioner may require the self-insured employer

2-37  to increase the amount of its reserves maintained pursuant to

2-38  subsection 5 if the Commissioner determines that the increase is

2-39  necessary to ensure payment of compensation. The self-insured

2-40  employer shall comply with such a requirement within 60 days

2-41  after receiving notice from the Commissioner.

2-42      7.  For the purposes of this section:

2-43      (a) In arriving at the amount of the self-insured employer’s

2-44  expected annual incurred cost of claims, the Commissioner must

2-45  give due consideration to the past and prospective experience of

3-1  the self-insured employer with losses and expenses within the

3-2  state, to the hazard of catastrophic loss, to other contingencies and

3-3  to trends within the state.

3-4  (b) In arriving at the amount of the deposit or reserves

3-5  required of the self-insured employer, the Commissioner may

3-6  consider the nature of the self-insured employer’s business, the

3-7  financial ability of the self-insured employer to pay compensation

3-8  and the probable continuity of operation of the self-insured

3-9  employer’s business.

3-10      8.  The Commissioner shall require the self-insured employer to

3-11  submit evidence of excess insurance to provide protection against a

3-12  catastrophic loss. The excess insurance must be written by an

3-13  insurer authorized to do business in this state. The Commissioner

3-14  shall consider the excess insurance coverage as a basis for a

3-15  reduction in the deposit or reserves required of [an employer.

3-16      6.] the self-insured employer.

3-17      9.  The Account for Self-Insured Employers is hereby created in

3-18  the State Agency Fund for bonds. All money received by the

3-19  Commissioner pursuant to this section must be deposited with the

3-20  State Treasurer to the credit of the Account for Self-Insured

3-21  Employers. All claims against this Account must be paid as other

3-22  claims against the State are paid.

3-23      Sec. 2.  NRS 616B.318 is hereby amended to read as follows:

3-24      616B.318  1.  The Commissioner shall impose an

3-25  administrative fine, not to exceed $1,000 for each violation, and:

3-26      (a) Shall withdraw the certification of a self-insured employer if:

3-27          (1) The deposit or reserves required pursuant to NRS

3-28  616B.300 [is] are not sufficient , and the employer fails to increase

3-29  the deposit or reserves after he has been ordered to do so by the

3-30  Commissioner;

3-31          (2) The self-insured employer fails to provide evidence of

3-32  excess insurance pursuant to NRS 616B.300 within 45 days after he

3-33  has been so ordered; or

3-34          (3) The employer becomes insolvent, institutes any voluntary

3-35  proceeding under the Bankruptcy Act or is named in any

3-36  involuntary proceeding thereunder.

3-37      (b) May withdraw the certification of a self-insured employer if:

3-38          (1) The employer intentionally fails to comply with

3-39  regulations of the Commissioner regarding reports or other

3-40  requirements necessary to carry out the purposes of chapters 616A

3-41  to 616D, inclusive, and chapter 617 of NRS;

3-42          (2) The employer violates the provisions of subsection 2 of

3-43  NRS 616B.500 or any regulation adopted by the Commissioner or

3-44  the Administrator concerning the administration of the employer’s

3-45  plan of self-insurance; or

4-1       (3) The employer makes a general or special assignment for

4-2  the benefit of creditors or fails to pay compensation after an order

4-3  for payment of any claim becomes final.

4-4  2.  Any employer whose certification as a self-insured employer

4-5  is withdrawn must, on the effective date of the withdrawal, qualify

4-6  as an employer pursuant to NRS 616B.650.

4-7  3.  The Commissioner may, upon the written request of an

4-8  employer whose certification as a self-insured employer is

4-9  withdrawn pursuant to subparagraph (3) of paragraph (a) of

4-10  subsection 1, reinstate the employer’s certificate for a reasonable

4-11  period to allow the employer sufficient time to provide industrial

4-12  insurance for his employees.

4-13      Sec. 3.  NRS 616B.327 is hereby amended to read as follows:

4-14      616B.327  1.  Except as otherwise provided in NRS 616D.120,

4-15  before any action may be taken pursuant to subsection 2, the

4-16  Commissioner [of insurance] shall arrange an informal meeting with

4-17  the self-insured employer to discuss and seek correction of any

4-18  conduct which would be grounds for withdrawal of the self-insured

4-19  employer’s certificate of self-insurance.

4-20      2.  Except as otherwise provided in NRS 616D.120, before the

4-21  withdrawal of the certification of any self-insured employer, the

4-22  Commissioner [of insurance] shall give written notice to that

4-23  employer by certified mail that his certification will be withdrawn

4-24  10 days after receipt of the notice unless, within that time, the

4-25  employer corrects the conduct set forth in the notice as the reason

4-26  for the withdrawal or submits a written request for a hearing to the

4-27  Commissioner . [of insurance.] Before requesting a hearing the

4-28  employer must make the deposit or maintain the reserves required

4-29  by NRS 616B.300.

4-30      3.  If the employer requests a hearing:

4-31      (a) The Commissioner [of insurance] shall set a date for a

4-32  hearing within 20 days after receiving the appeal request, and shall

4-33  give the employer at least 10 business days’ notice of the time and

4-34  place of the hearing.

4-35      (b) A record of the hearing must be kept but it need not be

4-36  transcribed unless requested by the employer with the cost of

4-37  transcription to be charged to the employer.

4-38      (c) Within 5 business days after the hearing, the Commissioner

4-39  [of insurance] shall either affirm or disaffirm the withdrawal and

4-40  give the employer written notice thereof by certified mail. If

4-41  withdrawal of certification is affirmed, the withdrawal becomes

4-42  effective 10 business days after the employer receives notice of the

4-43  affirmance unless within that period of time the employer corrects

4-44  the conduct which was ground for the withdrawal or petitions for

4-45  judicial review of the affirmance.

5-1  4.  If the withdrawal of certification is affirmed following

5-2  judicial review, the withdrawal becomes effective 5 days after entry

5-3  of the final decree of affirmance.

5-4  Sec. 4.  NRS 616B.333 is hereby amended to read as follows:

5-5  616B.333  1.  If for any reason the status of an employer as a

5-6  self-insured employer is terminated, the security deposited or the

5-7  reserves maintained under NRS 616B.300 must remain on deposit

5-8  or be maintained for a period of at least 36 months in such amount

5-9  as necessary to secure the outstanding and contingent liability

5-10  arising from accidental injuries or occupational diseases secured by

5-11  such security[,] or reserves, or to assure the payment of claims for

5-12  aggravation and payment of claims under NRS 616C.390 based on

5-13  such accidental injuries or occupational diseases.

5-14      2.  At the expiration of the 36-month period, or such other

5-15  period as the Commissioner [of insurance] deems proper, the

5-16  Commissioner [of insurance] may accept , in lieu of any security so

5-17  deposited or reserves maintained, a policy of paid-up insurance in a

5-18  form approved by the Commissioner . [of insurance.]

5-19      Sec. 5.  NRS 616B.615 is hereby amended to read as follows:

5-20      616B.615  1.  An employer who is certified as a self-insured

5-21  employer directly assumes the responsibility for providing

5-22  compensation due his employees and their beneficiaries under

5-23  chapters 616A to 617, inclusive, of NRS.

5-24      2.  A self-insured employer is not required to pay the premiums

5-25  required of other employers pursuant to chapters 616A to 617,

5-26  inclusive, of NRS but is relieved from other liability for personal

5-27  injury to the same extent as are other employers.

5-28      3.  The claims of employees and their beneficiaries resulting

5-29  from injuries while in the employment of self-insured employers

5-30  must be handled in the manner provided by chapters 616A to 616D,

5-31  inclusive, of NRS, and the self-insured employer is subject to the

5-32  regulations of the Division with respect thereto.

5-33      4.  [The] Neither the security deposited nor the reserves

5-34  maintained pursuant to NRS 616B.300 [does not] relieve that

5-35  employer from responsibility for the administration of claims and

5-36  payment of compensation under chapters 616A to 616D, inclusive,

5-37  of NRS.

5-38      Sec. 6.  NRS 617.205 is hereby amended to read as follows:

5-39      617.205  1.  An employer who is certified as a self-insured

5-40  employer directly assumes the responsibility for providing

5-41  compensation due his employees and their beneficiaries under this

5-42  chapter.

5-43      2.  A self-insured employer is not required to pay the

5-44  contributions required of other employers by NRS 617.1665.

6-1  3.  The claims of employees and their beneficiaries resulting

6-2  from occupational diseases while in the employment of self-insured

6-3  employers must be handled in the manner provided by this chapter,

6-4  and the self-insured employer is subject to the regulations of the

6-5  Division with respect thereto.

6-6  4.  [The] Neither the security deposited nor the reserves

6-7  maintained pursuant to NRS 616B.300 [does not] relieve the

6-8  employer from responsibility for the administration of claims and

6-9  payment of compensation under this chapter.

6-10      5.  A self-insured employer qualifying under the provisions of

6-11  this chapter must comply with the provisions of NRS 616B.300.

 

6-12  H